FCA and PRA consult on improving diversity and inclusion in financial services

On 25 September 2023, the FCA and PRA published consultation papers setting out proposals to introduce a new regulatory framework on diversity and inclusion (D&I) in the financial services sector. This follows the joint FCA and PRA discussion paper on diversity and inclusion (DP21/2) published in July 2021, which we covered in our August 2021 update. 

The consultation papers cover proposed new rules on:

• non-financial misconduct
• D&I strategies
• data disclosure and regulatory reporting
• target setting
• risk and governance. 

There is a particular focus on reducing groupthink. 

The application of the proposed rules varies depending on the type and size of the firm in question, with firms with over 250 employees being subject to the full regime.  

The FCA consultation paper can be found here. 

The PRA consultation paper can be found here. 

Both consultations close on 18 December 2023. The regulators will review feedback and publish policy statements in 2024, with a view to bringing the rules into force 12 months after publication of the policy statements.