FCA softens stance on D&I rules: A welcome relief for smaller firms?

Sahar Nazir
clock • 6 min read

The Financial Conduct Authority (FCA) has decided not to proceed with its previously proposed diversity and inclusion (D&I) rules, which would have mandated data collection and target-setting for regulated firms. The regulator’s recent letter to the Treasury Select Committee (TSC) confirms that, while D&I remains a priority, the focus will shift away from prescriptive data reporting.

This decision comes after concerns were raised about the effectiveness of data collection in driving meaningful cultural change, as well as the potential compliance burden on firms—particularly smaller ones. While some in the industry may welcome the reduced regulatory pressure, others question whether a softer approach will weaken efforts to improve diversity across financial services. A strategic withdrawal? Under its initial proposals, outlined in Consultation Paper CP23/20, the FCA had aimed to introduce formal D&I strategies, diversity targets, and workforce composition reporting ...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Your profession

How advisers can support clients through market volatility

How advisers can support clients through market volatility

‘Losses simply hurt more than gains feel good’

Sophia Panayi
clock 08 May 2026 • 3 min read
Feel Good Friday: Depledge founder to swim five-mile lake for Manchester homeless charity

Feel Good Friday: Depledge founder to swim five-mile lake for Manchester homeless charity

Raising money for Lifeshare

Professional Adviser
clock 08 May 2026 • 1 min read
Advising UK resident US citizens: A challenge worth embracing

Advising UK resident US citizens: A challenge worth embracing

Cross-border rules create a plethora of pitfalls

Tony Mudd
clock 08 May 2026 • 8 min read