CP23/20: Diversity and inclusion in the financial sector – working together to drive change

Read CP23/20 (PDF)[1]

Why we are consulting

We consider that greater levels of diversity and inclusion can improve outcomes for markets and consumers. In particular, by helping reduce groupthink, supporting healthy work cultures, improving understanding of and provision for diverse consumer needs and unlocking diverse talent, supporting the competitiveness of the UK’s financial services sector. We have been clear that diversity and inclusion are regulatory concerns. Despite progress, research shows there is more to be done to improve diversity and inclusion in the financial sector.

Our proposed framework would establish minimum standards and give firms a better understanding of what is expected of them in this area from a regulatory standpoint. It would also help ensure greater consistency and transparency across the sector on firms’ approaches to diversity and inclusion.

The PRA has published its own proposals[2] at the same time as our CP.

Who this is for

• This CP will be of interest to all firms with a Part 4A FSMA permission, though not all firms would be subject to the same requirements or have to meet them in the same way. We encourage you to read Chapter 3 of the CP for further detail regarding our proposed approach.

This consultation may be of interest to others, including: 

• regulated firms who do not have a Part 4A permission 
• industry groups/trade bodies 
• consumer groups and individual consumers 
• policy makers and other regulatory bodies 
• industry experts and commentators 
• academics and think-tanks

Draft Regulatory Return

Sample template[3] for illustrative purposes only. The proposed regulatory return would be made through RegData and would reflect design and user experience considerations. Please consult the guidance notes in Annex 4 of the Consultation Paper.

Next steps

This consultation is now closed. We will review the feedback and develop final regulatory requirements for publication in a Policy Statement in 2024. We propose that the implementation date for changes would be 12 months after publication of the Policy Statement to give firms time to prepare.

On 30 October 2023, we held a joint webinar with the PRA to discuss our proposals on diversity and inclusion in the financial sector. View a recording of the webinar[4].