Diversity and inclusion (D&I) has featured heavily in speeches by our UK regulators in recent months. The FCA, PRA and Bank of England (the regulators) have now published a discussion paper (DP21/2) which aims to kick-start discussion on how the financial services sector, with the help of the regulators, can “accelerate the pace of meaningful change” in improving D&I within financial services firms.

The policy options being considered in DP21/2 include:

  • regular reporting of diversity data to the regulators;
  • the use of targets for representation;
  • measures to make senior leaders directly accountable for D&I in their firms;
  • linking remuneration to D&I metrics;
  • having a D&I policytraining on D&I and undertaking a diversity audit; and
  • the regulators’ approach to non-financial misconduct, and considering D&I in Senior Managers approvals and assessment of threshold conditions.

The discussion paper also focuses on the importance of data and disclosure in order to enable firms, regulators and other stakeholders to monitor progress.

DP21/2 is relevant to all regulated firms, including insurers, reinsurers and (re)insurance intermediaries. The regulators recognise that D&I will look different for different firms and will not apply a one size fits all approach to D&I.

The proposals in the discussion paper are potentially far-ranging, addressing people-related policies and practices, governance arrangements, accountability, remuneration arrangements, approach to customers and disclosure. Given the importance of the issues raised, the potential for significant change and the level of regulatory scrutiny being proposed, firms should actively engage in this discussion, which is open for response until 30 September 2021.

For more a detailed overview of the policy options proposed in DP21/2, please see our briefing here.

Jenny Stainsby
Jenny Stainsby
Partner, London
+44 20 7466 2995
Christine Young
Christine Young
Partner, London
+44 20 7466 2845
Barnaby Hinnigan
Barnaby Hinnigan
Partner, London
+44 20 7466 2816
Alison Matthews
Alison Matthews
Consultant, London
+44 20 7466 2765
Karen Anderson
Karen Anderson
Partner, London
+44 20 7466 2404
Hywel Jenkins
Hywel Jenkins
Partner, London
+44 20 7466 2510
Clive Cunningham
Clive Cunningham
Partner, London
+44 20 7466 2278
Nish Dissanayake
Nish Dissanayake
Partner, London
+44 20 7466 2365
Patricia Horton
Patricia Horton
Professional Support Lawyer, London
+44 20 7466 2789
Benedicte Perowne
Benedicte Perowne
Senior Associate, London
+44 20 7466 2026