UK Financial Regulators Halt Diversity Reporting Plans Following Industry Pushback

The Bank of England and FCA cite regulatory cost concerns and overlapping government legislation as reasons for pausing new diversity and inclusion rules.

• The Bank of England's Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) have decided not to implement proposed diversity and inclusion rules for financial firms.
• The paused rules would have required firms to report diversity data, set inclusion targets, and link them to senior management pay, which drew criticism for adding regulatory burdens.
• Regulators highlighted that the UK government's Employment Rights Bill already includes measures addressing gender, ethnicity, and disability pay gaps, reducing the need for additional rules.
• The decision aligns with broader government efforts to reduce red tape on businesses and prioritize economic growth, as emphasized by Chancellor Rachel Reeves.
• This move comes against the backdrop of a global rollback of DEI initiatives, including actions in the US under President Donald Trump, and criticism from UK political figures like Kemi Badenoch and Nigel Farage.

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