March 12, 2025 – The UK’s Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have decided to abandon proposed rules aimed at strengthening diversity and inclusion (D&I) within the financial sector. The move follows industry feedback and government recommendations to ease regulatory burdens.

Regulators Reverse Course on D&I Rules

Initially launched in September 2023, the FCA and PRA’s consultation sought to introduce new D&I requirements, including:

Mandatory D&I strategies for firms
Board-level oversight of diversity policies
Enhanced data collection on workplace demographics

However, in letters to the Treasury Select Committee, the regulators walked back their proposals, citing concerns from industry respondents about duplicating existing initiatives and adding unnecessary costs.

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Regulatory Shift Amid Global DEI Pushback

Despite acknowledging the benefits of D&I—including improved governance, decision-making, and industry competitiveness—the FCA and PRA confirmed:

“We do not currently plan to publish new rules on diversity and inclusion.”

The UK’s decision reflects a broader global trend. In the U.S., regulatory scrutiny of corporate DEI policies has increased following a Supreme Court ruling against affirmative action in college admissions. The shift accelerated under Donald Trump, who signed an executive order banning DEI preferencing in federal contracting.

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