Diversity, equity and inclusion is a key area for financial services regulators in the UK and overseas. For the FCA, driving change and working with industry to achieve a more diverse and inclusive financial services industry is, together with firm culture more broadly, a core part of its objectives for its ESG priorities. DE&I in firms is also a key element of the PRA's strategic objective to maintain and build on the safety and soundness of the banking and insurance sectors, and ensure continuing resilience.

Against this background, in July 2023, the House of Commons Treasury Select Committee launched an inquiry into "Sexism in the City". This aimed to examine the barriers faced by women in financial services and the progress made in removing gender pay gaps. In March 2024 it issued its report which found "a 'shocking' prevalence of sexual harassment and bullying, and a culture which is 'holding back women' in the City."

It made the following recommendations to tackle sexism and misogyny in financial services, including: 

• Legislation to ban the use of non-disclosure agreements (NDAs) in sexual harassment cases (the UK Government has highlighted action it has taken to prevent NDAs being used in other sectors and says an NDA would 'most likely' be unenforceable when related to reporting a crime to the police. It therefore did not commit to taking forward the Committee's recommendation);
• Stronger protections for whistleblowers in sexual harassment cases;
• Ban on prospective employers asking for salary history;
• Legal requirement to include salary bands on job adverts;
• Reduce the size threshold for gender pay gap reporting from 250+ to 50+ employees for firms in the financial services sector;
• Businesses with wide gender pay gaps must explain the disparity and publish an action plan;
• Regulators should drop their plans for extensive diversity data reporting and target setting; and
• Changes to the Women in Finance Charter including strengthening the link between executive pay, and performance on improving diversity.

Last week, the Committee published letters from regulators and government bodies setting out progress made against its recommendations:

FCA: the FCA has prioritised work on the link between non-financial misconduct (NFM) and its rulebook and says that it intends to publish a final policy statement on NFM in early 2025. It plans to provide clearer guidance for whistleblowers who are affected by a non-disclosure agreement, but who wish to report to the FCA. The FCA has also said "We are committed to continuing to improve our whistleblowing procedures, the way we engage with whistleblowers and how we deal with the information that they provide".

PRA: the PRA writes that developments in government policy (for example, proposals for gender equality action plans and the plan for broadened pay gap reporting) may affect its reporting and target setting proposals. The PRA says that it will review the impact of the bonus cap policy and whether it has affected gender pay gaps when sufficient evidence is available.

HM Treasury: it sets out its priorities for supporting the development of women in the financial services sector and says "There is a large body of work going on across government aimed at improving labour market outcomes for women."