The Financial Conduct Authority laid out a timetable for its controversial plan to ‘name and shame’ companies under investigation and defended the move as one that “benefits firms that play by the rules”.

The regulator’s chief executive Nikhil Rathi said: “We have proposed being more transparent on enforcement. Not in all cases. But no longer just by exception.

“Our current approach doesn’t work. We think a degree more openness can reduce harm, build whistleblower confidence and benefit firms that play by the rules.”

Rathi was speaking at the City’s prestigious Mansion House dinner last night.

He said the watchdog will next month “provide more data and case studies on how a public interest test could work in practice”.

Adding that the body’s board will decide on whether to move ahead with the plans by “early next year”.

Rathi pointed out: “We have heard the strength of opposition and some concern that we could be an international outlier, detracting from competitiveness.

“We want to work through this together, mindful of all our objectives.”

The head of the regulator stressed that its investigations were quicker and more targeted, so that firms will remain under a cloud for less time.

The body conducted nine successful fraud prosecutions bringing 21 charges last year – its most ever. A record 45 people face further proceedings.

He added: “Investigation times are falling – as low as 14 months in recent cases versus a 42-month average.”

The watchdog outlined proposals earlier this year to release the names of firms under investigation if it believes it is in the public interest, which has been met with fierce opposition from firms.

It has received more than 130 responses to its first consultation on the plan, which closed in April.

In May, it emerged that 16 finance trade bodies — including UK Finance, The Investment Association and TheCityUK — had written to the then Chancellor Jeremy Hunt asking him to intervene.

“Firms believe that the proposals will have a negative impact on their valuation, could put at risk the wellbeing of individuals, and have the potential to destabilise financial markets,” the associations said in the letter to the then Chancellor Jeremy Hunt.

Hunt, in a rare intervention in regulatory affairs, said that he hoped the body “re-look at their ‘naming and shaming’ decision”.

It is unclear what new Chancellor Rachel Reeves’ views are on this policy, but in general terms, she has said that she is in favour of less financial red tape to “turbo-charge” UK firms to drive for growth.

Other UK regulators — such as those in competition, water and energy — often name firms that are under investigation before deciding on whether they have breached any rules.

However, this measure is rarely used by international financial services regulators such as the US Securities and Exchange Commission and Germany’s BaFin.