How does the FCA ensure fair treatment of minority shareholders?

The correct answer highlights that the FCA enforces rules that promote transparency and equitable treatment in corporate governance. This focus on governance is essential to ensure that all shareholders, including minority shareholders, are treated fairly. By implementing stringent rules and regulations, the FCA ensures that companies maintain a high standard of accountability and that all shareholders have access to important information regarding the company's operations, financial performance, and strategic direction.

Transparency in corporate governance allows minority shareholders to make informed decisions based on a clear understanding of how their interests are being managed alongside those of majority shareholders. Equitable treatment ensures that minority shareholders are not unduly disadvantaged in decisions that affect their investments or in the sharing of profits and voting power. This is vital for maintaining investor confidence and promoting a fair investment environment, which ultimately contributes to the overall stability and integrity of the financial markets.

In contrast, requiring larger shareholders to take control would undermine the rights of minority shareholders, while limiting their voting rights would further marginalize their influence in corporate decisions. Conducting audits of minority shareholders alone would not address the broader governance practices necessary to ensure fair treatment for all shareholders. Therefore, the commitment to transparency and equitable treatment stands as a fundamental principle in safeguarding minority shareholders' interests.