U.K. Financial Conduct Authority CEO Andrew Bailey said the regulator is undertaking a review to establish whether it needs to formally investigate Aviva Plc over the company's controversial proposal to cancel preference shares.

Bailey, who was responding to a March 20 letter by U.K. Treasury Select Committee Chair Nicky Morgan, said the primary focus of the regulator's inquiries is whether market abuse rules were breached. It is also seeking to understand Aviva's intentions and whether or not clear information was provided to shareholders when it announced the plans.

After strong criticism from investors and regulatory queries, Aviva disclosed March 23 that it was withdrawing the proposal to cancel preference shares, a decision that was welcomed by the FCA, Bailey said.

However, the FCA will see how the holders, and now potentially former holders, of the irredeemable preference shares that may have lost out financially due to the events were treated.

Bailey added that he will update the committee and other lawmakers who have written to him on the matter in due course.

Morgan said she welcomes the review.