||The Bank including the Prudential Regulation Authority (PRA) is required under the Financial Services Act 2012 and the Financial Services & Markets Act 2000 to enter into certain Memoranda of Understanding (MoU) with other organisations including other UK regulators and HM Treasury. These MoUs are documents through which the Bank expects to be held to account by Parliament, through the Treasury Select Committee. Separately, the PRA is required by statute to enter into a further three MoUs.
Agreements with other domestic bodies
In addition to the statutory MoUs governing its interaction with the Financial Conduct Authority (FCA), HM Treasury (HMT) and the rest of the Bank, the Prudential Regulation Authority (PRA) is also party to a number of agreements covering its relationship with other domestic regulators.
In order for the Bank and the Prudential Regulation Authority to carry out effectively their supervisory activities, it is necessary for them, at times, to share and receive confidential information with overseas authorities. Such information sharing must take place only where professional secrecy obligations are in place that are equivalent to those set out in certain EU directives. The Bank and the PRA are a party to a number of Memorandum of Understanding (MoU) with overseas authorities that facilitate such information sharing.
Prior to 1 April 2013, the Financial Services Authority (FSA) was party to a series of MoUs with overseas authorities; a number of these were jointly signed with the Bank. Under transitional provisions in the Financial Services Act 2012, the FSA’s MoUs continue in effect with the relevant successor UK authority/authorities. This may be one or more of the Bank, the PRA and the Financial Conduct Authority (FCA).
Before the implementation of the transitional provisions, the Bank and the FSA wrote to each of their MoU counterparts seeking additional changes to the MoUs to support the effective delivery of each of the UK authorities’ responsibilities. These changes were in four areas:
- permitting the UK authorities to use information received under the MoU to support their public functions;
- permitting the UK authorities to share confidential information with other UK authorities;
- clarifying exactly which MoU would transfer to the Bank, the PRA and/or the FCA; and
- that the transferred MoU would take effect as separate MoUs: one with the FCA and one with the Bank and/or the PRA. (see example letter).
MoUs to which these changes apply are marked below (*).