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Home > Prudential Regulation Authority > Proposed Implementation of the Enforcement Review and the Green Report – CP14/16

Proposed Implementation of the Enforcement Review and the Green Report – CP14/16

14 April 2016

Summary of proposals

This consultation paper (CP) sets out the PRA’s and FCA’s proposals for implementation of Chapters 3 (‘Co-operation between the regulators’) and 4 (‘Subjects’ understanding and representations’) of HM Treasury’s Review of enforcement decision-making at the financial services regulators (‘the HMT Review’). The focus of the HMT Review recommendations was on the transparency, fairness, effectiveness and speed of the FCA’s and the PRA’s enforcement decision-making processes.

The CP also incorporates the PRA’s and FCA’s proposals for implementing recommendations (2) and (3) of Andrew Green QC’s Report into the FSA’s enforcement actions following the failure of HBOS (‘the Green Report’). The Green Report made four recommendations, three of which are relevant to the HMT Review recommendations. They cover: (1) pre-referral decision-making; (2) ongoing dialogue between enforcement and supervision during an investigation; and (3) informing the subject of an investigation about the matters under investigation. Chapter 2 of the CP explains the PRA’s and FCA’s implementation at an operational level of recommendation (1). The final recommendation of the Green Report (recommendation (4)) in relation to internal meeting minutes has already been adopted and implemented by the PRA and the FCA at an operational level.

The PRA will be consulting separately on the settlement and contested decision-making recommendations (Chapters 5 and 6 of the HMT Review) later this year, once the Bank of England and Financial Services Bill has passed through Parliament. The reforms proposed by the new Bill will effect certain changes to the Bank’s corporate governance structure, including the change from the PRA being a subsidiary of the Bank of England to the creation of a new committee at the Bank of England, to be known as the Prudential Regulation Committee (PRC).

The PRA is also planning to publish its enforcement referral framework (Chapter 2 of the HMT Review) alongside its implementation of the other HMT Review recommendations.

This consultation on enforcement policy will be of interest to all firms and individuals involved in providing financial services and their professional advisers.

Responses and next steps

Please address responses, comments or enquiries by Thursday 14 July 2016 to:

Ref: CP14/16
Regulatory Action Division
Prudential Regulation Authority
20 Moorgate
London EC2R 6DA


Consultation paper