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Home > Prudential Regulation Authority > Implementation of the Enforcement Review and the Green Report – PS2/17

Implementation of the Enforcement Review and the Green Report – PS2/17

01 February 2017


In this policy statement (PS) the FCA and PRA respond to comments received on joint Consultation Paper (CP) 14/16 ‘Proposed Implementation of the Enforcement Review and the Green report’ and explain what changes are being made to enforcement policies and processes.

On 18 December 2014, HM Treasury published its ‘Review of enforcement decision-making at the financial services regulators’. The focus of the review was on the transparency, fairness, effectiveness and speed of the FCA’s and PRA’s enforcement decision-making process.

The review made a number of recommendations to the FCA and the PRA with the aim of improving current enforcement decision-making processes and arrangements. The recommendations ranged across the whole enforcement process, from referral to contested decision-making.

On 19 November 2015, the PRA and the FCA published two reports: a joint report into the failure of HBOS plc; and Andrew Green QC’s Report into the Financial Services Authority’s (FSA) enforcement actions following the failure of HBOS (the Green Report).

The Green Report made four recommendations, three of which were relevant to the review recommendations, and relate to: i) pre-referral decision-making; ii) ongoing dialogue between enforcement and supervision during an investigation; and iii) informing the subject of an investigation about the matters under investigation.

This PS will be of interest to all firms and individuals involved in providing financial services as it builds on our existing statements about our use of enforcement powers. It will be of particular interest to all firms and individuals (and their professional advisors) that are, or anticipate that they are likely to be, subject to FCA and/or PRA enforcement action.

Chapters 3 and 4 of this PS are on regulator cooperation and subject’s understanding and representations in the context of enforcement investigations. Chapters 2, 5 and 6 are FCA only.

Feedback on consultation responses
There were thirteen responses to CP14/16. A list of the non-confidential respondents is included in Annex 1. Six responses were from law firms, two from individuals, four from representative bodies, and one from the Financial Services Consumer Panel.

The responses were broadly supportive of the proposals, many of which were amendments to existing enforcement process and centred on increasing transparency. Not all respondents expressed a view on every question. Any additional comments tended to suggest where more information would be welcomed.

Policy statement

Implementation of the Enforcement Review and the Green Report – PS2/17