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Home > Prudential Regulation Authority > Regulatory action
 

Regulatory action

 
The Prudential Regulation Authority (PRA) has a variety of formal powers under the Financial Services and Markets Act 2000 (FSMA) including:
 
  • to vary a PRA-authorised person’s permissions or to impose a requirement;
  • to refuse to authorise a firm, approve an individual to carry out a controlled function, approve an individual for a limited period or subject to conditions (or both), or to object to a change of control (or to approve it subject to conditions);
  • to direct an unregulated parent undertaking;
  • to investigate a matter under Part XI of FSMA; and
  • to impose a penalty, a public censure, a suspension or restriction.
 
When will the PRA deploy its powers?
 
The PRA approach documents set out what the PRA expects of those subject to its regulatory requirements, and how it will deploy its powers.
 
The PRA has a variety of formal powers available to it under statute, which it can use in the course of supervision if deemed necessary to reduce risks. For example, it may use its power to require information from firms, or commission a report by a third party into specific areas of interest. It may also vary a firm’s permissions to undertake certain regulated activities, which may require a change to the firm’s business model or future strategy.
 
While the PRA looks to firms to co-operate with it in resolving supervisory issues, it will not hesitate to use formal powers where it considers them to be an appropriate means of achieving its desired supervisory outcomes. This means that, in certain cases, the PRA will choose to deploy formal powers at an early stage and not merely as a last resort.
 
The PRA’s preference is to use its powers to address emerging risks. The PRA does, however, have a set of disciplinary powers, including the power to impose financial penalties and publish public censures, for cases where such sanction is an appropriate response to the firm failing to meet the PRA’s regulatory requirements. The intention in deploying these powers might include sending a clear signal to a firm - and to the regulated community more widely - about the circumstances in which the PRA considers a firm’s behaviour to be unacceptable, and so deterring future misconduct.
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