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Home > Prudential Regulation Authority > The PRA's enforcement policies
 

The PRA's enforcement policies

​Enforcement policies  |  Enforcement, Supervisory Notices and Publicity  |  Information for overseas regulators

The Prudential Regulation Authority (PRA) is required by FSMA to maintain a number of policies governing the conduct of enforcement investigations, including policies on:

  • decision-making;
  • the imposition of penalties, including the calculation of financial penalties; and
  • interviews and investigations at the request of overseas regulators.

Outsourcing enforcement investigations

While the PRA may choose to carry out investigations using its own investigation teams, it may instead (or additionally) outsource the conduct of those investigations (including the gathering and analysis of evidence and interviews of individuals) to third parties, including the Financial Conduct Authority (FCA).

This may mean that, in certain cases, the subject of the investigation, and others, may be contacted by the FCA and/or third parties authorised by the PRA for the purposes of undertaking the investigation. This will usually take the form of the PRA using its powers under sections 167-169 of FSMA to appoint the third party, and/or specified officers or members of staff of that third party, as investigators under FSMA. The PRA may additionally appoint members of its own staff as investigators in such cases.

Where the PRA appoints a third party as an investigator, that person will have the full range of powers available to investigators under FSMA. 

The PRA will expect the subject of the investigation, and any person in relation to whom the investigator concerned exercises powers under FSMA, to provide the investigator with the same level of co-operation as it would provide the PRA were it to be investigating the matter itself. 

The PRA will retain control over, and responsibility for, the scope of the investigation, and the third party investigators will carry the investigation out under the PRA’s direction.

Where it chooses to outsource the conduct of an investigation, the PRA will:

  • inform the subject of the investigation that it has done so, and to whom the matter has been outsourced;
  • take reasonable steps to ensure that the investigator makes clear when making first contact with the subject of the investigation, or any other person in relation to whom FSMA powers are proposed to be exercised, that the investigation is being carried out on behalf of the PRA; and
  • ensure that any Notice of Appointment of investigators required under section 170 of FSMA sets out who the investigators are, and where the investigators are individuals, of which organisations they are officers or employees.

As the end-product from an outsourced investigation, the investigator provides to the PRA a report setting out what evidence it has uncovered, and to what extent the evidence is indicative that one or more of the PRA’s regulatory requirements has been breached.
 
The PRA will then determine what, if any action it proposes to take as a result of the investigation, including (but not limited to) the use of its supervisory or enforcement powers.
 
The PRA’s final statements of policy on the PRA’s decision making policy of procedure as well as on aspects of its disciplinary and other enforcement powers are available on the approach to enforcement statements.

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