The PRA’s statutory powers

The Prudential Regulation Authority (PRA) has a variety of formal powers under the Financial Services and Markets Act 2000 (FSMA).

What are the PRA’s statutory powers?

The Financial Services and Markets Act 2000 grants us powers, which fall broadly into two categories:

  • Supervisory

    For example, we can vary a PRA-authorised firm’s permissions to undertake certain regulated activities, or require a firm to undertake or stop an action. We can also approve (subject to conditions) an application for an individual to perform a senior (insurance) management function. We take action to address emerging risk, not to criticise the firm or individual involved.
  • Disciplinary

    If a firm fails to comply with regulations, we can take action such as a fine or public censure. This sends a clear signal to the firm, individual or wider regulated community about the actions we consider unacceptable. 
We expect firms, and those who run them, to cooperate with us to resolve any issues.

What do we consider when deciding whether to use our powers?

Our approach documents explain what we expect of authorised firms and how we use our powers. 

Before taking disciplinary action against a firm or an individual, we usually investigate whether (and if so, which) regulatory requirements have been breached. We have published our approach to enforcement, which includes statements of policy and procedure relating to:

  • statutory notices and decision making
  • financial penalties
  • suspensions and restrictions
  • settlement
  • publicity of regulatory action
  • conduct of interviews pursuant to section 169(7) of the FSMA.

How do we exercise our powers?

If we decide to exercise certain statutory powers, we must give a statutory notice to the relevant firm or individual. The appropriate PRA decision-making committee decides whether to give a statutory notice. Our policy ensures the level of seniority of the decision-maker is appropriate to the importance, complexity and urgency of the decision.

This page was last updated 26 April 2018
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