Supervision

We supervise banks, building societies, credit unions, major investment firms and insurers to judge whether they are complying with our policies.

Supervisory approach

We are responsible for the prudential regulation of banks, building societies, credit unions, insurers and major investment firms. We aim through our supervision to develop a rounded, robust and comprehensive view of these firms, to judge whether they are being run in a safe and sound manner, and whether insurers are protecting policyholders appropriately. 

Our approach documents set out how we carry out our role in practice.

The PRA's approach to supervision documents

Regulating smaller firms

We take a different approach to supervising the smaller firms that we regulate, due to their limited potential to cause harm to the financial system.

Credit unions, small overseas banks, small overseas insurers and mutual insurers are our lowest category of potential impact. At an individual level, these firms have little capacity to cause significant harm to the stability of the financial system. They could, however, generate some disruption to the financial system at an aggregate level, in the event of problems across a whole sector.

Additionally, our objectives require us to promote the safety and soundness of all the firms it supervises, and to contribute to securing an appropriate degree of protection for all policyholders. This motivates a baseline level of supervisory monitoring for these firms.

Our approach to supervising smaller firms

Our supervisory approach for smaller firms includes:

  • supervising firms on a portfolio basis using automated tools to analyse your regulatory returns
  • examining individual firms when a risk crystallises (as discovered through, for example, a visit to the firm, or an approach from the firm itself), or in response to authorisation requests from the firm
  • conducting peer group analysis across sectors as a whole, to develop a clear understanding of the risks posed by both small firms in aggregate and by a typical firm
  • conducting annual assessments of these firms, but in large peer groups.

We do not visit smaller firms on a fixed, regular schedule. But all firms, regardless of category, are subject to on-site work by us - with a period of notice - at any time.

View further information and materials for credit unions.

Our rules and expectations for branches are available in Supervising international banks: the PRA's approach to branch supervision - PS8/14.

View further information and materials for run-off firms. 

Contacts for smaller firms

These firms do not have a named supervisor. Instead, they should contact our Firm Enquiries Team at PRA.FirmEnquiries@bankofengland.co.uk or by phone on +44 (0)20 3461 7000.

Skilled Persons Reviews

A Skilled Persons review is one of the regulatory tools we can employ under FSMA 2000 (as amended by the 2012 Act).

Under FSMA, there are two types of Skilled Persons reviews that we can commission:

  • s166 Reports by Skilled Persons; and
  • s166A Appointment of Skilled Persons to collect and update information.

The ’Use of Skilled Persons’ Part of the PRA Rulebook sets out the PRA's requirements for a Skilled Persons review. Reports by Skilled Persons - SS7/14 sets out our policy on, and expectations for, the use of these powers.

The Skilled Person Panel (see list of Skilled Person Panel suppliers), used for directly commissioned s166 reviews, commenced in April 2017 and will be effective until 31 March 2022. In May 2020, due to the effects of Covid-19, the effective end date of the panel was extended to 31 March 2022, from 31 March 2021. The description of the Lots can be accessed through the Skilled Person Panel Lot descriptions.

Quarterly information

Information on the Skilled Persons reviews commissioned by us is published on a quarterly basis.

PRA Q1 2021/22 skilled persons reviews commissioned

Firm feedback survey

We seek input from firms on the effectiveness and quality of our supervisory framework and approach. One of the ways we do this is through the annual firm feedback survey. This process is overseen by a team which is independent of frontline supervision. 

The survey gives PRA-authorised firms the opportunity to comment on a number of topics, including:

  • our understanding of firms
  • the firm’s understanding of our regulatory objectives and expectations
  • our level of challenge to firms
  • the effectiveness of firms’ relationships with us
  • our co-ordination with other regulators and data requests; and
  • our approach to new technologies

Firms can make additional comments and we ask them what three improvements we could make, as well as addressing a topical question. 

We appreciate firms’ participation in the survey. It is important that we continue to understand, as we evolve, both what firms think works well and what we might do differently. 

Which firms are included? When should firms expect to receive the survey?

We send a standardised survey to all firms. Normally we invite large firms to follow-up meetings to discuss their views in more detail. In previous years, we have held roundtable discussions with small firms. However due to the pressure on firms and us from Coronavirus we have decided to suspend these, while keeping the situation under review.

Firm Feedback Survey: Largest firms

The smaller firms being surveyed in 2021 can expect to receive a notification on Wednesday 16 June 2021.

Firm Feedback Survey: Small and medium-sized firms 

How are the survey results used?

We analyse firms’ responses to identify both good practices and areas where we could improve how we supervise firms. This analysis is reported to our senior management and shared with the PRA’s Practitioner Panel. We also follow up on the points, including with the relevant supervisory directorate, being mindful of any confidentiality and sensitivity issues.

What has changed as a result of the surveys?

  • As in previous years, firms commented time scales for Senior Managers Certification Regime (SMCR) approvals were in some cases too long. Firms also indicated that on occasion the time limit was exceeded. The Financial Conduct Authority (FCA) had a large increase in applications contributing to the delays, and has increased resourcing to resolve this. We are also considering ways of helping firms improve the quality of their applications, such as engaging with larger firms and trade bodies. 
  • In response to feedback received about information requests, we have increased demand for data during the Coronavirus outbreak, we have taken steps to increase notice and reduce volume where possible. We are also actively seeking to develop more consistent data to be used in times of stress, so that firms can be better placed to respond. Longer term, we are looking to invest in better data capability to reduce the burden on firms.
  • Although firms said they prefer a consistent supervision team, they have recognised the better quality handovers that supervision provide.
  • We have enhanced the search function on our website and used reference numbers for papers to generate more streamlined results. We are also planning to introduce a mega-menu’ to aid navigation and are exploring additional methods to upgrade usability. Similarly, we continually seek ways to enhance the PRA Rulebook. 

New issues in 2020

A few new topics have been raised during the last year’s survey including:

  • Firms commented the quality of feedback provided was high, however they would benefit more from us increasing the amount and timeliness of this information.
  • Firms were largely positive about our understanding of their business models, however a few firms did adversely comment on this matter.
  • Our approach to operational resilience was generally well received, with firms noting the effectiveness of guidance, and good coordination with the FCA in this joint exercise. 

Are the results of the survey published?

We published the aggregated results for the 2020 survey on Friday 21 May 2021.

Previous aggregated survey results

20 December 2019: We published the aggregated results for the 2019 survey
14 December 2018: We published the aggregated results for the 2017/18 survey
12 December 2017: We published the aggregated results for the 2016/17 survey

Please see The National Archives for historic supervision information

This page was last updated 16 June 2021

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