UK: PRA Publishes Policy Statement on Its Approach to Decision-Making and Enforcement


    On 1 April 2013, the Prudential Regulation Authority (PRA) published a Policy Statement on its decision-making process, and disciplinary and enforcement procedures.

    The Policy Statement:

    • Stresses that, at least in the PRA's view, its final decision-making process will be "fair and proportionate", and consistent with its legal obligations;
    • Promises that the PRA's decision-making committees (DMCs) will always include at least one member who was not directly involved in gathering the evidence on which the decision will be based;
    • Defends its final committee structure and the decision to group category 3, 4 and 5 firms together for decision-making purposes, saying that cases can always be escalated if necessary;
    • Defends its policy for calculating penalties, even when they're to be imposed on small firms, but concedes that different metrics may be used if that would be "more appropriate";
    • Accepts that urgent decisions should be taken by two people rather than one, and that one of the two must be independent of the evidence gathering process. It also accepts that these decision makers must be of "equal seniority to the membership of the DMC to which the case would have been put";
    • Promises to take firms' representations into account before deciding whether to publish, and what information to include in a published, a Supervisory, Warning or Decision Notice;
    • Promises to cooperate with the Financial Conduct Agency (FCA) and other regulators, before taking enforcement action against a firm, whilst stressing that there may be occasions when two or more regulators investigate a firm and issue penalties in respect of the same events.

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