UK Regulators Finalize Changes to Enhance Their Enforcement Decision-Making Processes

The Financial Conduct Authority and Prudential Regulation Authority published a joint Policy Statement on changes to their enforcement decision-making processes. The changes are in response to the recommendations set out in HM Treasury's Review of enforcement decision-making at the financial services regulators (known as the Enforcement Review), published in December 2014, and the report by Andrew Green QC in the enforcement actions following the failure of HBOS (known as the Green Report), published in November 2015. The Enforcement Review and the Green Report made three overlapping recommendations about the regulators' decision-making processes covering pre-referral decision-making, communication and cooperation between and within the regulators and informing the subject of an investigation about the matters under investigation. 

The Policy Statement follows the consultation conducted by the FCA and PRA in 2016 and sets out the regulators’ policy on joint investigations and cooperation. It also sets out the FCA's policy on referral decision-making, settlement and contested-decision making. The revisions to the FCA's rules took effect on January 31, 2017 except for those on the introduction of partly contested cases and the abolition of stage 2 and 3 discounts to penalty in settlement, which will apply from March 1, 2017. The PRA will issue a policy statement later this year on the establishment of the Enforcement Decision Making Committee and a short guide to the PRA's enforcement processes. 

View the joint Policy Statement.

View the Enforcement Review.

View the Green Report.