FCA and PRA enforcement decision making processes

The FCA and PRA have recently published proposals aimed at strengthening the transparency and effectiveness of their enforcement decision-making processes. The proposals address recommendations made by HM Treasury in its "Review of enforcement decision-making at the financial services regulators" and Andrew Green QC’s "Report into the FSA’s enforcement actions following the failure of HBOS", with the aim of improving the end-to-end process, from referral through to settlement. A large number of the proposals are not controversial and are likely to be regarded by the regulated community as beneficial, for example, better transparency over the enforcement process and advance notice that a settlement stage will shortly commence.

However, some of the proposals may provoke more debate. For example, one topic under consultation is the creation of a focused resolution agreement which would allow for enforcement proceedings to be resolved in circumstances where an individual or firm agrees all or some relevant facts and/or the breaches which arise from those facts, but wishes to contest the sanction through the Regulatory Decisions Committee. The incentive for this route would be that the benefit of the 30% settlement discount would still apply. Whilst this may serve to narrow the issues in dispute, how much it would narrow those issues and how practical it would be, for example where there are multiple parties under investigation or parallel cases, could make this proposal hard to implement in practice.

This is an opportunity for firms and individuals who have been involved in enforcement proceedings with the FCA or PRA to provide feedback on their experience and have an influence over improving it. Simmons & Simmons have created a simple summary of the FCA and PRA’s consultation paper and the questions to which a response is invited. You can access our questionnaire here. Responses can be given either directly to the regulators or can be sent to us to be incorporated into our response on an anonymous basis. The regulators have asked for responses by 14 July 2016. If you would like us to include your comments in our response, we should be grateful if you could let us have them by 07 July 2016.

If you have any questions please contact Emma Sutcliffe or Richard Sims.