On 4 May 2023, the Bank of England (BoE) published Consultation Paper 9/23 ‘The Bank of England’s approach to enforcement: proposed changes and clarifications’ (CP9/23). CP9/23 proposes changes to the BoE’s and the Prudential Regulation Authority’s (PRA) enforcement policies and procedures, to the PRA’s policies and procedures for making supervisory and non-enforcement statutory notice decisions, and to the procedures of the Enforcement Decision Making Committee (EDMC).
The BoE and the PRA are proposing to create a consolidated set of statements of policy (SoPs) setting out the BoE’s approach to enforcement, and the PRA also proposes to create a new separate SoP setting out its allocation of decision-making and approach to supervisory decisions. The BoE (including its capacity as the PRA) is making these amendments to clarify the scope of its decision making and more clearly distinguish between enforcement powers and non-enforcement regulatory action.
The proposed amendments seek to:
- Clarify the scope of the BoE’s enforcement powers by creating a document that draws together the BoE’s existing enforcement policies and procedures into one consolidated document – the Bank Enforcement Approach.
- Move those sections of the current PRA Enforcement Approach Document which relate to the use of statutory tools other than enforcement powers into the proposed PRA Supervisory Decision-Making Policy.
- Make specific and consequential amendments to policies and procedures relating to the PRA Enforcement Approach Document to further incentivise cooperation by subjects under investigation.
- Clarify the approach and procedures the BoE would adopt in financial market infrastructure enforcement investigations.
- Set out in the new PRA Supervisory Decision-Making Policy revised policies which ensure operational efficiency and better advance the PRA’s statutory objectives.
- Update the EDMC remit to include various enforcement powers available to the PRA and/or the BoE under the Financial Services and Markets Act 2000.
- Clarify the EDMC procedures to reflect how the procedures have operated in practice and clarify the roles and responsibilities of the EDMC, in light of the practical experience of the EDMC in dealing with cases.
The deadline for feedback to CP9/23 is 4 August 2023.