On 18 December 2014, HM Treasury published its ‘Review of enforcement decision-making at the financial services regulators’. The focus of the review was on the transparency, fairness, effectiveness and speed of the FCA’s and the PRA’s enforcement decision-making processes. On 19 November 2015, the PRA and the FCA published two reports: (1) a joint report into the failure of HBOS plc; and (2) Andrew Green QC’s report into the FSA’s enforcement actions following the failure of HBOS (the Green Report).
The FCA and PRA have now jointly published Consultation Paper FCA CP16/10 PA CP14/16: Proposed Implementation of the Enforcement Review and the Green Report (CP16/10).
The Green Report made four recommendations, three of which are relevant to the HM Treasury review recommendations. They cover:
- pre-referral decision-making;
- on-going dialogue between enforcement and supervision during an investigation; and
- informing the subject of an investigation about the matters under investigation.
CP16/10 incorporates the PRA and FCA’s proposals for implementing recommendations (2) and (3) in chapters 3 and 4. Chapter 2 explains the PRA and FCA’s implementation at an operational level of recommendation.
The final recommendation of the Green Report (recommendation (4)) in relation to internal meeting minutes has already been adopted and implemented by the PRA and the FCA at an operational level.
The deadline for responses to CP16/10 is 14 July 2016.