The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have published proposals aimed at strengthening the transparency and effectiveness of both organisations’ decision-making processes.
The consultation paper explains the changes already put into the practice by the regulators and sets out the recommendations which require consultation according to both bodies.
The FCA also proposes to amend the Enforcement Guide and the Decision Procedure and Penalties Manual to provide a framework and incentives for partly contested cases.
It is not proposing any changes to the process for agreeing a full resolution of all issues – facts, liability and penalty – which will continue to have a 30% discount applied to the penalty at stage one.
All of the proposals address recommendations made by the 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.
The PRA will consult separately on the recommendations dealing with settlement and contested decision-making, once the Bank of England and Financial Services Bill has passed through Parliament.
Mark Steward, director of enforcement and market oversight at the FCA, said: “It is important that people have confidence in the enforcement process and that it is used fairly, efficiently and effectively.
“We believe that our proposals will achieve the aim of the recommendations which was to enhance the FCA’s capacity to deal with misconduct swiftly, fairly and robustly, and we welcome any comments on our approach to implementation.”