The PRA's distinctive enforcement approach

The prudential and conduct regulators have each forged bespoke procedures for taking action against parties for breaches of their rulebooks. Firms and individuals under enforcement investigation by the Prudential Regulation Authority must make key decisions early in the process as well as consider specific risks, say Jack Moore and Hywel Jenkins.

Hywel Jenkins and Chris Ninan are partners, and Jack Moore a senior associate, with Herbert Smith Freehills in London. Contact them on hywel.jenkins@hsf.com, chris.ninan@hsf.com and jack.moore@hsf.com.

At the end of January 2024, the Bank of England issued its new approach to enforcement - this marked a further evolution away from Prudential Regulation Authority enforcement being in relative lockstep with the Financial Conduct Authority, following the divergence between the two when the FCA adopted the 'partly-contested' process in 2017. This presents firms and individuals under enforcement investigation by the PRA with a set of new and distinctive challenges, opportunities and decisions that need to be made early on in any investigation process, which we will explore in this article. We also take a look at some of the broader trends in PRA enforcement and the specific risks it presents when compared to a solo FCA investigation.