Individuals subject to enforcement action are set to be offered an easier route to challenge decisions at a tribunal without having to first bring their appeal to the regulator’s decisions committee, under new plans unveiled by the government today (18 December).
Following a review by the Treasury of the processes used by the Financial Conduct Authority and Prudential Regulation Authority to make enforcement decisions in May this year, the government published a report making no fewer than 39 recommendations.
Among the plans are a “new sign-posted, expedited procedure to access the Upper Tribunal so that those who wish to access this independent judicial process can do so directly... “without making representations to the decision-maker”.
As part of this change, the government said the regulators may wish to “develop an expedited procedure for the issue of decision notices in substantially the same terms as warning notices”.
The report also sets out proposals for the PRA to set up its own committee with an independent chairperson, to mirror the FCA’s Regulatory Decisions Committee which makes determinations in enforcement cases.
Elsewhere, the recommendations include minor measures to boost transparency and accountability to parliament on enforcement matters, such as a requirement for the regulators’ decision committees to publish an annual report on enforcement.
It also suggests the Treasury Select Committee may wish to hold ‘pre-commencement’ hearings with prospective chairpersons of these committees.
Other recommendations include:
• regular independent review of the regulators’ settlement processes and proposals to remove the graduated system of discounts in favour of a single ‘stage one’ early settlement option;
• FCA and PRA to publish more information about their criteria for starting investigations, and their approaches to referring cases from supervision to enforcement;
• greater transparency around how the FCA and PRA co-operate with each other; and
• more constructive communication between investigators and those being investigated, with greater senior involvement by the regulators.
Chancellor George Osborne said that new financial regulators with stronger powers were created to protect customers and the integrity of financial markets on which they depend.
“Today’s recommendations will enhance the FCA and PRA’s capacity to deal with misconduct or tackle threats to financial stability swiftly, fairly and robustly.
“The review sits alongside the significant steps that the government has already taken to improve standards in banking and financial services, including by replacing the failed tripartite regulatory system.”
The ‘final report’ represents the conclusion of the consultation process. Regulators will now report back to the Treasury on how they intend to “take forward” the proposals.
ashley.wassall@ft.com, peter.walker@ft.com
