Prudential Regulation Authority Rulebook

1

This statement of procedure and policy is issued by the Prudential Regulation Authority (PRA). It deals with the question of publication of statutory notice decisions by the PRA in relation to supervisory decisions.^[18]

2

In discharging its general functions, the PRA must, so far as is reasonably possible, act in a way which advances its statutory objectives.^[19] The PRA is also required to have regard to certain regulatory principles,^[20] including the desirability in appropriate cases of the PRA publishing information relating to persons on whom requirements are imposed under the Act, as a means of contributing to the advancement of its objectives and the principle that the PRA should exercise its functions as transparently as possible.

3

Having regard to those overarching statutory requirements, the PRA recognises the potential scope for, benefits of and public interest in an appropriate degree of transparency concerning regulatory action in relation to supervisory decisions which it takes, in terms of:

1. (a) reinforcing publicly the PRA’s statutory objectives and its policies;
2. (b) informing the financial services industry of behaviour on the part of firms or individuals which it considers to be unacceptable;
3. (c) deterring future and/or more widespread breaches of its regulatory requirements; and
4. (d) informing society as a whole of the action it is taking and the reasons for it.

4

The general position under section 391 of the Act is that neither the PRA nor the person to whom a Warning Notice is given or copied may publish the notice, or any details concerning it. However, in relation to certain categories of Warning Notice,^[21] section 391 of the Act does permit the PRA, after consulting the persons to whom a relevant Warning Notice is given or copied, to publish such information as it considers appropriate about the matter to which the notice relates.

5

The PRA will consider a number of factors in determining whether it is appropriate to exercise its discretion in favour of publication, including the extent to which publication would in its view be likely to:

1. (a) advance its statutory objectives;
2. (b) where applicable, enhance financial stability;
3. (c) provide a signal to firms as to the types of behaviour it considers to be unacceptable; and
4. (d) prevent more widespread breaches of its regulatory requirements.

6

In accordance with section 391 of the Act, the PRA will not publish information if, in its opinion, publication would be:

1. (a) unfair to the persons concerned;
2. (b) prejudicial to the safety and soundness of PRA-authorised persons; or
3. (c) prejudicial to securing the appropriate degree of protection for policyholders.

7

Section 391 of the Act also requires the PRA to publish – in such manner as it considers appropriate – information about the matters to which a Supervisory Notice,^[22] a Decision Notice, and a Final Notice relate.

8

However, section 391 of the Act provides that the PRA may not publish such information if, in its opinion, publication would be:

1. (a) unfair to the persons concerned;
2. (b) prejudicial to the safety and soundness of PRA-authorised persons; or
3. (c) prejudicial to securing the appropriate degree of protection for policyholders.

9

The PRA will consider the circumstances of each case, but, subject to paragraph 7 above, will ordinarily publish action in relation to supervisory decisions when this has led to the issue of a Decision Notice, as well as where it has led to the issue of a Final Notice.

10

Where the PRA proposes to publish details of a Warning, Decision, Final, or Supervisory Notice, it will consider any representations made to it (whether as a result of a formal requirement to consult under the Act, or otherwise) by the subject of the notice and any person to whom the notice is copied.

11

Such representations should normally be made in writing,^[23] and should contain detailed information – with reference to the test in section 391 of the Act – as to why it would not be appropriate for the PRA to publish details of the relevant notice.

12

The PRA will not normally decide against publication solely because it is claimed that:

1. (a) publication could have negative impact on a person’s reputation; or
2. (b) a person will apply (or is likely to apply) for some or all of the matter to be dealt with in private when they refer it to the Tribunal.

13

In relation to information concerning a Warning Notice published pursuant to the PRA’s power under section 391 of the Act, section 395(2) provides that the PRA’s decision making policies must be designed to ensure that the decision to publish that a Warning Notice has been issued is taken in accordance with a procedure which is, as far as possible, the same as that applicable to a decision which gives rise to an obligation to give a Warning Notice.

14

The Statement of the PRA's policy on statutory notices and the allocation of decision making under the Act provides that the decision to publish that a Warning Notice has been issued will be taken by the same committee as took the decision to issue the Warning Notice itself.^[24]

15

In relation to Decision Notices, Final Notices, and Supervisory Notices, any decision concerning publication will normally be taken by the same committee as took the decision to issue the notice itself.

16

In relation to information concerning a Warning Notice published pursuant to the PRA’s power under section 391 of the Act, the information placed in the public domain will normally include:

1. (a) sufficient details as to the identity of the firm concerned for it to be clear to whom the matter relates. This will include, but may not be limited to, the name of the firm or a firm reference number;
2. (b) a brief summary of the facts which the PRA is relying on as giving rise to the decision to take regulatory action against the firm concerned; and
3. (c) a statement making clear that the issue of a Warning Notice is not a final decision,^[25] and that if, following representations, the PRA decides to issue a Decision Notice, the subject of the notice has the option to refer the matter to the Tribunal to have the matter considered afresh.

17

In relation to Decision Notices, Final Notices, and Supervisory Notices, publication will generally include placing the relevant notice on the PRA’s website. The notice may be accompanied by a press release.

18

In relation to Final Notices and Supervisory Notices, the PRA will also consider what matters it should notify to the FCA for inclusion on the FCA’s public register.

19

Where it has published details of a Warning, Decision, Final, or Supervisory Notice, the PRA will, on request, review those notices and any related press releases that are published on its website to determine whether – at the time of the request – continued publication is appropriate, or whether they should be removed or amended.

20

In determining whether continued publication remains appropriate, the PRA will, in particular, take into account:

1. (a) whether it has continuing concerns in respect of the person and any risk they might pose to its statutory objectives;
2. (b) the seriousness of the person’s misconduct;
3. (c) the nature of the action taken by it;
4. (d) whether the person is a firm or an individual;
5. (e) the extent to which the publication continues adequately to set out its position and/or expectations regarding behaviour in a particular area;
6. (f) public interest in the case (both at the time of publication and subsequently);
7. (g) whether continued publication is necessary for the purposes of deterrence and/or advancing its statutory objectives;
8. (h) how much time has passed since publication; and
9. (i) any representations made by the person on the continuing impact on them of the publication.