The Treasury has launched a review of the FCA and PRA’s enforcement processes and decision making.
The review will report to Chancellor George Osborne in the autumn and will look at whether current processes support the fair and effective use of enforcement powers by the regulators.
Osborne says: “The Government has taken action to provide a welcoming business environment for those in the financial services industry who play by the rules whilst ensuring that those intent on breaking them are held to account.
“I am committed to ensuring the financial services regulators pursue a model of enforcement that delivers the appropriate balance of fairness, transparency, speed and efficiency.”
The Treasury has published a call for evidence today and will host roundtable discussions with interested parties next month.
Treasury select committee chair Andrew Tyrie says the review is a step in the right direction.
He says: “This review can pave the way for implementing an important recommendation of the Banking Commission: providing greater autonomy for the FCA’s Regulatory Decisions Committee in taking enforcement decisions.”
He adds: “Those who conduct an enforcement investigation should be, and be seen to be, independent from those who reach a verdict.
“It is crucial that regulators strike the right balance between supervisory and disciplinary powers. Enforcement should usually be the last resort, not the first.”