What the Research Tells Us: The PRA and FCA

The PRA is not very active in enforcement. In calendar year 2016 it concluded only three cases (and only two in 2015) with a total of £4,248,016 in fines. Nevertheless, cases against individuals show its commitment to ensuring banks have effective risk management cultures and strong controls.

Whatever happens to the level of penalties, however, the adoption of Focused Resolution Agreements is likely to result in more cases this year. The agreements will allow subjects of investigation to agree with some aspects of the case, but disagree on others, while still retaining a proportion of the 30% settlement discount they get on penalties for reaching agreement early in cases. Whether the FCA has the human resources to handle any significant rise in cases remains to be seen.

The Global Enforcement Review (GER) provides analysis and commentary on global enforcement trends in the financial services industry. To compile this report, we studied published data released by the UK Financial Conduct Authority (FCA), the U.S. Securities and Exchange Commission (SEC), the U.S. Commodity Futures Trading Commission (CFTC), the U.S. Financial Industry Regulatory Authority (FINRA), and the Securities and Futures Commission (SFC) of Hong Kong in 2016 and recent years. We have also explored the enforcement trends in various offshore jurisdictions.