BoE updates enforcement approach

BoE has published its final policy and feedback to its consultation on its approach to enforcement. We covered the consultation here.

The changes (including changes from the original consultation that BoE has made in response to comments):

  • bring together existing enforcement policies and procedures into one document – the Bank Enforcement Approach (BEA), which incorporates changes to the PRA Enforcement Approach and FMI Enforcement Approach;
  • clarify the applicability of the Early Account Scheme within the PRA enforcement toolkit (under which firms can apply to cooperate early in an investigation) and Enhanced Settlement Discount, including timing for the EAS and information sharing. Firms can choose whether to apply to use the EAS, although it will not be available for criminal investigations and BoE does not expect it will be practical for all but specific investigations under s168 FSMA;
  • clarify the scope of the senior manager attestation required to supplement any Early Account provided by a firm or FMI. Respondents had queried whether this was necessary and raised concerns on the potential liability of the senior manager making the attestation;
  • amend the Step 2 starting point matrix (provides the starting point for the calculation of fines in respect of PRA authorised firms) to move to a starting point matrix, based on the firm categorisation and the severity of the breach;
  • update the serious financial hardship thresholds for individuals (now they reference the appropriate Office for National Statistics metrics);
  • amend and clarify Annex 2, Chapter 6 of the Bank Enforcement Approach regarding the availability of the EAS in FMI investigations; and
  • correct unintended deletions and typographical errors within the statements of policy.

The statement of policy generally take effect on Tuesday 30 January 2024.

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