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6 Contributions by Serjeants' Inn Experts
![Bank of England PRA enforcement settlements pre-30 January 2024: procedure, 30% discount stage, DMC approvals, and policy history [Archived]](images/default-source/pa-pool/10.tmb-small.jpg)
PRACTICE NOTES
ARCHIVED:
In light of the January 2024 revision to the Statement of policy—The Bank of England’s approach to enforcement: statements of policy and procedure, which encompasses the PRA’s Settlement Policy, this Practice Note is now archived and no longer updated.
It continues to apply to enforcement matters arising from conduct before 30 January 2024.
If a breach (for example, misconduct, contravention or failure) starts prior to 30 January 2024—the date the revised policy takes effect—and persists beyond it, two regimes will govern.
For the PRA’s updated Settlement Policy, see Practice Note: PRA enforcement essentials—settlement.
This Practice Note explains the settlement process for enforcement actions by the Prudential Regulation Authority (PRA) in relation to breaches before 30 January 2024, and draws on the policies and procedures in: Statement of Policy—The Prudential Regulation Authority's approach to enforcement: statutory statements of policy and procedure.
A table at the end of this
Financial Services
PRACTICE NOTES
This Practice Note summarises the statutory provisions that prescribe the requirement to be authorised to provide financial services in the UK. The regulators may take action against persons and businesses that operate without the proper authorisations. It introduces and explains the general prohibition in section 19 of the Financial Services and Markets Act 2000 (FSMA 2000), highlights the various exemptions, and notes the related criminal offences under FSMA 2000, ss 23–25.
The general prohibition under FSMA 2000
Consistent with section 19 of FSMA 2000, a person must not carry on a regulated activity in the UK, nor hold themselves out as doing so, unless they are either:
authorised (by the Prudential Regulation Authority (PRA) or Financial Conduct Authority (FCA)), or
exempt
The inclusion of the phrase ‘or purport to do so’ means the general prohibition is breached even where no regulated activity is
Financial Services
PRACTICE NOTES
The Financial Conduct Authority (FCA), the Bank of England (BoE) — which includes the Prudential Regulation Authority (PRA) — (together, the regulators) can take steps against individuals and companies that carry on activities without proper authorisations. This Practice Note outlines the regulators’ approach to enforcement in respect of unauthorised business matters.
The general prohibition
The general prohibition lies at the core of the UK regulatory regime. In essence, any person providing financial services must hold the requisite authorisations and permissions to act lawfully. Since 2013, with the introduction of a UK regulatory structure covering the Bank of England (e.g. for recognised clearing houses), the PRA (which forms part of the BoE), and the FCA, firms are expected to consider whether authorisation is needed from multiple bodies. In theory, there remains substantial scope for firms to breach the requirement to be authorised
Financial Services
PRACTICE NOTES
The general prohibition under FSMA 2000
The general prohibition sits at the centre of the UK regulatory framework, anchoring the regime. In essence, anyone delivering financial services must hold the appropriate authorisations and permissions to conduct business lawfully, before continuing such activities. Under the UK financial services regime, firms must assess whether approval is required from various authorities and recognise the notion of PRA-regulated activity as part of that assessment. In principle, this creates wider room for firms to inadvertently breach the need to be authorised and to lack the requisite Part 4A permissions in place. In practice, though, a large share of enforcement targets firms and individuals who likely never intended to seek authorisation, eg boiler rooms, share scams, deposit frauds, and ponzi schemes (all variants of fraud in different forms). For further details, see What are regulated
Financial Services
PRACTICE NOTES
The Bribery Act 2010 (BA 2010) criminalises:
offering or giving a bribe to another person (active bribery)
requesting, agreeing to receive, or accepting a bribe (passive bribery)
bribing a foreign public official
for a business or commercial organisation only, failing to prevent bribery
The purpose of this Practice Note is to present a general overview of the active and passive bribery offences in BA 2010, ss 1 and 2, together with the offence of bribing a foreign public official under BA 2010, s 6; in essence, the giving or receiving of bribes. It does not include a synopsis of the corporate offence of failing to prevent bribery, which is dealt with in Practice Note: Failure to prevent bribery—the offence. This Practice Note should be considered alongside Practice Note: The Bribery Act 2010—an introductory guide. BA 2010 came into force on 1 July 2011. Conduct occurring prior to
Corporate Crime
PRACTICE NOTES
The Bribery Act 2010 (BA 2010)
Enacted to secure the UK’s adherence to the Organisation for Economic Co-operation and Development’s (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, the Bribery Act 2010 (BA 2010) delivers an effective framework to address corruption across public and private spheres, updating the UK’s anti-corruption regime and supplanting Prevention of Corruption Act 1906 and Prevention of Corruption Act 1916. BA 2010 carries significant consequences for any company incorporated in, or trading from, the UK. Its global reach covers bribery undertaken by a business, or by third parties acting for it, regardless of where in the world the conduct occurs...
Corporate Crime
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