Dual-Regulated Firms

Question 1

Explain the roles and responsibilities of the FCA and the PRA with regards to
dual-regulated firms

Answer 1

1. FCA and the PRA share a single administrative process for dual-regulated firms.
2. Firms that are dual-regulated apply to the PRA, unless directed otherwise.
3. Applications are considered by both the FCA and the PRA

Question 2

Applications from dual-regulated firms are considered by both the FCA and the PRA and follow one of the two processes.

What are these processes?

PROCESS 1

Answer 2

1. CONSENT

When a firm applies to the PRA for authorisation or voluntary changes of permission or approved persons (someone with significant responsibilities):

A. FCA can give OR refuse consent to the PRA.

B. If FCA does not give consent - PRA must refuse the application

C. FCA’s focus on the authorisation process is on the issues that have conduct implications. PRA focuses on the financial soundness of the firm.

Both regulators MUST AGREE before an application is authorised

Question 3

Applications from dual-regulated firms are considered by both the FCA and the PRA and follow one of the two processes.

What are these processes?

PROCESS 2

Answer 3

2. CONSULT

When a firm applies for a change in control (important to the FCA’s objectives), transfer of insurance business or cancellation of permission:

A. PRA must consult the FCA.

B. The PRA must consider the response of the FCA but is not bound by it.

Question 4

In relation to enforcement/ before taking action against dual-regulated firms:

What is some of the criteria around this?

Answer 4

1. FCA consults with the PRA.
2. If the issue is relevant to both regulators, they decide whether it is best to pursue a joint investigation or for one body to act on its own.
3. Sometimes, there may be two separate investigations but, coordinated together.