On March 28, 2024, the Bank of England published a consultation paper on revisions to its Statement of Policy and Procedure on its approach to enforcement, published in January 2024, to reflect enhancements to the BoE's enforcement powers granted under the Financial Services and Markets Act 2023. The CP proposes that the SoP should describe:

• the PRA's approach to enforcement under the Securitisation Regulations 2024 against originators, sponsors or securitization special purpose entities who are not authorized by the PRA as well as individuals, including the PRA’s proposed method for calculating financial penalties;
• the BoE's approach to enforcement powers under the Banking Act 2009 against recognized payment systems that use digital settlement assets, recognized DSA service providers and specified service providers to those entities. This extends to these entities certain of the enforcement policies set out under the BoE's January 2024 SoP for financial market infrastructures, which include recognized clearing houses, recognized central securities depositories and third country central counterparties (although the latest consultation makes no changes to the policies that already apply to CCPs and CSDs);
• the BoE's approach to enforcement in connection with wholesale cash distribution under the Banking Act 2009, which applies to entities recognized by HM Treasury as having market significance in relation to wholesale cash distribution and other entities specified by HM Treasury (although no such entities have yet been recognized or specified); and
• the BoE and PRA's approach to enforcement against critical third parties under the Financial Services and Markets Act 2000 (as amended by FSMA 2023). The FCA has separately published a consultation on its own enforcement policy for CTPs. We discuss the new U.K. CTP regime in our client note, “The U.K.’s New Regime for Critical Third Party Supervision”. The BoE, PRA and FCA recently consulted jointly on proposed rules and regulatory expectations for CTPs.

Responses to the consultation should be submitted by June 28, 2024.

The FCA is separately consulting on the replacement of its own Enforcement Guide, with plans to make a range of different changes to its approach, including publicizing its investigation of firms at an earlier stage.

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