The Prudential Regulation Authority (PRA) - Coggle Diagram
The Prudential Regulation Authority (PRA)
Subsidiary of the Bank of England
2013 became responsible for the prudential regulation and supervision of
major investment firms
Two statutory objectives
A general objective to promote the safety and soundness of regulated firms. To meet this objective the PRA seeks to:
a. Minimise any adverse effects of firm failure on the UK financial system.
b. Ensure that firms carry on their business in a way that avoids adverse effects on the system
When dealing with insurers, the PRA has an additional ‘insurance objective’: contributing to achieving an appropriate degree of protection for existing or future policyholders.
Created by the Financial Services Act (2012). Has operational independence for regulation and supervision of PRA-authorised firms.
Works closely with other parts of the Bank of England including the Financial Policy Committee and the Special Resolution Unit on regulatory matters.
Financial Policy Committee
primary objective of identifying, monitoring and act to remove or reduce systemic risks with a view to protecting and enhancing the resilience of the UK financial system
Official committee of the Bank of England focused on the macro-economic and financial issues that may threaten the UK’s long- term growth prospects
secondary objective to support the economic policy of the Government
PRA has published a handbook adopting relevant parts of the old FSA handbook and rules making changes only when necessary to implement the new regulatory structure. The handbook is split into the following blocks:
Glossary – Terms used in the handbook,
· High level standards – The standards applying to all firms and approved persons,
· Prudential standards – Sets out the prudential requirements for firms,
· Business standards – Detailed requirements relating to firms’ day-to-day business,
· Regulatory processes – The manuals describing the operation of the FCA’s authorisation, supervisory and disciplinary functions,
· Redress – The processes for handling complaints and compensation,
· Specialist sourcebooks – Requirements applying to individual business sectors,
· Regulatory guides – These are guides to regulatory topics.