On 19 June 2014 the PRA published a Statement of Policy on how it would make use of its new powers under s.165A FSMA 2000 to require persons to provide specified information or documents relevant to the stability of the UK financial system.
Who can be required to provide information or documents?
The power may be used to impose such an information requirement on:
- persons with legal or beneficial interest in a relevant investment fund whose assets include financial instruments traded in the UK or issued by a UK-incorporated body;
- persons responsible for the management of a relevant investment fund;
- persons providing any service or facility to an authorised person;
- persons prescribed by Treasury order; or
- persons connected with any of the above.
A requirement can be imposed on either an authorised or unauthorised person.
How will the PRA decide when to use this power?
The PRA will use s.165A in order to obtain information that it cannot otherwise get from regular reporting by authorised persons, other UK or international authorities, or by the use of its other information gathering powers.
Information and documents may be obtained under s.165A for the purposes of disclosing them to the Bank of England, Financial Policy Committee, or Treasury.
Written notice and representations
Except in urgent cases (see below), the PRA will give a person notice in writing of its intention to impose an information requirement upon them. The notice will include the reasons why the PRA plans to do so, and will also provide a period in which the person can make representations to the regulator. (These will usually be required in writing, but the PRA will consider requests to make oral representations.)
How the PRA will decide on using this power
Once the period for making representations has expired (see above), the PRA will determine “within a reasonable period” whether to impose an information requirement, considering:
- the material it already has before it;
- any representations received;
- the nature and extent of the risks to financial stability;
- whether the same information might be more readily obtained from another source (bearing in mind the cost and time involved); and
- whether the information will help the PRA fulfil its functions, e.g. the exercise of its statutory powers.
Where the PRA decides to impose an information requirement, the person concerned must provide or produce the information or documents required within a “reasonable” period specified by the PRA. The PRA can also require that the information should be provided in a particular form, and also if it is to be verified or authenticated.
In a matter of urgency, the PRA may dispense with the step of hearing representations, and impose an information requirement without prior notice. (However, the PRA notes that any person receiving a without-notice information requirement “should raise any proposal to make representations with the PRA as soon as possible”.)
In determining whether a matter is urgent, the PRA will consider:
- the nature of the risk, and whether it is increasing rapidly;
- the extent of the risk;
- fairness; and
- whether the information could lead to prompt action by the regulator.