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Financial Services Law Insights and Observations

UK’s Prudential Regulation Authority imposes its second highest fine against a bank

Bank Regulatory Of Interest to Non-US Persons UK PRA Enforcement Deposits

On January 30, UK’s Prudential Regulation Authority (PRA) fined a large bank £57,417,500, the second highest fine ever imposed by the PRA, for allegedly failing to properly implement Depositor Protection Rule requirements. The bank allegedly exhibited shortcomings in depositor protection like maintaining information integrity, which is relied upon by the Financial Services Compensation Scheme (FSCS) to make payments to depositors in the event of a firm failure. In addition, the PRA alleged that the bank did not identify eligible deposits for FSCS protection from 2015 to 2022. The bank also allegedly failed to notify the PRA of inaccuracies in its account of eligible FSCS-protected accounts in a timely manner or to appoint a senior manager responsible for ensuring compliance with Depositor Protection Rules. The bank agreed to settle this matter at an early stage of the PRA’s investigation.