The PRA and FCA
Liaison between the PRA and FCA
Clearly the PRA and FCA cooperate closely. The fact that the FCA is the conduct regulator for PRA-authorised firms and the conduct and the prudential regulator for many other smaller UK firms is suggestive of potential overlaps – and perhaps conflicts – between the regulatory activities of the two organisations. To address these potential operational problems, a Memorandum of Understanding between the two authorities has been drawn up. This addresses the need for, and the process of, coordination between the PRA and FCA while recognising their separate, independent mandates and statutory objectives.
Regulation of pensions
The PRA and FCA’s responsibilities do not extend to the regulation of work-based pension schemes. The responsibility for these was passed from the Occupational Pensions Regulatory Authority to the Pensions Regulator in 2005 following the enactment of the Pensions Act 2004.
The Pensions Regulator has three statutory objectives (Pensions Regulator, 2013):
- protecting the benefits of members of work-based pension schemes
- reducing the risk of situations arising that may lead to compensation being payable under the Pension Protection Fund
- promoting, and improving understanding of, the good administration of work-based pension schemes.