Enforcement Decision Making Committee Report 2024/25

Foreword

This is the sixth report of the Enforcement Decision Making Committee (EDMC) of the Bank of England (the Bank), covering the period of 1 March 2024 to 28 February 2025. Earlier reports are available on the Bank’s website. The EDMC works to strengthen the Bank’s enforcement processes by ensuring a functional separation in contested enforcement cases between investigation teams and executive on the one hand, and decision-makers on the other. The essence of the system is that decisions are taken by the EDMC independently.

The procedures of the EDMC were updated in November 2024 mainly to expand the EDMC’s remit following the Financial Services and Markets Act 2023 (FSMA 2023). The process is designed to operate fairly and transparently, providing for disclosure of relevant material to the subject of an investigation, and allowing for written and oral representations by both the subject and the Enforcement & Litigation Division of the Bank. It is the final stage of administrative decision-making by the Bank in contested enforcement cases. Beyond this, the subject has the right to refer the matter to the Upper Tribunal (which is part of the UK Court system), which considers the matter afresh.

The Bank (including in its capacity as the Prudential Regulation Authority (PRA)) regulates fewer firms and fewer authorised individuals than the Financial Conduct Authority (FCA). The Bank, therefore, undertakes far fewer enforcement investigations than the FCA, which is the conduct regulator. Consequently, the number of contested cases dealt with by the EDMC is considerably fewer than those dealt with by the Regulatory Decisions Committee of the FCA. There were a number of cases ongoing at the time of this report.

As noted in previous annual reports, there is an established process by which the EDMC, through the secretariat, conducts a review of settled cases to assess the ongoing fairness and effectives of the PRA’s settlement process. The parties and their legal representatives who have participated in settlement discussions are invited to comment should they wish to do so. Such a review has now taken place in respect of three settled cases. Following the review, the EDMC is not proposing any recommendations.

As explained in the body of the report, three new members were appointed in June 2024.

An essential part of our functioning is the administrative support given by the secretariat, and the legal support given by the independent legal adviser appointed from within the Bank’s Legal Directorate. While the number of contested cases is unpredictable, and in future the number will likely remain relatively low, individual cases can involve a considerable workload for those involved. The resourcing which has been made available to the Committee is currently sufficient in this regard.

Sir William Blair

Chair, Enforcement Decision Making Committee

1: Overview

1.1 The EDMC is a committee of the Bank. It was established by the Bank’s Court of Directors (Court) in August 2018 to help the Bank discharge its responsibilities and strengthen its enforcement processes by ensuring a functional separation between the Bank’s investigation teams and the Bank’s decision-makers in contested enforcement cases.^{footnote [1]}

1.2 The EDMC acts within the statutory regimes operated by the Bank for: (a) prudential regulation; (b) financial market infrastructure (FMI); (c) resolution; (d) securitisation; (e) wholesale cash distribution and; (f) critical third parties. The EDMC also acts in Scottish and Northern Ireland (S&NI) Banknote Regime enforcement cases, pursuant to the relevant policy.

1.3 The EDMC’s published procedures require it to submit an annual statement to Court, with a copy also provided to the Prudential Regulation Committee (PRC). Subject to applicable disclosure restrictions, it will subsequently be published, to report on at least the following:

• how often the Committee has met and which members have sat in which matters;
• resourcing, recruitment, and profile;
• costs incurred;
• number of matters brought to it from the PRA, FMI, and Resolution, and in respect of the S&NI banknote regime, respectively;
• number of statutory notices respectively dealt with;
• whether the EDMC’s decisions have been subject to subsequent successful challenge;
• situations where a member was unable to hear a matter because of an actual or perceived conflict;
• any other matters which Court considers relevant to the operation of the Committee and of which it informs the EDMC Chair; and
• any other matters which the Committee feels it needs to bring to Court's attention.

1.4 This document sets out the report for the period from 1 March 2024 to 28 February 2025. The Annex deals specifically with each item listed in paragraph 1.3.

2: Membership

2.1 EDMC members are appointed for a fixed five-year period, renewable once. The EDMC currently comprises nine members, with legally qualified members appointed as Chair and Deputy Chair, in line with its procedures. Six members’ second terms were extended in 2024 to align with the five-year terms (introduced in January 2024), which means their terms will now end in 2026. Three members were recruited in June 2024 and are currently serving their first terms which will end in June 2029. The recruitment of these members will help to preserve the continuity of experience and expertise on the Committee by ensuring that not all of the members’ terms expire at the same time. It is not currently envisaged that generally there should be more than six members going forward but that will depend on the workload of the Committee.

2.2 The current members of the EDMC are:

• Sir William Blair (Chair)
• Dr Philip Marsden (Deputy Chair)
• Baroness Kishwer Falkner
• Anne Heal
• Mark Hoban
• Harry Matovu KC
• Dame Clare Moulder
• Edward Sparrow
• Pauline Wallace

3: Cases

3.1 The EDMC Chair convenes panels of at least three members to hear cases. Panels are supported by a secretariat function to provide administrative support, and legal advisers from (or appointed by) the Bank’s Legal Directorate. The legal advisers are independent from the Bank’s investigation teams.

3.2 There have been no concluded cases during the period covered by this report. However, as at the end of the report period, the EDMC was considering a number of contested cases.

3.3 The EDMC Procedures further set out how the EDMC takes decisions.

4: Upper Tribunal proceedings

4.1 The subject of a decision by the EDMC has the right to refer the case to the Upper Tribunal (which is part of the UK Court system). These proceedings are not a matter for the EDMC; the relevant team within the Bank deals with such matters. The Upper Tribunal considers the matter afresh; in other words, it reaches its own determination on the matter and may hear such evidence as it sees fit in order to do so.

4.2 In the reporting period, there have been no decision notices referred to the Upper Tribunal.

5: General matters

Non-case specific meetings

5.1 In addition to the EDMC’s work on specific cases, it has quarterly meetings to discuss matters of broader interest to the work it carries out. These matters have included relevant regulatory frameworks, engagement with the Bank’s Legal Directorate, and administrative matters. Further such meetings are scheduled during 2025.

Conflicts of interest

5.2 Members are required to declare actual or potential conflicts of interest prior to appointment, and any that arise after appointment. These are declared to the EDMC Chair and the Bank’s Conflicts Officer, who then take any appropriate action necessary to manage such actual and/or potential conflicts. During the period covered by this report, no situation has arisen where a member has been unable to hear a matter because of a conflict.

Other matters

5.3 In March 2024 the Bank consulted on its approach to enforcement in conjunction with the powers bestowed under FSMA 2023. The remit of the EDMC expanded to account for these powers and, consequently, the EDMC Procedures were updated in November 2024. The amendments included updating the table of regulatory enforcement statutory decisions within the remit of the EDMC and moving this to the Bank of England’s approach to enforcement: statement of policy and procedures, with links included in the EDMC Procedures.

6: Review of the enforcement settlement process

6.1 As set out in the Bank’s approach to enforcement: statutory statements of policy and procedure the EDMC has responsibility for conducting periodic reviews of settled enforcement cases, to assess the ongoing fairness and effectiveness of the PRA’s settlement processes. As part of these reviews, the EDMC seeks comments from subjects who have settled PRA enforcement cases, relevant enforcement staff, and relevant PRA decision-makers involved in settlement. The outcome of each review is reported to the PRC and a summary of the review is (if appropriate) included in the next EDMC annual report.

6.2 During the 2024/25 reporting period, the EDMC reviewed feedback on three settled cases. Overall, the feedback did not raise any material issues and the EDMC did not make any recommendations to the PRC. There were positive reports regarding the efficiency and fairness of the settlement processes, which have been passed on to the relevant enforcement teams and to the PRC.

7: Looking forward – the next 12 months

7.1 The EDMC will continue work on the ongoing cases currently under consideration. Following the publication of the updated EDMC Procedures in November 2024, the EDMC continues to monitor the impact of the expanded remit of the EDMC for contested enforcement cases.

7.2 As six of the current EDMC members terms expire in 2026, recruitment of new members will be considered over the coming period to ensure the committee is fully resourced.

Annex: Report summary

As noted, the procedures document lists points on which the EDMC must report. These are set out in the table below.