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<p>The Government has legislated to ensure that the Prudential Regulation Authority
(PRA) and Financial Conduct Authority (FCA), are fully empowered to maintain the integrity
of the ring-fence, and to take action in preventing this type of misconduct.</p><br
/><p>The ring fencing regime includes requirements that directors of the ring-fenced
body (RFB) be able to take decisions independently of group entities; that transactions
with group entities be on arm’s length terms; and that arrangements with other group
entities should be managed as with third parties.</p><br /><p>The PRA and the Bank
of England have powers to take action if such a transaction were to have a potential
impact on the prudential resilience or resolvability of the RFB. The FCA can also
take enforcement action for breaches of its rules or for these types of market abuse,
which includes the imposition of substantial financial penalties.</p>
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