The PRA published its 2020-21 annual report last week along with its latest enforcement and Skilled Persons statistics.  And it's fair to say that PRA investigators have had a slow year.

First, the PRA's enforcement caseload shrank for the first time in four years.

Secondly, what about 2019-20's beginnings of healthy diversity in the types of PRA enforcement outcomes (e.g. prohibitions and censures alongside fines and voluntary undertakings)?  Largely gone - there were only two VREQs and one fine in 2020-21.

Thirdly, this isn't just a matter of the PRA closing more investigations earlier (à la the FCA's aspiration).  The PRA is actually opening substantially fewer cases to start with.  In fact, in 2020-21 it opened only one investigation and that was into a firm.  

Individuals? Off the boil.

So, in 2020-21 the PRA commenced no new investigations into individuals.  This is a striking difference from the six new investigations into individuals opened in each of 2018-19 and 2019-20.  

Perhaps that's consistent with the PRA's messaging about the SMCR in its annual report: it touts the SMCR solely as a tool to improve individual accountability internally within firms.  

This diverges from the FCA's messaging about the SMCR as, among other things, implementing individual regulatory liability in an effort to ramp up deterrence.

Skilled Persons put on standby.

The PRA wasn't even "outsourcing" its investigatory work.  The number - and cost - of PRA Skilled Person appointments declined significantly year-on-year.  

Much of this decline is explained by the PRA's decision to pause Skilled Person reviews - and commission no new reviews for the time being - into regulatory reporting following an October 2019 Dear CEO letter on regulatory returns.  

Even adjusting for this, however, the number of new Skilled Person appointments is down 18% year-on-year.  This is in stark contrast to the FCA which substantially increased the number of its Skilled Person appointments in 2020-21.

What's next?

The burning questions are: why?  And will this continue?

Perhaps PRA faced headwinds in the form of resource constraints due to remote working.

Perhaps it deliberately decided not to encumber firms and senior individuals with investigations at a time when their businesses may be under operational and financial stress.

But the industry shouldn't get complacent.  The PRA's existing case portfolio already spans various strategic priorities including operational resilience and outsourcing, prudential management and risk controls and regulatory reporting.  None of these risk areas are going away, and new risk areas may now be materialising especially as Covid-19 economic support is tapered.

So get ready now.  PRA investigators will inexorably return to life.  Even if we need to wait until more people return to the office.  And maybe for the end of the summer.