PRA fines HDI Global SE £4,165,000 for inaccurate reporting of FSCS Liabilities and FSCS Fee Tariff data

What Changed

• - The PRA has explicitly reinforced that FSCS Liabilities and FSCS Fee Tariff data are core prudential reporting metrics, and misreporting them may both impede risk assessment and cause underpayment of FSCS levies.
• The enforcement action clarifies that failures to consult the PRA Rulebook and applicable guidance on FSCS coverage and fee tariff methodologies constitute a breach of Fundamental Rule 2 (due skill, care and diligence).
• The PRA has signalled that the absence of effective written processes for calculating regulatory data, and lack of clear accountability, internal oversight, and challenge over those calculations, amounts to a breach of Fundamental Rule 6 (responsible
• The case demonstrates that remediation submissions are subject to the same accuracy and governance expectations as original returns, and that errors in purported remediation will be treated as aggravating factors.
• The PRA’s Early Account Scheme (EAS), formally incorporated into its enforcement policy in January 2024, is now clearly positioned as a mechanism that can materially reduce penalties where firms provide a detailed and thorough factual account and ful
• The PRA has shown that cooperation and early resolution can secure a 30% reduction in financial penalties, setting a benchmark for the benefit of prompt settlement in similar data-reporting and governance breaches.

Suggested Considerations

• Review and map all FSCS Liabilities and FSCS Fee Tariff reporting obligations under the PRA Rulebook and applicable guidance, ensuring the firm’s methodology aligns with regulatory definitions of FSCS-covered liabilities.
• Conduct a detailed end-to-end review of regulatory reporting processes for FSCS data, including data sourcing, calculations, validations, and submission workflows, to identify and remediate control weaknesses.
• Develop and document formal, robust written procedures that govern the calculation and validation of FSCS Liabilities and FSCS Fee Tariff data, including change-control processes for methodologies.
• Assign clear ownership and accountability for FSCS-related reporting within the firm’s governance framework, ensuring named individuals or functions are responsible for accuracy, completeness, and timely submission.
• Strengthen internal oversight, challenge and review mechanisms over prudential and FSCS-related reporting, including regular independent checks by risk, compliance or internal audit.
• Verify that any previous remediation submissions to the PRA or other regulators have been subject to the same level of control and assurance as original regulatory returns, and correct and disclose any deficiencies identified.

Key Dates

Who is Affected