Bank of England PRA Publishes Updated Enforcement Approach Under PS1/24, Introducing Early Account Scheme

The Bank of England published its updated approach to enforcement, covering the Prudential Regulation Authority, on 30 January 2024, releasing Policy Statement PS1/24, which introduces a new Early Account Scheme designed to accelerate the resolution of enforcement cases by rewarding firms that engage cooperatively at an early stage of regulatory proceedings. The publication revises the framework governing how the PRA handles suspected rule breaches across its full supervisory remit, covering the banks, building societies and insurers that the PRA regulates, as well as Bank-regulated financial market infrastructures.

EARLY ACCOUNT SCHEME

The Early Account Scheme provides a formal mechanism through which firms can engage with the PRA at an early stage of an investigation, cooperate with the regulator's enquiries, and make admissions of fact or liability in exchange for defined incentives. The scheme is designed to reward genuine cooperation that advances the investigative process, not mere non-obstruction, and the scheme is intended to reward early and full engagement.

PENALTY METHODOLOGY

Alongside the Early Account Scheme, PS1/24 updates the financial penalty calculation methodology to bring it into closer alignment with the PRA's overall supervisory approach and the principles that guide its assessment of firm conduct. The revised methodology reflects how the PRA weighs factors including the nature and duration of a breach, the degree to which a firm's conduct displayed awareness of or disregard for regulatory requirements, and the importance of ensuring penalties are proportionate but sufficiently dissuasive to modify behaviour across the regulated population.