Bank of England to offer 50% early settlement discount in enforcement overhaul

The Bank of England and the Prudential Regulation Authority (PRA) have published a new consultation paper setting out proposed changes to their enforcement policies.

The changes would introduce options for speedier investigatory outcomes, including through the creation of a new route for early cooperation for subjects of an investigation and enhanced settlement discount of up to 50% for early admissions.

The Bank says the proposed changes would "provide a route for early cooperation in appropriate cases, enabling investigative outcomes to be reached more efficiently and quickly and engaging increased senior manager accountability in relation to such cooperation".

The paper also sets out proposed changes to the PRA’s policies and procedures for making supervisory and other statutory notice decisions, and to the Bank’s Enforcement Decision Making Committee’s (EDMC) procedures.

The changes also aim to set out the scope of its enforcement powers more clearly, including in relation to individuals. The proposals change how financial penalties are calculated for PRA-regulated firms and change the serious financial hardship thresholds, which have not been updated since 2013, for individuals.

The consultation will close on 4th August 2023. The Bank will also be holding a series of in-person roundtable discussions on the proposals, providing an additional opportunity for external stakeholders to engage and provide feedback on the proposed changes.

Sam Woods, deputy governor for prudential regulation and CEO of the PRA, said: “Since the PRA was established 10 years ago, we have delivered 25 enforcement outcomes against firms and individuals. This experience has allowed us to review the Bank’s enforcement policies to ensure they are clear and enable efficient, effective enforcement outcomes aligned with our statutory objectives.

"The changes we are consulting on include the creation of options for quicker investigatory outcomes, by providing a new route for early cooperation and increased incentives for earlier admissions by subjects”.