Bank Of England And PRA Enforcement Lead Signals Sea Change As Early Candour And The EAS Gain Traction

Speaking at the 5th Conference on Financial Law and Regulation at the University of Leeds on 24 June 2026, David Chaplin, Head of Enforcement and Litigation for the Bank of England (Bank) and PRA, highlighted a significant shift in how regulatory enforcement investigations are being approached, both by the Bank/PRA and the firms involved. 

Chaplin described a sustained and growing departure from the traditional adversarial model in which investigation subjects typically adopted defensive postures, avoided admissions until late in the process, and treated enforcement as quasi-litigation to more occasions of earlier candour, proactive factual accounts and early admissions of regulatory breaches. He saw this change across a growing number of live PRA and Bank investigations, and connected it to the policy ‘signals’ sent to firms about the enforcement ‘architecture’, particularly the Early Account Scheme (EAS) introduced as part of the Bank's January 2024 enforcement policy update (further updated in November 2024).

The EAS

Under the EAS, which is available to both firms and individuals at the discretion of the Bank, subjects can produce a comprehensive, accurate and timely factual account (typically within six months) supported by relevant material and subject to active engagement, testing and challenge by the Bank or PRA. Where subjects make early admissions of relevant facts and rule breaches significantly in advance of any settlement proposal, and have ceased the conduct and completed remediation, they may qualify for an enhanced penalty discount of up to 50%. Chaplin was clear that ‘early admissions’ means genuine, substantive acceptance of facts and breaches that shapes the scope and direction of the investigation; they are not general expressions of regret or tactical concessions made once settlement parameters are already established. 

He noted the March 2026 enforcement action against UK Insurance Limited (a subsidiary of Direct Line Insurance Group, now owned by Aviva) as the first formal EAS case to be publicly resolved, describing it as a successful pilot in which the firm received the maximum available discount in recognition of its proactive, candid and thorough engagement. We wrote about this case at the time (see our article: Weighing up the PRA's Early Account Scheme: Insights from the first case concluded using the process). There are clear potential benefits of using the EAS in terms of the speed and efficiency of resolution and positive impact on the regulatory relationship, in addition to the headline 50% penalty discount. However, there are also risks to be considered and it is important for firms to assess the legal, strategic and commercial factors, which may be difficult at an early stage and where the factual matrix may not be fully understood.

Rethinking the adversarial approach

Chaplin also noted that all 21 firm cases in which the Bank or PRA has made findings of breach to date have been resolved by settlement. The reasons that firms tend to settle regulatory investigations (whether Bank, PRA or FCA) are well rehearsed, with the opportunity to move on and the discount from penalty available under the penalty frameworks in place even before the introduction of the EAS. 

There is a suggestion in the speech that these settlements may mean that the adversarial approach adopted in many investigations may be misplaced and unnecessary in many cases. However, there is a tension between this idea and the acknowledgement that not all investigations result in enforcement action and, further, that this will inevitably continue as the Bank and PRA approaches investigations with an open mind and without a pre-determined outcome. 

In our view, therefore, the key is for firms to be able to quickly assess which category they fall within. Are they in the situation where engagement with the regulator prior to the appointment of investigator, perhaps including supervisory interventions such as the requirement to appoint a skilled person under s. 166¹, means that they have the ‘realistic and shared understanding’ that a breach was likely to have occurred that Chaplin refers to? Or are they in a situation where they feel that the regulator’s concerns are misplaced and the matter can be resolved without an enforcement outcome? Or are they somewhere in between such that further work is necessary to form a view?

If the position is not clear, a firm may need to conduct internal work – at speed – in order to make this assessment. It is then in a position to make an informed assessment about the best way to engage enforcement, in the wider context of the matter including potential litigation risks and implications for the firm’s strategy, customers, staff, and other stakeholders, which may need to be managed in parallel with the regulatory process.

Conclusion

Overall, the willingness of the Bank and PRA to engage early and appropriately recognise and reward such engagement by firms is positive. However, the concepts of good faith and a robust process must work both ways. Not all cases are straightforward, either in relation to the facts or the right regulatory outcome. Such cases will need to be tested and there is a real difference in firms taking reasonable and appropriate steps to challenge points with which they legitimately disagree and the sort of unreasonably aggressive and obstructive ‘adversarial’ conduct which regulators will seek to discourage. 

Footnote

1 A similar dynamic applies to the FCA with the increasing use of s.166 reviews, as explored in our article, Beyond the headlines: FCA sets out its full-spectrum approach to fighting financial crime,pushing the Enforcement process into the Supervisory relationship, emphasising the importance of managing such interactions effectively, before regulators reach firm conclusions.

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