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| 5 minutes read

The PRA’s New Early Account Scheme comes into force. What is it and what does it mean for firms?

Earlier this week, the PRA finalised a significant overhaul of its enforcement approach. In its first policy statement of 2024, it published:

  • Feedback on responses to changes it proposed in CP9/23 (see further here);
  • The Bank of England’s new approach to enforcement: statements of policy and procedures document;
  • The PRA Supervisory Decision-Making Policy; and
  • Amendments to the Enforcement Decision Making Committee (EDMC) Procedures.

Tucked away in that first document is the final terms of the PRA’s new Early Account Scheme (“EAS”), a formal scheme which should offer participants a predictable means of securing co-operation credit, aimed at fostering efficient, early resolution of investigations. 

This represents the PRA’s first significant divergence from the FCA’s enforcement approach. Although the FCA has long suggested that ‘exemplary’ engagement during the investigation process might justify a significant reduction in any eventual penalty, firms currently have no means of knowing in advance what behaviour will precipitate a reduction – the prospect of substantial co-operation credit remains substantially at the ex post facto discretion of the FCA. The EAS offers the prospect of greater predictability here and has generally been welcomed by stakeholders. 

What is the EAS?

The EAS offers parties subject to an investigation the opportunity to secure a significant discount on any eventual penalty in exchange for conducting, and sharing the results of, a time-limited internal investigation. An investigation subject must voluntarily apply to participate. If the PRA accepts the request, the subject must provide a detailed factual account of the matters under investigation, (the “Account”), along with evidence within six months of the date of the agreement. If the subject of the investigation is a firm, the Account must be supported by a senior manager attestation.  Given the focus on increasing the speed with which investigations are concluded, the PRA will only allow firms more than six months to complete their Account in exceptional circumstances. In practice, this may limit the application of the EAS to more self-contained, less complex cases.

As an incentive, those participating in the EAS will be able to claim an enhanced settlement discount of a figure higher than 30% (the general discount available for early settlement) up to a maximum of 50%. This significant discount rewards entities for fully co-operating and admitting any regulatory breaches early, which should result in swifter resolution of investigations.

The EAS is a voluntary scheme – adverse inferences will not be drawn if a party opts not to use it.

Requests to participate

Firms looking to use the EAS need to make a formal written request to participate in the Scheme within 28 days of the Notice of the Appointment of Investigators. The PRA will then consider this at the same time it outlines the scope and matters under investigation to the firm. Several respondents suggested that firms would need more time to weigh up the benefits of the scheme relative to their particular situation, however the PRA remains of the view that 28 days is sufficient. It has conceded that extensions will be available in exceptional circumstances.

The PRA has suggested that the EAS might be more appropriate (and therefore more likely to be available) in the case of specific investigations initiated under s.168 of the Financial Services and Markets Act, given the more focused and pointed nature of these investigations compared to those initiated under s.167. The EAS will not be available in cases where criminal conduct is suspected or where breaches of PRA Fundamental Rule (“FR”) 1 (integrity) or FR 7 (co-operation) are alleged. The PRA may defer a decision on the use of the EAS until it has taken further investigatory steps - this may be particularly relevant in multi-party investigations (see further below).

Should the PRA notify the firm that it is happy to proceed with the use of the EAS, they will then invite the firm to discuss the scope of the Account, plans for regular updates about progress, the involvement of third-party advisors and the approach to interviews. Importantly, where a firm indicates that it may want to interview witnesses as part of the preparation of the account, the PRA may wish to attend or even conduct these interviews itself where a firm does not have the resources to do so. Even where the PRA does not conduct interviews, it will expect the subject participating in the EAS to provide copies of transcripts.

A significant concern for some respondents to the consultation was how the production of the Account would interact with the protection of privileged material. Whilst it confirms that nothing in the EAS is intended to circumvent the protection offered to privileged information, there is at least a suggestion that those participating in the EAS would need to consider ‘carefully’ whether asserting privilege over information outweighs the benefit of an ‘open process’ for producing a ‘fulsome Account’. Such equivocation suggests that challenging discussions may lay ahead here. The PRA has confirmed that any without prejudice admissions will be held on a confidential basis. 

The PRA reserves the right to terminate the EAS arrangement before the final production of the Account, accompanying evidence, and related attestation. In such an event, any statutory demands for material that have been issued would be withdrawn. This might be appropriate if there is a significant change in the scope of the investigation; where a party becomes subject to a criminal investigation; where the subject makes limited progress in preparing the Account; or where the subject has specific reasons to request this.

Multi-Party Investigations

One of the questions raised in feedback to the consultation was whether the EAS would apply where investigations involve multiple parties, particularly where one or more of those parties is an individual. The PRA has confirmed that it will. Each party that elects to participate in the EAS would produce an individual Account, which the PRA will consider independently and on its own merits. Where one party participates in the EAS, other parties in the investigation won’t also be required to do so. The PRA is unlikely to permit multiple parties to provide a joint account (though it may consider allowing entities in the same corporate group to do this on a case-by-case basis). In multi-regulator investigations, the PRA will seek confirmation from the other regulators involved that they are happy for it to operate the scheme in respect of its specific investigation, before agreeing to permit its use.


The PRA’s introduction of a formal co-operation scheme in the form of the EAS is a significant milestone in the PRA’s decade-long journey as an enforcer. The final proposals address some of the concerns raised about its practical operation during the consultation period, however time will tell whether the potential for a reduced penalty is sufficiently attractive to outweigh the costs. Ultimately participation in the EAS will be a risk-based decision for firms based on the specific facts under investigation.

Getting the EAS wrong could have serious implications, particularly given the required senior management attestation and the looming rights of the PRA to revoke the arrangement at any time prior to the final production of the Account. The attestation requirement received some pushback, and the PRA has now clarified (and tightened) its scope. This may make this condition less of a disincentive, but it remains vital that firms have a robust governance and assurance process to support senior managers here.  While the additional 20% uplift to the settlement discount may seem attractive, firms need to have a good handle of the issues under investigation before they elect to participate. Engaging advisors early and rapidly bringing teams up to speed with the issues will be key to ensuring that firms make the right choice.


Pursuant to section 413 of FSMA, legally privileged material is protected from disclosure to the PRA. The Bank confirms that nothing in the EAS is designed to circumvent that protection. However, the Bank expects subjects to carefully consider the scope of any privilege claims in light of the benefits of an open process for producing a fulsome Account and a comprehensive set of related materials and evidence