Peters & Peters

PRA poised to reveal details of new penalty discount scheme

Under upcoming plans from the Prudential Regulation Authority, banks in the UK that self-report wrongdoing early could benefit from an “enhancement settlement discount”.

The plans are to be fleshed out by the spring but, under the scheme, fines could be reduced by up to half.

James Tyler was quoted in an article by Banking Risk and Regulation that discusses the upcoming plans and how there might be a catch, including the fact that the scheme may be “discretionary” and involve the loss of legal privilege.

Further, as James explained, another issue that might arise is the fact that regulators mostly rely on evidence from the banks’ own investigations when deciding on a penalty discount. However, those investigations may not always be completely accurate.

James said:


“If you wrap up an investigation as quickly as possible with a view to making a report your regulator will find acceptable, that doesn’t necessarily mean that it’s going to be as accurate and full as it might necessarily need to be.

“The regulator may find itself in a difficult position if it has a published final notice on its website saying X has occurred… and then there is an Upper Tribunal ruling that is contrary to that.”