PRA enforcement action—settlement
Produced in partnership with Sarah Clarke of 3 Serjeants’ Inn

The following Financial Services practice note produced in partnership with Sarah Clarke of 3 Serjeants’ Inn provides comprehensive and up to date legal information covering:

  • PRA enforcement action—settlement
  • Settlement decision making procedure
  • The PRA's settlement discount scheme
  • Concluding a settlement agreement

PRA enforcement action—settlement

Settlement decision making procedure

Like the Financial Conduct Authority (FCA), the Prudential Regulation Authority (PRA) has a formal settlement process for enforcement proceedings under which discounts on penalty are given for early settlement of enforcement action.

Its policy states that the PRA specifically recognises the potential scope for, benefits of and public interest in the timely and comprehensive settlement on appropriate terms, and particularly the early settlement, of enforcement actions.

The policy gives the PRA a wide discretion as to whether or not to enter into or continue settlement discussions and, where an agreement in principle can be reached, conclude a binding settlement agreement.

In exercising its discretion, the matters to which the PRA may have regard include:

  1. the PRA’s statutory objectives

  2. its stated policy and any relevant guidance or other materials issued by the PRA

  3. the facts and circumstances of the case in question

  4. the public interest as it applies to any particular case.

Although the ability to enter into settlement negotiations and conclude enforcement action by way of settled outcomes is undoubtedly beneficial, it should be born in mind that the PRA, like the FCA, is a public body which is required to ensure that enforcement actions and outcomes are consistent with its policies and regulatory objectives. The PRA cannot therefore 'cut a deal' in the way that a commercial party to litigation

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