The conventional model of regulatory enforcement involves the regulator investigating and gathering evidence, often over a lengthy period, before putting a proposal for action to the investigation subject once the regulator has formed a settled view. Chaplin describes engagement by the subject and their counsel as generally being defensive, focused on minimising exposure and challenging the regulator's conclusions, with admissions coming late, often only as part of a settlement. He says that investigation subjects are typically cautious about taking early positions, seeking to frame remediation as "enhancements" as opposed to corrections, and avoiding acknowledging rule breaches until the regulator's position is known. In short, enforcement is treated as “quasi-litigation" rather than a process of regulatory accountability.

Chaplin says that, while this approach is not wrong, particularly where facts or responsibility are genuinely contested, it is not the best model for every case. He points out that every one of the PRA's 21 enforcement actions against firms to date where rule breaches have been found has been resolved by settlement, with none contested at the Enforcement Decision Making Committee (EDMC) or the Upper Tribunal. He attributes this, not to the PRA pursuing only clear-cut cases, but to firms - by the settlement stage - having internally acknowledged the weaknesses in their systems, controls and governance, and recognizing the value of settlement certainty. He suggests that treating investigations as adversarial from the outset may therefore be unnecessary in many cases.

In particular, he singles out a substantial category of cases where there is an early, shared understanding that a breach has likely occurred - often arising from firms' own independent reports, section 166 skilled person reviews, root cause analyses or post-incident reports - which is often sufficient to enable a firm to understand what went wrong, why and how it did, and who is accountable. He says that, in cases such as these, applying the orthodox approach to enforcement means investigations take much longer, and cost much more, than they need to.

The EAS was introduced in 2024 as part of the PRA’s enforcement policy update and is available to both firms and individuals in appropriate cases. Chaplin describes the EAS as “a signal to subjects of…investigations about how [the regulator] expects mature regulatory engagement to work in appropriate cases”. This signal is that “early, high quality internal investigation is valued; comprehensive and accurate factual accounts matter; early admissions of breaches made well ahead of settlement are meaningful; and proactive candour can materially affect the efficiency and outcome of an investigation”.

In practice, the EAS provides a framework for co-operation. It allows an investigation subject to produce a candid "account", typically within six months, that is comprehensive, accurate and supported by evidence. This is a collaborative and iterative process, with the PRA actively testing and challenging the account as it develops, while retaining full use of its investigative and compulsory powers, and the ability to pursue lines of enquiry not adequately addressed in the account. Senior management accountability is built in through attestation as to the account's accuracy and completeness. Where a subject produces such an account, makes early admissions, ceases the relevant conduct, and carries out necessary remediation, it may receive an enhanced discount of up to 50% on any regulatory penalty. Chaplin stresses that “early admissions” comprises genuine acceptance of relevant facts and breaches made significantly ahead of any settlement proposal – and not general expressions of regret, tactical concessions made once settlement terms are clear or factual acknowledgements distinguished from regulatory breaches. He acknowledges that the EAS requires a mindset adjustment by the investigation subject and mutual trust between subject and regulator, including confidence among subjects that early engagement will be treated fairly.

For the PRA, the benefits of the co-operative approach advocated by the EAS include more focused, efficient investigations, better use of specialist resources, and enforcement outcomes delivered closer to the underlying events thereby sending a more powerful, deterrent message to the market. For firms and individuals, quick and efficient investigations reduce prolonged uncertainty, decrease cost and disruption, and provide incentives for governance and remediation, and the attraction of a reduced financial penalty is obvious.

Since the EAS has come into force, Chaplin has observed earlier without prejudice engagement, subjects volunteering structured factual accounts, and admissions made months, even years, earlier than before, including one case where a firm proactively indicated a financial sanction would be appropriate before any proposal was put to it. Some of these cases predated the EAS and were not formally on the "EAS track," but nonetheless took this approach.

He describes the PRA's first formal EAS outcome, published in March 2026, as a successful pilot in which the firm engaged proactively and candidly, demonstrated self-reflection and contrition, produced a comprehensive and timely account, and then made admissions of fact and rule breaches significantly in advance of any settlement proposal put forward by the PRA – meaning the investigation proceeded efficiently and quickly, resulting in the maximum discount for the firm.

This, Chaplin advocates, is a sea change not just in policy, but in observable behaviour across cases.

It is not often that we hear from the PRA on enforcement – it being, as Chaplin describes, a “supervision-led regulator” – so this speech is definitely one to sit up and pay attention to.

Some of his contentions, however, are open to scrutiny. His reliance on the fact that all of the PRA’s 21 enforcement actions against firms were resolved by settlement and did not involve an appeal to the EDMC or Upper Tribunal to suggest that a contentious approach to investigation is unnecessary, is too broad brush to be of much persuasion. Each of these cases will have turned on their own facts and circumstances, which will have informed the approach taken by the firm.

And while Chaplin is clearly an advocate of faster investigations based on earlier engagement and candour from the investigation subject, he himself concedes that it is not the most appropriate approach in every situation. Hence, the case-by-case approach remains. It may be obvious, but the category of case which Chaplin identifies, where there is an early shared understanding that a breach has occurred, may lend itself more readily to earlier engagement and resolution – but other cases, which are more complex or heavily contested, may not.

There is also an element of déjà vu in what Chaplin says. Since Therese Chambers and Steve Smart took over as co-heads of Enforcement at the Financial Conduct Authority (FCA) in 2023, they have made it their mission to increase the “pace and focus” of investigations, with early engagement and full co-operation by firms being fundamental to achieving this. Firms are rewarded with reduced financial penalties, with their co-operation sometimes cited as a mitigating factor in the calculation of the fine, or as justification for no fine whatsoever (but instead a public censure), in particular in cases where the firm agrees to pay redress to affected individuals.  Chambers has consistently and informally referred to this approach as firms “doing the right thing”. The PRA appears to have formalised the process of co-operation and incentivisation in the EAS.

Authored by  Daniela Vella.