A key objective of the European Union's Common Fisheries Policy reforms is the elimination of discards and a reduction in unwanted catches. Combining a discard ban with catch quotas, where all fish, independent of size, count towards quotas could create economic incentives for more selective fishing, reducing unwanted catches. We use fishing activities data from English North Sea otter trawlers to examine the impact of these measures on this fleet. Initial impacts depend on the scale of increase and distribution of quotas and are unevenly distributed, depending on catch and discard characteristics of vessels. Selective fishing will be rewarded as vessels that currently have low discards could increase catches and profits. Fishing by less selective vessels will be curtailed, reducing profits by 1-14%. This could be partially mitigated through reducing regulated catches but will require changes to fishing patterns as using currently available selective fishing gears may impact on profitability. So, catch quotas and a discard ban create strong incentives for more selective fishing practices, but also for non-compliance with full documentation of catches. A high level of monitoring and enforcement will be required to ensure that fishers improve profitability through more selective fishing practices rather than illegal discarding.