Corporate Advisory

PRA paper on Bank Ring-fencing

The PRA have issued their consultation paper around ring-fencing
Under the Financial Services and Markets Act 2000 (as amended by the Financial Services (Banking Reform) Act 2013) the PRA are required to make policy to implement the ring-fencing of core UK financial services and activities.
The consultation paper is relevant to banks which will be required to ring-fence their core activities. This will include banking groups with core deposits greater than £25 billion. It will also be of interest to financial and other institutions and customers who have dealings with these banks.
The Government has stated its intention for ring-fencing to take effect from 1 January 2019. The PRA intends to undertake further consultations during 2015 and to publish final rules and supervisory statements in 2016 to provide firms with sufficient time for implementation.
Summary of proposals
The paper sets out PRA policy proposals in three areas:
  • Legal structure arrangements of banking groups subject to ring-fencing;
  • Governance arrangements of ring-fenced bodies; and
  • Arrangements to ensure continuity of services and facilities to ring-fenced bodies.