On March 4, 2016, the Prudential Regulation Authority published its Policy Statement on feedback to its consultation on the PRA’s approach to ring-fencing transfer schemes together with the PRA’s final Statement of Policy. The Financial Services (Banking Reform) Act 2013 introduced requirements for UK banking groups that have more than £25 billion of core deposits to ring-fence the entity/ies that accept deposits—called ring-fenced bodies. To assist firms subject to the ring-fencing requirements and restructure their business, provisions were made for transfer of businesses by a RFTS.
The PRA’s Policy Statement sets out the regulator’s responses to questions raised during the consultation, including on the certificate as to financial resources of the transferee, new bank authorizations, alternative group arrangements and immunity of the skilled person. The PRA’s Statement of Policy sets out its approach to RFTS, noting that the PRA expects firms to nominate a skilled person to prepare the scheme report which nomination would be subject to the PRA’s approval. The Financial Conduct Authority published finalized guidance on its approach to the implementation of the ring-fencing requirements and RFTS. The ring-fencing regime is due to come into effect on January 1, 2019.
The PRA Policy Statement is available at: http://www.bankofengland.co.uk/pra/Documents/publications/ps/2016/ps1016.pdf, the PRA Statement of Policy is available at: http://www.bankofengland.co.uk/pra/Documents/publications/sop/2016/rftssop.pdf and the FCA Guidance is available at: http://www.fca.org.uk/static/documents/fg16-1.pdf.