Ring-fencing transfer schemes (RFTSs) were introduced by the Banking Reform Act 2013 and will enable firms to use the legal procedures under Part 7 of FSMA to give effect to any transfers of business needed by banking groups to achieve ring-fencing purposes. Under Part 7, the PRA is required to determine whether to approve the skilled person appointed to make the scheme report and then whether to approve the scheme report itself, in each case following consultation with the FCA. The PRA must also decide whether to give consent to the application for the RFTS.
The PRA has issued a policy statement (PS10/16) on RFTSs, together with the final version of itsstatement of policy on its approach to RFTSs. The FCA has also published finalised guidance (FG16/1) on its approach to RFTSs.
In September 2015, the PRA and FCA published a consultation paper (CP33/15) and a guidance consultation (GC15/5) respectively on draft versions of the PRA’s statement of policy and the FCA’s guidance.
In PS10/6 and FG16/1, the PRA and FCA set out details of the responses they received to the consultations and those changes they have made to the statement of policy and the guidance to clarify their position. The regulators comment that responses received to the consultations have not necessitated major changes to their original proposed approaches. The changes that have been made are mainly to clarify the regulators’ position.
The PRA has also published a webpage on the process for applying for approval as a skilled person in relation to RFTSs.