Treasury has published a set of draft secondary legislation to support the draft Banking Reform Bill:

  • the FSMA (Ring-fenced Bodies and Core Activities) Order 201* specifies the classes of institution that are exempted from the definition of “ring-fenced body” under FSMA as the Banking Reform Bill would amend it. The Order proposes to exempt banks holding deposits below £25 billion of core deposits, insurance companies, credit unions and industrial and provident societies. The Order also specifies the form of certificate of high net worth that individuals must provide for the purposes of deposits falling outside the ring fence;
  • the FSMA (Excluded Activities and Prohibitions) Order 201* sets out the circumstances in which ring-fenced entities will be able to deal in investments as principal as an exception to the general ban. It will allow transactions which help the ring-fenced body to manage its own risks or liquid asset buffer, or where it provides derivatives to its clients for limited purposes. It also restricts access to clearing and settlement services, restricts exposures of ring-fenced bodies to relevant financial institutions and ensures bodies get PRA approval for any branch or subsidiary outside the EEA; and
  • the FSMA (Fees and Prescribed International Organisations) Regulations 2013 allow for Treasury to charge certain expenses to authorised firms, investment exchanges and clearing houses, in relation to UK membership of the Financial Stability Board.

(Source: FSMA (Ring-fenced Bodies and Core Activities) Order, FSMA (Excluded Activities and Prohibitions) Order and FSMA (Fees and Prescribed International Organisations) Regulations)