The Bank of England has published a Market Notice: Changes to the eligibility criteria for access to reserves accounts and other sterling monetary framework activities.
The effect of this notice is to increase the range of institutions, by including smaller ones, that can apply for access to Reserve Accounts in order to manage their liquidity.
Until now only firms with an average level of Eligible Liabilities of £500 million or more could apply for Reserve Accounts. Henceforth, all firms subject to the statutory cash ratio deposit (CRD) scheme, which requires them to report their Eligible Liabilities to the Bank of England, will be able to apply.
Newly eligible firms will also be able to apply to access other Sterling Monetary Framework (SMF) facilities, including:
- The Operational Standing Facilities.
- The Discount Window Facility.
- The Bank’s Open Market Operations.
Newly eligible institutions granted access to an SMF facility will have to pay a minimum deposit of £200,000 which will be set at the same proportion of their Eligible Liabilities as for CRD payers.