On September 18, 2015, the Prudential Regulation Authority and Financial Conduct Authority both issued consultations on the implementation of Ring-Fencing Transfer Schemes under the UK's ring-fencing regime. Banks with core deposits over £25 billion over a period of three years are expected to comply with ring-fencing requirements from January 1, 2019, separating the retail arms of banks from their riskier investment banking operations. RFTSs enable some or all of a bank's business to be transferred to another body so that the bank can restructure to comply with the ring-fencing rules. A scheme report, which must comment on whether the scheme could have any adverse effect on third parties, must be prepared by a skilled person approved by the PRA and FCA. The scheme report is intended to assist the court in its decision whether to sanction the scheme. Consent from all parties that may be affected by the transfer is not required but third parties affected by the proposed scheme may make representations to the court. The PRA must also consult the FCA before approving a skilled person or a scheme report. The PRA will also issue two certificates: one providing its consent to the scheme and the second to verify that the transferee will have adequate financial resources. Where the transferee is only regulated by the FCA, the FCA must issue the financial resources certificate. The PRA seeks views on its draft Statement of Policy on the PRA's approach to RFTSs and on its proposed approach for the approval of skilled persons and scheme reports. The FCA seeks views on its draft general guidance on RFTSs. Comments on both consultations are due by October 30, 2015.

The PRA consultation is available at: http://www.bankofengland.co.uk/pra/Documents/publications/cp/2015/cp3315.pdf and the FCA consultation is available at: http://www.fca.org.uk/static/documents/guidance-consultations/gc15-05.pdf