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  • UK Competition Authority To Review Retail Banking Market Investigation Rules

    07/01/2019
    The U.K. Competition and Markets Authority has announced its decision to review Part 6 of the Retail Banking Market Investigation Order 2017. Part 6 requires providers of personal current account services to establish a system of alerts to their customers notifying them of specified information, including that the customer's account has exceeded a pre-agreed credit limit. 
     
    The Order was implemented following the CMA's investigation into adverse effects on competition in the supply of retail banking services to personal current account customers and small- and medium-sized enterprises in the U.K. Following the implementation of the legislation, the U.K. Financial Conduct Authority announced rules on overdraft alerts and reforms to the way banks charge for overdrafts that the CMA considered were effectively duplicative of Part 6 of the Order. The FCA's rules on overdraft alerts come into effect on December 18, 2019. The CMA's investigation will therefore consider whether Part 6 of the Order should be revoked prior to this time. In conducting its review, the CMA welcomes views from interested parties, which should be submitted by July 22, 2019. The review will be conducted by a group of independent panel members and is expected to be completed by December 2019.
     
    The CMA has also published a letter addressed to U.K. banks that are subject to the Part 6 rules requesting that they consider whether they are fully compliant with the rules. Banks are encouraged to consider a series of questions set out in the letter to determine their compliance, including:
     
    • whether newly-introduced personal current account products are included within auto-enrollment processes, ensuring that customers receive alerts following an alert trigger;
    • whether banks' systems are capable of processing sufficient numbers of alerts to ensure customers are able to receive alerts;
    • whether provisions have been put in place for planned systems outages; and
    • whether the wording of alerts is consistent with the requirements of the Order.
     
    If banks find they may have breached the rules, they should inform the CMA within 14 days. Banks are also invited to comment on the CMA's proposed amendments to the Part 6 rules.
     
    View the CMA's decision to review the Retail Banking Market Investigation Order 2017.
     
    View the CMA's letter.
     
    View details of the CMA's retail banking market investigation.
     
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    TOPIC: Competition