UK Prudential Regulator Implements New Waiver of Deposit Protection Rules
10/13/2019The U.K. Prudential Regulation Authority has announced that it will provide a new waiver by consent of the Continuity of Access Rules under the Depositor Protection Part of the PRA Rulebook. The DPP Rulebook sets out rules requiring firms to ensure that eligible depositors have access to deposits covered by the Financial Services Compensation Scheme in the event of the firm’s insolvency, by establishing systems to facilitate a transfer of such deposits (the so-called “Continuity of Access” rules).
As part of its review of bank prudential regulatory capital, the PRA has announced that it may consider permanent changes to the CoA rules. In the meantime, the PRA is providing the new waiver by consent, for which firms will be able to apply, and which will have an expiry date of December 1, 2022. Successful applicants must satisfy the PRA that they fall within one of the following three cases:
- where on March 31, 2019, the total assets the firm was required to report under its financial reporting obligations did not exceed £15bn;
- where on March 31, 2019, both: (i) the aggregate amount of covered deposits the firm is required to report under its common reporting obligations does not exceed £2bn; and (ii) the number of depositors a firm is required to report under certain PRA reporting obligations does not exceed 150,000; and
- where the firm has its registered office outside the U.K. but is not an “incoming firm” (e.g. an EEA firm, UCITS or AIFM exercising rights to operate in the U.K. under relevant U.K. legislation) and has a regulatory permission that includes accepting deposits.
The changes to the rules have been set out in the PRA’s Direction. Firms wishing to apply for the waiver should contact the PRA’s ATLAS Team.
View the PRA's Statement on the Waiver.
View the PRA's Direction on the Waiver.
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