In this consultation the Prudential Regulation Authority (PRA) seeks views on a draft statement of policy setting out its approach to ring-fencing transfer schemes (RFTS).
Part VII of the Financial Services and Markets Act 2000 (FSMA) provides for a process leading to a court order to facilitate transfers of insurance or banking business. The Financial Services (Banking Reform) Act 2013 legislated for an additional process for transfer of business known as an RFTS. Its purpose is to enable firms to restructure their businesses in order to comply with the ring-fencing requirements that will apply from 1 January 2019. This consultation paper focuses on the PRA’s functions relating to this particular transfer of business.
The consultation will be of interest to banks which will be required by FSMA, as amended by the Financial Services (Banking Reform) Act 2013, to ring-fence their activities. It will be of relevance to skilled persons commissioned to author the scheme report submitted to the court as part of the RFTS application. It may also be of interest to other financial institutions and customers who have dealings with ring-fenced bodies.
Summary of proposals
The Financial Services (Banking Reform) Act 2013 gave the PRA new powers in respect of RFTS. The purpose of the draft statement of policy is to set out the approach of the PRA in relation to these matters, which are:
- nomination or approval of the author of the scheme report (FSMA section 109A(2));
- approval of the form of the scheme report (FSMA section 109A(3)); and
- consent to an application to the court for an order sanctioning an RFTS (FSMA section 107(2A).
This consultation closed on Friday 30 October 2015. Please address any comments or enquiries to CP33_15@bankofengland.co.uk.
The PRA will consider the feedback received and will publish a statement of policy at a later date.
The implementation of ring-fencing: the PRA’s approach to ring-fencing transfer schemes - CP33/15
Final policy in relation to this consultation is available under related links.