Published on 24 March 2021
Depositor protection: Identity verification – PS4/21
Overview
This Prudential Regulation Authority (PRA) Policy Statement (PS) provides feedback to responses to Consultation Paper (CP) 3/21 ‘Depositor protection: Identity verification’ (page 2 of 2). It also contains the PRA’s final policy, as follows:
- amendments to the Depositor Protection (DP) Part of the PRA Rulebook (Appendix 1); and
- updates to Supervisory Statement (SS) 18/15 ‘Depositor and dormant account protection’ (Appendix 2).
Summary of responses
The PRA received two responses to the CP. The PRA’s feedback to these responses is set out in Chapter 2.
Both responses were supportive of the proposal to allow identity verification to be carried out after the compensation date for the purposes of determining FSCS protection eligibility. One response requested clarification on how the rule changes would impact existing Single Customer View (SCV) and Exclusions file requirements. The other respondent noted potential operational concerns relating to the costs of carrying out the identity verification and the transferability of the identity verification responsibilities.
Implementation
The changes outlined in this PS will take effect on Monday 29 March 2021.
Policy Statement 4/21Appendix
- Appendix 1: PRA RULEBOOK: CRR FIRMS, NON-CRR FIRMS, NON-AUTHORISED PERSONS: DEPOSITOR PROTECTION (IDENTITY VERIFICATION) INSTRUMENT 2021 (pdf)
- Appendix 2: SS18/15 ‘Depositor and dormant account protection’
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Published on 20 January 2021
CP3/21 - Depositor Protection: Identity verification
Overview
This Consultation Paper (CP) sets out the Prudential Regulation Authority’s (PRA) proposed rules regarding the timing of identity verification required for eligibility of depositor protection (DP) under the Financial Services Compensation Scheme (FSCS). It also proposes amendments to the PRA’s expectations in respect of Insolvency Practitioners (IPs) being best placed to carry out identity verification checks in the event that a firm has failed to do so by the compensation date.
The proposals in this CP would result in changes to the Depositor Protection Part of the PRA Rulebook (Appendix 1) and Supervisory Statement (SS) 18/15, ‘Depositor and dormant account protection’ (Appendix 2).
This CP is relevant to the FSCS, all PRA-authorised deposit-takers, and IPs. This CP contains no material of direct relevance to retail financial services consumers or consumer groups upon which they might need to act.
The proposed rule changes are intended to prevent FSCS eligibility issues in the event that a firm has failed to conduct identity verification in accordance with the relevant anti-money laundering requirements referred to in DP Rule 2.2(4)(f) (the Relevant AML Requirements).
The PRA has engaged closely with the Financial Conduct Authority (FCA) on these issues, due to the FCA’s responsibility for consumer protection and role as competent authority for the UK’s anti-money laundering regime, and has also engaged with the FSCS.
Implementation
The PRA proposes that the implementation date for the changes resulting from this CP would be Wednesday 24 March 2021.
Responses and next steps
This consultation closes on Monday 15 February 2021. The PRA invites feedback on the proposals set out in this consultation. Please address any comments or enquiries to CP3_21@bankofengland.co.uk.
The proposals set out in this CP have been designed in the context of the UK having left the European Union and the transition period having come to an end. Unless otherwise stated, any references made to legislation, including that which is ‘retained EU law’, relate to the UK version. The PRA will keep the policy under review to assess whether any changes would be required due to changes in the UK regulatory framework.