The PRA has recently received a number of queries from firms relating to the identification, marking and reporting of FSCS protected deposits. In response, the PRA wishes to remind all firms of their obligations under the Depositor Protection Part of the PRA Rulebook.
In particular, firms are reminded of Depositor Protection rules 43.1(1) and (2), which require the class A tariff base, reported annually to the FCA, to include both:
- covered deposits; and
- the total balance of any deposits, in any account, which holds funds to which the account holder is not absolutely entitled, or which are safeguarded funds, unless the firm has confirmed that these are not covered deposits.
Amounts included in the class A tariff base should be calculated consistently with the requirements on the calculation of single customer view and exclusions view set out in Chapter 12 of the Depositor Protection Part of the PRA Rulebook.
Where a deposit may potentially be FSCS protected, and the firm does not have sufficient information to determine conclusively that it is ineligible, the deposit should be included in the class A tariff base total under 43.1(2). These deposits, which would typically be included in a firm’s exclusions view file may include deposits held in trust accounts, client money accounts and safeguarded accounts.
International branches are also reminded to account for rules 43.1(1) and (2) in calculating the total potential liability to the FSCS in relation to covered deposits for the purposes of the Branch Return, in line with the guidance provided above. The total potential liability to the FSCS is one factor that the PRA will consider in assessing whether it will be content for an international bank to undertake retail activities in the UK through a branch, as set out in SS5/21 – International banks: The PRA’s approach to branch and subsidiary supervision.
Where deposits under 43.1(2) are material in causing a branch to exceed the indicative threshold for potential liability to the FSCS, the PRA encourages firms to provide details of these deposit types in the relevant ‘Firm Notes’ field of the Branch Return, so that this can be considered appropriately. As set out in SS5/21, firms should note that the PRA’s determination is also based on several other factors measuring deposit-taking activity. These factors are not hard thresholds, and the PRA will consider its approach on a firm-by-firm basis.
The PRA expects firms to prepare their year-end reporting in line with the requirements set out above, and to ensure that any necessary corrections are made prior to year-end reporting for 2026. Firms should engage their usual supervisory contact should this prompt any issues or uncertainties.