Bank of England: The implementation of ring-fencing: the PRA’s approach to ring-fencing transfer schemes
18 September 2015
In its consultation, the PRA seeks views on a draft statement of policy setting out its approach to ring-fencing transfer schemes.
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 a ring-fencing transfer schemes (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 Prudential Regulation Authority’s (PRA) functions relating to this particular transfer of business.
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:
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nomination or approval of the author of the scheme report (FSMA section 109A(2));
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approval of the form of the scheme report (FSMA section 109A(3)); and
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consent to an application to the court for an order sanctioning an RFTS (FSMA section 107(2A).
This consultation closes on Friday 30 October 2015. The PRA will consider the feedback received and will publish a statement of policy at a later date.
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