The FCA has published Consultation Paper 15/23: Ring-fencing: Disclosures to consumers by non-ring-fenced bodies (CP15/23).
As part of the new ring-fencing regime introduced by the Financial Services (Banking Reform) Act 2013, the FCA is required to make rules specifying the information that a non-ring-fenced body (NRFB) must provide to individuals with financial assets of at least £250,000 that are account holders or that have applied to open an account, including joint accounts, with an NRFB.
Under the new regime, NRFBs will be required to give the relevant consumers descriptions of the investment and commodities trading activities that they carry out, and details of any ‘prohibited action’ taken.
The FCA’s proposed rules in CP15/23 do not go significantly beyond what is explicitly required by the ring-fencing legislation. The area in which the rules go furthest beyond what is required is the timing of when the information is to be provided. The FCA anticipates that in most cases firms will provide the information before they become NRFBs, as well as when an individual applies to open an account with an NRFB. Further proposed rules for NRFBs include the need to:
- supply some explanatory information to help consumers to understand the implications of banking with a non-ring-fenced entity in the group; and
- display the information on their website and keep it up to date.
Deadline for comments to CP15/23 is 13 November 2015.
View CP15/23: Ring-fencing: Disclosures to consumers by non-ring-fenced bodies, 14 July 2015