In June 2014, the recast Deposit Guarantee Schemes Directive (recast DGSD) was published in the Official Journal of the EU. It introduces harmonised funding requirements (including risk-based levies), protection for certain types of temporary high balances, a reduction in pay-out deadlines, harmonisation of eligibility categories (including an extension of scope to cover deposits by most companies regardless of size) and new disclosure requirements. The recast DGSD must be implemented into Member States’ national law by July 2015, but there is scope to delay implementation in respect of certain requirements.
The PRA has now published Consultation Paper 20/14: Depositor protection (CP20/14). In CP20/14 the PRA sets out proposed changes to its rules in order to implement the recast DGSD. It also proposes new rules intended to ensure that depositors protected by the Financial Services Compensation Scheme (FSCS) can have continuity of access to their accounts during resolution, as well as changes to the existing single customer view rules on firms.
In CP20/14 the PRA proposes:
- a new Rulebook Part for Depositor Protection, Management Expenses Levy Limit and Base Costs and Management Expenses in respect of Relevant Schemes;
- two new supervisory statements; and
- a new statement of policy for the FSCS.
CP20/14 is relevant to UK banks, building societies and credit unions, as well as to overseas firms with a PRA deposit taking permission and UK branches of EEA credit institutions. It is also relevant to the FSCS, as the administrator of the UK’s Deposit Guarantee Scheme, and depositors, as beneficiaries of deposit protection.
The deadline for comments on CP20/14 is 6 January 2015.
The PRA intends to publish a policy statement in H1 2015. The PRA will publish a further consultation on compensation arrangements for dormant account fund operators and consequential changes needed to PRA rules as a result of the rules being proposed in CP20/14. The PRA will publish this further consultation paper before it publishes the policy statement.
View Depositor protection – CP20/14, 6 October 2014