On 11 October 2022, the FCA published an updated version of Finalised Guidance 22/6 ‘Branch and ATM closures and conversions’ (FG22/6).

The updated version of FG22/6 has been produced following a consultation that the FCA conducted in June. A summary of the responses to this consultation is included at Annex 1.

FG22/6 applies to regulated firms that operate (or have agents operate) branches, or ATMs (cash machine or cashpoint), and who are subject to Principles 6, 7 and 11 of the Principles for Businesses.

The updated guidance previously set out the FCA’s expectations of firms when considering branch or ATM closures. The update now includes the FCA’s expectations as regards partial closures.

Since first publishing FG22/6 in 2020, the FCA has seen cases where firms have made the decision to remove facilities such as counter services from branches, or to permanently and significantly reduce the hours that branches are open, rather than fully closing branches. Firms will now need to consider FG22/6 when planning a full closure of a branch or proposing a reduction in branch opening hours / days or services where this would have a significant impact on customers.

FG22/6 sets forth the following:

  • Communication with the FCA – where a firm is considering site closures or conversions, it should inform the FCA through its usual supervisory contact as early as possible. This should be in good time before the firm takes a decision and continues throughout the process.
  • Assessing customer needs and providing alternatives – when a firm considers closing a branch fully or partially or converting an ATM, before it decides how to proceed, the FCA expects it to analyse the needs of customers currently using the sites, the likely impact of the closure or conversion, and the alternatives that are or could reasonably be put in place to continue to meet those customer’s needs.
  • Implementation of a closure or conversion – firms should avoid causing harm by making sure that any proposed alternative service is in place and accessible to customers before the branch closes. Firms should ensure that they provide customers with clear and accessible information on the alternatives they can access.

FG22/6 applies from 11 October 2022 and continues to have effect until varied or revoked.