On 26 June 2018, there was published on the legislation.gov.uk website a draft of The Financial Services and Markets Act 2000 (Ring-fenced Bodies and Core Activities) (Amendment) Order 2018.
The draft Order resolves the otherwise conflicting requirements between the ring-fencing regime and financial sanctions regimes by amending the Financial Services and Markets Act 2000 (Ring-fenced Bodies and Core Activities) Order 2014 (the CAO).
The draft Order amends the definition of a “core deposit” so that accounts whose account holders are or have been subject to financial sanctions restrictions, as defined in section 143(4) of the Policing and Crime Act 2017, at any time in the last six months are no longer included in the definition. This means that banking groups will not be required to move retail accounts whose account holders are subject to financial sanctions into ring-fenced banks. Banking groups will have six months from the removal of financial sanctions to move retail accounts of those account holders previously subject to financial sanctions inside the ring fence. The draft Order will ensure that banking groups which cannot otherwise comply fully with the ring-fencing regime, because they are unable to move accounts of account holders subject to financial sanctions, are not deemed non-compliant under the ring fencing legislation.