Banking Reform Bill: HM Treasury publishes Amended Statutory Instrument

On 18 March 2013, HM Treasury published an amended version of draft Financial Services and Markets Act 2000 (Ring-fenced Bodies and Core Activities) Order (the “Ring-Fenced Bodies Order”).  The Ring-Fenced Bodies Order is one of the pieces of secondary legislation to be made under the Banking Reform Bill.

The main change from the original version of the Ring-Fenced Bodies Order, published on 8 March 2013, seems to relate to high net worth individuals (“HNWI”) and small and medium sized enterprises (“SME”).  As detailed in our previous blog post, deposits are exempt from the requirement to be held within a ring-fenced body if they are held on behalf of:

  • HNWI (i.e. individuals who have, on average over the previous year, held free and investible assets worth GBP 250,000 or more); and
  • SME which are also financial institutions.

Under the original order, HNWIs and SMEs could effectively self-certify their status as such.  Under the amended order it seems that the institution in question is now responsible for determining whether HNWI or SME status is indeed appropriate.

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