Accepting deposits

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • Accepting deposits
  • Background to the regulated activity of accepting deposits
  • The meaning of 'accepting deposits'
  • Money received by way of deposit
  • Lending or other activity financed by deposits
  • In more detail
  • Regulatory requirements for those authorised to accept deposits
  • Applying for authorisation and varying permissions—accepting deposits

Accepting deposits

Background to the regulated activity of accepting deposits

Under section 19 of the Financial Services and Markets Act 2000 (FSMA 2000), a person cannot carry out regulated activities in the UK unless that person is authorised or exempt. This is known as the general prohibition. For more information about the general prohibition and its territorial scope, see Practice Notes: The general prohibition and implications of its breach and Territorial scope of the general prohibition.

'Regulated activities' are defined as including specified activities carried on by way of business that relate to ‘specified investments’ or property of any kind to which the specified activity relates. ‘Specified’ for these purposes means specified by HM Treasury. The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, SI 2001/544 (RAO) sets out a number of activities and investments which are so specified. For further information on what constitutes regulated activities, see Practice Note: What are regulated activities? For more information about what 'by way of business' means in relation to insurance, see Practice Note: What does 'by way of business' mean?

This Practice Note looks at the regulated activity of accepting deposits (often referred to as deposit taking). Accepting deposits is a key hallmark of banks, credit unions or building societies. Firms should consider whether their proposed business models and plans require the firm to apply for authorisation to carry on

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