Financial Services (Banking Reform) Act 2013—essentials
Financial Services (Banking Reform) Act 2013—essentials

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

  • Financial Services (Banking Reform) Act 2013—essentials
  • Background to the Banking Reform Act
  • Ring-fencing under the Banking Reform Act
  • Key elements of the ring-fencing regime
  • Loss-absorbing under the Banking Reform Act
  • Priority of deposits insured by the FSCS under the Banking Reform Act
  • Bail-in under the Banking Reform Act
  • Summary of SRR changes and potential impact
  • Senior managers and certification regime under the Banking Reform Act
  • Limitation period against a firm or individual under the Banking Reform Act
  • More...

This Practice Note outlines the key changes to UK banking reform adopted through the Financial Services (Banking Reform) Act 2013 (FS(BR)A 2013 or the Banking Reform Act). The Act made significant reforms to UK financial services regulation, including providing the powers needed by HM Treasury and the Prudential Regulation Authority (PRA) to implement the recommendations of the Sir John Vickers and the Independent Commission on Banking (ICB) on ring-fencing requirements for the banking sector.

The Banking Reform Act also introduced a criminal offence of reckless misconduct in the management of a bank, a payment systems regulator (PSR), the senior managers and certification regime (SM&CR), a bail-in stabilisation option that formed part of the special resolution regime (SRR) and a cap on the cost of payday loans.

Background to the Banking Reform Act

On 18 December 2013, the Banking Reform Act received royal assent. There are eight Parts and ten Schedules to the Act. In particular, the Banking Reform Act gave HM Treasury and the relevant regulators, primarily the PRA, powers to implement some of the recommendations of the ICB including recommendations for ring-fencing requirements for banks. The Act also took into account some of the recommendations made by the Parliamentary Commission on Banking Standards (PCBS), established in July 2012, in its final report published in June 2013.

FS(BR)A 2013 was designed to improve the resilience of UK banks,

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