PRA publishes second policy statement on depositor protection rules

Following its September 2022 consultation, PRA has published a second policy statement on updates to its depositor protection (DP) rules.

The first policy statement, published 31 March 2023, concerned changes to the so-called safeguarding rules. The latest policy statement concerns changes in respect of the temporary high balance (THB) regime, FSCS protection for firms in default, withdrawal rights on deposit transfer, and FSCS protection notification rights. It provides for:

  • Further relevant amendments to the DP section of the Rulebook;
  • An updated supervisory statement – Depositor and dormant account protection; and
  • Updated statements of policy:
    • Deposits Guarantee Scheme
    • Calculating risk-based levies for the Financial Services Compensation Scheme deposits class

One respondent was concerned that the proposed increase in THBs held by a firm would result in an increase in the covered deposits reported by that firm. PRA confirmed that the Rulebook definition of covered deposits specifically excludes THBs, and that firms are not required to report additional THB amounts as covered deposits.

Laura Wiles