Lucy HadrillFollowing its commitment to safeguard access to cash across the UK, the Government granted the BoE powers to ensure that the wholesale cash distribution infrastructure remains effective, resilient and sustainable as cash usage further declines. These powers are included in a new Part 5A of the Banking Act 2009 which also requires the BoE to consult on any codes of practice (CoPs) that it intends to publish under the wholesale cash distribution oversight regime.
The BoE is now consulting on proposals for three detailed, outcomes-based CoPs for the market oversight regime:
- CoP on Information Gathering – this requires recognised firms to report a range of data on a regular basis (including information on cash centres, service level agreements, business plans and business continuity plans).
- CoP on Third Party Arrangements – this CoP will set out requirements for firms to carry out a materiality assessment on all current and proposed arrangements with third party providers of products and services relating to the firm’s wholesale cash distribution functions and activities. Any ‘material’ arrangements identified will be subject to further due diligence and risk assessments.
- CoP on Cash Centre Closure and Market Exit – firms will be required to engage with the BoE as soon as possible in their strategic planning of a material change, eg cash centre closure or market exit, and prior to a final decision being made.
The consultation closes on 31 January 2024. The BoE also expects to consult on and publish its approach to enforcement in 2024.
Separately, the Treasury expects to recognise relevant firms via the statutory recognition process in 2024.
