CP3/21 - Depositor Protection: Identity verification

Overview

This Consultation Paper (CP) sets out the Prudential Regulation Authority's (PRA) proposed rules regarding the timing of identity verification required for eligibility of depositor protection (DP) under the Financial Services Compensation Scheme (FSCS). It also proposes amendments to the PRA's expectations in respect of Insolvency Practitioners (IPs) being best placed to carry out identity verification checks in the event that a firm has failed to do so by the compensation date.

The proposals in this CP would result in changes to the Depositor Protection Part of the PRA Rulebook (Appendix 1) and Supervisory Statement (SS) 18/15, 'Depositor and dormant account protection' (Appendix 2).

This CP is relevant to the FSCS, all PRA-authorised deposit-takers, and IPs. This CP contains no material of direct relevance to retail financial services consumers or consumer groups upon which they might need to act.

The proposed rule changes are intended to prevent FSCS eligibility issues in the event that a firm has failed to conduct identity verification in accordance with the relevant anti-money laundering requirements referred to in DP Rule 2.2(4)(f) (the Relevant AML Requirements).

The PRA has engaged closely with the Financial Conduct Authority (FCA) on these issues, due to the FCA's responsibility for consumer protection and role as competent authority for the UK's anti-money laundering regime, and has also engaged with the FSCS.

Implementation

The PRA proposes that the implementation date for the changes resulting from this CP would be Wednesday 24 March 2021.

Responses and next steps

This consultation closes on Monday 15 February 2021. The PRA invites feedback on the proposals set out in this consultation. Please address any comments or enquiries to [e-mail].

The proposals set out in this CP have been designed in the context of the UK having left the European Union and the transition period having come to an end. Unless otherwise stated, any references made to legislation, including that which is 'retained EU law', relate to the UK version. The PRA will keep the policy under review to assess whether any changes would be required due to changes in the UK regulatory framework.

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