Disclosure Requirements for Deposit Firms

31st December 2009

From 1 January 2010, new rules come into force as to how firms regulated by the FSA that accept deposits are required to inform their customers that their deposits are covered by the FSCS.

EEA firms with branches in the UK that accept deposits will be required to inform their customers that their deposits are covered by their home state scheme.

Any firm operating under more than one trading name must disclose, in any communication, the trading names under which it operates and explain the impact this has on any protected deposit holder’s entitlement to compensation. These rules follow consultation by the FSA. In July 2009 the FSA published Policy Statement PS09/11 in response to the consultation. The Policy Statement followed the Consultation Paper CP09/3.

The FSA’s Policy Statement explains how and when the disclosure of this information should be made to customers. The FSA requires firms to disclose the FSCS protection to their customers every six months, or every twelve months if the communication is to a passbook account holder. This should be a written communication that is in keeping with normal contact made with the consumer. For example customers who receive paper statements should be advised on the statement.

For those consumers who use internet banking, disclosure should be displayed prominently, for instance in the form of a pop up box.

More information can be found on the FSA’s website.

Proposed wording for UK authorised firms

Proposed wording for topped-up EEA branches

Proposed wording for non-topped up EEA branches

FSA Policy Statement PS09/11

FSA consultation paper CP09/03

FSA web update

Jargon Buster

  • Deposits

    money placed in a bank or similar institution to earn interest or for safe-keeping.
  • EEA

    European Economic Area.
  • FSA

    Financial Services Authority, was previously the UK's regulator for the finance industry. It was replaced by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) on 1 April 2013.