Prudential Regulation Authority Rulebook

3.1

This chapter sets out the PRA’s expectations of how firms will disclose information about the relevant deposit guarantee scheme and is intended to be read together with the rules contained in Chapters 16, 17, 18, 19, 20, 21, 22 and 23 of the Depositor Protection Part of the PRA Rulebook.

3.2

Rules relating to the ‘information sheet’ that must be provided to depositors are set out in Depositor Protection Chapters 16 and 17.

3.3

The general principle is that rules in Chapters 16 and 17 of the Depositor Protection Part apply both per depositor and per account. For example, under Chapter 16, in respect of each account to be opened and each intending depositor on that account, firms must provide an information sheet to, and obtain acknowledgement of receipt from, the intending depositor before entering into each deposit-taking contract with that intending depositor. For the avoidance of doubt, the requirement to provide the information sheet to, and obtain acknowledgement from, a particular intending depositor (including for a joint account) is engaged where that intending depositor is entering into a deposit-taking contract and that deposit will be held by a DGS member in an establishment in the UK (or a UK firm’s establishment in Gibraltar).

3.4

In the case of joint account holders, provision of the information sheet and other information under Chapters 16 and 17 can be in line with wider firm practices around dealings with multiple parties on joint accounts (particularly on entering into contracts with, and providing account statements to, multiple parties), subject to the above principle.

3.5

In respect of Depositor Protection 17.2, where the statement of account covers multiple accounts it is acceptable for the firm to provide a single information sheet with that statement.

3.6

Whether a firm’s deposit-taking contract is an overall “umbrella” arrangement or product/account-specific depends on the firm’s contractual arrangements.

3.7

Where the account holder is not the beneficiary of DGS cover and the firm does not have a direct relationship with the beneficiary, the PRA expects firms to comply with information providing obligations with respect to the account holder, but does not consider information provision requirements should apply with respect to the underlying beneficiary.

3.8

The disclosure requirements referred to in this statement apply regardless of the sophistication of the depositor.

3.9

Depositor Protection 16.2(3) states that a firm must obtain an acknowledgement of receipt of the information sheet from each intending depositor before entering into a contract on deposit-taking where that deposit will be held by a DGS member in an establishment in the UK (or a UK firm’s establishment in Gibraltar). In order to meet this requirement, prior to the contract being entered into, firms should obtain one of the following:

1. (a) the intending depositor’s signature on the information sheet. In this case, the PRA considers it good practice for firms to provide the depositor with a copy of the information sheet;
2. (b) the intending depositor’s signature on an acknowledgement contained in a separate document to the information sheet (which would allow the depositor to retain the information sheet for their reference);
3. (c) the intending depositor’s acknowledgement in a separate ‘tick box’ in the account opening documentation; or
4. (d) the intending depositor’s express acknowledgement over the telephone.

3.10

Regarding options (b) and (c), the PRA considers it acceptable for the acknowledgement of receipt to be contained in a separate document from the information sheet. The PRA does not consider it good practice for the information sheet to be included within other terms and conditions (such as the deposit-taking contract). Where the deposit-taking contract is entered into online, the depositor should be provided with the information sheet and exclusions list and required to confirm receipt of the information sheet, prior to the contract being entered into. In this scenario, an electronic signature or ‘tick box’ is sufficient to meet the requirement, in Depositor Protection 16.2(3), to obtain acknowledgement of receipt of the information sheet.

3.11

Where the deposit-taking contract is entered into over the telephone (ie, in accordance with other distance contracting procedures), the information in the information sheet and the exclusions list may be provided, and the express acknowledgement of the intending depositor obtained, over the telephone (option (d)). The information provided should include all the ‘basic information’ on the information sheet together with the relevant ‘additional information’. In such cases, the information sheet and exclusions list should be provided to, and acknowledgement requested (although not necessarily required) from, the depositor alongside other documentation to be issued after the telephone call.

3.12

Where the deposit-taking contract is entered into in person in a branch, the PRA considers it good practice for firms to obtain the intending depositor’s signature on the information sheet, by way of acknowledgement (option (a)).

3.13

For child accounts where the deposit-taking contract is entered into by a parent or guardian, the PRA expects that the parent or guardian would be able to acknowledge receipt. Similarly, for accounts where there is power of attorney, receipt may be acknowledged by the depositor’s attorney.

3.14

The PRA also does not expect a new information sheet to be provided and acknowledged where an existing customer a depositor is moved into a new account (eg at the end of a fixed rate bond term), unless a new deposit-taking contract is entered into.

3.15

In retaining records of intending depositor acknowledgements, the PRA expects firms to follow existing record keeping procedures for other account opening documentation.

3.16

Where the information sheet states that firms should ‘insert all trading names which operate under the same licence’, the PRA expects firms to include all brands and trading names that fall under the same banking licence. Firms may include the relevant brand logos and the FSCS badge, which can be found on the FSCS website.^[3]

3.17

Firms may make minor formatting changes to the information sheet and exclusions list. For example, this could mean changing the format for mobile applications where it may be difficult to convey the information sheet on a small screen. The PRA does not expect firms to redraft the wording of the information sheet.

3.18

For the avoidance of doubt, all of the ‘basic information’ in Annex 1 of the Depositor Protection rules needs to be provided in the information sheet along with the ‘additional information’. Limited optionality is indicated in Annex 1 by square brackets and/or marked as ‘only where applicable’.

3.19

Provided that the information sheet and exclusions list are clearly distinguished, the PRA does not consider it necessary for the information sheet and exclusions list to be printed on separate pages.

3.20

For the purposes of Depositor Protection 21.1(3), the information should be communicated in a way that brings it to the attention of the depositor (rather than depositors generally). Unless otherwise stated, the PRA expects this to involve proactive communication to the specific depositor rather than passive display of information.

3.21

Where a firm has reasonable grounds to believe that a depositor is not resident at the address last known to the firm as the address of the depositor, the PRA expects the firm to make reasonable enquiries to ascertain up-to-date contact details of the depositor (in line with firms’ obligations under the FCA’s Banking: Conduct of Business sourcebook (BCOBS)) in order to comply with the information-providing obligations.

3.22

Under Depositor Protection 17.1, a firm must confirm that deposits are eligible deposits on a depositor’s statement of account. The PRA expects firms to consider both the eligibility of the depositor and the eligibility of the deposit when making this assessment (except where this is not reasonably practicable, for example, due to a lack of information as to whether a deposit has arisen out of a transaction in connection with which there has been a criminal conviction for money laundering). The PRA does not consider it acceptable if the confirmation on the depositor’s statement of account is conditional (ie ‘your deposits are eligible if you do not fall within the exclusions’) as the PRA expects firms to make this assessment.

3.23

For the avoidance of doubt, the PRA does not expect the confirmation on the statement of account to be changed where an account falls into negative or nil balance, assuming a deposit on that account would be an eligible deposit.

3.24

If information required to be disclosed under Depositor Protection 23.7 and 23.8 is displayed prominently on the front page of the firm’s website or mobile application or a pop-up box upon logging on to the website or mobile application, the PRA expects that the requirement to communicate in a way that best brings the information to depositors’ attention will have been satisfied.

3.25

The PRA considers that a DGS member will comply with Depositor Protection 23.4, 23.5, 23.6, 23.7 and 23.8, if it displays the relevant compensation sticker and/or compensation poster produced by the FSCS in accordance with the requirements of those rules.

3.26

In Depositor Protection 18.1, the PRA considers ‘advertising materials’ to include any materials containing an invitation to make a deposit, or information that is intended or might reasonably be presumed to be intended to lead directly or indirectly to the making of a deposit; and includes any means of bringing such an invitation or such information to the notice of the person or persons to whom it is addressed.

3.27

The PRA expects firms to update or, where appropriate pursuant to Depositor Protection 18.1, delete any existing references to the DGS in advertising materials, where changes in PRA rules mean the information is either no longer accurate or permitted.

3.28

For the avoidance of doubt, the PRA considers Depositor Protection 19.1 to apply to transfers of engagement taking place between credit unions.