On July 31, 2015, the PRA published a Policy Statement which includes final rules which will allow depositors affected by the recent change in level of deposit protection to adjust to the new limit without loss of interest or incurring any penalties. The PRA announced on July 3, 2015 that the existing £85,000 level of deposit protection will change to £75,000 after December 31, 2015. Depositors that are contractually tied into products with balances above £75,000, either currently or at product maturity, will be able to request, until December 31, 2015, to withdraw funds between the old and new limits. Firms are prohibited from requiring a depositor making such a request to close an entire account unless the funds are placed into a new product with similar terms. A firm must return funds to a depositor within the earlier of two months of the request or by January 31, 2016. The PRA also published a revised Supervisory Statement on depositors and dormant account protection which now includes the PRA's expectations of firms regarding the definition of "affected person", notification requirements, withdrawal of affected funds and the charges, penalties and loss of interest.
The Policy Statement is available at: http://www.bankofengland.co.uk/pra/Documents/publications/ps/2015/ps1815.pdf, the amended rules are available at: http://www.bankofengland.co.uk/pra/Documents/publications/ps/2015/ps1815instr1562.pdf and the revised Supervisor Statement is available at: http://www.bankofengland.co.uk/pra/Documents/publications/ss/2015/ss1815update4.pdf.
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