UK Banking Reform

Structural Reform of the UK banking sector

The Financial Services (Banking Reform) Act of 2013 is a UK Government proposal aiming to impose higher standards of conduct on the UK’s banks. It also looks to improve their loss-absorbing capacity and outlines plans for the “ring-fencing" of retail and wholesale banking activities.

What is the UK Banking reform?

After the global economic crisis, the UK Government put new rules in place to protect the economy and taxpayers, in case something similar happens again. This means that HSBC must:

  • Separate its retail banking operations from any wholesale and investment divisions
  • Change the way it is structured in the UK – creating a new ring-fenced bank, HSBC UK
  • Make the changes before 1 January 2019 – to achieve this, we intend to complete required activities well ahead of the deadline.

What does this mean for Global Banking and Markets clients?

There will be very little change for the vast majority of our Global Banking and Markets (GBM) clients. GBM customers will continue to bank with HSBC Bank plc and benefit from our international network and the ring-fenced bank where appropriate. Equally, customers of the ring-fenced bank will continue to benefit from our international network and our investment banking solutions.

However, we will need to make some changes:

  1. Sort code changes
    • A small number of GBM clients will need to move to a new sort code. This is because sort codes can only be allocated to one bank and a few of our existing ones will need to be adopted by HSBC UK.
    • We have already contacted those clients that will need a new sort code. If this applies to you, you can read more in our Sort Code Changes Brochure.
    • Ring-fencing impacts banks in the UK with deposits of GBP25bn or more so, if you have accounts with another impacted bank, you may receive similar communications from them.

    If HSBC has not already contacted you, it's unlikely that you will be affected by the changes.

  2. Qualification declaration
    • The ring-fencing rules mean that any entity that continues to bank with HSBC Bank plc that is not a Relevant Financial Institution (RFI) must go through a qualification process to confirm that it meets certain criteria.
    • For corporates and partnerships (not in their first year of trading) the following criteria is used to determine which clients will remain part of HSBC Bank plc. This is a once only exercise for existing customers and is based on the latest financial accounts. At least one entity in their corporate group must have:
      • Turnover: equal to or greater than GBP6.5m
      • Balance sheet total: equal to or greater than GBP3.26m
      • Number of employees: equal to or greater than 50.
    • If you have any questions about the qualification process, please contact your Relationship Manager.
Customers remaining in the non-ring-fenced bank (HSBC Bank plc) Customers part of the ring-fenced bank (HSBC UK)
  • All our Global Banking and Markets customers in our wholesale and investment banking division
  • UK commercial customers categorised as Non-Bank Financial Institutions, including Relevant Financial Institutions (RFI), and customers of non-UK branches of HSBC Bank plc, including Channel Islands and Isle of Man customers.
  • HSBC personal and commercial customers in the UK
  • UK retail brands M&S Bank and first direct
  • UK Private Bank Customers

Marks and Spencer Financial Services plc (MSFS) and HSBC Private Bank (UK) Limited (PBGB) will be subsidiaries of HSBC UK.

All our affected customers will be notified of these changes but, if you have any questions, please contact your Relationship Manager.

We don't anticipate any changes to our terms and conditions (other than changing the legal entity name for HSBC UK customers). If your money is eligible to be protected under the Financial Services Compensation scheme (or other similar schemes), it will still be covered as it is today.

Where to do for more information

For general questions, including sort code changes and the qualification process, see our client FAQs.

For more information about ring fencing visit:

For more detailed questions, please contact your Relationship Manager, or your Case Manager if you have been assigned one.

Last updated: 22 June 2017