General ring-fencing

What is ring-fencing?

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. The rules say that banks will have to separate their retail banking operations from their wholesale and investment banking divisions.

So we’re changing the way HSBC is structured in the UK. It means our personal and commercial customers will move to a new part of the bank, HSBC UK. 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.

Are all UK banks impacted by the new rules?

The Banking Reform Act (ring-fencing) impacts most of the large banks in the UK. Specifically those with deposits of £25bn or more (Barclays, RBS, Lloyds, Santander and HSBC). If you have accounts with more than one bank in the UK, this may mean you will receive similar communications from them too.

Will ring-fenced bank clients still have access to the global network? And will international clients have access to the UK?

HSBC’s international network will continue to be available to UK clients as is provided today. Equally, clients in other markets around the world will still be able to access HSBC’s UK capabilities in the future.

Qualification Declaration:

What are the qualifying 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 £6.5m
  • Balance sheet total: equal to or greater than £3.26m
  • Number of employees: equal to or greater than 50

If you have any questions about the qualification process, please contact your relationship manager.

What is supporting qualifying evidence?

We can accept original forms of the following documentation as evidence:

  • A copy of the annual accounts for the latest complete financial year
  • A statement signed and dated by a recognised accountant
  • Audited accounts and/ or balance sheet, or
  • Records from Companies House (UK entities) or equivalent for your jurisdiction.

What if I’m unable to provide supporting qualifying evidence?

If you are unable to provide sufficient evidence that you or a member of your Group meet one or more of the qualifying criteria to bank with HSBC Bank plc, please contact your relationship manager.

Which customers are impacted?

All customers that are not Relevant Financial Institutions (RFIs), in the UK and European Economic Area (EEA) branches of HSBC Bank plc that are not transferring to HSBC UK.

Which customers are out of scope and why?

As per the ring-fencing legislation, RFIs and customers in the Crown Dependencies cannot be part of the ring-fenced bank and therefore must bank with HSBC Bank plc. These customers therefore do not need to go through this qualification exercise. This does not apply to corporates or partnerships who are customers of subsidiaries of HSBC Bank plc.

How long do I have to respond to the Qualification Declaration letter?

Clients have 14 days from the time the communication is sent to provide qualifying evidence. This is in line with what is set out in the legislation.