Being Regulated


A new Banking Conduct Regime will take effect from 1 November 2009.  It will apply to the regulated activity of accepting deposits, and replace the non-lending aspects of the Banking Code and Business Banking Code (industry-owned codes monitored by the Banking Code Standards Board).

Latest updates and additions

We have recently sent a ‘Dear Compliance Officer’ letter to firms in relation to their readiness for the Banking Conduct Regime.

An e-learning module on BCOBS is now available, which provides an overview of the requirements of BCOBS and the broader Banking Conduct Regime.


BCOBS query?

If you have a BCOBS-related query, please email the BCOBS team.

The new Banking Conduct Regime commences from 1 November 2009:

  • the full application of the FSA’s Principles for Businesses;
  • the conduct of business requirements of the Payment Services Regulations (PSRs):  new UK legislation on payment services that implements the Payment Services Directive, a piece of European Community law; and
  • a new Banking Conduct of Business sourcebook (known as BCOBS), which contains rules and guidance.

This webpage focuses on the Principles for Businesses and BCOBS.

Further information on the Payment Services Regulations is available on our website.

The Principles for Businesses

In the past, we have said that in applying the Principles for Businesses with respect to accepting deposits and issuing electronic money we will proceed only in a prudential context.  That is to say, in this context, we would not expect to exercise our powers unless the contravention amounted to a serious or persistent violation which had implications for confidence in the financial system, or for the fitness and propriety of the firm or for the adequacy of the firm’s financial resources.

From 1 November, we will delete this guidance, and monitor and enforce compliance with the Principles in a conduct of business context, as well as a prudential context.

Further details on the Principles for Businesses, please see the relevant part of our Handbook.

Prior to the new regime we will be saying more about how we see the conduct Principles applying to deposit-taking, and will update this website with the relevant information.

The Banking Conduct of Business (BCOBS)

BCOBS is a new sourcebook that applies to firms from 1 November 2009 with respect to the activity of accepting deposits from banking customers in the UK.

A banking customer is defined as:

  • a consumer;
  • a micro-enterprise; or
  • a charity which has an annual income of less than £1 million

The rules in BCOBS on distance marketing, however, apply only to consumers.

BCOBS contains rules and guidance on:

  • communications with banking customers and financial promotions;
  • distance communications, including the requirements of the Distance Marketing Directive and E-commerce Directive;
  • information to be communicated to banking customers, including appropriate information and statements of account;
  • post sale requirements on prompt, efficient and fair service, moving accounts and lost and dormant accounts; and
  • cancellation, including the right to cancel and the effects of cancellation.

BCOBS applies to accepting deposits to the extent that it does not overlap with the requirements of the PSRs relating to payment transactions and payment accounts.

This means that, broadly:

  • where a retail banking service is not a payment service within the scope of the PSRs, BCOBS applies in full;
  • where a retail banking service is a payment service within the scope of the PSRs, parts of BCOBS would not apply.

The Payment Services Regulations

The PSRs also come into effect from 1 November 2009.  A range of information is available on our PSRs webpage, including:

  • a link to the Regulations;
  • a separate e-learning module;
  • ‘The FSA’s role under the Payment Services Regulations – Our Approach’, which gives guidance on our approach to implementing the PSRs; and
  • a list of frequently asked questions.

Further consultation

CP09/20 (July 2009) - ‘July quarterly consultation paper (no 21)’. 
We are currently consulting on additions and changes to BCOBS, including:

  • guidance on advance notice of disadvantageous changes to interest rates for accounts that are not payment accounts;
  • exclusion of liability;
  • transitional provisions; and consequential changes to our other Handbook modules.

We are also consulting on requirements for retail banking services that are not payment services in relation to:

  • liability for losses for unauthorised transactions (for those outside the scope of the PSRs);
  • value-dating; and
  • incorrect execution or non-execution.

The consultation period closes on Monday 17 August 2009, and we expect to confirm our decisions by the end of September 2009.

The material we have provided on these BCOBS webpages is intended to help you understand what we expect in an outcomes-focussed regulatory environment. For information about the status of Handbook guidance and supporting material, please refer to our statement on 'Giving guidance and the status of guidance'.

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