Summer Budget 2015: Updating the definition of a “banking company”

The definition of a “banking company” used in the bank levy and bank loss restriction legislation, relied on reference to the old definitions from the Prudential Sourcebook for Banks, Building Societies and Investment Firms (“BIPRU”). On 1 January 2014 the EU introduced the Capital Requirements Regulations (CRR), a new regulatory code for credit institutions and investment firms. This replaced the (“BIPRU”).

From 1 January 2014, financial regulators have used the CRR as the regulatory code for banks and building societies rather than BIPRU. The Prudential Regulatory Authority implemented the CRR directly and the Financial Conduct Authority introduced a new Prudential Sourcebook for investment firms.

In order to align the existing application of the bank levy and the bank loss restriction, the existing legislation will be amended to refer to the current definitions used by the Prudential Regulatory Authority or the Financial Conduct Authority.

This measure is a technical change to the wording of the legislation to ensure clarity. There is no change to the policy. The amended legislation will continue to apply to incorporated businesses in the banking sector and will continue to operate in the same manner.