UK Banking Reform - Questions and Answers

The below guidance has been published by the Authority on 27 June 2019, and replaces previous guidance published on 9 March 2018.

Broadly, the term “ring-fencing” refers to a change in the way large banks are structured in the UK, a number of which have a presence locally. In the Isle of Man the groups affected are Barclays, HSBC, Lloyds, Santander, and The Royal Bank of Scotland / NatWest.

The groups that have been required by the UK government to undergo this restructuring were divided into:-

  • A ring-fenced bank or group, for their core UK retail services; and
  • A non ring-fenced bank or group, for all other customers or services not permitted to be within the ring-fenced bank / group.

In accordance with the new UK rules, a ring-fenced bank cannot have an operation (branch or subsidiary bank) outside the European Economic Area (EEA). Therefore, the Isle of Man operations (and customers of those operations) are outside of the ring-fenced bank or group.

Ring-fencing was brought about by changes in UK law following the global economic crisis that began in 2008.

The rules took effect from 1 January 2019, and all the banks affected completed their restructuring ahead of this date.

The UK banks implemented ring fencing in different ways. Some banks needed to move customers into a different part of the group. Some banks’ trading names changed. Operational services may now be provided by a different firm within a group. Customers may have been issued with new debit and/or credit cards, and websites, mobile apps and online banking services may have changed.

Some UK banking groups in the Isle of Man have transferred customers’ accounts from one part of its business to another, and further structural changes may still occur. If a bank in the Isle of Man wishes to transfer accounts from one part of its business to another without the consent of every individual customer, it may use a legal process known as a Relevant Transfer Scheme (“RTS”). To use a RTS a bank must have the agreement of the Isle of Man High Court. If your bank intends to use a RTS it will notify you and provide further information.

If you have any queries about ring-fencing, you should contact your bank in the first instance. 

Yes, there are no changes to these arrangements.

Each bank has previously communicated with its own customers about ring-fencing and how it will affect them. If you have any further questions, please contact your bank.

Each banking group that is subject to ring-fencing has information on their websites.

The Bank of England provides a jargon-free explanation of ring fencing on its website, see

The Prudential Regulation Authority is the lead regulator for ring-fencing and provides technical information on its website, see

The Financial Conduct Authority’s website provides information on the UK’s process, see