Important information about the ring-fencing transfer scheme

 

Important information about the Ring-fencing Transfer Scheme

We're making some changes to the way our business is structured. This is to prepare for a change in UK law which requires us, along with other major UK banks, to separate everyday banking services such as current accounts, savings and payments, from investment banking.

This separation is called ring-fencing and is designed to make banking safer and to help protect the UK economy. It becomes law from 1 January 2019 and to prepare for it we need to reorganise the way the RBS Group is structured.

To make these changes we’re using a legal scheme called the ‘Ring-fencing Transfer Scheme’ (RFTS). We are pleased to confirm that the first RFTS was implemented on 30 April 2018.  We will complete a second RFTS (RFTS2) later in 2018. This will only impact certain markets products transferring from NatWest Bank Plc to NatWest Markets Plc.

 

What is the RFTS? 

The RFTS is a Court process and we need the Court’s permission before we can restructure our businesses.

NatWest Bank Plc and NatWest Markets Plc propose to use a RFTS to transfer the interest rate and foreign exchange derivatives over-the-counter business (with respect to derivative transactions that are maturing after 31 August 2018) of NatWest Bank Plc (the “Transferring Business”) to NatWest Markets Plc. This is subject to, amongst other things, regulatory approvals and the approval of the Court of Session in Edinburgh (the “Court”).

For copies of the RFTS documents, including the Skilled Person's report and a summary of the Skilled Person’s report, go to the RFTS documents page.

What does this mean for you?

The proposed RFTS will transfer any interest rate or foreign exchange derivative transactions you have with NatWest Bank Plc (that mature after 31 August 2018) to NatWest Markets Plc. However, certain trades will be eligible or ineligible to be opted-out of the scheme.

Further information on which trade(s) can be opted out of the scheme, can be found in section B in the relevant “Notification of the Ring-fencing Transfer Scheme” booklet. Please note that the criteria for which trades are eligible or ineligible for opt-out differs dependent on whether you are identified as a “Relevant Financial Institution” within the meaning of ring-fencing legislation. And therefore there is a booklet for Non-RFI customers and one for RFI customers.

If you decide to exercise any Opt-Out Rights you hold, the deadline for doing so is 17.00 UK time on 18 June 2018.

Please find below a summary of the key dates of the RFTS. Any change to the date of the final Court hearing or the Effective Time will be announced on this website.

 

15 May 2018 - First Court hearing

18 June 2018 - Deadline for opting-out of the RFTS (Eligible Derivatives only)

4 July 2018 - Last date by which we will respond to your Opt-Out Notification to confirm eligibility or ineligibility of your derivatives

11 July 2018 - Deadline for other written objections to the RFTS

20 July 2018 - Skilled Person’s supplementary report published on the RBS website

31 July 2018 - Final Court hearing

13 August 2018 - The “Effective Time”, this is the date we currently expect the RFTS to take effect

 

What happens next? 

The preliminary Court hearing was held on 15 May 2018 and the final Court hearing to consider approving the RFTS is expected to be held on 31 July. If the Court approves the RFTS, we expect it will take effect on 13 August 2018. Any change to the date of the final Court hearing or the effective date will be announced on this website. As will the results of the Court decision.

 

Ways to make your views known to the Court

If you think you would be adversely affected as a result of the RFTS, you have two ways of making sure the Court considers your views:

1. Lodging formal objections with the Court

You have the right to lodge formal written objections (known as Answers) with the Court. If you wish to lodge Answers, you should seek independent legal advice. Answers are a formal Court document which must comply with the rules of the Court and are normally prepared by Scottish legal counsel. Answers must be lodged with the Court at Parliament House, Parliament Square, Edinburgh EH1 1RQ, within 42 days of the publication of the last of the notices relating to the RFTS, which is expected to be on or around 18 May 2018. The deadline for lodging Answers is 29 June 2018. In addition, Answers must be accompanied by a fee to the Court.

 

2. In writing or in person

The Court will also consider any other informal objections to the RFTS which are made in writing or in person at the hearing to consider approving the RFTS.

If you wish to object in writing or in person at that hearing, you need to send a written statement of your views to all of the following:

 

a) the Court, by post or by hand to the above address;

b) National Westminster Bank Plc, either:

     (i) by post or by hand to 250 Bishopsgate, London, EC2M 4AA; or

     (ii) by email to ringfencing@natwestmarkets.com; and

c) the Prudential Regulation Authority, either:

     (i) by post or by hand to National Westminster Bank, Prudential Regulation Authority, Bank of England, Threadneedle Street, London EC2R 8AH; or

     (ii) by submitting it online at: www.bankofengland.co.uk/pra/Pages/authorisations/structuralreform/representations.aspx

 

If you do not do this by 17:00 UK time on 11 July 2018, the Court may not consider your objection at the hearing to consider approving the RFTS. No fee is payable to the Court for objecting in this way.

The Court is also likely to consider any objections made in writing or in person at the hearing to consider approving the RFTS, although it might not do so if you have not followed the process for objecting described above.

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