Ring-fencing meaning

ARCHIVED: This Practice Note has been archived and is no longer being maintained. Structural banking reform and ring-fencing The global financial crisis underscored the necessity for international structural reform of banking. In the UK, the Government brought forward a suite of measures to bolster the resilience of the UK financial system and to avoid taxpayers carrying the burden when banks fail. The Financial Services (Banking Reform) Act 2013 (FS(BR)A 2013) inserted fresh measures into the Financial Services and Markets Act 2000 (FSMA 2000), obliging the largest UK banks to segregate, within their groups, essential retail banking services from other activities, such as investment and international banking. This separation is termed ring-fencing. Its objective is to shield UK retail banking from shocks arising elsewhere in a banking group, which could otherwise adversely affect global financial markets. Ring-fencing legislation applies only to UK banks with a three-year average of more than £25bn in ‘core deposits’—broadly from individuals and small to medium-sized businesses...

This Checklist highlights the principal points to address when arranging payment or seeking the recovery of retention monies. It proceeds on the assumption that the contract falls within the HGCRA 1996 and focuses mainly on employer–contractor retention monies, though the same considerations extend to contractor–sub‑contractor retention monies as well. Refer to Practice Note: Retention of payment in construction contracts for a fuller explanation of retention, when it is usually paid, and the way retention is dealt with under JCT and NEC contracts, including typical timing and treatment. What does the building contract say? At the outset, scrutinise the contract’s retention provisions and clauses surrounding retention in detail. The usual pattern is a two‑stage release: the first 50% falls due on practical completion of the works, with the balance payable after any notified defects during the defects period have been remedied. This split release mechanism is the most common arrangement. Building contracts often state expressly that retention is to be held on trust; even if not expressed, case law...

What is a positive covenant? A covenant operates as a contractual promise. Common examples of positive covenants found in land transfers impose duties to: carry out repairs or upkeep (for example, access ways), or contribute towards repair and maintenance expenses incurred by another put up buildings or boundary fencing (for example, on a transfer of part) pay additional sums (i.e. overage) where, for instance, planning permission is obtained, or on a sale following development of the land What is the issue with positive covenants? At common law, it is firmly settled that the burden of a positive covenant affecting freehold land does not pass with the estate. Accordingly, if one party to a freehold transfer (Party B) gives a positive covenant in favour of the other (Party A), that obligation will not bind Party B's successors in title, despite section 79 of the Law of Property Act 1925...

In this issue: Electricity and gas market regulation and licensing Networks and network connections Renewable energy Capacity Market, balancing services and energy system flexibility International energy Daily and weekly news alerts Dates for your diary Trackers Electricity and gas market regulation and licensing DESNZ launches consultation on regulating TPIs in the retail energy market The Department for Energy Security and Net Zero has opened a consultation to bring Third Party Intermediaries in the retail energy market under regulation, bolstering consumer protection and aiding the shift to a cleaner energy system. Triggered by cases of consumers and businesses being targeted by unregulated rogue brokers and other TPIs, this forms part of the government’s ongoing support for Ofgem to develop an effective market for non-domestic customers, alongside implementing recommendations from Ofgem’s July 2023 non-domestic policy consultation. The consultation closes on 15 November 2024. See: LNB News 20/09/2024 36. Ofgem launches statutory consultation on SoLR Levy Offset...

Treasury Committee hearing on financial stability At a Treasury Committee session on financial stability, the Bank of England (BoE) governor warned they would mount a protest if the Treasury presses too far with its deregulation aims. In the Mansion House speech on 15 July 2025, Chancellor Rachel Reeves set out proposed regulatory changes, including plans concerning ring‑fencing. Bailey said they would begin by setting out their stance plainly, in public and, if desired, before the committee. He added that this would be the starting point. He did not outline what further steps might follow, nor how they could next use what Members of Parliament describe as their wide‑ranging powers to issue recommendations, including to the Treasury. Nonetheless, he marked a clear red line around the ring‑fencing regime, which keeps retail bank accounts separate from investment banking within groups. Bailey objected to...

In this issue: Sustainable finance and ESG weekly round-up Economic Crime and Corporate Transparency Act 2023 Lending Acquisition finance Shipping finance Real estate finance Sustainable finance Debt capital markets Derivatives Regulation for banking lawyers Sanctions Daily and weekly news alerts New and updated content Useful information Sustainable finance and ESG weekly round-up For a summary of this week’s Sustainable finance and ESG developments, see Sustainable finance and ESG weekly round-up—14 November 2024. Economic Crime and Corporate Transparency Act 2023 Economic Crime and Corporate Transparency Act 2023 (Commencement No 3) Regulations 2024 (SI 2024/1108): Provisions in ECCTA 2023 on civil recovery of cryptoassets in Scotland took effect on 7 November 2024, and measures introducing the UK-wide offence of failure to prevent fraud will commence on 1 September 2025. See: LNB News 07/11/2024 12. Unique Identifiers (Application of Company Law) Regulations 2024 (SI 2024/Draft): These draft Regulations would widen...

UK real estate investment trusts (UK REITs) The UK regime for real estate investment trusts (REITs, termed UK REITs in statute) took effect on 1 January 2007. There are now in excess of 150 REITs, several of which moved into the structure when the framework first commenced. Those early adopters have since been joined by many more participants owing to revisions to the entry criteria, in particular the following: the removal of the entry charge; permission for REITs to invest in other REITs; and a relaxation of the listing condition so that companies without a formal listing, but admitted to trading and actually traded on a recognised stock exchange (for example on markets such as AIM), can also qualify. Further amendments have been introduced to the REIT rules in recent years with the stated intention of making the regime more appealing to prospective entrants. The principal legislative provisions for the REIT tax regime sit in Part 12 of the Corporation Tax...

IP COMPLETION DAY: At 11pm (GMT) on 31 December 2020, the Brexit transition/implementation period that followed the UK’s withdrawal from the EU comes to a close. In UK law this moment is termed ‘IP completion day’. From that point, core transitional arrangements end and significant changes start to take effect across the UK’s legal framework. This note provides guidance on areas affected by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for lending lawyers? [Archived]. BREXIT: From 31 January 2020, the UK is no longer an EU Member State, but entered an implementation period during which, for many purposes, it continues to be treated by the EU as a Member State. As a third country, the UK cannot participate in the EU’s political institutions, agencies, offices, bodies and governance structures (except to the limited extent agreed), yet it must continue to meet its obligations under EU law (including EU treaties, legislation, principles and international agreements) and submit...

This Practice Note addresses the defences that may arise in response to a claim for injuries caused by an animal. It considers accidents attributable to the claimant, voluntary acceptance of risk, trespass and contributory negligence. The Animals Act 1971 is referred to in this Practice Note as AA 1971. Accident caused by claimant A defendant may avoid liability for injury arising from an animal if they can demonstrate, under AA 1971, s 5(1), that the claimant’s injury was wholly their own fault. Examples might include the following: riding so close to another horse in a show ring that it kicks out (see Jones v Baldwin (2010) Cardiff County Court (not reported by LexisNexis®)) grabbing and restraining a dog so it feels threatened and bites (see Preskey v Sutcliffe (2013) Leeds County Court (not reported by LexisNexis®)) Voluntary acceptance of risk A defendant will also avoid liability under AA 1971, s 5(2), where the claimant has voluntarily accepted the risk of...

This Precedent sets out a practical illustration involving a fictional in-house legal team seeking to refine its contract drafting workflow. Applying the Define, Measure, Analyse, Improve, Control (DMAIC) efficiency framework, several remedies have been surfaced, notably simplifying the workflow and reassessing document storage so internal clients need not ring administrative assistants to chase information, reducing delays and queries. This case study concentrates on putting that discrete change into practice and making it stick. The emphasis is on clarity and access to information within the drafting cycle. Stage: Questions/considerations • Case study scenario responses 1. Create a sense of urgency How will staff recognise the necessity for change? How will they grasp its significance? How will immediate and longer-term gains be made visible across the department? Communications should be clear and specific. Set out clearly: how the current contract drafting approach is straining budgets the effect the process is having now, and is expected to have, on supplier relationships in future how...

SUBJECT: [ Transaction Name OR Details ] – Signing of [ Name of Document ] As you are aware, the parties have agreed that the [ Name of Document ] (the Document) will be executed by each party to the Document in separate counterparts, rather than requiring all signatories to endorse a single document. Please review this email carefully and thoroughly, and ring me to discuss any queries at your convenience...

How to use this test These questions check your understanding following your attendance at training on our risk management procedures. When you have completed the test, please return it to [ insert name ]... General Name of person completing the test [ Insert name ] Role [ Insert role ] Date [ Insert date ] Multiple choice questions Ring the correct answer. What do we mean by risk? (a) A hazard (b) A financial loss (c) The possibility of an adverse/unwelcome outcome (d) A regulatory breach How do we identify risks? (a) By analysing suspicious activity report (SAR) records (b) Using all available sources, including meeting staff, looking at claims and complaints records, reviewing our regulatory experience, analysing our breach report register and reviewing internal risk reports...