Ring-fencing and Santander

What it means for you


After the global financial crisis which began in 2007, the UK Government arranged for an independent review of the ways in which UK banking groups are organised. This independent review recommended several important reforms designed to strengthen the financial system.

Ring-fencing is one of these reforms and was introduced in the Financial Services (Banking Reform) Act of 2013. It means the largest UK banking groups, including Santander UK, have to comply with new requirements to ring-fence their retail activities (like current accounts, savings accounts and payments).  

This means that we will be separating our more complex wholesale banking activity from our retail banking activity by 1 January 2019.

We’ll continue to add information about ring-fencing to this website over the coming months. Please check these pages regularly for updates. If you have any questions please visit the Contact us section for further information.


What is ring-fencing?

Ring-fencing arrangements must be in place by 1 January 2019.

Broadly speaking, ring-fencing legislation will affect any banking group that has more than £25 billion of UK deposits from individuals or small businesses. In general, within these groups, any UK bank that holds deposits from retail individuals or small businesses will be a ring-fenced bank.

Ring-fenced banks will be subject to restrictions on their business activities, designed to protect their customers’ deposits. The restrictions will prevent ring-fenced banks from providing some more complex wholesale products, such as complex derivatives to their customers.


Our approach to ring-fencing

In determining our approach, we’ve carefully considered our options and chosen an approach which we believe provides greater certainty for our customers while ensuring minimal disruption.

Santander UK plc will become our main ring-fenced bank in the UK. It will serve all our Santander personal customers in the UK, customers of cahoot and almost all of our business customers. Cater Allen Limited, which is known as Cater Allen Private Bank, will also be a ring-fenced bank. This means that for the vast majority of our customers there will be no change to the way in which we provide services to them.

Santander UK plc will also broadly, to the extent allowed by the legislation, continue to hold and serve our corporate banking business in the UK. Any products we can’t offer, or customers we can’t serve, from within the ring-fenced bank (which will include some Santander Global Corporate Banking business) will, in most cases, be provided or served by the wider Santander Group, notably Banco Santander, S.A.


Ring-fencing transfer scheme

We will be undertaking a ‘ring-fencing transfer scheme’ (UK Scheme) in order to transfer certain corporate and wholesale markets business between Santander Group members. This will form part of our activity to make sure we comply with the ring-fencing legislation. The UK Scheme requires the approval of the PRA (in consultation with the FCA) and the UK High Court (Court). A Skilled Person will also report on the UK Scheme to the Court.

A hearing is scheduled for 5 February 2018 for the Court to initiate the process to consider and approve the UK Scheme. At a second Court hearing, expected on 11 June 2018, the Court will be asked to give its final approval to the UK Scheme. If the UK Scheme is approved, the business transfers are expected to take effect from July 2018. More information about the UK Scheme will be available on this website nearer the time.

We are also expecting to conduct similar local transfer processes next year in Jersey and the Isle of Man in respect of our businesses there (CD Schemes), subject to relevant regulatory and court approvals.

You may have the right to participate in the UK Scheme process and to have your views heard in Court in relation to the UK Scheme. To do this you will first need to file a written statement with the Court following the first Court hearing in February 2018. At the same time, a copy must be sent to the PRA and Santander UK (if you are a customer of Santander UK) or Abbey National Treasury Services plc (if you are a customer of ANTS).

We will publish more details about the UK Scheme and about how to have your views heard nearer the time of the first Court hearing in February 2018.

What ring-fencing means for you

Use the links below to find out more:
Personal customers
Business customers
Corporate & Commercial customers
Santander International customers
Corporate & Investment Banking customers
Cater Allen Private Bank customers


Is ring-fencing a legal requirement?

Ring-fencing is a legal requirement for certain UK banks with effect from 1 January 2019. Any banking group that has more than £25 billion of UK deposits from individuals or small businesses will be affected by ring-fencing. In general, within these groups any UK bank that holds deposits from personal or small business customers will be a ring-fenced bank.

Have all banks subject to ring-fencing had to adopt the same approach?

No. There are different ways for banks to meet the requirements of ring-fencing legislation, so banks subject to ring-fencing have adopted different approaches depending on their structures, strategy and customer base. This means customers of different banks may be affected in different ways.

Which regulators have ensured Santander UK will comply with ring-fencing requirements?

Our plans for ring-fencing have been reviewed by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). The PRA is the lead regulator responsible for identifying which banks are within the scope of the ring-fencing legislation and for supervising banks’ implementation of the prudential rules. The FCA is working with the PRA, the Bank of England, HM Treasury and the banks that are subject to ring-fencing from the commencement of the regime to support the banks’ implementation of ring-fencing efficiently and on time.

Santander is a Spanish bank, so why does it need to adhere to UK banking laws?

Banco Santander, S.A. is a global banking group and each of its subsidiaries, including Santander UK, operates as an independently capitalised stand-alone business. Santander UK plc, Cater Allen Limited and Abbey National Treasury Services plc are each incorporated in the UK, are subject to UK legislation and are authorised by the UK Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and the PRA. Banco Santander, S.A. is authorised and supervised by the European Central Bank and by the Bank of Spain, and its London branch is also subject to limited regulation in the United Kingdom by the FCA and the PRA.

What is a ring-fencing transfer scheme?

A ring-fencing transfer scheme is a legal process that facilitates transfers of business to create a ring-fenced bank.

Part VII of the Financial Services and Markets Act 2000, provides for a process leading to a court order to facilitate transfers of insurance or banking business. The Financial Services (Banking Reform) Act 2013 added a process for transfers of business in connection with the creation of a ring-fenced bank known as a ring-fencing transfer scheme.

The purpose of a ring-fencing transfer scheme is to enable banks to restructure their businesses in order to comply with the ring-fencing requirements that apply from 1 January 2019.

What was the purpose of Santander’s ring-fencing transfer scheme?

The purpose of our ring-fencing transfer scheme was to enable us to restructure certain parts of our business to comply with the ring-fencing requirements that apply from 1 January 2019.

Under the Scheme:

  • Certain corporate and wholesale markets business have been transferred between Santander UK plc, Abbey National Treasury Services plc and Banco Santander, S.A. London branch.
  • With effect from 1 January 2019, all liabilities of Santander UK plc and Abbey National Treasury Services plc under the existing cross-guarantees issued by each of them in respect of the liabilities of the other have been released and those cross-guarantees unwound.
  • Certain other changes have been made to the terms and conditions of some contracts.