Like all other European banks, Triodos Bank has been in discussion with the regulators about the potential implications of the UK’s expected withdrawal from the European Union (EU). The focus of these conversations has been a desire to continue to support sustainable banking in the UK and individuals who want to embrace a more conscious approach to banking and finance.
Triodos Bank NV is headquartered in the Netherlands and currently has branch operations in the UK, Germany, Spain, Belgium and the Netherlands, as well as an agency in France. Since 1995, Triodos Bank has operated in the UK under a ‘passporting’ regime made possible by EU agreements. Under this passporting arrangement a banking licence has been issued and supervised by the Dutch Central Bank (De Nederlandsche Bank) and is subject to limited regulation by the UK Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA).
As the UK prepares to leave the EU, this passporting arrangement will no longer cover the Triodos Bank UK banking activities. Triodos Bank has been working with regulators for over a year to ensure the necessary regulatory and legal frameworks are in place to continue providing services to UK customers.
Triodos Bank UK subsidiary
To ensure Triodos Bank can continue to operate in the UK when the current EU regulatory framework no longer applies, a different legal structure is required. This means creating a new subsidiary company, which will be wholly owned by Triodos Bank NV.
Court proceedings have been completed in the UK to obtain the necessary approvals that will enable the establishment of a subsidiary in the UK with its own banking licence. The legal transfer of the business of the UK branch of Triodos Bank NV to Triodos Bank UK Ltd has been approved by the UK High Court of Justice using a Part VII transfer mechanism under the Financial Services and Markets Act 2000. The Part VII will enable Triodos Bank to transfer existing contractual relationships without the need for ‘repapering’ (re-issuing) every contract.
The terms of the Transfer are set out in full in a banking business transfer scheme document (the Scheme). The Scheme Document in full and an Explanatory Statement setting out the terms of the Scheme are available at: www.triodos.co.uk/legaltransfer.
The new structure of Triodos Bank’s activities in the UK is expected to be effective immediately after midnight (UK time) on 1 May 2019.
In preparation for the subsidiary Triodos has been granted a full banking licence for Triodos Bank UK Ltd. Triodos Bank UK Ltd will be authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and the PRA under new registration number 817008.
Deposit protection guarantee
Eligible deposits held with Triodos Bank UK until the time of the subsidiary legal transfer will be protected by either the Dutch Deposit Guarantee Scheme (DGS), as is currently the case, or the UK’s Financial Services Compensation Scheme (FSCS).
If, on 29 March 2019, the UK Government decides to remain within the European Economic Area (EEA), as envisaged during the implementation period (also known as the transition period) in the Government’s current proposed deal with the EU, then customers’ deposits remain covered by the existing Dutch Deposit Guarantee Scheme (DGS) until the date of transfer to become a subsidiary (Triodos Bank UK Ltd.). Deposits held by Triodos Bank UK Ltd. will be covered by the UK’s Financial Services Compensation Scheme (FSCS).
However, it is possible that the UK Government will not reach an agreement on the nature of the UK’s withdrawal from the EU on 29 March, and that the UK leaves the EU without an implementation period, or with a deal which no longer allows passporting for regulated financial activities. In order to prepare for that outcome, and in discussions with the regulators, we plan to be authorised under the Temporary Permissions Regime (TPR) until Triodos Bank UK become a subsidiary. This is an opportunity for firms currently operating through passporting in the UK under the existing European passport framework to seek permission to continue carrying out regulated activities in the UK. For this period, customers’ deposits would be covered under the UK’s Financial Services Compensation Scheme (FSCS). This protection would then remain in place once Triodos Bank UK Ltd is operational, from 1 May 2019.
The FSCS is the UK's compensation fund of last resort providing most customers, including private individuals and small businesses, with assurance that up to £85,000 of money deposited will be protected if the bank becomes unable to repay money deposited with it. FSCS does not apply to Triodos Crowdfunding holdings and Triodos investment products.
We will be writing to all our customers to confirm the transfer will take effect and to confirm any further changes to Terms & Conditions.
For more information, please contact:
T: 0117 311 0229
M: 07817 413 792
About Triodos Bank
Triodos Bank is a global pioneer in sustainable banking using the power of finance to invest in projects that are good for people and the planet. Triodos uses its €15.1 billion in assets to create social, environmental and cultural value in a transparent and sustainable way.
With UK operations based in Bristol, Triodos Bank has branches in the Netherlands, Belgium, Spain, Germany and an agency in France. Globally, Triodos Bank has microfinance projects in Central Asia and Eastern Europe, and is a founding member of the Global Alliance for Banking on Values (GABV), a worldwide network of 54 banks seeking to transform finance into a vehicle of positive influence.
Triodos Bank NV (incorporated under the laws of the Netherlands with limited liability, registered in England and Wales BR3012). Authorised by the Dutch Central Bank and subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority. Details about the extent of our regulation by the Financial Conduct Authority and Prudential Regulation Authority are available from us on request.