The Financial Services and Markets Act 2023 (FSMA 2023) introduces a legal framework to protect access to cash withdrawal and deposit facilities in the UK. Under the framework the FCA will be the lead regulator for retail cash access and has been provided with appropriate powers for ensuring that specified firms, i.e. banks and building societies as designated by HM Treasury, continue to ensure the reasonable provision of cash deposit and withdrawal facilities across the UK. The FCA’s powers will allow it to address cash access issues at both a national and local level.

On 24 May 2024, HM Treasury published a new webpage setting out its decisions on which firms have been designated under Part 8B of FSMA (as amended by FSMA 2023) for the provision of cash access services. The webpage sets out firms that have been designated as relevant current account providers under section 131R(1) of FSMA on a UK-wide, Great Britain only and Northern Ireland only basis. These include:

• Barclays Bank UK plc (UK wide)
• National Westminster Bank plc & The Royal Bank of Scotland plc (NatWest Group) (UK wide)
• Lloyds Bank plc and Bank of Scotland plc (Lloyds Banking Group) (UK wide)
• Santander UK plc (UK wide)
• HSBC UK Bank plc (UK wide)
• Nationwide Building Society (UK wide)
• TSB Bank plc (Great Britain only)
• Clydesdale Bank plc (Virgin Money) (Great Britain only)
• The Co-operative Bank plc (Great Britain only)
• Northern Bank Limited (Northern Ireland only)
• Bank of Ireland (UK) plc (Northern Ireland only)
• AIB Group (UK) plc (Northern Ireland only)

It also sets out firms designated as an operator of cash access coordination arrangements under Part 8B on a UK-wide basis, i.e., the Link Scheme Limited and Link Scheme Holdings.

So what?

These designations came into effect on 24 May 2024 and are subject to the FCA's proposed new regulatory framework for designated banks and building societies intended to ensure the reasonable provision of cash access services.

The FCA consulted on its new powers, including proposing a new part to its Handbook in December, with the consultation having closed on 8 February 2024.  Numerous firms responded as the regime was perceived as requiring a considerable up-tick imposing greater process and compliance burdens on designated banks most of which are already participants in the non-statutory access to cash scheme. The FCA is due to publish its final rules during Q3 2024, alongside the publication of its Policy Statement. It is proposing a transitional period, which would give designated entities additional time to carry out cash access assessments for the first 3 months after the rules come into force.

Once in force the FCA's new access to cash regime would require these designated firms to assess and fill gaps in cash access provision in the UK. This includes access to both notes and coins, and access that is free of charge for consumers with personal current accounts.

The FCA is proposing a regime which will require all designated firms, acting individually or (where permitted) through a coordination body, to:

• Undertake cash access assessments to determine whether additional cash access services are required to address local deficiencies;
• Deliver additional cash services to fill gaps in cash service provision where identified by cash access assessments;
• Ensure they do not close cash facilities, including bank branches, until any additional cash services identified as needed in the relevant assessment are available;
• Provide customers with clear information about where they can access cash services;
• Respond to cash access requests from local residents, community organisations and representatives to consider, assess and plug gaps in local deficiencies; and
• Submit regular reports to the FCA containing data on the provision of cash access services.

Along with the proposed regime firms will also be required to follow the FCA's existing guidance on branch and ATM closures or conversions (FG22/6) and the Payment Systems Regulator's directions i.e., the Specific Direction 12 (SD12), which holds the Link Scheme Holdings Ltd (the operator of the LINK ATM network) accountable for maintaining a broad geographic spread of free-to-use ATMs that allows users to access cash when they need to.