Class 1 - Deposit Taking

Class 1(1) Accepting deposits of money from any person, including persons that are not restricted depositors, where —

(a) the money received by way of deposit is lent to others; or

(b) any other activity of the person accepting the deposit is financed wholly, or to a material extent, out of the capital of or interest on the money received by way of deposit.

Class 1(2) Accepting deposits of money solely from persons who are restricted depositors, where —

(a) the money received by way of deposit is lent to others; or

(b) any other activity of the person accepting the deposit is financed wholly, or to a material extent, out of the capital of or interest on the money received by way of deposit.

Class 1(3) Operating a representative office of a foreign bank.

Full details of regulated activities, exclusions and exemptions from licensing may be found in the Deposit taking handbook. A licenceholder under the Financial Services Act 2008 is obliged to comply with any licence conditions that have been imposed by the Authority and which are shown on the licence.

The Deposit taking handbook also contains links to other legislation relating to licenceholders, including the Financial Services Rule Book which contains the detailed rules to be complied with by all licenceholders. Guidance on rules and on other regulatory matters may also be found in the handbook.

All Class 1(1) deposit-takers must be members of the Depositors' Compensation Scheme except for certain banks and building societies that may be exempted if they do not take retail deposits.

The Authority sometimes undertakes themed examinations of deposit takers across a range of topics covering different areas of regulation. The key findings from thematic reviews are shared with deposit takers (in addition to individual reoprts issued to deposit takers visited) and can be viewed by clicking on the titles below:

2022 AML Account Block Dear CEO Letter

2014-15 AML / CFT

2012-13 AML / CFT

2011-12 Complaints Handling

2011-12 Corporate Governance

2010-11 Credit Risk Management

The Authority’s Licensing Policy for Regulated Activities under the Financial Services Act 2008 (“licensing policy”) provides guidance for licenceholders. A licenceholder and its key staff are required to be fit and proper persons. The Authority’s licensing policy is to apply a test of fitness and propriety in the key areas of integrity, competence and solvency.

Licenceholders should also note the requirements of the anti-money laundering and countering the financing of terrorism legislation and handbook.