New laws requiring the ring-fencing of retail banking from investment banking have been enacted in the UK. The protection of retail businesses was one of many recommendations made by the Independent Commission on Banking in 2011. The full implications will only be understood once the secondary legislation is made and rules have been published by the UK regulators.

The Financial Services (Banking Reform) Act 2013 (the “Banking Reform Act”), which received Royal Assent on 18 December 2013, implements the recommendations of the Independent Commission on Banking (the “Vickers Report”) and the Parliamentary Commission on Banking Standards. This note focuses on the ring-fencing provisions. It is of note that this legislation and the final Volcker Rule, a similar US measure, have been published almost contemporaneously.