PRA clarifies FSCS deposit reporting for firms

The Prudential Regulation Authority (PRA) has reminded firms of their obligations under Depositor Protection rules 43.1 (1) and (2) regarding the annual Class A tariff base reporting to the Financial Conduct Authority (FCA).

This base is crucial for calculating contributions to the Financial Services Compensation Scheme (FSCS).

Firms must include *covered deposits* and the total balance of any deposits where the account holder is not absolutely entitled to the funds, or which are *safeguarded funds*, unless confirmed ineligible.

Calculations must align with *single customer view* and *exclusions view* requirements in Chapter 12 of the Depositor Protection Part of the PRA Rulebook.

Where a deposit may potentially be FSCS protected, but the firm lacks conclusive information on its ineligibility, it must be included in the Class A tariff base under rule 43.1 (2).

These deposits, often in a firm's *exclusions view* file, typically encompass funds held in trust accounts, client money accounts, and other safeguarded accounts, ensuring comprehensive liability assessment.

The PRA's guidance specifically addresses international branches, requiring them to apply rules 43.1 (1) and (2) when calculating their total potential liability to the FSCS for the Branch Return.

This liability is a critical factor in the PRA's assessment of an international bank's ability to conduct UK retail activities through a branch, as outlined in Supervisory Statement SS5/21. Should deposits under rule 43.1(2) materially cause a branch to exceed the indicative threshold for potential FSCS liability, firms are encouraged to detail these deposit types in the 'Firm Notes' field of the Branch Return.

This facilitates appropriate consideration during the assessment.

The PRA clarifies that its determination is not based on hard thresholds but considers various factors measuring deposit-taking activity, adopting a firm-by-firm approach.

Firms must prepare their year-end reporting for 2026 in line with these requirements, making necessary corrections beforehand.

Any issues or uncertainties should be promptly discussed with their usual supervisory contact.