Economic Secretary (): Wholesale cash distribution
(WCD) is the mechanism that supplies physical cash (specifically
banknotes and coins) to retail banks, cash machines, and the
wider retail market. This is a vital mechanism for ensuring the
sustainable provision of, and reliable public access to, cash.
Under Part 5A of the Banking Act 2009, the Bank of England is
responsible for managing risks to the effectiveness, resilience,
and sustainability of the WCD system. Specifically, the Act gives
the Bank of England powers to ‘oversee' firms recognised by the
Treasury in wholesale cash oversight orders as performing
relevant WCD activities and as being market significant. The Bank
of England can give directions, issue codes of practice, and
supervise firms' compliance. Further detail on the Bank of
England's supervisory approach can be found in its Statement of
Policy. [1]
HM Treasury's decision on recognition
Today I am announcing which firms the Treasury has specified as
recognised persons in wholesale cash oversight orders. As
required under the Act, in making this decision the Treasury has:
notified firms it considered for recognition; sought and
considered any representations from these firms; and consulted
relevant regulators, including the Bank of England.
Following this extensive process, I am announcing today that HM
Treasury has made wholesale cash oversight orders to the
following firms:
- Barclays Bank UK PLC;
- Barclays Bank PLC;
- G4S Cash Centres (UK) Limited;
- HSBC UK Bank PLC;
- HSBC Bank PLC;
- Lloyds Bank PLC;
- Bank of Scotland PLC;
- National Westminster Bank Public Limited Company;
- The Royal Bank of Scotland Public Limited Company;
- Post Office Limited;
- Santander UK PLC;
- Vaultex UK Limited.
These wholesale cash oversight orders have been made on 5 June
2025 and will come into force today, 12 June 2025.
In making these orders I have considered the requirements under
section 28 of the Small Business, Enterprise, and Employment Act
2015. This requires Minsters include in certain secondary
legislation that regulates businesses (and other bodies) a
provision for review or a statement as to why this is not
appropriate.
I consider a provision for review inappropriate as it would be
disproportionate relative to the economic impact. The impact on
business is expected to be de minimis with annual fees the Bank
of England can charge recognised firms effectively capped by the
Treasury, detailed in Banking Act 2009 (Wholesale Cash Oversight
Fees) Regulations 2024. The Bank of England can charge a maximum
of £400,000 per firm per year for supervision fees and £150,000
for ‘special projects'. The current aggregate impact of making
these orders is de minimis as defined in the Better Regulation
Framework.
Further, including a provision for review would be undesirable
for particular policy reasons. The legislation contains
provisions which necessitate ongoing review, meaning further
provisions would be duplicative. Under section 206J of the
Banking Act 2009, HM Treasury must revoke an order if it is no
longer satisfied that the firm meets the relevant criteria.
Section 206Z2 also requires the Bank of England to produce an
annual report on the discharge of its functions and the extent to
which risks in the WCD system have been managed. That report will
subsequently be laid in Parliament. HM Treasury also plans
routine engagement with the Bank of England that will monitor the
implementation and impact of the regime.
[1] https://www.bankofengland.co.uk/paper/2023/sop/sop-on-the-banks-supervisory-approach-to-market-oversight-for-wholesale-cash-distribution
