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RBS updates ring-fencing plans, seeks court approval by March 2018


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RBS updates ring-fencing plans, seeks court approval by March 2018

Royal Bank of Scotland Group Plc updated its restructuring strategy to comply with the ring-fencing legislation set to come into force in 2019.

The group will transfer certain personal and business banking as well as commercial banking businesses of Royal Bank of Scotland Plc to Adam & Co. Plc and National Westminster Bank Plc as part of its ring-fencing strategy.

A petition was presented to the Court of Session in Scotland on Nov. 17 for an order to approve the scheme. The first hearing was held Nov. 21, and the second hearing is set for March 22, 2018, with the effective date of the scheme set to be April 30, 2018, or any later date that RBS Group, Adam & Co. and NatWest agree with the U.K. Prudential Regulation and Financial Conduct Authorities.

When the scheme becomes effective, Adam & Co. will be renamed The Royal Bank of Scotland Plc, and RBS Plc will be renamed NatWest Markets Plc, the lender said.

Meanwhile, NatWest Plc will become the issuer of RBS Plc's covered bond program, the group said.

Further, during the second half of 2018, ownership of NatWest Holdings Ltd., the parent for the ring-fenced subgroup that includes NatWest and Adam & Co, will be transferred to RBS Group from RBS Plc.

NatWest Plc will also be the seller and servicer of mortgage loans held by the RBS Covered Bonds LLP; lender under the intercompany loan agreement; interest rate swap provider and covered bond swap provider to the partnership as well as designated member of the LLP.

Subject to court approval of the restructuring plan, RBS Plc will resign from its membership and the LLP renamed NatWest Covered Bonds LLP. Subsequently, RBS Plc will transfer its shares in RBS Covered Bonds (LM) Ltd. to NatWest and the entity renamed NatWest Covered Bonds (LM) Ltd.

RBS Plc's will transfer its authority as issuer of notes in Scotland to Adam & Co., subject to parliamentary approval of secondary legislation authorizing the transfer.

Meanwhile, the bank has asked people concerned about the changes to either lodge a formal objection, or an "Answer," in court, through legal advisers or directly in writing or an informal objection to the court, to RBS or to the U.K. Prudential Regulatory Authority by post. Those concerned can also lodge their informal objections with the U.K. PRA on their website, or before the court in person, RBS Group said.

The last date for raising objections is Feb. 23, 2018, by 5 p.m., for these to be considered by the court at the hearing called to consider approving the ring-fencing scheme.