Press release

BSA welcomes new FCA regime for retail CCDS

12 June 2015
The BSA is pleased to see publication by the FCA today of the final rules covering the restrictions on the retail distribution of regulatory capital instruments. For BSA members, this primarily covers the issuance of Core Capital Deferred Shares (CCDS) to retail investors. The rules come into force on 1 July 2015.
We agree with the FCA that retail capital instruments such as CCDS should only be sold to those investors who can understand the risk, and as a modest part of a portfolio - the rules specify a maximum of 10% of net investable assets.
Societies will go the extra mile in observing the highest standards in this area, to protect both their own members and themselves. CCDS are totally different to a savings account, and although the return may be higher, this matches the higher level of risk undertaken.
Commenting, Robin Fieth, Chief Executive of the BSA said:
“We are glad to see these final rules set and congratulate the FCA on seeing through a sound, evidence-based piece of policy work. Any society that wishes to issue CCDS now has the regulatory certainty on which to take forward its plans.
“I do not expect to see a queue forming to issue these instruments immediately, however this is a crucial addition to the capital tool-kit for customer-owned organisations like building societies.
“These final rules strike a good balance between investor protection and opening up a legitimate market. They should ensure that any individual buying CCDS is crystal clear about what they are buying. The investment restrictions mean that they can never be over exposed to this asset class. The rules are a logical extension to the inclusion of this asset as ISA-eligible by the Chancellor last year. ”

Notes for Editors


Hilary McVitty

Head of External Affairs

Tel: 0207 520 5926

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