As a global bank, it is important for us to be constantly working towards becoming simpler, safer and stronger.

Transcription

1 Information on the proposed Transfer of the Citi International Personal Bank Business of Citibank, N.A., London Branch to the UK Branch of Citibank Europe plc This leaflet has been created to provide you with more information regarding the proposed transfer of the International Personal Bank business of Citibank, N.A., London Branch to the UK Branch of Citibank Europe plc (the Transfer ). It also: 1. Summarises certain changes to our regulatory framework as a result of the Transfer; 2. Provides answers to questions you may have. Please take the time to read this leaflet. 1

2 Introduction As a global bank, it is important for us to be constantly working towards becoming simpler, safer and stronger. Following the merger of Citibank International Limited into Citigroup s pan-european Bank headquartered in Ireland, Citibank Europe plc on 1st January 2016, this Transfer is being proposed to further streamline the regulatory regime of the international personal banking business and simplify long-term planning within Citigroup. Citibank Europe plc has branches in 21 different countries and after the Transfer, your accounts will be held with the UK Branch of Citibank Europe plc. Deposit Guarantee Scheme There are some differences between the UK deposit guarantee scheme (the Financial Services Compensation Scheme or FSCS ) and the Irish deposit guarantee scheme (the DGS ) administered by the Central Bank of Ireland that will apply following the Transfer. The FSCS provides most customers who deposit money with a Financial Conduct Authority authorised deposit taker, with protection of up to 75,000 (or 150,000 if two customers hold the money in a joint account), if the bank becomes unable to repay money deposited with it. It is expected that this will change to 85,000 (or 170,000 in the case of joint deposits) with effect from 30 January Likewise, the DGS provides most customers who deposit money with a deposit taker authorised by the Central Bank of Ireland, with protection of up to 100,000 (or 200,000 if two customers hold the money in a joint account), if the bank becomes unable to repay money deposited with it. After the Transfer, your deposits will be migrated to the UK Branch of Citibank Europe plc, and it will be the Irish deposit guarantee scheme and Irish protection limit that will apply. At the present time, if you have money deposited with both Citibank, N.A., London Branch and the UK Branch (or any other branch*) of Citibank Europe plc, and circumstances arise where you are entitled to make a claim against both, you could currently claim a maximum of 75,000 under the FSCS and 100,000 under the DGS (or 150,000 and 200,000 in the case of joint accounts) against each organisation. However, if the Transfer becomes effective, the money you have in your Citibank, N.A., London Branch account(s) will be aggregated with what you hold in your Citibank Europe plc account(s)*. As a consequence, you would only be entitled to recover up to a maximum of 100,000 (or 200,000 in the case of joint accounts) from the DGS. Therefore, if as a result of the Transfer, you will have total eligible deposits of more than 100,000 (or 200,000 if two customers hold the money in a joint account) (or equivalent in local currency) held in your account(s) with Citibank Europe plc* UK Branch, you may withdraw or transfer any eligible deposits (including any accrued interest and other benefits) in excess of 100,000 (or 200,000 for joint accounts) (or equivalent in local currency) to another bank or institution from your Citbank Europe plc UK Branch account without incurring any charge or loss of interest. We will communicate again with you before the Transfer to provide you with further information about how you can exercise this right. *Please note, this limit is applied to the total of any deposits you have with the following: Citibank UK, Citi Private Bank, Citi International Personal Bank, Citibank Europe plc Greece Branch and Citibank Europe plc Hungary Branch which are trading names of Citibank Europe plc. Any total deposits you hold above the limit between these brands are unlikely to be covered. If you are impacted by this reduction in protection and you wish to discuss this in more detail, please contact your Relationship Manager. Temporary high balances Under the UK rules, in some cases, an eligible deposit which is categorised as a temporary high balance (for example, as a result of a house sale, inheritance, or insurance payment) may be protected to a higher limit for six months after the amount has been credited to your account or from the moment when such eligible deposits become legally transferable. See the FSCS website for full details. Similarly, European rules require Ireland to temporarily protect deposits above the usual 100,000 limit in certain limited circumstances. Under the DGS, for a deposit to qualify as a temporary high balance it must stem from at least one of the following: 2

3 deposits resulting from real estate transactions relating to private residential properties; deposits that are linked to particular life events such as marriage, civil partnership, divorce, retirement, dismissal, redundancy invalidity or death; and deposits based on the payment of insurance benefits. These qualifying deposits are protected up to a limit of 1,000,000 (or 2,000,000 if two customers hold the money in a joint account) for a period of 6 months after the deposits have been credited to an account or from the moment when such deposits become legally transferable. Where the qualifying temporary high balance arose from a payment in connection with personal injury or incapacity, the 1,000,000 protection limit does not apply and unlimited cover is provided. Other Compensation Schemes As with the deposit guarantee scheme, there are some differences between the Irish and the UK compensation schemes with regards to losses relating to the provision of investment and non-investment insurance intermediation services. The main difference is that the Irish scheme provides for the return of 90% of the value of an investor s net loss up to a maximum of 20,000 whereas, for protected investment business, the UK scheme provides for a return of 100% of the loss up to a maximum of 50,000. In addition, for protected non-investment insurance business, the UK scheme provides 100% of the loss with no upper limit where claims arise: (a) in respect of a liability subject to compulsory insurance; or (b) in respect of a liability subject to professional indemnity insurance; or (c) from the death or incapacity of the policyholder due to injury, sickness, or infirmity. Where claims arise under other types of policy, the UK scheme provides for the return of 90% of the loss with no upper limit. Due to the difference between the Irish and UK investment compensation schemes, the FSCS has provided us with supplemental cover to maintain the same level of protection as you currently have under Citibank, N.A., London Branch in relation to the investment services provided by Citi. Citi Europe plc UK Branch has made a similar application for supplemental cover in relation to insurance mediation services, and is expecting this to be granted before the Transfer. Therefore, to the extent you have a claim which exceeds the limits of the Irish scheme, you may be eligible to top up your claim under the UK scheme up to the limits set by the UK scheme. Additional information on the UK scheme and eligibility to claim is available from the UK scheme s website: or you can contact the UK Scheme at Financial Services Compensation Scheme, 10th Floor, Beaufort House, 15 St Botolph Street, London EC3A 7QU (Tel: ; enquiries@fscs.org.uk). Additional information on the Irish Investor Compensation Scheme is available from the Irish scheme s website: or you can contact the Irish scheme C/o Central Bank of Ireland, PO Box 11517, Spencer Dock North Wall Quay, Dublin 1 (Tel: ; Fax: ; info@investorcompensation.ie). Client Asset Protection Following the Transfer, the UK Branch of Citibank Europe plc will provide the services that customers currently receive from Citibank, N.A., London Branch. As a result, Irish legislation giving effect to certain European rules ( Irish requirements ) will be the legal and regulatory standard for client asset protection that will apply across Citibank Europe plc (and its branches), as it already applies for Citibank Europe plc today. The Irish requirements impose comparable levels of rigor to those operated in the UK. Irish requirements require Citibank Europe plc to clearly demonstrate that it has robust governance structures that segregate client assets from those of the firm and that it has adequate controls and procedures that support these requirements. As they are now, these elements will be the subject of external audit in accordance with Irish requirements, and will also be subject to the oversight of the Central Bank of Ireland. Although different legal regimes apply to the Citibank, N.A., London Branch and Citibank Europe plc for the protection of client assets, Citibank Europe plc will maintain standards of governance and oversight that are comparable with the standards being adopted by Citibank, N.A., London Branch. 3

4 So, for example, similar management oversight and reporting to that which is applied by Citibank, N.A., London Branch today for the FCA will be applied and produced for Citibank Europe plc but for internal governance purposes and senior management review rather than to meet a regulatory obligation. There are some aspects of the UK regime which will not be continued as part of the new transferee operations. For example, whilst Citibank Europe plc will develop processes for identifying shortfalls in client assets, it will not be required to segregate client money in the exceptional event that a shortfall in client assets was identified as is the case in the UK at the moment. However, these differences between the legal regimes do not affect the fundamental protection of your client assets, which is currently provided for in the UK by the FCA under its CASS Sourcebook and which will continue to be provided for in Ireland by the Irish requirements. In other words, following the Transfer your assets will continue to be protected in the event of the firm s insolvency. Conduct of Business Rules Citibank, N.A., London Branch is currently subject to a number of conduct of business rules when providing services to you. These conduct of business rules impose certain obligations on Citibank, N.A., London Branch and provide you with certain rights and protection. Currently UK rules apply to the provision of our services and, if you are located in the UK, this will not change. If you are located outside the UK, following the Transfer, Irish conduct of business rules will apply to the provision of certain services by the UK branch of Citibank Europe plc rather than UK rules which currently apply to Citibank, N.A., London Branch. However, whilst there may be some changes from UK to Irish conduct of business rules, both the UK and Irish rules are based on common standards set by European law and, in practice, we do not anticipate any material change to our obligations or the rights and protections afforded to you by those rules. Complaints Our internal complaints procedures will not change as a result of the Transfer. If you are resident outside of the UK, you may apply to the UK Financial Ombudsman Service who may accept your complaint or refer you to the Financial Services Ombudsman in Ireland. Alternatively, you may apply to the Irish Financial Services Ombudsman directly instead. Contact details for both will be provided in your new terms and conditions which will be sent to you closer to the Transfer date. If you are a resident of the UK you will continue to contact the Financial Ombudsman Service in the UK if, after you have given us the opportunity to put things right, we are unable to resolve a complaint to your satisfaction. This means that you may still refer a complaint to the UK Financial Ombudsman Service whether it arises before or after the Transfer and, if the UK Financial Ombudsman Service is in the process of dealing with a complaint at the time the Transfer occurs, the UK Financial Ombudsman Service will continue to be able to deal with that complaint. Data Protection The Transfer will not, in itself, affect the data protection rules applicable to any personal information that we process in providing services to you Citibank Europe plc will simply take on the data protection responsibilities of Citibank, N.A., London Branch. Withholding Tax It is not generally expected that, as a result of the Transfer, additional withholding tax should be levied on either Citibank Europe plc s payments to clients or clients payments to Citibank Europe plc (or that withholding tax imposed by jurisdictions other than the UK will apply on such payments) in connection with the majority of products offered by the UK Branch of Citibank Europe plc. However, such withholdings obligations arising cannot be excluded. It should be noted that the withholding tax position of clients with respect to interest payments made on loans following the Transfer (which will involve the migration of loans from Citibank, N.A., London Branch to Citibank Europe plc, UK Branch) may change, as the position will depend on, among other things, the country of residence of the borrower, whether that country has entered into a double tax treaty with the Republic of Ireland and the availability of any domestic law exemptions. If you are concerned about your withholding tax position in respect of payments following the Transfer, you should contact your tax advisor as Citi does not provide tax advice. 4

5 General Questions and Answers How would the Transfer work? The Transfer would be a court-approved process with applications being made to the English courts. At the final stage of the court process, the English court would consider and, if thought fit, approve the Transfer. The Transfer would have the effect of transferring all of Citibank, N.A., London Branch s assets and liabilities related to its International Personal Banking business to Citibank Europe plc, UK Branch. What does this mean for my relationship with Citibank, N.A., London Branch? There will be no material impact on the services we provide to you. In general, existing contractual arrangements you have with Citibank, N.A., London Branch will transfer automatically to Citibank Europe plc. As your existing contractual relationship is with Citibank, N.A., London Branch s office in London, Citibank Europe plc s UK branch would continue this relationship. When would the Transfer likely take place? The Transfer effective date is anticipated to be on 1 May Is the Transfer final? No, currently the Transfer of the International Personal Banking business of Citibank, N.A., London Branch is subject to certain approvals including the approval of the English courts. Who will be the relevant regulator following the Transfer? Citibank Europe plc, UK Branch is authorised by the Central Bank of Ireland under reference C26553 and subject to limited regulation by the Prudential Regulation Authority. It is subject to supervision by the Central Bank of Ireland, and subject to limited regulation by the Financial Conduct Authority and the Prudential Regulation Authority. Details about the extent of our authorisation and regulation by the Prudential Regulation Authority, and regulation by the Financial Conduct Authority are available from us on request. What are the registered addresses of Citibank Europe plc? Citibank Europe plc, UK Branch is registered as a branch (registration number FC032763) in the register of companies for England and Wales. The registered address in the UK is Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB. Citibank Europe plc is registered in Ireland with number , with its registered office at 1 North Wall Quay, Dublin 1. When will you update me on the final decision? We plan to write to you in the first quarter of 2017 once we learn the outcome of the Transfer. If the Transfer is successful, we will also send you your new Terms and Conditions containing the changes we have referred to in this document. What do I do if I am unhappy about the Transfer? If, after considering all of the information we have provided, you are unhappy about maintaining your account with Citibank Europe plc UK Branch after the Transfer, please contact us and we can help you make the arrangements necessary to close your account. 5

6 Products & Services Questions and Answers Will this change how Citi interacts with me? No, we do not anticipate any material change to the services we provide to clients. Will my account number stay the same? Your account number and IBAN will stay the same. We will let you know about changes to our sort code and SWIFT code nearer the time. Will I still be able to use my Citi Debit Card? Yes, your Citi Debit Card will carry on working. No new Citi Debit Cards will be issued directly as a result of the Transfer but new replacement cards will be issued in the ordinary course. Will the way I contact Citi stay the same? Yes, you will continue to contact us in the way you normally do. Will I receive a new set of Terms and Conditions? Yes, your new Terms and Conditions containing the changes we have referred to in this document will be sent out to you as soon as the Transfer is complete. Will there be a change to the current product and services I receive as a result of the Transfer? No, there will be no material changes to the products and services offered as result of the Transfer. Will Citibank Europe plc provide the same credit lines to clients as they do currently? Yes, credit lines extended by Citibank, N.A., London Branch will transfer to Citibank Europe plc on the effective date of the Transfer. What would happen in respect of any security I have granted you as part of a secured loan? Where you have granted security or collateral to Citibank, N.A., London Branch, this will transfer to Citibank Europe plc upon the Transfer and we do not anticipate you needing to take any steps to reflect the change in beneficiary. We may, however, need to take some administrative steps to update security registers with the change in details but this should not affect our priority or otherwise affect the date from which the security is valid. 6

7 What happens next? The Transfer of the International Personal Banking business of Citibank, N.A., London Branch to the UK Branch of Citibank Europe plc requires approval of the English High Court. In considering whether to give its approval, the Court will take into account whether the Transfer adversely affects customers and others. The Court hearing will take place on 12 April Anyone can appear at the hearing in person or be represented by a barrister or solicitor-advocate if they believe that they would be adversely affected by the Proposal. If you want to appear at the hearing, it would be helpful if you could register your intention by writing to Citibank N.A. Court Scheme c/o Hogan Lovells International LLP, Atlantic House, Holborn Viaduct, London, EC1A 2FG (the solicitors acting for us), or by ing them at citibanknacourtscheme@hoganlovells.com. Your letters need to be received by Hogan Lovells by 6 April 2017 (three business days before the Court hearing) and should state your objections and why you think you will be adversely affected by the Transfer. You can also write to Hogan Lovells with your reasons for objecting to the Proposal even if you are not going to appear at the hearing. Hogan Lovells will ensure that your objections are raised at the Court hearing. Again, it would be helpful if you could write to them so that your letters are received by 6 April In addition to the Court hearing, our regulator the Prudential Regulation Authority will carry out a limited review of the Transfer. As long as the Court gives its approval, we expect that the Transfer will take effect on 1 May Who can I speak to if I require advice on this matter? This leaflet is not intended to provide legal or tax advice (and you should not rely on it as such); it is intended only to provide you with information about the Transfer and to highlight certain considerations the Transfer may have for our clients and our ongoing business relationship. We therefore recommend that you seek advice from your professional advisors if you have any questions or concerns regarding the information we have provided in this communication. 7

8 Citibank N.A., London Branch is authorised and regulated by the Office of the Comptroller of the Currency (USA) and authorised by the Prudential Regulation Authority. Subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request. Our firm reference number with our UK regulators is Citibank N.A., London Branch is registered as a branch in the UK at Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB. Registered number BR Citibank N.A. is incorporated with limited liability in the USA. Head office: 399 Park Avenue, New York, NY 10043, USA. Citibank N.A CITI, CITI and Arc Design are registered service marks of Citigroup Inc. Calls may be monitored or recorded for training and service quality purposes INS