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ATCS 5.3 Step 1: Identifying local deficiencies

What is the local area?

ATCS 5.3.1R
  1. (1)

    In order to identify whether there is a local deficiency under ATCS 5.2.1R(1), a cash access assessment must establish the local area according to the methodology referred to in ATCS 5.3.2R.

  2. (2)

    The methodology must be used consistently by a designated person for its cash access assessments.

  3. (3)

    Where a cash access request is submitted by the FCA, the FCA may specify the local area for the purposes of the cash access assessment.

ATCS 5.3.2R
  1. (1)

    The cash access assessment must use an appropriate methodology which enables it to draw a boundary for a local area that takes in the addresses of the persons who could be affected if there was a deficiency in the specified cash access services being assessed.

  2. (2)

    Where a cash access assessment is triggered under ATCS 4.1.1R(1) (concerning closures of designated firms) or ATCS 4.1.1R(2) (concerning closures of persons other than designated firms), the persons referred to in (1) are the people or businesses in the area surrounding the cash access facility which is the subject of the relevant closure who have the potential to be more than nominally affected by the relevant closure.

  3. (3)

    Where a cash access assessment is triggered under ATCS 4.1.1R(3) (concerning cash access requests), the persons referred to in (1) are the people or businesses in the area surrounding the address, street or retail area referenced in the cash access request who would have the potential to be more than nominally affected if:

    1. (a)

      there was a relevant closure of a hypothetical cash access facility at the address, street or retail area referenced in the cash access request; and

    2. (b)

      the specified cash access services being assessed were provided through it.

ATCS 5.3.3G
  1. (1)

    ATCS 5.3.2R involves the need to establish who could be affected. The work undertaken to do this should be reasonable and proportionate, bearing in mind that this is not the cash access assessment itself. It involves looking at the potential for effects rather than reaching a conclusion on whether there are actual effects. It should not involve the need to establish whether any persons actually use cash, nor to undertake any of the detailed steps in ATCS 5.2.1R. The purpose is to establish the grouping of residents and businesses (by reference to an area) that those steps should be directed at.

  2. (2)

    In determining the people who could be affected under ATCS 5.3.2R, one consideration may be where people in the relevant surrounding area who might use cash are likely to use it regularly, such as retail areas, and the presence (or otherwise) of cash access facilities there. For example, if a relevant closure takes place in a village, residents of a nearby town may not be regarded as people who could be affected if it is reasonable to expect that they do not make regular use of the relevant cash access facility in the village because of the presence of cash access facilities in the town.

  3. (3)

    ATCS 5.3.2R(3) involves the application of a hypothetical test of who could be affected if a relevant closure was to take place. The methodology for determining the persons referred to in ATCS 5.3.2R(2) and ATCS 5.3.2R(3) should accordingly be consistent.

  4. (4)

    If the methodology adopts a radius measurement extending from the relevant reference point that is the same for every cash access assessment, that is unlikely to be regarded as an appropriate methodology as it would not take account of the potential for differing local circumstances, such as differences in geography.

  5. (5)

    Where the requirement for a cash access assessment is triggered under ATCS 4.1.1R(1) (concerning closures of designated firms) or ATCS 4.1.1R(2) (concerning closures of persons other than designated firms), the local area is unlikely to be appropriately drawn if it does not at least include the addresses of any persons who, as a result of the relevant closure, are or would no longer be within the relevant distance of one or more cash access facilities which, between them, provide the specified cash access services and specified cash access facility features being assessed at step 1.

Closures: scope

ATCS 5.3.4R

Where the requirement for a cash access assessment is triggered under ATCS 4.1.1R(1) (concerning closures of designated firms) or ATCS 4.1.1R(2) (concerning closures of persons other than designated firms):

  1. (1)

    an assessment must be made of whether there is or would be, after the relevant closure, a local deficiency in provision of each specified cash access service that is or was (as the case may be) subject to closure, reduction or change at the cash access facility as a result of the relevant closure, taking into account any specified cash access facility feature subject to the closure, reduction or change;

  2. (2)

    where a designated firm undertakes a cash access assessment, it does not have to assess a specified cash access service that relates to relevant personal current accounts if it does not provide any such accounts, and it does not have to assess a specified cash access service that relates to businesses if it does not provide any relevant current accounts for businesses;

  3. (3)

    where a designated coordination body undertakes a cash access assessment for its participating designated firms, the body does not have to assess a specified cash access service that relates to relevant personal current accounts if none of those firms provide any such accounts, and it does not have to assess a specified cash access service that relates to businesses if none of those firms provide any relevant current accounts for businesses;

  4. (4)

    an assessment may cover more specified cash access services or specified cash access facility features than those referred to in (1); and

  5. (5)

    ATCS 5.3.5R applies.

Closures: application of relevant distance

ATCS 5.3.5R

If at least 95% of people living in the local area have access to one or more cash access facilities within:

  1. (1)

    1 mile of where they live, if the local area is predominantly urban; or

  2. (2)

    3 miles of where they live, if the local area is predominantly rural,

through which:

  1. (3)

    a specified cash access service is provided which is of a type that is or was subject to closure, reduction or change as a result of the relevant closure, along with any specified cash access facility feature subject to the closure, reduction or change,

the cash access assessment may find that there is or would be no local deficiency in provision of that specified cash access service after the relevant closure, subject to ATCS 5.3.9R.

ATCS 5.3.6R

Where more specified cash access services or specified cash access facility features are assessed than those referred to in ATCS 5.3.4R(1), ATCS 5.3.5R applies as if ATCS 5.3.5R(3) refers to:

  1. (1)

    each specified cash access service being assessed; and

  2. (2)

    each specified cash access facility feature being assessed in relation to the service.

Cash access requests: scope

ATCS 5.3.7R

Where the requirement for a cash access assessment is triggered under ATCS 4.1.1R(3) (concerning cash access requests):

  1. (1)

    an assessment must be made of whether there is a local deficiency in provision of each specified cash access service indicated in the cash access request, taking into account any specified cash access facility feature indicated in relation to the service;

  2. (2)

    where a designated firm undertakes a cash access assessment, it does not have to assess a specified cash access service that relates to relevant personal current accounts if it does not provide any such accounts, and it does not have to assess a specified cash access service that relates to businesses if it does not provide any relevant current accounts for businesses;

  3. (3)

    where a designated coordination body undertakes a cash access assessment for its participating designated firms, the body does not have to assess a specified cash access service that relates to relevant personal current accounts if none of those firms provide any such accounts, and it does not have to assess a specified cash access service that relates to businesses if none of those firms provide any relevant current accounts for businesses;

  4. (4)

    an assessment may cover more specified cash access services or specified cash access facility features than those referred to in (1); and

  5. (5)

    ATCS 5.3.8R applies.

Cash access requests: application of relevant distance

ATCS 5.3.8R

If at least 95% of people living in the local area have access to one or more cash access facilities within:

  1. (1)

    1 mile of where they live, if the local area is predominantly urban; or

  2. (2)

    3 miles of where they live, if the local area is predominantly rural,

through which:

  1. (3)

    a specified cash access service being assessed is provided, along with any specified cash access facility feature being assessed in relation to the service,

the cash access assessment may find that there is no local deficiency in provision of that specified cash access service, subject to ATCS 5.3.9R.

Step 1 qualifications

ATCS 5.3.9R

ATCS 5.3.5R and ATCS 5.3.8R cannot be relied on where:

  1. (1)

    the time or cost of travelling for those living in the local area to any cash access facility that would otherwise be relied on to meet the requirements in those rules is such that it would not be reasonable to regard the relevant distance as an appropriate determining measure; or

  2. (2)

    the cash access facility or cash access facilities which would otherwise be relied on to meet the requirements in those rules do not, or would not after a relevant closure, have sufficient capacity between them to accommodate users of the relevant cash access service from the local area.

ATCS 5.3.10R

For the purposes of establishing whether there are cash access facilities that meet the requirements in ATCS 5.3.5R or ATCS 5.3.8R, account may only be taken of the availability of a specified cash access service and any specified cash access facility feature relating to the service at a branch of a bank or building society within the relevant distance if one of the conditions in ATCS 5.3.11R or ATCS 5.3.12R is satisfied.

ATCS 5.3.11R

The first condition referred to in ATCS 5.3.10R is that the same type of specified cash access service and (where relevant) specified cash access facility feature are available to customers of another relevant current account provider besides the bank or building society referred to in that rule at a cash access facility within the relevant distance.

ATCS 5.3.12R

The second condition referred to in ATCS 5.3.10R is that:

  1. (1)

    the requirement for the cash access assessment was triggered under ATCS 4.1.1R(1) (concerning closures of designated firms) or ATCS 4.1.1R(2) (concerning closures of persons other than designated firms); and

  2. (2)

    the cash access facility which is the subject of the relevant closure is a branch of the bank or building society referred to in ATCS 5.3.10R.

Guidance

ATCS 5.3.13G
  1. (1)

    The cash access assessment begins by considering whether there is a local deficiency in provision of cash access services by reference to what is available within the relevant distance. Exclusions from consideration of what cash access services are available for the purposes of ATCS 5.3.5R or ATCS 5.3.8R are set out in ATCS 5.2.5R and ATCS 5.3.10R. The effect of ATCS 5.2.5R(1) is that where a cash access assessment is undertaken as a result of an expected full closure of a cash access facility, that facility must be ignored for the purposes of ATCS 5.3.5R or ATCS 5.3.8R. Where the assessment results from a material reduction or change in provision of cash access services expected at a cash access facility, the effect of ATCS 5.2.5R(2) is that the facility can be taken into account but only to the extent of the cash access services it will provide after the reduction/change.

  2. (2)

    See ATCS 4.1.12G(3) on the impact of ATCS 4.1.11R on the specified cash access services and specified cash access facility features that must be assessed in accordance with ATCS 5.3.7R(1). Designated persons may want to bear this in mind when considering the scope of cash access assessments. Unless assessments are undertaken on a holistic basis (ie, by assessing all specified cash access services and specified cash access facility features), they could in theory have to act on multiple cash access requests indicating different issues in respect of the same or substantially the same local area within a 12-month period.

  3. (3)

    There is no requirement in ATCS 5.3.5R(3) that the specified cash access service at a cash access facility within the relevant distance must be provided by the same provider that provided it at the cash access facility which is the subject of the relevant closure. The focus is on the availability of the type of specified cash access service, not on the identity of the provider.

  4. (4)

    Reliance on ATCS 5.3.5R or ATCS 5.3.8R is not dependent on all the specified cash access services under assessment being provided at the same cash access facility. They may be provided through a combination of 2 or more cash access facilities.

  5. (5)

    ATCS 5.3.9R(1) is most likely to apply in rural areas – for example, where:

    1. (a)

      geographical barriers mean that it takes substantially longer for people living in the local area to travel to the relevant cash access facility or cash access facilities than it does to travel to their nearest retail areas; or

    2. (b)

      limited transport networks mean that it costs people living in the local area substantially more to travel to the relevant cash access facility or cash access facilities than it does to travel to their nearest retail areas.

  6. (6)

    An example of where ATCS 5.3.9R(2) may apply is if a cash access facility subject to a full closure has several service counters, and the only other cash access facility within the relevant distance with equivalent specified cash access services and specified cash access facility features has one counter. If this means the other cash access facility would be unable to accommodate the additional demand from users of cash access services in the local area following the relevant closure, ATCS 5.3.5R cannot be relied on.

  7. (7)

    Opening hours may be relevant to consideration of a cash access facility’s capacity under ATCS 5.3.9R(2). For example, the facility may be open for so few hours each week that this leads to unacceptable delays in service or queues.

  8. (8)

    Predictable fluctuations in demand may also be relevant to consideration of capacity. For example, where a local area receives a significant influx of visitors during the holiday season or on market days, which puts pressure on the cash access facility.

  9. (9)

    The effect of ATCS 5.3.10R is that if the only cash access facility within the relevant distance is a branch of a bank or building society, and the condition in ATCS 5.3.12R is not met, the only specified cash access services provided at the branch that it may be possible to take into account for the purposes of ATCS 5.3.5R or ATCS 5.3.8R are services which are also available to customers of at least one other relevant current account provider. An example of this is a cash withdrawal service provided through an automatic teller machine which is part of the LINK network. If cash withdrawal services are being assessed, it may be possible to find there is no local deficiency in them where there is such a machine, subject to any specified cash access facility features that also need to be assessed and the qualifications in ATCS 5.3.9R. But if any cash deposit services are being assessed in this scenario and these are not also available to customers of another relevant current account provider, they will have to proceed to step 2.

Background to relevant distances

ATCS 5.3.14G
  1. (1)

    Under section 131U(5) of the Act, a local deficiency in the provision of cash access services is: ‘a circumstance which limits the ability of persons in any locality in a part of the United Kingdom to (a) withdraw cash from a relevant current account, or (b) place cash on a relevant current account’.

  2. (2)

    Under section 131U(6) of the Act, in determining whether there are local deficiencies, the FCA must have regard to the Treasury’s Cash Access Policy Statement published under section 131P(6) of the Act which is currently in effect, as well as such other matters as the FCA considers appropriate.

  3. (3)

    The relevant distances are taken from the Treasury’s Cash Access Policy Statement published on 18 August 2023. These distances are measured in a straight line.

  4. (4)

    The distances in the Cash Access Policy Statement do not include distances for business premises from cash access facilities. However, the statement says: ‘the distance relative to the residential population is considered here to be a suitable proxy’. No separate distances are given in this chapter relative to business premises.

Going to step 2

ATCS 5.3.15R

If ATCS 5.3.5R or ATCS 5.3.8R cannot be relied on, it must be found that there is, or would be after a relevant closure, a local deficiency in provision of the relevant specified cash access service.