PART 3Requirements as to backing assets
Backing assets6
1
An authorised bank must have backing assets in accordance with these Regulations and the rules.
2
The following kinds of assets are specified as backing assets—
a
Bank of England banknotes of such denominations and series as are specified in the rules;
b
current coins of the United Kingdom; and
c
funds placed on deposit in sterling in an account held by the Bank of England and designated by the Bank of England for the purposes of this regulation.
3
Backing assets in the form of Bank of England banknotes must be held either—
a
by the Bank of England; or
b
at one or more locations for the time being approved by the Bank of England for this purpose.
4
Backing assets in the form of coins must be held at one or more locations for the time being approved by the Bank of England for this purpose.
5
6
The rules may prohibit an authorised bank from maintaining more than a specified proportion of its backing assets—
b
in the form of current coins of the United Kingdom.
7
The rules may specify requirements with which an authorised bank must comply where it—
a
places funds on deposit in an account designated under paragraph (2)(c); or
8
Rules may specify the procedure by which authorised banks may acquire or dispose of Bank of England banknotes and coins held as backing assets.