1
Application and Definitions
1.1
Unless otherwise stated, this Part applies to:
- (1) the FSCS;
- (2) UK banks;
- (3) credit unions;
- (4) Northern Ireland credit unions;
- (5) building societies; and
- (6) an overseas firm, if:
- (a) the firm has a Part 4A permission that includes accepting deposits; and
- (b) deposits are held by a UK establishment of the firm.
- 31/12/2020
1.2
Chapter 23 and Rule 20.2 apply to a UK branch of a Gibraltar-based credit institution.
- 31/12/2020
1.3
This Part also applies to a firm which used to have a Part 4A permission to accept deposits but which has ceased to have a Part 4A permission to accept new deposits, or which is subject to a requirement not to accept new deposits, and which is not a member of the Gibraltar DGS.
- 31/12/2020
1.3A
- 31/12/2020
1.3B
For the purposes of this Part, references to a Gibraltar establishment or branch (as applicable) of a UK firm, means an establishment or branch established pursuant to Gibraltar-market access rights.
- 31/12/2020
1.4
Unless otherwise stated, in this Part, the following definitions shall apply:
means cash, deposits and low-risk assets which can be liquidated within a period not exceeding seven business days.
[Note: Art. 2(1)(12) of the DGSD]
means management expenses which are not attributable to any particular class.
means a levy, forming part of the management expenses levy, to meet the base costs in the financial year of the compensation scheme to which the levy relates.
means one of the classes to which the FSCS allocates levies in accordance with the rules of the compensation scheme.
means the class which consists of DGS members.
has the meaning given in 43.1.
means a valid claim made in respect of a civil liability owed by a DGS member to the claimant.
means the date on which a determination is made by the PRA, the FSCS or a judicial authority that deposits held by a DGS member are unavailable deposits such that the DGS member is in default.
means 23.7(2), 23.8(2) and 23.9.
means the person to whom the FSCS is required to pay compensation, as set out in Chapter 6.
means the Financial Services Compensation Scheme established under section 213 of FSMA.
compensation sticker and poster rules
means 23.4, 23.5, 23.6, 23.7(1) and 23.8(1).
means the part of an eligible deposit that does not exceed the coverage levels set out in Chapter 4.
[Note: Art. 2(1)(5) of the DGSD]
has the meaning given in section 31 of the Credit Unions Act 1979.
means:
- (1) in relation to a credit union, any share of a class defined as a deferred share by section 31A of the Credit Unions Act 1979;
- (2) in relation to a building society, any share of a class defined as deferred shares for the purposes of section 119 of the Building Societies Act 1986.
means:
- (1) a credit balance which results from funds left in an account or from temporary situations deriving from normal banking transactions and which a credit institution is required to repay under the legal and contractual conditions applicable, including a fixed-term deposit and a savings deposit, but excluding a credit balance where:
- (a) its existence can only be proven by a financial instrument, unless it is a savings product which is evidenced by a certificate of deposit made out to a named person and which existed in the UK, Gibraltar or a Member State of the EU on 2 July 2014;
- (b) its principal is not repayable at par; or
- (c) its principal is only repayable at par under a particular guarantee or agreement provided by the credit institution or a third party;
- (2) a share in a building society, excluding a deferred share;
- (3) a share in a credit union, excluding a deferred share; or
- (4) a share in a Northern Ireland credit union, excluding a deferred share.
[Note: Art. 2(1)(3) of the DGSD]
means the compensation scheme for compensating persons in respect of deposits.
deposit guarantee scheme regulations
means the Deposit Guarantee Scheme Regulations 2015 (SI 2015/486).
means the holder or, in the case of a joint account, each of the holders, of a deposit.
[Note: Art. 2(1)(6) of the DGSD]
means a base costs levy imposed by the FSCS on DGS members.
means the costs incurred:
- (1) in paying compensation under the deposit guarantee scheme;
- (2) under section 214B or section 214D of FSMA; or
- (3) by virtue of section 61 of the Banking Act 2009;
(including the costs of paying interest, principal and other costs of borrowing to pay such costs).
means a levy imposed by the FSCS on DGS members to meet DGS compensation costs.
means the Deposit Guarantee Scheme and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018.
means a DGS compensation costs levy, a DGS management expenses levy or a legacy costs levy.
means a levy imposed by the FSCS on DGS members to meet management expenses and which is made up of one or more of a DGS base costs levy and a DGS specific costs levy.
means:
- (1) a UK bank;
- (2) a building society;
- (3) a credit union;
- (4) a Northern Ireland credit union; or
- (5) an overseas firm if:
- (a) the firm has a Part 4A permission that includes accepting deposits; and
- (b) deposits are held by a UK establishment of the firm.
means management expenses attributable to the deposit guarantee scheme other than base costs, which the FSCS has incurred or expects to incur.
means a levy, forming part of the DGS management expenses levy, to meet the DGS specific costs in the financial year of the deposit guarantee scheme to which the levy relates.
means Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes (recast).
has the meaning given in section 10 of the Dormant Bank and Building Society Accounts Act 2008.
has the meaning given in regulation 2(1) and in regulation 20(5) of the Electronic Money Regulations.
means a single, consistent view of:
- (1) an account holder’s aggregate deposits with a firm limited to accounts that contain or may contain eligible deposits to which the account holder is not absolutely entitled or which are safeguarded funds; or
- (2) a depositor’s aggregate eligible deposits with a firm limited to accounts that are not active
and which contains the information required by 12.9.
means:
- (1) up to and including 31 December 2016, a list in the form set out in Section A of Annex 3 to this Part;
- (2) from 1 January 2017 until IP completion day, a list in the form set out in Section B of Annex 3 to this Part; and
- (3) from IP completion day, a list in the form set out in Section C of Annex 3 to this Part.
means the area established by the EEA agreement.
Gibraltar-based credit institution
means a credit institution authorised as such by the Gibraltar Financial Services Commission that has its head office in and is incorporated in Gibraltar.
means the deposit guarantee scheme established in Gibraltar.
Gibraltar market access rights
means market access rights pursuant to which a person incorporated in the UK is entitled to establish a branch or provide services in Gibraltar.
means a firm which, immediately before IP completion day, was an incoming firm within the meaning of section 193 of FSMA as in force at that date.
describes the status of a firm following a determination that its deposits are unavailable deposits.
means an information sheet containing the categories of information set out in the template in Annex 1 to this Part.
means:
- (1) in relation to an electronic money institution, an insolvency event as defined in regulation 22(3) of the Electronic Money Regulations;
- (2) in relation to an authorised payment institution or small payment institution, an insolvency event as defined in regulation 23(18) of the Payment Services Regulations; or
- (3) in relation to an electronic money institution, authorised payment institution or small payment institution, entry into special administration as defined in regulation 7 of The Payment and Electronic Money Institution Insolvency Regulations 2021 (SI 2021/716).
has the meaning given in section 22(4) of FSMA.
means the costs incurred prior to 3 July 2015 by the FSCS:
- (1) in paying compensation; or
- (2) under section 214B or section 214D of FSMA; or
- (3) by virtue of section 61 of the Banking Act 2009;
(including the costs of paying interest, principal and other costs of borrowing to pay such costs).
means a levy imposed by the FSCS to meet legacy costs.
means
- (1) in England and Wales, a local authority within the meaning of the Local Government Act 1972, the Greater London Authority, the Common Council of the City of London or the Council of the Isles of Scilly;
- (2) in Scotland, a council within the meaning of the Local Government etc. (Scotland) Act 1994;
- (3) in Northern Ireland, a district council within the meaning of The Local Government Act (Northern Ireland) 1972;
- (4) an authority equivalent to (1), (2) or (3) located in a country outside the UK.
means items falling into the first or second category of Table 1 of Article 336 of the CRR.
[Note: Art. 2(1)(14) of the DGSD]
has the meaning given in section 223(3) of FSMA.
means, at any time, the mandatory contributions paid before that time by credit institutions to schemes of mandatory contributions established by the UK for the purposes of covering the costs related to systemic risk, failure and resolution of institutions, up to the target level, less any amounts of such mandatory contributions previously borrowed by the FSCS which have not been repaid.
micro, small and medium-sized enterprises
means micro, small and medium-sized enterprises as defined with regard to the annual turnover criterion referred to in Article 2(1) of the Annex to Commission Recommendation 2003/361/EC, taking into account all other provisions in the Annex to Commission Recommendation 2003/361/EC relevant to calculation of that criterion (including any relevant data from partner enterprises or linked enterprises in accordance with Article 3).
means the Money Laundering Regulations, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
has the meaning given in Article 1(3) of the money laundering directive.
means Directive 2015/849/EU.
means in relation to a member of a personal pension scheme or an occupational pension scheme or the widow or widower or surviving civil partner of a member of such a scheme, benefits the rate or amount of which is calculated solely by reference to the schemes assets which (because of the nature of the calculation) must necessarily suffice to provide the benefits which fall within section 181 of the Pensions Scheme Act 1993 and section 99 of the Pensions Act 2008, each as amended by section 29 of the Pensions Act 2011.
means a body corporate whose business consists solely of acting as a nominee holder of investments or other property.
means a scheme established pursuant to the DGSD in an EEA State.
means a firm which is either a society registered under the Credit Unions (Northern Ireland) Order 1985 or a society registered under the Industrial and Provident Societies Act (Northern Ireland) 1969 as a credit union.
an account is not active if it:
- (1) is a dormant account; or
- (2) is an account for which the firm has received formal notice of a legal dispute or competing claims to the proceeds of the account; or
- (3) is an account owned or controlled by a person whose name appears on the “Consolidated list of financial sanctions targets in the United Kingdom” that is maintained by HM Treasury or which is otherwise subject to restrictive measures imposed by national governments or international bodies.
has the meaning given in article 3(1) of the Regulated Activities Order.
means, in relation to a deposit which comprises safeguarded funds, the persons whose claims in the event of an insolvency event are to be paid from the asset pool in priority to all other creditors.
means freehold, heritable or leasehold property (or the equivalent in another country), including land, which was, is, or is intended to become the depositor’s only or main residence.
includes a government, central administrative authority, provincial authority, regional authority, municipal authority or local authority.
means a deposit held by a UK establishment of a PRA-authorised credit institution and made by:
- (1) an electronic money institution for the purposes of regulation 21 or 22 of the Electronic Money Regulations; or
- (2) an authorised payment institution or a small payment institution for the purposes of regulation 23 of the Payment Services Regulations.
means a single, consistent view of a depositor’s aggregate eligible deposits with a firm which contains the information required by 12.9, but excludes from view those accounts included in the exclusions view.
means a report from a firm’s board of directors confirming that the firm’s SCV system satisfies the SCV requirements.
means the requirements on firms set out in Chapter 12.
means a firm’s system for satisfying the SCV requirements.
means a local authority with an annual budget of up to EUR 500,000.
small self-administered scheme
means an occupational pension scheme of a kind described in article 4(4) and 4(5) of the Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) Order 2001 (SI 2001/1177).
means the information required under 44.2.
means 0.8% of the amount of covered deposits (excluding temporary high balances) of DGS members.
means a deposit that is due and payable but has not been paid by a DGS member under the applicable legal or contractual conditions where either:
- (1) (in accordance with the deposit guarantee scheme regulations) the PRA, or the FSCS in the case of a credit union or a Northern Ireland credit union, has determined that in its view the DGS member appears to be unable for the time being, for reasons which are directly related to its financial circumstances, to repay the deposit and has no current prospect of being able to do so; or
- (2) a judicial authority has made a ruling for reasons which are directly related to the DGS member’s financial circumstances and the ruling has had the effect of suspending the rights of depositors to make claims against it.
[Note: Art. 2(1)(8) of the DGSD]
- 12/03/2023