Prudential Regulation Authority Rulebook

5.1

This Chapter applies only to the FSCS.

5.2

1. (1) Compensation shall be calculated by reference to eligible deposits held on the compensation date; or
2. (2) Where an insolvency event occurs in relation to a depositor of safeguarded funds after the compensation date, compensation relating to its deposit shall be calculated by reference to eligible deposits held by it, and the position of its priority creditors, on the date the insolvency event occurred and taking account of any compensation already paid in respect of the safeguarded funds..

[Note: Art. 7(4) of the DGSD]

5.3

The limit provided for in 4.2 applies to the aggregate eligible deposits placed by a depositor with the same credit institution, irrespective of the number of accounts, the currency, or whether such eligible deposits are held by a UK establishment or a Gibraltar establishment of a DGS member.

[Note: Art. 7(1) of the DGSD]

5.4

The share of each depositor of a joint account shall be considered separately in calculating the limits provided for in 4.2 and 4.3, except where 5.5 applies. In the absence of contrary provision, the joint account shall be divided equally among the depositors to the nearest penny.

[Note: Art. 7(2) of the DGSD]

5.5

Deposits in an account to which two or more persons are entitled as members of a business partnership, association or grouping of a similar nature, without legal personality, must be aggregated and treated as if made by a single depositor for the purpose of calculating the limits provided for in 4.2 and 4.3.

[Note: Art. 7(2) of the DGSD]

5.6

Where several persons are absolutely entitled to a beneficial interest in a deposit, the share of each, under the arrangements subject to which the deposit is managed, shall be considered separately in calculating the amount payable to each of them.

[Note: Art. 7(3) of the DGSD]

5.7

Where several persons are absolutely entitled to a beneficial interest in a deposit, and some of them are persons whose own deposits would not be eligible deposits, the FSCS must adjust the amount of the overall deposit to eliminate the part of it which, in the FSCS’s view, relates to those beneficiaries’ interest in the overall deposit.

5.7A

1. (1) Where a deposit is part of safeguarded funds, the share of each priority creditor that relates to those safeguarded funds shall be considered separately in calculating the amount payable in relation to that deposit;
2. (2) Where a priority creditor is a person whose own deposit would not be an eligible deposit, the FSCS must in calculating the amount payable under (1) adjust the amount of the overall deposit to eliminate the part of it which, in the FSCS's view, relates to that priority creditor;
3. (3) The part of the overall deposit that relates to a priority creditor shall be determined by the FSCS on the basis of the FSCS's reasonable estimate of the amount of the overall deposit that would be used to pay the claims to that priority creditor on the occurrence of an insolvency event.

5.8

Liabilities of the depositor against the DGS member shall not be taken into account when calculating the compensation sum.

[Note: Art. 7(4) of the DGSD]

5.9

Except where the compensation sum arises from a temporary high balance, the FSCS shall reimburse interest owed on eligible deposits which had accrued, but has not been credited, at the compensation date. The limit provided for in 4.2 shall not be exceeded by the payment of any such interest.

[Note: Art. 7(7) of the DGSD]