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Application provision

2.1 This Chapter applies to the FSCS and firms.

2.1

03/07/2015

This Chapter applies to the FSCS and firms.

2.2

07/03/2019

The provisions in this rule determine whether a deposit is an eligible deposit:

  1. (1) A deposit is an eligible deposit only if it is held by:
    1. (a) a UK establishment of a DGS member; or
    2. (b) a branch of a DGS member established in another EEA State under an EEA Right.
  2. (2) A deposit is held by a UK establishment or a branch if it is assigned by the firm to an account of that UK establishment or that branch.
  3. (3) A deposit is, subject to the other rules in this Chapter, an eligible deposit if it is held by a firm which:
    1. (a) had a Part 4A permission to accept such deposits at the time the deposit was accepted but no longer has permission to accept eligible deposits, or is subject to a requirement preventing it from doing so; and
    2. (b) is not now a member of a non-UK scheme which protects such deposits.
  4. (4) The following are not eligible deposits:
    1. (a) a deposit made by another credit institution;
    2. (b) own funds;
    3. (c) a deposit arising out of a transaction in connection with which there has been a criminal conviction for money laundering;
    4. (d) a deposit by a financial institution;
    5. (e) a deposit by an investment firm;
    6. (f) a deposit the holder and any beneficial owner (as defined in regulation 3 of the Money Laundering Regulations, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017) of which have not, at the compensation date had their identity verified in accordance with:
      1. (i) regulation 30 of the Money Laundering Regulations, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017;
      2. (ii) if their identity was verified prior to 26 June 2017, regulation 9 of the Money Laundering Regulations 2007 (in which case, the term beneficial owner in (f) above shall have the meaning given in regulation 6 of the Money Laundering Regulations 2007); or
      3. (iii) in each case, equivalent European Economic Area requirements);
    7. (g) a deposit by an insurance undertaking or a reinsurance undertaking;
    8. (h) a deposit by a collective investment undertaking;
    9. (i) a deposit by a pension or retirement fund (but excluding deposits by personal pension schemes, stakeholder pension schemes and occupational pension schemes of micro, small and medium-sized enterprises);
    10. (j) a deposit by a public authority, unless it is a small local authority;
    11. (k) a debt security issued by the DGS member and any liabilities arising out of own acceptances and promissory notes.

Additional Notes


[Note: Art. 4(3), 4(6), 5(1), 5(2)(a) and 14(1) of the DGSD]

2.3

03/07/2015

A firm, must at least annually, take reasonable steps to confirm that a depositor that it has classified as a small local authority continues to be a small local authority, using the exchange rate prevailing on the 3 July immediately preceding the date on which any confirmation is undertaken.