Prudential Regulation Authority Rulebook

2.1

This Chapter applies to the FSCS and firms.

2.2

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 Gibraltar pursuant to Gibraltar market access rights.
2. (2) [Deleted.]
3. (3) A deposit is, subject to the other rules in this Chapter, an eligible deposit if it is held by a UK or Gibraltar establishment of 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 the Gibraltar DGS 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 MLR) of which have not had their identity verified:
1. (i) at any time in the manner set out in regulation 28 of the MLR by the DGS member or by a third party who falls within regulation 39(3) of the MLR;
2. (ii) if their identity was verified prior to 26 June 2017, in accordance with 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:
1. (1) Gibraltar requirements, provided that, if their identity is so verified after IP completion day, the deposit referred to in (f) is held by a branch of a DGS member established in Gibraltar pursuant to Gibraltar market access rights; or
2. (2) European Economic Area requirements, provided that their identity was so verified prior to IP completion day.
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.

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

2.3

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.