# The Bank Insolvency (England and Wales) Rules 2009, Rule 73: Disapplication of set off for eligible depositors

Extent: E+W

(1) This rule applies if the appropriate regulator Rules allow the FSCS to make gross payments of compensation.
(2) Rule 72 shall apply but, for the purpose of determining the sums due from the bank to the eligible depositor in respect of protected deposits under rule 72(3)—
(a) where the total of sums held by the bank for the depositor in respect of protected deposits is no more than the amount prescribed as the maximum compensation payable in respect of protected deposits under Part 15 of the Financial Services and Markets Act 2000 (“the limit”), then paragraph (3) applies; and
(b) where the sums exceed the limit, then paragraph (4) applies.
(3) Where this paragraph applies there shall be deemed to have been no mutual dealings, regardless of whether there are any sums due from the depositor to the bank, and the sum due to the ... depositor from the bank will be the total of the sums held by the bank for that depositor in respect of the protected deposits.
(4) Where this paragraph applies then—
(a) any mutual dealings shall be treated as being mutual dealings only in relation to the amount by which the total of sums due to the depositor exceeds that limit, and
(b) the sums due from the bank to the the depositor in respect of the protected deposits will be—
(i) the amount by which that total exceeds the limit, set off against the amounts due to the bank from the depositor in accordance with rule 72(3), and
(ii) the sums held by the bank for the depositor in respect of protected deposits up to the limit.
(5) Any arrangements with regard to set-off between the bank and the eligible depositor in existence before the commencement of bank insolvency shall be subject to this rule in so far as they relate to protected deposits.
(6) In this rule—
“eligible depositor” has the meaning given by section 93(3) of the 2009 Act;
“appropriate regulator rules” means the rules, as amended from time to time, made under section 213 of the Financial Services and Markets Act 2000 by the Financial Conduct Authority or the Prudential Regulation Authority;
“protected deposit” means a protected deposit within the meaning given by the appropriate regulator Rules.

---
Source: https://www.legislation.gov.uk/uksi/2009/356/rule/73 (the official version)
Page: https://openlegislation.uk/bank-insolvency-england-and-wales-rules-2009/rule-73
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.