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Rule 74 Disapplication of set-off for eligible depositors

Original text. Later amendments are not shown.

(1)

This rule applies if the appropriate regulator’s rules allow the FSCS to make gross payments of compensation.

(2)

In respect of protected deposits rule 73 shall apply and, for the purpose of determining the sums due from the society to an eligible depositor under rule 73(3)—

(a)

where the total of the sums held by the society for the eligible depositor in respect of protected deposits is no more than the prescribed limit, then paragraph (3) applies; and

(b)

where the sums held exceed the prescribed 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 eligible depositor to the society, and the sum due to the eligible depositor from the society in respect of the protected deposits will be the total of the sums held by the society for that depositor in respect of those 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 that total exceeds the prescribed limit, and

(b)

the sums due from the society to the eligible depositor in respect of the protected deposits will be—

(i)

the amount by which that total exceeds the prescribed limit, set off in accordance with rule 73(3); and

(ii)

the sums held by the society for the eligible depositor in respect of protected deposits up to the prescribed limit.

(5)

Any arrangements with regard to set-off between the society and the eligible depositor in existence before the commencement of building society insolvency shall be subject to this rule, insofar as they relate to protected deposits.

(6)

In this rule—

  • “the appropriate regulator’s rules” means the rules, as amended from time to time, made under section 213 of the Financial Services and Markets Act 2000 by—

    1. (a)

      if the building society is a PRA-authorised person (within the meaning of that Act), the Prudential Regulation Authority or the Financial Conduct Authority; and

    2. (b)

      in any other case, the Financial Conduct Authority;

  • “prescribed limit” means the amount prescribed as the maximum compensation payable in respect of protected deposits under Part 15 of the Financial Services and Markets Act 2000; and

  • “protected deposit” means a protected deposit within the meaning given by the appropriate regulator’s rules but does not include a share in the society held by an eligible depositor.