Regulation 54 Reserve fund

(1)

The deposit management organisation which is first appointed following the inception of the Scheme must establish a reserve fund within 5 years of the date of its appointment.

(2)

The deposit management organisation, and any deposit management organisation which is subsequently appointed in its place, must—

(a)

maintain the reserve fund in such amount as is necessary to fund the payments set out in paragraph (3), or

(b)

maintain the reserve fund in such amount as the Secretary of State may direct.

(3)

In this regulation “reserve fund” means a fund out of which, in the event of the deposit management organisation’s appointment being revoked, payments may be made by the interim scheme administrator in respect of—

(a)

expenditure incurred by the deposit management organisation in the exercise of its functions under or in connection with the Scheme before its appointment was revoked, and

(b)

expenditure incurred by the interim scheme administrator in the discharge of its functions under or in connection with the Scheme before the appointment of another person as the deposit management organisation (see Chapter 10 of this Part).