Regulation 18 Loans to pay scheme benefitsI1

The prescribed rate of interest referred to in Article 123(6) (loans to pay scheme benefits) shall be the base rate.

The rate of interest referred to in paragraph (1) shall be calculated on a day-to-day basis from the date on which a loan is made by the Board to the trustees or managers of an eligible scheme to the date of payment and compounded with 3-monthly rests.

In this regulation –

• “base rate” means the rate for the time being quoted by the reference banks as applicable to sterling deposits or, where there is for the time being more than one such base rate, the rate which, when the base rate quoted at each bank is ranked in a descending sequence of 4, is the first in the sequence;

• “date of payment” means the date on which the full amount of the loan, together with interest, is repaid to the Board by the trustees or managers of the scheme to which the loan has been made;

• “reference banks” means the 4 largest persons for the time being who –

  1. (a)

     have permission under Part IV of the FSMA 2000 (permission to carry on regulated activities) to accept F1deposits, and ;

  2. (b)

     are incorporated in the United Kingdom and carrying on there a regulated activity of accepting deposits, and quote a base rate applicable to sterling deposits.

F2In paragraph (3), paragraph (b) of the definition of “reference banks” must be read with –