Financial Services and Markets Act 2000

Status:

Point in time view as at 01/01/2024. This version of this part contains provisions that are prospective.

Status

The term provision is used to describe a definable element in a piece of legislation that has legislative effect – such as a Part, Chapter or section. A version of a provision is prospective either:

where the provision (Part, Chapter or section) has never come into force or;
where the text of the provision is subject to change, but no date has yet been appointed by the appropriate person or body for those changes to come into force.

Commencement Orders listed in the ‘Changes to Legislation’ box as not yet applied may bring this prospective version into force.

Changes to legislation:

Financial Services and Markets Act 2000, Part XV is up to date with all changes known to be in force on or before 22 November 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.

Changes to Legislation

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Part XVU.K. The Financial Services Compensation Scheme

Modifications etc. (not altering text)

C1Pt. XV (ss. 212-224) excluded (27.4.2002) by The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544), art. 9J (as inserted by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2002 (S.I. 2002/682), arts. 1(2), 4)

Pt. XV (ss. 212-224) modified (2.7.2002) by The Financial Services and Markets Act 2000 (Consequential Amendments and Transitional Provisions) (Credit Unions) Order 2002 (S.I. 2002/1501), art. 5

C2Pt. 15 modified (29.9.2008 at 8.00 a.m.) by The Bradford & Bingley plc Transfer of Securities and Property etc. Order 2008 (S.I. 2008/2546), art. 29 (with art. 30(6))

C3Pt. 15 modified (7.10.2008 at 9.30 a.m.) by The Heritable Bank plc Transfer of Certain Rights and Liabilities Order 2008 (S.I. 2008/2644), art. 14 (with art. 15(8)

C4Pt. 15 modified (8.10.2008 at 12.15 p.m.) by The Kaupthing Singer & Friedlander Limited Transfer of Certain Rights and Liabilities Order 2008 (S.I. 2008/2674), art. 15 (with art. 16(8))

The scheme managerU.K.

212 The scheme manager.U.K.

[F1(1)The scheme manager” means the body corporate established by the Financial Services Authority under this section as originally enacted.

(2)The regulators must take such steps as are necessary to ensure that the scheme manager is, at all times, capable of exercising the functions conferred on it by or under this Part or Part 15A.]

(3)The constitution of the scheme manager must provide for it to have—

(a)a chairman; F2...

[F3(aa)a chief executive F4...; and]

(b)a board (which must include the chairman [F5and chief executive] ) whose members are the scheme manager’s directors.

(4)The chairman[F6, chief executive] and other members of the board must be persons appointed, and liable to removal from office, by the [F7regulators] (acting, in the case of the chairman [F8and the chief executive], with the approval of the Treasury).

(5)But the terms of their appointment (and in particular those governing removal from office) must be such as to secure their independence from the [F9regulators] in the operation of the compensation scheme.

(6)The scheme manager is not to be regarded as exercising functions on behalf of the Crown.

(7)The scheme manager’s F10... officers and staff are not to be regarded as Crown servants.

Textual Amendments

F1S. 212(1)(2) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 2(2) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F2Word in s. 212(3) omitted (1.4.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), ss. 16(2)(a), 148(5); S.I. 2014/377, art. 2(2)(a)

F3S. 212(3)(aa) inserted (1.4.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), ss. 16(2)(b), 148(5); S.I. 2014/377, art. 2(2)(a)

F4Words in s. 212(3)(aa) omitted (29.8.2023) by virtue of Financial Services and Markets Act 2023 (c. 29), ss. 62(2), 86(2)(h)

F5Words in s. 212(3)(b) inserted (1.4.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), ss. 16(2)(c), 148(5); S.I. 2014/377, art. 2(2)(a)

F6Words in s. 212(4) inserted (1.4.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), ss. 16(3)(a), 148(5); S.I. 2014/377, art. 2(2)(a)

F7Word in s. 212(4) substituted (24.1.2013 for specified purposes) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 2(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3

F8Words in s. 212(4) inserted (1.4.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), ss. 16(3)(b), 148(5); S.I. 2014/377, art. 2(2)(a)

F9Word in s. 212(5) substituted (24.1.2013 for specified purposes) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 2(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3

F10Words in s. 212(7) omitted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by virtue of Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 2(4) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

The schemeU.K.

213 The compensation scheme.U.K.

(1)The [F11regulators] must by rules [F12made in accordance with an order under subsection (1A)] establish a scheme for compensating persons in [F13cases where—

(a)relevant persons are unable, or likely to be unable, to satisfy claims against them, F14...

[F15(aa)relevant exchanges are unable, or likely to be unable, to satisfy claims made against them in connection with a regulated activity relating to a trading facility carried on by the exchange, or]

(b)persons who have assumed responsibility for liabilities arising from acts or omissions of relevant persons [F16or relevant exchanges] (“successors”) are unable, or likely to be unable, to satisfy claims against the successors that are based on those acts or omissions.]

[F17(1A)The Treasury must by order specify—

(a)the cases in which the FCA may, or may not, make rules under subsection (1), and

(b)the cases in which the PRA may, or may not, make rules under that subsection.]

(2)The rules [F18(taken together)] are to be known as the Financial Services Compensation Scheme (but are referred to in this Act as “the compensation scheme”).

(3)The compensation scheme must, in particular, provide for the scheme manager—

[F19(a)to assess and pay compensation, in accordance with the scheme, to claimants in respect of claims made in connection with—

(i)a regulated activity carried on (whether or not with permission) by relevant persons; and

(ii)a regulated activity relating to a trading facility carried on (whether or not in accordance with any requirements relating to that activity resulting from section 286) by relevant exchanges; and

(b)to have power to impose levies for the purpose of meeting its expenses (including in particular expenses incurred, or expected to be incurred, in paying compensation, borrowing or insuring risks)—

(i)on authorised persons, or any class of authorised person;

(ii)on recognised investment exchanges carrying on a regulated activity relating to a trading facility, or any class of such exchanges; or

(iii)on authorised persons and on recognised investment exchanges carrying on a regulated activity relating to a trading facility, or on any class of such persons and exchanges.]

[F20(4)The compensation scheme may provide for the scheme manager to have power to impose levies—

(a)on authorised persons, or any class of authorised person;

(b)on recognised investment exchanges carrying on a regulated activity relating to a trading facility, or any class of such exchanges; or

(c)on authorised persons and on recognised investment exchanges carrying on a regulated activity relating to a trading facility, or on any class of such persons and exchanges,

for the purpose of recovering the cost (whenever incurred) of establishing the scheme.]

[F21(5)In making any provision of the scheme by virtue of subsection (3)(b), the regulators must take account of the desirability of ensuring that the amount of the levies imposed on a particular —

(a)class of authorised person;

(b)class of recognised investment exchange carrying on a regulated activity relating to a trading facility; or

(c)class of authorised person and of recognised investment exchanges carrying on a regulated activity relating to a trading facility;

reflects, so far as is practicable, the amount of claims made, or likely to be made in respect of that class of person, exchange, or persons and exchanges.]

(6)An amount payable to the scheme manager as a result of any provision of the scheme made by virtue of subsection (3)(b) or (4) may be recovered as a debt due to the scheme manager.

(7)Sections 214 to 217 make further provision about the scheme but are not to be taken as limiting the power conferred on the [F11regulators] by subsection (1).

(8)In those sections “specified” means specified in the scheme.

(9)In this Part (except in sections 219, 220 or 224) “relevant person” means a person who was—

(a)an authorised person at the time the act or omission giving rise to the claim against him [F22, or against a successor falling within subsection (1)(b),] took place; or

(b)an appointed representative at that time.

[F23(10A)But a person is not to be regarded as a relevant person in relation to a regulated activity if, at that time, the person—

(a)was a Gibraltar-based person with a Schedule 2A permission to carry on the activity, and

(b)fell within a prescribed category, either generally or in relation to the activity.

(10B)Regulations prescribing a category of person for the purposes of subsection (10A) may, among other things, make provision by reference to—

(a)whether the activity is carried on through a branch in the United Kingdom;

(b)the level of protection provided by the compensation scheme and by any comparable scheme operating in Gibraltar.]

F24(10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F24(11). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F25(12)In this Part (except in sections 220 and 224) “relevant exchange” means a body corporate or unincorporated association which was a recognised investment exchange carrying on a regulated activity relating to a trading facility at the time the act or omission giving rise to the claim against it, or against a successor falling within subsection (1)(b), took place.

(13)In this Part “regulated activity relating to a trading facility” means—

(a)the regulated activity of operating a multilateral trading facility; or

(b)the regulated activity of operating an organised trading facility.]

[F26(14)In this Part, “funeral plan contract” has the same meaning as in article 59(2) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.]

Textual Amendments

F11Word in s. 213 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 3(2) (with Sch. 20); S.I. 2013/113, art. 2(1)(b)(c), Sch. Pts. 2, 3; S.I. 2013/423, art. 3, Sch.

F12Words in s. 213(1) inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 3(3)(a) (with Sch. 20); S.I. 2013/113, art. 2(1)(b)(c), Sch. Pts. 2, 3; S.I. 2013/423, art. 3, Sch.

F13Words in s. 213(1) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 3(3)(b) (with Sch. 20); S.I. 2013/113, art. 2(1)(b)(c), Sch. Pts. 2, 3; S.I. 2013/423, art. 3, Sch.

F14Word in s. 213(1)(a) omitted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 23(2)(a) (with reg. 7)

F15S. 213(1)(aa) inserted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 23(2)(b) (with reg. 7)

F16Words in s. 213(1)(b) inserted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 23(2)(c) (with reg. 7)

F17S. 213(1A) inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 3(4) (with Sch. 20); S.I. 2013/113, art. 2(1)(b)(c), Sch. Pts. 2, 3; S.I. 2013/423, art. 3, Sch.

F18Words in s. 213(2) inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 3(5) (with Sch. 20); S.I. 2013/113, art. 2(1)(b)(c), Sch. Pts. 2, 3; S.I. 2013/423, art. 3, Sch.

F19S. 213(3)(a)(b) substituted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 23(3)(a) (with reg. 7)

F20S. 213(4) substituted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 23(4) (with reg. 7)

F21S. 213(5) substituted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 23(5) (with reg. 7)

F22Words in s. 213(9)(a) inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 3(6) (with Sch. 20); S.I. 2013/113, art. 2(1)(b)(c), Sch. Pts. 2, 3; S.I. 2013/423, art. 3, Sch.

F23S. 213(10A)(10B) inserted (1.9.2023) by Financial Services Act 2021 (c. 22), s. 49(5), Sch. 8 para. 7; S.I. 2023/934, reg. 2(b)(iii)

F24S. 213(10)(11) omitted (31.12.2020) by virtue of The EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018 (S.I. 2018/1149), reg. 1(3), Sch. para. 14 (with savings in reg. 4 and S.I. 2019/680, regs. 1(2), 11 (with reg. 11(8)-(10) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 40(f))); 2020 c. 1, Sch. 5 para. 1(1)

F25S. 213(12)(13) inserted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 23(6) (with reg. 7)

F26S. 213(14) inserted (16.5.2022 for specified purposes, 29.7.2022 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2022 (S.I. 2022/466), arts. 1(3), 6(4)

Modifications etc. (not altering text)

C5S. 213 modified (31.12.2020) by The EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018 (S.I. 2018/1149), regs. 1(3), 24(2) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 2(a) and (1.1.2024) by S.I. 2023/1410, regs. 1(2), 14)

C6S. 213 modified (31.12.2020) by The EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018 (S.I. 2018/1149), regs. 1(3), 70(2) (as inserted by S.I. 2019/105, regs. 1(2), 5(1) and as amended by S.I. 2019/1010, regs. 1(3), 5 and S.I. 2020/1301, regs. 1, 3, Sch. para. 2(b))

C7S. 213(3)(a) excluded (31.10.2004) by The Financial Services and Markets Act 2000 (Transitional Provisions) (Mortgages) Order 2004 (S.I. 2004/2615), arts. 1(2), 5, Sch. para. 8

C8S. 213(3)(a) excluded (14.1.2005) by The Financial Services and Markets Act 2000 (Transitional Provisions) (General Insurance Intermediaries) Order 2004 (S.I. 2004/3351), arts. 1(2), 6

C9S. 213(3)(a) excluded (26.7.2013 for specified purposes, 2.9.2013 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 (S.I. 2013/1881), arts. 1(2)(5), 59(8)

C10S. 213(9) excluded (2.7.2002) by The Financial Services and Markets Act 2000 (Consequential Amendments and Transitional Provisions) (Credit Unions) Order 2002 (S.I. 2002/1501), art. 5(1)

Commencement Information

I1S. 213 wholly in force at 18.6.2001; s. 213 not in force at Royal Assent see s. 431(2); s. 213(10) in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b), Sch. Pt. 2; s. 213 in force in so far as not already in force at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.

Provisions of the schemeU.K.

214 General.U.K.

(1)The compensation scheme may, in particular, make provision—

(a)as to the circumstances in which a relevant person [F27or relevant exchange] is to be taken (for the purposes of the scheme) to be unable, or likely to be unable, to satisfy claims made against him [F28or it];

[F29(aa)as to the circumstances in which a successor falling within section 213(1)(b) is to be taken (for the purposes of the scheme) to be unable, or likely to be unable, to satisfy claims against the successor that are based on the acts or omissions of a relevant person [F30or relevant exchange];]

(b)for the establishment of different funds for meeting different kinds of claim;

(c)for the imposition of different levies in different cases;

(d)limiting the levy payable by a person in respect of a specified period;

(e)for repayment of the whole or part of a levy in specified circumstances;

(f)for a claim to be entertained only if it is made by a specified kind of claimant;

(g)for a claim to be entertained only if it falls within a specified kind of claim;

(h)as to the procedure to be followed in making a claim;

(i)for the making of interim payments before a claim is finally determined;

(j)limiting the amount payable on a claim to a specified maximum amount or a maximum amount calculated in a specified manner;

(k)for payment to be made, in specified circumstances, to a person other than the claimant.

[F31(1A)Rules by virtue of subsection (1)(h) may, in particular, allow the scheme manager to treat persons who are or may be entitled to claim under the scheme as if they had done so.

(1B)A reference in any enactment or instrument to a claim or claimant under this Part includes a reference to a deemed claim or claimant in accordance with subsection (1A).

(1C)Rules by virtue of subsection (1)(j) may, in particular, allow, or be subject to rules which allow, the scheme manager to settle a class of claim by payment of sums fixed without reference to, or by modification of, the normal rules for calculation of maximum entitlement for individual claims.]

(2)Different provision may be made with respect to different kinds of claim.

(3)The scheme may provide for the determination and regulation of matters relating to the scheme by the scheme manager.

(4)The scheme, or particular provisions of the scheme, may be made so as to apply only in relation to—

(a)activities carried on,

(b)claimants,

(c)matters arising, or

(d)events occurring,

in specified territories, areas or localities.

F32(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)The scheme may provide for the scheme manager to have power—

(a)in specified circumstances,

(b)but only if the scheme manager is satisfied that the claimant is entitled to receive a payment in respect of his claim—

(i)under a scheme which is comparable to the compensation scheme, or

(ii)as the result of a guarantee given by a government or other authority,

to make a full payment of compensation to the claimant and recover the whole or part of the amount of that payment from the other scheme or under that guarantee.

Textual Amendments

F27Words in s. 214(1)(a) inserted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 24(a)(i) (with reg. 7)

F28Words in s. 214(1)(a) inserted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 24(a)(ii) (with reg. 7)

F29S. 214(1)(aa) inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 4 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F30Words in s. 214(1)(aa) inserted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 24(b) (with reg. 7)

F31S. 214(1A)-(1C) inserted (17.2.2009 for certain purposes and 21.2.2009 otherwise) by Banking Act 2009 (c. 1), ss. 174(1), 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.

F32S. 214(5) omitted (31.12.2020) by virtue of The EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018 (S.I. 2018/1149), reg. 1(3), Sch. para. 15 (with reg. 4); 2020 c. 1, Sch. 5 para. 1(1)

Modifications etc. (not altering text)

C11S. 214(5) modified (31.12.2020) by The Gibraltar (Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/680), regs. 1(2), 11(3)(4)(6) (with reg. 11(8)-(10) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 40(f))); 2020 c. 1, Sch. 5 para. 1(1)

Commencement Information

I2S. 214 wholly in force at 18.6.2001; s. 214 not in force at Royal Assent see s. 431(2); s. 214(5) in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b), Sch. Pt. 2; s. 214 in force in so far as not already in force at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.

Prospective

[F33214AContingency fundingU.K.

(1)The Treasury may make regulations (“contingency fund regulations”) permitting the scheme manager to impose levies under section 213 for the purpose of maintaining contingency funds from which possible expenses may be paid.

(2)Contingency fund regulations may make provision about the establishment and management of contingency funds; in particular, the regulations may make provision about—

(a)the number and size of funds;

(b)the circumstances and timing of their establishment;

(c)the classes of person from whom contributions to the funds may be levied;

(d)the amount and timing of payments into and out of funds (which may include provision for different levies for different classes of person);

(e)refunds;

(f)the ways in which funds' contents may be invested (including (i) the extent of reliance on section 223A, and (ii) the application of investment income);

(g)the purposes for which funds may be applied, but only so as to determine whether a fund is to be used (i) for the payment of compensation, (ii) for the purposes of co-operating with a bank liquidator in accordance with section 99 of the Banking Act 2009, or (iii) for contributions under section 214B;

(h)procedures to be followed in connection with funds, including the keeping of records and the provision of information.

(3)The compensation scheme may include provision about contingency funds provided that it is not inconsistent with contingency fund regulations.]

Textual Amendments

F33S. 214A inserted (prosp.) by Banking Act 2009 (c. 1), ss. 170(1), 263(1)(2) (with s. 247)

[F34[F35214BContribution to costs of special resolution regimeU.K.

(1)This section applies if—

(a)a stabilisation power under Part 1 of the Banking Act 2009 has been exercised in respect of a bank, building society [F36, credit union or investment firm] within the meaning of that Part (“the institution”); and

(b)the Treasury think that the institution was or was likely to have been, or but for the exercise of the power would have become, unable to satisfy claims against it.

(2)The Treasury may require the scheme manager to make payments (to the Treasury or any other person) in respect of expenses of a prescribed description incurred (by the Treasury or that person) in connection with the exercise of the power.

(3)Subsection (2) is subject to section 214C (limit on amount of special resolution regime payments).

(4)In subsection (2) “expenses” includes interest at a specified rate on the difference, at any time, between—

(a)the total amount of expenses (including interest) incurred at or before that time; and

(b)the total amount recovered, or received from the scheme manager, in respect of the institution, at or before that time, by—

(i)the Treasury; and

(ii)any other person who has incurred expenses in connection with the exercise of the power that are of a description prescribed under subsection (2).

(5)Any payment made by the scheme manager under subsection (2) is to be treated for the purposes of this Part as an expense under the compensation scheme.

(6)In this section and section 214C “specified rate” means a rate specified by the Treasury.

(7)Different rates may be specified under different provisions or for different periods.

(8)A rate may be specified by reference to a rate set (from time to time) by any person.]]

Textual Amendments

F34S. 214B inserted (17.2.2009 for certain purposes and 21.2.2009 otherwise) by Banking Act 2009 (c. 1), ss. 171(1), 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.

F35Ss. 214B-214D substituted (8.4.2010) for s. 214B by Financial Services Act 2010 (c. 28), ss. 16(1), 26(1)

F36Words in s. 214B(1)(a) substituted (1.8.2014) by Financial Services Act 2012 (c. 21), ss. 101(10), 122(3) (with Sch. 20); S.I. 2014/1847, art. 2

Modifications etc. (not altering text)

C12S. 214B applied (with modifications) (17.2.2009 for certain purposes and 21.2.2009 otherwise) by Banking Act 2009 (c. 1), ss. 83(2)(h)(i), 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.

C13Ss. 214B-214D applied (with modifications) (8.4.2010) by Financial Services Act 2010 (c. 28), ss. 16(2), 26(1)

C14S. 214B applied (with modifications) by 2009 c. 1, s. 81CA(7) (as inserted (31.12.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(5), Sch. 2 para. 7(2); S.I. 2014/3160, art. 2(1)(b))

[F37214CLimit on amount of special resolution regime paymentsU.K.

(1)The total amount of special resolution regime payments required to be made in respect of a person (“the institution”) may not exceed—

(a)notional net expenditure (see subsection (3)), minus

(b)actual net expenditure (see subsection (4)).

(2)A “special resolution regime payment” is—

(a)a payment under section 214B(2); or

(b)a payment required to be made by the scheme manager by virtue of section 61 of the Banking Act 2009 (special resolution regime: compensation).

(3)Notional net expenditure is—

(a)the total amount of expenses that would have been incurred under the compensation scheme in respect of the institution if the stabilisation power had not been exercised and the institution had been unable to satisfy claims against it, minus

(b)the total amount that would have been likely, at the time when the power was exercised, to be recovered by the scheme manager in respect of the institution in those circumstances.

(4)Actual net expenditure is—

(a)the total amount of expenses (other than special resolution regime payments) actually incurred by the scheme manager in respect of the institution, minus

(b)the total amount actually recovered by the scheme manager in respect of the institution.

(5)In subsection (3)(a) “expenses” includes interest at a specified rate on the difference, at any time, between—

(a)the total amount of expenses (including interest) that would have been incurred as mentioned in subsection (3)(a) at or before that time; and

(b)the total amount that would have been likely to have been recovered as mentioned in subsection (3)(b) at or before that time.

(6)In subsection (4)(a) “expenses” includes interest at a specified rate on the difference, at any time, between—

(a)the total amount of expenses (including special resolution regime payments and interest) actually incurred by the scheme manager in respect of the institution at or before that time; and

(b)the total amount actually recovered by the scheme manager in respect of the institution at or before that time.

(7)In paragraph (b) of subsections (3) to (6) references to amounts recovered (or likely to have been recovered) by the scheme manager do not include any levy received (or likely to have been received) by it.

Textual Amendments

F37Ss. 214B-214D substituted (8.4.2010) for s. 214B by Financial Services Act 2010 (c. 28), ss. 16(1), 26

Modifications etc. (not altering text)

C15Ss. 214B-214D applied (with modifications) (8.4.2010) by Financial Services Act 2010 (c. 28), ss. 16(2), 26(1)

214DContributions under section 214B: supplementaryU.K.

(1)This section supplements sections 214B and 214C.

(2)The scheme manager must determine—

(a)the amounts of expenses (other than interest) that would have been incurred as mentioned in section 214C(3)(a); and

(b)the time or times at which those amounts would have been likely to have been incurred.

(3)The Treasury, or a person designated by the Treasury, must in accordance with regulations appoint a person (“the valuer”) to determine—

(a)the amounts that would have been likely, at the time when the stabilisation power was exercised, to be recovered as mentioned in section 214C(3)(b); and

(b)the time or times at which those amounts would have been likely to be recovered.

The person appointed under this subsection may be the person appointed as valuer under section 54 of the Banking Act 2009 in respect of the exercise of the stabilisation power.

(4)Regulations may enable the Treasury to specify principles to be applied by—

(a)the scheme manager when exercising functions under subsection (2); or

(b)the valuer when exercising functions under subsection (3).

(5)The regulations may in particular enable the Treasury to require the scheme manager or valuer—

(a)to use, or not to use, specified methods;

(b)to take specified matters into account in a specified manner; or

(c)not to take specified matters into account.

(6)Regulations—

(a)must provide for independent verification of expenses within section 214B(2);

(b)may provide for the independent verification of other matters; and

(c)may contain provision about the appointment and payment of an auditor.

(7)Regulations—

(a)must contain provision enabling the valuer to reconsider a decision;

(b)must provide a right of appeal to a court or tribunal against any decision of the valuer;

(c)may provide for payment of the valuer; and

(d)may apply (with or without modifications) or make provision corresponding to—

(i)any provision of sections 54 to 56 of the Banking Act 2009; or

(ii)any provision made, or that could be made, by virtue of any of those sections.

(8)Regulations may make provision for payments under section 214B(2) to be made—

(a)before any verification required by the regulations is undertaken, and

(b)before the limit imposed by section 214C is calculated,

subject to any necessary later adjustment.

(9)If they do so they must provide that the amount of any payment required by virtue of subsection (8) must not be such as to give rise to an expectation that an amount will be required to be repaid to the scheme manager (once any necessary verification has been undertaken and the limit imposed by section 214C has been calculated).

(10)Regulations may—

(a)make provision supplementing section 214B or 214C or this section;

(b)make further provision about the method by which amounts to be paid under section 214B(2) are to be determined;

(c)make provision about timing;

(d)make provision about procedures to be followed;

(e)provide for discretionary functions to be exercised by a specified body or by persons of a specified class; and

(f)make provision about the resolution of disputes (which may include provision conferring jurisdiction on a court or tribunal).

(11)“Regulations” means regulations made by the Treasury.

(12)Any payment made by the Treasury by virtue of this section is to be met out of money provided by Parliament.

(13)The compensation scheme may make provision about payments under section 214B(2) and levies in connection with such payments (except provision inconsistent with any provision made by or under section 214B or 214C or this section).]

Textual Amendments

F37Ss. 214B-214D substituted (8.4.2010) for s. 214B by Financial Services Act 2010 (c. 28), ss. 16(1), 26

Modifications etc. (not altering text)

C16Ss. 214B-214D applied (with modifications) (8.4.2010) by Financial Services Act 2010 (c. 28), ss. 16(2), 26(1)

215[F38Rights of the scheme in insolvency]U.K.

[F39(1)The compensation scheme may make provision—

(a)about the effect of a payment of compensation under the scheme on rights or obligations arising out of matters in connection with which the compensation was paid;

(b)giving the scheme manager a right of recovery in respect of those rights or obligations.]

(2)Such a right of recovery conferred by the scheme does not, in the event of [F40a person's insolvency], exceed such right (if any) as the claimant would have had in that event.

[F41(2ZA)The compensation scheme may also make provision in relation to a relevant person, or to a successor of a description falling within section 213(1)(b), who enters into or carries out funeral plan contracts and is unable, or likely to be unable, to satisfy claims made against them—

(a)about rights or obligations in connection with any trust or contract of insurance relating to the funeral plan contracts entered into or carried out by such a person or successor;

(b)about the effect of a payment of compensation, or of a payment in connection with securing continuity of funeral plan contracts under the scheme, on rights and obligations arising out of matters in connection with which the payment was made;

(c)giving the scheme manager a right of recovery in respect of the rights or obligations referred to in paragraphs (a) and (b).

(2ZB)The amount required to be paid to the scheme manager under such a right of recovery conferred by the scheme may not exceed the amount paid or (in the opinion of the scheme manager) to be paid out by the scheme manager in connection with those funeral plan contracts.

(2ZC)For the purposes of subsection (2ZA)(a), the provision that may be made includes—

(a)provision in respect of rights or obligations that came into existence before or after the date on which that subsection comes into force;

(b)provision to vary existing rights or obligations;

(c)provision to create new rights in favour of, or obligations to, the scheme manager which override existing rights or obligations.]

[F42(2A)Any payment made by the scheme manager under section 214B(2) in connection with the exercise of a stabilisation power in respect of a bank, building society or credit union is to be treated as a debt due to the scheme manager from that bank, building society or (as the case may be) credit union.

(2B)In [F43subsection (2A)]—

“bank” has the meaning given in section 2 of the Banking Act 2009;
“building society” has the meaning given in the Building Societies Act 1986;
“credit union” means a credit union within the meaning of—
(a)
the Credit Unions Act 1979; or
(b)
article 2 of the Credit Unions (Northern Ireland) Order 1985.]

(3)If a person other than the scheme manager [F44makes an administration application under Schedule B1 to the 1986 Act or [F45Schedule B1 to] the 1989 Order] in relation to [F46—

(a)a company or partnership which is a relevant person; or

(b)a body corporate or unincorporated association which is a relevant exchange;

the scheme manager has the same rights as are conferred on the regulators by section 362.]

[F47(3A)In subsection (3) the reference to making an administration application includes a reference to—

(a)appointing an administrator under paragraph 14 or 22 of Schedule B1 to the 1986 Act [F48or paragraph 15 or 23 of Schedule B1 to the 1989 Order], or

(b)filing with the court a copy of notice of intention to appoint an administrator under [F49any] of those paragraphs.]

(4)If a person other than the scheme manager presents a petition for the winding up of a body which is a relevant person [F50or relevant exchange] , the scheme manager has the same rights as are conferred on the [F51regulators] by section 371.

(5)If a person other than the scheme manager presents a bankruptcy petition to the court in relation to an individual who, or an entity which, is a relevant person, the scheme manager has the same rights as are conferred on the [F51regulators] by section 374.

(6)Insolvency rules may be made for the purpose of integrating any procedure for which provision is made as a result of subsection (1) into the general procedure on the administration of a company or partnership or on a winding-up, bankruptcy or sequestration.

(7)“Bankruptcy petition” means a petition to the court—

(a)under section 264 of the 1986 Act or Article 238 of the 1989 Order for a bankruptcy order to be made against an individual;

(b)under section [F522 or 5 of the 2016] Act for the sequestration of the estate of an individual; or

(c)under section 6 of the [F532016] Act for the sequestration of the estate belonging to or held for or jointly by the members of an entity mentioned in subsection (1) of that section.

(8)“Insolvency rules” are—

(a)for England and Wales, rules made under sections 411 and 412 of the 1986 Act;

(b)for Scotland, rules made by order by the Treasury, after consultation with the Scottish Ministers, for the purposes of this section; and

(c)for Northern Ireland, rules made under Article 359 of the 1989 Order and section 55 of the M1Judicature (Northern Ireland) Act 1978.

(9)F54... “the 1986 Act”, “the 1989 Order” [F55, “the 2016 Act”] and “court” have the same meaning as in Part XXIV.

Textual Amendments

F38S. 215: heading substituted (17.2.2009 for certain purposes and 21.2.2009 otherwise) by virtue of Banking Act 2009 (c. 1), ss. 175(4), 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.

F39S. 215(1) substituted (17.2.2009 for certain purposes and 21.2.2009 otherwise) by Banking Act 2009 (c. 1), ss. 175(2), 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.

F40Words in s. 215(2) substituted (17.2.2009 for certain purposes and 21.2.2009 otherwise) by Banking Act 2009 (c. 1), ss. 175(3), 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.

F41S. 215(2ZA)-(2ZC) inserted (16.5.2022 for specified purposes, 29.7.2022 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2022 (S.I. 2022/466), arts. 1(3), 6(5)(a)

F42S. 215(2A)(2B) inserted (26.3.2015) by The Deposit Guarantee Scheme Regulations 2015 (S.I. 2015/486), regs. 1(2), 13(3)

F43Words in s. 215(2B) substituted (16.5.2022 for specified purposes, 29.7.2022 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2022 (S.I. 2022/466), arts. 1(3), 6(5)(b)

F44Words in s. 215(3) substituted (15.9.2003) by Enterprise Act 2002 (c. 40), ss. 248(3), 279, Sch. 17 para. 54(2); S.I. 2003/2093, art. 2(1), Sch. 1 (subject to arts. 1(3)-(5), 3-8 (as amended by S.I. 2003/2332, art. 2))

F45Words in s. 215(3) substituted (N.I.) (27.3.2006) by The Insolvency (Northern Ireland) Order 2005 (S.I. 2005/1455 (N.I. 10)), arts. 1(3), 3(3), Sch. 2 para. 57(2); S.R. 2006/21, art. 2 (subject to S.R. 2006/22, arts. 2-7)

F46Words in s. 215(3) substituted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 25(2) (with reg. 7)

F47S. 215(3A) inserted (15.9.2003) by Enterprise Act 2002 (c. 40), ss. 248(3), 279, Sch. 17 para. 54(3); S.I. 2003/2093, art. 2(1), Sch. 1 (subject to arts. 1(3)-(5), 3-8 (as amended by S.I. 2003/2332, art. 2))

F48Words in s. 215(3A)(a) inserted (N.I.) (27.3.2006) by The Insolvency (Northern Ireland) Order 2005 (S.I. 2005/1455 (N.I. 10)), arts. 1(3), 3(3), Sch. 2 para. 57(3)(a); S.R. 2006/21, art. 2 (subject to S.R. 2006/22, arts. 2-7)

F49Word in s. 215(3A)(b) substituted (N.I.) (27.3.2006) by The Insolvency (Northern Ireland) Order 2005 (S.I. 2005/1455 (N.I. 10)), arts. 1(3), 3(3), Sch. 2 para. 57(3)(b); S.R. 2006/21, art. 2 (subject to S.R. 2006/22, arts. 2-7)

F50Words in s. 215(4) inserted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 25(3) (with reg. 7)

F51Word in s. 215 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 5 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F52Words in s. 215(7)(b) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 20(2)(a)(i)

F53Word in s. 215(7)(c) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 20(2)(a)(ii)

F54Words in s. 215(9) omitted (30.11.2016) by virtue of The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 20(2)(b)(i)

F55Words in s. 215(9) inserted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 20(2)(b)(ii)

Modifications etc. (not altering text)

C17S. 215 modified (21.2.2009) by The Banking Act 2009 (Parts 2 and 3 Consequential Amendments) Order 2009 (S.I. 2009/317), art. 5(1)(2)

C18S. 215 applied (with modifications) (8.2.2011 with application in accordance with reg. 27(a) of the applying S.I.) by The Investment Bank Special Administration Regulations 2011 (S.I. 2011/245), reg. 27, Sch. 6 Pt. 2 para. 3(2) (as amended (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 198(s)(i) (with Sch. 2 para. 213))

C19S. 215 applied (with modifications) (E.W.S.) (6.4.2014) by The Industrial and Provident Societies and Credit Unions (Arrangements, Reconstructions and Administration) Order 2014 (S.I. 2014/229), arts. 1, 5 (with art. 10)

C20S. 215(3)(4)(6) applied (with modifications) (6.4.2001 for E.W.S and 13.9.2004 for N.I.) by S.I. 2001/1090, regs. 1, 6; S.R. 2004/307, reg. 6

Commencement Information

I3S. 215 wholly in force at 18.6.2001; s. 215 not in force at Royal Assent see s. 431(2); s. 215(6)(8)(9) in force at 25.2.2001 by S.I. 2001/516, art. 2(a), Sch. Pt. 1; s. 215 in force in so far as not already in force at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.

Marginal Citations

M11978 c. 23.

[F56215AContinuity etc. of funeral plan contractsU.K.

(1)The compensation scheme may, in particular, include provision requiring or enabling the scheme manager to make arrangements for securing continuity of cover for—

(a)plan holders;

(b)plan holders of a specified class;

(c)plan holders of funeral plan contracts of a specified class.

(2)In this section—

“plan holder” means—
(a)
a person who has a funeral plan contract with a relevant funeral plan provider, or
(b)
a person whose funeral is to be provided or secured under a funeral plan contract with a relevant funeral plan provider;
“relevant funeral plan provider” means a relevant person who—
(a)
has permission to enter into or carry out a funeral plan contract as provider, and
(b)
is unable, or likely to be unable, to satisfy claims made against them.

(3)The scheme may provide for the scheme manager to take such measures as appear to it to be appropriate—

(a)for securing or facilitating the transfer of a relevant funeral plan provider’s business so far as it consists of the carrying out of funeral plan contracts, or of any part of that business, to another authorised person;

(b)for securing the issue by another authorised person to the plan holders concerned of funeral plan contracts in substitution for their existing contracts.

(4)The scheme may also provide for the scheme manager to make, or secure the making of, payments to a plan holder or to any other person in connection with the provision of a funeral—

(a)during any period while the scheme manager is seeking to make arrangements mentioned in subsection (1);

(b)if it appears to the scheme manager that it is not reasonably practicable to make such arrangements.

(5)The scheme may also provide, in relation to the administration or winding up of a relevant funeral plan provider, for the scheme manager to make payments—

(a)in specified circumstances,

(b)but only if the scheme manager is satisfied that such payments are made in respect of any reasonable fees, costs, charges or other expenses reasonably and exclusively incurred for the purposes of complying with a request of the scheme manager under section 215B,

to, or on behalf of, the relevant funeral plan provider or to the administrator or liquidator of the funeral plan provider.

(6)A provision of the scheme made by virtue of section 213(3)(b) may include the power to impose levies for the purpose of meeting expenses of the scheme manager incurred in—

(a)taking measures as a result of any provision of the scheme made by virtue of subsection (3);

(b)making, or securing the making of, payments as a result of any provision of the scheme made by virtue of subsection (4) or (5).

Textual Amendments

F56Ss. 215A, 215B inserted (16.5.2022 for specified purposes, 29.7.2022 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2022 (S.I. 2022/466), arts. 1(3), 6(6)

215BScheme manager’s power to require assistance from liquidator etc. in relation to funeral plan contractsU.K.

(1)This section applies in relation to the administration or winding up of a relevant funeral plan provider.

(2)The administrator or liquidator of the relevant funeral plan provider must, at the request of the scheme manager, provide any assistance identified by the scheme manager as being necessary—

(a)to enable the scheme manager to administer the compensation scheme in relation to funeral plan contracts, and

(b)to enable the scheme manager to secure continuity of cover in relation to funeral plan contracts.

(3)“Relevant funeral plan provider” has the meaning given in section 215A.]

Textual Amendments

216 Continuity of long-term insurance policies.U.K.

(1)The compensation scheme may, in particular, include provision requiring the scheme manager to make arrangements for securing continuity of insurance for policyholders, or policyholders of a specified class, of relevant long-term insurers.

(2)“Relevant long-term insurers” means relevant persons who—

(a)have permission to effect or carry out contracts of long-term insurance; and

(b)are unable, or likely to be unable, to satisfy claims made against them.

(3)The scheme may provide for the scheme manager to take such measures as appear to him to be appropriate—

(a)for securing or facilitating the transfer of a relevant long-term insurer’s business so far as it consists of the carrying out of contracts of long-term insurance, or of any part of that business, to another authorised person;

(b)for securing the issue by another authorised person to the policyholders concerned of policies in substitution for their existing policies.

(4)The scheme may also provide for the scheme manager to make payments to the policyholders concerned—

(a)during any period while he is seeking to make arrangements mentioned in subsection (1);

(b)if it appears to him that it is not reasonably practicable to make such arrangements.

(5)A provision of the scheme made by virtue of section 213(3)(b) may include power to impose levies for the purpose of meeting expenses of the scheme manager incurred in—

(a)taking measures as a result of any provision of the scheme made by virtue of subsection (3);

(b)making payments as a result of any such provision made by virtue of subsection (4).

217 Insurers in financial difficulties.U.K.

(1)The compensation scheme may, in particular, include provision for the scheme manager to have power to take measures for safeguarding policyholders, or policyholders of a specified class, of relevant insurers.

(2)“Relevant insurers” means relevant persons who—

(a)have permission to effect or carry out contracts of insurance; and

(b)are in financial difficulties.

(3)The measures may include such measures as the scheme manager considers appropriate for—

(a)securing or facilitating the transfer of a relevant insurer’s business so far as it consists of the carrying out of contracts of insurance, or of any part of that business, to another authorised person;

(b)giving assistance to the relevant insurer to enable it to continue to effect or carry out contracts of insurance.

(4)The scheme may provide—

(a)that if measures of a kind mentioned in subsection (3)(a) are to be taken, they should be on terms appearing to the scheme manager to be appropriate, including terms reducing, or deferring payment of, any of the things to which any of those who are eligible policyholders in relation to the relevant insurer are entitled in their capacity as such;

(b)that if measures of a kind mentioned in subsection (3)(b) are to be taken, they should be conditional on the reduction of, or the deferment of the payment of, the things to which any of those who are eligible policyholders in relation to the relevant insurer are entitled in their capacity as such;

(c)for ensuring that measures of a kind mentioned in subsection (3)(b) do not benefit to any material extent persons who were members of a relevant insurer when it began to be in financial difficulties or who had any responsibility for, or who may have profited from, the circumstances giving rise to its financial difficulties, except in specified circumstances;

(d)for requiring the scheme manager to be satisfied that any measures he proposes to take are likely to cost less than it would cost to pay compensation under the scheme if the relevant insurer became unable, or likely to be unable, to satisfy claims made against him.

(5)The scheme may provide for the [F57either regulator or both regulators] to have power—

(a)to give such assistance to the scheme manager as it considers appropriate for assisting the scheme manager to determine what measures are practicable or desirable in the case of a particular relevant insurer;

(b)to impose constraints on the taking of measures by the scheme manager in the case of a particular relevant insurer;

(c)to require the scheme manager to provide it with information about any particular measures which the scheme manager is proposing to take.

(6)The scheme may include provision for the scheme manager to have power—

(a)to make interim payments in respect of eligible policyholders of a relevant insurer;

(b)to indemnify any person making payments to eligible policyholders of a relevant insurer.

(7)A provision of the scheme made by virtue of section 213(3)(b) may include power to impose levies for the purpose of meeting expenses of the scheme manager incurred in—

(a)taking measures as a result of any provision of the scheme made by virtue of subsection (1);

(b)making payments or giving indemnities as a result of any such provision made by virtue of subsection (6).

(8)“Financial difficulties” and “eligible policyholders” have such meanings as may be specified.

Textual Amendments

F57Words in s. 217(5) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 6 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

[F58217ZAInsurers subject to write-down ordersU.K.

(1)The compensation scheme must include provision requiring the scheme manager to take specified measures for safeguarding policyholders affected by write-down orders.

(2)A person (“P”) is a policyholder affected by a write-down order if—

(a)P is a policyholder of an insurer in respect of whom a write-down order has effect, and

(b)the value of any thing to which P is (or may become) entitled, in P’s capacity as a policyholder of the insurer, is reduced under the write-down order.

(3)Measures specified by virtue of subsection (1) must, in particular, require financial assistance to be given to insurers subject to write-down orders for the purpose mentioned in subsection (4).

(4)The purpose is to enable payments to be made to affected policyholders in respect of the reduction in value of their entitlements (or contingent entitlements), as mentioned in subsection (2)(b).

(5)Financial assistance given under this section—

(a)must not be used for any purpose other than the purpose mentioned in subsection (4);

(b)is not to be taken into account, to any extent, in valuing the assets of the insurer for any purpose.

(6)Measures taken by the scheme manager by virtue of this section are in addition to any measures the scheme manager may take under powers provided by virtue of section 217(1).

(7)In this section and section 217ZB—

“insurer” means a relevant person who has permission to carry out contracts of insurance;
“write-down order” means an order under section 377A (as it has effect in accordance with section 377H).]

Textual Amendments

F58Ss. 217ZA, 217ZB inserted (29.8.2023) by Financial Services and Markets Act 2023 (c. 29), s. 86(2)(e), Sch. 12 para. 5

[F58217ZBRecovery of financial assistance under section 217ZAU.K.

(1)The compensation scheme may make provision giving the scheme manager a right of recovery in respect of financial assistance given to an insurer by virtue of section 217ZA.

(2)Any right of recovery the scheme manager has in respect of financial assistance given to an insurer by virtue of subsection (1) must not be exercised against a policyholder of the insurer.

(3)Subsection (4) applies where, by virtue of subsection (1), the scheme manager has a right of recovery in respect of financial assistance given to an insurer.

(4)In valuing the insurer’s liabilities for the purposes of a relevant insolvency provision, no account is to be taken of any expectation that the right will be exercised.

(5)In subsection (4), “relevant insolvency provision” has the same meaning as in paragraph 9 of Schedule 19B (treatment of written-down liabilities for purposes of relevant insolvency provisions).]

Textual Amendments

F58Ss. 217ZA, 217ZB inserted (29.8.2023) by Financial Services and Markets Act 2023 (c. 29), s. 86(2)(e), Sch. 12 para. 5

[F59Relationship with the regulatorsU.K.

Textual Amendments

F59S. 217A and cross-heading inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 7 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

217ACo-operationU.K.

(1)Each regulator and the scheme manager must take such steps as they consider appropriate to co-operate with each other in the exercise of their functions under this Part and Part 15A.

(2)Each regulator and the scheme manager must prepare and maintain a memorandum describing how that regulator and the scheme manager intend to comply with subsection (1).

(3)The scheme manager must ensure that the memoranda as currently in force are published in the way appearing to it to be best calculated to bring them to the attention of the public.]

[F60Annual plan and report]U.K.

Textual Amendments

F60S. 218 cross-heading substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 8 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

[F61217BAnnual planU.K.

(1)The scheme manager must in respect of each of its financial years prepare an annual plan.

(2)The plan must be prepared before the start of the financial year.

(3)An annual plan in respect of a financial year must make provision about the use of the resources of the scheme manager.

(4)The plan may include material relating to periods longer than the financial year in question.

(5)Before preparing an annual plan, the scheme manager must consult such persons (if any) as the scheme manager considers appropriate.

(6)The scheme manager must publish each annual plan in the way it considers appropriate.]

Textual Amendments

F61S. 217B inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 9 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

218 Annual report.U.K.

(1)At least once a year, the scheme manager must make a report to the [F62regulators] on the discharge of its functions.

(2)The report must—

(a)include a statement setting out the value of each of the funds established by the compensation scheme; and

(b)comply with any requirements specified in rules made by the [F63regulators].

(3)The scheme manager must publish each report in the way it considers appropriate.

[F64(4)The Treasury may—

(a)require the scheme manager to comply with any provisions of the Companies Act 2006 about accounts and their audit which would not otherwise apply to it, or

(b)direct that any such provision of that Act is to apply to the scheme manager with such modifications as are specified in the direction.

(5)Compliance with any requirement under subsection (4)(a) or (b) is enforceable by injunction or, in Scotland, an order for specific performance under section 45 of the Court of Session Act 1988.

(6)Proceedings under subsection (5) may be brought only by the Treasury.]

Textual Amendments

F62Word in s. 218(1) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 10(2) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F63Word in s. 218(2)(b) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 10(2) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F64S. 218(4)-(6) inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 10(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

[F65218ZAAudit of accountsU.K.

(1)The scheme manager must send a copy of its annual accounts to the Comptroller and Auditor General and the Treasury as soon as is reasonably practicable.

(2)The Comptroller and Auditor General must—

(a)examine, certify and report on accounts received under this section, and

(b)send a copy of the certified accounts and the report to the Treasury.

(3)The Treasury must lay the copy of the certified accounts and the report before Parliament.

(4)The scheme manager must send a copy of the certified accounts and the report to the regulators.

(5)Except as provided by section 218(4), the scheme manager is exempt from the requirements of Part 16 of the Companies Act 2006 (audit), and its balance sheet must contain a statement to that effect.

(6)In this section “annual accounts” has the meaning given by section 471 of the Companies Act 2006.]

Textual Amendments

F65S. 218ZA inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 11 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

Information and documentsU.K.

[F66218A [F67Regulators'] power to require informationU.K.

[F68(1)Each regulator may make rules enabling that regulator to require authorised persons [F69or recognised investment exchanges carrying on a regulated activity relating to a trading facility] to—

(a)provide information to the scheme manager on the request of that regulator or the scheme manager; or

(b)provide information to that regulator, which may then be made available to the scheme manager by that regulator.]

(2)A requirement may be imposed only if the [F70regulator] thinks the information is of a kind that may be of use to the scheme manager in connection with functions in respect of the scheme.

(3)A requirement under this section may apply—

(a)to authorised persons generally or only to specified persons or classes of person;

[F71(aa)to recognised investment exchanges mentioned in subsection (1) generally or only to specified exchanges or classes of exchange;]

(b)to the provision of information at specified periods, in connection with specified events or in other ways.

(4)In addition to requirements under this section, a notice under section 165 may relate to information or documents which the [F72regulator] thinks are reasonably required by the scheme manager in connection with the performance of functions in respect of the scheme; and section 165(4) is subject to this subsection.

(5)Rules under subsection (1) shall be prepared, made and treated in the same way as (and may be combined with) the [F73regulator's] general rules.]

Textual Amendments

F66S. 218A inserted (17.2.2009 for certain purposes and 21.2.2009 otherwise) by Banking Act 2009 (c. 1), ss. 176(1), 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.

F67Word in s. 218A heading substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 12(5) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F68S. 218A(1) substituted (26.3.2015) by The Deposit Guarantee Scheme Regulations 2015 (S.I. 2015/486), regs. 1(2), 13(4)

F69Words in s. 218A(1) inserted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 26(2) (with reg. 7)

F70Word in s. 218A(2) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 12(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F71S. 218A(3)(aa) inserted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 26(3) (with reg. 7)

F72Word in s. 218A(4) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 12(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F73Word in s. 218A(5) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 12(4) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F74218BTreasury's power to require information from scheme managerU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F74S. 218B omitted (29.8.2023) by virtue of Financial Services and Markets Act 2023 (c. 29), ss. 62(3), 86(2)(h)

219 Scheme manager’s power to require information.U.K.

(1)The scheme manager may, by notice in writing [F75require a person]—

(a)to provide specified information or information of a specified description; or

(b)to produce specified documents or documents of a specified description.

[F76(1A)A requirement may be imposed only—

(a)on a person (P) against whom a claim has been made under the scheme,

(b)on a person (P) who is unable or likely to be unable to satisfy claims under the scheme against P,

[F77(ba)on a person (P) who is an insurer who has been given financial assistance under section 217ZA,]

(c)on a person (“the Third Party”) whom the scheme manager thinks was knowingly involved in matters giving rise to a claim against another person (P) under the scheme, F78...

(d)on a person (“the Third Party”) whom the scheme manager thinks was knowingly involved in matters giving rise to the actual or likely inability of another person (P) to satisfy claims under the scheme [F79, or

(e)on a person (“the Third Party”) whom the scheme manager thinks is or was at any relevant time involved in any contract of insurance or in the administration of any trust arrangement relating to a funeral plan contract entered into or carried out by a person (P)—

(i)against whom a claim has been made under the scheme, or

(ii)who is unable or likely to be unable to satisfy claims under the scheme against P.]

(1B)For the purposes of subsection (1A)(b) [F80, (d) and (e)(ii)] whether P is unable or likely to be unable to satisfy claims shall be determined in accordance with provision to be made by the scheme (which may, in particular—

(a)apply or replicate, with or without modifications, a provision of an enactment;

(b)confer discretion on a specified person).]

(2)The information or documents must be provided or produced—

(a)before the end of such reasonable period as may be specified; and

(b)in the case of information, in such manner or form as may be specified.

(3)This section applies only to information and documents the provision or production of which the scheme manager considers[F81 to be necessary (or likely to be necessary) for the fair determination of claims which have been or may be made against P].

[F82(3A)Where a stabilisation power under Part 1 of the Banking Act 2009 has been exercised in respect of a bank, [F83building society or credit union,] the scheme manager may by notice in writing require [F84the bank, building society or credit union, or the Bank of England,] to provide information that the scheme manager requires for the purpose of [F85determining the matters mentioned in section 214D(2)(a) and (b) above].]

(4)If a document is produced in response to a requirement imposed under this section, the scheme manager may—

(a)take copies or extracts from the document; or

(b)require the person producing the document to provide an explanation of the document.

(5)If a person who is required under this section to produce a document fails to do so, the scheme manager may require the person to state, to the best of his knowledge and belief, where the document is.

(6)If [F86P] is insolvent, no requirement may be imposed under this section on a person to whom section 220 or 224 applies.

(7)If a person claims a lien on a document, its production under this Part does not affect the lien.

(8)F87. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9)“Specified” means specified in the notice given under subsection (1).

(10)F88. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F75Words in s. 219(1) substituted (17.2.2009 for certain purposes and 21.2.2009 otherwise) by Banking Act 2009 (c. 1), ss. 176(3), 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.

F76S. 219(1A)-(1B) inserted (17.2.2009 for certain purposes and 21.2.2009 otherwise) by Banking Act 2009 (c. 1), ss. 176(4), 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.

F77S. 219(1A)(ba) inserted (29.8.2023) by Financial Services and Markets Act 2023 (c. 29), s. 86(2)(e), Sch. 12 para. 6

F78Word in s. 219(1A)(c) omitted (16.5.2022 for specified purposes, 29.7.2022 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2022 (S.I. 2022/466), arts. 1(3), 6(7)(a)

F79S. 219(1A)(e) and word inserted (16.5.2022 for specified purposes, 29.7.2022 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2022 (S.I. 2022/466), arts. 1(3), 6(7)(b)

F80Words in s. 219(1B) substituted (16.5.2022 for specified purposes, 29.7.2022 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2022 (S.I. 2022/466), arts. 1(3), 6(7)(c)

F81Words in s. 219(3) substituted (17.2.2009 for certain purposes and 21.2.2009 otherwise) by Banking Act 2009 (c. 1), ss. 176(5), 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.

F82S. 219(3A) inserted (17.2.2009 for certain purposes and 21.2.2009 otherwise) by Banking Act 2009 (c. 1), ss. 176(6), 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.

F83Words in s. 219(3A) inserted (8.4.2010) by Financial Services Act 2010 (c. 28), ss. 21(8)(a), 26(1)

F84Words in s. 219(3A) substituted (8.4.2010) by Financial Services Act 2010 (c. 28), ss. 21(8)(b), 26(1)

F85Words in s. 219(3A) substituted (8.4.2010) by Financial Services Act 2010 (c. 28), ss. 24(1), 26(1), Sch. 2 para. 22

F86Word in s. 219(6) substituted (17.2.2009 for certain purposes and 21.2.2009 otherwise) by Banking Act 2009 (c. 1), ss. 176(7), 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.

F87S. 219(8) omitted (17.2.2009 for certain purposes and 21.2.2009 otherwise) by virtue of Banking Act 2009 (c. 1), ss. 176(8), 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.

F88S. 219(10) omitted (17.2.2009 for certain purposes and 21.2.2009 otherwise) by virtue of Banking Act 2009 (c. 1), ss. 176(9), 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.

Modifications etc. (not altering text)

C21S. 219 extended (1.12.2001) by S.I. 2001/2967, arts. 1(2), 7(a), 12(4)(a); S.I. 2001/3538, art. 2(1)

C22S. 219(2)(4)(5)(7) applied (7.10.2008 at 9.30 a.m.) by The Heritable Bank plc Transfer of Certain Rights and Liabilities Order 2008 (S.I. 2008/2644), art. 16 (with art. 15(8))

C23S. 219(2)(4)(5)(7) applied (8.10.2008 at 10.10 a.m.) by The Transfer of Rights and Liabilities to ING Order 2008 (S.I. 2008/2666), art. 13(3)

C24S. 219(2)(4)(5)(7) applied (8.10.2008 at 12.15 p.m.) by The Kaupthing Singer & Friedlander Limited Transfer of Certain Rights and Liabilities Order 2008 (S.I. 2008/2674), art. 17(3) (with art. 16(8))

220 Scheme manager’s power to inspect information held by liquidator etc.U.K.

(1)For the purpose of assisting the scheme manager to discharge its functions in relation to a claim made in respect of an insolvent relevant person [F89or insolvent relevant exchange], a person to whom this section applies must permit a person authorised by the scheme manager to inspect relevant documents.

(2)A person inspecting a document under this section may take copies of, or extracts from, the document.

(3)This section applies to—

(a)the administrative receiver, administrator, liquidator [F90, bank liquidator][F91, building society liquidator] or trustee in bankruptcy of an insolvent relevant person [F92or insolvent relevant exchange];

(b)the [F93trustee in the sequestration, under the Bankruptcy (Scotland) Act 2016, of] the estate of an insolvent relevant person [F94or insolvent relevant exchange].

(4)This section does not apply to a liquidator, administrator or trustee in bankruptcy who is—

(a)the Official Receiver;

(b)the Official Receiver for Northern Ireland; or

(c)the Accountant in Bankruptcy.

(5)“Relevant person” [F95and “relevant exchange”] [F96have] the same meaning as in section 224.

Textual Amendments

F89Words in s. 220(1) inserted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 27(2) (with reg. 7)

F90Words in s. 220(3)(a) inserted (17.2.2009 for certain purposes and 21.2.2009 otherwise) by Banking Act 2009 (c. 1), ss. 123(3), 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.

F91Words in s. 220(3)(a) inserted (29.3.2009) by The Building Societies (Insolvency and Special Administration) Order 2009 (S.I. 2009/805), art. 15

F92Words in s. 220(3)(a) inserted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 27(3)(a) (with reg. 7)

F93Words in s. 220(3)(b) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 20(3)

F94Words in s. 220(3)(b) inserted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 27(3)(b) (with reg. 7)

F95Words in s. 220(5) inserted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 27(4)(a) (with reg. 7)

F96Word in s. 220(5) substituted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 27(4)(b) (with reg. 7)

Modifications etc. (not altering text)

C25S. 220 extended (1.12.2001) by S.I. 2001/2967, arts. 1(2), 8, 12(4)(c); S.I. 2001/3538, art. 2(1)

C26S. 220(3) applied (with modifications) (8.2.2011 with application in accordance with reg. 27(a) of the applying S.I.) by The Investment Bank Special Administration Regulations 2011 (S.I. 2011/245), reg. 27, Sch. 6 Pt. 2 para. 3(3)

[F97220APower to inspect information held by write-down managerU.K.

(1)For the purpose of assisting the scheme manager to discharge its functions under section 217ZA or 217ZB in relation to an insurer, a person to whom this section applies must permit a person authorised by the scheme manager to inspect relevant documents.

(2)This section applies to a person appointed under section 377G to act as the manager of a write-down order which has effect in relation to the insurer.

(3)A person inspecting a document under this section may take copies of, or extracts from, the document.]

Textual Amendments

F97S. 220A inserted (29.8.2023) by Financial Services and Markets Act 2023 (c. 29), s. 86(2)(e), Sch. 12 para. 7

221 Powers of court where information required.U.K.

(1)If a person (“the defaulter”)—

(a)fails to comply with a requirement imposed under section 219, or

(b)fails to permit documents to be inspected under section 220,

the scheme manager may certify that fact in writing to the court and the court may enquire into the case.

(2)If the court is satisfied that the defaulter failed without reasonable excuse to comply with the requirement (or to permit the documents to be inspected), it may deal with the defaulter (and, in the case of a body corporate, any director or [F98other] officer) as if he were in contempt [F99; and “officer”, in relation to a limited liability partnership, means a member of the limited liability partnership.].

(3)“Court” means—

(a)the High Court;

(b)in Scotland, the Court of Session.

Textual Amendments

F98Word in s. 221(2) inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 13 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F99Words in s. 221(2) inserted (6.4.2001 for E.W.S. and 13.9.2004 for N.I.) by S.I. 2001/1090, regs. 1, 9, Sch. 5 para. 21; S.R. 2004/307, reg. 9, Sch. 4 para. 17

Modifications etc. (not altering text)

C27S. 221 extended (1.12.2001) by S.I. 2001/2967, arts. 1(2), 7(b), 8, 12(4)(b)(c); S.I. 2001/3538, art. 2(1)

MiscellaneousU.K.

[F100221ADelegation of functionsU.K.

(1)The scheme manager may arrange for any of its functions to be discharged on its behalf by another person (a “scheme agent”).

(2)Before entering into arrangements the scheme manager must be satisfied that the scheme agent—

(a)is competent to discharge the function, and

(b)has been given sufficient directions to enable the agent to take any decisions required in the course of exercising the function in accordance with policy determined by the scheme manager.

(3)Arrangements may include provision for payments to be made by the scheme manager to the scheme agent (which payments are management expenses of the scheme manager [F101except where the function in question is one under Part 15A]).]

Textual Amendments

F100S. 221A inserted (17.2.2009 for certain purposes and 21.2.2009 otherwise) by Banking Act 2009 (c. 1), ss. 179(1), 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.

F101Words in s. 221A(3) inserted (12.10.2010) by Financial Services Act 2010 (c. 28), ss. 24(1), 26(3), Sch. 2 para. 23; S.I. 2010/2480, art. 2(e)(f)

222 Statutory immunity.U.K.

(1)Neither the scheme manager nor any person who is, or is acting as, its F102... officer [F103, scheme agent] or member of staff is to be liable in damages for anything done or omitted in the discharge, or purported discharge, of the scheme manager’s functions.

(2)Subsection (1) does not apply—

(a)if the act or omission is shown to have been in bad faith; or

(b)so as to prevent an award of damages made in respect of an act or omission on the ground that the act or omission was unlawful as a result of section 6(1) of the M2Human Rights Act 1998.

Textual Amendments

F102Words in s. 222(1) omitted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by virtue of Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 14 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F103Words in s. 222(1) inserted (17.2.2009 for certain purposes and 21.2.2009 otherwise) by Banking Act 2009 (c. 1), ss. 179(2), 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.

Modifications etc. (not altering text)

C28S. 222 modified (29.9.2008 at 8.00 a.m.) by The Bradford & Bingley plc Transfer of Securities and Property etc. Order 2008 (S.I. 2008/2546), art. 32 (with art. 30(6))

C29S. 222 modified (7.10.2008 at 9.30 a.m.) by The Heritable Bank plc Transfer of Certain Rights and Liabilities Order 2008 (S.I. 2008/2644), art. 17 (with art. 15(8))

C30S. 222 modified (8.10.2008 at 10.10 a.m.) by The Transfer of Rights and Liabilities to ING Order 2008 (S.I. 2008/2666), art. 14

C31S. 222 modified (8.10.2008 at 12.15 p.m.) by The Kaupthing Singer & Friedlander Limited Transfer of Certain Rights and Liabilities Order 2008 (S.I. 2008/2674), art. 18 (with art. 16(8))

C32S. 222(1) modified (31.12.2020) by The Deposit Guarantee Scheme and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1285), regs. 1(3), 6(3); 2020 c. 1, Sch. 5 para. 1(1)

Marginal Citations

M21998 c. 42.

223 Management expenses.U.K.

(1)The amount which the scheme manager may recover, from the sums levied under the scheme, as management expenses attributable to a particular period may not exceed such amount as may be fixed by the scheme as the limit applicable to that period.

(2)In calculating the amount of any levy to be imposed by the scheme manager, no amount may be included to reflect management expenses unless the limit mentioned in subsection (1) has been fixed by the scheme.

(3)“Management expenses” means expenses incurred, or expected to be incurred, by the scheme manager in connection with its functions under this Act other than those incurred—

(a)in paying compensation;

(b)as a result of any provision of the scheme made by virtue of section [F104215A(3) or (4),] 216(3) or (4) or 217(1) or (6)[F105;

(c)under section 214B [F106or 214D].]

[F107(d)under Part 15A.]

Textual Amendments

F104Words in s. 223(3)(b) inserted (16.5.2022 for specified purposes, 29.7.2022 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2022 (S.I. 2022/466), arts. 1(3), 6(8)

F105S. 223(3)(c) added (17.2.2009 for certain purposes and 21.2.2009 otherwise) by Banking Act 2009 (c. 1), ss. 171(2), 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.

F106Words in s. 223(3)(c) inserted (8.4.2010) by Financial Services Act 2010 (c. 28), ss. 24(1), 26(1), Sch. 2 para. 24(2)

F107S. 223(3)(d) inserted (12.10.2010) by Financial Services Act 2010 (c. 28), ss. 24(1), 26(3), Sch. 2 para. 24(3); S.I. 2010/2480, art. 2(e)(f)

Commencement Information

I4S. 223 wholly in force at 1.12.2001; s. 223 not in force at Royal Assent see s. 431(2); s. 223 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; s. 223 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

Prospective

[F108223AInvesting in National Loans FundU.K.

(1)Sums levied for the purpose of maintaining a contingency fund may be paid to the Treasury.

(2)The Treasury may receive sums under subsection (1) and may set terms and conditions of receipts.

(3)Sums received shall be treated as if raised under section 12 of the National Loans Act 1968 (and shall therefore be invested as part of the National Loans Fund).

(4)Interest accruing on the invested sums may be credited to the contingency fund (subject to any terms and conditions set under subsection (2)).

(5)The Treasury shall comply with any request of the scheme manager to arrange for the return of sums for the purpose of making payments out of a contingency fund (subject to any terms and conditions set under subsection (2)).]

Textual Amendments

F108S. 223A inserted (prosp.) by Banking Act 2009 (c. 1), ss. 172, 263(1)(2) (with s. 247)

[F109223BBorrowing from National Loans FundU.K.

(1)The scheme manager may request a loan from the National Loans Fund for the purpose of funding expenses incurred or expected to be incurred under the scheme.

(2)The Treasury may arrange for money to be paid out of the National Loans Fund in pursuance of a request under subsection (1).

(3)The Treasury shall determine—

(a)the rate of interest on a loan, and

(b)other terms and conditions.

(4)The Treasury may make regulations—

(a)about the amounts that may be borrowed under this section;

(b)permitting the scheme manager to impose levies under section 213 for the purpose of meeting expenses in connection with loans under this section (and the regulations may have effect despite any provision of this Act);

(c)about the classes of person on whom those levies may be imposed;

(d)about the amounts and timing of those levies.

(5)The compensation scheme may include provision about borrowing under this section provided that it is not inconsistent with regulations under this section.]

Textual Amendments

F109S. 223B inserted (17.2.2009 for certain purposes and 21.2.2009 otherwise) by Banking Act 2009 (c. 1), ss. 173, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.

[F110223CPayments in errorU.K.

(1)Payments made by the scheme manager in error may be provided for in setting a levy by virtue of section 213, 214A, 214B or 223B.

(2)This section does not apply to payments made in bad faith.]

Textual Amendments

F110S. 223C inserted (17.2.2009 for certain purposes and 21.2.2009 otherwise) by Banking Act 2009 (c. 1), ss. 177, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.

224 Scheme manager’s power to inspect documents held by Official Receiver etc.U.K.

(1)If, as a result of the insolvency or bankruptcy of a relevant person [F111or relevant exchange], [F112or a successor falling within section 213(1)(b),] any documents have come into the possession of a person to whom this section applies, he must permit any person authorised by the scheme manager to inspect the documents for the purpose of establishing—

(a)the identity of persons to whom the scheme manager may be liable to make a payment in accordance with the compensation scheme; or

(b)the amount of any payment which the scheme manager may be liable to make.

(2)A person inspecting a document under this section may take copies or extracts from the document.

(3)In this section “relevant person” means a person who was—

(a)an authorised person at the time the act or omission which may give rise to the liability mentioned in subsection (1)(a) took place; or

(b)an appointed representative at that time.

F113(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F114(4ZA)But a person is not to be regarded as a relevant person in relation to a regulated activity if, at that time, the person—

(a)was a Gibraltar-based person with a Schedule 2A permission to carry on the activity, and

(b)fell within a prescribed category, either generally or in relation to the activity.

(4ZB)Regulations prescribing a category of person for the purposes of subsection (4ZA) may, among other things, make provision by reference to—

(a)whether the activity is carried on through a branch in the United Kingdom;

(b)the level of protection provided by the compensation scheme and by any comparable scheme operating in Gibraltar.]

[F115(4A)In this section “relevant exchange” means a body corporate or unincorporated association carrying on a regulated activity relating to a trading facility at the time the act or omission which may give rise to the liability mentioned in subsection (1)(a) took place.]

(5)This section applies to—

(a)the Official Receiver;

(b)the Official Receiver for Northern Ireland; and

(c)the Accountant in Bankruptcy.

Textual Amendments

F111Words in s. 224(1) inserted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 28(2) (with reg. 7)

F112Words in s. 224(1) inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 10 para. 15 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F113S. 224(4) omitted (31.12.2020) by virtue of The EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018 (S.I. 2018/1149), reg. 1(3), Sch. para. 16 (with savings in reg. 4 and S.I. 2019/680, regs. 1(2), 11 (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 40(f))); 2020 c. 1, Sch. 5 para. 1(1)

F114S. 224(4ZA)(4ZB) inserted (1.9.2023) by Financial Services Act 2021 (c. 22), s. 49(5), Sch. 8 para. 9; S.I. 2023/934, reg. 2(b)(iv)

F115S. 224(4A) inserted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 28(3) (with reg. 7)

Modifications etc. (not altering text)

C33S. 224 extended (1.12.2001) by S.I. 2001/2967, arts. 1(2), 8, 12(4)(c); S.I. 2001/3538, art. 2(1)

C34S. 224 modified (31.12.2020) by The EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018 (S.I. 2018/1149), regs. 1(3), 70(3) (as inserted by S.I. 2019/405, regs. 1(2), 5(1)); 2020 c. 1, Sch. 5 para. 1(1))

C35S. 224 modified (31.12.2020) by The EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018 (S.I. 2018/1149), regs. 1(3), 24(3) (with regs. 4, 22 (as amended by S.I. 2020/56, regs. 1, 6(2))); 2020 c. 1, Sch. 5 para. 1(1)

C36S. 224(3) excluded (2.7.2002) by The Financial Services and Markets Act 2000 (Consequential Amendments and Transitional Provisions) (Credit Unions) Order 2002 (S.I. 2002/1501), art. 5(1)

Commencement Information

I5S. 224 wholly in force at 1.12.2001; s. 224 not in force at Royal Assent see s. 431(2); s. 224(4) in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b), Sch. Pt. 2; s. 224 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

[F116224ZADischarge of functionsU.K.

(1)In discharging its functions the scheme manager must have regard to—

(a)the need to ensure efficiency and effectiveness in the discharge of those functions, and

(b)the need to minimise public expenditure attributable to loans made or other financial assistance given to the scheme manager for the purposes of the scheme.

(2)In subsection (1)(b) “financial assistance” includes the giving of guarantees and indemnities and any other kind of financial assistance (actual or contingent).]

Textual Amendments

F116S. 224ZA inserted (1.3.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), ss. 14, 148(5); S.I. 2014/377, art. 2(1)(a), Sch. Pt. 1

[F117224AFunctions under the Banking Act 2009U.K.

[F118(1)]A reference in this Part to functions of the scheme manager (including a reference to functions conferred by or under this Part) includes a reference to functions conferred by or under the Banking Act 2009.

[F119(2)Any payment required to be made by the scheme manager by virtue of section 61 of that Act (special resolution regime: compensation) is to be treated for the purposes of this Part as an expense under the compensation scheme.]]

Textual Amendments

F117S. 224A added (17.2.2009 for certain purposes and 21.2.2009 otherwise) by Banking Act 2009 (c. 1), ss. 180, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.

F118S. 224A renumbered as s. 224A(1) (8.4.2010) by Financial Services Act 2010 (c. 28), ss. 24(1), 26(1), Sch. 2 para. 25(2)

F119S. 224A(2) inserted (8.4.2010) by Financial Services Act 2010 (c. 28), ss. 24(1), 26(1), Sch. 2 para. 25(3)

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Changes over time for: Part XV

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Changes to Legislation

Part XVU.K. The Financial Services Compensation Scheme

The scheme managerU.K.

212 The scheme manager.U.K.

The schemeU.K.

213 The compensation scheme.U.K.

Provisions of the schemeU.K.

214 General.U.K.

[F33214AContingency fundingU.K.

[F34[F35214BContribution to costs of special resolution regimeU.K.

[F37214CLimit on amount of special resolution regime paymentsU.K.

214DContributions under section 214B: supplementaryU.K.

215[F38Rights of the scheme in insolvency]U.K.

[F56215AContinuity etc. of funeral plan contractsU.K.

215BScheme manager’s power to require assistance from liquidator etc. in relation to funeral plan contractsU.K.

216 Continuity of long-term insurance policies.U.K.

217 Insurers in financial difficulties.U.K.

[F58217ZAInsurers subject to write-down ordersU.K.

[F58217ZBRecovery of financial assistance under section 217ZAU.K.

[F59Relationship with the regulatorsU.K.

217ACo-operationU.K.

[F60Annual plan and report]U.K.

[F61217BAnnual planU.K.

218 Annual report.U.K.

[F65218ZAAudit of accountsU.K.

Information and documentsU.K.

[F66218A [F67Regulators'] power to require informationU.K.

F74218BTreasury's power to require information from scheme managerU.K.

219 Scheme manager’s power to require information.U.K.

220 Scheme manager’s power to inspect information held by liquidator etc.U.K.

[F97220APower to inspect information held by write-down managerU.K.

221 Powers of court where information required.U.K.

MiscellaneousU.K.

[F100221ADelegation of functionsU.K.

222 Statutory immunity.U.K.

223 Management expenses.U.K.

[F108223AInvesting in National Loans FundU.K.

[F109223BBorrowing from National Loans FundU.K.

[F110223CPayments in errorU.K.

224 Scheme manager’s power to inspect documents held by Official Receiver etc.U.K.

[F116224ZADischarge of functionsU.K.

[F117224AFunctions under the Banking Act 2009U.K.

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