The Credit Institutions (Protection of Depositors)Regulations 1995

Duty to levy contributions etc.

39.—(1) In section 26 of the 1986 Act(1) (power to levy contributions etc.), subsection (1), which is superseded by regulation 38 above, shall be omitted.

(2) For subsections (2) to (6) of that section there shall be substituted the following subsections—

“(2) If a participating institution becomes insolvent the Board shall levy contributions to the Fund for the purpose of making insolvency payments to investors at such level of investor protection as is provided for by section 27 and meeting the other expenses attributable to the insolvency.

(3) All institutions (other than the insolvent institution) which on the date of the insolvency are—

(a) authorised building societies; or

(b) European authorised institutions which, in accordance with Chapter I of Part II of the 1995 Regulations, are participating in the scheme established by the protective scheme provisions,

are liable to contribute to the Fund and are in the protective scheme provisions of this Part referred to as ‘contributory institutions’.

(4) If a participating institution becomes insolvent—

(a) the Board shall, subject to subsection (10) below, levy a contribution from each of the contributory institutions; and

(b) the amount of the contribution due from an institution shall be determined by applying to its share and deposit base a percentage determined by the Board for the purpose of the contributions levied to meet the expenses attributable to the insolvency.

(5) In determining the percentage to be applied under subsection (4) above to the share and deposit bases of contributory institutions, the Board shall have regard to the factors specified in subsection (6) below.

(6) Those factors are—

(a) the amount available to meet the expenses attributable to the insolvency from the contributions leviable from contributory institutions; and

(b) the amount of the expenses attributable to the insolvency at the level of investor protection provided for by section 27.”

(3) In subsection (7) of that section—

(a) for the words “building society” there shall be substituted the words “participating institution”;

(b) for the words “determined by the Board under” there shall be substituted the words “provided for by”; and

(c) for the words “contributory societies” there shall be substituted the words “contributory institutions”.

(4) In subsection (8) of that section—

(a) for the words “contributory society” there shall be substituted the words “contributory institution”; and

(b) for the words “the society”, in both places where they occur, there shall be substituted the words “the institution”.

(5) For subsection (9) of that section there shall be substituted the following subsections—

“(8A) Where—

(a) a notice under subsection (8) above is served on a contributory institution; and

(b) the amount specified in the notice remains unpaid after the period of twenty-one days mentioned in that subsection,

the Board shall as soon as practicable give written notice of that fact to the Commission.

(9) In relation to any contribution, the share and deposit base of an authorised building society is such amount as represents the aggregate of so much of the society’s liabilities as is referable to sums desposited with the society, or to shares in the society, as shown in the latest balance sheet sent to the Commission in accordance with section 81.

(9A) In relation to any contribution, the share and deposit base of a participating EEA institution is the difference between—

(a) such amount as represents the aggregate of so much of the institution’s liabilities as is referable to sums deposited with the institution, or (in the case of an Irish building society) to shares in the institution, as shown in the latest balance sheet sent to the supervisory authority in its home State; and

(b) the amount mentioned in subsection (9B) below.

(9B) The amount referred to in subsection (9A) above is the amount given by the formula—

where—

PA

=

so much of the first-mentioned amount as is attributable to desposits which are protected by the institution’s home State scheme;

HS

=

the level of protection (expressed in ecus) afforded by that scheme at the time as at which the balance sheet was drawn up, or the level of protection mentioned below, whichever is the less

UK

=

the level of protection (so expressed) afforded by this Part of this Act at that time.”

(6) In subsection (10) of that section—

(a) for the words “contributory society” there shall be substituted the words “contributory institution”;

(b) for the words “building society” there shall be substituted the words “participating institution”; and

(c) for the word “society's” there shall be substituted the word “institution's”.

(7) In subsection (11) of that section—

(a) for the words “a society” there shall be substituted the words “an institution”; and

(b) for the words “contributory societies” there shall be substituted the words “contributory institutions”.

(8) In subsection (14) of that section, for the words “building society” there shall be substituted the words “participating institution”.

(9) In subsection (15) of that section, for the words “contributory societies” there shall be substituted the words “contributory institutions”.

(10) In subsection (16) of that section—

(a) for the words “building society” there shall be substituted the words “participating institution”; and

(b) for the words “contributory societies” there shall be substituted the words “contributory institutions”.

(1)

1986 c. 53; section 26 was amended by the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405) (N.I. 19), article 381(2) and Schedule 9, Part II, paragraph 42.