Loans to pay scheme benefitsE+W+S

18.—(1) The prescribed rate of interest referred to in section 139(6) of the Act (loans to pay scheme benefits) shall be the base rate.

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

(3) In this regulation—

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

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

“reference banks” means the four largest persons for the time being who—

(a)

have permission under Part 4 of the FSMA (permission to carry on regulated activities) to accept deposits, [F1and]

(b)

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

(4) [F2 In paragraph (3), paragraph (b) of the definition of “reference banks”] must be read with—

(a)section 22 of the FSMA (the classes of activity and categories of investment),

(b)any relevant order under that section, and

(c)Schedule 2 to that Act (regulated activities).

Textual Amendments