134.—(1) This rule applies—
(a)in a special administration (bank insolvency); and
(b)in a special administration (bank administration) if all or part of a creditor’s claim against the investment bank is in respect of protected deposits.
(2) In determining the sums due from the investment bank to an eligible depositor or from the eligible depositor to the investment bank for the purpose of any right or claim of set-off available to the investment bank against the eligible depositor—
(a)where the total of the sums held by the investment bank for any eligible depositor in respect of protected deposits is no more than the amount prescribed as the maximum compensation payable in respect of protected deposits under Part 15 of the 2000 Act (“the limit”) paragraph (3) applies; and
(b)where the sums held by the investment bank exceed the limit, paragraph (4) applies.
(3) Where this paragraph applies, regardless of whether there are any sums due from the eligible depositor to the investment bank, the investment bank shall not be entitled to exercise or claim any right of set-off available to it against or in respect of those sums held by the investment bank for the eligible depositor in respect of the protected deposits; and the sum due to the eligible depositor from the investment bank will be the total of the sums held by the investment bank for that eligible depositor in respect of protected deposits which sum shall be deemed free from any right or claim of set-off by the investment bank.
(4) Where this paragraph applies—
(a)the investment bank shall be entitled to exercise any right or claim of set-off available to it only in respect of any sums held by the investment bank for that eligible depositor in excess of the limit, which sums shall be subject to any right or claim of set-off available to the investment bank; and
(b)the sums due from the investment bank to the eligible depositor in respect of the protected deposits will be—
(i)the amount by which the total amount exceeds the limit, subject to any right or claim of set-off available to the investment bank; and
(ii)the sums held by the investment bank for the eligible depositor in respect of protected deposits up to the limit.
(5) Any arrangements with regard to set-off between the investment bank and the eligible depositor in existence before the commencement of special administration (bank insolvency) or special administration (bank administration), as the case may be, shall be subject to this rule in so far as they relate to protected deposits.
(6) In this rule—
“2000 Act” means the Financial Services and Markets Act 2000(1);
“eligible depositor” has the meaning given by section 93(3) of the 2009 Act;
“protected deposit” means a protected deposit within the meaning given in the General Provisions and Glossary Instrument 2001 (2001/7) made by the Financial Services Authority under the 2000 Act; and
“set-off” includes (without limitation) claims of compensation, rights of retention and rights of balancing accounts on insolvency.