Dormant Bank and Building Society Accounts Act 2008

Dormant Bank and Building Society Accounts Act 2008

2008 CHAPTER 31

Commentary on Sections and Schedules

Part 1: Transfer of balances in dormant accounts

Section 7: “Bank”

53. This section explains which banks are eligible to participate in the schemes under sections 1 and 2. “Bank” is defined by reference to persons authorised for the purposes of the Financial Services and Markets Act 2000 (“FSMA”) to accept deposits. (Deposit-taking is specified as a regulated activity under section 22 of FSMA, by article 5 of the Regulated Activities Order 2001 (SI 2001/544)). These are either banks incorporated in the UK (or foreign banks incorporated outside the EEA) which are authorised to accept deposits in the UK by the Financial Services Authority; or credit institutions authorised in another EEA Member State in accordance with the Banking Consolidation Directive (Directive 2006/48/EC) which exercise passport rights under Schedule 3 to FSMA to accept deposits in the UK. Broadly speaking, the definition aims to capture all retail banks operating from branches in the UK.

54. Subsections (3) and (4) exclude from this definition:

• those institutions that have permission under FSMA to accept deposits only in the course of another activity, for example insurance providers;

• those specified, or within a class of persons specified, by an exemption order made under section 38 of FSMA. The Financial Services and Markets Act 2000 (Exemption) Order 2001 (SI 2001/1201) specifies various banks and classes of persons, with the effect that, for example, certain international development banks and charities are excluded from the definition of “bank”; and

• UK building societies, credit unions and friendly societies.