The Banking Act 1987 (Exempt Transactions) Regulations 1997

NOW THIS DEED WITNESSETH AND IT IS HEREBY DECLARED as follows:

10.—(1) Any Participating Society may apply to leave the Scheme by sending written notice to that effect to the Union, and shall, save under the protection of Part II of the Banking Act 1987 cease to accept new Deposits (with the exception of withdrawable share capital) and shall within the period of 9 months from the receipt by the Union of such written notice either (i) repay all Deposits (with the exception of the withdrawable share capital) held by it or (ii) secure protection for those Deposits (with the exception of withdrawable share capital) under Part II of the Banking Act 1987. At the expiration of the said period of 9 months and subject to the due performance of (i) or (ii) above within that period the Society shall cease to be a Participating Society, and upon such due performance as above within the said period of 9 months there shall be repaid to such Society out of the Fund such sum (if any) as the Union shall in its absolute discretion consider appropriate. Without prejudice to the application of Clause 6 hereof (and the provisions of Clauses 7 and 8) in the case of a Participating Society which becomes insolvent during the said period of 9 months, if such Society shall not have duly performed (i) or (ii) above within the said period of 9 months, Clause 6 hereof (and the provisions of Clauses 7 and 8 so far as applicable) shall apply to the depositors of such Society who have not had their Deposits (with the exception of withdrawable share capital) so repaid or secured as if that Society had become insolvent, but so that any payment thereunder shall be made within 6 months after the end of the said 9 months' period.

(2) Where a Participating Society applies to leave the Scheme and within a period of 9 months from the date of the Society’s application to leave the Scheme either repays all deposits other than withdrawable share capital or secures protection for those deposits under Part II of the Banking Act 1987 nevertheless the Scheme shall thereafter continue to give protection in respect of withdrawable share capital for a period of nine months from the date of the Society’s application to leave the Scheme PROVIDED ALWAYS that no deposits taken by the Society shall be protected deposits for the purposes of the Scheme for any period during which protection for those deposits (with the exception of withdrawable share capital) has been secured under Part II of the Banking Act 1987.

(3) A Participating Society which has applied to leave the Scheme shall thereafter continue to be fully liable for payment of all supplementary contributions required by the Union pursuant to Clause 5(3) above until such time as the Society has ceased to be a Participating Society pursuant to Clause 10(1) above.

(4) A Participating Society which has applied to leave the Scheme shall, save under the protection of Part II of the Banking Act 1987, cease to accept new deposits (with the exception of withdrawable share capital), and no new deposits taken by a Participating Society after it has applied to leave the Scheme shall be protected deposits for the purposes of the Scheme.

(5) Any Participating Society which applies to leave the Scheme shall forthwith take all such steps as may be necessary to bring its intended withdrawal and the consequences of such withdrawal to the notice of depositors and notice of such intended withdrawal with an explanation of the consequences thereof shall be advertised by the Society in the “Co-operative News” and in any other manner which appears to the Board to be necessary for informing depositors and other members of the public.

(6) New Members admitted to a Participating Society during the period of nine months from the date of a Participating Society’s application to leave the Scheme shall be notified in writing by the Society that their deposits with the Society will not be protected deposits for the purposes of the Scheme.

(7) Without prejudice to the generality of the foregoing, the following shall rank among the circumstances to be considered by the Union in respect of any such repayment to a society under Clause 10(1) above—

(a) The amount of the Fund;

(b) The income generated by the Fund since its inception;

(c) The expenses borne by the Fund since its inception; and

(d) Payments out of the Fund in respect of Deposits.