The Building Society Insolvency (England and Wales) Rules 2010

Disapplication of set-off for eligible depositors

74.—(1) This rule applies if the FSA Rules allow the FSCS to make gross payments of compensation.

(2) In respect of protected deposits Rule 73 shall apply and, for the purpose of determining the sums due from the building society to an eligible depositor under rule 73(3)—

(a) where the total of the sums held by the building society for the eligible depositor in respect of protected deposits is no more than the prescribed limit, then paragraph (3) applies; and

(b) where the sums held exceed the prescribed limit, then paragraph (4) applies.

(3) Where this paragraph applies, there shall be deemed to have been no mutual dealings, regardless of whether there are any sums due from the depositor to the building society, and the sum due to the eligible depositor from the building society in respect of the protected deposits will be the total of the sums held by the building society for that depositor in respect of those deposits.

(4) Where this paragraph applies then—

(a) any mutual dealings shall be treated as being mutual dealings only in relation to the amount by which that total exceeds the prescribed limit, and

(b) the sums due from the building society to the eligible depositor in respect of the protected deposits will be—

(i) the amount by which that total exceeds the prescribed limit, set off in accordance with rule 73(3); and

(ii) the sums held by the building society for the eligible depositor in respect of protected deposits up to the prescribed limit.

(5) Any arrangements with regard to set-off between the building society and the eligible depositor in existence before the commencement of building society insolvency shall be subject to this rule, insofar as they relate to protected deposits.

(6) In this rule—

“the FSA Rules” means the FSA’s Compensation Sourcebook, as amended from time to time, made under section 213 of the Financial Services and Markets Act 2000(1);

“prescribed limit” means the amount prescribed as the maximum compensation payable in respect of protected deposits under Part 15 of the Financial Services and Markets Act 2000; and

“protected deposit” means a protected deposit within the meaning given by the FSA Rules but does not include a share in the society held by an eligible depositor.

(1)

2000 c 8.