PART 2

Depositor preference and the Financial Services Compensation Scheme

Depositor preference

Preferential debts: Great Britain
13
1
In Schedule 6 to the Insolvency Act 1986 (categories of preferential debts) after paragraph 15A insert—

Category 7: Deposits covered by Financial Services Compensation Scheme
15B
So much of any amount owed at the relevant date by the debtor in respect of an eligible deposit as does not exceed the compensation that would be payable in respect of the deposit under the Financial Services Compensation Scheme to the person or persons to whom the amount is owed.

Interpretation for Category 7
15C
1
In paragraph 15B “eligible deposit” means a deposit in respect of which the person, or any of the persons, to whom it is owed would be eligible for compensation under the Financial Services Compensation Scheme.
2
For this purpose a “deposit” means rights of the kind described in—
a
paragraph 22 of Schedule 2 to the Financial Services and Markets Act 2000 (deposits), or
b
section 1(2)(b) of the Dormant Bank and Building Society Accounts Act 2008 (balances transferred under that Act to authorised reclaim fund).
2
In section 386 of the Insolvency Act 1986 (categories of preferential debt), in subsection (1), after “production” insert “ ; deposits covered by Financial Services Compensation Scheme ”.
3
In Part 1 of Schedule 3 to the Bankruptcy (Scotland) Act 1985 (list of preferred debts), after paragraph 6A insert—

Deposits covered by Financial Services Compensation Scheme
6B
So much of any amount owed at the relevant date by the debtor in respect of an eligible deposit as does not exceed the compensation that would be payable in respect of the deposit under the Financial Services Compensation Scheme to the person or persons to whom the amount is owed.
4
In Part 2 of Schedule 3 to the Bankruptcy (Scotland) Act 1985 (interpretation of Part 1), after paragraph 9 insert—

Meaning of eligible deposit
9A
1
In paragraph 6B “eligible deposit” means a deposit in respect of which the person, or any of the persons, to whom it is owed would be eligible for compensation under the Financial Services Compensation Scheme.
2
For this purpose a “deposit” means rights of the kind described in paragraph 22 of Schedule 2 to the Financial Services and Markets Act 2000 (deposits).

Financial Services Compensation Scheme

Discharge of functions by the scheme manager
14
After section 224 of FSMA 2000 insert—

Discharge of functions
224ZA
1
In discharging its functions the scheme manager must have regard to—
a
the need to ensure efficiency and effectiveness in the discharge of those functions, and
b
the need to minimise public expenditure attributable to loans made or other financial assistance given to the scheme manager for the purposes of the scheme.
2
In subsection (1)(b) “financial assistance” includes the giving of guarantees and indemnities and any other kind of financial assistance (actual or contingent).

Power to require information from scheme manager
15. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Scheme manager: appointment of accounting officer
16
1
Section 212 of FSMA 2000 (the scheme manager of the Financial Services Compensation Scheme) is amended as follows.
2
In subsection (3)—
a
omit the “and” following paragraph (a),
b
after that paragraph insert—
aa
a chief executive (who is to be the accounting officer); and
, and
c
in paragraph (b), after “chairman” insert “ and chief executive ”.
3
In subsection (4)—
a
after “chairman”, in the first place, insert “ , chief executive ”, and
b
after “chairman”, in the second place, insert “ and the chief executive ”.
S. 14 in force at 1.3.2014 by S.I. 2014/377, art. 2(1)(a), Sch. Pt. 1
S. 16 in force at 1.4.2014 by S.I. 2014/377, art. 2(2)(a)
S. 13 in force at 31.12.2014 by S.I. 2014/3160, art. 2(1)(a)
S. 15 omitted (29.8.2023) by virtue of Financial Services and Markets Act 2023 (c. 29), ss. 62(4), 86(2)(h)