Prudential Regulation Authority Rulebook

6.1

This Chapter applies to the FSCS.

6.2

The FSCS must pay any compensation to the depositor, with the following exceptions:

1. (1) where the FSCS is required to make payments on behalf of a non-UK scheme in accordance with the deposit guarantee scheme regulations;
2. (2) where the FSCS must instruct a non-UK scheme to make payments on its behalf in accordance with 27.3;
3. (3) where the FSCS is required to make payments to a person other than the depositor in accordance with section 214B or section 214D of FSMA or section 61 of the Banking Act 2009;
4. (4) where the depositor directs that any compensation be paid to another person, the FSCS may pay the compensation as directed by the depositor;
5. (5) where the account holder is not absolutely entitled to the eligible deposit:
1. (a) if another person (A) is absolutely entitled to the eligible deposit, A is the person entitled to compensation in respect of the deposit, and accordingly the FSCS must pay any compensation to A (or, where A (or a person who has authority to act on behalf of A) directs that any compensation be paid to another person, the FSCS may pay the compensation as directed by A (or a person who has authority to act on behalf of A), provided that A has been identified or is identifiable before the compensation date; and
2. (b) if no person is absolutely entitled to the eligible deposit, the FSCS must pay any compensation in accordance with such of 6.3, 6.4, 6.5 and 6.6 as applies.

[Note: Art. 7(3) of the DGSD]

6.3

If a person is:

1. (1) a trustee (other than a bare trustee); or
2. (2) the operator of, or the person carrying on the regulated activity of winding up, a stakeholder pension scheme (which is not an occupational pension scheme) or personal pension scheme,

the FSCS must treat that person’s entitlement to compensation in this capacity as separate from the entitlement to compensation in any other capacity, as if the two entitlements were held by different persons.

6.4

If a deposit is held:

1. (1) for the trustees of a small self-administered scheme, an occupational pension scheme of micro, small and medium sized enterprise, or the trustee or operator of, or the person carrying on the regulated activity of winding up, a stakeholder pension scheme (which is not an occupational pension scheme) or personal pension scheme;
2. (2) for one or more members of a pension scheme (or, where relevant, the beneficiary of any member) whose benefits are money-purchase benefits,

the FSCS must treat the member or members (or, where relevant, the beneficiary of any member) separately as persons entitled to receive compensation.

6.5

If any group of persons are:

1. (1) co-trustees (other than bare co-trustees); or
2. (2) operators of, or persons carrying on the regulated activity of winding up, a stakeholder pension scheme (which is not an occupational pension scheme) or a personal pension scheme

(or any combination thereof), the FSCS must treat them as a single and continuing person distinct from the person who may from time to time be the trustees, or the operators or persons winding up the relevant pension scheme.

6.6

Where the same person is:

1. (1) trustee for different trusts or for different stakeholder pension schemes (which are not occupational pension schemes) or personal pension schemes; or
2. (2) the operator of, or the person carrying on the regulated activity of winding up, different stakeholder pension schemes (which are not occupational pension schemes) or personal pension schemes,

the FSCS shall treat that person’s entitlement to compensation in respect of each of these trusts or schemes as if they were entitlements of a different person.

6.7

Where any of the provisions of 6.3, 6.5 or 6.6 apply, the FSCS must try to ensure that any amount paid to:

1. (1) the trustee; or
2. (2) the operator of, or the person carrying on the regulated activity of winding up, a stakeholder pension scheme (which is not an occupational pension scheme) or personal pension scheme
3. is, in each case:
4. (3) for the benefit of members or beneficiaries whose own deposits would be eligible deposits; and
5. (4) no more than the amount of the loss suffered by those members or beneficiaries.

6.8

Where a person holds a deposit as the personal representative of another or on behalf of another, the FSCS must treat the personal representative or the person acting on behalf of another in respect of that deposit as if they were standing in the shoes of that other person.

6.9

In applying this Chapter to deposits held with a branch outside the UK of a DGS member, the FSCS must interpret references to:

1. (1) persons entitled as personal representatives, trustees, bare trustees, operators of pension schemes or persons carrying on the regulated activity of winding up pension schemes; or
2. (2) persons having a joint account or joint interest in a deposit or carrying on business in partnership,

as references to persons entitled, under the law of the relevant country or territory, in a capacity appearing to the FSCS to correspond as nearly as may be to that capacity.

6.10