Banking Business (Depositors
Compensation) (Jersey) Regulations 2009
part 1
interpretation
1 Interpretation
In these Regulations, unless the context otherwise
requires –
“administrator”, in respect of a bank in default, means
the person for the time being charged with the administration of the
bank’s property;
“annual administration levy” has the meaning given by
Regulation 25 and includes any additional levy a bank is required to pay
under Regulation 25B(5) in relation to such a levy;
“Appointments Commission” means the Commission
established under Article 17 of the Employment of States of
Jersey Employees (Jersey) Law 2005;
“bank” means a person registered under the Banking Law;
“bank depositors compensation scheme” or
“scheme” means the scheme established by Part 3;
“bank in default” means a bank that has become bankrupt;
“Banking Law” means the Banking Business (Jersey) Law
1991;
“bankrupt”, in respect of a bank, includes the winding
up of an insolvent bank pursuant to Article 155 of the Companies (Jersey)
Law 1991;
“become bankrupt”, in respect of a bank, includes
becoming bankrupt, or a state equivalent or similar to becoming bankrupt, under
the law of a jurisdiction outside Jersey;
“Board” means the Jersey Bank Depositors Compensation
Board established by Regulation 8;
“charity” means a corporation, association or trust, the
income from the property of which is exempt from income tax by virtue of
Article 115(a), (aa) or (ab) of the Income Tax (Jersey)
Law 1961;
“child”, in respect of an eligible depositor, means a
person who has not attained the age of 18;
“Commission” means the Jersey Financial Services
Commission established by the Financial Services Commission
(Jersey) Law 1998;
“compensation” means compensation payable under the bank
depositors compensation scheme;
“compensation fund” means a fund established under Regulation 17;
“compensation levy” means a levy that a bank is liable
to pay under Regulation 25A and includes any additional levy the bank is
required to pay under Regulation 25B(5) in relation to such a levy;
“default-related administrative costs” has the meaning
given by Regulation 17(4);
“eligible deposit”, in respect of a bank, means a
deposit held by the bank in an account in Jersey in respect of an eligible
depositor;
“eligible depositor” has the meaning given to that
expression by Regulation 5;
“financial year” has the meaning given to that
expression by Article 1 of the Public Finances (Jersey)
Law 2019;
“function” includes a power and a duty;
“recurring administrative costs” means any costs of the
Board that are neither compensation nor default-related administrative costs,
but does not include any repayment under Regulation 32(2) or payment under
Regulation 33(3);
“relevant date”, in respect of a bank in default, means
the date specified in a notice published by the Board in respect of the bank
under Regulation 15(1) and any reference to a situation as at a relevant
date is a reference to the situation at the start of the day that falls on that
date;
“valid application” has the meaning given to that
expression by Regulation 2;
“working day” means any day other than a Saturday, a
Sunday, Christmas Day or Good Friday or a day that is a bank holiday or a
public holiday under the Public Holidays and Bank
Holidays (Jersey) Law 1951.[1]
2 “Valid
application” defined
For the purposes of these Regulations, an application for
compensation made to the Board is a valid application if it –
(a) specifies
the name and address of the applicant;
(b) provides
sufficient evidence to show that the applicant is an eligible depositor;
(c) provides
sufficient evidence to identify the eligible depositor’s eligible deposit
and the amount of that deposit;
(d) contains
sufficient proof that the applicant has made a claim in respect of the
applicant’s eligible deposit to the administrator of the bank in default;
(e) contains
details of any payments mentioned in Regulation 24(1) that the applicant
has received;
(f) specifies
the manner in which any compensation payable by the Board to the applicant is
to be paid; and
(g) contains
or provides any other information or matter necessary to allow the Board to
verify the applicant’s claim for compensation and to pay the compensation
to the applicant.
3 Determination
of money standing to the credit of an eligible deposit
(1) For
the purposes of these Regulations, if a bank becomes bankrupt any calculation
of the amount of money standing to the credit of an eligible deposit shall be
made as at the relevant date in respect of the bank in default.
(2) Accordingly,
any money standing to the credit of an eligible deposit that is not in the
currency of Jersey shall be calculated on the basis of the opening middle
market exchange rate as determined by the Board on the relevant date in respect
of the bank in default.
(3) Compensation
paid by the Board shall be paid in the currency of Jersey.
4 Provisions
in respect of joint accounts
(1) In
this Regulation “joint account” means an account –
(a) that
is in the names of 2 or more persons; or
(b) over
which 2 or more persons have rights,
that may be operated against the signature of one or more of those
persons.
(2) A
deposit held in a joint account with a bank is an eligible deposit to the same
extent as an eligible depositor has an interest in the account.
(3) If
an eligible deposit is held in a joint account with a bank, the amount in the
account is to be divided –
(a) according
to the holders’ shares in the account; but
(b) if
there is no indication of the share of each holder, equally between them.
5 “Eligible
depositor” defined and “eligible deposit” clarified
(1) For
the purposes of these Regulations, a depositor with a deposit in a bank account
in Jersey is an “eligible depositor” if the depositor –
(a) is
a natural person and the deposit is for the person’s own benefit other
than as a partner in a partnership;
(b) is
a natural person and the deposit is for the benefit of a child of the person or
for the benefit of a child for whom the person has parental responsibility;
(c) is
the administrator or executor of the estate of a deceased person and the
deposit represents the whole or part of the proceeds of the estate of the
person;
(d) is
a charity; or
(e) is
the Jersey registered company called Community Savings & Credit Ltd.
(2) If,
by virtue of paragraph (1), a person is an eligible depositor in more than
one capacity, the depositor shall be taken to be a separate eligible depositor
in each such capacity for the purpose of Regulation 22.
(3) Accordingly,
if a person is an eligible depositor in respect of more than one child or
estate, the depositor shall be taken to be a separate eligible depositor in
respect of each such child or estate for the purpose of Regulation 22.
(4) Despite
the date of maturity of a deposit with a bank in default, an eligible deposit
with the bank shall not include any interest on the deposit in respect of any
period after the relevant date in respect of the bank.
(5) In
this Regulation “a deposit in a bank account in Jersey” does not
include a deposit that is being held by a bank that is registered to carry on
banking business in Jersey for business recovery reasons.
6 Banking
groups
(1) The
Minister may, for the purpose of calculating the annual administration levy,
the compensation levy and the compensation to be paid in respect of associated
banks, group banks.[2]
(2) The
Minister may do so by notice published in a manner that, in the opinion of the
Minister, is likely to bring the notice to the attention of those affected by
it.
(3) The
banks included in each group of banks are to be taken to be one bank for the
purposes of calculating the annual administration levy, the compensation levy
and the compensation to be paid in respect of those banks under these
Regulations.[3]
(4) However,
if a bank in a group becomes bankrupt, the compensation levy shall still be
imposed on the group but the eligible deposits of the group shall be calculated
without reference to the eligible deposits of the bank in default.[4]
7 Calculation
of periods
(1) A
period of 5 years mentioned in these Regulations starts on a relevant date
in respect of a bank in default.
(2) The
liability of a bank to pay a compensation levy in respect of a bank in default
arises on the relevant date in respect of the bank in default.[5]
part 2
The Jersey Bank Depositors Compensation Board
8 Jersey
Bank Depositors Compensation Board
(1) There
is established a Board, called the Jersey Bank Depositors Compensation Board.[6]
(2) The
Board is an incorporated body that may, in its own name –
(a) sue
and be sued;
(b) enter
into contracts; and
(c) acquire,
hold and dispose of property of any type.
(3) The
Board may, in so far as it is possible for an incorporated body to do
so –
(a) exercise
the rights, powers and privileges; and
(b) incur
the liabilities and obligations,
of a natural person of full age and capacity.
8A Functions of the Board[7]
(1) The
functions of the Board are –
(a) generally
to administer the bank depositors compensation scheme, including in particular –
(i) establishing
and maintaining arrangements in readiness for the possibility of a default, and
(ii) administering
compensation for any default; and
(b) to
arrange for the publication of information for the public on the operation of
the scheme.
(2) In
the exercise of its functions the Board must ensure that –
(a) the
Board and the scheme are administered in a prudent and economical manner; and
(b) the
resources of the Board are used efficiently and effectively.
(3) The
Board may do anything reasonably necessary or expedient for or incidental to
any of its functions, and may in particular, in the exercise of those
functions –
(a) borrow
money, whether for a compensation fund or for any of its other functions;
(b) invest
money, whether standing to the credit of a compensation fund or otherwise;
(c) insure
against its liabilities, whether in connection with the administration of a
compensation fund or with any of its other functions;
(d) insure
against such liabilities of its members, or indemnify its members in respect of
those liabilities;
(e) appoint
an employee, agent or contractor to assist it in exercising any of its
functions.
(4) The
functions of the Board must be carried out by the Minister, and not by the
Board, until such time as the Minister may determine by notice in writing to
the Board that it should assume its functions.
(5) The
Minister may determine different times in relation to the assumption of
different functions, and in particular may determine a time for the Board to
assume the power to raise an annual administration levy even if that time is before
any time determined in respect of any or all other functions.
(6) Despite
paragraphs (4) and (5), no annual administration levy may be raised –
(a) by
the Minister; or
(b) by
the Board in respect of any recurring administrative costs incurred by the
Minister in carrying out under paragraph (4) any function of the Board.
(7) The
references in paragraphs (5) and (6) to raising an annual administration
levy are to sending a notice under Regulation 25B(2)(b) in respect of such
a levy.
9 Independence
of Board
(1) The
Board is independent of the Minister and of the States.
(2) Accordingly,
neither a Minister nor the States are liable for –
(a) an
act or an omission of the Board; or
(b) a debt
or other obligation of the Board.
10 Constitution of
the Board
(1) The
Board must have at least 3 members.
(2) The
members of the Board shall be appointed by the Minister after consulting with
the Appointments Commission.[8]
(2A) Article 2
of the States of Jersey (Appointment
Procedures) (Jersey) Law 2018 shall apply to the appointment of members of the
Board.[9]
(3) A
person shall not be eligible for appointment as a member of the Board if the
person is –
(a) a
member of the States;
(b) subject
to a disqualification order under Article 78 of the Companies (Jersey)
Law 1991 or Article 24(7) of the Bankruptcy (Désastre)
(Jersey) Law 1990; or
(c) bankrupt.
(4) The
appointment of a person as a member of the Board ceases if the person becomes a
person who may not be appointed to be a member of the Board.
(5) The
rights and obligations of the Board, and the performance of its functions,
shall not be affected by –
(a) any
vacancy in its membership; or
(b) any
defect in the appointment of a member.
(6) [10]
(7) [11]
11 Terms and
conditions of appointment of members of the Board
(1) A
person appointed to be a member of the Board –
(a) holds
the appointment on terms and conditions agreed between the person and the
Minister; and
(b) may
be reappointed.
(2) The
terms and conditions must include terms and conditions in respect
of –
(a) the
term of the appointment of the member, being a term not exceeding 5 years;
(b) the
manner in which the member may resign during that term;
(c) the
grounds upon which the appointment of the member may be terminated during that
term;
(d) the
remuneration (if any) of the member,
and may contain such other terms and conditions as the Minister may
consider appropriate or necessary.
(3) The
grounds mentioned in paragraph (2)(c) must include –
(a) the
member being mentally or physically incapable of carrying out his or her
functions as a member; and
(b) the
member being convicted of an offence that carries a penalty of imprisonment for
a term of 2 years or longer.
12 Procedures of the
Board
(1) The
quorum for a meeting of the Board is half the number of members appointed to be
members of the Board at the time of the meeting.
(2) The
Board must keep a record of its decisions.
(3) The
Minister may determine the procedures of the Board.
(4) The
Minister must present to the States a copy of any determination made under
paragraph (3).
(5) Except
as otherwise provided by this Regulation or the Minister, the Board may
determine its own procedures.
(6) [12]
13 Limitation of
liability
(1) This
Regulation applies to –
(a) the
States;
(b) a
Minister;
(c) the
Board;
(d) a
member of the Board;
(e) a
person appointed under Regulation 8A(3)(e); and
(f) a
person who is carrying out a function of the Board.[13]
(2) A
body or person to whom this Regulation applies shall not be liable in damages
for anything done or omitted to be done in the discharge or purported discharge
of a function under these Regulations.
(3) Paragraph (2)
does not apply if it is shown that the act or omission was in bad faith.
(4) Nor
does it apply in the case of a body acting as a public authority for the
purposes of the Article 7 of the Human Rights (Jersey)
Law 2000, so as to prevent an award of damages made in respect of an act or
omission on the ground that the act or omission was unlawful as a result of
Article 7(1) of the Human Rights (Jersey)
Law 2000.
14 Accounts and
report
(1) This
Regulation applies if during a financial year the Board receives, holds or
expends money.
(2) The
Board must keep accounts prepared in accordance with generally accepted
accounting principles that show a true and fair view –
(a) of the profit or loss
of the Board for
the financial year; and
(b) of the state of the Board’s affairs at the
end of the financial year.
(2A) The
Board’s accounts must deal with each compensation fund
separately –
(a) from
any other compensation fund in respect of another bank in default; and
(b) from
any other money received, held or expended by the Board.[14]
(3) The
Board must, within 3 months after the end of the financial year, have its
accounts audited by an auditor qualified for appointment as an auditor of a
company by virtue of Article 113 of the Companies (Jersey)
Law 1991.
(4) The
Board must, within 3 months after its accounts have been audited, provide
the Minister with –
(a) its
audited accounts; and
(b) a
report.
(5) The
report must contain –
(a) details
of the Board’s activities during the financial year; and
(b) such
other information as the Minister may direct the Board to provide.
(6) The
Minister must lay the accounts and report before the States as soon as
practicable after receiving them.
(7) The
Board must keep records that permit its financial position to be ascertained
with reasonable accuracy at any time.
(8) The
Comptroller and Auditor General may audit the accounts of the Board.
(9) When
requested to do so by the Comptroller and Auditor General the Board must make
its records and accounts available to the Comptroller and Auditor General.
(10) [15]
part 3
The BANK DEPOSITORS COMPENSATION scheme
Obligations of the Board
15 Board to publish
“relevant date” in respect of bank in default
(1) The
Board must, as soon as practicable after a bank becomes bankrupt –
(a) publish
a notice, in a manner that is likely to bring it to the attention of those
affected by it, specifying the date on which, in the Board’s opinion, the
bank became a bank in default in Jersey; and
(b) inform
the Minister of the date specified in the notice and the name of the bank in
default.
(2) The
date specified in the notice is the relevant date in respect of the bank in
default.
(3) The
Minister must inform the States as soon as practicable of the name of the bank
in default and the relevant date in respect of the bank.
16 Board must take preliminary steps in respect of default[16]
(1) This
Regulation applies when the Board has published a notice under
Regulation 15 in respect of a bank in default.
(2) The
Board must, within 15 working days after the publication of the relevant
date in respect of the bank in default send to each bank, other than the bank
in default, a notice requiring the bank, within 15 working days of the
receipt of the notice, to provide to the Board –
(a) a
statement of the total amount (if any) the bank calculates that it held on the
relevant date by way of eligible deposits; and
(b) any
evidence required by the Board in support of the statement.
(3) Within
the same time, the Board must send to the administrator of the bank in default
a notice requiring the administrator, as soon as practicable but in any event
within 15 working days of the receipt of the notice, to provide to the
Board sufficient information in respect of the bank in default to enable the
Board to calculate the likely compensation levy to be imposed on banks, the
information to be provided in such form and verified in such manner as the
Board may specify.[17]
(4) The
Board may at any time send to the administrator of the bank in default further
notices requiring the administrator, as soon as practicable but in any event
within 15 working days of the receipt of each notice, to provide to the
Board such further information or documents in respect of the bank in default
as are required by the Board to enable it to carry out its functions under
these Regulations, the information to be provided in such form and verified in
such manner as the Board may specify.
(5) The
Board may, on the application of the bank or the administrator to whom it was
sent, extend the period specified in a notice sent under this Regulation as the
period for compliance with the notice.
(6) The
Board must, as soon as reasonably possible, also make or activate such further
arrangements as it considers expedient to administer the bank depositors
compensation scheme in respect of the bank in default.[18]
(7) Those
arrangements must, in particular, be designed to ensure –
(a) that
applications for compensation are submitted to the Board as soon as
practicable;
(b) that
applicants for compensation are given clear instructions on how they may make
valid applications for compensation; and
(c) that
each claim for compensation is properly verified.
(8) Regulations
35A(3) and (4) apply to a notice under this Regulation as they apply to an
information notice under that Regulation.[19]
(9) A
bank commits an offence, and is liable to a fine, if it fails without
reasonable cause to comply with a notice sent to it under paragraph (2).[20]
(10) An administrator of a bank in
default commits an offence, and is liable to a fine, if the administrator fails
without reasonable cause to comply with a notice sent to the administrator
under paragraph (3) or (4).[21]
17 Board must
establish a compensation fund[22]
(1) The
Board must establish and maintain a separate compensation fund in respect of
each bank in default.[23]
(2) The
Board must pay into the fund money received by the Board in respect of the
default, whether by way of loan, compensation levy, shortfall payment under
Regulation 30(6), subrogation under Regulation 33 or otherwise.[24]
(3) The
Board may, in accordance with these Regulations, pay out of the
fund –
(a) compensation
payable in respect of the default;
(b) the
Board’s default-related administrative costs in respect of that default;
(c) any
repayment under Regulation 32(2), or payment under Regulation 33(3), in
respect of that default.[25]
(4) In
these Regulations “default-related administrative cost” means any
money paid out by the Board, other than as compensation, if the payment is, in
the opinion of the Board, attributable to the operation of the scheme in
relation to a particular bank in default, including –
(a) repayments of borrowings paid into the
compensation fund, and associated interest and costs;
(b) repayment of any excess under
Regulation 32 in respect of the bank in default;
(c) costs of and related to insurance against
the Board’s liabilities in respect of the compensation fund or the bank
in default;
(d) any expenses of the members of the Board
that would not have been incurred but for the default; and
(e) any increase, attributable to a default, in
the amount of a payment that would have been made at a lower rate but for the
default.[26]
(5) For the purpose of paragraph (4) but
without prejudice to its generality, the following are not to be treated as
attributable to the operation of the scheme in relation to a particular bank in
default (and accordingly are recurring administrative costs) –
(a) the remuneration of members of the Board,
and any of their expenses not falling within paragraph (4)(d); and
(b) the costs of insuring those members against
risks that do not vary according to whether a bank is or has been in default.[27]
18 Board must make
interim payment of compensation
(1) This
Regulation applies where –
(a) the
Board receives a valid application for compensation; and
(b) the
application includes a request for an interim payment of compensation.
(2) The
Board must, within 7 working days of receiving the application, pay to the
applicant, by way of compensation the lesser of –
(a) £5000;
or
(b) an
amount equal to the eligible deposit of the applicant on the relevant date.
(3) Paragraph (2)
is subject to Regulations 20, 31 and 33.
19 Board must pay
compensation
(1) This
Regulation applies where the Board receives a valid application for
compensation.
(2) The
Board must, within 3 months of receiving the application pay to the
applicant the compensation due to the applicant under the bank depositors
compensation scheme.
(3) The
Minister may –
(a) extend
the period mentioned in Regulation 18(2) or paragraph (2) of this
Regulation; or
(b) permit
compensation to be paid by instalments over a specified period,
if the Minister is satisfied that it is necessary to do so for the
better administration of the scheme.
(4) The
Minister may do so by notice published in a manner that, in the opinion of the
Minister, is likely to bring the notice to the attention of those affected by
it.
(5) Paragraph (2)
is subject to Regulations 20, 31 and 33.
20 Eligible deposit
liable to confiscation
(1) The
Board may delay payment of compensation under Regulation 18 or 19 in
respect of an eligible deposit if it is satisfied that the whole or any part of
the deposit is or may become liable to confiscation by virtue of any enactment,
whether of Jersey or elsewhere, that relates –
(a) to
money laundering;
(b) to
the proceeds of crime; or
(c) to
terrorism.
(2) Compensation
is not payable in respect of an eligible deposit that is confiscated or that is
liable to confiscation by virtue of an enactment mentioned in paragraph (1).
21 Board to comply
with time limit on applications for compensation
(1) The
Board must not accept an application for compensation in respect of a bank in
default unless the application is made during the period of 6 months after the
relevant date in respect of the bank in default.
(2) Despite
paragraph (1), the Board may, in a particular case, accept an application
made after the end of the period mentioned in paragraph (1) if it is
satisfied that the applicant was prevented by events outside the
applicant’s control from applying during that period.
21A Offences related to applications[28]
(1) A
person commits an offence, and is liable to imprisonment for a term of 2 years
and to a fine, if the person, in connection with an application to the Board
for compensation, knowingly or recklessly provides –
(a) information
that is false, misleading or deceptive in a material particular; or
(b) a
document that contains any such information.
(2) A
person commits an offence, and is liable to imprisonment for a term of 2 years
and to a fine, if the person –
(a) makes
an application to the Board for compensation; and
(b) knowingly
fails to inform the Board of any subsequent event that reduces the amount of
compensation that may be claimed.
Amount of compensation
22 Amount of
compensation
(1) The
maximum amount of compensation that the Board may pay to an eligible depositor
in respect of a bank in default is the lesser of –
(a) £50,000;
or
(b) an
amount equal to the total amount of all eligible deposits that the eligible
depositor had with the bank in default on the relevant date in respect of that
bank.
(2) Paragraph (1)
shall not apply in respect of the Jersey registered company called Community
Savings & Credit Ltd.
(3) The
Board shall, instead, pay the company a maximum amount equal to the total of
the amount each natural person has in an account with the company except that
if any natural person has more than £50,000 in an account with the
company the Board shall pay the company a maximum amount of £50,000 in
respect of each such person.
23 Entitlement under
another depositors compensation scheme
(1) This
Regulation applies if an eligible depositor in respect of a bank in default is
entitled to receive compensation under a bank depositors compensation scheme
(howsoever called) operating in some other jurisdiction.
(2) The
eligible depositor is not entitled to receive compensation under these
Regulations except to any extent that the Board agrees with the person or body
administering the bank depositors compensation scheme in the other
jurisdiction.
(3) Despite
paragraph (2), in the absence of agreement under that paragraph, the Board
may pay compensation to the eligible depositor.
(4) However –
(a) the
amount of compensation that the Board may pay under paragraph (3); and
(b) any
compensation the eligible depositor receives under the bank depositors
compensation scheme operating in the other jurisdiction,
must not exceed the maximum amount specified in Regulation 22.
24 Reduction in
amount of compensation
(1) The
maximum amount of compensation that the Board may pay to an eligible depositor in
respect of a bank in default is reduced by an amount equal to any payments that
the depositor has received in respect of the eligible deposit.
(2) Those
payments include any amount that the eligible depositor has
received –
(a) from
a bank depositors compensation scheme (howsoever called) operating in some
other jurisdiction;
(b) from
an insurance policy taken out by the depositor or taken out on his or her
behalf; or
(c) from
the administrator of the bank in default.
(3) A
person –
(a) who
is paid compensation by the Board; and
(b) who
subsequently receives a payment mentioned in paragraph (1),
must, within 30 working days of receiving the payment, pay to
the Board an amount equal to the payment received.
(4) A
person commits an offence, and is liable to imprisonment for a term of 2 years
and to a fine, if the person fails without reasonable cause to comply with
paragraph (3).[29]
Levies on banks[30]
25 Annual
administration levy[31]
(1) An annual administration levy is a levy
raised by the Board to enable it to meet its recurring administrative costs in
a particular registration year.
(2) The provisions of these Regulations on
annual administration levies accordingly apply to any registration year
irrespective of whether any bank becomes bankrupt in that year.
(3) Before the end of each registration year the
Board may, after reviewing whether it might need to raise an annual
administration levy to meet its likely recurring administrative costs for that
year, decide an amount to be raised as an annual administration levy for that
year.
(4) A bank is liable to pay to the Board an
annual administration levy in respect of a year if –
(a) that year is a registration year for which
the Board decides to raise a levy under paragraph (3); and
(b) the bank is registered during any part of
that year, irrespective of whether it is not registered during any other part
of that year.
(5) The Minister may, by notice to the Board,
direct the Board not to raise more than a specified amount of annual
administration levy for a specified registration year.
(6) An amount specified under paragraph (5)
applies to registration years subsequent to the specified year, unless the
Minister withdraws or amends the notice.
(7) For the purpose of this
Regulation –
“registered”
means registered as described in the definition “bank” in
Regulation 1;
“registration year”
means –
(a) the period (whether of one year or shorter)
starting at the first time determined by the Minister under
Regulation 8A(4) and ending on the next day on which registrations under
the Banking Law expire by virtue of Article 9(2) of that Law; and
(b) each subsequent period of 12 months
ending on each day on which such registrations so expire.[32]
25A Compensation levy[33]
(1) This Regulation applies if a bank becomes
bankrupt.
(2) A bank that is not in default is liable to
pay a compensation levy, in respect of the bank that is in default,
if –
(a) the Board publishes under Regulation 15
a notice specifying the relevant date in respect of the bank in default; and
(b) the bank that is not in default held
eligible deposits on that relevant date.
(3) This Regulation is without prejudice to
Regulation 7(2).
25B Notice of levies[34]
(1) This Regulation applies to both annual
administration levies and compensation levies, except as expressly otherwise
provided.
(2) The Board –
(a) must calculate the levy to be paid by each
bank liable to pay a levy; and
(b) must, as soon as practicable and no later
than the date specified in paragraph (3), send a written notice to each
such bank, requiring it to pay the levy.
(3) The date referred to in paragraph (2)(b)
is –
(a) in the case of an annual administration
levy, one month after the Board decides to raise the levy, or the end of the
registration year (as defined in Regulation 25) for that levy, whichever
is sooner; or
(b) in the case of a compensation levy,
6 months after the relevant date in respect of the bank in default.
(4) The notice must specify –
(a) the levy the bank is required to pay;
(b) how the levy has been calculated; and
(c) the date or dates on which the levy or any
instalment of the levy becomes payable.
(5) If, at any time, the Board is satisfied that
it has become necessary to do so, it may, by written notice sent to each bank
required to pay the levy, require each such bank to pay an additional levy.
(6) The notice must specify –
(a) the additional levy the bank is required to
pay;
(b) how the additional levy has been calculated;
and
(c) the date or dates on which the additional
levy or any instalment of the levy becomes payable.
(7) A bank to which a notice has been sent under
this Regulation must pay the levy or any instalment of the levy within
15 working days of the date specified in the notice as the date when the
amount of the levy or any instalment of the amount becomes payable.
(8) A levy that has become payable is a debt due
to the Board and therefore can be sued for accordingly.
25C Amount of annual
administration levy[35]
(1) To calculate the amount of annual
administration levy to be paid by each bank liable to pay such a levy in a
registration year, the Board must divide the amount decided under
Regulation 25(3) by the number of banks so liable.
(2) If the Board has accepted a payment from a
bank towards the Board’s recurring administrative costs, other than as an
annual administration levy, the Board must –
(a) disregard the contribution in deciding the
amount under Regulation 25(3), and give credit for the contribution
against the amount calculated under paragraph (1) in respect of that bank;
or
(b) adjust the amounts calculated under
paragraph (1) in respect of different banks in such other manner as the
Board considers to be equitable in all the circumstances.
26 Total amount of
compensation levies[36]
Subject to the limitations set out in Regulations 28 and 29, the
total amount of the compensation levies to be paid by the banks liable to pay such
a levy in respect of a bank in default must be sufficient to raise such amount
as the Board estimates will be necessary to meet –
(a) the
payment by it of compensation in respect of the bank in default; and
(b) the
Board’s default-related administrative costs in that respect.[37]
27 Amount of compensation
levy to be paid by each bank[38]
Subject to the limitations set out in Regulations 28 and 29,
the Board must require each bank liable to pay a compensation levy in respect
of a bank in default to pay by way of compensation levy 
of
the amount required for the purposes mentioned in Regulation 26
where –
A = the total amount held by the
bank by way of eligible deposits on the relevant date in respect of the bank in
default; and
B = the total amount held on that
relevant date by way of such deposits by all the banks liable to pay a
compensation levy.[39]
28 Limitation on
amount the Board may expend in
relation to a default[40]
(1) The
maximum amount that the Board may expend –
(a) by
way of compensation; and
(b) to
meet its default-related administrative costs,
in respect of one or more banks in default during a period of
5 years is £100 million.[41]
(2) The
Board may not pay compensation in respect of a bank in default more than
5 years after the relevant date in respect of the bank in default.
29 Limitation on
liability of banks to pay compensation levy[42]
(1) Subject
to the limit set out in paragraph (2), the maximum amount the Board may require
a bank to pay by way of compensation levy in respect of a bank in default is an
amount equal to 0.3% of the eligible deposits held by the bank on the relevant
date in respect of the bank in default.[43]
(2) The
maximum amount for which a bank may be liable by way of compensation levy in
respect of one or more banks in default in respect of a period of 5 years
is –
(a) if
the amount calculated under paragraph (1) is or would exceed
£10 million, £10 million; and
(b) in
any other case, £5 million.[44]
(3) The
maximum amount for which a bank may be liable by way of compensation levy in
respect of one or more banks in default is –
(a) in
the case of a bank to which paragraph (2)(a) applies,
£2 million in respect of any period of 12 months; and
(b) in
any other case, £1 million in respect of any period of
12 months.[45]
(4) The
Board may not require a bank to pay a compensation levy in respect of a bank in
default more than 5 years after the relevant date in respect of the bank
in default.[46]
(5) Nothing
in paragraph (4) shall be taken as prohibiting the enforcement after the
5 year period of a requirement to pay a compensation levy falling due
before the end of that period.[47]
30 Payment of shortfall
(1) This
Regulation applies if, on a relevant date in respect of a bank in default, the
total amount that the banks liable to pay a compensation levy are liable to pay
by way of compensation levy is less than the maximum amount the Board may
expend under Regulation 28 in respect of the bank in default.[48]
(2) There
shall be due to the Board –
(a) by
way of payment from the consolidated fund; or
(b) by
way of set off against any loan to the Board by the States,
the amount calculated under paragraph (3).
(3) That
amount is the difference between –
(a) the
total amount the banks liable to pay a compensation levy are liable to pay by
way of compensation levy in respect of the bank in default; and
(b) the
maximum amount of compensation and default-related administrative costs the
Board may expend in respect of the bank in default.[49]
(4) The
Board –
(a) must,
at the same time as it sends to banks notices under Regulation 25B(2)(b) in
respect of a bank in default, send a notice to the Minister for Treasury and
Resources stating how much is due to the Board by way of shortfall under this
Regulation as calculated by the Board; and
(b) may
subsequently send a further notice to the Minister for Treasury and Resources
stating further amounts that are due to the Board by way of any such shortfall.[50]
(5) A
notice under paragraph (4) must specify –
(a) the
amount due; and
(b) how
the amount has been calculated.
(6) The
amount mentioned in paragraph (2)(a) must be withdrawn from the
consolidated fund and paid to the Board within 30 working days of the
receipt of the notice by the Minister.
31 Insufficient
funds to pay compensation
(1) This
Regulation applies if a bank is in default and –
(a) by
virtue of Regulation 28, the amount the Board may expend; or
(b) by
virtue of Regulation 29, the amount available to the Board,
in respect of the bank is insufficient to pay the full amount of the
compensation payable in respect of the bank in default and the Board’s default-related
administrative costs in that respect.[51]
(2) The
Regulation also applies if any bank liable to pay a compensation levy defaults
in the payment of the levy for any reason.[52]
(3) The
amount of compensation to be paid by the Board in respect of each eligible
depositor of the bank in default shall be reduced –
(a) by
a rateable amount; or
(b) in
such other manner as the Board considers to be equitable in all the
circumstances.
(4) For
the purpose of paragraph (3)(a), any deduction under Regulation 24
shall be disregarded when calculating the reduction to be made under that
paragraph.
32 Repayment of
overpaid compensation levy[53]
(1) This Regulation applies if, during or after
a period of 5 years in relation to a default, the Board has in the
compensation fund for that default more money than it requires to pay
compensation and to meet its default-related administrative costs in relation
to that default.
(2) The Board must apply the excess firstly to
repay any shortfall paid to the Board out of the consolidated fund under Regulation 30
in respect of the default and secondly to pay any remaining amount to the banks
that paid a compensation levy to the Board in that respect in proportion to the
amount of levy paid by each bank.
Subrogation
33 Subrogation.
(1) This
Regulation applies if the Board is satisfied that a person has made a valid
application for compensation.
(2) Despite
Regulations 18 and 19, the Board must not pay the compensation
claimed, under either of those Regulations, until the eligible depositor has
agreed in writing that –
(a) the
depositor’s rights in respect of the depositor’s eligible deposit
with the bank in default are vested in the Board;
(b) the
depositor will provide any assistance the Board may require to enable it to
exercise those rights; and
(c) the
depositor will pay to the Board any amount the depositor receives in respect of
those rights, after deducting from that amount any amount the Board would have
been required to pay to the depositor under paragraph (3).
(3) The
Board must, as soon as practicable, pay to the depositor any amount that the
Board receives in respect of the depositor’s eligible deposit that exceeds
an amount equal to the amount of compensation paid or payable by the Board to
the depositor in respect of the depositor’s eligible deposit.
(4) The
Board must pay any amount paid to it under paragraph (2)(a) or (c)
into the compensation fund in respect of the bank in default to which the
compensation relates.[54]
34 Board to be
treated as creditor
(1) This
Regulation applies if any depositor’s rights in respect of a
depositor’s eligible deposit with a bank in default have been vested in
the Board.
(2) The
Board –
(a) may
participate in the nomination of a person to sit upon any creditors’
committee or committee of inspection of the bank in default;
(b) may
require that it be sent any notice addressed to creditors of the bank; and
(c) may
nominate a person to attend and vote at a creditors’ meeting.
(3) For
the purpose of paragraph (2), the Board is to be taken to be a creditor of
the bank in default –
(a) with
the priority of a depositor with the bank; and
(b) to
the total value of any depositors’ rights that have been vested in the
Board.
Appeals
35 Appeals
(1) A
person who is dissatisfied with a decision of the Board –
(a) that
the person is not entitled to compensation;
(b) in
respect of the amount of the compensation to which the person is entitled; or
(c) not
to extend, under Regulation 21(2), the period during which the person may
make an application for compensation,
may appeal to the Royal Court against the decision on the ground
that, on the facts available to the Board, its decision was unreasonable.
(2) A
bank that is dissatisfied by a decision of the Board requiring the bank to pay
an annual administration levy or a compensation levy may appeal to the Royal
Court against the decision on the grounds that –
(a) the
bank is not liable to pay a levy;
(b) the
Board has miscalculated the amount of the levy or any instalment of the levy
that the bank is required to pay; or
(c) the
Board has miscalculated the date on which the levy or any instalment of the
levy becomes payable.[55]
(3) Unless
the Royal Court otherwise directs, an appeal by a bank under paragraph (2)
does not suspend the operation of a notice sent to the bank under
Regulation 25B.[56]
(4) The
Minister for Treasury and Resources may appeal to the Royal Court against a
decision of the Board requiring the payment of a shortfall under
Regulation 30 on the grounds that –
(a) the
shortfall is not payable;
(b) the
Board has miscalculated the amount of the shortfall; or
(c) the
Board has miscalculated the date on which the shortfall is payable.
(5) Unless
the Royal Court otherwise directs, an appeal by the Minister for Treasury and
Resources under paragraph (4) does not suspend the operation of a notice
sent to the Minister under Regulation 30(4).
(6) On
an appeal under this Article, the Royal Court may make any order it considers
appropriate.
(7) A
reference in this Regulation to miscalculation includes miscalculation by
virtue of a decision, that is unreasonable having regard to all the
circumstances of the case, to treat any costs as recurring administrative costs
or as default-related administrative costs.[57]
Information[58]
35A Powers to demand information, and
to specify format[59]
(1) Articles 26(1),
(3), (5), (13), (14) and (15) of the Banking Law apply in relation to these
Regulations –
(a) with
the substitution, for references to the Commission, of references to the Board;
and
(b) with
the substitution, for references to the performance of functions under that
Law, of references to the performance of functions under these Regulations.
(2) Without
prejudice to the generality of paragraph (1), the Board may at any time
serve a notice on a bank under Article 26 of the Banking Law, as applied
by paragraph (1), requiring the bank to provide the Board, within a time
specified in the notice, with either or both of the following –
(a) information
consisting of a statement of the total amount held, as at a time specified in
the notice, by that bank by way of eligible deposits;
(b) other
information, specified in the notice, that –
(i) relates
to eligible deposits held by the bank, and
(ii) is
relevant to the raising of a levy or to any other matter connected with the
functions of the Board or any other person under these Regulations, or
connected with the operation of the depositors compensation scheme.
(3) The
Board may, after consulting the Minister, include in an information notice a
requirement that the information is to be provided in a format specified in the
notice.
(4) For
the purpose of paragraph (3) –
(a) an
information notice is a notice served on a bank under –
(i) Article 26
of the Banking Law as applied by paragraph (1), or
(ii) paragraph (2);
(b) different
formats may be specified in respect of different descriptions of banks and
different descriptions of information;
(c) a
format may be specified by reference to a general notice published by the Board
in a manner that, in the opinion of the Board, is likely to bring the notice to
the attention of banks; and
(d) the
specified format may include any description of electronic record, as defined by the Electronic Communications
(Jersey) Law 2000, and any description of electronic communication, as defined by
that Law.
(5) Nothing
in paragraph (4)(b), (c) or (d) limits any of paragraphs (1), (2) and
(3).
(6) If
a notice under paragraph (2) includes a requirement to provide information
under paragraph (2)(a), the Board may, after consulting the Minister,
specify in the notice that the information is to be provided forthwith.
(7) A person
commits an offence, and is liable to imprisonment for a term of 6 months and to
a fine, if the person –
(a) fails
without reasonable excuse to comply with a requirement imposed on the person
under this Regulation; or
(b) obstructs
an officer, or an agent, exercising powers under Article 26(5) of the Banking
Law, as applied by paragraph (1) or (2).
(8) For
the purpose of Article 26(14) of the Banking Law, as applied by paragraph (1)
of this Regulation, the reference to proceedings under Article 26(12) or
22 of that Law is to be read as a reference to proceedings under any of –
(a) paragraph (7)(b)
of this Regulation;
(b) Regulation
21A(1); and
(c) Article 22(1)
of the Banking Law.
(9) Paragraph (10)
applies to any information (including any document or answer) that –
(a) is
obtained by the Board under this Regulation;
(b) is
not also obtained under Regulation 16, or held for the purpose of paying
compensation or verifying a claim for compensation; and
(c) consists
of or includes personal data, within the meaning of the Data Protection (Jersey) Law
2018,
relating to a person as a depositor of a bank other than a bank in default.
(10) The
Board must –
(a) as
soon as is practicable after obtaining the information, encrypt it if it is not
already encrypted; and
(b) ensure
that it is encrypted at all times at which it –
(i) is
held by or on behalf of the Board, and
(ii) is
not in use for a purpose that requires it to be temporarily decrypted.
(11) For the
purposes of the Data Protection (Jersey) Law
2018
and the Data Protection Authority
(Jersey) Law 2018, a contravention of paragraph (10) is to be treated as also
being a contravention of Articles 8(1) and 21(1) of the Data Protection (Jersey) Law
2018.
(12) Paragraphs (10)
and (11) are in addition to, and are not to be read as derogating from, any
duty imposed on the Board by or under the Data Protection (Jersey) Law
2018
(and in particular by Article 8(1)(f), or Article 21(1) as read with
Article 21(2)(a), of that Law) or by any other law.
35B Disclosure of information[60]
(1) Article 42
of the Banking Law applies, subject to paragraph (2), in relation to
information received under or for the purposes of these Regulations as it
applies in relation to information received under or for the purposes of the Banking
Law.
(2) The
Board, or a person who is, or is acting as, an officer, servant or agent of the
Board, may disclose information –
(a) to
any of the following persons –
(i) the
Viscount,
(ii) the
Comptroller and Auditor General,
(iii) the
administrator of a bank in default, if the information concerns the bank;
(b) to
the Minister, if the information –
(i) concerns
the administration or operation of the scheme, and
(ii) does
not consist of or include personal data, within the meaning of the Data Protection (Jersey) Law
2018,
relating to a person as a depositor;
(c) to
the Commission, or to a person acting on its behalf, to enable or assist the
Commission to discharge a function under an enactment that gives the Commission
a supervisory function; or
(d) to
any person –
(i) for
the purpose of enabling or assisting the Board, or a person acting on its
behalf, to discharge the Board’s functions under these Regulations,
(ii) with
a view to the investigation of a suspected offence or to the institution of
criminal proceedings, or otherwise for the purposes of criminal proceedings (in
each case whether in Jersey or elsewhere and whether under these Regulations or
otherwise),
(iii) in
connection with any other proceedings (whether in Jersey or elsewhere) arising
out of these Regulations,
(iv) in
compliance with a court order,
(v) for
the purpose of obtaining advice on the performance by the Board of its
functions under these Regulations, or
(vi) for
the purpose of cooperating with any person or body administering a bank
depositors compensation scheme (however called) in another jurisdiction in
respect of a bank in default.
part 4
final PROVISIONS[61]
35C
Criminal liability of
officers and others[62]
Article 52(1) of the Banking
Law applies to an offence under these Regulations as it applies to an offence
under that Law.
36 Citation
These Regulations may be cited as the Banking Business (Depositors
Compensation) (Jersey) Regulations 2009.