
Bank
(Recovery and Resolution) (Jersey) Amendment Law 202-
A LAW to amend the Bank (Recovery and Resolution) (Jersey) Law 2017,
to provide for the continuation of the Bank Depositors
Compensation Scheme and to provide for the transfer of functions to the
Authority for the administration of that Scheme.
Adopted
by the States 30 September 2025
Sanctioned
by Order of His Majesty in Council [date to be inserted]
Registered by the Royal Court [date to be inserted]
Coming into force [date to be inserted]
THE STATES, subject to the sanction of His Most
Excellent Majesty in Council, have adopted the following Law –
Part 1
Bank (Recovery and Resolution) (Jersey) Law 2017
amended
1 Bank (Recovery and Resolution) (Jersey) Law
2017 amended
This Part amends the Bank (Recovery and
Resolution) (Jersey) Law 2017.
2 Article 1 (interpretation)
amended
In Article 1 –
(a) the definition “2009 Regulations” is deleted;
(b) after the definition
“annual administration levy” there is inserted –
“assignment”, in respect of a
right held by a person, includes assignment of the right by contract to another
person, vesting of the right in another person by operation of law, and
assignment of the right in any other manner to another person;
(c) for the definition
“Authority” there is substituted –
(d) for the definition “bank”
there is substituted –
“bank” means –
(a) for the purpose of the
Bank Depositors Compensation Scheme, a Jersey bank;
(b) for any other purpose, a
person to whom this Law applies under Article 3(1);
(e) for the definition “bank
depositors compensation scheme” there is substituted –
(f) after the definition
“Bank Depositors Compensation Scheme” there is inserted –
“bank in default” means a bank
that has been declared to be in default under Article 142I;
(g) for the definition “bank liquidator” there is substituted –
“bank
liquidator” means –
(a) for
a bank that is being wound up under Part 7, a person appointed under
Article 98 as a bank liquidator;
(b) for
a branch of a foreign bank that is bankrupt, the person for the time being
charged with the administration of the property of the foreign bank by virtue
of it being bankrupt;
(h) after the definition
“bank winding up order” there is inserted –
(i) for the definition “covered deposit” there
is substituted –
“covered deposit” means, for
an eligible deposit or a deposit that would be an eligible deposit of a bank
incorporated in Jersey if the deposit was held in Jersey, that part of the
deposit that does not exceed the greater of the following –
(a) the maximum amount of
depositors’ compensation payable in respect of the eligible deposit under
Article 142T;
(b) the maximum amount of
compensation payable under an overseas depositors’ compensation scheme in
respect of the deposit, up to a maximum of £85,000;
(j) after the definition
“debt instruments” there is inserted –
“default-related administrative costs”
has the meaning given in Article 142M(5);
“default date”, for a bank in
default, means the date specified in a published notice under Article 142I
as the date on which the bank became a bank in default;
(k) for the definition
“deposit” there is substituted –
“deposit” –
(a) in Part 7A, has the meaning given in Article 142E(1); and
(b) in the rest of this Law, has
the meaning given in Article 2 of the 1991 Law;
(l) after the definition
“deposit” there is inserted –
“depositor” means a person who
makes a deposit;
“depositors’ compensation” means
depositors’ compensation payable under Article 142P(1),
(4) or (6);
(m) for the definition
“Depositors Compensation Fund” there is substituted –
“depositors’ compensation fund” means a compensation fund
established under Article 142M for a bank in
default;
“depositors’ compensation levy”
means –
(a) a levy a bank is required
to pay under Article 142ZB(2); and
(b) any additional levy the
bank is required to pay under Article 142ZC(3)
or (5) in relation to that levy;
(n) for the definition
“eligible deposit” there is substituted –
“eligible deposit” has the
meaning given in Article 142E(2);
(o) for the definition
“eligible depositor” there is substituted –
“eligible depositor” has the
meaning given in Article 142E(4);
(p) after the definition
“foreign bank” there is inserted –
“foreign law” means the law of
a jurisdiction other than Jersey;
(q) in the definition
“foreign resolution action”, for “the law of a jurisdiction, other than
Jersey,” there is substituted “a foreign law”;
(r) after the definition
“foreign resolution instrument” there is inserted –
“function” includes a power
and a duty;
(s) the definition “Fund” is
deleted;
(t) after the definition “home resolution authority” there is
inserted –
“insolvent”, in respect of a
bank, means unable, or likely to be unable, to pay its debts as they fall due;
(u) the definition “Jersey Bank Depositors Compensation Board” is
deleted;
(v) after the definition “netting arrangement” there is
inserted –
“overseas depositors’ compensation
scheme” means a scheme (irrespective of its name) that operates in a
jurisdiction other than Jersey and is, in the opinion of the Authority, the
same as or similar to the Bank Depositors Compensation Scheme;
(w) after the definition
“provisional valuation” there is inserted –
“published notice” means a
notice published in a manner that, in the opinion of the Authority, is likely
to bring the notice to the attention of those affected by it;
(x) in the definition
“relevant insolvency proceedings”, for paragraph (a), there is
substituted –
(a) proceedings for a bank
winding up order under Part 7 or, for a branch of a foreign bank,
proceedings under a foreign law that the Authority considers are the same as or
similar to proceedings to wind up a bank under Part 7;
(y) after the definition
“resolution conditions” there is inserted –
“Resolution Fund” means the
Jersey Bank Resolution Fund established under Article 22;
(z) after the definition
“resolvability assessment” there is inserted –
(za) after the definition
“winding up” there is inserted –
3 Article 3
(application) amended
(1) In
Article 3(1), “Subject to paragraph (2)” is deleted.
(2) For
Article 3(2) there is substituted –
(a) Part 7A and other provisions of this Law relating to the Bank
Depositors Compensation Scheme apply only to a person specified in paragraph (1)(a);
and
(b) if a stabilisation power
is exercised in respect of a bank, it does not cease to be a bank for the
purposes of this Law if it is no longer registered to carry on the
deposit-taking business as a result of a resolution action.
4 Heading to Part 2
(Jersey Resolution Authority) amended
In the heading to Part 2,
after “Resolution” there is inserted “and Depositors Compensation”.
5 Article 4
(establishment of the Authority) substituted
For Article 4 there
is substituted –
4 Jersey Resolution and Depositors Compensation Authority
(1) The
Jersey Resolution and Depositors Compensation Authority is a body corporate
with perpetual succession and a common seal that may –
(a) sue and be sued in its
corporate name;
(b) enter into contracts and
acquire, hold and dispose of any property; and
(c) so far as possible for a
body corporate, exercise the rights, powers and privileges and incur the
liabilities and obligations of a natural person of full age and capacity.
(2) The
application of the common seal of the Authority must be authenticated by the
signature of a person authorised by the Authority to sign on its behalf.
(3) Every
document bearing the imprint of the common seal of the Authority is taken to be
properly sealed unless the contrary is proved.
(4) The
Authority is independent of the Minister and of the States and neither the
Minister nor the States are liable for any act or omission, or debt or other
obligation, of the Authority.
6 Article 7
(functions of the Authority) substituted
For Article 7 there
is substituted –
7 Functions of the Authority
(1) The
Authority has the following general functions in relation to bank resolution
and recovery –
(a) to make preparations to
facilitate the resolution of banks;
(b) to administer the
resolution of banks;
(c) to carry out any other functions
in relation to bank resolution or recovery or incidental or ancillary matters
required or authorised by this Law or the Regulations.
(2) The
Authority has the following general functions in relation to the Bank
Depositors Compensation Scheme –
(a) to administer the Scheme
in a prudent and economical manner, including in particular –
(i) establishing and
maintaining arrangements in readiness for the possibility of a bank being
declared to be in default under Article 142I;
(ii) obtaining and sharing
information in accordance with Part 7A (Bank Depositors
Compensation Scheme) and Part 9 (restriction on disclosure of information);
(iii) paying depositors’ compensation
under Part 7A in a timely manner; and
(iv) ensuring that banks comply
with their obligations to the Authority under Part 7A
and any other provisions of this Law relating to the Scheme, including by
exercising the Authority’s enforcement powers under Part 7 and assisting
other persons in their enforcement of Part 7;
(b) to carry out any other
functions in relation to the Scheme or incidental or ancillary matters required
or authorised by this Law or the Regulations.
(3) The
Authority has the general function to carry out any other functions conferred
on it by this Law or another enactment.
(4) The
States may by Regulations amend this Law to make different or further provision
as to the general functions of the Authority in relation to the Bank Depositors
Compensation Scheme.
7 Article 8 (guiding
principles) amended
(1) The
text of the existing Article 8 becomes paragraph (1).
(2) After
Article 8(1) there is inserted –
(2) In
the exercise of its functions, the Authority must ensure that –
(a) the Authority is
administered in a prudent and economical manner; and
(b) the resources of the
Authority are used efficiently and effectively.
(3) In
the exercise of its functions relating to the Bank Depositors Compensation
Scheme, the Authority must have regard to the objectives of –
(a) protecting the interests
of eligible depositors; and
(b) contributing to financial
stability in Jersey.
8 Article 9 (general
powers of the Authority) amended
In Article 9(1),
after sub-paragraph (c) there is inserted –
(d) the exercise of its
powers relating to the Bank Depositors Compensation Scheme under Part 7A.
9 Article 14A inserted
After Article 14 (publication
of information and advice) there is inserted –
14A Publication of information and advice about
the Scheme
(1) The
Authority must arrange for information on the operation of the Bank Depositors
Compensation Scheme to be published.
(2) The
Authority must publish a list of Jersey banks for the purpose of the Bank
Depositors Compensation Scheme.
(3) The
Authority may publish a standard for statements about the Bank Depositors
Compensation Scheme to be followed by banks in advertisements, account
statements or other documents or publicity produced for depositors or potential
depositors.
(4) The Authority may, in relation to a
standard published under paragraph (3) –
(a) make different provision
for different cases or purposes; and
(b) provide for exceptions to
the standard in specified circumstances, subject to specified conditions, or at
the discretion of the Authority.
(5) The
Authority may, by published notice, amend or revoke a standard published under
paragraph (3).
(6) Anything
published by the Authority under this Article must be published in a manner
that, in the opinion of the Authority, is likely to bring the publication to
the attention of the persons affected by it.
(7) The
Authority must notify the Commission and the Minister of the publication of a
standard under paragraph (3).
(8) The
States may by Regulations amend this Law to make other provision as to
statements to be made in connection with the Bank Depositors Compensation
Scheme.
10 Article 16 (annual
administration levy) amended
(1) For
Article 16(2) there is substituted –
(2) This
Article applies to any year whether or not, in that year, the Authority –
(a) takes resolution action
against a bank; or
(b) declares a bank to be in
default under Article 142I.
(2) After
Article 16(13) there is inserted –
11 Articles 18 and 19
substituted
For Articles 18 and
19 there is substituted –
18 Borrowing by the Authority
(1) For
the purpose of enabling the Authority to carry out its functions, the Authority
may borrow money up to a prescribed maximum amount.
(2) The
Authority may –
(a) insure against its
liabilities in connection with any of its functions;
(b) insure against
liabilities of its members in connection with any of its functions, or
indemnify its members in respect of those liabilities.
(3) The
Minister, on behalf of the States, may on terms determined by the
Minister –
(a) guarantee the liabilities
of the Authority up to the prescribed maximum amount; or
(b) lend money to the
Authority up to the prescribed maximum amount.
12 Article 21
(accounts, audit and reports) amended
(1) In
Article 21(3), for “Fund” there is substituted “Resolution Fund”.
(2) In
Article 21(10), after “this Article” there is inserted “and Article 21A,”.
13 Article 21A inserted
After Article 21
(accounts, audit and reports) there is inserted –
21A Accounts, audit and reports for
depositors’ compensation funds
(a) keep proper accounts for each
depositors’ compensation fund and proper records in relation to those accounts
that permit the status of those accounts to be ascertained with reasonable
accuracy at any time; and
(b) in accordance with
paragraph (3), prepare those accounts for each accounting period and prepare
a report on the Authority’s activities in relation to the bank in default during
the accounting period.
(2) The
accounts for each depositors’ compensation fund must be kept separate from the
accounts for –
(a) any other depositors’
compensation fund; and
(b) any other money received,
held or expended by the Authority.
(3) The
accounts for each depositors’ compensation fund must be prepared in accordance
with generally accepted accounting principles and show a true and fair view of –
(a) the profit or loss of the
depositors’ compensation fund for the accounting period; and
(b) the status of the
depositors’ compensation fund at the end of the accounting period.
(4) The
Authority must, within 3 months after the end of each accounting period,
have the accounts for each depositors’ compensation fund audited by an auditor.
(5) The
Authority must, within 3 months after the accounts for a depositors’
compensation fund have been audited, provide the Minister with –
(a) the audited accounts;
(b) the report of the
auditor; and
(c) the report prepared by
the Authority under paragraph (1)(b).
(6) The
report provided to the Minister under paragraph (5)(c) must contain –
(a) details of the Authority’s
activities in relation to the bank in default during the accounting period; and
(b) any other information as
directed by the Minister.
(7) The
Minister must lay before the States a copy of the audited accounts and the
reports provided to the Minister under paragraph (5) not later than 7 months
after the end of each accounting period.
(8) In
this Article, “accounting period” means –
(a) for the first accounting
period, a period of up to 18 months beginning with the default date for
the bank in default;
(b) for the final accounting
period, a period of up to 12 months beginning with the end of the previous
accounting period and ending with the completion of the depositors’
compensation exercise under Part 7A; and
(c) for any other accounting
period, a period of 12 months beginning with the end of the previous
accounting period.
14 Article 22
(establishment and management of Fund) amended
In Article 22, in
the following places, for “Fund” there is substituted “Resolution Fund” –
(a) the heading;
(b) paragraph (2);
(c) paragraph (3)(a);
(d) paragraph (4);
(e) paragraph (5);
(f) paragraph (5)(c);
(g) paragraph (6);
(h) paragraph (7), in
both places it occurs;
(i) paragraph (8);
(j) paragraph (9).
15 Article 26 (minimum
requirement for own funds and eligible liabilities) amended
After Article 26(1)
there is inserted –
(1A) The Minister may prescribe criteria relating
to eligible liabilities to be used by the Authority when setting the minimum
requirement for own funds and eligible liabilities for each Jersey bank.
16 Article 28
(requirement for notice) amended
Article 28(4)(c) is
deleted.
17 Article 29
(resolution powers) amended
In Article 29(4),
after sub-paragraph (b) there is inserted –
(c) before the transfer of a deposit-taking
business, the requirement to comply with the Schedule to the 1991 Law.
18 Article 30 (priority
of claims) amended
In
Article 30(5) –
(a) for sub-paragraph (c),
there is substituted –
(c) the
following which are ranked equally –
(i) where a right of an
eligible depositor in respect of an eligible deposit held by a bank in default is
vested in the Authority, the total amount owing to the Authority by virtue of
the vested right (but not exceeding £50,000 per depositor);
(ii) where
a right of a depositor in respect of a deposit held in a branch outside Jersey
of a bank incorporated in Jersey is vested in an overseas depositors’
compensation scheme (and the deposit would be an eligible deposit if it was
held in Jersey), the total amount owing to the overseas depositors’
compensation scheme by virtue of the vested right (but not exceeding £50,000
per depositor);
(b) for sub-paragraph (e),
there is substituted –
(e) that part of a covered
deposit that –
(i) is not vested in the
Authority or in an overseas depositors’ compensation scheme; or
(ii) is re-vested back to the
depositor by the Authority or by an overseas depositors’ compensation scheme;
19 Article 37 (manner
of recovery by the Authority of expenses) amended
In Article 37, for
“Fund” there is substituted “Resolution Fund”.
20 Article 44 (pre-resolution
valuation) amended
In Article 44 –
(a) in paragraph (5)(c)(i), for “Fund” there is substituted “Resolution Fund”;
(b) for paragraph (6)(g)
there is substituted –
(g) an estimate of the amount
of depositors’ compensation that would be payable under Part 7A if the bank were to be wound up or made insolvent under
relevant insolvency proceedings.
21 Article 65
(application of bail-in tool) amended
In Article 65 –
(a) in paragraph (7),
for “the law of another jurisdiction” there is substituted “a foreign law”;
(b) for paragraph (7)(g)(iv),
there is substituted –
(c) in paragraphs (10), (11)
and (11)(b), for “Fund” there is substituted “Resolution Fund”.
22 Article 66
(assessment of amount of bail-in) amended
In Article 66(2)(a),
for “Fund” there is substituted “Resolution Fund”.
23 Article 72 (contractual
recognition of bail-in) amended
(1) For
the heading to Article 72, there is substituted “Contractual recognition
of bail-in for banks incorporated in Jersey”.
(2) In
Article 72(1), for “bank shall” there is substituted “bank incorporated in
Jersey must”.
(3) For
Article 72(1)(b) and (c), there is substituted –
(b) not that part of a
deposit mentioned in Article 30(5)(f);
(c) governed by a foreign
law;
(4) In
Article 72(1)(d)(i), “by the Minister by Order”
is deleted.
(5) For
Article 72(2) there is substituted –
(2) The
Authority may specify the contractual term for the recognition of bail-in that
a bank is required, under paragraph (1), to include in its contractual
documents.
(2A) The Minister may prescribe the circumstances
under which it would be legally or otherwise impracticable for a bank to
include in its contractual documents the contractual term required by paragraph (1).
(2B) A bank is not required to include in its
contractual documents the contractual term required by paragraph (1) if
the prescribed circumstances apply.
(6) In
Article 72(3), for “Paragraph (1)(a) shall” there is substituted
“Paragraph (1) does”.
(7) For
Article 72(6) there is substituted –
(6) On
the application of a bank setting out the circumstances that make it
impracticable for the bank to comply with paragraph (1), the Authority may
waive the requirements of that paragraph.
24 Article 77
(difference of treatment valuation) amended
In Article 77(3)(a) and
(b), for “Jersey Bank Depositors Compensation Board” there is substituted
“Authority, in relation to the administration of the Bank Depositors
Compensation Scheme,”.
25 Article 78
(safeguard for shareholders and creditors) amended
In Article 78, for
“Fund” there is substituted “Resolution Fund”.
26 Article 79
(procedural requirements after creation of a resolution instrument or share
transfer order) amended
Article 79(1)(a)(iv)
is deleted.
27 Article 80
(safeguard for partial transfers) amended
In Article 80(3)(b),
for “the law of another jurisdiction” there is substituted “a foreign law”.
28 Article 92 (notice
of application) amended
Article 92(e) is
deleted.
29 Article 93 (right to
be heard in proceedings for a bank winding up order) amended
Article 93(f) is
deleted.
30 Article 99
(objectives of a bank liquidator in exercising his or her duties) amended
(1) In
the heading to Article 99, for “exercising his or her” there is
substituted “exercise of”.
(2) In
Article 99(1), for “his or her duties under this Law, the objectives of a
bank liquidator shall be” there is substituted “their duties under this Law, the
objectives of a bank liquidator appointed under Article 98 are”.
(3) In
Article 99(1)(a), for “Jersey Bank Depositors Compensation Board” there is
substituted “Authority”.
31 Article 101 (bank
liquidation committee) amended
In Article 101 –
(a) paragraph (2)(c) is
deleted;
(b) for paragraph (17)
there is substituted –
(17) If
a bank liquidation committee passes a resolution under paragraph (15)(a) –
(a) the bank liquidator must
summon a meeting of creditors; and
(b) the meeting of creditors
must elect an individual as a new member of the bank liquidation committee to
represent the interests of creditors.
32 Article 104 (powers
of bank liquidator) amended
In Article 104(h), in
both places it occurs, for “Jersey Bank Depositors Compensation Board” there is
substituted “Authority”.
33 Article 133
(disclosure of information by bank liquidator) amended
In Article 133(1),
for “Jersey Bank Depositors Compensation Board” there is substituted
“Authority”.
34 Article 141 (final
dissolution) amended
Article 141(2)(f) is
deleted.
35 Part 7A (Bank Depositors
Compensation Scheme) inserted
After Article 142
(assistance for foreign authorities in insolvency matters) there is
inserted –
142B Transfer of assets from the Jersey Bank
Depositors Compensation Board to the Authority
(1) The
assets, rights and liabilities of the Board are transferred to the Authority on
the transfer date.
(2) The
Authority is not liable in damages for anything done, or omitted to be done, in
bad faith by the Board or other person in the discharge or purported discharge
of a function under the Banking Business
(Depositors Compensation) (Jersey) Regulations 2009.
(3) In
this Article –
Division 2 – interpretation of Part 7A
142C Interpretation of Part 7A
“Community
Savings Ltd” has the meaning given in Article 142D;
“compensatable right” has the meaning given in Article 142ZI;
“completion of the depositors’
compensation exercise” means the completion declared under Article 142ZA(1);
“excess right” has the meaning
given in Article 142ZI;
“later date”, in relation to
the vesting of compensatable rights or excess rights,
means a date that falls after the default date for a bank in default and is
specified as the vesting date for those rights in –
(a) a published notice
under Article 142I; or
(b) a further notice
published under Article 142J(1)(e) or (f);
“maximum amount of depositors’
compensation”, in relation to an eligible deposit, has the meaning given
in Article 142T;
“relevant holding”, in respect
of a bank at a particular time, means the total amount held by the bank by way
of eligible deposits at that time;
“relevant right” has the
meaning given in Article 142ZI;
“States loan” has the meaning
given in Article 142O;
“straight-through pay-out” means
a payment of depositors’ compensation under Article 142Q
made by the Authority without requiring an application under Article 142R;
“vesting date” –
(a) for compensatable
rights, has the meaning given in Article 142ZJ; and
(b) for excess rights, has
the meaning given in Article 142ZK.
(2) In
this Part, a bank is “bankrupt” if –
(a) a bank winding up order
has been made under Part 7 in respect of the bank; or
(b) for a branch of a foreign
bank, the foreign bank has a status under a foreign law that the Authority
considers is the same as or similar to the status of a bank under sub-paragraph (a).
(3) In
this Part, a reference to a situation as at the default date is a reference to
the situation at the beginning of that day.
142D Meaning of Community Savings Ltd
(1) In
this Part, “Community Savings Ltd” means the company that is an exempt person
for the purposes of Article 8(2)(d) of the 1991 Law by virtue of paragraph
2 of Schedule 1 to the Banking Business
(General Provisions) (Jersey) Order 2002.
(2) The
Minister may by Order amend the definition “Community Savings Ltd” in paragraph (1).
142E Meaning of deposit, eligible deposit and
eligible depositor
(1) In
this Part, “deposit” has the meaning given in Article 2 of the 1991 Law,
but is to be read as if sub-paragraphs (b), (c) and (e) of paragraph (3)
of that Article do not apply.
(2) A
deposit is an “eligible deposit” if it is held by a bank in an account in
Jersey in respect of a depositor who is –
(a) a natural person and the
deposit is for the person’s own benefit other than as a partner in a
partnership;
(b) a natural person and the
deposit is for the benefit of the person’s child or for the benefit of a child
for whom the person has parental responsibility;
(c) the administrator or
executor of a deceased person’s estate and the deposit represents the whole or
part of the proceeds of that estate;
(d) Community Savings Ltd, if
the deposit is made on behalf of a natural person who holds an account with
Community Savings Ltd; or
(e) a registered charity
within the meaning of the Charities (Jersey) Law 2014,
including Community Savings Ltd depositing in its own corporate capacity.
(3) An
eligible deposit with a bank in default does not include interest on the eligible
deposit in respect of a period after the default date for the bank in default,
despite the date of maturity of the eligible deposit.
(4) A
depositor mentioned in paragraph (2) is an “eligible depositor”.
(5) If
a person is an eligible depositor in more than 1 capacity under paragraph (2),
the person is a separate eligible depositor in each capacity for the purpose of
Article 142T.
(6) In
paragraph (2) –
(a) a deposit that is “held
by a bank in an account in Jersey” does not include a deposit held by a bank
that is registered to carry on banking business in Jersey for business recovery
reasons; and
(b) a person ceases to be a
“child” on attaining the age of 18.
(7) The
Minister may by Regulations amend –
(a) the meaning of “deposit”
in paragraph (1);
(b) the meaning of “eligible
deposit” in paragraph (2).
142F Calculation of money standing to the credit of
eligible deposit
(1) If
a bank is declared to be in default under Article 142I, the amount of
money standing to the credit of an eligible deposit held by the bank in default
is to be calculated as at the default date for the bank.
(2) The
amount of money standing to the credit of an eligible deposit held by the bank
in default that is not in the currency of Jersey is to be calculated using either
of the following rates as at the default date for the bank –
(a) the opening middle market
exchange rate as determined by the Authority; or
(b) another exchange rate determined
by the Authority and specified in a published notice.
(3) Compensation
paid by the Authority must be paid in the currency of Jersey.
142G Eligible deposit in joint account
(1) In
this Article, “joint account” means an account –
(a) that is in the names of 2
or more persons, or over which 2 or more persons have rights; and
(b) that may be operated
against the signature of 1 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.
142H Grouping of banks for purposes of Scheme
(1) The
Minister may group banks in readiness for the possibility of a bank being
declared to be in default under Article 142I.
(2) If
the Minister groups banks under paragraph (1), the Authority must publish
a list showing the groups of banks.
(3) The
list must be published in a manner that is, in the opinion of the Authority,
likely to bring the list to the attention of those affected by it.
(4) The
banks included in each group of banks are taken to be 1 bank for the purposes
of calculating the depositors’ compensation levy and the depositors’
compensation to be paid in respect of those banks under this Law.
(5) If
a bank in a group is declared to be in default under Article 142I, the depositors’
compensation levy must still be imposed on the group but the eligible deposits
of the group must be calculated without reference to the eligible deposits of
the bank in default.
Division 3 – declaration of default
142I Notice declaring bank to be in default
(1) As
soon as practicable after the Authority determines that, in its opinion, a bank
is bankrupt or insolvent, the Authority must –
(a) by published
notice –
(i) declare the bank to be
in default; and
(ii) specify the date on
which the bank became a bank in default (“default date”);
(b) notify the Minister of
the name of the bank and the default date.
(2) The
Minister must, as soon as practicable after being notified, inform the States
of –
(a) the name of the bank in
default; and
(b) the default date.
(3) Paragraph (1)
does not apply if, and for so long as, the Authority considers that –
(a) a resolution action or
foreign resolution action other than bankruptcy proceedings has started and has
not finished, or is likely to start within a reasonable time, in respect of the
bank; and
(b) it is appropriate, in the
light of that action, not to declare the bank to be in default for the time
being or at all.
(4) If,
after the Authority has declared a bank to be in default, the Authority
considers that sub-paragraphs (a) and (b) of paragraph (3) both apply, the
Authority may postpone the performance of any of its functions under this Law,
including the payment of depositors’ compensation, until it is satisfied that
those sub-paragraphs no longer apply.
(5) The
Minister may, by Order, amend this Law to make alternative provision as to
declaring a bank to be in default.
(6) In
this Article, “bankruptcy proceedings” means –
(a) proceedings for a bank
winding up order under Part 7; or
(b) for a branch of a foreign
bank, proceedings under a foreign law that the Authority considers are the same
as or similar to proceedings to wind up a bank under Part 7.
142J Notice under Article 142I may contain
statement about vesting date
(1) The
Authority may include any of the following statements in a published notice
under Article 142I –
(a) a statement that an
eligible depositor’s compensatable rights vest in the
Authority under Article 142ZJ as at the default date
for the bank in default;
(b) a statement that an eligible
depositor’s compensatable rights vest in the
Authority under Article 142ZJ on a later date
specified in the notice;
(c) subject to Article 142ZK(1), a statement that an eligible depositor’s excess
rights vest in the Authority under Article 142ZK
as at the default date for the bank in default;
(d) subject to Article 142ZK(1), a statement that an eligible depositor’s excess rights
vest in the Authority under Article 142ZK on a
later date specified in the notice;
(e) a statement that the
Authority will publish a further notice specifying a later date (not being
earlier than the date the further notice is published) on which an eligible
depositor’s compensatable rights vest in the
Authority under Article 142ZJ;
(f) subject to Article 142ZK(1), a statement that the Authority will publish a
further notice specifying a later date (not being earlier than the date the
further notice is published) on which an eligible depositor’s excess rights
vest in the Authority under Article 142ZK.
(2) A
statement under paragraph (1) may specify that the statement relates to compensatable rights or excess rights in respect of all
eligible deposits or a description of eligible deposits held by the bank in
default as at the default date for the bank.
(3) If
the published notice under Article 142I states that a further notice will
be published, an eligible depositor’s compensatable
rights or excess rights do not vest in the Authority under Article 142ZJ or 142ZK until the date
specified in the further notice.
142K Notice requiring banks to provide statement of
relevant holding
(1) The
Authority must, as soon as practicable after declaring a bank to be in default
under Article 142I, serve a notice on each bank (other than the bank in
default) requiring the bank to provide to the Authority, within the time
specified in the notice –
(a) a statement of the bank’s
relevant holding as at the date specified in the notice; and
(b) any evidence required by
the Authority in support of the statement.
(2) The
Authority must, as soon as practicable after declaring a bank to be in default
under Article 142I, serve on the responsible person for the bank in
default a notice requiring the responsible person to provide to the
Authority –
(a) a statement of the bank
in default’s relevant holding, as at the default date for the bank in default;
and
(b) any other information
held by the bank in default that the Authority requires for calculating each
payment of depositors’ compensation to be made in respect of the default.
(3) The
Authority may serve on the responsible person a further notice requiring the
responsible person to provide to the Authority any further information or
documents relating to the bank that the Authority requires to carry out its
functions under this Law.
(4) The
responsible person must provide the statement, information and documents required
by a notice under paragraph (2) or (3) –
(a) within the time and in
the format specified in the notice; and
(b) verified in the manner
required by the notice.
(5) The
Authority may, on the application of the bank or the responsible person, extend
the time specified in a notice under this Article as the time for compliance
with the notice.
(6) A
bank that without reasonable cause fails to comply with a notice under
paragraph (1) commits an offence and is liable to a fine.
(7) A
responsible person who without reasonable cause fails to comply with a notice
under paragraph (2) or (3) commits an offence and is liable to
imprisonment for a term of 6 months and to a fine.
(8) This
Article applies to Community Savings Ltd as it applies to a bank.
(9) For
the purpose of paragraph (8), “relevant holding” means the total of the
amounts that each natural person had in an account with Community Savings Ltd as
at the default date for the bank in default.
142L Further steps following declaration of default
(1) The
Authority must, as soon as is reasonably practicable after declaring a bank to
be in default under Article 142I, make or activate any further
arrangements it considers expedient to administer the Bank Depositors
Compensation Scheme in respect of the bank in default.
(2) Those
arrangements must, in respect of depositors’ compensation not paid by way of
straight-through pay-out, be designed in particular to ensure that –
(a) applications for that
depositors’ compensation are submitted to the Authority as soon as practicable;
(b) applicants for that
depositors’ compensation are given clear instructions on how they may apply for
depositors’ compensation; and
(c) each claim for that
depositors’ compensation is properly verified.
Division 4 – depositors’ compensation funds
142M Establishment of depositors’ compensation funds
(a) establish and maintain a
separate depositors’ compensation fund for each bank in default; and
(b) pay into the depositors’ compensation
fund all money received by the Authority in respect of the default.
(2) Paragraph (1)(b)
applies whether or not money is received –
(a) as a loan (including a
States loan);
(b) as a depositors’
compensation levy;
(c) by way of adjustment
under Article 142ZF(5)(b);
(d) as an amount described in
Article 142ZJ(5);
(e) as an amount described in
Article 142ZK(6); or
(f) otherwise.
(3) The
Authority must not make a payment out of a depositors’ compensation fund
established for a bank in default, other than –
(a) a payment of
default-related administrative costs in respect of that default;
(b) payment of depositors’
compensation in respect of that default;
(c) payment under Article 142N(1)(d), (e) or (f) in respect of that default; and
(d) payment to another depositors’
compensation fund by way of adjustment under Article 142ZF(5)(b).
(4) Unless
otherwise expressly provided by this Law, the source of money paid into a depositors’
compensation fund does not limit any power or duty of the Authority to make a
payment out of that fund.
(5) In
this Law, “default-related administrative costs” means amounts payable by the
Authority (other than an amount payable under paragraph (3)(b), (c) or (d))
that, in the opinion of the Authority, are attributable to the operation of the
Bank Depositors Compensation Scheme in respect of a bank in default.
(6) Payment
of default-related administrative costs includes –
(a) repayment of borrowings to
the depositors’ compensation fund (subject to Article 142O),
and payment of associated interest and costs;
(b) payment of costs of and
related to insurance against the Authority’s liabilities in respect of the depositors’
compensation fund or the bank in default;
(c) payment of expenses of
the members of the Authority that would not have been incurred but for the
default; and
(d) payment of a higher amount
attributable to a default, where a lower amount would have been paid but for
the default.
142N Order of priority
and timing of payments out of depositors’ compensation funds
(1) Subject
to Article 142O and this Article, the order of
priority for payments out of a depositors’ compensation fund for a bank in default
is –
(a) payment to another
depositors’ compensation fund by way of adjustment under Article 142ZF(5)(b);
(b) payment of
default-related administrative costs;
(c) payment of depositors’
compensation to eligible depositors;
(d) payment to each eligible depositor
whose excess rights vested in the Authority under Article 142ZK, of the amount in respect of which the eligible
depositor’s excess rights were vested;
(e) repayment of any States
loan;
(f) repayment, to each bank
that paid a depositors’ compensation levy in respect of the bank in default, of
the amount paid by each bank.
(2) Subject
to paragraphs (3) and (4), the Authority –
(a) may make a payment of
default-related administrative costs before making a payment to another
depositors’ compensation fund by way of adjustment under Article 142ZF(5)(b);
(b) may make a payment of
depositors’ compensation before making –
(i) a payment to another
depositors’ compensation fund by way of adjustment under Article 142ZF(5)(b); or
(ii) a payment of default-related
administrative costs; and
(c) in deciding to make a
payment of depositors’ compensation to an eligible depositor before assessing
or paying an amount of depositors’ compensation to another eligible depositor, may
take account of –
(i) the need, charitable
status or other characteristics of an eligible depositor; or
(ii) any other factor affecting
the assessment or payment of depositors’ compensation to an eligible depositor.
(3) When
making a payment out of the depositors’ compensation fund, the Authority must
seek to ensure that, on completion of the depositors’ compensation exercise,
the order of priority will be satisfied.
(4) When
making a payment of depositors’ compensation, the Authority must in addition
seek to ensure that, on completion of the depositors’ compensation exercise, if
there will be insufficient money in the depositors’ compensation fund to pay
the maximum amount of depositors’ compensation to every eligible depositor, the
total amount paid in depositors’ compensation in respect of each eligible
depositor will be reduced –
(a) by a proportional amount (disregarding
any deduction under Article 142U or 142V) calculated in a manner that the Authority considers
to be appropriate; or
(b) in any other manner that the
Authority considers to be equitable in the circumstances.
(5) In
respect of each of sub-paragraphs (d) to (f) of paragraph (1), the
Authority –
(a) must not make a payment
under that sub-paragraph unless money remains in the depositors’ compensation
fund after the Authority has paid in full all of the amounts described in the
sub-paragraphs of paragraph (1) that precede that sub-paragraph; and
(b) must apply any money
remaining in the depositors’ compensation fund to payment under that
sub-paragraph, subject to paragraphs (6) to (8).
(6) The
total amount paid under paragraph (1)(d) must not exceed, despite Article 142M(4), the amount by which the total amount paid into the
depositors’ compensation fund under Articles 142ZJ(5)
and 142ZK(6) exceeded the total amount of depositors’
compensation paid by the Authority.
(7) If
the remaining money, or the amount of that money that is available under
paragraph (6), is insufficient for the Authority to make payment in full
under paragraph (1)(d), the Authority must reduce payment to each eligible
depositor under paragraph (1)(d) –
(a) by a proportional amount,
calculated in a manner that the Authority considers to be appropriate; or
(b) if the Authority
considers that it is appropriate in a particular default, whether for
operational or other reasons, to depart from the general rule in sub-paragraph (a),
in any other manner that the Authority considers to be appropriate.
(8) If
the remaining money is insufficient for the Authority to make payment in full
under paragraph (1)(f), the Authority must reduce payment to each
bank –
(a) in proportion to the
amount of levy paid by each bank; or
(b) in any other manner that
the Authority considers to be appropriate in the circumstances.
(9) The
Authority must complete payment of all default-related administrative costs in
respect of a bank in default no later than 5 years after the default date
for the bank, or before the end of any extended period under Article 142ZH.
142O States loan to Authority in respect of bank in
default
(1) This
Article applies to a loan made by the States to the Authority for the purpose
of funding a depositors’ compensation fund (a “States loan”).
(2) Subject
to paragraph (6), payment of default-related administrative costs does not
include repayment of a States loan (as distinct from the payment of any
interest or costs associated with that loan).
(3) Despite
Articles 142M(4) and 142N,
the Authority –
(a) must apply a States loan
to the payment of depositors’ compensation and default-related administrative
costs; and
(b) must apply any money
received by way of depositors’ compensation levy firstly to the repayment of a
States loan (and payment of any interest or costs associated with that loan),
and secondly to any other payments under Article 142N.
(4) Paragraph (3)(b)
does not apply to the extent that the Minister has made different provision in
a notice under paragraph (5).
(5) The
Minister, after consultation with the Minister for Treasury and Resources, may,
by notice to the Authority, permit the Authority to apply all, or a specified
amount of, money received by way of depositors’ compensation levy to the payment
of depositors’ compensation, in preference to the repayment of a States loan
(and payment of any interest or costs associated with that loan).
(6) The
Minister may, in a notice under paragraph (5), provide that payment of
default-related administrative costs includes the repayment of all, or a
specified amount, of a States loan that is made after the payment of depositors’
compensation in accordance with the notice.
(7) In
paragraphs (5) and (6), “specified amount” means an amount –
(a) specified in the notice;
or
(b) calculated or otherwise
determined in a manner specified in the notice.
Division 5 – payment of depositors’ compensation
142P Authority must
pay depositors’ compensation by primary payment date
(1) The
Authority must, on or before the primary payment date for a bank in default,
pay to an eligible depositor, in respect of an eligible deposit, the maximum
amount of depositors’ compensation payable to the eligible depositor in respect
of the bank in default.
(2) For
the purpose of this Article, the “primary payment date” for a bank in default is
7 working days after the day on which the Authority is satisfied that the
responsible person for that bank has complied with the notice under Article 142K(2).
(3) The
Authority may pay depositors’ compensation, in respect of an eligible depositor
who is not resident in Jersey, to another person for onward payment to the
eligible depositor, if the Authority considers that to do so would more
efficiently achieve payment to the eligible depositor.
(4) If
the Authority is not satisfied that both conditions in paragraph (5) are
met, the Authority may pay, for the purpose of paragraph (1), a part of
the maximum amount of depositors’ compensation payable to the eligible depositor
in respect of the bank in default, being an amount that appears prudent to the
Authority having regard to Article 142N.
(5) The
conditions are –
(a) that there is sufficient
money in the depositors’ compensation fund for the Authority to make all
payments of maximum amounts of depositors’ compensation; and
(b) that there is, or will be
by the completion of the depositors’ compensation exercise, sufficient money in
the depositors’ compensation fund for the Authority to pay all the
default-related administrative costs in full.
(6) If
the Authority makes a part payment under paragraph (4), the Authority must
make further payments towards the remaining part of the maximum amount of
depositors’ compensation if, at any subsequent time, it is satisfied that there
is sufficient money in the depositors’ compensation fund to enable it to do so
without contravening Article 142N.
(7) Paragraphs
(1), (4) and (6) are subject to the powers of the Authority under Articles 142I(4),
142S(1), 142ZJ(4), 142ZK(5), 142ZL(5)(b) and 142ZO(6) to postpone or refuse payment of depositors’
compensation.
(8) The
Authority must not pay depositors’ compensation in respect of a bank in default
more than 5 years after the default date for the bank, or after the end of
any extended period under Article 142ZH.
(9) The
Authority may, by published notice, postpone the primary payment date for a
bank in default if the Authority and the Minister are satisfied that –
(a) to do so would assist the
Authority in the application of Article 142N(4);
or
(b) it is otherwise
appropriate to do so for the better administration of the Bank Depositors
Compensation Scheme or for a related purpose.
142Q Straight-through pay-out
(1) The
Authority must pay depositors’ compensation without requiring an application
under Article 142R, unless it publishes a notice
under paragraph (4) in respect of that depositors’ compensation.
(2) Paragraph (4)
applies if, in the opinion of the Authority, it is unreasonable in the
circumstances to assess depositors’ compensation, or depositors’ compensation
in respect of a description of eligible deposits, without any additional
information or evidence that might be provided by an application under Article 142R.
(3) In
making a determination under paragraph (2) the Authority must have
particular regard to –
(a) the information that the
Authority holds on the bank and the eligible deposits (whether derived from the
records of the bank or elsewhere);
(b) any practical constraint
on the ability of the Authority to make payments by way of straight-through
pay-out in the particular circumstances of the default; and
(c) the Authority’s function
of timely payment of depositors’ compensation under Article 7(2).
(4) If
this paragraph applies, the Authority may, by published notice, require an
application to be made to the Authority under Article 142R –
(a) for all depositors’
compensation payable in respect of the bank in default; or
(b) for depositors’
compensation payable in respect of a description, specified in the notice, of eligible
deposits held by that bank.
(5) For
the purpose of paragraph (4)(b), a description of eligible deposits may be
framed in terms of –
(a) the amounts or any other
characteristics of the eligible deposits;
(b) any characteristics of eligible
depositors or other persons with a relationship to the eligible deposits; or
(c) any other factor relating
to the eligible deposits.
142R Application for depositors’ compensation not
payable by way of straight-through pay-out
(1) This
Article applies to depositors’ compensation in respect of which the Authority
has published a notice under Article 142Q(4)
requiring an application to be made to the Authority.
(2) An
application for that compensation must, to the satisfaction of the
Authority –
(a) specify the name and
address of the applicant;
(b) provide sufficient evidence
to show that the applicant is an eligible depositor;
(c) provide sufficient
evidence to identify the applicant’s eligible deposit and the amount of the
eligible deposit;
(d) contain details of any
payments mentioned in Article 142V(2) that the
applicant has received;
(e) specify the manner in
which any depositors’ compensation payable by the Authority to the applicant is
to be paid; and
(f) contain or provide any
other information or matter necessary to allow the Authority to verify the
applicant’s claim for depositors’ compensation and to pay depositors’
compensation to the applicant.
(3) Despite
Article 142P(1), (4) and (6) and Article 142X, the Authority must not pay depositors’ compensation
unless the Authority has received an application for depositors’
compensation that complies with paragraph (2) –
(a) within 6 months
after the default date for the bank in default; or
(b) within a longer period that
the Authority considers reasonable, subject to Article 142P(8),
if the Authority is satisfied that the applicant was prevented by events
outside the applicant’s control from applying within the 6-month period.
142S Postponement of and refusal to pay depositors’
compensation
(1) If
it appears to the Authority that 1 or more of the grounds in paragraph (2)
applies, the Authority may –
(a) postpone a payment of
depositors’ compensation in respect of an eligible deposit; or
(b) refuse to make the
payment.
(a) that there is any reason
for which the bank in default would, but for the default, have had a right or
duty to postpone or refuse payment of the eligible deposit;
(b) that the account in which
the eligible deposit is held is dormant for any
reason; or
(c) that there is any other
reason justifying the exercise of the power conferred by paragraph (1) in
the circumstances.
(3) The
reasons that may be taken into account under paragraph (2)(a)
include –
(a) a reason related to
seizure, detention, restraint, freezing, forfeiture, confiscation or other
prohibition of dealing under 1 or more of the following –
(b) any other reason related
to an injunction, ownership dispute, pending or ongoing litigation or court order,
or death or disability of the eligible depositor.
(4) The
reasons that may be taken into account under paragraph (2)(b)
include –
(a) that any records of the
bank in default class the account as dormant;
(b) that 2 months or
more have passed without a response to a communication sent by the Authority to
an address recorded as that of the eligible depositor in the records of the
bank in default;
(c) that the account
otherwise appears to be dormant within the meaning of any enactment of Jersey
or a foreign law that appears to the Authority to be relevant; and
(d) any other reason for
which an account might reasonably be described as dormant.
(5) In
assessing a reason for the purpose of paragraph (2)(c), the Authority may,
without limitation, have regard to –
(a) the Authority’s general
function to administer the Bank Depositors Compensation Scheme; and
(b) the desirability of
administering the Bank Depositors Compensation Scheme for any default so that
the maximum amount of depositors’ compensation is paid to each eligible
depositor, or, if that is not possible, so that the depositors’ compensation is
paid as fully as appears to the Authority to be practicable and fair in the
circumstances.
(6) A
postponement of payment of depositors’ compensation under this Article takes
effect as a refusal of payment under this Article, if the postponement would
otherwise extend beyond the time allowed for payment by Article 142P(8).
(7) Paragraph (8)
applies if –
(a) a right in respect of an
eligible deposit vests in the Authority under Article 142ZJ
or 142ZK; and
(b) the Authority refuses to
pay depositors’ compensation under this Article in relation to that deposit.
(8) If
this paragraph applies –
(a) the Authority must repay
to the responsible person any amount the Authority has received from that
person by virtue of Article 142ZJ or 142ZK in respect of the right; and
(b) the right vests in the
eligible depositor who held the right before it vested in the Authority.
142T Maximum amount of depositors’ compensation
(a) £50,000; or
(b) an amount equal to the
total amount of eligible deposits held by the bank in respect of the eligible
depositor (in that capacity) as at the default date for the bank.
(2) In
calculating the amount for the purpose of paragraph (1)(b), no account is
to be taken of any right (whether under an enactment, a provision of a
contract, a rule of customary law, a law of another jurisdiction or otherwise)
of set-off or counter-claim that the bank may have against the eligible depositor
or the eligible deposit, or of any similar right that might otherwise reduce
the amount.
(3) Despite
paragraph (1), the maximum amount of depositors’ compensation that the
Authority may pay to Community Savings Ltd in its capacity in Article 142E(2)(d) in respect of a bank in default is an amount
equal to the total of the amounts that each natural person had in an account
with Community Savings Ltd as at the default date for the bank in default,
subject to a maximum of £50,000 for each natural person.
(4) References
in this Law to the maximum amount of depositors’ compensation are to the amount
calculated under this Article, as read with Articles 142U
and 142V.
(5) The
Minister may by Order amend paragraph (3) to make alternative provision
for the application of this Article to Community Savings Ltd.
142U Entitlement under overseas depositors’
compensation scheme
(1) This
Article applies if an eligible depositor in respect of a bank in default is
entitled to receive compensation under an overseas depositors’ compensation
scheme in respect of the eligible deposit.
(2) The
eligible depositor is not entitled to receive depositors’ compensation under
this Law except to the extent that the Authority agrees with the person or body
administering the overseas depositors’ compensation scheme.
(3) In
the absence of agreement under paragraph (2), the Authority may pay
depositors’ compensation to the eligible depositor if the total amount of
compensation paid to the eligible depositor does not exceed the maximum amount
of depositors’ compensation.
(4) In
paragraph (3), “total amount of compensation” means the total of –
(a) the amount of depositors’
compensation paid by the Authority to the eligible depositor; and
(b) any compensation the
eligible depositor receives under the overseas depositors’ compensation scheme
in respect of the eligible deposit.
142V Reduction in amount of depositors’ compensation
(1) The
Authority must use its best endeavours to ensure that the amount in paragraph (2)
is deducted from the amount of depositors’ compensation payable to the eligible
depositor in respect of the eligible deposit.
(2) The
amount is an amount equal to any payments that an eligible depositor receives
in respect of a compensatable right vested in the
Authority under Division 8, other than by way of depositors’ compensation.
(3) For
the purpose of this Article, payments that an eligible depositor receives in
respect of an eligible deposit, other than by way of depositors’ compensation, include
an amount that the eligible depositor has received from –
(a) an overseas depositors’
compensation scheme;
(b) an insurance policy taken
out by or on behalf of the eligible depositor; or
(c) the responsible person for
the bank in default.
(4) A
payment that an eligible depositor receives in respect of a compensatable
right vested in the Authority under Division 8, other than by way of
depositors’ compensation, is to be disregarded for the purpose of paragraph (1)
if the eligible depositor pays to the Authority an amount equal to that payment
under Article 142ZJ(2)(b).
(5) An
eligible depositor who is paid depositors’ compensation by the Authority and subsequently
receives a payment falling within paragraph (6) must, within 30 working
days after receiving the payment falling within paragraph (6), pay to the
Authority whichever is the lesser of –
(a) the amount of the payment
falling within paragraph (6); and
(b) the amount of depositors’
compensation paid to the eligible depositor.
(6) A
payment falls within this paragraph if –
(a) it is a payment that the
eligible depositor receives in respect of a compensatable
right vested in the Authority under Division 8, other than by way of
depositors’ compensation;
(b) it is received by the eligible
depositor after the Authority has paid depositors’ compensation to the eligible
depositor, but before the completion of the depositors’ compensation exercise;
and
(c) the payment and the
depositors’ compensation are both in respect of the same eligible deposit.
(7) A
person who, without reasonable cause, contravenes paragraph (5) commits an
offence and is liable to imprisonment for a term of 2 years and to a fine.
Division 6 – winding up and completion of depositors’ compensation exercise
142W Meaning of winding-up date
In this Division, “winding-up date” means the first date (being no
later than 5 years after the default date for the bank in default, or before
the end of any extended period under Article 142ZH)
on which the Authority is satisfied that –
(a) it has completed payment
of all default-related administrative costs, apart from any costs relating to
the audited accounts and report prepared under Article 142ZA(2);
(b) it has repaid a States
loan in full or that it will be able to do so after receiving further payments
of depositors’ compensation levy in respect of the bank in default, or that no
further repayments of a States loan are to be made;
(c) it is unlikely to receive
further payments of depositors’ compensation levy, other than payments taken
into account under sub-paragraph (b); and
(d) it is unlikely to receive
any further payments under rights vested in it under Article 142ZJ or 142ZK.
142X Winding-up of depositors’ compensation exercise
As soon as practicable after the winding-up date, the Authority must
assess and make any outstanding payments in accordance with the order of
priority and timings under Article 142N.
142Y Assignment of rights after winding-up date
(1) This
Article applies if, on the winding-up date –
(a) the Authority still holds
a right to an amount vested in it under Article 142ZJ
(compensatable rights) or 142ZK
(excess rights); and
(b) that right has not been
realised.
(2) The
Authority must, as soon as practicable after the winding-up date, assign the
rights in the following order and in respect of the following amounts –
(a) first, if amounts of
depositors’ compensation paid to eligible depositors were reduced under Article 142N(4), to those eligible depositors in respect of the
amounts of those reductions;
(b) second, if payments of
amounts in respect of excess rights vested in the Authority were due to
eligible depositors under Article 142N(1)(d) but
were not made in full, to those eligible depositors in respect of the amounts
remaining unpaid;
(c) third, if any States loan
was not repaid in full by the winding-up date, to the States in respect of the
amount remaining unpaid;
(d) fourth, if the banks that
paid a depositors’ compensation levy in respect of a bank in default were not
repaid in full under Article 142N(1)(f), to
those banks in respect of the amounts remaining unpaid.
(3) Before
assigning rights to amounts under a sub-paragraph of paragraph (2), the
Authority must satisfy itself that it can comply in full with
each sub-paragraph preceding that sub-paragraph.
(4) If
the Authority cannot comply in full with a
sub-paragraph of paragraph (2), the Authority must assign the rights to the
amounts proportionally or in any other manner that the Authority considers to
be appropriate in the circumstances.
(5) The
power of the Authority to assign rights under this Article is not limited by
the source of those rights before they vested in the Authority.
(6) Accordingly –
(a) an eligible depositor who
held the right before it vested in the Authority is not entitled to assignment
of all or part of that right;
(b) to comply with a
particular sub-paragraph of paragraph (2), a right vested in the Authority
may be assigned to –
(i) an eligible
depositor, whether or not the right was held by another eligible depositor
before it vested in the Authority;
(ii) the States; or
(iii) a bank;
(c) a right of an eligible
depositor vested in the Authority may be assigned as part of the rights held by
the Authority, without identifying the eligible depositor who held the right
before it vested in the Authority;
(d) rights vested in the
Authority may be assigned by reference to a description of eligible depositor
and a formula as to the amount, without identifying each eligible depositor or
specifying each amount.
(7) It
is irrelevant whether the Authority assigns rights under this Article before,
on or after the primary payment date determined under Article 142P, but the Authority must have complied with paragraph (2)
no later than 5 years after the default date for the bank in default, or
before the end of any extended period under Article 142ZH.
(8) If
the Authority assigns a right under Article 142ZL(1)
before the winding-up date, it must seek to ensure that it will have complied
with paragraph (2) on completion of the depositors’ compensation exercise.
142Z Assignment of excess rights
(1) The
Authority must, when carrying out its functions under Articles 142Y and 142ZL(1) in
relation to excess rights vested in the Authority under Article 142ZK, ensure that paragraph (2) is satisfied –
(a) on or before completion
of the depositors’ compensation exercise; and
(b) as soon as will not
prejudice the operation of the Bank Depositors Compensation Scheme.
(2) For
every eligible depositor whose excess right is vested in the Authority under
Article 142ZK –
(a) the payment amount must equal
the taken rights amount; or
(b) if the payment amount is
less than the taken rights amount, the returned rights amount must equal the
difference between the payment amount and the taken rights amount.
(a) the “payment amount” is
the amount paid to the eligible depositor in respect of excess rights under
this Law or under an agreement under this Law;
(b) the “taken rights amount”
is the total of the amounts in respect of which excess rights of the eligible
depositor are vested in the Authority under Article 142ZK;
and
(c) the “returned rights
amount” is the total of the amounts in respect of which excess rights have been
assigned to the eligible depositor by the Authority under Article 142Y or 142ZL(1) (whether the
rights vested in the Authority were rights of the eligible depositor or rights
of another person).
142ZA Completion of
depositors’ compensation exercise
(1) The
Authority must, as soon as practicable after it has complied with Articles 142X and 142Y, publish a notice declaring
the completion of the depositors’ compensation exercise for a bank in default.
(2) The
Authority must, in relation to the final accounting period –
(a) prepare the accounts for the
depositors’ compensation fund under Article 21A;
and
(b) comply with Article 21A(4) to (6).
(3) The Minister must comply with Article 21A(7) in relation to the final accounting period.
Division 7 – depositors’ compensation levy
142ZB Liability to pay depositors’ compensation
levy in respect of bank in default
(1) This
Article applies if a bank is declared under Article 142I to be in default
(“bank in default”).
(2) Each
bank that held eligible deposits as at the default date for the bank in default
is liable to pay a depositors’ compensation levy in respect of the bank in
default (see Article 142ZC for the amount and
timing of the payment).
(3) Paragraph (2)
does not apply to another bank in default.
142ZC Notice of depositors’ compensation levy
(a) must calculate the amount
of depositors’ compensation levy to be paid by each bank liable to pay the
levy; and
(b) must, as soon as
practicable and no later than 6 months after the default date for the bank
in default, serve on each bank liable to pay the levy a written notice
requiring it to pay the levy.
(2) A
notice under paragraph (1)(b) must specify –
(a) the amount of depositors’
compensation 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 an instalment of the levy becomes payable.
(3) The
Authority may at any time, by written notice served on each bank liable to pay
the depositors’ compensation levy, require the bank to pay an additional levy
if satisfied that it has become necessary to do so.
(4) Paragraph (5)
applies if –
(a) a bank fails to provide a
statement of the bank’s relevant holding (as required by a notice under Article 142K(1)(a)) within the time specified in the notice; or
(b) the Authority is
satisfied that the statement of a bank’s relevant holding provided under that
Article is materially inaccurate.
(5) The
Authority may, by written notice served on the bank, require the bank to pay an
additional levy representing any underpayment that the Authority considers is
attributable to that failure or inaccuracy.
(6) The
calculation of the additional levy must take account of the effect of
sub-paragraphs (a) and (b) of the definition of “A” in the formula in Article 142ZE (amount of depositors’ compensation levy to be paid
by each bank).
(7) A
notice under paragraph (3) or (5) must specify –
(a) the amount of 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 an instalment of the levy becomes payable.
(8) A
bank served with a notice under this Article must pay the levy or instalment on
the date specified in the notice as the date on which that levy or instalment
becomes payable.
(9) A
levy or instalment that has become payable is a debt due to the Authority.
(10) The
Authority may bring proceedings for the recovery of the debt at any time after
the date on which the levy or instalment becomes payable.
142ZD Total amount of depositors’ compensation
levy
(1) The
total amount of depositors’ compensation levy to be paid by the banks liable to
pay the levy in respect of a bank in default must be an amount that the
Authority estimates will meet –
(a) the payment of depositors’
compensation in respect of the bank in default;
(b) all default-related
administrative costs; and
(c) the repayment of any
States loan.
(2) This
Article applies subject to the limitations set out in Articles 142ZF(5)(b) and 142ZG.
142ZE Amount of depositors’ compensation levy to
be paid by each bank
(1) The
Authority must require each bank liable to pay a depositors’ compensation levy
in respect of a bank in default to pay an amount of levy calculated in
accordance with paragraph (2).
(2) The
amount of levy is A÷B of the amount required for the
purposes mentioned in Article 142ZD, where –
A is the amount stated by the bank in compliance with the notice
under Article 142K(1)(a) or, if the bank failed
to comply with that notice, the amount most recently stated by the bank –
(a) under Article 142ZQ(2)(a) or (3); or
(b) in compliance with a
notice falling within Article 142ZR(1); and
B is the total of the amounts stated in accordance with A by all the
banks liable to pay a depositors’ compensation levy.
(3) This
Article applies subject to the limitations set out in Articles 142ZF(5)(b) and 142ZG.
142ZF Limitation on amount Authority may raise by
way of depositors’ compensation levy
(1) The
maximum amount that the Authority may raise by way of depositors’ compensation
levy in respect of 1 or more banks in default over any period of 5 years
(whether the period begins with a default date or another date) is £100 million.
(2) Paragraphs
(3) to (5) apply if –
(a) a bank (“Bank A”) is
declared to be in default;
(b) another bank or banks (“Bank
B”) are declared to be in default; and
(c) the default date for Bank
B is the same as, or within the period of 5 years after, the default date
for Bank A.
(3) If
the default date for Bank B is on or after the date of the making of the first
payment of depositors’ compensation for Bank A, the Authority must, for the purpose
of paragraph (1) –
(a) raise a depositors’
compensation levy in respect of Bank A in preference to a depositors’
compensation levy in respect of Bank B; or
(b) apply the limitation
under paragraph (1) to the raising of depositors’ compensation levies in
respect of Bank A and Bank B in another manner that the Authority considers
equitable in the circumstances.
(4) If
the default date for Bank B is before the date of the making of the first
payment of depositors’ compensation in respect of Bank A, the Authority must,
for the purpose of paragraph (1) –
(a) raise depositors’
compensation levies in respect of Bank A and Bank B in proportion to the
Authority’s estimate of the total depositors’ compensation payable in respect
of each bank; or
(b) apply the limitation
under paragraph (1) to the raising of depositors’ compensation levies in
respect of Bank A and Bank B in another manner that the Authority considers
equitable in the circumstances.
(5) If,
as a result of the operation of paragraph (3)(b), (4)(a) or (4)(b), the
Authority considers that a depositors’ compensation levy demanded in respect of
Bank A should be applied in respect of Bank B, the Authority may –
(a) treat the depositors’
compensation levy as payable in respect of Bank B; and
(b) if the Authority has paid
the proceeds of the depositors’ compensation levy into the depositors’
compensation fund for Bank A, make a payment, of any amount it considers
expedient by way of adjustment, from that depositors’ compensation fund to the depositors’
compensation fund for Bank B.
142ZG Limitation on liability of banks to pay
depositors’ compensation levy
(1) Subject
to the limit set out in paragraph (2), the maximum amount the Authority
may require a bank (“Bank A”) to pay by way of depositors’ compensation levy in
respect of a bank in default (“Bank B”) is an amount equal to 0.3% of the
eligible deposits held by Bank A as at the default date for Bank B.
(2) In
any 5-year period, the maximum amount for which a bank may be liable by way of
depositors’ compensation levy in respect of 1 or more banks in default
is –
(a) if the amount calculated
under paragraph (1) is £10 million or more, £10 million; and
(b) if the amount calculated
under paragraph (1) is less than £10 million, £5 million.
(3) The
maximum amount for which a bank may be liable by way of depositors’
compensation levy in a 12-month period (regardless of how many banks are in
default in that period) is –
(a) for a bank to which
paragraph (2)(a) applies, £2 million; and
(b) for any other bank,
£1 million.
(4) The
Authority may not require a bank to pay a depositors’ compensation levy in
respect of a bank in default more than 5 years after the default date for
the bank in default.
(5) But
nothing in paragraph (4) prohibits the enforcement, after
the 5-year period, of a requirement to pay a depositors’ compensation
levy falling due before the end of that period.
142ZH Extension of periods of 5 years
(1) The
Authority, with the consent of the Minister, may by published notice extend any
period of 5 years mentioned in Articles 142N,
142P, 142W or 142Y in relation to a bank in default to a date specified
in the notice.
(2) The
extension of any 5-year period under paragraph (1) does not have the
effect of increasing the total amount of depositors’ compensation levy
estimated by the Authority under Article 142ZD as
payable by banks in respect of a bank in default.
Division 8 – vesting of rights in the Authority
142ZI Interpretation
“compensatable right” means a relevant right other than an
excess right;
“excess right” means a
relevant right in respect of the amount of eligible deposit that exceeds the
maximum amount of depositors’ compensation;
“relevant right” means a right
(whether under the law of Jersey or a foreign law) of an eligible depositor in
respect of an eligible deposit held by a bank in default as at the default date
for the bank, or that right as subsequently vested in another person under this
Part.
(2) Paragraph (3)
applies if the maximum amount of depositors’ compensation is reduced under
Article 142V (without regard to any power or
duty of the Authority to pay less than the maximum amount of depositors’
compensation).
(3) A
relevant right in respect of the amount of an eligible deposit that equals the
amount of the reduction described in paragraph (2) is neither a compensatable right nor an excess right.
142ZJ Vesting of compensatable rights in the
Authority
(1) An
eligible depositor’s compensatable rights in respect
of an eligible deposit with a bank in default vest in the Authority on the
vesting date for those rights.
(2) On
and after the vesting date for those rights, the eligible depositor must –
(a) provide any assistance
the Authority may require to enable the Authority to
exercise a compensatable right vested in it; and
(b) promptly notify the
Authority of any amount the eligible depositor receives on or after the default
date in respect of a compensatable right, and pay
that amount to the Authority as soon as is practicable.
(3) Paragraph (4)
applies if –
(a) a later date is specified
as the vesting date for the eligible depositor’s compensatable
rights, and that date has not yet been reached; or
(b) the eligible deposits are
held by a branch of a foreign bank, and the Authority considers that there is a
risk that the effect of paragraphs (1) and (2), in respect of an eligible
deposit, may not be recognised under a foreign law.
(4) The
Authority may postpone payment of depositors’ compensation in respect of the
eligible deposit until the eligible depositor enters into –
(a) a written agreement with
the Authority that paragraphs (1) and (2) are to apply in respect of the
eligible deposit from the date specified in the written agreement; or
(b) a contract, under the law
of Jersey or a foreign law, that contains provisions having effect equivalent,
to the satisfaction of the Authority, to the effect of applying paragraphs (1)
and (2) in respect of the eligible deposit from the date specified in the
contract.
(5) The
Authority must pay into the depositors’ compensation fund for the bank in
default –
(a) any amount paid to the
Authority under a compensatable right vested in it
under this Article; and
(b) any amount paid to it
under paragraph (2)(b).
(6) In this Article, “vesting date”, in
relation to compensatable rights, means –
(a) the default date;
(b) a later date; or
(c) a date specified in a
written agreement or contract entered into under paragraph (4) as the
vesting date for those rights.
142ZK Vesting of excess rights in the Authority
(1) The
Authority, if it considers that it is expedient to do so for a reason listed in
paragraph (3), may decide that excess rights in respect of all eligible
deposits, or a description of eligible deposits, held by a bank in default vest
in the Authority on the vesting date.
(2) On
and after the vesting date for those rights, the eligible depositor must –
(a) provide any assistance
the Authority may require to enable the Authority to
exercise an excess right vested in it; and
(b) promptly notify the
Authority of any amount the eligible depositor receives on or after the default
date in respect of an excess right, and pay that amount to the Authority as
soon as is practicable.
(a) to counteract any
prejudice (within the meaning of Article 142ZO(4))
likely to be caused to the Scheme by the operation of a foreign law;
(b) to achieve, in any other
respect, an effect closer to the effect of the order of priority under Article 30,
142N or 142Y;
(c) to achieve more timely
payment of depositors’ compensation to some or all eligible depositors; or
(d) to enable the Authority
to better perform its functions under this Part.
(4) Paragraph (5)
applies if –
(a) a later date is specified
as the vesting date for excess rights in respect of all eligible deposits or a
description of eligible deposits, and that date has not yet been reached; or
(b) an eligible deposit is
held by a branch of a foreign bank, and the Authority considers that there is a
risk that the effect of paragraphs (1) and (2) in respect of excess rights
may not be recognised under a foreign law.
(5) If the Authority considers that it is
expedient to do so for any reason listed in paragraph (3), the Authority
may –
(a) postpone payment of
depositors’ compensation in respect of an eligible deposit until the eligible
depositor enters into –
(i) a written agreement with
the Authority to the effect that paragraphs (1) and (2) apply in respect
of the eligible deposit from the date specified in the written agreement; or
(ii) a contract, under the
law of Jersey or a foreign law, that contains provisions having effect
equivalent, to the satisfaction of the Authority, to the effect of applying paragraphs (1)
and (2) to the eligible deposit from the date specified in the contract; and
(b) treat the depositor as not
being an eligible depositor if the depositor fails to enter into the written agreement
or contract within a time specified by the Authority by notice in writing to
the eligible depositor.
(6) The
Authority must pay into the depositors’ compensation fund for the bank in
default –
(a) any amount paid to it
under an excess right vested in it under this Article; and
(b) any amount paid to it
under paragraph (2)(b).
(7) In this Article, “vesting date”, in
relation to excess rights, means –
(a) the default date;
(b) a later date; or
(c) a date specified in a
written agreement or contract entered into under paragraph (5) as the
vesting date for those rights.
142ZL Assignment of rights vested in the
Authority: general
(1) If
a right to an amount vests in the Authority under Article 142ZJ or 142ZK, the Authority
may, by serving a notice under paragraph (2), assign the right to that
amount (subject to Article 142Y), in whole or in
part –
(a) to the eligible depositor
who held the right before it vested in the Authority; or
(b) to another person, if the
Authority is satisfied that the assignment, or arrangements made by the
Authority in connection with the assignment, will assist the Authority to –
(i) comply with its duties
under Articles 142N, 142Y
and 142ZA;
(ii) counteract any prejudice
(within the meaning of Article 142ZO(4)) likely
to be caused to the Scheme by the operation of a foreign law; or
(iii) achieve, in any other
respect, an effect closer to the effect of the order of priority under Article 30.
(2) In
respect of the assignment of a right under paragraph (1) –
(a) it is irrelevant whether
the Authority serves the notice before, on or after paying depositors’
compensation;
(b) the notice must specify –
(i) the right assigned; and
(ii) the date (being a date
after the notice is served and before the completion of the depositors’ compensation
exercise) on which the right vests in the person to whom it is assigned (“the
assignee”);
(c) the Authority may serve
the notice –
(i) in respect of a
particular eligible deposit, by giving the notice to –
(A) the eligible depositor who
held the right before it vested in the Authority;
(B) the assignee; and
(C) the responsible person
for the bank in default; or
(ii) in respect of all
eligible deposits, or of a description of eligible deposits, or of a particular
eligible deposit, by –
(A) publishing the notice; and
(B) giving it to the responsible
person for the bank in default;
(A) subordination of all or
part of the right assigned to all or part of any rights retained by the
Authority; or
(B) subordination of all or
part of any rights retained by the Authority to all or part of the right
assigned; and
(ii) provide that the subordination
has effect as if effected –
(A) by contract;
(B) by variation of the order
of priority under an enactment; or
(C) in any other manner; and
(i) vests in the assignee on
the date specified in the notice; and
(ii) is subject to any
subordination provided for in the notice.
(3) A
notice under paragraph (2), if published under paragraph (2)(c)(ii),
may specify either or both of –
(a) a description of a class
of persons who are the assignees, instead of specifying the assignees; and
(b) a formula or other means
for calculating or otherwise ascertaining the right assigned to each assignee,
instead of specifying the right assigned to each assignee.
(4) For
as long as a right remains vested in the Authority under Article 142ZJ or 142ZK, that right is to
be treated (despite any contrary provision of an enactment, contract, rule of
customary law or a foreign law) as if it were not subject to a right of another
person, if under Article 142T(2) no account is
to be taken of that right in calculating the maximum amount of depositors’
compensation.
(5) If
an eligible depositor fails to comply with an obligation imposed by Article 142ZJ or 142ZK, or an obligation
arising from a written agreement entered into under Article 142ZJ(4) or 142ZK(5), the
Authority –
(a) may enforce the
obligation –
(i) in respect of payment of
money, as a civil debt; and
(ii) in any other respect, by
application to the Court for an injunction requiring compliance with the
obligation; and
(b) may postpone payment of an
amount to the eligible depositor (whether the payment is an amount of
depositors’ compensation or another amount) until the eligible depositor
complies with the obligation.
(6) The
assistance that the Authority may require under Articles 142ZJ(2) and 142ZK(2) includes
taking steps that the Authority considers would assist in achieving –
(a) an assignment of a
relevant right that has effect under a foreign law and is assigned in
accordance with formalities required by the foreign law, including formalities
for an assignment that does not have effect by operation of a statute;
(b) an assignment of a
relevant right the effect of which is recognised under a foreign law even if
the effect of Article 142ZJ or 142ZK is not recognised under the foreign law;
(c) recognition under a
foreign law of the effect of any of the following –
(i) Article 142ZJ;
(ii) Article 142ZK;
(iii) this Article;
(iv) the order of priority
under Article 30; or
(d) any other effect under a
foreign law that is equivalent to the effect of a provision mentioned in
sub-paragraph (c).
(7) The
steps that the Authority may require the eligible depositor to take include
entering into a contract (under the law of Jersey or a foreign law) that
contains provisions the Authority considers would assist in achieving any
result described in paragraph (6).
(8) Nothing
in a contract entered into, or other instrument produced, for the purpose of
paragraph (6) is to be read as –
(a) an admission by the
Authority that a right has not vested in the Authority under this Law; or
(b) preventing or limiting the
vesting of a right in the Authority under this Law.
142ZM Authority as creditor of bank in default
(1) This
Article applies if an eligible depositor’s rights in respect of an eligible
deposit with a bank in default have vested in the Authority.
(2) The
Authority may –
(a) participate in the
nomination of a person to sit on a creditors’ committee or committee of
inspection for the bank in default;
(b) require that a notice
addressed to creditors of the bank is sent to the Authority; and
(c) nominate a person to
attend and vote at a creditors’ meeting.
(3) For
the purpose of paragraph (2), the Authority is taken to be a creditor of
the bank in default –
(a) with the equivalent priority
of an eligible depositor with the bank; and
(b) to the total value of the
eligible depositors’ rights that have vested in the Authority.
(4) This
Article does not affect –
(a) any other right of the
Authority that arises under the Scheme as a result of an eligible depositor’s
rights vesting in the Authority; or
(b) the manner in which the
Authority is to be treated as a result of an eligible depositor’s rights vesting
in the Authority.
Division 9 – foreign banks and foreign law
142ZN Objectives of bank liquidator for foreign
bank in exercising duties
(1) This
Article applies if a branch of a foreign bank that is bankrupt has been
declared to be in default under Article 142I.
(2) The
objectives of the bank liquidator are to –
(a) work
with the Authority to ensure that all depositors’ compensation is paid out as
soon as is reasonably practicable; and
(b) assist
the Authority in relation to the Bank Depositors Compensation Scheme.
142ZO Conditions related to foreign law
(1) The
Authority may impose a condition on a payment of depositors’ compensation if it
appears to the Authority, in respect of a relevant right of an eligible
depositor, that the condition is likely to be proportionate and effective in
assisting in –
(a) achieving recognition
under a foreign law of the effect on the eligible depositor’s right of the
operation under Jersey law of a priority provision;
(b) achieving under a foreign
law an effect equivalent to the effect on the eligible depositor’s right of the
operation under Jersey law of a priority provision; or
(c) counteracting, in another
way, any prejudice that would otherwise be likely to be caused to the Scheme by
the operation of a foreign law in relation to the eligible depositor’s right.
(2) The
conditions that may be imposed under paragraph (1) include –
(a) a condition that the eligible
depositor must take a step, in relation to the foreign law, appearing to the
Authority to be expedient under the foreign law to achieve recognition under
the foreign law that a right of the eligible depositor –
(i) has vested in the
Authority; or
(ii) has been given a
priority, in bankruptcy or otherwise, that would not otherwise be given under
the foreign law;
(b) a condition that an
eligible depositor must take any other step specified by the Authority before
depositors’ compensation is paid; and
(c) a condition that relates
to a right of the eligible depositor, whether or not that right has already
vested in the Authority under Article 142ZJ or 142ZK, or in another way.
(3) In
this Article, “priority provision” means –
(a) Article 30;
(b) Articles 142ZJ to 142ZM;
(c) Article 142N;
(d) Article 142Y; and
(e) any other provision or
enactment specified by the Minister by Order for the purpose of this Article.
(4) For
the purpose of this Article, the operation of a foreign law is likely to cause prejudice
to the Bank Depositors Compensation Scheme if there is a risk that the effect
of the foreign law is –
(a) to increase or decrease
the amount that an eligible depositor will receive by way of depositors’
compensation taken together with –
(i) any equivalent of
depositors’ compensation under the foreign law; and
(ii) any other payments in
respect of the eligible deposit to which the depositors’ compensation relates;
(b) to prevent, delay or
reduce the recovery by the Authority of amounts due to it by virtue of rights vested
in it under Article 142ZJ or 142ZK
(whether because of the application of rules of set-off under a foreign law, or
because of delay in or refusal of recognition of vesting under Article 142ZJ or 142ZK or delay in or
refusal of recognition of the order of priority under Article 30, or for
any other reason);
(c) to delay the provision of
any information required by the Authority; or
(d) otherwise to reduce the
chance that a person will comply with this Law in respect of the default, or to
reduce the chance that a function will be performed effectively by or on behalf
of the Authority.
(5) For
the purpose of paragraph (4), the effect of a foreign law may arise in any
manner, including –
(a) because the bank in
default –
(i) is a branch of a foreign
bank;
(ii) is a subsidiary company
(within the meaning of the 1991 Law) of a holding company (within the
meaning of that Law) that is established in another jurisdiction under the
foreign law; or
(iii) has assets held in
another jurisdiction under the foreign law that, in the opinion of the
Authority, are relevant to the amount that may be recovered under rights vested
in the Authority, or are otherwise relevant to the operation of the Bank
Depositors Compensation Scheme;
(b) because a contract
relating to an eligible deposit with the bank in default states that that
contract is governed by that foreign law, or the proper law of the contract is
for any other reason that foreign law; and
(c) because there is a
difference or a perceived difference between the law of Jersey and the foreign
law that may cause prejudice to the operation of the Bank Depositors
Compensation Scheme in another way.
(6) Without
limiting any other means by which the Authority may enforce compliance with a
condition imposed under this Article, the Authority may –
(a) postpone payment of
depositors’ compensation until the condition is met; and
(b) refuse to pay depositors’
compensation if the condition is not met, or if the Authority is satisfied that
the condition will not be met, within 5 years after the default date for
the bank in default.
Division 10 – powers to obtain information
142ZP General duty of Authority in relation to
information
The Authority must exercise its functions under this Part with a
view in particular to –
(a) obtaining directly from
banks information that –
(i) is timely, accurate and
comprehensive; and
(ii) is necessary for the
Authority to carry out its functions under this Law; and
(b) sharing, with persons in
Jersey or elsewhere, information that –
(i) is timely, accurate and
comprehensive; and
(ii) enables those persons to
carry out functions that they have in relation to a bank in default, the Bank
Depositors Compensation Scheme or an overseas compensation scheme.
142ZQ Annual holdings returns from banks
(1) Each
bank that holds an eligible deposit at the end of a calendar year must send to
the Authority an annual holdings return, to be received by the Authority within
28 days after the end of that calendar year.
(2) An
annual holdings return must contain the following statements –
(a) a statement of the bank’s
relevant holding as at the end of the calendar year;
(b) a statement of the total
amount held by the bank as at the end of the calendar year by way of deposits,
including both eligible deposits and other deposits;
(c) a statement of the total
amount held by the bank as at the end of the calendar
year by way of amounts of eligible deposits that do not exceed £50,000;
(d) a statement of the number
of eligible depositors, as at the end of the calendar year, for whom the bank
holds eligible deposits;
(e) a statement of the total
assets of the bank as at the end of the calendar year.
(3) If
a bank’s relevant holding, as at any time during the calendar year following
the year to which the bank’s last return relates, is at least 10% less than the
amount stated in that return, the bank may send to the Authority a further
return containing a statement of the lesser relevant holding.
(4) A
return sent under paragraph (1) or (3) –
(a) must be in a form
specified by the Authority in a published notice as the appropriate form for
that return or description of return;
(b) must be accompanied by
any additional information specified in the published notice; and
(c) may be sent to the
Authority through a third party, if the published notice so provides.
(5) The
Minister may, by Order, amend this Law to make alternative provision as to the
contents, form or sending of a return.
(6) This
Article applies to every calendar year whether or not, in that year, a bank is
in default.
(7) A
bank that without reasonable cause fails to comply with paragraph (1) commits
an offence and is liable to a fine.
(8) This
Article applies to Community Savings Ltd as it applies to a bank.
(9) For
the purpose of paragraph (8) –
“eligible deposit” means an
amount that a natural person has in an account with Community Savings Ltd as at
the end of the calendar year;
“relevant holding” means the
total of the amounts that each natural person had in an account with Community
Savings Ltd as at the end of the calendar year.
142ZR Information notice may be served at any time
(1) The
Authority may at any time serve a notice on a bank (“information notice”) requiring
the bank to provide to the Authority, within a time specified in the notice,
either or both of the following –
(a) a statement of the bank’s
relevant holding, as at the time specified in the notice;
(b) any other information specified
in the notice in relation to –
(i) eligible deposits held
by the bank; and
(ii) the raising of a levy or
any other matter connected with the functions of the Authority under this Part
or connected with the operation of the Scheme.
(2) The
Authority may include in an information notice a requirement that the
information is to be provided in a specified format.
(3) The
specified format may –
(a) be different for
different descriptions of banks and different descriptions of information; and
(b) be published in a general
notice by the Authority in a manner that, in the opinion of the Authority, is
likely to bring the notice to the attention of banks.
(4) The
specified format may include a description of electronic record, as defined in Article 1(1)
of the Electronic
Communications (Jersey) Law 2000, and a description of electronic
communication, as defined in that Article.
(5) For
the purpose of paragraphs (2) to (4), a specified format is a format decided by
the Authority after consultation with the Minister.
(6) If
an information notice includes a requirement to provide information under
paragraph (1)(a), the Authority may, after consulting the Minister,
specify in the notice that the information is to be provided without delay.
(7) A
person commits an offence, and is liable to a fine, if the person –
(a) fails without reasonable
excuse to comply with a requirement imposed on the person under this Article;
or
(b) obstructs the Authority
in exercising its powers under this Article.
(8) This Article applies to Community Savings
Ltd as it applies to a bank.
(9) In
applying this Article to Community Savings Ltd –
“eligible deposit” means an
amount that a natural person has in an account with Community Savings Ltd as at
the time specified in the notice;
“relevant holding” means the
total of the amounts that each natural person had in an account with Community
Savings Ltd as at the time specified in the notice.
142ZS Encryption of information obtained under
Article 142ZR
(1) Paragraph (2)
applies to information (including any document or answer) obtained by the
Authority under Article 142ZR that –
(a) has not already been obtained
under Article 142K, or is not obtained for the
purpose of paying depositors’ compensation or verifying a claim for depositors’
compensation; and
(b) 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.
(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 while it is held by or on behalf of the Authority except when it is
in use for a purpose that requires it to be temporarily decrypted.
36 Article 155
(disclosure for facilitating discharge of functions of the Authority and specified
persons) amended
In Article 155,
after paragraph (1) there is inserted –
(1A) Article 154 does not preclude the
disclosure of information by the Authority to –
(a) the responsible person
for a bank in default, if the information concerns the bank; or
(b) any person for the
purpose of obtaining advice on the performance by the Authority of its
functions.
37 Article 157 (other
permitted disclosures) amended
In Article 157(4),
for “a compensation scheme in relation to one or more deposit-taking businesses
(whether in Jersey or in a country or territory outside Jersey)” there is substituted
“an overseas depositors’ compensation scheme”.
38 Article 165 (service
of notices) amended
In Article 165(2), for
“these Regulations” there is substituted “this Law”.
39 Article 166 (false
or misleading information) amended
In Article 166,
after paragraph (2) there is inserted –
(3) A
person commits an offence if, after applying to the Authority for depositors’
compensation, the person knowingly fails to inform the Authority of a
subsequent event that reduces the amount of depositors’ compensation that may
be claimed.
(4) A
person who commits an offence under paragraph (3) is liable to
imprisonment for a term of 2 years and to a fine.
40 Article 167
(criminal liability of partners, directors and other officers) amended
(1) After
Article 167(1) there is inserted –
(1A) Where an offence mentioned in paragraph (1)
is an offence that may be committed by neglect, and the commission of the
offence is proved to be attributable to neglect on the part of a person
mentioned in paragraph (1)(a) or (b), that person also commits the offence
and is liable in the same manner as the partnership or body corporate to the
penalty provided for that offence.
(2) In
Article 167(2), for “paragraph (1) applies” there is substituted
“paragraphs (1) and (1A) apply”.
41 Article 168 (appeal)
amended
(1) For
the heading to Article 168, there is substituted “Appeals relating to
recovery and resolution”.
(2) Before
Article 168(1) there is inserted –
(A1) This Article applies to
decisions relating to recovery and resolution.
42 Article 168A (appeals relating to
default) inserted
After Article 168,
there is inserted –
168A Appeals relating
to default
(1) A
person who is dissatisfied with a decision of the Authority mentioned in
paragraph (2) may appeal to the Court against the decision on the ground
that, on the facts available to the Authority, the decision was unreasonable.
(2) The
decisions of the Authority are –
(a) a decision that the
person is not entitled to depositors’ compensation;
(b) a decision under Article 142I(4),
142S(1), 142ZJ(4), 142ZK(5), 142ZL(5)(b) or 142ZO(6) to postpone or refuse payment of depositors’
compensation;
(c) a decision as to the
amount of depositors’ compensation the person is entitled to; or
(d) a decision not to
exercise its power under Article 142R(3)(b) to
accept the person’s late application for depositors’ compensation.
(3) A
bank that is dissatisfied with a decision of the Authority requiring the bank
to pay a depositors’ compensation levy may appeal to the Court against the
decision on the grounds that –
(a) the bank is not liable to
pay the levy;
(b) the Authority has
miscalculated the amount of levy, or the amount of an instalment of the levy,
that the bank is required to pay; or
(c) the Authority has
miscalculated the date on which the levy, or an instalment of the levy, becomes
payable.
(4) Unless
the Court otherwise directs, an appeal by a bank under paragraph (3) does
not suspend the operation of a notice sent to the bank under Article 142ZC.
(5) On
an appeal under this Article, the Court may make any order it considers
appropriate.
(6) A
reference in this Article to a miscalculation includes a decision to treat
costs as recurring administrative costs for the purpose of Article 16(1)(a)
or as default-related administrative costs, if that decision is unreasonable
having regard to all the circumstances.
(7) A
person who is dissatisfied with a decision that is made on behalf of the
Authority may not appeal to the Court under this Article until –
(a) the person has requested,
in writing, the Authority to review the decision; and
(b) the Authority has
reviewed the decision, or 6 weeks have elapsed since the request was made,
whichever is the sooner.
(8) Nothing
in this Article is to be read as limiting the Authority’s power to reconsider
its own decisions.
(9) A
person may not make an appeal under this Article later than 1 year after
the date on which the person became aware of the decision appealed against
(whether or not paragraph (7) applies).
43 Article 172 (Regulations)
amended
(1) In
Article 172(b), for “Part 5 or 6” there is substituted “Part 5,
6 or 7A”.
(2) In
Article 172(d), after “supplementary” there is inserted “, savings”.
44 Article 178
(citation and commencement) amended
In Article 178, for
“and Resolution” there is substituted “, Resolution and Depositors’
Compensation”.
45 Schedule 1 (appointment
of members and procedures at meetings of the Authority) amended
In paragraph 1
(terms of appointment of members), for sub-paragraphs (2) and (3) there is
substituted –
(a) must be appointed by
instrument in writing for a period of not more than 5 years; and
(b) is eligible for
re-appointment at the end of that period.
(3) The States may extend the period of
appointment or re-appoint the member only if the total period of appointment is
not more than 9 years.
46 Schedule 2, Part 2
(contents of a resolution plan) amended
In Schedule 2, Part 2,
paragraph (1)(i)(i), for
“Fund” there is substituted “Resolution Fund”.
Part 2
Other
enactments amended
47 Income Tax (Jersey) Law 1961 amended
(1) This
Article amends the Income
Tax (Jersey) Law 1961.
(2) In
Article 3(1) (general provisions as to interpretation) –
(a) after the definitions
“connected” and “unconnected” there is inserted –
“depositors’
compensation levy” means a levy paid by a
bank to the Jersey Resolution and Depositors Compensation Authority in respect
of a bank declared to be in default under Part 7A
of the Bank (Recovery, Resolution and Depositors’ Compensation) (Jersey) Law 2017;
(b) after the definition
“international activities” there is inserted –
“Jersey Resolution and Depositors
Compensation Authority” means the Authority mentioned in Article 4
of the Bank (Recovery, Resolution and Depositors’ Compensation) (Jersey) Law 2017;
(3) For
Article 62C there is substituted –
62C Application of Schedule D to the repayment
of depositors’ compensation levy
Tax must be charged under Schedule D in respect of the repayment or
partial repayment to a bank of depositors’ compensation levy as if the
repayment or partial repayment were a trading receipt of the bank in the year
in which the repayment or partial repayment is made.
(4) For
Article 70B there is substituted –
70B Deduction on account of depositors’
compensation levy
Despite Article 70, in computing the profits or gains to be
charged in respect of a trade or profession under Schedule D, a bank may deduct
as expenses in any year an amount equal to any depositors’ compensation levy
paid by the bank to the Jersey Resolution and Depositors Compensation Authority
in that year.
(5) For
Article 115(p) and (q) (miscellaneous exemptions) there is
substituted –
(p) income derived by the
Jersey Resolution and Depositors Compensation Authority in the exercise of its
functions relating to the Bank Depositors Compensation Scheme established by
Part 3 of the Banking
Business (Depositors Compensation) (Jersey) Regulations 2009 and
continued under Part 7A of the Bank (Recovery,
Resolution and Depositors Compensation) (Jersey) Law 2017;
(q) depositors’ compensation
paid to an eligible depositor under Part 7A of
the Bank (Recovery, Resolution and Depositors’ Compensation) (Jersey)
Law 2017;
48 Article 37 of the Banking Business (Jersey) Law 1991 deleted
Article 37 (compensation
schemes) of the Banking Business (Jersey) Law 1991
is deleted.
49 Banking Business (General Provisions) (Jersey)
Order 2002 amended
In the Banking Business (General Provisions) (Jersey) Order 2002,
Schedule 2, paragraph 4(1)(a), after “Law” there is inserted “and
continued under Part 7A of the Bank (Recovery,
Resolution and Depositors Compensation) (Jersey) Law 2017”.
50 Bankruptcy (Netting, Contractual Subordination
and Non-Petition Provisions) (Jersey) Law 2005 amended
In the Bankruptcy (Netting, Contractual Subordination and Non-Petition
Provisions) (Jersey) Law 2005, after Article 6 (Law to
prevail in respect of bodies corporate established outside Jersey) there is
inserted –
6A Bank Depositors Compensation Scheme
(1) The
application of this Law in respect of bank deposits to which the Bank
Depositors Compensation Scheme relates is subject to any provision of or under the
Bank (Recovery, Resolution and Depositors’ Compensation) (Jersey) Law 2017.
(2) In
this Article, “Bank Depositors Compensation Scheme” means the scheme for
payment of depositors’ compensation established by Part 3 of the Banking Business
(Depositors Compensation) (Jersey) Regulations 2009 and continued
under Part 7A of the Bank (Recovery, Resolution
and Depositors’ Compensation) (Jersey) Law 2017.
51 Data Protection (Jersey) Law 2018 amended
(1) This
Article amends the Data Protection (Jersey) Law 2018.
(2) For
Article 48(5)(b) there is substituted –
(b) any function conferred on
the Jersey Resolution and Depositors Compensation Authority under Article 7
of the Bank (Recovery, Resolution and Depositors’ Compensation) (Jersey) Law 2017;
(3) In
Schedule 3 (exceptions to adequacy requirements), after paragraph 5
there is inserted –
5A Transfer by or on behalf of the Jersey
Resolution and Depositors Compensation Authority
(1) The
transfer is necessary for reasons of substantial public interest, which will be
the case if –
(a) the transfer is a
disclosure that is permitted or required under an enactment in force in Jersey;
(b) the transfer is made by
or on behalf of the Jersey Resolution and Depositors Compensation Authority (“the
Authority”); and
(c) the Authority has taken
reasonable steps to ensure that the transferee will not transfer the personal
data to another person except –
(i) with the consent of the Authority;
or
(ii) to comply with an order
of a court (whether or not a Jersey court) that directs the transferee to
transfer the personal data to the other person.
(2) In
this paragraph, “Jersey Resolution and Depositors Compensation Authority” means
the Authority mentioned in Article 4 of the Bank (Recovery, Resolution and
Depositors’ Compensation) (Jersey) Law 2017.
52 Public Finances (Jersey) Law 2019 amended
For Article 59(4)
(expenditures carried forward) of the Public Finances (Jersey) Law 2019 there is substituted –
(4) The
authority to transfer up to £100 million from the Strategic Reserve Fund
to the Jersey Resolution and Depositors Compensation Authority (the successor
to the Jersey Bank Depositors Compensation Board) for the administration of the
Bank Depositors Compensation Scheme or to meet any temporary cash flow funding
requirements of that Scheme, as set out in P.84/2009
(lodged on 2 June 2009 and adopted by the States on 6 November 2009), is
continued.
(4A) In this Article –
“Jersey Bank Depositors Compensation
Board” means the Board established by the Banking Business
(Depositors Compensation) (Jersey) Regulations 2009 for the purpose of
administering the Bank Depositors Compensation Scheme;
“Jersey Resolution and Depositors
Compensation Authority” means the Authority mentioned in Article 4
of the Bank (Recovery, Resolution and Depositors’ Compensation) (Jersey)
Law 2017;
“Bank Depositors Compensation Scheme”
means the scheme for payment of depositors’ compensation established by Part 3
of the Banking
Business (Depositors Compensation) (Jersey) Regulations 2009 and
continued under Part 7A of the Bank (Recovery,
Resolution and Depositors’ Compensation) (Jersey) Law 2017.
53 Revenue Administration (Information Sharing)
(Jersey) Order 2024 amended
In Schedule 1 to the Revenue Administration (Information Sharing) (Jersey) Order 2024, for the entry relating to the
Jersey Resolution Authority there is substituted –
Jersey Resolution and Depositors
Compensation Authority
|
Enabling or assisting the Jersey
Resolution and Depositors Compensation Authority to exercise functions under
the Bank (Recovery, Resolution and Depositors’ Compensation) (Jersey) Law 2017
|
54 Banking Business
(Depositors Compensation) (Jersey) Regulations 2009 amended
(1) The
Banking Business (Depositors Compensation)
(Jersey) Regulations 2009 are amended as follows.
(2) For
Regulation 8A there is substituted –
8AA Continuation of the Board
The Board continues in existence until the date on which Regulation 14
ceases to be in force, for the purpose of enabling the Board to fulfil its
functions under Regulations 8A and 14.
8A Continuing functions of the Board
(1) For
the period that the Board continues in existence, the function of the Board is
to exercise its functions under Regulation 14 in relation to the final
reporting period.
(2) In
the exercise of those functions, the Board must ensure that –
(a) the Board is 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 those
functions, and may in particular, in the exercise of those functions, appoint
an employee, agent or contractor to assist it in exercising those functions.
(3) In
Regulation 14 (accounts and report) –
(a) in paragraph (1), for
“a financial year” there is substituted “the final reporting period”;
(b) in paragraphs (2)(a)
and (b), (3) and (5)(a), for “financial year” there is substituted “final
reporting period”;
(c) after paragraph (10)
there is inserted –
(11) In
this Regulation, “final reporting period” means the period beginning on
1 January 2025 and ending on a date specified by Order of the Minister for
External Relations under Article 51 of the Banking Business
(Jersey) Law 1991.
(4) Regulations 2
to 7 and 15 to 36 are deleted.
(5) Regulations 1
and 8 to 14 are deleted.
Part 3
Final
provisions
55 Citation and commencement
This Law may be cited as
the Bank (Recovery and Resolution) (Jersey) Amendment Law 202- and comes into
force on a day specified by Order of the Minister for External Relations.