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