Financial Services (Deposit Guarantee Scheme) Act 2009

5A

F9 [ Order of payments

5A. (1) On the occurrence of a compensation event giving rise to payments from the contributory fund, the payments shall be charged in the order set out in subsection (2) .

(2) The order referred to in subsection (1) shall be the following:

(a) firstly, the contributory fund;

(b) where a shortfall exists in the contributory fund and a positive balance exists in the legacy fund, the legacy fund;

(c) where a shortfall exists after recourse has been had to the legacy and contributory funds, financing from any other source permitted under the Deposit Guarantee Regulations.

(3) A charge on the legacy fund, under this section, shall be apportioned proportionately between credit institutions on the basis of the covered deposits held by those respective institutions.

(4) Each credit institution authorised after the commencement of Part 3 of the Finance (Miscellaneous Provisions) Act 2015, subject to the requirements of the deposit guarantee scheme shall, where

(a) the legacy fund is operational,

(b) a compensation event has occurred, and

(c) the available financial means of the contributory fund are not sufficient to meet the payments in respect of the compensation event referred to in paragraph (b) ,

contribute to the compensation event an amount equivalent to what it would have been charged had it maintained a balance in the legacy fund up to a maximum of 0.2 per cent of its covered deposits.

(5) The amount required to be held on deposit by a credit institution in the legacy fund shall be reduced on a yearly basis by the annual contribution of the institution concerned to the contributory fund.

(6) Where there is a charge upon the legacy fund which results in insufficient funds in respect of a particular credit institution remaining in that fund to fulfil its annual contribution to the contributory fund, any remaining funds shall be transferred to the contributory fund with any balance due for that year being charged to the credit institution concerned and that credit institution shall pay such charge on the written request of the Bank. ]