Information Leaflet
October 2015
Introduction
Some definitions of key terms are given below. Where these terms appear in the
leaflet they are shown in bold type.
Definitions
Scheme
The Guernsey Banking Deposit Compensation
Scheme
Commission
The Guernsey Financial Services Commission
States
The States of Guernsey, being the body which
is responsible for the government of the
Island of Guernsey
Board
The Board of the Scheme, which is appointed
by the Commerce and Employment
Department but is independent of both the
Commission and the States
Licensed Banks
Banks licensed by the Commission under the
Banking Supervision (Bailiwick of Guernsey)
Law, 1994
Ordinance
The Banking Deposit Compensation Scheme
(Bailiwick of Guernsey) Ordinance, 2008, as
amended from time to time
Qualifying Claimant
See summary under ‘Key Elements of the
Scheme’
This leaflet is intended to give members of the public a short introduction to
the Scheme. It is not intended as a substitute for the actual wording of the
Ordinance.
This is only a brief summary of the Scheme and you should take note of
the details mentioned below. If you have any questions, or need further
information, please use the contact details provided.
Key Elements of the Scheme
•
The Scheme is intended to provide an element of protection for people,
wherever they live, who deposit money with Guernsey Licensed Banks. It is
aimed mainly at protecting retail depositors.
•
It is operated by an independent statutory Board.
Key Elements of the Scheme •• The is Bank
intended provide an element of protection for If aScheme Licensed
fails,to it will
be declared
in default
by the Commission.
people, wherever they live, who deposit money with Guernsey Banks. Ithen
t is aimed mainly at protecting • Licensed The Scheme
provides
compensation
ofretail up todepositors.
£50,000 for Qualifying
Claimants
(see
below)
who
held
deposits
with
the
failed bank.
• It is operated by an independent statutory Board. •
•
If a Licensed Bank fails, it will be declared in default by the It aims to pay compensation within three months of a bank’s failure.
Commission. •• The Scheme then provides compensation of up to £50,000 for The total amount of compensation is capped at £100 million in any 5 year
Qualifying Claimants (see below) who held deposits with the failed period. If claims exceed this cap, compensation will be reduced pro rata. The
bank. cap also means that compensation in respectof any one bank cannot exceed
•
It a£100
ims to pay compensation within three months of a bank’s failure. million.
•
The maximum total amount of compensation is capped at £100 million in any 5 year period. claims exceed this cap, compensation will charges
be •The
Scheme
is paidIf for
by the
Licensed
Banks
through annual
and
reduced rata. Tin
he the
cap event
also m
that failure.
compensation in respect of specialpro charges
ofeans a bank
any one bank cannot exceed £100 million. •
The Scheme is paid for by the Licensed Banks through annual charges and special charges in the event of a bank failure. Frequently
Asked
Questions
Frequently Asked Questions Will I be a Qualifying Claimant? 1
You will be a Qualifying Claimant in You will be a Qualifying Claimant in respect of a
respect of a bank in default if you have a bank in default if you have a deposit with that bank1
deposit with that bank1 and you are: and you are:
-­‐- A ersonal cclient
lient22; ;
A ppersonal
-­‐- The trustee of a Guernsey Retirement The trustee of a Guernsey Retirement Annuity
Annuity Trust; Trust; -­‐- A parent holding
holding anan account a A parent
account
for afor child;
child; - The executor or administrator of a deceased -­‐ The executor or administrator of a person’s estate; or
deceased person’s estate; or - A Guernsey-registered charity
-­‐ A Guernsey-­‐registered charity As long as the deposit is not criminal in origin. 21 As long as the deposit is not criminal in origin.
The Ordinance strictly states that the deposit must be made by a “natural 2 Charles Tracy 20/8/
Deleted: it
The
Ordinance
that the deposit must be made by a “natural person for his own benefit”.
person for his strictly
own bstates
enefit”.
Which Which bbanks anks aare re participants participants iin n tthe he Which banks are Scheme? Scheme? participants in the Scheme? The Scheme ccovers aall BBanks. The overs ll allLLicensed icensed anks. TheScheme Scheme
covers
Licensed
Banks.
The Scheme covers all Licensed Banks. I I llive
iv
hav
hav
I liv
with
wit
hav
Isle Isle
wit
cove
cov
Isle
cov
What What aabout bout banking banking ‘‘brands’? brands’? What about banking ‘brands’? I I d
don’t on’t llive ive iin n Guernsey; Guernsey; aam m II I don’t live itn he covered b
y covered by the Guernsey; am I Scheme?
Scheme?by the covered Scheme?
Brands Brands of of banks, banks, such such as as the the ‘NatWest’ ‘NatWest’ brand o
perated b
y R
oyal B
ank brand operated by Royal Bank oof f SScotland cotland Brands of banks, such as
as the ‘NatWest’ Brands of banks,
such
the ‘NatWest’
brand
International, are not Licensed Banks in International, are not Licensed Banks in brand operated by Royal Bank of Sinstead cotland operated
by
Royal
Bank
of
Scotland
International,
their own right, but participate their own right, but participate instead International, are Banks
not Licensed Banks in are not Licensed
in their own
through the of their through the banking banking licence licence of right,
their but
their own right, but participate instead participatebank. instead
through
the banking
licence
operating Both the bank operating bank. Both the operating operating bank through the banking licence of their of
their
operating
bank.
Both
the
operating
and and its its brand brand are are therefore therefore classed classed as as a a bank
operating bank. Both the operating bank and
its
brand
are
therefore
classed
as
a
single
single single Licensed Licensed Bank Bank for for the the purposes purposes of of and its brand are classed a Licensed
Bank
fortherefore the purposes
of theas Scheme.
the Scheme. A with in the Scheme. A person person with a a deposit deposit in single Licensed Bank for the purposes of A
person
with
a
deposit
in
Natwest
and
a
deposit
Natwest and a deposit in RBSI would thus Natwest and a deposit in RBSI would thus the Scheme. A person with a deposit in in
RBSI
would
thus
only
be
entitled
to
a
maximum
only only be be entitled entitled to to a a maximum maximum total total of of Natwest and a deposit in RBSI would thus total of £50,000
in compensation.
You need
to
£50,000 in compensation. You need £50,000 in compensation. You need to to only be entitled to a maximum total of check
the
list
of
Licensed
Banks
carefully
to
check check the the list list of of Licensed Licensed Banks Banks carefully carefully £50,000 in compensation. You need to you
confirm
the
status
of yourof bank.
Alternatively,
to confirm the status your bank. to confirm the status of your bank. should
speak
to
your
bank
about
its
status.
check the list of Licensed Banks carefully Alternatively, Alternatively, you you should should speak speak to to your your to confirm the status of your bank. bank a
bout i
ts s
tatus.
bank about its status. Alternatively, you should speak to your Yes. s llong aaas
s ou ave w
Yes.A
long
you
ave aaann bank its Yes. AaAs
s bout ong s syytatus.
ou hhhave
n aaccount
account ccount with
with ith a
a Licensed Bank you will be covered by Licensed
Bank
you
will
be
covered
by
the
a Licensed Bank you will be covered by Yes. s long aws herever you have an live. account with the SSAcheme, Scheme,
wherever
the cheme, wherever yyou ou live. a Licensed Bank you will be covered by you live.
the Scheme, wherever you live. I I hhaa
acco
acc
I ha
ban
ban
acc
cove
cov
ban
cov
I I hhaa
acco
acc
I ha
part
par
acc
cove
cov
par
Sche
Sch
cov
Sch
Are Are
cove
cov
Are
cov
I live in Guernsey but have an account with a bank in the Isle of Man – am I covered? I have three accounts with my bank, are all of them covered?
No.The The Scheme
banks
licensed by
No. Scheme only
only covers
covers banks the Commission.
If you bank
with bank a bank that
licensed by the Commission. If you is not
licensed
with a bank that byis the
not Commission
licensed by then
the your
Commission then your deposit will not be deposit will not be covered by the Scheme.
covered by the Scheme. You syou
hould You should
check
whether
arecheck protected by
whether are protected by applying
another to the Isle
anotheryou scheme,
such as that
scheme, of Man.such as that applying to the Isle of Man. Yes. The Scheme provides compensation up to a maximum of £50,000 per person per Licensed Bank. If a person has more than one account with a bank then deposits in all of those accounts will be covered, but only up to a total maximum of £50,000. Compensation may be covered? whether whether you you are are protected protected by by another another scheme, scheme, such such as as that that applying applying to to the the Isle Isle of of M
Man.
an. Yes. Yes. The The Scheme Scheme provides provides compensation compensation Yes.
The
Schemeof provides compensation
up to
up to a maximum up to a maximum of £50,000 £50,000 per per person person a
maximum
of
£50,000
per
person
per
Licensed
per per Licensed Licensed Bank. Bank. If If a a person person has has more more Bank.
If aaccount person has
more
than
one account
than one with a bank than one account with a bank then then with a bank
thenthose deposits in all ofwill those accounts
deposits deposits in in all all of of those accounts accounts will be be will be covered, but only up to a total of £50,000.
covered, but only up to a total maximum covered, but only up to a total maximum CompensationCompensation may be reduced if the be £100 million
of of £50,000. £50,000. Compensation may may be cap
is
exceeded
–
see
below.
reduced reduced if if the the £100 £100 million million cap cap is is exceeded exceeded –– ssee ee bbelow. elow. Your Your share in the deposit will be treated treated as a
Yourshare sharein inthe thedeposit depositwill will be be
treated
as a
s
eparate a
ccount i
n y
our n
ame, tto as separate
a separate account in your name, o bcombined
be e account
in your
name,
to be
combined with any other deposits you combined with deposits
any other you with any other
youdeposits may have
for the
may hhave the urposes oof f tthe may ave ffor or he pp£50,000
urposes limit.
he ££50,000 50,000 purposes
oftthe
limit. limit. ave tthree hree I I hhave accounts with accounts w
ith m
my y bank, a
re a
ll o
f bank, are all of tthem hem covered?
covered?
ave a
a jjoint oint I I hhave account w
with account ith m
my y partner, h
ow partner, how iis s tthat hat covered b
by y tthe covered he Scheme?
Scheme?
Usually only trustee accounts Usuallynot. not. The The only
accounts
that are
Usually not. The only trustee
trustee accounts that are covered are charitable trusts, if covered
are
charitable
trusts,
if
they
are
that are covered are charitable trusts, if Guernsey
they are charities, registered
charities,registered and Guernsey
Retirement
they are Guernsey Guernsey registered charities, and Guernsey Retirement Annuity Trusts Annuity
Trusts
(or,
at
the
discretion
of the Board,
and Guernsey Retirement Annuity Trusts (or, at the discretion of the Board, similar similar
schemes
such
as
SIPPS).
(or, at the discretion of the Board, similar schemes schemes ssuch uch aas s SSIPPS). IPPS). Are ttrustee rustee a
Are accounts ccounts covered?
covered?
Are company accounts covered?
What happens f I Are company Are
sole
traders ior
have a loan which is accounts covered?
partnerships
covered?
secured against my deposit?
What happens if I have loan which is Do I gaet secured against compensation if m
my y deposit?
account is in a foreign currency?
Do I get compensation if my How would I make a No. you are a sole trader with an No. Unless A company
is not
a Qualifying
Claimant.
account in your personal name, a company is not a Qualifying Claimant, nor are partnerships, other businesses or trustees (except as set out above). If the bank has taken formal security over No. you are a sole is
trader an formed
Yes,Unless unless
your
business
incorporated,
your deposit (for example by a with security account in your personal name, a as
a
limited
partnership,
or
formed
as
a
limited
interest agreement or other form of legal company i
s n
ot a
Q
ualifying C
laimant, n
or liability
partnership.
Partners
in
non-limited
charge) your compensation might be are partnerships, other businesses partner¬ships
holding
accounts
for theiror own
reduced. trustees (except set out as
above). benefit would
beas treated
joint account holders.
If the bank has taken formal security over your deposit (for example by a security Yes. The balance will simply be converted interest agreement or other form of legal into sterling for the purposes of charge) your compensation might be calculating compensation. reduced. Yes. The balance will simply be converted The Board will provide full information at into sterling for the purposes of the time. There will be a claim form, and a calculating compensation. • The peop
Licen
• It is •
•
•
•
•
•
•
•
•
•
•
If a
Com
The The peop
Qua
Licen
bank
It is o
It aim
If a The Com
in an
The redu
Qua
any bank
The It aim
and The in an
redu
r accounts ccovered?
overed?
accounts accounts covered?
What appens What hhhappens appens iiif f f III What have a
l
oan w
hich What h
if I iis have aa llappens oan w
which hich have oan is s secured a
gainst m
y have a
l
oan w
hich is secured a
gainst m
y secured against my deposit?
secured a
gainst m
y deposit?
deposit?
deposit?
Do I get Do I get compensation if my Do I get compensation my y compensation iif f m
account is in a if my compensation account is in aa foreign account ciurrency?
s in a foreign currency?
urrency?
foreign currency?
How would I make a make ake aa How would I m
claim? How would I make a claim? claim? How long would I ould II How long would have o wait to I How ltong would o have to wait tto receive have to awny ait to receive any compensation? receive any compensation? compensation? compensation? How is the Scheme funded? Is it guaranteed by the States?
•• The peop
The peo
•
•••
•
••
•
•
••
•
•
••
••
••
•
•
••
•
The Board will provide full information at The Board will provide full information at The Board will provide full information at the There ill be afull
claim form, and The Board will provide full information at Thetime. Board
will w
provide
information
ata the
the ttime. ime. TThere here wwill ill bbe e aa c claim laim fform, orm, aand nd aa the leaflet will be wbe
available giving further the time. There ill abe a claim form, aand a will
time.
There
will
claim
form,
and
leaflet
leaflet will will be be available available giving giving further further leaflet information. leaflet will giving
be available giving further be available
further information.
information. information. information. The Scheme aims to pay out within three The Scheme aims to pay out within three The Scheme aims to pay out within three months of a bank’s failure, but no claim The Scheme aims to pay out within three The Scheme
aims tofailure, pay outbut within
three
months of a a bank’s bank’s failure, but no claim claim months
months of no can be of considered without but a no properly months a bank’s failure, claim of a be bank’s
failure, but
no claima a can
be considered
can be considered considered without properly can without properly completed claim form. without a properly can be considered without a properly
completed claim form.
completed laim fform. orm. completed cclaim completed claim form. The Scheme is paid for The
Scheme
is paid
forby bythe theLicensed Licensed Banks,
Banks, who an
pay an annual to administrative
cover who pay
annual
levy tolevy cover
administrative and upon
will be called costs and willcosts be called
to pay
further levies
upon to pay further levies in the event of in the event of a bank default. It is not guaranteed
a bby
ank default. It is not guaranteed by the the
States.
States. The amount of compensation payable in respect of any one bank cannot exceed £100 million, so any compensation paid might be less than your full claim. You should ask your bank whether you might be affected. There is also a limit of £100 million for compensation payable in any Special rules apply if two or more banks
failyear withinperiod. a short period.
five If either of these limits were reached, compensation to Qualifying Claimants would be reduced so that the maximum total applicable What happens if claims in total exceed £100 million? 1 account your personal name, nor a company iis in s nnot ot ualifying laimant, company aa QQualifying CClaimant, nor are partnerships, other businesses company is not a Qualifying Claimant, nor are partnerships, other businesses or are partnerships, other businesses or trustees (except s s sset ut bove). are partnerships, other or trustees except aaas et ooout ut aaabusinesses bove). trustees ((except set bove). trustees (
except a
s s
et o
ut a
bove). If the bank has taken formal security over If the bank has taken formal security over If the bank has taken formal security over If thedeposit bank has
taken
formalby security
over your
your (for example a a security If the bank has taken formal security over your deposit deposit (for (for example example by by a security your security deposit
(for
example
by
a
security
interest
interest agreement or other form of legal your deposit (for example by a security interest agreement or other form of legal interest agreement or other form of legal agreement
or other
form of legal
charge)
your
charge) your compensation might be interest agreement or other form of legal charge) your your compensation compensation might might be be charge) compensation
might
be
reduced.
reduced. charge) reduced. your compensation might be reduced. reduced. Yes. The balance will simply be converted Yes. The balance will simply be converted into
Yes. The balance will simply be converted Yes. The balance will simply be converted into sterling for the rate
purposes of sterling
at the mid-market
on the date
Yes. The balance will simply be converted into sterling for the the purposes purposes of into sterling for of calculating compensation. of the sterling default
forfor the purposes
of calculating
into the purposes of calculating c
ompensation. calculating compensation. compensation. compensation.
calculating peop
Licen
peop
Lice
Licen
Licen
It is o
It It is iso
It If is a If If a a
Com
If a
Com
Com
Com
The The
The Qual
The Qua
Qual
bank
Qua
ban
bank
bank
It aim
i
It It aaim
It aim
The Them
The in an
The in an
a
in redu
in an
redu
redu
any o
redu
anyo
any any The The
The and The ands
and and Will I
Will I
Will Claim
Will I
Claim
Claim
Claim
1
1 1 21 2 2 2
As lo
As As lolo
The As loO
The TheO
perso
The O
perso
pers
perso
n n f f f f t t States?
What What hhappens appens iif f claims claims iin n ttotal otal eexceed xceed £100 illion? What happens £100 m
m
illion? if claims in total exceed £100 million? What What hhappens appens iif f tthe he administrator administrator oor r liquidator rrecovers liquidator ecovers What happens if the funds funds ffrom rom tthe he offr ailed ailed administrator bank?
bank?
liquidator recovers funds from the failed bank?
Who Who aare re tthe he BBoard oard members?
members?
Who are the Board members?
a bank default. It is not guaranteed by the States. The The amount amount of of compensation compensation payable payable in in respect respect of of any any one one bank bank cannot cannot exceed exceed £100 million, so any paid The compensation payable in respect
£100 million, of so compensation
any compensation compensation paid The amount amount
of
payable
in
might be less than your full claim. You respect of less any one bank cannot exceed might than your full claim. You of anybe one
bank
cannot
exceed
£100
million, so
should ask whether might £100 million, so bank any compensation paid should ask your your bank whether you might any compensation
paid
might you be less
than your full
be affected. There is also a limit of £100 might be less than your full claim. You you might
be affected. There is also a limit of £100 claim. You should ask your bank whether
million for payable any should ask your bank whether you might million for compensation compensation payable in any million for
be affected.
There
is also
a limit
ofin £100
five year period. If either of these limits be affected. There is also a limit of £100 five year period. If either of these limits compensation payable in any five year period. If
were reached, compensation to million for compensation in compensation
any were reached, to either of
these
limitscompensation werepayable reached,
Qualifying Claimants would be reduced Qualifying Claimants would be reduced five year period. If either of these limits to Qualifying Claimants would be reduced so that
so that the total so that reached, the maximum maximum total applicable applicable were compensation to the total applicable compensation did not exceed
compensation d
id n
ot e
xceed 100 m
compensation did not ewould xceed ££be 100 reduced m1illion illion Qualifying Claimants 1
£100 fmillion
inpthe
five
year period .
in yyear in he five ive the ear maximum period
eriod1. . total applicable so tthe that compensation did na ot prior exceed £100 million The claim The Scheme has prior claim on any The Scheme Schemehas has a a prior
claim
onon anyany monies that
1
in t
he f
ive y
ear p
eriod
. monies that are recovered, up to the monies that are recovered, up to the are recovered, up to the amount of compensation
amount oof f ccompensation ppaid. amount ompensation aid. The has a prior claim on any paid.Scheme monies that are recovered, up to the amount of compensation paid. The The nnames ames oof f tthe he ccurrent urrent BBoard oard m
members embers sshown are are hown oon n tthe he SScheme cheme w
website. ebsite. The names of the current Board members are
The names of the current Board members shown on the Scheme website.
are shown on the Scheme website. 11
Special rules apply if two or more banks fail within a short period. Special rules apply if two or more banks fail within a short period. Further reading
1
Special rules apply if two or more banks fail within a short period. The following documents and other information are available on the Scheme
website which is shown below.
-
Relevant Policy Letters about the Scheme, including the original Policy Letter
presented to the States of Guernsey in November 2008.
-
A copy of the Ordinance, which established the Scheme, including
amendments.
-
A list of Licensed Banks that are participants in the Scheme.
The Board of the Guernsey Banking Deposit Compensation Scheme has provided this leaflet as a public
service. While it has made every effort to ensure that the text of the leaflet and any documents which can
be accessed from the website are accurate, this leaflet does not constitute a legally binding statement of
the law in the context of the Scheme.
P.O. Box 380, Maison Trinity, Trinity Square, St. Peter Port, Guernsey C.I., GY1 3FY
Tel (01481) 722756
Email: [email protected]
www.dcs.gg
© 2014 Board of the Guernsey Banking Deposit Compensation Scheme