Prudential Regulation Authority Rulebook

2.1

This Chapter applies to the FSCS and firms.

2.2

The provisions in this rule determine whether a deposit is an eligible deposit:

1. (1) A deposit is an eligible deposit only if it is held by:
1. (a) a UK establishment of a DGS member; or
2. (b) a branch of a DGS member established in another EEA State under an EEA Right.
2. (2) A deposit is held by a UK establishment or a branch if it is assigned by the firm to an account of that UK establishment or that branch.
3. (3) A deposit is, subject to the other rules in this Chapter, an eligible deposit if it is held by a firm which:
1. (a) had a Part 4A permission to accept such deposits at the time the deposit was accepted but no longer has permission to accept eligible deposits, or is subject to a requirement preventing it from doing so; and
2. (b) is not now a member of a non-UK scheme which protects such deposits.
4. (4) The following are not eligible deposits:
1. (a) a deposit made by another credit institution;
2. (b) own funds;
3. (c) a deposit arising out of a transaction in connection with which there has been a criminal conviction for money laundering;
4. (d) a deposit by a financial institution;
5. (e) a deposit by an investment firm;
6. (f) a deposit the holder and any beneficial owner (as defined in regulation 6 of the Money Laundering Regulations 2007) of which have not, at the compensation date had their identity verified in accordance with regulation 9 of the Money Laundering Regulations 2007 (or equivalent EEA requirements)
7. (g) a deposit by an insurance undertaking or a reinsurance undertaking;
8. (h) a deposit by a collective investment undertaking;
9. (i) a deposit by a pension or retirement fund (but excluding deposits by personal pension schemes, stakeholder pension schemes and occupational pension schemes of micro, small and medium-sized enterprises);
10. (j) a deposit by a public authority, unless it is a small local authority;
11. (k) a debt security issued by the DGS member and any liabilities arising out of own acceptances and promissory notes.

[Note: Art. 4(3), 4(6), 5(1), 5(2)(a) and 14(1) of the DGSD]

2.3

A firm, must at least annually, take reasonable steps to confirm that a depositor that it has classified as a small local authority continues to be a small local authority, using the exchange rate prevailing on the 3 July immediately preceding the date on which any confirmation is undertaken.