Transitional Provisions and Schedules

Part

COMP Compensation Sourcebook

Chapter

Transitional Provisions and Schedules

Printed on: 05/07/2024

Rulebook at: 01/10/2005

Transitional Provisions and Schedules

COMP TP 1

Transitional Provisions

COMP TP 1.1

Transitional Provisions Table

(1)

(2)

(3)

(4)

(5)

(6)

Material to which the transitional provision applies

Transitional Provision

Transitional provision: dates in force

Handbook Provisions coming into force

COMP 5

Protected claims

Indefinitely

Commencement

(1)

A claim for a protected deposit or under a protected contract of insurance includes a claim in respect of an article 9 default, subject to (2)

(2)

A claim must be treated as a claim in relation to a protected contract of insurance under COMP 5.4.5 R if the conditions in article 10(1)(a)-(d) of the compensation transitionals order are satisfied.

(3)

A claim in connection with protected investment business includes a claim in respect of a pending application.

(4)

Where the claim is in respect of an article 9 default or a pending application, theFSCSmust apply the rules of therelevant former scheme, as they applied to the default beforecommencement, unless (2) applies.

(5)

The rules of each investment business compensation scheme are amended so that references to the person managing the scheme are replaced by references to the FSCS.

(6)

The rules of the Friendly Societies Protection Scheme are amended so that:

(a)

references to the person managing the scheme are replaced by references to the FSCS; and

(b)

References to functions conferred upon the Friendly Societies Protection Scheme Board are replaced by references to functions conferred upon the FSCS.

(7)

Where the default occurs after commencement, aclaimfor aprotected depositincludes aclaimthat arose beforecommencementin respect of:

(a)

a deposit within the meaning of the Banking Act 1987; and

(b)

a claim in respect of a protected investment within the meaning of section 27 of the Building Societies Act 1986.

(8)

Where the default occurs after commencement, aclaim in connection withprotected investment businessincludes aclaimthat could have been entertained under aninvestment business compensation scheme(provided that the person making the claim has not also made apending applicationarising out of the same set of facts).

COMP 13.5 and COMP 13.6

Expired

COMP 13.4.6 R and COMP 13.6.7 R

Expired

COMP 13.5.8 R

Expired

COMP 6.2.1 R

Credit unions

Indefinitely

Commencement

In relation to a claim or potential claim referred to in (1) or (2), a relevant person is also any credit union which:

(1)

becomes unable, or is likely to become unable, to satisfy claims against it which relate to deposits which were accepted before 2 July 2002; or

(2)

(a)

has ceased to have Part IV permission by virtue of article 3(4) of the Financial Services and Markets Act 2000 (Permission and Applications) (Credit Unions etc.) Order 2002 (SI 2002/704) (failure to comply with a direction to re-apply for Part IV permission); and

(b)

thereafter, becomes unable, or is likely to become unable, to satisfy claims against it which relate to deposits which were accepted on or after 2 July 2002 but before the date on which it ceased to have Part IV permission.

COMP 6.2.1 R

In consequence of transitional provision 5R, compensation can be provided:

(a)

in respect of a credit union which is unable, or likely to become unable, to satisfy claims for protected deposits accepted before 2 July 2002; and

(b)

where a credit union has ceased to hold a Part IV permission (because of failure to comply with a direction to re-apply for the Part IV permission), for protected deposits accepted on or after 2 July 2002 but before the date at which it ceased to have the Part IV permission.

COMP 6.2.1 R

In consequence of transitional provision 5R(1), a credit union becomes a relevant person in respect of deposits accepted before 2 July 2002.

Amendments introduced by the Compensation Sourcebook (Amendment No.2) Instrument 2003.

Provisions and definitions arising out of (2) only apply to defaults, or circumstances giving rise to arrangements made under COMP 3.3.1 R or to measures taken under COMP or to measures taken under COMP 3.3.3 R, occurring after the date in (6)

Indefinitely

1 December 2003

COMP 13.6.8 R

Expired

COMP 5.7.1 R, COMP 13.4.7 R and COMP 13.6.9 R

Rules not in effect.

31 October 2004 to 13 January 2005

31 October 2004

COMP 13.4.1 R, COMP 13.4.19 R, COMP 13.5.8 R, COMP 13.5.6 R, COMP 13.6.1 R and COMP 13.6.6 R

With regard to contribution group A.18 Mortgage lenders, advisers and arrangers, the management expenses levy and compensation costs levy for 2005/2006 may also take account of expenditure in the period 31 October 2004 to 31 March 2005.

31 October 2004 to 31 March 2006

31 October 2004

COMP 13.4.1 R, COMP 13.4.19 R, COMP 13.5.6 R, COMP 13.5.8 R, COMP 13.6.1 R and COMP 13.6.6 R

With regard to contribution group A.19 General insurance mediation, the management expenses levy and compensation costs levy for 2005/2006 may also take account of expenditure in the period 14 January 2005 to 31 March 2005.

14 January 2005 to 31 March 2006

31 October 2004

COMP 13.6.7 R (4) COMP 13.6.9A R and COMP 13.6.11 R (2)

For the period 31 October 2004 to 31 March 2006 the tariff base will be the annual income (relating to the relevant contribution group) reported in accordance with note 3 to AUTH 4 Annex 2 R or, if the firm prefers, that amount of its annual income which is attributable to business conducted with eligible claimants but only if the firm notifies FSCS of the amount by 28 February 2005.

31 October 2004 to 31 March 2006

31 October 2004

COMP 13.6.7 R (5), COMP 13.6.9B R and COMP 13.6.11 R (2)

For the period 14 January 2005 to 31 March 2006 the tariff base will be the annual income (relating to the relevant contribution group) reported in accordance with note 3 to AUTH 4 Annex 2 R or, if the firm prefers, that amount of its annual income which is attributable to business conducted with eligible claimants but only if the firm notifies FSCS of the amount by 28 February 2005.

14 January 2005 to 31 March 2006

31 October 2004

01/04/2005

COMP Sch 1

Record-keeping requirements

01/12/2004

COMP Sch 1.1

The aim of the guidance in the following able is to give the reader a quick overall view of the relevant record keeping requirements. The Rules listed below apply only to FSCS (the scheme manager).

It is not a complete statement of those requirements and should not be relied upon as it were.

01/12/2004

COMP Sch 1.2

Handbook reference

Subject of record

Contents of record

When record must be made

Retention period

COMP 13.4.12 R

FSCS funding

Full details of the movement of funds within sub-schemes.

Ongoing requirement.

N/A

01/12/2004

COMP Sch 2

Notification requirements

01/12/2004

COMP Sch 2.1

The aim of the guidance in the following table is to give the reader a quick overall view of the relevant requirements for notification and reporting. In all cases, other than those concerning Chapter 13 and Chapter 14, the notification rules in COMP apply only to FSCS (the scheme manager).

It is not a complete statement of those requirements and should not be relied on as if it were.

01/02/2004

COMP Sch 2.2

Handbook reference

Matter to be notified

Contents of notification

Trigger event

Time allowed

COMP 2.2.5G

Annual Report

Not specified in COMP - see Memorandum of Understanding (MoU) between FSAand FSCS

End of Financial Year

Not specified in COMP (see MoU)

COMP 2.2.7R

Default of relevant person

Not specified - although FSCS must take appropriate steps to ensure claimants are informed about how they can claim compensation

default of a relevant person

Not specified - but as soon as practicable after determining default

COMP 13.3.1R

Right to exemption for specific costs and compensation costs levy

Notice that firm does not conduct business that could give rise to a claim on the FSCS and has no reasonable likelihood of doing so

If it does not, or if it ceases to, conduct business with persons eligible to claim on FSCS, unless it has already given such notice

None specified though exemption generally only takes effect from the date of receipt of notice by FSCS

COMP 13.3.4R

Loss of right to seek exemption from specific costs & compensation costs levy

Statement that firm no longer qualifies for exemption because it carries on business with persons eligible to claim on FSCS

Firm loses the right to claim the exemption.

As soon as reasonably practicable

COMP 13.6.11R

Levy base for participant firm

The contribution groups to which the participant firm belongs. The total amount of business (measured in accordance with the appropriate tariff bases, which it conducted as at 31 December of the previous year)

The end of the calendar year (the occasion of 31 December every year beginning with 31 December 2001)

By end February

COMP 13.8

Participant firms compensation levy for the financial year

Amount of levy payable by the participant firm

The decision by the FSCS that it must impose a levy

30 days before the levy is payable

COMP 14.2.1R

Application by eligible inward passporting EEA firm to obtain top-up cover into compensation scheme

That firm is qualifying incoming EEA firm. The sub-scheme(s) the firm wishes to participate in. Confirmation that the level or scope of cover offered by its home state scheme(s) is less than that available in the UK.

The firm's decision that it wishes to obtain top-up cover into the UK scheme.

N/A

COMP 14.4.5R

Termination of top-up cover

Statement that incoming EEA firm is terminating top-up cover

Decision by firm to resign from FSCS

6 months notice

COMP 14.4.6R

Termination of inward passporting EEA firm's top-up cover into compensation scheme

The firm's resignation from the compensation scheme and the level of compensation available to clients of the firm's UK branch following its decision to resign from FSCS

Termination of firm's top-up cover

No later than six weeks after the end of the firms participation in compensation scheme

01/02/2004

COMP Sch 3

Fees and other required payments

01/12/2004

COMP Sch 3.1

The rules in COMP 13 give FSCS (the scheme manager) the power to raise levies on participant firms in order to meet its expenses. The rules in COMP 13 do not specify the amount of any levy but do specify how a participant firm's share of a levy is to be calculated and any limit on the amount leviable by the FSCS is a particular period.

01/12/2004

COMP Sch 4

Powers Exercised

01/12/2004

COMP Sch 4.1

The following powers and related provisions in or under the Act and the Financial Services and Markets Act 2000 (Transitional Provisions, Repeals and Savings) (Financial Services Compensation Scheme) Order 2001 ("the compensation transitionals order") have been exercised by the FSA to make the rules in COMP:

Section 138 (General rule-making power)

Section 156 (General supplementary powers)

Section 213 (The compensation scheme)

Section 214 (General)

Section 215 (Rights of the scheme in relevant person's insolvency)

Section 216 (Continuity of long-term insurance policies)

Section 217 (Insurers in financial difficulties)

Section 218 (Annual report)

Section 223 (Management expenses)

Article 4 (Pending Applications) of the compensation transitionals order

Article 6 (Post-commencement applications) of the compensation transitionals order

Article 9 (Article 9 defaults occurring before commencement) of the compensation transitionals order

Article 10 (Applications in respect of compulsory liability insurance) of the compensation transitionals order

Article 12 (Applications under the new scheme) of the compensation transitionals order

01/12/2004

COMP Sch 4.2

The following additional powers have been exercised by the FSA to make the rules in COMP:

Articles 3 (Further power for Authority to make rules concerning mesothelioma claims) and 4 (Modification of FSMA in relation to FSA rules for mesothelioma claims) of the mesothelioma regulations.

01/12/2004

COMP Sch 4.3

The following powers in the Act have been exercised by the FSA to give the guidance in COMP:

Section 157(1) (Guidance)

01/12/2004

COMP Sch 5

Rights of action for damages

01/12/2004

COMP Sch 5.1

The table below sets out the rules in COMP, contravention of which by an authorised person may be actionable under section 150 of the Act (Actions for damages) by a person who suffers loss as a result of the contravention.

If a "yes" appears in the column headed "For private person?", the rule may be actionable by a "private person" under section 150 unless a "yes" appears in the column headed "Removed". A "yes" in the column headed "Removed" indicates that the FSA has removed the right of action under section 150(2) of the Act. If so, a reference to the rule in which it is removed is also given.

In accordance with the Financial Services and Markets Act 2000 (Rights of Action) Regulations 2001 (SI 2001/2256) a "private person" is:

any individual, except when acting in the course of carrying on a regulated activity; and

any person who is not an individual, except when acting in the course of carrying on business of any kind;

but does not include a government, local authority or an international organisation.

The column headed "For other person?" indicates whether the rule is actionable by a person other than a private person, in accordance with those Regulations. If so, an indication of the type of person by whom the rule is actionable is given.

The vast majority of rules in COMP are rules to which the FSCS is subject. No right of action arises under section 150 for breach of these rules, as the FSCS is not an authorised person.

01/12/2004

COMP Sch 5.2

Chapter/Appendix

Section/Annex

Paragraph

For private person?

Removed

For other person?

COMP 13

Funding (all rules)

Yes

COMP 14.4.6R

Yes

01/12/2004

COMP Sch 6

Rules that can be waived

01/12/2004

COMP Sch 6.1

The rules in COMP cannot be waived by the FSA, except:

(1) COMP 13.6.11 R;

(2) COMP 14.4.6 R

01/12/2004