Legalize / United Kingdom / Public General Act

Banking Act 1987 (repealed)

Type Public General Act

Publication 1987-05-15

Last updated 2013-04-01

State In force

Department Statute Law Database

Source legislation.gov.uk

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Reform history JSON API

(1) A tribunal may give such directions as it thinks fit for the payment of costs or expenses by any party to the appeal.

(2) On an appeal under section 27(2) above the institution concerned shall be entitled to be heard.

(3) Subject to subsection (4) below, the Treasury may, . . . make regulations with respect to appeals under this Part of this Act; and those regulations may in particular make provision—

(a) as to the period within which and the manner in which such appeals are to be brought;

(b) as to the manner in which such appeals are to be conducted, including provision for any hearing to be held in private, as to the persons entitled to appear on behalf of the parties and for enabling appeals to be heard notwithstanding the absence of a member of the tribunal other than the chairman;

(c) as to the procedure to be adopted where appeals are brought both by an institution and a person who is or is to be a director, controller or manager of the institution, including provision for hearing the appeals together and for the mutual disclosure of information;

(d) for requiring an appellant or the Authority to disclose or allow the inspection of documents in his or its custody or under his or its control;

(e) for requiring any person, on tender of the necessary expenses of his attendance, to attend and give evidence or produce documents in his custody or under his control and for authorising the administration of oaths to witnesses;

(f) for enabling an appellant to withdraw an appeal or the Authority to withdraw its opposition to an appeal and for the consequences of any such withdrawal;

(g) for taxing or otherwise settling any costs or expenses which the tribunal directs to be paid and for the enforcement of any such direction;

(h) for enabling any preliminary or incidental functions in relation to an appeal to be discharged by the chairman of a tribunal; and

(j) as to any other matter connected with such appeals.

(4) Regulations under this section with respect to appeals where the institution concerned—

(a) is a company registered in Scotland; or

(b) has its principal or prospective principal place of business in the United Kingdom in Scotland,

shall be made by the Lord Advocate . . ..

(5) A person who, having been required in accordance with regulations under this section to attend and give evidence, fails without reasonable excuse to attend or give evidence, shall be liable on summary conviction to a fine not exceeding the fifth level on the standard scale.

(6) A person who without reasonable excuse alters, suppresses, conceals, destroys or refuses to produce any document which he has been required to produce in accordance with regulations under this section, or which he is liable to be so required to produce, shall be guilty of an offence and liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both;

(b) on summary conviction, to a fine not exceeding the statutory maximum.

(7) Any regulations made under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Further appeals on points of law

31

(1) An institution or other person who has appealed to a tribunal may appeal to the court on any question of law arising from the decision of the appeal by the tribunal and an appeal on any such question shall also lie at the instance of the Authority; and if the court is of opinion that the decision was erroneous in point of law, it shall remit the matter to the tribunal for re-hearing and determination by it.

(2) In subsection (1) above “the court” means the High Court, the Court of Session or the High Court in Northern Ireland according to whether—

(a) if the institution concerned is a company registered in the United Kingdom, it is registered in England and Wales, Scotland or Northern Ireland;

(b) in the case of any other institution, its principal or prospective principal place of business in the United Kingdom is situated in England and Wales, Scotland or Northern Ireland.

(3) No appeal to the Court of Appeal or to the Court of Appeal in Northern Ireland shall be brought from a decision under subsection (1) above except with the leave of that court or of the court or judge from whose decision the appeal is brought.

(4) An appeal shall lie, with the leave of the Court of Session or the House of Lords, from any decision of the Court of Session under this section, and such leave may be given on such terms as to costs, expenses or otherwise as the Court of Session or the House of Lords may determine.

Invitations to make deposits

Advertisement regulations

32

(1) The Treasury may after consultation with the Authority and the Building Societies Commission make regulations for regulating the issue, form and content of deposit advertisements.

(2) Regulations under this section may make different provision for different cases and, without prejudice to the generality of subsection (1) above, may in particular—

(a) prohibit the issue of advertisements of any description (whether by reference to their contents, to the persons by whom they are issued or otherwise);

(b) make provision with respect to matters which must be, as well as matters which may not be, included in advertisements;

(c) provide for exemptions from any prohibition or requirement imposed by the regulations, including exemptions by reference to a person’s membership of a class whose membership is determined otherwise than by the Treasury.

(3) Subject to subsection (4) below, any person who issues or causes to be issued in the United Kingdom an advertisement the issue of which is prohibited by regulations under this section or which does not comply with any requirements imposed by those regulations shall be guilty of an offence and liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both;

(b) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both.

(4) A person whose business it is to publish or arrange for the publication of advertisements shall not be guilty of an offence under this section if he proves that he received the advertisement for publication in the ordinary course of his business, that the matters contained in the advertisement were not (wholly or in part) devised or selected by him or by any person under his direction or control and that he did not know and had no reason for believing that publication of the advertisement would constitute an offence.

(5) In this section “a deposit advertisement” means any advertisement containing—

(a) an invitation to make a deposit; or

(b) information which is intended or might reasonably be presumed to be intended to lead directly or indirectly to the making of a deposit;

and for the purposes of this section an advertisement includes any means of bringing such an invitation or such information to the notice of the person or persons to whom it is addressed and references to the issue of an advertisement shall be construed accordingly.

(6) For the purposes of this section—

(a) an advertisement issued or caused to be issued by any person by way of display or exhibition in a public place shall be treated as issued or caused to be issued by him on every day on which he causes or permits it to be displayed or exhibited;

(b) an advertisement inviting deposits with a person specified in the advertisement shall be presumed, unless the contrary is proved, to have been issued to the order of that person.

(7) For the purposes of this section an advertisement issued outside the United Kingdom shall be treated as issued in the United Kingdom if it is directed to persons in the United Kingdom or is made available to them otherwise than in a newspaper, journal, magazine or other periodical publication published and circulating principally outside the United Kingdom or in a sound or television broadcast transmitted principally for reception outside the United Kingdom.

(8) Regulations under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Advertisement directions

33

(1) If the Authority considers that any deposit advertisement issued or proposed to be issued by or on behalf of an authorised institution is misleading, the Authority may by notice in writing give the institution a direction under this section.

(2) A direction under this section may contain all or any of the following prohibitions or requirements—

(a) a prohibition on the issue of advertisements of a specified kind;

(b) a requirement that advertisements of a particular description shall be modified in a specified manner;

(c) a prohibition on the issue of any advertisements which are, wholly or substantially, repetitions of an advertisement which has been issued and which is identified in the direction;

(d) a requirement to take all practical steps to withdraw from display in any place any advertisements or any advertisements of a particular description specified in the direction.

(3) Not less than seven days before giving a direction under this section the Authority shall give the institution concerned notice in writing of its intention to give the direction stating the reasons for the proposed direction and giving particulars of the rights conferred by subsection (4) below.

(4) An institution to which a notice is given under subsection (3) above may within the period of seven days beginning with the day on which the notice was given make written representations to the Authority; and the Authority shall take any such representation into account in deciding whether to give the direction.

(5) A direction under this section may be varied by a further direction; and a direction may be revoked by the Authority by a notice in writing to the institution concerned.

(6) Any person who issues or causes to be issued an advertisement the issue of which is prohibited by a direction under this section or which does not comply with any requirements imposed by such a direction shall be guilty of an offence and liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both;

(b) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both.

(7) In this section “deposit advertisement” has the same meaning as in section 32 above and subsections (4) and (6) of that section shall apply also for the purposes of this section.

Unsolicited calls

34

(1) The Treasury may after consultation with the Authority and the Building Societies Commission make regulations for regulating the making of unsolicited calls—

(a) on persons in the United Kingdom; or

(b) from the United Kingdom on persons elsewhere,

with a view to procuring the making of deposits.

(2) Regulations under this section may make different provision for different cases and, without prejudice to the generality of subsection (1) above, may in particular—

(a) prohibit the soliciting of deposits from, and the making of agreements with a view to the acceptance of deposits from, persons on whom unsolicited calls are made and prohibit the procuring of such persons to make deposits or to enter into such agreements;

(b) specify persons by whom or circumstances in which unsolicited calls may be made;

(3) Any person who contravenes regulations made under this section shall be guilty of an offence and liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both;

(b) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both.

(4) In this section “unsolicited call” means a personal visit or oral communication made without express invitation.

(5) Regulations under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Fraudulent inducement to make a deposit

35

(1) Any person who—

(a) makes a statement, promise or forecast which he knows to be misleading, false or deceptive, or dishonestly conceals any material facts; or

(b) recklessly makes (dishonestly or otherwise) a statement, promise or forecast which is misleading, false or deceptive,

is guilty of an offence if he makes the statement, promise or forecast or conceals the facts for the purpose of inducing, or is reckless as to whether it may induce, another person (whether or not the person to whom the statement, promise or forecast is made or from whom the facts are concealed)—

(i) to make, or refrain from making, a deposit with him or any other person; or

(ii) to enter, or refrain from entering, into an agreement for the purpose of making such a deposit.

(2) This section does not apply unless—

(a) the statement, promise or forecast is made in or from, or the facts are concealed in or from, the United Kingdom or arrangements are made in or from the United Kingdom for the statement, promise or forecast to be made or the facts to be concealed;

(b) the person on whom the inducement is intended to or may have effect is in the United Kingdom; or

(3) A person guilty of an offence under this section shall be liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding seven years or to a fine or to both;

(b) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both.

(4) For the purposes of this section the definition of deposit in section 5 above shall be treated as including any sum that would be otherwise excluded by subsection (3) of that section.

Information

Notification of change of director, controller or manager

36

(1) Subject to subsection (3) below, an authorised institution shall give written notice to the Authority of the fact that any person has become or ceased to be a director, controller or manager of the institution.

(2) A notice required to be given under subsection (1) above shall be given before the end of the period of fourteen days beginning with the day on which the institution becomes aware of the relevant facts.

(3) The Authority may by a notice in writing wholly or partly dispense from the obligation imposed by subsection (1) above any authorised institution whose principal place of business is outside the United Kingdom.

(4) An institution which fails to give a notice required by this section shall be guilty of an offence and liable on summary conviction to a fine not exceeding the fifth level on the standard scale.

Notification of acquisition of significant shareholding

37

(1) A person who becomes a significant shareholder in relation to an authorised institution incorporated in the United Kingdom shall within seven days give written notice of that fact to the Authority.

(2) For the purposes of this section “a significant shareholder”, in relation to an institution, means a person who is not a shareholder controller but who, either alone or with any associate or associates—

(a) holds 5 per cent. or more of the shares in the institution or another institution of which it is a subsidiary undertaking; or

(b) is entitled to exercise, or control the exercise of, 5 per cent. or more of the voting power at any general meeting of the institution or of another institution of which it is such an undertaking;

and in this subsection “share” has the same meaning as in Part VII of the Companies Act 1985 or Part VIII of the Companies (Northern Ireland) Order 1986.

(3) Subject to subsection (4) below, any person who contravenes subsection (1) above shall be guilty of an offence.

(4) A person shall not be guilty of an offence under subsection (3) above if he shows that he did not know of the acts or circumstances by virtue of which he became a significant shareholder in relation to the institution; but where any person becomes such a shareholder without such knowledge and subsequently becomes aware of the fact that he has become such a shareholder he shall be guilty of an offence unless he gives the Authority written notice of the fact that he has become such a shareholder within fourteen days of becoming aware of that fact.

(5) A person guilty of an offence under this section shall be liable on summary conviction to a fine not exceeding the fifth level on the standard scale.

Reports of large exposures

38

(1) An authorised institution, other than one whose principal place of business is outside the United Kingdom, shall make a report to the Authority if—

(a) it has entered into a transaction or transactions relating to any one person as a result of which it is exposed to the risk of incurring losses in excess of 10 per cent. of its available capital resources; or

(b) it proposes to enter into a transaction or transactions relating to any one person which, either alone or together with a previous transaction or previous transactions entered into by it in relation to that person, would result in its being exposed to the risk of incurring losses in excess of 25 per cent. of those resources.

(2) Subsection (1) above applies also where the transaction or transactions relate to different persons if they are connected in such a way that the financial soundness of any of them may affect the financial soundness of the other or others or the same factors may affect the financial soundness of both or all of them.

(3) If an authorised institution to which subsection (1) above applies has one or more subsidiaries which are not authorised institutions the Authority may by notice in writing to that institution direct that that subsection shall apply to it as if the transactions and available capital resources of the subsidiary or subsidiaries, or such of them as are specified in the notice, were included in those of the institution.

(4) The reports required to be made by an institution under subsection (1) above shall be made, in a case within paragraph (a) of that subsection, in respect of such period or periods and, in a case within paragraph (b) of that subsection, at such time before the transaction or transactions are entered into, as may be specified by notice in writing given to the institution by the Authority; and those reports shall be in such form and contain such particulars as the Authority may reasonably require.

(5) For the purposes of this section a transaction entered into by an institution relates to a person if it is—

(a) a transaction under which that person incurs an obligation to the institution or as a result of which he may incur such an obligation;

(b) a transaction under which the institution will incur, or as a result of which it may incur, an obligation in the event of that person defaulting on an obligation to a third party; or

(c) a transaction under which the institution acquires or incurs an obligation to acquire, or as a result of which it may incur an obligation to acquire, an asset the value of which depends wholly or mainly on that person performing his obligations or otherwise on his financial soundness;

and the risk of loss attributable to a transaction is, in a case within paragraph (a) or (b) above, the risk of the person concerned defaulting on the obligation there mentioned and, in a case within paragraph (c) above, the risk of the person concerned defaulting on the obligations there mentioned or of a deterioration in his financial soundness.

(6) Any question whether an institution is or would be exposed to risk as mentioned in subsection (1) above (or in that subsection as extended by subsection (2)) shall be determined in accordance with principles published by the Authority or notified by it to the institution concerned; and those principles may in particular make provision for determining the amount at risk in particular circumstances or the extent to which any such amount is to be taken into account for the purposes of this section.

(7) For the purposes of this section the available capital resources of an institution (or, in a case within subsection (3) above, of an institution and its relevant subsidiary or subsidiaries) and the value of those resources at any time shall be determined by the Authority and notified by it to the institution by notice in writing; and any such determination, which may be varied from time to time, shall be made by the Authority after consultation with the institution concerned and in accordance with principles published by the Authority.

(8) The principles referred to in subsections (6) and (7) above may make different provision for different cases and those referred to in subsection (6) may, in particular, exclude from consideration, either wholly or in part, risks resulting from transactions of a particular description or entered into in particular circumstances or with persons of particular descriptions.

(9) An institution which fails to make a report as required by this section shall be guilty of an offence; but where an institution shows that at the time when the report was required to be made it did not know that the facts were such as to require the making of the report it shall not be guilty of an offence by reason of its failure to make a report at that time but shall be guilty of an offence unless it makes the report within seven days of becoming aware of those facts.

(10) An institution guilty of an offence under this section shall be liable on summary conviction to a fine not exceeding the fifth level on the standard scale.

(11) The Treasury may after consultation with the Authority by order—

(a) amend subsection (1) above so as to substitute for either of the percentages for the time being specified in that subsection such other percentage as may be specified in the order;

(b) make provision, whether by amending subsection (5) above or otherwise, with respect to the transactions and risks to be taken into account for the purposes of this section,

but any such order shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(12) For the avoidance of doubt it is hereby declared that references in this section to “one person” include references to a partnership.

Power to obtain information and require production of documents

39

(1) The Authority may by notice in writing served on an authorised institution—

(a) require the institution to provide the Authority, or such person acting on behalf of the Authority as may be specified in the notice, at such time or times or at such intervals or in respect of such period or periods as may be so specified, with such information as the Authority may reasonably require for the performance of its functions under this Act;

(b) require the institution to provide the Authority with a report by an accountant or other person with relevant professional skill on, or on any aspect of, any matter about which the Authority has required or could require the institution to provide information under paragraph (a) above.

(2) The accountant or other person appointed by an institution to make any report required under subsection (1)(b) above shall be a person nominated or approved by the Authority; and the Authority may require his report to be in such form as is specified in the notice.

(3) The Authority may—

(a) by notice in writing served on an authorised institution require it to produce, within such time and at such place as may be specified in the notice, such document or documents of such description as may be so specified;

(b) authorise an officer, servant or agent of the Authority, on producing evidence of his authority, to require any such institution to provide him forthwith with such information, or to produce to him forthwith such documents, as he may specify,

being such information or documents as the Authority may reasonably require for the performance of its functions under this Act.

(4) Where, by virtue of subsection (3) above, the Authority or any officer, servant or agent of the Authority has power to require the production of any documents from an authorised institution, the Authority or that officer, servant or agent shall have the like power to require the production of those documents from any person who appears to be in possession of them; but where any person from whom such production is required claims a lien on documents produced by him, the production shall be without prejudice to the lien.

(5) The power under this section to require an institution or other person to produce any documents includes power—

(a) if the documents are produced, to take copies of them or extracts from them and to require that institution or person, or any other person who is a present or past director, controller or manager of, or is or was at any time employed by or acting as an employee of, the institution in question, to provide an explanation of any of them; and

(b) if the documents are not produced, to require the person who was required to produce them to state, to the best of his knowledge and belief, where they are.

(6) If it appears to the Authority to be desirable in the interests of the depositors or potential depositors of an authorised institution to do so, it may also exercise the powers conferred by subsections (1) and (3) above in relation to any undertaking which is or has at any relevant time been—

(a) a parent undertaking, subsidiary undertaking or related company of that institution;

(b) a subsidiary undertaking of a parent undertaking of that institution;

(d) an undertaking in the case of which a shareholder controller of that institution, either alone or with any associate or associates, holds 50 per cent. or more of the shares or is entitled to exercise, or control the exercise of, more than 50 per cent. of the voting power at a general meeting;

or in relation to any partnership of which that institution is or has at any relevant time been a member.

(7) If it appears to the Authority to be desirable to do so in the interests of the depositors or potential depositors of an authorised institution which is a partnership (’the authorised partnership’), it may also exercise the powers conferred by subsections (1) and (3) above in relation to—

(a) any other partnership having a member in common with the authorised partnership;

(b) any undertaking which is or has at any time been a member of the authorised partnership;

(c) any undertaking in the case of which the partners in the authorised partnership, either alone or with any associate or associates, hold 20 per cent. or more of the shares or are entitled to exercise, or control the exercise of, more than 50 per cent. of the voting power at a general meeting; or

(d) any subsidiary undertaking or parent undertaking of any such undertaking as is mentioned in paragraph (b) or (c) above or any parent undertaking of any such subsidiary undertaking.

(7A) In subsections (6) and (7) above ’share’ has the same meaning as in Part VII of the Companies Act 1985 or Part VIII of the Companies (Northern Ireland) Order 1986.

(8) The foregoing provisions of this section shall apply to a former authorised institution as they apply to an authorised institution.

(9) The Authority may by notice in writing served on any person who is or is to be a director, controller or manager of an authorised institution require him to provide the Authority, within such time as may be specified in the notice, with such information or documents as the Authority may reasonably require for determining whether he is a fit and proper person to hold the particular position which he holds or is to hold.

(10) The Authority may exercise the powers conferred by subsections (1) and (3) above in relation to any person who is a significant shareholder of an authorised institution within the meaning of section 37 above if the Authority considers that the exercise of those powers is desirable in the interests of the depositors or potential depositors of that institution.

(11) Any person who without reasonable excuse fails to comply with a requirement imposed on him under this section shall be guilty of an offence and liable on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding the fifth level on the standard scale or to both.

(12) A statement made by a person in compliance with a requirement imposed by virtue of this section may be used in evidence against him.

(12A) However, in criminal proceedings in which that person is charged with an offence to which this subsection applies—

(a) no evidence relating to the statement may be adduced, and

(b) no question relating to it may be asked,

by or on behalf of the prosecution, unless evidence relating to it is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person.

(12B) Subsection (12A) above applies to any offence other than—

(a) an offence under subsection (11) above or section 94(1)(a) below;

(b) an offence under section 5 of the Perjury Act 1911 (false statements made otherwise than on oath);

(c) an offence under section 44(2) of the Criminal Law (Consolidation) (Scotland) Act 1995 (false statements made otherwise than on oath); or

(d) an offence under Article 10 of the Perjury (Northern Ireland) Order 1979 (false statements made otherwise than on oath).

(13) Nothing in this section shall compel the production by a barrister, advocate or solicitor of a document containing a privileged communication made by him or to him in that capacity.

Right of entry to obtain information and documents

40

(1) Any officer, servant or agent of the Authority may, on producing if required evidence of his authority, enter any premises occupied by a person on whom a notice has been served under section 39 above for the purpose of obtaining there the information or documents required by that notice and of exercising the powers conferred by subsection (5) of that section.

(2) Any officer, servant or agent of the Authority may, on producing if required evidence of his authority, enter any premises occupied by any person on whom a notice could be served under section 39 above for the purpose of obtaining there such information or documents as are specified in the authority, being information or documents that could have been required by such a notice; but the Authority shall not authorise any person to act under this subsection unless it has reasonable cause to believe that if such a notice were served it would not be complied with or that any documents to which it would relate would be removed, tampered with or destroyed.

(3) Any person who intentionally obstructs a person exercising rights conferred by this section shall be guilty of an offence and liable on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding the fifth level on the standard scale or to both.

Investigations

Investigations on behalf of the Bank

41

(1) If it appears to the Authority desirable to do so in the interests of the depositors or potential depositors of an authorised institution the Authority may appoint one or more competent persons to investigate and report to the Authority on—

(a) the nature, conduct or state of the institution’s business or any particular aspect of it; or

(b) the ownership or control of the institution;

and the Authority shall give written notice of any such appointment to the institution concerned.

(2) If a person appointed under subsection (1) above thinks it necessary for the purposes of his investigation, he may also investigate the business of any undertaking which is or has at any relevant time been—

(a) a parent undertaking, subsidiary undertaking or related company of the institution under investigation;

(b) a subsidiary undertaking or related company of a parent undertaking of that institution;

(d) an undertaking in the case of which a shareholder controller of that institution, either alone or with any associate or associates, holds 20 per cent. or more of the shares or is entitled to exercise, or control the exercise of, more than 20 per cent. of the voting power at a general meeting;

or the business of any partnership of which that institution is or has at any relevant time been a member.

(3) If a person appointed under subsection (1) above thinks it necessary for the purposes of his investigation in the case of an authorised institution which is a partnership (’the authorised partnership’), he may also investigate the business of—

(a) any other partnership having a member in common with the authorised partnership;

(b) any undertaking which is or has at any time been a member of the authorised partnership;

(c) any undertaking in the case of which the partners in the authorised partnership, either alone or with any associate or associates, hold 20 per cent. or more of the shares or are entitled to exercise, or control the exercise of, more than 20 per cent. of the voting power at a general meeting; or

(d) any subsidiary undertaking, related company or parent undertaking of any such undertaking as is mentioned in paragraph (b) or (c) above or any parent undertaking of any such subsidiary undertaking.

(3A) In subsections (2) and (3) above “share” has the same meaning as in Part VII of the Companies Act 1985 or Part VIII of the Companies (Northern Ireland) Order 1986.

(4) Where a person appointed under subsection (1) above decides to investigate the business of any body by virtue of subsection (2) or (3) above he shall give it written notice to that effect.

(5) It shall be the duty of every person who is or was a director, controller, manager, employee, agent, banker, auditor or solicitor of a body which is under investigation (whether by virtue of subsection (1), (2) or (3) above), any person appointed to make a report in respect of that body under section 8(5) or 39(1)(b) above and anyone who is a significant shareholder in relation to that body within the meaning of section 37 above—

(a) to produce to the persons appointed under subsection (1) above, within such time and at such place as they may require, all documents relating to the body concerned which are in his custody or power;

(b) to attend before the persons so appointed at such time and place as they may require; and

(c) otherwise to give those persons all assistance in connection with the investigation which he is reasonably able to give;

and those persons may take copies of or extracts from any documents produced to them under paragraph (a) above.

(6) The foregoing provisions of this section shall apply to a former authorised institution as they apply to an authorised institution.

(7) For the purpose of exercising his powers under this section a person appointed under subsection (1) above may enter any premises occupied by a body which is being investigated by him under this section; but he shall not do so without prior notice in writing unless he has reasonable cause to believe that if such a notice were given any documents whose production could be required under this section would be removed, tampered with or destroyed.

(8) A person exercising powers by virtue of an appointment under this section shall, if so required, produce evidence of his authority.

(9) Any person who—

(a) without reasonable excuse fails to produce any documents which it is his duty to produce under subsection (5) above;

(b) without reasonable excuse fails to attend before the persons appointed under subsection (1) above when required to do so;

(c) without reasonable excuse fails to answer any question which is put to him by persons so appointed with respect to an institution which is under investigation or a body which is being investigated by virtue of subsection (2) or (3) above; or

(d) intentionally obstructs a person in the exercise of the rights conferred by subsection (7) above,

shall be guilty of an offence and liable on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding the fifth level on the standard scale or to both.

(10) A statement made by a person in compliance with a requirement imposed by virtue of this section may be used in evidence against him.

(10A) However, in criminal proceedings in which that person is charged with an offence to which this subsection applies—

(a) no evidence relating to the statement may be adduced, and

(b) no question relating to it may be asked,

by or on behalf of the prosecution, unless evidence relating to it is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person.

(10B) Subsection (10A) above applies to any offence other than—

(a) an offence under subsection (9)(c) above or section 94(4) below;

(b) an offence under section 5 of the Perjury Act 1911 (false statements made otherwise than on oath);

(c) an offence under section 44(2) of the Criminal Law (Consolidation) (Scotland) Act 1995 (false statements made otherwise than on oath); or

(d) an offence under Article 10 of the Perjury (Northern Ireland) Order 1979 (false statements made otherwise than on oath).

(11) Nothing in this section shall compel the production by a barrister, advocate or solicitor of a document containing a privileged communication made by him or to him in that capacity.

Investigation of suspected contraventions

42

(1) Where the Authority has reasonable grounds for suspecting that a person is guilty of contravening section 3 or 35 above the Authority or any duly authorised officer, servant or agent of the Authority may by notice in writing require that or any other person—

(a) to provide, at such place as may be specified in the notice and either forthwith or at such time as may be so specified, such information as the Authority may reasonably require for the purpose of investigating the suspected contravention;

(b) to produce, at such place as may be specified in the notice and either forthwith or at such time as may be so specified, such documents, or documents of such description, as may be specified, being documents the production of which may be reasonably required by the Authority for that purpose;

(c) to attend at such place and time as may be specified in the notice and answer questions relevant for determining whether such a contravention has occurred.

(2) The Authority or a duly authorised officer, servant or agent of the Authority may take copies of or extracts from any documents produced under this section.

(3) Any officer, servant or agent of the Authority may, on producing if required evidence of his authority, enter any premises occupied by a person on whom a notice has been served under subsection (1) above for the purpose of obtaining there the information or documents required by the notice, putting the questions referred to in paragraph (c) of that subsection or exercising the powers conferred by subsection (2) above.

(4) Any person who without reasonable excuse fails to comply with a requirement imposed on him under this section or intentionally obstructs a person in the exercise of the rights conferred by subsection (3) above shall be guilty of an offence and liable on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding the fifth level on the standard scale or to both.

(5) A statement made by a person in compliance with a requirement imposed by virtue of this section may be used in evidence against him.

(5A) However, in criminal proceedings in which that person is charged with an offence to which this subsection applies—

(a) no evidence relating to the statement may be adduced, and

(b) no question relating to it may be asked,

by or on behalf of the prosecution, unless evidence relating to it is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person.

(5B) Subsection (5A) above applies to any offence other than—

(a) an offence under subsection (4) above or section 94(1)(a) below;

(b) an offence under section 5 of the Perjury Act 1911 (false statements made otherwise than on oath);

(c) an offence under section 44(2) of the Criminal Law (Consolidation) (Scotland) Act 1995 (false statements made otherwise than on oath); or

(d) an offence under Article 10 of the Perjury (Northern Ireland) Order 1979 (false statements made otherwise than on oath).

(6) Nothing in this section shall compel the production by a barrister, advocate or solicitor of a document containing a privileged communication made by him or to him in that capacity.

Powers of entry in cases of suspected contraventions

43

(1) A justice of the peace may issue a warrant under this section if satisfied on information on oath laid by an officer or servant of the Authority or laid under the Authority’s authority that there are reasonable grounds for suspecting that a person is guilty of such a contravention as is mentioned in section 42 above and—

(a) that that person has failed to comply with a notice served on him under that section; or

(b) that there are reasonable grounds for suspecting the completeness of any information provided or documents produced by him in response to such a notice; or

(c) that there are reasonable grounds for suspecting that if a notice were served on him under that section it would not be complied with or that any documents to which it would relate would be removed, tampered with or destroyed.

(2) A warrant under this section shall authorise any constable, together with any other person named in the warrant and any other constables—

(a) to enter any premises occupied by the person mentioned in subsection (1) above which are specified in the warrant, using such force as is reasonably necessary for the purpose;

(b) to search the premises and take possession of any documents appearing to be such documents as are mentioned in subsection (1)(c) above or to take, in relation to any such documents, any other steps which may appear to be necessary for preserving them or preventing interference with them;

(d) to require any person named in the warrant to answer questions relevant for determining whether that person is guilty of any such contravention as is mentioned in section 42 above.

(3) A warrant under this section shall continue in force until the end of the period of one month beginning with the day on which it is issued.

(4) Any documents of which possession is taken under this section may be retained—

(a) for a period of three months; or

(b) if within that period proceedings to which the documents are relevant are commenced against any person for any such contravention as is mentioned in section 42 above, until the conclusion of those proceedings.

(5) Any person who intentionally obstructs the exercise of any right conferred by a warrant issued under this section or fails without reasonable excuse to comply with any requirement imposed in accordance with subsection (2)(d) above shall be guilty of an offence and liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both;

(b) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both.

(6) A statement made by a person in compliance with a requirement imposed by virtue of this section may be used in evidence against him.

(7) In the application of subsection (1) above to Scotland, the reference to a justice of the peace includes a reference to a sheriff and for the reference to information on oath there shall be substituted a reference to evidence on oath; and in the application of that subsection to Northern Ireland for the reference to laying an information on oath there shall be substituted a reference to making a complaint on oath.

Obstruction of investigations

44

(1) A person who knows or suspects that an investigation is being or is likely to be carried out—

(a) under section 41 above; or

(b) into a suspected contravention of section 3 or 35 above,

shall be guilty of an offence if he falsifies, conceals, destroys or otherwise disposes of, or causes or permits the falsification, concealment, destruction or disposal of, documents which he knows or suspects are or would be relevant to such an investigation unless he proves that he had no intention of concealing facts disclosed by the documents from persons carrying out such an investigation.

(2) A person guilty of an offence under this section shall be liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both;

(b) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both.

Accounts and auditors

Audited accounts to be open to inspection

45

(1) An authorised institution shall at each of its offices in the United Kingdom at which it holds itself out as accepting deposits—

(a) keep a copy of its most recent audited accounts; and

(b) during normal business hours make that copy available for inspection by any person on request.

(2) An institution which fails to comply with paragraph (a) of subsection (1) above or with any request made in accordance with paragraph (b) of that subsection shall be guilty of an offence and liable on summary conviction to a fine not exceeding the fifth level on the standard scale.

(3) In the case of an institution incorporated in the United Kingdom the accounts referred to in subsection (1) above include the auditors’ report on the accounts and, in the case of any other institution whose accounts are audited, the report of the auditors.

Notification in respect of auditors

46

(1) An authorised institution incorporated in the United Kingdom shall forthwith give written notice to the Authority if the institution—

(a) proposes to give special notice to its shareholders of an ordinary resolution removing an auditor before the expiration of his term of office; or

(b) gives notice to its shareholders of an ordinary resolution replacing an auditor at the expiration of his term of office with a different auditor,

or if a person ceases to be an auditor of the institution otherwise than in consequence of such a resolution.

(2) An auditor of an authorised institution appointed under Chapter V of Part XI of the Companies Act 1985 shall forthwith give written notice to the Authority if he—

(a) resigns before the expiration of his term of office;

(b) does not seek to be re-appointed; or

(c) decides to include in his report on the institution’s accounts any qualification as to a matter mentioned in section 235(2) or any statement pursuant to section 235(3) or section 237 of that Act.

(3) The foregoing provisions of this section shall apply to a former authorised institution as they apply to an authorised institution.

(4) In the application of subsection (2) above to Northern Ireland for the references to Chapter V of Part XI and sections235(2) and 235(3) and 237 of the Companies Act 1985 there shall be substituted references to Chapter V of Part XII and Articles, 243(2), 243(3) and 245 of the Companies (Northern Ireland) Order 1986.

(5) An institution or auditor who fails to comply with this section shall be guilty of an offence and liable on summary conviction to a fine not exceeding the fifth level on the standard scale.

Communication by auditor etc., with the Bank

47

(1) No duty to which—

(a) an auditor of an authorised institution; or

(b) a person appointed to make a report under section 8(5) or 39(1)(b) above, or

(c) an auditor of a body with which an authorised institution which is a credit institution is closely linked by control who is also either—

(i) an auditor of the institution; or

(ii) a person appointed to make a report under section 8(5) or 39(1)(b) above in respect of the institution,

may be subject shall be regarded as contravened by reason of his communicating in good faith to the Authority, whether or not in response to a request made by it, any information or opinion on a matter to which this section applies and which is relevant to any function of the Authority under this Act.

(2) In relation to an auditor of an authorised institution this section applies to any matter of which he becomes aware in his capacity as auditor and which relates to the business or affairs of the institution or any associated body.

(3) In relation to a person appointed to make a report under section 8(5) or 39(1)(b) above this section applies to any matter of which he becomes aware in his capacity as the person making the report and which—

(a) relates to the business of affairs of the institution in relation to which his report is made or any associated body of that institution; or

(b) if by virtue of section 39(6) or (7) above the report relates to an associated body of an institution, to the business or affairs of that body.

(3A) In relation to an auditor of a body with which an authorised institution which is a credit institution is closely linked by control, this section applies to any matter of which he becomes aware in his capacity as auditor of the body and which relates to the business or affairs of the institution.

(4) In this section “associated body”, in relation to an institution, means any such body as is mentioned in section 39(6) or (7) above.

(5) If it appears to the Treasury that any accountants or class of accountants who are persons to whom subsection (1) above applies are not subject to satisfactory rules made or guidance issued by a professional body specifying circumstances in which matters are to be communicated to the Authority as mentioned in that subsection the Treasury may, after consultation with the Authority and such bodies as appear to the Treasury to represent the interests of accountants and authorised institutions, make regulations applying to those accountants and specifying such circumstances; and it shall be the duty of an accountant to whom the regulations apply to communicate a matter to the Authority in the circumstances specified by the regulations.

(6) Regulations under this section may make different provision for different cases and no such regulations shall be made unless a draft of them has been laid before and approved by a resolution of each House of Parliament.

(7) This section applies to the auditor of a former authorised institution as it applies to the auditor of an authorised institution.

Unauthorised acceptance of deposits

Repayment of unauthorised deposits

48

(1) If on the application of the Authority it appears to the court that a person has accepted deposits in contravention of section 3 above the court may—

(a) order him and any other person who appears to the court to have been knowingly concerned in the contravention to repay the deposits forthwith or at such time as the court may direct; or

(b) except in Scotland, appoint a receiver to recover those deposits;

but in deciding whether and, if so, on what terms to make an order under this section the court shall have regard to the effect that repayment in accordance with the order would have on the solvency of the person concerned or otherwise on his ability to carry on his business in a manner satisfactory to his creditors.

(2) The jurisdiction conferred by this section shall be exercisable by the High Court and the Court of Session.

Profits from unauthorised deposits

49

(1) If on the application of the Authority the court is satisfied that profits have accrued to a person as a result of deposits having been accepted in contravention of section 3 above the court may order him to pay into court or, except in Scotland, appoint a receiver to recover from him, such sum as appears to the court to be just having regard to the profits appearing to the court to have accrued to him.

(2) In deciding whether, and if so, on what terms to make an order under this section the court shall have regard to the effect that payment in accordance with the order would have on the solvency of the person concerned or otherwise on his ability to carry on his business in a manner satisfactory to his creditors.

(3) Any amount paid into court or recovered from a person in pursuance of an order under this section shall be paid out to such person or distributed among such persons as the court may direct, being a person or persons appearing to the court to have made the deposits as a result of which the profits mentioned in subsection (1) above have accrued or such other person or persons as the court thinks just.

(4) On an application under this section the court may require the person concerned to furnish it with such accounts or other information as it may require for determining whether any and if so, what profits have accrued to him as mentioned in subsection (1) above and for determining how any amounts are to be paid or distributed under subsection (3) above; and the court may require any such accounts or other information to be verified in such manner as it may direct.

(5) The jurisdiction conferred by this section shall be exercisable by the High Court and the Court of Session.

Part II — The Deposit Protection Scheme

The Board and the Fund

The Deposit Protection Board

50

(1) The body corporate known as the Deposit Protection Board and the Fund known as the Deposit Protection Fund established by section 21 of the Banking Act 1979 shall continue to exist.

(2) The Deposit Protection Board (in this Part of this Act referred to as “the Board”) shall—

(a) hold, manage and apply the Fund in accordance with the provisions of this Part of this Act;

(b) levy contributions for the Fund, in accordance with those provisions, from contributory institutions.; and

(3) Schedule 4 to this Act shall have effect with respect to the Board.

The Deposit Protection Fund

51

(1) The Fund shall consist of—

(a) any money which forms part of the Fund when this section comes into force;

(b) initial, further and special contributions levied by the Board under this Part of this Act;

(d) any other money required by any provision of this Part of this Act to be credited to the Fund or received by the Board and directed by it to be so credited.

(2) The money constituting the Fund shall be placed by the Board in an account with the Bank.

(3) As far as possible, the Bank shall invest money placed with it under subsection (2) above in Treasury bills; and any income from money so invested shall be credited to the Fund.

(3A) In subsection (3) above, the reference to Treasury bills includes a reference to bills and other short-term instruments issued by the government of another EEA State and appearing to the Bank to correspond as nearly as may be to Treasury bills.

(4) There shall be chargeable to the Fund—

(a) repayments of special contributions under section 55(2) below;

(b) payments under section 58 below;

(d) the administrative and other necessary or incidental expenses incurred by the Board.

Contributions to the Fund

Contributory institutions and general provisions as to contributions

52

(1) All UK institutions and participating institutions shall be liable to contribute to the Fund and are in this Part of this Act referred to as ’contributory institutions’.

(2) Contributions to the Fund shall be levied on a contributory institution by the Board by the service on the institution of a notice specifying the amount due, which shall be paid by the institution not later than twenty-one days after the date on which the notice is served.

(2A) Where—

(a) a notice under subsection (2) above is served on a contributory institution; and

(b) the amount specified in the notice remains unpaid after the period of twenty-one days mentioned in that subsection,

the Board shall as soon as practicable give written notice of that fact to the Authority.

(3) Subject to section 56 below, on each occasion on which contributions are to be levied from contributory institutions (other than the occasion of the levy of an initial contribution from a particular institution under section 53 below)—

(a) a contribution shall be levied from each of the contributory institutions; and

(b) the amount of the contribution of each institution shall be ascertained by applying to the institution’s deposit base the percentage determined by the Board for the purpose of the contribution levied on that occasion.

(4) Subject to subsection (4B) and section 57 below, the deposit base of an institution in relation to any contribution is the amount which the Board determines as representing the average, over such period preceding the levying of the contribution as appears to the Board to be appropriate, of deposits in EEA currencies with the United Kingdom offices of that institution other than—

(a) secured deposits;

(b) deposits which are own funds within the meaning given by Section 1 of Chapter 2 of Title V of the Banking Consolidation Directive;

(d) deposits in respect of which the institution has in the United Kingdom issued a certificate of deposit in an EEA currency.

(4A) In its application to UK institutions, subsection (4) above shall have effect as if the reference to United Kingdom offices included a reference to offices in other EEA States.

(4B) In the case of a participating EEA institution, the amount determined under subsection (4) above shall be reduced by the amount given by the formula—

$$HSUK$where—PA = so much of the amount so determined as is attributable to deposits which are protected by the institution’s home State scheme;HS = the level of protection (expressed in ecus) afforded by that scheme at the time when the determination is made, or the level of protection mentioned below, whichever is the less;UK = the level of protection (so expressed) afforded by this Part of this Act at that time.$

(5) In its application to this section, section 5(3) above shall have effect with the omission of paragraphs (b) and (c).

(6) In this Part of this Act—

’the 1995 Regulations’ means the Credit Institutions (Protection of Depositors) Regulations 1995;

’administrator’, in relation to an institution, means an administrator of the institution under Part II of the Insolvency Act 1986 or Part III of the Insolvency (Northern Ireland) Order 1989 ;

’building society’ means a building society incorporated (or deemed to be incorporated) under the Building Societies Act 1986;

’the deposit protection scheme’ means the scheme for the protection of depositors continued in force by this Part of this Act;

’ecu’ means—

(a) the European currency unit as defined in Article 1 of Council Regulation No. 3320/94/EC ; or

(b) except in section 60(1) below, any other unit of account which is defined by reference to the European currency unit as so defined;

(7) In its application to this Part, section 5(3) above shall have effect as if—

(a) the references in paragraph (a) to an authorised institution included references to a building society and to any credit institution which is incorporated in or formed under the law of a country or territory outside the United Kingdom; and

(b) in Schedule 2 to this Act, paragraph 5 (building societies) were omitted.

(8) This Part of this Act shall apply as if Gibraltar were an EEA State other than the United Kingdom.

Initial contributions

53

(1) Subject to subsection (4) below, where an institution becomes a contributory institution after the coming into force of this Part of this Act the Board shall levy from it, on or as soon as possible after the day on which it becomes a contributory institution, an initial contribution of an amount determined in accordance with subsection (2) or (3) below.

(2) Where the institution concerned has a deposit base, then, subject to section 56(1) below, the amount of an initial contribution levied under this section shall be such percentage of the deposit base as the Board considers appropriate to put the institution on a basis of equality with the other contributory institutions, having regard to—

(a) the initial contributions previously levied under this section or under section 24(1) of the Banking Act 1979; and

(b) so far as they are attributable to an increase in the size of the Fund resulting from an order under subsection (2) of section 54 below or subsection (2) of section 25 of that Act, further contributions levied under either of those sections.

(2A) In its application to participating EEA institutions, subsection (2) above shall have effect as if the reference to a basis of equality were a reference to a basis of parity.

(3) Where the institution concerned has no deposit base the amount of an initial contribution levied under this section shall be the minimum amount for the time being provided for in section 56(1) below.

(4) The Board may waive an initial contribution under this section if it appears to it that the institution concerned is to carry on substantially the same business as that previously carried on by one or more institutions which are or were contributory institutions.

Further contributions

54

(1) If at the end of any financial year of the Board the amount standing to the credit of the Fund is less than £3 million the Board may, with the approval of the Treasury, levy further contributions from contributory institutions so as to restore the amount standing to the credit of the Fund to a minimum of £5 million and a maximum of £6 million.

(2) If at any time it appears to the Treasury to be desirable in the interests of depositors to increase the size of the Fund, the Treasury may, after consultation with the Board, by order amend subsection (1) above so as to substitute for the sums for the time being specified in that subsection such larger sums as may be specified in the order; but no such order shall be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.

(3) An order under subsection (2) above may authorise the Board forthwith to levy further contributions from contributory institutions so as to raise the amount standing to the credit of the Fund to a figure between the new minimum and maximum amounts provided for by the order.

Special contributions

55

(1) If it appears to the Board that payments under section 58 below are likely to exhaust the Fund, the Board may, with the approval of the Treasury, levy special contributions from contributory institutions to meet the Fund’s commitments under that section.

(2) Where at the end of any financial year of the Board there is money in the Fund which represents special contributions and will not in the opinion of the Board be required for making payments under section 58 below in consequence of institutions having become insolvent or subject to administration orders before repayments are made under this subsection the Board—

(a) shall repay to the institutions from which it was levied so much (if any) of that money as can be repaid without reducing the amount standing to the credit of the Fund below the maximum amount for the time being specified in subsection (1) of section 54 above; and

(b) may repay to those institutions so much (if any) of that money as can be repaid without reducing the amount standing to the credit of the Fund below the minimum amount for the time being specified in that subsection.

(3) Repayments to institutions under this section shall be made pro rata according to the amount of the special contribution made by each of them but the Board may withhold the whole or part of any repayment due to an institution that has become insolvent and, in the case of an institution that has ceased to be a contributory institution, may either withhold its repayment or make it to any other contributory institution which, in the opinion of the Board, is its successor.

Maximum and minimum contributions

56

(1) The amount of the inital contribution levied from a contributory institution shall be not less than £10,000.

(2) The amount of the initial contribution or any further contribution levied from a contributory institution shall not exceed £300,000.

(3) No contributory institution shall be required to pay a further or special contribution if, or to the extent that, the amount of that contribution, together with previous initial, further and special contributions made by the institution, after allowing for any repayments made to it under section 55(2) above or section 63 below, amounts to more than 0.3 per cent. of the institution’s deposit base as ascertained for the purpose of the contribution in question.

(4) Nothing in subsection (3) above—

(a) shall entitle an institution to repayment of any contribution previously made; or

(b) shall prevent the Board from proceeding to levy contributions from other contributory institutions in whose case the limit in that subsection has not been reached.

(5) The Treasury may from time to time after consultation with the Board by order—

(a) amend subsection (1) or (2) above so as to substitute for the sum for the time being specified in that subsection such other sum as may be specified in the order; or

(b) amend subsection (3) above so as to substitute for the percentage for the time being specified in that subsection such other percentage as may be specified in the order.

(6) No order shall be made under subsection (5) above unless a draft of it has been laid before and approved by a resolution of each House of Parliament.

Deposit base of transferee institutions

57

(1) This section applies where the liabilities in respect of deposits of a person specified in Schedule 2 to this Act (an “exempted person”) are transferred to an institution which is not such a person (a “transferee institution”).

(2) If the transferee institution becomes a contributory institution on the occasion of the transfer or immediately thereafter it shall be treated for the purposes of section 53 above as having such deposit base as it would have if—

(a) deposits in EEA currencies with the United Kingdom offices of the exempted person at any time had at that time been deposits in EEA currencies with the United Kingdom offices of the transferee institution; and

(b) certificates of deposit in EEA currencies issued by the exempted person had been issued by the transferee institution.

(3) If the transferee institution is already a contributory institution at the time of the transfer, the Board shall levy from it, as soon as possible after the transfer, a further initial contribution of an amount equal to the initial contribution which it would have been liable to make if—

(a) it had become a contributory institution on the date of the transfer;

(b) its deposit base were calculated by reference (and by reference only) to the deposits in EEA currencies with the United Kingdom offices of the exempted person, taking certificates of deposit in EEA currencies issued by the exempted person as having been issued by the transferee institution; and

(c) the amount specified in section 56(2) above were reduced by the amount of any initial contribution which the transferee institution has already made.

(4) Whether or not the transferee institution is already a contributory institution at the time of the transfer it shall be treated for the purposes of the levying from it of any further or special contribution as having such deposit base as it would have if the deposits in EEA currencies with its United Kingdom offices and the certificates of deposit in EEA currencies issued by it included respectively deposits in EEA currencies with the United Kingdom offices of the exempted person and certificates of deposit in EEA currencies issued by that person.

(4A) In their application to UK institutions, subsections (2) to (4) above shall have effect as if references to United Kingdom offices included references to offices in other EEA States.

(5) In its application to this section, section 5(3) above shall have effect with the omission of paragraphs (b) and (c).

Payments out of the Fund

Compensation payments to depositors

58

(1) Subject to the provisions of this section, if at any time an institution to which this subsection applies becomes insolvent, the Board—

(a) shall as soon as practicable pay out of the Fund to depositors who have protected deposits with that institution which are due and payable amounts equal to nine-tenths of their protected deposits; and

(b) shall in any event secure that, before the end of the relevant period, it is in a position to make those payments as soon as they fall to be made.

(2) Subsection (1) above applies to an institution which—

(a) is a UK institution or participating institution;

(b) is a former UK institution or a former participating institution; or

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