Content Options

COMP 5.1 Application and Purpose

Application

COMP 5.1.1 R

This chapter applies to the FSCS.

COMP 5.1.2 G

It is also relevant to claimants.

Purpose

COMP 5.1.3 G

The purpose of this chapter is to set out the various categories of claim for which compensation may be payable.

COMP 5.2 What is a protected claim?

COMP 5.2.1 R
COMP 5.2.2 G
  1. (5.2.2

    [deleted]2

  2. 1
COMP 5.2.3 R

7Notwithstanding COMP 5.2.1 R, where the relevant personin default:

  1. (1)

    is an authorised professional firm that is subject to the rules of the Law Society (England and Wales) or the Law Society of Scotland; and

  2. (2)

    with respect to its regulated activities, does not participate in the relevant society's compensation scheme:

a claim with respect to that person is only a protected claim if, when the basis for the claim arose, that person did not participate in the relevant society's compensation scheme with respect to its regulated activities.

Claims in respect of successors

COMP 5.2.4 G

8Where a claim for compensation is in respect of a claim against a successor, the following rules apply to the relevant person for whose liabilities the successor has assumed responsibility (or to such relevant person’s activities, as the case may be):

  1. (1)

    8COMP 5.5.1R;

  2. (2)

    8COMP 5.5.2R;

  3. (3)

    8COMP 5.5.3R;

  4. (4)

    8COMP 5.6.1R;

  5. (5)

    8COMP 5.6.2R; and

  6. (6)

    8COMP 5.7.2R.

COMP 5.4 Protected contracts of insurance

COMP 5.4.1 R

[deleted]

Contracts of insurance issued after commencement

COMP 5.4.2 R

[deleted]

COMP 5.4.3 R

[deleted]

COMP 5.4.4 R

[deleted]

Contracts of insurance issued before commencement

COMP 5.4.5 R

[deleted]

Contracts not evidenced by a policy

COMP 5.4.6 R

[deleted]

Liabilities giving rise to claims under a protected contract of insurance

COMP 5.4.7 R

[deleted]

COMP 5.5 Protected investment business

COMP 5.5.1 R

Protected investment business is:

  1. (1)

    designated investment business carried on by the relevant person with, or for the benefit of, the claimant (so long as that claimant has a claim), or as agent on the claimant's behalf;2

    2
  2. (2)

    the activities of the manager or trustee of an AUT, provided that the claim is made by a holder;

  3. (3)

    the activities of the ACD or depositary of an ICVC, provided that the claim is made by a holder;

  4. (4)

    the activities of the authorised contractual scheme manager or depositary of an ACS, provided that the claim is made by a holder;6

  5. (5)

    the activities of the manager or depositary of an ELTIF, provided that the claim is made by a holder; 9

provided that the territorial scope condition in COMP 5.5.2 R is satisfied and, for a firm acting as the manager or depositary of a fund, one of the conditions in COMP 5.5.3 R is satisfied.7

7

Territorial scope condition

COMP 5.5.2 R

The territorial scope condition is that7 the protected investment business was carried on from:

7
  1. (1)

    an establishment of the relevant person in the United Kingdom; or

  2. (2)

    a branch of a UK firm which is:

    1. (a)

      a MiFID investment firm established in another EEA State; or

      4
    2. (b)

      a UCITS management company established in another EEA State (but only in relation to managing investments (other than advising on investments or safeguarding and administering investments);

      55
  3. and the claim is an ICD claim; or

  4. (3)

    both (1) and (2); or5

  5. (4)
    1. (a)

      5a UKbranch of an EEA UCITS management company; or

    2. (b)

      an establishment of such an EEA UCITS management company in its Home State from which cross border services are being carried on;

    and in either case the management company is providing collective portfolio management services for a UCITS scheme but only if the claim relates to that activity; or7

    7
  6. (5)

    an establishment of an incoming EEA AIFM in another EEA State if the claim relates to providing AIFM management functions on a cross border services basis for an authorised AIF.7

Managers and depositaries of funds

COMP 5.5.3 R

7The conditions referred to in COMP 5.5.1 R for a manager or depositary of a fund are:

  1. (1)

    for the activities of managing an AIF or establishing, operating or winding up a collective investment scheme, the claim is in respect of an investment in:

    1. (a)

      an authorised fund; or

    2. (b)

      any other fund which has its registered office or head office in the UK or is otherwise domiciled in the UK unless it is an AIF that is a body corporate and not a collective investment scheme9;

  2. (2)

    where a firm is acting as depositary of an AIF and in so doing is carrying on the activity of acting as trustee or depositary of an AIF or safeguarding and administering assets, the claim is in respect of their activities for:9

    1. (a)

      an authorised AIF; or

    2. (b)

      a charity AIF unless it is a body corporate that is not a collective investment scheme9.

      8

COMP 5.6 1Protected home finance mediation2

COMP 5.6.1 R

Protected home finance mediation2 is:

2
  1. (1)

    advising on a home finance transaction;2 or

    2
  2. (2)

    arranging (bringing about) a home finance transaction;2 or

    2
  3. (3)

    making arrangements with a view to a home finance transaction2; or

    2
  4. (4)

    agreeing to carry on a regulated activity in (1) to (3); or

  5. (5)

    the activities of a home finance provider2 which would be arranging but for article 28A of the Regulated Activities Order (Arranging contracts or plans2 to which the arranger is a party);

    2

provided that the condition in COMP 5.6.2 R is satisfied.

COMP 5.6.2 R

COMP 5.6.1 R applies only if the protected home finance mediation2 was carried on by a relevant person:

2
  1. (1)

    with a customer who was a resident in the United Kingdom; or

  2. (2)

    from an establishment maintained by the relevant person (or its appointed representative) in the United Kingdom with a customer who was resident elsewhere in the EEA;

at the time the protected home finance mediation2 was carried on.

2
COMP 5.6.3 R

3This section does not apply in respect of a regulated mortgage contract which is:4

  1. (1)

    4a legacy CCA mortgage contract; or

  2. (2)

    4a CBTL credit agreement.

COMP 5.7 2 1 1Protected non-investment insurance mediation

COMP 5.7.1 R
COMP 5.7.2 R

COMP 5.7.1 R only applies if the conditions in (1) and (2) are satisfied:3

1
  1. (1)

    the protected non-investment insurance mediation was carried on from:3

    3
    1. (a)

      an establishment of the relevant person in the United Kingdom; or3

    2. (b)

      a branch of a UK firm4 established in another EEA State in the exercise of an EEA right derived from the IMD; and3

      4
  2. (2)

    the claimant making the claim (or where COMP 3.2.4 R applies, the customer on behalf of whom a firm makes a claim) dealt initially, with a view to entering into a relevant general insurance contract or a pure protection contract but not a long-term care insurance contract or a reinsurance contract, with an intermediary that was:4

    34
    1. (a)

      established in the United Kingdom; or4

      4
    2. (b)

      a branch of a UK firm established in another EEA State in the exercise of an EEA right derived from the IMD.4

      4
COMP 5.7.3 G

4The FSCS will not cover a claim against an intermediary 5or a successor of an intermediary 5that meets the criteria of either COMP 5.7.2 R (2)(a) or COMP 5.7.2 R (2)(b) where the claimant was introduced to that intermediary by an intermediary that does not meet the criteria of either COMP 5.7.2 R (2)(a) or COMP 5.7.2 R (2)(b).

COMP 5.7.4 G

4The FSCS will not cover a claim in respect of an intermediary that is not a relevant person, for example a retailer selling extended warranties that are connected contracts. However, COMP 5.7.2 R has the effect that a claim in respect of a relevant person further up the chain carrying on protected non-investment insurance mediation in accordance with COMP 5.7.2 R (1)(a) may be covered by the FSCS if the claimant dealt initially with a UK intermediary that is not a relevant person.