COMP TP 1 Transitional Provisions

1

COMP 5

R

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, the FSCS must apply the rules of the relevant former scheme, as they applied to the default before commencement, 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, a claim for a protected deposit includes a claim that arose before commencement in 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, a claim in connection with protected investment business includes a claim that could have been entertained under an investment business compensation scheme (provided that the person making the claim has not also made a pending application arising out of the same set of facts).

2

COMP 13.5 andCOMP 13.6

R

Funding

Commencement - 31 March 2004

Commencement

(1)

The FSCS must give a participant firm which is a professional firm the following discount on the specific costs levy or compensation costs levy that it would otherwise have to pay:

(a)

75%, if the levy is made between 1 December 2001 and 31 March 2002;

(b)

25%, if the levy is made between 1 April 2002 and 31 March 2003;

(c)

10%, if the levy is made between 1 April 2003 and 31 March 2004.

(2)

The FSCSmust reallocate the amount of any discount to the other members of the relevant contribution group, in accordance with the relevant tariff basis inCOMP 13.6.7 R.

3

COMP 13.4.6 R andCOMP 13.6.7 R

R

Calculation of levies

Commencement - 31 March 2002

Commencement

(1)

Until 31 March 2002, the FSCS must calculate a participant firm's share of a compensation costs levy allocated to the insurance business sub-scheme in accordance with the provisions of the Policyholders Protection Act 1975 (including the provisions relating to net premium income)

(2)

In making the calculation under transitional provision 3R(1), the FSCS may assess a participant firm for its share of a compensation costs levy on any reasonable basis, if the participant firm has not provided the information required under the Policyholders Protection Act 1975, making such adjustments as seem appropriate in subsequent levies once the true figures are known.

4

COMP 13.5.8 R

R

Grandfathered Firms

Commencement - 31 March 2002

Commencement

COMP 13.5.8 R (New participant firms) does not apply to a firm that becomes authorised at commencement under the Financial Services and Markets Act 2000 (Transitional Provisions) (Authorised Persons etc.) Order 2001.

5

COMP 6.2.1 R

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.1

6

COMP 6.2.1 R

G

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.1

7

COMP 6.2.1 R

G

In consequence of transitional provision 5R(1), a credit union becomes a relevant person in respect of deposits accepted before 2 July 2002.1

8

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

R

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 20032

9

COMP 13.6.8 R

R

With regard to a member, relevant net premium incomeis to include the premium income in respect ofcontracts of insurance:

(a) entered into by themember in the year preceding that in which the date for submission of the information underCOMP 13.6.11 R falls: and5

(b) which would have beenprotected contracts of insuranceif entered into on or after I January 2004;5net of any relevant rebates or refunds.

1 January 2004 to 1 January 2005

Commencement

103

COMP 5.7.1 R, COMP 13.4.7 R and COMP 13.6.9 R3

R3

Rules not in effect.3

31 October 2004 to 13 January 20053

31 October 20043

113

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 R3

R3

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 2005.3

31 October 2004 to 31 March 20063

31 October 20043

123

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 R3

R3

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 2005.3

14 January 2005 to 31 March 20063

31 October 20043

133

COMP 13.6.7 R (4) COMP 13.6.9A R and COMP 13.6.11 R (2)3

R3

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 2005.3

31 October 2004 to 31 March 20063

31 October 20043

143

COMP 13.6.7 R (5), COMP 13.6.9B R and COMP 13.6.11 R (2)3

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 2005.3

14 January 2005 to 31 March 20063

31 October 20043