DEPOSITOR COMPENSATION SCHEME [ S.L.371.09 1
SUBSIDIARY LEGISLATION 371.09
DEPOSITOR COMPENSATION SCHEME 
REGULATIONS
21st November, 2003
LEGAL NOTICE 369 of 2003.
Citation.
Compensation Scheme Regulations.
Interpretation.
Cap. 371.
''branch'' shall have the meaning assigned to the word in article 2
of the Act and, for the purposes of these regulations, includes a
place of business which forms a legally dependent part of a credit
institution and from which some or all of the activities for which
the credit institution has been authorised are conducted. All the
places of business set up in any one country by a credit institution
whose head office is in Malta or in another country shall be
regarded as a single branch;
''business of banking'' shall have the meaning assigned to the
words in article 2 of the Act;
Cap. 204.
''Central Bank'' means the Central Bank of Malta as defined by
the Central Bank of Malta Act;
''competent authority'' means the competent authority under the
Act;
''credit institution'' shall have the meaning assigned to the words
in article 2 of the Act;
''deposit'' shall have the meaning assigned to the word in article 2
of the Act;
''depositor'' means any individual who otherwise than in the
course of or for the purposes of a business, trade or profession
entrusts a deposit to a credit institution, to the exclusion of the
persons and entities listed in the First Schedule;
''eligible deposit'' shall have the meaning assigned to it by
regulation 18;
Cap. 330.
''Financial Services Tribunal'' means the tribunal established in
terms of the Malta Financial Services Authority Act;
S.L. 370.09
''Management Committee'' means the Compensation Schemes
Management Committee established under regulation 3 and 5 of the
Investor Compensation Scheme Regulations;
''participant'' means a credit institution participating in the
Scheme in terms of regulation 11;
''the Scheme'' means the Depositor Compensation Scheme
established under regulation 3;
2 [ S.L.371.09 DEPOSITOR COMPENSATION SCHEME
and the words and expressions which are also used in the Act shall
have the same meaning as in the Act.
Establishment of 
the Depositor 
Compensation 
Scheme.
3. (1) There shall be established a Depositor Compensation
Scheme.
(2) The Scheme shall be a body corporate having a distinct
legal personality and shall be capable, subject to the provisions of
the Act and of these regulations, of entering into contracts of
borrowing or otherwise incurring indebtedness for the purposes of
its functions, of acquiring, holding and disposing of any kind of
property for the purposes of its functions, of suing or being sued
and of doing all such things and entering into all such transactions
as are incidental or conducive to the exercise or performance of its
functions.
(3) The Scheme shall be managed and administered by and be
under the general control of the Management Committee.
(4) The legal and judicial representation of the Scheme shall
vest in the chairperson of the Management Committee:
Provided that, and without prejudice to the foregoing, the
Management Committee may vest any one or more of its members
or of the officers or agents of the Scheme with legal or judicial
representation.
Functions of the 
Scheme.
4. (1) Without prejudice to any other power or function
conferred on it by these regulations or by any other law, it shall be
the function of the Scheme:
( a ) to maintain a fund or funds out of which payments
shall be made to depositors and to meet such other
payments or expenses as may be paid out of the fund
or funds in accordance with these regulations;
( b ) to establish and maintain, after consultations with the
competent authority, arrangements for the making of
payments to depositors in accordance with these
regulations;
( c ) to process claims for compensation by depositors as
expeditiously as possible and to ensure that
compensation is paid out without undue delay; and
( d ) to advise the competent authority on matters relating
to compensation of depositors.
(2) The objective of the Scheme is to provide a means of
protection for private depositors within the framework of these
regulations. All the members of the Management Committee shall
work in the best interest of the Scheme and shall pursue and
promote its objective.
Composition of the 
Management 
Committee.
S.L. 370.09
5. The Management Committee shall be composed and
regulated by the provisions of regulations 3 and 5 of the Investor
Compensation Scheme Regulations.
Powers and duties 
of the Management 
Committee.
6. (1) The Management Committee shall have the power to
enter into such reasonable administrative and other expenses as
may be necessary to enable it to fulfil its functions under these
DEPOSITOR COMPENSATION SCHEME [ S.L.371.09 3
regulations.
(2) The Management Committee may place contributions made
by participants in terms of regulation 12 and any other funds
managed and administered by it on deposit or may invest such
contributions, having regard to the need for prudence.
(3) The Management Committee may take out insurance
policies, borrow or otherwise incur indebtedness on behalf of the
Scheme for the purposes of the Scheme’s functions, in any way and
under any terms it may consider appropriate, provided that
borrowings do not exceed 30 per cent of the net asset value of the
Scheme.
(4) The Management Committee shall cause proper books of
account to be kept so that the financial position of the Scheme can
be ascertained with reasonable accuracy at any time.
(5) In exercising its powers and duties, the Management
Committee shall be bound to safeguard and take into account the
general interests of depositors entitled to claim under these
regulations.
Investment 
management and 
administrative 
support 
agreements.
7. Without prejudice to regulation 6(1) the Management
Committee shall enter into such investment management and
administrative support agreements as may be approved by the
competent authority.
Publication of 
financial 
statements.
8. (1) The Management Committee shall prepare annual
forecast statements of the expected costs and revenues of the
Scheme, and shall make available such forecast statements to all
participants upon request.
(2) The Management Committee shall submit to the competent
authority an annual report on the discharge of its functions and on
the operation of the Scheme within three months from the financial
year end of the Scheme. Such annual report shall include,  inter
alia :
( a ) a statement showing the payments in and payments out
of the Scheme during its immediate previous financial
year; and
( b ) annual audited financial statements prepared in
accordance with International Accounting Standards.
(3) The annual report shall be made available on the website of
the competent authority.
(4) The books of accounts shall be kept at such place as the
Management Committee thinks fit.
Meetings of the 
Committee.
S.L. 370.09
9. The meetings of the Management Committee shall be
convened and held in accordance with regulation 9 of the Investor
Compensation Scheme Regulations.
Source and 
application of 
funds.
10. (1) In terms of regulation 4, the Scheme shall establish
and maintain a fund or a number of funds out of which payments
shall be made in accordance with these regulations.
(2) The sources of funding shall include:
4 [ S.L.371.09 DEPOSITOR COMPENSATION SCHEME
( a ) contributions levied from participants of the Scheme
by the Management Committee;
( b ) money paid as administrative fees by all participants,
as may be prescribed;
( c ) money received as income from the investment of the
assets of the fund;
( d ) money borrowed by the Management Committee for
the purposes of the Scheme;
( e ) money received by the Management Committee on any
insurance policy it takes out; and
( f ) any other money required to be paid in to the fund or
funds, received or recovered by the Management
Committee for the purposes of the Scheme.
(3) There shall be paid out of the fund or funds:
( a ) money determined by the Management Committee as
compensation for depositors;
( b ) money required for the repayment of (or interest on or
charges in connection with) any money borrowed or
for the payment of premia on any insurance policies
taken out, for the purposes of the Scheme;
( c ) the costs incurred in administering and managing the
Scheme; and
( d ) any other money paid out by the Management
Committee for the purposes of the Scheme.
(4) The Management Committee shall hold, manage and apply
the fund or funds in accordance with these regulations.
Participants. 11. (1) Every credit institution which is licensed in Malta
under the Act to accept deposits from depositors in Maltese lira
shall participate in and contribute to the Scheme, including a
branch of a credit institution operating in another country.
(2) In the case of a participant whose head office is situated in
a country outside Malta, as well as branches of a credit institution
having their head office in Malta but operating outside Malta, and
where there is supplementary cover by a corresponding scheme in
that other country, the Management Committee shall enter into a
bilateral agreement with the authority responsible for the
management and administration of the scheme in that other country
stipulating,  inter alia , the rules and procedures to be followed for
the payment of compensation to depositors.
(3) Participation in the Scheme does not exclude the possibility
that particular credit institutions may have to participate also in
another compensation or similar schemes set up under a different
law and governed by another competent authority or other body, in
Malta or abroad.
(4) When a credit institution becomes a participant in the
Scheme after the coming into force of these regulations, the
Management Committee shall determine all the relative obligations
and conditions of the new participant as set out in the Third
DEPOSITOR COMPENSATION SCHEME [ S.L.371.09 5
Schedule.
Contributions to 
the Scheme.
12. (1) Participants shall pay such contributions to the
Scheme as prescribed in the Second Schedule.
(2) Participants may be requested to pay to the Scheme such
reasonable administrative fees as may from time to time be
prescribed by the Management Committee.
Determination.
( a ) it appears to the competent authority that a participant
is unable, for the time being, for reasons which are
directly related to its financial circumstances to meet
its obligations arising from claims by its depositors
and to have no early or foreseeable prospect of being
able to do so, or has otherwise suspended payment; or
( b ) in respect of a credit institution which has its head
office in Malta an order has been made by the Courts
of Malta for its winding-up or liquidation under the
laws of Malta;
whichever is the earlier, the competent authority shall make a
determination to that effect within twenty-one days of the
occurrence of such circumstances.
(2) The competent authority may, by way of banking
directives, establish those circumstances or criteria which it may
consider in arriving at a decision as to whether it will make a
determination in terms of subregulation (1).
(3) As soon as practicable after a determination is made, the
competent authority shall inform the Management Committee in
writing of such determination. The Management Committee may
take additional measures it deems necessary or appropriate within
its powers under these regulations.
(4) The competent authority shall, as soon as possible, inform
any other compensation scheme relating to financial services
activities, as may be established under any other law and regulated
by other competent authority or other body, which it believes may
be effected by such determination.
(5) In making a determination in accordance with subregulation
(1), the competent authority shall have regard to any report of
officers or agents authorised by it on the state of affairs of the
credit institution, and any other information in its possession.
Application for 
compensation.
14. (1) On being informed by the competent authority that a
determination has been made under regulation 13(1), the
Management Committee shall publish a notice in at least two local
newspapers, informing depositors of the credit institution
concerned of such determination and of the manner in which claims
supported by documentary evidence are to be submitted.
(2) The right of a depositor for compensation shall not be
forfeited if the depositor is able to prove that he was unable to
assert his right to compensation within any prescribed time-limits
as may be provided by the Management Committee.
6 [ S.L.371.09 DEPOSITOR COMPENSATION SCHEME
(3) The Management Committee may, following an application
for compensation being made to it by a depositor, accept or refuse
to provide compensation in accordance with these regulations.
(4) The Management Committee shall proceed to pay
compensation for verified claims within three months of the date of
the determination given in terms of regulation 13(1):
Provided that the Management Committee may, in
exceptional circumstances, apply to the competent authority for an
extension of this period by a further period of up to three months,
and up to two further periods of up to three months each thereafter.
Verification of 
claims.
15. (1) The Management Committee shall make its own
administrative arrangements for verifying claims. These
arrangements shall include:
( a ) providing an application form for claimants both in
English and in Maltese;
( b ) providing for the exercise of the Management
Committee’s right of subrogation under regulation 22;
and
( c ) requiring claimants to give:
(i) their identity and address;
(ii) the capacity in which they claim;
(iii) evidence of the eligible deposits as defined in
regulation 18; and
(iv) any other information as may be required by the
Management Committee.
(2) The Management Committee may refuse to make a payment
for compensation until the claimant informs the Management
Committee as to the capacity in which he is the beneficial owner of
the deposit and provides satisfactory documentary evidence and
information to allow the Management Committee to determine the
amount of compensation payable.
Cap. 373.
(3) The Management Committee may decide to delay payment
to a claimant until determination of any criminal charge brought
against the claimant, depositor, or any person entitled to or
interested in respect of an eligible deposit under the provisions of
the Prevention of Money Laundering Act or a corresponding law of
a country outside Malta.
(4) Where in the opinion of the Management Committee
circumstances so warrant, the Management Committee may effect
part payments to claimants eligible for compensation under these
regulations.
When funds appear 
to be inadequate.
16. Whenever it appears to the Management Committee that
the funds for the time being held by the Scheme are inadequate for
the Management Committee to exercise its functions, the
Management Committee may require a Special Contribution to be
made to the Scheme by participants in accordance with the Second
Schedule. Such Special Contribution shall be provided to the
Scheme within thirty calendar days of their being requested.
DEPOSITOR COMPENSATION SCHEME [ S.L.371.09 7
Limit of 
compensation.
17. The total amount of compensation that may be paid out to a
depositor shall be the lesser of ninety per cent (90%) in respect of
that depositor’s eligible deposits, or up to the Maltese liri
equivalent of 20,000 euro converted on the basis of the official
closing middle rate issued by the Central Bank of Malta prevailing
on the date of settlement of the claim:
Provided that where the funds of the Scheme are
insufficient to satisfy the claims in full, payments to claimants shall
be made  pro rata .
Eligible deposits.
deposits'', in relation to a depositor with a credit institution, means
the total aggregate liability of the credit institution to such
depositor, including, as the case may be, any interest or premium
accrued thereon in an account or accounts denominated in Maltese
lira held in Malta or in a branch of a licensed credit institution
other than in Malta.
(2) For the avoidance of doubt, ''eligible deposits'' shall not
include the following:
( a ) an ''interbank deposit'', that is a deposit with a credit
institution by other credit institutions on its own behalf
and on its own account;
( b ) part of the participant’s own funds within the meaning
of any banking directive issued by the competent
authority to regulate own funds; and
( c ) a deposit made by a person or persons listed in the
First Schedule.
Compensation paid 
to be deducted 
from compensation 
payable.
19. (1) In calculating the amount of eligible deposit, the
Management Committee shall take account of any legal and
contractual conditions attached to the respective deposits and shall
deduct from the total liability of the credit institution:
( a ) any payments made to the depositor from a depositor
compensation scheme elsewhere in respect of such
liability;
( b ) any payments made to the depositor under a policy of
professional indemnity insurance held by the credit
institution in respect of such liability;
( c ) the amount of any liability of the depositor to that
credit institution in respect of which a right of set-off
against the said deposit existed immediately before the
notice of determination issued in terms of regulation
13 or in respect of which such a right would have
existed had the said deposit been repayable on demand
and such liability fallen due immediately before the
issue of such a notice of determination; and
( d ) any payments made under any other law, whether in
Malta or abroad, in respect of such liability.
(2) Without prejudice to the aforesaid -
( a ) any right of set-off shall only be possible where claims
8 [ S.L.371.09 DEPOSITOR COMPENSATION SCHEME
are properly documented, can be settled easily, are not
subject to dispute and were established well before the
notice of determination issued in terms of regulation
13;
( b ) any compensation in respect of an eligible deposit
shall only be payable as and when the deposit becomes
due.
Claimants. 20. (1) Only persons being individuals falling within the
definition of ''depositor'' in regulation 2 may make a claim against
the Scheme in terms of these regulations. A depositor may only
submit one claim in respect of all his deposits taken in aggregate
with the credit institution concerned.
(2) The following individuals are excluded from claiming
under the Scheme:
( a ) directors and managers of the relevant credit
institution and members of the credit institution with
personal liability, persons holding five percent or more
of the capital of such credit institution, the auditors of
the credit institution and persons of the same
description with respect to a company forming part of
the same group of companies as the credit institution;
( b ) close relatives, that is ascendants, descendants or the
spouse of the persons referred to in paragraph ( a );
( c ) depositors who, in the view of the Management
Committee, have any responsibility for or have taken
advantage of certain facts relating to a credit
institution which gave rise to a credit institution’s
financial difficulties or contributed to the deterioration
of its financial situation;
Cap. 373.
( d ) depositors in respect of transactions in connection with
which a criminal conviction has been obtained for
money laundering in terms of the Prevention of Money
Laundering Act; and
( e ) nominees or other third parties acting on behalf or in
the interest of the persons referred to in paragraphs ( a )
to ( d ).
(3) The categories listed in the First Schedule are also excluded
from claiming under the Scheme.
(4) The Scheme shall provide for the payment of compensation
in respect of claims arising out of a participant’s inability to repay
money owed to or belonging to depositors and held on their behalf
in connection with banking business.
(5) A depositor may not claim against more than one scheme in
respect of a single claim. Where a claim has been made under two
or more compensation schemes, the Management Committee shall
conclusively determine under which scheme the claimant is eligible
for compensation.
(6) Claims shall be made in such form, and shall be
accompanied by such documentation or information, as the
DEPOSITOR COMPENSATION SCHEME [ S.L.371.09 9
Management Committee may determine and make public from time
to time.
Claims.
depositor is not eligible for compensation in whole or in part in
terms of these regulations, the Management Committee shall give
notice in writing to such depositor of that opinion and the reasons
therefor.
Subrogation.
the Scheme shall be subrogated to the rights and remedies of that
claimant against the credit institution.
(2) Prior to payment, depositors shall confirm in writing to the
Management Committee that:
( a ) they have not received any payment from any other
scheme or from the credit institution concerned in
respect of the same loss;
( b ) they will provide any assistance the Management
Committee may require to enable the Management
Committee to exercise its rights and remedies against
the credit institution; and
( c ) their rights and remedies against the credit institution
in respect of the claims paid shall be subrogated in
favour of the Management Committee.
Joint ownership.
eligible deposit, each of these persons shall be treated as having a
separate deposit of an amount produced by dividing the amount of
the deposit to which such persons are jointly entitled by the number
of persons so entitled, unless there exists specific evidence or
special contractual provisions determining the particular
entitlements of such persons in which case such evidence shall be
taken into account in determining their entitlements.
(2) Where a person is acting as trustee or nominee for one or
more persons under a deed of trust or other similar agreement, the
eligible deposit comprising the claim shall be deemed to belong to
the beneficial owners equally, unless there exists specific evidence
or special contractual provisions determining the beneficial
interests of such persons in which case such evidence shall be taken
into account in determining their entitlements, and provided in any
event that ownership is proved to the entire satisfaction of the
Management Committee.
Consumer 
information.
24. The Management Committee shall ensure that the general
public is adequately informed about the operation of the Scheme
arrangements.
Advertisements.
prospective depositors adequate and clear information concerning
the applicability of the Scheme together with such other particulars
as may from time to time be specified by the competent authority in
a manner and form specified by the competent authority:
Provided that a credit institution shall not advertise or cause
10 [ S.L.371.09 DEPOSITOR COMPENSATION SCHEME
to be advertised the fact that deposits placed with a credit
institution are protected by or through the Scheme except with the
prior written consent of the competent authority.
(2) The competent authority may from time to time, specify the
information that credit institutions are to provide to depositors
regarding the Scheme and its operations, as well as the manner and
form in which such information should be provided.
Power of the 
Management 
Committee to 
obtain information.
26. (1) The Management Committee may request participants,
either directly or through the competent authority, to provide such
information which the Management Committee may consider
relevant for the proper administration of the Scheme, within a
period of time as may be established by the Management
Committee. The request may be addressed to the participant or to
any of its directors or officials who are in possession of such
information.
(2) Without prejudice to any other provision of these
regulations, a participant or any director or official thereof, who
fails to comply with the Management Committee’s request for
information within the period of time established by the
Management Committee in terms of subregulation (1), or who
knowingly or recklessly furnishes information, or makes a
statement which is inaccurate, false or misleading in any material
respect, shall be liable to an administrative penalty not exceeding
one thousand liri as may be imposed by the competent authority by
means of a notice in writing and without recourse to a court
hearing.
(3) Where an administrative penalty has been imposed by the
competent authority in terms of subregulation (2), an appeal shall
lie to the Financial Services Tribunal in accordance with articles 10
and 35A of the Act.
Confidentiality.
Cap. 377.
27. (1) Members of the Management Committee and persons
appointed under regulation 6(1) shall be subject to the provisions of
the Professional Secrecy Act and shall keep confidential any
information obtained by them in the course of performing their
duties under these regulations, and shall not reveal any information
to any person, credit institution, association or entity except as may
be allowed by these regulations or any other law or by Court order.
(2) The duty of confidentiality shall not be contravened in the
case of:
( a ) exchange of information between the Management
Committee and competent authorities in other
countries, or the competent authorities for the
management and administration of corresponding
schemes in other countries, provided that the relevant
information is necessary for the discharge of their
duties under these regulations; and
( b ) any use or disclosure as may be required to enable the
Management Committee and its officers or agents to
perform their duties and carry out their functions under
these regulations.
DEPOSITOR COMPENSATION SCHEME [ S.L.371.09 11
Failure to comply 
with obligations.
28. (1) Where a credit institution fails to comply with its
obligations under these regulations, the Management Committee
shall notify and consult with the competent authority and shall
agree on the appropriate measures to be taken by the competent
authority, including the imposition of penalties, to ensure that the
credit institution complies with such obligations.
(2) If these measures fail to secure compliance on the part of
the credit institution, the Management Committee shall report the
matter to the competent authority for any further measures to be
taken at law, including the possible restriction or withdrawal of the
credit institution’s licence.
(3) After the restriction or withdrawal of a licence, cover shall
continue to be provided in respect of eligible deposits effected up
to the date of restriction or withdrawal.
Procedures to 
investigate 
complaints.
29. The Management Committee shall establish and maintain
adequate internal procedures to investigate complaints against it by
credit institutions and by depositors.
Power to issue 
directives.
30. (1) The competent authority may issue banking directives
to credit institutions for the purposes of these regulations.
(2) Such banking directives may contain such incidental,
supplementary and consequential provisions as appear to the
competent authority to be expedient for the purpose of these
regulations.
Exemption from 
liability for 
damages.
31. The Management Committee and officers or agents of the
Scheme shall not be liable in damages for anything done or omitted
in the discharge of functions under these regulations unless it is
shown that the act or omission was in bad faith.
Financial year end 
of the Scheme.
32. The financial year end of the Scheme shall be an
accounting period of twelve months ending on the thirty-first day
of December of each year.
Audit.
with International Standards on Auditing by auditors appointed by
the Management Committee from among persons who are qualified
to be appointed as auditors of a company under the law for the time
being in force in Malta.
Cooperation with 
other authorities.
34. The competent authority and the Management Committee
shall consult the relevant competent authorities and the persons
responsible for compensation schemes in other countries outside
Malta and seek to reach agreement with those authorities and
persons about:
( a ) the procedures to be followed if a participant defaults;
( b ) the amounts of compensation payable, after deductions
if any, under each scheme; and
( c ) any other aspect which is deemed appropriate for the
proper management and administration of the
schemes.
12 [ S.L.371.09 DEPOSITOR COMPENSATION SCHEME
Transitory 
provisions.
S.L. 370.09
35. (1) The Management Committee established under
regulation 3 of the Investor Compensation Scheme Regulations,
and the Management Committee referred to in these regulations are
one and the same. The Management Committee referred to in these
regulations shall continue in the personality of the Management
Committee established immediately before the coming into force of
these regulations and accordingly shall succeed to all its rights and
obligations.
L.N. 7 of 2003.
S.L. 370.09
(2) All appointments, decisions, contributions, claims,
payments or other acts made or taken under the Deposit Guarantee
Scheme Regulations, 2003, before the coming into force of these
regulations shall continue in force and shall be deemed to have
been made or taken under these regulations, and any reference in
any law to the Management Committee shall be deemed to be a
reference to the Management Committee established under
regulation 3 of the Investor Compensation Scheme Regulations.
DEPOSITOR COMPENSATION SCHEME [ S.L.371.09 13
FIRST SCHEDULE
Exclusions
(Regulations 18, 20)
For the avoidance of doubt, the following are excluded from claiming under the
Scheme and shall not be deemed to be depositors for the purpose of these
regulations:
(1) Sole traders, companies and other commercial partnerships;
(2) Professional and institutional depositors, including:
( a ) Persons holding an investment services licence under article 6 of the
Investment Services Act;
( b ) Credit institutions carrying on the business of banking under the Act;
( c ) Financial Institutions as defined in article 2 of the Financial Institutions
Act;
( d ) Companies authorised to carry on the business of insurance under the
Insurance Business Act;
( e ) Collective investment schemes as defined in article 2 of the Investment
Services Act;
( f ) Retirement funds as defined in the Special Funds (Regulation) Act; and
( g ) Other categories of local and, or foreign professional and institutional
investors, whether resident or non-resident in Malta, as may be
determined by the competent authority from time to time;
(3) National and international institutions, governments and administrative
authorities;
(4) Local and municipal councils or authorities; and
(5) Debt securities issued by the same institution and liabilities arising out of
own acceptances and promissory notes.
SECOND SCHEDULE
Contributions in terms of regulation 12
All credit institutions participating in the Scheme shall make contributions to the
Scheme as follows:
( a ) Initial Contribution;
( b ) Supplementary Contributions;
( c ) Special Contributions.
The minimum amount held by the Scheme and which should be available for
compensation shall be Lm1 million, established over a period of time not exceeding
five years from the coming into force of the Deposit Guarantee Scheme Regulations,
2003.
1. Initial Contribution
( a ) An Initial Contribution shall be paid by participants within 30 calendar
14 [ S.L.371.09 DEPOSITOR COMPENSATION SCHEME
days from the coming into force of these regulations.
( b ) The minimum amount of the Initial Contribution shall be of Lm10,000
per participant.
( c ) The Management Committee may, in consultation with the competent
authority, postpone part or all of the payment of the Initial Contribution
and determine a time schedule for the payment thereof.
(d) This paragraph shall not apply to participants who have paid the Initial
Contribution prior to the coming into force of these regulations.
2. Supplementary Contributions
( a ) The level of Supplementary Contributions for each participant shall be
calculated by applying the percentage determined by the Management
Committee on the eligible deposits held by the participant as at its most
recent financial year end.
( b ) The minimum amount of Lm1 million shall be contributed
proportionately in accordance with the participants’ share of total
eligible deposits over a period not exceeding five years, commencing
from the date on which the Deposit Guarantee Scheme Regulations,
2003 came into force.
( c ) The formula applicable for participants for the yearly contribution for
the first five years to attain the minimum amount of the Scheme shall be
as shown hereunder. For the sake of clarification, Year 1 shall be
deemed to be the year in which the Deposit Guarantee Scheme
Regulations, 2003 came into force.
( d ) As from Year 5 onwards, participants shall need to ensure that their
aggregate proportional contribution amounts to 0.1% of their respective
eligible deposits as at the previous financial year end.
( e ) If the amount contributed in any subsequent year (i.e. from Year 5
onwards) is less than 0.1% minimum, the participant shall be required to
make an additional Supplementary Contribution.
( f ) A participant shall not be eligible for a refund if the 0.1% of eligible
deposits for a particular year represent an amount which is less than the
aggregate amount contributed.
Yea
r
Formula
1 0.1% of Eligible Deposits (as at the most recent financial year end)
5
2 (0.1% of Eligible Deposits as at financial year end of Year 1)
less (Year 1 contribution)
4
3 (0.1% of Eligible Deposits as at financial year end of Year 2)
less (Year 1 + Year 2 contributions)
3
4 (0.1% of Eligible Deposits as at financial year end of Year 3)
less (Year 1 + Year 2 + Year 3 contributions)
2
DEPOSITOR COMPENSATION SCHEME [ S.L.371.09 15
( g ) Payment of Supplementary Contributions shall be made within 21
calendar days from service to each participant of a request in writing by
the Management Committee.
Provided that the Management Committee may authorize the contribution to
be paid in two equal instalments; if such authorization is granted, the first instalment
shall be paid on the day indicated in this subparagraph and the second instalment
shall be paid by not later than six months thereafter.
3. Special Contributions
( a ) The Management Committee may, at any time during the financial year
of the Scheme, levy Special Contributions from participants in order to
meet commitments of the Scheme.
( b ) The Management Committee may, at the end of its financial year during
which Special Contributions have been levied, refund part or all of such
Special Contributions not utilised, or not expected to be utilised for the
following 12 months, to participants pro rata and according to the
amounts of Special Contributions made. No interest shall be payable on
Special Contributions refunded to participants.
( c ) Payment of Special Contributions shall be within 30 calendar days from
service to each participant of a written notice specifying the amount
due.
4. Maximum limit for contributions
( a ) When the amount held by the Scheme (and which is available for
compensation) is about to reach, or has reached, Lm3 million, the
Management Committee shall, with the approval of the competent
authority, consider whether current and future circumstances merit a
revision of the Supplementary Contributions made by participants and
whether participants are to cease further cash payments of
Supplementary Contributions to the Scheme.
( b ) Participants shall not be required to make any Supplementary or Special
Contributions, if the total of its contributions to date (Initial,
Supplementary and Special), after deducting any refund of Special
Contributions, exceeds 0.3% of the total eligible deposit liabilities.
( c ) After Year 5, the difference between the ''capped'' level of 0.3% and the
amount paid in Supplementary Contributions (as at the date from which
participants have ceased payment of Supplementary Contributions on a
decision of the Management Committee), shall be considered by the
Management Committee to be funds ''on call'' and shall either be held as
a capital reserve by the participant or as a contingent liability.
( d ) In this respect and upon further consultation with participants, the
competent authority shall issue banking directives to participants
determining how such funds ''on call'' should be treated.
( e ) In any case, participants shall ensure that such funds are made available
to the Scheme within 30 calendar days from the time when a call is
made on such funds.
5. Other conditions
A credit institution which has ceased to be a participant of the Scheme shall
not be entitled to a refund of any contributions made from the date it became a
participant of the Scheme except where otherwise stated in this schedule.
16 [ S.L.371.09 DEPOSITOR COMPENSATION SCHEME
THIRD SCHEDULE
New participants
(Regulation 11(4))
(1) When a credit institution becomes a participant in the Scheme after the
coming into force of these regulations, the Management Committee shall levy as
soon as practicable an Initial Contribution of an amount to be determined in terms of
this Schedule but which shall be no less than the amount established in the Second
Schedule to these regulations.
(2) Where a credit institution which becomes a participant has a deposit base,
the amount of the Initial Contribution shall be calculated on the total Eligible
Deposit liabilities at the time it becomes a participant with such a percentage as the
Management Committee considers appropriate in order for the participant to reach
the levels of compensation with the other participants, taking into account any Initial
and Supplementary Contributions up to the date when the credit institution becomes
a participant.
(3) The Management Committee shall determine a time schedule for the
payment of the Initial Contribution taking into consideration the particular
circumstances of the new participant.
