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28 May 2012

FSA introduces rules telling banks to display depositor compensation arrangements


The FSA will require all banks, building societies and credit unions prominently to display posters and stickers in branches and on websites explaining which deposit guarantee scheme applies to their customers' deposits. These rules will take effect from 31 August this year.

Eligible depositors in banks that are incorporated in the UK, including the UK incorporated subsidiaries of foreign banks, are covered by the UK’s Financial Services Compensation Scheme (FSCS) up to a limit of £85,000.

  • Eligible depositors in banks that are incorporated outside the European Economic Area (EEA) but authorised by the FSA to accept deposits in the UK as a branch are also covered by the FSCS up to a limit of £85,000.
  • Under European law, eligible depositors in a bank that is based in the EEA – which includes the EU Member States, plus Iceland, Norway and Liechtenstein – and that operate in the UK as a branch, are protected by the deposit guarantee scheme provided by the bank’s home country and not by the FSCS.

If customers are using the UK branch of a foreign bank from the European Economic Area, (EEA), the posters will have to set out that those customers are not covered by the UK’s Financial Services Compensation Scheme (FSCS). In this case they would have to specify which national scheme will provide protection.

Andrew Bailey, FSA director of UK banks and building societies, commented:

“Customers need to feel confident about their money and to do this they need to know what the compensation limits are and which scheme would provide cover in the event of a bank, building society or credit union failure.

“Too many people assume that because their branch is located on a local high street in the UK, they are covered by the FSCS. This is not true for UK branches of EEA banks where the home country’s deposit guarantee scheme applies.

“Banks, building societies and credit unions will have to display these compensation stickers or posters in the branch window along with a sticker at the cashier’s window or desk and a further poster in a prominent position inside.” 

Full information



© FSA - Financial Services Authority


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