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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

A protected claim is:

  1. (1)

    a claim for a protected deposit or a protected dormant account6(see COMP 5.3); or

  2. (2)

    a claim under a protected contract of insurance (see COMP 5.4); or

  3. (3)

    a claim in connection with protected investment business (see COMP 5.5); or3

  4. (4)

    a claim in connection with protected home finance mediation5 (see COMP 5.6); or34

    5
  5. (5)

    a claim in connection with protected non-investment insurance mediation (see COMP 5.7).42

COMP 5.2.2 G
  1. (5.2.2

    [deleted]2

    2. 1

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;

provided that the condition in COMP 5.5.2 R is satisfied.

COMP 5.5.2 R

COMP 5.5.1 R only applies if the protected investment business was carried on from:

  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 firm3 established in another EEA State; or

      3
    2. (b)

      a UCITS management company established in another EEA State (but only in relation to managing investments (other than collective portfolio management),5advising on investments or safeguarding and administering investments);

      5

  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.

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 5.7 2 1 1Protected non-investment insurance mediation

COMP 5.7.1 R

Protected non-investment insurance mediation is an insurance mediation activity where the investment concerned is a relevant general insurance contract or a pure protection contract but3 which is not a long-term care insurance contract or a 3reinsurance contract, provided that the conditions4 in COMP 5.7.2 R are4 satisfied.12

3 4 4
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 that 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.