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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 5.2.3 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.

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.