This chapter applies to the FSCS.

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

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.

2A protected deposit continues to be a protected deposit if, under a transfer of banking business, it is transferred to:

1. (1)

   an establishment of a relevant person in the United Kingdom; or

2. (2)

   a branch of a UK firm which is a credit institution established in another EEA State under an EEA right.

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;

4. (4)

   the activities of the authorised contractual scheme manager or depositary of an ACS, provided that the claim is made by a holder;6

provided that the territorial scope condition in COMP 5.5.2 R is satisfied and, for a firm acting as the manager or depositary of a fund, one of the conditions in COMP 5.5.3 R is satisfied.7

The territorial scope condition is that7 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 firm established in another EEA State; or

   2. (b)

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

      55

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; or7

   7
6. (5)

   an establishment of an incoming EEA AIFM in another EEA State if the claim relates to providing AIFM management functions on a cross border services basis for an authorised AIF.7

7The conditions referred to in COMP 5.5.1 R for a manager or depositary of a fund are:

1. (1)

   for the activities of managing an AIF or establishing, operating or winding up a collective investment scheme, the claim is in respect of an investment in:

   1. (a)

      an authorised fund; or

   2. (b)

      any other fund which has its registered office or head office in the UK or is otherwise domiciled in the UK and is not a closed-ended corporate AIF;

2. (2)

   where a firm is acting as depositary of an AIF and in so doing is carrying on the activity of acting as trustee or depositary of an AIF or safeguarding and administering assets, the claim is in respect of their activities for;

   1. (a)

      an authorised AIF; or

   2. (b)

      a charity AIF which is not a closed-ended corporate AIF;

Protected home finance mediation2 is:

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 5.6.1 R applies only if the protected home finance mediation2 was carried on by a relevant person:

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.

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

COMP 5.7.1 R only applies if the conditions in (1) and (2) are satisfied:3

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