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Make
provision for the introduction of a mandatory requirement for
banks |
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and building societies to
offer safety deposit current accounts to allow money |
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to be stored for safe-keeping;
and for connected purposes. |
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Be
it enacted by the Queen’s most Excellent Majesty,
by and with the advice and |
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consent of the Lords Spiritual
and Temporal, and Commons, in this present |
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Parliament assembled,
and by the authority of the same, as follows:— |
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1 |
Safety
deposit current accounts |
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(1) |
All banks and building
societies must make available safety deposit current |
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(2) |
“Safety deposit
current account” means a deposit account in which legal
and |
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equitable title to any
money deposited in the account is fully vested in the |
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customer for whom the money
is held (the “customer”). |
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(3) |
Banks and building societies
may not restrict the availability of safety deposit |
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current accounts to particular
classes of customer. |
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(4) |
Banks and building societies
may not limit or otherwise restrict the quantity of |
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money deposited or the
length of time money is deposited in a safety deposit |
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(5) |
Money held in a safety
deposit current account must be— |
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(a) |
kept in the form of cash,
and |
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(b) |
held separately from the
general or other assets of the relevant bank or |
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(6) |
Money deposited in a safety
deposit current account shall only be— |
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(a) |
held in the safety deposit
current account, or |
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(b) |
delivered in accordance
with the instructions of the customer. |
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(7) |
Banks and building societies
may not engage in disposals, dealings or |
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investments with money
held in a safety deposit current account other than in |
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accordance with the express
instructions of the customer. |
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(8) |
Money
held in a safety deposit current account shall remain immediately
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available to the customer. |
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(9) |
In subsection (8), “immediately”
means within the next 24 working hours of the |
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bank or building society. |
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(10) |
Banks and building societies
shall have clear written procedures for all |
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withdrawals from safety
deposit current accounts. |
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(1) |
A bank or building society
may charge reasonable fees to customers for the |
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service of providing, maintaining
and administering transactions on safety |
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deposit current accounts. |
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(2) |
Complaints about the reasonableness
of the fees charged shall be referred to |
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the Financial Ombudsman
Service who shall act as arbitrator and who shall, in |
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determining the issue of
reasonableness, take into account the factors set out in |
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(3) |
A complaint under subsection
(2) shall be considered as falling within the |
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Financial Ombudsman Service’s
compulsory jurisdiction for the purposes of |
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Part 3 of Schedule 17 to
the Financial Services and Markets
Act 2000 (c. 8). |
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(4) |
In determining the reasonableness
of a fee, the Financial Ombudsman Service |
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(a) |
the circumstances in which
the fee was charged; |
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(b) |
the payment methods of the
fee; |
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(c) |
the services provided by
the bank or building society; and |
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(d) |
the costs incurred by the
bank or building society. |
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(1) |
Enforcement of the provisions
of section 1
of this Act shall be a function of the |
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Financial Services Authority
who must, at least annually, inspect and audit the |
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inventory of cash held
separately in safety deposit current accounts in order to |
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ensure compliance with
section 1(4). |
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(2) |
Failure to comply with
the provisions of section 1
of this Act shall result in a |
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financial penalty, calculated
by the Financial Services Authority in accordance |
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with the following factors— |
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(a) |
the effectiveness of the
fine as a deterrent to both the bank or building |
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society concerned and to
other banks and building societies; |
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(b) |
the severity of the non-compliance; |
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(c) |
the nature of the non-compliance;
and |
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(d) |
the reasons for the non-compliance. |
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(3) |
Where the Financial Services
Authority imposes a financial penalty under |
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subsection (2) it shall
immediately give the bank or building society a decision |
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notice in writing stating
the amount of the penalty. |
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(4) |
Once the Financial Services
Authority has given a decision notice in |
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accordance with subsection
(3), a bank or building society may refer the matter |
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to the Financial Services
and Markets Tribunal. |
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(5) |
For
the purposes of subsection (4), the following provisions of
the Financial |
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Services
and Markets Act 2000 (c. 8) apply as they apply
to that Act— |
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(a) |
section 133 (proceedings
of the Tribunal); |
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(b) |
section 137 (appeal on a
point of law). |
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4 |
Guarantees
or insurance |
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(1) |
The Financial Services
Authority shall be liable to customers for any breach of |
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its statutory duties under
section 3. |
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(2) |
It shall be unlawful for
any authority to apply public money towards the |
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guarantee or insurance
of any bank or building society account other than a |
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safety deposit current
account. |
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subject to subsection
(4), “bank” means an authorised deposit-taker that
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has its head office, or
one or more branches, in the United Kingdom; |
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“building society”
means a building society incorporated (or deemed to |
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be incorporated) under
the Building Societies Act 1986
(c. 53); |
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“cash” means
notes and coins of the currency in which the account is |
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(2) |
In the definition of “bank”
in subsection (1), “authorised deposit-taker” |
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(a) |
a person who under Part
4 of the Financial Services and Markets
Act |
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2000
has permission to accept deposits; |
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(b) |
an EEA firm of the kind
mentioned in paragraph 5(b) of Schedule 3 to |
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the Financial
Services and Markets Act 2000 that has permission under
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paragraph 15 of that Schedule
(as a result of qualifying for |
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authorisation under paragraph
12 (1) of that Schedule) to accept |
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(3) |
A reference in subsection
(2) to a person or firm with permission to accept |
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deposits does not include
a person or firm with permission to do so only for the |
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purposes of, or in the
course of, an activity other than accepting deposits. |
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(4) |
“Bank” does
not include— |
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(b) |
a person who is specified,
or is within a class of persons specified, by an |
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order under section 38 of
the Financial Services and Markets
Act 2000 |
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35 |
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“credit union”
has the same meaning as in the Credit
Unions Act 1979 |
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(c. 34) (see section
1(1) of that Act); |
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40 |
“friendly society”
has the same meaning as in the Friendly
Societies Act |
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1992
(c. 40) (see section 116 of that Act). |
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