Banking Deposit Compensation Scheme (Bailiwick of Guernsey) Ordinance, 2008 (Consolidated text)

Summary

This Ordinance establishes the Guernsey Banking Deposit Compensation Scheme, a depositor protection scheme funded and administered separately from any Cayman Islands framework. It is administered by the Guernsey Banking Deposit Compensation Board and applies to holders of a Guernsey banking licence, who are automatically participants in the Scheme.

• Mandatory participation: Every holder of a banking licence under the Banking Supervision (Bailiwick of Guernsey) Law, 1994 must participate in the Scheme; withdrawal is only possible after licence revocation or surrender and at least six months' written notice to the Board.
• Funds and financing: The Board must maintain an administration fund and, on any declaration of default, a separate compensation fund, financed through annual fees, insurance levies and compensation levies imposed on participants.
• Default and compensation process: The Guernsey Financial Services Commission must make a declaration of default within 21 days of specified triggering events (such as insolvency proceedings against a participant), after which the Board processes compensation applications from qualifying depositors, subject to maximum liability limits and interest provisions.
• Governance and accountability: The Board is a body corporate with defined powers (Schedule 1), subject to confidentiality obligations on its members and staff, and its decisions are appealable by participants on specified grounds (Schedule 3), including error of law, unreasonableness, bad faith, disproportionality or material factual/procedural error.
• Qualifying deposits: Schedule 4 defines which deposits qualify for compensation (e.g. deposits for natural persons, children, estates, retirement annuity trusts, registered charities) and excludes deposits linked to proceeds-of-crime, drug trafficking, terrorism or forfeiture convictions.

The consolidated text incorporates amendments up to 2021, with a further amending Ordinance from 2026 noted as prospective. Because large sections of the operative compensation, fee and levy provisions were not fully visible in the extracted text, some procedural detail (e.g. exact fee amounts, application timelines for depositors) could not be confirmed from this excerpt.

Key obligations

• Holders of a Guernsey banking licence must participate in the Banking Deposit Compensation Scheme (section 2(1)).
• A participant may only withdraw from the Scheme after its banking licence is revoked or surrendered and after giving the Board at least six months' written notice (section 2(2)).
• The Commission must make a declaration of default within 21 days of a specified triggering event affecting a participant (section 9(2)).
• The Board must establish and maintain an administration fund and, upon a declaration of default, a compensation fund for that default (section 6(1)).
• Participants must pay annual fees to the Board and are liable to insurance levies and compensation levies as determined under sections 16 to 18.
• Board members, employees, servants or agents must not disclose confidential business or affairs information acquired in the course of their functions, except in specified permitted circumstances (section 5).
• Participants dissatisfied with a Board decision may appeal to the Court on the grounds set out in Schedule 3 (section 19).

Applies to

banking licence holders, banks, the Guernsey Banking Deposit Compensation Board, depositors/qualifying claimants

Deadlines

• within 21 days of the triggering event: The Commission must make a declaration of default in respect of a participant within 21 days of specified insolvency or regulatory events.
• at least 6 months' written notice: A participant wishing to withdraw from the Scheme after licence revocation or surrender must give the Board at least six months' prior written notice.