Isle of Man’s Depositors’ Compensation Scheme ("DCS")

The Isle of Man has a depositors’ compensation scheme (DCS). The DCS partially compensates you if a bank in which you have deposited money fails. Here are the DCS Regulations - you should consult these Regulations for further information.

• The DCS compensates people who have money in current and deposit accounts in the Isle of Man with up to £50,000 of net deposits* per individual depositor or £20,000 for most other categories of depositor. Cover is calculated per depositor, per deposit taker, if this bank fails.
  This means that a maximum of £50,000 compensation is payable per individual and a maximum of £20,000 for companies, trusts etc. Note that maximum amounts paid under the DCS will be reduced by amounts paid by IoM Treasury under Early Payment Schemes.
  (* Net deposits: Loans may be netted off against any deposits you have with the same deposit taker).

  If two or more individuals share a joint account, they would each be entitled to up to £50,000 in compensation. However, if either individual has any other accounts with the same licence holder, these balances would also need to be taken into consideration, as compensation is limited to £50,000 per individual.

  Examples for individual depositors:
  (1) If you have a joint account with one other individual which contains £80,000, you would each be entitled to receive ½ of £80,000 ie £40,000.
  (2) If in the previous example you also had £25,000 in a sole account, the total balances apportioned to you under the DCS would be your share of the joint account (ie £40,000), plus the £25,000 of your own, giving a total of £65,000. As this exceeds the maximum covered by the DCS the scheme provides for you to receive the maximum payment of £50,000. If there are sufficient funds on liquidation of the failed bank, the remaining £15,000 may be paid from the liquidation proceeds.
  (3) If you have total credit balances of £80,000, also a mortgage of £50,000, your mortgage would be netted off against your credit balances, to leave a net total of £30,000. You would therefore be entitled to receive £30,000 from the DCS.

• The Isle of Man’s DCS covers depositors irrespective of which country they live in or are incorporated in.
• All licensed banks in the Isle of Man are members of the DCS, except those few which are listed in the Schedule at the end of the DCS Regulations. Building societies in the Isle of Man are not participants in the DCS. The specific banks listed in the Schedule do not take deposits on the Island from the general public. Here is a list of the banks in the DCS.
• Your deposits with each bank that is separately licensed in the Isle of Man are covered, even if they are part of the same group. Here is a list of all the deposit takers (banks and building societies) which are licensed in the Isle of Man. Kaupthing Singer & Friedlander (Isle of Man) Limited is a member of the DCS, but its licence is currently suspended.
• Deposit compensation schemes in the UK, Ireland or elsewhere do not cover deposits with banks or building societies in the Isle of Man.
• In order to claim compensation you will have to assign your rights to your whole deposit to the DCS manager.
• The Financial Supervision Commission administers the DCS as the Scheme Manager.

Please also see this further guidance on aspects of the DCS.

Isle of Man’s Authorised Collective Investment Schemes’ Compensation Scheme ("ACISCS")

The Isle of Man also has a scheme to compensate investors in authorised collective investment schemes. A summary of the cover provided by the ACISCS is as follows:

• The ACISCS partially compensates you if an authorised collective investment scheme in which you have invested fails to pay you when money is due to you.

• Compensation may be due to you if a manager or trustee of an authorised collective investment scheme fails to repay you when required by the terms of the scheme.

• Compensation payable is as follows : 100% of the first £ 30,000 90% of the next £ 20,000 with a MAXIMUM Compensation of £48,000.

• Compensation is paid out of levies collected from other authorised scheme managers and trustees ("authorised persons") in the Isle of Man. There is no "standing fund" of compensation (i.e. money is not collected in advance).

• All authorised persons in the Isle of Man are members of the ACISCS. A list of these is on the FSC’s website.

• The legislation for the Isle of Man’s authorised collective investment schemes’ compensation scheme can be found on the FSC’s website.

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