1. Scope of the deposit protection scheme
The legal remit of the protection scheme is to guarantee the reimbursement, of up to a maximum of € 100,000, of deposits that could not be returned to the clients of a defaulting credit institution or a stockbroking firm.
This guarantee is understood to mean per person (natural persons as well as legal entities) and per member financial institution of the Protection Fund (see list of members).
2. Deposits covered by guarantee
The guarantee applies to cash assets (in EEA currencies) held in the form of deposit accounts (time deposit, sight and savings accounts). Savings notes ("bons de caisse", "kasbons") are also covered if they are registered, dematerialised or held on a securities account.
Cash accounts are taken into consideration for the guarantee regardless of their origin or destination. Assets derived from a liberal profession are therefore protected as well.
Investors' assets, that is, assets intended for/or resulting from transactions involving financial instruments, are also covered by the deposit guarantee.
3. Beneficiaries of the guarantee
Each individual, association, NPI or small and medium-sized enterprise that is the holder or one or more cash accounts is taken into consideration to obtain the guarantee.
If different people (such as spouses) can assert rights over cash assets held in a joint account, the balance of this account is deemed to belong equally to the co-holders. Each of these co-holders will be able to lay claim to the guarantee of up to € 100,000.
Accounts which contain assets belonging to a third party are deemed to belong to this third party. If there are several third parties, the assets are shared out among them for the purpose of calculating the guarantee. Each of these third parties may thus lay claim to the guarantee of up to € 100,000.
The guarantee is granted regardless of the place of residence or the nationality of the beneficiary.
Certain depositers that can be described as a professional institution fall under the exemption regime. As regards the type of deposits, it should be noted that subordinated loans are excluded from the guarantee.
5. Which financial institutions are concerned by the guarantee?
The deposit guarantee scheme applies to assets held at:
- credit institutions (banks, savings banks, investment banks)
- stockbroking firms
established either under Belgian law or the law of a country which is not a member of the European Economic Area. The list of institutions belonging to the protection scheme may be consulted on our website.
Membership of the protection scheme is an indispensable condition for these institutions to obtain accreditation from the National Bank of Belgium.
6. Institutions operating in Belgium to which the guarantee scheme does not apply
In accordance with EU legislation, deposits placed with branches of institutions established under the law of another member state of the European Economic Area are covered by the protection scheme of the country of origin.
These institutions are included in the list of establishments recognised by the FSMA. Your financial institution will be able to inform you about the protection scheme it belongs to, as well as the practical arrangements of the cover that applies. In the event of default, requests for compensation will have to be addressed to this foreign deposit protection scheme.
7. Calculating the deposit guarantee
In order to calculate the deposit guarantee, all the assets of a beneficiary held with a financial institution are added up, irrespective of the number of accounts over which the deposits are spread, and regardless of the nature and denomination of these accounts.
The sum of assets covered is defined in accordance with the legal and contractual terms that apply to them. The amount of the guarantee is established after set-off of claims against debts of the same client.
8. Rules of Intervention
The precise conditions that need to be met in order to claim compensation under the protection scheme are mentioned in the Rules of Intervention.
These rules determine the beneficiaries who may qualify for a reimbursement, the type of assets eligible for compensation, the method of calcuating the compensation and the procedures to be respected.
Any natural person may qualify for compensation. As regards self-employed people, all their assets are taken into consideration, including those derived from a professional or commercial activity.
Assets of minors are guaranteed in the same way and to the same extent as those of adults.
Cash deposits are taken to mean all balances in credit on sight, term or savings accounts, regardless of the precise name given to them by the financial institution. The protection is understood to include accrued interest.
Assets held in account derived from or intended for transactions connected with investments in financial instruments also come under the deposit guarantee scheme (cash assets of investors).
Savings notes ("bons de caisse", "kasbons") are another form of savings assets covered by the protection scheme. Savings notes are taken into account if they are registered, dematerialised or held on a securities account opened at a financial institution member of the protection scheme.
Savings notes held in bearer form do not benefit from the deposit protection.
Take the example of somebody holding the following accounts:
- sight account: € 5,000
- term account: € 25,000
- savings account: € 50,000
- savings note held in account: € 30,000
These assets totalling € 110,000 are guaranteed up to a maximum of € 100,000. In the case of the non-reimbursed part of these accounts (€ 10,000), the depositor retains a claim on the defaulting institution for which he can lay claim to a liquidation or bankruptcy dividend.
The balance of a joint account is attributed equally to the co-holders.
Let us take the example of a couple who hold the following accounts :
- the husband has a sight account: € 15,000
- the husband holds a State note in his own name: € 60,000
- the wife has a sight account: € 25,000
- the couple hold a joint savings account: € 100,000
The husband has a total of € 15,000 + 60,000 + half of the € 100,000 = 125,000. In his case, the deposit guarantee is limited to € 100,000. In all, the wife has 25,000 + half of the € 100,000 = 75,000. Her assets are fully guaranteed.
The couple qualify for a guarantee of € 175,000 in all compared with total assets of € 200,000. They nevertheless have the possibility of optimising
their overall protection to the tune of € 200,000, for instance by sharing out their assets differently over their accounts or by pooling some of their assets.
It is specified that an account cannot be deemed as being joint unles the persons concerned are co-holders of the account and can individually assert rights over the whole account. A proxy is not considered to be a co-holder.
Assets held by a person acting in his own name but on behalf of a third party shall be considered to belong to the said third party if the latter was identified or identifiable on the date of the occurrence of the insolvency of the financial institution.
Assets recorded on accounts opened in the name of professional investors not belonging to the financial professions and devoted exclusively to the holding and movement of third-party funds will be recognised as claims belonging to these third parties if the accounts are sub-headed in the name of these third parties in the depository institution's accounts or if their share is established by the account-holder on the basis of communications made at the time of the payments, transfers and withdrawals. Third-party accounts of notaries, lawyers and bailiffs most notably fall under this provision.
Enterprises having the authorisation to draw up abbreviated balance sheets may benefit from the guarantee under the deposit protection scheme.
Large companies, in other words those required to file full-format accounts, are therefore excluded. In practice, these are enterprises that either employ an annual average of more than 100 workers, or exceed at least more than one of the following criteria: a balance sheet total of € 3,650,000, annual turnover (excluding VAT) of € 7,300,000, an average workforce of 50 people.
NPIs (and non-profit-making international associations) always qualify for cover by the deposit protection scheme. The non-eligibility rules laid down for large companies do not apply to them.
Associations, groupings or partnerships that do not have legal status (and which therefore do not take the form of a company) may benefit from the guarantee offered by the protection scheme.
Their members may lay individual claim to the intervention of € 100,000. To do so, they must be able to assert rights over the assets held in account and the identity of each of them must be identifiable.
Whether the above-mentioned conditionsare met will be based on actual facts and will depend on concrete elements (e.g. statutes). In cases where individual application of the guarantee may be admissible, the assets are shared out equally, unless it can be proved that there is another distribution formula.
The protection scheme covers cash deposits in the currency of a member country of the European Economic Area: the euro, the pound sterling, the Polish zloty, the Swedish, Danish, Czech, Norwegian and Icelandic crowns, the Hungarian forint, Latvian lats, Romanian leu, Bulgarian lev and Lithuanian litas.
Assets held in account arising from or intended for transactions connected with investments in financial instruments are covered regardless of the currency in which they are denominated.
In accordance with the EU Directive on deposit-guarantee schemes, this guarantee cannot be granted to subordinated claims, falling within the categories set out in Article 57 of Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions, without however taking into consideration the restrictions contained in this provision as well as the assets listed in Article 63 of the same Directive.
Your financial institution will be able to inform you whether the securities it has issued are concerned by this provision.
Among those excluded from the protection scheme are: governments and their institutions, financial establishments, institutional investors, major corporations and persons associated with the institution or the defaulting enterprise in various capacities (administrators, representatives, associated companies, etc.) or which have contributed to its default as a result of their own actions.
NB: No rights can be derived from the above information.