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Temporary High Balances Notice



Information Sheet

Temporary High Balances (THB)

 

In addition to the maximum compensation sum of €100,000 which each eligible depositor is entitled under the Depositor Compensation Scheme (‘DCS’) Regulations1, a depositor may be entitled to an additional sum amounting to a maximum compensation of €500,000 if the transaction was a result of a temporary high balance (THB).

 

What constitutes a Temporary High Balance

Eligibility

The payment of additional compensation is only applicable to depositors who are natural persons. Therefore, legal persons (such as companies, associations etc) are not entitled to receive additional compensation for THBs.

 

Criteria

To qualify for additional compensation by the DCS, the transaction must meet any ONE of the following criteria:

Either:

a. The transaction must comprise of monies:

(i)deposited in preparation for the purchase of a private residential property by the depositor; OR

(ii)which represent the proceeds of sale of a private residential property of the depositor.

Or:

b. It comprises sums paid to the depositor in respect of:

(i)A separation, divorce or dissolution of their civil union; or

(ii)Benefits payable on retirement; or

(iii)A claim for compensation for unfair dismissal; or

1LN 383 of 2015

(iv)A claim for compensation for redundancy; or

(v)Benefits payable for death or bodily injury; or

(vi)A claim for compensation for wrongful conviction.

 

Time period

The protection for THBs starts running from the date of compensation that is the date when the MFSA determines that a bank has failed to meet its obligations to depositors. In regard to Nemea Bank plc, the date of compensation as set out by the MFSA is the 30 March 2017. Therefore, THBs in accounts held with Nemea Bank plc run for a period of six months (between 30 September 2016 and 30 March 2017) from the later of:

i.the first date on which the THB is credited to a your account, or to another account on a your behalf; and/or

ii.The first date on which the THB becomes legally transferable to you.

Therefore, any deposits – even if they meet any of the criteria mentioned above – which may have been deposited prior to 30 September 2016, would not be eligible for additional compensation by the Scheme.

 

A.What information is required to be provided to the Scheme

You must provide the Scheme with a written application and evidence supporting your claim that all or part of the eligible deposit in excess of €100,000 qualifies as a THB.

A claim form has been prepared for this purpose.

A depositor may make more than ONE claim if there are multiple events giving rise to a THB.

Please submit this claim form, including all relevant documents, by not later than one month following the date of issue of this notice from the Scheme.

 

B.How and when will compensation be made

The Scheme is required to review and assess each application in line with the law. It may request further clarifications from the claimant and may also make its own independent verifications, if this is necessary.

Once the Scheme reviews the claim in full and determines its eligibility, it shall proceed to pay due compensation within three months of the compensation date.

The Scheme may defer payment in respect of a THB beyond these three months if the depositor submits the application and evidence to the Scheme two months later following the date of issue of this notice from the Scheme.

The Scheme may also defer payment if the account is not active. The regulations specify when an account is not an active account: these include:

Deposits held in the name of a deceased customer; or

Pledged deposits; or

Deposits held by a minor; or

Deposits subject to usufruct or similar rights; or

Deposits subject to a legal dispute, or to restrictive measures imposed by national governments or international bodies; or

Deposits where the depositor has been charged with an offence arising out of or in relation to money laundering;or

Deposits which are a dormant account.

 

If the Scheme considers that the claim for additional compensation does not demonstrate a sufficient link between an event giving rise to a THB and the eligible deposit in excess of €100,000, the Scheme will communicate with the claimant for any additional information that the Scheme considers necessary to determine the claim further.

If the Scheme determines that the deposit is not a THB, it will inform the claimant setting out the reasons for its determination and will provide a summary of any rights for reconsideration or appeal.

For more information about THB, please visit ‘Frequently Asked Questions’ on www.compensationschemes.org.mt or contact the Depositor Compensation Scheme on: Tel +35621441155 or info@compensationschemes.org.mt



Last Updated: 30 Mar, 2017