The Banking Act 1987 (Exempt Transactions) Regulations 1997

NOW THIS DEED WITNESSETH AND IT IS HEREBY DECLARED as follows:

12.—(1) Upon termination of the Scheme and in any event at the expiration of the period of 78 years less 1 day from the Founding Date (from which time no new Deposits (with the exception of withdrawable share capital) shall, save under the protection of Part II of the Banking Act 1987, be accepted by Participating Societies), all the then Participating Societies shall within the period of 9 months thereafter either

(i)repay all their Deposits (with the exception of withdrawable share capital); or

(ii)secure protection for those Deposits (with the exception of withdrawable share capital) under Part II of the Banking Act 1987.

(2) If any Participating Society (hereinafter called “a Defaulting Society”) shall not in respect of the Deposits (with the exception of withdrawable share capital) taken by it have either

(i)repaid them, or

(ii)secured protection for them under Part II of the Banking Act 1987, within the period of 9 months from

(a)such termination or

(b)the expiration of the said period of 78 years less 1 day whichever is the sooner,

Clause 6 hereof (and the provisions of Clauses 7 and 8 hereof so far as applicable) shall apply to the depositors of that Defaulting Society who have not had their Deposits (with the exception of withdrawable share capital) so repaid or secured as if that Defaulting Society had become insolvent but so that any payment thereunder shall be made within 6 months after the end of the said 9 months period.

(3) Subject to any payments required to be made under this Scheme (including under sub-clause (2) above) and subject to the payment or provision of all proper charges for banking and of all the expenses of administering, managing and winding up this Scheme, the Union shall within 15 months after the expiration of the 9 months' period referred to in the preceding sub-clause (2) distribute the Fund among the Participating Societies other than Defaulting Societies in such amounts and in such manner as it shall in its absolute discretion determine but with a view to making repayments in proportion to their respective contributions.

(4) Clause 6 hereof (and the provisions of Clauses 7 and 8) shall apply in the case of a Participating Society which becomes insolvent during the said period of 9 months referred to in sub-clause (2) of this Clause. Any payment under the said Clause 6 whether made under the present sub-clause or otherwise shall be made not later than 6 months after the end of the said 9 months period.

(5) If by reason of an amalgamation or transfer of engagements (hereinafter called “a merger”) a co-operative society (hereinafter called “the Merged Society”) becomes possessed of or entitled to Deposits some of which are protected under this Scheme and some of which are not so protected the following provisions shall apply:

(a)Forthwith upon the merger’s becoming effective the merged Society shall marshall its Deposits into two classes namely

(i)the Protected Class, being Deposits taken in circumstances such that they were protected by the Scheme; and

(ii)the Unprotected Class, being Deposits not so protected.

(b)To the Protected Class the Scheme shall continue to give protection subject to its terms and conditions for which purpose the Merged Society shall be treated as a Participating Society.

(c)The Merged Society shall within a period of three months from the Merger’s becoming effective by joining the Scheme arrange protection under the Scheme for the Unprotected Class.

(d)If the Merged Society shall have failed within the said period by joining the Scheme to obtain protection for all of the Unprotected Class it shall be deemed to have given notice under Clause 10(1) hereof as at the expiration of the said period of 3 months.

(6) If by reason of a merger a Merged Society becomes entitled to or possessed of Deposits all of which were taken in the circumstances such that they were protected under the Scheme the Merged Society shall forthwith upon the merger’s becoming effective join the Scheme under Clause 2(4)(a) but shall be relieved of a joining contribution, and if it shall fail to join the Scheme within the period of 3 months from the merger’s becoming effective it shall be deemed to have given notice under Clause 10(1) hereof.