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. To pay compensation, a DCS fund is created (when needed) from contributions made by other banks in the Isle of Man. A summary of the cover provided by the DCS is as follows:

• 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. Here is a link to guidance about the DCS.
  (* 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 the same license 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.
• Compensation is paid out of levies collected from other deposit takers in the Isle of Man, from sums that are loaned to the DCS by the Isle of Man Government and from any other sums that may be borrowed by the Scheme Manager for this purpose. The legislation does not specify when compensation will be paid, but the Scheme Manager will pay pay the full entitlement or part of the entitlement as soon as possible. The timing of payments may depend upon the size of the bank which fails. The payment period will also vary according to when liquidation proceeds are collected from the failed bank and how much is recovered. There is no "standing fund" of compensation (i.e. money is not collected before a bank failure).
• 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 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. A list of all the banks which are licensed in the Isle of Man is on the FSC’s website.
• Deposit compensation schemes in the UK, Ireland or elsewhere do not cover deposits with banks or building societies in the Isle of Man.
• The legislation for the Isle of Man’s depositors’ compensation scheme can be found on the FSC’s website.
• In order to claim compensation you will have to assign your rights to your deposit to the DCS manager.
• The FSC administers the DCS as the Scheme Manager. This page has been revised to reflect the Compensation of Depositors Regulations 2008 as amended by Tynwald on 23rd October 2008.

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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