On 1 January 2015, the Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (SI 2014/3486) (the "Order") came into force.
The Order implements the requirements contained in Article 108 of the Bank Recovery and Resolution Directive (2014/59/EU) ("BRRD")1 to ensure that both deposits that are eligible for compensation under the UK Financial Services Compensation Scheme ("FSCS"), and other deposits that would be eligible deposits but for the fact that they are made in branches of UK banks outside the EEA, are treated as preferential debts. The Order also ensures that eligible deposits are given a higher priority within the class of preferential debts than other.
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