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New compensation scheme to apply

It looks as if depositors with the failed Isle of Man branch of Kaupthing Singer and Friedlander would benefit from the improved Depositors' Compensation Scheme.

The latest information on the website of the Financial Supervision Commission makes it clear the scheme cannot be 'triggered' by the Fund Manager until after the company has been 'wound up' in the High Court.

A hearing is scheduled for October 24, after which - the FSC says - any payments would be under the current scheme, namely the one approved by Tynwald yesterday, with maximum compensation for each depositor of £50,000.

The scheme would only be triggered after the Fund Manager had established something called 'an event of default' had occurred.

The FSC is pointing out that during yesterday's sitting of Tynwald the Treasury Minister indicated the new regulations might be subject to amendment, which could happen at the scheduled October sitting, the week after next.

Three expressions of interest have been declared to the liquidator by parties interested in taking over the bank, which could also have a bearing on whether the compensation scheme was triggered.

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