Deposit Advertising

This paper provides guidance to all authorised institutions under the Banking Act, 1992 with offices in Gibraltar on the information and advertising requirements which was introduced in Gibraltar as a result of the implementation of the European Deposit Guarantee Schemes Directive; this was transposed into Gibraltar law through the implementation of The Deposit Guarantee Scheme Act 1997 (the "Act"). The Act was amended by the Deposit Guarantee Scheme (Amendment) Act 2009 which made changes to the Act as regards the coverage level and the payout delay of the scheme.

  1. The recent amendment to the Act now means that the maximum payment which may be received by any eligible depositor will be 100% of 100,000 Euros (or the Sterling equivalent).
  2. An EEA bank with a branch(s) in another Member State is permitted to join the scheme in that country if the level and/or scope of cover available under the host state scheme is more generous. This supplementary cover is known as "topping-up". Conversely, an EEA bank with a branch(es) in another Member State will not be able to offer more generous or wider coverage than is available in the host state. This is known as the "export cap". It would be possible for an EEA bank to top up as to level of cover but be subject to the export cap as to scope and vice versa. Gibraltar branches of banks with head offices outside the EEA ("non-EEA institutions") will remain members of the Gibraltar scheme unless the Gibraltar Deposit Protection Board is satisfied that arrangements in the bank’s home state provide cover to Gibraltar depositors at a level which is at least equivalent to the Gibraltar scheme.
  3. Paragraph 24 of the Act deals with the provision of information to actual and intended depositors. In accordance with this Paragraph, the Act requires banks to make available on request details of the scheme(s) to which they belong, including details of the level and scope of that scheme and the conditions for compensation and the formalities which must be completed to obtain compensation. The Act also requires that, as a minimum, explanatory literature relating to the making of deposits and supplied in the ordinary course of business contains a reference to the name of the scheme(s) to which a bank belongs, and a statement that further information is available on request. More information about deposit protection may be included in explanatory literature if banks wish, but unless this comprises all the information required to be made available to depositors on request as outlined above, a statement that further information is available on request must also be inserted. In addition to this, depositors may be directed to the GDGB website for further information.
  4. In addition to the provision of information to depositors, the Act requires Member States to establish rules limiting the use in advertising of information on deposit guarantee schemes.
    This requirement is designed to prevent advertisements affecting the stability of the banking system or depositors confidence. The Board intends to restrict information on deposit protection in advertising to a similar reference to the name of the scheme(s) to which a bank belongs, and a statement that further information is available on request or by visiting the GDGB website.
  5. The Act affects:
    1. All Gibraltar incorporated institutions authorised under the Banking Act 1992 in respect of deposits made with all their offices with the EEA;
    2. all recognised institutions taking deposits in Gibraltar through their Gibraltar offices;
    3. all non-EEA institutions taking deposits through offices.
  6. If home host states’ information and advertising requirements overlap in any respect, this will have to be resolved between the authorities concerned. The Act enables the information requirements to be modified in their application to branches of EEA banks in Gibraltar and to branches of Gibraltar banks in other EEA States.
  7. Some guidance on the requirements to include information in any explanatory literature relating to the making of deposits and supplied to depositors or intending depositors in the ordinary curse of business may be helpful. It is emphasised that this is not legal guidance and it is for banks to seek their own legal advice on compliance with the Act.
  8. In the Board’s view, the term "explanatory literature" includes any leaflets and other material setting out the terms of deposit facilities which banks send to depositors or intending depositors and/or which are available on counters or in offices generally. The Act does not require the information to be sent to all existing depositors but it is the Board’s view that it would be best practice for the minimum information to be advised to existing depositors as soon as practicable. If explanatory literature is not supplied in the ordinary course of business (this may, for example, be the practice in the wholesale market), it is the Board’s view that the Act does not create an independent obligation to provide information. In order to provide for further changes to the Act the Board is of the opinion that banks may provide basic information on explanatory literature and direct depositors to the GDGB website for additional information e.g. “name of bank” is a participant in the Gibraltar Deposit Guarantee Scheme (“The Scheme”) established under the Deposit Guarantee Scheme Ordinance 1997, in Gibraltar. Further information may be obtained on request or by browsing this website.