Deposit Guarantee Scheme Spain

Information Leaflet on Bank Deposit Guarantee Schemes in Spain. Find Out Today How Your Bank Account Balance is Protected.

Deposit Guarantee Scheme (Spain): The Fondo de Garantia de Depositos de Entidades de Credito (FGD) is responsible for the protection and reimbursement of insured account balances held with licensed and supervised credit institutions that participate in the FGD scheme.

Secured Deposit Limit: 100.000 euro per customer per bank.

Additional Investment Coverage: 100.000 euro for investors who have deposited securities or other financial instruments with a FGD member in Spain.

Temporary High Balances: The FGD provides an additional and unlimited guarantee for specific deposits for a period of three months from the moment the funds have been credited or such deposit became legally transferrable. Coverage is explicit and limited to deposits from real estate transactions involving private residential properties, deposits deriving from payments received by the depositor on a one-off basis on connection with marriage, divorce, retirement, dismissal or death, and deposits concerning insurance payments or indemnity payments for damages as a result of a criminal act or judicial error.

FGD Payout Events: The FGD applies different triggers to payout compensation of cash deposits and securities. For plain cash deposits it is required that the credit institution is declared insolvent, or that a request has been filed through the courts for insolvency, or when deposits are past-due and callable on demand but have not been reimbursed and the Central Bank of Spain decides that the credit institution is unable to repay said deposits. FGD compensation for securities becomes available when a court judgement has been issued declaring the institution insolvent and suspending the return of the securities or financial instruments, or when the Central Bank of Spain declares that the credit institution in question cannot fulfil its obligations to investors because of the events the Central Bank of Spain has been made aware of, or for reasons directly related with the financial position of the institution.

Claim Filing Procedures: Upon the decision of the court that the credit institution is insolvent, or by confirmation of the Central Bank of Spain that a credit institution is unable, or likely to become unable to return securities or cash deposits, the credit institution shares all data comprising the insured deposits and securities held with the bank with the FGD. The FGD or the Central Bank of Spain then contacts all insured creditors to explain the exact claim filing procedures. These procedures always include, but are not limited to a verification of claim eligibility and claim ownership.

Applicable Timeframes: Within 7 business days after the closure of the credit institution, reserved money is made available for repayment of cash deposits to creditors. Claim verification currently takes up to 10 working days.

Claim Eligibility and Repayment Conditions: Most deposits and creditors are protected under the Spanish FGD scheme. However, the following account holders are exempted from coverage: broker-dealer firms, insurance companies, security investment companies, management companies responsible for collective investments, pension fund companies, mortgage securitization funds, private equity and the deposits of the institutions that they manage, portfolio management companies and financial advice companies, private equity companies and their management companies, any other financial institution as defined under article 4.1.26 of Regulation (EU) No 575/2013. Also excluded are deposits constituted:
a) In breach of current legislation, in particular those funds arising out of operations in relation to which there has been a criminal sentence for offences involving money-laundering transactions. b) For customers who have brought about, through their own actions, financial conditions that have contributed towards worsening the situation of the institution, provided such circumstances have been confirmed by a court conviction. c) Persons acting on behalf of any depositors excluded under the foregoing or under this subsection, or those acting in concert with those persons mentioned previously in paragraphs a) and b).

DGS Claim Rejections: Prior to a repayment is effectuated, the FGD must confirm claim eligibility. Eligibility is verified by matching the records of the bank with the facts presented by the claimant. DGS claim rejections can be objected by providing the FGD with sufficient evidence of claim eligibility to justify reinspection of the claim. Perseverance of a rejection by the FGD can then be challenged in the civil courts. However, claimants must substantiate their position to allow an evaluation on the merits of their case.

Financial Structure: FGD membership is mandatory for licensed and supervised deposit taking credit institutions in Spain. Members make annual contributions based on the size, nature and risk profile of their customer base and their account balances. Where needed, the FGD may decide to request a member to make extraordinary contributions. The fund has about 4.2 billion Euro in reserves to ensure swift repayment to creditors in the event of the failure of one of its members.

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