Commentary on Sections and Schedules Part 1: Transfer of balances in dormant accounts Section 5: Functions etc of a reclaim fund and Schedule 1: Provision to be made in articles of association of reclaim fund
46.A “reclaim fund” will receive money from dormant accounts transferred from individual banks and building societies under sections 1 and 2. Section 5 defines “reclaim fund”. It must be a company incorporated under the Companies Act 2006 with restricted purposes (company objects). The main purposes are:
	the management of money transferred from dormant accounts;
	the payment of claims by dormant account holders whose balances have been transferred into the scheme; and
	the transfer of surplus money to the Big Lottery Fund (or any other distributor appointed under section 24).
47.The reclaim fund will be expected to keep sufficient reserves of money to meet anticipated levels of claims for repayment by customers, to comply with rules imposed by the Financial Services Authority and to cover its running costs.
48.Schedule 1 sets out further provision that must be included in the articles of association of a reclaim fund. The requirements are designed to ensure that the deductions of expenses which are made from a reclaim fund’s income are reasonable, that no distributions are made to its members and that information about levels of participation in the dormant accounts schemes is published.
49.Subsection (4) contains a direction-making power for the Treasury to ensure compliance by a reclaim fund with its articles of association.
50.Subsection (5) requires the Treasury to lay before Parliament any directions it gives under subsection (4).
51.The British Bankers’ Association and Building Societies Association have committed to lead on the selection or establishment of a body to act as a reclaim fund.