The new fund will be known as Reclaim Fund, and forms a wholly owned subsidiary of The Co-operative Financial Services.
The Co-operative Financial Services said the new fund will operate independently with an appointed board and executive.
The fund will be run as a non-profit making organization, and there will be no financial benefits to The Co-operative Financial Services administering the fund.
Following the authorization from the FSA, Reclaim Fund is now ready to receive the initial tranche of dormant account monies from banks and building societies.
These will be followed by further tranches as more institutions sign up to the scheme and periodical transfers in future years as and when accounts become dormant.
Reclaim Fund will then transfer any money considered surplus to that needed for customer reunification to the Big Lottery Fund, for onwards distribution to good causes, including for example the Big Society Bank in England.
The Co-operative Financial Services CEO Neville Richardson said as a trusted financial organization, they have been delighted to step forward and offer their support to the Government and the industry in establishing Reclaim Fund.
"We do recognize the need for the fund and the benefits that it offers both the industry and wider community," Richardson said.
