There is less than a week left for firms to respond to the Financial Services Authority's plans for the Financial Services Compensation Scheme.
The FSA suggested in July that interim levies could be reduced, giving firms more certainty about the level of fees they pay.
Earlier this year, Financial Planners and investment intermediaries had to pay out £60m for the failures for firms such as Keydata and MF Global. • Two separate approaches for funding FSCS' costs, one for activities it expects will be subject to the Prudential Regulation Authority's (PRA) funding rules for the FSCS, such as deposit takers and insurance providers, and one for the other activities it expects will be subject to the Financial Conduct Authority's (FCA) funding rules. There would be no cross-subsidy between the two;
• No changes to the current funding classes;
• A retail pool made up of all classes it expects to be subject to the FCA's funding rules which would be triggered if one or more FCA classes reached their annual threshold (that is, the limit that funding class would be expected to contribute in any one year);
• Revised annual thresholds based on assessments of affordability, and;
• The FSCS to consider potential compensation costs expected in the 36 months following the levy instead of 12 months as is currently the case (except for the deposit class). This should smooth the impact of levies and may make levy requirements more predictable than now.
Firms have until Thursday 25 October to respond to the proposals.
Click here to read the FSA's report: http://www.fsa.gov.uk/library/policy/cp/2012/12-16.shtml