CP18/1: Aligning the Financial Services Compensation Scheme levy time period

Open consultation: CP18/1
04/01/2018
04/01/2018
Consultation closes
05/02/2018
Handbook Notice
February 2018

We are consulting on transitional provisions to ensure that the life and pensions intermediation class will continue to benefit from support from the retail pool over the next few months, consistent with the FSCS’s public messaging on this.

Read the summary of CP18/1 (PDF)

Read the full consultation (PDF)

Following consultation, including with the FSCS, we recently made changes to the FSCS funding arrangements as part of a broader review of FSCS funding. One of the changes was to align the FSCS compensation levy year with the financial year. We have since become aware that a practical implication of this change is a different allocation of costs to the life and pensions intermediation class which was not intended. We think it is reasonable to now consult on transitional provisions which delay the effect of this change meaning in effect that we maintain the status quo. The provisions will ensure that the life and pensions intermediation class will continue to benefit from support from the retail pool over the next few months, consistent with the FSCS’s public messaging on this. 

In this paper we propose to:

  • allow the 2017/18 compensation year to run to its original timeframe
  • require the Financial Services Compensation Scheme (FSCS) to run a nine-month compensation levy year for the period 1 July 2018 to 31 March 2019 with pro-rated class thresholds
  • delay the introduction of arrangements for firms who pay fees on account by one year until April 2019

We are also consulting on minor clarifications to the new rule about levy paying arrangements for firms who pay fees on account.

Who this applies to

This consultation paper will be of interest to all firms who are current or potential contributors to FSCS funding.

What you need to do

Please send us your comments by 5 February 2018: 

Online response form

You can also:

  • email [email protected] or
  • write to: Clare Vicary, Financial Conduct Authority, 25 The North Colonnade, London E14 5HS

Next steps

We plan to publish our feedback on your comments and final rules in a Handbook Notice in February 2018.

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