We alongside the Prudential Regulation Authority (PRA) are consulting on proposals for the annual Management Expenses Levy Limit (MELL) for the Financial Services Compensation Scheme (FSCS) for the financial year 2023/24.
Why we are consulting
The FCA and PRA are required to set a limit on the total management expenses that the FSCS can levy financial services firms. The MELL covers the FSCS’s ongoing operating costs and includes the FSCS’s IT, staff, legal and outsourced and internal claims’ handling costs. It does not include compensation costs, which are levied separately and decided by the FSCS.
Who this is for
- FCA authorised firms
- PRA authorised firms
This consultation closes on 9 February 2023. Please send any comments on the proposed MELL using the online response form on the FCA’s website or by email.
The FCA is accepting responses on behalf of both the FCA and the PRA, and both authorities will consider the responses.
Subject to the responses to this consultation, the FCA will then issue a Handbook Notice and the PRA will publish a Policy Statement so that final rules can be in place for the start of the FSCS’s financial year on 1 April 2023.
The proposed MELL for 2023/24 is £109.8 million consisting of:
- the FSCS management expenses budget of £99.8 million
- an unlevied reserve of £10 million
- the proposed MELL is £0.7 million lower than the 2022/23 MELL of £110.5 million
- the MELL would apply from 1 April 2023, the start of the FSCS’s financial year, to 31 March 2024
- more details on the MELL, how it is calculated and an explanation of the FSCS’s unlevied reserve can be found in Chapter 2 of the consultation paper and in the FSCS's 2023/24 Budget Update