In a joint consultation with the Prudential Regulation Authority (PRA), we are consulting on the management expenses levy limit (MELL) for the Financial Services Compensation Scheme (FSCS).
The PRA and the FCA are required to set a limit on the total management expenses that the FSCS can levy on financial services firms.
The MELL is the maximum amount the FSCS may levy in a year for its operating costs without further consultation. It does not include claimants’ compensation costs, which are levied separately and decided by the FSCS.
Who this applies to
This consultation is relevant to all PRA and FCA authorised firms who fund the FSCS through levies.
This consultation closes on Monday 12 February 2024. The PRA and the FCA invite responses on the proposals set out in this consultation.
Please address any comments or enquiries to [email protected]. The PRA is accepting responses on behalf of both authorities.
After considering responses, the PRA proposes to issue a policy statement and the FCA proposes to issue a Handbook Notice so that the final rules can be in place on 1 April 2024.
The proposed MELL is £108.1m for 2024/25. This consists of a management expenses budget of £103.1m and an unlevied reserve of £5m. This is a reduction of £1.7m from the 2023/24 MELL of £109.8m.
The proposed MELL would apply from Monday 1 April 2024, the start of the FSCS’s financial year, to Monday 31 March 2025.