This paper confirms:
- we will proceed as outlined in CP13/1; and
- the final rules for the FCA Retail Pool.
Why are we issuing this PS?
In January 2013, we confirmed most of the FSCS funding rules that we proposed in CP 12/16 but, in response to feedback from industry, we re-consulted on one element (CP13/1): the funding arrangements for the FCA retail pool.
We proposed that, as well as the five FCA FSCS funding classes already included in the FCA retail pool by CP12/16, all FCA-regulated deposit takers, general insurers, life insurers and home finance providers should also contribute to the pool when it is triggered by costs arising from the intermediation classes.
Who is this PS aimed at?
This document will interest all firms regulated by the FSA, and the FCA after 1 April 2013, whether current or potential contributors to FSCS compensation costs levies and/or annual management expenses levies (i.e. this may include some firms that are currently exempt from these levies).
What are the next steps?
From 1 April 2013, both the PRA and the FCA will decide how the FSCS will be funded, but each regulator will have distinct rule-making responsibilities: the PRA for claims for deposits and under insurance contracts (i.e. insurance claims following the failure of an insurer), and the FCA for all other claims (including claims in the investment sector and those related to regulated mediation activities including insurance).
The rules on the FCA retail pool apply to firms that are FCA-regulated (which may include firms that are dual-regulated by the FCA and PRA). The rules are therefore set out in FCA rules only and the Handbook text has been made by the the FSA Board under its legislative powers to discharge this function for the Financial Conduct Authority.
Want to find out more?
For more information:
- FSA - CP12/16: FSCS Funding Model Review: FSCS Funding Model Review
- FSA - CP13/1: FSCS Funding Model Review – feedback on CP12/16 and further consultation
- look at the FCA Handbook.