3 Min Read
LONDON (Reuters) - Britain’s scheme for compensating consumers hit by financial company failures has set itself a billion-pound ($1.37 billion) budget for the coming year to cope with a likely surge in collapses due to COVID-19.
FILE PHOTO: A woman feeds birds on the bank of the river Thames with London s financial district seen in the background, amid the coronavirus disease (COVID-19) in London, Britain, November 25, 2020. REUTERS/Simon Dawson
The Financial Services Compensation Scheme’s (FSCS) budget of 1.04 billion pounds for the 2021/22 financial year that starts in April is its highest in six years.
The FSCS also said it would add 78 million pounds to the current year’s budget - a lower than expected increase - due to more firms failing, pushing the total for 2020/21 to 700 million pounds.
Advisers to be levied £240m again as FSCS announces £1bn overall levy Cannot normalise this level of loss
Firms can expect to receive their invoices in February this year and the 1,000 largest regulatory levy free payers will be invoiced in March.
Financial advisers can expect a significant regulatory levy bill once again for the next financial year as the Financial Services Compensation Scheme (FSCS) has predicted an overall levy forecast of £1bn for the first time.
In its budget for 2021/22, the FSCS has predicted a bill of £361m for financial advisers funding class - also known as the life distribution and investment intermediation class (LDII) - to pay for the.
FCA admits ‘mistakes’ after scathing reports on mini-bond and collapsed fund scandals
‘We are profoundly sorry for the mistakes we have made’
Two independent investigations into the Financial Conduct Authority’s (FCA) handling of the London Capital Finance (LCF) mini-bond mis-selling and the collapse of the Connaught fund have revealed a raft of serious regulatory failures.
The Connaught review found that the FCA’s actions put in place to remedy the effect of the collapse of the collective investment scheme – including putting out consumer alerts, contacting IFAs, and varying some permissions – were “well-intentioned but insufficient to protect those persons who invested in the fund before May 2011, or who did so in the following period leading up to the collapse of the fund in 2012”.
Bondholders will be able to claim compensation from regulator, economic secretary says
Two independent investigations into the Financial Conduct Authority’s (FCA) handling of the London Capital Finance (LCF) mini-bond mis-selling and the collapse of the Connaught fund have revealed several regulatory failures.
The Connaught review found that the FCA’s actions put in place to remedy the effect of the collapse of the collective investment scheme – including putting out consumer alerts, contacting IFAs, and varying some permissions – were “well-intentioned but insufficient to protect those persons who invested in the fund before May 2011, or who did so in the following period leading up to the collapse of the fund in 2012”.
Tim Fassam: Why the FCA should embrace quick FSCS wins Rebuild bridges
While the FSCS levy is a complex problem that cannot be fixed with simple solutions, argues PIMFA s Tim Fassam, the FCA should embrace some quick wins while it sorts out the bigger problems.
A well-functioning, competitive and accessible retail investment market is critical for both savers and the wider economy. As we recover from the Covid-19 crisis the UK will need to rebalance away from.
Sign In