The FCA has published its final rules and feedback on its consultation on Financial Services Compensation Scheme: changes to the Compensation sourcebook, CP15/40. The new rules change the compensation arrangements available to consumers under the Financial Services Compensation Scheme (FSCS). Some key changes to note are:
- In situations where a successor firm has taken on the liabilities of a predecessor firm, the proposed rule change makes it clear that claims against a successor firm in respect of liabilities arising from the acts or omissions of a predecessor firm fall within the scope of the FSCS.
- Subject to certain exceptions, directors of a firm in default are not eligible to claim on the FSCS. Companies in the same corporate group as a firm are also not eligible to claim on the FSCS.
- The FSCS now has flexibility not to pay compensation to a person to whom a claimant has directed the FSCS to pay but instead to pay any compensation to the claimant directly.
- The rule change provides for a general requirement for firms to cooperate with the FSCS, and not a specific requirement to provide information. Nonetheless, The FCA encourages firms to provide information to the FSCS in a more timely manner where this may not already be the case.
The FCA encourages firms to familiarise themselves with the amended rules. The changes implemented by this Policy Statement came into force on 29 April 2016. In terms of issues relating to the FSCS funding, the FCA confirmed this will be dealt with separately under a consultation paper due to be published later this year.