Industry associations have responded to FSA's review of the Financial Services Compensation Scheme (FSCS) funding model. In particular:
- BBA's response focuses on aligning the funding model to regulated activities and says cross-subsidies between classes should operate only where strictly necessary;
- APCIMS is also disappointed with the proposals. It says FSA is trying to justify its previous approach, rather than carrying out the necessary "root and branch" review to assess historic claims. Further criticisms highlight claims that resulted from FSA's failure to supervise properly, and that using permissions as a sole determinant of levy class does not give the right levels of affinity between class members; and
- the Investment Management Association (IMA) says the proposals are wholly unacceptable. It argues the current model is flawed and the future model goes further, in expecting fund managers to pay for the mis-selling of products by other sectors. It advocates a reserve policy, with three-year forecasts, which it says would give firms certainty about contributions, smooth exceptional claims and ensure the right person pays.