In October 2008, the FSA published Consultation Paper 08/15: Financial Services Compensation Scheme: Review of limits (CP08/15).
In CP08/15, the FSA set out proposals for changes to the non-deposit limits of the Financial Services Compensation Scheme (FSCS). CP08/15 also referred to changes concerning the deposit sub-scheme that the FSA made without consultation on 2 October 2008, increasing the FSCS limit for deposits to £50,000 from 7 October 2008 and introducing a ‘rateable’ method for allocation of recoveries from a defaulted deposit taker to customers of that deposit taker with deposits of more than £50,000. CP08/15 also sought views on options for protection of temporary high deposit balances.
The FSA has now published Policy Statement 09/7: Financial Services Compensation Scheme: Review of limits - Feedback on CP08/15 and made rules for non-deposit limits (PS09/7).
PS09/7 summarises the comments the FSA received in response to CP08/15 in relation to the non-deposit limits and explains why it is making the changes it proposed without amendment. The FSA also explains in PS09/7 that firms will have until 1 January 2010 to make changes to their consumer disclosures to reflect the new limits.
The FSA’s policy on temporary high deposit balances, including feedback on responses to the discussion on this issue in CP08/15, is covered in Consultation Paper 09/11: FSCS: Temporary high deposit balances and implementing changes to the Deposit Guarantee Schemes Directive.