FSA is consulting on changes to the funding model for the Financial Services Compensation Scheme (FSCS), which it hopes will potentially reduce levies while continuing to reassure consumers. The changes comprise:
- splitting the levy between activities that are PRA and FCA regulated, with no cross-subsidy between the two;
- introducing a “retail pool” for all classes FSA expects to fall within the FCA regulatory pool (the individual funding classes will not change), which FSCS can call on if one FCA class reaches its limit;
- new annual thresholds based on assessments of affordability; and
- smoothing the impact of levies by requiring FSCS to consider likely levies in the following three years (currently just the following year).
FSA asks for comments by 25 October.