From 1st July the Council of Mortgage Lenders is integrated into a new trade association, UK Finance. For the time being, all UKF mortgage information will continue to be published on this website, and UKF member-only mortgage information will only be available here.

UK Finance represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation takes on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association. Please go to www.ukfinance.org.uk for wider content and updates from UK Finance.

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Reviewing the funding of the Financial Services Compensation Scheme (FSCS) - consultation

Last updated: 31 Mar 2017

Consulting body:
Financial Conduct Authority
Status:
Closed
Period of consultation:
Runs from 14 December 2016 to 31 March 2017
CML action:
Response submitted

The FCA has published Consultation Paper CP16/42.

In the consultation, the FCA is inviting responses on a number of options for changing both the funding of the Financial Services Compensation Scheme (FSCS) and the coverage it provides to consumers, including:

  • the professional indemnity insurance (PII) market and the coverage that it provides
  • introducing product provider contributions towards intermediation claims
  • changing the FSCS funding classes for intermediation activities
  • updating limits on consumer coverage in light of the pension freedoms, and
  • exploring the potential for FSCS levies to better reflect the risks posed by particular practices

It is also consulting on a number of specific proposals to change rules around the scope and operation of FSCS funding, including:

  • introducing FSCS coverage for debt management firms
  • extending coverage in respect of fund management
  • applying FSCS protection to advice and intermediation of structured deposits
  • ensuring that FCA rules include Lloyd’s of London appropriately, in circumstances where they could be called on to contribute, and
  • amending payment arrangements so that firms may be asked to pay a proportion of the levy on account

CML response

For markets to work well the public must have confidence in the products and firms in the market.

An important part of creating that confidence is the existence of a statutory fund of last resort which has clear rules.

Any funding model that the FCA proposes for the FSCS must be transparent and ensure that regulated UK financial markets work well.

Read the full CML response below.