The FCA has published a consultation paper on aligning the Financial Services Compensation Scheme (FSCS) levy time period (CP18/1).
The FCA recently made changes to the FSCS funding arrangements as part of a broader review of FSCS funding, including to align the FSCS compensation levy year with the financial year.
The FCA has since become aware that a practical implication of this change is a different allocation of costs to the life and pensions intermediation class, which was not intended. As a result, the FCA is consulting on transitional provisions to
- allow the 2017/2018 compensation levy year to run to its original timeframe;
- require the FSCS to run a nine-month compensation levy year for the period 1 July 2018 to 31 March 2019 with pro-rated class thresholds; and
- delay the introduction of arrangements for firms who pay fees on account by one year until 1 April 2019.
In addition, the FCA is consulting on minor clarifications to the new rule about levy paying arrangements for firms who pay fees on account.
The deadline for responses is 5 February 2018.