Allie Sanchez
Reforms to the Financial Services Compensation Scheme (FSCS) are expected to be finalized by the Financial Conduct Authority (FCA) by summer 2017, according to an
FT Adviser report.
The major proposed revision to the FSCS consists of a shift from an industry levy to a product based fee.
FCA chief executive Andrew Bailey sent Treasury Committee chairman Andrew Tyrie a communique on October 11 to provide an update on the progress of the FSCS reforms, the report claims.
Apart from the change in levy structure, the Financial Advice Market Review also recommended changes to FSCS compensation limits, as well as the consideration of risk-based levies over the products or services offered by firms under FSCS jurisdiction.
The FCA has been consulting with consumer groups, trade associations, and other stakeholders to further refine proposed revisions to the FSCS mandate. It will publish a review of the consultations in November.
If the new rules are adopted next year, they will be implemented by 2018-2019.
The FCA also said in its letter to Tyrie that the agency is considering options to augment its current funding model so it can enhance affordability for its clients without sacrificing existing consumer protections.
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