UK levy payers may have to pick up the tab for FSCS expenses
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The FSA has hinted that the Financial Services Compensation Scheme may be allowed to recoup management expenses it incurs when acting on behalf of schemes from UK levy payers.
In its paper on implementing aspects of the Financial Services Act 2010, published last week, the FSA says it has extended this part of the consultation because it failed to publish a compatibility statement and cost benefit analysis for the proposal.
But the FSA says it expects the costs would be low as the expenses would only be passed to UK levy payers if the FSCS has failed to obtain reimbursement of the expenses.
It says: “We have considered the arguments against levying FSCS levy payers received so far. We continue to believe that the financial impact on levy payers will not be significant. As the likelihood of the FSCS acting for another scheme is low, the costs involved are likely to be minimal and the FSCS will have made every effort to recoup these costs from the relevant scheme or government before it allocates the levy.
“As the expenses are expected to be minimal, we do not believe that it would be proportionate to produce a detailed methodology for allocating the costs. We will consider any responses received during the extended consultation. Subject to anything further coming out of the consultation, we propose to recommend to our board that the rules are made in September 2010.”
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Readers' comments (1)
Julian Stevens | 29 Jul 2010 9:52 am
"the FSA says it has extended this part of the consultation because it failed to publish a compatibility statement and cost benefit analysis for the proposal".
Hmm, okay. So what's a "compatibility statement" and since when was any Cost:Benefit Analysis produced by the FSA worth the paper on which it's printed? They may as well be scribbled on the back of a fag packet, given that all they say is what the FSA wants them to.
I have in mind, of course, the C:BA on the strength of which the FSA decided to launch the RDR, revealed subsequently to have been grossly inaccurate ~ to an even greater extent than was pointed out by pretty well everyone who offered comment on it when it was first published. As usual, those tiresomely inconvenient voices of dissent were resolutely ignored.
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