FSA hints at extra costs for FSCS levy payers
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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 other schemes from UK levy payers.
In its paper on implementing aspects of the Financial Services Act 2010, published today, 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 from the relevant scheme or government.
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 (6)
Christopher Bearfoot | 23 Jul 2010 3:32 pm
"... 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..."
Hmm, an alternative interpretation might be
"... We continue to believe that the levy payers represent a cash cow that we will milk at every opportunity as there is no effective way for them to stop this from happening and we can act with impunity"
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Anonymous | 23 Jul 2010 3:34 pm
if the costs are so 'minimal' then why not take them out of FSA bonus payments?
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Anonymous | 23 Jul 2010 3:42 pm
Well said! When will something be done to make the FSA accountable for the despicable way IFAs are treated?
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derekt | 23 Jul 2010 4:08 pm
once the door is open , then they can use any excuse to charge us ,,, thats the next thing .
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All Over | 23 Jul 2010 4:38 pm
I should be amazed at the ordasity of the FSA and the FSCS assertion that all levy payers want to or can even afford to pay any additional levy BUT IM NOT, I think milking a cash cow is one thing but bleeding the thing to death is another. Where do these people think this money comes from? IDIOTS the lot of them.
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All Over | 23 Jul 2010 4:47 pm
Dear FSA Can you publish some of the arguments aginst the levy payers paying the levy recieved so far please, I have considered your argument and it seems rather one sided at present !! perhaps some ofthe 86% of the FSA staff who received a bonus for thier poor performance could give up some of thier poorly earned bonuses to fund the levy, now theres an argument.
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