FSCS sets aside £30m to repay firms over Keydata

1 July 2011 1:32 pm | By Natalie Holt

The Financial Services Compensation Scheme has made a £30m provision to repay firms who have been overcharged as a result of the £326m interim levy charged to the industry to pay for claims relating to Keydata.

In its annual report and accounts published today, the FSCS reveals firms who have applied for a reduction in the amount they were levied based on tariff data they submitted to the FSA have put in claims for refunds totalling £80m.

The FSCS says: “Based on the best information available to directors, provision for £30m has been made in the accounts. The final amount that is likely to be repaid is uncertain and may potentially result in a material adjustment to the provision being required.

“Any resulting adjustment to the levy is likely to be made in 2011/12.”

An FSCS spokeswoman says no additional levy for Keydata has been announced, but any additional levy or any amount that is ultimately returned to firms will depend on the total number of Keydata claims, the final levy amount, and what is recovered.

The FSCS paid out a total of £535m in 2010/11, £214m of which was paid to Keydata investors.

The failure of Keydata and stockbroking firms amounted to 60 per cent of the new claims from the investment sector.

The cost of running the FSCS in 2010/11 was just under £37m compared to a budget of £32.7m, which it says reflects higher than expected claims during the year.

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