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ABI move to set up loan scheme to pay FSCS levy

The ABI is believed to be in talks with the FSA over a loan sch-eme to enable IFAs to pay Fin-ancial Services Compensation Scheme fees in instalments.

The ABI is negotiating with the FSA over establishing a loan service that intermediaries can dip into to pay the FSCS levy.

Officially, the ABI says there is no change to the situation regarding payments to IFAs. Providers volunteered to pay an extra 1.5m to the FSCS this year in addition to the 3m paid in the last three years.

There have been calls for the FSA to allow IFAs to pay in instalments but the regulator is known to be reluctant to allow this since it would mean the unprecedented move of applying for credit status. How-ever, it is thought that some deal may be struck offering a preferential rate of interest.

When the FSCS levy was increased last year, many IFAs struggled to meet the extra cost. This was combined with the closure of the Pass scheme which provided subsidies for the levy.

It is thought that another solution would be to get the FSCS budget approved at an earlier stage so that firms would have seven to eight months to save for the levy.

ABI spokesman Leonie Edwards says: “There is nothing more to say about the situation other than that prov-iders have recently agreed to pay an extra 1.5m to the FSCS this year. This was in addition to the 3m given in the last three years. That is the situation as it stands.”

The FSA declined to comment.

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