The Financial Conduct Authority and the Prudential Regulation Authority will both raise levies in future to pay for the Financial Services Compensation Scheme, although only one regulator will collect the levies.
The FSA is currently responsible for raising levies to fund the FSCS, the Consumer Financial Education Body, and the Financial Ombudsman Service.
In a consultation paper on future financial regulation published today, the Treasury says the new FCA, formerly known as the Consumer Protection and Markets Authority, will maintain responsibility for raising levies for the FOS and CFEB.
The FCA, which will look after conduct regulation, and the PRA, which will look after prudential regulation, will both have the power to make rules and raise levies for the FSCS.
The Treasury says: “In relation to the FSCS, both authorities will have the power to make rules, albeit only in relation to the sub-schemes for which they have responsibility, and therefore raise levies.
“It is expected, however, that while the PRA will levy its own fees, a non-statutory arrangement will be put in place for the collection of fees through one organisation, similar to that which currently exists in relation to the collection of the FSCS levy by the FSA.”
When the Treasury put out its first consultation paper on reforming the regulatory system in July, Aifa said the cross subsidisation of providers under the FSCS was crucial to provide protection for consumers.
Last year’s paper suggested that separate compensation schemes could be established to cover conduct regulation and prudential regulation, which would have meant the end of the current cross-subsidy system.