The FSA says it is unable to speed up its review of the Financial Services Compensation Scheme until European regulations are finalised.
At the All-party Parliamentary Group on Insurance and Financial Services last week, FSA director of conduct policy Sheila Nicoll said it is “fairly unlikely” that the review process could be completed by April 2012. We would have to consult for three months,” she said. “We want any changes to be sustainable and not throw up problems elsewhere.”
She cited delays to the European deposit guarantee scheme directive and the investor compensation scheme directive as factors affecting the review. “Discussions around deposits are due on July 4,” she said. “A lot of the principles surrounding the FSCS review will be included. We hope to be able to take matters forward once there is certainty there.”
APPG chair Jonathan Evans pointed out that there is uncertainty over European issues. “We have no timescale as to when agreement will be reached in Europe,” he said. “The FSA recognised the need for a review in 2009. We are not beating the FSA up to carry out the review. It knows we need one.”
Nicoll assured the APPG that the FSCS review would take place “relatively quickly” because of the FSA’s previous work, saying: “We have had chats over some of the issues such as cross-subsidising and sub-classes.”