View more on these topics

FSCS funding review will look at how sub-classes are made up

The FSA says the way that sub-classes of the Financial Services Compensation Scheme are made up will be scrutinised as part of the proposed review of FSCS funding.

Earlier this month, Informed Choice submitted an open letter and petition to FSA chief executive Hector Sants and Treasury financial secretary Mark Hoban, calling for urgent reform of the FSCS funding model. The petition closed with 678 signatures.

Sants responded to the letter last week, saying: “The investment intermediation sub-class was established when we last reviewed the FSCS funding model. It covers the activities of advising, arranging or dealing in investments.

“While firms in this sub-class may have different business models, we concluded that there was sufficient affinity between the firms to include them in the same sub-class. When we consult on the review of FSCS funding, we intend to discuss the composition of the classes.”

The FSA last reviewed the funding model in 2007. A new review was expected last year but has been postponed due to the upcoming restructure of UK regulation and possible changes at a European level.

Advisers have been calling for an urgent reform of FSCS funding for over a year, since the FSCS revealed it categorised Keydata as an intermediary rather than a provider.

On adviser liability for firms that sold a failed firm’s investment products, such as Keydata, Sants says: “We will take further regulatory action in respect of individual live distributor firms where we consider it appropriate.”

Informed Choice managing director Martin Bamford appreciates Sants taking the time to respond.

Bamford says: “Perhaps the best we can hope for now is a more effective regulator in the shape of the Financial Conduct Authority, taking earlier and more robust action where they identify emerging risks. I remain optimistic that we will eventually see reform when it comes to the funding of the FSCS.”


Lindsell Train may hedge Japan fund

Lindsell Train Investment Management is considering adding a sterling-hedged share class to its Japanese Equity fund and is winding up its second Japan fund. The Japanese Equity fund is a long-only strategy, domiciled in Dublin and structured as an Oeic. The Japan fund, domiciled in the Cayman Islands, is unregulated and is structured as a […]

Knock-on effects raise protection fears

The protection industry has raised concerns about potential knock-on effects of the European Court of Justice’s ruling that insurers cannot price products based on gender. The ECJ gave its judgment this week following a test case brought by Belgian consumer group Test-Achats, which suggested that to price products such as annuities and life insurance according […]


Cable looks to remove barriers for small businesses

Business Secretary Vince Cable has pledged to cut small business red tape in an attempt to boost the economy. But, according to a report in today’s Financial Times, Cable said the Government was constrained by financial limitations and could not provide the sector with an “all-encompassing plan” for growth in the economy. Addressing 200 business […]


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. Julian Stevens 9th March 2011 at 9:40 am

    Sorry to be negative, but I don’t share Martin Bamford’s optimism for reform of the way in which the way the FSCS is funded. The FSA has made plain that it wants to put off that review indefinitely and as yet has offered no comment on the (entirely reasonable) proposal of a product levy. Why not?

    Also, I see no hope for the FCA being any different from or better than the FSA. It’s going to be the same people operating from the same offices with the same “independence” from government, accountable to nobody but its own board (i.e. accountable to no one) and it’ll probably still enjoy statutory immunity from prosecution. And, of course, it’ll grant itself the same unilateral opt-out from the Statutory Code of Practice for Regulators (easy to find online and an easy read ~ how can a body created by Statute be allowed to exempt itself from a Statutory Code of Practice?).

    The FCA will be just the same as the FSA and, according to Hector Sants, it’s going to cost £50m just to change the sign over the door and the logo on its stationery. Will the NAO be doing anything about that? Don’t hold your breath. It’s just going to be more of the same old same old.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm