The Financial Services Compensation Scheme says it understands advisers’ concerns about its decision to levy Keydata compensation costs on intermediaries but it had to follow the rules set out by the FSA.
The remarks come in response to last week’s High Court dismissal of a judicial review into its decision to classify Keydata as an intermediary.
The FSCS says in a statement: “The FSCS is pleased with the High Court decision that the scheme acted within its rules when it correctly raised the levy for the costs of Keydata claims on the investment intermediation sub-class.
“We recognise that the application raised issues about our funding and understand the concerns that financial advisers in particular have about the allocation of this levy. The FSCS has no power to deviate from the rules when allocating the costs of compensation, as the judgment confirms.”
Regulatory Legal partner Gareth Fatchett, who led the judicial review on behalf of over 200 advisers, says despite the dismissal, the review was justified. He says: “Regulatory Legal is disappointed at the result. However, the Keydata issue needed to be clarified and it was right to take this matter to trial. The law is now clarified.”