RegulationMar 26 2013

Providers told to cough up for advisers mis-selling

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In a policy statement published on Monday (25 March), the FSA stated how much providers may have to cough up to the Financial Services Compensation Scheme if a mis-selling scandal occurs.

The maximum amount that any single class of firms can be called upon to contribute to compensation costs - arising in their own FSCS funding class, from the pool or in aggregate - is the annual affordability threshold for that FSCS funding class or, in the case of FCA provider contributors, the corresponding funding class.

Costs to firms would only ever arise if the pool is triggered. The impact on each class - or firm within the class - would then depend on the size of the pool contribution required as well as the composition and size of the class required to contribute. However, this will be capped at the relevant annual threshold for the class or classes in question.

http://www.fsa.gov.uk/static/pubs/policy/ps13-04.pdf