The Financial Conduct Authority has proposed that the Financial Services Compensation Scheme should have a management expenses levy limit of £74.4m for the 2015/16 financial year, a 7 per cent fall on the current year.
In a consultation paper, published today (19 January), the FCA said out of this figure £69.1m would go towards FSCS management expenses, “meaning this is the minimum amount that will be levied for 2015/16”, with a contingency reserve of £5.3m.
The proposed contingency is unchanged from the current financial year. It will “not be levied unless required by the FSCS”.
The £69.1m management expenses figure is a 7.4 per cent fall from the 2014/1 year and will cover items such as staff and building costs, on-going operating expenses, IT, outsourcing and claims handling, legal or other professional services and strategic programmes.
The paper also revealed that the FSCS expects a fall in its “financing and major recoveries” expenses to £10.8m in 2015/16 from the current £15.1m. This would include the scheme’s case against advisers who sold Keydata.
The consultation will be open for four weeks until the 16 February.
Last year, the FSCS’s plan and budget revealed that advisers in the investment intermediation sub-sector were hit with a levy bill of £105m for the 2014/2015 financial year, a rise of 38 per cent which the scheme said was due to paying redress over collapsed firm Catalyst Investment Group.
The FSCS said its plan and budget will be published this week.