The FCA is seeking feedback on further ideas to help reduce the Financial Services Compensation Scheme (FSCS) levy, including forcing advice firms to hold extra money aside in case they are declared in default.
In a consultation paper released on Monday, the FCA said it is keen to look at options which better enable the ‘polluter pays' principle by making sure firms that distribute products considered ‘higher risk' cover a greater proportion of the levy. It said one way to do this and reduce the levy could be to force additional capital to be held where a firm conducts business that is excluded from its personal indemnity insurance (PII) policy. The regulator also suggested funds could be held in trust for firms that have certain exclusions in their PII policies for active business. Read:...
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