Published on 31 March 2016
Financial Services Compensation Scheme – management expenses levy limit 2016/17 – PS12/16
This policy statement publishes the final management expenses levy limit (MELL) for the Financial Services Compensation Scheme (FSCS) for 2016/17 and provides feedback to the responses to Consultation Paper 4/16 on the FSCS MELL for 2016/17.
Under the Financial Services and Markets Act 2000 (FSMA), the PRA and the FCA must set a limit on the total management expenses to be levied. This allows the Financial Services Compensation Scheme (FSCS) adequate resources to perform its functions efficiently and economically, and provide a responsive and well-understood compensation service for consumers of financial services. The management expenses levy limit (MELL) represents the maximum amount of management expenses that the FSCS can levy in order to fulfil the obligations imposed on it by PRA and FCA rules, although it is not necessarily the amount the FSCS will actually levy in the coming year.
The policy statement sets out the final rules on the MELL and confirms that it has been set at £72.7 million for 2016/17, as consulted on in CP4/16. This figure comprises:
- budgeted FSCS management expenses (or budget) of £67.4 million; and
- a contingency reserve of £5.3 million.
This policy statement is relevant to any authorised persons that are, or may become, FSCS levy payers. On 29 March 2016 the Financial Conduct Authority (FCA) published FCA Policy Statement 16/10 which also confirms that the FSCS MELL for 2016/17 will be set at £72.7 million and sets out the relevant rules in the FCA Handbook.
Policy Statement 12/16Appendices
PRA RULEBOOK: NON AUTHORISED PERSONS: FSCS MANAGEMENT EXPENSES LEVY LIMIT AND BASE COSTS INSTRUMENT 2016
Published on 18 January 2016
Financial Services Compensation Scheme – Management Expenses Levy Limit 2016/17 – CP4/16
This Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) consultation paper (CP) sets out the proposed management expenses levy limit (MELL) for the Financial Services Compensation Scheme (FSCS) for 2016/17. Under the Financial Services and Markets Act 2000 (FSMA), the PRA and the FCA must set a limit on the total management expenses to be levied. This allows the FSCS adequate resources to perform its functions efficiently and economically, and provide a responsive and well-understood compensation service for consumers of financial services. The MELL represents the maximum amount of management expenses that the FSCS can levy in order to fulfil the obligations imposed on it by PRA and FCA rules, although it is not necessarily the amount the FSCS will actually levy in the coming year.
The proposed levy limit would apply from 1 April 2016, the start of the FSCS’s financial year, to 31 March 2017.
The consultation is relevant to all authorised firms.
Summary of proposals
The MELL consulted on for 2016/17 is £72.7 million.
Responses
This consultation closed on 15 February 2016.
The PRA and the FCA will consider together the feedback received and will publish and issue respective policy statements or equivalent Handbook Notices (as appropriate) on the final MELL in order that the amended PRA and FCA rules can be in place for the start of the FSCS’s financial year on 1 April 2016.