First published on 27 September 2016
This statement of policy (SoP) sets out the calculation methodology that the Prudential Regulation Authority (PRA) uses, as the United Kingdom’s designated authority in respect of the Deposit Guarantee Scheme (DGS), to calculate the risk-adjustment for DGS member contributions to the Financial Services Compensation Scheme (FSCS).
This methodology will apply only to the calculation of compensation cost levies.
This SoP is intended to be read together with the rules governing the funding of the FSCS in the Depositor Protection Part of the PRA Rulebook, and the sections relating to the role of the FSCS in funding the DGS in PRA SoP, ‘Deposit Guarantee Scheme', which applies to the FSCS. Readers may also wish to refer to the European Banking Authority (EBA) guidelines on risk-based contributions, upon which the PRA's methodology is based.