The Financial Services Compensation Scheme (FSCS) took operational responsibility for investment and...
The Financial Services Compensation Scheme (FSCS) took operational responsibility for investment and deposit protection business on 1 February, earlier than originally planned.
The creation of a single financial services compensation scheme, which is accountable to the FSA, follows consultation last year.
The FSCS has taken full responsibility for managing the Investors Compensation Scheme (ICS) which is now a wholly owned subsidiary of FSCS, and the Deposit Protection Scheme, under a service level agreement with the Deposit Protection Board.
FSCS is currently discussing the terms of a service level agreement with the Policyholders Protection Board, which covers insurance business carried out by insurance firms, with a view to also providing operational resources to that scheme.
Christine Farnish, FSA director of consumer relations, said that the move was an important step towards the creation of a single compensation scheme which comes fully into effect at N2, the date on which the regulator takes on its full powers. The exact date has yet to be announced, but is likely to be at some point during the summer.
Farnish said: "This marks an important step in the process of bringing together existing financial services compensation schemes, to protect consumers when companies go bust.
"The FSCS management team can now get on with bringing existing schemes under one roof, and working towards offering consumers a one-stop shop for claims."
This process will not affect the operation and funding of the current compensation arrangements.
New rules will come into effect when the Financial Services and Markets Act is fully implemented later this year.
The FSA will be issuing a consultation paper on the scheme's funding arrangements before Easter.
Regtech or fintech
Underperformance still present – for now
15% increase in number of claims paid
Open architecture philosophy
Inflation above 2% for first this this year