The FSA has proposed a radical overhaul of funding for the Financial Services Compensation Scheme which scraps the ‘pay as you go' system and requires advisers to pay a levy based on the income they earn from specific types of business.
Details of the CP07/05 FSCS Funding Review paper just issued by the Financial Services Authority reveal the regulatory body would like to increase the base annual funding requirement and widen the circle of firms required to fund the compensation, so the first level of compensation is paid by firms specifically working in the sector monies relate to and the higher costs are then borne by the wider financial services community where it crosses new set thresholds. According to CP07/05, some trade bodies and rivals to this idea have argued this is in breach of section 213(5) of the Financial...
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