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Background
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 closes on 15 February 2016.
Please address any comments or enquiries to CP4_16@bankofengland.co.uk.
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.
Consultation paper
Financial Services Compensation Scheme – Management Expenses Levy Limit 2016/17 – CP4/16
