This Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) paper sets out the consultation on the management expenses levy limit for the Financial Services Compensation Scheme for 2016/17.
Why are we issuing this consultation paper?
The management expenses levy limit (MELL) ensures that the Financial Services Compensation Scheme (FSCS) has suitable funding to ensure that it is capable of exercising the functions conferred on it by Part 15 of the Financial Services and Markets Act 2000 (FSMA). The management expenses levy limit is consulted on annually. Chapter 2 sets out the proposed MELL for 2016/17.
Chapter 3 contains the PRA and FCA’s analysis of the costs and benefits of proposed rules (including the impact on mutual societies) as required under FSMA, and a statement regarding the PRA’s and the FCA’s respective competition objectives. It also contains the PRA and FCA’s assessment of the compatibility of the proposed rules with their respective statutory objectives and regulatory principles as set out in FSMA and their duty to have due regard to the need to eliminate discrimination and to promote equality of opportunity in carrying out their policies, services and functions.
Who is this consultation aimed at?
This consultation is relevant to all authorised firms, but contains no material of direct relevance to retail financial services consumers or consumer groups upon which they might need to act. As costs may be passed on to consumers in the form of higher prices, consumers may indirectly meet a part of the FSCS levies. However, an efficient and adequately funded compensation scheme is beneficial to consumers.
Next steps
We want to know what you think and welcome feedback on the proposed management expenses levy limit. Please email us your comments by 15 February 2016.
Following this consultation, the PRA and FCA will consider any feedback and issue two respective policy statements or an equivalent Handbook Notice on the final MELL so that the amended PRA and FCA rules can be in place for the start of the FSCS’s financial year on 1 April 2016.