Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what guidance his Department plans to provide to firms affected by supplementary Financial Services Compensation Scheme levies.

The Financial Services Compensation Scheme (FSCS) is an independent non-governmental body. The FSCS carries out its compensation function within rules set by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), who are also independent from government.

The FSCS levy is set annually by the FSCS within the limits set by the FCA and PRA, in accordance with the levy rules and FSCS funding model as determined by the FCA and PRA. It is therefore for the FCA and PRA to consider the impact of the levies on the firms they regulate, acting in line with their statutory duties. The Government has no role in setting the levy.

The FCA regularly consults with the financial services sector regarding its fees policy. This includes the funding of the FSCS. The FCA most recently consulted on the funding of the FSCS in May 2018 as part of a three-year review of the FSCS funding model.