Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an assessment of the impact on the cost of living of the twentyfold increase since 2017 in the levy paid by investment managers for the Financial Services Compensation Scheme.

Under the Financial Services and Markets Act 2000 (FSMA), the Financial Conduct Authority (FCA) is responsible for setting the rules of the compensation framework of the Financial Services Compensation Scheme (FSCS) in relation to the levy paid by investment managers.

The FCA recently published a discussion paper DP21/5 in December 2021 which explored ways in which aspects of the compensation framework which the FCA is responsible for could be improved. This paper invited responses from stakeholders and those responses are now being considered by the FCA.

The FSCS provides important protection for consumers by allowing them access compensation where a firm has failed. This is important to maintaining overall confidence in the financial system.