Explanation of our terms

  • Here are some commonly used terms you will find on this site:
  • Authorised firm: a company, unincorporated body, partnership or individual permitted to carry out a regulated activity by the FSA. This term includes a mutual (unincorporated) organisation, for example a friendly society.
  • Credit union: a financial co-operative which is owned and controlled by its members.
  • Deposits: money placed in a bank or similar institution to earn interest or for safe-keeping.
  • Deposit-taker: an organisation which accepts deposits, for example a bank or building society.
  • In default: A firm unable, or likely to be unable to pay claims against it. This will generally be because it has stopped trading and has insufficient assets to meet claims, or is in insolvency.
  • EEA: European Economic Area.
  • Eligible: qualifying for compensation under Scheme rules.
  • FSCS or 'the Scheme': Financial Services Compensation Scheme.
  • FSA: Financial Services Authority, the UK's regulator for the finance industry.
  • FOS: Financial Ombudsman Service, for complaints or claims against firms that are still trading.
  • FSMA: Financial Services and Markets Act 2000, an Act of Parliament governing the regulation and provision of financial products, product providers and financial advisers.
  • Insolvency: having insufficient assets to meet due debts or liabilities.
  • Investment: a financial product in which money can be invested to earn interest or profit (although the value of investments can go down as well as up).
  • IMRO: Investment Management Regulatory Organisation (replaced by the FSA).
  • Nominee: a company or individual who holds your funds or investments on your behalf.
  • Pensions Review: a review to assess financial loss for those people wrongly sold personal pensions between 29 April 1988 and 30 June 1994. Mis-selling occurred when people who would have been financially better off at retirement in their employer's pension scheme were advised to leave or not to join their employer's pension scheme, or where they transferred pension benefits from a previous employer's scheme and took out a personal pension plan instead.
  • PIA: Personal Investment Authority (replaced by the FSA).
  • Provisional liquidation: the start of the process whereby the affairs of a firm are wound up so that its assets are realised and distributed to discharge its liabilities.
  • Regulated activities: financial services activities subject to rules and procedures laid down by the FSA.
  • Smaller company: (as an indicative guide only) must meet two of the following criteria (as set out in section 247 of the Companies Act 1985):

    Turnover: not more than £6.5 million
    Balance sheet total: not more than £3.26 million
    Total number of employees: not more than 50

  • SFA: Securities and Futures Authority (replaced by the FSA).
  • SIB: Securities and Investment Board (replaced by the FSA).
  • If this site uses any terms that you are not familiar with, please email enquiries@fscs.org.uk and let us know. We will be happy to explain them to you.