Plan and Budget 2008-09

Sub-class D2 Investments - intermediation
£9m 2008/09 estimated gross initial funding requirement
Cost drivers
Claims relating to investment mis-selling and a share of FSCS management expenses. (NOTE: it is too early to say what impact Pacific Continental Securities might have. Potential claims relating to this firm, or new defaults, are therefore not included).
Any credit or debit from previous contribution groups?
YES - firms in A10, A12 and A13 are expected to share a CREDIT according to their tariff data for 2007/08.*
What will firms in this Sub-class pay?
The net amount to be paid by individual firms is their share of the £9m funding requirement, according to their 2008/09 tariff data, less any credit (if any) in respect of their membership of A10, A12 and A13.


The estimated funding requirement in this Sub-class is £9.0m. Based on current claims estimates, firms in the previous contribution groups A10, A12 and A13 will benefit from a fund balance credit at 31 March 2008.

 

A12 and A13 contribution group fund balances as at 31 March 2008

These balances will be distributed to firms in the respective contribution groups by reference to their 2007/08 tariff data. We estimate the balances to be some £5.1m in A12 and £16.3m in A13, due mainly to lower than expected mortgage endowments volumes and costs. Most firms should therefore expect credit notes to offset 2008/09 funding requirements.

It would be misleading to try to map these balances against the new Sub-classes here, as there is no exact correlation between old groups and new Sub-classes. However, firms now in A12 or A13 will receive their full entitlement to any refund which will defray any liabilities in C2 or D2.

The majority of the refund will apply to firms previously in contribution groups A12 and A13 as these are the two contribution groups with the largest estimated fund balances at 31 March 2008.


* Firms will only receive credit or debit notes from previous contribution groups if they were a member of a previous contribution group from 1 April 2007. Details of the transition rules are available from the FSA (PS07/19, FSCS Funding Review - Feedback on CP07/5 and made text).