BFS Levy Implications

3rd February 2006

On Wednesday 1 February 2006 BFS's Board decided it had insufficient funds to meet potential investors' claims in relation to split capital investment trusts. The shareholders decided to seek a creditors' voluntary liquidation. At a creditors' meeting on 10 February the following joint liquidators were appointed:

Implications for levy payers

We appreciate that levy payers may be concerned about the impact the potential default of this firm may have on the levies they pay to FSCS. We are talking to the joint liquidators to determine our potential involvement and are in contact with both the FSA and the Financial Ombudsman Service (FOS) about potential claims that may fall within our protection. However, it is currently too early to say what compensation costs might be paid by FSCS, or on which contribution groups any costs would fall.

Our forecasts for expenditure in 2005/06 and 2006/07 were published in our Plan and Budget 2006/07 on 1 February 2006. This information may need to be updated in light of the liquidation of BFS. We will provide an update on likely levy implications for the industry as soon as we can. 

Further information

FSCS's Plan and Budget 2006/07 which provides current forecast expenditure for 2005/06 and likely budget requirements for 2006/07. Splits costs were not included in these estimates.

The FSA's Consultation Paper on our Management Expenses Levy Limit for 2006/07

More information about the funding structure of FSCS