As a statutory fund of last resort there are limits to the protection FSCS can provide.
To qualify for compensation claimants need to be eligible under our rules. These form part of the FCA and PRA Handbook of rules and guidance, and can be found under Redress, Compensation. The rules tell us which types of claim are eligible for compensation, and limit how much compensation we are allowed to pay. We must abide by these rules at all times.
The main points are:
We can pay compensation only when an authorised firm is unable, or likely to be unable, to pay claims made against it. We describe this as being in default. We will carry out an investigation to establish the financial position of the firm.
We can pay compensation only if a claim is eligible under our rules.
FSCS can pay compensation only for financial loss and there are limits to the amounts of compensation we can pay.
The Scheme was set up mainly to assist private individuals, although smaller businesses are also covered.
Larger businesses are generally excluded, although there are some exceptions to this for deposit and insurance claims.
FSCS can only consider claims against firms that were authorised by a UK regulator at the time the advice was given. The UK's regulators are the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). They replaced previous regulators, including:
FSA (Financial Services Authority)
PIA (Personal Investment Authority),
SIB (Securities and Investment Board),
FIMBRA (Financial Intermediaries, Managers and Brokers Regulatory Authority);
LAUTRO (Life Assurance and Unit Trust Regulatory Organisation);
SFA (Securities and Futures Authority)
Claims before 1 December 2001:
The Financial Conduct Authority website includes a searchable database of all firms authorised and regulated by the FCA and the Prudential Regulation Authority (PRA).