14th July 2011
The FSCS is in the process of reviewing requests from firms to resubmit data previously provided to the FSA for the SD01 and SD02 sub-classes. This has been used to calculate the FSCS interim levy announced in January this year.
The FSCS has started writing to firms regarding their re-submissions and expects to have contacted all firms who have made a request by the end of August. Firms that have not provided enough detail for the FSCS to make a decision about whether to accept the request will then have 30 days to provide further information. Once the FSCS is in a position to take a decision, firms will be informed. If firms are not happy with the FSCS decision, they will have 30 days to write to the FSCS asking for the decision to be reviewed. Once all decisions (including review decisions) have been taken, the FSCS will be able to determine firms’ revised share of the interim levy. At that stage the Scheme will also be able to inform firms of the amount of any refunds or additional charges. We would like this exercise to be completed by the end of 2011. However, this timescale is contingent on a number of factors outside our control. We will continue to update the industry during the process.
The total amount that the FSCS needs to pay Keydata claims is not expected to increase and it does not expect any additional funds over the amount already levied will be required from the industry. The FSCS will also need to take into account recoveries received, including the recovery from the Norwich & Peterborough Building Society. However, some firms' share of the interim levy may increase if other firms’ contribution to the levy decreases as a result of requests to re-submit tariff data.
Mark Neale, Chief Executive, says: “It is too early to say whether rebates to firms who submitted incorrect tariff data will lead to a fresh levy on other firms. That is because there are other factors that will impact on the final reckoning, including, the amount we have received in recoveries and the total amount paid in compensation.
“We do not expect to need any further funding in respect of Keydata on top of the £326m levied in January. But, as we have explained, this is a zero sum game so there may be a need for some firms to contribute more if other firms' share reduces.”
All levies on the investment sector, including the recent interim levy are attributed to firms in each sub-class based on the tariff data provided to the FSA by firms. The tariff measure for both the Investment Fund Management and Investment Intermediation sub-classes is “annual eligible income”.