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PIMFA WEEKLY NEWS BULLETIN | 30 May 2022 Dear Nigel,
Welcome to the PIMFA Bulletin; grab a coffee and take 10 minutes to read the latest news impacting you and your firm.
PIMFA: Reduction in FSCS Levy Welcome but Long-Term Solution Still Needed
PIMFA welcomed the latest forecast of the Financial Services Compensation Scheme (FSCS) levy, showing a reduction for 2022/23 to £625mn from an original forecast of £900m in November 2021. However, we have repeated our call for the Government to consider using Financial Conduct Authority (FCA) fines to subsidise the levy, at the very least as a short-term option. Doing so would be the purest way of ensuring a ‘polluter pays’ model of compensation for consumers and would mean 90% in the FSCS levy this financial year would be paid from FCA fines.
We continue to believe the current model, which sees consumers suffer and well-run firms pay for the poor behaviour of others, is both unsustainable and unfair. PIMFA is still actively engaging with the FCA and we have been pleased to see the FCA accept our argument that the FSCS levy is dysfunctional. PIMFA will continue to work with the FCA to achieve a long-term solution.