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Pritchard and Worldspread failings leave £25m FSCS hole
by Annabelle Williams on Nov 30, 2012 at 13:36
Investment firms should expect to face an interim Financial Services Compensation Scheme (FSCS) levy next year as the body announced it is projecting a shortfall of £25 million in the investment intermediation sub-class.
The supplementary levy is due to higher than expected costs over the failure of Pritchard Stockbrokers, which went into administration earlier this year, and spread betting company Worldspread.
The FSCS expects to pay out £16 million in compensation over Pritchards, and a further £17 million for Worldspreads.
Fund managers should not expect to cross-subsidy the investment intermediation sub-class class, the FSCS said, although the final decision on the interim levy will not be made until later in the final year.
Investment intermediaries have paid out £66 million to the FSCS so far in 2012, leaving £34 million in ‘headroom’ for further compensation costs before fund managers will be asked to contribute.
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