Financial Services Compensation Scheme to be reviewed
The Financial Services Authority is consulting on possible changes to the FSCS...
...with a view to speeding up the compensation process and improving awareness of the scheme among consumers (including charities). The scheme caught the sector’s attention during the Icelandic banking crisis in October 2008 (see Caritas, issue 12, November 2008). The consultation document specifically comments: ‘Charities, depending on their size and how they are structured, may be eligible for compensation. This was seen in the recent default of Icesave, where some charities were protected as they fell into the smaller entity category, while others were large entities and so were not protected.’
The document did not appear to change the eligibility criteria for larger charities but has proposed a ‘flagging’ system. This would require deposit takers to check the eligibility status of a ‘smaller entity’ and flag them appropriately at least once a year to make sure that those who do qualify get a faster payout.
The consultation document can be viewed at: www.fsa.gov.uk/pubs/cp/cp09_03.pdf
The Charity Commission’s guidance on how the FSA regulations affect compensation payments to charities can be seen at: www.charitycommission.gov.uk/news/
Author: Clarissa Dann
Clarissa Dann was the editor of Caritas as well as an HR and management online service,he People Bulletin until July 2011.
She is now the editor of the specialist trade finance magazine, Trade and Forfaiting Review which can be viewed at www.tfreview.com but does write on charity finance and investment from time to time.
Clarissa has a background in legal and professional publishing, as well as business journalism and holds an MBA from
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