FSCS levy calculations: FCA clarifies process for reporting income
The FCA has published a new webpage for investment managers, clarifying the options for reporting income for Financial Services Compensation Scheme (FSCS) levy calculations.
The clarification is necessary as the FCA has become aware that some firms may be reporting income for the FSCS levy that does not need to be reported. It relates to the requirements on asset managers to report "look through" income for the FSCS levy. Income relating to beneficiaries who are FSCS-eligible claimants must be reported under Chapter 6 of the Fees manual (FEES 6).
The FCA explains that, when calculating annual eligible income (in accordance with the FCA Glossary definition) there are two options:
- to only include such annual income if it is attributable to business in respect of which the FSCS may pay compensation; or
- include all such annual income.
Therefore, firms must include income they know relates to eligible claimants, and income that may relate to eligible claimants. If the firm cannot identify whether the underlying beneficiary is an eligible claimant, income derived from that business must be included, because the FSCS may pay compensation in relation to it.
The FCA further clarifies that, if the firm can identify income that relates to beneficiaries who are not eligible claimants, that income can be excluded. In any case, a firm can report all income if it chooses to do so.
The FCA webpage includes an example to illustrate the requirements.
Executive remuneration: Investment Association principles and guidance
The Investment Association has published a revised version of its principles of remuneration. The main changes from the November 2019 version are clarified sections on pensions, non-financial performance measures, post-employment shareholding requirements and deferral of bonuses. These are explained further in the IA's letter to remuneration committee chairs.
The Investment Association has also updated its guidance "Executive Remuneration in UK listed companies – Shareholder Expectations during the COVID-19 Pandemic".
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Authored by Yvonne Clapham