On 12 January 2023, the FCA and the PRA jointly published a Consultation Paper concerning the 2023/24 Management Expenses Levy Limit (MELL) for the Financial Services Compensation Scheme (FSCS).
Under section 233 (1) of the Financial Services and Markets Act 2000 (FSMA), a limit must be set for the total management expenses that the FSCS can levy on financial services firms. The MELL is the maximum amount that the FSCS may levy in a financial year for its operating costs without further rule-making by the FCA and PRA after consultation.
In the Consultation Paper the following proposals are set out:
- The proposed MELL for 2023/24 is £109.8 million consisting of:
- The FSCS management expenses budget of £99.8 million
- An unlevied reserve of £10 million
- The proposed MELL is £0.7 million lower than the 2022/23 MELL of £110.5 million.
- The MELL would apply from 1 April 2023, the start of the FSCS’s financial year, to 31 March 2024.
The deadline for responding to the Consultation Paper is 9 February 2023.