This sourcebook is principally relevant to the FSCS. It sets out the circumstances in which compensation may be paid, to whom compensation may be paid, and on whom the FSCS can impose levies to meet the costs of paying compensation (see in particular COMP 3, 4, and FEES 61). It also describes how the FSCS is to calculate compensation in particular cases (see COMP 12).1
Claimants and their advisers will be particularly interested in the sections of this sourcebook which deal with eligibility for claiming compensation, the way that the FSCS calculates compensation, and how they can make a claim. For convenience, the relevant parts of this sourcebook are highlighted in a list of questions and answers in COMP 1.3.3 G.
The FCA and PRA are5 also required, under section 213 of the Act (The compensation scheme), to make rules establishing a compensation scheme. The FCA’s5rules are set out in the remaining chapters of this sourcebook, and are directed to the FSCS, claimants and potential claimants, and firms. The PRA’s rules dealing with claims for deposits and under contracts of insurance are set out in the PRA Rulebook.5
The FSCS will only pay claims if a firm or a successor4is unable or likely to be unable to meet claims against it because of its financial circumstances. If a firm (or, where applicable, a successor) 4is still trading and has sufficient financial resources to satisfy a claim, the firm (or, where applicable, the successor) 4will be expected to meet the claim itself. This can, for example, be an amount the firm agrees with the claimant, or the amount of an Ombudsman award from the Financial Ombudsman Service.
6By making rules that allow the FSCS to provide compensation at a level appropriate for the protection of retail consumers and small businesses, the FCA enables consumers to participate in the financial markets with the confidence that they will be protected, at least in part, should the relevant person with whom they are dealing4, or a successor, 4be unable to satisfy claims against it.