It is important
to understand that The Financial Services Compensation
Scheme (FSCS) protection is not the same as
the "Excess FSCS" protection provided
by CAPCO. CAPCO does not offer FSCS protection.
FSCS is the sole source of FSCS protection.
There is no affiliation between CAPCO and FSCS.
Pursuant to the Financial Services and Markets
Act 2000 (FSMA), the Financial Services Authority
(FSA) created the FSCS as a statutory fund of
last resort for customers of firms authorised
by the FSA, compensating them when an authorised
firm is unable, or likely to be unable, to satisfy
claims against it (generally, when a firm is
insolvent). The FSCS is an independent body
funded by compulsory levies on firms authorised
by the FSA.
FSCS covers investment business of firms authorised
by the FSA. Investments covered include stocks
and shares, unit trusts, futures and options,
personal pension plans and long-term policies
such as endowments. FSCS also covers other regulated
business including authorised deposits and insurance.
Firms authorised in other EU countries who also
do business in the UK are generally unlikely
to be covered by the FSCS and will be covered
by compensation regimes established in their
To qualify for FSCS compensation, a claimant
needs to be eligible under FSCS rules which
are published in the Compensation Sourcebook
of the FSA's Handbook of Rules and Guidance.
The FSCS was set up mainly to assist claimants
who are private individuals, although smaller
businesses are also covered. Larger businesses
are generally excluded, at least for claims
relating to investment business.
The FSCS rules state which types of claim are
eligible for FSCS compensation, and how much compensation
can be paid. Under the FSCS rules, there are
limits to the amount of compensation FSCS can
pay to a claimant depending on the type of claim.
In respect of investment business, the FSCS
will cover a claim by an eligible person up
to £50,000, although the maximum payment
of compensation in relation to such a claim
will be £48,000 (FSCS will compensate
100% of the first £30,000 and 90% of the
next £20,000 of any claim). FSCS does
not compensate persons for a failure of investment
performance to match a guarantee given or representation
made, or for mere fluctuations in the value
of investments. FSCS compensation is generally made
by way of cash payments.
For further information on the FSCS, please
see http://www.fscs.org.uk/, call the Scheme's
Customer Services Team on 020 7892 7300 or write
to: Financial Services Compensation Scheme,
7th Floor, Lloyds Chambers, Portsoken Street,
London E1 8BN.