FSCS 'expects' adviser interim levy after Catalyst/ARM failure

The Financial Services Compensation Scheme (FSCS) has said it is likely it will be forced to raise a supplementary levy on investment advisers before the end of the current levy year, to make up for losses incurred by the failings of ARM bonds and their distributor Catalyst.

FSCS chief executive Mark Neale said the losses incurred by ARM investors would likely be in "the tens of millions of pounds". The FSCS did not detail the cost of the likely levy. Neale said in a statement: "There is still a good deal of uncertainty about both [Keydata and Catalyst]. So we cannot yet provide robust guidance on the total bill. "But I do expect one consequence to be that FSCS will have to raise a supplementary levy on investment intermediaries before the end of levy year in June 2014. We know this will be difficult for firms and is unwelcome news, but we have a duty ...