The UK's Financial Conduct Authority is canvassing opinion about some changes that it wants to make to the rules that govern its Financial Services Compensation Scheme, especially involving funding.

The FSCS is the UK’s statutory compensation scheme of last resort, which can step in when a financial firm is unable, or likely to be unable, to pay its creditors. Firms from all over the financial sector pay levies to fund both the FSCS’s operating costs and the compensation it pays out.

The rules were last reviewed in March 2013 and, since then, FSCS levies have risen sharply in value for some firms. In 2014-2015, the scheme paid out £327 million ($510 million), a 34% jump from a year earlier.

The FCA is now calling for opinions about several options it is proffering for the funding of the scheme. These are as follows.

• To amend payment arrangements so that the scheme asks firms to pay a proportion of the levy on account.
• To introduce FSCS coverage for debt management firms.
• To extend coverage in respect of fund management.
• To apply FSCS protection to advice and intermediation of structured deposits.
• To ensure that the FCA's rules include Lloyd’s of London.

Additionally, the regulator is proposing to change professional indemnity insurance (PII) by introducing mandatory terms. It is also thinking of introducing "product provider contributions towards intermediation claims"; changing the FSCS funding classes for intermediation activities; updating limits on consumer coverage in the light of the UK's so-called 'pension freedoms'; and exploring the potential for FSCS levies to cater more effectively for the risks posed by particular practices.