Investor compensation and redress

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This overview is a guide to the Lexis+® UK Financial Services content within the 'Investor compensation and redress' sub-topic, with links to appropriate materials.

It considers the role and scope of the Financial Services Compensation Scheme (FSCS).

The two existing EU guarantee scheme directives, the Investor Compensation Schemes Directive (Directive (EC) 97/9) (ICSD) and the recast Deposit Guarantee Schemes Directive (Directive 2014/49/EU) (recast DGSD), require Member States to establish, respectively, investor and depositor protection schemes, offering minimum levels and scope of protection to customers of ICSD and DGSD firms.

The UK has met these obligations through the Financial Services Compensation Scheme (FSCS). (For the impact of the UK’s withdrawal from EU (‘Brexit’), see below).

Where an authorised firm is unable to meet its liabilities to a customer, that customer may be able to claim compensation from the FSCS.

The FSCS is established under Part XV of the Financial Services and Markets Act 2000 (FSMA 2000). It is independent of both the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) and the government and does not charge claimants for using

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Latest Financial Services News

FCDO announces sanctions against Russian GRU units and officers for cyber attacks

The Foreign, Commonwealth and Development Office (FCDO) has imposed sanctions on three units of Russia's Main Intelligence Directorate (GRU) and 18 military intelligence officers. The measures target units responsible for cyber operations against UK infrastructure and the 2022 Mariupol Theatre bombing. The sanctions package includes restrictions on GRU Unit 26165, which conducted reconnaissance for missile strikes, and officers linked to the 2018 Salisbury poisonings. Additional sanctions target three leaders of 'African Initiative' for conducting Russian-backed disinformation campaigns in West Africa.

PRA sets out CRR and Solvency II requirements, and approach to Own Funds (CRR) waivers and permissions

The Prudential Regulation Authority (PRA) has published policy statement PS12/25—Restatement of CRR and Solvency II requirements in PRA Rulebook—2026 implementation. The PRA has also published a statement of policy (SoP) on its approach to considering applications from PRA-authorised persons not to apply rules, or to apply them with modifications, under section 138BA of the Financial Services and Markets Act 2000 (FSMA).

Financial Services—other developments (18/7/2025)

A round-up of other developments, which have not been covered in full by the LexisNexis Financial Services practical guidance team but may nevertheless be of interest.

ESMA updates Q&As on MiCA and UCITS Directive

The European Securities and Markets Authority (ESMA) has published updated questions and answers (Q&As) on the Markets in Cryptoassets Regulation (Regulation (EU) 2023/1114) (MiCA) and the Undertakings for Collective Investment in Transferable Securities Directive (Directive 2009/65/EC) (UCITS). The impacted MiCA Q&As are: (1) ‘Staking on own account’ and (2) ‘Pre-funding clients’ orders with clients’ cryptoassets’. The impacted UCITS Directive Q&A is ‘Performance fees for feeder funds’.

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