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.

Prior to the UK’s withdrawal from EU (‘Brexit’), the UK met these obligations through the establishment of the Financial Services Compensation Scheme (FSCS). (For the impact of 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) and, since Brexit, continues to have its legal basis in FSMA 2000. It is independent of both the Prudential

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Latest Financial Services News

Government departments update ECCTA guidance on AML information sharing measures

The Home Office, HM Treasury, Ministry of Justice, Companies House, Serious Fraud Office and Department for Business and Trade have updated guidance on information sharing measures under the Economic Crime and Corporate Transparency Act (ECCTA) 2023. The updated guidance, published on 3 October 2025, sets out provisions for anti-money laundering (AML) regulated firms to share customer information directly or indirectly through third-party intermediaries to prevent, detect and investigate economic crime. The guidance covers warning and request conditions for direct sharing, practical considerations including cross-sector sharing mechanisms, and requirements for law enforcement reporting, UK General Data Protection Regulation compliance and customer redress. The measures, which came into force on 15 January 2024, disapply confidentiality obligations and civil liability for AML regulated firms when sharing information for specified economic crime prevention purposes.

BoE Speech reflects on post-crisis financial reforms and calls for adaptive regulatory approach

The Bank of England (BoE) has published a speech delivered by its governor, Andrew Bailey, reflecting on the financial system reforms implemented since the 2008 financial crisis and addressing current challenges to the regulatory framework. Bailey outlined three major changes in financial intermediation: rebalancing non-bank finance, increased interconnection between banks and non-banks through activities such as prime brokerage, and growth of crypto assets.

FCA publishes Handbook Notice No 133

The Financial Conduct Authority (FCA) has published Handbook Notice No 133, which includes changes to the FCA Handbook made by the FCA board on 31 July and 2 October 2025.

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