The Financial Conduct Authority (FCA) is consulting on fees for regulated firms for the 2015/16 financial year. These fees are used to cover the cost of the FCA’s regulatory activities, with fees for individual firms based on the areas of business they undertake.
The FCA’s 2015/16 annual funding requirement is £481.6m, up from £446.4m in 2014/15, and it has proposed an 8.4% rise in fees to meet this increase. We will use this to deliver the programme of work set out in our 2015/16 business plan (including market studies on pensions, our work on pensions, market study into competition in investment banking and implementing the Parliamentary Commission on Banking Standard’s recommendations on accountability), the development of our information systems and the continuing need to invest in our people.
38% of regulated firms will continue to pay the minimum fee which will increase to £1084 from £1000, the first increase since 2010.
Martin Wheatley, FCA chief executive, said:
“These proposals seek to share the cost of being regulated and ensure the FCA has the right resources in place to deliver appropriate protection for consumers and make markets work well.”
Today’s publication also sets out the proposed fees for the Money Advice Service (MAS) and Ombudsman Service, which are collected by the FCA on their behalf.
- The ombudsman service has asked us to collect £23.3m on its behalf (which is the same amount asked for in 2013/14) recovered in the same proportions across the industry.
- We will collect £79.1 million on behalf of MAS. Their overall budget for 2015/16 is £81.1m which is the same as last year. However as the energy and water industries are voluntarily contributing £2.0 m to debt advice, the amount levied on financial services firms will be 2.5% lower than last year.
In addition the FCA has proposed fees for firms offering consumer credit, the pension guidance levy (which covers the cost of the government’s Pension Wise initiative) and the Payment Systems Regulator, which fall, outside the FCA’s annual funding requirement.
Firms can check their prospective fees for next year based on these proposals using the FCA fees calculator[1]. The consultation closes on 18 May 2015, and we expect to confirm changes to our fees in summer 2015.
Notes to editors
- The consultation paper[2]. The FCA’s annual budget reflects the cost of the resources we need to carry out our work in 2015/16. This reflects:
- the policy and regulatory environment including the impact of EU legislation and UK Government policies,
- changing economic conditions and market developments,
- the continuing need to invest in our people, and
- the need to adapt to the changing technological environment while maintaining our existing systems.
- The FCA’s 2015/16 business plan[3].
- More information on MAS[4] and the Ombudsman service[5].
- The FCA took over responsibility for regulating consumer credit firms on 1 April 2013. Previously these firms had been licence by the OFT, and have been granted interim permissions while the FCA assesses their applications.
Firms with interim permissions do not pay FCA, Ombudsman Service or MAS fees and firms who become authorised through the year are charged on a pro-rata on the basis of the number of months remaining in the fee-year. We anticipate that consumer credit firms will move onto the FCA’s normal fee structure in 2016/17.
- The Payment Systems Regulator Ltd (PSR) was incorporated on 1 April 2014 as a subsidiary of the FCA, and becomes fully operational from 1 April 2015. We will recoup the start-up costs (£12.2 million) and on-going costs (£15.9 million) of the PSR from payment systems operators, as designated by HM Treasury. The 2015/16 PSR Annual Plan and Budget[6] and more information on the PSR[7].
- The FCA will recover the estimated £39.1m cost of providing Pension Wise will be recovered from the relevant regulated firms on behalf of the government.
- On the 1 April 2013 the Financial Conduct Authority (FCA) became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
- The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
- Find out more information about the FCA.