FSA plans to simplify regulatory fees
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The Financial Services Authority is consulting on a number of measures to simplify the fee structure for regulated firms.
The regulator says it will enhance the fairness and transparency of the annual regulatory fees that firms have to pay.
Following a review of its approach, the FSA is looking at setting a standard ‘minimum fee’ that all firms will have to pay to cover the basic cost of being regulated.
The FSA expects the minimum fee level to be approximately £1,000, which will avoid the current situation of firms being charged several minimum fees on fee-blocks and then receiving discounts.
The amount the regulator recovers from minimum fees will fall from £30.3m to £19.7m under the proposals.
Of the 8,993 firms that currently only pay minimum fees, 25% will pay the same or see a change of £40 or less, 35% will pay less and 40% will pay more.
The main group paying more will be firms that only carry out permitted business falling under fee-block A.19, General insurance mediation.
These represent 87% of the firms paying more.
The FSA also wants to ensure that variable fees above this minimum £1,000 level increase in proportion with a firm’s size, meaning that fees for the largest firms reflect greater engagement with the regulator.
It will publish a fees calculator at the end of Novemner which will enable firms to assess what these proposals mean for them.
Mark Norris, chief operating officer at the FSA, says: “We are committed to delivering fair and transparent fees to all authorised firms.
“This is particularly important given that we are funded entirely by the firms we regulate, so we need to ensure firms can clearly see how we calculate their contribution to the running costs of the FSA.”
The deadline for responses to the FSA’s consultation paper is January 11 2010.
In February 2010, depending on the outcome of this consultation, the regulator then plans to consult on fee levels for 2010/11 using this new fee model.
