Sinclair says while it’s good news the FSA will freeze fees for smaller firms, the devil was in the detail of the FSA’s Business Plan for 2009/10 and appointed representatives of networks may not benefit.
He says it will depend on how networks calculate their fees, but if they face a hefty bill they may have no choice but to pass it onto their members.
He says: “Larger firms and networks will see considerable increases, some trebling. It puts added pressure on firms at a time when they don’t need it.”
For example, medium sized firms with more than £5m average earnings will see overall regulatory fees rise by 114%.
He says: “The FSA is estimating that its budget will need to increase by £117m on last year’s figures. This will impact greatly on our members.
“We have never had a regulator that has cost the industry almost half-a-billion pounds. The failings of the financial system rest with the banks and the wholesale markets. It is they who should be forced to pay for their misadventures.”
He adds: “Intermediaries do not pose a systemic risk and were not responsible for the current economic situation we find ourselves in. This is a clear case of good firms paying for the failure of the banks and their regulator.
“While we understand FSA’s rationale to enhance its overall capacity to deal with volatility and to ‘minimise new initiatives,’ this level of fee increase is fundamentally inappropriate.
“Every firm in the UK is facing great difficulty and trying to find ways of cutting costs. FSA is doing the opposite. At a time when the government is trying to help small firms it is clear that this goes against that policy.”