FCA to raise minimum fees for financial services firms
The UK Financial Conduct Authority (FCA) has proposed changes to the fees financial services firms pay to cover the cost of regulation. The minimum fee, which has remained largely unchanged over the last decade, would increase from £1,151 to £2,200.
According to the regulator, the fee increase would better reflect the costs associated with the authorisation and supervision of 51,000 firms throughout the UK.
As part of its transformation to a more innovative and assertive regulator, the FCA has committed to invest £120 million over the next three years to strengthen its ability to identify firms and individuals of concern. These changes are designed to benefit both consumers and firms.
In addition, the FCA is proposing changes to the calculation of consumer credit firm fees to bring them more into line with other firm fees.
In the meantime, the FCA has come under fire for the slow processing of retail broker license applications. Brokers complain the process takes 1-5 years.
In addition, the FCA CEO has recently noted that it has become increasingly difficult to justify one-off payments following the publication of two independent reviews, which found that the FCA acted too slowly and with insufficient creativity and assertiveness to prevent harm to consumers. This is particularly so when bonuses are paid to the vast majority of staff and not just those who have performed exceptionally.
As a result, the FCA is proposing that the discretionary bonus, from next financial year, will no longer be available.