FCA lowers fee increase for coming financial year
The City watchdog has narrowed its fee increase for the coming financial year after taking into account feedback from regulated firms.
The Financial Conduct Authority (FCA) charges all FCA-authorised firms – including peer-to-peer lending platforms – an annual fee. It says this is based on its annual funding requirement, which it uses to achieve its objectives that it sets out in its business plan.
It previously said its total annual funding requirement for 2022/23 was £640m – an increase of £26.3m from the previous year. But after a consultation period, it has now reduced the 2022/23 funding requirement to £630.9m.
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As a result, fees are being reduced to £581.5m from £591m. Most of this reduction comes from the FCA’s decision to phase the increase in minimum fees over four years instead of three, following feedback from smaller firms.
The FCA had proposed to increase all minimum fees in line with the 6.2 per cent increase in its ongoing regulatory activities budget, to reflect higher inflation.
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The regulator also said that it is able to reduce the total amount of fees payable thanks to £49.4m of revenues from financial penalties which will cover its 2021/22 enforcement costs. It said it applies this as a rebate against the following year’s fees and the balance paid to the Treasury.
The FCA will invoice firms from July 2022 onwards for their 2022/23 fees and levies.
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