In its formal response to the FSA’s regulatory fees and levies 2009/10 consultation paper, Aifa says the current process is flawed.
Director general Chris Cummings says: “The FSA should not have the power to develop and authorise its own budget. It does not work. The ability to give final approval of its own bud-get should be taken away from the regulator. We are calling for consultation on who should be authorised to give that final sign-off. This would take a lot of problems away from the FSA. It should not be fighting battles it does not need to fight.”
In February, Cummings called for a full review of FSA budget by the National Audit Office.
He slammed the FSA for increasing regulatory fees for all but the smallest IFA firms and warned that medium-sized firms will face fee increases of 90 per cent this year. He has proposed an inflation-linked increase of no more than 3 per cent a year for advice firms.
He says: “It is true that the FSA needs to do more to regulate the banks but it should be the banks themselves that meet this bill.”
Philip J Milton Financial Services managing director Philip Milton says: “An external body is a sensible idea, even if that third party is Government-oriented. I think the final responsibility should lie with the Treasury or the Bank of England.”
An FSA spokesman says: “We will be considering all submissions and our response will be published in a feedback statement next month.”