Apfa: FCA fines should fund FSCS

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Apfa has urged the FCA to redirect money it collects from regulatory fines into funding the Financial Services Compensation Scheme.

Apfa today circulated its response to the regulator’s 2016/17 fees and levies consultation that was published in April.

In its response, Apfa says it understands the FCA was not responsible for deciding fines should be paid to the Treasury but reamined concerned this was the case.

The trade body says: “We believe that fines levied on financial services firms should be used to benefit the customers of the financial services industry and, as we have previously proposed, should therefore be used to help fund the FSCS or another body for which the financial services sector pays fees.”

Apfa also suggests the FCA should commit to freezing its budget for the next three years.

It explains: “We believe that it is of paramount importance that, without the budgetary review process and scrutiny from HM Treasury that the rest of the public sector has to undergo, the FCA exercise budgetary restraint in the spending of other people’s money.”

It also says it was disappointed that recent FCA consultation papers on fees and levies had been scheduled to close after changes had already come into effect.

Apfa adds: “We believe that consulting at such a late stage means that it is not a consultation in any real sense of the word and so you are failing in your obligation to consult. It seems to us that there would be no point in participating in future consultative charades.”