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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.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Julian Stevens 27th May 2016 at 4:58 pm

    You’re missing the biggest point Mr Hannant, namely that whenever some flaky investment scheme comes apart at the seams and plunges to earth in flames, the FSCS takes on not only the losses incurred by the clients of authorised firms (those, amongst all the rest of us, that actually fund the FSCS) but also those of all unregulated firms which pay NOTHING into the FSCS and are beyond regulatory sanction. If you can’t see this, then you really shouldn’t be in the position you are.

  2. We’ve been there before – fat chance. This is pocket money for the Treasury and the arguments is that it helps to fund the miscreant firms. (That they can be excluded seems to have bypassed the Patricians)

  3. Julian Stevens 2nd June 2016 at 10:22 am

    Was APFA not aware that the FCA has no power to overturn an edict handed down from No. 11? If it was, then what’s the point of “urging” the FCA to do so? If it wasn’t [aware that this is the case], then it really needs to be considerably better informed about such subjects instead of making completely pointless demands just to get its name in the trade press.

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