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Big firms facing FSA regulation fee of £25k

Big mortgage and general insurance intermediaries could face a one-off bill of up to £25,000 for applying to be regulated by the FSA while smaller firms face a maximum of £1,200.

According to CP180, firms with £1m or less in annual income pay £500 if they apply electronically before April 1 for mortgages or June 1, 2004 for insurance.

Those paying after these dates face higher charges, as do those using written applications.

A draft of CP180 seen by Money Marketing in March made no mention of fees varying depending on the size of the firm, Instead, it divided firms between the type of business they did.

CP180 says firms earning under £1m will pay between £500 and £1,200 depending on how and when they apply. Firms with inc-ome of £1m-£25m will pay £8,750-£11,000 and firms earning over £25m face bills of £22,500-£25,000. IFAs will not have to apply but will pay a one-off £250 fee to vary their permissions.

FSA managing director John Tiner says: “We are proposing to charge fees based on the size of business in recognition of the thousands of smaller firms.”

LIA head of public affairs John Ellis says: “Too many brokers are going to be unaware of the impending regulation and will end up paying £1,200 when they face the reality of going out of business.”

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