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FCA chief: We do not like the phrase ‘regulatory dividend’

The FCA does not like the phrase “regulatory dividend” and believes all firms must pay their share of regulatory costs, says chief executive Martin Wheatley.

Speaking at the FCA’s annual public meeting in London today, Wheatley said the phrase is “banned from our lexicon”.

Apfa has repeatedly called on the FCA to deliver a regulatory dividend for advisers given the increased professionalism requirements under the RDR.

Responding to a question from Money Marketing, Wheatley said: “The regulatory dividend concept is something that fell out of favour because it was seen as us somehow giving firms an easier ride through the system.

“Our view is that all firms have to live up to the standard and therefore they should all contribute to the cost of providing a regulated market.”

Asked what assurance the FCA can give to rule-abiding firms that they are not paying for the bad practices of others, Wheatley said: “We try to run as tight a ship as we can within the very broad range of responsibilities we have. Our costs are recovered from the industry through the allocation of fee blocks.

“The Chancellor decided that our fines were an attractive means of revenue for the Treasury so that is no longer a means of offsetting our costs.”


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There are 7 comments at the moment, we would love to hear your opinion too.

  1. “We try to run as tight a ship as we can within the very broad range of responsibilities we have.”

    Its a very tight ship when you have paid over £100,000 in board away days in the last five years! also, lets not forget the millions of pounds worth of art that you have on the walls of Canary Warf, what about the extortionate amount they paid to revamp their reception?

    How tight a ship can it be?

    “Our costs are recovered from the industry through the allocation of fee blocks.” Shouldn’t that say, “We will charge you what we want as you don’t have anywhere else to go. We can dictate whatever fess we want to charge you!”

  2. We know what he is aiming to say, but taken literally there must be a regulatory dividend somewhere or regulation is pointless and causing detriment to the system as a whole. So who is getting the benefit?

    Consumers – no because all they get is a lot of more expensive, restricted choice products; Providers and distributers – no; FCA Staff? Errr….. It’s no wonder that the phrase is banned!

  3. Julian Stevens 17th July 2014 at 2:53 pm

    Our expectation is that as regulators integrate the Code’s standards into their regulatory culture and processes, they will become more efficient and effective in their work. They will be able to use their resources in a way that gets the most value out of the effort that they make, whilst delivering significant benefits to low risk and compliant businesses through better-focused inspection activity, increased use of advice for businesses, and lower compliance costs.

    Wheatley’s response? F— that.

  4. We wouldn’t need to request a regulatory dividend if the financial services industry was ringfenced from the rest of the UK economy. In such a scenario firms would pay regulatory fees as we do today, but all fines levied would be used to offset regulatory costs.

    Bad firms pay, good firms pay less.

  5. Incompetent Regulators 17th July 2014 at 3:41 pm

    What about the salaries us regulated firms pay like a £610,000 package with pensions benefits? One rule for them and another for us!

  6. Julian Stevens 17th July 2014 at 6:22 pm

    To Simon Kershaw ~ Quite right. Shouldn’t risk-based monitoring be reflected in risk-based levies?

    What’s APFA’s view on this?

  7. I dont mind calling it something else – if the words Regulatory Dividend are so offensive how about calling it Treating Advisers Fairly ?

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