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Fee reform could see costs fall for ARs going direct

The FCA is to launch a consultation on the way it calculates authorisation fees, which could see costs reduce for appointed representatives seeking direct authorisation.

In a discussion paper published this week, the regulator says it will issue consultation proposals in October and introduce a new structure in April 2015.

Fees are charged to firms looking to enter the market, as well as those seeking to vary their permissions.

Currently, the FCA classifies firms as straightforward, moderately complex or complex. Straightforward firms, which include advisers, are charged £1,500, while moderately complex firms are charged £5,000, and complex firms are charged £25,000.

The costs are split between applicants and existing firms.

But the FCA says it is considering introducing a fourth category of firm – very straightforward – which would include ARs seeking direct authorisation.

It says improvements to its systems will enable it to “streamline” the process for these applications.

In a cost projection which sets out four different scenarios, the FCA proposes charging very straightforward firms £600, and straightforward firms £1,000. Other scenarios, however, propose increasing the cost to straightforward firms to £2,250, and keeping the cost for very straightforward firms at £1,500.

The regulator is also seeking views on whether authorisation costs should continue to be split between applicants and existing firms, or whether they should be paid for only by applicants, or only by existing firms.

But it has rejected the suggestion that some firms could pay extra to have their applications fast-tracked.

It says this would be neither realistic nor fair, as to give certain firms an advantage would conflict with the FCA’s competition objective.

Responses to be paper must be submitted by 22 August.


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