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Fee reform could see costs fall for ARs going direct

The FCA is to consult on the way it calculates authorisation fees, which could see costs reduce for appoin-ted representatives seeking direct authorisation.

In a discussion paper 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 or vary their permissions.

Currently, the FCA classifies firms as straightforward, moderately complex or complex. Straightforward firms, which include advisers, are charged £1,500, 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 – very straightforward – to inc-lude ARs seeking direct authorisation. It says imp-rovements to its systems will
enable it to “streamline” these applications. In a cost projection of four scenarios, the FCA proposes charging very straightforward firms £600 and straightforward firms £1,000. But other scenarios propose a cost of £2,250 for straightforward firms and £1,500 for very straightforward firms.

The regulator is also seeking views on whether costs should continue to be split between applicants and existing firms. But it has rejected the suggestion that some firms could pay extra to have their applications fast-tracked.

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