View more on these topics

Firms could be hit with higher costs of Euro regulation


Senior European regulators are pushing for financial services firms in member states, including the UK, to pay more towards the cost of their expanding regulatory remits.

The European Securities and Markets Authority, the European Insurance and Occupational Pensions Authority and the European Banking Authority were set up in January 2011. Known as European supervisory authorities, their role is to create a single EU rulebook for financial services, but experts say their remit is expanding from drafting legislation to oversight of national regulators.

The bodies currently receive 60 per cent of their total funding from member states, and 40 per cent from the European Union.

The Financial Conduct Authority is set to contribute £890,000 from its budget in 2013 towards the cost of European regulation, while the Prudential Regulation Authority is set to pay £896,000.

Esma chairman Steven Maijoor told a recent public hearing on financial supervision in the EU that its current funding model creates a tension between strengthening both EU and national regulation, as it implies more funding for European regulators means less for national regulators.

He says: “The way we are now funded appears to have become an important problem for the development of Esma. Possible solutions to consider here are decreasing the level of funding by national competent authorities and increasing funding from the EU budget, or from market participants. On the latter, while we are already partly funded by market participants, not all Esma activities directly related to market participants are yet funded by them.”

His comments echo those made by Eiopa chairman Gabriel Bernardino, who says in order to strengthen Eiopa’s independence, a “partial financing by levying fees on the industry” should be looked at.

UK financial services firms have seen significant increases in regulatory costs in recent years. The FCA and the PRA have a combined total budget for 2013/14 of £646.3m, a 15 per cent incrasse on the FSA budget of £559.8m for 2012/13. Advisers are seeing a 15.5 per cent increase in regulatory fees from £32.8m in 2012/13 to £37.9m in 2013/14.

Lansons director of regulatory consulting Richard Hobbs says he could imagine a scenario where last-minute EU budget negotiations result in a marginal amount of extra funding for European regulators from the EU, with the rest of the costs falling on the industry.

Philip J Milton & Company managing director Philip Milton says: “This would be yet another levy by unelected, unwanted entities in Europe.”



Sector Focus: Managers outlook for emerging markets

Julian Thompson, manager of the AXA Framlington Emerging Markets fund:  Emerging markets have underperformed developed markets over the last few months, prompting many commentators to suggest that the emerging markets’ growth advantage is now nearing an end. True, emerging markets have yet to regain the peak seen in April 2011 even as the S&P reaches […]

Brussels looks to strip London of Libor oversight

Brussels is set to strip London of its oversight of Libor and hand it to the European Securities and Markets Authority following last year’s rate rigging scandal.  A draft of the European Commission’s proposals, seen by the Financial Times, aims to move direct supervision of Libor to ESMA, which is based in Paris.  This comes […]

Thomas Miller launches model portfolio service

Thomas Miller Investment has launched a range of six model portfolios.  Aimed at investors with over £50,000 of investable assets, the offering will come with an annual management charge of 0.4 per cent plus platform fees.  The portfolio range will target the same securities as the firm’s institutional clients and will cover equity and fixed […]


News and expert analysis straight to your inbox

Sign up


There are 4 comments at the moment, we would love to hear your opinion too.

  1. I thought that Mr Cameron had opted out of a lot of this, but his actions that he wanted so much credit for seem to have been a lot of gun but not much powder.

  2. So what will be the implications for 2014/15 fees given a 30% reduction in IFA’s and 50% reduction in Bank advisers. That is a big chunk of lost revenue for the FCA that the remaining will have to pay and now a proposed additional cost!

  3. Stephen Rowland 6th June 2013 at 10:30 am

    We all know what’s going to happen – Fines will go up for any little misdemeanour & the end game is to get rid of Advice by hook or by crook ( literally!)

    It will get to the stage (soon) where there is more Compliance / Regulators as a Industry than there are practicioner’s / Advisers!

    How can this situation be left to carry on before someone at the top (hopefully in this country) realises that the Financial Services sector is in meltdown!

    We all know the government want to lessen the Financial Services GDP rate against Manufacturing – but do they really need to trash the goose that laid (in the past anyway) the golden egg?

    An absolute travesty to ordinary Clients & Advisors throughout the UK who have lost their jobs to gold plated EEC rules & regulation red tape.

  4. Bigger fleas have smaller fleas upon their backs to bite’em. And smaller fleas have smaller flea , and so ad infinitem.
    Vote UKIP!

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm