The FSA has confirmed that overall regulatory funding will rise 15.6 per cent over the next year from £500.5m in 2011/12 to £578.4m in 2012/13.
The FSA’s Business Plan, published today, confirms the regulator’s 2012/13 budget, which was first proposed in its consultation paper on fees and levies in February.
It shows of the £578.4m total budget, £32.5m is going towards the regulator’s switch to the incoming twin peaks regulatory structure. Last year, that figure was £10.9m, an increase of 198 per cent.
This means the operating budget for 2012/13 will be £543.5m.
The business plan says most of the increase will be carried by large firms which will face more intensive supervision in the regulator’s new judgement-based approach to regulation. It adds that the minimum fee of £1,000 paid by 42 per cent of regulated firms will reman the same for 2012/13.
Last year, the Budget rose by 10 per cent from £454.7m in 2010/11 to £500.5m for 2011/12.
In his forward to the plan, outgoing FSA chief executive Hector Sants says: “We recognise that the average increase in the FSA’s fees for the last five years has been around 13 per cent. This rate of growth cannot continue indefinitely, particularly when the financial services industry continues to be under pressure and so we would like to emphasise our commitment to ensuring direct costs of regulation are proportionate.”
Part of the rise is also down to increases in staff pay averaging 3.5 per cent.