The FSA has confirmed that overall regulatory funding will see a gross increase of 10.1 per cent over the next year, from £454.7m in 2010/11 to £500.5m for 2011/12.
However enforcement fines levied over the previous year will mean that in total firms will pay 2 per cent less in regulatory fees compared to last year.
The minimum fee paid by 43 per cent of the FSA’s authorised firms, including many IFAs, will fall by 9 per cent from £925 to £844.
In its Business Plan for 2011/12 published today, the FSA says that due to the cost of regulatory reform it is not planning any regulatory initiatives and will cap headcount at the current level.
The regulator has also set up a workstream to focus on what support the industry needs to transition to the RDR, and has pledged to help the industry develop a simplified advice service.
The FSA says: “In respect of the RDR, the project is on track to ensure the intended principal changes with regard to adviser remuneration commission structure and training and qualifications are introduced from January 1, 2013.
“The FSA nevertheless remains conscious of the need to work with the industry to ensure that the changes occur in as smooth a manner as possible and to this end the FSA has set up a workstream looking at what support industry needs. In particular, the FSA will continue to assist industry in its development of a simplified advice service.”
Updating on the Mortgage Market Review, the regulator says that an indicative cost benefit analysis of the proposals will be published in the summer.
The regulator has admitted that its initial proposal to have a fixed 25 year term to assess affordability may not be appropriate.
It adds that it is not the FSA’s intention to ban interest-only loans.
FSA chief executive Hector Sants says: “The 2011/12 business year for the FSA will be a difficult one. We have to ensure that we are operating effectively as a supervisor as well as taking forward the key policy initiatives.
“The principal ones are progressing the domestic consumer protection strategy, implementing a number of key EU directives and influencing the continuing international regulatory reform agenda. All this has to be done at the same time as taking forward the preparations for a new regulatory structure.
“The regulatory reform agenda remains on track to ensure the new structure will be ready in 2012. We will be seeking to deliver this agenda with a capped headcount.”
The FSA put out its consultation on the 2011/12 Business Plan in February.