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FSA says 10,000 small firms to see fee decrease

Over 10,000 small firms will pay lower FSA fees than last year according to the regulator’s business plan, despite an increase in the annual funding requirement by £117m to £437.7m.

But larger national firms and networks will face higher fees than last year.

Speaking to Money Marketing, FSA chief operating officer David Kenmir says a firm with 636 appointed representatives will face a 17 per cent hike in fees.

He says: “Firms will also need to take into account the FSCS and FOS levies. Overall it’s likely that firms will face higher costs because of the increase in the FSCS levy.”

10,000 smaller firms will have their minimum FSA fees frozen at 2008/09 levels and the regulator says they will see a reduction in fees due to sums raised by the impact of FSA fines.

The FSA says its budget for 2009/10 reflects the cost of priorities including enhanced supervision of higher risk firms and global regulation.

It says £70m of the £117m increase is due to the cost of embedding and delivering higher quality supervision. The FSA will also be investing an additional £12m in technology and property infrastructure to support the enhancement of its supervisory process.

FSA chief executive Hector Sants says: “The financial services industry is facing unprecedented challenges, which look set to continue in 2009. The FSA has a central part to play in addressing these challenges and providing leadership on the future shape of regulation. We will be focused on ensuring firms are soundly run in these difficult times and consumers are protected.

“We will need additional financial resources to meet these demanding priorities for the coming year. This will mean higher fees for regulated firms, although we have been careful to ensure, as far as possible, that firms requiring the most regulatory work and engagement pay proportionately. There will be no increase in fees for the smallest firms, and many of them will actually experience a fee reduction.”

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