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Firm’s plea for pro rata FCA fees rejected as too costly

A firm has lost its battle with the regulator over having to pay a full year’s FCA fees for a period when it was authorised for less than six months.

In a final report last week, Commissioner Antony Townsend said the FCA’s decision not to pro-rata charging is within its policy remit.

Introducing a pro-rata charging system would likely be too costly for the regulator overall, he added.

He said: “I am afraid that the FCA is entitled to this policy, to charge in full years, with a cut-off point of 31 March.”

The FCA rejected the complainant’s initial call for fees to be waived or reduced in an October decision letter.

The complainant called charging a full year’s annual fees “grossly unfair” given their business has been de-registered for more than half of the charging period.

The commissioner said: “The FCA has decided, on policy grounds, to charge in full years, [and] this has been its practice for several years, and is well publicised, as the FCA has explained.

Townsend said this complainant was not alone in raising the issue: “You are not the only firm which has complained to me about this, and I know that a significant number of firms are unhappy about it, but I am afraid that the FCA is entitled to adopt this policy and, having done so, must apply it fairly.

“It has done so in your case.

“It would, of course, be possible for the FCA to introduce a system of pro rata fees or rebates for part-year authorisations. That would, however, come at a cost to the overall system,” he added.

Townsend recommended the complainant approach the Smaller Business Practitioner Panel regarding potential changes to the regulator’s charging policies.


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There are 16 comments at the moment, we would love to hear your opinion too.

  1. If you always do what you’ve always done, you always get what you’ve always got! What a great innovative approach, “We’ve always done it this way.” Yes, so did Woolworths, Blockbuster et al.

    In the 21st century, with paying for parking, shopping, entertainment via your phone and on the cusp of driverless cars, visits to Mars and beyond, it is completely luddite to blame ‘time’ as a reason for the FCA not to be ‘fair to its clients’.

  2. Nicholas Pleasure 8th January 2019 at 1:25 pm

    More proof, if it were ever needed, that TCF only applies to other people.

  3. In Regu-land fairness is a one-way street

  4. Paul Lewis take note ……

    RE -: your latest article on banks and their charging …

    It seems our regulator (FCA)can charge what it likes based on stone-age principles and process,arguing cost as a barrier,and please don’t let propaganda cloud your knowledge that the “industry” pays these costs ….like any other business expense its passed on to the consumer !

    And well done Mr Townsend (pppphhhfffttt) please exit left of stage and collect a well deserved handshake for completely missing the point ! what the FCA has done for many years is not a basis of correctness nor fairness

  5. Corrupt practices are widespread in the financial services industry and give it a bad name. The regulator’s job is to stamp them out; not encourage them.

  6. Just because the FCA is entitled to do something or has done it that way for many years doesn’t make it right Mr Townsend.

    And just why, exactly, would a pro-rata charging system be too costly for the regulator overall? How flipping difficult can it be for some FCA admin. wallah to stab a few buttons on a calculator to arrive at the appropriate pro-rata charge for the (part) year?


  7. Ok, fine.. so just tell us where and how much this additional cost would be.. give us an example so that we can see for ourselves, because we don’t believe you especially when you make comments like “because the FCA is entitled to this policy”. That smacks of because we can .. we will so if you don’t like it… tough!!

    • Other than those with a predetermined outcome, the FCA doesn’t do Cost:Benefits analyses. And even if it did, it wouldn’t be prepared to entertain any debate over the conclusion. We can do whatever we like and you, the Great Unwashed, just have to go along with it whether you like it or not.

  8. By this logic, if I engage a client in March, I should be able to charge a full year’s fee dating back to the previous April!

    If the client were (quite reasonably) to complain about this, I think we all know what the FOS decision would be.

    One rule for some etc …..

  9. Treating customers fairly. NOT!

  10. Total agree with all the comments already posted – some TCF this is.

    Get a calculator FCA !

  11. New Year, same old hypocrisy.

  12. This confuses fairness with applying equally unfair treatment to all.
    Not permissible for FS firms to perpetrate and astounding that their regulator should apply this false logic in treatment of them, especially smaller firms, whose financial vulnerability can be equivalent to or even worse than average financial services customers.

  13. Is it not manifestly unjust that anyone who switches from one regulated firm to another on 1st April is charged two full years’ worth of regulatory levies (presumably all of them)? Of course it is, but plainly the FCA has no intention of addressing it.

  14. Charles Seymour-Cole 9th January 2019 at 12:42 pm

    This is nothing more than legalise robbery. At least Dick Turpin had the decency to wear a mask and point a gun at you when stealing your money.

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