Tenet warns on cost of Mifid II to networks

Mike O'Brien 2

Tenet is concerned networks may face high regulatory fees to pay for Mifid II if new levies treat them as one business rather than many.

In a consultation paper released last month the FCA said it planned to recover its costs of implementing Mifid II in 2018 by introducing a levy on the relevant firms’ fee blocks from next year.

After Mifid II has been in operation for a year the regulator will update the levies for fee-blocks where fewer firms are found to have benefited directly from Mifid II.

The consultation proposes small firms in the advice fee-block – those that have income of less than £100,000 – will continue to pay the FCA’s standard minimum fee without paying extra contributions towards cost recovery.

Tenet regulatory director Mike O’Brien says the changes are worrying for Tenet and other networks if their fee is calculated for the network as a whole rather than a collection of small companies.

He says: “Although we are a network and we have got more than £11m in turnover, we are actually a collection of small companies. We do have firms that earn over £100,000 and firms that earn less than £100,000. What we are concerned about is that they treat the network as being one company and therefore we get a huge levy passed on to us which distorts the market if you are not doing the same for directly authorised firms.”