The FCA is consulting on the rates for the regulatory fees and levies for the next financial year (1 April to 31 March). The Consultation Paper (CP 23/7) explains how it proposes to recover the costs of carrying out its work, covering:
- The FCA’s annual funding requirement and its allocation across fee-blocks
- Details of the FCA periodic fees for authorised firms
- FCA fees for other bodies
- The new structure of application fees introduced in January 2022
- How it handles the revenue from financial penalties imposed on firms
It also consults on the Financial Ombudsman Service general levy and levies collected on behalf of government departments for the next financial year.
In relation to the Insurance Distribution sector, the FCA is seeking to raise fees to £34.7m for 2023/24 (as its budget rises to £684.2m, including a £5.3m Consumer Duty cost). The 10.4% rise for brokers from the current £31.5m would be ahead of the 8.5% year-on-year increase to the FCA’s overall funding requirement. Under the proposals being consulted on, brokers will benefit from £2.9m of penalties collected in the current financial year being rebated into the GI mediation group.
In relation to the costs of overseeing the FCA’s greater efforts in relation to ARs, the planned budget for 2023/24 will remain the same as that for 2022/23, at £7.1m. There is no proposed increase, therefore, in the annual AR/IAR charges of £260 and £88 respectively.
Feedback on responses to this Consultation Paper, as well as final fees and levy rates, will be published in a Policy Statement in June/July 2023.
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