On 17 November 2017, we blogged that the FCA published its first Consultation Paper 16/33: Regulatory fees and levies: policy proposals for 2017/18 (CP16/33). In CP16/33 the FCA sets out its proposed policy changes regarding how its fees will be raised from 2017/18.

The FCA has now published Consultation Paper: FCA Regulated fees and levies: Rates proposals 2017/18 (CP17/12). CP17/12 covers the proposed 2017/18 regulatory fees and levies for the:

  • FCA;
  • Financial Ombudsman Service;
  • Money Advice Service;
  • Pension Wise service; and
  • Illegal Money Lending expenses of HM Treasury.

The FCA’s annual funding requirements (AFR) for 2017/18 is £526.9m. This is an increase of £7.6 (1.5%) over the AFR for 2016/17 and is driven by an inflation aligned £5.1m (1.0%) increase in the FCA’s ongoing regulatory activities (ORA) budget and £2.5 for EU withdrawal costs.

Over the past 3 years, the FCA’s approach to allocation has been to maintain an even distribution of AFR increases, unless there have been material and explainable exceptions not to do so for individual fee-blocks. The FCA is proposing to continue to follow the allocations by exception approach for 2017/18. The exceptions it is proposing to an even distribution of the 1.5% increase in its 2017/18 cover:

  • changes to the FCA’s regulatory scope (scope change);
  • EU withdrawal costs;
  • Payment Services Directive implementation costs; and
  • an adjustment relating to the annual contribution to reducing the FCA pension deficit.

The deadline for comments on CP17/12 is 9 June 2017. The FCA will consider responses and will publish a policy statement including feedback on the consultation and final rules, subject to FCA Board approval, at the end of June 2017 or in early July 2017. Certain fee payers have been invoiced from February 2017 for “on-account” payments, and other firms will be invoiced from July 2017, on the basis of the new fees and levies.

The FCA provides a facility on its website to enable firms to calculate their periodic fees for the forthcoming year based on the draft fees set out in CP17/12. The fee calculator will also cover PRA, where applicable, and Financial Services Compensation Scheme levies. The fees calculator for 2017/18 will be available for firms to use from 19 April 2017.

View FCA consults on 2017/18 regulated fee and levy rate proposals, 18 April 2017