On 9 April 2024, the Financial Conduct Authority (FCA) published Consultation Paper CP24/6 on the rules that enable the FCA to raise regulatory fees and levies in 2024/2025 to fund the FCA and the Financial Ombudsman Service (FOS). CP24/6 also covers rules that enable the FCA to collect certain levies on behalf of government departments.

The proposals apply to all FCA fee-payers and to any businesses considering applying for FCA authorisation or registration.

The Consultation Paper (CP) is in parallel with the FCA’s 2024/2025 Business Plan, where the FCA outlined its priorities and objectives over the coming year. 

Proposed changes

The FCA explains that, due to inflationary pressures firms faced in 2023/2024, it froze minimum and flat rate fees, as well as application fees, with the aim of easing cost pressures on smaller firms. However, in Policy Statement PS23/10 and Consultation Paper CP23/22, the FCA committed to increasing minimum, flat rate and application fees in line with the increase of its ongoing regulatory activities budget. Accordingly, from 2024/2025 the FCA plans to increase the relevant fees by 8.75% and resume staged increases for A-block and consumer credit minimum fees.

In Chapter 5 of the CP, the FCA also consults on allocating the FOS general levy (which is raised and collected by the FCA) between industry blocks. The general levy is payable by all firms authorised or registered by the FCA, including those that have not had any cases referred to the FOS.

In Chapter 6 of the CP, the FCA presents the levies it has been directed to collect by government departments. These are the:

  • Money and Pensions Advice Service levy.
  • Devolved Authorities debt advice levy.
  • Illegal money-lending levy.

The FCA is also proposing some consequential changes to rules in the FEES Manual. For example, it proposes to remove references to the Alternative Investment Fund Managers Regulations 2019, as the temporary access for EEA Alternative Investment Funds under Part 9A has now expired, and to remove references to the obsolete term ‘General Periodic Fee’ in FEES 4A Annex 1R. These changes are set out in Appendix 1 of CP24/6.

Next steps

The FCA has requested that comments are submitted by 14 May 2024. It plans to publish its feedback and final rules in a policy statement in July 2024.