global insurance management

FCA Fees and Levies (2015-16)


Apr 22 2015

FCA Fees and Levies (2015-16)

Relevance:                   All firms.

Action required:           Take note of the increased cost of regulation.

In the first quarter of each year there are a number of events that happen and are celebrated; such as Burns Night, St Valentine’s Day, Pancake Day, St David’s Day, Mothers Day and St Patrick’s Day. 

Another notable event is the publication of the Consultation Paper that contains details of the proposed fees and levies that the FCA will invoicing firms for later in the year – this event is perhaps less celebrated than others listed!

As well as collecting its own fees, the FCA is also responsible for collecting the levies charged by the other bodies that make up the cost of regulation; the Financial Ombudsman Service (FOS), the Financial Services Compensation Scheme (FSCS) and the Money Advice Service (MAS).

The FCA has also proposed fees for firms offering consumer credit and the Payment Systems Regulator, which fall, outside the FCA’s annual funding requirement.

In addition, there is an extra levy this year, the Pensions Guidance Levy (PGL), which “will fund the provision of pensions guidance – Pension Wise, the Government’s impartial guidance service to help consumers understand the greater flexibility they will have with their pension pots resulting from the pension reforms under the Pension Schemes Act 2015.”  However, this will only be charged to those firms that might gain a benefit from the guidance, e.g. insurers, pension scheme operators and IFAs.

So, what do we know about the overall funds that are required by the various bodies that regulate firms in the financial services industry (excluding the PRA)?

Each organisation produces its own “Business Plan and Budget” document that outlines what they intend doing and what income they need to do it.  The following list summarises the figures for 2015-16:

Body

Income

Required

% change

Broker contribution

% change

FCA

£481.6m

8.4+

£28.1m

  8.50+

FOS

£270.3m

2.9 -

£  5.4m

  3.75-

FSCS

£287.0m

8.3 -

Nil

100.00-

MAS

£  81.1m

Same

£  0.7m

  36.00-

As usual, the FCA has made its calculator available using its proposed rates chargeable for fees and levies, which can be accessed with the following link: http://www.fca.org.uk/firms/being-regulated/fees/calculator

FCA fees have increased, others have reduced but the significant impact is on FSCS fees for insurance intermediaries where only a small contribution to cost is required for the coming year.

For example, if a firm has an income from regulated activities of £500,000 or £1,000,000, the following costs are indicated by the FCA calculator – a bit different to the rates for 2014-15:

Body

£500,000

£1,000,000

2015-16

2014-15

2015-16

2014-15

FCA

£1,849.76

£1,742.62

£2,806.97

£2,670.89

PRA

£       0.00

£       0.00

£       0.00

£       0.00

MAS

£     28.40

£     40.00

£     51.40

£     77.50

FSCS

£     55.70

£2,220.09

£     87.26

£4,434.01

FOS

£   233.50

£   242.60

£   467.00

£   485.20

PGL

£       0.00

£       0.00

£       0.00

£       0.00

Total

£2,167.36

£4,245.31

£3,412.63

£7,667.60

The consultation period closes on 18th May 2015 and the FCA expects to publish feedback on the responses received together with final FCA, FOS and MAS fees and levies rates in a policy statement at the end of June or early July.

Back to news

Global News Archive

We are now part of the AXA Group Click here

Generation 3 Ceramic  Click here

Cutting edge, Market Leading Software from our Solutions company. Click here