The Financial Conduct Authority (FCA) has set out its predicted fees and levies for the 2023-24 financial year.
These will need to be paid by all FCA-regulated firms and those looking to get authorisation as well.
The total annual funding requirement (AFR) for the next financial year will be £684.2m ($853m, €780m) – a £53.3m (8.4%) rise from the 2022-23 figure of £630.9m.
The rise in the AFR is to ensure the FCA is “adequately resourced to manage its expanding remit” and “to cover inflationary pressure and to meet the policy opportunity provided by the transfer of previously retained EU financial services law into our regulation”.
The FCA is looking for feedback on the fees by 11 May 2023. It will publish feedback on responses received to the April with final fees and levy rates announced in June/July 2023.
Advisers
In the breakdown, the A.13 fee block, which consists of advisers, arrangers, dealers and brokers, has been proposed at £94.6m for 2023-24.
This is a £7.8m rise from the previous financial year at £86.8m.
The UK regulator estimates a 2.4% drop in the number of firms in the A.13 fee block – dropping to 11,375 from 11,651 in 2022-23.
The FCA said that estimated 2022/23 retained penalties to be applied to benefit of A.13 fee-payers in 2023/24 is £4.3m.
The estimated rebate applied to 2023/24 fees is 4.6%.
The fees received by the regulator will be used to fund:
- The FCA;
- The Financial Ombudsman Service;
- The Money and Pension Service;
- Devolved authorities (in Scotland, Wales and Northern Ireland); and
- The Treasury’s expenses in funding the teams that tackle illegal money lending.
Business plan
The FCA has also issued a business plan for 2023/2024.
It will focus on these four commitments:
- Preparing financial services for the future – working with the Treasury to implement the new regulatory framework so we can address emerging harms more efficiently;
- Putting consumers’ needs first – to improve consumer protection and standards for all consumers and ensure our support for struggling consumers remains a priority;
- Reducing and preventing financial crime – prioritising this will also help protect consumers to an extent and consumers in vulnerable circumstances specifically, as they may be more susceptible to fraud; and
- Strengthening the position in global wholesale markets – to help ensure that the UK continues to be seen as one of the leading global markets of choice and strengthen our ability to respond to market volatility.
The FCA also added that it will be spending £5.3m on the Consumer Duty implementation. It added that the funding will allow it to undertake sector-specific supervisory work, focused on the priorities detailed in its letters.
Nikhil Rathi, chief executive of the FCA, said: “We set out a bold vision last year of what we wanted the FCA to be, and we are well underway to achieving our objectives thanks to our talented colleagues and the better use of technology and data across our organisation.
“With many consumers across the UK struggling with the cost of living and markets events causing concern, we have put in place vital changes over the past few years which mean we’re better set up to face these challenges.”
