CP24/6: FCA Consulting on Regulated Fees and Levies for 2024/25

The Financial Conduct Authority (“FCA”) published consultation paper (“CP”) CP24/6 on 9 April 2024 and has since expanded on its contents on 29 May 2024 with the addition of an Addendum. The purpose of the annual paper will be to consult with firms on the rules that enable the FCA to charge regulated fees and levies. The fees and levies raised go towards funding the FCA, the Financial Ombudsman Service (“FOS”) and certain government departments.

Application

All FCA authorised firms should take note of the CP, alongside any other bodies currently paying fees to the FCA in the course of business. Firms intending on applying for FCA authorisation should also consider its contents.

Proposed Changes

It was to be expected that the FCA would make reference to economic and inflationary pressures faced in 2023/24. In response to this, the FCA had previously frozen minimum, flat rate fees and application fees in order to ease the financial burden faced by small firms in particular. This is set to change moving into 2024/25. The FCA has now committed to increasing minimum, flat rate and application fees by 8.75%. There will also be a return to staged increases for consumer credit and A-block fees.

With regards to the FOS general levy, the FCA plans to change allocation between respective industry blocks. The FOS general levy is imposed on all FCA authorised or registered firms, regardless of whether or not a firm has had any cases referred to the FOS during the year.

In line with continuing work post-Brexit, the FCA has proposed changes to the contents of the FEES Manual. We can expect to see the removal of any reference to regulations which have been revoked, removed or no longer apply since the UK’s exit from the EU. Notably, any reference to temporary permissions afforded to EEA firms as part of the transition period will be taken out. For example, temporary access for EEA firms under the Alternative Investment Fund Managers Regulations 2019 Part 9A has now expired. Other changes of this nature are set out in Appendix 1 of the CP.

Next Steps

Although still at consultation stage, we do not anticipate that the proposed changes will differ materially when the final policy statement is published in July 2024. The general sense of what firms can expect is that there will be an increase in fees and levies collected by the FCA. Firms already authorised and those applying for authorisation must ensure they are adequately resourced for this change, factoring this into their 2024/25 financial year preparations.

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How Complyport can help:

Navigating the FCA’s annual fees and levies changes can be time-consuming and cumbersome. We help firms to ensure they are ready before the July 2024 deadline. We provide:

  • Risk management and Risk assessment services
  • ICARA preparation
  • Financial and Regulatory reporting
  • Financial and Regulatory reporting full service (including submission)
  • Implementation Guidance and Advisory services
  • Ongoing support for any questions regarding new regulations and their impacts

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