FSA Fee Changes

The FSA has published a Consultation Paper (‘Regulatory fees and levies: policy proposals for 2010/11’ – CP09/26) which includes proposals to change the way that the FSA calculates the fees payable by firms.

It is proposed that fees will consist of two components: a basic minimum fee plus a straight line recovery.

The former would be in the region of £1,000 and would cover the basic costs such as the costs of the firm contact centre and the minimal base line monitoring carried out on all firms. The straight line element is based upon fees being in direct proportion to the size of permitted business (under the current regime the fees paid by larger firms tend to taper off as each incremental increase in tariff data is exceeded).

Firms that are in more than one-fee block will see an immediate benefit in respect of the basic fee, as the fee will be per firm and not per fee-block. However the straight line component is a little more complicated but Table 5.1 in CP09/26 suggests that the majority of firms will end up paying less or the same.

The FSA will be launching a fees calculator by the end of November (see s5.10) so that firms can calculate what their 2009/10 fees would have been (“Stage 1”) had the new proposals already been adopted to allow firms to assess the impact of the proposals.

Corporate finance advisors (fee-block A.14) and ‘advisers, arrangers, dealers and brokers’ (fee-blocks A.12 & A.13) should be aware that the FSA are considering moving away from a headcount basis to a measure based upon income (see Chapter 8).

Below is a link to the current FSA fees section, where the FSA will eventually be publishing the Stage 1 calculator referred to above, as well as allowing navigation to the 2009/2010 fee calculator.