FCA is consulting on its policy proposals for the 2024/5 fee year.
- For application fees, FCA did not increase these fees last year, but now feels it is appropriate to do so as its costs for processing applications are rising. It will limit the uplift to the overall increase in its “ongoing regulatory activities” budget, and will consult on the new costs of each of its 10 pricing categories in April.
- FCA also froze minimum and flat rate fees last year for the 34,500 firms that pay minimum fees only. It now proposes to continue with its previously stated policy of increasing the fees for fee block A.0 as well as those in the CC blocks.
- The consultation also covers changes to the proxy income for limited permission credit brokers, given that the measure it was assessing loans against for the purpose of creating a meaningful figure was the BoE base rate, and that this is currently a disproportionate measure. It proposes currently set set a factor of 5% .
- There will be a new fee structure for firms dealing as principal to take account of changes the IFPR introduced. The changes will include moving matched principal brokers, MiFID oil and energy market firms and former “locals” in to fee block A.10. FCA proposes to introduce these changes from 1 April 2025. It is also proposing to split the A.10 fee block so that dual regulated firms that deal as principal and any non-MiFIDPRU firms are in a new block A.10A and MiFIDPRU firms in A.10B. For the new A.10B block, it is looking to revisit the current trader headcount approach to calculations.
- Fees relating to FOS will change so that the definition of “relevant business” will include all business with customers eligible to complain to FOS, not just consumers. FCA will also align reporting dates for insurers with the required PRA reporting dates under Solvency II.
While FCA will still allow firms to pay by cheque if they wish, it is proposing to introduce a requirement that payment other than electronically or by card be pre-agreed with FCA.
Consultation closes on 16 January 2024.