"However, it should be noted that the FCA has listened to some of the challenges raised since April, with the result of some ‘tweaking’ around the edges."
Whilst this is a much-needed decrease on last year, at 1.6%, it is not a substantial one. The underlying annual funding requirement remains unchanged from last year (£481.6m), and the proposed decrease in the cost of ‘ongoing regulatory activities’ is also confirmed. Fundamentally, the allocation of fees and levies has not changed from those proposed in CP16/9 published in April.
However, it should be noted that the FCA has listened to some of the challenges raised since April, with the result of some ‘tweaking’ around the edges.
What has changed?
FCA fees: The CBTL fees have been modified so that only CBTL firms that do not have permission to carry out any regulated activities will pay CBTL flat fees. The effect of this modification is that forms in A.2 or A.18 fee-blocks, or who undertake consumer credit activities in the CC2 fee-block will not pay separate CBTL fees in addition to the minimum fees they already pay through these fee-blocks. CBTL periodic fees will still be paid by firms that are registered for CBTL activities and are not in any of the fee blocks above.
This means that a small mortgage broker, only in the A.18 fee-block, but with income from this activity less than £100,000, also fully authorised to undertake consumer credit activities in the CC2 fee-block but their income from this activity is less than £50,000, and registered to carry out CBTL activity of arrangers and advisers, will see their fees unchanged from 2015/16.
Financial Ombudsman Service general levy: Due to an observed lack of clarity in the April proposals, the FCA has amended its rules to make clear that only CBTL firms that do not have permission to carry out any regulated activities will pay the £35 levy.
Money Advice Service levies: The FCA is proceeding with the levy rates as proposed. However, since April the Money Advice Service has reported an underspend of £0.5m in its money advice budget for 2015/16. It also expects more consumer credit contributions than previously reported. This means the FCA will levy £65.1m rather than £68.9m, comprising of £25.7 m for money advice and £39.4m for debt advice.
Pension Guidance levy: The FCA is continuing with the allocations proposed in CP16/9, unchanged, however the final funding requirement for Pension Wise has been confirmed to be £22.5m, which is £0.1m less that proposed in the April consultation.
What is unchanged?
Consumer Credit periodic fees: Despite movement in the number of firms with full permission as opposed to those with limited permission, the FCA does not believe their there should be a change in policy approach.
The FCA will invoice fee-payers from the end of June 2016 onwards.
The FCA provide a facility on their website to enable firms to calculate their periodic fees for the forthcoming year based on the final FCA, consumer credit, the PGL, and the FOS and MAS rates.
The fees calculator will also cover FSCS levies, and is now available for use.
The fees calculator - 2016/17 final rates - may be accessed here.
