FCA publishes rules on fees and levies – brokers and dealers may see reduced burden


The Financial Conduct Authority (FCA) has published a report which details the updated fee structure which applies to all firms which are regulated under its jurisdiction. The FCA’s reasoning for publishing rules on this procedure is due to the method by which it is funded, relying entirely on the fees and levies recovered from the firms which it regulates.

The FCA receives no subsidies from other sources. The policy aims to raise the funding for the FCA, the ombudsman (excluding case fees) and the Money Advice Service to meet their statutory objectives in 2014/15.

As Britain’s regulatory authority which overseas all non-bank financial services activities, FX brokers and dealers are included within its remit.

The regulator has stated that its allocation of the 2014-2015 increase across fee-blocks was to maintain an even distribution of the increase, identified at an individual fee-block level. The allocation movements were materially different from the overall invrease in the annual funding requirement (AFR).

In terms of how this affects industry participants, the fee-block allocated to dealers and brokers has reduced by 18.7%, with firms dealing as principle experiencing a reduction in AFR of 5.6%.

Firms holding client money or assets, or both, are required to have an AFR of £13.4 million, which is unchanged from that of the previous period.

As far as dealers and brokers which hold client assets (CASS) is concerned, the FCA has indicated that the fee-block allocated to such entities would account for the vast majority of client asset supervision costs.

Multilateral trading facilities will experience an increase in AFR of 3.1%, rising from £2.2 million to £2.3 million during this year, whilst payment processing firms which fall under Payment Services Regulations 2009 will also experience a 3.1% increase in AFR allocation.

The entire AFR which is distrubuted across all participants in Britain’s financial services industry is £446.4 million, representing a 3.3% increase over the previous year’s £432.1 million.

For the full report, click here.

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FCA publishes rules on fees and levies - brokers and dealers may see reduced burden

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