FSA revamps fee structure

The Financial Services Authority (FSA) has today announced proposals to simplify the structure of the fees it levies on regulated firms and to enhance fairness and transparency.

Following a review of its approach for determining the annual fees that firms pay, the FSA is consulting on a number of measures to ensure that fees continue to be set in a fair way, and to make the basis for calculating fees easier for firms to understand, including:

• Setting a standard “minimum fee” that all firms will have to pay to cover the basic cost of being regulated;
• Ensuring that “variable” fees over and above this basic minimum amount increase in direct relation to a firm’s size – with the result that fees for the largest firms reflect the greater regulatory engagement they receive.

By the end of November, the FSA will publish a Fees Calculator which will enable firms to assess what these proposals mean for them.

Mark Norris, the FSA’s chief operating officer, said: “We are committed to delivering fair and transparent fees to all authorised firms. This is particularly important given that we are funded entirely by the firms we regulate, so we need to ensure firms can clearly see how we calculate their contribution to the running costs of the FSA.”

The FSA is inviting responses to the proposals in its consultation paper by 11 January 2010. In February 2010, depending on the outcome of this consultation, the FSA plans to consult on fee levels for 2010/11 using this new fee model.