Applying for regulation could cost some brokers as much as £25,000 each, as the FSA seeks to recoup £25m of estimated administration costs.
The proposed fees for brokers applying for direct regulat ...
Applying for regulation could cost some brokers as much as £25,000 each, as the FSA seeks to recoup £25m of estimated administration costs.
The proposed fees for brokers applying for direct regulation are outlined in CP180: Fees for mortgage firms and insurance intermediaries.
It is proposed that the fees will be linked to annual income, and that discounts will be given for applications which are lodged electronically.
The FSA also plans to give a discount for early applications, with 1 June 2004 as the proposed cut-off date.
Under the FSA's proposals, brokers with an annual income of up to £1m will be charged £1,200 for a standard paper application lodged after 1 June 2004, which will fall by 50% for early applications. A £100 discount is proposed for electronic applications.
Brokers with an annual income of between £1m and £25m will be charged £11,000 for a standard paper application, lodged after 1 June 2004.
Brokers whose annual income is greater than £25m will be hardest hit, with a maximum application fee of £25,000 for standard paper applications lodged after 1 June 2004. Under the proposals, these brokers will be eligible for a £2,000 discount for early applications and a discount of £500 for electronic applications.
The Broker Network managing director Grant Ellis said the vast majority of UK brokers would have annual income of less than £1m.
He said: "For small firms I don't think those figures are unreasonable, but I sympathise with firms with an annual income of £1.1m. To jump to a minimum cost of £8,750 is a bit of a shock."
All FSA registered brokers will also face annual fees, which are yet to be determined. Responses on the proposed fees are due to the FSA by 24 June.
