The Financial Conduct Authority has increased its annual funding requirement for the next financial year by £35m to £481.6m, largely due to is the additional scope changes needed to embed the Alternative Investment Fund Managers Directive.
Its business plan for 2015/16, published today (24 March), revealed that of the £481.6m - a 7 per cent increase on last year’s figure of £446.4m - investment, mortgages and general insurance intermediaries will be bearing the brunt, paying 30.8 per cent. In monetary terms, this amounts to £148.3m.
Firms that accept deposits, mortgages and ‘principal position’ taking will pay 28 per cent, while insurance providers will pay 13.9 per cent, fund managers and scheme operators will be liable for 12 per cent and ‘other’ will pay 15.3 per cent.
This reflects how the FCA has proposed the funding will be allocated, however the regulator confirmed to FTAdviser that its consultation paper on how it annual funding is allocated between fee-blocks will be published later this week.
The £481.m figure excludes the cost of setting up the consumer credit regime, but does include operating costs.
The paper also revealed that the FCA’s budget for its ‘ongoing regulatory activity’ for the year is £479m, an increase of £27m (6 per cent) driven by investment in people and its information systems.
The regulator said it will increase its ORA funded headcount to about 3,060 people to help deliver its competition objective, undertake more enforcement activity to combat market abuse and unauthorised business, and enhance its supervisory model for benchmarks.
It will also continue investing in Project Innovate, the new initiative to ensure the regulatory environment is supporting innovation in the market.
Regarding consumer credit, the FCA said it plans to increase the headcount to 500 and incur £43m costs driven by authorising firms under the consumer credit regime. This compares to £16m worth of associated project costs incurred in 2013/14.
The business plan stated that the costs are instead ring-fenced so that they do not flow through to fee payers until the consumer credit regime is fully operational in 2016/17.
The FCA spent £10m less than it anticipated in the current financial year, but said that “tighter budgeting” means it will not be returned to fee-payers.
donia.o’loughlin@ft.com
