FCA highlights mortgage reforms as key step

The City watchdog’s annual report, its first since it replaced the Financial Services Authority in April 2013, showed that it had carried out 4000 surveys with firms and several workshops with lenders to explain new affordability and stress testing requirements when applying for a mortgage.

The FCA said the costs of these changes would be reflected in next year’s financial statements, although this year’s document did reveal other spending and regulatory activities.

For example, the regulator spent £3.3m monitoring implementation of the retail distribution review and on 30 January 2014 it fined former Intrinsic authorised representative Ewan King £19,900 for fabricating his statement of professional standing. The FCA authorised 1046 firms and levied £425m in fines during its first year.

As part of its diversity report, which was published alongside the annual report, the City watchdog said 42 per cent of its board was female, a higher proportion than the 20.3 per cent at UK FTSE 100 companies.

However, there was some bad news, with the regulator making a loss of £29.3m for the year ended 31 March 2014, driven by increased staffing costs, implementing regulatory reforms and changes to its pension scheme.

The regulator said any costs would be recouped by the relevant fee blocks, such as in areas of consumer credit.

Despite the costs, the FCA still had money for increased staff salaries, the report showed. Chief executive Martin Wheatley’s total remuneration, including pension benefits, was more than £600,000.