Costs levied on financial services firms to fund the Prudential Regulation Authority are to rise by £11m for the coming financial year, as the watchdog prepares to take on a host of new powers including a new authorisation regime.
In a consultation published this morning on its fees and levies for the coming financial year, the regulator said its ongoing activities costs would increase from £232m to £243m in 2015/2016. Of the uplift, £35m will be used to “deliver an expansion in the PRA’s responsibilities and implement specific new policy initiatives”.
This includes the new senior managers regime for banking staff, of which details were confirmed last week, implementation of new European capital adequacy directives, and funding to cover the costs of enhanced banking stress tests.
The PRA is a division of the Bank of England that regulates larger financial firms, such as banks and insurers, that present a systemic risk to the UK economy. It makes up one half of the ‘twin peaks’ regime, alongside the conduct regulator the Financial Conduct Authority.
The FCA’s costs are expected to be revealed in the coming week and certainly before the end of the financial year. Last year it levied £403m, as costs for the second year of the dual regime remained around 20 per cent more, compared to the final year of the FSA.
As was the case for the current year ending in April, in addition to ongoing fees, the PRA has also applied a £14.8m bill to cover the deferred set up costs of moving from the old regime, taking the total amount being levied to £257.8m.
Firms will receive rebates totalling £5.4m from an underspend in the current financial year and distribution of fines.