As mentioned in the FCA Business Plan article, the FCA’s Annual Funding Requirement (‘AFR’) is identified as £446.4m. A detailed analysis of proposed fees is contained in CP14/6 ‘FCA Regulated fees and levies: Rates proposals 2014/15’.
Although the approach to allocation has been to maintain an even distribution of the AFR across all fee-blocks, in practice there are some exceptions. Portfolio managers (fee-block A.7) see an increase of 11.7% whilst ‘managers and depositaries of investment funds, and operators of collective investment schemes or pension schemes’ (fee-block A.9) are presented with a 23.6% increase. In both cases we are advised that this is due to the recovery of the FCA’s set-up costs for the implementation of the AIFMD (the activity of ‘managing an AIF’ falls under both fee-blocks).
The allocation of the AFR also reflects the proposals in CP13/14 (see Regulatory Roundup 52) in that fee-block A.12 has merged into fee-block A.13 so that there is now the one fee-block for ‘advisory arrangers, dealers or brokers’. The original distinction between these two fee-blocks hinged upon whether client money and/or assets were held; there is now a new fee-block (A.21) for ‘firms holding client money or assets or both’. Table 2.2 of CP14/6 shows the allocation across all fee-blocks.
The calculation of fees payable by firms is complicated and the headline increases in the AFR allocation do not take into account the financial penalty rebate nor any year-on-year changes in the number of firms in each fee-block, AuM or income etc. The link to the FCA Fee Calculator will allow firms assess the likely regulatory costs for 2014/15, albeit that the calculation will be based upon the consultation rates – at the time of this article it is not clear whether the Calculator has been updated to reflect the FSCS levy for 2014/15 (see separate article).
The consultation period ends 30 May with final fee rates published around end of June.