Sarah Wilson, Director of High Street Firms said:
"The smallest firms will pay an application fee of £500 if they apply early and electronically. Initially, we expect the minimum annual fee to be around £750.
"Now that firms know the key costs and shape of the new regime, they can decide whether to become directly authorised by the FSA or to become an appointed representative of an authorised firm.
"I would strongly encourage firms to apply early and electronically. That way they can be confident their application will be processed in time and they will also be eligible for a discount on their application fee. Anyone who does leave it to the last minute may find that they do not receive authorisation in time.
"Firms will be able to register for an application pack, online or by telephone, from early November. At the same time, we will be launching a contact centre to provide firms with the help and support they need to complete their forms. We will start accepting completed applications from mid-January."
Application fees are available at www.fsa.gov.uk
Early application discounts
To be eligible for the early application discount, the FSA must receive completed applications from firms doing mortgage lending and administration or mortgage advising and arranging by 31 March 2004. For general insurance intermediaries the early application deadline is 31 May 2004. If a firm is applying to be authorised for advising and arranging on mortgages and general insurance, the FSA must receive its application by 31 March 2004 for it to be eligible for the early discount.
Periodic fees
Firms will pay an annual ('periodic') fee for each of the newly regulated activities they carry out. Although subject to a number of uncertainties, the FSA currently expects each of the mediation activity fee-blocks (A.18 mortgages / A.19 general insurance) to have an initial minimum periodic fee of around £750 for a twelve month period. This would apply to fewer firms than are caught by the £0 - £1 million annual income band for application fees.
Periodic fees will be consulted on as part of the FSA’s usual fees cycle in January 2005.
The FSA will consult separately on funding of the Financial Ombudsman Service (FOS) and the Financial Services Compensation Scheme (FSCS) towards the end of this year.
