For small mortgage firms and arrangers, the FSA fee will be £550, the Financial Services Compensation Scheme (FSCS) fee will be £18, the FOS fee £50 and the FSA stub period fee will stand at £300. In total the typical small firm will therefore pay £918 for the year as opposed to the £1,120 that was initially estimated.
The FSA minimum fee stands at £620, but the decrease to £550 includes a £70 rebate from the MCCB surplus money given to the FSA.
For general insurance, the typical small firm will pay an FSA fee of £400, an FSCS fee of £9, a FOS fee of £50 and an FSA stub period fee of £100, totaling £559 for the year. The initial expectation was that firms would have to pay £663.
Overall, the majority of FSA fees for all firms are either reduced or have remained the same as those contained in the January 2005 Consultation Paper. This is due to the FSA’s funding requirement for 2005/06 being £6.6 million less than originally forecast. Additionally in some fee blocks, the distribution of enforcement fines will reduce fees further.
Graeme Ashley-Fenn, FSA director of contact, revenue and information Management, said: “In establishing the fee rates for 2005/06 the FSA has tried to
ensure that the overall majority of small firms' fees will either see no increase or an inflation-only increase compared to prior year. This recognises that for many smaller firms, regulatory fees are a significant element of their costs, and that cash flow is important."
"Regulatory fees are necessary for the FSA to undertake its statutory obligations,
though we realise that we must drive down costs, wherever possible. We have fully engaged with the industry in an open and transparent way, which has provided a full understanding of their concerns. As a result we are pleased to announce that the FSA will undertake a review of the funding regimes. In addition, as announced earlier this month, we have facilitated a payment by instalment scheme, which should further assist firms with their cash flow, if they wish to take up this option,” Ashley-Fenn added.
The review of the funding regime will focus mainly on the Financial Services Compensation Scheme (FSCS) levy but may have consequential changes to the FSA and FOS arrangements. This work will be co-ordinated with the review on compensation and eligibility limits announced in the FSA’s Business Plan, and with the FSA's work on European developments including the Commission’s current review of the deposit guarantee schemes directive.
