The United Kingdom regulatory body FCA has increased the application fees for the authorization of new firms. The idea of a hike was proposed in November 2020 and the last time such a measure was taken was in 2014. The new fee structure is 2,500 pounds for straightforward applications and 10,000 for a moderately complex application. The previous fee structure was 1,500 pounds and $5,000 pounds.
The fee hike is now being argued it might become a barrier for new firms to take an entry in the market. FCA states the processing cost for a straightforward application is 2,450 pounds and for a complex one is 6,750 pounds.
The regulatory body proposed restructuring and revalorizing the application fees. Similarly, it proposed introducing new notification charges as well along with a hike in fees for other segments.
Earlier this month, FCA confirmed to proceed with the fee increase after going through the feedback and some adjustments made in responding to the issues raised.
Meanwhile, proposals differed on changes in control stating the fees are mostly paid online and an amendment is required along with the test system process need to be observed before going live. The new fee structure has been successfully exercised and this is the reason it has been implemented.
The stand-along Form A application fee has not been changed as further work is required before introduction. A notice will be issued with the implementation date when the body will make the changes.
FCA assures most fees have remained unchanged and these were introduced about two decades ago. Inflation has eroded the value of these.
While reviewing the proposals in 2020, the authority identified over eighty segregated charges for applications. These have been condensed into 10 categories in the new structure by revalorizing with that of inflation from the introduction date and thereafter making adjustments to the nearest category.
FCA adds that 23 charges remained the same while 19 increased. Eleven were even reduced. As an aftermath, it is said the overall impact would raise the contribution towards processing costs.
Meanwhile, the income-based fee has been removed and a charge of 2,500 pounds has been introduced for lead generators.
FCA is the acronym for the Financial Conduct Authority. It was formed in April 2013 and replaced by the Financial Services Authority. It is headquartered in London, UK. It is financed by the fees charged to members and operates independently. It regulates the financial firms and focuses on the regulation of financial services in the country.