FCA eyes split fee-blocks for principal firms
The proposal could lead to reduced or increased fees, as a result, depending on the business.
The move follows its review of the Investment Firms Prudential Regime (IFPR) — the prudential regime applying to UK firms authorised under MiFID — which came into force in January 2022.
In its consultation paper on regulatory fees and levies for 2024/25 published today (21 November), the FCA explained most MiFID and non-MiFID firms fall under the A.10 block for fees and levies, which relates to firms dealing as principals.
Financial services industry bodies call for greater clarity on FCA D&I proposals
As part of its proposals, the regulator plans to split the A.10 block in two: A.10A for dual-regulated firms (companies falling under the regulatory remit of both the FCA and Prudential Regulation Authority) and A.10B for solo-regulated firms.
This could lead to reduced or increased fees, as a result, depending on the business.
Previously, in order to determine business sizes, the FCA's predecessor (the Financial Services Authority) proposed to base its metric for calculating fees on the headcount of traders.
But now, the regulator said trader headcount may not be «in all cases a reflection of the business size activity».
The FCA added: «At this stage, the tariff base for A.10A would remain unchanged and we are taking this opportunity to consider feedback more broadly on potential alternatives to trader headcount as a measure of business size.
»Within the planned A.10B fee-block, initial analysis suggests several firms will see a reduction in fees while some firms may see significant upwards adjustments. To address concerns on fee increases, we are also considering transitional provisions."
The changes would will also include
Read more on investmentweek.co.uk
