UK financial regulator cuts back to deal with Brexit
The UK’s withdrawal from the European Union will cost the country’s financial services regulator £30m (€34.4m), according to its 2018-19 business plan.
The Financial Conduct Authority (FCA) said it had already made “difficult and challenging decisions” about its priorities that had helped to partially fund its work on Brexit, but warned it still had to find £16m.
UK-based regulated firms would pay for roughly £5m of this through annual fees, the regulator said, with a further £5m coming from its reserves.
For the remaining £6m, the FCA said it would recover costs from “specific firms” in areas particularly affected by Brexit “once we know the final costs and number of firms affected”.
“A significant proportion of our resources are already focused on the forthcoming exit, including arrangements to implement the change,” the regulator said.
“To fulfil our regulatory objectives and provide technical support to the government in the run up to withdrawal, we have increased the level of resource dedicated to co-ordinating and managing this work.”
The regulator’s annual funding requirement increased by 3.2% on last year to £543.9m. However, investment management firms could see their fees fall by nearly 6% according to a proposed levy model published today alongside the business plan.
The FCA said it intended to charge “managers and depositaries of investment funds, and operators of collective investment schemes or pension schemes” £11.6m in total for 2018-19, compared to £12.3m in the 2017-18 financial year.
Aside from Brexit, the FCA said it would focus on monitoring and improving the culture of financial services companies.
“Firms should be able to show the effectiveness of their governance arrangements in identifying, managing and mitigating the risk of harm,” the regulator said.
It also highlighted cybersecurity as an important area of focus, promising to monitor closely the companies deemed to be at high risk of security breaches.