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Peer2Peer Finance News | August 17, 2019

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P2P lenders braced for fee hikes as FCA confirms funding requirements

P2P lenders braced for fee hikes as FCA confirms funding requirements
Marc Shoffman

PEER-TO-PEER lenders will be among the financial services firms seeing their regulatory bills increase this month.

The Financial Conduct Authority (FCA) has confirmed its annual funding requirement for 2019/2020, revealing that it will need £558.5m from all regulated firms.

This is up from £543m last year and helps fund the City watchdog’s ongoing activities as well as the costs of preparing for Brexit.

The regulator has proposed a 1.9 per cent increase in its minimum fee –  which is paid by all regulated firms  – while consumer credit firms could see a three per cent rise in fees.

A policy statement from the FCA said respondents had expressed their expectation that consumer credit firms would see a reduction in their fees once the accelerated recovery of the regime’s set-up costs was completed.

However, the regulator did not give any further explanation of the increase in their fees.

Read more: Regulation special feature: Playing by the rules

Read more: Consumer credit regulation “largest” challenge FCA has faced

Depending on their size and regulatory permissions, firms may also have to contribute to levies for the Financial Ombudsman Service and the Money Advice Service, which is rebranding as the Money and Pensions Service (MAPS).

The Ombudsman budget is set to be increased to £331.8m for 2019/2020 up from £289.8m, while MAPS is to be given £117.6m.

Invoices are sent out by the FCA in July, to be paid by September.