FCA freezes regulatory fees

Firms overseen by the Financial Conduct Authority (FCA), including peer-to-peer lenders, could benefit from a freeze in regulatory fees.

The City watchdog has frozen the minimum fee paid by all firms it regulates due to the coronavirus outbreak and has also extended its payment terms, with the levies due in 90 days rather than two months.

The consumer credit fee, which is paid by some P2P lenders, has also been frozen but the FCA has increased the amount it will take from this cohort for its 2020/21 budget by £12m to £52.1m.

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Its budget or annual funding requirement for the next year is up 5.2 per cent to £587.6m.

This covers changes to its regulatory responsibilities, EU withdrawals costs and plans to improve the way the regulator works.

P2P platforms will also have to contribute higher fees for the Financial Ombudsman Service, which has increased its levy by £38m to £83.9m for the year.

“Given the impact of Covid-19, we have aimed to ensure that we protect the smallest firms by proposing a freezing of minimum fees,” the FCA said.

“This means that the 71 per cent of firms that are small enough to only pay minimum fees will see no change in the fees they pay.

“To help medium and smaller firms we are proposing to extend the period for paying their fees by two months to 90 days.

“This means that 89 per cent of firms will have until the end of 2020 to pay their fees and levies.

“Larger firms will be expected to pay their fees under the usual payment terms.”

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