DP14/1 Recovering the costs of administering the regulatory gateway through application fees

This discussion paper (DP) invites views on how we should recover from firms the costs of administering the regulatory gateway.

Why are we issuing this Discussion Paper (DP)?

A year after the establishment of the FCA and the PRA as the FSA’s successor bodies, we believe it is the right moment to take stock of how we recover the costs of processing applications for authorisation. This DP covers the following topics:

  • Operating the gateway.
  • Distributing the recovery of authorisation costs between different fee-payers.
  • Suggestions for revising application fees.

This DP focuses only on application fees. We are not considering the other regulatory and non-regulatory considerations that might affect a firm’s decision to enter a market, such as the authorisation process itself and the ongoing costs of compliance.

Who does this DP affect?

This DP affects all firms already regulated by the FCA and the PRA, and any firm considering undertaking financial services business from 1 April 2015 onwards.

We are restricting the focus of  this DP to the 18,500 firms in the FCA’s ‘A’ fee-blocks, but when we prepare our proposals for consultation in October, we will consider whether there are implications for the way we charge other types of firm such as payment services providers, electronic money issuers, issuers and sponsors of securities and mutual societies.

We are not addressing consumer credit application fees in this review. Consumer credit is a new regulatory responsibility for the FCA and the charging structure for applications was introduced on 1 April 2014. To maintain continuity, we are not planning to adjust the charging structure for consumer credit applications at this stage.

DP14/1 Recovering the costs of administering the regulatory gateway through application fees [PDF]

What are the next steps?

Online response form

We are asking for comments on this Discussion Paper by 22 August 2014. In the light of the comments we receive, we expect to publish proposals for consultation in October 2014, for implementation from 1 April 2015.

The PRA also intends to address the issue of application fees in its consultation paper on fees in October, and is engaging with our review.

Want to find out more?

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