The Financial Conduct Authority has recently released a Policy Statement (“PS”) confirming its new structure for authorisation application fees which comes into effect from 24 January 2022.
With respect to the increase of the application fees, the FCA has argued that most of its application fees have not changed for almost 20 years and that inflation has eroded their value, leaving FCA authorised firms paying an increasing proportion of their processing costs for authorisation applications through their periodic fees.
The PS follows the regulator’s consultation in November 2020 which identified a confusing application fee structure with more than 80 separate charges for FCA applications. These charges have now been condensed into 10 simple pricing categories, as follows:
For UK investment firms (e.g.: asset manager, investment adviser and brokers), these are some FCA fee changes by way of exemplification:
- Variation of Permission (‘VoP’) application within the same fee block has increased from £250 to £500 (Category 2); and
- Part 4A Permission / FCA authorisation application for portfolio managers has increased from £5,000 to £10,000 (Category 6).
All fees are payable electronically when submitting the applications via the FCA’s portal system CONNECT.
In addition, the FCA is looking into introducing a new charge of £250 for each approved persons application to hold (i) senior management functions under the Senior Managers and Certification Regime and (ii) controlled functions for appointed representatives under the Approved Persons Regime. It is envisaged that this new charge will be introduced once CONNECT has been updated to provide the functionality to charge the fee for these applications.