The Financial Conduct Authority is consulting on a proposed change to fees that will see a significant increase for all regulated consumer credit firms, and a new fee applied to those who have Appointed Representatives.
The consultation, which forms part of a wider review into the fee structure as part of the FCA’s Transformation Programme, is open until 25 May 2021.
The main changes affecting BVRLA members are that there will be:
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A significant increase to the fees paid by consumer credit firms to create greater alignment of minimum fees charged to other authorised firms in the ‘A’ fee-blocks. Currently their minimum fee is £1,151, whilst consumer credit firms’ minimum fees are £106.
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A new £250 flat fee introduced for principals for every Appointed Representative on their books to account for the further work that the FCA needs to do on the Appointed Representative regime.
The FCA’s thematic reviews of the general insurance sector in 2016 and the investment management sector in 2019 identified significant shortcomings in principal firms’ understanding of their regulatory responsibilities for their ARs, concluding that principals had insufficient oversight of their ARs and inadequate controls over the regulated activities for which they were responsible.
BVRLA Director of Fleet Services, Amanda Brandon said: “It appears that the FCA is assuming that its findings in the insurance sector are indicative of all AR regimes, and the BVRLA will be making clear that this is not the case.
“Furthermore, the timing of these significant hikes in fees could not be worse as consumer credit firms have not yet recovered from the impacts of COVID-19 where significant payment deferrals were offered by motor finance firms. We will be recommending that the FCA looks to achieve this alignment of fees over a much longer period of time.”
To help medium and smaller firms, the FCA is proposing to continue to extend the period for paying fees to 90 days. This means that 88% of firms will have until later in 2021 to pay their fees and levies. Larger firms will be expected to pay their fees under the usual payment terms.
BVRLA members can share their views with the policy team via [email protected].
