Experts say the Financial Conduct Authority must beef up its authorisations team to successfully introduce new application fees.
On 27 May 2022 onward, the FCA will introduce a £250 fee for both the senior managers regime (SMR) and controlled functions (CF) for appointed representatives (AR) appointments. The change is visible in FCA Handbook Notice 98.
Apricity head of regulatory support Maddie Delboy told Money Marketing that the decision to increase fees is fair. Yet she believes the regulator will have to reinforce its authorisations team.
She said: “The regulator has been open about their struggles with recruitment, matched with the sheer volume of applications etc. If this fee is going to fix that then it seems to be a perfect solution.
“The worst-case scenario would be for the implementation of this fee, but the same service standards being experienced, and statutory deadlines being missed. We shall just have to wait and see on this one!”
The regulator said in February it was expecting to have around 200 new joiners by the end of the first quarter of 2022.
FCA executive director for markets Sarah Pritchard said the regulator is recruiting for senior leaders across supervision, competition, and policy enforcement.
In an effort to retain staff, it set out a new employment offer designed to reward strong performance, aid career development and close pay gaps on 1 March.
But the regulator has been dealing with a series of strikes as a result of staff discontent over recent pay and bonus changes.
Delboy also feels that the fee is not being sufficiently mentioned. As a result, she fears it could hit people by surprise. This is because they are likely to not be aware of this new fee’s existence.
More broadly, Delboy believes that the new regime for application fees that the FCA announced earlier this year is sensible.
She said: “You don’t have to look far to see prices are rising on the whole. It makes sense that the FCA needs to change their fees, I don’t think anyone has an issue with that.
“That being said, this year’s increase to authorisation fees was fairly substantial, and unfortunately I think this has turned some people off being authorised (we work with a lot of firms wanting to go directly authorised).
“In my view it’s not because they can’t afford the new fee, but some are taking the view that the FCA will start to increase more fees around it.”