Regulatory Fees for Smaller Firms
We continue to tell the FSA that fee increases, at the very high levels imposed in recent years, are simply unsustainable to smaller businesses operating in areas that have not contributed to the current problems. We welcomed the restructuring of regulatory fees (as in CP09/26) which set out a fairer and more transparent way of dividing the fees.
While the FSA has restricted the fee increases for the smallest firms, a number of firms that are small in their sector suffered extremely large fee increases despite the fact that their sector had not been exposed to losses in the ‘credit crunch’. The Panel considered it inequitable that these firms should pay the price for the enhanced level of regulation the FSA had planned, following the failures of the banking sector.
We are continuing to challenge the FSA in this regard.
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What the SBPP has said previously on this topic:
In July 2008 the cost of regulation, particularly fees, was a considerable concern to smaller businesses, and the Panel has advised the FSA that continuous increases will cause some smaller firms problems and, at the same time, has urged the regulator to monitor and control its budget more effectively. The overall burden of regulation also continued to present practical difficulties for smaller firms, especially the pace and cumulative impact of change.
The Panel felt that the FSA should place greater emphasis on supervising and enforcing smaller firms’ adherence to existing rules rather than continue to create new policy and/or propose any further regulatory changes.