FSA budget tops £500m but City firms pay less

The Financial Services Authority (FSA), the market watchdog, has raised its budget for the coming year to just over half a billion pounds, an annual increase of more than 10 per cent.

The increase – which takes the budget to £500.5m – takes the regulator's annual funding requirement to its highest level in the FSA's history. But despite the rise for the financial year starting in April, City firms, which contribute to the FSA budget through a special levy, will end up paying less because of an increase in fines last year.

The FSA collected more than £79m in fines in the first nine months of 2010/11, up from £33m in the preceding year. As it returns the money earned from fines by way of discounts on the levy, the regulated firms will end up paying 2 per cent less than last year. Most firms authorised by the FSA will pay a minimum fee, the regulator said, adding that larger firms will bear most of the increase in the budget owing to the costs of supervising their activities.

"The completion of the FSA's changes to move to a more intensive approach to financial-services regulation has inevitably led to some increase in the authority's cost base," the regulator's chief executive, Hector Sants, said. "However, we are very mindful of minimising the additional cost to firms and are pleased that, net of enforcement fines, the actual amount we will be billing firms will be falling by 2 per cent."

The bigger budget will go towards readying the regulator ahead of its splitting in 2012 into the Prudential Regulatory Authority – which will be set up within the Bank of England and take on the regulator's prudential supervision powers – and a new Consumer Protection and Markets Authority.

The increased funding requirement also comes against the backdrop of new UK and international policies, particularly the reforms to the Basel Committee's banking norms.

"Longer term, the implementation of new UK and EU policies, along with the cost of managing the transition to two new authorities, will continue to put upward pressure on our cost base," Mr Sants said.

"However, in general, we would expect these increases to be borne by larger and more complex groups and would hope to minimise the impact on smaller firms," he added.

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Day In a Page

The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003