Financial Services Authority unveil budget plan

By Simon Hayes on February 12, 2010 2:30 PM |

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The Financial Services Authority is asking for over £450million to carry out its supervisory duties for the next year.

The Wharf-based regulator wants £454.7million to pay for its more "intensive and intrusive supervision of businesses. It represents a 9.9 per cent increase on last year's figure of £413.8million.

The amount includes the cost of 280 new staff hired by the FSA, as well as the implementation of Solvency2 - the review of the capital adequacy regime for the European insurance industry.

Despite the £40million increase the FSA insisted a new fee structure means 60 per cent of firms will pay less, with firms that require more regulation paying more.

FSA chief executive Hector Sants, who announced earlier this week that he will be leaving the organisation in the summer, said: "The way the FSA regulates has changed radically, both in approach and intensity over the last three years.

"We recognise that any increase in the industry's costs is unwelcome at a time when margins are under pressure in some segments of the industry.

"However, the overall increases are necessary to deliver our new intensive supervisory approach. The new fee structure will ensure that the costs are fairly distributed and the increased investment is paid for by those firms who will bue subject to increased scrutiny."

The FSA is now consulting on its proposal, which will cover the financial year from April 1.