The FCA’s new application fee structure

The FCA wishes you a happy new year with its first policy statement PS22/1 announcing an increase in application fees effective as of 24 January 2022.

Why is the FCA changing their fee structure?

Most application costs have remained unchanged for over 20 years, resulting in the FCA resorting to forcing firms to pay more through periodic fees in a bid to combat inflation - a clearly unsustainable model. The FCA also identified more than 80 separate application charges which have now been condensed into 10 pricing categories.

What do you need to know?

The following table sums up the 10 new pricing categories regarding the new fees that have been presented by the FCA:

Information in relation to the categories mentioned has been constructed by the FCA and can be viewed through their application fees page. 

What are the key features of this new structure?

Investment Firms have witnessed the following changes:

• An increase from £1,500 to £2,500 for ‘Straightforward’ applications.
• An increase from £5,000 to £10,000 for ‘Moderately Complex’ applications.
• An increase from £25,000 to £50,000 for ‘Complex’ applications. 
• An increase from £250 to £500 within the scope of an applicant firm’s permission contained within the same FCA permission fee block.

Payment Services Firms have witnessed the following changes:

• As a Small Payment Institution (SPI), being subject to a fee amendment of £500 (Category 2).
• As an Authorised Payment Institution (API), being subject to a fee amendment of category £2,500 (Category 4) or £5,000 (Category 5).
• As a Registered Account Information Service Provider (RAISP), being subject to a fee amendment of £1,000 (Category 3).
• As a Limited Network Exclusion/Electronic Communications Exclusion, being subject to a fee amendment of £250 (Category 1). 

Consumer Credit firms have witnessed the following changes:

• Category 2, also known as ‘Limited Permission’, applications have increased from their initial range of £100-£500 to just £500.
• Category 3, also known as ‘Straightforward’, applications have increased from their initial range of £600-£5,000 to just £1,000. 
• Category 5, also known as ‘Moderately Complex’ applications, have increased from their initial range of £800-£10,000 to just £5,000. 
• Category 6, also known as ‘Complex’ applications, have increased from their initial range of £1,000-£15,000 to £10,000. 

Payment Services firm Variation of Permission (VOP) FCA application fees are:

• £1,250 for API increasing their permissions.
• £250 of pricing Category 2 for SPI increasing their permissions. 

E-money firm VOP FCA application fees are now:

• £2,500 for an Authorised Electronic Money Institution (AEMI) undergoing an increase their services
• £500 of pricing Category 3 for a Small EMI applying for a variation of registration. 

The FCA has also consulted on introducing new charges in respect of new applications to perform controlled functions under the Senior Managers Regime (SMR) and for appointed representatives (ARs). Further notice will be provided before implementation. 

The deluge of regulatory changes doesn’t look set to slow this year. But with the right support to hand, adjusting to the changes can be much easier. Should you require expert support, contact us today and a member of our team will be happy to assist.