The FSA is proposing scrapping its current A12 and A13 fee blocks, which encompass advisers, to create a much wider reaching category for firms holding client assets.
The move comes as the regulator bumps up its regulatory focus on firms holding client money and assets (CM&A) following concerns about the 'unaccaptably high risks to consumers' in this area.
It has created a specialist client asset unit to oversee these firms and now proposes a shake-up of its fee-blocks to ensure the correct firms are billed for the costs of the enhanced supervision.
Under today's plans detailed in CP10/24: Regulating fees and levies, the brunt of the costs of the unit will not just fall on the A.12 fee block as at present (advisory arrangers, dealers or brokers (holding or controlling client money or assets or both).
Instead, a new sector will be established which will also encompass firms including some deposit acceptors, fund managers, operators, trustees and depositaries of collective investment schemes and general insurance mediation groups from other fee blocks.
The new fee group will levied based on the amount of client money and/or assets held by firms with relevant CM&A permissions and authorities.
The changes mean the scope of fee block A.13 (advisory arrangers, dealers or brokers (not controlling client money or assets or both) will be altered so only the costs of regulating activities will be allocated and not CM&A.
According to the FSA, the financial impact on firms of its proposals is difficult to assess.
It says: "The wider scope of the new fee block would mean some firms that have permissions and authority to hold assets or money and do not currently pay towards CM&A costs would start paying.
"Other firms who have permission and authority to hold assets and money, who already contribute towards CM&A costs, may find they pay less in relative terms, although they may pay more in absolute terms as the level of resources dedicated to the CM&A regulation rises.
"Likewise, those firms that only have authority to control client money or arrange safeguarding, may find that they are paying lower fees as a result."
The FSA is seeking industry views on its plans and aims to publish a consultation with draft rules in 2011/12 for implementation in 2012/13.
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