Business

City regulator faces £30m Brexit bill


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PA

The City regulator has said it is facing a £30m Brexit bill in the year running up to the UK’s withdrawal from the EU.

The Financial Conduct Authority will ditch “non-critical” work to find £14m, while the rest will come from reserves and fees from the financial industry.

Last year, the FCA had to find an extra £2.5m for Brexit work.

The costs were revealed for the first time in its business plan for the coming year.

The Brexit bill is the dominant issue in the 60-page document, which also outlines FCA priorities including tackling poor pension advice and investigating treatment of longstanding insurance customers.

Andrew Bailey, FCA chief executive, said: “Uncertainty around Brexit is a challenge. We must be prepared to adjust [our plan].”

Switching priorities

The FCA’s sums assume a deal is done between the UK and the EU, and he said a transitional deal would be welcomed.

Last year, the regulator hired 15 lawyers specifically to oversee its Brexit preparations.

The FCA is required to give technical support to the government, and help prepare the regulatory regime in the UK for life outside the EU.

It said it would “reprioritise”, as well as “delay and reduce non-critical activity” to save money from its existing budget to cover £14m of the Brexit bill.

Projects such as creating a digital archive of company filings will be postponed to free up funds.

Another £5m will come from FCA reserves, and the same amount will be raised from fees levied on large firms that are most likely to be affected by EU withdrawal.

The final £6m will come from specific fees from the FCA’s extra work. For example, credit rating agencies will come under the FCA’s regulatory umbrella this year, and be charged a fee as a result.

Consumer protection

Elsewhere in the FCA’s mission statement for the year are seven priority areas – many of which involve the treatment of customers by the financial services industry.

This will include pointing the spotlight on how firms charge longstanding, loyal customers who fail to switch compared with new customers.

Pension advice – specifically firms encouraging savers to leave a defined benefit, or final-salary, deal to move to investment-based products – will come under the microscope. This follows concerns over advice given to many British Steel Pension Scheme members.

Other topical areas of work include investigating the security of customer data held by firms, and tackling money laundering.



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