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The Financial Conduct Authority is facing a £30m bill in the year running up to Brexit, with firms carrying some of the cost, the City regulator revealed in its Business Plan for 2018/19.
Editor at Credit Strategy. Previously held roles at Accountancy Age, Accountancy Daily and the Leicester Mercury.
Around £14m of this cost will be “absorbed” by “reprioritising, delaying or reducing non-critical activity and finding more effective ways to deliver our regulatory requirements,” the FCA said.
The rest will come from reserves and fees from the financial industry, the regulator said, with around £5m drawn from reserves, a further £5m derived from EU withdrawal fees and the remaining £6m drawn from “firm-specific costs”.
“We will recover the costs of implementing new regulatory responsibilities, such as passporting and on-shoring credit rating agencies and trade repositories, once we know the final costs and number of firms’ affected,” the FCA said in its Business Plan. “There is still considerable uncertainty about the scale and timing of various activities in connection with EU withdrawal. We will closely monitor the progress of negotiations and the potential for any further impact on our cost base.”
The impact of Brexit is the central issue in the 60-page document, which also covers other FCA priorities including poor pension advice and investigating the treatment of longstanding insurance customers.
The regulator’s costings assume a deal will be struck with the EU over Brexit, and chief executive Andrew Bailey said a transitional deal would be welcomed.
Alongside Brexit-related work, the FCA will focus on seven cross-sector priority areas, based on assessments of where there is the greatest harm or potential for harm, and where intervention can have the greatest impact.
Those areas are:
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