• About the FSA
  • Who are we
    • How we are funded

We are an independent body and do not receive any funding from the government. To finance our work, we charge fees to all authorised firms that carry out activities we regulate, as well as other bodies such as recognised investment exchanges.

Our general powers to raise these fees are set out in Schedule 1, Part III, paragraph 17 of the Financial Services and Markets Act (FSMA). FSMA also gives us the power to maintain sufficient reserves.

As well as FSA fees, we also invoice on behalf of the Financial Services Compensation Scheme (FSCS), the Financial Ombudsman Service (FOS) and the Financial Reporting Council (FRC). This means that firms can see in one place what their regulatory costs are.

The FSA charges firms:

• periodic fees (paid yearly), which provide most of the funding needed to carry out our statutory functions;
• application fees, which recover some of the costs we incur in processing certain applications under our rules or FSMA; and
• special project fees where we undertake regulatory activity at the request of fee-payers, and the benefit of that activity primarily accrues to them.

 

In deciding what periodic fees to charge we consider:

The type of regulated activities a firm undertakes

Firms are allocated to one or more fee-blocks depending on the activities in their permission. Fee-blocks group together firms undertaking similar activities, reflecting the fact that they pose similar risks to our statutory objectives.

 

The costs we incur in regulating those activities

Our 2007/08 Business Plan sets out our priorities and the budget we need to fund our work. The total amount which we seek to recover from fee-payers is known as our 'annual funding requirement' (AFR). This is allocated across our fee-blocks and recovered through our fees.

 

The scale on which the firm undertakes those activities

The amount a firm pays depends on the potential impact it has on our statutory objectives. We use an appropriate size of business measure in each fee-block (the 'tariff base') as a proxy for potential impact. In general this means that the larger the firm the higher the fee it has to pay.

For more information about our fees see the following pages.

• Fees homepage
• Consolidated policy statement on our fee-raising arrangements.