In its annual report published this week, the regulator said there was a £27.3m increase in its annual funding requirement. This included a £13.8m increase because of changes in scope – of which £7.7m related to the first year recovery of £62m of consumer credit set-up costs. These costs are to be recovered over a maximum term of 10 years.
The remaining set-up recoveries in 2017 relate to implementation of the Senior Managers and Certification Regime (SM&CR) in the banking sector and the Mortgage Credit Directive.
Costs also rose as the FCA completed its first full year regulating consumer credit, while application fees declined £13.1m as the majority of consumer credit applications were processed in 2016.
The Payment Systems Regulator (PSR) fee income declined from £28.1m in 2016 to £10.2m in 2017 as the prior year fees included the recovery of set up costs for the PSR and £5m rebate issued to fee payers in 2017 relating to an operating surplus in 2016.
The FCA has reduced staff turnover, ending the year at 10.9%, and is using direct recruitment techniques, resulting in an estimated cost saving of £590,000.
In the coming year, FCA chairman John Griffith-Jones (pictured) said the big task is to prepare amendments to FCA rules to give effect to Brexit.
The FCA is providing impartial technical advice to the government to support the EU withdrawal negotiations and related legislative change, particularly where they could affect its ability to continue to meet operational objectives.
It is also working with firms to understand their plans to continue to service their cross-border operations, and is the lead regulator on technical input for the Great Repeal Bill.
“Our fundamental objective in this work is to give all interested parties certainty, so that there is a clear and functioning regulatory regime on the day that the UK ceases to be a member of the EU,” it said.
“It is important that we continue to be able to share regulatory information with our EU counterparts after Brexit.”