Earlier today, the regulator confirmed new rules that would apply to ARs from December, which carry out business on behalf of a firm known as a principal.
The new rules include increased oversight of ARs from principals, risk monitoring, notifying the regulator of future AR appointments within 30 days as opposed to 60 days and producing complaints and revenue information for ARs annually.
According to the FCA, the average cost per large principal firm is estimated to be £35,900 and £2,100 for all principal firms.
In its consultation paper in December, the total ongoing costs for all firms were £5.4m, and for large firms it was estimated at £500,000. At the time, average costs per large firm were estimated to be £6,500 and for all firms it was £1,500.
The regulator projected that it would take a principal compliance team member around one to two hours per AR to manage notifications, conduct annual reviews and self-assessments.
It continued that as the average number of ARs across large firms “in scope” for these changes was around 330, implementing these changes would take approximately 70 working days. This is 28 per cent of working days in the year.
The FCA expects that for large firms, it would take senior managers four working days and three people to manage ongoing costs, and for the compliance team it would be 35 working days and two people.
This is an upgrade from its consultation paper, when it said senior managers would take one working day and three members of staff to complete the work required, and six working days for compliance and two members of staff.
However, it said it believed the interventions would remain “net beneficial” and that it had not received “significant challenge on costs from small and medium sized firms”.
