U.K. financial regulation fees will rise 15 percent to 646.3 million pounds ($990 million) this year after the Financial Services Authority was split into two agencies.
The annual funding cost for the Financial Conduct Authority, the new consumer watchdog, is 432.1 million pounds, the regulator said in an e-mailed statement today. The Prudential Regulation Authority, a unit of the Bank of England that is in charge of lender stability, will have a budget of 214.2 million pounds, including investments on a new office in London and technology.
The increase will be borne mostly by larger banks and institutions because they’ll fall under the watch of both regulators. Medium-sized firms will also see an increase depending on the type of business they conduct, and 42 percent of companies authorized by the FCA will only pay the minimum 1,000-pound fee, the regulator said.
“Much of the increase in annual funding requirements is the result of the additional resources needed to ensure the FCA delivers on its new objectives, as well as the practical costs of implementing the new regulatory structure,” FCA Chief Executive Officer Martin Wheatley said.
The PRA said its new office at 20 Moorgate will cost 12.6 million pounds per year, and it will spend 28.7 million pounds on information technology in 2013.
“The PRA will make every effort to reduce its costs and take advantage of sharing support costs with the Bank of England and seek efficiencies in its operations as part of any bank-wide value for money initiatives,” the regulator said in a statement on its website.
The FSA was shut down this month after politicians criticized it for failing to do more to prevent the financial crisis that led to the bailouts of three U.K. banks five years ago.
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