AMI: FSA budget 'fundamentally inappropriate'

The FSA has come under fire for its proposed budget for 2009/10, despite announcing that 10,000 smaller firms would actually pay lower fees.

The regulator published its business plan for the period last week, outlining a budget of £415m for its various initiatives. To fund its proposed work, the FSA has had to increase the amount it raises from firms by £117m, with £70m to be spent on embedding and delivering higher quality supervision, particularly of higher impact firms. 

Hector Sants, chief executive of the FSA, said: "We will need additional financial resources to meet these demanding priorities for the coming year. This will mean higher fees for regulated firms, although we have been careful to ensure, as far as possible, that firms requiring the most regulatory work and engagement pay proportionately. There will be no increase in fees for the smallest firms, and many of them will actually experience a fee reduction."

However, the Association of Mortgage Intermediaries (AMI) expressed outrage that some of the largest intermediary firms will see their fees treble.

Robert Sinclair, director of AMI, said: "While we understand FSA's rationale to enhance its overall capacity to deal with volatility and to 'minimise new initiatives', this level of fee increase is fundamentally inappropriate. Every firm in the UK is facing great difficulty and trying to find ways of cutting costs. FSA is doing the opposite.

"We are quite simply not prepared to accept this, and to paraphrase the words of FSA chairman Adair Turner, 'The intermediary community has paid too much for regulation for too long'."