On 24 March 2016, the PRA issued a consultation paper on regulated fees and levies for 2016/17 (CP10/16), setting out the following:
- The fee rates to meet the PRA's 2016/17 annual funding requirement (AFR)
The proposed AFR is £257.3 million (a slight decrease of 0.2% from 2015/16). Although broadly similar to last year, changes in the balance of activities within the PRA and to the funding of such activities has led to differing impacts on specific fee blocks. However, the overall costs to be recovered from every fee block, once the Solvency II special project fee is removed and the proposed ring-fencing implementation fee is taken into account, is less than the overall costs charged in 2015/16.
- Proposed rules for introducing a ring-fencing implementation fee
When the new ring-fencing regime takes effect, the Finance Services (Banking Reform) Act 2013 requires the PRA to undertake a significant amount of work through to 2019. The PRA has consequently proposed to recover costs associated with this work through a ring-fencing implementation fee, applying to firms currently ring-fencing their core activities in line with the Act, with budgeted costs amounting to £7.9 million.
- How the PRA intends to distribute a refund from the 2015/16 AFR
It has been estimated by the PRA that there will be a refund to fee payers of the AFR in 2015/16 amounting to £4.5 million.
- How the PRA intends to distribute the retained penalties for 2015/16
Estimated retained penalties of £1.3 million will be paid to all eligible PRA-authorised firms, with the PRA proposing to allocate retained penalties across fee blocks using population data from 2015/16.
- A consequential amendment to the fees rules as a result of recent policy changes for credit unions
The PRA has now outlined proposals for a new single rate authorisation fee for credit unions in Chapter 6.
Comments are requested on the consultation by 24 May 2016. Feedback and final rules will be published in a policy statement in June 2016.