On November 16, the UK Financial Conduct Authority (FCA) published a consultation (Consultation) on regulatory fees and levies, and its policy proposals for 2017/2018. The Consultation sets forth the FCA’s proposals on: 1) the structure of a new levy to fund action against illegal money lending; 2) the relevant groups (fee-blocks) of regulated firms from which the FCA intends to recover the costs of implementing the revised Market in Financial Instrument Directive (MiFID II); 3) proposals for market infrastructure providers to use income as a measure to calculate fees to recover the FCA’s annual funding requirement; and 4) amendments and clarifications to be made to the FCA’s Fee Manual, among others.

With regard to MiFID II implementation, the FCA notes in the Consultation that it only intends to recover costs from those participants who are themselves most directly impacted by MiFID II. Chapter 3 of the Consultation sets out a list of all relevant firm categories and indicates which will be liable—and whether the FCA proposes to recover costs from them—notably:

  • portfolio managers (i.e., firms offering managed account services);
  • managers and depositaries of investment funds (whether directly appointed or with authority delegated from an AIFM or a UCITS manager);
  • operators of collective investment schemes or pension schemes;
  • firms dealing as principal (i.e., proprietary trading firms);
  • advisers, arrangers, dealers or brokers;
  • corporate finance advisers; and
  • market operators, operators of multilateral trading facilities and organized trading facilities and recognized investment exchanges.

Responses to the Consultation must be submitted to the FCA by January 16, 2017. The FCA intends to publish feedback on the Consultation and rules in a final FCA Handbook notice in February or March 2017.

The Consultation is available here.