Response to FCA Consultation Paper CP20/22

Consultation Paper 20/22, regulatory fees and levies: policy proposal for 2021/22

On the 19th November 2020, the FCA published a consultation paper which set out proposed policy changes to the way they raise their fees and levies. Cosegic worked closely with CryptoUK, the United Kingdom's trade body for the cryptoasset industry, and other community members, to put together a response to this consultation.

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Background

The consultation, which closed on 22 January 2021, included the FCA's proposal for increasing application fees in line with inflation and reducing the number of pricing categories. The sectors in scope for these changes include, consumer credit; claims management; and cryptoassets. The FCA, also, proposes new transaction fees for Changes in Controls (CiCs) and Senior Managers applications, and introduces income to calculate periodic fees for firms that operate Multilateral Trading Facilities (MTFs) and Organised Trading Facilities (OTFs).

An important element covered in the consultation is the FCA’s proposal for periodic fees for registered cryptoasset businesses. The FCA proposes a minimum annual fee of £2,000 for supervised cryptoasset firms with an annual income below the threshold of £100,000. For businesses with income above the threshold, the FCA proposes a minimum annual fee of £2,000 plus a variable rate based on the firm’s annual gross (cryptoasset related) income.

As part of its offer to restructure application fees, the FCA is also proposing to remove the lower registration fee of £2,000 (for new cryptoasset applicants with an income up to £250,000) for applications under Money laundering Regulations (MLRs). Instead, they wish to set up a standard registration fee of £10,000 for all applications from 1st April 2021.

It is expected that the FCA will publish its final rules in March 2021, after consideration of comments gathered during the consultation stage.

You can download a copy of the joint response here.

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