According to the latest minutes from the FCA’s February board meeting: “It was noted that, as further clarity on the EU transition emerged, it would be necessary to consider the impact on the budget.
“The current philosophy was for the organisation to absorb Brexit-related costs where possible and it was felt that this should be made more explicit within the business plan,” it says.
The UK watchdog is financed by charging fees to members of the financial services industry, which indicates that there will be no increase in the money paid to the FCA by firms.
The FCA does not specify when the 2018/19 business plan and budget will be released in the minutes, however it is believed to be imminent.
Fragmented market
Andrew Bailey, FCA chief executive, said in a speech in February that financial services must be part of the post-Brexit trade deal.
Bailey said the fragmentation of financial markets is not a price worth paying for either the UK or Europe.
“Take clearing houses as a case in point; they reap benefits by being multi-currency. Segregating currencies reduces the depth of liquidity pools and increases costs.
“It is in no one’s interest. Fragmented markets reduce diversification and transparency, thereby increasing risk,” he said.
