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Section 166 reviews cost firms £110 million

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Section 166 reviews cost firms £110 million

The Financial Conduct Authority’s skilled persons reviews (s166) cost regulated firms £110.1 million in the year to 31 March 2017.

Revealing the figure in its annual report and accounts, the FCA said that aggregate costs for firms, including reviews in progress since April 2013, was £110 million, net of VAT, with one review constituting most of it.

Over the 12 months, there were 49 cases for which the regulator used its s166 powers most of which were concerning conduct of business, up from 42 year-on-year.

Elsewhere in the accounts, the FCA revealed that it made a loss of £8.6 million, compared to a £3.8 million gain over the same period in 2016.

When combined with the losses incurred by the Payment Systems Regulator, the group loss is £9.2 million. The group had ended the previous year with a surplus of £21.3 million.

While the City watchdog’s fee income increased from £517.1 million to £543.9 million, other income went down to £20.9 million from £34.8 million, a decrease of 40%. This was mainly attributed to a decline in income from skilled persons reviews of £13.3 million.

Total staff costs were £329 million, marginally down from £330.7 million in 2015/16.

The FCA also highlighted that the costs of 15 ongoing reviews of interest rate hedging products from the 2013/14 financial year now stand at £391.5 million, as at 31 March.

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