The Report describes significant developments during the year which continue to be taken forward. These include: initiating the development of a strategy to improve the basic competence of individuals to take important personal financial decisions; further implementing badly-needed reforms to the regulation of life insurance; contributing to EU and international regulatory work; and carrying out a major overhaul of the FSA's processes and organisation. The Report also sets out the new management structure, from April this year, which reflects the focus on improved delivery of the three business priorities.
Annual Funding Requirement and fees
The Annual Funding Requirement (AFR) for the FSA in 2004/05 is projected to be £213.3m, marginally lower on a like-for-like basis than the £214 million for 2003/04. The FSA is entirely funded by fees from the firms that it regulates and from listed companies, via the UK Listing Authority. The AFR is the basis upon which these fees are assessed. Taking into account changes in the amount of business done by firms in the past year, the FSA expects that, on average, fees directly attributable to the FSA for authorised firms will decrease by around 1% this year. The actual fees charged relate to the type of business carried out by a firm, so within this average figure there will be considerable differences across industry blocks.
Directors' Remuneration
The FSA Chairman, Callum McCarthy, and Chief Executive, John Tiner, were both appointed to their posts mid-way through the financial year so their current salaries are not disclosed in this Report.
Mr McCarthy's current salary is £314,000 and during the Report Year he was paid £159,131, together with other emoluments and benefits valued at £64,638. At his own request, Mr McCarthy does not participate in the performance-related bonus scheme.
Mr Tiner's current salary is £365,000 and in the Report Year he was paid £310,971 compared with £260,000 in 2002/03. This reflects the additional responsibilities he took on when promoted from Managing Director to Chief Executive on 21 September 2003. His performance-related bonus in 2003/04, set by the FSA's Remuneration Committee, was £52,000 compared with £24,000 in the previous year. During the Report Year Mr Tiner received other emoluments and benefits valued at £108,685 including a supplement of £47,741 paid towards the funding of his personal pension.
Background
- The FSA Annual Report 2003/04 covers the FSA's regulation of the financial services sector from 1 April 2003 to 31 March 2004 under the Financial Services and Markets Act. It is presented to the Chancellor of the Exchequer and a copy has been placed today in both libraries of both Houses of Parliament.
- The Annual Report is available here on the FSA website. Further information, including statistics and our responses to the annual reports of the Financial Services Practitioner Panel, the Financial Services Consumer Panel, the Small Business Practitioner Panel and Complaints Commissioner are also on the Annual Report page.
- As required by the FSM Act, the Report includes an estimate by the FSA of how far it has met its four statutory objectives and had regard during the year to the principles of good regulation set out in section 2(3) of the FSM Act. The Annual Report also contains, as required by the Act, the report by the FSA’s non-executive committee on the discharge of its functions.
- The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection of consumers; and fighting financial crime.
- The FSA aims to maintain efficient, orderly and clean financial markets and help retail consumers achieve a fair deal.
