Apparently one-off implementation costs for the new laws regarding financial services range from between £253m and £323m, and among the measures and levies imposed on the financial sector are rules on capital requirements, data collection, consumer complaints and financial crime.
Daniel Pinto, Chairman of London-based investment firm Stanhope Capital and director at the New City Initiative, which represents independent firms, said the "excessive" regulation would stifle small and medium enterprises, which were paying the price for the failure of big banks. "
Smaller firms are not equipped to handle this increasing cost of compliance. For them these costs can be the difference between being profitable or not," he said.
Mr Pinto said smaller firms spent about 5 per cent of their revenues on complying with regulation and the extra FSA laws created a "systemic risk" that the SME sector would "shrink" as it struggles to cope with the legal burden.
And Michael Wade, Executive Chairman of Besso, has criticised the FSA’s draconian approach to enforcing the Bribery Act 2010, saying that “London will lose billions of pounds of premium. It will go into the markets that are less regulated.”
He added: “It’s a no lose situation for the FSA and a no win situation for the regulated and that is not fair.”
The figures for the cost of regulation have come out in the same week that Business Secretary Vince Cable is preparing to outline plans to cut business red tape at an employers’ event on Wednesday. The Government is apparently concerned about feedback from companies complaining of “regulation overload.”
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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