Brexit will cost UK finance regulator FCA £30 million

Chris Ratcliffe | Bloomberg via Getty Images

A logo sits on a sign in the reception area of the headquarters of the Financial Conduct Authority (FCA) in the Canary Wharf business district in London, U.K.

Britain’s financial watchdog said it needs to dedicate £30 million ($42 million) of spending to deal with the impact of Brexit on the financial services sector next year.

In its latest annual business plan, released Monday, the Financial Conduct Authority (FCA) said it would devote £14 million of spending on the U.K.’s withdrawal from the European Union by delaying or reducing “non-critical” activity.

That leaves £16 million which the regulator will have to raise itself. It said it will raise £5 million by targeting firms most likely to be affected by Brexit with fees, another £5 million will come from FCA reserves and the remaining £6 million will come from fees charged to firms as part of new regulations.

“We recognize that this year we need to dedicate a significant amount of resource to withdrawal from the EU,” FCA Chief Executive Andrew Bailey said in a statement Monday.

“As a result, setting our priorities this year has involved a particularly rigorous level of scrutiny and challenge to focus on areas where we see the greatest potential for harm.”