Amid a large budget increase, the UK’s Financial Services Authority is preparing to split its operations.

The FSA published its last annual business plan today, setting out its priorities for the year ahead. In April 2013, it is due to divide into the Prudential Regulation Authority and the Financial Conduct Authority. In the meantime, the FSA says it will adopt a two-pronged model internally, meaning that firms will have two groups of supervisors, one focusing on prudential matters and one focusing on conduct.

For the year ahead, the FSA promises to maintain its policy of intensive supervision, and to continue to implement various regulatory reform initiatives, particularly the move to Basel III. Its new consumer protection strategy, which seeks to actively anticipate consumer detriment and stop it before it occurs, will remain a priority, it adds. The FSA promises to intervene where it sees unsuitable products with a high probability of being mis-sold, as well as where its sees firms with poor standards of product design or sales processes.

Additionally, the FSA says it will continue with the structural reform of the investment market through its Retail Distribution Review project, which will ban sales commissions, among other things.

The major changes underway at the FSA come at a hefty price. Its budget for the year ahead totals £578.4 million, an increase of 15.6% in overall funding from the previous year.

“The FSA recognizes that given the economic circumstances the industry faces, it is not realistic that the cost of regulation continues to rise at this rate in the long term, and therefore the new authorities will be very focused on controlling costs,” says the FSA’s outgoing chief executive, Hector Sants. Sants is leaving the FSA at the end of June.