The UK’s Financial Services Authority says that its fees will have to rise to meet the regulatory challenges of the year ahead.

The FSA published its business plan on Thursday, outlining its priorities and specific initiatives for the year ahead.

“This will be a very difficult year for financial markets and their users,” it says, noting that the FSA “will focus on ensuring firms are soundly run and in particular that they adjust their business models to ensure they can remain well capitalized and securely funded.”

“In carrying out its consumer mandate, the FSA will concentrate its resources on helping people cope with the economic downturn and maintaining pressure on firms to treat customers fairly,” it adds.

“The financial services industry is facing unprecedented challenges, which look set to continue in 2009,” said FSA chief executive, Hector Sants. “We will be focused on ensuring firms are soundly run in these difficult times and consumers are protected.”

Sants added that the regulator will need additional financial resources to meet its obligations for the coming year, and that this will mean higher fees for regulated firms. The FSA’s budget for the year is £415 million ($750.7 million), up 22.6% from the previous year. The regulator’s biggest expense, staffing costs, are rising 24%, and IT expenditures are going up by almost 30%.

To fund its proposed work the FSA says it will need to increase the amount it raises from firms by £117 million. The largest component of this increase, approximately £70 million, is due to the cost of embedding and delivering higher quality supervision, it said. And, to support the enhancement of its supervisory process, the FSA will also be investing an additional £12 million in technology and property infrastructure.

IE