FEES Fees Manual

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FEES 1

Fees Manual

FEES 1.1

Application and Purpose

  • 01/01/2006

FEES 1.1.1

handbook-guidance
FEES applies to all persons required to pay a fee or levy under a provision of the Handbook. The purpose of this chapter is to set out to whom the rules and guidance in FEES apply. FEES 2 (General Provisions) contains general provisions which may apply to any type of fee payer. FEES 3 (Application, Notification and Vetting Fees) covers one-off fees payable on a particular event for example various application fees (including those in relation to authorisation, variation of Part 4A permission, listing and the Basel Capital Accord) and fees relating to certain notifications and document vetting requests. FEES 4 (Periodic fees) covers all periodic fees and transaction reporting fees. FEES 5 (Financial Ombudsman Service Funding) relates to FOS levies and case fees (in FEES 5.5A). FEES 6 (Financial Services Compensation Scheme Funding) relates to the FSCS levy. FEES 7 relates to the CFEB levy.

Application

FEES 1.1.2

handbook-rule

This manual applies in the following way:

  1. (1) FEES 1, 2 and 3 apply to the fee payers listed in column 1 of the Table of application, notification and vetting fees in FEES 3.2.7 R and FEES 3.2.7A R.
    1. (a) [deleted]
    2. (b) [deleted]
    3. (c) [deleted]
    4. (d) [deleted]
    5. (e) [deleted]
    6. (f) [deleted]
    7. (g) [deleted]
    8. (h) [deleted]
    9. (i) [deleted]
    10. (j) [deleted]
    11. (k) [deleted]
    12. (l) [deleted]
    13. (m) [deleted]
    14. (n) [deleted]
    15. (o) [deleted]
    16. (p) [deleted]
    17. (q) [deleted]
    18. (r) [deleted]
    19. (s) [deleted]
  2. (2) FEES 1, 2 and 4 apply to:
    1. (a) every firm (except an AIFM qualifier, ICVC or UCITS qualifier);
    2. (b) every authorised fund manager of an authorised unit trust or authorised contractual scheme;
    3. (c) every ACD of an ICVC;
    4. (d) every person who, under the constitution or founding arrangements of a recognised scheme, is responsible for the management of the property held for or within the scheme;
    5. (e) every designated professional body;
    6. (f) every recognised body;
    7. (g) under the Listing Rules every issuer of shares, depositary receipts and securitised derivatives;
    8. (h) under the Listing Rules (LR) every sponsor;
    9. (i) under the Disclosure Rules and Transparency Rules (DTR) every issuer of shares, depositary receipts and securitised derivatives;
    10. (j) every fee-paying payment service provider;
    11. (k) every fee-paying electronic money issuer;
    12. (l) every issuer of a regulated covered bond;
    13. (m) every AIFM applying to become a small registered UK AIFM and every small registered UK AIFM;
    14. (n) every AIFM notifying the FCA under regulation 57, 58 and 59 of the AIFMD UK regulation and every AIFM which has made such a notification; and
    15. (o) each of the following that makes transactions reports directly to the FCA under SUP 17 (Transaction reporting):
      1. (i) a firm;
      2. (ii) a third party acting on a firm's behalf;
      3. (iii) an approved reporting mechanism;
      4. (iv) an operator of a regulated market; and
      5. (v) an operator of an MTF.
  3. (3) FEES 1, 2 and 5 apply to:
    1. (a) every firm (except to the extent it is bidding in emissions auctions), fee-paying payment service provider and fee-paying electronic money issuer which is subject to the Compulsory Jurisdiction of the Financial Ombudsman Service; and
    2. (b) every other person who is subject to the Compulsory Jurisdiction in relation to relevant complaints.
  4. (4) FEES 1, 2 and 6 apply to:
    1. (a) every participant firm;
    2. (b) the FSCS; and
    3. (c) the Society.
  5. (5) FEES 1, 2 and 7 apply to:
    1. (a) every person having a Part 4A permission;
    2. (b) an incoming EEA firm;
    3. (c) an incoming Treaty firm;
    4. (d) the Society;
    5. (e) every fee-paying payment service provider except the Bank of England, government departments and local authorities;
    6. (f) every fee-paying electronic money issuer except the Bank of England, government departments, local authorities, municipal banks and the National Savings Bank.
  6. (6) FEES App 1 Annex 1 applies to every:
    1. (a) registered society; or
    2. (b) sponsoring body; or
    3. (c) person who submits a proposal for the registration of a registered society;
  7. each as defined in FEES Appendix 1.

FEES 1, 2 and 7 do not apply to an incoming EEA firm or an incoming Treaty firm that has not established a branch in the United Kingdom.
The application statement at FEES 1.1.2R (3) does not apply to FEES 5.5A, FEES 5 Annex 2R or FEES 5 Annex 3R.

FEES 1.1.3A

handbook-guidance
The rules in FEES should be read in conjunction with GEN 2.2.23 R to GEN 2.2.25 G. In relation to FEES, some rules are made by both the FCA and PRA. Those rules may contain obligations for or references to FCA-authorised persons (for example payment service providers and electronic money issuers) notwithstanding that they also are made by the PRA in order to apply them to PRA-authorised persons. GEN 2.2.23 R limits the application of those rules so that the PRA will only apply them in respect of PRA-authorised persons and not to such FCA-authorised persons as are specifically included within the rule.
  • 01/04/2013

Purpose

FEES 1.1.4

handbook-guidance
The purpose of this manual is to set out the fees applying to the persons set out in FEES 1.

Export chapter as

FEES 2

General Provisions

FEES 2.1

Introduction

  • 01/01/2006

Application

FEES 2.1.1

handbook-rule
Except to the extent referred to in FEES 2.1.1A R, this chapter applies to every person who is required to pay a fee or share of a levy to the appropriate regulator, FOS Ltd or FSCS, as the case may be, by a provision of the Handbook.

FEES 2.1.2

handbook-rule
FEES 2.2.1R does not apply in respect of any fee payable under FEES 3 (Application, notification and vetting fees).

FEES 2.1.3

handbook-guidance
The provisions for late payments in FEES 2.2.1R do not apply to fees payable under FEES 3 as applications, notifications and requests for vetting are generally regarded as incomplete until the relevant fee is paid.

Purpose

FEES 2.1.4

handbook-guidance
The purpose of this chapter is to set out the general provisions applicable to those who are required to pay fees or levies to the appropriate regulator or a share of the FSCS levy.

FEES 2.1.5-A

handbook-guidance
Paragraph 31 of Schedule 1ZB of the Act enables the PRA to charge fees to cover its costs and expenses in carrying out its functions. The corresponding provisions for the FSCS levy are set out in FEES 6.1.

FEES 2.1.6

handbook-guidance

The appropriate regulator fees payable will vary from one fee year to another, and will reflect the appropriate regulator's funding requirement for that period and the other key components, as described in FEES 2.1.7G. Periodic fees, which will normally be payable on an annual basis, will provide the majority of the funding required to enable the appropriate regulator to undertake its statutory functions.

FEES 2.1.7

handbook-guidance

The key components of the appropriate regulator fee mechanism (excluding the FSCS levy, the FOS levy and case fees, and the CFEB levy which are dealt with in FEES 5, FEES 6 and FEES 7) are:

  1. (1) a funding requirement derived from:
    1. (a) the appropriate regulator's financial management and reporting framework;
    2. (b) the appropriate regulator's budget; and
    3. (c) adjustments for audited variances between budgeted and actual expenditure in the previous accounting year, and reserves movements (in accordance with the appropriate regulator's reserves policy);
  2. (2) mechanisms for applying penalties received during previous financial years for the benefit of fee payers;
  3. (3) fee-blocks, which are broad groupings of fee payers offering similar products and services and presenting broadly similar risks to the appropriate regulator's regulatory objectives;
  4. (4) a costing system to allocate an appropriate part of the funding requirement to each fee-block; and
  5. (5) tariff bases, which, when combined with fee tariffs, allow the calculation of fees.

FEES 2.1.8

handbook-guidance
The amount payable by each fee payer will depend upon the category (or categories) of regulated activity or exemption, or other relevant activity applicable to that person (fee-blocks). It will, in most cases, also depend on the amount of the business that person conducts in each category (fee tariffs).

FEES 2.1.9

handbook-guidance
By basing fee-blocks on categories of business, the appropriate regulator aims to minimise cross-sector subsidies. The membership of the fee-blocks is identified in the FEES provisions relating to the type of fees concerned.

FEES 2.1.9A

handbook-guidance
PRA-authorised persons and persons seeking to become PRA-authorised persons should note that the FCA and the PRA have agreed for the FCA to act as the PRA's agent in relation to the collection of PRA fees. Where applicable, both PRA and FCA fees should be paid as a single payment to the FCA, which will receive the payment in its own capacity in respect of FCA fees and in its capacity as agent for the PRA in respect of the PRA fees. References to this arrangement will be referred to in FEES where applicable.
  • 01/04/2013

FEES 2.2

Late Payments and Recovery of Unpaid Fees

  • 01/01/2006

Late Payments

FEES 2.2.1

handbook-rule

If a person does not pay the total amount of a periodic fee, FOS levy, or share of the FSCS levy or CFEB levy, before the end of the date on which it is due, under the relevant provision in FEES 4, 5, 6 or 7, that person must pay an additional amount as follows:

  1. (1) if the fee was not paid in full before the end of the due date, an administrative fee of £250; plus
  2. (2) interest on any unpaid part of the fee at the rate of 5% per annum above the Official Bank Rate from time to time in force, accruing on a daily basis from the date on which the amount concerned became due.

FEES 2.2.2

handbook-guidance
The FCA, (for FCA and PRA periodic fees, FOS and FSCS levies and CFEB levies), expects to issue invoices at least 30 days before the date on which the relevant amounts fall due. Accordingly it will generally be the case that a person will have at least 30 days from the issue of the invoice before an administrative fee becomes payable.

Recovery of Fees

FEES 2.2.3

handbook-guidance

Paragraphs 23(8) of Schedule 1ZA and paragraphs 31(7) of Schedule 1ZB of the Act permit the FCA and PRA respectively to recover fees (including in respect of the FCA, fees relating to payment services, the issuance of electronic money and, where relevant, FOS levies and CFEB levies), and section 213(6) permits the FSCS to recover shares of the FSCS levy payable, as a debt owed to the FCA, PRA and FSCS respectively, and the FCA, PRA and FSCS, as relevant, will consider taking action for recovery (including interest) through the civil courts.

[Note: For the PRA version of this guidance, see this provision as it was on 31 March 2015.]

FEES 2.2.4

handbook-guidance

In addition, the appropriate regulator may be entitled to take regulatory action in relation to the non-payment of fees, FOS levies and CFEB levies. The appropriate regulator may also take regulatory action in relation to the non-payment of a share of the FSCS levy, after reference of the matter to the appropriate regulator by the FSCS. What action (if any) that is taken by the appropriate regulator will be decided upon in the light of the particular circumstances of the case.

FEES 2.3

Relieving Provisions

  • 01/01/2006

Remission of Fees and levies

FEES 2.3.1

handbook-rule
If it appears to the appropriate regulator or the FSCS (in relation to any FSCS levy only) that in the exceptional circumstances of a particular case, the payment of any fee, FSCS levy, FOS levy or CFEB levy would be inequitable, the appropriate regulator or the FSCS as relevant, may (unless FEES 2.3.2B R applies) reduce or remit all or part of the fee or levy in question which would otherwise be payable.

FEES 2.3.2

handbook-rule
If it appears to the appropriate regulator or the FSCS (in relation to any FSCS levy only) that in the exceptional circumstances of a particular case to which FEES 2.3.1R does not apply, the retention by the appropriate regulator, the FSCS, or the CFEB, as relevant, of a fee, FSCS levy, FOS levy or CFEB levy which has been paid would be inequitable, the appropriate regulator, the FSCS or the CFEB, may (unless FEES 2.3.2B R applies) refund all or part of that fee or levy.

FEES 2.3.2A

handbook-guidance
A poor estimate or forecast by a fee or levy payer, when providing information relevant to an applicable tariff base, is unlikely, of itself, to amount to an exceptional circumstance for the purposes of FEES 2.3.1 R or FEES 2.3.2 R. By contrast, a mistake of fact or law by a fee or levy payer may give rise to such a claim.

FEES 2.3.2B

handbook-rule
The appropriate regulator or the FSCS may not consider a claim under FEES 2.3.1 R and/or FEES 2.3.2 R to reduce, remit or refund any overpaid amounts paid by a fee or levy payer in respect of a particular period, due to a mistake of fact or law by the fee or levy payer, if the claim is made by the fee or levy payer more than 2 years after the beginning of the period to which the overpayment relates.

FEES 2.4

VAT

  • 01/04/2009

FEES 2.4.1

handbook-rule
All fees payable or any stated hourly rate under FEES 3 (Application, notification and vetting fees), FEES 4 (Periodic fees) and FEES 7 (The CFEB levy) are stated net of VAT. Where VAT is applicable this must also be included.

Export chapter as

FEES 3

Application, Notification and Vetting Fees

FEES 3.1

Introduction

  • 01/01/2006

Application

FEES 3.1.1

handbook-rule
This chapter applies to every person set out in column 1 of the Table of application, notification and vetting fees in FEES 3.2.7 R and FEES 3.2.7A R.

FEES 3.1.2

handbook-guidance

This chapter does not apply to:

  1. (1) an EEA firm that wishes to exercise an EEA right; or
  2. (2) an EEA authorised payment institution; or
  3. (3) an EEA authorised electronic money institution.

Purpose

FEES 3.1.3

handbook-guidance
The purpose of this chapter is to set out the appropriate regulator fee paying requirements on the persons set out in FEES 1.1.2R (1).

FEES 3.1.4

handbook-guidance
Most of the detail of what fees are payable by the persons referred to in FEES 3.1.3 G is set out in FEES 3 Annex 1 - FEES 3 Annex 10 R.

FEES 3.1.5

handbook-guidance
  1. (1) The rates set for authorisation fees represent an appropriate proportion of the costs of the appropriate regulator in processing the application or exercise of Treaty rights.
  2. (2) [deleted]
  3. (3) [deleted]

FEES 3.1.6

handbook-guidance
Applications for Part 4A permission (and exercises of Treaty rights) other than in respect of credit-related regulated activities are categorised by the appropriate regulator for the purpose of fee raising as straightforward, moderately complex and complex as identified in FEES 3 Annex 1. This differentiation is based on the permitted activities sought and does not reflect the appropriate regulator's risk assessment of the applicant (or Treaty firm).

FEES 3.1.7

handbook-guidance
A potential applicant for Part 4A permission (or Treaty firm) has the opportunity to discuss its proposed application (or exercise of Treaty rights) with the appropriate regulator before submitting it formally. If an applicant for Part 4A permission (or Treaty firm) does so, the appropriate regulator will be able to use that dialogue to make an initial assessment of the fee categorisation and therefore indicate the authorisation fee that should be paid.

FEES 3.1.8A

handbook-guidance
Application fees for applications for and variations of Part 4A permission in respect of credit-related regulated activities are also set out in FEES 3 Annex 1F. Applications for Part 4A permission in respect of credit-related regulated activities are categorised by the appropriate regulator for the purposes of fee raising as straightforward, moderately complex and complex as identified in FEES 3 Annex 1, unless the application is for a limited permission.
  • 01/04/2014

FEES 3.2

Obligation to pay fees

  • 01/01/2006

General

FEES 3.2.1

handbook-rule

A person in column (1) of the table in FEES 3.2.7 R and, if applicable, FEES 3.2.7A R as the relevant fee payer for a particular activity must pay to the FCA (in its own capacity or, if the fee is payable to the PRA, in its capacity as collection agent for the PRA) a fee for each application or request for vetting, or request for support relating to compatibility of its systems with appropriate regulator systems, or admission approval made, or notification or notice of exercise of a Treaty right given, or other matter as is applicable to it, as set out or calculated in accordance with the provisions referred to in column (2) of the appropriate table:

  1. (1) in full and without deduction; and
  2. (2) on or before the date given in column (3) of that table.

FEES 3.2.2

handbook-guidance
If an application for a Part 4A permission (or exercise of a Treaty right) falls within more than one category set out in FEES 3 Annex 1, only one fee is payable. That fee is the one for the category to which the highest fee tariff applies.

Method of payment

FEES 3.2.3

handbook-rule
  1. (1) Unless (2), (3) or (4) applies, the sum payable under FEES 3.2.1 R must be paid by bankers draft, cheque or other payable order.
  2. (2) The FCA does not specify a method of payment for a person seeking to:
    1. (a) become a recognised body or a designated professional body; or
    2. (b) be added to the list of designated investment exchanges or accredited bodies.
  3. (3) The sum payable under FEES 3.2.1 R by a firm applying for a variation of its Part 4A permission which is not an application for new permission solely in respect of one or more credit-related regulated activities ( FEES 3.2.7 R(p)(1) or FEES 3.2.7 R(p)(4) and, if applicable, FEES 3.2.7 R(c)) must be paid by any of the methods described in (1) or by Maestro, Visa Debit or credit card (Visa/Mastercard/American Express only).
  4. (4) Unless FEES 3.2.3A R applies, the sum payable under FEES 3.2.1 R by a firm applying for a Part 4A permission in respect of credit-related regulated activities only or a variation of its Part 4A permission to add solely one or more credit-related regulated activities must be paid by Maestro, Visa Debit or credit card (Visa/Mastercard/American Express only).
  5. (5) Payments by credit card must include an additional:
    1. (a) 2% of the sum paid when paying by Visa or Mastercard; or
    2. (b) 3.2% of the sum paid when paying by American Express.

FEES 3.2.3A

handbook-rule
  1. (1) If the fee payer (as specified in column (1) of FEES 3.2.7 R) in relation to FEES 3.2.3R (4) is:
    1. (a) unable to make a payment by credit or debit card; or
    2. (b) permitted to make a paper application rather than an online application for a Part 4A permission in respect of credit-related regulated activities only or a variation of its Part 4A permission to add a credit-related regulated activity;
  2. the sum payable under FEES 3.2.1 R can be paid by bankers draft, cheque or other payable order.
  • 01/04/2014

FEES 3.2.3B

handbook-guidance
If FEES 3.2.3AR (1)(a) applies to a fee payer, that fee payer would be expected to notify the FCA of these circumstances in advance of making its payment (and, in any event, no less than 7 days before the date on which the application for a Part 4A permission or the variation of a Part 4A permission is made) unless such notification is impossible in the circumstances, eg, there is a sudden technological failure.
  • 01/04/2014

FEES 3.2.5

handbook-guidance
  1. (1) The appropriate authorisation or registration fee is an integral part of an application for, or an application for a variation of, a Part 4A permission, authorisation, registration or variation under the Payment Services Regulations or the Electronic Money Regulations, or notification or registration under the AIFMD UK regulation. Any application or notification received by the appropriate regulator without the accompanying appropriate fee, in full and without deduction (see FEES 3.2.1 R), will not be treated as an application or notification made, incomplete or otherwise, in accordance with section 55U(4), or section 55H or 55I (as the case may be), of the Act or regulation 5(3) or 12(3) of the Payment Services Regulations or regulation 5 or 12 of the Electronic Money Regulations or regulation 11(1) and 60(a) of the AIFMD UK regulation. Where this is the case, the appropriate regulator will contact the applicant to point out that the application cannot be progressed until the appropriate fee has been received. In the event that the appropriate authorisation fee, in full and without deduction, is not forthcoming, the application will be returned to the applicant and no application will have been made.
  2. (2) With the exception of persons seeking to become a designated professional body, all applications, notifications, requests for vetting or admission approval will be treated as incomplete until the relevant fee is fully paid and the appropriate regulator will not consider an application, notification, request for vetting or admission approval until the relevant fee is fully paid. Persons seeking to become a designated professional body have 30 days after the designation order is made to pay the relevant fee.

FEES 3.2.6

handbook-guidance
Fees paid under this chapter are not refundable.

FEES 3.2.7A

handbook-rule

Table of application, notification and vetting fees payable to the PRA

FEES 3 Annex 1

Authorisation fees payable

  • 01/01/2006

handbook-rule

Part 1 - Authorisation fees payable
For PRA-authorised persons and persons seeking to become PRA-authorised persons, the amount payable to the PRA is 50% of the amount payable under Part 1 and the amount payable to the FCA is 50% of the amount payable under Part 1. The amount payable to the PRA above is collected by the FCA as agent of the PRA.

For FCA-authorised persons and persons seeking to become FCA-authorised persons, the amount payable to the FCA is the amount payable under Part 1, No amount is payable to the PRA.
The table below sets out the following:

  1. (1) fees for applications by credit unions and community finance organisations;
  2. (2) application fees in respect of the complexity groupings that relate to regulated activities that are not credit-related regulated activities; and
  3. (3) application fees in respect of the complexity groupings that relate to credit-related regulated activities.

Part 2 - Complexity Groupings not relating to credit-related regulated activities Straightforward Cases

Moderately Complex Cases

Complex Cases R

Part 3 - Complexity Groupings relating to credit-related regulated activity

Straightforward cases

Moderately complex cases

Complex cases

Part 4 - Authorisation Fees for Treaty Firms R

Part 5 - Activity Groupings R

Part 6 - Change of legal status

Part 7 - Change of legal status - sponsors fees

FEES 3 Annex 6B

Part 1

  • 01/01/2014

handbook-rule
Table 1 Table 2 (1) For the purposes of Table 2, a firm's A.1 or A10 tariff data for the relevant period will be used to provide the value of modified eligible liabilities or number of traders.

Table 3 (Advanced IRB approach where the appropriate regulator or the consolidating supervisor has already given permission to use Foundation IRB)

Part 2

Fees payable in relation to the application for a permission to use the internal model method for counterparty credit risk under Article 283 of the EUCRR: 54,000
  • 01/01/2014

FEES 3 Annex 9

Special Project Fee for restructuring

  • 01/06/2009

FEES 3 Annex 9

handbook-rule

FEES 3 Annex 10

Fees payable for authorisation as an authorised electronic money institution or registration as a small electronic money institution or variation thereof, including notification fees, in accordance with the Electronic Money Regulations

handbook-rule
Authorisation, registration and variation fees payable

FEES 3 Annex 11

Guidance on fees due under FEES 3.2.7R and FEES 3.2.7AR

handbook-guidance
The following table sets out guidance on how a firm liable to pay a fee under both FEES 3.2.7 R (s) and FEES 3.2.7 R (ze) in respect of fees payable to the FCA and FEES 3.2.7AR(e) and FEES 3.2.7AR(d) in respect of fees payable to the PRA for the same transaction should expect to be treated.

Firms liable under both FEES 3.2.7R(s) and FEES 3.2.7R(ze) in respect of fees payable to the FCA and FEES 3.2.7AR (e) and FEES 3.2.7AR(d) in respect of fees payable to the PRA

Export chapter as

FEES 4

Periodic fees

FEES 4.1

Introduction

  • 01/01/2006

Application

FEES 4.1.1

handbook-rule
This chapter applies to every person set out in FEES 1.1.2R (2).

Purpose

FEES 4.1.2

handbook-guidance
The purpose of this chapter is to set out the requirements on firms and others to pay periodic fees and transaction reporting fees in certain circumstances.

Background

FEES 4.1.3

handbook-guidance
Most of the detail of the periodic fees that are payable by firms is set out in FEES 4 Annexes 1A to 11BR. FEES 4 Annex 12 G and (for the FCA only) FEES 4 Annex 13 G provide guidance on the calculation of certain tariffs. Most of the provisions of the Annexes will vary from one fee year to another. Accordingly fresh FEES 4 Annexes will come into force, following consultation, for each fee year.

FEES 4.1.5

handbook-guidance
The Society of Lloyd's, which has permission, has its own fee block.

FEES 4.1.7

handbook-guidance
In the case of periodic fees for firms, fees are calculated individually for each firm, but they may be paid on a group basis, if the group so wishes.

FEES 4.2

Obligation to pay periodic fees

  • 01/01/2006

General

FEES 4.2.1

handbook-rule

A person shown in column (1) of the table in FEES 4.2.11 R and, if applicable, FEES 4.2.11AR as the relevant fee payer must pay each periodic fee applicable to it, calculated in accordance with the provisions referred to in column (2) of the applicable table, as adjusted by any relevant provision in this chapter:

  1. (1) in full and without deduction (unless permitted or required by a provision in FEES); and
  2. (2) on or before the date given in column (3) of that table, unless FEES 4.2.10 R applies.

FEES 4.2.2

handbook-guidance
  1. (1) A relevant fee payer will be required to pay a periodic fee for every year during which they have the status in column 1 of the table in FEES 4.2.11 R and/or FEES 4.2.11AR (or in relation to collective investment schemes, for every year during which it is a regulated collective investment scheme) subject to any reductions or exemptions applicable under this chapter. If a person is the relevant fee payer for more than one status listed in column 1 of the table in FEES 4.2.11 R and/or FEES 4.2.11AR (or in relation to collective investment schemes, the relevant fee payer for more than one regulated collective investment scheme) he will be required to pay a fee in relation to each.
  2. (2) [deleted]

FEES 4.2.3

handbook-guidance
The FCA will issue invoices in respect of the FCA and PRA to firms and other fee payers and expects to do so at least 30 days before the dates on which payments fall due under FEES 4.2.1 R.

Method of payment

FEES 4.2.4

handbook-rule
  1. (1) A periodic fee must be paid using either direct debit, credit transfer (BACS/CHAPS), cheque, Maestro, Visa Debit or by credit card (Visa/Mastercard only). Any payment by permitted credit card must include an additional 2% of the sum paid.
  2. (2) [deleted]

Modifications for persons becoming subject to periodic fees during the course of a fee year

FEES 4.2.6

handbook-rule
  1. (1) For the fee year during which the event described in column 4 of the table in FEES 4.2.11 R and/or FEES 4.2.11AR, giving rise to, or giving rise to an increase in, the fee payable in FEES 4.2.1 R occurs, the periodic fee required under FEES 4.2.1 R is modified for:
    1. (a) firms (other than AIFM qualifiers, ICVCs and UCITS qualifiers) in accordance with FEES 4.2.7 R and FEES 4.2.8 R;
    2. (b) all other fee payers in column (1) of the table in FEES 4.2.11 R or FEES 4.2.11A R, in accordance with the formula set out below.
  1. (2) [deleted]

FEES 4.2.7

handbook-rule

A firm (other than an AIFM qualifier, ICVC or UCITS qualifier) which becomes authorised or registered, or whose permission and/or payment service activities are extended, during the course of the fee year must pay a fee which is calculated by:

  1. (1) identifying each of the tariffs set out in Part 1 of FEES 4 Annex 2AR, Part 1 of FEES 4 Annex 2BR and/or Part 1 of FEES 4 Annex 11 as appropriate for the relevant fee year that apply to the firm only after the permission is received or extended or payment service activities are authorised or registered or extended or electronic money issuance activities are authorised or registered under the Electronic Money Regulations;
  2. (2) calculating the amount for each of the applicable tariffs which is the higher of:
    1. (a) any applicable minimum fee specified in relation to a particular tariff in FEES 4 Annex 2AR or FEES 4 Annex 2BR (but note, for the avoidance of doubt, that these are not the A.0 or PA.0 minimum fees set out under Part 2 of FEES 4 Annex 2AR and Part 2 of FEES 4 Annex 2BR); and
    2. (b) the result of applying the tariff to the projected valuation, for its first year (as provided in the course of the firm's application), of the business to which the tariff relates;
  3. (3) adding together the amounts calculated under (2) in relation to fees payable to the FCA and, if applicable, separately adding together the amounts calculated under (2) in relation to the fees payable to the PRA;
  4. (4) working out whether an A.0 or a PA.0 minimum fee is payable under Part 2 of FEES 4 Annex 2AR or Part 2 of FEES 4 Annex 2BR (except that minimum fee is not payable again by a firm whose permission is extended if the fee was already payable before the extension);
  5. (4A) working out whether an AP.0 FCA prudential fee is payable under Part 2 of FEES 4 Annex 2AR and if so how much;
  6. (4B) working out whether a PT.1 PRA transitional fee is payable under Part 2 of FEES 4 Annex 2BR and if so how much;
  7. (5) adding together the amounts calculated under (3), (4) and (4A) that relate to fees payable to the FCA and then adding this sum to any applicable flat rate fee, and, if applicable, separately adding together the amounts calculated under (3), (4) and (4B) that relate to fees payable to the PRA and then adding this sum to any applicable flat rate fee; and
  8. (6) modifying the result for the FCA and, if applicable, the PRA in accordance with the formula set out in FEES 4.2.6 R (except that FEES 4 Annex 10R (Periodic fees for MTF operators) deals with a firm that receives permission for operating a multilateral trading facility or has its permission extended to include this activity during the course of the relevant fee year and FEES 4.2.6 R does not apply).

FEES 4.2.7A

handbook-guidance
Projected valuations for a firm's first year will be collected for the 12 month period beginning with the date a firm becomes authorised or registered, or the date its permission and/or payment service activities are extended. That information will be used to calculate the periodic fee for the remainder of the fee year in which the firm was authorised or registered or its permission and/or payment service activities were extended (adjusted in accordance with FEES 4.2.7 R) and to calculate the periodic fee for the following fee year. Projected valuations are not relevant for those fee payers that are only required to pay fixed fees.

FEES 4.2.7B

handbook-rule
  1. (1) This rule deals with the calculation of:
    1. (a) a firm's fees for its second and subsequent fee year. These are the fee years years following the fee year in which it was given permission and/or was authorised or registered under the Payment Services Regulations or the Electronic Money Regulations or had its permission and/or payment services activities extended (the relevant permissions); and
    2. (b) the tariff base for the fee block or fee blocks that relate to each of the relevant permissions.
  2. (2) The starting point for calculating the fees referred to in (1)(a) is determining whether or not the firm's tariff base for the relevant fee year can be calculated using data from a complete period (as specified in Part 5 of FEES 4 Annex 1AR, Part 5 of FEES 4 Annex 1BR or Part 4 of FEES 4 Annex 11 R) that begins on or after the date that the firm obtained the relevant permission to which that tariff base relates.
    1. (a) If it can, the firm must use that data for calculating its tariff base.
    2. (b) If it cannot, the tariff base must be calculated using the projected valuations for its first year of the business to which the tariff relates (as provided in the course of the firm's application), unless (5)(b) or 5(c) applies.
  3. (3) This rule does not apply to a firm with a permission for operating a multilateral trading facility.
  4. (4) [deleted]
  5. (5)
    1. (a) [deleted]
    2. (b) If a firm:
      1. (i) receives a relevant permission between 1 April and 31 December inclusive; and
      2. (ii) is, but for this rule, required to calculate its tariff base for that relevant permission by reference to the average of its modified eligible liabilities for October, November and December;
    3. it must calculate that tariff base as at the December before the start of the fee year.
    4. (c) If a firm:
      1. (i) is, but for this rule, required to calculate its tariff base for the relevant permission by reference to the firm's financial year ended in the calendar year ending on the 31 December before the start of the fee year and, since obtaining the relevant permission, the firm has yet to complete a full financial year ended in the calendar year ending on the 31 December before the start of the fee year; or
      2. (ii) is, but for this rule, required to calculate its tariff base by reference to the twelve months ending on the 31 December before the start of the fee year and, since obtaining the relevant permission, the firm has yet to complete a full twelve months ending on the 31 December before the start of the fee year;
    5. it must calculate the tariff base under (d) below unless it is in its second fee year and was authorised between 1 January and 1 April (in which case it must use the projected valuations provided for in (2)(b) above).
    6. (d) If a firm satisfies either of the conditions in (c) it must calculate its tariff base as follows:
      1. (i) it must use actual data in relation to the business to which the tariff relates rather than projected valuations;
      2. (ii) in respect of firms satisfying condition (5)(c)(i), the tariff is calculated by reference to the period beginning on the date it acquired the relevant permission relating to the tariff, and ending on either the 31 December before the start of the fee year or, if earlier, the start date of the firm's financial year; and
      3. in respect of firms satisfying condition (5)(c)(ii), the tariff is calculated by reference to the period beginning on the date on which it acquired the relevant permission, and ending on the 31 December before the start of the fee year
      4. (iii) the figures are annualised by increasing them by the same proportion as the period of 12 months bears to the period starting from when the firm received its relevant permission to to the relevant period end date specified in (ii).
    7. (e) Where a firm is required to use the method in (d) it must notify the FCA (in its own capacity and, if applicable, in its capacity as collection agent for the PRA) of this by the date specified in FEES 4.4 (Information on which Fees are calculated).
    8. (f) Where a firm is required to use actual data under this rule FEES 4 Annex 1AR Part 5, FEES 4 Annex 1BR Part 5 and FEES 4 Annex 11 Part 4, are modified, where applicable, in relation to the calculation of that firm's valuation date in the fee years to which this rule applies.

Application of FEES 4.2.7BR

FEES 4.2.7C

handbook-guidance
The table below sets out the period within which a firm's tariff base is calculated (the data period) for second year fees calculated under FEES 4.2.7B R. The example is based on a firm that acquires permission on 1 November 2009 and has a financial year ending 31 March. Where valuation dates fall before the firm receives permission it should use projected valuations in calculating its fees.

References in this table to dates or months are references to the latest one occurring before the start of the appropriate regulator's fee year unless otherwise stated.

FEES 4.2.8

handbook-rule
In relation to an incoming EEA firm or an incoming Treaty firm the modification provisions of FEES 4.2.7 R apply only in relation to the relevant regulated activities of the firm, which are passported activities or Treaty activities and which are carried on in the United Kingdom, and which are not provided on a cross border services basis. For payment services and electronic money issuance, the adjustment only applies to the business to which the calculation made in FEES 4.3.12A R relates.

Fee payers ceasing to hold relevant status or reducing the scope of their permission after start of relevant period

FEES 4.2.9

handbook-guidance

The appropriate regulator will not refund periodic fees if, after the start of the period to which they relate:

  1. (1) a fee payer ceases to have the status set out in column (1) of the table in FEES 4.2.11 R or FEES 4.2.11AR; or
  2. (2) a firm reduces its permission or payment services activities so that it then falls out of the fee-block previously applied to it;

(but see FEES 2.3 (Relieving Provisions) and FEES 4.3.13 R (Firms Applying to Cancel or Vary Permission Before Start of Period)).

Extension of Time

FEES 4.2.10

handbook-rule

A person need not pay a periodic fee on the date on which it is due under the relevant provision in FEES 4.2.1 R, if:

  1. (1) that date falls during a period during which circumstances of the sort set out in GEN 1.3.2 R (Emergencies) exist, and that person has reasonable grounds to believe that those circumstances impair its ability to pay the fee, in which case he must pay it on or before the fifth business day after the end of that period; or
  2. (2) unless FEES 4.3.6R (3), FEES 4.3.6R (4) or FEES 4.3.6R (4A) (Time and method for payment) applies, that date would otherwise fall on or before the 30th day after the date on which the FCA (in its own capacity or in its capacity as agent for the PRA) has sent written notification to that person of the fee payable on that date, in which case he must pay on or before the 30th day after the date on which the FCA sends the notification.

FEES 4.2.10A

handbook-rule
A CRR firm need not pay a periodic fee on the date on which it is due under the relevant provision in FEES 4.2.1 R, if that date falls during a period during which circumstances of the sort set out in General Provisions 2.2 in the PRA Rulebook exist, and that firm has reasonable grounds to believe that those circumstances impair its ability to pay the fee, in which case the firm must pay it on or before the fifth business day after the end of that period.
  • 02/04/2015

FEES 4.2.11A

handbook-rule
Table of periodic fees payable to the PRA
  • 01/04/2013

FEES 4.3

Periodic fee payable by firms (other than AIFM qualifiers, ICVCs and UCITS qualifiers)

FEES 4.3.1

handbook-rule

The periodic fee payable by a firm (except an AIFM qualifier, ICVC or a UCITS qualifier) is:

  1. (1) each periodic fee applicable to it calculated in accordance with FEES 4.3.3 R, using information obtained in accordance with FEES 4.4; plus
  2. (1A) any periodic fee applicable to it calculated in accordance with FEES 4.3.3A R using information relating to its UK business obtained in accordance with FEES 4.4 (or by other means in the case of the Bank of England); less
  3. (2) any deductions from the periodic fee specified in Part 2 of FEES 4 Annex 2AR, FEES 4 Annex 2BR or Part 7 of FEES 4 Annex 11.

FEES 4.3.2

handbook-guidance
  1. (1) The amount payable by each firm will depend upon the category (or categories) of regulated activities or payment services it is engaged in (fee-blocks) and whether it is issuing electronic money, and on the amount of business it conducts in each category (tariff base). The fee-blocks and tariffs are identified in FEES 4 Annex 1AR in respect of the FCA and FEES 4 Annex 1BR in respect of the PRA (and guidance on calculating certain of the tariffs is at FEES 4 Annex 12 G and (for the FCA only) FEES 4 Annex 13G), while FEES 4 Annex 2AR in respect of the FCA and FEES 4 Annex 2BR in respect of the PRA set out the tariff rates for the relevant fee year. In the case of firms that provide payment services and/or issue electronic money, the relevant fee blocks, tariffs and rates are set out in FEES 4 Annex 11.
  2. (2) Incoming EEA firms, incoming Treaty firms, EEA authorised payment institutions and EEA authorised electronic money institutions receive a discount to reflect the reduced scope of the appropriate regulator's responsibilities in respect of them. The level of the discount varies from fee-block to fee-block, according to the division of responsibilities between the appropriate regulator and Home state regulators for firms in each fee-block (see FEES 4.3.11 G, FEES 4.3.12 R and FEES 4.3.12A R).

Calculation of periodic fee (excluding fee-paying payment service providers and fee-paying electronic money issuers)

FEES 4.3.3

handbook-rule

The periodic fee referred to in FEES 4.3.1 R is (except in relation to the Society, fee-paying payment service providers and fee-paying electronic money issuers) calculated as follows:

  1. (1) identify each of the tariffs set out in Part 1 of FEES 4 Annex 2AR and Part 1 of FEES 4 Annex 2BR which apply to the business of the firm for the period specified in that annex;
  2. (2) for each of the applicable tariffs, calculate the sum payable in relation to the business of the firm for that period;
  3. (3) add together the amounts calculated under (2) in relation to fees payable to the FCA and, if applicable, separately add together the amounts calculated under (2) in relation to the fees payable to the PRA;
  4. (4) work out whether an A.0, CC.0 or a PA.0 minimum fee is payable under Part 2 of FEES 4 Annex 2AR and Part 2 of FEES 4 Annex 2BR and if so how much (except that that minimum fee is not payable again by a firm whose permission is extended if the fee was already payable before the extension);
  5. (4A) work out whether an AP.0 FCA prudential fee is payable under Part 2 of FEES 4 Annex 2AR and if so how much;
  6. (4B) work out whether a PT.1 PRA transitional fee is payable under Part 2 of FEES 4 Annex 2BR and if so how much;
  7. (5) add together the amounts calculated under (3), (4) and (4A) that relate to fees payable to the FCA and, if applicable, separately adding together the amounts calculated under (3), (4) and (4B) that relate to fees payable to the PRA; and
  8. (6) apply any applicable payment charge specified in FEES 4.2.4 R, provided that:
    1. (a) for payment by direct debit, successful collection of the amount due is made at the first attempt by the FCA (in its own capacity and, if applicable, in its capacity as agent for the PRA); or
    2. (b) for payment by credit transfer, the amount due is received by the FCA (in its own capacity and, if applicable, in its capacity as agent for the PRA) on or before the due date.

Modification for firms with new or extended permissions

FEES 4.3.4

handbook-guidance
  1. (1) A firm which becomes authorised or registered during the course of a fee year will be required to pay a proportion of the periodic fee which reflects the proportion of the year for which it will have a permission or the right to provide particular payment services or the right to issue electronic money - see FEES 4.2.5 G and FEES 4.2.6 R.
  2. (2) Similarly a firm which extends its permission or its right to provide particular payment services so that its business then falls within additional fee blocks will be required to pay a further periodic fee under this section for those additional fee blocks, but discounted to reflect the proportion of the year for which the firm has the extended permission or payment services activity - see FEES 4.2.6 R and FEES 4.2.7 R.
  3. (3) These provisions apply (with some changes) to incoming EEA firms, incoming Treaty firms, EEA authorised payment institutions and EEA authorised electronic money institutions.
  4. (4) These provisions do not apply to a firm's periodic fees in relation to its permission for operating a multilateral trading facility obtained from the FCA during the course of a fee year.

Amount payable by the Society of Lloyd's

FEES 4.3.5

handbook-rule
The periodic fee referred to in FEES 4.3.1 R in relation to the Society is specified against its name in FEES 4 Annex 2AR and FEES 4 Annex 2BR.

Time of payment

FEES 4.3.6

handbook-rule
  1. (1) Subject to FEES TP 8, if the firm's, designated professional body's, recognised investment exchange's, or regulated covered bond issuer's periodic fee for the previous fee year was at least £50,000, it must pay the FCA:
    1. (a) an amount equal to 50% of the FCA periodic fee payable for the previous fee year, by 30 April or, if later, within 30 days of the date of the invoice, in the fee year to which the sum due under FEES 4.2.1 R relates; and
    2. (b) the balance of the FCA periodic fee due for the current fee year by 1 September or, if later, within 30 days of the date of the invoice, in the fee year to which that sum relates.
  2. (1A) Subject to FEES TP 8, if the firm is also a PRA-authorised person and its periodic fee for the previous fee year was at least 50,000, it must pay the PRA (through the FCA acting as its collection agent):
    1. (a) an amount equal to 50% of the PRA periodic fee payable for the previous fee year, by 30 April in the fee year to which the sum due under FEES 4.2.1 R relates; and
    2. (b) the balance of the PRA periodic fee due for the current fee year by 1 September or, if later, within 30 days of the date of the invoice, in the fee year to which that sum relates.
  3. (1B) If the firm paid periodic fees to both the FCA and the PRA in the previous fee year, FEES 4.3.6R (1) and (1A) only apply if the firm's combined FCA and PRA periodic fees for that fee year were at least £50,000.
  4. (2) If the firm's, designated professional body's, recognised investment exchange's, or regulated covered bond issuer's periodic fee for the previous fee year was less than £50,000, it must pay the periodic fee due in full by 1 August or, if later, within 30 days of the date of the invoice in the fee year to which that sum relates.
  5. (3) If a firm has applied to cancel its Part 4A permission in the way set out in SUP 6.4.5 D (Cancellation of permission), or its status as a payment institution under regulation 10 of the Payment Services Regulations (Cancellation of authorisation) or as regulation 10 is applied by regulation 14 of the Payment Services Regulations (Supplementary provisions), or its status as an electronic money issuer under regulation 10 of the Electronic Money Regulations (Cancellation of authorisation) or as regulation 10 is applied by regulation 15 of the Electronic Money Regulations (Supplementary provisions), then (1) and (2) do not apply but it must pay the total amount due when the application is made.
  6. (4) If the appropriate regulator has exercised its own-initiative powers to cancel a firm's Part 4A permission, then (1) and (2) do not apply but the firm must pay the total amount due immediately before the cancellation becomes effective.
  7. (4A) If the FCA has cancelled a firm's authorisation or registration under regulation 10 of the Payment Services Regulations or regulation 10 of the Electronic Money Regulations or its registration under regulation 10 as applied by regulation 14 of the Payment Services Regulations or its registration under regulation 10 as applied by regulation 15 of the Electronic Money Regulations, then (1) and (2) do not apply but the firm must pay the total amount due immediately before the cancellation becomes effective.
  8. (5) [deleted]
  9. (5A) (In relation to PRA-authorised persons only) paragraphs (1A) and (2) do not apply to any Solvency 2 Special Project fee or Solvency 2 Implementation fee (as defined in FEES 4 Annex 2B) and such fees are not taken into account for the purposes of the split in (1A). Instead any Solvency 2 Special Project fee or Solvency 2 Implementation fee is payable on the date specified in (1A)(b) or (2) (depending on which applies to the rest of its periodic fee) or any earlier date required by (3) or (4).
  10. (6) Paragraphs (1) and (2) do not apply to any periodic fee in relation to a firm's permission for operating a multilateral trading facility and such a fee is not taken into account for the purposes of the split in (1). Instead any fee for this permission is payable on the date specified in FEES 4 Annex 10 (Periodic fees for MTF operators).

FEES 4.3.6A

handbook-rule
If a firm has applied to cancel its Part 4A permission in the way set out in Permissions and Waivers 2 of the PRA Rulebook, then FEES 4.3.6R (1) and (2) do not apply but it must pay the total amount due when the application is made.
  • 19/06/2014

Groups of firms

FEES 4.3.7

handbook-rule

A firm which is a member of a group may pay all of the amounts due from other firms in the same group under FEES 4.2.1 R, if:

  1. (1) it notifies the FCA (in its own capacity and, if applicable, in its capacity as agent for the PRA) in writing of the name of each other firm within the group for which it will pay; and
  2. (2) it pays the fees, in accordance with this chapter, as a single amount as if that were the amount required from the firm under FEES 4.2.1 R.

FEES 4.3.8

handbook-guidance
A notification under FEES 4.3.7R (1) should be made in accordance with SUP 15.7 (Form and method of notification).

FEES 4.3.9

handbook-guidance

If the payment made does not satisfy in full the periodic fees payable by all of the members of the group notified to the FCA under FEES 4.3.7 R, the FCA (in its own capacity and, if applicable, in its capacity as agent for the PRA) will apply the sum received among the firms which have been identified in the notification given under FEES 4.3.7R (1) in proportion to the amounts due from them. Each firm will remain responsible for the payment of the outstanding balance attributable to it.

FEES 4.3.10

handbook-guidance
If a firm pays its fees through an agent outside the scope of FEES 4.3.7 R, the firm is responsible for ensuring that the FCA (in its own capacity and, if applicable, in its capacity as agent for the PRA) is informed that the sum being paid is for that firm's periodic fees.

Incoming EEA firms, incoming Treaty firms, EEA authorised payment institutions and EEA authorised electronic money institutions

FEES 4.3.11

handbook-guidance
The appropriate regulator recognises that its responsibilities in respect of an incoming EEA firm, an incoming Treaty firm, an EEA authorised payment institution or an EEA authorised electronic money institution are reduced compared with a firm which is incorporated in the United Kingdom. Accordingly the periodic fees which would otherwise be applicable to incoming EEA firms, incoming Treaty firms, EEA authorised payment institutions and EEA authorised electronic money institutions are reduced.

FEES 4.3.12

handbook-rule

For an incoming EEA firm, (excluding MTF operators), or an incoming Treaty firm, the calculation required by FEES 4.3.3 R is modified as follows:

  1. (1) the tariffs set out in Part 1 of FEES 4 Annex 2AR and, if applicable, Part 1 of FEES 4 Annex 2BR are applied only to the regulated activities of the firm which are carried on in the United Kingdom; and
  2. (2) those tariffs are modified in accordance with Part 3 of FEES 4 Annex 2AR and, if applicable, Part 3 of FEES 4 Annex 2BR.

Firms Applying to Cancel or Vary Permission Before Start of Period

FEES 4.3.13

handbook-rule
  1. (1) If:
    1. (a) a firm makes an application to vary its permission (by reducing its scope), or cancel it, in the way set out in SUP 6.3.15 D (3) (Variation of permission) and SUP 6.4.5 D (Cancellation of permission), or applies to vary (by reducing its scope) or cancel its authorisation or registration (regulation 8 and 10(1) of the Payment Services Regulations including as applied by regulation 14 of the Payment Services Regulations) or applies to cancel its authorisation or registration (regulation 10 and 12 of the Electronic Money Regulations including as applied by regulation 15 of the Electronic Money Regulations); an issuer makes an application for de-listing; or a sponsor notifies the FCA of its intention to be removed from the list of approved sponsors; and
    2. (b) the firm, issuer or sponsor makes the application or notification referred to in (a) before the start of the fee year to which the fee relates;
  2. FEES 4.2.1 R applies to the firm as if the relevant variation or cancellation of the firm's permission or authorisation or registration under the Payment Services Regulations or the Electronic Money Regulations, de-listing or removal from the list of approved sponsors, took effect immediately before the start of the fee year to which the fee relates.
  3. (2) But (1) does not apply if, due to the continuing nature of the business, the variation, cancellation, de-listing or removal is not to take effect on or before 30 June of the fee year to which the fee relates.

FEES 4.3.13A

handbook-rule
  1. (1) If:
    1. (a) a firm makes an application to vary its permission (by reducing its scope), or cancel it, in the way set out in Permissions and Waivers 2 of the PRA Rulebook; and
    2. (b) the firm makes the application or notification referred to in (a) before the start of the fee year to which the fee relates,
  2. FEES 4.2.1 R applies to the firm as if the relevant variation or cancellation of the firm's permission took effect immediately before the start of the fee year to which the fee relates.
  3. (2) But (1) does not apply if, due to the continuing nature of the business, the variation or cancellation is not to take effect on or before 30 June of the fee year to which the fee relates.
  • 19/06/2014

FEES 4.3.14

handbook-guidance
Where a firm has applied to cancel its Part 4A permission, or its authorisation or registration under the Payment Services Regulations or the Electronic Money Regulations, or the appropriate regulator has exercised its own-initiative powers to cancel a firm's Part 4A permission or the appropriate regulator has exercised its powers under regulation 10 (Cancellation of authorisation), including as applied by regulation 14 (Supplementary provisions) of the Payment Services Regulations to cancel a firm's authorisation or registration under the Payment Services Regulations or the appropriate regulator has exercised its powers under regulation 10 (Cancellation of authorisation), including as applied by regulation 15 (Supplementary provisions) of the Electronic Money Regulations, the due dates for payment of periodic fees are modified by FEES 4.3.6R (3), FEES 4.3.6R (4) and FEES 4.3.6R (4A) respectively.

Firms acquiring businesses from other firms

FEES 4.3.15

handbook-rule
  1. (1) This rule applies if:
    1. (a) a firm (A) acquires all or a part of the business of another firm (B), whether by merger, acquisition of goodwill or otherwise, in relation to which a periodic fee would have been payable by B, unless no periodic fee was payable by A in the financial year that the business was acquired from B; or
    2. (b) A became authorised or registered as a result of B's simple change of legal status (as defined in FEES 3 Annex 1 Part 6).
  2. (2) If, before the date on which A acquires the business, B had paid any periodic fee payable for the period in which the acquisition occurred, FEES 4.2.6 R to FEES 4.2.7 R do not apply to A in relation to the business acquired from B.
  3. (3) If the acquisition occurs after the valuation date applicable to the business (as set out in FEES 4 Annex 1AR, FEES 4 Annex 1BR and FEES 4 Annex 11) which A acquired from B, for the period following that in which the acquisition occurred, FEES 4.2.1 R applies to A, in relation to that following period, as if the acquisition had occurred immediately before the relevant valuation date.

FEES 4.4

Information on which Fees are calculated

  • 01/01/2006

FEES 4.4.1

handbook-rule
A firm (other than the Society and an MTF operator in relation to its MTF business) must notify to the FCA (in its own capacity and, if applicable, in its capacity as collection agent for the PRA) the value (as at the valuation date specified in Part 5 of FEES 4 Annex 1AR in relation to fees payable to the FCA or Part 5 of FEES 4 Annex 1BR in relation to fees payable to the PRA) of each element of business on which the periodic fee payable by the firm is to be calculated.

FEES 4.4.2

handbook-rule
A firm (other than the Society) must send to the FCA (in its own capacity and, if applicable, in its capacity as collection agent for the PRA) in writing the information required under FEES 4.4.1 R as soon as reasonably practicable, and in any event within two months, after the date specified as the valuation date in Part 5 of FEES 4 Annex 1AR in relation of fees payable to the FCA or Part 5 of FEES 4 Annex 1B R in relation to fees payable to the PRA (or FEES 4.2.7B R where applicable).

FEES 4.4.3

handbook-rule
To the extent that a firm has provided the information required by this section to the appropriate regulator as part of its compliance with another provision of the Handbook, it is deemed to have complied with the provisions of this section.

FEES 4.4.4

handbook-guidance
In most cases a firm will provide the information required by this section as part of its compliance with the provisions of SUP. To the extent that the FCA (in its own capacity and, if applicable, in its capacity as collection agent for the PRA), does not obtain sufficient, or sufficiently detailed, information the FCA or the PRA, as appropriate, may seek this by using the general information gathering powers (see SUP 2 (Information gathering by the appropriate regulator on its own initiative)).

FEES 4.4.5

handbook-rule
For an incoming EEA firm or an incoming Treaty firm, the information required under FEES 4.4 is limited to the regulated activities of the firm which are carried on in the United Kingdom, except those provided on a cross border services basis.

Information relating to payment services and the issuance of electronic money

FEES 4.4.9

handbook-directions
To the extent that a firm has provided the information required by FEES 4.4.7 D to the FCA as part of its compliance with another provision of the Handbook, it is deemed to have complied with the provisions of that direction.

FEES 4 Annex 1B

PRA activity groups, tariff bases and valuation dates

  • 01/04/2013

handbook-rule
  • 01/04/2013

FEES 4 Annex 2B

PRA fee rates and EEA/Treaty firm modifications for the period from 1 March 2015 to 29 February 2016

FEES 4 Annex 2B

handbook-rule

FEES 4 Annex 12

Guidance on the calculation of tariffs set out in FEES 4 Annex 1AR Part 3 and FEES 4 Annex 1BR Part 3

handbook-guidance
The following table sets out guidance on how a firm should calculate tariffs for fee-block A.4.

Export chapter as

FEES 6

Financial Services Compensation Scheme Funding

FEES 6.1

Application

  • 01/01/2006

FEES 6.1.1

handbook-rule
This chapter applies to:
(1) every participant firm;
(2) the FSCS; and
(3) the Society.

FEES 6.1.2

handbook-guidance

(1) Firms which are not participant firms (such as certain types of incoming EEA firms, service companies and ICVCs) are not required to contribute towards the funding of the compensation scheme.

(2) Although a member is a participant firm for the purposes of most provisions of COMP, a member is excluded from the definition of participant firm for the purposes of FEES 6 (see definition of participant firm in Glossary). This is because the fees levied in relation to the carrying on of insurance market activities by members will be imposed on the Society rather than individually on each member (see FEES 6.3.24 R).

Purpose

FEES 6.1.3

handbook-guidance
The purpose of this chapter is to set out the requirements on participant firms to pay levies imposed by the FSCS to provide funding for its functions.

General structure

FEES 6.1.4

handbook-guidance
Section 213(3)(b) of the Act requires the appropriate regulator to make rules to enable the FSCS to impose levies on authorised persons in order to meet its expenses. These expenses include in particular expenses incurred, or expected to be incurred, in paying compensation, borrowing or insuring risks.

FEES 6.1.4A

handbook-guidance
Section 224F of the Act enables the appropriate regulator to make rules to enable the FSCS to impose levies on authorised persons (or any class of authorised persons) in order to meet its management expenses incurred if, under Part 15A of the Act, it is required by HM Treasury to act in relation to relevant schemes. But those rules must provide that the FSCS can impose a levy only if the FSCS has tried its best to obtain reimbursement of those expenses from the manager of the relevant scheme.

FEES 6.1.5

handbook-guidance
The FSCS may impose three types of levy: a management expenses levy (consisting of a base costs levy and a specific costs levy), a compensation costs levy and a MERS levy. The FSCS has discretion as to the amount and timing of the levies imposed.

FEES 6.1.6

handbook-guidance
In calculating a compensation costs levy, the FSCS:
(1) for claims for protected deposits, may include compensation costs expected in the 12-month period following the date of the levy; and
(2) for other protected claims, may include up to the greater of one third of the compensation costs expected in the 36-month period following the date of the levy, or the compensation costs expected in the 12 months following that date.

FEES 6.1.6A

handbook-guidance
The total amount of all management expenses levies attributable to a financial year will be restricted to the amount set out on an annual basis in FEES 6 Annex 1 R.
  • 01/04/2014

FEES 6.1.7

handbook-guidance
In order to allocate a share of the amount of specific costs and compensation costs to be funded by an individual participant firm, the funding arrangements are split into twelve classes. These are the deposits class; the life and pensions provision class; the general insurance provision class; the investment provision class; the life and pensions intermediation class; the home finance intermediation class; the investment intermediation class and the general insurance intermediation class and the four FCA provider contribution classes (the deposit acceptor's contribution class; the insurers-life contribution class; the insurers - general contribution class; and the home finance providers and administrators' contribution class). The permissions held by a participant firm determine into which class, or classes, it falls.

FEES 6.1.8

handbook-guidance
The provisions on the allocation of levies to classes up to their levy limits meet a requirement of section 213(5) of the Act that the appropriate regulator, in making rules to enable the FSCS to impose levies, must take account of the desirability of ensuring that the amount of the levies imposed on a particular class of authorised person reflects, so far as practicable, the amount of claims made, or likely to be made, in respect of that class of person.

The management expenses levy

FEES 6.1.9

handbook-guidance
Section 223 of the Act (Management expenses) prevents the FSCS from recovering, through a levy, any management expenses attributable to a particular period in excess of the limit set in COMP as applicable to that period. 'Management expenses' are defined in section 223(3) to mean expenses incurred or expected to be incurred by the FSCS in connection with its functions under the Act, except:
(1) expenses incurred in paying compensation;
(2) expenses incurred as a result of the FSCS making the arrangements to secure continuity of insurance set out in COMP 3.3.1 R and COMP 3.3.2 R or taking the measures set out in COMP 3.3.3 R and COMP 3.3.4 R when a relevant person is an insurer in financial difficulties;
(3) expenses incurred under section 214B or section 214D of the Act as a result of the FSCS being required by HM Treasury to make payments in connection with the exercise of the stabilisation power under Part 1 of the Banking Act 2009; and
(4) expenses incurred under Part XVA of the Act as a result of the FSCS being required by HM Treasury to act in relation to a relevant scheme.

FEES 6.1.10

handbook-guidance
A management expenses levy may consist of two elements. The first is a base costs levy, for the base costs of running the compensation scheme in a financial year, that is, costs which are not dependent upon the level of activity of the compensation scheme and which therefore are not attributable to any specific class. Included in this category are items such as the salary of the members of the board of the FSCS, the costs of the premises which the FSCS occupies, and its audit fees. It would also likely include the cost of any insurance cover secured by FSCS against the risk of it paying claims out in circumstances where the levy limit of the particular class to which the claim would otherwise be attributable has exceeded its levy limit for the year, as the insurance cover is likely to benefit all classes which may have costs allocated to them if the levy limit of another class is breached. The amount that each participant firm pays towards a base costs levy is calculated by reference to the regulatory costs paid by the firm. All participant firms are liable to contribute towards a base costs levy.

FEES 6.1.11

handbook-guidance
The second element of a management expenses levy is a specific costs levy for the "specific costs" of running the compensation scheme in a financial year. These costs are attributable to a class, and include the salary costs of certain staff of the FSCS and claims handling and legal and other professional fees. It also may include the cost of any insurance cover that FSCS secures against the risk of FSCS paying out claims above a given level in any particular class (but below the levy limit for that class for the year). The specific costs are attributed to the class which is responsible for those costs. When the FSCS imposes a specific costs levy, the levy is allocated to the class which is responsible for those costs up to the relevant levy limits. The FSCS may include in a specific costs levy the specific costs that the FSCS expects to incur (including in respect of defaults not yet declared at the date of the levy) during the financial year of the compensation scheme to which the levy relates. The amount that each participant firm pays towards the specific costs levy is calculated by reference to the amount of business conducted by the firm in each of the classes to which the FSCS has allocated specific costs. Each class has a separate "tariff base" for this purpose, set out in FEES 6 Annex 3 R. Participant firms may be exempt from contributing to the specific costs levy.

FEES 6.1.13

handbook-guidance
The limit on the management expenses attributable to the forthcoming financial year of the FSCS. will be consulted on in January each year.

The compensation costs levy

FEES 6.1.14

handbook-guidance
In imposing a compensation costs levy in each financial year of the compensation scheme the FSCS will take into account the compensation costs which the FSCS has incurred and has not yet raised through levies, any recoveries it has had made using the rights that have been assigned to it or to which it is subrogated and a further amount calculated taking into account:
(1) for claims for protected deposits, those compensation costs it expects to incur (including in respect of defaults yet to be declared) in the 12 months following the date of the levy; and
(2) for other protected claims:
(a) the compensation costs it expects to incur in the 12 months following the date of the levy; or, if greater
(b) one third of the compensation costs it expects to incur in the 36 months following the date of the levy (see FEES 6.3.1 R (Imposing management expenses and compensation costs levies)).

FEES 6.1.15

handbook-guidance

Compensation costs are principally the costs incurred in paying compensation. Costs incurred:

  1. (1) in securing continuity of long-term insurance; or
  2. (2) in safeguarding eligible claimants when insurers are in financial difficulties; or
  3. (3) in making payments or giving indemnities under COMP 11.2.3 R; or
  4. (4) as a result of the FSCS being required by HM Treasury to make payments in connection with the exercise of the stabilisation power under Part 1 of the Banking Act 2009; or
  5. (5) in paying interest, principal and other costs from borrowing to allow the FSCS to pay claims attributable to a particular class;

are also treated as compensation costs. Compensation costs are attributed to the class which is responsible for the costs. When the FSCS imposes a compensation costs levy the levy is allocated to the class which is responsible for the costs up to relevant levy limits. Certain classes may be funded, for compensation costs levies beyond the class levy limit, by the retail pool.

Participant firms that are members of more than one class

FEES 6.1.16

handbook-guidance

If a participant firm is a member of more than one class, the total compensation costs levy and specific costs levy for that firm in a particular year will be the aggregate of the individual levies calculated for the firm in respect of each of the classes for that year. Each class has a levy limit which is the maximum amount of compensation costs and specific costs which may be allocated to a particular class in a financial year for the purposes of a levy.

Incoming EEA firms

FEES 6.1.17

handbook-guidance
Incoming EEA firms which obtain cover or 'top up' under the provisions of COMP 14 are firms whose Home State scheme provides no or limited compensation cover in the event that they are determined to be in default. Under FEES 6.6, the FSCS is required to consider whether incoming EEA firm's should receive a discount on the amount that they would otherwise pay as their share of the levy, to take account of the availability of their Home State cover. The amount of any discount is recoverable from the other members of the incoming EEA firm's class.

FEES 6.2

Exemption

  • 01/01/2006

FEES 6.2.1

handbook-rule
(1) A participant firm which does not conduct business that could give rise to a protected claim by an eligible claimant and has no reasonable likelihood of doing so is exempt from a specific costs levy, or a compensation costs levy, or both, provided that:
(a) it has notified the FSCS in writing that those conditions apply; and
(b) the conditions in fact continue to apply.
(2) The exemption takes effect from the date on which the notice was received by the FSCS, subject to FEES 6.2.6 R.

FEES 6.2.4

handbook-rule
A participant firm which is exempt under FEES 6.2.1 R must notify the FSCS in writing as soon as reasonably practicable if the conditions in FEES 6.2.1 R no longer apply.

FEES 6.2.5

handbook-guidance
A participant firm to which the conditions in FEES 6.2.1 R no longer apply will then become subject to FEES 6.3.

FEES 6.2.6

handbook-rule
If a participant firm ceases to conduct business that could give rise to a protected claim by an eligible claimant and notifies the FSCS of this under FEES 6.2.1R (1), it will be treated as a participant firm to which FEES 6.7.6 R applies until the end of the financial year of the compensation scheme in which the notice was given.

FEES 6.2.7

handbook-guidance

The financial year of the compensation scheme is the twelve months ending on 31 March. The effect of FEES 6.2.6 R and FEES 6.2.1R (2) is that if a firm fails to notify FSCS of an exemption under FEES 6.2.1 R by 31 March it will be treated as non-exempt for the whole of the next financial year.

FEES 6.2.8

handbook-rule
For the purposes of FEES 6.2.1 R a participant firm will only be exempt from a specific costs levy or compensation costs levy for any given financial year if it met the conditions in FEES 6.2.1 R on 31 March of the immediately preceding financial year.

FEES 6.3

The FSCS's power to impose levies

  • 01/01/2006

Imposing management expenses and compensation costs levies

FEES 6.3.1

handbook-rule
The FSCS may at any time impose a management expenses levy or a compensation costs levy, provided that the FSCS has reasonable grounds for believing that the funds available to it to meet relevant expenses are, or will be, insufficient, taking into account expenditure already incurred, actual and expected recoveries and:
(1) in the case of a management expenses levy, the level of the FSCS's expected expenditure in respect of those expenses in the financial year of the compensation scheme in relation to which the levy is imposed;
(2) in the case of a compensation costs levy relating to claims for protected deposits, the level of the FSCS's expected expenditure in respect of compensation costs in the 12 months immediately following the levy; and
(3) in the case of a compensation costs levy relating to other protected claims,
(a) the FSCS's expenditure in respect of compensation costs expected in the 12 months following the levy; or, if greater
(b) one third of the FSCS's expenditure in respect of compensation costs expected in the 36 months following the levy.

FEES 6.3.2

handbook-guidance
The calculation of levies will also take into account previous levies, where funds raised in anticipation of meeting liabilities prove either more or less than the amount actually required.

FEES 6.3.2A

handbook-guidance
The FSCS will usually levy once in each financial year (and in respect of compensation costs, for expenditure expected in the period of 12 months or, if greater, one third of the expenditure expected in the period of 36 months following 1 July in that year). However, if the compensation costs or specific costs incurred, or expected to be incurred, exceed the amounts held, or reasonably expected to be held, to meet those costs, the FSCS may, at any time during the financial year, do one or more of the following:
(1) impose an interim compensation costs levy or management expenses levy; or
(2) utilise other sources of funding such as commercial borrowing or other borrowing including from the National Loans Fund; or
(3) utilise money collected from firms as set out in, and subject to, FEES 6.3.17 R (Management of funds).
The FSCS will generally impose a levy rather than borrow or utilise funds as described in (3), unless the latter options appear to it to be preferable in the specific circumstances prevailing at the relevant time; for example, to address short-term liquidity issues, or in order to deal with a significant failure without having to wait for a levy to be imposed or collected.

FEES 6.3.3

handbook-guidance
The FSCS has committed itself in Memorandum of Understanding with each of the FCA and the PRA to publish its policy in respect of levying.

FEES 6.3.4

handbook-guidance
The discretion over levying in FEES 6 also gives the FSCS, if it thinks this appropriate, the ability to use third parties as its agents in raising and collecting the levies.

Imposing a MERS levy

FEES 6.3.4A

handbook-rule
The FSCS may at any time impose a MERS levy provided that the FSCS has reasonable grounds for believing that the funds available to it to meet relevant expenses are or will be insufficient, taking into account relevant expenses incurred or expected to be incurred in the 12 months following the date of the levy.
  • 01/04/2013

Limits on compensation costs and specific costs levies on classes

FEES 6.3.5

handbook-rule
The maximum aggregate amount of compensation costs and specific costs for which the FSCS can levy each class in any one financial year of the compensation scheme is limited to the amounts set out in the table in FEES 6 Annex 2.

Levy for compensation costs paid in error

FEES 6.3.10

handbook-rule
The FSCS may include in a compensation costs levy the costs of compensation paid by the FSCS in error, provided that the payment was not made in bad faith.

Management of funds

FEES 6.3.11

handbook-rule

The FSCS must hold any amount collected from a specific costs levy or compensation costs levy to the credit of the classes in accordance with the allocation established under FEES 6.4.6 R and FEES 6.5.2 R.

FEES 6.3.12

handbook-rule
Any funds received by the FSCS by way of levy or otherwise for the purposes of the compensation scheme are to be managed as the FSCS considers appropriate, and in doing this the FSCS must act prudently.

FEES 6.3.13

handbook-rule
Interest earned by the FSCS in the management of funds held to the credit of a class must be credited to that class, and must be set off against the management expenses or compensation costs allocated to that class.

FEES 6.3.14

handbook-rule
The FSCS must keep accounts which include:
(1) the funds held to the credit of each class; and
(2) the liabilities of that class.

FEES 6.3.17

handbook-rule
(1) The FSCS may use any money held to the credit of one class (the creditor class) to pay compensation costs or specific costs attributable or allocated by way of levy to another class (the debtor class) if the FSCS has reasonable grounds to believe that this would be more economical than borrowing funds from a third party or raising a levy.
(2) Where the FSCS acts in accordance with (1), it must ensure that:
(a) the creditor class is reimbursed by the debtor class as soon as possible;
(b) the debtor class pays interest at a rate equivalent to the Bank of England's repo rate from time to time in force; and
(c) the amount lent by the creditor class to the debtor class is taken into account by the FSCS when considering whether to impose a compensation costs levy on the creditor class under FEES 6.3.1 R.

FEES 6.3.18

handbook-guidance
FEES 6.3.17 R deals with how FSCS may use money available to it and does not affect the rules on levy allocation in FEES 6.4, 6.5 and 6.5A.

FEES 6.3.19

handbook-rule
Unless FEES 6.3.20 R applies, any recoveries made by the FSCS in relation to protected claims must be credited to the classes to which the related compensation costs was attributable.

FEES 6.3.20

handbook-rule
  1. (1) Where the FSCS makes recoveries in relation to protected claims where a related compensation costs levy would have been allocated to a class (class A) had the levy limit for class A not been reached and has been allocated to another class or classes in the retail pool, the recoveries must be applied:
    1. (a) first, to the classes to which the costs levied were allocated in accordance with FEES 6.5A in the same proportion as those classes contributed, up to the total amount of that allocation plus interest at a rate equivalent to the Bank of England's Official Bank Rate from time to time in force; and
    2. (b) thereafter, to class A.
  2. (2) This rule applies even though the recovery is made in a subsequent financial year.
  3. (3) [deleted]

FEES 6.3.20A

handbook-guidance
Recoveries under FEES 6.3.20 R are net of the costs of recovery.

FEES 6.3.21

handbook-rule

If the FSCS has more funds (whether from levies, recoveries or otherwise) to the credit of a class than the FSCS believes will be required to meet levies on that class for the next 12 months, it may refund the surplus to members or former members of the class on any reasonable basis.

Adjustments to calculation of levy shares

FEES 6.3.22

handbook-rule
The FSCS may adjust the calculation of a participant firm's share of any levy to take proper account of:
(1) any excess, not already taken into account, between previous levies of that type imposed in relation to previous periods and the relevant costs actually incurred in that period; or
(2) participant firms that are exempt from the levy under FEES 6.2; or
(3) amounts that the FSCS has not been able to recover from participant firms as a result of FEES 6.3.5 R; or
(4) amounts that the FSCS has not been able to recover from participant firms after having taken reasonable steps; or
(5) FEES 2.3 (Relieving Provisions), FEES 6.4.8 R (New participant firms), FEES 6.5.9 R (New participant firms), FEES 6.3.23 R (Remission of levy or additional administrative fee) or FEES 6.6 (Incoming EEA firms); or
(6) anything else that the FSCS believes on reasonable grounds should be taken into account.

FEES 6.3.22A

handbook-rule
The FSCS may not adjust the calculation of a participant firm's share of any levy under FEES 6.3.22 R on the grounds that it would be inequitable for that firm to pay that share or part of it or on the grounds that it would be inequitable for the FSCS to retain that share or part of it.

FEES 6.3.22B

handbook-guidance
The reason for FEES 6.3.22A R is that any such claim should be dealt with under FEES 2.3 (Relieving Provisions).

Firms acquiring businesses from other firms

FEES 6.3.22C

handbook-rule
(1) This rule applies to the calculation of the levies of a firm (A) if:
(a) either:
(i) A acquires all or a part of the business of another firm (B), whether by merger, acquisition of goodwill or otherwise; or
(ii) A became authorised as a result of B's simple change of legal status (as defined in FEES 3 Annex 1 Part 6);
(b) B is no longer liable to pay a levy; and
(c) that acquisition or change takes place after the date to which, or as of which, A's most recent statement of business under FEES 6.5.13 R is drawn up so far as concerns the classes covered by B's business.
(2) A must pay an additional amount equal to the levy that would have been payable by B in relation to the relevant business and relevant classes if the acquisition or change in status had not taken place and B had remained liable to pay levies. The amount is based on the most recent information supplied by B under FEES 6.5.13 R. A is included in the classes applicable to the relevant business.
(3) This rule only applies with respect to those financial years of the FSCS for which A's levies are calculated on the basis of a statement of business under FEES 6.5.13 R drawn up to a date, or as of a date, before the acquisition or change in legal status took place.

Remission of levy or additional administrative fee

FEES 6.3.23

handbook-rule
If a participant firm's share of a levy or an additional administrative fee under FEES 6.7.4 R would be so small that, in the opinion of the FSCS, the costs of collection would be disproportionate to the amount payable, the FSCS may treat the participant firm as if its share of the levy or additional administrative fee amounted to zero.

Levies on the Society of Lloyd's

FEES 6.3.24

handbook-rule
The FSCS may impose a levy on the Society to be calculated as the aggregate of the levies that would be imposed on each member if this chapter applied to members, as follows:
(1) a proportionate share of a base costs levy in respect of the compensation scheme's costs for the period from 1 January 2004 to the end of the compensation scheme's financial year and a share of such levies for all subsequent financial years; and
(2) a specific costs levy and a compensation costs levy in respect of costs arising out of a relevant person being in default, arrangements made under COMP 3.3.1 R or measures taken under COMP 3.3.3 R where:
(a) the default occurs or the circumstances giving rise to the arrangements being made or the measures being taken, as the case may be, occur; and
(b) the protected contracts of insurance in connection with which the costs arise were entered into;
on or after 1 January 2004.

FEES 6.4

Management expenses

  • 01/01/2006

Obligation on participant firm to pay

FEES 6.4.1

handbook-rule
A participant firm must pay to the FSCS a share of each management expenses levy.

Limit on management expenses

FEES 6.4.2

handbook-rule
The total of all management expenses levies attributable to a particular period of the compensation scheme may not exceed the limit applicable to that period set out in FEES 6 Annex 1.

Participant firm's share

FEES 6.4.3

handbook-rule
A participant firm's share of a management expenses levy consists of one or more of: (1) a share of a base costs levy and (2) a share of a specific costs levy.

FEES 6.4.4

handbook-rule
The FSCS must ensure that each participant firm's share of a management expenses levy separately identifies the firm's share of the base costs levy and specific costs levy.

Base costs levy

FEES 6.4.5

handbook-rule

Subject to FEES 6.3.22 R, the FSCS must calculate a participant firm's share of a base costs levy by:

  1. (1) identifying the base costs which the FSCS has incurred, or expects to incur, in the relevant financial year of the compensation scheme, but has not yet levied and:
    1. (a) allocating 50% of those base costs as the sum to be levied on participants in activity groups A.1, A.3, A.4, A.5 and A.6 (as listed in FEES 4 Annex 1B); and
    2. (b) allocating 50% of those base costs as the sum to be levied on participants in all the activity groups listed in FEES 4 Annex 1A;
  2. (2) calculating the amount of the participant firm's regulatory costs as a proportion of the total regulatory costs relating to all participant firms for the relevant financial year:
    1. (a) if the participant firm belongs to any of the activity groups in (1)(a), imposed by the PRA in respect of those groups; and
    2. (b) if the participant firm belongs to any of the activity groups in (1)(b), imposed by the FCA in respect of those groups; and
  3. (3) applying the proportion calculated in (2)(a), if any to the sum in (1)(a), and the proportion calculated in (2)(b) (if any) to the sum in (1)(b).

FEES 6.4.5A

handbook-guidance
The effect of FEES 6.4.5 R is that if a participant firm belongs to activity groups in both (1)(a) and (1)(b) of that rule, it will be required to pay a share of the base costs levy in respect of both sets of activity groups.
  • 01/04/2013

Specific costs levy

FEES 6.4.6

handbook-rule
The FSCS must allocate any specific costs levy amongst the relevant classes in proportion to the amount of relevant costs arising from the different activities for which firms in those classes have permission up to the levy limit of each relevant class.

FEES 6.4.7

handbook-rule
The FSCS must calculate a participant firm's share of a specific costs levy (subject to FEES 6.3.22 R (Adjustments to calculation of levy shares) by:
(1) identifying each of the relevant classes to which the participant firm belongs, using the statement of business most recently supplied under FEES 6.5.13 R;
(2) identifying the management expenses other than base costs which the FSCS has incurred, or expects to incur, in the relevant financial year of the compensation scheme, allocated to the classes identified in (1), but not yet levied;
(3) calculating, in relation to each relevant class FF, the participant firm's tariff base (see FEES 6 Annex 3) as a proportion of the total tariff base of all participant firms in the class, using the statement of business most recently supplied under FEES 6.5.13 R;
(4) applying the proportion calculated in (3) to the figure in (2); and
(5) if more than one class is relevant, adding together the figure in (4) for each class.

New participant firms

FEES 6.4.8

handbook-rule
A firm which becomes a participant firm part way through a financial year of the compensation scheme will not be liable to pay a share of a specific costs levy made in that year.

FEES 6.4.10

handbook-guidance
Since a firm that becomes a participant firm in the course of a financial year of the compensation scheme will already be obtaining a discount in relation to the base costs levy through the modified fee provisions of FEES 4.2.6 R, no rule is necessary in FEES 6 for discounts on the base costs levy.

Specific costs levy for newly authorised firms

FEES 6.4.10A

handbook-rule
(1) This rule deals with the calculation of:
(a) a participant firm's specific costs levy in the financial year of the FSCS following the FSCS financial year in which it became a participant firm; or
(b) a participant firm's specific costs levy in the financial year of the FSCS in which it had its permission extended, and the following FSCS financial year; and
(c) the tariff base for the classes that relate to the relevant permissions or extensions, as the case may be.
(2) Unless this rule says otherwise the tariff base is calculated, where necessary, using the projected valuation of the business to which the tariff relates.
(3) The rest of this rule only applies to a firm that becomes a participant firm, or extends its permission, on or after 1 April 2009.
(a) If a participant firm's tariff base is calculated using data from a period that begins on or after it became a participant firm or on or after the date that the participant firm receives its extension of permission, as the case may be, the participant firm must use that data.
(b) If a participant firm satisfies the following conditions it must calculate its tariff base under (c) for the FSCS financial year following the FSCS financial year it became a participant firm:
(i) it became a participant firm or receives its extension of permission, as the case may be, between 1 April and 31 December inclusive; and
(ii) its tariff base, but for this rule, is calculated by reference to the financial year ended in the calendar year ending 31 December or the twelve months ending 31 December before the FSCS financial year.
(c) If a participant firm satisfies the conditions in (b) it must calculate its tariff base as follows:
(i) it must use actual data in relation to the business to which the tariff relates rather than projected valuations;
(ii) the tariff is calculated by reference to the period beginning on the date it became a participant firm or had its permission extended, and ending on the 31 December before the start of the FSCS financial year; and
(iii) the figures are annualised by increasing them by the same proportion as the period of 12 months bears to the period starting from when the participant firm became a participant firm or had its permission extended to the 31 December, as the case may be.
(d) Where a participant firm is required to use the method in (c) it must notify the FSCS of its intention to do so by the date specified in FEES 6.5.13 R (Reporting Requirements).
(e) Where a participant firm is required to use actual data under this rule FEES 6 Annex 3 R is disapplied, to the extent it is incompatible, in relation to the calculation of that participant firm's valuation date in its second financial year.

Application of FEES 6.4.10AR

FEES 6.4.10B

handbook-guidance
The table below sets out the period within which a participant firm's tariff base is calculated ("the data period") for second year levies calculated under FEES 6.4.10B. The example is based on a participant firm that extends its permission on 1 November 2009 and has a financial year ending 31 March.

References in this table to dates or months are references to the latest one occurring before the start of the FSCS financial year unless otherwise stated.

FEES 6.4A

Management expenses in respect of relevant schemes

  • 12/10/2010

Obligation on participant firm to pay

FEES 6.4A.1

handbook-rule
A participant firm must pay to the FSCS a share of each MERS levy.

Restriction on management expenses in respect of relevant schemes

FEES 6.4A.2

handbook-rule
The FSCS can impose a MERS levy only if the FSCS has tried its best and has failed to obtain reimbursement of those expenses from the manager of the relevant compensation scheme.

Management expenses in respect of relevant schemes levy

FEES 6.4A.3

handbook-rule
The FSCS must calculate a participant firm's share of a MERS levy on a reasonable basis.

FEES 6.5

Compensation costs

  • 01/01/2006

FEES 6.5.2

handbook-rule

The FSCS must allocate any compensation costs levy:

  1. (1) to the relevant classes in proportion to the amount of compensation costs arising from, or expected to arise from, claims in respect of the different activities for which firms in those classes have permission up to the levy limit of each relevant class.
  2. (2) [deleted]

Allocation: all classes except A, B and C

FEES 6.5.2A

handbook-guidance
The use made by FSCS of borrowing facilities to provide liquidity until the next levy does not affect the attribution of compensation costs, nor the allocation of compensation cost levies; the allocation of a compensation costs levy occurs at the time that the FSCS imposes a levy.

FEES 6.5.3

handbook-rule
If a participant firm which is in default has carried on a regulated activity other than in accordance with a permission, the FSCS must treat any compensation costs or specific costs arising out of that activity as if the relevant permission were held by the participant firm.

FEES 6.5.4

handbook-rule
If the relevant person in default is an appointed representative, the FSCS must treat any compensation costs or specific costs arising out of a regulated activity for which his principal has not accepted responsibility to as if the principal had accepted responsibility.

FEES 6.5.5

handbook-rule
(1) A participant firm must pay to the FSCS a share of each compensation costs levy allocated to the classes of which it is a member unless either the firm is exempt under FEES 6.2 (Exemption) or the FSCS has chosen to exercise its discretion under FEES 6.3.23 R in respect of that firm.
(2) [deleted]

FEES 6.5.6

handbook-rule
The FSCS must calculate each participant firm's share of a compensation costs levy (subject to FEES 6.3.22 R (Adjustments to calculation of levy shares)) by:
(1) identifying each of the classes to which each participant firm belongs, using the statement of business most recently supplied under FEES 6.5.13R (1);
(2) identifying the compensation costs falling within FEES 6.5.1 R allocated, in accordance with FEES 6.5.2 R, to the classes identified in (1);
(3) calculating, in relation to each relevant class, the participant firm's tariff base (see FEES 6 Annex 3) as a proportion of the total tariff base of all participant firms in the class, using the statement of business most recently supplied under FEES 6.5.13 R;
(4) applying the proportion calculated in (3) to the figure in (2); and
(5) if more than one class is relevant, adding together the figure in (4) for each class.

Classes and tariff bases for compensation cost levies and specific costs levies

FEES 6.5.7

handbook-rule
When calculating a participant firm's share of a compensation costs levy or specific costs levy allocated to each class the FSCS must use the classes and tariff bases as set out in the table in FEES 6 Annex 3 R.
(1) [deleted]
(2) [deleted]
(3) [deleted]
(4) [deleted]
(5) [deleted]

FEES 6.5.8

handbook-guidance
Guidance on parts of FEES 6 Annex 3 R can be found in FEES 6 Annex 4.

New participant firms

FEES 6.5.9

handbook-rule
A firm which becomes a participant firm part way through a financial year of the compensation scheme will not be liable to pay a share of a compensation costs levy made in that year.

Compensation costs levy for newly authorised firms

FEES 6.5.9A

handbook-rule
FEES 6.4.10AR applies to the calculation of a participant firm's compensation costs levy and its tariff base as it applies to the calculation of its specific costs levy.

FEES 6.5.9B

handbook-guidance
The example table in FEES 6.4.10B G can be applied to the calculation of the tariff bases under FEES 6.5.9AR.

Membership of several classes

FEES 6.5.12

handbook-guidance
A participant firm may belong to more than one class.

Reporting requirements

FEES 6.5.13

handbook-rule
(1) Unless exempt under FEES 6.2.1 R or FEES 6.2.1A R, a participant firm must provide the FSCS by the end of February each year (or, if it has become a participant firm part way through the financial year, by the date requested by the appropriate regulator) with a statement of:
(a) classes to which it belongs; and
(b) the total amount of business (measured in accordance with the appropriate tariff base or tariff bases) which it conducted, in respect of the most recent valuation period (as specified by FEES 6 Annex 3 R (Financial Services Compensation Scheme - classes)) ending before the relevant year in relation to each of those classes.
(2) In this rule the relevant year means the year in which the month of February referred to in (1) falls.
(3) [deleted]

FEES 6.5.13A

handbook-guidance
For example, when the tariff base for a particular class is based on a firm's annual eligible income the valuation period for that class is the firm's last financial year ending in the year to 31 December preceding the financial year of the FSCS for which the calculation is being made. In the case of a firm in class A1 (Deposits) its valuation period will be 31 December.

FEES 6.5.14

handbook-rule
If the information in FEES 6.5.13 R has been provided to the appropriate regulator under other rule obligations, a participant firm will be deemed to have complied with FEES 6.5.13 R.

FEES 6.5.15

handbook-rule
Where a participant firm can identify that a protected deposit or a protected dormant account was made by or belonged to a person who is not an eligible claimant, it may exclude the amount of that deposit or that account from the tariff base, provided that it notifies the FSCS of the amount of the deposit or the account so excluded and provides the FSCS with such information about the deposit or account as the FSCS may reasonably require.

FEES 6.5.16

handbook-rule
If a participant firm does not submit a complete statement by the date on which it is due in accordance with FEES 6.5.13 R and any prescribed submission procedures:
(1) the firm must pay an administrative fee of £250 (but not if it is already subject to an administrative fee under FEES Annex 2A, Part 1 or FEES 5.4.1 R for the same financial year); and
(2) the compensation costs levy and any specific costs levy will be calculated using (where relevant) the valuation or valuations of business applicable to the previous period, multiplied by the factor of 1.10 (or, if it has become a participant firm part way through a financial year, on the basis of the information provided to the appropriate regulator for the purposes of FEES 4.4.2 R) or on any other reasonable basis, making such adjustments as seem appropriate in subsequent levies once the true figures are known.

FEES 6.6

Incoming EEA firms

  • 01/01/2006

FEES 6.6.1

handbook-rule
If an incoming EEA firm, which is a CRD credit institution, an IMD insurance intermediary or MiFID investment firm, is a participant firm, the FSCS must give the firm such discount (if any) as is appropriate on the share of any levy it would otherwise be required to pay, taking account of the nature of the levy and the extent of the compensation coverage provided by the firm's Home State scheme.

FEES 6.7

Payment of levies

  • 01/01/2006

FEES 6.7.1

handbook-rule
A participant firm must pay its share of any levy made by the FSCS:
(1) in one payment; or
(2) where the FSCS agrees, quarterly, at the beginning of each quarter, by direct debit agreement.

FEES 6.7.2

handbook-guidance
The amount paid under a direct debit arrangement will be adjusted on a continuous basis to take account of interim levies and other adjustments made during the course of the financial year.

FEES 6.7.3

handbook-rule
A participant firm's share of a levy to which FEES 6.7.1R (1) applies is due on, and payable within 30 days of, the date when the invoice is issued.

FEES 6.7.4

handbook-rule
If a participant firm does not pay its share of a levy subject to a direct debit agreement as required by FEES 6.7.1R (2), the entire amount of the levy becomes due and payable to the FSCS, and additional administrative fees are payable at the rate set out in FEES 2.2.1 R.

FEES 6.7.5

handbook-rule
A participant firm liable to pay its share of the levy under FEES 6.7.1 R must do so using one of the methods set out in FEES 4.2.4 R save that no additional amount or discount is applicable.

FEES 6.7.6

handbook-rule
If a firm ceases to be a participant firm or carry out activities within one or more classes part way through a financial year of the compensation scheme:
(1) it will remain liable for any unpaid levies which the FSCS has already made on the firm; and
(2) the FSCS may make one or more levies upon it (which may be before or after the firm has ceased to be a participant firm or carry out activities within one or more classes, but must be before it ceases to be an authorised person) for the costs which it would have been liable to pay had the FSCS made a levy on all participant firms or firms carrying out activities within that class in the financial year it ceased to be a participant firm or carry out activities within that class.
(3) [deleted]
(4) [deleted]
(5) [deleted]

FEES 6 Annex 1

Financial Services Compensation Scheme - Management Expenses Levy Limit

handbook-rule

FEES 6 Annex 2

Financial Services Compensation Scheme - annual levy limits

  • 06/11/2007

handbook-rule
This table belongs to FEES 6.3.5 R and FEES TP 2.5.2R

FEES 6 Annex 3

Financial Services Compensation Scheme - classes and sub-classes

  • 06/11/2007

handbook-rule
This table belongs to FEES 6.5.7 R and FEES TP 2.5.2R

FEES 6 Annex 4

Guidance on the calculation of tariff bases

  • 06/11/2007

handbook-guidance
This table belongs to FEES 6.5.8 G

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Transitional Provisions and Schedules

FEES TP 2

Transitional provisions relating to changes to the FSCS levy arrangements taking effect in 2007/8 and in 2008/9

FEES TP 3

Transitional provisions relating to changes to the FSCS levy arrangements taking effect in 2010/11

FEES TP 4

Transitional provisions relating to information requirements following changes to FEES 4 or 5

FEES TP 5

Transitional Provisions relating to the Special Project Fee for Restructuring

FEES TP 7

Transitional provisions relating to changes to the FSCS levy arrangements taking effect in 2013/14

  • 01/04/2013

FEES TP 8

Transitional provisions relating to FEES 3 Annex 9R and FEES 4.3.6R taking effect in 2013/14

FEES TP 10

Transitional Provisions relating to FEES 4.2.7BR for firms carrying on credit related regulated activities

  • 01/04/2014

FEES Sch 1

[to follow]

  • 06/10/2009

handbook-guidance
[to follow]

FEES Sch 2

[to follow]

  • 06/10/2009

handbook-guidance
[to follow]

FEES Sch 3

[to follow]

  • 06/10/2009

handbook-guidance
[to follow]

FEES Sch 5

[to follow]

  • 06/10/2009

handbook-guidance
[to follow]

FEES Sch 6

Rules that can be waived

FEES Sch 6.2

handbook-guidance
As a result of section 138A of the Act (Modification or waiver of rules) the PRA has power to waive all its rules, other than rules made under section 137O of the Act (threshold condition code). However, if the rules incorporate requirements laid down in European directives, it will not be possible for the PRA to grant a waiver that would be incompatible with the United Kingdom's responsibilities under those directives.
  • 01/04/2013

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