AUTH 4 Annex 2 Authorisation fees payable in relation to the A.2 and A.18 activity groups up to and including 30 October 2004 and the A.19 activity group up to and including 13 January 2005

Note: This annex specifies the application fees for applicants seeking to apply for Part IV permission, or to vary their existing Part IV permission, in order to undertake any of the activities specified in the A.2, A.18 and A.19 activity groups (see Part 1 of SUP 20 Annex 1 for details of the activities).3

For the permitted activities included in the A.2 and A.18 activity groups, regulation commences on 31 October 2004. Regulation commences on 14 January 2005 for the permitted activities included in the A.19 activity group.

The fee rules set out in this annex will apply from the beginning of the application period until regulation of these permitted activities commences. At that time, these rules will cease to have effect and application fees for these types of permitted activities will be dealt with alongside the other authorisation fees as part of AUTH 4 Annex 1.

1. For the A.2 and A.18 activity groups, these rates apply up to and including 30 October 2004.

2. For the A.19 activity group, these rates apply up to and including 13 January 2005.

Fee bands

Fee - early applications

Fee - other applications

Discount - electronic applications

Discount - non-electronic applications paying by direct debit

Band no.

Band

A.2 Mortgage lenders and administrators

1

2

3

4

Gross advances (£m)

0-10

>10-100

>100-1,000

>1,000

Fee (?)

600

8,000

13,000

23,000

Fee (?)

1,200

10,000

15,000

25,000

Discount (£)

100

250

250

500

Discount (£)

50

50

50

50

A.18 Mortgage lenders, advisers and arrangers; and

A.19 General insurance mediation

5

6

7

8

Annual income (£m)

0 - 1

>1-3

>3-25

>25

Fee (?)

600

4,250

9,000

23,000

Fee (?)

1,200

5,750

11,000

25,000

Discount (£)

100

250

250

500

Discount (£)

50

50

50

50

(1)

An early application is an application lodged:

(a)

for A.2 or A.18 applications, before 1 April 2004; and

(b)

for A.19 applications, before 1 June 2004.

(2)

For the purposes of this table:

(a)

An electronic application is one submitted via the electronic facility provided by the FSA for these purposes.

(b)

Gross advances means the value of all new mortgage advances made (not the total mortgage balances outstanding) including loans for house purchase, remortgages, further advances and top-up loans, in the 12 months to 31 December 2003; PLUS

the value of all new mortgages administered (not the total mortgage balances outstanding) including loans for house purchase, remortgages, further advances and top-up loans, in the 12 months to 31 December 2003, multiplied by 0.5.

Note: For this purpose, a mortgage is a contract for a loan secured by a first charge over residential property in the United Kingdom.

(3)

For the purposes of this table, annual income means:

(a)

the net amount retained by the firm of all brokerages, fees, commissions and other related income (e.g. administration charges, overriders, profit shares) due to the firm in respect of or in relation to:

(i)

activities which would be mortgage mediation activity if they had been carried out after 30 October 2004; PLUS

(ii)

activities which would be insurance mediation activity (in relation to general insurance contracts or pure protection contracts) if they had been carried out after 13 January 2005;

earned in its latest financial year ending on or before 31 December 2003;

PLUS

(b)

(i)

in relation to the activities set out in (a)(i), for any mortgage mediation activity carried out by the firm for which it receives payment from the lender on a basis other than that in (a), the value of all new mortgage advances resulting from that activity multiplied by 0.004;

PLUS

(ii)

If the firm is a mortgage lender, the value of all new mortgage advances which would be regulated mortgage contracts if they had been made after 30 October 2004 (other than those made as a result of mortgage mediation activity by another firm), multiplied by 0.004;

for its latest financial year ending on or before 31 December 2003;

PLUS

(c)

in relation to the activities set out in (a)(ii):

(i)

for any insurance mediation activity carried out by the firm for which it receives payment from the insurer on a basis other than that in (a), the amount of premiums receivable on the contracts of insurance resulting from that activity multiplied by 0.07; PLUS

(ii)

if the firm is an insurer, the amount of premiums receivable on its contracts of insurance multiplied by 0.07, excluding those contracts of insurance which:

(aa)

result from insurance mediation activity by another firm, where a payment has been made by the insurer to the firm under (a); or

(ab)

the insurer reports, and pays a fee on, in the A.4 activity group; or

(ac)

are not general insurance contracts or pure protection contracts;

for its latest financial year ending on or before 31 December 2003.

The firm must include in its income calculation, on the same basis as above, earnings from those who will become its appointed representatives immediately after authorisation.

In note (3), a reference to a "firm" also includes reference to any person who carried out activities which would be;

(1)

mortgage mediation activity if they had been carried out after 30 October 2004; or

(2)

insurance mediation activity (in respect of general insurance contracts or pure protection contracts) if they had been carried out after 13 January 2005. 2

3.

The activity group definitions are set out in SUP 20 Annex 1.1