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FEES 2.1 Introduction

Application

FEES 2.1.1 R 01/01/2006

1 20This1 20 chapter applies to every person who is required to pay a fee or share of a levy to the FSA, FOS Ltd or FSCS, as the case may be, by a provision of the Handbook.

FEES 2.1.2 R 01/01/2006

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 G 01/01/2006

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 G 01/01/2006

The purpose of this chapter is to set out the general provisions applicable to those who are required to pay fees or levies to FSA, case fees to FOS Ltd or a share of the FSCS levy.

FEES 2.1.5 G 01/01/2006

Paragraph 17 of Schedule 1 and section 99 to the Act enable the FSA to charge fees to cover its costs and expenses in carrying out its functions. The corresponding provisions for the FSCS levy and FOS levies and case fees are set out in FEES 6.1, and FEES 5.2 respectively.

FEES 2.1.6 G 01/01/2006

The FSA fees payable will vary from one financial year to another, and will reflect the FSA'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 FSA to undertake its statutory functions.

FEES 2.1.7 G 01/01/2006

The key components of the FSA fee mechanism (excluding the FSCSlevy and FOS levy and case fees, which are dealt with in FEES 5 and FEES 6) are:

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

FEES 2.1.8 G 01/01/2006

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 G 01/01/2006

By basing fee-blocks on categories of business, the FSA 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 2.1.10 G 01/01/2006

Paragraph 17(2) of Schedule 1 and section 99(3) to the Act prohibit the FSA from taking account of penalties received when setting its periodic and other fees. Accordingly periodic fees are specified without reference to the penalties received. However, the FSA normally expects to allocate those penalties to the fee-blocks within which the penalty payers fall, by way of a deduction from the periodic fee. Any deductions of this sort are set out in the relevant fees provisions or will be notified to the fee payer at the relevant time.

FEES 2.2 Late Payments and Recovery of Unpaid Fees

Late Payments

FEES 2.2.1 R 01/11/2007

If a person does not pay the total amount of a periodic fee (including fees relating to transaction reports 4 3 to the FSA using the FSA's Transaction Reporting System (see SUP 17))1, FOS levy or case fee, or share of the FSCS levy, before2 the end of the2 date on which it is due, under the relevant provision in FEES 4, 5, or 6, that person must pay an additional amount as follows:

3 4 2 2

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

FEES 2.2.2 G 01/04/2007

The FSA, (for periodic fees, FOS and FSCS levies), FOS Ltd (for FOS case fees), expect to issue invoices at least 30 days before the date on which the relevant amounts fall due. FOS case fees are invoiced on a monthly basis. 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 G 01/01/2006

Paragraph 17(4) of Schedule 1 and section 99(5) to the Act permit the FSA to recover fees ( and, where relevant, FOS levies), and section 213(6) permits the FSCS to recover shares of the FSCS levy payable, as a debt owed to the FSA and FSCS respectively, and the FSA and FSCS, as relevant, will consider taking action for recovery (including interest) through the civil courts. Also, the FOS Ltd (in respect of case fees) may take steps to recover any money owed to it (including interest).

FEES 2.2.4 G 01/01/2006

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

FEES 2.3 Relieving Provisions

Remission of Fees and levies2

FEES 2.3.1 R 01/11/2008

If it appears to the FSA, the FSCS (in relation to any FSCS levy only) 2 or FOS Ltd (in relation to any FOS case fee only), that in the exceptional circumstances of a particular case, the payment of any fee, FSCS levy2 or FOS levy would be inequitable, the FSA, the FSCS 2 or FOS Ltd, as relevant, may (unless FEES 2.3.2B R applies)1 reduce or remit all or part of the fee or levy in question which would otherwise be payable.

FEES 2.3.2 R 01/11/2008

If it appears to the FSA, the FSCS (in relation to any FSCS levy only)2 or FOS Ltd (in relation to any FOS case fee only), that in the exceptional circumstances of a particular case to which FEES 2.3.1R does not apply, the retention by the FSA, the FSCS,2 or FOS Ltd, as relevant, of a fee or FOS levy which has been paid would be inequitable, the FSA, the FSCS 2 or FOS Ltd, may (unless FEES 2.3.2B R applies)1 refund all or part of that fee or levy.

FEES 2.3.2A G 01/11/2008

1A poor estimate or forecast by a fee or levy 2payer, 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 2payer may give rise to such a claim.

FEES 2.3.2B R 01/11/2008

1The FSA or the FSCS 2may 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 levy2 payer in respect of a particular period, due to a mistake of fact or law by the fee or levy2 payer, if the claim is made by the fee or levy2 payer more than 2 years after the beginning of the period to which the overpayment relates.

FEES 2.3.3 G 01/11/2008

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