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.

The purpose of this chapter is to set out the general provisions applicable to those who are required to pay fees or levies to the5FCA12or a share of the FSCS levy.

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Paragraph 23 of Schedule 1ZA18 of2 the Act,7regulation 92 of the Payment Services Regulations, 22 regulation 59 of the Electronic Money Regulations7and article 25(a) of the MCD Order22 enable the FCA18 to charge fees to cover its costs and expenses in carrying out its functions. The corresponding provisions for the FSCS levy ,5FOS levies and CFEB levies5 are set out in FEES 6.1,5FEES 5.2 and FEES 7.1.4 G5 respectively. Case fees payable to the FOS Ltd are set out in FEES 5.5B. 22Fee-paying payment service providers, 22fee-paying electronic money issuers7 and CBTL firms22 are not required to pay the FSCS levy but are liable for FOS levies.4

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3Regulation 92 of the Payment Services Regulations and regulation 59 of the Electronic Money Regulations each provide7 that the functions of the FCA18 under the respective7 regulations are treated for the purposes of paragraph 23 of Schedule 1ZA18 to the Act as functions conferred on the FCA18 under the Act. Paragraph 23(7) 22 however, has not been included 22.7This is 22the FCA's187 obligation to ensure that the amount of penalties received or expected to be received are not to be taken into account in determining the amount of any fee payable.22

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22Article 25 of the MCD Order provides that the functions under the MCD Order are to be treated for the purposes of paragraph 23 of Schedule 1ZA to the Act as functions conferred on the FCA under the Act.

The FCA’s12fees payable will vary from one fee year18 to another, and will reflect the FCA’s12funding 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 FCA12to undertake its statutory functions.

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The key components of the FCA12fee mechanism (excluding the FSCS5levy, the FOS5 levy and case fees, and the CFEB levy5which are dealt with in FEES 5,5FEES 6 and FEES 7)5 are:

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1. (1)

   a funding requirement derived from:

   1. (a)

      the FCA’s12financial management and reporting framework;

   2. (b)

      the FCA’s12budget; and

   3. (c)

      adjustments for audited variances between budgeted and actual expenditure in the previous accounting year, and reserves movements (in accordance with the FCA’s12reserves 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 FCA’s12regulatory 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.

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).

By basing fee-blocks on categories of business, the FCA12aims to minimise cross-sector subsidies. The membership of the fee-blocks is identified in the FEES provisions relating to the type of fees concerned.

18 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 collection 12agent for 12PRA 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 collection 12agent for the PRA in respect of the PRA fees. References to this arrangement will be referred to in FEES where applicable.

The FCA22, (for FCA and PRA22periodic fees, FOS and FSCS levies and CFEB levies), expects11 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.

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Paragraph 1323(8) of Schedule 1ZA 13of the Act permits 13the FCA13to recover fees (including13 fees relating to payment services,5 the issuance of electronic money, fees relating to CBTL firms24 and, where relevant, FOS levies and CFEB levies6), and section 213(6) permits the FSCS to recover shares of the FSCS levy payable, as a debt owed to the FCA13and FSCS respectively. The 13FCA13and FSCS, as relevant, will consider taking action for recovery (including interest) through the civil courts. 6

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In addition, the FCA13may be entitled to take regulatory action in relation to the non-payment of fees,6FOS levies and CFEB levies. The FCA136 may also take regulatory action in relation to the non-payment of FOS case fees or 723 a723 share of the FSCS levy, after reference of the matter to the6FCA13 by the6FSCS. What action (if any) that is taken by the FCA13will be decided upon in the light of the particular circumstances of the case.

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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.