FEES 4 Annex 11A Definition of annual income for the purposes of calculating fees in fee-blocks A.12, A.13 and A.14

"Annual income"is an amount equal to the net amount retained by the firm of all income due to the firm in respect of, or in relation to, the provision in the UK of the regulated activities specified in FEES 4 Annex 1A R Part 115 as belonging to fee-blocks A.12, A.13 and A.14.

For the purposes of calculating annual income, 'net amount retained' means:

(a) all brokerages, commissions, fees, and other related income (for example, administration charges, overriders, profit shares etc) due to the firm in respect of, or in relation to, the provision in the UK of the regulated activities specified in FEES 4 Annex 1A R Part 115 as belonging to fee-blocks A.12, A.13 or A.14and which the firm has not rebated to clients or passed on to other authorised firms15 (for example, where there is a commission chain).

Plus:

(b) any ongoing commission from previous business received by the firm during the reporting year.

Plus:

(c) the 'commission-equivalent' of any relevant business. In this instance, the 'commission equivalent' isan estimate of the amount the firm would otherwise have received for any regulated activity under (a) above, but for which it has made a business decision not to charge.