FEES 4 Annex 1A FCA Activity groups, tariff bases and valuation dates

45Part 1

This table shows how the FCA links the regulated activities for which a firm has permission to activity groups (fee-blocks). A firm can use the table to identify which fee-blocks it falls into based on its permission.

Activity group

Fee payer falls in the activity group if

A.1 Deposit acceptors

its permission includes accepting deposits or operating a dormant account fund BUT DOES NOT include either of the following:

effecting contracts of insurance;

carrying out contracts of insurance.

A.2 Home finance providers and administrators

its permission includes a regulated activity within one or more of the following:

entering into a home finance transaction; or

administering a home finance transaction; or agreeing to carry on a regulated activity which is within either of the above.

A.3 Insurers - general

its permission includes one or more of the following:

- effecting contracts of insurance;

- carrying out contracts of insurance;

in respect of specified investments that are:

- general insurance contracts; or

- long-term insurance contracts other than life policies.

A.4 Insurers - life

its permission includes one or more of the following:

- effecting contracts of insurance;

- carrying out contracts of insurance;

in respect of specified investments including life policies;

- entering as provider into a funeral plan contract.

A.5 Managing agents at Lloyd's

its permission includes managing the underwriting capacity of a Lloyd's syndicate as a managing agent at Lloyd's.

A.6 The Society of Lloyd's

it is the Society of Lloyd's

Note for authorised professional firms:

Generally, for fee-blocks A.7 to A.19 below, only those regulated activities that are not limited to non-mainstream regulated activities should be taken into account in determining which fee-block(s) fee-payers belong to for the purpose of charging periodic fees. However, in the case that all the regulated activity within a firm permission are limited to non-mainstream regulated activities, then that firms will be allocated to fee-block A.13 alone. This does not prevent a fee being payable by an authorised professional firm under FEES 3.2.7 R and/or FEES 3.2.7A R(c) where it applies to vary its Part 4A permission such that it would normally be allocated to fee-block(s) other than A.13 if the variation was granted.

Portfolio managers

(1) its permission includes managing investments (a firm falling within this category is a class (1) firm);

OR

(2) its permission includes

ONLY either one or both of:

safeguarding and administering of investments (without arranging); and

arranging safeguarding and administration of assets (a firm falling within this category is a class (2) firm);

4 OR

(3) the firm is a venture capital firm (a firm falling within this category is a class (3) firm if it is not a class (1) or (2) firm).

OR

(4) its permission includes managing an AIF or managing a UCITS

Note:

Class (1) firms are subdivided into three classes:

- class (1)A, where the funds managed by the firm belong to one or more occupational pension schemes;

- class (1)B, where:

(a) the firm is not a class (1)A firm; and

(b) the firm permission includes NEITHER of the following:

safeguarding and administering investments (without arranging);

arranging safeguarding and administration of assets; and (c) the firm EITHER:

has a requirement that prohibits the firm from holding or controlling client money, or both; OR

if it does not have such a requirement, only holds or controls client money (or both), arising from an agreement under which commission is rebated to a client; and

- class (1)C, where the firm is not within class (1)A or class (1)B.

A.9 Managers and depositaries of investment funds, and operators of collective investment schemes or pension schemes4

(1) its permission:

(a) includes one or more of the following:

managing an AIF;4

managing a UCITS;4

acting as trustee or depositary of an AIF;4

acting as trustee or depositary of a UCITS;4 establishing, operating or winding up a collective investment scheme;5

establishing, operating or winding up a regulated collective investment scheme;

establishing, operating or winding up an unregulated collective investment scheme;

acting as trustee of an authorised unit trust scheme; acting as the depositary of an authorised contractual scheme;3 acting as the depositary or sole director of an open-ended investment company;

establishing, operating or winding up a personal pension scheme or a stakeholder pension scheme (but only if the firm does not fall within activity group A1 or A4);

AND

(b) PROVIDED the firm is NOT one of the following:

OR

a corporate finance advisory firm;

a firm in which the above activities are limited to carrying out corporate finance business;

a venture capital firm;

a firm which would be a venture capital firm but for the inclusion of managing an AIF on its permission; but only where the firm is managing an AIF exclusively in respect of AIFs which only invest in venture capital investments.4

OR

(2) if the fee-payer has none of the regulated activities above within its permission, but ALL the remaining regulated activities in its permission are limited to carrying out trustee activities.

A.10 Firms dealing as principal

its permission includes:

(a) dealing in investments as principal; and/or

(b) bidding in emissions auctions;

BUT NOT if one or more of the following apply:

the firm is acting exclusively as a matched principal broker;

the above activity is limited either toestablishing, operating or winding up a collective investment scheme,5 establishing, operating or winding up a personal pension scheme or a stakeholder pension scheme, or to carrying out depositary5 activities;

the firm is a corporate finance advisory firm;

the above activity is otherwise limited to carrying out corporate finance business;

the firm is subject to a limitation to the effect that the firm, in carrying on this regulated activity, is limited to entering into transactions in a manner which, if the firm was an unauthorised person, would come within article 16 of the Regulated Activities Order (Dealing in contractually based investments);

the above activity is limited to not acting as a market maker;

the firm is an oil market participant , energy market participant or a local (except where the firm is bidding in emissions auctions);

its permission includes either:

- effecting contracts of insurance; or

- carrying out contracts of insurance.

A.12 Advisors, arrangers, dealers or brokers (holding or controlling client money or assets, or both)

its permission:

(a) includes one or more of the following, in relation to one or more designated investments:

dealing in investments as agent;

arranging (bringing about) deals in investments;

making arrangements with a view to transactions in investments;

dealing as principal in investments where the activity is carried on as a matched principal broker, oil market participant, energy market participant or local;

advising on investments (except pension transfers and pension opt-outs);

advising on pension transfers and pension opt-outs;

advising on syndicate participation at Lloyd's;

(b) BUT NONE of the following:

effecting contracts of insurance; or

carrying out contracts of insurance;

AND

(c) CAN HAVE one or more of the following:

safeguarding and administering of assets;

arranging safeguarding and administration of assets;

the ability to hold or control client money, or both:

- that is, there is no requirement which prohibits the firm from doing this; and

- provided that the client money in question does not only arise from an agreement under which commission is rebated to a client;

AND

(d) PROVIDED the fee-payer is NOT any of the following:

a corporate finance advisory firm;

a firm for whom all of the applicable activities above are otherwise limited to carrying out corporate finance business;

a firm for whom all the applicable activities above5are limited to carrying out venture capital business;

a firm for whom all the applicable activities above are limited to acting as a residual CIS operator;5

a firm for whom all the applicable activities above are limited to acting as trustee or depositary of an AIF and/or acting as trustee or depositary of a UCITS;5

a service company.

A.13 Advisors, arrangers, dealers or brokers (not holding or controlling client money or assets, or both)

(1) it is an authorised professional firm and ALL the regulated activities in its permission are limited to non-mainstream regulated activities (a firm falling within this category is a class (1) firm);

OR

(2) its permission:

(a) includes one or more of the

following, in relation to one or more designated investments:

dealing in investments as agent;

arranging (bringing about) deals in investments;

making arrangements with a view to transactions in investments;

dealing as principal in investments where the activity is carried on as a matched principal broker, oil market participant, energy market participant or local;

advising on investments

(except pension transfers and pension opt-outs);

giving basic advice on a stakeholder product;

advising on pension transfers and pension opt-outs;

advising on syndicate participation at Lloyd's;

(b) BUT NONE of the following:

effecting contracts of insurance;

carrying out contracts of insurance;

safeguarding and administration of assets;

arranging safeguarding and administration of assets;

AND

(c) MUST EITHER, in connection with its designated investment business:

have a requirement that prohibits the firm from holding or controlling client money, or both;

OR

if it does not have such a requirement, only holds or controls client money (or both), arising from an agreement under which commission is rebated to a client;(d)

AND

a corporate finance advisory firm;

a firm for whom all of the applicable activities above are otherwise limited to carrying out corporate finance business;

a firm for whom all the applicable activities above5are limited to carrying out venture capital business;

a firm for whom all the applicable activities above are limited to acting as a residual CIS operator;5

a firm for whom all the applicable activities above are limited to acting as trustee or depositary of an AIF and/or acting as trustee or depositary of a UCITS;5 a service company.

A firm falling within (2) and not (1) is a class 2 firm.

A.14 Corporate finance advisers

the firm is carrying on corporate finance business PROVIDED the fee-payer is NOT a venture capital firm.

A.18 Home finance providers, advisers and arrangers

its permission includes a regulated activity within one or more of the following:

entering into a home finance transaction; or

arranging (bringing about) a home finance transaction ; or

making arrangements with a view to a home finance transaction; or

advising on a home finance transaction; or

agreeing to carry on a regulated activity which is within any of the above.

A.19 General insurance mediation

its permission includes one or more of the following in relation to a non-investment insurance contract:

dealing in investments as agent; or

arranging (bringing about) deals in investments; or

making arrangements with a view to transactions in investments; or

assisting in the administration and performance of a contract of insurance; or

advising on investments; or

agreeing to carry on a regulated activity which is within any of the above.

B. Market operators

firms that have been prescribed as an operator of a prescribed market under the Financial Services and Markets Act 2000 (Prescribed Markets and Qualifying Investments) Order 2001 (SI 2001/996).

B. Service companies

it is a service company.

B. MTF operators

its permission includes operating a multilateral trading facility .1

1B. Benchmark administrators

It is a benchmark administrator

Part 2

This table sets out the activity groups (fee blocks) in relation to (i) the minimum feepayable to the FCA and (ii) the prudential fee payable to the FCA.

Activity group

Fee payer falls into the fee-block if

A.0 FCA minimum fee

(1) it is in at least one of the fee blocks under Part 1; and

(2) it is not:

(a) a UK ISPV; or

(b) a firm whose only permission is

operating a dormant fund account.

AP.0 FCA prudential fee

(1) it is an FCA authorised person2 ;and

(2) the periodic fee it pays to the FCA is not limited to the A.0 FCA minimum fee.2

Part 3

This table indicates the tariff base for each fee-block set out in Part 1.

The tariff base in this Part is the means by which the FCA measures the amount of business conducted by a firm for the purposes of calculating the annual periodic fees payable to the FCA by that firm.2

Activity group

Tariff base

A.1

MODIFIED ELIGIBLE LIABILITIES

For banks and building societies:

Item B of Form ELS (Note (1)):

(1 + 2 + 3 + 4 + 0.6*5 + 6 - 8 - 9A - 9B - 10A - 10B - 10C - 11A - 11B - 0.6*12) + (1/3)*(F1 + F2 + F3 + F4 + 0.6*F5 + F6 - F8 - F9A - F9B - F10A - F10B - F10C - F11A - F11B - 0.6*F12)

- 13M

Notes:

(1) All references in the above formula are to entries on Form ELS (that is, the Eligible Liabilities Return completed to provide information by banks and building societies to the Bank of England as required by the Bank of England Act 1998).

(2) The figures reported on the Form ELS relate to business conducted out of offices in the United Kingdom.

For credit unions:

Deposits with the credit union (share capital)

LESS

the credit union's bank deposits (investments + cash at bank)

Note:

Only United Kingdom business is relevant for calculating credit unions' MELs.

Note:

For a dormant account fund operator the tariff base is not relevant and the flat fee in FEES 4 Annex 2A R is payable.

A.2

NUMBER OF MORTGAGES OR OTHER HOME FINANCE TRANSACTIONS ENTERED INTO AND ADMINISTERED

The number of newmortgage contracts, home purchase plans, home reversion plans and regulated sale and rent back agreements entered into;

AND

The number of mortgage contracts, home purchase plans, home reversion plans and regulated sale and rent back agreements being administered, multiplied by 0.05 for mortgage outsourcing firms or other home finance outsourcing firms and by 0.5 for all other firms.

Notes:

(1) Mortgage outsourcing firms are firms with permission for administering regulated mortgage contracts, but not to enter the contract as lender.

Home finance outsourcing firms are firms with permission for administering a home finance transaction, but not entering into a home finance transaction.

(2) In this context a 'mortgage' means a loan secured by a first charge over residential property in the United Kingdom. For the measure of the number of contracts being administered, each firstcharge counts as one contract, irrespective of the number of loans involved.

(3) Mortgages, home purchase plans, home reversion plans and regulated sale and rent back agreements administered include those that the firm administers on behalf of other firms.

A.3

GROSS PREMIUM INCOME AND GROSS TECHNICAL LIABILITIES

For insurers:

The amount of premium receivable which must be included in the documents required to be deposited under

IPRU(INS) 9.6 in relation to the financial year to which the documents relate but disregarding for this purpose such amounts as are not included in the document by reason of a waiver or an order under section 68 of the Insurance Companies Act 1982 carried forward as an amendment to

IPRU(INS) under transitional provisions relating to written concessions in SUP;

AND the amount of gross technical liabilities (IPRU(INS) Appendix 9.1 - Form 15, line 19) which must be included in the documents required to be deposited under IPRU(INS) 9.6R in relation to the financial year to which the documents relate but disregarding for this purpose such amounts as are not included in the document by reason of a waiver or an order under section 68 of the Insurance Companies Act 1982 carried forward as an amendment to IPRU(INS) under transitional provisions relating to written concessions in SUP.

Notes:

(1) in the case of either:

(a) a pure reinsurer carrying on general insurance business through a branch in the United Kingdom; or

(b) an insurer whose head office is not in an EEA State carrying on general insurance business through a branch in the United Kingdom; or

(c) an EEA-deposit insurer;

the amount only includes premiums received and gross technical liabilities held in respect of its United Kingdom business;

(2) for a Swiss general insurance company, premiums and gross technical liabilities include those relevant to the operations of the company's United Kingdom branch; and

(3) a firm need not include premiums and gross technical liabilities relating to pure protection contracts which it reports, and pays a fee on, in the A.4 activity group.

For friendly societies:

Either:

(a) the value of contributions as income under Schedule 7: Part I item 1(a) to the Friendly Societies (Accounts and Related Provisions) Regulations 1994 (SI 1994/1983) (the regulations) for a non-directive friendly society, included within the income and expenditure account; or

(b) the value of gross premiums written under Schedule 1: Part I items I.1(a) and II.1.(a) of the regulations for a directive friendly society included within the income and expenditure account.

Notes:

(1) In both (a) and (b) above only premium receivable in respect of United Kingdom business are relevant.

(2) For UK ISPVs the tariff base is not relevant and a flat fee set out in FEES 4 Annex 2AR is payable.

A.4

ADJUSTED GROSS PREMIUM INCOME AND MATHEMATICAL RESERVES (see FEES 4 Annex 12 G)

Amount of new regular premium business (yearly premiums including reassurances ceded but excluding cancellations and reassurances accepted), times ten;

Plus:

amounts of new single premium business (total including reassurances ceded but excluding cancellations and reassurances accepted). Group protection business (life and private health insurance) must be included;

Less:

premiums relating to pension fund management;

Less:

premiums relating to Trustee Investment Plans.

For each of the above, business transacted through independent practitioners or tied agents (either single or multi-tie) will be divided by two in calculating the adjusted gross premium income;

AND

the amount of mathematical reserves

(IPRU(INS) Appendix 9.1R - Form 14 , Line 11 ) which must be included in the documents required to be deposited under

IPRU(INS) 9.6R in relation to the financial year to which the documents relate but disregarding for this purpose such amounts as are not included in the document by reason of a waiver or an order under section 68 of the Insurance Companies Act 1982 carried forward as an amendment to IPRU(INS) under transitional provisions relating to written concessions inSUP;

Less

mathematical reserves relating to pension fund management.

Less

mathematical reserves relating to Trustee Investment Plans.

Notes:

(1) Only premiums receivable and mathematical reserves held in respect of United Kingdom business are relevant.

(2) An insurer must include in its calculation of adjusted gross premium income (AGPI) and mathematical reserves (MR) the value of MR and AGPI relating to all risks ceded to ISPVs.

(3) Trustee Investment Plans are the class of contract of insurance specified in Class III of Part II of Schedule 1 to the Regulated Activities Order (Contracts of long-term insurance) and which are invested in pooled funds beneficially owned by the insurer and not earmarked to individual beneficiaries by that insurer.

A.5

ACTIVE CAPACITY

The capacity of the syndicate(s) under management in the year in question. This includes the capacity for syndicate(s) that are not writing new business, but have not been closed off in the year in question.

A.6

Not applicable.

A.7

FUNDS UNDER MANAGEMENT (FuM)

The total value, in pounds sterling, of all assets (see note (a) below) in portfolios which the firm manages, on a discretionary basis (see note (b) below), in accordance with its terms of business, less:

a) funds covered by the exclusion contained in article 38 (Attorneys) of the Regulated Activities Order;

(b) funds covered by the exclusion contained in article 66(3) (Trustees, nominees and personal representatives) of the Regulated Activities Order;

(c) funds covered by the exclusion contained in article 68(6) (Sale of goods or supply of services) of the Regulated Activities Order;

(d) funds covered by the exclusion contained in article 69(5) (Groups and joint enterprises) of the Regulated Activities Order; and

(e) the value of those parts of the managed portfolios in respect of which the responsibility for the discretionary management has been formally delegated to another firm (and which firm will include the value of the assets in question in its own FuM total); any such deduction should identify the firm to which management responsibility has been delegated.

Notes on FuM

(a) Except for funds under management where the fund is an AIF, for4 the purposes of calculating the value of funds under management, assets means all assets that consist of or include any investment which is a designated investment or those assets in respect of which the arrangements for their management are such that the assets may consist of or include such investments, and either the assets have at any time since 29 April 1988 done so or the arrangements have at any time (whether before or after that date) been held out as arrangements under which the assets would do so.

(aa) for funds under management, where the fund is an AIF, assets means all assets or property of any description of the fund.4

(b) Assets managed by the firm on a discretionary basis exclude the firm's own assets. Assets managed on a non-discretionary basis, being assets that the firm has a contractual duty to keep under continuous review but in respect of which prior specific consent of the client must be obtained for proposed transactions, are also excluded as this activity is covered in those charged to fees in activity groups A.12 andA.13.

(c) In respect of collective investment schemes, assets means the total value of the assets of the scheme.

(d) For an OPS firm, the FuM should also be reduced by the value of the assets held as a result of a decision taken in accordance with article 4(6) of The Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) Order 2001 (investments in collective investment scheme or bodies corporate which have as their primary purpose the acquisition, directly, or indirectly, of relevant investments, as defined in that article).

(e) Only assets that are managed from an establishment maintained by the firm in the United Kingdom are relevant.

(f) If the firm is managing an overlay portfolio of derivative instruments and the underlying assets are managed by itself or a firm within the same group that has not reported them separately to the FCA, or by a firm outside its group, then it should calculate the value of the derivatives and other assets as prescribed in the guidance in FSA038 in SUP 16 Annex 25.

If the underlying assets are managed by another firm within the same group who has reported their value separately to the FCA, then to avoid double-counting within the group, the calculation must be restricted to the exposure of the overlay.

A.9

GROSS INCOME(1) For AIFMs (excluding internally managed AIFs), management companies,4 operators (including ACDs and authorised fund managers3 of unit trusts or authorised contractual schemes3 but excluding operators of a personal pension scheme or a stakeholder pension scheme) and residual CIS operators4 gross income from the activity relating to fee-block A.9 is defined as:

the amount of the annual charge on investments in the fund4 received or receivable in the latest accounting period (this is calculated as a % of funds invested, typically 1% p.a.);

PLUS

the front-end or exit charge levied on sales or redemptions of collective investment schemes (typically 4-5% of sales/redemptions) in that same accounting period;

PLUS

any additional initial or management charges levied through a product wrapper such as an ISA;

BUT EXCLUDING box management profits.

(2)4For depositaries (including trustees of collective investment schemes and ICVC or ACS3 depositaries):

The amount of the annual charge levied on investments in funds4 for which they act as depositary (typically a % of the total funds for which they act as depositary).(3)4

For operators of a personal pension scheme or a stakeholder pension schemegross income from the activity relating to fee block A.9 is defined as:4

The amount of the charges levied on the personal pension scheme or stakeholder pension scheme for which they act as operator:

including up-front charges, fund related charges, transaction related charges and periodic charges; but

excluding charges made to an investor in respect of third party suppliers; for example, charges for stock broking, borrowing, banking services and charges for arranging third party legal services, surveys or environmental screening in connection with property.

Note:

Only the gross income corresponding to United Kingdom business is relevant.

(4) Internally managed AIFs must use a proxy for gross income for the activities relating to fee block A.9. This is the total value of funds under management (as defined in fee block A.7) multiplied by 0.01.4

A.10

NUMBER OF TRADERS

Any employee or agent, who:

ordinarily acts within the United Kingdom on behalf of an authorised person liable to pay fees to the FCA in its fee-block A.10 (firms dealing as principal); and who,

as part of their duties in relation to those activities of the authorised person, commits the firm in market dealings or in transactions in securities or in other specified investments in the course of regulated activities.

But not any employees or agents who work solely in the firm's MTF operation.

A firm may, as an option, report employees or agents as full-time equivalents (FTE), taking account of any part-time staff. In calculating the FTE, firms must take into account the total hours employees or agents have contracted to work for the firm and not the time employees or agents devote to the dealing in investments as principal and bidding in emissions auctions functions set out in fee-block A.10. Any figures using the FTE calculation to be recorded to one decimal place, rounded down to the nearest decimal place.

A.12

ANNUAL INCOME

Annual income as defined in FEES 4 Annex 11A R

A.13

ANNUAL INCOME

Annual income as defined in FEES 4 Annex 11A R

A.14

ANNUAL INCOME

Annual income as defined in FEES 4 Annex 11A R.

A.18

ANNUAL INCOME

(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 home finance mediation activity (or activities which would have been mortgage mediation activity if they had been carried out after 30 October 2004 or home purchase mediation activity or home reversion mediation activity if they had been carried out on or after 6 April 2007 or regulated sale and rent back mediation activity if they had been carried out on or after 1 July 2009);

PLUS

(b) for any home finance mediation activity carried out by the firm for which it receives payment from the lender or provider on a basis other than that in (a), the value of all new mortgage advances and amounts provided under other home finance transactions resulting from that activity multiplied by 0.004;

PLUS

(c) if the firm is a home finance provider, the value of all new mortgage advances and amounts provided under other home finance transactions which are or would be regulated mortgage contracts if they had been made after 30 October 2004 or home purchase plans or home reversion plans if they had been made on or after 6 April 2007 or regulated sale and rent back mediation activity if they had been carried out on or after 1 July 2009 (other than those made as a result of home finance mediation activity by another firm), multiplied by 0.004.

For mortgage outsourcing firms or home finance outsourcing firms whose permission does not include advising on a home finance transaction the relevant amounts are multiplied by 0.15.

Notes on annual income:

(1) For the purposes of calculating annual income, "net amount retained" means all the commission, fees, etc. in respect of home finance mediation activity that the firm has not rebated to customers or passed on to other firms (for example, where there is a commission chain). Items such as general business expenses (e.g. employees' salaries, overheads) should not be deducted.

(2) 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.

(3) Reference to a "firm" above also includes reference to any person who carried out activities which would be mortgage mediation activity if they had been carried out after 30 October 2004 or home purchase mediation activity or reversion mediation activity if they had been carried out on or after 6 April 2007 or regulated sale and rent back mediation activity if they had been carried out on or after 1 July 2009.

(4) Mortgage outsourcing firms are firms whose permission includes administering regulated mortgage contracts, but not entering into a regulated mortgage contract. Home finance outsourcing firms are firms whose permission includes administering a home finance transaction, but not entering into a home finance transaction.

(5) The same firm may receive income under paragraph (a) and (c).

(6) A firm must include in paragraph (a) any income it receives from home finance mediation activity carried on by another person with respect to any home finance transaction into which the firm has entered as lender, plan provider or home purchase provider.

(7) In calculating the net amount retained, a firm may not deduct amounts that it rebates to a person other than another firm, a person falling within the extended definition of firm in Note (4) or the firm's customer.

(8) A firm may only deduct amounts under paragraph (a) in calculating its net amount retained if the amount is to be deducted from income that the firm must include under paragraph (a). Therefore for example:

(a) if a mortgage lender (Firm A) pays a firm commission for arranging a regulated mortgage under which Firm A is a lender, Firm A may not take that expense into account in calculating its annual income if Firm A does not receive a fee from the borrower or another person in respect of that regulated mortgage; and

(b) if a mortgage lender (Firm A) pays a firm (Firm B) commission for arranging a regulated mortgage under which Firm A is a lender, Firm A receives a payment from the borrower under that transaction and the amount payable to Firm B exceeds the amount payable by the borrower, Firm A may not take that excess into account in calculating its annual income and must instead net the sum payable by the borrower to zero.

(9) A firm must include in paragraph (a) any survey and booking fees due to it in respect of or in relation to home finance mediation activity or which would been home finance mediation activity if they had been carried on or after the dates in paragraph (a).

A.19

ANNUAL INCOME (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 insurance mediation activity (or activities which would have been insurance mediation activity if they had been carried out after 13 January 2005 or, in relation to connected travel insurance contracts, from 1 January 2009) in relation to general insurance contracts or pure protection contracts;

Plus (B) in relation to the activities set out in (A), 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 (C) if the firm is an insurer, in relation to the activities set out in (A), the amount of premiums receivable on its contracts of insurance multiplied by 0.07, excluding those contracts of insurance which:

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

(ii) the insurer reports in, and pays a fee under, the A.4 activity group; or

(iii) are not general insurance contracts or pure protection contracts.

Notes on annual income:

(1) For the purposes of calculating annual income, "net amount retained" means all the commission, fees, etc. in respect of insurance mediation activity that the firm has not rebated to customers or passed on to other firms (for example, where there is a commission chain). Items such as general business expenses (e.g. employees' salaries, overheads) should not be deducted.

(2) 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.

(3) Reference to a "firm " above also includes reference to any person, including a connected travel insurance intermediary, who carried out activities which would be insurance mediation activity (in respect of general insurance contracts or pure protection contracts) if they had been carried out after 13 January 2005 or, in relation to connected travel insurance contracts, from 1 January 2009.

(4) The same firm may receive income under (A) and (C).

(5) A firm must include in (A) any income it receives from insurance mediation activity carried on by another person with respect to any general insurance contracts or pure protection contracts into which the firm has entered as insurer.

(6) In calculating the net amount retained, a firm may not deduct amounts that it rebates to a person other than another firm, a person falling within the extended definition of firm in Note (4) or the firm's customer.

(7) A firm may only deduct amounts under (A) in calculating its net amount retained if the amount is to be deducted from income that the firm must include under (A). Therefore for example:

(a) if an insurer (Firm A) pays a firm commission for arranging a general insurance contract or pure protection contract under which Firm A is the insurer, Firm A may not take that expense into account in calculating its annual income if Firm A does not receive a fee from the insured or another person in respect of that contract; and

(b) if an insurer (Firm A) pays a firm (Firm B) commission for arranging a general insurance contract or pure protection contract under which Firm A is the insurer, Firm A receives a payment from the insured under that transaction and the amount payable to Firm B exceeds the amount payable by the insured, Firm A may not take that excess into account in calculating its annual income and must instead net the sum payable by the insured to zero.

B. Market operators

Not applicable.

B. Service companies

Not applicable.

B. MTF operators

Not applicable.1

1B. Benchmark administrators

Not applicable.

Part 4

This table indicates the tariff base for each fee block set out in Part 2.

The tariff base in this Part is the means by which the FCA measures the amount of business conducted by a firm for the purposes of calculating the annual periodic fees payable to the FCA by that firm.2

Activity Group

Tariff base

A.0

Not applicable because the minimum fee is a specified amount.

AP.0

The total periodic fees payable as a result of fee blocks A.2 and A.7 to A.19 in 2 Part 1 of FEES 4 Annex 2A R excluding any periodic fee for operating a dormant fund account.

Activity group

Valuation date

IN THIS TABLE, REFERENCES TO SPECIFIC DATES OR MONTHS ARE REFERENCES TO THE LATEST ONE OCCURRING BEFORE THE START OF THE PERIOD TO WHICH THE FEE APPLIES, UNLESS OTHERWISE SPECIFIED - E.G. FOR 2013/14 FEES (1 APRIL 2013 TO 31 MARCH 2014), A REFERENCE TO DECEMBER MEANS DECEMBER 2012.

Where a firm's tariff data is in a currency other than sterling, it should be converted into sterling at the exchange rate prevailing on the relevant valuation date.

A.1

For banks:

Modified eligible liabilities (MELs), valued at:

for a firm which reports monthly, the average of the MELs for October, November and December;

for a firm which reports quarterly, the MELs for December. For credit unions:

For credit unions:

MELs, valued at December or as disclosed by the most recent annual return made prior to that date.

For building societies:

MELs, valued at the average of the MELs for October, November and December.

A.2

Number of mortgages, home purchase plans, home reversion plans and regulated sale and rent back agreements entered into in the twelve months ending 31 December.

AND

Number of mortgages, home purchase plans, home reversion plans and regulated sale and rent back agreements being administered on 31 December.

A.3

Annual gross premium income (GPI), for the financial year ended in the calendar year ending 31 December.

AND

Gross technical liabilities (GTL) valued at the end of the financial year ended in the calendar year ending 31 December.

A.4

Adjusted annual gross premium income (AGPI) for the financial year ended in the calendar year ending 31 December.

AND

Mathematical reserves (MR) valued at the end of the financial year ended in the calendar year ending 31 December.

A.5

Active capacity (AC), in respect of the Underwriting Year (as reported to the Society of Lloyd's) which is current at the beginning of the period to which the fee relates.

[Note: this is the Underwriting Year which is already in progress at the start of the fee period - e.g. for 2013/14 fees, the fee period will begin on 1 April 2013, which is in the 2013 Underwriting Year, so the AC for that Underwriting Year is the relevant measure.]

A.6

Not applicable.

A,7

Funds under management (FuM), valued at 31 December.

A.9

Annual gross income (GI), valued at the most recent financial year ended before 31 December.

A.10

Number of traders as at 31 December.

A.12

Annual income for the financial year ended in the calendar year ending 31 December.

A.13

Annual income for the financial year ended in the calendar year ending 31 December.

A.14

Annual income for the financial year ended in the calendar year ending 31 December.

A.18

Annual income (AI) for the financial year ended in the calendar year ending 31 December.

A.19

Annual income (AI) for the financial year ended in the calendar year ending 31 December.

B. Market operators

Not applicable.

B. Service companies

Not applicable.

B. MTF operators

Not applicable.1

1B. Benchmark administrators

Not applicable