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FEES 4A.1 Introduction

Application

FEES 4A.1.1 R

1This chapter applies to TP persons.

Purpose

FEES 4A.1.2 G

1The purpose of this chapter is to set out the requirements on TP persons to pay periodic fees. For the avoidance of doubt, the definition of TP persons includes supervised run-off firms but not CRO firms. Only FEES 4A.2.1R and FEES 4A Annex 4R apply to CRO firms.

FEES 4A.1.3 G

1The detail of the special project fees payable by certain TP persons and CRO firms is set out in FEES 4A Annex 3R and FEES 4A Annex 4R respectively.

FEES 4A.2 Obligation to pay periodic fees

FEES 4A.2.1 R

1A TP person must pay periodic fees applicable to it:

  1. (1)

    in full and without deduction by 1 August or, if later, within 30 days of the fee year to which the sum relates, unless modified by FEES 4A.2.2R; and

  2. (2)

    in accordance with the rules in this chapter.

A TP person or a CRO firm must pay any special project fees applicable to it under FEES 4A Annex 3R or FEES 4A Annex 4R respectively.

FEES 4A.2.2 R

1If a TP firm’s periodic fee for the previous financial year was at least £50,000, the TP firm must pay:

  1. (1)

    an amount equal to 50% of the periodic fee payable for the previous year, by 1 April (or if later, within 30 days of the date of the invoice) in the financial year to which the sum due under FEES 4A.2.1R relates; and

  2. (2)

    the balance of the periodic fee due for the current financial year by 1 September (or if later, within 30 days of the date of the invoice) in the financial year to which that sum relates.

FEES 4A.2.2A R

2Where the FCA grants a person’s application for annulment of a cancellation or variation of Part 4A permission under Schedule 6A to the Act and the person falls within FEES 4A.2.1R and on the date the annulment has effect the date for payment specified in FEES 4.2.1R has passed, then that date for payment does not apply, but the person must pay the periodic fees applicable to it on the date on which the annulment takes effect.

FEES 4A.2.2B R

2Where the FCA grants a person’s application for annulment of a cancellation or variation of Part 4A permission under Schedule 6A to the Act and the person falls within FEES 4A.2.2R and:

  1. (1)

    the annulment takes effect after 1 April, or after the invoice referred to in FEES 4A.2.2(1) has been issued, then the date for payment in FEES 4A.2.2R(1) does not apply, but the person must, where the annulment takes effect after 1 April but before 1 September, pay:

    1. (a)

      an amount equal to 50% of the FCA periodic fee payable for the previous year on the date on which the annulment takes effect; and

    2. (b)

      the balance of the FCA periodic fee due for the current financial year by 1 September or, if later, within 30 days of the date of the invoice, in the financial year to which that sum relates; or

  2. (2)

    the annulment takes effect after 1 September or after the invoice referred to in FEES 4A.2.2R(2) has been issued, then the date for payment in FEES 4A.2.2R(2) does not apply, but the person must pay the total periodic fee due for the current financial year, on the date on which the annulment takes effect.

Calculation of periodic fees for TP persons, excluding TPR funds

FEES 4A.2.3 R

1Periodic fees for TP persons, excluding TPR funds, are calculated as follows:

  1. (1)

    identify each of the activity groups set out in Parts 1, 3 and 4 of FEES 4A Annex 1R that apply to the business of the TP person (excluding TPR funds) for the relevant period (for this purpose, the activity groups under FEES 4A Annex 1R are defined in accordance with Part 1 of FEES 4 Annex 1AR and Part 2 of FEES 4 Annex 11R);

  2. (2)

    calculate the size of the TP person’s tariff base for the activity groups identified under (1) using:

    1. (a)

      the tariff base calculations in Part 3 of FEES 4 Annex 1AR and Part 3 of FEES 4 Annex 11R (including only business undertaken from a branch in the UK); and

    2. (b)

      the valuation date requirements in Part 5 of FEES 4 Annex 1AR and Part 4 of FEES 4 Annex 11R;

  3. (3)

    multiply the value of the TP person’s tariff base by the rate applicable to each band of tariff base under FEES 4A Annex 1R;

  4. (4)

    work out whether a minimum fee is payable under Part 2 of FEES 4A Annex 1R and if so how much;

  5. (5)

    add together the fixed sums, as set out in the tables in Parts 1, 3 and 4 of FEES 4A Annex 1R, applicable to each band identified under (1);

  6. (6)

    add together the amounts in (3), (4), and (5); and

  7. (7)

    the amount in (6) is the amount of periodic fees payable by the TP person.

FEES 4A.2.4 R

1For the purposes of FEES 4A.2.3R:

  1. (1)

    a TP person may apply the relevant tariff bases and rates to its non-UK business, as well as to its UK business, if:

    1. (a)

      it has reasonable grounds for believing that the costs of identifying the TP person’s UK business separately from its non-UK business in the way described in Part 3 of FEES 4 Annex 1AR and Part 3 of FEES 4 Annex 11R are disproportionate to the difference in fees payable; and

    2. (b)

      it notifies the FCA in writing at the same time as it provides the information concerned under FEES 4A.2.5R, or, if earlier, at the time it pays the fees concerned.

  2. (2)

    for a TP person which has not complied with FEES 4A.2.5R for this period, the periodic fee is calculated using (where relevant) the valuation or valuations of business applicable to the previous period, multiplied by the factor of 1.10.

FEES 4A.2.4A G

2Schedule 6A to the Act sets out a procedure to enable the FCA to cancel or vary the Part 4A permission of a person who it appears to the FCA is not carrying on a regulated activity. Paragraph 5 of Schedule 6A to the Act sets out a procedure for annulment of cancellation or variation of Part 4A permission in specified circumstances. It is for the FCA to decide whether it is just and reasonable to annul the decision to cancel a person’s permission or vary the permission to reduce its scope. Where the FCA grants an application for annulment, paragraph 6 of Schedule 6A sets out its effect. In particular, the cancellation or variation of Part 4A permission is treated as if it had never taken place. As a result of annulment, the periodic fees for the period during which the person’sPart 4A permission was cancelled or varied apply to the person.

Information on which TP person’s periodic fees are calculated

FEES 4A.2.5 R

1A TP person, excluding TPR funds, must notify to the FCA (in its own capacity and, if applicable, in its capacity as collection agent for the PRA) the value (as at the valuation date specified in Part 5 of FEES 4 Annex 1AR and Part 4 of FEES 4 Annex 11R) of each element of business on which the periodic fee payable by the TP person is to be calculated.

FEES 4A.2.6 R

1A TP person must send to the FCA (in its own capacity and, if applicable, in its capacity as collection agent for the PRA) in writing the information required under FEES 4A.2.3R as soon as reasonably practicable, and in any event within two months, after the date specified as the valuation date in Part 5 of FEES 4 Annex 1AR and Part 4 of FEES 4 Annex 11R in relation to fees payable to the FCA.

FEES 4A.2.7 R

1For a TP person which has not complied with FEES 4A.2.6R for the period covered by FEES 4A Annex 1R:

  1. (1)

    the fee is calculated using (where relevant) the valuation or valuations of business applicable to the previous period, multiplied by the factor of 1.10; and

  2. (2)

    an additional fee of £250 is payable, unless the TP person also pays periodic fees under the PRA Rulebook in which case an additional fee of £125 is payable instead.

FEES 4A.2.8 R

1If a TP person, other than a TPR fund, is subject to Solvency II Directive in activity group A.3 or A.4 and the PRA or the FCA has either:

  1. (1)

    not received the necessary tariff data on a timely basis in line with Part 3 and 5 of FEES 4 Annex 1AR; or

  2. (2)

    deemed the tariff data received to be incomplete or insufficiently reliable, by reference to a specific TP person or across all or part of the activity group, the FCA may use tariff data from the previous reporting period for the periodic fees calculation.

FEES 4A.2.8A R

2Where the FCA grants a person’s application for annulment of a cancellation or variation of Part 4A permission under Schedule 6A to the Act and on the date the annulment takes effect the date for notification to the FCA referred to in FEES 4A.2.6R of the information on which a person’s periodic fee is calculated has passed, the date for compliance referred to in FEES 4A.2.6R does not apply, but the person must comply with FEES 4A.2.5R and FEES 4A.2.6R within 2 months after the date on which the annulment takes effect.

Periodic fees commencement

FEES 4A.2.9 R

1Periodic fees payable by TP persons under FEES 4A.2.1R relate to the whole of any fee year and are due for payment from the commencement of the fee year unless the modification in FEES 4A.2.9AR applies. Any payment made under FEES 4A.2.1R is not refundable.

FEES 4A.2.9A R

1Where a CRO firm becomes a supervised run-off firm, the periodic fee payable under FEES 4A.2.1R will be pro-rated over the remaining number of calendar months of the fee year that it is a supervised run-off firm.

Periodic fees for TPR funds

FEES 4A.2.10 R

1Periodic fees for TPR funds are set out in FEES 4A Annex 2R.

FEES 4 rules incorporated into FEES 4A by cross-reference

FEES 4A.2.11 G

1The FCA Handbook provisions relating to the periodic fees for TP persons including supervised run-off firms in FEES 4A are meant to follow closely the provisions relating to the general provisions under FEES 4. For brevity, not all of the provisions in FEES 4 are set out again in FEES 4A. In some cases, certain FEES 4 rules are applied to the payment of the periodic fees for TP persons by individual rules in FEES 4A. The rest are set out in the table in FEES 4A.2.13R.

FEES 4A.2.12 R

1The FEES 2 and FEES 4rules set out in the table in FEES 4A.2.13R and any other rules in FEES 4 included in FEES 4A by cross-reference apply to the periodic fees for TP persons in the same way as they apply to periodic fees payable under FEES 4.

FEES 4A.2.13 R

1Table of rules in FEES 4 that also apply to FEES 4A to the extent that in FEES 4 they apply to fees payable to the FCA

FEES 4 rules incorporated into FEES 4A

Description

Applicable to TP persons other than TPR funds

Applicable to TPR funds

FEES 4.2.4R

Method of payment

Yes

Yes

FEES 4.2.10R

Extension of time

Yes

Yes

FEES 4.3.7R

Groups of firms

Yes

Yes

FEES 4.3.17R

Firms acquiring business from other firms

Yes

Yes

FEES 4A Annex 1R TP persons periodic fees for the period from 1 April 20212 to 31 March 20222

R

1 Part 1

Activity group

Fee payable

A.1

Band Width (£ million of Modified Eligible Liabilities (MELs))

Fee (£/£m or part £m of MELs)

General Periodic fee

>10 - 140

14.57722

>140 - 630

14.57722

>630 – 1,580

14.57722

>1,580 – 13,400

18.2222

>13,400

24.0522

A.2

Band Width (no. of mortgages and/or home finance transactions)

Fee (£/mortgage)

>50

2.8162

A.3

Gross written premium for fees purposes (GWP)

Periodic fee

Band Width (£ million of GPI)

Fee (£/£m or part £m of GWP)

>0.5

365.89 plus, where neither the firm, nor a member of its group, was a defendant in Financial Conduct Authority v Arch Insurance (UK) Ltd and others [2020] EWCA Comm 2448, 110.632

PLUS

Best estimate liabilities for fees purposes (BEL)

General Periodic fee

Band Width (£ million of BEL)

Fee (£/£m of part £m of BEL)

>1

18.90 plus, where neither the firm, nor a member of its group, was a defendant in Financial Conduct Authority v Arch Insurance (UK) Ltd and others [2020] EWCA Comm 2448, 6.152

A.4

Gross written premium for fees purposes (GWP)

General Periodic fee

Band Width (£ million of GWP)

Fee (£/£m or part £m of GWP)

>1

224.272

PLUS

Best estimate liabilities for fees purposes

General Periodic fee

Band Width (£ million of BEL)

Fee (£/£m or part £m of BEL)

>1

12.892

A.7

For class 1(C), (2), (3) and (4) firms:

Band Width (£ million of Funds under Management (FuM))

Fee (£/£m of part £m of FuM)

>10

4.552

Class 1 (C) firms are defined in FEES 4 Annex 1A

A.9

Band Width (£ million of Gross Income (GI))

Fee (£/£m of part £m of GI)

>1

973.262

A.102

Band Width (no. of traders)

Fee (£/trader)

>1

6,697.262

A.13

For class (2) firms

Band Width (£ thousands of annual income (AI))

Fee (£/£ thousand or part £ thousand of AI)

>100

2.4432

For a professional firm in A.13 the fee is calculated as above less 10%.

A.14

Band Width (£ thousands of annual income (AI))

Fee (£/£ thousand or part £ thousand of AI)

> 100

1.5482

A.18

Band Width (£ thousands of annual income (AI))

Fee (£/£ thousand or part £ thousand of AI)

> 100

[tbc]

A.19

Band Width (£ thousands of Annual Income (AI))

Fee (£/£ thousand or part £ thousand of AI)

>100

1.6622

2

2

CC.2

Band Width (£ thousands of annual income (AI))

Fee (£)

0 - 50

7502

>50 - 100

1,0002

>100

1,1512

PLUS:

Fee (£/£ thousand or part £ thousand of AI)

>250

1.402

Part 2

The table below shows the tariff rates (minimum fees) applicable to each of the fee blocks set out in Part 1 of FEES 4A Annex 1R other than fee-block CC2.

Activity group

Fee payable

A.0

£1,1512 unless it is a TP firm that also pays minimum fees set out in the PRA Rulebook, in which case it is £5742.

Part 3

TA PI firm or TA RAISP firm

Activity group

Fee payable

G.2

Minimum fee (£)

5252

£ million or part £ million of Modified Eligible Liabilities (MELs)

Fee (£/£m or part £m of MELs)

>0.1

0.4992

2

2

G.3

Minimum fee (£)

5252

£ thousands or part £ thousand of Relevant Income

Fee (£/£thousand or part £ thousand of Relevant Income)

>100

0.3352

Part 4

TA EMI firm

Activity group

Fee payable

G.10

Minimum fee (£)

1,726

£ million or part £ million of average outstanding electronic money (AOEM)

Fee (£/£m or part £m of AOEM)

>5.0

35.002

FEES 4A Annex 2 TPR funds periodic fees for the period from 1 April 20212 to 31 March 20222

R

1 Part 1

Scheme type

Basic fee (£)

Total funds/sub-funds aggregate

Fee (£)

EEA UCITS scheme recognised under Part 6 of The Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2018

350.002

1-2

350.002

3-6

875.002

7-15

1,750.002

16-50

3,850.002

>50

7,700.00

Note:

Schemes are charged according to the number of funds or sub-funds which a TP firm is operating and marketing in the UK as at 31 March immediately before the start of the period to which the fee applies. For example, for

2019/20 fees a reference to 31 March means 31 March 2019.

Part 2

Scheme type

Fee (£)

EEA AIF, EuVECA, EuSEF, or EEA ELTIF which may be marketed in the UK under Part 9A of The Alternative Investment Fund Managers (Amendment) (EU Exit) Regulations 2018

3442

FEES 4A Annex 3 Special Project Fee for restructuring

R

R

(1)

The Special Project Fee for restructuring (the SPFR) is only payable by a TP firm or TA PI firm in one of the following categories:

(a)

if it is in any of the A fee-blocks (as defined in Part 1 of FEES 4 Annex 1AR); or

(b)

if it is in fee-block G.3 (as defined in FEES 4 Annex 11R).

R

(2)

The SPFR becomes payable by a TP firm or TA PI firm falling into (1)(a) or (b) if it engages in, or prepares to engage in, activity which involves it undertaking or making arrangements with a view to any of the following:

(a)

raising additional capital; or

(b)

a significant restructuring of the TP firm or TA PI firm or the group to which it belongs, including:

(i) mergers or acquisitions;

(ii) reorganising the TP firm’s or TA PI firm’s group structure;

(iv) a significant change to the TP firm’s or TA PI firm’s business model; and

(v) a significant internal change programme.

R

(3)

No SPFR is payable under (2) if the transaction only involves the TP firm or TA PI firm seeking to raise capital within the group to which it belongs.

R

(4)

Where the transaction in (2) involves raising capital outside the TP firm or TA PI firm to which the TP firm or TA PI firm belongs, any SPFR in relation to that transaction is only payable by the largest TP firm or TA PI firm in that group. The largest firm is the one that pays the highest periodic fee in the fee year in which the bill is raised. For the purpose of the calculation in (9), all time spent and fees and disbursements incurred in relation to the group are added together.

R

(5)

The definition of group is limited for the purposes of calculating the SPFR to parent undertakings and their subsidiary undertakings.

R

(6)

The FCA will levy its own SPFR separate to any levy issued by the PRA, and this may be in relation to the same event or circumstance.

R

(7)

No SPFR is payable to the FCA:

(a)

if the amount calculated in accordance with (8) in relation to the regulatory work conducted by the FCA totals less than £25,000 in the case of a TP firm in fee-blocks A.1 or A.3 or A.4, or £50,000 in the case of a TP firm in any of the other A fee-blocks; or

(b)

for time spent giving guidance to the TP firm or TA PI firm in relation to the same matter if the FCA has charged that TP firm or TA PI firm for that guidance.

R

(8)

The SPFR for the FCA is calculated as follows:

(a)

Determine the number of hours, or part of an hour, taken by the FCA in relation to regulatory work conducted as a consequence of the activities referred to in (2).

(b)

Next, multiply the applicable rate in the table at (11) by the number of hours or part hours obtained under (a).

(c)

Then add any fees and disbursements invoiced to the FCA by any person in respect of services performed by that person for the FCA in relation to assisting the FCA in performing the regulatory work referred to in (a).

(d)

The resulting figure is the fee.

(e)

The number of hours or part hours referred to in (a) are the number of hours or part hours as recorded on the FCA’s systems in relation to the regulatory work referred to in (a).

R

(9)

The first column in the table at (10) sets out the relevant pay grades of those employed by the FCA and the second column sets out the hourly rates chargeable in respect of those pay grades.

R

(10)

Table of FCA hourly rates:

FCA pay grade

Hourly rate (£)

Administrator

45

Associate

75

Technical Specialist

130

Manager

145

Any other person employed by the FCA

255

G

(11)

The obligation to pay the SPFR is ongoing. Accordingly, there is no limitation on the number of times that the FCA may invoice a TP firm or TA PI firm for the SPFR in relation to the same events or circumstances referred to in (2). If the FCA does so, there is a single floor under (7)(a) and not a separate one for each instalment.

G

(12)

If the SPFR is payable, the full amount calculated under (8) is payable, and not just the excess over £50,000 or £25,000.

FEES 4A Annex 4 Special Project Fee for contractual run-off firms

R

(1)

The Special Project Fee for contractual run-off firms (the SPFCRO) is only payable by a CRO firm.

R

(2)

The SPFCRO is payable to recover the cost of the activities the FCA undertakes to carry out its functions under regulation 47 of the EU Exit Passport Regulations.

R

(3)

The FCA will levy its own SPFCRO separate to any levy issued by the PRA, and this may be in relation to the same event or circumstance.

R

(4)

No SPFCRO is payable to the FCA if the amount calculated in accordance with (5) in relation to the activities carried out by the FCA totals less than £5,000.

R

(5)

The SPFCRO for the FCA is calculated as follows:

(a)

Determine the number of hours, or part of an hour, taken by the FCA in relation to the activities undertaken as a consequence of carrying out its functions referred to in (2).

(b)

Next, multiply the applicable rate in the table at (7) by the number of hours or part hours obtained under (a).

(c)

Then add any fees and disbursements invoiced to the FCA by any person in respect of services performed by that person for the FCA in relation to assisting the FCA in performing the activities referred to in (a).

(d)

The resulting figure is the fee.

(e)

The number of hours or part hours referred to in (a) are the number of hours or part hours as recorded on the FCA’s systems in relation to the activities referred to in (a).

R

(6)

The first column in the table at (7) sets out the relevant pay grades of those employed by the FCA and the second column sets out the hourly rates chargeable in respect of those pay grades.

R

(7)

Table of FCA hourly rates:

FCA pay grade

Hourly rate (£)

Administrator

45

Associate

75

Technical Specialist

130

Manager

145

Any other person employed by the FCA

255

G

(8)

The obligation to pay the SPFCRO is ongoing. Accordingly, there is no limitation on the number of times that the FCA may invoice a CRO firm for the SPFCRO in relation to the same activities or circumstances referred to in (2). If the FCA does so, there is a single floor under (4) and not a separate one for each instalment.

G

(9)

If the SPFCRO is payable, the full amount calculated under (5) is payable, and not just the excess over £5,000.