FEES 6.2 Exemption
- (1)
3Except as set out in (3), a participant firm which does not conduct business in respect of which the FSCS may pay compensation4 and has no reasonable likelihood of doing so is exempt from a specific costs levy, or a compensation costs levy, or both, provided that:
- (a)
it has notified the FSCS in writing that those conditions apply; and
- (b)
the conditions in fact continue to apply.
- (a)
- (2)
The exemption takes effect from the date on which the notice was received by the FSCS, subject to FEES 6.2.6 R.
- (3)
The exemption in (1) does not apply in respect of a specific costs levy or compensation costs levy arising from the firm's membership of any of the following:5
- (a)
category 1.2 (General insurance provision) of class 1 (the General Insurance Distribution Claims class); or5
- (b)
categories 2.2 (Life insurance provision), 2.3 (Investment provision) or 2.4 (Structured deposits provision) of class 2 (Investment Intermediation Claims class); or5
- (c)
category 4.2 (Home finance provision) of class 4 (the Home Finance Intermediation Claims class); or5
- (d)
category 5.2 (Consumer credit provision) of class 5 (the Debt Management Claims class); or5
- (e)
- (a)
FEES 6.2.1AR4 does not apply to a participant firm that may be subject to a claim under COMP 3.2.4 R.
A participant firm to which COMP 3.2.4R4 applies must report annual eligible income in accordance with FEES 6.5.13 R. Such a participant firm may take advantage of the option to report its annual income attributable to business in respect of which the FSCS may pay compensation4.
A participant firm which is exempt under FEES 6.2.1AR4 must notify the FSCS in writing as soon as reasonably practicable if the conditions in FEES 6.2.1AR4 no longer apply.
A participant firm to which the conditions in FEES 6.2.1AR4 no longer apply will then become subject to FEES 6.3.
The financial year of the compensation scheme is the twelve months ending on 31 March. The effect of FEES 6.2.6 R and FEES 6.2.1AR4 is that if a firm fails to notify FSCS of an exemption under FEES 6.2.1AR4 by 31 March it will be treated as non-exempt for the whole of the next financial year4.
21For the purposes of FEES 6.2.1AR4 a participant firm will only be exempt from a specific costs levy or compensation costs levy for any given financial year4 if it met the conditions in FEES 6.2.1AR4 on 31 March of the immediately preceding financial year4.