FEES 6.4 Management expenses

A participant firm must pay to the FSCS a share of each management expenses levy.

The total of all management expenses levies attributable to a particular period of the compensation scheme may not exceed the limit applicable to that period set out in FEES 6 Annex 1 R.

A participant firm's share of a management expenses levy consists of one or more of: (1) a share of a base costs levy and (2) a share of a specific costs levy.

The FSCS must ensure that each participant firm's share of a management expenses levy separately identifies the firm's share of the base costs levy and1 specific costs levy .

Unless FEES 6.3.22 R applies, the FSCS must calculate a participant firm's share of a base costs levy by:

1. (1)

   identifying the base costs which the FSCS has incurred, or expects to incur, in the relevant financial year of the compensation scheme, but has not yet levied;

2. (2)

   calculating the amount of the participant firm's regulatory costs as a proportion of the total regulatory costs relating to all participant firms for the relevant financial year; and

3. (3)

   applying the proportion calculated in (2) to the figurein (1).

1The FSCS must allocate any specific costs levy amongst the relevant sub-classes in proportion to the amount of relevant costs arising from, or expected to arise from, claims in respect ofthe different activities represented by those sub-classes.1

The FSCS must calculate a participant firm's share of a specific costs levy (subject to FEES 6.3.22 R (Adjustments to calculation of levy shares) by:1

1. (1)

   identifying each of the relevant sub-classes 1to which the participant firm belongs, using the statement of business most recently supplied under FEES 6.5.13 R;

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2. (2)

   identifying the management expenses other than base costs which the FSCS has incurred, or expects to incur, in the relevant financial year of the compensation scheme, allocated to the sub-classes1 identified in (1), but not yet levied;

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3. (3)

   calculating, in relation to each relevant sub-class1FF, the participant firm's tariff base as a proportion of the total tariff base of all participant firms in the sub-class1, using the statement of business most recently supplied under FEES 6.5.13 R;

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4. (4)

   applying the proportion calculated in (3) to the figure in (2); and

5. (5)

   if more than one class1 or sub-class1 is relevant, adding together the figure in (4) for each sub-class.1

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A firm which becomes a participant firm part way through a financial year of the compensation scheme will not be liable to pay a share of a specific costs levy made in that year.