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FEES 7.1 Application and Purpose

Application

FEES 7.1.1 R

1This chapter applies to every person listed in FEES 1.1.2R (5).

Purpose

FEES 7.1.2 G RP

The purpose of this chapter is to set out the requirements on the persons listed in FEES 7.1.1 R to pay annual CFEB levies in order to establish and fund the CFEB.

FEES 7.1.3 G RP

Section 6A(1) of the Act (Enhancing public understanding of financial matters etc) requires the FSA to establish the CFEB in order to enhance:

  1. (1)

    the understanding and knowledge of members of the public of financial matters (including the UK financial system); and

  2. (2)

    the ability of members of the public to manage their own financial affairs.

FEES 7.1.4 G RP

Paragraph 12(1) of Part 2 of Schedule 1A to the Act enables the FSA to make rules requiring certain2authorised persons or payment service providers or electronic money issuers2 to pay to the FSA specified amounts or amounts calculated in a specified way in order to meet a proportion of:

2 2
  1. (1)

    the expenses incurred by the FSA in establishing the CFEB, whenever these were incurred; and

  2. (2)

    the expenses incurred, or expected to be incurred, by the CFEB in connection with the discharge of the functions described in FEES 7.1.3 G.

FEES 7.1.5 G

FEES 7 sets out the rules referred to in FEES 7.1.4 G.

FEES 7.1.6 G RP

The FSA must have regard to other anticipated sources of funding of the costs described in FEES 7.1.4 G when setting the CFEB levy.

FEES 7.1.7 G RP

The amounts to be paid under the CFEB levy may include a component to cover the FSA's expenses in collecting the payments.

FEES 7.1.8 G RP

The FSA must pay to the CFEB the amounts that it receives under the CFEB levy apart from amounts in respect of its collection costs (which it may keep).

FEES 7.1.9 G RP

Paragraph 7(1) of Part 1 of Schedule 1A to the Act requires the CFEB to adopt an annual budget which has been approved by the FSA.

FEES 7.1.10 G RP

This chapter sets out the method by which the CFEB levy will be calculated. Details of the actual levy payable will vary from year to year, depending on the CFEB's annual budget. These details are set out in FEES 7 Annex 1. New details will be prepared and consulted on for each financial year.

Exemption

FEES 7.1.11 G RP

2A firm is not liable to pay a CFEB levy in relation to payment services or electronic money issuance if it is the Bank of England, a government department, a local authority, a municipal bank or the National Savings Bank.

FEES 7.2 The CFEB levy

Obligation to pay CFEB levy

FEES 7.2.1 R RP

A firm must pay each CFEB levy applicable to it:

  1. (1)

    in full and without deduction (unless permitted or required by a provision in FEES); and

  2. (2)

    in accordance with the provisions of FEES 4.3.6 R as modified by FEES 7.2.1A R.1

FEES 7.2.1A R RP
  1. (1)

    1For the purposes of FEES 7.2.1R (2), FEES 4.3.6R (1), as applied by FEES 7.2.8 R, is modified so that if a firm's periodic fees for the previous financial year was at least 50,000, the firm must pay:1

    1. (a)

      an amount equal to 50% of the CFEB levy payable for the previous year, by 30 April in the financial year to which the sum due under FEES 7.2.1 R relates; and

    2. (b)

      the balance of the CFEB levy due for the current financial year by 1 September in the financial year to which that sum relates.

  2. (2)

    For the purposes of FEES 7.2.1R (2), FEES 4.3.6R (2), as applied by FEES 7.2.8 R, is modified so that if the firm's periodic fee for the previous financial year was less than 50,000, the firm must pay its CFEB levy in full by 1 July in the financial year to which that sum relates.

Calculation of CFEB levy

FEES 7.2.2 R RP

The CFEB levy is calculated as follows:

  1. (1)

    identify each of the activity groups set out in Part 1 of FEES 7 Annex 1 that apply to the business of the firm for the relevant period (for this purpose, the activity groups are defined in accordance with Part 1 of FEES 4 Annex 1);

  2. (2)

    for each of those activity groups, calculate the amount payable in the way set out in FEES 7.2.3 R;

  3. (3)

    add the amounts calculated under (2);

  4. (4)

    work out whether a minimum fee is payable under Part 2 of FEES 7 Annex 1 and if so how much;

  5. (5)

    add together the amounts calculated under (3) and (4);

  6. (6)

    modify the result as indicated by the table in FEES 4.2.6 R and FEES 4.2.7 R (if applicable);

  7. (7)

    apply any applicable payment charge specified in FEES 4.2.4 R to the amount in (6), provided that:

    1. (a)

      for payment by direct debit, successful collection of the amount due is made at the first attempt by the FSA; or

    2. (b)

      for payment by credit transfer, the amount due is received by the FSA on or before the due date;

  8. (8)

    make the calculations using information obtained in accordance with FEES 4.4.

FEES 7.2.3 R RP

The amount payable by a firm with respect to a particular activity group is calculated as follows:

  1. (1)

    calculate the size of the firm's tariff base for that activity group using the tariff base calculations in Part 2 of FEES 4 Annex 1 and Part 3 of FEES 4 Annex 111 and the valuation date requirements in Part 3 of FEES 4 Annex 1 and Part 3 of FEES 4 Annex 11;1

  2. (2)

    use the figure in (1) to calculate which of the bands set out in column 2 of the table in Part 1 of FEES 7 Annex 1 the firm falls into;

  3. (3)

    add together the fixed sums, as set out in column 3 of the table in Part 1 of FEES 7 Annex 1, applicable to each band identified under (2);

  4. (4)

    the amount in (3) is the amount payable by the firm with respect to that activity group.

FEES 7.2.4 R RP

For the purposes of FEES 7.2.3 R:

  1. (1)

    a firm 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 firm'sUK business separately from its non-UK business in the way described in Part 2 of FEES 4 Annex 1 and Part 1 of FEES 4 Annex 111 are disproportionate to the difference in fees payable; and

    2. (b)

      it notifies the FSA in writing at the same time as it provides the information concerned under FEES 4.4 (Information on which fees are calculated), or, if earlier, at the time it pays the fees concerned;

  2. (2)

    for a firm which has not complied with FEES 4.4.2 R (Information on which fees are calculated) orFEES 4.4.8 D (Information relating to payment services and the issuance of electronic money)1 for this period, the CFEB levy is calculated using (where relevant) the valuation or valuations of business applicable to the previous period, multiplied by the factor of 1.10.

FEES 7.2.5 R

The modifications in Part 3 of FEES 4 Annex 2 and Part 7 of FEES 4 Annex 11 apply.1

Amount payable by the Society of Lloyds

FEES 7.2.6 R RP

The CFEB levy in relation to the Society is specified against its activity group in Part 1 of FEES 7 Annex 1.

FEES 4 rules incorporated into FEES 7 by cross-reference

FEES 7.2.7 G RP

The Handbook provisions relating to the CFEB levy are meant to follow closely the provisions relating to the payment of periodic fees under FEES 4.3.1 R In the interests of brevity, not all of these provisions are set out again in FEES 7. In some cases, certain FEES 4 rules are applied to the payment of the CFEB levy by individual rules in FEES 7. The rest are set out in the table in FEES 7.2.9 R.

FEES 7.2.8 R RP

The rules set out in the table in FEES 7.2.9 R and any other rules in FEES 4 included in FEES 7 by cross-reference apply to the CFEB levy in the same way as they apply to periodic fees payable under FEES 4.3.1 R.

FEES 7.2.9 R RP

Table of rules in FEES 4that also apply to FEES 7

FEES 4 rules incorporated into FEES 7

Description

FEES 4.2.4 R

Method of payment

FEES 4.2.7B R

Calculation of periodic fee and tariff base for a firm's second financial year

FEES 4.2.8 R

How FEES 4.2.7 R applies in relation to an incoming EEA firm or an incoming Treaty firm

FEES 4.2.10 R

Extension of time

FEES 4.2.11 R (first entry only)

Due date and changes in permission for periodic fees

FEES 4.3.7 R

Groups of firms

FEES 4.3.13 R

Firms applying to cancel or vary permission before start of period

FEES 4.3.15 R

Firms acquiring businesses from other firms

FEES 4.4.1 R to FEES 4.4.6 R

Information on which fees are calculated
FEES 7.2.9A D RP

1 FEES 4.4.7 D to FEES 4.4.9 D (Information relating to payment services and the issuance of electronic money) also apply to FEES 7.

FEES 7.2.10 G RP

References in a FEES 4rule incorporated into FEES 7 by cross-reference to a periodic fee should be read as being to the CFEB levy. References in a FEES 4rule incorporated into FEES 7 to market operators, service companies, MTF operators, investment exchanges, clearing houses, designated professional bodies or Solvency 2 Implementation fees, Solvency 2 Implementation Flat fees, Solvency 2 Special Project fees and Solvency 2 Special Project Flat fees should be disregarded.

1
FEES 7.2.11 G RP

In some cases, a FEES 4rule incorporated into FEES 7 in the manner set out in FEES 7.2.7 G will refer to another rule in FEES 4 that has not been individually incorporated into FEES 7. Such a reference should be read as being to the corresponding provision in FEES 7. The main examples are set out in FEES 7.2.12 G.

FEES 7.2.12 G RP

Table of FEES 4 rules that correspond to FEES 7 rules

FEES 4 rules

Corresponding FEES 7 rules

FEES 4.2.1 R

FEES 7.2.1 R

FEES 4.3.1 R

FEES 7.2.2 R

FEES 4.3.3 R

FEES 7.2.2 R 1

1 FEES 4.3.3A R

FEES 7.2.2 R

FEES 4.3.12 R

FEES 7.2.5 R 1

1 FEES 4.3.12A R

FEES 7.2.5 R

Part 1 of FEES 4 Annex 2

Part 1 of FEES 7 Annex 11

1Part 2 of FEES 4 Annex 11

Part 1 of FEES 7 Annex 1

1Part 5 of FEES 4 Annex 11

Part 1 of FEES 7 Annex 1

FEES 7 Annex 1 CFEB levies for the period from 1 April 2011 to 31 March 2012

Part 1
R

This table shows the CFEB levies applicable to each activity group (fee-block)

Activity Group

CFEB levy payable

A.1

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

Fixed sum (/m or part m of MELs)

> 10 - 140

5.011

1

> 140 - 630

5.011

1

>630 -1,580

5.011

1

>1,580 - 13,400

5.011

1

>13,400

5.011

1

Note 1

For a firm in A.1 which has a limitation on its permission to the effect that it may accept deposits from wholesale depositors only, this levy is calculated as above less 30%.

A.2

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

Fixed sum (/mortgage)

>50 - 130

0.1421

1

>130 - 320

0.1421

1

>320 - 4,570

0.1421

1

>4, 570 - 37,500

0.1421

1

> 37,500

0.1421

1

A.3

Gross premium income (GPI)

Band Width ( million of GPI)

Fixed sum (/m or part m of GPI)

>0.5 - 10.5

55.741

1

>10.5 -30

55.741

1

>30 - 245

55.741

1

>245 - 1, 900

55.741

1

>1,900

55.741

1

PLUS

Gross technical liabilities (GTL)

Band Width ( million of GTL)

Fixed sum (/m or part m of GTL)

>1 - 12.5

3.011

1

>12.5 - 70

3.011

1

>70 - 384

3.011

1

>384 - 3,750

3.011

1

>3,750

3.011

1

A.4

Adjusted annual gross premium income (AGPI)

Band Width ( million of AGPI)

Fixed sum (/m or part m of AGPI)

>1 - 5

72.651

1

>5 - 40

72.651

1

>40 - 260

72.651

1

>260 - 4,000

72.651

1

>4,000

72.651

1

PLUS

Mathematical reserves (MR)

Band Width ( million of MR)

Fixed sum (/m or part m of MR)

>1 - 20

1.571

1

>20 - 270

1.571

1

>270 - 7,000

1.571

1

>7,000 - 45,000

1.571

1

>45,000

1.571

1

A.5

Band Width ( million of Active Capacity (AC))

Fixed sum (/m or part m of AC)

>50 - 150

5.631

1

>150 - 250

5.631

1

>250 - 500

5.631

1

>500 - 1,000

5.631

1

>1,000

5.631

1

A.6

Flat levy

159,941.901

1

A.7

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

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

Fixed sum (/m or part m of FuM)

>10 - 150

0.791

1

>150 - 2,800

0.791

1

>2,800 - 17,500

0.791

1

>17,500 - 100,000

0.791

1

>100,000

0.791

1

For class 1(B) firms: the fee calculated as for class 1(C) firms above, less 15%.

For class 1(A) firms: the fee calculated as for class 1(C) firms above, less 50%.

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

A.9

Band Width ( million of Gross Income (GI))

Fixed sum (/m or part m of GI)

>1 - 4.5

83.731

1

>4.5 - 17

83.731

1

>17 - 145

83.731

1

>145 - 50

83.731

1

>750

83.731

1

A.10

Band Width (no. of traders)

Fixed sum (/trader)

2 - 3

318.751

1

4 - 5

318.751

1

6 - 30

318.751

1

31 - 180

318.751

1

>180

318.751

1

A.12

Band Width (no. of persons)

Fixed sum (/person)

2 - 5

43.131

1

6 - 35

43.131

1

36 - 175

43.131

1

176 - 1,600

43.131

1

>1,600

43.131

1

For a professional firm in A.12 the fee is calculated as above less 10%.

A.13

For class (2) firms

Band Width (no. of persons)

Fixed sum (/person)

2 - 3

160.791

1

4 - 30

160.791

1

31 - 300

160.791

1

301 - 2,000

160.791

1

>2,000

160.791

1

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

A.14

Band Width (no. of persons)

Fixed sum (/person)

2 - 4

126.341

1

5 - 25

126.341

1

26 - 80

126.341

1

81 - 199

126.341

1

>199

126.341

1

A.18

Band Width ( thousands of Annual Income (AI))

Fixed sum (/ thousand or part thousand of AI)

>100 - 180

1.361

1

>180 - 1,000

1.361

1

>1,000 - 12,500

1.361

1

>12,500 - 50,000

1.361

1

>50,000

1.361

1

A.19

Band Width ( thousands of Annual Income (AI))

Fixed sum (/ thousand or part thousand of AI)

>100 - 325

0.2561

1

325 - 10,000

0.2561

1

10,000 - 50,750

0.2561

1

50,750 - 250,000

0.2561

1

>250,000

0.2561

1

1G.3

thousands or part thousand of Relevant Income

Fee (/thousand or part thousand of Relevant Income)

>100

0.04787

>250

0.04787

>1,000

0.04787

>10,000

0.04787

>50,000

0.04787

>500,000

0.04787

1G.4

A flat fee of 10

1G.10

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

Fee (/m or part m of AOEM)

> 5.0

12.00

1G.11

A flat fee of 10

1Notes

1(1) The definitions of fee-blocks G5 and G10 under Part 2 and Part 2A of FEES 4 Annex 11 are modified, for the purposes of FEES 7, so that they exclude the Bank of England, government departments, local authorities, municipal banks and the National Savings Bank.

1(2) The definitions of those fee-blocks are further amended to exclude EEA firms and those firms which hold a Part IV permission.

Part 2

(1)

This Part sets out the minimum CFEB levy applicable to the firms specified in (3) below.

(2)

The minimum CFEB levy payable by any firm referred to in (3) is £10.

(3)

A firm is referred to in this paragraph if it falls within the following activity groups: A.1; A.2; A.3 (excluding UK ISPVs); A.4; A.5; A.7; A.9; A.10; A.12; A.13; A.14; A.18; A.19; G.3 and G.10.1

1