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FEES 10.1 1Application, purpose and background

Application

FEES 10.1.1 R

This chapter applies to a firm that:

  1. (1)
    1. (a)

      has a Part 4A Permission; or

    2. (b)

      is an incoming EEA firm with a branch in the United Kingdom; or

    3. (c)

      is an incoming Treaty firm with a branch in the United Kingdom; and

  2. (2)

    is in one of the following activity groups listed in Part 1 of FEES 4 Annex 1A:

    1. (a)

      A.1 Deposit acceptors;

    2. (b)

      A.4 Insurers — life;

    3. (c)

      A.7 Portfolio managers excluding Class (1)A firms;

    4. (d)

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

    5. (e)

      A.13 Advisors, arrangers, dealers or brokers.

Where rules from other FEES chapters are incorporated into this chapter, those rules are the rules in effect on 1 April 2015.

Purpose

FEES 10.1.2 G

This chapter sets out rules governing the amounts payable by firms to the FCA to fund the Secretary of State for Work and Pensions’2 pensions guidance costs and the related FCA collection costs.

Background

FEES 10.1.3 G

The Secretary of State’s2 pensions guidance costs are defined in subsection 10 of section 333R (Funding of the Secretary of State’s2 pensions guidance costs) of the Act as the expenses incurred, or expected to be incurred, by the Secretary of State2:

  1. (1)

    in giving pensions guidance or arranging for it to be given by designated guidance providers;

  2. (2)

    in meeting the expenses of designated guidance providers incurred in connection with the giving of the guidance (whether by means of the power conferred by section 333D (Financial assistance to bodies involved in giving pensions guidance) of the Act or otherwise);

  3. (3)

    in providing services to designated guidance providers to support them in giving the guidance;

  4. (4)

    in increasing awareness of the availability of the guidance;

  5. (5)

    in undertaking or commissioning research relating to the availability of the guidance; and

  6. (6)

    otherwise in connection with the carrying out of the Secretary of State’s2 functions under section 333B (the Secretary of State’s2 role in relation to pensions guidance).

FEES 10.1.4 G
  1. (1)

    Section 333R(1) of the Act requires the Secretary of State2 to notify the FCA of the amount of the Secretary of State’s2 pensions guidance costs.

  2. (2)

    Section 333R(2) requires the FCA to make rules requiring authorised persons to pay amounts, or amounts calculated in a specified way, to the FCA with a view to recovering the amounts notified by the Secretary of State2.

  3. (3)

    Under subsection 3 such amounts may include a component to cover the expenses of the FCA in collecting the payments.

FEES 10.1.5 G

This chapter contains the rules referred to in FEES 10.1.4 G.

FEES 10.1.6 G

Under section 333R(8) of the Act, the FCA must pay to the Secretary of State2 the amounts that it receives under these rules, apart from amounts covering its collection costs (which it may keep).

FEES 10.1.7 G

The total amount raised by the pensions guidance levy may vary from year to year depending on the amount notified to the FCA by the Secretary of State2.

FEES 10.1.8 G

These rules were made with the consent of the Secretary of State2 pursuant to section 333R(5) of the Act.

FEES 10.2 1Pensions guidance levy

Obligation to pay pensions guidance levy

FEES 10.2.1 R

A firm must pay the pensions guidance levy applicable to it:

  1. (1)

    in full and without deduction; and

  2. (2)

    in accordance with this chapter.

Time of payment

FEES 10.2.2 R
  1. (1)

    A firm must pay the pensions guidance levy applicable to it within 30 days of the date of the invoice to which that sum relates, unless any of (2) to (5) apply.

  2. (2)

    If the firm has applied to cancel its Part 4A permission under SUP 6.4.5D (Cancellation of permission), the firm must pay the pensions guidance levy applicable to it on the date of its application.

  3. (3)

    If the FCA has exercised its own-initiative powers to cancel a firm'sPart 4A permission, the firm must pay the pensions guidance levy applicable to it immediately before cancellation takes effect.

  4. (4)

    If the firm receives or extends its permission during the fee year, the firm must pay the pensions guidance levy applicable to it within 30 days of that date.

  5. (5)

    If:

    1. (a)

      the due date falls during an emergency period as set out in GEN 1.3.2R (Emergencies); and

    2. (b)

      the firm has reasonable grounds to believe that those circumstances impair its ability to pay the pensions guidance levy applicable to it;

    the firm must pay the pensions guidance levy applicable to it on or before the fifth business day after the end of that emergency period.

Calculation of pensions guidance levy

FEES 10.2.3 R

The pensions guidance levy applicable to a particular firm is calculated as follows:

  1. (1)

    identify each of the activity groups in FEES 10.1.1R (2) that apply to the business of the firm for the relevant period;

  2. (2)

    calculate the amount payable under FEES 10.2.4 R for each of those activity groups;

  3. (3)

    modify the result in accordance with FEES 10.2.5 R if applicable; and

  4. (4)

    apply any payment charge in FEES 4.2.4 R.

FEES 10.2.4 R

The amount payable for a particular activity group is calculated as follows:

  1. (1)
    1. (a)

      calculate the size of the firm's tariff base for the activity group using:

      1. (i)

        the tariff base calculations in Part 3 of FEES 4 Annex 1A; and

      2. (ii)

        the valuation date requirements in Part 5 of FEES 4 Annex 1A;

    2. (b)

      exclude mathematical reserves in the calculation for fee block A4;

  2. (2)

    use the figure in (1) to calculate the levy applicable for each band in FEES 10 Annex 1;

  3. (3)

    add together the sums for each applicable band under (2); and

  4. (4)

    the amount in (3) is the amount payable by the firm for that activity group.

FEES 10.2.5 R

For the first fee year during which FEES 10 applies to a firm'spermission to carry on a regulated activity, the pensions guidance levy applicable to that permission must be modified using the formula in FEES 4.2.6 R.

FEES 10.2.6 R

For FEES 10.2.4 R, a firm may apply the relevant tariff bases and rates to its non-UK business, as well as to its UK business, if:

  1. (1)

    it has reasonable grounds for believing that the cost of identifying the firm'sUK business separately from its non-UK business is disproportionate to the difference in the pensions guidance levy payable by it; and

  2. (2)

    it notifies the FCA in writing:

    1. (a)

      at the same time as it provides the information concerned under FEES 4.4 (Information on which fees are calculated); or

    2. (b)

      if earlier, at the time it pays the pensions guidance levy applicable to it.

FEES 10.2.7 R

The pensions guidance levy is calculated using the same information that is used to calculate a firm's periodic fee under FEES 4.

FEES 10.2.8 R

Where a firm which has not complied with FEES 4.4.2 R (Information on which fees are calculated) in relation to a particular fee year the pensions guidance levy for that firm for that fee year is calculated using (where relevant) the valuation(s) of business used to calculate the pensions guidance levy for that firm for the previous fee year, multiplied by the factor of 1.10.

Value-added tax (VAT)

FEES 10.2.9 R
  1. (1)

    All levies payable under FEES 10 are stated net of VAT.

  2. (2)

    Where VAT is applicable, this must also be included.

FEES 10.3 1Late payments and recovery of unpaid levies

Late payments

FEES 10.3.1 R

If a firm does not pay the total amount of the pensions guidance levy before the end of the date on which it is due, it must pay:

  1. (1)

    an administrative fee of £250; plus

  2. (2)

    interest on any unpaid part of the levy at an annual rate of 5% above the Official Bank Rate from time to time in force, accruing daily from the date on which the amount concerned became due.

FEES 10.3.2 G
  1. (1)

    The FCA expects to issue invoices at least 30 days before the date on which the relevant amounts fall due.

  2. (2)

    Accordingly, a firm will usually have at least 30 days from the issue of the invoice before an administrative fee becomes payable.

Recovery of levies

FEES 10.3.3 G
  1. (1)

    The FCA may recover the pensions guidance levy as a debt owed to the FCA under paragraph 23(8) of Schedule 1ZA of the Act.

  2. (2)

    The FCA will consider taking action for recovery (including interest) through the civil courts.

FEES 10.3.4 G
  1. (1)

    In addition, the FCA may be entitled to take regulatory action for the non-payment of the pensions guidance levy.

  2. (2)

    What action (if any) is taken by the FCA will be decided by the particular circumstances of the case.

FEES 10.4 1Relieving provisions

Reductions, remission or repayment of levy

FEES 10.4.1 G

The FCA may reduce or remit all or part of the pensions guidance levy applicable to a firm if it appears to the FCA that, in the exceptional circumstances of a particular case, paying all or part of it would be inequitable.

FEES 10.4.2 G

The FCA may refund all or part of the pensions guidance levy applicable to a firm if it appears to the FCA that, in the exceptional circumstances of a particular case, retaining all or part of the pensions guidance levy applicable to that firm would be inequitable.

FEES 10.4.3 G
  1. (1)

    A poor estimate or forecast by a levy payer, when providing information relevant to an applicable tariff base, is unlikely to be an exceptional circumstance under FEES 10.4.1 G or FEES 10.4.2 G.

  2. (2)

    By contrast, a mistake of fact or law by a levy payer may give rise to such a claim.

FEES 10.4.4 G

The FCA is entitled not to consider a claim under FEES 10.4.1 G or FEES 10.4.2 G to refund any overpaid amounts due to a mistake of fact or law by the fee paying firm if the claim is made more than two years after the beginning of the period to which the pensions guidance levy subject to the claim relates.

FEES 10.5 1Application of FEES 4 to the pensions guidance levy

FEES 10.5.1 G
  1. (1)

    The Handbook provisions relating to the pensions guidance levy are meant to follow closely the provisions relating to the payment of periodic fees payable by an authorised person under FEES 4.

  2. (2)

    As such, the table in FEES 10.5.4 R lists rules in FEES 4 that also apply, in a modified form, to the pensions guidance levy.

FEES 10.5.2 R

The rules in the table in FEES 10.5.4 R and any other rules in FEES included in FEES 10 by cross-reference apply to the pensions guidance levy in the same way as they apply to periodic fees payable under FEES 4.

FEES 10.5.3 R

A reference to a periodic fee in a FEES 4rule incorporated into FEES 10 must be read, for the purposes of applying that rule to the pensions guidance levy, as a reference to the pensions guidance levy.

FEES 10.5.4 R

Table of rules in FEES 4 that also apply in FEES 10.

FEES 4 incorporated into FEES 10

Description

Modifications

FEES 4.2.4 R

Method of payment

none

FEES 4.2.7B R

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

none

FEES 4.2.7C G

Application of FEES

none

FEES 4.2.8 R

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

none

FEES 4.2.9 G

Fee payers ceasing to hold relevant status or reducing the scope of their permission after start of relevant period

Reference to column (1) of the table in FEES 4.2.11 R is a reference to FEES 10.1.2 G

FEES 4.3.7 R

Groups of firms

Reference to FEES 4.2.1 R is a reference to FEES 10.2.1 R.

FEES 4.3.13 R

Firms applying to cancel or vary permission before start of period

Reference toFEES 4.2.1 R is a reference to FEES 10.2.1 R.

FEES 4.3.15 R

Firms acquiring businesses from other firms

Reference to FEES 4.2.6 R and FEES 4.2.7 R is a reference to FEES 10.2.5 R

Reference to FEES 4.2.1 R is a reference to FEES 10.2.1 R

FEES 4.4.1 R to FEES 4.4.6 R

Information on which fees are calculated

none

FEES 10 Annex 1 1 3Pension guidance levy for the period 1 April 2017 to 31 March 20184

R

Activity Group

Pensions guidance levy payable

A.1

Band width (£ million of modified eligible liabilities (MELs)) >10

Fee3 (£/£m or part £m of MELS)

1.3294

2 2 3

A.4

Band width (£ million of adjusted annual gross premium income (AGPI) >1

Fee3 (£/£m or part £m of AGPI)

69.284

2 2 3

A.7

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

Band width (£ million of funds under management (FuM))

>10

Fee3 (£/£m or part £m of FuM)

0.554

2 2

A.9

Band width (£ million of gross income (GI))

>1

Fee3 (£/£m or part £m of GI)

224.354

2 2 3

A.13

Band width3 (£ thousands of annual income (AI))

>100

Fee3 (£/£ thousand or part of £ thousand of AI)

0.0744

2 2 3