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FEES 2.1 Introduction

Application

FEES 2.1.1RRP

619Except to the extent referred to in FEES 2.1.1A R, this1619118 chapter applies to every person who is required to pay a fee or share of a levy to the appropriate regulator, FOS Ltd or FSCS, as the case may be, by a provision of the Handbook.

FEES 2.1.1ARRP

619This chapter does not apply in relation to:8

8
  1. (1)

    FEES 5.5A; or8

  2. (2)

    FEES 5 Annex 2R; or8

  3. (3)

    FEES 5 Annex 3R; or8

  4. (4)

    a PSR fee8; or9

  5. (5)

    the pensions guidance levy; or10

    910
  6. (6)

    the pensions guidance providers’ levy; or11

    10
  7. (7)

    11the FOS ADR levy.

FEES 2.1.2RRP

FEES 2.2.1R does not apply in respect of any fee payable under FEES 3 (Application, notification and vetting fees).

FEES 2.1.3GRP

The provisions for late payments in FEES 2.2.1R do not apply to fees payable under FEES 3 as applications, notifications and requests for vetting are generally regarded as incomplete until the relevant fee is paid.

Purpose

FEES 2.1.4GRP

The purpose of this chapter is to set out the general provisions applicable to those who are required to pay fees or levies to the5 appropriate regulator or a share of the FSCS levy.

619561956
FEES 2.1.5GRP

Paragraph 23 of Schedule 1ZA16 of2 the Act,7regulation 92 of the Payment Services Regulations, 20 regulation 59 of the Electronic Money Regulations 7and article 25(a) of the MCD Order 20 enable the FCA 16 to charge fees to cover its costs and expenses in carrying out its functions. The corresponding provisions for the FSCS levy ,5 FOS levies and CFEB levies5 are set out in FEES 6.1,5 FEES 5.2 and FEES 7.1.4 G5 respectively. Case fees payable to the FOS Ltd are set out in FEES 5.5B. 20Fee-paying payment service providers, 20fee-paying electronic money issuers 7 and CBTL firms 20 are not required to pay the FSCS levy but are liable for FOS levies.4

2162316561956192020
FEES 2.1.5AGRP

3Regulation 92 of the Payment Services Regulations and regulation 59 of the Electronic Money Regulations each provide7 that the functions of the FCA16 under the respective7 regulations are treated for the purposes of paragraph 23 of Schedule 1ZA16 to the Act as functions conferred on the FCA16 under the Act. Paragraph 23(7) 20 however, has not been included 20.7This is 20the FCA's167 obligation to ensure that the amount of penalties received or expected to be received are not to be taken into account in determining the amount of any fee payable.20

71616161616202071620
FEES 2.1 5BGRP

20Article 25 of the MCD Order provides that the functions under the MCD Order are to be treated for the purposes of paragraph 23 of Schedule 1ZA to the Act as functions conferred on the FCA under the Act.

FEES 2.1.6GRP

The appropriate regulator 16fees payable will vary from one fee year16 to another, and will reflect the appropriate regulator's 16funding requirement for that period and the other key components, as described in FEES 2.1.7G. Periodic fees, which will normally be payable on an annual basis, will provide the majority of the funding required to enable the appropriate regulator 16to undertake its statutory functions.

16161616
FEES 2.1.7GRP

The key components of the appropriate regulator fee mechanism (excluding the FSCS 5levy, the FOS5 levy and case fees, and the CFEB levy 5which are dealt with in FEES 5,5 FEES 6 and FEES 7)5 are:

555
  1. (1)

    a funding requirement derived from:

    1. (a)

      the appropriate regulator's financial management and reporting framework;

    2. (b)

      the appropriate regulator's budget; and

    3. (c)

      adjustments for audited variances between budgeted and actual expenditure in the previous accounting year, and reserves movements (in accordance with the appropriate regulator's reserves policy);

  2. (2)

    mechanisms for applying penalties received during previous financial years for the benefit of fee payers;

  3. (3)

    fee-blocks, which are broad groupings of fee payers offering similar products and services and presenting broadly similar risks to the appropriate regulator's regulatory objectives;

  4. (4)

    a costing system to allocate an appropriate part of the funding requirement to each fee-block; and

  5. (5)

    tariff bases, which, when combined with fee tariffs, allow the calculation of fees.

FEES 2.1.8GRP

The amount payable by each fee payer will depend upon the category (or categories) of regulated activity or exemption, or other relevant activity applicable to that person (fee-blocks). It will, in most cases, also depend on the amount of the business that person conducts in each category (fee tariffs).

FEES 2.1.9GRP

By basing fee-blocks on categories of business, the appropriate regulator aims to minimise cross-sector subsidies. The membership of the fee-blocks is identified in the FEES provisions relating to the type of fees concerned.

FEES 2.1.9AGRP

16PRA-authorised persons and persons seeking to become PRA-authorised persons should note that the FCA and the PRA have agreed for the FCA to act as the PRA's agent in relation to the collection of PRA fees. Where applicable, both PRA and FCA fees should be paid as a single payment to the FCA, which will receive the payment in its own capacity in respect of FCA fees and in its capacity as agent for the PRA in respect of the PRA fees. References to this arrangement will be referred to in FEES where applicable.

FEES 2.1.10G

[deleted]17

17
FEES 2.1.11G

[deleted]17

77717