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FEES 2.1 Introduction

Application

FEES 2.1.1 R RP

6 20Except to the extent referred to in FEES 2.1.1A R, this1620119 chapter applies to every person who is required to pay a fee or share of a levy to the FSA, FOS Ltd or FSCS, as the case may be, by a provision of the Handbook.

FEES 2.1.1A R RP

6 20This chapter does not apply in relation to FEES 5.5A, FEES 5 Annex 2R or FEES 5 Annex 3R.

FEES 2.1.2 R RP

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

FEES 2.1.3 G RP

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 2.1.4 G RP

The purpose of this chapter is to set out the general provisions applicable to those who are required to pay fees or levies to the5FSAor a share of the FSCS levy.

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FEES 2.1.5 G RP

Paragraph 17 of Schedule 1 to2 and section 99 of2 the Act,7 regulation 92 of the Payment Services Regulations and 3 regulation 59 of the Electronic Money Regulations7 enable the FSA to charge fees to cover its costs and expenses in carrying out its functions. The corresponding provisions for the FSCS levy ,5FOS levies and CFEB levies5 are set out in FEES 6.1,5FEES 5.2 and FEES 7.1.4 G5 respectively. Case fees payable to the FOS Ltd are set out in FEES 5.5A. 620Fee-paying payment service providers and fee-paying electronic money issuers7 are not required to pay the FSCS levy but are liable for FOS levies.4

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FEES 2.1.5A G RP

3Regulation 92 of the Payment Services Regulations and regulation 59 of the Electronic Money Regulations each provide7 that the functions of the FSA under the respective7 regulations are treated for the purposes of paragraph 17 of Schedule 1 to the Act as functions conferred on the FSA under the Act. Paragraphs 17(2) and (3) however, have not been included .7 These are, respectively, the FSA's7 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 and the provision that allows fees to be raised to repay borrowed monies in respect of expenses incurred, before or after the coming into force of the Act or the Bank of England Act 1998.

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FEES 2.1.6 G RP

The FSA fees payable will vary from one financial year to another, and will reflect the FSA's funding 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 FSA to undertake its statutory functions.

FEES 2.1.7 G RP

The key components of the FSA fee mechanism (excluding the FSCS5levy, the FOS5 levy and case fees, and the CFEB levy5which are dealt with in FEES 5,5FEES 6 and FEES 7)5 are:

5 5 5
  1. (1)

    a funding requirement derived from:

    1. (a)

      the FSA's financial management and reporting framework;

    2. (b)

      the FSA'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 FSA'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 FSA'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 2.1.8 G RP

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 2.1.9 G RP

By basing fee-blocks on categories of business, the FSA 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 2.1.10 G

Paragraph 17(2) of Schedule 1 and section 99(3) to the Act prohibit the FSA from taking account of penalties received when setting its periodic and other fees. Accordingly periodic fees are specified without reference to the penalties received. However, the FSA normally expects to allocate those penalties to the fee-blocks within which the penalty payers fall, by way of a deduction from the periodic fee. Any deductions of this sort are set out in the relevant fees provisions or will be notified to the fee payer at the relevant time.

FEES 2.1.11 G

3Whilst paragraph 17(2) of Schedule 1 to the Act has not been applied to the fee-raising power of the FSA under the Payment Services Regulations and the Electronic Money Regulations,7 regulation 92(2) and 59(2)7 of these regulations respectively require7 the FSA to apply amounts paid to it by way of penalties imposed under these7 regulations towards expenses incurred in carrying out its functions under the regulations, or for any incidental purpose.

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FEES 2.2 Late Payments and Recovery of Unpaid Fees

Late Payments

FEES 2.2.1 R RP

If a person does not pay the total amount of a periodic fee3, FOS levy, or share of the FSCS levy or CFEB levy6, before2 the end of the2 date on which it is due, under the relevant provision in FEES 4, 5, 6 or 7, 6that person must pay an additional amount as follows:

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  1. (1)

    if the fee was not paid in full before the end of the due date, an administrative fee of £250; plus

  2. (2)

    interest on any unpaid part of the fee at the rate of 5% per annum above the Official Bank Rate10 from time to time in force, accruing on a daily basis from the date on which the amount concerned became due.

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FEES 2.2.2 G RP

The FSA, (for periodic fees, FOS and FSCS levies and CFEB levies), expect to issue invoices at least 30 days before the date on which the relevant amounts fall due. Accordingly it will generally be the case that a person will have at least 30 days from the issue of the invoice before an administrative fee becomes payable.

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Recovery of Fees

FEES 2.2.3 G RP

Paragraph 17(4) and paragraph 19B6 of Schedule 1 to6 and section 99(5) of6 the Act permit the FSA to recover fees (including fees relating to payment services,5 the issuance of electronic money8 and, where relevant, FOS levies and CFEB levies6), and section 213(6) permits the FSCS to recover shares of the FSCS levy payable, as a debt owed to the FSA and FSCS respectively, and the FSA and the6FSCS, as relevant, will consider taking action for recovery (including interest) through the civil courts. 6

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FEES 2.2.4 G RP

In addition, the FSA may be entitled to take regulatory action in relation to the non-payment of fees,6FOS levies and CFEB levies. The FSA6 may also take regulatory action in relation to the non-payment of FOS case fees or 723 a723 share of the FSCS levy, after reference of the matter to the6FSA by the6FSCS. What action (if any) that is taken by the FSA will be decided upon in the light of the particular circumstances of the case.

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FEES 2.3 Relieving Provisions

Remission of Fees and levies2

FEES 2.3.1 R RP

If it appears to the FSA or410 the FSCS (in relation to any FSCS levy only) 2 that in the exceptional circumstances of a particular case, the payment of any fee, FSCS levy2,3FOS levy or CFEB levy3would be inequitable, the FSA or410 the FSCS2 as relevant, may (unless FEES 2.3.2B R applies)1 reduce or remit all or part of the fee or levy in question which would otherwise be payable.

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FEES 2.3.2 R RP

If it appears to the FSA or410 the FSCS (in relation to any FSCS levy only)2 that in the exceptional circumstances of a particular case to which FEES 2.3.1R does not apply, the retention by the FSA, the FSCS,2 or the CFEB3, as relevant, of a fee, FSCS levy2,3FOS levy or CFEB levy3which has been paid would be inequitable, the FSA, the FSCS2 or the CFEB3, may (unless FEES 2.3.2B R applies)1 refund all or part of that fee or levy.

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FEES 2.3.2A G RP

1A poor estimate or forecast by a fee or levy 2payer, when providing information relevant to an applicable tariff base, is unlikely, of itself, to amount to an exceptional circumstance for the purposes of FEES 2.3.1 R or FEES 2.3.2 R. By contrast, a mistake of fact or law by a fee or levy 2payer may give rise to such a claim.

FEES 2.3.2B R RP

1The FSA or the FSCS2may not consider a claim under FEES 2.3.1 R and/or FEES 2.3.2 R to reduce, remit or refund any overpaid amounts paid by a fee or levy2 payer in respect of a particular period, due to a mistake of fact or law by the fee or levy2 payer, if the claim is made by the fee or levy2 payer more than 2 years after the beginning of the period to which the overpayment relates.

FEES 2.3.3 G

[deleted]2

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FEES 2.4 1VAT

FEES 2.4.1 R RP

1All fees payable or any stated hourly rate under FEES 3 (Application, notification and vetting fees),2FEES 4 (Periodic fees) and FEES 7 (The CFEB levy) 2are stated net of VAT. Where VAT is applicable this must also be included.