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FEES 4.1 1Introduction

Application

FEES 4.1.1 R

1This chapter applies to every person set out in FEES 1.1.2R (2).

FEES 4.1.1A R RP

4A reference to firm in this chapter includes a reference to:15

  1. (1)

    a fee-paying payment service provider;15

  2. (2)

    a CBTL firm; 15

  3. (3)

    a fee-paying electronic money issuer;14

    15
  4. (4)

    a recognised investment exchange; and14

    15
  5. (5)

    a data reporting services provider. (other than an incoming data reporting services provider).14

20 12 6

Purpose

FEES 4.1.2 G RP

The purpose of this chapter is to set out the requirements on firms and others to pay periodic fees and transaction reporting fees in certain circumstances.

Background

FEES 4.1.3 G RP

Most of the detail of the periodic fees that are payable by firms is set out in FEES 4 Annexes 1A to 11BR11. FEES 4 Annex 12 G194 and 13FEES 4 Annex 13G provide10 guidance on the calculation of certain tariffs.5 Most of the provisions of the Annexes will vary from one fee year19 to another. Accordingly fresh FEES 4 Annexes will come into force, following consultation, for each fee year19.

4 11 19 10 19 19 9
FEES 4.1.4 G RP
  1. (1)

    The periodic fees for collective investment schemes reflect the estimated costs to the FCA of considering proposals to change regulated collective investment schemes, maintaining up to date records about them, and related policy work.

  2. (2)

    [deleted]8

    28
  3. (3)

    The periodic fees for fee-paying payment service providers, fee-paying electronic money issuers, CBTL firms, data reporting service providers (other than incoming data reporting services providers14 and issuers of regulated covered bonds7are set out in FEES 4 Annex 11R12. This annex sets out the activity groups, tariff base, valuation dates and, where applicable, the flat fees due for these firms.

    4776121212
FEES 4.1.5 G RP

The Society of Lloyd's, which has permission, has its own fee block.

18
FEES 4.1.6 G

[deleted]19

19
FEES 4.1.7 G RP

In the case of periodic fees for firms, fees are calculated individually for each firm, but they may be paid on a group basis, if the group so wishes.

FEES 4.2 Obligation to pay periodic fees

General

FEES 4.2.1 R RP

A person shown in column (1) of the table in FEES 4.2.11 R34as the relevant fee payer must pay each periodic fee applicable to it, calculated in accordance with the provisions referred to in column (2) of the applicable61 table, as adjusted by any relevant provision in this chapter:

61 61
  1. (1)

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

  2. (2)

    on or before the date given in column (3) of that table, unless FEES 4.2.10 R applies.

FEES 4.2.2 G RP

A relevant fee payer will be required to pay a periodic fee for every year during which they have the status in column 1 of the table in FEES 4.2.11 R3434 (or in relation to collective investment schemes, for every year during which it is a regulated collective investment scheme) subject to any reductions or exemptions applicable under this chapter. If a person is the relevant fee payer for more than one status listed in column 1 of the table in FEES 4.2.11 R34 (or in relation to collective investment schemes, the relevant fee payer for more than one regulated collective investment scheme) he will be required to pay a fee in relation to each.

61 61
  1. (2) 60

    [deleted]60

FEES 4.2.2A G RP

60A recognised body may also have obligations to pay fees to the FCA under other rules arising from legislation other than the Act. For example a recognised body may have an obligation to pay a fee as an approved operator of a relevant system under the Uncertificated Securities Regulations 1995 (SI 1995/3272).

FEES 4.2.3 G RP

The FCA60 will issue invoices 34at least 30 days before the dates on which payments fall due under FEES 4.2.1 R.

60 60

Method of payment

FEES 4.2.4 R RP
  1. (1)

    A60 periodic fee must be paid using either direct debit, credit transfer (BACS/CHAPS), cheque, Maestro1162, Visa Debit21 or by credit card (Visa/Mastercard only). Any payment by permitted credit card must include an additional 2% of the sum paid.1

    1601162
  2. (2)

    [deleted]60

    60
FEES 4.2.4A R RP

60The FCA does not specify a method of payment for a recognised body or a designated professional body.

FEES 4.2.5 G RP

The FCA expects a recognised body or a designated professional body will generally pay their respective fees by electronic credit transfer.

Modifications for persons becoming subject to periodic fees during the course of a fee year60

FEES 4.2.6 R

[deleted]42

FEES 4.2.7 R

[deleted]42

5 18 12 9 9 61 61
FEES 4.2.7A G

[deleted]42

1 12 9 9 9 60 60 12 9 60 60 9
FEES 4.2.7B R

[deleted]42

FEES 4.2.7C G

[deleted]42

7 60 34 60 60 60
FEES 4.2.7D R

[deleted]42

15
FEES 4.2.7E R RP
  1. (1)
    1. (a)

      42A firm (other than an AIFM qualifier, an ICVC, a UCITS qualifier, or an issuer of regulated covered bonds) which becomes authorised or registered, or whose permission and/or activities is extended, during the course of the fee year must pay a fee based on its projected valuation for the first twelve months of its new business.

    2. (b)

      This is the valuation provided by the firm in the course of its application.

  2. (2)

    The calculation for the first year of authorisation or registration for:

    1. (a)

      an AIFM qualifier, an ICVC and a UCITS qualifier is in FEES 4 Annex 4R Part 1; and

    2. (b)

      an issuer of regulated covered bonds is in FEES 4 Annex 11R Part 4.

Calculating the fee in the firm’s first year of authorisation

FEES 4.2.7F R RP

42(1)

Identify the tariff rate or rates which will be relevant to the firm as a result of its new or extended permission; and then

(2)

apply the formula (A+B+C) x D, where:

A = the amount arrived at by applying the tariff rates to the firm’s projected valuation for its first year of new business, as provided by it in the course of its application;

B = the A.0 minimum fee, unless already paid;

C = any fee that becomes due in AP.0 following the calculation of A; and

D = the number of calendar months (inclusive) between the calendar month during which the firm received its new or extended permission and the last calendar month of that fee year ÷ 12.

Calculating fees in the second fee-year where the firm received permission between 1 January and 31 March in its first fee year

FEES 4.2.7G R RP

42When a firm receives permission between 1 January and 31 March, its fee for the following fee year starting 1 April will be calculated from the projected valuation for the first twelve months of its new business that it provided in the course of its application.

Calculating all other fees in the second and subsequent years of authorisation where a full year of tariff data is not available

FEES 4.2.7H R RP

42If it can, a firm must provide data from a complete period (as specified in FEES 4 Annex 1AR Part 5 or FEES 4 Annex 11R Part 4) that begins on or after the date that the firm obtained the relevant permissions to which the tariff base relates.

FEES 4.2.7I R RP

42If a firm does not have sufficient tariff data to enable the periodic fees calculation to be made in respect of that fee year, it must calculate an annualised figure based on actual data where possible. If the tariff base is a cumulative measure like income, covering the full year, it must apply the formula (A÷B) x 12, where:

A = the total income from the date of authorisation up to the firm’s financial year end or 31 December (whichever is sooner), calculated according to the relevant rules; and

B = the number of months in the period referred to in A.

FEES 4.2.7J G RP

42For example, suppose the tariff data for a particular permission is based on income for the financial year ending during the calendar year ending 31 December before the relevant fee year starting the following April. A firm is authorised in October and its financial year ends in June. By April, it will not have been able to report on the basis of its financial year. The value of A would therefore cover the period from October to December and the value of B would be two i.e. November and December.

If the firm was authorised in June and its financial year ended in October, then the value of A would cover June to October and the value of B would be four i.e. July to October.

FEES 4.2.7K R RP

42Where the measure is not cumulative (e.g. the number of traders for fee-block A10), the firm must use the figure relating to its annual reporting date (e.g. 31 December for A10) or, if that is not available, the projected figure used when it was authorised. Table A sets out the reporting requirements for the key fee-blocks when actual data is not available:

Table A: calculating tariff data for second and subsequent years of authorisation when full trading figures are not available

Fee-block

Tariff base

Calculation where trading data are not available

A1. Deposit acceptors

Average MELS for October - December

Use data available at 31 December or, if trading has not commenced by 31 December, use the projection submitted as part of the application process.

A2. Home finance providers and administrators

Number of relevant contracts entered into or being administered in the twelve months up to 31 December

Apply the formula (A÷B) x 12 to arrive at an annualised figure.

A3. Insurers - general

Annual gross premium income for the financial year ended in the calendar year ending 31 December and gross technical liabilities valued at the end of the financial year

Income – apply the formula (A÷B) x 12 to arrive at an annualised figure.

Gross technical liabilities and mathematical reserves. Use data at valuation date or, if trading has not commenced by then, use projections provided at authorisation.

A4. Insurers - life

Adjusted gross premium income for the financial year ended in the calendar year ending 31 December and mathematical reserves valued at the end of the financial year

A5. Managing agents at Lloyd’s

Active capacity in respect of the underwriting year at the beginning of the period to which the fee relates

Not applicable.

A6. The Society of Lloyd’s

Bespoke fee

Not applicable.

A7. Portfolio managers

Funds under management valued at 31 December

Use data as at 31 December or, if trading has not commenced by 31 December, use the projection submitted as part of the application process.

A9. Managers and depositaries of investment funds, and operators of collective investment schemes or pension schemes

Annual gross income for the financial year ended in the calendar year ending 31 December

Apply the formula (A÷B) x 12 to arrive at an annualised figure.

A10. Firms dealing as principal

Number of traders as at 31 December

Use data as at 31 December or, if trading has not commenced by 31 December, use the projection submitted as part of the application process

A13. Advisors, arrangers, dealers or brokers

Annual income for the financial year ended in the calendar year ending 31 December

Apply the formula (A÷B) x 12 to arrive at the annualised figure

A14. Corporate finance advisers

A18. Home finance providers, advisers and arrangers

A19. General insurance mediation

A21. Firms holding client money or assets, or both

The highest amount of client money and the highest amount of custody assets held over the 12 months ending 31 December

The highest amount of client money and/or custody assets over the period between the date of authorisation and 31 December or, if trading has not started, use the projection submitted as part of the application process.

B. Market operators,41 MTF operators and OTF operators41

Flat fee

Not applicable.

B. Service companies

Annual income for the financial year ended in the calendar year ending 31 December

Apply the formula (A÷B) x 12 to arrive at the annualised figure.

B. Benchmark administrators

Annual income for the financial year ended in the calendar year ending 31 December39

Apply the formula (A÷B) x 12 to arrive at the annualised figure.39

B. Recognised investment exchanges

Annual income for the financial year ended in the calendar year ending 31 December39

Apply the formula (A÷B) x 12 to arrive at the annualised figure.39

B. Recognised auction platforms

Flat fee

Not applicable.

B. Recognised overseas investment exchanges

Flat fee

Not applicable.

CC1. Credit-related regulated activities with limited permission

Annual income for the financial year ended in the calendar year ending 31 December

Apply the formula (A÷B) x 12 to arrive at an annualised figure.

CC2. Credit related regulated activities

40

40

40

G.2 Payment services institutions – deposit acceptors

See A1 deposit acceptors

G.3. Large payment services institutions

Relevant income

Apply the formula (A÷B) x 12 to arrive at an annualised figure.

G.4 Small payment institutions

Flat fee

Not applicable.

G.5 Other payment institutions

Relevant income

Apply the formula (A÷B) x 12 to arrive at an annualised figure.

G.10 Large electronic money institutions

Average outstanding e-money over 12 months ending 31 December

Average over the period from authorisation to 31 December.

G.11 Small electronic money institutions

Flat fee

Not applicable.

G.15 Issuer of regulated covered bonds

Value as at 31 December

Not applicable.

G.20 Consumer buy-to-let (CBTL) lender

Flat fee

Not applicable.

G.21 CBTL adviser and arranger
FEES 4.2.8 R RP

In relation to an incoming EEA firm or an incoming Treaty firm the modification provisions of FEES 4.2.7 R apply only in relation to the relevant regulated activities of the firm, which are passported activities or Treaty activities and which are carried on in the United Kingdom, and which are not provided on a cross border services basis.4 For payment services and electronic money issuance, 12the adjustment only applies to the business to which the calculation made in FEES 4.3.12A R relates. 9

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

FEES 4.2.9 G RP

The FCA34 will not refund periodic fees if, after the start of the period to which they relate:

  1. (1)

    a fee payer ceases to have the status set out in column (1) of the table in FEES 4.2.11 R34; or

    61
  2. (2)

    a firm reduces its permission or payment services activities 9so that it then falls out of the fee-block previously applied to it;9

    9

(but see FEES 2.3 (Relieving Provisions) and FEES 4.3.13 R (Firms Applying to Cancel or Vary Permission Before Start of Period)).

Extension of Time

FEES 4.2.10 R RP

A person need not pay a periodic fee on the date on which it is due under the relevant provision in FEES 4.2.1 R, if:

  1. (1)

    that date falls during a period during which circumstances of the sort set out in GEN 1.3.2 R (Emergencies) exist, and that person has reasonable grounds to believe that those circumstances impair its ability to pay the fee, in which case he must pay it on or before the fifth business day after the end of that period; or

  2. (2)

    unless FEES 4.3.6R (3), 9FEES 4.3.6R (4) or FEES 4.3.6R (4A)9 (Time and method for payment) applies, that date would otherwise fall on or before the 30th day after the date on which the FCA (in its own capacity or in its capacity as collection 34agent for the PRA)60 has sent written notification to that person of the fee payable on that date, in which case he must pay on or before the 30th day after the date on which the FCA60 sends the notification.

    96060
FEES 4.2.11 R RP

Table of periodic fees payable to the FCA61

61

1 Fee payer

2 Fee payable

3 Due date

4 Events occurring during the period leading to modified periodic fee

Any firm (except an AIFM qualifier,25ICVC or a UCITS qualifier)

(1) Unless (2) applies, as37 specified in FEES 4.3.1 R in relation to FEES 4 Annex 2AR and FEES 4 Annex 11 R61.37

(2) Where a firm is paying a ring-fencing implementation fee, as specified in FEES 4 Annex 2BR.37

(1) Unless (2) or (3) apply7, on or before the relevant dates specified in FEES 4.3.6 R.12

(2) Unless (3) applies, if 7an event specified in column 4 occurs during the course of a fee year,60 30 days after the occurrence of that event, or if later the dates specified in FEES 4.3.6 R.7

(3) Where the permission is for , the date specified in FEES 4 Annex 10 (Periodic fees for MTF operators).

7 7 60

Firm receives permission, or becomes authorised or registered under the Payment Services Regulations, article 8 of the MCD Order32 or the Electronic Money Regulations12;9 or firm9extends permission or its payment service activities916

63 9

Persons who hold a certificate issued by the FCA60 under article 54 of the Regulated Activities Order (Advice given in newspapers etc.)

60

£1,09540

31 31

(1) Unless (2) applies, on or before 1 August or, if later, within 30 days of the date of the invoice23

(2) If an event in column 4

occurs

during the course of a fee year,60 30 days after the occurrence of that event

23 60

Certificate issued to person by FCA60 under article 4054 RAO

60

Any manager of an AUT23;

23

In relation to each unit trust the amount specified in part 1 of 25FEES 4 Annex 4

Authorisation order is made in relation to the relevant scheme24

24Any authorised fund manager of an authorised contractual scheme;

In relation to each authorised contractual scheme the amount specified in part 1 of25FEES 4 Annex 4

Any ACD of an ICVC; and

In relation to each ICVC,25 the amount specified in part 1 of25FEES 4 Annex 4

Persons who, under the constitution or founding arrangements of a recognised scheme, are 33responsible for the management of the property held for or within the scheme;

In relation to each recognised scheme the amount specified in part 1 of25FEES 4 Annex 4

The relevant scheme becomes a recognised scheme25

Not applicable

AIFM of a UK ELTIF33

In relation to each ELTIF the amount specified in part 1 of FEES 4 Annex 433

(1) Unless (2) applies, on or before 1 August or, if later, within 30 days of the date of the invoice.33

(2) If an event in column 4 occurs during the course of a fee year, 30 days after the occurrence of that event.33

The ELTIF is authorised by the FCA under the ELTIF regulation33

Designated professional body

FEES 4 Annex 5

On or before the relevant dates specified in FEES 4.3.6 R23

23

Not applicable

UK recognised body

FEES 4 Annex 6 , part 1 for a UK RIE ; and

FEES 4 Annex 6 R , part 1A for a UK RIE that is also an RAP13

61

(1) On or before the relevant dates specified in FEES 4.3.6 R23

(2) If the event in column 4 occurs during the course of a fee year60, 30 days after the occurrence of that event

23 60

Recognition order is made.

The modified1162 periodic fee is specified in FEES 4 Annex 6 R, Part 1and (in the case of an RAP) Part 1A.131162

11 62 11 62 11 62 11 62

ROIE 61

61

FEES 4 Annex 6 , part 2

(1) On or before the relevant dates specified in FEES 4.3.6 R23

(2) If the event in column 4 occurs during the course of a fee year60, 30 days after the occurrence of that event.

23 60

Recognition order is made.

The modified1162 periodic fee is specified in FEES 4 Annex 6, Part 2.1162

11 62 11 62 11 62 11 62

A listedissuer35 (in LR) of shares and certificates representing certain securities35.

3 3

FEES 4 Annex 14R 35

Within 30 days of the date of the invoice

Listed issuer 3 (in LR) becomes subject to listing rules

3

A sponsor35

FEES 4 Annex 14R 35

31 10 12 23 23 31 12 10 2 31

Within 30 days of the date of the invoice

35Approval of a35sponsor35

14 14 14

All non-listed issuers (in DTR) of shares and certificates representing certain securities35.

6 6

FEES 4 Annex 14R 35

29

Within 30 days of the date of the invoice

Non-listed issuer (in DTR) becomes subject to disclosure requirements36 and transparency rules629

29Any primary information provider

FEES 4 Annex 14R 35

Within 30 days of the date of the invoice

A person is approved as a primary information provider

6All firms reporting transactions in securities derivatives10to the FCA60 in accordance with SUP 17, and market operators who provide facilities for trading in securities derivatives.10

60 10

FEES 4 Annex 9 R

Within 30 days of the date of the invoice

Not applicable

15Any issuer of a regulated covered bond.

1 R

(1) Unless (2) applies, on or before the relevant dates specified in FEES 4.3.6 R

(2) If an event specified in column 4 occurs during the course of a fee year60, 30 days after the occurrence of that event or, if later, the dates specified in FEES 4.3.6 R

60

A person becomes registered as an issuer of a regulated covered bond

26(i) An AIFM (other than a UK AIFM or an EEA AIFM with a branch in the UK) which has notified the FCA of its intention to market an AIF in the UK under regulation 57 of the AIFMD UK regulation and which has not ceased to market that AIF in the UK as at 1 April of the current fee year.

(ii) An AIFM which has notified the FCA of its intention to market an AIF in the UK under regulation 58 or 59 of the AIFMD UK regulation and which has not ceased to market that AIF in the UK as at 1 April of the current fee year.

For each notification made by the AIFM of the kind specified in part 2 of FEES 4 Annex 4, the amount specified in part 2 of FEES 4 Annex 4

(1) Unless (2) applies, on or before 1 August, or, if later, within 30 days of the date of the invoice

(2) If an event in column 4 occurs during the course of a financial year, 30 days after the occurrence of that event

The FCA receives a notification to market in the UK

26A small registered UK AIFM

The basic fee contained in part 3 of FEES 4 Annex 4

The AIFM is registered by the FCA under regulation 10 of the AIFMD UK regulation.

30Each of the following that makes transaction reports directly to the FCA under SUP 17 (Transaction reporting):

(1) a firm;

(2) a third party acting on a firm's behalf;

(3) an approved reporting mechanism;

(4) an operator of a regulated market; and

(5) an operator of an MTF.

FEES 4 Annex 3A

Within 30 days of the date of the invoice

The FCA enters into arrangements with the fee payer under which it can make transaction reports directly to the FCA

Note: Sponsors on the list of approved sponsors as at 1 April each year will be liable for the full year's annual fee unless FEES 4.3.13 R applies.2

FEES 4.3 Periodic fee payable by firms (other than AIFM qualifiers, ICVCs and UCITS qualifiers)13

FEES 4.3.1 R RP

The periodic fee payable by a firm (except an AIFM qualifier,13ICVC or a UCITS qualifier) is:

  1. (1)

    each periodic fee applicable to it calculated in accordance with FEES 4.3.3 R, using information obtained in accordance with FEES 4.4; plus7

    7
  2. (1A)

    any periodic fee applicable to it calculated in accordance with FEES 4.3.3A R using information relating to its UK business obtained in accordance with FEES 4.4 (or by other means in the case of the Bank of England); less7

  3. (2)

    any deductions from the periodic fee specified in Part 2 of FEES 4 Annex 2AR17or Part 7 of26FEES 4 Annex 11R17. 7

    262626
FEES 4.3.2 G RP
  1. (1)

    The amount payable by each firm will depend upon the category (or categories) of regulated activities or payment services7it is engaged in (fee-blocks)and whether it is issuing electronic money,10 and on the amount of business it conducts in each category (tariff base). The fee-blocks and tariffs are identified in FEES 4 Annex 1AR17 (and guidance on calculating certain of the tariffs is at FEES 4 Annex 12 G and 17FEES 4 Annex 13G15) 17while 26FEES 4 Annex 2AR sets 17 out the tariff rates for the relevant fee year.25 In the case of firms that provide payment services and/or issue electronic money10, the relevant fee blocks, tariffs and rates are set out in FEES 4 Annex 11R17.

    26826257
  2. (2)

    Incoming EEA firms,incoming Treaty firms,10EEA authorised payment institutions7 and EEA authorised electronic money institutions10receive a discount to reflect the reduced scope of the appropriate regulator's responsibilities in respect of them. The level of the discount varies from fee-block to fee-block, according to the division of responsibilities between the appropriate regulator and Home state regulators for firms in each fee-block (see FEES 4.3.11 G,7FEES 4.3.12 R and FEES 4.3.12A R).7

    77

10Calculation of periodic fee (except in relation to the Society of Lloyd’s, fee-paying payment service providers, CBTL firms, fee-paying electronic money issuers and data reporting services providers )

FEES 4.3.3 R RP

The periodic fee referred to in FEES 4.3.1 R is (except in relation to the Society,10fee-paying payment service providers, CBTL firms,20fee-paying electronic money issuers and data reporting services providers20) 20 calculated as follows:

10 7
  1. (1)

    identify each of the tariffs set out in Part 1 of FEES 4 Annex 2AR1726 which apply to the business of the firm for the period specified in that annex;

    26
  2. (2)

    for each of the applicable26 tariffs, calculate the sum payable in relation to the business of the firm for that period;

    269
  3. (3)

    add together the amounts calculated under (2)17;

    269
  4. (4)

    work out whether an A.0, or 17, CC.0 minimum fee is payable under Part 2 of FEES 4 Annex 2AR17and if so how much (except that that minimum fee is not payable again by a firm whose permission is extended if the fee was already payable before the extension)26;9

    926
  5. (4A)

    26work out whether an AP.0 FCA prudential fee is payable under Part 2 of FEES 4 Annex 2AR and if so how much;

  6. (4B)

    [deleted] 17

    26
  7. (5)

    9add together the amounts calculated under (3), (4) and (4A) 17; and

    26
  8. (6)

    9apply any applicable payment charge specified in FEES 4.2.4 R, provided that:

    1. (a)

      for payment by direct debit, successful collection of the amount due is made at the first attempt by the FCA (in its own capacity and, if applicable, in its capacity as collection 17agent for the PRA)25; or

      25
    2. (b)

      for payment by credit transfer, the amount due is received by the FCA (in its own capacity and, if applicable, in its capacity as collection 17agent for the PRA)25 on or before the due date.

      25

    19[Note: Transitional provisions apply to FEES 4.3.3R for firms in activity groups A.3 and A.4 – see FEES TP 13]

10 7Calculation of periodic fee for fee-paying payment service providers, CBTL firms, data reporting services providers (other than incoming data reporting services providers) and fee-paying electronic money issuers

FEES 4.3.3A R RP

7The periodic fee referred to in FEES 4.3.1 R in relation to fee-paying payment service providers, CBTL firms16, data reporting services providers (other than incoming data reporting services providers)20 and fee-paying electronic money issuers10 is calculated in accordance with FEES 4 Annex 11 R.

27

Modification for firms with new or extended permissions

FEES 4.3.4 G RP
  1. (1)

    A firm which becomes authorised or registered 7during the course of a fee year25 will be required to pay a proportion of the periodic fee which reflects the proportion of the year for which it will have a permission or the right to provide particular payment services or the right to issue electronic money107- see FEES 4.2.5 G and FEES 4.2.6 R.

    25
  2. (2)

    Similarly a firm which extends its permission or its right to provide particular payment services7so that its business then falls within additional fee blocks will be required to pay a further periodic fee under this section for those additional fee blocks, but discounted to reflect the proportion of the year for which the firm has the extended permission or payment services activity 7- see FEES 4.2.6 R and FEES 4.2.7 R.

  3. (3)

    These provisions apply (with some changes) to incoming EEA firms,10incoming Treaty firms, EEA authorised payment institutions and EEA authorised electronic money institutions.10

  4. (4)

    5These provisions do not apply to a firm's periodic fees in relation to its permission for operating a multilateral trading facility obtained from the FCA25 during the course of a fee year.25

    2525

Amount payable by the Society of Lloyd's

FEES 4.3.5 R RP

The periodic fee referred to in FEES 4.3.1 R in relation to the Society is specified against its name in 26FEES 4 Annex 2AR17.

26

Time of payment

FEES 4.3.6 R RP
  1. (1)

    [deleted]17

    262612112626111126
  2. (1A)

    [deleted] 17

    26
  3. (1B)

    [deleted] 17

    26
  4. (1C)

    17If a person meets either of the conditions in (1D) it must pay the FCA the fee in (1E).

  5. (1D)

    17A person meets the conditions referred to in (1C) if:

    1. (a)

      its periodic fee for the previous fee year was at least £50,000 and it is:

      1. (i)

        an FCA-authorised person; or

      2. (ii)

        a designated professional body; or

      3. (iii)

        a recognised investment exchange; or

      4. (iv)

        a regulated covered bondissuer; or

    2. (b)

      it is a PRA-authorised person and its combined FCA and PRA periodic fees for the previous fee year were at least £50,000.

  6. (1E)

    17The fee in (1C) is:

    1. (a)

      an amount equal to 50% of the FCA periodic fee payable for the previous fee year by:

      1. (i)

        118 April; or

      2. (ii)

        if later, within 30 days of the date of the invoice, in the fee year to which the sum due under FEES 4.2.1R relates; and

    2. (b)

      the balance of the FCA periodic fee due for the current fee year by:

      1. (i)

        1 September; or

      2. (ii)

        if later, within 30 days of the date of the invoice, in the fee year to which that sum relates.

    [Note: If the firm is a PRA-authorised person that meets the condition at FEES 4.3.6R(1)(D)(b), the firm will also pay its PRA periodic fees in two tranches as specified in the Fees Part of the PRA Rulebook20 . The FCA, acting as the PRA’s collection agent, will collect these fees.]

  7. (2)

    If the firm's, designated professional body's, recognised investment exchange's, 12or regulated covered bondissuer's11periodic fee for the previous fee year25 was less than £50,000, it11 must pay the periodic fee due in full by 1 August or, if later, within 30 days of the date of the invoice26 in the fee year25 to which that sum relates.

    251125
  8. (3)

    If a firm has applied to cancel its Part 4A permission25 in the way set out in SUP 6.4.5 D (Cancellation of permission), or its status as a payment institution under regulation 10 of the Payment Services Regulations (Cancellation of authorisation) or as regulation 10 is applied by regulation 14 of the Payment Services Regulations (Supplementary provisions), or its status as an electronic money issuer under regulation 10 of the Electronic Money Regulations (Cancellation of authorisation) or as regulation 10 is applied by regulation 15 of the Electronic Money Regulations (Supplementary provisions), 10or its registration as a CBTL firm under article 13(c) of the20MCD Order16 or its authorisation as a data reporting services provider under regulation 11 of the DRS Regulations,20 then (1) and (2) do not apply but it must pay the total amount due when the application is made.

    25
  9. (4)

    If the FCA17 has exercised its own-initiative powers to cancel a firm's2Part 4A permission25, then (1) and (2) do not apply but the firm must pay the total amount due immediately before the cancellation becomes effective.

    2525225
  10. (4A)

    If the FCA has cancelled a firm's authorisation or registration under regulation 10 of the Payment Services Regulations or regulation 10 of the Electronic Money Regulations10 or its registration under regulation 10 as applied by regulation 14 of the Payment Services Regulations or its registration under regulation 10 as applied by regulation 15 of the Electronic Money Regulations, or its registration under article 13 (except under article 13(c)) of the MCD Order16, or its authorisation as a data reporting services provider under regulation 11 or 12 of the DRS Regulations,2010 then (1) and (2) do not apply but the firm must pay the total amount due immediately before the cancellation becomes effective.7

  11. (5)

    [deleted]26

    626
  12. (5A)

    [deleted] 17

    14
  13. (6)

    5Paragraphs (1) and (2) do not apply to any periodic fee in relation to a firm'spermission for operating a multilateral trading facility or operating an organised trading facility20 and such a fee is not taken into account for the purposes of the split in (1). Instead any fee for this permission is

    payable on the date specified in FEES 4 Annex 10 (Periodic fees for MTF and OTF20 operators).

Groups of firms

FEES 4.3.7 R RP

A firm which is a member of a group may pay all of the amounts due from other firms in the same group under FEES 4.2.1 R, if:

  1. (1)

    it notifies the FCA (in its own capacity and, if applicable, in its capacity as collection 17agent for the PRA)25 in writing of the name of each other firm within the group for which it will pay; and

    25
  2. (2)

    it pays the fees, in accordance with this chapter, as a single amount as if that were the amount required from the firm under FEES 4.2.1 R.

FEES 4.3.8 G RP

A notification under FEES 4.3.7R (1) should be made in accordance with SUP 15.7 (Form and method of notification).

FEES 4.3.9 G RP

If the payment made does not satisfy in full the periodic fees payable by all of the members of the group notified to the FCA25 under FEES 4.3.7 R, the FCA (in its own capacity and, if applicable, in its capacity as collection 17agent for the PRA)25 will apply the sum received among the firms which have been identified in the notification given under FEES 4.3.7R (1) in proportion to the amounts due from them. Each firm will remain responsible for the payment of the outstanding balance attributable to it.

25 25
FEES 4.3.10 G RP

If a firm pays its fees through an agent outside the scope of FEES 4.3.7 R, the firm is responsible for ensuring that the FCA (in its own capacity and, if applicable, in its capacity as collection 17agent for the PRA)25 is informed that the sum being paid is for that firm's periodic fees.

25

Incoming EEA firms, incoming Treaty firms, EEA authorised payment institutions and EEA authorised electronic money institutions107

FEES 4.3.11 G RP
  1. (1)

    The FCA17recognises that its responsibilities in respect of an incoming EEA firm, an incoming Treaty firm, an EEA authorised payment institution or an EEA authorised electronic money institution are reduced compared with a firm which is incorporated in the United Kingdom.17

  2. (2)

    Accordingly the periodic fees which would otherwise be applicable to incoming EEA firms, incoming Treaty firms, EEA authorised payment institutions and EEA authorised electronic money institutions are reduced.17

7 7 10 7 10 7 7 10 7 10
FEES 4.3.12 R RP

For an incoming EEA firm, (excluding MTF and OTF20 operators), 5 or an incoming Treaty firm, the calculation required by FEES 4.3.3 R is modified as follows:

  1. (1)

    the tariffs set out in 26 Part 1 of FEES 4 Annex 2AR17 are applied only to the regulated activities of the firm which are carried on in the United Kingdom; and

    26
  2. (2)

    those tariffs are modified in accordance with Part 3 of FEES 4 Annex 2AR17.

    26
FEES 4.3.12A R RP

10For:

10
  1. (-1)
    1. (a)

      a full credit institution which is a fee-paying payment service provider and an EEA firm; or

    2. (b)

      a full credit institution which is a fee-paying electronic money issuer and an EEA firm; or

    3. (c)

      an EEA authorised payment institution; or

    4. (d)

      an EEA authorised electronic money institution;

    the calculation required by FEES 4.3.3A R is modified as follows:

  2. (1)

    the tariffs set out in Part 5 of FEES 4 Annex 11 are only applied to the payment services or electronic money issuance10of the firm carried on from an establishment in the United Kingdom, including any payment services carried on10 through any of its agents established in the United Kingdom; and

    1010
  3. (2)

    those tariffs are modified in accordance with Part 7 of FEES 4 Annex 11.

Firms Applying to Cancel or Vary Permission Before Start of Period

FEES 4.3.13 R RP
  1. (1)

    If:

    1. (a)

      a firm:20

      1. (i)

        makes an application to vary its permission (by reducing its scope), or cancel it, in the way set out in SUP 6.3.15D(3) (Variation of permission) and SUP 6.4.5D (Cancellation of permission); or20

      2. (ii)

        applies to vary (by reducing its scope) or cancel its authorisation or registration (regulation 8 and 10(1) of the Payment Services Regulations including as applied by regulation 14 of the Payment Services Regulations); or20

      3. (iii)

        applies to cancel its authorisation or registration (regulation 10 and 12 of the Electronic Money Regulations including as applied by regulation 15 of the Electronic Money Regulations); or20

      4. (iv)

        applies for revocation of its registration under article 13(c) of the MCD Order; or20

      5. (v)

        applies to vary (by reducing its scope) or cancel its authorisation as a data reporting services provider under regulation 11 and 12 of the DRS Regulations; or20

      1610771
    2. (aa)

      an issuer makes an application for de-listing; or20

    3. (ab)

      a sponsor notifies the FCA of its intention to be removed from the list of approved sponsors; and20

    4. (b)

      the firm, issuer or sponsor1 makes the application or notification 1referred to in (a), (aa) or (ab) respectively20, before the start of the fee year26 to which the fee relates;

      26

    FEES 4.2.1 R applies to the firm as if the relevant variation or cancellation of the firm'spermission or authorisation or registration under the Payment Services Regulations, MCD Order, DRS Regulations20 or the Electronic Money Regulations10, 7 de-listing or removal from the list of approved sponsors,1 took effect immediately before the start of the fee year26 to which the fee relates.

    271626
  2. (2)

    But (1) does not apply if, due to the continuing nature of the business, the variation, cancellation, de-listing or removal1 is not to take effect on or before 30 June of the fee year to which the fee relates26.

    126
FEES 4.3.14 G RP

The due dates for payment of periodic fees are modified by FEES 4.3.6R(3), FEES 4.3.6R(4)and FEES 4.3.6R(4A) respectively where:20

  1. (1)

    a firm has applied to cancel its:20

    1. (a)

      Part 4A permission; or20

    2. (b)

      its authorisation or registration under the Payment Services Regulations or the Electronic Money Regulations; or20

    3. (c)

      its registration as a CBTL firm under article 13(c) of the MCD Order; or20

    4. (d)

      authorisation under regulation 11 of the DRS Regulations; or20

  2. (2)

    the FCA has exercised its:20

    1. (a)

      own-initiative powers to cancel a firm's Part 4A permission; or20

    2. (b)

      powers under regulation 10 (Cancellation of authorisation), including as applied by regulation 14 (Supplementary provisions) of the Payment Services Regulations to cancel a firm's authorisation or registration under the Payment Services Regulations; or20

    3. (c)

      powers under regulation 10 (Cancellation of authorisation), including as applied by regulation 15 (Supplementary provisions) of the Electronic Money Regulations or regulation 11 of the DRS Regulations; or 20

    4. (d)

      powers under article 13 (Revocation of registration), excluding article 13(c), of the MCD Order.20

7 10 16 17 7 7 17 17 10 16 7 7 7 7

Firms acquiring businesses from other firms

FEES 4.3.15 R

21[deleted]

FEES 4.3.16 R
  1. (1)

    [deleted]9

  2. (2)

    [deleted]9

  3. (3)

    [deleted]9

FEES 4.3.17 R RP
  1. (1)

    21This rule applies if:

    1. (a)

      a firm (A)

      1. (i)
        1. (A)

          acquires all or a part of the business of another firm (B), whether by merger, acquisition of goodwill or otherwise; and

        2. (B)

          would be required to pay a periodic fee in the fee year in which the acquisition takes place; or

      2. (ii)

        becomes authorised or registered as a result of another firm’s (B) simple change of legal status (as defined in FEES 3 Annex 1R Part 6); and

    2. (b)

      had that acquisition or simple change of legal status (or any associated cancellation) not taken place, a periodic fee would have been payable by B in that same fee year.

  2. (2)

    If, before the date of acquisition or simple change of legal status, B had paid any periodic fee that would have become payable by it in that fee year, FEES 4.2.1R and FEES 4.2.7ER to FEES 4.2.7KR will not apply to A in relation to the business of B.

  3. (3)
    1. (a)

      If, before the date of acquisition or simple change of legal status, B had not paid any periodic fee that would have become payable by it in that fee year, FEES 4.2.1R and FEES 4.2.7ER to FEES 4.2.7KR will apply to A in relation to the business of B.

    2. (b)

      Periodic fees that would have become payable in that fee year include those which may have been dis-applied under FEES 4.3.13R.

  4. (4)

    Regardless of A’s valuation date:

    1. (a)

      if the acquisition or simple change of legal status takes place before B’s valuation date, then A must report the tariff data for, and pay fees or levies on, the transferred business up to the date of the transfer; and

    2. (b)

      if the acquisition or simple change of legal status takes place after B’s valuation date and B has not paid the relevant fees or levies, then the data should be reported and fees be paid by A as if the transfer had taken place immediately before the valuation (if B continues to be authorised, it should strip the transferred business out of its report).

FEES 4.4 Information on which fees 6are calculated

FEES 4.4.1 R RP

A firm (other than the Society or8 an MTF or OTF8 operator in relation to its MTF or OTF8 business5) must notify to the FCA (in its own capacity and, if applicable, in its capacity as collection agent for the PRA) the value (as at the valuation date specified in Part 5 of FEES 4 Annex 1AR6) of each element of business on which the periodic fee payable by the firm is to be calculated.

15
FEES 4.4.2 R RP

A firm (other than the Society) must send to the FCA (in its own capacity and, if applicable, in its capacity as collection agent for the PRA)15 in writing the information required under FEES 4.4.1 R as soon as reasonably practicable, and in any event within two months, after the date specified as the valuation date in Part 5 of FEES 4 Annex 1AR in relation of fees payable to the FCA6 (or FEES 4.2.7B R where applicable).2

7 [Note: Transitional provisions apply to FEES 4.4.1R and FEES 4.4.2R for firms in activity groups A.3 and A.4 – see FEES TP 13]

15 15 15
FEES 4.4.3 R RP

To the extent that a firm has provided the information required by this section 6 as part of its compliance with another provision of the Handbook, it is deemed to have complied with the provisions of this section.

14 14
FEES 4.4.4 G RP

In most cases a firm will provide the information required by this section as part of its compliance with the provisions of SUP. To the extent that the FCA6 does not obtain sufficient, or sufficiently detailed, information it 6 may seek this by using the general information gathering powers (see SUP 2 (Information gathering by the FCA or PRA6 on its own initiative)).

14 14 14 14 14 14 14
FEES 4.4.5 R RP

For an incoming EEA firm or an incoming Treaty firm, the information required under FEES 4.4 is limited to the regulated activities of the firm which are carried on in the United Kingdom, except those provided on a cross border services basis. 1

FEES 4.4.6 R RP

3The obligations of a firm to supply information as set out in FEES 4.4.1 R and FEES 4.4.2 R do not apply in respect of any of its payment services business.

Information relating to payment services and the issuance of electronic money4

FEES 4.4.7 D RP

3A fee-paying payment service provider and a fee-paying electronic money issuer4 must notify to the FCA the value (as at the valuation date specified in Part 4 of FEES 4 Annex 11) of each element of business on which the periodic fee (other than a flat fee)4 payable by the firm under 1 R4 is to be calculated, including any payment services carried on by its agents from an establishment in the United Kingdom.

4
FEES 4.4.8 D RP

3A firm4 must send to the FCA in writing the information required under FEES 4.4.7 D as soon as reasonably practicable, and in any event within two months, after the date specified as the valuation date in Part 4 of FEES 4 Annex 11.

FEES 4.4.9 D RP

3To the extent that a firm4 has provided the information required by FEES 4.4.7 D to the FCA as part of its compliance with another provision of the Handbook, it is deemed to have complied with the provisions of that direction.4

4 4

FEES 4 Annex 1A FCA activity16 groups, tariff bases and valuation dates

R

43Part 1

This table shows how the FCA links the regulated activities for which a firm has permission to activity groups (fee-blocks). A firm can use the table to identify which fee-blocks it falls into based on its permission.

Activity group

Fee payer falls in the activity group if:19

A.1 Deposit acceptors

its permission includes accepting deposits or operating a dormant account fundBUT DOES NOT include either of the following:

effecting contracts of insurance;

carrying out contracts of insurance.

A.2 Home finance providers and administrators

its permission includes a regulated activity within one or more of the following:

entering into a home finance transaction; or

administering a home finance transaction; or agreeing to carry on a regulated activity which is within either of the above.

A.3 Insurers - general and UK ISPVs 21

its permission includes one or more of the following:

- effecting contracts of insurance;

- carrying out contracts of insurance;

in respect of specified investments that are:

- general insurance contracts; or

- long-term insurance contracts other than life policies

OR 21

it has permission to carry on insurance risk transformation21.

A.4 Insurers - life

its permission includes one or more of the following:

- effecting contracts of insurance;

- carrying out contracts of insurance;

in respect of specified investments including life policies;

- entering as provider into a funeral plan contract.

A.5 Managing agents at Lloyd's

its permission includes managing the underwriting capacity of a Lloyd's syndicate as a managing agent at Lloyd's.

A.6 The Society of Lloyd's

it is the Society of Lloyd's

Note for authorised professional firms:

Generally, for fee-blocks A.7 to A.19 below, only those regulated activities that are not limited to non-mainstream regulated activities should be taken into account in determining which fee-block(s) fee-payers belong to for the purpose of charging periodic fees. However, in the case that all the regulated activity within a firmpermission are limited to non-mainstream regulated activities, then that firms will be allocated to fee-block A.13 alone. This does not prevent a fee being payable by an authorised professional firm under FEES 3.2.7 R and/or FEES 3.2.7A R(c) where it applies to vary its Part 4A permission such that it would normally be allocated to fee-block(s) other than A.13 if the variation was granted.

A.7 Portfolio managers 6

6

(1) its permission includes managing investments (a firm falling within this category is a class (1) firm);

OR

(2) its permission includes

ONLY either one or both of:

safeguarding and administering of investments (without arranging); and

arranging safeguarding and administration of assets (a firm falling within this category is a class (2) firm);

4 OR

(3) the firm is a venture capital firm (a firm falling within this category is a class (3) firm if it is not a class (1) or (2) firm).

OR

(4) its permission includes managing an AIF or managing a UCITS (a class 4 firm)10

Note:

Class (1) firms are subdivided into three classes:

- class (1)A, where the funds managed by the firm belong to one or more occupational pension schemes;

- class (1)B, where:

(a) the firm is not a class (1)A firm; and

(b) the firm permission includes NEITHER of the following:

safeguarding and administering investments (without arranging);

arranging safeguarding and administration of assets; and (c) the firmEITHER:

has a requirement that prohibits the firm from holding or controlling client money, or both; OR

if it does not have such a requirement, only holds or controls client money (or both), arising from an agreement under which commission is rebated to a client; and

- class (1)C, where the firm is not within class (1)A or class (1)B.

A.9 Managers and depositaries of investment funds, and operators of collective investment schemes or pension schemes 4

(1) its permission:

(a) includes one or more of the following:

managing an AIF;4

managing a UCITS;4

acting as trustee or depositary of an AIF;4

acting as trustee or depositary of a UCITS;4establishing, operating or winding up a collective investment scheme;5

establishing, operating or winding up a personal pension scheme or a stakeholder pension scheme (but only if the firm does not fall within activity group A1 or A4);

AND

(b) PROVIDED the firm is NOT one of the following:

OR

a corporate finance advisory firm;

a firm in which the above activities are limited to carrying out corporate finance business;

a venture capital firm;

a firm which would be a venture capital firm but for the inclusion of managing an AIF on its permission; but only where the firm is managing an AIF exclusively in respect of AIFs which only invest in venture capital investments.4

OR

(2) if the fee-payer has none of the regulated activities above within its permission, but ALL the remaining regulated activities in its permission are limited to carrying out trustee activities.

5

A.10 Firms dealing as principal

its permission includes:

(a) dealing in investments as principal; and/or

(b) bidding in emissions auctions;

BUT NOT if one or more of the following apply:

the firm is acting exclusively as a matched principal broker;

the above activity is limited either toestablishing, operating or winding up a collective investment scheme,5establishing, operating or winding up a personal pension scheme or a stakeholder pension scheme, or to carrying out depositary5 activities;

the firm is a corporate finance advisory firm;

the above activity is otherwise limited to carrying out corporate finance business;

the firm is subject to a limitation to the effect that the firm, in carrying on this regulated activity, is limited to entering into transactions in a manner which, if the firm was an unauthorised person, would come within article 16 of the Regulated Activities Order (Dealing in contractually based investments);

the above activity is limited to not acting as a market maker;

the firm is an oil market participant , energy market participant or a local (except where the firm is bidding in emissions auctions);

its permission includes either:

- effecting contracts of insurance; or

- carrying out contracts of insurance.

5 5
6 5 6 5 6 5 6 6 6

A.13 Advisors, arrangers, dealers or brokers 6

6

(1) it is an authorised professional firm and ALL the regulated activities in its permission are limited to non-mainstream regulated activities (a firm falling within this category is a class (1) firm);

OR

(2) its permission:

(a) includes one or more of the following14:

14(i) in relation to one or more designated investments:

dealing in investments as agent;

arranging (bringing about) deals in investments;

making arrangements with a view to transactions in investments;

dealing as principal in investments where the activity is carried on as a matched principal broker, oil market participant, energy market participant or local;

advising on investments (except P2P agreements) 14

(except pension transfers and pension opt-outs);

giving basic advice on a stakeholder product;

advising on pension transfers and pension opt-outs;

advising on syndicate participation at Lloyd's;

14(ii) advising on P2P agreements;

(iii) in relation to a structured deposit:19

dealing in investments as agent; or19

arranging (bringing about deals) in investments;19

or making arrangements with a view to transactions in investments; or19

advising on investments (except P2P agreements); or19

advising on investments (except pension transfers and pension opt-outs);19

(b) BUT NONE of the following:

effecting contracts of insurance; or8

carrying out contracts of insurance;

AND 6

(c) 6PROVIDED the fee-payer is NOT any of the following:

a corporate finance advisory firm;

a firm for whom all of the applicable activities above are otherwise limited to carrying out corporate finance business;

a firm for whom all the applicable activities above5are limited to carrying out venture capital business;

a firm for whom all the applicable activities above are limited to acting as a residual CIS operator;5

a firm for whom all the applicable activities above are limited to acting as trustee or depositary of an AIF and/or acting as trustee or depositary of a UCITS;5 a service company.

A firm falling within (2) and not (1) is a class 2 firm.

6 6 6 6 6 6 6 6 5 5 5

A.14 Corporate finance advisers

the firm is carrying on corporate finance businessPROVIDED the fee-payer is NOT a venture capital firm.

A.18 Home finance providers, advisers and arrangers

its permission includes a regulated activity within one or more of the following:

entering into a home finance transaction; or

arranging (bringing about) a home finance transaction ; or

making arrangements with a view to a home finance transaction; or

advising on a home finance transaction; or

agreeing to carry on a regulated activity which is within any of the above.

A.19 General insurance mediation

its permission includes one or more of the following in relation to a non-investment insurance contract:

dealing in investments as agent; or

arranging (bringing about) deals in investments; or

making arrangements with a view to transactions in investments; or

assisting in the administration and performance of a contract of insurance; or

advising on investments; or

agreeing to carry on a regulated activity which is within any of the above.6

6 A.21 Firms holding client money or assets, or both

(1) It is a firm carrying on a regulated activity defined in fee-block A.13;

AND EITHER OR BOTH:

(2A) It is a firm to which the client money rules apply

AND/OR

(2B) Its permissions includes safeguarding and administration of assets (without arranging)

UNLESS

CASS does not apply to that firm in accordance with CASS 1.2

18

18

15 15

B. Service companies

it is a service company.

B. MTF and OTF operators19operators

its permission includes operating a multilateral trading facilityor operating an organised trading facility19.1

17

1 12 12 12

17

12

12 B. Benchmark administrators 12

it administers one or more specified benchmarks17.

12

20 B. Recognised investment exchanges

it is a recognised investment exchange.

20 B. Recognised auction platforms

it is a recognised auction platform.

20 B. Recognised overseas investment exchanges

it is a recognised overseas investment exchange.

7 CC1. Credit-related regulated activities with limited permission

it carries on credit-related regulated activities; and

it has a limited permission; and

it is not a not-for-profit debt advice body; and

it is not a credit union or

community finance organisation with annual income as defined in FEES 4 Annex 11B R of less than £250,000.

7 CC2. Credit-related regulated activities

it carries on credit-related regulated activities; and

it does not have a limited permission; and

it is not a not-for-profit debt advice body; and

it is not a credit union or

community finance organisation with annual income as defined in FEES 4 Annex 11B R of less than £250,000.

Part 2

This table sets out the activity groups (fee blocks) in relation to (i) the minimum fees7payable to the FCA and (ii) the prudential fee payable to the FCA.

7

Activity group

Fee payer falls into the fee-block if

A.0 FCA minimum fee

(1) it is in at least one of the fee blocks under Part 1; and

(2) it is not:

(a) a UK ISPV; or

(b) a firm whose only permission is

operating a dormant fund account; or7

(c) a firm exclusively carrying on credit-related regulated activities.7

7

AP.0 FCA prudential fee

(1) it is an FCA authorised person2 other than an FCA authorised person exclusively carrying on credit-related regulated activities7;and

(2) the periodic fee it pays to the FCA is not limited to the A.0 FCA minimum fee.2

2 2

Part 3

This table indicates the tariff base for each fee-block set out in Part 1.

The tariff base in this Part is the means by which the FCA measures the amount of business conducted by a firm for the purposes of calculating the annual periodic fees payable to the FCA by that firm.2

Activity group

Tariff base

A.1

MODIFIED ELIGIBLE LIABILITIES

For banks and building societies:

Item B of Form ELS (Note (1)):

(1 + 2 + 3 + 4 + 0.6*5 + 6 - 8 - 9A - 9B - 10A - 10B - 10C - 11A - 11B - 0.6*12) + (1/3)*(F1 + F2 + F3 + F4 + 0.6*F5 + F6 - F8 - F9A - F9B - F10A - F10B - F10C - F11A - F11B - 0.6*F12)

- 13M

Notes:

(1) All references in the above formula are to entries on Form ELS (that is, the Eligible Liabilities Return completed to provide information by banks and building societies to the Bank of England as required by the Bank of England Act 1998).

(2) The figures reported on the Form ELS relate to business conducted out of offices in the United Kingdom.

For credit unions:

Deposits with the credit union (share capital)

LESS

the credit union's bank deposits (investments + cash at bank)

Note:

Only United Kingdom business is relevant for calculating credit unions' MELs.

Note:

For a dormant account fund operator the tariff base is not relevant and the flat fee in FEES 4 Annex 2A R is payable.

A.2

NUMBER OF HOME FINANCE TRANSACTIONS ENTERED INTO AND ADMINISTERED

The number of newhome finance transactions11 entered into;

AND

The number of home finance transactions11being administered:11

(a) multiplied by 0.05 for firms with permission for administering a home finance transaction but not permission for entering into a home finance transaction; or11

(b) by 0.5 for all other firms.11

Notes:

(1)[deleted]11

(2) For the measure of the number of contracts being administered, each charge counts as one contract, irrespective of the number of loans involved.

(3) Home finance transactions11administered include those that the firm administers on behalf of other firms.

11 11 10 11 11 11 11 11

A.3

GROSS PREMIUM INCOME AND GROSS TECHNICAL LIABILITIES

For insurers:

The amount of premium receivable which must be included in the documents required to be deposited under IPRU(INS) (as defined in the Fees Part of the PRA Rulebook) 139.6 in relation to the financial year to which the documents relate but disregarding for this purpose such amounts as are not included in the document by reason of a waiver or an order under section 68 of the Insurance Companies Act 1982 carried forward as an amendment to IPRU(INS) (as defined in the Fees Part of the PRA Rulebook) 13under transitional provisions relating to written concessions in SUP;

AND the amount of gross technical liabilities IPRU(INS) (as defined in the Fees Part of the PRA Rulebook) 13Appendix 9.1 - Form 15, line 19) which must be included in the documents required to be deposited under FUND 3.4.8G IPRU(INS) (as defined in the Fees Part of the PRA Rulebook) 139.6R in relation to the financial year to which the documents relate but disregarding for this purpose such amounts as are not included in the document by reason of a waiver or an order under section 68 of the Insurance Companies Act 1982 carried forward as an amendment to IPRU(INS) (as defined in the Fees Part of the PRA Rulebook) 13under transitional provisions relating to written concessions in SUP.

Notes:

(1) in the case of either:

(a) a pure reinsurer carrying on general insurance business through a branch in the United Kingdom; or

(b) an insurer whose head office is not in an EEA State carrying on general insurance business through a branch in the United Kingdom; or

(c) an EEA-deposit insurer;

the amount only includes premiums received and gross technical liabilities held in respect of its United Kingdom business;

(2) for a Swiss general insurance company, premiums and gross technical liabilities include those relevant to the operations of the company's United Kingdombranch; and

(3) a firm need not include premiums and gross technical liabilities relating to pure protection contracts which it reports, and pays a fee on, in the A.4 activity group.

For friendly societies:

Either:

(a) the value of contributions as income under Schedule 7: Part I item 1(a) to the Friendly Societies (Accounts and Related Provisions) Regulations 1994 (SI 1994/1983) (the regulations) for a non-directive friendly society, included within the income and expenditure account; or

(b) the value of gross premiums written under Schedule 1: Part I items I.1(a) and II.1.(a) of the regulations for a directive friendly society included within the income and expenditure account.

Notes:

(1) In both (a) and (b) above only premium receivable in respect of United Kingdom business are relevant.

(2) For UK ISPVs the tariff base is not relevant and a flat fee set out in FEES 4 Annex 2AR is payable.

A.4

ADJUSTED GROSS PREMIUM INCOME AND MATHEMATICAL RESERVES (seeFEES 4 Annex 12 G)

Amount of new regular premium business (yearly premiums including reassurances ceded but excluding cancellations and reassurances accepted), times ten;

Plus:

amounts of new single premium business (total including reassurances ceded but excluding cancellations and reassurances accepted). Group protection business (life and private health insurance) must be included;

Less:

premiums relating to pension fund management;

Less:

premiums relating to Trustee Investment Plans.

For each of the above, business transacted through independent practitioners or tied agents (either single or multi-tie) will be divided by two in calculating the adjusted gross premium income;

AND

the amount of mathematical reserves (IPRU (INS) (as defined in the Fees Part of the PRA Rulebook) 13Appendix 9.1R - Form 14 , Line 11 ) which must be included in the documents required to be deposited under IPRU (INS) (as defined in the Fees Part of the PRA Rulebook) 139.6R in relation to the financial year to which the documents relate but disregarding for this purpose such amounts as are not included in the document by reason of a waiver or an order under section 68 of the Insurance Companies Act 1982 carried forward as an amendment to IPRU (INS) (as defined in the Fees Part of the PRA Rulebook) 13IPRU(INS) under transitional provisions relating to written concessions inSUP;

Less

mathematical reserves relating to pension fund management.

Less

mathematical reserves relating to Trustee Investment Plans.

Notes:

(1) Only premiums receivable and mathematical reserves held in respect of United Kingdom business are relevant.

(2) An insurer must include in its calculation of adjusted gross premium income (AGPI) and mathematical reserves (MR) the value of MR and AGPI relating to all risks ceded to ISPVs.

(3) Trustee Investment Plans are the class of contract of insurance specified in Class III of Part II of Schedule 1 to the Regulated Activities Order (Contracts of long-term insurance) and which are invested in pooled funds beneficially owned by the insurer and not earmarked to individual beneficiaries by that insurer.

A.5

ACTIVE CAPACITY

The capacity of the syndicate(s) under management in the year in question. This includes the capacity for syndicate(s) that are not writing new business, but have not been closed off in the year in question.

A.6

Not applicable.

A.7

FUNDS UNDER MANAGEMENT (FuM)

The total value, in pounds sterling, of all assets (see note (a) below) in portfolios which the firm manages, on a discretionary basis (see note (b) below), in accordance with its terms of business, less:

a) funds covered by the exclusion contained in article 38 (Attorneys) of the Regulated Activities Order;

(b) funds covered by the exclusion contained in article 66(3) (Trustees, nominees and personal representatives) of the Regulated Activities Order;

(c) funds covered by the exclusion contained in article 68(6) (Sale of goods or supply of services) of the Regulated Activities Order;

(d) funds covered by the exclusion contained in article 69(5) (Groups and joint enterprises) of the Regulated Activities Order; and

(e) the value of those parts of the managed portfolios in respect of which the responsibility for the discretionary management has been formally delegated to another firm (and which firm will include the value of the assets in question in its own FuM total); any such deduction should identify the firm to which management responsibility has been delegated.

Notes on FuM

(a) Except for funds under management where the fund is an AIF, for4 the purposes of calculating the value of funds under management, assets means all assets that consist of or include any investment which is a designated investment or those assets in respect of which the arrangements for their management are such that the assets may consist of or include such investments, and either the assets have at any time since 29 April 1988 done so or the arrangements have at any time (whether before or after that date) been held out as arrangements under which the assets would do so.

(aa) for funds under management, where the fund is an AIF, assets means all assets or property of any description of the fund.4

(b) Assets managed by the firm on a discretionary basis exclude the firm's own assets. Assets managed on a non-discretionary basis, being assets that the firm has a contractual duty to keep under continuous review but in respect of which prior specific consent of the client must be obtained for proposed transactions, are also excluded as this activity is covered in those charged to fees in activity group 6A.13.

(c) In respect of collective investment schemes, assets means the total value of the assets of the scheme.

(d) For an OPS firm, the FuM should also be reduced by the value of the assets held as a result of a decision taken in accordance with article 4(6) of The Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) Order 2001 (investments in collective investment scheme or bodies corporate which have as their primary purpose the acquisition, directly, or indirectly, of relevant investments, as defined in that article).

(e) Only assets that are managed from an establishment maintained by the firm in the United Kingdom are relevant.

(f) If the firm is managing an overlay portfolio of derivative instruments and the underlying assets are managed by itself or a firm within the same group that has not reported them separately to the FCA, or by a firm outside its group, then it should calculate the value of the derivatives and other assets as prescribed in the guidance in FSA038 in SUP 16 Annex 25.

If the underlying assets are managed by another firm within the same group who has reported their value separately to the FCA, then to avoid double-counting within the group, the calculation must be restricted to the exposure of the overlay.

6

A.9

GROSS INCOME(1) For AIFMs (excluding internally managed AIFs), management companies,4 operators (including ACDs and authorised fund managers3 of unit trusts or authorised contractual schemes3 but excluding operators of a personal pension scheme or a stakeholder pension scheme) and residual CIS operators4 gross income from the activity relating to fee-block A.9 is defined as:

the amount of the annual charge on investments in the fund4 received or receivable in the latest accounting period (this is calculated as a % of funds invested, typically 1% p.a.);

PLUS(a)10

the front-end or exit charge levied on sales or redemptions of collective investment schemes (typically 4-5% of sales/redemptions) in that same accounting period; and10

(b) any amount the firm would have levied as such a charge but for a business decision to waive, discount or rebate etc. that charge;10

PLUS

any additional initial or management charges levied through a product wrapper such as an ISA;

BUT EXCLUDING box management profits.

(2)4Fordepositaries (includingtrusteesofcollective investment schemesandICVC or ACS3depositaries):

The amount of the annual charge levied on investments in funds4 for which they act as depositary (typically a % of the total funds for which they act as depositary).(3)4

For operators of a personal pension scheme or a stakeholder pension schemegross income from the activity relating to fee block A.9 is defined as:4

The amount of the charges levied on the personal pension scheme or stakeholder pension scheme for which they act as operator:

including up-front charges, fund related charges, transaction related charges and periodic charges; but

excluding charges made to an investor in respect of third party suppliers; for example, charges for stock broking, borrowing, banking services and charges for arranging third party legal services, surveys or environmental screening in connection with property.

Note:

Only the gross income corresponding to United Kingdom business is relevant.

(4) Internally managed AIFs must use a proxy for gross income for the activities relating to fee block A.9. This is the total value of funds under management (as defined in fee block A.7) multiplied by 0.01.4

3 4

A.10

NUMBER OF TRADERS

Any employee or agent, who:

ordinarily acts within the United Kingdom on behalf of an authorised person liable to pay fees to the FCA in its fee-block A.10 (firms dealing as principal); and who,

as part of their duties in relation to those activities of the authorised person, commits the firm in market dealings or in transactions in securities or in other specified investments in the course of regulated activities.

But not any employees or agents who work solely in the firm'sMTF operation.

A firm may, as an option, report employees or agents as full-time equivalents (FTE), taking account of any part-time staff. In calculating the FTE, firms must take into account the total hours employees or agents have contracted to work for the firm and not the time employees or agents devote to the dealing in investments as principal and bidding in emissions auctions functions set out in fee-block A.10. Any figures using the FTE calculation to be recorded to one decimal place, rounded down to the nearest decimal place.

A.13

ANNUAL INCOME

Annual income as defined in FEES 4 Annex 11A R

A.14

ANNUAL INCOME

Annual income as defined in FEES 4 Annex 11A R.

A.18

Annual income as defined in FEES 4 Annex 11A6

6

A.19

Annual income as defined in FEES 4 Annex 11A6

6

6 A.21

CLIENT MONEY/ASSETS HELD:

A value in pound sterling equal to:

Highest total amount of client money held by the firm during the 12 months ending 31 December before the relevant fee year

PLUS

Highest total value of safe custody assets held by the firm during the 12 months ending 31 December before the relevant fee year

18

18

B. Service companies

ANNUAL INCOME

Annual income as defined in FEES 4 Annex 11AR.9

9

B. MTF and OTF 19 operators

SUPERVISORY CATEGORY

The general supervisory category to which the MTF or OTF operator19 was assigned as at the start of the relevant fee year.9

9 20

1 B. Benchmark administrators

Annual income as defined in FEES 4 Annex 11AR. 17

7

20 B. Recognised investment exchanges

Annual income as defined in FEES 4 Annex 11AR. 17

20 B. Recognised auction platforms

Not applicable.

20 B. Recognised overseas investment exchanges

Not applicable.

7 CC1. Credit-related regulated activities with limited permission

Annual income as defined in FEES 4 Annex 11B R.

7 CC2. Credit-related regulated activities

Annual income as defined in FEES 4 Annex 11B R.

Part 4

This table indicates the tariff base for each fee block set out in Part 2.

The tariff base in this Part is the means by which the FCA measures the amount of business conducted by a firm for the purposes of calculating the annual periodic fees payable to the FCA by that firm.2

Activity Group

Tariff base

A.0

Not applicable because the minimum fee is a specified amount.

AP.0

The total periodic fees payable as a result of fee blocks A.2 and A.7 to A.19 in 2 Part 1 of FEES 4 Annex 2A R excluding any periodic fee for operating a dormant fund account.

Part 5

This table indicates the valuation date for each fee-block. A firm can calculate its tariff data in respect of fees payable to the FCA by applying the tariff bases set out in Part 3 with reference to the valuation dates shown in this table.

Activity group

Valuation date

IN THIS TABLE, REFERENCES TO SPECIFIC DATES OR MONTHS ARE REFERENCES TO THE LATEST ONE OCCURRING BEFORE THE START OF THE PERIOD TO WHICH THE FEE APPLIES, UNLESS OTHERWISE SPECIFIED - E.G. FOR 2013/14 FEES (1 APRIL 2013 TO 31 MARCH 2014), A REFERENCE TO DECEMBER MEANS DECEMBER 2012.

Where a firm's tariff data is in a currency other than sterling, it should be converted into sterling at the exchange rate prevailing on the relevant valuation date.

A.1

For banks:

Modified eligible liabilities (MELs), valued at:

for a firm which reports monthly, the average of the MELs for October, November and December;

for a firm which reports quarterly, the MELs for December. For credit unions:

For credit unions:

MELs, valued at December or as disclosed by the most recent annual return made prior to that date.

For building societies:

MELs, valued at the average of the MELs for October, November and December.

A.2

Number of mortgages, home purchase plans, home reversion plans and regulated sale and rent back agreements entered into in the twelve months ending 31 December.

AND

Number of mortgages, home purchase plans, home reversion plans and regulated sale and rent back agreements being administered on 31 December.

A.3

Annual gross premium income (GPI), for the financial year ended in the calendar year ending 31 December.

AND

Gross technical liabilities (GTL) valued at the end of the financial year ended in the calendar year ending 31 December.

16[Note: Transitional provisions apply – see FEES TP 13]

A.4

Adjusted annual gross premium income (AGPI) for the financial year ended in the calendar year ending 31 December.

AND

Mathematical reserves (MR) valued at the end of the financial year ended in the calendar year ending 31 December.

16[Note: Transitional provisions apply – see FEES TP 13]

A.5

Active capacity (AC), in respect of the Underwriting Year (as reported to the Society of Lloyd's) which is current at the beginning of the period to which the fee relates.

[Note: this is the Underwriting Year which is already in progress at the start of the fee period - e.g. for 2013/14 fees, the fee period will begin on 1 April 2013, which is in the 2013 Underwriting Year, so the AC for that Underwriting Year is the relevant measure.]

A.6

Not applicable.

A,7

Funds under management (FuM), valued at 31 December.

A.9

Annual gross income (GI), valued at the most recent financial year ending 201731 December.

A.10

Number of traders as at 31 December.

A.13

Annual income for the financial year ended in the calendar year ending 31 December.

A.14

Annual income for the financial year ended in the calendar year ending 31 December.

A.18

Annual income (AI) for the financial year ended in the calendar year ending 31 December.

A.19

Annual income (AI) for the financial year ended in the calendar year ending 31 December.6

6 A.21

In respect of client money, the highest amount of client money held over the 12 months ending 31 December before the relevant fee year.

In respect of safe custody assets, the highest amount of safe custody assets held over the 12 months ending 31 December before the relevant fee year.

18

18

B. Service companies

Annual income for the financial year ended in the calendar year ending 31 December.9

9

B. MTF 20 and OTF 19 operators

The start of the relevant fee year.9

9

1 B. Benchmark administrators 20

Annual income for the financial year ended in the calendar year ending 31 December17.20

7

20 B. Recognised investment exchanges

Annual income for the financial year ended in the calendar year ending 31 December17.

20 B. Recognised auction platforms

Not applicable.

20 B. Recognised overseas investment exchanges

Not applicable.

7 CC1. Credit-related regulated activities with limited permission

Annual income for the financial year ended in the calendar year ending 31 December.

7 CC2. Credit-related regulated activities

Annual income for the financial year ended in the calendar year ending 31 December.

FEES 4 Annex 2A 5 7 7 11FCA Fee rates and EEA/Treaty firm modifications for the period from 1 April 2017 to 31 March 2018

R

38Part 1

This table shows the tariff rates applicable to each of the fee blocks set out in Part 1 of FEES 4 Annex 1AR.

(1)

For each activity group specified in the table below, the fee is the total of the sums payable for each of the tariff bands applicable to the firm's business, calculated by multiplying the value of the firm's tariff base by the rate applicable to each tranche of the tariff base, as indicated.

(2)

A firm may apply the relevant tariff bases and rates to non-UK business, as well as to its UK business, if:

(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 3 of FEES 4 Annex 1A R are disproportionate to the difference in fees payable; and

(b)

it notifies the FCA 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.

(3)

For a firm which has not complied with FEES 4.4.2R8 (Information on which fees are calculated) for this period:

(a)

the fee is calculated using (where relevant) the valuation or valuations of business applicable to the previous period, multiplied by the factor of 1.10; and11

(b)

an additional fee of £250 is payable, unless the firm is a PRA-authorised person in which case an additional fee of £125 is payable instead.11

(c)

[deleted]11

5 5 7 7 7 7

Activity group

Fee payable

A.1

Band width (£2million of Modified Eligible Liabilities (MELs))

Fee (£/£m or part £m2 of MELs)

2

General Periodic fee

>10 - 140

15.4313

2 5 5 7 7 11

>140 - 630

15.4313

2 5 5 7 7 11

>630 - 1,580

15.4313

2 5 5 7 7 11

>1,580 - 13,400

19.2913

2 5 5 7 7 11

>13,400

25.4613

2 5 5 7 7 11

The tariff rates in A.1 are not relevant for the permissions relating to operating a dormant account fund. Instead a flat fee of £116,060 13is payable in respect of these permissions

A.2

Band width (No. of mortgages and/or home finance transactions)

Fee (£2/mortgage)

>50

2

2.3013

2 5 5 7 7 11

A.3

Gross premium income (GPI)

Periodic fee

Band Width (£2million of GPI)

Fee (£2/m or part m of GPI)

>0.5

2

345.7113

2 5 5 7 7 11

PLUS

Gross technical liabilities (GTL)

General Periodic fee

Band Width (£2million of GTL)

Fee (£2/£2m or part £2m of GTL)

>1

2

18.5313

2 5 5 7 7 11

For UKISPVs the tariff rates are not relevant and a flat fee of 7 £11471 13 is payable in respect of each FCA financial year (the 12 months ending 31 March).

7 7 7

A.4

Adjusted annual gross premium income (AGPI)

General Periodic fee

Band Width (£2million of AGPI)

Fee (£2/£2m or part £2m of AGPI)

>1

2

525.9113

2 5 5 7 7 11

PLUS

Mathematical reserves (MR)

General Periodic fee

Band Width (£2million of MR)

Fee (£2/£2m or part £2m of MR)

>1

2

11.0813

2 5 5 7 7 11

A.5

Band Width (£2million of Active Capacity (AC))

Fee (£2/£2m or part £2m of AC)

>50

2

7.7013

2 5 5 7 7 11

A.6

Flat fee (£)2

334,93913

2 5 5 7 7 11

A.7

For class 1(C), (2) , (3) and (4)6firms:

6

Band Width (£2million of Funds under Management (FuM))

Fee (£2/£2m or part £2m of FuM)

>10

2

6.0913

2 5 5 7 7 11

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%.2

A.9

Band Width (£2million of Gross Income (GI))

Fee (£2/£2m or part £2m of GI)

>1

2

1,003.5213

2 5 5 7 7 11

A.10

Band Width (No. of traders)

Fee (£2/person)

>12

2

5,473.7813

2 5 5 7 7 11

For firms carrying on auction regulation bidding, the fee in A.10 is calculated as above less 20% for each trader that carries on auction regulation bidding but not MiFID business bidding or dealing in investments as principal.
2 3 2 3

A.13

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

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

>1002

2

2.75613

2 5 5 7 7 11

A.14

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

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

>1002

2

1.7913

2 5 5 7 7 11

A.18

Band Width (£2 thousands of Annual Income (AI))

Fee (£2/£2 thousand or part £2 thousand of AI)

>100

2

12.4413

2 5 5 7 7 11

A.19

Band Width (£2 thousands of Annual Income (AI))

Fee (£2/£2 thousand or part £2 thousand of AI)

>100

2

1.75113

2 5 5 7 7 11

3A.21

Client money

Band Width (£ client money) (CM) held

Fee (£/£ millions or part £ million of CM)

less than £1 million5

5

116.5013

5 5 7 7 11

an amount equal to or greater than £1 million but less than or equal to £1 billion

87.3813

5 5 7 7 11

more than £1 billion5

5

58.2513

5 5 7 7 11

PLUS

Safe custody assets

Band Width (£ safe custody assets) (CA) held

Fee (£/£ millions or part £ million of CA)

less than £10 million5

5

0.4513

5 5 11

an amount equal to or greater than £10 million and less than or equal to £100 billion

0.3413

5 5

more than £100 billion5

5

0.2313

5 5

13

2

13

2 7 7 11

5B. Service Companies

Band Width

Fee (£/£m or part £ thousand of income)12

Annual income up to and including £100,000

1,078.0013

7 7 11 12

Annual income over £100,00012

1.8013

7 7 11 12

12

12

7 7 11

12

1 13 7

11 7 7

13

7 7 11
7 7 11 7

B Benchmark administrators12

Band width12

Fee (£)15

12

Annual income up to and including £3,000,00012

100,00012

15 PLUS:

15Band width

Fee (£/£ thousand or part thousand of income)

Annual income over £3,000,00012

28.9015

12

12B. Recognised investment exchanges

Band width

Fee (£)15

Annual income up to and including £10,000,000

100,000

15 PLUS:

15Band width

Fee (£/£ thousand or part thousand of income)

Annual income over £10,000,000

5.5815

12B. Recognised auction platforms

53,537.0013

12B. Recognised overseas investment exchanges

61,224.0013

B. MTF and OTF14 operators

As set out in FEES 4 Annex 10R14 (Periodic fees for MTF and OTF14 operators).

4CC1. Credit-related regulated activities with limited permission

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

Fee (£)5

0 - 105

5

10113

5 5

>10 - 505

5

25313

5 5

>50 - 1005

5

40413

5 5

>1005

5

50513

5 5

5 PLUS:

5Fee (£/£ thousand or part £ thousand of AI)

>2505

5

0.405

5

4CC2. Credit-related regulated activities

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

Fee (£)

5

0 - 505

5

30313

5 5

>50 - 1005

5

50513

5 5

>1005

5

1,01013

5 5

5 PLUS:

5Fee (£/£ thousand or part £ thousand of AI)

>2505

5

1.3011

5 5

Part 2

The tables below show 9the tariff rates (minimum fees) applicable to each of the fee blocks set out in Part 2 of FEES 4 Annex 1AR.

9Part 2(a) shows the tariff rates (minimum fees) payable to the FCA by FCA-authorised persons and Part 2(b) shows the tariff rates (minimum fees) payable to the FCA by PRA-authorised persons.

[Note:PRA-authorised persons will also pay minimum fees to the PRA as set out in Chapter 3 of the Fees Part of the

PRA Rulebook.]

9 Part 2(a) tariff rates (minimum fees) payable to the FCA by FCA-authorised persons

A.0

(1)

£111,095 13unless it is a community finance organisation with a tariff base of:11

2 2 7 7 9

11(a)

up to and including 3 mortgages and/or home finance transactions, in which case a minimum fee of £168 13is payable; or

11(b)

more than 3 but no more than 10 mortgages and/or home finance transactions, in which case a minimum fee of £568 13is payable; or

2 2 7 7

11(c)

more than 10 but no more than 50 mortgages and/or home finance transactions, in which case a minimum fee of £1,052 13is payable.

2 7 7
2 2 7 7

(2)
2 2 7 7

[deleted]9

3 3 2 2 7 7

(3)

[deleted]9

[deleted]9

2

(4)

[deleted]9

2

AP.0

Periodic fees payable under fee blocks A.2, A.7 to A.19and A. 21 5in 2 Part 1 multiplied by rate £0.111 13

2 5 7 7 11

9 Part 2(b) tariff rates (minimum fees) payable to the FCA by PRA-authorised persons

A.0

(1)

£547 13unless:

(a)

It is a credit union that meets the conditions in (2), in which case the minimum fee payable is as set out in (2);

(b)

it is a non-directive friendly society that falls into the A.3 activity group but not the A.4 activity group and meets the conditions set out in (3)(a), in which case the minimum fee payable is £235; 13or

(c)

it is a non-directive friendly society that falls into the A.4 activity group but not the A.3 activity group and meets the conditions in (3)(b), in which case the minimum fee payable is £235; 13or

(d)

it is a non-directive friendly society that falls into the A.3 and A.4 activity groups and meets the conditions in (3)(a) and (3)(b), in which case the minimum fee payable is £23513.

(2)

The conditions referred to in (1)(a) are that the credit union has a tariff base (Modified Eligible Liabilities) of:

(a)

0 to 0.5million, in which case a minimum fee of £87 13is payable; or

(b)

greater than 0.5millon but less than 2.0million, in which case a minimum fee of £295 13is payable.

(3)

The conditions referred to in (1) are that:

(a)

the non-directive friendly society falls into the A.3 activity group and has, for that activity, 0.5 million or less in gross premium income and holds gross technical liabilities of 1.0 million or less;

(b)

the non-directive friendly society falls into the A.4 activity group and has, for that activity, written 1.0 million or less in adjusted gross premium income and holds mathematical reserves of 1.0 million or less.

The figures for gross premium income, gross technical liabilities, adjusted gross premium income and mathematical reserves are the same as used for Part 1 of this Annex.

Part 3

This table shows the modifications to fee tariffs that apply in respect of the FCA to incoming EEA firms and incoming Treaty firms which have established branches in the UK.

Activity Group

Percentage deducted from the tariff payable under Part 1 applicable to the firm

A.1

10%2

2

A.3

10%2

2

A.4

10%2

2

A.7

10%2

2

A.9

10%2

2

A.10

In relation to each trader that carries on auction regulation bidding but not MiFID business bidding or dealing in investments as principal, 100%.

In relation to all other traders, 10%2.

2

A.13

10%2

2

10A.18

10%

A.19

50%2

2

B. MTF and OTF14 operators

Not applicable

AP.0

100%

Note 1

The modifications to fee tariffs payable by an incoming EEA firm or an incoming Treaty firm which has established a branch in the UK apply only in relation to the relevant regulated activities of the firm which are passported activities or Treaty activities and which are carried on in the UK.

Note 2

The FCA minimum fee described in Part 2 of FEES 4 Annex 2A R applies in full and the modifications in this Part do not apply to it.

FEES 4 Annex 2B Ring-Fencing Implementation Fee

R

1In the fee year starting 1 April 2017 2and subsequent fee years:

(1)

The FCA will charge a ring-fencing implementation fee to recover the annual cost to the FCA, as determined by the FCA, of implementing ring-fencing.

(2)

All firms in a ring-fencing fees group are subject to ring-fencing implementation fees. The FCA may require that a single firm in a ring-fencing fees group pay all of the applicable ring-fencing implementation fees.

(3)

In each fee year the FCA will allocate to each ring-fencing fees group the proportion referred to in (4) of the cost referred to in (1). An amount reflecting this proportion will be the total fee payable by the firms within the ring-fencing fees group.

(4)

The proportion was determined by the FCA for the 2017/18 fee year2in accordance with the following formula (all figures are rounded to the nearest whole number):

[(X + Y) ÷2] %

where

X= [core deposits (ring-fencing fees group) ÷ core deposits (all ring-fencing fees groups)] x 100

and

Y = [assets outside expected RFB subgroup (ring-fencing fees group) ÷ assets outside expected RFB subgroups (all ring fencing fees groups)] x 100

(5)

The following are not required to pay the fee set out below if a ring-fencing implementation fee is payable by that person or another firm in the applicant’s ring-fencing fees group:

Fee payer

Fee

(a) a firm that applies for a Part 4A permission and/or a variation of a Part 4A permission as a result of ring-fencing

an application fee under FEES 3.2.7R Part 1(1)(a) or (p)

(b) an issuer that applies for registration of a regulated covered bond as a result of ring-fencing

an application fee under FEES 3.2.7R Part 1(1)(zm)

(c) an issuer that proposes to make a material change to the contractual terms of a regulated covered bond under RCB 3.5.4D as a result of ring-fencing

an application fee under FEES 3.2.7R Part 1(1)(zn)

FEES 4 Annex 3A 1 2 2 3Fees relating to the direct reporting of transactions to the FCA under SUP 17 for the period 1 April 2017 to 31 March 20184

R

1This table shows the fees payable by a firm, a third party acting on behalf of a firm, an approved reporting mechanism, an operator of a regulated market or an operator of an MTF that makes transaction reports directly to the FCA under SUP 17 (Transaction reporting).

Fee

Fee amount (£)

Technical support fee

5,0004

2 2 3

Testing environment fee

3,7504

2 2 3

Variable transaction-based fee

3.91 4 per 100,000 transaction reports or part 100,000 transaction reports processed during the calendar year ending 31 December before the fee year to which the fee relates

2 2 3

FEES 4 Annex 4 1 9 10 16 15 16 18Periodic fees in relation to collective investment schemes, AIFs marketed in the UK and small registered UK AIFMs payable for the period 1 April 2017 to 31 March 201819

R

1Part 1 - Periodic fees payable

Scheme type

Basic fee (£)

Total funds/sub-funds aggregate

Fund factor

Fee (£)

ICVC 18,

AUT 18,

ACS 18,

UK ELTIFs,17

Section 264 of the Act, schemes other than non-EEA AIFs recognised under section 272 of the Act,16

11 16 16 12 15 12 16

194109

18 16 2 4 6 8 9 15 15 16

1-2

3-6

7-15

16-50

>50

1

2.5

5

11

22

41019

1,02519

2,05019

4,51019

9,020199999

18 18 18 18 18 16 16 16 16 16 2 3 6 2 3 6 2 3 6 2 3 6 2 3 6 7 8 8 8 8 8 9 9 9 9 9 10 10 10 10 10 15 16 15 15 15 15

Non-EEA AIFs recognised under section 272 of the Act18

12 12 15

1,67019

2 4 7 8 9 10 15 16 16 18

1-2

3-6

7-15

16-50

>50

1

2.5

5

11

22

1,67019

4,17519

8,35019

18,37019

36,74019

2 3 6 2 3 2 3 6 2 3 6 2 3 6 7 8 8 8 8 8 9 9 9 9 9 10 10 10 10 10 15 15 16 16 15 16 16 15 16 16 15 16 16 15 16 16 18 18 18 18 18

Fees are charged according to the number of funds or sub-funds5operated by a firm as at 31 March preceding the relevant fee year14.83 Where a new collective investment scheme becomes authorised during a fee year14, fees are charged according to the number of funds or sub-funds5operated by a firm as at the date of authorisation. Where more than one fund or sub-fund5is operated,5 the number of funds (not including the umbrella5or parent fund) produces a 'fund factor' in accordance with the table above,5 which is then applied to a basic fee to produce one total fee per operator5. Fund factors are applied per operator5rather than per scheme5so that the fees relate to the number of funds rather than the number of schemes5. This means that, for example, an authorised fund manager5 of three schemes5pays the same as an operator5or authorised fund manager5of one scheme5with three sub-funds5(as only the sub-funds5are counted).

Schemes 5 set up under section 264 of the Act are charged according to the number of funds or sub-funds5which a firm is operating and marketing into the UK as at 31 March immediately before the start of the period to which the fee applies. For example, for 2010/117fees a reference to 31 March means 31 March 2010.7

Part 2 - Periodic fees for AIFs marketed in the UK, following a notification to the FCA under regulation 57, 58 or 59 of the AIFMD UK regulation13

5 2 3 5 8 9 14 14 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 3 7 3

13Kind of notification

Fee per AIF (£)

Notification under regulation 57 of the AIFMD UK regulation

34519

18

Notification under regulation 58 of the AIFMD UK regulation

24019

18

Notification under regulation 59 of the AIFMD UK regulation

34519

18

Part 3 - Periodic fees paid by small registered UK AIFMs13

13The annual fee for small registered UK AIFMs is £68019

18

FEES 4 Annex 5 1 5 11 16 17 17 18Periodic fees for designated professional bodies payable in relation to the period 1 April 2017 to 31 March 201819

R

1Table of fees10 payable by Designated Professional Bodies

15Name of Designated Professional Body

Amount payable (£)17

The Law Society of England & Wales

62,43019

16 16 17 17 18

The Law Society of Scotland

13,390 19

16 16 17 17 18

The Law Society of Northern Ireland

12,520 19

16 16 17 17 18

The Institute of Actuaries

10,070 19

17 17 18

The Institute of Chartered Accountants in England and Wales

68,770 19

16 16 17 17 18

The Institute of Chartered Accountants of Scotland

10,920 19

16 16 17 17 18

The Institute of Chartered Accountants in Ireland

13,130 19

16 16 17 17 18

The Association of Chartered Certified Accountants

15,900 19

16 16 17 17 18

The Council for Licensed Conveyancers

11,17018

16 16 17 17

Royal Institution of Chartered Surveyors

13,400 19

16 16 17 17 18

Notes

(1) The Financial Services Register includes details of exempt professional firms carrying out insurance mediation activity.

4 2

FEES 4 Annex 6 1 4 9 12 17 16 17Periodic fees for recognised investment exchanges, and recognised auction platforms payable in relation to the period 1 April 2016 to 31 March 201719

R

[deleted]20

12 21 12 12 15 15 17

FEES 4 Annex 10 4 6 7 7 8 9Periodic fees for MTF and OTF operators payable in relation to the period 1 April 2017 to 31 March 2018

R

General supervisory category of MTF or OTF10 operator (see Note below)

Fee payable (£)

Due date

(i)8 1 August 201710; or8

(ii)8 30 days from the date of the invoice in the case of a firm which receives permission to be operating a multilateral trading facility or to be operating an organised trading facility10 or whose permission is extended to include either10 activity in the course of the relevant financial year.8

7 7

MTF or OTF10 operator has a named individual fixed portfolio supervisor8

316,7109

7 7

All other MTF or OTF10 operators (i.e. those supervised by a team of flexible portfolio supervisors)8

29,8679

7 7 8

[deleted]8

 7 7

8an EEA firm8

08

7 7 7 7 7 7

8

7 7

Note: subject to FEES 4.3.13 R, this table applies to all MTF or OTF10 operators with permission to operate an MTF or OTF10 as at 1 April of the applicable fee year; irrespective of whether, and if so when, their permission to operate an MTF or OTF10 was subsequently cancelled during that fee year.

FEES 4 Annex 11 Periodic fees in respect of payment services, electronic money issuance, regulated covered bonds, CBTL business and data reporting services in relation to the period 1 April 2017 to 31 March 2018664321089911

R

17This Annex sets out the periodic fees in respect of payment services carried on by fee-paying payment service providers under the Payment Services Regulations and electronic money issuance by fee-paying electronic money issuers under the Electronic Money Regulations and issuance of regulated covered bonds by issuers and CBTL business carried on by CBTL firms under the MCD Order and data reporting services providers (other than incoming data reporting services providers) under the DRS Regulations.1413

2Part 1 - Method for calculating the fee for fee-paying payment service providers4

(1)

The periodic fee for fee-paying payment service providers is calculated by identifying the relevant activity group under Part 2 and then4adding the minimum fee to an additional fee calculated by multiplying the tariff base identified in Part 3 of FEES 4 Annex 11 by the appropriate rates applying to each tranche of the tariff base as indicated in the table at Part 5. For small payment institutions and small electronic money institutions4the tariff rates are not relevant and a flat fee is payable.

4

(2)

A fee-paying payment service provider may apply the relevant tariff bases and rates to non-UK business, as well as to its UK business, if:

(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 3 of FEES 4 Annex 11 is disproportionate to the difference in fees payable; and

(b)

it notifies the FCA 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.

(3)

For a fee-paying payment service provider which is required to comply with FEES 4.4.9 D (Information on which fees are calculated) and has not done so for this period:

(a)

the fee is calculated using (where relevant) the valuation or valuations of business applicable to the previous period, multiplied by the factor of 1.10; and11

(b)

an additional administrative fee of £250 is payable.11

(c)

[deleted]11

9 9

4Part 1A - Method for calculating the fee for fee-paying electronic money issuers

(1)

The periodic fee for fee-paying electronic money issuers is calculated by identifying the relevant activity group under Part 2A and then multiplying the tariff base identified in Part 3 of 1 R by the appropriate rates applying to each tranche of the tariff base as indicated in the table at Part 5. For small electronic money institutions, the tariff rates are not relevant and a flat fee is payable.

(2)

A fee-paying electronic money issuer may apply the relevant tariff bases and rates to non-UK business, as well as to its UK business, if:

(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 3 of 1 R is disproportionate to the difference in fees payable; and

(b)

it notifies the FCA 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.

(3)

For a fee-paying electronic money issuer which is required to comply with FEES 4.4 (Information on which fees are calculated) and has not done so for this period:

(a)

the fee is calculated using (where relevant) the valuation or valuations of business applicable to the previous period, multiplied by the factor of 1.10; and11

(b)

an additional administrative fee of £250 is payable.11

(c)

[deleted]11

9 9

4Part 1B - Method for calculating the periodic fee where the firm is both a fee-paying payment service provider and a fee-paying electronic money issuer

Add the fee calculated under Part 1 to the fee calculated under Part 1A.

6Part 1C - Method for calculating the fee for an issuer of a regulated covered bond

The issuance of regulated covered bonds by issuers is linked to activity group G.15 in this annex. The periodic fees for issuers of regulated covered bonds is calculated by multiplying the tariff base relevant to G.15 in Part 3 of 1 R by the appropriate rates applying to each tranche of the tariff base as indicated in the table at Part 5.

Part 2 - Activity groups relevant to fee-paying payment service providers4

This table shows how the payment services performed by fee-paying payment service providers are linked to activity groups (fee-blocks). A fee-paying payment service provider can use the table to identify which fee-blocks it falls into based on its authorisation or registration.

Activity group

Fee payer falls into this activity group if:

G.2 Certain deposit acceptors

4

it is a fee-paying payment service provider not falling within any of the other fee-blocks in this table

G.3 Large payment institutions and registered account information service providers16

it is a fee-paying payment service provider that is 4an authorised payment institution,4 an EEA authorised payment institution, 4a registered account information service provider, an EEA registered account information service provider, 16 the Post Office Limited or a fee-paying electronic money issuer (except if it is a small electronic money institution)4

4

G.4 Small payment institutions

it is a fee-paying payment service provider that is 4a small payment institution or a small electronic money institution4

4

G.5 - Other institutions

it is the Bank of England or a government department or local authority that provides payment services other than when carrying out functions of a public nature.

4Part 2A - Activity groups relevant to fee-paying electronic money issuers

This table shows how the electronic money issuance by fee-paying electronic money issuers is linked to activity groups ('fee-blocks'). A fee-paying electronic money issuer can use the table to identify which fee-blocks it falls into based on its authorisation, registration or permission, as applicable.

4Activity group

Fee payer falls into this activity group if:

G.10 Large electronic money institutions

it is a fee-paying electronic money issuer (except if it is a small electronic money institution)

G.11 Small electronic money institutions

it is a small electronic money institution

13

17

10Part 2B – Activity groups relevant to CBTL firms

This table shows how CBTL business carried on by CBTL firms is linked to activity groups ('fee-blocks'). A CBTL firm can use the table to identify which fee-blocks it falls into based on its registration

Activity Group

Fee payer falls into this activity group if11

G.20 CBTL lender11

It is a CBTL lender and does not have permission to carry out any regulated activities11

G.21 CBTL arranger and CBTL adviser11

it11 is a CBTL arranger or a CBTL adviser and does not have permission to carry out any regulated activities11

14Part 2C – Activity group relevant to data reporting services providers

Activity Group

Fee payer falls into this group if:

G.25 DRSP

it is a data reporting services provider. (other than an incoming data reporting services provider).

Part 3

This table indicates the tariff base for each fee-block. The tariff base is the means by which the FCA measures the amount of business conducted by fee-paying payment service providers,6fee-paying electronic money issuers, CBTL firms, data reporting services providers (other than incoming data reporting services providers)14firms registered under the Money Laundering Regulations15 and issuers of regulated covered bonds6.4

6 10 13 12 17

Activity Group

Tariff base

13

17

13

G.2

MODIFIED ELIGIBLE LIABILITIES

These are determined in the same manner as the tariff-base for relevant firms in the A.1 fee-block set out in FEES 4 Annex 1 Part 2 R.

G.3

RELEVANT INCOME

This is the sum of the following elements of the firm'sUK business:

Interest income

Interest expenses

Gross commissions and fees received

Gross other operating income

calculated in the same manner as the relevant indicator referred to in paragraph 10(3) 16

of Schedule 3 to the Payment Services Regulations.

For the Post Office Limited only, Relevant Income relates only to its payment services business.

G.4

Not applicable.

G.5

As in G.3 and Relevant Income only relates to payment services business.

4G.10

Average outstanding electronic money as defined under regulation 2(1) of the Electronic Money Regulations.

This is the average total amount of financial liabilities related to electronic money in issue at the end of each calendar day over the preceding twelve5 calendar months (which is the period ending on the date set out under Part 4), calculated on the first calendar day of each calendar month and applied for that calendar month (£million).5

5 6

4G.11

Not applicable.

6G.15

Regulated covered bonds issued in the 12 months ending on the valuation date and valued as at the valuation date.

10G.20

Not applicable

10G.21

Not applicable

14G.25

Not applicable

Part 4 - Valuation period

This table indicates the valuation date for each fee-block. A fee-paying payment service provider,6 a fee-paying electronic money issuer and a regulated covered bondissuer64can calculate tariff data by applying the tariff bases set out in Part 34 with reference to the valuation dates shown in this table.

6 4 4

Activity group

Valuation date

In this table, reference to specific dates or months are references to the latest one occurring before the start of the period to which the fee applies e.g. for 2010/11 fees (1 April 2010 to 31 March 2011), a reference to December means December 2009.

Where the tariff data of a fee-paying payment service provider or a fee-paying electronic money issuer4 is in a currency other than sterling, it must be converted into sterling at the exchange rate prevailing on the relevant valuation date.

4

13

17

13

G.2

For banks and building societies as in FEES 4 Annex 1 Part 3.

4

G.3

Relevant income for the financial year ended in the calendar year ending 31 December.

G.4

Not relevant.

G.5

Relevant income for the twelve months ending 31 December.

4G.10

31 December.

4G.11

Not relevant.

6G.15

(1) The last day of the financial quarter during which the issuer became registered as an issuer in the FCA financial year (the 12 months ending 31 March).

(2) For subsequent FCA financial years, 31 December unless (3) applies.

(3) If the issuer became registered as an issuer between 1 January and 31 March inclusive, 31 March in respect of the FCA financial year immediately following the FCA financial year during which it became registered and 31 December in respect of all further FCA financial years.

A reference to a financial quarter in this box means any of the following periods: 1 April to 30 June inclusive, 1 July to 30 September inclusive, 1 October to 31 December inclusive or 1 January to 31 March inclusive.

Part 5 - Tariff rates

Activity group

Fee payable in relation to 642017/1817

4 6 7 8 9 9 11

13

17

13

13

G.2

Minimum fee (£)

50013

9 9

£ million or part £m 3of Modified Eligible Liabilities (MELS)

Fee (£/£m or part £m of MELS)
3 3

3> 0.1

6 40.645613

4 6 7 8 9 9 11

G.3

Minimum fee (£)

50013

9 9

£ thousands or part thousand of Relevant Income

Fee (£/£thousand or part £thousand of Relevant Income)
3 3

3> 1004

4

6 40.434113

4 6 7 8 9 9 11

G.4

Flat fee (£)7

50013

9 9

G.5

As in G.311

4G.10

Minimum fee (£)

1,64313

9 9

£74million or part m of average outstanding electronic money (AOEM)

Fee (£7/£7m11, or part £11m of AOEM)

4>5.0

120.00116

6 7 7 9 9

4G.11

Flat fee (£)7

1,09513

6 6 9 9

6G.15

Minimum fee for the first registered programme (£)7

89,87613

7 8 8 9 9 11

Minimum fee for all subsequent registered programmes

75% of minimum fee for first registered programme

£11million or part £11m of regulated covered bonds issued in the 12 months ending on the valuation date.

Fee (£11/£11m or part £11m of regulated covered bonds issued in the 12 months ending on the valuation date)

>0.00

13.2713

7 8 8 9 9 11

For the purposes of calculating fees, any regulated covered bonds denominated in a currency other than sterling must be converted into sterling at the applicable exchange rate set out below.

Where an exchange rate hedging agreement was entered into in connection with the issuance of regulated covered bonds denominated in a currency other than sterling, the applicable exchange rate for those regulated cover bonds is the exchange rate stipulated in the exchange rate hedging agreement.

An exchange rate hedging agreement is any agreement entered into to hedge the market risk relating to fluctuations in exchange rates.

In all other cases, the applicable exchange rate is the daily spot rate available on the Bank of England's Statistical Interactive Database (the Bank of England exchange rate) applying on the valuation date. If the valuation date is not a business day, then the applicable exchange rate is the Bank of England exchange rate applying on the first business day following the valuation date.

10G.20

Flat fee (£)

404.0013

11

10G.21

Flat fee (£)

202.0013

11

14G.25

Flat fee (£) for first data reporting service plus 50% flat fee for each additional data reporting service for which the data reporting services provider (other than an incoming data reporting services provider) has authorisation.

£25,00018

3 4

6 30 6 30

13

3 4 6 4 3

13

4 6 4 3

13

3 4 6 4 3

13

3 4 6 4 3

13

6

13

6
30

Part 7 - This table shows the modifications to fee tariffs that apply to 3EEA authorised payment institutions, EEA authorised electronic money institutions,4 and3full credit institutions that are EEA firms.3

4 3

Activity group

Percentage deducted from the tariff payable under Part 5 applicable to the firm

Minimum amount payable

G.2

40%3

 3

G.3

3

40%3

 3

4G.10

40%

FEES 4 Annex 11A 2 4Definition of annual income for the purposes of calculating fees in fee blocks A.13, A.14, A.18, A.19 and B. Service Companies, Recognised Investment Exchanges and Benchmark Administrators

R

Annual income definition 2

2

General definition for all relevant fee-blocks (other than where the firms is an operator of a Recognised Investment Exchange or a Benchmark Administrator) 6

"Annual income" for a particular fee block (the “relevant fee block”) is the gross inflow of economic benefits (i.e. cash, receivables and other assets) recognised in the firm's accounts during the reporting year2 in respect of, or in relation to, the provision in the UK of the regulated activities specified in FEES 4 Annex 1A R Part 115 as belonging to the relevant fee block 2.

The figure should be reported for the relevant fee block without netting off the operating costs or business expenses, but including:

(a) all brokerages, commissions, fees, and other related income (for example, administration charges, overriders, profit shares etc) due to the firm in respect of, or in relation to, the provision in the UK of the regulated activities specified in FEES 4 Annex 1A R Part 115 as belonging to the relevant fee block 2and which the firm has not rebated to clients or passed on to other authorisedfirms15 (for example, where there is a commission chain).

PLUS:2

(b) any ongoing commission from previous business received by the firm during the reporting year.

PLUS:2

(c) the “fair value” of any goods or services the firm provided to clients. This is the commission equivalent or 2an estimate of the amount the firm would otherwise have received for any regulated activity under (a) above, but for which it has made a business decision to waive or discount its charges2.

Definition for Recognised Investment Exchanges 6

“Annual income” for a recognised investment exchange is the gross inflow of economic benefits (i.e. cash, receivables and other assets) recognised in the firm’s accounts during the reporting year in respect of, or in relation to activities that comprise a necessary part of an exchange’s business as an investment exchange.6

For the purposes of calculating annual income of the recognised investment exchange include amounts received in relation to the operation of its markets; access to those markets; the submission, management and execution of orders; quotes or transactions on those markets; the supply of pre-and post- trade transparency information about those markets; fees for admission to trading or listing; membership of connectivity charges; fees for order execution or management; trade reporting; market data and any other relevant revenue streams.6

Where the firm is a Benchmark Administrator 6

“Annual income” for a benchmark administrator is the gross inflow of economic benefits (i.e. cash, receivables and other assets) recognised in the firm’s accounts during the reporting year in respect of, or in relation to activities that comprise a necessary part of its business as a

benchmark administrator.6

Where the sales and marketing of a benchmark are undertaken by a separate legal entity, the benchmark administrator is responsible for identifying the relevant income and reporting it to us as its own income. To avoid double counting, the benchmark administrator should report only the income from sales and exclude any amount paid to it from that income to pay for its expenses as a benchmark administrator.6

Where the firm’s regulated activities are carried on by an appointed representative of the firm 5

The firm's annual income must include income received by an appointed representative carrying a regulated activity in a relevant fee block on behalf of the firm. 5

The appointed representative's annual income must be calculated in the same way as the firm's. However, to avoid double counting, the appointed representative's annual income must not include any income also recognised in the firm’s accounts, including income recognised as a result of a commission sharing arrangement with the appointed representative.

Where the relevant fee-block is fee-block A.18 2

For the purposes of calculating annual income for fee-block A.18, also include the following:2

(d) for any home finance mediation activity carried out by the firm for which it receives payment from the lender or provider on a basis other than that in (a), the value of all new mortgage advances and amounts provided under other home finance transactions resulting from that activity multiplied by 0.004;2

PLUS:2

(e) if the firm is a home finance provider, the value of all new mortgage advances and amounts provided under other home finance transactions which are regulated mortgage contracts, home purchase plans, home reversion plans or regulated sale and rent back mediation activity, multiplied by 0.004m, excluding mortgage advances and home finance transactions which result from home finance mediation activity carried on by another firm, where payment has been made by the home finance provider to that other firm under (a);2

PLUS: 2

(f) for firms whose permission includes administering regulated mortgage contracts, but not entering into a regulated mortgage contract and firms whose permission includes administering a home finance transaction but not entering into a home finance transaction, and in either case whose permission does not include advising on a home finance transaction, the relevant amounts are multiplied by 0.15. 2

2

Where the relevant fee-block is fee-block A.19 2

For the purposes of calculating annual income for fee-block A.19, also include the following:2

(g) in relation to any activities in (a), for any insurance mediation activity carried out by the firm for which it receives payment from the insurer on a basis other than that in (a), the amount of premiums receivable on its contracts of insurance multiplied by 0.07;2

PLUS: 2

(h) if the firm is an insurer in relation to the activities in (a), the amount of premiums receivable on its contracts of insurance multiplied by 0.07,3excluding those contracts of insurance which:2

- result from insurance mediation activity by another firm, where payment has been made by the insurer to the firm under (a); or2

- are not general insurance contracts or pure protection contracts.2

AND2

(i) for the purposes of calculating annual income for fee-block A.19:2

- the provision in the UK of the regulated activities specified in FEES 4 Annex 1A Part 1 as belonging to the relevant fee block includes the provision of activities that would have been insurance mediation activity in relation to general insurance contracts or pure protection contracts if they had been carried on after 13 January 2005 or, in relation to connected travel insurance contracts, from 1 January 2009; 2- a reference to a "firm " includes a reference to any person, including a connected travel insurance intermediary, who carried on activities which would be insurance mediation activity (in respect of general insurance contracts or pure protection contracts) if they had been carried on after 13 January 2005 or, in relation to connected travel insurance contracts, from 1 January 2009.2Guidance on the interpretation of this definition is presented in FEES 4 Annex 13 G.2

2 15 2 2 15 2 15 2 2 2 2 3

FEES 4 Annex 11B Definition of annual income for the purposes of calculating fees in fee blocks CC1 and CC2

FEES 4 Annex 11B R

(1) Annual income definition for credit related regulated activities 4

1 4

“Annual income” is the gross inflow of economic benefits (i.e. cash, receivables and other assets) recognised in the firm's accounts during the reporting year in respect of, or in relation to, the provision in the UK of the regulated activities specified in FEES 4 Annex 1A Part 1 as belonging to fee-blocks CC1 or CC2 as applicable.

The figure should be reported without netting off the operating costs or business expenses, but including:

(a) all interest received on loans, brokerages, commissions, fees, and other related income (for example, administration charges, overriders, profit shares etc) due to the firm in respect of, or in relation to, the provision in the UK of the credit-related regulated activities specified in FEES 4 Annex 1A Part 1 as belonging to fee-blocks CC1 and CC2 and which the firm has not rebated to clients or passed on to other authorised firms (for example, where there is a commission chain).

Plus:

(b) any ongoing commission from previous business received by the firm during the reporting year.

(ba) any vouchers, reward cards or other benefits staff have received from other firms as recompense for making introductions as a credit broker.5

Plus:

(c) the “fair value” of any goods or services the firm provided to clients. This is an estimate of the amount the firm would otherwise have received for any regulated activity under (a) above, but for which it has made a business decision to waive or discount its charges.

Plus:

(d) [deleted]4

Or4

(e) The figure must be reported using the proxy measure of annual income if the firm receives no annual income of the type in 1(a) to (c) and meets the criteria in (2).4

2 4 3 4 3 4 3 4 4

(2) Proxy measure of annual income

(a) A firm that receives no annual income of the type in 1(a) to (c) must report its annual income using the proxy measure in (b) if:4

(i) its main business is to sell goods or supply services, and is not to carry on a credit activity in 2(a)(ii) or 2(a)(iii);4

and4

(ii) it carries on:4

(aa) credit broking in relation to credit agreements, except for credit broking in relation to buy-to-let mortgages; or4

(bb) entering into a regulated credit agreement as lender;4

or4

(iii) it carries on:4

(aa) credit broking in relation to consumer hire agreements; or4

(bb) entering into a regulated consumer hire agreement as owner.4

(b) The proxy measure for annual income is calculated:4

(i) for activities in 2(a)(ii), by multiplying the gross loan amount under all agreements falling within the activity by the percentage value at (b)(iii);4

(ii) for activities in 2(a)(iii), by multiplying the gross value of all goods under all agreements falling within the activity by the percentage value at (b)(iii);4

(iii) the percentage value is 5% plus the Bank of England base rate on the final day of the firm’saccounting reference date.4

(iv) any proxy income should be calculated on the basis of the Bank of England base rate in force at the time of submission.6

(3) Where the firm’s regulated activities are being carried on by an appointed representative of the firm 4

The firm's annual income must include income received by an appointed representative carrying a regulated activity in a relevant fee block on behalf of the firm.4

The appointed representative's annual income must be calculated in the same way as the firm's. However, to avoid double counting, the appointed representative's annual income must not include any income also recognised in the firm's accounts, including income recognised as a result of a commission sharing arrangement with the appointed representative.4

Guidance on the interpretation of this definition is presented in Table 2 of FEES 4 Annex 13 G.4

FEES 4 Annex 12 Guidance on the calculation of tariffs set out in FEES 4 Annex 1AR Part 3 64

G

The following table sets out guidance on how a firm should calculate tariffs for fee-block A.4.3

3 2 3 3 3

Adjusted Gross Premium Income and Mathematical reserves - calculation of new regular premium business

(1) In calculating the new regular premium business element of its Adjusted Gross Premium Income, a firm (A) should not include business transferred from another firm (B) under the procedure set out at Part VII of the Act, during the relevant financial year, provided that that transfer did not involve the creation of new contracts between the policyholders subject to the transfer and A. This is because that business is existing business even though it is new from the point of view of A. This means that if new contracts are created as part of the transfer, that business should be included in the calculation of As new regular premium income business.

(2) If any business is transferred to a firm (A) from another firm (B) under the procedure set out at Part VII of the Act and that business would have been included in B's tariff base as new regular premium business in the absence of such a transfer, this business should be included in either A's or B's tariff base, depending on the date of transfer. FEES 4.3.15R explains in whose tariff base it should be included.

(3) Mathematical reserves should take account of all of A's business, including all new business transferred from B.
3

FEES 4 Annex 13 Guidance on the calculation of tariffs set out in FEES 4 Annex 1AR Part 3

FEES 4 Annex 13 G

Table 11

The following table sets out guidance on how a firm should calculate tariffs for fee blocks A.13. A.14, A.18, A.19 and B. Service Companies, Recognised Investment Exchanges and Benchmark Administrators6.3

3

Calculating and apportioning annual income - FEES 4 Annex 11AR

Calculating annual income

Defining relevant income streams

(1)

The firm should refer to the fee-block definitions in FEES 4 Annex 1AR6, Part 1 to decide which particular income streams should be taken into account when calculating its annual income for the purposes of fee-blocks A.13, A.14, A.18, A.19 and B. Service Companies, Recognised Investment Exchanges and Benchmark Administrators6.3

3

(2)

For the avoidance of doubt, the only income streams reportable for a relevant fee-block are those income streams which relate to a regulated activity listed in that fee-block. Income streams that do not relate to a regulated activity listed in the relevant fee-block should not be reported. Service companies, operators of recognised investment exchanges and benchmark administrators should report the income relating to each of these activities, excluding income from any other activities in the B fee-block on which they pay FCA fees.6

Under FEES 4 Annex 11AR, where the sales and marketing of a benchmark are undertaken by a separate legal entity within the same group, the income generated as a result is also deemed to relate to the regulated activity carried on by the benchmark administrator and so should be reported to the FCA by the benchmark administrator as its own income (for fees setting purposes). 6

Firms 6 should exclude from the calculation of their annual income for any particular fee-block all income6 directly derived from the performance of regulated activities belonging to other fee-blocks. For example:6

(a)6 interest from loans made in the course of providing or administering home finance (A.2) should be excluded from commission earned from arranging home finance agreements (A18);6

(b)6 premium interest from carrying out or effecting life insurance contracts (A.3), income from managing the underwriting capacity of a Lloyd’s syndicate as a managing agent at Lloyds (A.5) should be excluded from commissions for arranging general insurance (A.19);6

(c)6 income from managing investments, collective investment schemes or pensions schemes (A.7 or A.9) or income from operating multi-lateral trading facilities (FEES 4 Annex 10R) should be excluded from income derived from investment intermediation (A.13) or operating a recognised investment exchange or administering a specified benchmark.6

3 3

(3)

Firms should only include revenue streams that relate to regulated activities which are carried on 'in the United Kingdom'. In many cases, it will be quite straightforward to identify where an activity is carried on. But when there is a cross-border element, for example because a client is outside the United Kingdom or because some other element of the activity happens outside the United Kingdom, the question may arise as to where the activity is carried on. PERG 2.4 generally and PERG 4.11 regarding activities relating to regulated mortgage contracts, PERG 5.12 regarding activities relating to insurance mediation activities and PERG 14.6 regarding home reversion plans and home purchase plans describe the legislation that is relevant to this question and gives the FCA's views on various scenarios.

Reporting period

(4)

The “reporting year” is the firm's financial year end during the calendar year prior to the FCAfee year. This fee year starts on 1 April. This is specified in part 5 of FEES 4 Annex 1A.

(5)

The income that should be included is the income that was recognised in the accounts of the relevant reporting year. This means that some income due may not be reported until the following year because it has not yet been recognised in the accounts, while other income may be carried forward from previous years.

Fair value

(6)

Except in relation to fee-block A.18 and A.19 where one or more of paragraphs (d) to (f) or (g) to (i) of FEES 4 Annex 11A apply, the firm should report a “fair value” price for any services for which it has made a business decision not to charge to clients.

We consider fair value to refer to the amount at which goods or services could be exchanged in an arm’s length transaction between informed and willing parties, other than in a forced or liquidation sale.

For example, where a firm has forgone or discounted the commission or fee would actually have charged but for the business decision to grant a discount in a particular case or on a temporary basis, it should report the amount it would have otherwise have charged for providing equivalent activities.

In the case of home finance mediation in fee-block A.18 and general insurance intermediation in fee-block A.19 where one or more of paragraphs (e) to (f) or (g) to (i) of FEES 4 Annex 11A apply, instead of asking for firms to estimate fair value, certain ratios are prescribed in FEES 4 Annex 11BR where the client is not charged directly for the service provided.

Inclusions

(7)

Annual income should include:

(a)

all amounts due to the firm arising out of the regulated activities referred to in the relevant fee block for which the firm holds permission, including regular charges and instalments due to the firm during the reporting year;

(b)

any payment from a parent to facilitate the discounting or forgoing of any amounts that would otherwise be charged in full to a client, to the extent that the payment exceeds the “fair value” price reported in accordance with paragraph (6) above;

(c)

(i) amounts earned by a firm'sappointed representative when carrying on a regulated activity for the firm to which FEES 4 Annex 11A applies; and 4

(ii) amounts earned by a person who will become the firm'sappointed representative immediately after authorisation; 4

4

(d)

administrative charges and any interest from income related to the regulated activities specified in the relevant fee block.

(8)

Additional inclusions in respect of fee-block A.18:

(a)

a firm must include in paragraph (a) any survey and booking fees due to it in respect of home finance mediation activity.

Prohibited deductions

(9)

Deductions should not be made for:

(a)

bad debts;

(b)

customer benefits such as cash rewards, complimentary travel insurance, air miles vouchers etc.;

(c)

items such as general business expenses (e.g. employees’ salaries and overheads);

(d)

fines or penalties levied against the firm;

(e)

commission a firm pays another party to arrange a transaction with a client unless it receives a fee in respect of the same transaction;

(f)

the difference (if positive) between the fee payable by a firm to another party for arranging a transaction and the amount payable to the firm by the end client in respect of that transaction (here, the firm must net any excess payable by the end client to zero);

(g)

payments made to clients by way of redress.

Exclusions

(10)

The following should be excluded from the calculation of annual income:

(a)

To avoid double-counting, amounts which have been passed on to other firms may be excluded from the calculation of annual income, for example, where there is a commission chain. Transfers of income to other firms may be especially common within groups where, to present a single interface to clients, all amounts due to the group may be collected by one firm for subsequent redistribution to other firms within the group. It is for groups themselves to decide the most convenient way to report such annual income - i.e. whether the firm which receives the full amount should declare that full amount, or whether each firm in the group should report its separate distribution.

(b)

Any payment from a parent to facilitate the discounting or forgoing of any amount that would otherwise be charged in full to a client should be excluded to the extent that the payment does not exceed or equal the “fair value” price reported in accordance with paragraph (6) above.

(c)

Rebates to customers and fees or commissions passed onto other firms should be excluded.

(d)

Authorised professional firms should exclude the income from non-mainstream regulated activities. They may estimate the proportion of their business that is derived from those activities and split the income from individual invoices accordingly.

(e)

For the avoidance of doubt, income relating to or in respect of an activity is not part of annual income for the purposes of the definition in FEES 4 Annex 11A to the extent that the activity benefits from the exclusion in article 69 of the Financial Services and Markets Act 2000 (Regulated Activities Order) 2001 (Groups and joint enterprises). Firms should refer to the guidance on the application of this exclusion is contained in PERG 2.9.

Apportioning annual income

Where a firm cannot separate its income on the basis of activities, it may apportion the income on the basis of the proportionate split of business that the firm otherwise undertakes. For instance:

(1)

If a firm receives annual income from a platform-based business it may report this in line with a wider breakdown of its activities.

(2)

A firm providing corporate finance advice which does not maintain records of the split between regulated activities and non-regulated activities for individual cases may calculate that regulated business accounts for a certain proportion of its business overall and apply that as a multiplier across its income.

(3)

A firm may allocate ongoing commission from previous business on the basis of the type of firm it receives the commission from. This avoids tracking back legacy business which may no longer match the provider's current business model.

(4)

An authorised professional firm may estimate the proportion of its business that is derived from regulated activity and split its income for individual invoices accordingly.

(5)

If a firm has invested income from regulated activities, then any interest received should be reported as income, in proportion to the volume of regulated business it undertakes to avoid tracking back old payments.

(6)

Firms' systems ought to be able to distinguish UK from non-UK business to establish which conduct of business regime it was conducted under. If, however, they do not relate the figures back to income streams for the specific regulated activities in a particular fee-block then the firm may make a proportionate split as described above, calculating its regulated UK income on the basis of the overall split between UK and overseas income.

(7)

It is for individual firms to determine how they should calculate the appropriate split of income. The FCA is not prescriptive about the methodology. It requires only that:

(a)

the approach should be proportionate - the FCA is looking for firms to make their best efforts to estimate the split;

(b)

the firm must be able on request to provide a sound and clearly expressed rationale for its approach - for example, if all invoices were analysed over a particular period, the firm should be able to justify the period as representative of its business across the year;

(c)

the methodology should be objective - for example, based on random sampling of invoices or random stratified sampling;

(d)

the firm must on request be able to provide an audit trail which demonstrates that the choice of methodology was properly considered at an appropriate level or in the appropriate forums within the firm, and the decision periodically reviewed at the same level or in an equivalent forum.

2Table 2

The following table sets out guidance on how a firm should calculate tariffs for fee blocks CC.1 and CC.2

Calculating and apportioning annual income - FEES 4 Annex 11BR

Calculating annual income

Defining relevant income streams

(1)

Firms should report the total income from the credit-related regulated activities for which they have permission.

(2)

Firms should only include revenue streams that relate to regulated activities which are carried on 'in the United Kingdom'. In many cases, it will be quite straightforward to identify where an activity is carried on. But when there is a cross-border element, for example because a client is outside the United Kingdom or because some other element of the activity happens outside the United Kingdom, the question may arise as to where the activity is carried on. PERG 2.4 describes the legislation that is relevant to this question.

Reporting period

(3)

The “reporting year” is the firm's financial year end during the calendar year prior to the FCAfee year. This fee year starts on 1 April. This is specified in part 5 of FEES 4 Annex 1A.

(4)

The income that should be included is the income that was recognised in the accounts of the relevant reporting year. This means that some income due may not be reported until the following year because it has not yet been recognised in the accounts, while other income may be carried forward from previous years.

Fair value

(5)

The firm should report a “fair value” price for any services for which it has made a business decision not to charge to clients. We consider fair value to refer to the amount at which goods or services could be exchanged in an arm’s length transaction between informed and willing parties, other than in a forced or liquidation sale.

Some examples where fair value may be relevant in the context of consumer credit are:

(a) “Imputed interest”: where a loan has been provided interest-free or at a discounted rate, the charge should be rounded up to the prevailing rate normally chargeable to a client with a similar credit rating;

(b) “Commission-equivalent” or “fee-equivalent”: where a firm has foregone or discounted the commission or fee it would actually have charged but for the business decision to grant a discount in a particular case or on a temporary basis, it should report the amount it would otherwise have charged for providing equivalent credit-related regulated activity.

(6)

Firms should not estimate a fair value where:

(a) there is a statutory prohibition on charging interest (such as bankruptcy debts); or

(b) they have reduced or suspended their normal charging structure because the debtor is unable to meet contractual repayments and an alternative repayment arrangement has been agreed with the creditor; or

(c) they have made a “borrower-lender-supplier” agreement to allow a customer to pay the cash price of goods or services in instalments - any penalties or interest charged where the customer is in default should be declared as income.
3 5

3(6A)

[deleted]5

5 5 5

5(6B)

Proxy measure of annual income FEES 4 Annex 11BR(2)

FEES 4 Annex 11BR(2) sets out the proxy measure of annual income for a firm defined in FEES 4 Annex 11BR(1)(e). An example of what a firm would report as a proxy measure of annual income is provided below:

If a firm enters into a regulated credit agreement as lender:

(a) providing a gross loan amount of £1,000;

(b) to enable a customer to purchase goods from it priced at £1,000; and

(c) the Bank of England base rate on the final day of the firm’saccounting reference date is 0.5%;

the firm should report: (5% + 0.5%) x (£1000) = £55

(Historic Bank of England base rates (currently known as the Official Bank Rate) are available here: http://www.bankofengland.co.uk/statistics/Documents/rates/baserate.pdf)

Inclusions

(7)

Annual income should include:

(a)

all amounts due to the firm arising out of credit-related regulated activities for which the firm holds permission, including regular charges and instalments due to the firm during the reporting year;

(b)

income received in relation to the provision of current account overdrafts interest charges, arrangement fees and credit cards charges;

(c)

any payment from a parent to facilitate the discounting or forgoing of any amounts that would otherwise be charged in full to a client, to the extent that the payment exceeds the “fair value” price reported in accordance with paragraph (5) above;

(d)

(i) amounts earned by the firm'sappointed representatives when carrying on a regulated activity for the firm to which FEES 4 Annex 11B R applies; and4

(ii) amounts earned by a person who will become the firm'sappointed representative immediately after authorisation; and

4

(e)

administrative charges and any interest from income related to its credit-related regulated activity.

Prohibited deductions

(8)

Deductions should not be made for:

(a)

bad debts;

(b)

customer benefits such as cash rewards, complimentary travel insurance, air miles vouchers etc;

(c)

items such as general business expenses (eg, employees’ salaries and overheads);

(d)

fines or penalties levied against the firm;

(e)

commission a firm pays to another party to arrange a transaction with a client unless it receives a fee in respect of the same transaction;

(f)

the difference (if positive) between the fee payable by a firm to another party for arranging a transaction and the amount payable to the firm by the end client in respect of that transaction (here, the firm must net any excess payable by the end client to zero);7

(g)

payments to clients made by way of redress; and7

(h)

commission or fees clawed back by a third party firm in subsequent years, for example because a client introduced by a credit broker to a lender repays a loan early or defaults.7

Exclusions

(9)

The following should be excluded from the calculation of annual income:

(a)

Any income arising from business which is not a credit-related regulated activity.

(b)

(i) Repayments of principal lent by the firm in the course of it carrying on a credit-related regulated activity and (ii) sums received by the firm in exchange for the rights to principal owed to the firm where the principal was lent by the firm in the course of carrying on a credit-related regulated activity and where the rights are not sold at a premium to the value of the principal outstanding, should not be included. By the same token, the money a firm has received for the purpose of lending on to consumers as principal (e.g. money raised through wholesale borrowing, grant-aid, intra-group transfers, etc) should not be treated as income.

(c)

On the same principle, the income on debt purchase is the difference between the price paid for the purchased book and the amount collected.

(d)

To avoid double-counting, amounts which have been passed on to other firms carrying on credit-related regulated activity may be excluded from the calculation of annual income, for example where there is a commission chain. Transfers of income to other firms may be particularly common within groups where, to present a single interface to clients, all amounts due to the group may be collected by one firm for subsequent redistribution to other firms within the group. It is for groups themselves to decide the most convenient way to report such annual income, ie whether the firm which receives the full amount should declare that full amount or whether each firm in the group should report its separate distribution.

(e)

Any payment from a parent to facilitate the discounting or forgoing of any amount that would otherwise be charged in full to a client should be excluded to the extent that the payment does not exceed or equal the “fair value” price reported in accordance with paragraph (6) above.

(f)

Rebates to customers and fees or commissions passed onto other firms should be excluded.

(g)

The costs of wholesale funding should be excluded from the calculation - ie interest payments on money borrowed in order to lend on to customers.

(h)

If the total income a firm reports to us in one year includes an estimate for potential income which had been recognised in the accounts but not in practice received, and which has subsequently been written off as a bad debt, the amount may be deducted from the following year’s reported income.

(i)

Any debit backs deducted from an intermediary by a lender where a customer settles the loan early or defaults.

(j)

Authorised professional firms should exclude the income from non-mainstream regulated activities. They may estimate the proportion of their business that is derived from those activities and split the income from individual invoices accordingly.

(k)

For the avoidance of doubt, income relating to operating current accounts and debit card transactions should be excluded except where the income relates to the provision of overdrafts (see paragraph (6)(c) above).

(l)

For the avoidance of doubt, income relating to or in respect of an activity is not part of annual income to the extent that the activity benefits from the exclusion in article 69 of the Financial Services and Markets Act 2000 (Regulated Activities Order) 2001 (Groups and joint enterprises). Firms should refer to the guidance on the application of this exclusion is contained in PERG 2.9.

Apportioning annual income

Where a firm cannot separate its income on the basis of credit-related regulated activities, it may apportion the income on the basis of the proportionate split of business that the firm otherwise undertakes. Examples are outlined below.

(1)

If a firm receives annual income from a platform-based business it may report this in line with a wider breakdown of its activities.

(2)

A firm may allocate ongoing commission from previous business on the basis of the type of firm it receives the commission from. This avoids tracking back legacy business which may no longer match the provider's current business model.

(3)

If a firm has invested income from credit-related regulated activities, then any interest received should be reported as income, in proportion to the volume of business relating to credit-related regulated activities it undertakes to avoid tracking back old payments.

(4)

Firms' systems ought to be able to distinguish UK from non-UK business to establish which conduct of business regime it was conducted under. However, if, a firm has a mix of business and its systems do not relate the figures back to the income streams from credit-related regulated activities, then it may make a proportionate split as described above, calculating its regulated UK income on the basis of the overall split between UK and non-UKincome.

(5)

An authorised professional firm may estimate the proportion of its business that is derived from regulated activity and split its income for individual invoices accordingly.

(6)

It is for individual firms to determine how they should calculate the appropriate split of income. The FCA is not prescriptive about the methodology. It requires only that:

(a)

the approach should be proportionate - the FCA is looking for firms to make their best efforts to estimate the split;

(b)

the firm must be able on request to provide a sound and clearly expressed rationale for its approach - for example, if all invoices were analysed over a particular period, the firm should be able to justify the period as representative of its business across the year;

(c)

the methodology should be objective - for example, based on random sampling of invoices or random stratified sampling; and

(d)

the firm must on request be able to provide an audit trail which demonstrates that the choice of methodology was properly considered at an appropriate level or in the appropriate forums within the firm, and the decision periodically reviewed at the same level or in an equivalent forum.

FEES 4 Annex 14 UKLA periodic fees for the period from 1 April 2017 to 31 March 2018 3

R

1

Part 1 Base fee

Activity group or invoice code (Note 1)

Description

Base fee payable (£)

E.1

Discontinued

E.2

Premium listed issuer

A listedissuer of equity shares with a premium listing (see Note 2)

5,2003

E.3

Standard listed issuer

A listedissuer of shares and certificates representing certain securities with a standard listing and not with a premium listing (see Note 2)

19,6953

E.4

Discontinued

E.5

Discontinued

E.6

Non-listed issuer (in DTR)

A non-listedissuer (in DTR)

0

E.7

Primary information provider

A primary information provider

16,4253

ES.01

Sponsor

A sponsor (see Note 3)

27,3703

Notes

Note 1

The ‘E’ activity groups are codes that appear on FCA invoices for periodic fees.

Note 2

A listedissuer of shares and certificates representing certain securities need not pay periodic fees if the following conditions apply:

(1) the listedissuer, or a related entity, has already paid a periodic fee in respect of the period concerned; or

(2) the listedissuer is subject to listing rules as a result of a reverse takeover; or

(3) the listedissuer is a newly formed entity, created as a result of a restructuring.

Note 3

In the case of approval of a sponsor following a change of legal status in accordance with FEES 3 Annex 1R Part 7, the balance of the fees otherwise due from the original sponsor is due from the sponsor that is a result of the change of legal status.

Part 2 Variable fee additional to base fee

Activity Group

Market capitalisation as at the last business day of the November prior to the fee-year in which the fee is payable in £million

Fee payable in £per £million or £part million

E.2

Premium listed issuer (as described in Part 1)

0 - 100

0

> 100 - 250

28.4696273

2

> 250 – 1,000

10.9844213

2

> 1,000 – 5,000

6.7613633

2

> 5,000 – 25,000

0.1649303

2

> 25,000

0.0532843

2