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FEES 5.3 The general levy

FEES 5.3.1G

Each financial year, the FCA and FOS Ltd will consult on the amount of the annual budget 14of the Financial Ombudsman Service which is to be raised by the general levy.

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FEES 5.3.2G

For the purposes of the general levy, a firm will fall into one or more of the industry blocks set out in FEES 5 Annex 1 depending on the business activities which it conducts.

FEES 5.3.3G

The FCA will determine, following consultation, the amount to be raised from each industry block. This will be based on the budgeted costs and numbers of Financial Ombudsman Service staff required to deal with the volume of complaints which the Financial Ombudsman Service expects to receive about the firms in each industry block. Modified arrangements have been made for certain types of small firms (see FEES 5.5.3 R to FEES 5.5.5 G).

FEES 5.3.4G

FEES 5 Annex 1 sets out the fee tariffs for each industry block.

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FEES 5.3.5G

The FCA will specify a minimum levy for firms in each industry block.

FEES 5.3.6R

A firm must pay to the FCA a general levy towards the costs of operating the Compulsory Jurisdiction of the Financial Ombudsman Service.

FEES 5.3.7G

Under the standard terms, VJ participants will be required to pay to FOS Ltd an amount calculated on a similar basis towards the costs of operating the Voluntary Jurisdiction of the Financial Ombudsman Service, see FEES 5 Annex 2R25. FOS Ltd will be responsible for invoicing and collecting this amount.

FEES 5.3.8R

A firm's general levy under the compulsory jurisdiction 14 is calculated as follows:

  1. (1)

    identify each of the tariff bases set out in FEES 5 Annex 1 which apply to the relevant business of the firm for the relevant year;

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  2. (2)

    for each of those tariff bases, calculate the sum payable in relation to the relevant business of the firm for that year;

  3. (3)

    add together the amounts calculated under (2).

    3[Note: Transitional provisions apply to FEES 5.3.8R in relation to firms in industry blocks 2 and 4 – see FEES TP 13]

FEES 5.3.9R

For the purpose of FEES 5.3.6 R and FEES 5.3.8 R, a member of the Society of Lloyd's or a managing agent at Lloyd's will not in that capacity be treated as a firm. But the Society of Lloyd's will pay a general levy in respect of Lloyd's insurance business conducted with eligible complainants.

FEES 5.3.10R

For the purpose of FEES 5.3, references to relevant business for a firm which falls in industry block 16 or 17 and which so elects under FEES 5 Annex 1, are references to the firm's total amount of annual income reported in accordance with Part 2 of FEES 4.

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