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Status: You are viewing the version of the handbook as on 2009-03-31.

FEES 6.4 Management expenses

Obligation on participant firm to pay

FEES 6.4.1RRP

A participant firm must pay to the FSCS a share of each management expenses levy.

Limit on management expenses

FEES 6.4.2RRP

The total of all management expenses levies attributable to a particular period of the compensation scheme may not exceed the limit applicable to that period set out in FEES 6 Annex 1 R.

Participant firm's share

FEES 6.4.3RRP

A participant firm's share of a management expenses levy consists of one or more of: (1) a share of a base costs levy and (2) a share of a specific costs levy.

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FEES 6.4.4RRP

The FSCS must ensure that each participant firm's share of a management expenses levy separately identifies the firm's share of the base costs levy and1 specific costs levy .

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Base costs levy

FEES 6.4.5RRP

Unless FEES 6.3.22 R applies, the FSCS must calculate a participant firm's share of a base costs levy by:

  1. (1)

    identifying the base costs which the FSCS has incurred, or expects to incur, in the relevant financial year of the compensation scheme, but has not yet levied;

  2. (2)

    calculating the amount of the participant firm's regulatory costs as a proportion of the total regulatory costs relating to all participant firms for the relevant financial year; and

  3. (3)

    applying the proportion calculated in (2) to the figurein (1).

Specific costs levy

FEES 6.4.6R

1The FSCS must allocate any specific costs levy amongst the relevant sub-classes in proportion to the amount of relevant costs arising from, or expected to arise from, claims in respect ofthe different activities represented by those sub-classes.1

FEES 6.4.7R

The FSCS must calculate a participant firm's share of a specific costs levy (subject to FEES 6.3.22 R (Adjustments to calculation of levy shares) by:1

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  1. (1)

    identifying each of the relevant sub-classes 1to which the participant firm belongs, using the statement of business most recently supplied under FEES 6.5.13 R;

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  2. (2)

    identifying the management expenses other than base costs which the FSCS has incurred, or expects to incur, in the relevant financial year of the compensation scheme, allocated to the sub-classes1 identified in (1), but not yet levied;

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  3. (3)

    calculating, in relation to each relevant sub-class1FF, the participant firm's tariff base as a proportion of the total tariff base of all participant firms in the sub-class1, using the statement of business most recently supplied under FEES 6.5.13 R;

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  4. (4)

    applying the proportion calculated in (3) to the figure in (2); and

  5. (5)

    if more than one class1 or sub-class1 is relevant, adding together the figure in (4) for each sub-class.1

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New participant firms

FEES 6.4.8RRP

A firm which becomes a participant firm part way through a financial year of the compensation scheme will not be liable to pay a share of a specific costs levy made in that year.

FEES 6.4.9G

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FEES 6.4.10GRP

Since a firm that becomes a participant firm in the course of a financial year of the compensation scheme will already be obtaining a discount in relation to the base costs levy through the modified fee provisions of FEES 4.2.6 R, no rule is necessary in COMP for discounts on the base costs levy.1

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FEES 6.4.11R

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FEES 6.4.12R

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