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FEES 6.5A 1The retail pool

Allocation of compensation costs levies and specific costs levies through the retail pool

FEES 6.5A.1R

The FSCS must allocate a compensation costs levy or specific costs levy, which has been allocated to the retail pool (under FEES 6.5.2-A R(2)):

  1. (1)

    to classes whose retail pool levy limit has not been reached as at the date of the levy;

  2. (2)

    in proportion to the relative sizes of the retail pool levy limits of the classes in (1); and

  3. (3)

    in accordance with the table in FEES 6 Annex 5.

[Note: The retail pool levy limits for classes other than FCA provider contribution classes are the normal levy limits for that class. See the table in FEES 6 Annex 5 for the retail pool levy limits for all relevant classes.]

FEES 6.5A.2R
  1. (1)

    An allocation in FEES 6.5A.1 R to an FCA provider contribution class other than the home finance providers and administrators' contribution class may not be of an amount that, if it were added to any compensation costs levies or specific costs levies which have previously been imposed on the PRA funding class which corresponds to that FCA provider contribution class (as set out in FEES 6.5A.7 R) the combined figure would be greater than the levy limit of the corresponding PRA funding class.

  2. (2)

    Where:

    1. (a)

      an FCA provider contribution class has already contributed to specific costs or compensation costs (through the retail pool); and

    2. (b)

      if the amount of that previous contribution by the class in (a) were added to a compensation costs levy or specific costs levy which is being imposed on the PRA funding class which corresponds to the class in (a) (and any previous such levies), the combined figure would be greater than the levy limit of the corresponding PRA funding class;

    the FSCS must, so far as reasonably possible, obtain repayment of the previous contribution by the class in (a) from the retail pool (including the FCA provider contribution classes except the class in (a)) to the extent that ensures that the combined figure in (b) would no longer be greater than the levy limit of the corresponding PRA funding class, and credit the repayment to the class in (a).

  3. (3)

    The FSCS may obtain the repayment in (2) by:

    1. (a)

      a levy;

    2. (b)

      commercial or other borrowing; or

    3. (c)

      utilising funds as set out in, and subject to, FEES 6.3.17 R.

[Note: the home finance providers and administrators' contribution class does not have a corresponding PRA funding class.]

FEES 6.5A.3G

In considering which of the options in FEES 6.5A.2 R (2) to adopt, the FSCS will generally impose a levy, rather than borrow or utilise funds as described in FEES 6.5A.2R(2)(c), unless the latter options appear to be preferable in the specific circumstances prevailing at the relevant time.

FEES 6.5A.4R

The calculation of the relative sizes of the retail pool levy limit (for the purpose of FEES 6.5A.1 R) is based on the original retail pool levy limits for the classes (as set out in FEES 6 Annex 5) and not the remaining capacity in each class.

FEES 6.5A.5R

When the FSCS allocates excess compensation costs levies or specific costs levies under FEES 6.5A.1 R or any levy imposed under FEES 6.5A.2 R (3)(a), a class to which part of the excess is allocated (a "receiving class") may, as a result of that allocation, itself reach its limit. In that case, the FSCS must apply FEES 6.5A.1 R or FEES 6.5A.2 R so that any resulting excess levy beyond the limit of the receiving class is allocated amongst the remaining classes whose limits have not been reached, to the exclusion of the receiving class. This process is repeated until the compensation costs levy or specific costs levy has been met in full or the limits of all classes have been exhausted.

Calculation of participant firms' shares in levies allocated to classes in the retail pool

FEES 6.5A.6R

In relation to a specific costs levy or compensation costs levy allocated to an FCA provider contribution class in the retail pool, FEES 6.4.7A R (3) and FEES 6.5.6A R (3), respectively, are replaced by the following: "calculating, in relation to each relevant class, the participant firm's most recent regulatory costs arising from its membership of the corresponding activity group (as listed in FEES 4 Annex 1A R) set out in FEES 6.5A.7 R, as a proportion of the total most recent regulatory costs of all participant firms in that activity group arising from their membership of that group;".

FEES 6.5A.7R

The corresponding PRA funding classes and corresponding activity groups referred to in FEES 6.5A.2 R and FEES 6.5A.6 R respectively are as follows:

FCA provider contribution class

Corresponding PRA funding class

Corresponding activity group

Deposit acceptor's contribution class

Deposits

A.1: Deposit acceptors

Insurers - life contribution class

Life and pensions provision

A.4: Insurers - life

Insurers - general contribution class

General insurance provision

A.3: Insurers - general

Home finance providers and administrators' contribution class

None

A.2: Home finance providers and administrators