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FEES 7.1 Application and Purpose

Application

FEES 7.1.1 R

1This chapter applies to every person listed in FEES 1.1.2R (5).

Purpose

FEES 7.1.2 G RP

The purpose of this chapter is to set out the requirements on the persons listed in FEES 7.1.1 R to pay annual CFEB levies in order to establish and fund the CFEB.

FEES 7.1.3 G RP

Section 6A(1) of the Act (Enhancing public understanding of financial matters etc) (as it had effect before the passing of the Financial Services Act 2012) required3 the FSA to establish the CFEB in order to enhance:

3
  1. (1)

    the understanding and knowledge of members of the public of financial matters (including the UK financial system); and

  2. (2)

    the ability of members of the public to manage their own financial affairs.

FEES 7.1.4 G RP

Paragraph 12(1) of Part 2 of Schedule 1A to the Act enables the FCA to make rules requiring certain2authorised persons or payment service providers or electronic money issuers2 to pay to the FCA specified amounts or amounts calculated in a specified way in order to meet a proportion of:

2 2
  1. (1)

    the expenses incurred by the FCA in establishing the CFEB, whenever these were incurred; and

  2. (2)

    the expenses incurred, or expected to be incurred, by the CFEB in connection with the discharge of the functions described in FEES 7.1.3 G.

FEES 7.1.5 G

FEES 7 sets out the rules referred to in FEES 7.1.4 G.

FEES 7.1.6 G RP

The FCA must have regard to other anticipated sources of funding of the costs described in FEES 7.1.4 G when setting the CFEB levy.

FEES 7.1.7 G RP

The amounts to be paid under the CFEB levy may include a component to cover the FCA's expenses in collecting the payments.

FEES 7.1.8 G RP

The FCA must pay to the CFEB the amounts that it receives under the CFEB levy apart from amounts in respect of its collection costs (which it may keep).

FEES 7.1.9 G RP

Paragraph 7(1) of Part 1 of Schedule 1A to the Act requires the CFEB to adopt an annual budget which has been approved by the FCA.

FEES 7.1.10 G RP

This chapter sets out the method by which the CFEB levy will be calculated. Details of the actual levy payable will vary from year to year, depending on the CFEB's annual budget. These details are set out in FEES 7 Annex 1. New details will be prepared and consulted on for each financial year.

Exemption

FEES 7.1.11 G RP

2A firm is not liable to pay a CFEB levy in relation to payment services or electronic money issuance if it is the Bank of England, a government department, a local authority, a municipal bank or the National Savings Bank.

FEES 7.2 The CFEB levy

Obligation to pay CFEB levy

FEES 7.2.1 R RP

A firm must pay each CFEB levy applicable to it:

  1. (1)

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

  2. (2)

    in accordance with the provisions of FEES 4.3.6 R as modified by FEES 7.2.1A R.1

FEES 7.2.1A R RP
  1. (1)

    1For the purposes of FEES 7.2.1R (2), FEES 4.3.6R(1C)-(1E)2, as applied by FEES 7.2.8 R, is modified so that if a firm's periodic fees for the previous financial year was at least £50,0002, the firm must pay:1

    1. (a)

      an amount equal to 50% of the CFEB levy payable for the previous year, by 12 April in the financial year to which the sum due under FEES 7.2.1 R relates; and

    2. (b)

      the balance of the CFEB levy due for the current financial year by 1 September in the financial year to which that sum relates.

  2. (2)

    For the purposes of FEES 7.2.1R (2), FEES 4.3.6R (2), as applied by FEES 7.2.8 R, is modified so that if the firm's periodic fee for the previous financial year was less than 50,000, the firm must pay its CFEB levy in full by 1 July in the financial year to which that sum relates.

Calculation of CFEB levy

FEES 7.2.2 R RP

The CFEB levy is calculated as follows:

  1. (1)

    identify each of the activity groups set out in Part 1 of FEES 7 Annex 1R and Part 1 of FEES 7 Annex 2R4 that apply to the business of the firm for the relevant period (for this purpose, the activity groups under FEES 7 Annex 1R4 are defined in accordance with Part 1 of FEES 4 Annex 1AR and the activity groups under FEES 7 Annex 2R are defined in accordance with Part 1 of that Annex4);

    55
  2. (2)

    for each of those activity groups, calculate the amount payable in the way set out in FEES 7.2.3 R;

  3. (3)

    add the amounts calculated under (2);

  4. (4)

    work out whether a minimum fee is payable under Part 2 of FEES 7 Annex 1 and if so how much;

  5. (5)

    add together the amounts calculated under (3) and (4);

  6. (6)

    modify the result as indicated by FEES 4.2.7ER, FEES 4.2.7FR, FEES 4.2.7GR, FEES 4.2.7HR, FEES 4.2.7IR, FEES 4.2.7JG and FEES 4.2.7KR4 (if applicable);

  7. (7)

    apply any applicable payment charge specified in FEES 4.2.4 R to the amount in (6), provided that:

    1. (a)

      for payment by direct debit, successful collection of the amount due is made at the first attempt by the FCA; or

    2. (b)

      for payment by credit transfer, the amount due is received by the FCA on or before the due date;

  8. (8)

    make the calculations using information obtained in accordance with FEES 4.4.in the case of FEES 7 Annex 1R and Part 3 of FEES 7 Annex 2R in the case of Part 2 of that Annex4.

FEES 7.2.3 R RP

The amount payable by a firm with respect to a particular activity group is calculated as follows:

  1. (1)

    calculate the size of the firm's tariff base for that activity group using:3

    5151
    1. (a)

      3the tariff base calculations in Part 3 of FEES 4 Annex 1AR4, Part 3 of FEES 4 Annex 11R4and Part 2 of FEES 7 Annex 2R4; and

    2. (b)

      3the valuation date requirements in Part 5 of FEES 4 Annex 1AR4, Part 3 of FEES 4 Annex 11R4 and Part 3 of FEES 7 Annex 2R4;

  2. (2)

    use the figure in (1) to calculate which of the bands set out in the table in Part 1 of FEES 7 Annex 1R and Part 4 of FEES 7 Annex 2R4 the firm falls into;

    3
  3. (3)

    add together the fixed sums, as set out in the table in Part 1 of FEES 7 Annex 1R and Part 4 of FEES 7 Annex 2R4, applicable to each band identified under (2);

    3
  4. (4)

    the amount in (3) is the amount payable by the firm with respect to that activity group.

FEES 7.2.4 R RP

For the purposes of FEES 7.2.3 R:

  1. (1)

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

    1. (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 1A5 and Part 1 of FEES 4 Annex 111 are disproportionate to the difference in fees payable; and

    2. (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;

  2. (2)

    for a firm which has not complied with FEES 4.4.2 R (Information on which fees are calculated) orFEES 4.4.8 D (Information relating to payment services and the issuance of electronic money)1 for this period, the CFEB levy is calculated using (where relevant) the valuation or valuations of business applicable to the previous period, multiplied by the factor of 1.10.

FEES 7.2.5 R

The modifications in Part 3 of 5FEES 4 Annex 2A5 and Part 7 of FEES 4 Annex 11 apply.1

Amount payable by the Society of Lloyds

FEES 7.2.6 R RP

The CFEB levy in relation to the Society is specified against its activity group in Part 1 of FEES 7 Annex 1.

FEES 4 rules incorporated into FEES 7 by cross-reference

FEES 7.2.7 G RP

The Handbook provisions relating to the CFEB levy are meant to follow closely the provisions relating to the payment of periodic fees under FEES 4.3.1 R In the interests of brevity, not all of these provisions are set out again in FEES 7. In some cases, certain FEES 4 rules are applied to the payment of the CFEB levy by individual rules in FEES 7. The rest are set out in the table in FEES 7.2.9 R.

FEES 7.2.8 R RP

The rules set out in the table in FEES 7.2.9 R and any other rules in FEES 4 included in FEES 7 by cross-reference apply to the CFEB levy in the same way as they apply to periodic fees payable under FEES 4.3.1 R.

FEES 7.2.9 R RP

Table of rules in FEES 4that also apply to FEES 7 to the extent that in FEES 4 they apply to fees payable to the FCA5

FEES 4 rules incorporated into FEES 7

Description

FEES 4.2.4 R

Method of payment

4 FEES 4.2.7ER

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

4 FEES 4.2.7FR

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

4 FEES 4.2.7GR

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

4 FEES 4.2.7HR to FEES 4.2.7KR

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

FEES 4.2.8 R

How FEES 4.2.7 R applies in relation to an incoming EEA firm or an incoming Treaty firm

FEES 4.2.10 R

Extension of time

FEES 4.2.11 R (first entry only)

Due date and changes in permission for periodic fees

FEES 4.3.7 R

Groups of firms

FEES 4.3.13 R

Firms applying to cancel or vary permission before start of period

FEES 4.3.17R 4

Firms acquiring businesses from other firms

FEES 4.4.1 R to FEES 4.4.6 R

Information on which fees are calculated

FEES 7.2.9A D RP

1 FEES 4.4.7 D to FEES 4.4.9 D (Information relating to payment services and the issuance of electronic money) also apply to FEES 7.

FEES 7.2.10 G RP

References in a FEES 4rule incorporated into FEES 7 by cross-reference to a periodic fee should be read as being to the CFEB levy. References in a FEES 4rule incorporated into FEES 7 to market operators, service companies, MTF operators, investment exchanges, or5designated professional bodies should be disregarded.

1 5 5
FEES 7.2.11 G RP

In some cases, a FEES 4rule incorporated into FEES 7 in the manner set out in FEES 7.2.7 G will refer to another rule in FEES 4 that has not been individually incorporated into FEES 7. Such a reference should be read as being to the corresponding provision in FEES 7. The main examples are set out in FEES 7.2.12 G.

FEES 7.2.12 G RP

FEES 7 Annex 1 7 9 9 11Money advice CFEB levy for the period from 1 April 2018 to 31 March 201913

Part 1

R

This table shows the money advice 13CFEB levy13applicable to each activity group (fee-block)

2Activity group13

The money advice 13CFEB levy payable

12

A.1

12

Band Width (£4 million of Modified Eligible Liabilities (MELs))

Fee10 (£/£m4 or part m of MELs)

10 4

>10

4

1.54714

4 7 7 9 9 10 13 11
4 7 7 9 9 10 11
12
4 4
4 4
4 4
4 4
3

A.2

12 12

Band Width (no. of mortgages and/or home finance transactions)

Fee104/mortgage)

10 10 4

>50

4

0.59314

7 7 9 9 13 11 10
7 7 9 9 11 10
4 4
4 4
4 4
4 4

A.3

Gross written premium for fees purposes (GWP) 14

Band Width (£4 million of GWP14)

Fee10 (£/£m or part £m4 of GWP14)

>0.5

4

31.2814

4 7 7 9 9 11 10
4 4
4 4
4 4
4 4

PLUS

Best estimate liabilities for fees purposes (BEL) 14

Band Width (£4 million of BEL14)

Fee10 (£/£m of part £m4 of BEL14)

4

>1

4

1.7214

4 7 7 9 9 11 10
4 4
4 4
4 4
4 4

A.4

Gross written premium for fees purposes (GWP) 14

Band Width (£4 million of GWP14)

Fee10 (£/£m or part £m of GWP14)4

4

>1

4

20.48114

4 7 7 9 9 11 10
4 4
4 4
4 4
4 4

PLUS

Best estimate liabilities for fees purposes (BEL) 14

Band Width (£4 million of BEL14)

Fee10 (£/£m or part £m 4 of BEL14)

4

>1

4

0.642314

4 7 7 9 9 10 11
4 4
4 4
4 4
4 4

A.5

Band Width (£4 million of Active Capacity (AC))

Fee10 ((£/£m or part £m4 of AC)

4

>50

4

0.009

4 7 7 9
4 4
4 4
4 4
4 4

A.6

Flat levy

0.009

4 7 7 9

A.7

For class 1(c),7(2)9, 9 (3) 9and (4) 9firms10:

7 9

Band Width (£4 million of Funds under Management (FuM))

Fee10 (£/£m of part £m4 of FuM)

4

>10

4

0.16214

4 7 7 9 9 11 10
4 4
4 4
4 4
4 4

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%.

Class 1(A), (B) and (C) firms are defined in 15FEES 4 Annex 1A15.14

A.9

Band Width (£4 million of Gross Income (GI))

Fee10 (£/£m of part £m4 of GI)

4

>1

4

92.4814

4 7 7 9 9 11 10
4 4
4 4
4 4
4 4

A.10

Band Width (no. of traders)

Fee104/trader)

>14

4

148.4314

4 7 7 9 9 11 10
4 4
4 4
4 4
4 4

A.13

For class (2) firms

Band Width (£ thousands of annual income (AI))4

4

Fee (£/£ thousand or part £ thousand of AI)4

4

>1004

4

0.071514

4 7 7 9 9 11 10
4 4
4 4
4 4
4 4

For a professional firm in A.13 the fee is calculated as above less 10%.

A.14

Band Width (£ thousands of annual income (AI))4

4

Fee (£/£ thousand or part £ thousand of AI)4

4

> 1004

4

0.03114

4 7 7 9 9 11 10
4 4
4 4
4 4
4 4

A.18

Band Width (£4 thousands of Annual Income (AI))4

Fee10 ((£/£ thousand or part £4 thousand of AI)

4

>1004

4

0.21114

4 7 7 9 9 11 10
4 4
4 4
4 4
4 4

A.19

Band Width (£4 thousands of Annual Income (AI))4

Fee10 (£/£ thousand or part £4 thousand of AI)

4

>1004

4

0.03814

4 7 7 9 9 11 10
4 4
4 4
4 4
4 4

5A.21

Band Width (£ client money) (CM) held

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

less than £1 million7

7

2.2114

7 7 9 9 11 10

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

1.6614

7 7 9 9 11 10

more than £1 billion7

7

1.1114

7 7 9 9 11 10

PLUS

Safe custody assets

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

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

less than £10 million7

7

0.00814

7 7 9 9 11 10

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

0.00614

7 7 9 9 11 10

more than £100 billion7

7

0.00414

7 7 9 9 11 10

G.3

Minimum fee (£4)

10

£ thousands or part £ thousand of Relevant Income4

4

Fee (£/£thousand or part £ thousand of Relevant Income)4

4

>100

0.029314

4 7 7 9 9 11 10
4 4
4 4
4 4
4 4
4 4

G.4

Flat fee (£)4

4

104

G.10

Minimum fee (£4)

10

£ million or part £m4 of average outstanding electronic money (AOEM)

4

Fee (£/£m or part £m4 of AOEM)

4

> 5.0

7.3014

4 7 7 9 9 11 10

G.11

Flat fee (£)4

4

1045

6CC.1

Minimum fee

14107

7

10£ thousand of annual income (AI)

8

Fee (£/£ thousand or part thousand of AI)8

>2508

0.10214

8 9 9

6CC.2

Minimum fee (£)10

10107

7

10£ thousands of annual income (AI)10

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

>2507

7

0.10214

7 7

Notes

(1) The definitions of fee-blocks G5 and G10 under Part 2 and Part 2A of FEES 4 Annex 11R13are modified, for the purposes of FEES 7, so that they exclude the Bank of England, government departments, local authorities, municipal banks and the National Savings Bank.

(2) The definitions of those fee-blocks are further amended to exclude EEA firms12 and those12 which hold a Part 4A permission.

12

Part 2

(1)

This Part sets out the minimum money advice 13CFEB levy applicable to the firms specified in (3) below.

(2)

The minimum money advice 13CFEB levy payable by any firm referred to in (3) is £1310.

(3)

A firm is referred to in this paragraph if it falls within the following activity groups: A.1; A.2; A.3 (excluding UK ISPVs); A.4; A.5; A.7; A.9; A.10; A.12; A.13; A.14; A.18; A.19; G.3 and G.10.1

1
12 13
13 13 13 13 13 13 13 13 13 13 13
13 13
13 13
13 13

FEES 7 Annex 2 Debt advice CFEB levy for the period from 1 April 2018 to 31 March 2019

Part 1

R

1This 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 for the purposes of the debt advice CFEB levy applicable to each activity group (fee-block).

Activity group

Debt advice CFEB levy payer falls in the activity group if:

A.2 Home finance providers and administrators

It falls under activity group A.2 as defined in Part 1 of FEES 4 Annex 1AR.

CC.3 Consumer credit lending

Its permission is in relation to the following regulated activities:

- entering into a regulated credit agreement as lender (article 60B(1) of the Regulated Activities Order);

- exercising, or having the right to exercise, the lender’s rights and duties under a regulated credit agreement (article 60B(2) of the Regulated Activities Order);

which is carried on by way of business and relates to the following specified investments:

(a) a regulated credit agreement (excluding high-cost short-term credit, a home credit loan agreement and a bill of sale loan agreement);

(b) high-cost short-term credit;

(c) a home credit loan agreement;

(d) a bill of sale loan agreement.

Part 2

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 debt advice CFEB levy payable to the FCA by that firm.

Activity group

Tariff base

A.2 Home finance providers and administrators

The sterling value of any residential loans to individuals being the sum of gross unsecuritised and securitised balances (applying the definitions of Unsecuritised balances and Securitised balances set out in Section A: Balance Sheet of SUP 16 Annex 19BG.)

CC.3 Consumer credit lending

Value of lending in column A of data item CCR003 reported by firms under SUP 16 Annex 38AR, being the sum of data elements entered in rows:

- 1 Debt purchasing;

- 2 Hire purchase/conditional sale agreements;

- 3 Home credit loan agreements;

- 4 Bill of sale loan agreements;

- 5 Pawnbroking;

- 6 High-cost short-term credit;

- 11 Overdrafts;

- 12 Other running-account credit; and

- 8 Other lending

Notes

(1) The tariff base for authorised professional firms that do not submit data item CCR003 under SUP 16 Annex 38AR is the same as set out above and should be reported to the FCA as required by FEES 4.4.1R and FEES 4.4.2R. The valuation date is in accordance with the CC.3 valuation date in Part 3.

(2) The tariff base for an incoming EEA firm or an incoming Treaty firm is the same as set out above but limited to the regulated activities of the firm which are carried out in the United Kingdom, except those provided on a cross border services basis, and should be reported to the FCA as required by FEES 4.4.1R and FEES 4.4.2R. The valuation date is in accordance with the CC.3 valuation date in Part 3.

Part 3

This table indicates the valuation date for each fee-block. A firm can calculate its tariff data in respect of the debt advice CFEB levy payable to the FCA by that firm.

Activity group

Valuation date

A.2 Home finance providers and administrators

The 31 December before the start of the period to which the fee applies or, if earlier, the date of the valuation as disclosed by the annual return made in the calendar year prior to the 31 December.

CC.3 Consumer credit lending

Value of lending under Part 2 valued at the firm’saccounting reference date in the calendar year ending 31 December occurring before the start of the period to which the debt advice CFEB levy applies.

Part 4

This table shows the tariff rates applicable to each of the fee-blocks set out in Part 1.

Activity group

Debt advice CFEB levy payable

A.2 Home finance providers and administrators

Band width (£million of secured debt)

>0

Fee (£/£m or part £m of secured debt)

21.132

CC.3 Consumer credit lending

Band width (£million of value of lending)

>0 (Note 1)

Fee (£/£m or part £m of value of lending)

109.962

Note

(1) Credit unions and community finance organisations do not pay any debt advice CFEB levy on the first £2,000,000 of value of lending.