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Status: You are viewing the version of the handbook as on 2005-06-30.

GEN 3.1 Introduction

Application

GEN 3.1.1R

1This chapter applies to every person who is required to pay a fee to the FSA by a provision of the Handbook.

GEN 3.1.2R

GEN 3.2.1 R and GEN 3.3.1 R do not apply in respect of any fee payable under AUTH 4 (Authorisation fees), REC 7 (Recognised bodies fees), SUP 6.3.22 R (Application fee for variation of permission), COLL 10 (Fees); or CIS 18 (Collective investment schemes fees) on the making of an application or a notification.2

GEN 3.1.3G

The chapters referred to in GEN 3.1.2 R treat applications as incomplete until the relevant fee is paid.

Purpose

GEN 3.1.4G

The purpose of this chapter is to set out the general provisions applicable to those who are required to pay fees to the FSA. The requirements themselves are set out in the parts of the Handbook to which the fees concerned relate.

Background

GEN 3.1.5G

Paragraph 17 of Schedule 1 to the Act enables the FSA to charge fees to cover its costs and expenses in carrying out its functions.

GEN 3.1.6G

The provisions of this chapter set out the general provisions applicable to the fees regime. Most of the detail of what fees are payable, and the related requirements, will appear in the part of the Handbook to which they relate. If a sourcebook or manual contains requirements which impose fees or other payments, a schedule of those fees or other payments is included in that sourcebook or manual.

GEN 3.1.7G

The fees payable will vary from one financial year to another, and will reflect the FSA's funding requirement for that period and the other key components, as described in GEN 3.1.8 G. Periodic fees, which will normally be payable on an annual basis, will provide the majority of the funding required to enable the FSA to undertake its statutory functions.

GEN 3.1.8G

For periodic fees, the key components of the fee mechanism are:

  1. (1)

    a funding requirement derived from:

    1. (a)

      the FSA's financial management and reporting framework;

    2. (b)

      the FSA's budget;

    3. (c)

      adjustments for audited variances between budgeted and actual expenditure in the previous accounting year, and reserves movements (in accordance with the FSA's reserves policy);

  2. (2)

    mechanisms for applying penalties received during previous financial years for the benefit of fee payers;

  3. (3)

    fee-blocks, which are broad groupings of fee payers offering similar products and services and presenting broadly similar risks to the FSA's regulatory objectives;

  4. (4)

    a costing system to allocate an appropriate part of the funding requirement to each fee-block; and

  5. (5)

    tariff bases, which, when combined with fee tariffs, allow the calculation of fees.

GEN 3.1.9G

The amount payable by each fee payer will depend upon the category (or categories) of regulated activity or exemption applicable to that person (fee-blocks). It will, in most cases, also depend on the amount of the business that person conducts in each category (fee tariffs).

GEN 3.1.10G

By basing fee-blocks on categories of business, the FSA aims to minimise cross-sector subsidies. The membership of the fee-blocks is identified in the Handbook provisions relating to the type of fees concerned.

GEN 3.1.11G

Paragraph 17(2) of Schedule 1 to the Act prohibits the FSA from taking account of penalties received when setting its periodic and other fees. Accordingly periodic fees are specified without reference to the penalties received. However, the FSA normally expects to allocate those penalties to the fee-blocks within which the penalty payers fall, by way of a deduction from the periodic fee. Any deductions of this sort are set out in the relevant fees provisions.