Related provisions for FEES 6.1.3

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FEES 6.3.1RRP
The FSCS may at any time impose a management expenses levy or a compensation costs levy,6 provided that the FSCS has reasonable grounds for believing that the funds available to it to meet relevant expenses are, or will be, insufficient, taking into account expenditure already incurred, actual and expected recoveries and8:668(1) in the case of a management expenses levy, the level of the FSCS's expected8 expenditure in respect of those expenses in the financial year of the compensation
FEES 6.3.2AGRP
8The FSCS will usually levy once in each financial year (and in respect of compensation costs, for expenditure expected in the period of 12 months or, if greater, one third of the expenditure expected in the period of 36 months8following 1 July in that year). However, if the compensation costs or specific costs incurred, or expected to be incurred, exceed the amounts held, or reasonably expected to be held, to meet those costs, the FSCS may, at any time during the financial year,
FEES 6.3.3GRP
The FSCS has committed itself in Memorandum of Understanding with each of the FCA and the PRA12 to publish its policy in respect of levying.8126812121212
FEES 6.3.4GRP
The discretion over levying in FEES 612 also gives the FSCS, if it thinks this appropriate, the ability to use third parties as its agents in raising and collecting the levies.12
FEES 6.3.4ARRP
8The FSCS may at any time impose a MERS levy provided that the FSCS has reasonable grounds for believing that the funds available to it to meet relevant expenses are or will be insufficient, taking into account relevant expenses incurred or expected to be incurred in the 12 months following the date of the levy.
FEES 6.3.5RRP
The maximum aggregate amount of compensation costs and specific costs for which the FSCS can levy each8class in any one financial year of the compensation scheme is limited to the amounts set out in the table in FEES 6 Annex 2 R.22
FEES 6.3.10RRP
The FSCS may include in a compensation costs levy the costs of compensation paid by the FSCS in error, provided that the payment was not made in bad faith.55
FEES 6.3.11RRP
The FSCS must hold any amount collected from a specific costs levy or compensation costs levy to the credit of the classes2 in accordance with the allocation established under FEES 6.4.6 R and FEES 6.5.2 R.228
FEES 6.3.12RRP
Any funds received by the FSCS by way of levy or otherwise for the purposes of the compensation scheme are to be managed as the FSCS considers appropriate, and in doing this the FSCS must act prudently.
FEES 6.3.17RRP
(1) The FSCS may use any money held to the credit of one class2(the creditor class)2 to pay compensation costs or specific costs attributable 8or allocated by way of levy8 to 2another class2(the debtor class)2 if the FSCS has reasonable grounds to believe that this would be more economical than borrowing funds from a third party or raising a levy.228822(2) Where the FSCS acts in accordance with (1), it must ensure that:(a) the creditor class2 is reimbursed by the debtor class2
FEES 6.3.18GRP
2FEES 6.3.17 R deals with how FSCS may use money available to it and does not affect the rules on levy allocation in FEES 6.4, 6.5 and 6.5A8.8
FEES 6.3.20RRP
(1) Where8 the FSCS makes recoveries in relation to protected claims where a8 related compensation costs levy8 would have been allocated to a class (class A) had the levy limit for class A not been reached and has been allocated to another class or classes in the retail pool, the recoveries must be applied:8888(a) 8first, to the classes to which the costs levied were allocated in accordance with FEES 6.5A in the same proportion as those classes contributed, up to the total amount
FEES 6.3.21RRP
If the FSCS has more funds (whether from levies, recoveries or otherwise)8 to the credit of a class82 than the FSCS believes will be required to meet levies on that class82 for the next 12 months, it may refund the surplus to members or former members of the class82 on any reasonable basis.28228
FEES 6.3.22RRP
The FSCS may adjust the calculation of a participant firm's share of any levy to take proper account of:(1) any excess, not already taken into account, between previous levies of that type imposed in relation to previous periods and the relevant costs actually incurred in that period; or(2) participant firms that are exempt from the levy under FEES 6.2; or(3) amounts that the FSCS has not been able to recover from participant firms as a result of FEES 6.3.5 R ; or2(4) amounts
FEES 6.3.22ARRP
4The FSCS may not adjust the calculation of a participant firm's share of any levy under FEES 6.3.22 R on the grounds that it would be inequitable for that firm to pay that share or part of it or on the grounds that it would be inequitable for the FSCS to retain that share or part of it.
FEES 6.3.22CRRP
(1) 4This rule applies to the calculation of the levies of a firm (A) if:(a) either:(i) A acquires all or a part of the business of another firm (B), whether by merger, acquisition of goodwill or otherwise; or(ii) A became authorised as a result of B's simple change of legal status (as defined in FEES 3 Annex 1 Part 6); (b) B is no longer liable to pay a levy; and(c) that acquisition or change takes place after the date to which, or as of which, A's most recent statement of business
FEES 6.3.23RRP
If a participant firm's share of a levy or an additional administrative fee under FEES 6.7.4 R would be so small that, in the opinion of the FSCS, the costs of collection would be disproportionate to the amount payable, the FSCS may treat the participant firm as if its share of the levy or additional administrative fee amounted to zero.
FEES 6.1.4GRP
Section 213(3)(b) of the Act requires the appropriate regulator to make rules to enable the FSCS to impose levies on authorised persons, and on recognised investment exchanges that are operating a multilateral trading facility or operating an organised trading facility,13 in order to meet its expenses. These expenses include in particular expenses incurred, or expected to be incurred, in paying compensation, borrowing or insuring risks.
FEES 6.1.4AGRP
Section 224F of the Act enables the appropriate regulator to make rules to enable the FSCS to impose levies on authorised persons (or any class of authorised persons) in order to meet its management expenses incurred if, under Part 15A of the Act, it is required by HM Treasury to act in relation to relevant schemes. But those rules must provide that the FSCS can impose a levy only if the FSCS has tried its best to obtain reimbursement of those expenses from the manager of the
FEES 6.1.5GRP
The FSCS may impose three 6types of levy: a management expenses levy (consisting of a base costs levy and a specific costs levy)9, a compensation costs levy and a MERS levy.6 The FSCS has discretion as to the amount and 9timing of the levies imposed.662
FEES 6.1.6GRP
In calculating a compensation costs levy, the FSCS:9989999(1) for claims for protected deposits, may include compensation costs expected in the 12-month period following the date of the levy; and9(2) for other protected claims, may include up to the greater of one third of the compensation costs expected in the 36-month period following the date of the levy, or the compensation costs expected in the 12 months following that date.9
FEES 6.1.8GRP
The9 provisions on the allocation of levies to classes9 up to their levy limits2 meet9 a requirement of section 213(5) of the Act that the appropriate regulator , in making rules to enable the FSCS to impose levies, must take account of the desirability of ensuring that the amount of the levies imposed on a particular class of authorised person reflects, so far as practicable, the amount of claims made, or likely to be made, in respect of that class of person.22229999
FEES 6.1.9GRP
Section 223 of the Act (Management expenses) prevents the FSCS from recovering, through a levy, any management expenses attributable to a particular period in excess of the limit set in COMP as applicable to that period. 'Management expenses' are defined in section 223(3) to mean expenses incurred or expected to be incurred by the FSCS in connection with its functions under the Act, except:(1) expenses incurred in paying compensation;5(2) expenses incurred as a result of the FSCS
FEES 6.1.10GRP
A management expenses levy may consist of two 2elements. The first is a base costs levy, for the base costs of running the compensation scheme in a financial year, that is, costs which are not dependent upon the level of activity of the compensation scheme and which therefore are not attributable to any specific class.9 Included in this category are items such as the salary of the members of the board of the FSCS, the costs of the premises which the FSCS occupies, and its audit
FEES 6.1.11AGRP
10The second element of a management expenses levy is a specific costs levy for the "specific costs" of running the compensation scheme in a financial year. These costs are attributable to a class, and include the salary costs of certain staff of the FSCS and claims handling and legal and other professional fees. It also may include the cost of any insurance cover that FSCS secures against the risk of FSCS paying out claims above a given level in any particular class (but below
FEES 6.1.14GRP
In imposing a compensation costs levy in each financial year of the compensation scheme the FSCS will take into account the compensation costs which the FSCS has incurred and has not yet raised through levies, any recoveries it has had made using the rights that have been assigned to it or to which it is subrogated and9 a further amount calculated taking into account:9(1) 9for claims for protected deposits, those compensation costs it expects to incur (including in respect of
FEES 6.1.17GRP
Incoming EEA firms which obtain cover or 'top up' under the provisions of COMP 14 are firms whose Home State scheme provides no or limited compensation cover in the event that they are determined to be in default. Under FEES 6.6, the FSCS is required to consider whether incoming EEA firm's should receive a discount on the amount that they would otherwise pay as their share of the levy, to take account of the availability of their Home State cover. The amount of any discount is
FEES 6.4.1RRP
A participant firm must pay to the FSCS a share of each management expenses levy.
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.
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 and1specific costs levy .11
FEES 6.4.5RRP
Subject to3FEES 6.3.22 R, the FSCS must calculate a participant firm's share of a base costs levy by:33(1) for recognised investment exchanges, providing for £1,000 per RIE for each financial year of the compensation scheme (other than in the financial year in which the recognised investment exchange becomes a participant firm, when its share is nil);633(2) for other participant firms:633(a) identifying the base costs which the FSCS has incurred, or expects to incur, in the relevant
FEES 6.4.6ARRP
4The FSCS must allocate any specific costs levy:(1) first, amongst the relevant classes in proportion to the amount of relevant costs arising from the different activities for which firms in those classes have permission up to the levy limit of each relevant class. The FCA provider contribution classes are not relevant classes for this purpose; and(2) thereafter, where the levy limit has been reached (whether as a result of compensation costs or specific costs or both) for a class
FEES 6.4.8RRP
A firm or a recognised investment exchange6 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 6.4.10GRP
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 FEES 69 for discounts on the base costs levy.119
FEES 6.4.10ARRP
(1) 22This rule deals with the calculation of:(a) a participant firm'sspecific costs levy in the financial year of the FSCS following the FSCS financial year in which it became a participant firm; or(b) a participant firm'sspecific costs levy in the financial year of the FSCS in which it had its permission extended, and the following FSCS financial year; and(c) the tariff base for the classes3 that relate to the relevant permissions or extensions, as the case may be.3(2) Unless
FEES 6.4.10BGRP
The table below sets out the period within which a participant firm's tariff base is calculated ("the data period") for second year levies calculated under FEES 6.4.10B. The example is based on a participant firm that extends its permission on 1 November 2009 and has a financial year ending 31 March.References in this table to dates or months are references to the latest one occurring before the start of the FSCS financial year unless otherwise stated.Type of permission acquired
FEES 6.7.1RRP
A participant firm must pay its share of any levy made by the FSCS:(1) in one payment; or(2) where the FSCS agrees, quarterly, at the beginning of each quarter, by direct debit agreement.
FEES 6.7.4RRP
If a participant firm does not pay its share of a levy subject to a direct debit agreement as required by FEES 6.7.1 R (2), the entire amount of the levy becomes due and payable to the FSCS, and additional administrative fees are payable at the rate set out in FEES 2.2.1 R.
FEES 6.7.6RRP
If a firm ceases to be a participant firm or carry out activities within one or more classes54 part way through a financial year4 of the compensation scheme:4(1) it will remain liable for any unpaid levies which the FSCS has already made on the firm; and41(2) the FSCS may make one or more levies4 upon it (which may be before or after the firm5 has ceased to be a participant firm or carry out activities within one or more classes5,4 but must be before it ceases to be an authorised
FEES 6.5.2-ARRP
12The FSCS must allocate any compensation costs levy:(1) first, to the relevant classes in proportion to the amount of compensation costs arising from, or expected to arise from, claims in respect of the different activities for which firms in those classes have permission up to the levy limit of each relevant class. The FCA provider contribution classes are not relevant classes for this purpose; and(2) thereafter, where the levy limit has been reached (whether as a result of
FEES 6.5.2AGRP
4The use made by FSCS of borrowing facilities to provide liquidity until the next levy does not affect the attribution of compensation costs, nor the10 allocation of compensation cost levies; the allocation of a compensation costs levy occurs at the time that the FSCS imposes a levy.10
FEES 6.5.5RRP
4(1) A participant firm must pay to the FSCS a share of each compensation costs levy allocated to the classes of which it is a member10 unless either the firm is exempt under FEES 6.2 (Exemption) or the FSCS has chosen to exercise its discretion under FEES 6.3.23 R in respect of that firm.4(2) [deleted]10104
FEES 6.5.6ARRP
12The FSCS must calculate each participant firm's share of a compensation costs levy (subject to FEES 6.3.22 R (Adjustments to calculation of levy shares)) by:(1) identifying each of the relevant classes to which each participant firm belongs, using the statement of business most recently supplied under FEES 6.5.13 R (1);(2) identifying the compensation costs falling within FEES 6.5.1 R allocated, in accordance with FEES 6.5.2 R, to the classes identified in (1);(3) calculating,
FEES 6.5.9RRP
A firm or a recognised investment exchange14 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 compensation costs levy made in that year.4
FEES 2.2.1RRP
If a person does not pay the total amount of a periodic fee3, FOS levy, or share of the FSCS levy or CFEB levy6, before2 the end of the2 date on which it is due, under the relevant provision in FEES 4, 5, 6 or 7, 6that person must pay an additional amount as follows: 342972126(1) if the fee was not paid in full before the end of the due date, an administrative fee of £250; plus(2) interest on any unpaid part of the fee at the rate of 5% per annum above the Official Bank Rate10
FEES 2.2.2GRP
The FCA20, (for FCA and PRA20periodic fees, FOS and FSCS levies and CFEB levies), expects11 to issue invoices at least 30 days before the date on which the relevant amounts fall due. Accordingly it will generally be the case that a person will have at least 30 days from the issue of the invoice before an administrative fee becomes payable.206721117212
FEES 2.2.3GRP
(1) Paragraph15 23(8) of Schedule 1ZA of the Act permits the FCA to recover fees (including fees relating to payment services, the issuance of electronic money, 17CBTL firms, data reporting services providers,17designated credit reference agencies, designated finance platforms16 and, where relevant, FOS levies and CFEB levies).14(2) Section 213(6) of the Act permits the FSCS to recover shares of the FSCS levy payable, as a debt owed to the FCA and FSCS respectively. 14(3) The
FEES 2.2.4GRP
In addition, the FCA13may be entitled to take regulatory action in relation to the non-payment of fees,6FOS levies and CFEB levies. The FCA136 may also take regulatory action in relation to the non-payment of a721 share of the FSCS levy, after reference of the matter to the6FCA13 by the6FSCS. What action (if any) that is taken by the FCA13will be decided upon in the light of the particular circumstances of the case.667216721721
FEES 6.5A.1RRP
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) to classes whose retail pool levy limit has not been reached as at the date of the levy;(2) in proportion to the relative sizes of the retail pool levy limits of the classes in (1); and(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
FEES 6.5A.2RRP
(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
FEES 6.5A.3GRP
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.5RRP
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
FEES 2.3.1RRP
If it appears to the FCA5 or48 the FSCS (in relation to any FSCS levy only) 2 that in the exceptional circumstances of a particular case, the payment of any fee, FSCS levy2,3FOS levy or CFEB levy3would be inequitable, the FCA5 or48 the FSCS2 as relevant, may (unless FEES 2.3.2B R applies)1 reduce or remit all or part of the fee or levy in question which would otherwise be payable. 4834848348
FEES 2.3.2RRP
If it appears to the FCA5 or48 the FSCS (in relation to any FSCS levy only)2 that in the exceptional circumstances of a particular case to which FEES 2.3.1R does not apply, the retention by the FCA5 the FSCS,2 or the CFEB3, as relevant, of a fee, FSCS levy2,3FOS levy or CFEB levy3which has been paid would be inequitable, the FCA5 the FSCS2 or the CFEB3, may (unless FEES 2.3.2B R applies)1 refund all or part of that fee or levy.48348348348
FEES 2.3.2BRRP
1The FCA5or the FSCS2may not consider a claim under FEES 2.3.1 R and/or FEES 2.3.2 R to reduce, remit or refund any overpaid amounts paid by a fee or levy2 payer in respect of a particular period, due to a mistake of fact or law by the fee or levy2 payer, if the claim is made by the fee or levy2 payer more than 2 years after the beginning of the period to which the overpayment relates.
FEES 2.1.1RRP
619Except to the extent referred to in FEES 2.1.1A R, this1619118 chapter applies to every person who is required to pay a fee or share of a levy to the FCA12, FOS Ltd or FSCS, as the case may be, by a provision of the Handbook.
FEES 2.1.4GRP
The purpose of this chapter is to set out the general provisions applicable to those who are required to pay fees or levies to the5FCA12or a share of the FSCS levy.619561956
FEES 2.1.5GRP
(1) The following enable the FCA to charge fees to cover its costs and expenses in carrying out its functions:13(a) paragraph 23 of Schedule 1ZA of the Act;13(b) regulation 92 of the Payment Services Regulations;13(c) regulation 59 of the Electronic Money Regulations;13(d) article 25(a) of the MCD Order;1513(e) regulation 21 of the Small and Medium Sized Businesses (Credit Information) Regulations. 13(f) regulation 18 of the Small and Medium Sized Business (Finance Platforms)
FEES 2.1.7GRP
The key components of the FCA12fee mechanism (excluding the FSCS5levy, the FOS5 levy and case fees, and the CFEB levy5which are dealt with in FEES 5,5FEES 6 and FEES 7)5 are:555(1) a funding requirement derived from:(a) the FCA’s12financial management and reporting framework;(b) the FCA’s12budget; and(c) adjustments for audited variances between budgeted and actual expenditure in the previous accounting year, and reserves movements (in accordance with the FCA’s12reserves policy);(2)
FEES 6.4A.1RRP
1A participant firm (but not a recognised investment exchange)2 must pay to the FSCS a share of each MERS levy.
FEES 6.4A.2RRP
The FSCS can impose a MERS levy only if the FSCS has tried its best and has failed to obtain reimbursement of those expenses from the manager of the relevant compensation scheme.
FEES 6.4A.3RRP
The FSCS must calculate a participant firm's share of a MERS levy on a reasonable basis.
FEES 6.2.1ARRP
(1) 3Except as set out in (3), a participant firm which does not conduct business that could give rise to a protected claim by an eligible claimant and has no reasonable likelihood of doing so is exempt from a specific costs levy, or a compensation costs levy, or both, provided that:(a) it has notified the FSCS in writing that those conditions apply; and(b) the conditions in fact continue to apply.(2) The exemption takes effect from the date on which the notice was received by
FEES 1.1.1GRP
(1) FEES applies to all persons required to pay a fee or levy under a provision of the Handbook. The purpose of this chapter is to set out to whom the rules and guidance in FEES apply. 30(2) FEES 2 (General Provisions) contains general provisions which may apply to any type of fee payer.30(3) FEES 3 (Application, Notification and Vetting Fees) covers one-off fees payable on a particular event for example:3330(a) 33various application fees (including those in relation to authorisation,
FEES 6.6.1RRP
If an incoming EEA firm, which is aCRD credit institution2, an IMD insurance intermediary, an MCD mortgage credit intermediary3 or MiFID investment firm1, is a participant firm, the FSCS must give the firm such discount (if any) as is appropriate on the share of any levy it would otherwise be required to pay, taking account of the nature of the levy and the extent of the compensation coverage provided by the firm's Home State scheme.21