Periodic fees

Part

FEES Fees Manual

Chapter

Periodic fees

Printed on: 01/11/2024

Rulebook at: 23/07/2013

FEES 4

Periodic fees

FEES 4.1

Introduction

01/01/2006

Application

FEES 4.1.1

This chapter applies to every person set out in FEES 1.1.2R (2).

01/04/2013

Purpose

FEES 4.1.2

The purpose of this chapter is to set out the requirements on firms and others to pay periodic fees and transaction reporting fees in certain circumstances.

01/04/2013

Background

FEES 4.1.3

Most of the detail of the periodic fees that are payable by firms is set out in FEES 4 Annexes 1A to 11. FEES 4 Annex 12 G provides guidance on the calculation of certain tariffs. Most of the provisions of the Annexes will vary from one fee year to another. Accordingly fresh FEES 4 Annexes will come into force, following consultation, for each fee year.

01/07/2013

FEES 4.1.5

The Society of Lloyd's, which has permission, has its own fee block.

01/04/2013

FEES 4.1.7

In the case of periodic fees for firms, fees are calculated individually for each firm, but they may be paid on a group basis, if the group so wishes.

01/04/2013

FEES 4.2

Obligation to pay periodic fees

01/01/2006

General

FEES 4.2.1

A person shown in column (1) of the table in FEES 4.2.11 R and, if applicable, FEES 4.2.11AR as the relevant fee payer must pay each periodic fee applicable to it, calculated in accordance with the provisions referred to in column (2) of the applicable table, as adjusted by any relevant provision in this chapter:

(1) in full and without deduction (unless permitted or required by a provision in FEES); and
(2) on or before the date given in column (3) of that table, unless FEES 4.2.10 R applies.

01/04/2013

FEES 4.2.2

(1) A relevant fee payer will be required to pay a periodic fee for every year during which they have the status in column 1 of the table in FEES 4.2.11 R and/or FEES 4.2.11AR (or in relation to collective investment schemes, for every year during which it is a regulated collective investment scheme) subject to any reductions or exemptions applicable under this chapter. If a person is the relevant fee payer for more than one status listed in column 1 of the table in FEES 4.2.11 R and/or FEES 4.2.11AR (or in relation to collective investment schemes, the relevant fee payer for more than one regulated collective investment scheme) he will be required to pay a fee in relation to each.
(2) [deleted]

01/04/2013

FEES 4.2.3

The FCA will issue invoices in respect of the FCA and PRA to firms and other fee payers and expects to do so at least 30 days before the dates on which payments fall due under FEES 4.2.1 R.

01/04/2013

Method of payment

FEES 4.2.4

(1) A periodic fee must be paid using either direct debit, credit transfer (BACS/CHAPS), cheque, Maestro, Visa Debit or by credit card (Visa/Mastercard only). Any payment by permitted credit card must include an additional 2% of the sum paid.
(2) [deleted]

01/07/2013

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

FEES 4.2.6

(1) Unless (2) applies, if the event, as described in column 4 of the table in FEES 4.2.11 R and/or FEES 4.2.11AR, giving rise to, or giving rise to an increase in, the fee payable in FEES 4.2.1 R, occurs on or after 1 July of the relevant fee year, the periodic fee required under FEES 4.2.1 R is modified for:

(a) firms (other than AIFM qualifiers, ICVCs and UCITS qualifiers) in accordance with FEES 4.2.7 R and FEES 4.2.8 R;
(b) for all other fee payers in column (1) of the table in FEES 4.2.11 R or FEES 4.2.11A R, in accordance with the table below.

Period in which event (in column 4 of the table in FEES 4.2.11 R or FEES 4.2.11AR) occurs

Proportion of periodic fee payable

Fees payable to the FCA

1 April to 30 June inclusive

100%

1 July to 30 September inclusive

75%

1 October to 31 December inclusive

50%

1 January to 31 March inclusive

25%

Fees payable to the PRA for fee year 2013/14

1 April to 30 June inclusive

100%

1 July to 30 September inclusive

75%

1 October to 31 December inclusive

50%

1 January to 28 February inclusive

25%

(2) For recognised bodies, if the recognition order is made during the course of the relevant fee year, the periodic fee required is set out in Column (4) of the table in FEES 4.2.11 R.

23/07/2013

FEES 4.2.7

A firm (other than an AIFM qualifier, ICVC or UCITS qualifier) which becomes authorised or registered, or whose permission and/or payment service activities are extended, during the course of the fee year must pay a fee which is calculated by:

(1) identifying each of the tariffs set out in Part 1 of FEES 4 Annex 2AR, Part 1 of FEES 4 Annex 2BR and/or Part 1 of FEES 4 Annex 11 as appropriate for the relevant fee year that apply to the firm only after the permission is received or extended or payment service activities are authorised or registered or extended or electronic money issuance activities are authorised or registered under the Electronic Money Regulations, but ignoring:

(a) the A.13 activity group if, before the variation, the A.12 activity group applied to the firm's business; or
(b) the A.12 activity group if, before the variation, the A.13 activity group applied to the firm's business;

(2) calculating the amount for each of the applicable tariffs which is the higher of:

(a) any applicable minimum fee specified in relation a particular tariff in FEES 4 Annex 2AR or FEES 4 Annex 2BR (but note, for the avoidance of doubt, that these are not the A.0 or PA.0 minimum fees set out under Part 2 of FEES 4 Annex 2AR and Part 2 of FEES 4 Annex 2BR); and
(b) the result of applying the tariff to the projected valuation, for its first year (as provided in the course of the firm's application), of the business to which the tariff relates;

(3) adding together the amounts calculated under (2) in relation to fees payable to the FCA and, if applicable, separately adding together the amounts calculated under (2) in relation to the fees payable to the PRA;;
(4) working out whether an A.0 or a PA.0 minimum fee is payable under Part 2 of FEES 4 Annex 2AR or Part 2 of FEES 4 Annex 2BR (except that that minimum fee is not payable again by a firm whose permission is extended if the fee was already payable before the extension);
(4A) working out whether an AP.0 FCA prudential fee is payable under Part 2 of FEES 4 Annex 2AR and if so how much;
(4B) working out whether a PT.1 PRA transitional fee is payable under Part 2 of FEES 4 Annex 2BR and if so how much;
(5) adding together the amounts calculated under (3), (4) and (4A) that relate to fees payable to the FCA and then adding this sum to any applicable flat rate fee, and, if applicable, separately adding together the amounts calculated under (3), (4) and (4B) that relate to fees payable to the PRA and then adding this sum to any applicable flat rate fee; and
(6) modifying the result for the FCA and, if applicable, the PRA as indicated by the table in FEES 4.2.6 R (except that FEES 4 Annex 10 (Periodic fees for MTF operators) deals with a firm that receives permission for operating a multilateral trading facility or has its permission extended to include this activity during the course of the relevant fee year and FEES 4.2.6 R does not apply).

23/07/2013

FEES 4.2.7A

Projected valuations for a firm's first year will be collected for the 12 month period beginning with the date a firm becomes authorised or registered, or the date its permission and/or payment service activities are extended. That information will be used to calculate the periodic fee for the remainder of the fee year in which the firm was authorised or registered or its permission and/or payment service activities were extended (adjusted in accordance with FEES 4.2.7 R) and to calculate the periodic fee for the following fee year. Projected valuations are not relevant for those fee payers that are only required to pay fixed fees.

01/04/2013

FEES 4.2.7B

(1) This rule deals with the calculation of:

(a) a firm's fees for its second and subsequent fee year. These are the fee years years following the fee year in which it was given permission and/or was authorised or registered under the Payment Services Regulations or the Electronic Money Regulations or had its permission and/or payment services activities extended (the relevant permissions); and
(b) the tariff base for the fee block or fee blocks that relate to each of the relevant permissions.

(2) The starting point for calculating the fees referred to in (1)(a) is determining whether or not the firm's tariff base for the relevant fee year can be calculated using data from a complete period (as specified in Part 5 of FEES 4 Annex 1AR, Part 5 of FEES 4 Annex 1BR or Part 4 of FEES 4 Annex 11 R) that begins on or after the date that the firm obtained the relevant permission to which that tariff base relates.

(a) If it can, the firm must use that data for calculating its tariff base.
(b) If it cannot, the tariff base must be calculated using the projected valuations for its first year of the business to which the tariff relates (as provided in the course of the firm's application), unless (5)(b) or 5(c) applies.

(3) This rule does not apply to a firm with a permission for operating a multilateral trading facility.
(4) [deleted]
(5)

(a) [deleted]
(b) If a firm:

(i) receives a relevant permission between 1 April and 31 December inclusive; and
(ii) is, but for this rule, required to calculate its tariff base for that relevant permission by reference to the average of its modified eligible liabilities for October, November and December;

it must calculate that tariff base as at the December before the start of the fee year.
(c) If a firm:

(i) is, but for this rule, required to calculate its tariff base for the relevant permission by reference to the firm's financial year ended in the calendar year ending on the 31 December before the start of the fee year and, since obtaining the relevant permission, the firm has yet to complete a full financial year ended in the calendar year ending on the 31 December before the start of the fee year; or
(ii) is, but for this rule, required to calculate its tariff base by reference to the twelve months ending on the 31 December before the start of the fee year and, since obtaining the relevant permission, the firm has yet to complete a full twelve months ending on the 31 December before the start of the fee year;

it must calculate the tariff base under (d) below unless it is in its second fee year and was authorised between 1 January and 1 April (in which case it must use the projected valuations provided for in (2)(b) above).
(d) If a firm satisfies either of the conditions in (c) it must calculate its tariff base as follows:

(i) it must use actual data in relation to the business to which the tariff relates rather than projected valuations;
(ii) in respect of firms satisfying condition (5)(c)(i), the tariff is calculated by reference to the period beginning on the date it acquired the relevant permission relating to the tariff, and ending on either the 31 December before the start of the fee year or, if earlier, the start date of the firm's financial year; and
in respect of firms satisfying condition (5)(c)(ii), the tariff is calculated by reference to the period beginning on the date on which it acquired the relevant permission, and ending on the 31 December before the start of the fee year
(iii) the figures are annualised by increasing them by the same proportion as the period of 12 months bears to the period starting from when the firm received its relevant permission to to the relevant period end date specified in (ii).

(e) Where a firm is required to use the method in (d) it must notify the FCA (in its own capacity and, if applicable, in its capacity as collection agent for the PRA) of this by the date specified in FEES 4.4 (Information on which Fees are calculated).
(f) Where a firm is required to use actual data under this rule FEES 4 Annex 1AR Part 5, FEES 4 Annex 1BR Part 5 and FEES 4 Annex 11 Part 4, are modified, where applicable, in relation to the calculation of that firm's valuation date in the fee years to which this rule applies.

01/04/2013

Application of FEES 4.2.7BR

FEES 4.2.7C

The table below sets out the period within which a firm's tariff base is calculated (the data period) for second year fees calculated under FEES 4.2.7B R. The example is based on a firm that acquires permission on 1 November 2009 and has a financial year ending 31 March. Where valuation dates fall before the firm receives permission it should use projected valuations in calculating its fees.

References in this table to dates or months are references to the latest one occurring before the start of the appropriate regulator's fee year unless otherwise stated.

Type of permission acquired on 1 November

Tariff base

Valuation date but for FEES 4.2.7BR

Data period under FEES 4.2.7BR

Accepting deposits (monthly reporting firms)

Modified eligible liabilities (MELs)

Average of the MELs for October, November, December - so projected valuations will be used

MELs for December 2009.

Accepting deposits (quarterly reporting firms)

MELs

December 2009

December 2009.

Entering into a home finance transaction

Number of mortgages, home purchase plans or home reversion plans entered into

12 months ending 31 December 2009 - so projected valuations will be used

1 November to 31 December 2009.

Effecting contracts of insurance
(Insurers - general)

Gross premium income and gross technical liabilities

31 March 2009 - so projected valuations will be used

1 November to 31 December 2009.

01/04/2013

FEES 4.2.8

In relation to an incoming EEA firm or an incoming Treaty firm the modification provisions of FEES 4.2.7 R apply only in relation to the relevant regulated activities of the firm, which are passported activities or Treaty activities and which are carried on in the United Kingdom, and which are not provided on a cross border services basis. For payment services and electronic money issuance, the adjustment only applies to the business to which the calculation made in FEES 4.3.12A R relates.

01/04/2013

Fee payers ceasing to hold relevant status or reducing the scope of their permission after start of relevant period

FEES 4.2.9

The appropriate regulator will not refund periodic fees if, after the start of the period to which they relate:

(1) a fee payer ceases to have the status set out in column (1) of the table in FEES 4.2.11 R or FEES 4.2.11AR; or
(2) a firm reduces its permission or payment services activities so that it then falls out of the fee-block previously applied to it;

(but see FEES 2.3 (Relieving Provisions) and FEES 4.3.13 R (Firms Applying to Cancel or Vary Permission Before Start of Period)).

01/04/2013

Extension of Time

FEES 4.2.10

A person need not pay a periodic fee on the date on which it is due under the relevant provision in FEES 4.2.1 R, if:

(1) that date falls during a period during which circumstances of the sort set out in GEN 1.3.2 R (Emergencies) exist, and that person has reasonable grounds to believe that those circumstances impair its ability to pay the fee, in which case he must pay it on or before the fifth business day after the end of that period; or
(2) unless FEES 4.3.6R (3), FEES 4.3.6R (4) or FEES 4.3.6R (4A) (Time and method for payment) applies, that date would otherwise fall on or before the 30th day after the date on which the FCA (in its own capacity or in its capacity as agent for the PRA) has sent written notification to that person of the fee payable on that date, in which case he must pay on or before the 30th day after the date on which the FCA sends the notification.

01/04/2013

FEES 4.2.11A

Table of periodic fees payable to the PRA

1 Fee payer

2 Fee payable

3 Due date

4 Events occurring during the period leading to modified periodic fee

Any firm

As specified in FEES 4.3.1 R in relation to FEES 4 Annex 2BR

(1)

Unless (2) applies, on or before the relevant dates specified in FEES 4.3.6 R.

Firm receives permission; or firm extends permission

(2)

if an event specified in column 4 occurs during the course of a fee year, 30 days after the occurrence of that event, or if later the dates specified in FEES 4.3.6 R.

01/04/2013

FEES 4.3

Periodic fee payable by firms (other than AIFM qualifiers, ICVCs and UCITS qualifiers)

23/07/2013

FEES 4.3.1

The periodic fee payable by a firm (except an AIFM qualifier, ICVC or a UCITS qualifier) is:

(1) each periodic fee applicable to it calculated in accordance with FEES 4.3.3 R, using information obtained in accordance with FEES 4.4; plus
(1A) any periodic fee applicable to it calculated in accordance with FEES 4.3.3A R using information relating to its UK business obtained in accordance with FEES 4.4 (or by other means in the case of the Bank of England); less
(2) any deductions from the periodic fee specified in Part 2 of FEES 4 Annex 2AR, FEES 4 Annex 2BR or Part 7 of FEES 4 Annex 11.

23/07/2013

FEES 4.3.2

(1) The amount payable by each firm will depend upon the category (or categories) of regulated activities or payment services it is engaged in (fee-blocks) and whether it is issuing electronic money, and on the amount of business it conducts in each category (tariff base). The fee-blocks and tariffs are identified in FEES 4 Annex 1AR in respect of the FCA and FEES 4 Annex 1BR in respect of the PRA (and guidance on calculating certain of the tariffs is at FEES 4 Annex 12 G), while FEES 4 Annex 2AR in respect of the FCA and FEES 4 Annex 2BR in respect of the PRA set out the tariff rates for the relevant fee year. In the case of firms that provide payment services and/or issue electronic money, the relevant fee blocks, tariffs and rates are set out in FEES 4 Annex 11.
(2) Incoming EEA firms, incoming Treaty firms, EEA authorised payment institutions and EEA authorised electronic money institutions receive a discount to reflect the reduced scope of the appropriate regulator's responsibilities in respect of them. The level of the discount varies from fee-block to fee-block, according to the division of responsibilities between the appropriate regulator and Home state regulators for firms in each fee-block (see FEES 4.3.11 G, FEES 4.3.12 R and FEES 4.3.12A R).

01/04/2013

Calculation of periodic fee (excluding fee-paying payment service providers and fee-paying electronic money issuers)

FEES 4.3.3

The periodic fee referred to in FEES 4.3.1 R is (except in relation to the Society, fee-paying payment service providers and fee-paying electronic money issuers) calculated as follows:

(1) identify each of the tariffs set out in Part 1 of FEES 4 Annex 2AR and Part 1 of FEES 4 Annex 2BR which apply to the business of the firm for the period specified in that annex;
(2) for each of the applicable tariffs, calculate the sum payable in relation to the business of the firm for that period;
(3) add together the amounts calculated under (2) in relation to fees payable to the FCA and, if applicable, separately add together the amounts calculated under (2) in relation to the fees payable to the PRA;
(4) work out whether an A.0 or a PA.0 minimum fee is payable under Part 2 of FEES 4 Annex 2AR and Part 2 of FEES 4 Annex 2BR and if so how much (except that that minimum fee is not payable again by a firm whose permission is extended if the fee was already payable before the extension);
(4A) work out whether an AP.0 FCA prudential fee is payable under Part 2 of FEES 4 Annex 2AR and if so how much;
(4B) work out whether a PT.1 PRA transitional fee is payable under Part 2 of FEES 4 Annex 2BR and if so how much;
(5) add together the amounts calculated under (3), (4) and (4A) that relate to fees payable to the FCA and, if applicable, separately adding together the amounts calculated under (3), (4) and (4B) that relate to fees payable to the PRA; and
(6) apply any applicable payment charge specified in FEES 4.2.4 R, provided that:

(a) for payment by direct debit, successful collection of the amount due is made at the first attempt by the FCA (in its own capacity and, if applicable, in its capacity as agent for the PRA); or
(b) for payment by credit transfer, the amount due is received by the FCA (in its own capacity and, if applicable, in its capacity as agent for the PRA) on or before the due date.

01/04/2013

Modification for firms with new or extended permissions

FEES 4.3.4

(1) A firm which becomes authorised or registered during the course of a fee year will be required to pay a proportion of the periodic fee which reflects the proportion of the year for which it will have a permission or the right to provide particular payment services or the right to issue electronic money - see FEES 4.2.5 G and FEES 4.2.6 R.
(2) Similarly a firm which extends its permission or its right to provide particular payment services so that its business then falls within additional fee blocks will be required to pay a further periodic fee under this section for those additional fee blocks, but discounted to reflect the proportion of the year for which the firm has the extended permission or payment services activity - see FEES 4.2.6 R and FEES 4.2.7 R.
(3) These provisions apply (with some changes) to incoming EEA firms, incoming Treaty firms, EEA authorised payment institutions and EEA authorised electronic money institutions.
(4) These provisions do not apply to a firm's periodic fees in relation to its permission for operating a multilateral trading facility obtained from the FCA during the course of a fee year.

01/04/2013

Amount payable by the Society of Lloyd's

FEES 4.3.5

The periodic fee referred to in FEES 4.3.1 R in relation to the Society is specified against its name in FEES 4 Annex 2AR and FEES 4 Annex 2BR.

01/04/2013

Time of payment

FEES 4.3.6

(1) Subject to FEES TP 8, if the firm's, designated professional body's, recognised investment exchange's, or regulated covered bond issuer's periodic fee for the previous fee year was at least £50,000, it must pay the FCA:

(a) an amount equal to 50% of the FCA periodic fee payable for the previous fee year, by 30 April or, if later, within 30 days of the date of the invoice, in the fee year to which the sum due under FEES 4.2.1 R relates; and
(b) the balance of the FCA periodic fee due for the current fee year by 1 September or, if later, within 30 days of the date of the invoice, in the fee year to which that sum relates.

(1A) Subject to FEES TP 8, if the firm is also a PRA-authorised person and its periodic fee for the previous fee year was at least 50,000, it must pay the PRA (through the FCA acting as its collection agent):

(a) an amount equal to 50% of the PRA periodic fee payable for the previous fee year, by 30 April in the fee year to which the sum due under FEES 4.2.1 R relates; and
(b) the balance of the PRA periodic fee due for the current fee year by 1 September or, if later, within 30 days of the date of the invoice, in the fee year to which that sum relates.

(1B) If the firm paid periodic fees to both the FCA and the PRA in the previous fee year, FEES 4.3.6R (1) and (1A) only apply if the firm's combined FCA and PRA periodic fees for that fee year were at least £50,000.
(2) If the firm's, designated professional body's, recognised investment exchange's, or regulated covered bond issuer's periodic fee for the previous fee year was less than £50,000, it must pay the periodic fee due in full by 1 August or, if later, within 30 days of the date of the invoice in the fee year to which that sum relates.
(3) If a firm has applied to cancel its Part 4A permission in the way set out in SUP 6.4.5 D (Cancellation of permission), or its status as a payment institution under regulation 10 of the Payment Services Regulations (Cancellation of authorisation) or as regulation 10 is applied by regulation 14 of the Payment Services Regulations (Supplementary provisions), or its status as an electronic money issuer under regulation 10 of the Electronic Money Regulations (Cancellation of authorisation) or as regulation 10 is applied by regulation 15 of the Electronic Money Regulations (Supplementary provisions), then (1) and (2) do not apply but it must pay the total amount due when the application is made.
(4) If the appropriate regulator has exercised its own-initiative powers to cancel a firm's Part 4A permission, then (1) and (2) do not apply but the firm must pay the total amount due immediately before the cancellation becomes effective.
(4A) If the FCA has cancelled a firm's authorisation or registration under regulation 10 of the Payment Services Regulations or regulation 10 of the Electronic Money Regulations or its registration under regulation 10 as applied by regulation 14 of the Payment Services Regulations or its registration under regulation 10 as applied by regulation 15 of the Electronic Money Regulations, then (1) and (2) do not apply but the firm must pay the total amount due immediately before the cancellation becomes effective.
(5) [deleted]
(5A) (In relation to PRA-authorised persons only) paragraphs (1A) and (2) do not apply to any Solvency 2 Special Project fee or Solvency 2 Implementation fee (as defined in FEES 4 Annex 2B) and such fees are not taken into account for the purposes of the split in (1A). Instead any Solvency 2 Special Project fee or Solvency 2 Implementation fee is payable on the date specified in (1A)(b) or (2) (depending on which applies to the rest of its periodic fee) or any earlier date required by (3) or (4).
(6) Paragraphs (1) and (2) do not apply to any periodic fee in relation to a firm's permission for operating a multilateral trading facility and such a fee is not taken into account for the purposes of the split in (1). Instead any fee for this permission is payable on the date specified in FEES 4 Annex 10 (Periodic fees for MTF operators).

01/07/2013

Groups of firms

FEES 4.3.7

A firm which is a member of a group may pay all of the amounts due from other firms in the same group under FEES 4.2.1 R, if:

(1) it notifies the FCA (in its own capacity and, if applicable, in its capacity as agent for the PRA) in writing of the name of each other firm within the group for which it will pay; and
(2) it pays the fees, in accordance with this chapter, as a single amount as if that were the amount required from the firm under FEES 4.2.1 R.

01/04/2013

FEES 4.3.8

A notification under FEES 4.3.7R (1) should be made in accordance with SUP 15.7 (Form and method of notification).

01/04/2013

FEES 4.3.9

If the payment made does not satisfy in full the periodic fees payable by all of the members of the group notified to the FCA under FEES 4.3.7 R, the FCA (in its own capacity and, if applicable, in its capacity as agent for the PRA) will apply the sum received among the firms which have been identified in the notification given under FEES 4.3.7R (1) in proportion to the amounts due from them. Each firm will remain responsible for the payment of the outstanding balance attributable to it.

01/04/2013

FEES 4.3.10

If a firm pays its fees through an agent outside the scope of FEES 4.3.7 R, the firm is responsible for ensuring that the FCA (in its own capacity and, if applicable, in its capacity as agent for the PRA) is informed that the sum being paid is for that firm's periodic fees.

01/04/2013

Incoming EEA firms, incoming Treaty firms, EEA authorised payment institutions and EEA authorised electronic money institutions

FEES 4.3.11

The appropriate regulator recognises that its responsibilities in respect of an incoming EEA firm, an incoming Treaty firm, an EEA authorised payment institution or an EEA authorised electronic money institution are reduced compared with a firm which is incorporated in the United Kingdom. Accordingly the periodic fees which would otherwise be applicable to incoming EEA firms, incoming Treaty firms, EEA authorised payment institutions and EEA authorised electronic money institutions are reduced.

01/04/2013

FEES 4.3.12

For an incoming EEA firm, (excluding MTF operators), or an incoming Treaty firm, the calculation required by FEES 4.3.3 R is modified as follows:

(1) the tariffs set out in Part 1 of FEES 4 Annex 2AR and, if applicable, Part 1 of FEES 4 Annex 2BR are applied only to the regulated activities of the firm which are carried on in the United Kingdom; and
(2) those tariffs are modified in accordance with Part 3 of FEES 4 Annex 2AR and, if applicable, Part 3 of FEES 4 Annex 2BR.

01/04/2013

Firms Applying to Cancel or Vary Permission Before Start of Period

FEES 4.3.13

(1) If:

(a) a firm makes an application to vary its permission (by reducing its scope), or cancel it, in the way set out in SUP 6.3.15 D (3) (Variation of permission) and SUP 6.4.5 D (Cancellation of permission), or applies to vary (by reducing its scope) or cancel its authorisation or registration (regulation 8 and 10(1) of the Payment Services Regulations including as applied by regulation 14 of the Payment Services Regulations) or applies to cancel its authorisation or registration (regulation 10 and 12 of the Electronic Money Regulations including as applied by regulation 15 of the Electronic Money Regulations); an issuer makes an application for de-listing; or a sponsor notifies the FCA of its intention to be removed from the list of approved sponsors; and
(b) the firm, issuer or sponsor makes the application or notification referred to in (a) before the start of the fee year to which the fee relates;

FEES 4.2.1 R applies to the firm as if the relevant variation or cancellation of the firm's permission or authorisation or registration under the Payment Services Regulations or the Electronic Money Regulations, de-listing or removal from the list of approved sponsors, took effect immediately before the start of the fee year to which the fee relates.
(2) But (1) does not apply if, due to the continuing nature of the business, the variation, cancellation, de-listing or removal is not to take effect on or before 30 June of the fee year to which the fee relates.

01/04/2013

FEES 4.3.14

Where a firm has applied to cancel its Part 4A permission, or its authorisation or registration under the Payment Services Regulations or the Electronic Money Regulations, or the appropriate regulator has exercised its own-initiative powers to cancel a firm's Part 4A permission or the appropriate regulator has exercised its powers under regulation 10 (Cancellation of authorisation), including as applied by regulation 14 (Supplementary provisions) of the Payment Services Regulations to cancel a firm's authorisation or registration under the Payment Services Regulations or the appropriate regulator has exercised its powers under regulation 10 (Cancellation of authorisation), including as applied by regulation 15 (Supplementary provisions) of the Electronic Money Regulations, the due dates for payment of periodic fees are modified by FEES 4.3.6R (3), FEES 4.3.6R (4) and FEES 4.3.6R (4A) respectively.

01/04/2013

Firms acquiring businesses from other firms

FEES 4.3.15

(1) This rule applies if:

(a) a firm (A) acquires all or a part of the business of another firm (B), whether by merger, acquisition of goodwill or otherwise, in relation to which a periodic fee would have been payable by B, unless no periodic fee was payable by A in the financial year that the business was acquired from B; or
(b) A became authorised or registered as a result of B's simple change of legal status (as defined in FEES 3 Annex 1 Part 6).

(2) If, before the date on which A acquires the business, B had paid any periodic fee payable for the period in which the acquisition occurred, FEES 4.2.6 R to FEES 4.2.7 R do not apply to A in relation to the business acquired from B.
(3) If the acquisition occurs after the valuation date applicable to the business (as set out in FEES 4 Annex 1AR, FEES 4 Annex 1BR and FEES 4 Annex 11) which A acquired from B, for the period following that in which the acquisition occurred, FEES 4.2.1 R applies to A, in relation to that following period, as if the acquisition had occurred immediately before the relevant valuation date.

01/04/2013

FEES 4.4

Information on which Fees are calculated

01/01/2006

FEES 4.4.1

A firm (other than the Society) must notify to the FCA (in its own capacity and, if applicable, in its capacity as collection agent for the PRA) the value (as at the valuation date specified in Part 5 of FEES 4 Annex 1AR in relation to fees payable to the FCA or Part 5 of FEES 4 Annex 1BR in relation to fees payable to the PRA) of each element of business on which the periodic fee payable by the firm is to be calculated.

01/04/2013

FEES 4.4.2

A firm (other than the Society) must send to the FCA (in its own capacity and, if applicable, in its capacity as collection agent for the PRA) in writing the information required under FEES 4.4.1 R as soon as reasonably practicable, and in any event within two months, after the date specified as the valuation date in Part 5 of FEES 4 Annex 1AR in relation of fees payable to the FCA or Part 5 of FEES 4 Annex 1B R in relation to fees payable to the PRA (or FEES 4.2.7B R where applicable).

01/04/2013

FEES 4.4.3

To the extent that a firm has provided the information required by this section to the appropriate regulator as part of its compliance with another provision of the Handbook, it is deemed to have complied with the provisions of this section.

01/04/2013

FEES 4.4.4

In most cases a firm will provide the information required by this section as part of its compliance with the provisions of SUP. To the extent that the FCA (in its own capacity and, if applicable, in its capacity as collection agent for the PRA), does not obtain sufficient, or sufficiently detailed, information the FCA or the PRA, as appropriate, may seek this by using the general information gathering powers (see SUP 2 (Information gathering by the appropriate regulator on its own initiative)).

01/04/2013

FEES 4.4.5

For an incoming EEA firm or an incoming Treaty firm, the information required under FEES 4.4 is limited to the regulated activities of the firm which are carried on in the United Kingdom, except those provided on a cross border services basis.

01/04/2013

Information relating to payment services and the issuance of electronic money

FEES 4.4.9

To the extent that a firm has provided the information required by FEES 4.4.7 D to the FCA as part of its compliance with another provision of the Handbook, it is deemed to have complied with the provisions of that direction.

01/04/2013

FEES 4 Annex 1B

PRA activity groups, tariff bases and valuation dates

01/04/2013

Part 1
This table shows how the PRA links the PRA-regulated activities for which a PRA-authorised person has permission to activity groups (fee-blocks). A PRA-authorised person can use the table to identify which fee-blocks it falls into based on its permission.

Activity group

Fee payer falls in the activity group if

A.1 Deposit acceptors

its permission includes accepting deposits BUT DOES NOT include either of the following:
effecting contracts of insurance;
carrying out contracts of insurance.

A.3 Insurers - general

its permission includes one or more of the following:
- effecting contracts of insurance;
- carrying out contracts of insurance;
in respect of specified investments that are:
- general insurance contracts; or
- long-term insurance contracts other than life policies.

A.4 Insurers - life

its permission includes one or more of the following:
- effecting contracts of insurance;
- carrying out contracts of insurance;
in respect of specified investments including life policies;
- entering as provider into a funeral plan contract.

A.5 Managing agents at Lloyd's

its permission includes managing the underwriting capacity of a Lloyd's syndicate as a managing agent at Lloyd's.

A.6 The Society of Lloyd's

it is the Society of Lloyd's.

A.10 Firms dealing as principal

its permission includes dealing in investments as principal; and
the PRA has designated dealing in investments as principal a PRA-regulated activity in respect of the firm.

Part 2
This table sets out the activity groups (fee blocks) in relation to (i) the minimum fee payable to the PRA and (ii) the transitional fee payable to the PRA.

Activity group

Fee payer falls into the fee-block if

PA.0 PRA minimum fee

(1) it is in at least one of the fee blocks under Part 1; and
(2) it is not a UK ISPV.

PT.1 PRA transitional fee

(1) it is in at least one of the fee blocks under Part 1; and
(2) it is not:
(a) a firm whose only fee payable to the PRA is the PA.0 PRA minimum fee; and/or
(b) a UK ISPV.

Part 3
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 PRA measures the amount of business conducted by a PRA-authorised person for the purposes of calculating the annual periodic fees payable to the PRA by that PRA-authorised person.

Activity Group

Tariff base

A.1

MODIFIED ELIGIBLE LIABILITIES
For banks and building societies:
Item B of Form ELS (Note (1)):
(1 + 2 + 3 + 4 + 0.6*5 + 6 - 8 - 9A - 9B - 10A - 10B - 10C - 11A - 11B - 0.6*12) + (1/3)*(F1 + F2 + F3 + F4 + 0.6*F5 + F6 - F8 - F9A - F9B - F10A - F10B - F10C - F11A - F11B - 0.6*F12)
- 13M
Notes:
(1) All references in the above formula are to entries on Form ELS (that is, the Eligible Liabilities Return completed to provide information by banks and building societies to the Bank of England as required by the Bank of England Act 1998).
(2) The figures reported on the Form ELS relate to business conducted out of offices in the United Kingdom

For credit unions:
Deposits with the credit union (share capital)
LESS
the credit union's bank deposits (investments + cash at bank)
Note:
Only United Kingdom business is relevant for calculating credit unions' MELs.

A.3

GROSS PREMIUM INCOME AND GROSS TECHNICAL LIABILITIES
For insurers:
The amount of premium receivable which must be included in the documents required to be deposited under IPRU(INS) 9.6 in relation to the financial year to which the documents relate but disregarding for this purpose such amounts as are not included in the document by reason of a waiver or an order under section 68 of the Insurance Companies Act 1982 carried forward as an amendment to IPRU(INS) under transitional provisions relating to written concessions in SUP;
AND the amount of gross technical liabilities (IPRU(INS) Appendix 9.1 - Form 15, line 19) which must be included in the documents required to be deposited under IPRU(INS) 9.6R in relation to the financial year to which the documents relate but disregarding for this purpose such amounts as are not included in the document by reason of a waiver or an order under section 68 of the Insurance Companies Act 1982 carried forward as an amendment to IPRU(INS) under transitional provisions relating to written concessions in SUP.
Notes:
1) in the case of either:
(a) a pure reinsurer carrying on general insurance business through a branch in the United Kingdom; or
(b) an insurer whose head office is not in an EEA State carrying on general insurance business through a branch in the United Kingdom; or
(c) an EEA-deposit insurer;
the amount only includes premiums received and gross technical liabilities held in respect of its United Kingdom business;
(2) for a Swiss general insurance company, premiums and gross technical liabilities include those relevant to the operations of the company's United Kingdom branch; and
(3) a firm need not include premiums and gross technical liabilities relating to pure protection contracts which it reports, and pays a fee on, in the A.4 activity group.
For friendly societies:
Either:
(a) the value of contributions as income under Schedule 7: Part I item 1(a) to the Friendly Societies (Accounts and Related Provisions) Regulations 1994 (SI 1994/1983) (the regulations) for a non-directive friendly society, included within the income and expenditure account; or
(b) the value of gross premiums written under Schedule 1: Part I items I.1(a) and II.1.(a) of the regulations for a directive friendly society included within the income and expenditure account.
Notes:
(1) In both (a) and (b) above only premium receivable in respect of United Kingdom business are relevant.
(2) For UK ISPVs the tariff base is not relevant and a flat fee set out in FEES 4 Annex 2BR is payable.

A.4

ADJUSTED GROSS PREMIUM INCOME AND MATHEMATICAL RESERVES (see FEES 4 Annex 12 G)
Amount of new regular premium business (yearly premiums including reassurances ceded but excluding cancellations and reassurances accepted), times ten;
Plus
amounts of new single premium business (total including reassurances ceded but excluding cancellations and reassurances accepted). Group protection business (life and private health insurance) must be included;
Less
premiums relating to pension fund management;
Less
premiums relating to Trustee Investment Plans.
For each of the above, business transacted through independent practitioners or tied agents (either single or multi-tie) will be divided by two in calculating the adjusted gross premium income;
AND
the amount of mathematical reserves (IPRU(INS) Appendix 9.1R - Form 14, Line 11) which must be included in the documents required to be deposited under IPRU(INS) 9.6R in relation to the financial year to which the documents relate but disregarding for this purpose such amounts as are not included in the document by reason of a waiver or an order under section 68 of the Insurance Companies Act 1982 carried forward as an amendment to IPRU(INS) under transitional provisions relating to written concessions in SUP;
Less
mathematical reserves relating to pension fund management.
Less
mathematical reserves relating to Trustee Investment Plans.
Notes: (1) Only premiums receivable and mathematical reserves held in respect of United Kingdom business are relevant.
(2) An insurer must include in its calculation of adjusted gross premium income (AGPI) and mathematical reserves (MR) the value of MR and AGPI relating to all risks ceded to ISPVs.
(3) Trustee Investment Plans are the class of contract of insurance specified in Class III of Part II of Schedule 1 to the Regulated Activities Order (Contracts of long-term insurance) and which are invested in pooled funds beneficially owned by the insurer and not earmarked to individual beneficiaries by that insurer.

A.5

ACTIVE CAPACITY
The capacity of the syndicate(s) under management in the year in question. This includes the capacity for syndicate(s) that are not writing new business, but have not been closed off in the year in question.

A.6

Not applicable

A.10 (only to the extent that the PRA has designated dealing in investments as principal to be a PRA-regulated activity in respect of the firm)

NUMBER OF TRADERS
Any employee or agent, who:
ordinarily acts within the United Kingdom on behalf of an authorised person liable to pay fees to the PRA in its fee-block A.10 (firms dealing as principal); and who, as part of their duties in relation to those activities of the authorised person, commits the firm in market dealings or in transactions in securities or in other specified investments in the course of regulated activities.
But not any employees or agents who work solely in the firm's MTF operation.
A firm may, as an option, report employees or agents as full-time equivalents (FTE), taking account of any part-time staff. In calculating the FTE, firms must take into account the total hours employees or agents have contracted to work for the firm and not the time employees or agents devote to the dealing in investments as principal functions set out in fee-block A.10. Any figures using the FTE calculation to be recorded to one decimal place, rounded down to the nearest decimal place.

Part 4
This table indicates the tariff base for each fee block set out in Part 2 above
The tariff base in this Part is the means by which the PRA measures the amount of business conducted by a firm for the purposes of calculating the annual periodic fees payable to the PRA by that firm.

Activity Group

Tariff base

PA.0

Not applicable because the minimum fee is a specified amount.

PT.1

The total periodic fees payable as a result of Part 1 of FEES 4 Annex 2B R.

Part 5
This table indicates the valuation date for each fee-block. A PRA-authorised person can calculate its tariff data in respect of fees payable to the PRA by applying the tariff bases set out in Part 3 with reference to the valuation dates shown in this table.

IN THIS TABLE, REFERENCES TO SPECIFIC DATES OR MONTHS ARE REFERENCES TO THE LATEST ONE OCCURRING BEFORE THE START OF THE PERIOD TO WHICH THE FEE APPLIES, UNLESS OTHERWISE SPECIFIED - E.G. FOR 13/14 FEES (1 APRIL 2013 TO 31 MARCH 2014), A REFERENCE TO DECEMBER MEANS DECEMBER 2012.

Where a firm's tariff data is in a currency other than sterling, it should be converted into sterling at the exchange rate prevailing on the relevant valuation date.

A.1

For banks:
Modified eligible liabilities (MELs), valued at:
for a firm which reports monthly, the average of the MELs for October, November and December;
for a firm which reports quarterly, the MELs for December.
For credit unions:
MELs, valued at December or as disclosed by the most recent annual return made prior to that date.
For building societies:
MELs, valued at the average of the MELs for October, November and December.

A.3

Annual gross premium income (GPI), for the financial year ended in the calendar year ending 31 December. AND
Gross technical liabilities (GTL) valued at the end of the financial year ended in the calendar year ending 31 December.

A.4

Adjusted annual gross premium income (AGPI) for the financial year ended in the calendar year ending 31 December.
AND
Mathematical reserves (MR) valued at the end of the financial year ended in the calendar year ending 31 December.

A.5

Active capacity (AC), in respect of the Underwriting Year (as reported to the Society of Lloyd's) which is current at the beginning of the period to which the fee relates.
[Note: this is the Underwriting Year which is already in progress at the start of the fee period - e.g. for 2004/05 fees, the fee period will begin on 1 April 2004, which is in the 2004 Underwriting Year, so the AC for that Underwriting Year is the relevant measure.]

A.6

Not applicable.

A.10

Number of traders as at 31 December.

01/04/2013

FEES 4 Annex 2B

PRA fee rates and EEA/Treaty firm modifications for the period from 1 April 2013 to 28 February 2014

01/04/2013

Part 1
This table shows the tariff rates applicable to each of the fee blocks set out in Part 1 of FEES 4 Annex 1B R.

(1)

For each activity group specified in the table below, the fee is the total of the sums payable for each of the tariff bands applicable to the firm's business, calculated by multiplying the value of the firm's tariff base by the rate applicable to each tranche of the tariff base, as indicated.

(2)

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

(a)

it has reasonable grounds for believing that the costs of identifying the firm's UK business separately from its non-UK business in the way described in Part 3 of FEES 4 Annex 1B R are disproportionate to the difference in fees payable; and

(b)

it notifies the FCA (acting as the collecting agent of the PRA) 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.

(3)

For a firm which has not complied with FEES 4.4.2 R (Information on which fees are calculated) for this period:

(a)

the fee is calculated using (where relevant) the valuation or valuations of business applicable to the previous period, multiplied by the factor of 1.10;

(b)

an additional administrative fee of 125 is payable; and

(c)

the minimum total fee (including the administrative fee in (b)) is 215.

Note

In the case of activity groups A.3 and A.4 there are three tariff rates. The rate in column 1 applies to all firms in their respective fee-blocks. The rate in column 2 relates to the Solvency 2 Implementation fee and firms must determine their obligation to pay this fee by reference to Part 5 of this Annex. The rate in Column 3 relates to the Solvency 2 Special Project fee and firms must determine their obligation to pay this fee by reference to Part 4 of this annex. The total periodic fee for each of these fee-blocks is determined by adding the amounts obtained under all three columns, as applicable.

Activity group

Fee payable

A.1

Band width (£ million of Modified Eligible Liabilities (MELs))

Fee (£/£m or part £m of MELs)

General Periodic fee

>10 - 140

33.38

>140 - 630

33.38

>630 - 1,580

33.38

>1,580 - 13,400

41.73

>13,400

55.08

A.3

Gross premium income (GPI)

Column 1
General periodic fee

Column 2
Solvency 2 implementation fee

Column 3
Solvency 2 special project fee

Minimum fee (£)

Not applicable

25.00

Band Width (£ million of GPI)

Fee (£/£m or part £m of GPI)

>0.5 - 10.5

370.25

-27.03

20.84

>10.5 - 30

370.25

-27.03

20.84

>30 - 245

370.25

-27.03

20.84

>245 - 1,900

370.25

-27.03

20.84

>1,900

370.25

-27.03

20.84

Plus

Gross technical liabilities (GTL)

Column 1
General periodic fee

Column 2
Solvency 2 implementation fee

Column 3
Solvency 2 special project fee

Band Width (£ million of GTL)

Fee (£/£m or part £m of GTL)

>1 - 12.5

19.93

-1.41

1.22

>12.5 - 70

19.93

-1.41

1.22

>70 - 384

19.93

-1.41

1.22

>384 - 3,750

19.93

-1.41

1.22

>3,750

19.93

-1.41

1.22

For UK ISPVs the tariff rates are not relevant and a flat fee of £430.00 is payable in respect of each fee year.

A.4

Adjusted annual gross premium income (AGPI)

Column 1
General periodic fee

Column 2
Solvency 2 implementation fee

Column 3
Solvency 2 special project fee

Minimum fee (£)

Not applicable

25.00

Band Width (£ million of AGPI)

Fee (£/£m or part £m of AGPI)

>1 - 5

360.32

-38.31

20.39

>5 - 40

360.32

-38.31

20.39

>40 - 260

360.32

-38.31

20.39

>260 - 4,000

360.32

-38.31

20.39

>4,000

360.32

-38.31

20.39

PLUS

A.4

Mathematical reserves (MR)

Column 1
General periodic fee

Column 2
Solvency 2 implementation fee

Column 3
Solvency 2 special project fee

Minimum fee (£)

Not applicable

25.00

Band Width (£ million of MR)

Fee (£/£m or part £m of MR)

>1 - 20

8.06

-0.86

0.44

>20 - 270

8.06

-0.86

0.44

>270 - 7,000

8.06

-0.86

0.44

>7,000 - 45,000

8.06

-0.86

0.44

>45,000

8.06

-0.86

0.44

A.5

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

Fee (£/£m or part £m of AC)

>50 - 150

54.36

>150 - 250

54.36

>250 - 500

54.36

>500 - 1,000

54.36

>1,000

54.36

A.6

Flat fee
Solvency 2 Special Project Flat Fee (£)
Solvency 2 Implementation Flat Fee (£)

1,394,436.00
272,293.06
-92,775.96

A.10

Band Width (No. of traders)

Fee (£/trader)

2 - 3

4,507.98

4 - 5

4,507.98

6 - 30

4,507.98

31 - 180

4,507.98

>180

4,507.98

Part 2
This table sets out the tariff rate applicable to each of the fee blocks set out in Part 2 of FEES 4 Annex 1B R

PA.0

(1)

The minimum fee payable by any firm referred to in (3) is 500 unless:

(a)

it is a credit union that meets the conditions in (2), in which case the minimum fee payable is as set out in (2); or

(b)

it is a non-directive friendly society that falls into the A.3 activity group but not the A.4 activity group and meets the conditions set out in (3)(a), in which case the minimum fee payable is 215; or.

(c)

it is a non-directive friendly society that falls into the A.4 activity group but not the A.3 activity group and meets the conditions in (3)(b), in which case the minimum fee payable is 215;or

(d)

it is a non-directive friendly society that falls into the A.3 and A.4 activity groups and meets the conditions in (3)(a) and (3)(b), in which case the minimum fee payable is 215;

(2)

The conditions referred to in (1)(a) are that the credit union has a tariff base (Modified Eligible Liabilities) of:

(a)

0 to 0.5million, in which case a minimum fee of 80 is payable; or

(b)

greater than 0.5millon but less than 2.0million, in which case a minimum fee of 270 is payable.

(3)

The conditions referred to in (1) are that:

(a)

the non-directive friendly society falls into the A.3 activity group and has, for that activity, 0.5 million or less in gross premium income and holds gross technical liabilities of 1.0 million or less;

(b)

the non-directive friendly society falls into the A.4 activity group and has, for that activity, written 1.0 million or less in adjusted gross premium income and holds mathematical reserves of 1.0 million or less.

The figures for gross premium income, gross technical liabilities, adjusted gross premium income and mathematical reserves are the same as used for Part 1 of this Annex.

PT.1

Periodic fees payable under Part 1 multiplied by rate £0.0745

Part 3
This table shows the modifications to fee tariffs that apply to incoming EEA firms and incoming Treaty firms which have established branches in the UK.

Activity Group

Percentage deducted from the tariff payable under Part 1 applicable to the firm

A.1

50%

A.3

90%

A.4

90%

PT.1

100%

Note 1

The modifications to fee tariffs payable by an incoming EEA firm or an incoming Treaty firm which has established a branch in the UK apply only in relation to the relevant regulated activities of the firm which are passported activities or Treaty activities and which are carried on in the UK.

Note 2

The PRA minimum fee described in Part 2 of FEES 4 Annex 2B R applies in full and the modifications in this Part do not apply to it.

Part 4

This part sets out when a Solvency 2 Special Project fee is due for firms falling into fee block A.3 or A.4.

(1)

The Solvency 2 Special Project fee forms part of the periodic fee payable under fee blocks A.3 and A.4.

(2)

The Solvency 2 Special Project fee is only payable by a firm if it meets the conditions in Part 5 and the condition set out in paragraph (3) of this Part.

(3)

The condition is that before 1 June 2013 the firm, or a member of the group of which the firm is also a member (in either case, the recipient), received a written communication from the FSA or, on or after 1 April 2013, the PRA that it has met the criteria for entry into pre-Internal Model Approval Process status (pre-IMAP) and the recipient remains in pre-IMAP status on 1 June 2013.

(4)

For the purposes of (3), the recipient will be deemed to remain in pre-IMAP status unless, before 1 June 2013:

(a)

the recipient informs the FSA or, on or after 1 April 2013, the PRA in writing that it wishes to withdraw from pre-IMAP status; or

(b)

the recipient has been informed by the FSA or, on or after the 1 April 2013, the PRA in writing that it is no longer in pre-IMAP status.

(5)

For the purposes of this Part, a reference to pre-IMAP means the status achieved by the recipient by joining the process established by the FSA whereby the FSA or, on or after 1 April 2013, the PRA and the recipient engage with a view to the FSA or, on or after 1 April 2013, the PRA establishing whether an internal model developed by the recipient is likely to meet the tests and standards specified in the Solvency 2 Directive.

(6)

FEES 4.2.6 R and FEES 4.2.7 R do not apply to the Solvency 2 Special Project Fee.

Part 5

This Part sets out when a Solvency 2 Implementation fee is due for firms in the A.3 and A.4 fee blocks.

(1)

The Solvency 2 Implementation fee is only payable by a firm if it meets all the conditions in (2) and neither of the conditions in (3).

(2)

The conditions in this paragraph are:

(a)

FEES 4.3.13 R (Firms Applying to Cancel or Vary Permission Before Start of Period) does not apply with respect to the relevant fee blocks;

(b)

the firm has not notified the FSA before the start of the 2013/2014 fee year that it intends to migrate out of the United Kingdom for regulatory purposes before the Solvency 2 Directive is implemented;

(c)

it meets either of the following conditions:

(i)

its gross premium income or adjusted gross premium income, as appropriate, referred to in FEES 4 Annex 1 Part 2, exceeds EUR 5 million at the end of the financial year ended in the calendar year ending 31 December prior to the 2013/2014 fee year; or

(ii)

its gross technical liabilities or mathematic reserves, as appropriate, referred to in FEES 4 Annex 1 Part 2, exceed EUR 25 million at the end of the financial year ended in the calendar year ending 31 December prior to the 2013/2014 fee year;

(d)

it was in one or both of the insurance fee blocks at the start of the 2013/2014 fee year;

(e)

it is not an incoming EEA firm or an incoming Treaty firm;

(3)

The conditions in this paragraph are:

(a)

the firm is a reinsurance undertaking that has, by 10 December 2007, ceased to conduct a new insurance business and only administers its existing portfolio in order to terminate its activity as a reinsurance undertaking;

(b)

it is a reinsurance undertaking whose insurance business is conducted or fully guaranteed by the United Kingdom government for reasons of substantial public interest in the capacity of the reinsurer of last resort.

(4)

Where a firm has notified the FSA or, on or after 1 April 2013, the PRA that it intends to migrate out of the United Kingdom for regulatory purposes before the Solvency 2 Directive is implemented in the United Kingdom but when the Solvency 2 Directive is implemented that firm remains in the United Kingdom for regulatory purposes, it must pay the Solvency 2 Implementation fee for each FSA financial year and each PRA fee year commencing 1 April 2013 for which the Solvency 2 Implementation fee would have applied to the firm but for the firm notifying the FSA or the PRA of its intention to migrate.

(5)

Where a firm is required to pay a Solvency 2 Implementation fee because of the circumstances described in (4) it must pay this fee within 30 days of the date of the invoice.

(6)

For the purposes of this Part, the exchange rate from the Euro to the pound sterling is calculated as at the last day of October preceding the financial year of the FSA or, on or after 1 April 2013, the PRA fee year in question for which the exchange rates for the currencies of all European Union member states were published in the Official Journal of the European Union.

(7)

FEES 4.2.6 R and FEES 4.2.7 R do not apply to the Solvency 2 Implementation fee.

01/07/2013

FEES 4 Annex 12

Guidance on the calculation of tariffs set out in FEES 4 Annex 1AR Part 3

01/04/2013

The following tables set out guidance on how a firm should calculate relevant tariffs.
Table 1: Fee block A.4

Adjusted Gross Premium Income and Mathematical reserves - calculation of new regular premium business

(1) In calculating the new regular premium business element of its Adjusted Gross Premium Income, a firm (A) should not include business transferred from another firm (B) under the procedure set out at Part VII of the Act, during the relevant financial year, provided that that transfer did not involve the creation of new contracts between the policy holders subject to the transfer and A. This is because that business is existing business even though it is new from the point of view of A. This means that if new contracts are created as part of the transfer, that business should be included in the calculation of As new regular premium income business.
(2) If any business is transferred to a firm (A) from another firm (B) under the procedure set out at Part VII of the Act and that business would have been included in Bs tariff base as new regular premium business in the absence of such a transfer, this business should be included in either As or Bs tariff base, depending on the date of transfer. FEES 4.3.15R explains in whose tariff base it should be included.
(3) Mathematical reserves should take account of all of As business, including all new business transferred from B.

Table 2: Fee-blocks A.12, A.13 and A.14

Calculating and apportioning annual income - FEES 4 Annex 11A R

Calculating annual income

(1) Annual income should include all amounts due to the firm arising out of the regulated activities referred to in fee-blocks A.12, A.13 and A.14 for which the firm holds permission, including regular charges and instalments due to the firm during the reporting year.
The firm should refer to the fee-block definitions in FEES 4 Annex 1A R, Part 1 to decide which particular income streams should be taken into account when calculating its annual income for the purposes of fee-blocks A.12, A.13 and A.14.
(2) To avoid any doubt, the firm should exclude from the calculation of its annual income any regulated activities belonging to fee-blocks A.12, A.13 and A.14 where the performance of such regulated activities is entirely incidental to the carrying out by the firm of the regulated activity of managing investments belonging to fee-block A.7.
(3) To avoid double-counting, amounts which have been passed on to other firms may be excluded from the calculation of annual income. Transfers of income to other firms may be especially common within groups where, to present a single interface to clients, all amounts due to the group may be collected by one firm for subsequent redistribution to other firms within the group. It is for groups themselves to decide the most convenient way to report such annual income - i.e. whether the firm which receives the full amount should declare that full amount, or whether each firm in the group should report its separate distribution.
(4) The firm should include earnings from those who will become its appointed representatives immediately after authorisation.
(5) If any fee payable by the firm to another party for arranging a transaction with a client exceeds the amount payable by the end client, the firm may not take that excess into account in calculating the net amount retained but must instead net the sum payable by the end client to zero.
(6) The total should include administration charges and any interest from income related to the regulated activities.
(7) Items such as general business expenses (e.g. employees' salaries and overheads) should not be deducted, nor any penalties or fines that have been levied against the firm.
(8) Rebates to clients should be excluded and also fees or commission passed to other authorised firms.
(9) Authorised professional firms should exclude income from non-mainstream regulated activities. They may estimate the proportion of their business that is derived from those activities and split the income from individual invoices accordingly.

Apportioning income

Where a firm cannot separate its income on the basis of activities, it may apportion the income on the basis of the proportionate split of business that the firm otherwise undertakes. For instance:
(1) If a firm receives annual income from a platform-based business it may report this in line with a wider breakdown of its activities.
(2) A firm providing corporate finance advice which does not maintain records of the split between regulated activities and non-regulated activities for individual cases may calculate that regulated business accounts for a certain proportion of its business overall and apply that as a multiplier across its income.
(3) A firm may allocate ongoing commission from previous business on the basis of the type of firm it receives the commission from. This avoids tracking back legacy business which may no longer match the provider's current business model.
(4) An authorised professional firm may estimate the proportion of its business that is derived from regulated activity and split its income for individual invoices accordingly.
(5) If a firm has invested income from regulated activities, then any interest received should be reported as income, in proportion to the volume of regulated business it undertakes to avoid tracking back old payments.
(6) Firms' systems ought to be able to distinguish UK from non-UK business to establish which conduct of business regime it was conducted under. If, however, they do not relate the figures back to income streams for the specific regulated activities in a particular fee-block then the firm may make a proportionate split as described above, calculating its regulated UK income on the basis of the overall split between UK and overseas income.
(7) It is for individual firms to determine how they should calculate the appropriate split of income. The FCA is not prescriptive about the methodology. It requires only that:
(a) the approach should be proportionate - the FCA is looking for firms to make their best efforts to estimate the split;
(b) the firm must be able on request to provide a sound and clearly expressed rationale for its approach - for example, if all invoices were analysed over a particular period, the firm should be able to justify the period as representative of its business across the year;
(c) the methodology should be objective - for example, based on random sampling of invoices or random stratified sampling;
(d) the firm must on request be able to provide an audit trail which demonstrates that the choice of methodology was properly considered at an appropriate level or in the appropriate forums within the firm, and the decision periodically reviewed at the same level or in an equivalent forum.

01/04/2013