FEES 4 Periodic fees

Part 1

This table shows how the FCA links the activities (for which a firm has permission or designation) to activity groups (fee-blocks). A firm can use the table to identify which fee-blocks it falls into based on its permission or its other activities.

its permission includes accepting deposits or operating a dormant asset fund BUT DOES NOT include either of the following:

effecting contracts of insurance;

carrying out contracts of insurance.

its permission includes a regulated activity within one or more of the following:

entering into a home finance transaction; or

administering a home finance transaction; or agreeing to carry on a regulated activity which is within either of the above.

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

OR

it has permission to carry on insurance risk transformation.

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.

Note for authorised professional firms:

Generally, for fee-blocks A.7 to A.19 below, only those regulated activities that are not limited to non-mainstream regulated activities should be taken into account in determining which fee-block(s) fee-payers belong to for the purpose of charging periodic fees. However, in the case that all the regulated activity within a firm permission are limited to non-mainstream regulated activities, then that firms will be allocated to fee-block A.13 alone. This does not prevent a fee being payable by an authorised professional firm under FEES 3.2.7 R and/or FEES 3.2.7A R(c) where it applies to vary its Part 4A permission such that it would normally be allocated to fee-block(s) other than A.13 if the variation was granted.

(1) its permission includes managing investments (a firm falling within this category is a class (1) firm);

OR

(2) its permission includes

ONLY either one or both of:

safeguarding and administering of investments (without arranging); and

arranging safeguarding and administration of assets (a firm falling within this category is a class (2) firm);

OR

(3) the firm is a venture capital firm (a firm falling within this category is a class (3) firm if it is not a class (1) or (2) firm).

OR

(4) its permission includes managing an AIF or managing a UK UCITS (a class 4 firm)

Note:

Class (1) firms are subdivided into three classes:

- class (1)A, where the funds managed by the firm belong to one or more occupational pension schemes;

- class (1)B, where:

(a) the firm is not a class (1)A firm; and

(b) the firm permission includes NEITHER of the following:

safeguarding and administering investments (without arranging);

arranging safeguarding and administration of assets; and (c) the firm EITHER:

has a requirement that prohibits the firm from holding or controlling client money, or both; OR

if it does not have such a requirement, only holds or controls client money (or both), arising from an agreement under which commission is rebated to a client; and

- class (1)C, where the firm is not within class (1)A or class (1)B.

(1) its permission:

(a) includes one or more of the following:

managing an AIF;

managing a UK UCITS

acting as trustee or depositary of an AIF;

acting as trustee or depositary of a UK UCITS establishing, operating or winding up a collective investment scheme;

establishing, operating or winding up a personal pension scheme or a stakeholder pension scheme (but only if the firm does not fall within activity group A1 or A4);

AND

(b) PROVIDED the firm is NOT one of the following:

OR

a corporate finance advisory firm;

a firm in which the above activities are limited to carrying out corporate finance business;

a venture capital firm;

a firm which would be a venture capital firm but for the inclusion of managing an AIF on its permission; but only where the firm is managing an AIF exclusively in respect of AIFs which only invest in venture capital investments.

OR

(2) if the fee-payer has none of the regulated activities above within its permission, but ALL the remaining regulated activities in its permission are limited to carrying out trustee activities.

its permission includes

(a) dealing in investments as principal; and/or

(b) bidding in emissions auctions;

BUT NOT if one or more of the following apply:

the above activity is limited either to establishing, operating or winding up a collective investment scheme, establishing, operating or winding up a personal pension scheme or a stakeholder pension scheme, or to carrying out depositary activities;

the firm is a corporate finance advisory firm;

the above activity is otherwise limited to carrying out corporate finance business;

the firm is subject to a limitation to the effect that the firm, in carrying on this regulated activity, is limited to entering into transactions in a manner which, if the firm was an unauthorised person, would come within article 16 of the Regulated Activities Order (Dealing in contractually based investments);

the firm is an oil market participant or energy market participant (except where the firm is bidding in emissions auctions);

its permission includes either:

- effecting contracts of insurance; or

- carrying out contracts of insurance

(1) it is an authorised professional firm and ALL the regulated activities in its permission are limited to non-mainstream regulated activities (a firm falling within this category is a class (1) firm);

OR

(1A) it is a POP operator

OR

(2) its permission:

(a) includes one or more of the following:

(i) in relation to one or more designated investments:

dealing in investments as agent;

arranging (bringing about) deals in investments;

making arrangements with a view to transactions in investments;

dealing as principal in investments where the activity is carried on as an oil market participant or energy market participant;

advising on investments (except P2P agreements) 

(except pension transfers and pension opt-outs);

giving basic advice on a stakeholder product;

advising on pension transfers and pension opt-outs;

advising on syndicate participation at Lloyd's;

providing targeted support;

(ii) advising on P2P agreements;

(iii) in relation to a structured deposit:

dealing in investments as agent; or

arranging (bringing about deals) in investments;

or making arrangements with a view to transactions in investments; or

advising on investments (except P2P agreements); or

advising on investments (except pension transfers and pension opt-outs);

(b) BUT

(i) unless (ii) applies, such a fee-payer is not in fee-block A.13 if its permission includes any of the following:

effecting contracts of insurance; or

carrying out contracts of insurance;

(ii) the exception being a fee-payer which belongs in fee-block A.4 and holds a permission for providing targeted support;

AND

(c) PROVIDED the fee-payer is NOT any of the following:

a corporate finance advisory firm;

a firm for whom all of the applicable activities above are otherwise limited to carrying out corporate finance business;

a firm for whom all the applicable activities above are limited to carrying out venture capital business;

a firm for whom all the applicable activities above are limited to acting as a residual CIS operator;

a firm for whom all the applicable activities above are limited to acting as trustee or depositary of an AIF and/or acting as trustee or depositary of a UK UCITS;

a service company.

A firm falling within (1A) or (2), and not (1), is a class 2 firm.

its permission includes a regulated activity within one or more of the following:

entering into a home finance transaction; or

arranging (bringing about) a home finance transaction; or

making arrangements with a view to a home finance transaction; or

advising on a home finance transaction; or

agreeing to carry on a regulated activity which is within any of the above.

its permission includes one or more of the following in relation to a non-investment insurance contract:

dealing in investments as agent; or

arranging (bringing about) deals in investments; or

making arrangements with a view to transactions in investments; or

assisting in the administration and performance of a contract of insurance; or

advising on investments; or

agreeing to carry on a regulated activity which is within any of the above.

(1) It is a firm carrying on a regulated activity defined in fee-block A.13;

AND EITHER OR BOTH:

(2A) It is a firm to which the client money rules apply

AND/OR

(2B) Its permissions includes safeguarding and administration of assets (without arranging)

UNLESS

CASS does not apply to that firm in accordance with CASS 1.2

Its permission includes one or more of the permissions referred to in FEES 3.2.7R Part 1 (zzh):

(1) carrying on funeral plan distribution;

(2) carrying out a funeral plan contract as provider; or

(3) carrying out a funeral plan contract as provider and entering as provider into a funeral plan contract.

it carries on credit-related regulated activities; and

it has a limited permission; and

it is not a not-for-profit debt advice body; and

it is not a credit union or community finance organisation.

it carries on credit-related regulated activities; and

it does not have a limited permission; and

it is not a not-for-profit debt advice body; and

it is not a credit union or community finance organisation.

it is a firm carrying on a regulated activity defined in fee-block CC2; AND

between 2007 and 2021 (inclusive) it entered into at least one regulated credit agreement as lender which financed the purchase of a motor vehicle and included a discretionary commission arrangement between the firm as lender and a credit broker.

Part 2

This table sets out the activity groups (fee blocks) in relation to (i) the minimum fees payable to the FCA and (ii) the prudential fee payable to the FCA.

(1) it is in at least one of the fee blocks under Part 1; and

(2) it is not:

(a) a UK ISPV; or

(b) a firm whose only permission is operating a dormant asset fund; or

(c) a firm exclusively carrying on credit-related regulated activities.

(1) it is an FCA authorised person other than an FCA authorised person carrying on credit-related regulated activities with limited permission; and

(2) the periodic fee it pays to the FCA is not limited to the A.0 FCA minimum fee.

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 FCA measures the amount of business conducted by a firm for the purposes of calculating the annual periodic fees payable to the FCA by that firm.

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.

Note:

For a dormant asset fund operator the tariff base is not relevant and the flat fee in FEES 4 Annex 2A R is payable.

NUMBER OF HOME FINANCE TRANSACTIONS ENTERED INTO AND ADMINISTERED

The number of new home finance transactions entered into;

AND

The number of home finance transactions being administered:

(a) multiplied by 0.05 for firms with permission for administering a home finance transaction but not permission for entering into a home finance transaction; or

(b) by 0.5 for all other firms.

Notes:

(1)[deleted]

(2) For the measure of the number of contracts being administered, each charge counts as one contract, irrespective of the number of loans involved.

(3) Home finance transactions administered include those that the firm administers on behalf of other firms.

GROSS WRITTEN PREMIUM FOR FEES PURPOSES AND BEST ESTIMATE LIABILITIES FOR FEES PURPOSES

Gross written premium for fees purposes means:

(1) for UK Solvency II firms, the total gross written premiums reported in the firm’s annual regulatory submissions to the FCA or PRA in respect of general insurance business conducted from a UK firm; and

(2) [deleted]

(3) for non-directive firms, the total gross premiums received in respect of general insurance business conducted from a UK firm, as reported in the firm’s annual regulatory submissions to the FCA or PRA, or, where this is not reported because the firm is not required to submit such returns, from the firm’s audited accounts or, in the case of friendly societies, from the income or contributions line in their annual accounts prepared under the Friendly Societies (Accounts and Related Provisions) Regulations 1994 (SI 1994/1983), or from other equivalent and verifiable internal data.

AND

Best estimate liabilities for fees purposes means: 

(1) for UK Solvency II firms, a firm’s best estimate liabilities as reported to the PRA in the firm’s annual quantitative reporting submissions; and

(2) [deleted]

(3) for non-directive firms, a firm’s total gross technical provisions as reported to the PRA, or where this is not reported because the firm is a marine mutual, total liabilities on the form M2 statement of assets and liabilities, or where the firm is a friendly society, the balance sheet entry C3 ‘claims outstanding’ where this entry is required under the Friendly Societies (Accounts and Related Provisions) Regulations 1994 (SI 1994/1983); and otherwise zero. 

‘UK Solvency II firm’ has the meaning given in Insurance General Application 2 of the PRA Rulebook.

Notes:

(1) The recovery of the FCA’s annual funding requirement allocated to the A.3 fee-block will be weighted:

(a) 90% from gross written premium for fees purposes; and

(b) 10% from best estimate liabilities for fees purposes.

(2) This tariff base (A.3 fee-block) does not include gross written premium for fees purposes and best estimate liabilities for fees purposes on which a composite firm reports data relevant for fee-block A.4.

(3) Where any figure used in the calculation of this tariff base is a negative number, it shall instead be deemed to be zero.

(4) For UK ISPVs this tariff base is not relevant and a flat fee set out in FEES 4 Annex 2AR is payable.

GROSS WRITTEN PREMIUM FOR FEES PURPOSES AND BEST ESTIMATE LIABILITIES FOR FEES PURPOSES22 (see FEES 4 Annex 12 G)

Gross written premium for fees purposes means:

(1)

for UK Solvency II firms, a firm’s gross written premium as reported to the PRA, being the item entered under row code R1410, column code C0300 of the annual quantitative reporting template S05.01.01 minus corporate pension business as reported to the PRA under the annual quantitative reporting template S14.01.01.

AND

Best estimate liabilities for fees purposes means:

for UK Solvency II firms, a firm’s best estimate liabilities as reported to the PRA, being the sum of items entered under row codes R0010 and R0030, column codes C0150 and C0210 minus the sum of items entered under row codes R0010 and R0030, column codes C0090, C0140 and C0190 of the annual quantitative reporting template S12.01.01; minus corporate pension business reported under the annual quantitative reporting template S14.01.01.

[deleted]

‘Annual quantitative reporting template’ has the meaning given in Fees Chapter 1 Application and Definitions of the PRA Rulebook.

‘Corporate pension business’ has the meaning given in Fees Chapter 1 Application and Definitions of the PRA Rulebook.

‘UK Solvency II firm’ has the meaning given in Insurance General Application 2 of the PRA Rulebook.

Notes:

(1) The recovery of the FCA’s annual funding requirement allocated to the A.4 fee-block will be weighted:

(a) 60% from gross written premium for fees purposes; and

(b) 40% from best estimate liabilities for fees purposes.

(2) For non-directive firms, including non-directive composite firms to the extent that they come within the A.4 fee block, the tariff base is not relevant to the level of fees due and only the minimum fee as specified in Part 2(b) of FEES 4 Annex 2AR is payable.

(3) Where any figure used in the calculation of this tariff base is a negative number, it shall instead be deemed to be zero.

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.

FUNDS UNDER MANAGEMENT (FuM)

The total value, in pounds sterling, of all assets (see note (a) below) in portfolios which the firm manages, on a discretionary basis (see note (b) below), in accordance with its terms of business, less:

a) funds covered by the exclusion contained in article 38 (Attorneys) of the Regulated Activities Order;

(b) funds covered by the exclusion contained in article 66(3) (Trustees, nominees and personal representatives) of the Regulated Activities Order;

(c) funds covered by the exclusion contained in article 68(6) (Sale of goods or supply of services) of the Regulated Activities Order;

(d) funds covered by the exclusion contained in article 69(5) (Groups and joint enterprises) of the Regulated Activities Order; and

(e) the value of those parts of the managed portfolios in respect of which the responsibility for the discretionary management has been formally delegated to another firm (and which firm will include the value of the assets in question in its own FuM total); any such deduction should identify the firm to which management responsibility has been delegated.

Notes on FuM

(a) Except for funds under management where the fund is an AIF, for the purposes of calculating the value of funds under management, assets means all assets that consist of or include any investment which is a designated investment or those assets in respect of which the arrangements for their management are such that the assets may consist of or include such investments, and either the assets have at any time since 29 April 1988 done so or the arrangements have at any time (whether before or after that date) been held out as arrangements under which the assets would do so.

(aa) for funds under management, where the fund is an AIF, assets means all assets or property of any description of the fund.

(b) Assets managed by the firm on a discretionary basis exclude the firm's own assets. Assets managed on a non-discretionary basis, being assets that the firm has a contractual duty to keep under continuous review but in respect of which prior specific consent of the client must be obtained for proposed transactions, are also excluded as this activity is covered in those charged to fees in activity group A.13.

(c) In respect of collective investment schemes, assets means the total value of the assets of the scheme.

(d) For an OPS firm, the FuM should also be reduced by the value of the assets held as a result of a decision taken in accordance with article 4(6) of The Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) Order 2001 (investments in collective investment scheme or bodies corporate which have as their primary purpose the acquisition, directly, or indirectly, of relevant investments, as defined in that article).

(e) Only assets that are managed from an establishment maintained by the firm in the United Kingdom are relevant.

(f) If the firm is managing an overlay portfolio of derivative instruments and the underlying assets are managed by itself or a firm within the same group that has not reported them separately to the FCA, or by a firm outside its group, then it should calculate the value of the derivatives and other assets as prescribed in the guidance in FSA038 in SUP 16 Annex 25.

If the underlying assets are managed by another firm within the same group who has reported their value separately to the FCA, then to avoid double-counting within the group, the calculation must be restricted to the exposure of the overlay.

GROSS INCOME (1) For AIFMs (excluding internally managed AIFs), management companies, operators (including ACDs and authorised fund managers of unit trusts or authorised contractual schemes but excluding operators of a personal pension scheme or a stakeholder pension scheme) and residual CIS operators gross income from the activity relating to fee-block A.9 is defined as:

the amount of the annual charge on investments in the fund received or receivable in the latest accounting period (this is calculated as a % of funds invested, typically 1% p.a., excluding any additional ad hoc charges such as performance fees);

PLUS

(a) the front-end or exit charge levied on sales or redemptions of collective investment schemes (typically 4-5% of sales/redemptions) in that same accounting period; and

(b) any amount the firm would have levied as such a charge but for a business decision to waive, discount or rebate etc. that charge;

PLUS

any additional initial or management charges levied through a product wrapper such as an ISA;

BUT EXCLUDING box management profits.

(2) For depositaries (including trustees of collective investment schemes and ICVC or ACS depositaries):

The amount of the annual charge levied on investments in funds for which they act as depositary (typically a % of the total funds for which they act as depositary).

(3) For operators of a personal pension scheme or a stakeholder pension scheme gross income from the activity relating to fee block A.9 is defined as:

The amount of the charges levied on the personal pension scheme or stakeholder pension scheme for which they act as operator:

including up-front charges, fund related charges, transaction related charges and periodic charges; but

excluding charges made to an investor in respect of third party suppliers; for example, charges for stock broking, borrowing, banking services and charges for arranging third party legal services, surveys or environmental screening in connection with property.

Note:

Only the gross income corresponding to United Kingdom business is relevant.

(4) Internally managed AIFs must use a proxy for gross income for the activities relating to fee block A.9. This is the total value of funds under management (as defined in fee block A.7) multiplied by 0.01.

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 FCA 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 and bidding in emissions auctions 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.

ANNUAL INCOME

Annual income as defined in FEES 4 Annex 11A R

ANNUAL INCOME

Annual income as defined in FEES 4 Annex 11A R.

CLIENT MONEY/ASSETS HELD:

A value in pound sterling equal to:

Highest total amount of client money held by the firm during the 12 months ending 31 December before the relevant fee year

PLUS

Highest total value of safe custody assets held by the firm during the 12 months ending 31 December before the relevant fee year

MODIFIED NUMBER OF APPOINTED REPRESENTATIVES

Total number of appointed representatives appointed by the firm (including introducer appointed representatives), where:

(1) the number of appointed representatives (other than introducer appointed representatives) is multiplied by 1.0; and

(2) the number of introducer appointed representatives is multiplied by 0.3.

ANNUAL INCOME

Annual income as defined in FEES 4 Annex 11AR.

MODIFIED ELIGIBLE LIABILITIES

These are determined in the same manner as the relevant tariff-base in the A.1 fee-block.

ANNUAL INCOME

Annual income as defined in FEES 4 Annex 11AR.

MODIFIED ELIGIBLE LIABILITIES

These are determined in the same manner as the relevant tariff-base in the A.1 fee-block.

ANNUAL INCOME

Annual income as defined in FEES 4 Annex 11AR.

Annual income as defined in FEES 4 Annex 11AR.

Part 4

This table indicates the tariff base for each fee block set out in Part 2.

The tariff base in this Part is the means by which the FCA measures the amount of business conducted by a firm for the purposes of calculating the annual periodic fees payable to the FCA by that firm.

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:

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.

Number of mortgages, home purchase plans, home reversion plans and regulated sale and rent back agreements entered into in the twelve months ending 31 December.

AND

Number of mortgages, home purchase plans, home reversion plans and regulated sale and rent back agreements being administered on 31 December.

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 2013/14 fees, the fee period will begin on 1 April 2013, which is in the 2013 Underwriting Year, so the AC for that Underwriting Year is the relevant measure.]

In respect of client money, the highest amount of client money held over the 12 months ending 31 December before the relevant fee year.

In respect of safe custody assets, the highest amount of safe custody assets held over the 12 months ending 31 December before the relevant fee year.