FEES 5.2 Introduction

Paragraph 9 of Schedule 17 to the Act (The Ombudsman Scheme) requires FOS Ltd to adopt an annual budget which has been approved by the FCA. The annual budget must distinguish between the costs of operating the Compulsory Jurisdiction and the Voluntary Jurisdiction.

Section 234 of the Act (Industry Funding) enables the FCA to require the payment to it or to FOS Ltd, by firms or any class of firm, of specified amounts (or amounts calculated in a specified way) to cover the costs of:

1. (1)

   the establishment of the Financial Ombudsman Service; and

2. (2)

   its operation in relation to the Compulsory Jurisdiction.

Paragraph 15 of Schedule 17 to the Act enables FOS Ltd to require firms subject to the Compulsory Jurisdiction, any other respondents to a complaint and complainant representatives to pay specified fees to it in respect of complaints referred to and closed by the Financial Ombudsman Service.

The Ombudsman Transitional Order provides for unauthorised persons to be charged fees in respect of any relevant complaints against them which the Financial Ombudsman Service handles.

Paragraph 18 of Schedule 17 to the Act enables FOS Ltd to require VJ participants to pay to it such amounts at such times as it specifies in the standard terms.

The relevant provisions of the rules in FEES 5 and FEES 2 will be applied to VJ participants through the standard terms made by FOS Ltd under paragraph 18 of Schedule 17 to the Act (see DISP 4).

This chapter sets out the framework for the funding arrangements of the Financial Ombudsman Service, including, where relevant, the method by which fees will be calculated. Details of the actual fees payable will vary from year to year, depending on the annual budget of the Financial Ombudsman Service. These details will be set out in annexes to this chapter. New annexes will be prepared and consulted on for each financial year.