FEES 6.5A The retail pool

The FSCS must allocate a compensation costs levy or specific costs levy, which has been allocated to the retail pool (under FEES 6.5.2-AR(2) or FEES 6.4.6AR):

1. (1)

   to classes whose levy limit has not been reached as at the date of the levy;

2. (2)

   in proportion to the relative sizes of the levy limits of the classes in (1) and up to those levy limits; and

3. (3)

   in accordance with the table in FEES 6 Annex 2R; and

4. (4)

   a class’s share of a levy allocated to the retail pool must be distributed amongst any categories within that class in proportion to the unused levy limits for those categories and up to those levy limits: see FEES 6 Annex 2R.

The calculation of the relative sizes of the levy limit (for the purpose of FEES 6.5A.1R(2)) is based on the original levy limits for the classes (as set out in FEES 6 Annex 2R) and not the remaining capacity in each class.

When the FSCS allocates excess compensation costs levies or specific costs levies under FEES 6.5A.1 R or any levy imposed under FEES 6.5.2-AAR(4), a class to which part of the excess is allocated (a "receiving class") may, as a result of that allocation, itself reach its limit. In that case, the FSCS must apply FEES 6.5A.1 R or FEES 6.5.2-AAR so that any resulting excess levy beyond the limit of the receiving class is allocated amongst the remaining classes whose limits have not been reached, to the exclusion of the receiving class. This process is repeated until the compensation costs levy or specific costs levy has been met in full or the limits of all classes have been exhausted.