FEES 6.2 Exemption

1. (1)

   Except as set out in (3), a participant firm which does not conduct business in respect of which the FSCS may pay compensation and has no reasonable likelihood of doing so is exempt from a specific costs levy, or a compensation costs levy, or both, provided that:

   1. (a)

      it has notified the FSCS in writing that those conditions apply; and

   2. (b)

      the conditions in fact continue to apply.

2. (2)

   The exemption takes effect from the date on which the notice was received by the FSCS, subject to FEES 6.2.6 R.

3. (3)

   The exemption in (1) does not apply in respect of a specific costs levy or compensation costs levy arising from the firm's membership of any of the following:

   1. (a)

      category 1.2 (General insurance provision) of class 1 (the General Insurance Distribution Claims class); or

   2. (b)

      categories 2.2 (Life insurance provision), 2.3 (Investment provision) or 2.4 (Structured deposits provision) of class 2 (Investment Intermediation Claims class); or

   3. (c)

      category 4.2 (Home finance provision) of class 4 (the Home Finance Intermediation Claims class); or

   4. (d)

      category 5.2 (Consumer credit provision) of class 5 (the Debt Management Claims class); or

   5. (e)

      the deposit acceptors’ contribution class.

FEES 6.2.1AR does not apply to a participant firm that may be subject to a claim under COMP 3.2.4 R.

A participant firm which is exempt under FEES 6.2.1AR must notify the FSCS in writing as soon as reasonably practicable if the conditions in FEES 6.2.1AR no longer apply.

1. (1)

   If a participant firm ceases to conduct business that could give rise to a protected claim by an eligible claimant and notifies the FSCS of this under FEES 6.2.1AR, it will be treated as a participant firm to which FEES 6.7.6R applies until the end of the financial year of the compensation scheme in which the notice was given.

2. (2)

   Where the FCA grants a person’s application for annulment of a cancellation or variation of Part 4A permission under Schedule 6A to the Act and when the Part 4A permission was cancelled or varied the person ceased to conduct business that could give rise to a protected claim by an eligible claimant, it will be treated as a participant firm to which FEES 6.7.6R applies until the end of the financial year of the compensation scheme in which the person’s Part 4A permission was cancelled or varied (but for the annulment).

For the purposes of FEES 6.2.1AR a participant firm will only be exempt from a specific costs levy or compensation costs levy for any given financial year if it met the conditions in FEES 6.2.1AR on 31 March of the immediately preceding financial year.

Where the FCA grants a person’s application for annulment of a cancellation or variation of Part 4A permission under Schedule 6A to the Act and when the person’s Part 4A permission was cancelled or varied the person was exempt by virtue of FEES 6.2.1AR, the person remains exempt provided that the conditions in that rule (apart from notification to the FCA) apply for the financial year of the compensation scheme in question.