General fees questions

This invoice is for fees and levies payable by your firm as it is authorised by the FSA to conduct business regulated under the Financial Services and Markets Act 2000 (the Act). It includes the FSA Periodic Fees, the Financial Services Compensation Scheme (FSCS) Levy and (where applicable) the Financial Ombudsman Service (FOS) General Levy. The FSA acts as agent for collection of levies for the FSCS and the FOS. The invoice covers the period 1 April 2007 to 31 March 2008.

Each fee-block that your firm is allocated to has its own fee rates. These fee rates are applied to the fee tariff data (a measure of the amount of business your firm undertakes) that you provided to us, or which we hold. The FSA fee rates for 2007/08 are in FEES 4 Annex 2R of the Handbook. An explanation of the tariff-base (the measure of business used to calculate fees) for each fee-block for firms are in FEES 4 Annex 1R. We explain these rules and the fees for 2007/08 in our Policy Statement PS07/7.

Details of the fee-tariff data used to calculate your fees are outlined on your invoice. The fee-rates applied to this fee-tariff data are set out in FEES 4 Annex 1R.

For an indication of your 2007/08 fees and levies please use our Fee Calculator.

Here's an example. If your firm falls within the A19 fee block with Annual Income (AI) of £1,400,000, the firm's FSA fee for 2007/08 would be calculated as follows (tranches of AI are shown in £thousands):

Your invoice shows the fee tariff data we used to calculate your fees. The 2007/08 fee rates we applied to this fee tariff data are those in FEES 4 Annex 2R in our Handbook. If you believe that we have applied the fee rates incorrectly or that the fee tariff data amount is incorrect, then you should contact us, preferably in writing (e-mail or post), and explain why you think the invoice is incorrect. We will review the issues you have raised and respond to you as soon as we can – usually within 12 days.

Our fee rules are set out in the Fees Manual (FEES) of our Handbook, available on our website, or to order by phoning 0845 606 9966 (call rates may vary).

• The FSA Periodic Fees are in FEES 4;
• The FSCS Levy rules are in FEES 6;
• The FOS General Levy rules are in FEES 5; and
• Application fee rules are in FEES 3.

Other more general rules about fees (covering payment terms and administrative arrangements) are in the General Provisions, Chapter 2 (FEES 2).

There could be a number of reasons for this, for example:

• changes to the Annual Funding Requirement (AFR) we need to recover from the fee-block since last year;
• changes in the total number of firms in the fee-block;
• changes in the total reported tariff data for the fee-block;
• changes in your firm's tariff data;
• changes in the fee-block tariff rates;
• you may have extended or reduced your permission; or
• changes to the amount of financial penalties being returned to firms as deductions from their periodic fees.

PS07/07 gives further details on significant fee rate changes for specific fee-blocks.

A minimum fee is payable for each fee-block. This is because we believe every institution with the capacity to carry on regulated activities should contribute towards the cost of regulation. This means that fee payers pay at least the minimum fee where they have activities within their permission that place them into a particular fee-block, even if they choose not to undertake those activities. We consider it generally undesirable for firms to have activities within their permission purely as a precaution. Please refer to Chapter 6 of our Consolidated Policy Statement (PS07/7) for further information on minimum fees.

Firms in more than one fee-block get a 50% discount in any fee-block in which they are liable for only the minimum fee. If your firm is a minimum fee payer in all the fee-blocks it belongs to, you will pay 100% of the highest minimum fee and 50% of the others. This means that a firm will pay proportionate fees if it does a only small amount of business in one or more fee-blocks, in addition to its main source of business.

Firms authorised in other EEA states and passporting into the UK as a branch get a discount to FSA periodic fees, compared to a UK-authorised firm conducting the same business. The level of discount varies between fee-blocks and reflects the fact that the home state regulator is responsible for some aspects of passporting firms' supervision. Details of the discounts can be found in Part 3 of FEES 4 Annex 2R. We are reviewing these discounts in 2007. An EEA passporting firm who operates on a service only basis will pay no FSA fee.

Firms are allocated to a fee-block (or fee-blocks) according to the permission (the set of regulated activities) they have agreed with us and which they hold on 1 April each year. Each fee-block has a definition of the regulated activities it covers, and/or limitations and requirements in relation to those. You will find the listing and definitions of our fee-blocks in the Fees manual – FEES 4 Annex 1. A summary is the Annexes to our Consolidated Policy Statement (PS07/7).

Firms which have varied their permissions during the year may be allocated to a different fee-block (or more than one fee-blocks) as a result.

It is most likely that we did not receive your variation of permission request by the cut off date of 31 March 2007. The 2007/08 invoice is based on your permission as at 1 April 2007 and any changes made after that date do not affect this year's fees.

Your firm has been allocated to one or more fee-blocks according to the permission (the set of regulated activities) agreed with us. If you believe your firm does not conduct that type of business, please refer to your supervisor (if you have a direct supervisor) or to the Firm Contact Centre on 0845 606 9966 (email – fcc@fsa.gov.uk) to discuss varying your permission.

As 2007/08 fees are calculated on the permission held by firms as at 1 April 2007, you will still need to pay the current year's invoice, even if you have agreed your permission in error. Any successful variation of permission after 1 April 2007 will not have a retrospective effect on the 2007/08 fees, which will still be payable.

If the application was made before 31 March then the fees for the fee-block(s) in question will not be due for the follow fee period. However if, due to the continuing nature of your business, the variation or cancellation does not take effect within 3 months from 1 April – that is, by 30 June - then the fees for this financial year remain due (see FEES 4.3.13 of FSA Handbook).

If the acquisition took place after the acquired firm paid its relevant periodic fees, then the acquiring firm will not be liable for any additional fees relating to the acquired firm. However, if the acquisition took place after the valuation date (31 December 2007) and the acquired firm had not paid the due periodic fees for the period following the acquisition, then the acquiring firm would be liable for fees based on its own and the acquired firm's fee-tariff data (see FEES 4.3.15).

You can check your firm’s approved persons by viewing the FSA Register. Enter your firm’s FSA Reference number, and search under Individuals. Please remember that if your firm's tariff base is based upon approved persons, your fees are calculated on the number of approved persons as at 31 December of the previous financial year. For fees purposes, we only take into account approved persons with Controlled Function 30 (the Customer Function) excluding those CF30s solely carrying out investment management. Not all these Controlled Functions are relevant to all fee-blocks with a tariff base of approved persons. Please check the tariff base descriptions in Part 2 of FEES 4 Annex 1. The relevant fee-blocks are A.12, A.13 and A.14.

We used the number of individuals on the FSA Register as at 31 December 2006 to calculate 2007/08 fees for firms in fee-blocks A.12, A.13 and A.14. Fees based on the Register entry as at 31 December remain payable. To amend details about individuals on the Register, you must contact the Individuals CIS & Mutuals Department on 020 7066 0019 or by email to iva@fsa.gov.uk.

No. The fee calculations are based at a set point in time. This date is fixed for all firms and ensures that firstly, the FSA collects the correct amount of periodic fees required to cover the Annual Funding Requirement (AFR) and secondly, the FSA is cost-efficient by not revising and re-issuing invoices throughout the year. However, additional fees will not be charged for any increase in the number of registered approved persons after this date during the fee year.

In late January or early February each year we must publish our Plan & Budget and our estimated fee-tariffs for the coming year (see CP07/3). To do this we need to obtain tariff-data that is up-to-date, yet within a timeframe that enables us to model tariff-rates for consultation. The 31st December is the latest date we can use that enables us to do this.

Yes. This policy issue is discussed at length in CP168, Chapter 5.

We had no direct financial relationship with you or your firm when it was a member of a network. We levy the network (based on the number of approved persons the network registered) to meet the cost to us of regulating the network. How the network passes on those fees to network members is a private contractual matter between it and its members.

So, any private obligation your firm may have to pay sums of money to a network has no impact on the fees due to us. The cost to us of directly regulating your firm is no less, solely because your firm was previously a member of a network.

Therefore, it is not our policy to provide any fee rebate or relief to firms who were previously network members. Firms considering being regulated directly by us should be aware that both a one-off application fee and periodic fees must be paid.

Your invoice is due for payment no later than the due date shown on your invoice. Our terms are 30 days from the date of the invoice.

If you are late in paying, you will be liable to an additional charge of:

• an administrative fee of £250.00; plus
• from the invoice due date interest on any unpaid amount at 5% per annum above the Bank of England's rate will be charged for the period from the due date until payment is received.

If firms apply to pay their fees and levies via Premium Credit Limited after the invoice due date, they will be liable for the late payment charges and interest.

• By Direct Debit – direct debit mandates are available on the Payment methods page. Please complete and return this no later than 14 days before the invoice is due.

Account Name – FSA Collection Account
Bank Name - Lloyds TSB Bank
Account Number - 00828179
Sort Code - 30-00-02
Swift Code - LOYD GB 2L CTY

Please reference your payment with your FRN and the invoice number, and fax a remittance to the Cashier on 020 7066 3415.

• By Cheque – Cheques should be made payable to 'The Financial Services Authority' and have your firm reference number on the reverse. They should be sent for the attention of 'The Cashier' to Revenue Dept, 25 The North Colonnade, Canary Wharf, London, E14 5HS.

• By Credit/Debit card – Please complete the debit/credit card form on the Payment methods page and return it to us by the due date. Invoices paid by credit card incur an additional 2% charge of the transaction.

Yes, there is a facility for firms to pay their regulatory fees by instalments. As in 2006/07, we have facilitated a market solution, together with the industry and the FSA's Smaller Business Practitioner Panel, for the payment of 2007/08 fees and levies by instalment. An industry working group reviewed proposals from interested credit providers and following careful consideration selected Premium Credit Limited as their preferred supplier. Details of the instalment plan will be provided in your invoices.

We published a briefing note on this in March 2006.

Yes, credit contracts with PCL are fixed term agreements and do not 'roll-over' into the following fee period.

No. Firms can make their own arrangements directly through other credit providers if they wish to do so.