Transitional Provisions and Schedules

Part

FEES Fees Manual

Chapter

Transitional Provisions and Schedules

Printed on: 18/05/2024

Rulebook at: 01/01/2014

Transitional Provisions and Schedules

FEES TP 2

Transitional provisions relating to changes to the FSCS levy arrangements taking effect in 2007/8 and in 2008/9

2.1

Treatment of balances as at 1 April 2008

2.1.1

FSCS must calculate a levy balance as at 31 March 2008 attributable to each participant firm to which this rule applies (see FEES TP 2.1.19R), in respect of contribution groups in place as at 31 March 2008, in the following way:

(1)

identifying each of the relevant contribution groups to which a participant firm belongs;

(2)

identifying amounts held to the credit of each such contribution group;

(3)

identifying amounts held as a debit balance to each such contribution group;

(4)

calculating the net balance for each contribution group from (2) and (3);

(5)

calculating, in relation to each relevant contribution group, that participant firm's tariff base as a proportion of the total tariff base of all participant firms in the contribution group;

(6)

for each relevant contribution group applying the proportion in (5) to the figure in (4); and

(7)

the balance for the participant firm is calculated by adding together the figure in (6) for each relevant contribution group of which the participant firm is a member.

2.1.2

This rule relates to a claim or other amount that could be the subject of a compensation costs levy or specific costs levy and is otherwise eligible for inclusion in a debit balance for a contribution group under FEES TP 2.1.1R(3). This rule deals with a case where there are insufficient funds standing to the credit of that contribution group's FSCS account to meet the claim. Such a claim may only be included in the debit balance in accordance with the requirements about the amounts that can be levied under compensation costs levies and specific costs levies under FEES 6 in the form FEES 6 was in force on 31 March 2008.

2.1.3

The credit balance referred to in FEES TP 2.1.1R(2) includes:

(1)

funds standing to the credit of the contribution group together with any interest receivable less any tax payable;

(2)

any amounts lent to another contribution group (together with any interest payable on that amount under FEES 6); and

(3)

any amount levied on or before 31 March 2008 but not received by 31 March 2008;

(all such amounts being calculated as at 31 March 2008).

2.1.4

(1)

The debit balance referred to in FEES TP 2.1.1R(3) includes:

(a)

any amounts borrowed by FSCS for the purpose of paying amounts for which a compensation costs levy may be imposed on the contribution group in question together with any interest payable;

(b)

any amounts borrowed from another contribution group (together with any interest payable on that amount under FEES 6); and

(c)

amounts that could be the subject of a compensation costs levy or specific costs levy that FSCS has not yet paid;

(all such amounts being calculated as at 31 March 2008).

(2)

If FSCS has decided to pay a claim, has decided the amount it will pay and (where applicable) has agreed the payment with the claimant it is eligible for inclusion under (1)(c). So is a claim for which FSCS has sent out a compensation cheque if the cheque has not been cleared by 31 March. A claim that has been made and settled will not be included as it will have already reduced the funds standing to the credit of the relevant contribution group. Claims made but not yet accepted or agreed by 31 March will not be included.

2.1.5

FEES TP 2.1.2R has a further limitation on what claims can be included as a debit for a contribution group under FEES TP 2.1.1R. They may be included if there are sufficient funds standing to the credit of the contribution group. Any excess can also be included but only up to the levy limit for the relevant contribution group. In calculating the amount that FSCS would have been able to levy, FSCS will take into account any levies already made in the financial year beginning on 31 March 2007 (and, if relevant, previous years). The caps for these purposes are the ones in force on 31 March 2008.

2.1.6

(1)

If a participant firm's levy balance calculated under FEES TP 2.1.1R(7) is a debit, it is to be added to the first compensation costs levy or management expenses levy made on or after 1 April 2008 in which the participant firm shares.

(2)

If a participant firm's levy balance calculated under FEES TP 2.1.1R(7) is a credit, it is to be refunded as follows:

(a)

by deduction from any compensation costs levy or management expenses levy in which the participant firm shares included in the invoice that includes the appropriate regulator's periodical fee referred to in (2)(b);

(b)

(as to any balance) by deduction from any appropriate regulator periodical fees payable under FEES 4.3 in respect of the financial year beginning on 1 April 2008 and the general levy payable in respect of the same financial year; and

(c)

(as to any balance) by payment to the participant firm.

2.1.7

Any amount that is added to a participant firm's levy under FEES TP 2.1.6R must not be taken into account for the purpose of calculating whether a levy limit of any sub-class has been exceeded and how much headroom there is between a levy limit and the amount already levied.

2.1.8

If it appears to the FSCS that in the exceptional circumstances of a particular case, refunding a participant firm's credit balance arising under FEES TP 2.1.1R by way of a deduction in accordance with FEES TP 2.1.6R would be inequitable, the FSCS may refund any part of that amount by payment to the participant firm.

2.1.9

FSCS may use the money collected from participant firms prior to 1 April 2008 in order to pay claims or management expenses after 31 March 2008 but only in so far as any such payments are treated as costs to be allocated to sub-classes in existence after 31 March 2008 and do not prejudice the calculation in FEES TP 2.1.1R.

2.1.10

Subject to FEES TP 2.1.16R, FSCS must calculate any levy after 31 March 2008 on the basis that all credit balances referred to in FEES TP 2.1R have been refunded to participant firms and all debit balances referred to in FEES TP 2.1R have been repaid and all management expenses levies made before 1 April 2008 have been spent.

2.1.11

For the purposes of the calculations in FEES TP 2.1R, FSCS may rely on information FSCS relied on in the 2007/8 financial year.

2.1.12

Subject to FEES TP 2.1.16R, if a participant firm provides, or is deemed to provide, incorrect information which is used for the purposes of FEES TP 2.1, then FSCS may take account of any resulting material overpayment or underpayment made under FEES TP 2.1 notified to it. If FSCS does take into account any such overpayment or underpayment it will be dealt with as follows:

(1)

FSCS must repay any such overpayment on or before 30 calendar days after the date when it decides to take such overpayment into account; and

(2)

the participant firm must repay such underpayment on or before 30 calendar days after the date when the invoice for it is issued by FSCS.

2.1.13

FSCS may, in its absolute discretion, refuse requests to recalculate a firm's levy balance calculated under FEES TP 2.1.1R on the basis of information corrected or re-submitted after 31 March 2009.

2.1.14

Any rebate or refund to a participant firm arising out of the recalculation of a participant firm's levy balance carried out in accordance with FEES TP 2.1.12R is to be allocated to the sub-class most closely analogous to the contribution group the firm belonged to before 1 April 2008 or, if applicable, in accordance with FEES TP 2.1.18R.

2.1.15

Any interest, arising between 31 March 2008 and the date that a credit balance is refunded to a participant firm under FEES TP 2.1.6R (including any interest attributable to the use of the funds in accordance with FEES TP 2.1.9R) is to be held for the benefit of the sub-class most closely analogous to the contribution group the firm belonged to before 1 April 2008 or, if applicable, in accordance with FEES TP 2.1.18R.

2.1.16

FEES TP 2.1 does not apply to the extent that it is inconsistent with the provisions of the compensation transitionals order.

2.1.17

If a participant firm fails to pay an amount due with respect to a debit balance under FEES TP 2.1.6R, that default is to be allocated to the sub-class most closely analogous to the contribution group the firm belonged to before 1 April 2008 for which the debit balance arises, or if applicable, in accordance with FEES TP 2.1.18R.

2.1.18

(1)

FEES TP 2.1.18R deals with a situation in which FEES TP 2.1 requires that a rebate, refund, receipt or default be allocated to the sub-class most closely analogous to the contribution group a participant firm belonged to before 1 April 2008 but where it is not possible to do this because the participant firm belonged to more than one relevant contribution group or because the contribution group maps onto more than one sub-class.

(2)

That sum will be divided between contribution groups and sub-classes in whatever way FSCS considers fair and consistent with the purpose of FEES TP 2.1.

2.1.19

FEES TP 2.1.1R does not apply to a participant firm that was not a participant firm on 1 April 2007 or that was exempt during FSCS's financial year beginning on that date. Subject to that, FEES TP 2.1.1R applies to a participant firm as at 31 March 2008 that has subsequently ceased to be a participant firm.

2.1.20

The purpose of FEES TP 2.1 is to help to ensure that there is a clean break between periods beginning on or after 1 April 2008 and periods before. The aim is to ensure that debit and credit balances for each contribution group as at 31 March 2008 are discharged and any credit balance in relation to a contribution group is returned to participant firms in that contribution group as at that date.

2.2

Split of business between life and pensions intermediation and investment intermediation

2.3

Incorrect information

2.3.1

If a participant firm provides, or is deemed to provide, information under FEES 6.5.13 R (2) which is incorrect then FSCS may take account of any material overpayment or underpayment notified to it in calculating the firm's share of the next FSCS levy in accordance with FEES 6.3.22 R. Any overpayment or overcharge will not be refunded or reduced in the year of the levy unless it appears to FSCS that in the exceptional circumstances of a particular case, the payment of, or retention by FSCS of, any such FSCS levy would be inequitable.

2.3.2

FEES TP 2.3 applies in relation to information supplied for the purpose of the FSCS's financial year beginning on 1 April 2008.

2.3.3

FEES TP 2.3.1R does not apply in relation to the calculations in FEES TP 2.1.

2.4

Allocation of recoveries

2.4.1

Any recoveries made by the FSCS after 31 March 2008 in relation to protected claims compensated prior to 1 April 2008, the costs of which were allocated to the relevant contribution group in place at the time, must be credited to the sub-class in place after 31 March 2008 to which the costs of the protected claim would have been allocated had it been compensated after that date, or if relevant, in accordance with FEES 6.3.20 R.

2.4.2

FEES TP 2.4.1R does not apply to the extent that it is inconsistent with the compensation transitionals order.

2.5

Interpretation

2.5.1

In FEES TP 2 'contribution group' means one of the groups of participant firms within a sub-scheme in existence prior to 1 April 2008 set out in FEES 6.5.7 R at the time, being groups that carried on business of a similar nature, to which compensation costs and specific costs were allocated in accordance with FEES 6.4 and FEES 6.5 in force at the time. Sub-scheme means one of the sub-schemes to which FSCS allocated liabilities for compensation costs prior to 1 April 2008, as described in FEES 6.5.7 R at the time.

2.5.2

For the purpose of FEES 6.5.13 R as it applies with respect to the FSCS's financial year beginning on 1 April 2008:

(1)

references in FEES 6.5.13 R to sub-classes must be read as references to sub-classes to which firms will belong after 31 March 2008; and

(2)

(where FEES TP provides for the tariff base for a sub-class to be calculated by reference to a contribution group prior to that date) FEES 6.5.13 R (1) must be read as also including a requirement for the supply of the necessary information in relation to that contribution group.

2.5.3

The amendments made to FEES 6.5.16 R by the Fees Manual (FSCS Funding) Instrument 2007 only have effect before 1 April 2008 for the purpose of FSCS's financial year beginning on 1 April 2008.

2.5.4

FEES 6 Annex 2 R and FEES 6 Annex 3 R (classes, sub-classes and tariff bases) are brought into force for the purpose of FEES TP and FEES 6.5.13 R in November 2007. However they do not have any other effect until 1 April 2008.

2.6

Past defaults

2.6.1

The changes made to the levy rules made by the Fees Manual (FSCS Funding) Instrument 2007 apply to any levy made after 31 March 2008. This is so even if:

(1)

the claim against the firm in default arose or relates to circumstances arising before that date;

(2)

the firm was in default before that date; or

(3)

the levy relates to arrangements or measures under COMP 3.3 made or taken before that date.

2.7

Transitional provisions for changes to relieving provisions

2.7.1

The amendments made in Part 1 of Annex B to the Financial Services Compensation Scheme (Amendment of Tariff Measures and Other Levy Rules) Instrument 2008 to FEES 2.3 and the addition of FEES 6.3.22A R (and consequential changes) (changes to Relieving Provisions) do not apply to any request made by a levy payer before 1 November 2008.

2.8

Effect of the tariff base changes for the financial year beginning on 1 April 2009 before that date

2.8.1

The amendments made to FEES 6 Annex 3 R (Financial Services Compensation Scheme - classes and sub-classes) and FEES TP 2 by Part 3 of Annex B to the Financial Services Compensation Scheme (Amendment of Tariff Measures and Other Levy Rules) Instrument 2008 have effect before 1 April 2009 for the purpose of the supply of information under FEES 6.5.13 R in relation to the FSCS's financial year beginning on 1 April 2009.

01/04/2013

FEES TP 3

Transitional provisions relating to changes to the FSCS levy arrangements taking effect in 2010/11

3.1

Effect of the tariff base changes made in 2008 in relation to the financial year 2010/11 before that date

3.1.1

The amendments made to FEES 6 and to FEES TP by Part 4 of Annex B to the Financial Services Compensation Scheme (Amendment of Tariff Measures and Other Levy Rules) Instrument 2008 have effect before 1 April 2010 for the purpose of the supply of information under FEES 6.5.13 R in relation to the FSCS's financial year beginning on 1 April 2010.

3.2

Transitional requirements relating to firms in run off

3.2.1

This rule adjusts the calculation of the tariff base for sub-class B1 (General insurance providers) and sub-class C1 (Life and pensions providers) for the purposes of the FSCS's financial year beginning on 1 April 2010 and for subsequent periods. It applies if the firm is in run-off and has been in run-off since 1 November 2008.

3.2.2

The whole of the levy is calculated by reference to relevant net premium income instead of being split 75:25 between relevant net premium income and eligible gross technical liabilities or mathematical reserves.

3.2.3

A firm is in run-off for these purposes if it has ceased to effect new contracts of insurance, its permission for effecting contracts of insurance has been cancelled, its exclusive remaining business is administering its remaining insurance liabilities and, if it is required to supply one, it has supplied a run-off plan under SUP App 2.8.1 R.

3.3

Treatment of pure protection fees in 2010/11

01/04/2013

FEES TP 4

Transitional provisions relating to information requirements following changes to FEES 4 or 5

4.1

Effect of changes to FEES 4 or 5 in relation to the supply of information to the appropriate regulator

4.1.1

This rule applies where any rule, or amendment to a rule, in FEES 4 or FEES 5 ("a FEES rule") has been made but will only come into force in relation to a future financial year of the appropriate regulator or Financial Ombudsman Service ("the future year"), as the case may be.

4.1.2

Unless another rule expressly disapplies this rule, a FEES rule has immediate effect for the supply of information under FEES 4.4 or FEES 5.4 in relation to that future year.

4.1.3

A reference in this rule to an appropriate regulator or Financial Ombudsman Service financial year is a reference to the 12 months ending 31 March.

01/04/2013

FEES TP 5

Transitional Provisions relating to the Special Project Fee for Restructuring

5.1

Special Project Fee for Restructuring applicable to circumstances before 1 July 2010

5.1.1

This rule relates to the changes to FEES 3 Annex 9 (Special Project Fee for restructuring) made by the Fees (Special Project Fee For Restructuring) (Amendment) Instrument 2010. It deals with a trigger event that occurred or started before 1 July 2010 (an "old trigger event") but which was of a type that was only brought into the definition of trigger event by that instrument. A trigger event means a circumstance or event of a type set out in paragraphs (2) or (6) of that Annex (events or circumstances that trigger liability for the Special Project Fee for restructuring).

5.1.2

An old trigger event is still a trigger event and thus triggers liability for the fee. However any regulatory work conducted before 1 July 2010 as a consequence of an old trigger event is not taken into account for the purposes of the calculation of the fee (including the floor in paragraph (8)(a) of FEES 3 Annex 9). Likewise any fees and disbursements invoiced to the appropriate regulator in respect of services performed for the appropriate regulator in relation to assisting the appropriate regulator in performing such regulatory work are not included to the extent that the invoice relates to the period before 1 July 2010.

5.1.3

For example, say that a firm goes into administration before 1 July 2010. Say that the administration did not come within the list of events that triggered liability for the fee before 1 July 2010. The fee is still potentially payable. However the fee will not cover work carried out by the appropriate regulator before 1 July 2010. The same applies even if the administration started before 1 June 2009, when the fee first came into force.

01/04/2013

FEES TP 7

Transitional provisions relating to changes to the FSCS levy arrangements taking effect in 2013/14

7.1

As at 31 March 2013, the FSCS must:

(1)

allocate any surplus or deficit in the balance of an FSA activity group in respect of base costs, to the account of the corresponding FCA activity group as listed in FEES 4 Annex 1A R as at 1 April 2013; and

(2)

take that surplus or deficit (so allocated) into account when calculating the amount to be levied under FEES 6.4.5 R in respect of the financial year commencing on 1 April 2013.

01/04/2013

FEES TP 8

Transitional provisions relating to FEES 3 Annex 9R and FEES 4.3.6R taking effect in 2013/14

(1)

(2) Material to which the transitional provision applies

(3)

(4) Transitional provision

(5) Transitional provision: dates in force

(6) Handbook provision: coming into force

8.1

Special project fee transitional provisions

8.1.1

FEES 3 Annex 9R

This rule relates to a special project fee or part of a special project fee which has the following characteristics:
(1) one or more of the events described in FEES 3 Annex 9R (2) or (6) had occurred before 1 April 2013; and
(2) FSA employees conducted regulatory work which had been recorded on the FSA's systems and/or the FSA was invoiced fees and disbursements as a consequence of the applicable event or events referred to in FEES 3 Annex 9R (2) or (6) before 1 April 2013.
(3) Hours or part hours worked by FSA staff and any fees or disbursements invoiced to the FSA of the kind described in FEES 3 Annex 9R (9) which were not accounted for in an invoice issued by the FSA prior to 31 March 2013 shall be named "pre-LCO accrued costs" in FEES TP 8.1.

From 1 April 2013 indefinitely

1 April 2013

8.1.2

FEES 3 Annex 9R

In relation to the kind of special project fee specified in FEES TP 8.1.1R,
(a) where one of the events referred to in FEES 3 Annex 9R (6)(a) had occurred, any pre-LCO accrued costs shall be included in the calculation of any amount payable to the FCA under FEES 3 Annex 9R (9);
(b) a special project fee is payable to the FCA regardless of whether the amount calculated according to FEES 3 Annex 9R for the FCA is less than £50,000; and
(c) no special project fee is payable if the sum total of adding together (i) the amount calculated in accordance with FEES 3 Annex 9R (9) in respect of the FCA and (ii) the total costs invoiced by the FSA before 1 April 2013 results in a total amount of less than £50,000.

From 1 April 2013 indefinitely

1 April 2013

8.1.3

FEES 3 Annex 9R

In relation to the kind of special project fee specified in FEES TP 8.1.1R, where one of the events referred to in FEES 3 Annex 9R (2) or (6)(b) had occurred:
(a) 50% of the pre-LCO accrued costs shall be included in the calculation of any amount payable to the FCA under FEES 3 Annex 9R(9);
(b) 50% of the pre-LCO accrued costs shall be included in the calculation of any amount payable to the PRA under FEES 3 Annex 9R(9);
(c) a special project fee is payable to the appropriate regulator regardless of whether the amount calculated according to FEES 3 Annex 9R for the appropriate regulator is less than £50,000; and
(d) no special project fee is payable if the sum total of adding together (i) the amount calculated in accordance with FEES 3 Annex 9R(9) in respect of the FCA, (ii) the amount calculated in accordance with FEES 3 Annex 9R(9) in respect of the PRA and (iii) the total costs invoiced by the FSA before 1 April 2013 results in a total amount of less than £50,000.

From 1 April 2013 indefinitely

1 April 2013

8.1.4

FEES 3 Annex 9

As a result of FEES FEES TP 8.1.3R, pre-LCO accrued costs may give rise to two separate fee payment obligations following 1 April 2013, one in respect of the FCA and one in respect of the PRA if the threshold in FEES TP 8.1.3(d) is breached.

From 1 April 2013 indefinitely

1 April 2013

8.1.5

FEES 3 Annex 9

(1) This guidance gives examples of how FEES TP 8.1 is intended to operate.
(2) If an event specified in FEES 3 Annex 9 (2) occurred on 1 April 2012, the £50,000 threshold was breached on 1 November and the FSA invoiced for the full amount outstanding as at 1 December 2012 but issued no further invoices, any accrued hours or part hours and fees or disbursements invoiced to the FSA between 1 December 2012 and 1 April 2013 will be divided equally between the FCA and the PRA and an amount would be payable to the FCA and the PRA as separate fees regardless of whether the separate thresholds contained in FEES 3 Annex 9 (8) are met as long as the combined FSA, FCA and PRA costs incurred exceeded £50,000.
(3) If an event specified in FEES 3 Annex 9 (6)(a) occurred on 1 February 2013, the FSA had begun the relevant regulatory work but had yet issued any invoices or breached the 50,000 floor before 1 April 2013, the accrued hours and disbursements will be allocated towards the FCA's fee calculation.

From 1 April 2013 indefinitely

1 April 2013

8.2

On account fee transitional provisions

8.2.1

FEES 4.3.6 R (1) and FEES 4.3.6 R (1A)

For the 2013/2014 fee year, "previous fee year" is replaced by "FSA financial year for 2012/2013" and "periodic fee" is replaced by "periodic fee payable to the FSA".