Prudential Regulation Authority Rulebook

1.1

This Part, unless otherwise stated, applies to every firm and every person required to pay a fee to the PRA.

1.2

In this Part, the following definitions shall apply:

active capacity

means the capacity of the syndicate(s) under management in the fee year in question, including the capacity of syndicates that are not writing new business but have not been closed off in the year in question.

adjusted gross premium income or AGPI

means adjusted gross premium income of an insurer calculated as follows (all business transacted through independent practitioners or tied agents, whether single or multi-tie, being divided by two):

1. (1) amount of new regular premium business (yearly premiums including reassurances ceded but excluding cancellations and reassurances accepted) x10;
2. plus
3. (2) amounts of new single premium business (total including reassurances ceded but excluding cancellations and reassurances accepted). Group protection business (life and private health insurance) must be included;
4. less
5. (3) premiums relating to pension fund management;
6. less
7. (4) premiums relating to trustee investment plans.

advanced IRB

means the internal ratings based approach for assessing credit risk referred to in Article 151(4) and (9) of the CRR.

advanced measurement approaches or AMA

means advanced measurement approaches to operational risk based on a firm’s own operational risk management systems as referred to in s312(2) CRR.

annual funding requirement or AFR

means, in respect of any fee year, the total ongoing costs of the PRA as determined by the PRA.

application

means a request to the PRA, in any format, for the PRA to exercise its functions in relation to the applicant or for approval, waiver or confirmation of any matter relating to the applicant.

assets outside expected RFB subgroups

means assets of a ring-fencing fees group which its ring-fencing business plan indicated were not intended to be held within a ring-fenced body or its UK sub-group for ring-fencing purposes on 1 January 2019.

collection agent

means the agent, currently the FCA, designated from time to time by the PRA to collect and analyse tariff data from firms and to calculate, invoice and collect fees on its behalf.

consumer credit-related activity (ies)

means:

any of the activities 1 (a) – (m) in Part 2 or 3A; and

advising on regulated credit agreements for the acquisition of land under Article 53DA

of the Regulated Activities Order in the manner specified in Part 3 of the Regulated Activities Order as being relevant to those activities.

contributions as income

means contributions as income of a friendly society under Schedule 7: Part I item 1 (a) to the Friendly Societies (Accounts and Related Provisions) Regulations 1994 (SI 1994/1983) in respect of United Kingdom business

core deposit

means core deposits within the meaning of article 2(2) of the FSMA (Ring-Fenced Bodies and Core Activities) Order 2014.

deposit acceptors fee block

means the fee block for firms whose Part 4A permission includes accepting deposits but does not include either of the following:

1. (1) effecting contracts of insurance; or
2. (2) carrying out contracts of insurance.

designated firms dealing as principal fee block

means firms whose Part 4A permission includes dealing in investments as principal where the PRA has designated ‘dealing in investments as principal’ a PRA regulated activity in respect of that firm.

due date for payment

means the due date for payment of any fee under this Part, payment being required in cleared funds on or before 5pm on that day or, where it is not a business day, the next business day.

fee block

means firms conducting broadly similar regulated activities grouped together for the purposes of calculating and collecting fees as follows:

A0 - the minimum fee block

A1 – the deposit acceptors fee block

A3 – the general insurance fee block

A4 – the life insurance fee block

A5 – the Lloyd’s managing agents fee block

A6 - the Society of Lloyd’s fee block

A10 – the designated firms dealing as principal fee block

PT1 – the transition costs fee block

fee payer

means any firm or person required to pay a fee in accordance with this Part of the Rulebook.

fee tariff (s) or tariff

means a payment or scale of payments in accordance with the PRA’s fee-charging system.

fee year

means the PRA’s fee year, being twelve months from 1 March in one calendar year to the last day of February in the following calendar year.

first fee year

means the fee year during which a firm becomes authorised or receives an extended Part 4A permission in relation to PRA-regulated activity.

Form ELS

means the eligible liabilities return by which banks and building societies provide information to the Bank of England as required by the Bank of England Act 1998.

foundation IRB

means the internal ratings based approach for assessing credit risk referred to in Article 143(1) of the CRR.

general insurance fee block

means firms whose Part 4A permission includes effecting or carrying out contracts of general insurance or contracts of long term insurance other than life policies.

gross premium income or GPI

means the amount of premium receivable which must be included in the documents required to be deposited under IPRU(INS) 9.6 in relation to the financial year to which the documents relate but disregarding for this purpose such amounts as are not included in the documents by reason of a waiver or an order under section 68 of the Insurance Companies Act 1982 carried forward as an amendment to IPRU (INS) of the PRA Handbook under transitional provisions relating to written concessions; or

gross premiums written

means gross premiums written under Schedule 1: Part I.1 (a) and II.1. (a) of the Friendly Societies (Accounts and Related Provisions) Regulations 1994 (SI 1994/1983)

gross technical liabilities or GTL

means the amount of gross technical liabilities referred to in (IPRU (INS) (Appendix 9.1- Form 15 line 19) which must be included in the documents required to be deposited under IPRU(INS)9.6R in relation to the financial year to which the documents relate but disregarding for this purpose such amounts as are not included in the documents by reason of a waiver or an order under section 68 of the Insurance Companies Act 1982 carried forward as an amendment to IPRU (INS) of the PRA Handbook under transitional provisions relating to written concessions.

insolvency proceedings

means:

1. (1) any proceedings under the Insolvency Act 1986 or Companies Act 2006 to have a firm declared insolvent or to wind up its business including, without limitation, administration, company voluntary arrangement, scheme of arrangement, receivership, administrative receivership, liquidation, sequestration or appointment of a trustee in bankruptcy;
2. (2) any proceedings under the Banking Act 2009 special insolvency regime; or
3. (3) any equivalent process in any jurisdiction outside the United Kingdom.

insurance business transfer scheme

means a scheme to transfer the whole or part of the business of an insurance undertaking or member or former member of the Society which meets the conditions of Part VII FSMA or, where applicable, the Financial Services and Markets Act 2000 (Control of Transfers of Business Done at Lloyd’s) Order 2001(SI 2001/3626).

internal model method

means the internal approach to counterparty credit risk referred to in Article 283 of the CRR.

IPRU (INS)

means the IPRU (INS) section of the PRA Handbook which remains in force to the extent required by:

1. (1) Transitional Measures 3.7 of the PRA Rulebook for Solvency II firms; and
2. (2) Transitional Measures 3.1 of the PRA Rulebook for non-directive firms,

and references to rules, forms and appendices are to those applicable as at 31 December 2015.

late payment interest

means interest at the rate of 5% per annum above the official bank rate of the Bank of England from time to time in force.

life insurance fee block

means firms whose permission includes effecting or carrying out contracts of insurance which are, or include, life policies or entering into a funeral plan contract as provider.

Lloyd’s managing agents fee block

means firms whose permission includes managing the underwriting capacity of a syndicate as a managing agent at the Society.

mathematical reserves for fees purposes

modified eligible liabilities or MELs

minimum fee block

means the fee block comprising all firms referred to in Table I of the Periodic Fees Schedule.

new authorisations

means any application, or granting of an application, for (1) a Part 4A permission which includes a PRA regulated activity or (2) a top-up permission which includes a PRA regulated activity.

number of traders

means the number of employees or agents who, as part of their ordinary duties on behalf of a firm in the designated firms dealing as principal fee block (A10) commit the firm in market dealings or in transactions in securities or other investments in the course of PRA regulated activities, but excluding anyone working solely for the firm’s multi-lateral trading facility operation.

pension fund management

means the class of contract of insurance specified in paragraph VII of Part II of Schedule 1 to the Regulated Activities Order (Contracts of long-term insurance) where effected or carried out by a person who does not carry on a banking business but otherwise carries on insurance business.

periodic fee(s)

means the fee or fees payable in accordance with Chapter 3.

Periodic Fees Schedule

means the schedule of periodic fees annexed to Chapter 3, which is replaced annually following the PRA’s fee rates consultation.

reattribution

means the process under which an insurer seeks to redefine the rights and interests of policy holders.

regulatory transaction fee(s)

means the fee or fees payable in accordance with Chapter 4.

ring-fencing fees group

means a banking group, or part of a banking group, which (i) has submitted a ring-fencing business plan and (ii) was notified by the PRA on or prior to 1 May 2016 that a fee relating to ring-fencing would be payable by one or more members of its group.

ring-fencing business plan

means the near-final business plans submitted to the PRA on or before 1 March 2016 setting out firms’ proposals for ring-fencing.

ring-fenced body or RFB

has the meaning in Section 142A of FSMA.

ring-fencing

means the UK ring-fencing regime as provided for in the Financial Services (Banking Reform) Act 2013, including statutory instruments and PRA rules made or to be made pursuant thereto.

ring-fencing implementation fee(s)

means the fee or fees in 3.18.

second fee year

means the fee year commencing on 1 March immediately following the end of the firm’s first fee year.

special project fee(s) or SPF (s)

means the fee or fees payable in accordance with Chapter 5.

Society of Lloyd’s fee block

means the fee block of which the Society is the sole member.

tariff bands

means broad groupings of business volumes for the purpose of calculating periodic fees.

tariff base

means the PRA’s methodology for calculating volumes of business for the purposes of determining periodic fees.

tariff data

means information about a firm’s business used in the calculation of periodic fees.

tariff rate

means the rate of fee applied to a particular activity for the purpose of calculating periodic fees.

transition costs

means the costs of establishing the PRA which are being recovered from firms over a period of five years from 2013/14 to 2017/18.

transition costs fee block

means firms which are liable to pay transition costs as shown in Table II of the Periodic Fees Schedule..

Treaty firm

means, as defined in paragraph 1 of Schedule 4 of FSMA, a person whose head office is situated in an EEA state other than the United Kingdom and which is recognised by the law of that state as its national.

trustee investment plans

means the class of contracts of insurance specified in Class 3 of Part II of Schedule 1 to the Regulated Activities Order and which are invested in pooled funds beneficially owned by an insurer and not earmarked for individual beneficiaries by that insurer.

valuation point

means the relevant date or period for assessing a firm’s tariff data and calculating periodic fees under Chapter 3.

2.1

All fees must be paid in full and without deduction on the due date for payment.

2.2

The due date for payment of:

1. (1) periodic fees is as specified in 3.15;
2. (2) regulatory transaction fees is as specified in 4.2;
3. (3) special project fees is as specified in 5.8.

2.3

As permitted by paragraphs 31(7) and 35 of Schedule 1ZB of FSMA, the PRA may take all steps and seek all remedies available to a creditor to recover, as a debt due to the PRA, any fee or other amount, such as interest, which remains unpaid after it falls due.

2.4

The PRA may take regulatory action in relation to non-payment of fees in addition to, or instead of, any steps taken or remedies pursued under 2.3.

2.5

Fee-payers must comply with directions, whether in an invoice, form, notice or otherwise, of the collection agent when acting in that capacity on behalf of the PRA.

2.6

Subject to 2.8, a fee payer who does not pay the full amount of a fee by the due date for payment will incur late payment interest on any unpaid part of the fee, accruing on a daily basis from the due date for payment until payment is made.

2.7

The PRA will not charge interest on late payment interest.

2.8

Late payment interest does not apply to regulatory transaction fees and special project fees.

2.9

If it appears to the PRA in relation to any fee that in the exceptional circumstances of a particular case it would be inequitable to require payment or to retain sums previously paid, it may at its discretion:

1. (1) waive the payment;
2. (2) reduce the amount payable; or
3. (3) offer a whole or partial refund of sums already paid.

2.10

The PRA will not consider a claim by a fee payer for waiver, reduction or refund under 2.9 based on the fee payer’s error if the claim is made more than two years after the beginning of the period to which the fee relates.

3.1

Periodic fees are payable in respect of each PRA fee year by any person who is, or becomes, a firm during the fee year.

3.2

The amount payable depends upon the fee block to which the firm has been allocated. Firms falling into more than one fee block pay periodic fees in relation to each.

3.3

Periodic fees payable by firms in any fee year will be the sum of the following (so far as applicable to them):

1. (1) a minimum periodic fee at the rate specified in Table I of the Periodic Fees Schedule;
2. (2) a transition costs allocation calculated in accordance with Table II of the Periodic Fees Schedule;
3. (3) periodic fees at the rate specified in Table III, subject to any modifications in Table IV and Table V, of the Periodic Fees Schedule calculated as follows:
1. (a) applying the tariff bases and valuation points set out in 3.4 to the tariff data which they have supplied to the PRA or its collection agent;
2. (b) where applicable, grouping tariff data into the tariff bands shown in Column 3 of Table III of the Periodic Fees Schedule; and
3. (c) applying the appropriate tariff rate as shown in Column 4 of Table III of the Periodic Fees Schedule;
4. the fee being the total of sums payable in respect of all tariff bands; and
5. (4) the ring-fencing implementation fee if applicable.

3.4

The tariff bases and valuation points referred to in 3.3 (3)(a) are:

1. (1) for firms in the deposit acceptors fee block (A1):
1. (a) if the firm is a bank and reports monthly, average MELs for October, November and December prior to commencement of the fee year; or
2. (b) if the firm is a bank and reports quarterly, MELs for the December prior to commencement of the fee year; or
3. (c) if the firm is a building society, average MELs for October, November and December prior to commencement of the fee year; or
4. (d) if the firm is a credit union, either its MELs for the December preceding the commencement of the fee year or, in the absence of December MELs its MELs as disclosed by its most recent annual return submitted for regulatory reporting purposes prior to the December preceding commencement of the fee year.
2. (2) for firms in the general insurance fee block (A3):
1. (a) if the firm is an insurer, the sum of its annual gross premium income for, and its gross technical liabilities at the end of, the firm’s financial year which ends in the calendar year to 31 December prior to commencement of the fee year, noting that:
1. (i) in the case of a pure reinsurer carrying on general insurance business through a branch in the United Kingdom, or an insurer whose head office is not in an EEA state carrying on general insurance business through a branch in the United Kingdom, or an EEA –deposit insurer, only premiums received and gross technical liabilities held in respect of its United Kingdom business are included;
2. (ii) for a Swiss general insurance company premiums and gross technical liabilities include those relevant to the operations of the company’s United Kingdom branch; and
3. (iii) a firm need not include premiums and gross technical liabilities relating to pure protection contracts which it reports, and pays a fee on, in the A4 life insurers’ fee block.
4. or
2. (b) if the firm is a non-directive friendly society, the value of contributions as income receivable in respect of United Kingdom business included in its income and expenditure account at the end of the firm’s financial year which ends in the calendar year to 31 December prior to commencement of the fee year;
1. or
3. (c) if the firm is a directive friendly society, the value of gross premiums written in respect of United Kingdom business included in its income and expenditure account at the end of the firm’s financial year which ends in the calendar year to 31 December prior to commencement of the fee year,
4. and
5. (d) for UK ISVPs, the tariff base is not relevant and a flat fee shown in Table III of the Periodic Fees Schedule is payable,
3. (3) for firms in the life insurance fee block (A4), the sum of adjusted gross premium income for, and mathematical reserves for fees purposes valued at the end of, the firm’s financial year ending in the calendar year to 31 December prior to commencement of the fee year noting that:
1. (a) only premiums receivable and mathematical reserves held in respect of United Kingdom business are relevant; and
2. (b) an insurer must include in its calculation of adjusted gross premium income and mathematical reserves for fees purposes the value relating to all risks ceded to ISPVs.
4. (4) for firms in the Lloyd’s managing agents fee block (A5), active capacity as reported to the Society for the underwriting year which is in progress at the beginning of the fee year.
5. (5) for firms in the designated firms acting as principal fee block (A10) number of traders as at 31 December prior to commencement of the fee year.

3.5

The periodic fees payable by:

1. (1) the Society are as specified in Table III of the Periodic Fees Schedule; and
2. (2) fee-payers subject to the ring-fencing implementation fee are as specified in 3.18.

3.6

The following requirements apply to all firms whose activities give rise to periodic fees, other than firms which pay only a flat rate of fee:

1. (1) within two months after, or where relevant after the end of, the relevant valuation point, the firm must provide to the PRA’s collection agent the tariff data on which the periodic fee payable by the firm is to be calculated as at that valuation point
2. (2) if the PRA does not, on its own behalf or through its collection agent, obtain sufficient, or sufficiently detailed, information, the PRA may obtain this through its general information-gathering powers;
3. (3) for an incoming EEA firm or an incoming Treaty firm, the information required is in relation to the regulated activities of the firm carried on in the United Kingdom, other than those provided on a cross border services basis;
4. (4) as periodic fees in respect of any fee year are calculated on the basis of firms’ tariff data for the previous fee year, there may be insufficient tariff data on which the periodic fees may be calculated under 3.4 where a firm becomes authorised for the first time or undertakes a new PRA-regulated activity, resulting in a significant change to its business. In those circumstances, the periodic fees payable will be calculated in accordance with:
1. (a) 3.7 for firms in their first fee year;
2. (b) 3.9 and 3.10 for firms in the deposit acceptors fee block (A1), the general insurance fee block (A3) or the life insurance fee block (A4) in their second fee year or any subsequent fee year;
5. (5) a firm intending to apply any of the methods of calculation in 3.9 must notify the PRA’s collection agent by the date specified in 3.6 (1).
6. (6) Unless 3.7 or 3.9 applies, where a firm has not complied with 3.6 (1) for any period by reference to which periodic fees are to be calculated, but a valuation is available for the previous period by reference to which periodic fees are to be calculated, the fee should be calculated using the tariff data applicable to the previous period multiplied by 1.10. An additional administration fee of £125.00 is payable in this case in addition to the minimum fee.
7. (7) Where a new requirement is imposed on firms under the PRA Rulebook or an existing requirement amended but does not take effect until a future fee year, in the absence of an express statement to the contrary, firms must comply with the new requirement immediately in so far as it relates to the supply of information under 3.6 (1).

3.7

A firm in its first fee year pays periodic fees based on its projected valuation for the first twelve months of its new business as follows:

1. (1) The calculation requires the firm to identify, in Table III of the Periodic Fees Schedule, the tariff rates which will be relevant to it as a result of its new or extended permission and apply the formula in 3.7 (2). The resulting figure will be the periodic fee payable by the firm for its first fee year.
2. (2) The formula referred to at 3.7(1) is (A+B) x C, where:
1. A = the amount arrived at by applying the tariff rates in Table III of the Periodic Fees Schedule to the firm’s projected valuation for its first year of new business, as provided to the PRA or its collection agent during the application and data collection process;
2. B = the A.0 minimum fee, unless already paid; and
3. C = the number of calendar months (inclusive) between the calendar month during which the firm received its new or extended permission and the last calendar month of the fee year ÷ 12.

3.8

3.9 applies only to firms in the deposit acceptors fee block (A1), the general insurance fee block (A3) or the life insurance fee block (A4).

3.9

Subject to 3.10, where in:

1. (1) its second fee year; or
2. (2) any subsequent fee year,

a firm has not yet submitted sufficient tariff data to enable the periodic fees calculation at 3.6 (1) to be made in respect of that fee year, periodic fees will be calculated in accordance with Table A below:

Table A
Deposit acceptors fee block (A1)	Either: (1) if the firm is in its second fee year and received permission relevant to the activity between 1 January in its first fee year and 1 April in its second fee year, apply projected valuations as set out in 3.7; or (2) apply the formula (A÷B) x 12 to arrive at an annualised figure, where A = its tariff base, as if its MELS for the month of December prior to commencement of the relevant fee year were its tariff base for the whole fee year; and B= the number of complete months in the period referred to in A.
General insurance fee block (A3) and life insurance fee block (A4)	Where under 3.4, the tariff base for an activity is to be calculated by reference to data for the firm’s financial year ending on the 31 December before the start of the fee year, a firm which has not completed a full financial year by that date should: (1) if it is in its second fee year and received its new or extended permission relevant to the activity between 1 January in its first fee year and 1 April in its second fee year, apply projected valuations as set out in 3.7; and (2) in any other case, apply the formula (A÷B) x 12 to annualise the tariff data it has available, where: A = its tariff base calculated by reference to tariff data for the period starting on the date the firm received permission for the relevant activity and ending on the earlier of the 31 December prior to the start of its second fee year or the 31 December prior to the start of the firm’s financial year; and B= the number of complete calendar months in the period referred to in A.

3.10

Except in the circumstances to which 3.9 applies, firms in their second fee year or any subsequent fee year after receiving a new or extended permission must calculate their new or additional liability for periodic fees in accordance with 3.4.

3.11

The following modifications to periodic fees will apply:

1. (1) In relation to incoming EEA firms and incoming Treaty firms:
1. (a) the modifications in 3.7 apply only in relation to the relevant regulated activities of the firm which are EEA passported activities or activities of a Treaty firm exercising rights under Schedule 4 of FSMA; and
2. (b) the tariff rates set out in Table III of the Periodic Fees Schedule only apply to the regulated activities of the firm in the United Kingdom and the tariffs are modified in accordance with Table IV of the Periodic Fees Schedule.
2. (2) Periodic fees in the A3 general insurance fee block and the A4 life insurance fee block payable by firms outside the scope of the Solvency II Directive are subject to the modifications in Table V of the Periodic Fees Schedule, to be applied to the final figure arrived at under 3.3 (3) once all other modifications relevant to the firm have been taken into account.

3.12

Where:

1. (1) a firm (A) acquires all or part of the business of another firm (B) in relation to which a periodic fee would have been payable by B; or
2. (2) A becomes authorised as a result of B’s simple change of legal status as defined in 4.5 (4), the following rules apply:
1. (a) if before the date of the acquisition, B had already paid the periodic fees in relation to the business or part of the business acquired by A, A will not pay a further fee; and
2. (b) if the acquisition occurs after the valuation point applicable to the business or part of the business acquired as set out in 3.4, A will pay periodic fees in relation to the period following the acquisition as if the acquisition had occurred immediately before the relevant valuation point.
3. (3) Where the acquisition involves a calculation of periodic fees for the A4 life insurers fee block:
1. (a) when calculating the new regular premium business element of its adjusted gross premium income, A should not include business transferred from B under the procedure set out in Part VII of FSMA during the relevant financial year unless the transfer involved the creation of new contracts between the policyholders subject to the transfer and A;
2. (b) If any business is transferred to A from B under the procedure set out in Part VII of FSMA and that business would have been included in B’s tariff base in the absence of the transfer, that business should be included in A or B’s tariff base depending on the date of transfer as required by 3.12(2)(b).
3. (c) Mathematical reserves for fees purposes should include all new business transferred from B.

3.13

If a firm makes an application to cancel or reduce the scope of its Part 4A permission before the start of a fee year, the obligation to pay periodic fees under 3.1 will apply as if the relevant variation or reduction in scope had also taken effect immediately before the start of the fee year.

3.14

Other than where the PRA exercises the discretion in 2.9 it will not waive liability for, or refund, periodic fees after the start of the fee year to which they relate should the firm cancel its Part 4A permission or if the new business activity or event which has given rise to the fee no longer applies to the firm.

3.15

The due date for payment of periodic fees is as follows:

1. (1) Subject to 3.15 (3), any firm whose total liability for periodic fees in the previous fee year was less than £50,000 must pay the total periodic fee due for the current fee year in full by 1 August.
2. (2) Any firm whose combined total liability for periodic fees payable to the FCA and the PRA in the previous fee year was £50,000.00 or above must pay its periodic fees for the current year in two tranches as follows:
1. (a) an amount equal to 50% of the PRA periodic fee payable in the previous fee year on or before 1 April in the current fee year; and
2. (b) the balance of the periodic fee for the current fee year by 1 September.
3. (3) If a firm cancels its Part 4A permission in the way set out in Permissions and Waivers or the PRA has exercised its own-initiative powers to cancel a firm’s Part 4A permission, the total amount of periodic fees for the fee year, less any amounts already paid, become payable immediately before the cancellation takes effect.

3.16

A fee payer need not pay a periodic fee on the due date for payment under the relevant provision of 3 if that date falls during a period during which circumstances described in General Provisions 2.2 exist and the firm has reasonable grounds to believe that those circumstances impair its ability to pay the fee, in which case the firm must pay on or before the fifth business day after the end of that period.

3.17

Fee-payers must comply with directions from the PRA or its collection agent as to payment of periodic fees arising from any variance between budgeted and actual AFR or any corrections to the AFR once final, audited figures are available in relation to any fee year. As the PRA may determine:

1. (1) a surplus of fee income against AFR may result in a credit to firms or fee blocks; and
2. (2) a shortfall may necessitate a call for additional fees.

3.18

In the fee year commencing on 1 March 2016 and subsequent fee years:

1. (1) The PRA will charge a ring-fencing implementation fee to recover the annual cost to the PRA, as determined by the PRA, of implementing ring-fencing.
2. (2) All firms within ring-fencing fees groups are subject to ring-fencing implementation fees. The PRA may require that a single firm pays all ring-fencing implementation fees due to the PRA by the group.
3. (3) In each fee year the PRA will allocate to each ring-fencing fees group the proportion referred to in 3.18 (4) of the cost referred to in 3.18 (1). An amount reflecting this proportion will be the total fee payable by the group.
4. (4) The proportion referred to in 3.18 (3) was determined by the PRA as at 1 March 2016 in accordance with the following formula (all figures rounded to the nearest whole number):

[(X + Y) ÷ 2] %

where

X = [core deposits (ring-fencing fees group) ÷ core deposits (all ring-fencing fees groups)] x 100

and

Y = [assets outside expected RFB sub-group (ring-fencing fees group) ÷ assets outside expected RFB sub-groups (all ring-fencing fees groups)] x 100

1. (5) Fee payers must comply with directions from the PRA or its collection agent as to payment of ring-fencing implementation fees arising from any variance between the PRA’s budgeted costs under 3.18 (1) and its actual costs once final, audited figures are available in relation to any fee year. A surplus of fee income against the PRA’s actual costs may result in a credit to the firms making payment and a shortfall may necessitate a call for additional fees.
2. (6) Where an application for a new authorisation or variation of Part 4A permission is made in the context of ring-fencing, no regulatory transaction fee will be payable under 4.5 or 4.7 if a ring-fencing implementation fee is payable under 3.18 whether by the applicant or another fee payer.

TABLE 1 MINIMUM PERIODIC FEES RATES

Fee payer	Fee payable (£)
Credit unions with MELs under £2.0 million:
With modified eligible liabilities of 0 – 0.5 million	80.00
With modified eligible liabilities greater than 0.5million and less than 2.0 million	270.00
Non-directive friendly societies which either: (1) fall within the A3, but not the A4, fee block and have, in relation to their A3 activities, gross premium income of 0 - £0.5million and gross technical liabilities of 0- £1.0million; or (2) fall within the A4, but not the A3, fee block and have, in relation to their A4 activities, adjusted gross premium income of 0-£1.0 million and hold 0-£1.0million of mathematical reserves for fees purposes; or (3) fall within both the A3 and A4 fee blocks and meet condition (1) above in relation to their A3 activities and condition (2) above in relation to their A4 activities.	215.00
All other firms	500.00

TABLE II - TRANSITION COSTS ALLOCATION

Fee payer	Tariff base for allocations to firms
All firms, except those paying only the minimum fee and insurance special purpose vehicles.	Total periodic fees, excluding minimum fees, payable by the firm multiplied by 0.0627.

TABLE III – PERIODIC FEE RATES APPLICABLE TO PRA FEE BLOCKS OTHER THAN THE MINIMUM AND TRANSITION COSTS FEE BLOCKS

Column 1 Fee block	Column 2 Tariff base	Column 3 Tariff bands	Column 4 Tariff rates
A1 deposit acceptors fee block	modified eligible liabilities	Band width (£million of MELs)	Fee payable per million or part million of MELs(£)
		>10 - 140	36.66
		>140 – 630	36.66
		>630 - 1,580	36.66
		>1,580 - 13,400	45.83
		> 13,400	60.49
A3 general insurers fee block gross premium income + gross technical liabilities	gross premium income (GPI)	Band width (£million of GPI)	Fee payable per million of GPI (£)
		>0.5	541.25
	gross technical liabilities (GTL)	Band Width (£ million of GTL)	Fee payable per million of GTL (£)
		>1	30.30
		For UK ISPVs the tariff rates are not relevant and a flat fee of £430.00 is payable in respect of each fee year.
A4 Life insurers fee block adjusted gross annual income (AGPI) +mathematical reserves	adjusted gross annual premium income (AGPI)	Band width (£million of AGPI)	Fee payable per million of AGPI (£)
		>1	546.20
	mathematical reserves	Band width (£million of mathematical reserves for fees purposes)	Fee per million or part million of mathematical reserves for fees purposes (£)
		>1	11.57
A5 managing agents at Lloyd’s	active capacity	Band width (£million of active capacity)	Fee per million of active capacity (£)
		>50	57.15
A6 Society of Lloyd’s	flat fee	N/A	General periodic fee (£) 1,795,750.10
A10 Firms dealing as principal fee block	fee per trader	Fee (£ per trader)	5,537.00

TABLE IV – MODIFICATIONS TO PERIODIC FEES FOR INCOMING EEA FIRMS AND INCOMING TREATY FIRMS WITH BRANCHES IN THE UK

Fee payer	Discount applied to periodic fees
A1 deposit acceptors fee block	50%
A3 general insurers fee block	90%
A4 life insurers fee block	90%
PT1 transition costs fee block	100%
Incoming EEA firms and incoming Treaty firms offering cross border services only	100%

TABLE V – MODIFICATIONS TO PERIODIC FEES FOR NON-DIRECTIVE FIRMS IN THE A3 AND A4 FEE BLOCKS

Fee payer	Discount applied to periodic fees
A3 general insurers fee block	11%
A4 life insurers fee block	11%

4.1

This chapter does not apply to EEA firms wishing to exercise an EEA right.

4.2

Unless otherwise indicated in 4, the due date for payment of regulatory transaction fees is on or before the application is made.

4.3

Regulatory transaction fees incurred by a firm remain payable even if an application is withdrawn. Regulatory transaction fees once received by the PRA, or by the collection agent on its behalf, are non-refundable.

4.4

This Chapter 4 shows regulatory transaction fees payable to the PRA. As all PRA firms are dual regulated, fees may also be payable to the FCA.

4.5

Regulatory transaction fees for new authorisations are payable as follows:

1. (1) All applications for new authorisations other than from credit unions are first assigned to the complexity groupings in Tables B and C to assist the PRA in determining the appropriate fee. Fees are then payable in accordance with:
1. (a) Table B if the permission sought does not include consumer credit-related activities; and
2. (b) Table C if the permission sought involves consumer credit related activities.

Table B – New authorisations not involving consumer credit-related activities
Application type	£
Straightforward: A3 or A4 fee payer which is a friendly society	750.00
Moderately complex: A3 fee payer seeking permission as a UK insurance special purpose vehicle A5 fee payer seeking permission as a managing agent at Lloyd’s	2,500.00
Complex: A1 fee payer (other than a credit union) seeking permission to accept deposits or operate dormant accounts A3 fee payer (other than a friendly society or UK insurance special purpose vehicle) A4 fee payer other than a friendly society	12,500.00

Table C – New authorisations involving consumer credit-related activities
Application type	£
Straightforward: Fee payer seeking permission for credit broking or providing information services.	Annual consumer credit income £	Fee £
	50,000.00 or less	300.00
	Greater than 50,000.00 and less than 100,000.00	375.00
	Greater than 100,000.00 and less than 250,000.00	500.00
	Greater than 250,000.00 and less than 1,000,000.00	750.00
	Greater than 1,000,000.00	2,500.00
Moderately complex: Fee payer seeking permission for: (1) debt administration/debt collecting; (2) entering into regulated consumer hire agreement as lender (other than in relation to high-cost short term credit, bill of sale loan agreements and home credit loan agreements); (3) exercising or having the right to exercise the owner’s rights under a regulated consumer hire agreement; (4) exercising or having the right to exercise the lender’s rights and duties under a regulated consumer hire agreement (other than in relation to high-cost short term credit, bill of sale loan agreements and home credit loan agreements); or (5) operating an electronic system in relation to lending.	Annual consumer credit income £	Fee £
	50,000 or less	400.00
	Greater than 50,000.00 and less than 100,000.00	500.00
	Greater than 100,000.00 and less than 250,000.00	750.00
	Greater than 250,000.00 and less than 1,000,000	2,500.00
	Greater than 1,000,000.00	5,000.00
Complex Fee payer seeking permission for: (1) debt adjusting/debt counselling; (2) entering into a regulated credit agreement as lender in relation to high-cost short term credit, bill of sale loan agreements and home credit loan agreements; (3) exercising, or having the right to exercise, the lender’s rights and duties under a credit agreement as lender in relation to high-cost short term credit, bill of sale loan agreements and home credit loan agreements; or (4) providing credit references.	Annual consumer credit income £	Fee £
	50,000.00 or less	500.00
	Greater than 50,000.00 and less than 100,000.00	625.00
	Greater than 100,000.00 and less than 250,000.00	1,000.00
	Greater than 250,000.00 and less than 1,000,000.00	3,500.00
	Greater than 1,000,000.00	7,500.00

1. (2) Credit unions applying for new authorisations pay fees as follows:
1. (a) any credit union applying for a Part 4A permission for consumer credit related activities £100.00;
2. (b) a credit union which, prior to 3rd February 2016, would have been categorised as a Version 1 credit union applying for Part 4A permission not limited to consumer credit related activities £150.00;
3. (c) a credit union which, prior to 3rd February 2016, would have been categorised as a Version 2 credit union applying for Part 4A permission not limited to consumer credit related activities £900.00.
2. (3) Where an application is categorised as either straightforward or moderately complex and involves a simple change of legal status as defined in 4.5 (4), the fee payable for a new authorisation is discounted by 50%.
3. (4) An application involves only a simple change of legal status under 4.5(3) if it is from an applicant which:
1. (a) is a new legal entity intending to carry on the business, using the same business plan, of an existing firm where the latter has no outstanding regulatory obligations and is cancelling its Part 4A permission; and
2. (b) will:
1. (i) have the same or a narrower Part 4A permission and the same branches as the firm;
2. (ii) assume all of the rights and obligations in connection with any of the PRA regulated activities carried on by the firm;
3. (iii) continue the same compliance arrangements in relation to client assets and client money as the firm except for any changes required only as a result of the change of legal status; and
4. (iv) continue with a risk profile and arrangements for controlling and monitoring risk which will not be materially different from those of the firm.
4. (5) Where an applicant for a new authorisation is FCA authorised, the application will be treated as a variation of permission and fees will be payable in accordance with 4.7.
5. (6) Where a new authorisation under 4.5 or an exercise of Treaty rights under 4.6 relates to more than one PRA regulated activity, a single fee, being the highest applicable regulatory transaction fee, is payable.
6. (7) An application for a new authorisation is not deemed complete until the regulatory transaction fee is paid.

4.6

Regulatory transaction fees are payable as follows by incoming Treaty firms seeking to exercise a Treaty right in order to qualify for authorisation under Schedule 4 FSMA in respect of PRA regulated activities for which it does not have EEA passporting rights and which are not restricted to providing cross border services:

1. (1) unless 4.6 (2) applies:
1. (a) 50% of the amount payable under 4.5 if the permitted activities are being undertaken through the firm’s branch in the United Kingdom; or
2. (b) 25% of the amount payable under 4.5 if the permitted activities are being undertaken by providing cross border services in the United Kingdom.
2. (2) No regulatory transaction fees are payable if HM Treasury has issued a certificate under paragraph 3(4) of Schedule 4 of FSMA confirming that equivalent protection is provided under the law of an EEA state other than the United Kingdom.

4.7

Where a fee-payer seeks to vary its existing Part 4A permission or is an FCA-authorised firm seeking to obtain or vary a Part 4A permission in relation to PRA regulated activity, regulatory transaction fees are payable as follows:

1. (1) if the firm is extending the scope of its Part 4A permission to include additional regulated activities, the fee will be 50% of the highest fee which would have been payable by that firm had it been applying for a new authorisation under 4.5; and
2. (2) no fee is payable if the variation involves a reduction in scope of a Part 4A permission with no increases in permission.

4.8

The transferor seeking regulatory consent for an insurance business transfer scheme under Part VII of FSMA pays regulatory transaction fees as follows:

1. (1) transfers involving long term insurance business £9,250.00; or
2. (2) all other transfers £5,000.00,

the due date for payment being on or before the date of any application to the PRA for the appointment of an independent expert.

4.9

For the purposes of 4.8 an insurance business transfer scheme involving more than one transferor or transferee may, at the PRA’s discretion, be treated as a single scheme to which only one fee will be applied. Where there is more than one transferor they will be jointly and severally liable for the fee.

4.10

A transferor in an insurance business transfer scheme may be liable to pay a regulatory transaction fee under 4.8 and a special project fee under 5 in relation to the same subject matter.

4.11

An applicant for a waiver or in relation to the treatment of assets of a United Kingdom insurance special purpose vehicle pays a fee of £20,000.00

4.12

4.12 - 4.15 apply only to CRR firms.

4.13

Regulatory transaction fees are payable as follows where a CRR firm seeks permission from the PRA in its capacity as United Kingdom regulator or consolidating supervisor:

1. (1) for permission to use one of the internal approaches referred to in 4.15 which require consent under Part Three of the CRR;
2. (2) to modify that approach once permission is granted; or
3. (3) for guidance as to the availability of such an approach or modified approach.

4.14

The due date for payment under 4.12 -4.15 is as follows:

1. (1) where the application is made directly to the PRA, on or before the application is made;
2. (2) otherwise within 30 days after the PRA notifies the firm that its EEA parent’s consolidating supervisor has requested assistance.

4.15

Where a CRR firm seeks permission to apply the internal model method for counterparty credit risk the fee payable is £54,000.00 and for other model approaches as set out in Table D below:

Table D: Model approaches under CRR other than the internal model method for counterparty credit risk
Applicant (groupings based on tariff data submitted by firms as at 31 December in the fee year prior to the fee year in which the fee is payable).	Column 1 Fee payable (£) except where Column 2 applies		Column 2 Fee payable (£) (firm with permission for foundation approach moving to an advanced approach.)
Where the application relates to CRD credit institutions or designated investment firms with five or more significant overseas entities within the same group.	model approach	£	67,000.00
	advanced IRB	268,000.00
	foundation IRB	232,000.00
	advanced measurement approaches	181,000.00
Where, at 31 December prior to the fee year in which the fee is payable, the applicant has (1) modified eligible liabilities in excess of £40,000,000.00; or (2) more than 200 traders.	model approach	£	58,000.00
	advanced IRB	232,000.00
	foundation IRB	198,000.00
	advanced measurement approaches	146,000.00
Where, at 31 December prior to the fee year in which the fee is payable, the applicant has (1) modified eligible liabilities greater than £5,000,000.00 and less than £40,000,000.00; or (2) between 26 and 200 traders.	model approach	£	23,500.00
	advanced IRB	94,000.00
	foundation IRB	72,000.00
	advanced measurement approaches	51,000.00
Where, at 31 December prior to the fee year in which the fee is payable, the applicant has (1) modified eligible liabilities of £5,000,000.00 or less; or (2) between 0 and 25 traders.	model approach	£	10,500.00
	advanced IRB	42,000.00
	foundation IRB	30,000.00
	advanced measurement approaches	24,000.00

4.16

Where the PRA has given notice to a fee payer of its intention to itself appoint a skilled person to:

1. (1) provide it with a report pursuant to s166(3)(b) of FSMA; or
2. (2) collect or update information pursuant to Section 166A(2)(b) of FSMA;

the fee will be the amount invoiced by the skilled person.

4.17

The due date for payment will be within 30 days of the invoice.

5.1

In the circumstances described in this Chapter, a firm may be required to pay a special project fee for restructuring in addition to the other fees that it pays.

5.2

An SPF for restructuring becomes payable by a firm if it engages, or prepares to engage, in activity which involves it undertaking or making arrangements with a view to any of the following:

1. (1) raising additional capital; or
2. (2) a significant restructuring of the firm or the group to which it belongs, including without limitation:
1. (a) mergers or acquisitions;
2. (b) reorganising the firm’s group structure; and
3. (c) reattribution.

5.3

No SPF for restructuring is payable if the transaction only involves the firm seeking to raise capital within the group to which it belongs.

5.4

An SPF for restructuring may also be payable by a firm if:

1. (1) the firm becomes subject to insolvency proceedings or steps are taken by someone entitled to do so to commence insolvency proceedings against the firm; or
2. (2) either the Bank of England or HM Treasury has exercised a stabilisation power in respect of the firm under the Banking Act 2009.

5.5

The PRA and the FCA will levy separate SPFs for restructuring and may do so in relation to the same event or circumstance.

5.6

SPFs for restructuring, once paid, are non-refundable.

5.7

The SPF for restructuring is calculated as follows:

1. (1) Determine the number of hours, or part of an hour, taken by the PRA in relation to regulatory work conducted as a consequence of the activities referred to in 5.2 or 5.4. The number of hours or part hours is as recorded on the PRA’s systems in relation to the work.
2. (2) Next, multiply the applicable rate in the table of SPF hourly rates below by the number of hours or part hours arrived at under 5.7(1):

3. SPF hourly rates
   Pay grade of persons employed by the PRA	Hourly rate
   Administrator	£30.00
   Associate	£60.00
   Technical specialist	£90.00
   Manager	£115.00
   Any other persons employed by the PRA	£170.00

4. (3) Then add any fees and disbursements invoiced to the PRA by any third party provider in respect of services performed for the PRA in relation to assisting the PRA in performing the regulatory work referred to in 5.2 and 5.4.
5. (4) The resulting figure is the fee.

5.8

The due date for payment of an SPF for restructuring is 30 days from the date of the invoice.

5.9

The obligation to pay an SPF for restructuring is ongoing. There is no limit to the number of times that the PRA may invoice a firm for the SPF for restructuring in relation to the same events or circumstances.

5.10

The SPF for restructuring is a single fee which may be payable under both 5.2 and 5.4.