FSCS Management Expenses Levy Limit and Base Costs

1.1

This Part applies to the FSCS.

1.2

In this Part, the following definitions shall apply:

contracts of insurance

has the meaning given in Article 3(1) of the Regulated Activities Order.

FCA compensation scheme rules

means the rules of the compensation scheme that are FCA rules.

management expenses levy

means a levy imposed by the FSCS to meet management expenses.

operating a dormant account fund

means any of the regulated activities specified in:

1. article 63N(1)(a) of the Regulated Activities Order (meeting of repayment claims); or
   
   
2. article 63N(1)(b) of the Regulated Activities Order (managing dormant account funds (including the investment of such funds)).

participant firm

has the meaning given in the PRA Handbook for the purposes of the PRA’s rules in FEES 1 and has the meaning given in the FCA Handbook for the purposes of the FCA’s rules in FEES 1.

policyholder protection scheme

means the compensation scheme for claims under contracts of insurance.

PRA class

means a class to which the FSCS allocates levies in accordance with PRA rules.

regulatory costs

means the periodic fees payable to the PRA or FCA by a participant firm (and where applicable, the Society) in accordance with FEES 4 in the PRA Handbook and FEES 4 in the FCA Handbook.

1.3

Unless otherwise defined, an italicised expression used in this Part and in the Depositor Protection Part, has the same meaning as in the Depositor Protection Part.

1.4

Unless otherwise defined, an italicised expression used in this Part and in the Dormant Account Scheme Part, has the same meaning as in the Dormant Account Scheme Part.

2.1

The total of all management expenses levies attributable to the period 1 April 2015 to 31 March 2016 of the deposit guarantee scheme, the dormant account scheme or the policyholder protection scheme may not exceed £74,429,000 less whatever management expenses levies the FSCS has imposed in accordance with FCA compensation scheme rules attributable to that period.

3.1

The FSCS must calculate a share of a base costs levy for a firm, a dormant account fund operator and, where applicable, the Society by:

1. (1) identifying the base costs which the FSCS has incurred, or expects to incur, in the relevant financial year of the compensation scheme but has not yet levied and allocating 50% of those base costs as the sum to be levied on participants in PRA classes;
   
   
2. (2) calculating the amount of the regulatory costs of the firm or dormant fund operator (or, where applicable, the Society) as a proportion of the total regulatory costs of all participant firms (and, where applicable, the Society) for the relevant financial year; and
   
   
3. (3) applying the proportion calculated in (2), if any to the sum in (1).