Reference Case Number: FOI8513
Freedom of Information: Right to know request:
Follow-up to FOI8347 and FOI8441:
Unfortunately, the provided information does not satisfy our request. We are looking to understand how the FCA is exercising its relief powers under the "FCA Handbook, FEES 2.3.1, especially where the circumstances mentioned in FEES 2.3.2A ("a mistake of fact or law by a fee or levy payer may give rise to an [exceptional] claim for [reduction of fees]") were engaged". We are interested to understand the FCA's decision-making process on applications under these provisions in the context of a mistake of fact or law made by a levy payer or another involved party.
We should therefore be grateful if you would provide us with case studies/summaries of the last 5 instances in the last 12 months where the FCA has exercised the abovementioned powers. This should not be too expensive for the FCA as it should not exceed the cost limit of £450 (18h) as per the Freedom of Information and Data Protection (Appropriate Limit and Fees) Regulations 2004.
The provision of this information is not precluded by s 348 of the Financial Services and Markets Act 2000, as s 348(4)(b) of the same provides that "Information is not confidential information if…it is in the form of a summary or collection of information so framed that it is not possible to ascertain from it information relating to any particular person." We are not interested in any specificity which could reveal the identity of the fee payer in question so all of this information can be omitted. We need a summary of the circumstances that led to the exercise of the relief powers and the reasons for the decision made by the FCA in the particular case.
FCA response:
Thank you for your email of 20 July 2021 in which you requested further information relating to “… instances in which the Financial Conduct Authority (the “FCA”) has exercised its relief powers under the FCA Handbook, FEES 2.3.1, especially where the circumstances mentioned in FEES 2.3.2A were engaged.”
You have asked us to provide you “… with case studies/summaries of the last 5 instances in the last 12 months where the FCA has exercised the abovementioned powers.”
Your request has been processed in line with the provisions of the Freedom of Information Act 2000 (FOIA) and we are able to provide you with the last five instances where the FCA has exercised its relief powers under FEES 2.3 (with identifying details removed). It should be noted that this includes occasions where firms were identified as having mistakenly under-reported, meaning they paid lower fees than they should have. Invoices were issued for the unpaid fee portions.
- Scenario 1
A firm’s regulatory fees for 2020/21 were reduced after it became aware of an error in its reporting leading to an overstatement of fee tariff data. Data of £16.5bn for the A7 fee block (funds under management) had been submitted, rather than data for the A13 fee block of around £250,000 (annual income from investment mediation). The FCA agreed this was a mistake originating from the firm’s external compliance advisor and that the equitable solution would be to refund the relevant fee portion of c.£75,000.
- Scenario 2
A firm’s regulatory fees for 2020/21 were reduced after it became aware that some of its fee tariff data had been submitted incorrectly. The number of home finance transactions, used to calculate fees for the A002 fee blocks and others, had been overstated. The FCA agreed this was a mistake and that the equitable solution would be to refund the relevant fee portion of c.£30,000.
- Scenario 3
A firm’s regulatory fees for 2020/21 were reduced after it became aware of an error in its reporting leading to an overstatement of fee tariff data. The value of funds under management, used to calculate fees for the A007 fee block and others, had been overstated. The FCA agreed this was a mistake and that the equitable solution would be to refund the relevant fee portion of c.£33,000.
- Scenario 4
A firm’s regulatory fees for 2020/21 were increased after it became aware of an error in its reporting leading to an understatement of fee tariff data. A projected income from investment mediation had been entered as 0 rather than around £2.5m. The FCA worked with the firm to record the correct information and issued an invoice for the difference in fees, which came to just over £3,000.
- Scenario 5
A firm’s regulatory fees for 2020/21 were increased after it became aware of an error in its reporting leading to an understatement of fee tariff data. Data for Financial Ombudsman Service and Financial Services Compensation Scheme fee blocks had been submitted as 0 when it should have been around £50,000 and £250,000 respectively. The FCA worked with the firm to record the correct information and issued an invoice for the difference in fees, which was around £500.