Feedback on Consultation Paper No. 1 2020 – Investment Business Fees

Summary

This is JFSC's feedback paper on Consultation Paper No.1 2020, confirming that Investment Business fee rates will increase by 16% as originally proposed. Only one response was received (supportive), and the JFSC proceeded with the fee changes to keep Investment Business fees proportionate with increases already applied across other regulated sectors. The final Investment Business Fees Notice is attached as Appendix A and sets out the new application, annual, late payment and late filing fees for the period 1 May 2020 to 30 April 2021.

• Fee increase: Investment Business fee rates increase by 16%, effective for the period 1 May 2020 to 30 April 2021.
• Application fees: Class A, B or C (or combination): £2,100; Class D only: £1,045; Class E only: £1,045.
• Annual fees: Class A/B/C: £3,405 base plus £2,380 per employee for the first 15 and £1,235 per additional employee (up to 25); Class D: £3,150 base plus £1,235 per employee for first 15 and £615 per additional employee (up to 25); Class E: £1,235 per fund on the relevant date.
• Covid-19 relief: Firms experiencing financial constraints due to Covid-19 may contact their supervisor to defer payment of the fee increase to the 2021 fee payment round.
• Late payment fee: An additional 5% of unpaid principal is charged the day after the due date and on the 1st of each subsequent month if the annual fee is unpaid.
• Administration fee: A £200 fee is charged (and repeated monthly) if a firm fails to supply information needed to calculate its annual fee by the due date.
• Late filing fee: A £100 fee per complete month or part thereof applies for any document required under the Law that is not filed or delivered by its due date, unless the JFSC has agreed in writing to a later date.

The JFSC also signalled that it intends to hold further strategic discussions with the Investment Business sector during 2020 and consult on potential changes to fee methodology to maintain proportionality across all fee-paying sectors.

Key obligations

• Registered persons carrying on Investment Business must pay the annual fee by 31 May 2020 (if already registered on 1 May 2020) or by the date their application is granted (if registered later).
• Firms must supply investment employee data needed to calculate their annual fee by the due date or incur a £200 administration fee, repeated monthly until supplied.
• Unpaid annual fees after the due date incur a 5% late payment fee, applied on the day after the due date and on the 1st of each subsequent month.
• Any registered person failing to file or deliver a required document by its due date must pay £100 per complete month or part thereof it remains outstanding, unless the JFSC has agreed in writing to a later filing date.
• New applicants for Investment Business registration must pay the specified application fee (varying by Class A/B/C, D, or E) on application.
• Firms registered after 31 December 2020 pay only half the annual fee otherwise payable.

Applies to

Investment Business firms, registered persons carrying on investment business (Class A, B, C, D and E)

Deadlines

• 31 May 2020: Due date for payment of the annual Investment Business fee for firms already registered on 1 May 2020.
• 1 May 2020 - 30 April 2021: Period for which the new Investment Business fee rates and notice are effective.
• 1 April 2020: Relevant date used to determine investment employees for fee calculation (or date of application if between 1 May 2020 and 30 April 2021).
• 31 December 2020: If a person is registered after this date, the annual fee payable on registration is halved.