Bank of England Finalizes Fee-Levying Regime for Financial Market Infrastructures
06/19/2018The Bank of England has published a Policy Statement outlining the fees it intends to levy on Financial Market Infrastructures, namely CCPs, central securities depositaries, recognised payment systems and specified service providers to recognised payment systems.
The BoE is empowered under the Banking Act 2009 to levy fees on FMIs but has not so far exercised its power to do so. The BoE has instead funded its supervision of FMIs through the Cash Ratio Deposit scheme. The Policy Statement follows a recommendation in February 2017 from the BoE's independent evaluation office that the BoE review its approach to funding FMI supervision and consider whether levying fees on supervised FMIs would be appropriate. The BoE consulted in August 2017 on proposals to introduce a new funding structure for FMI supervision. A further joint consultation was launched by the BoE and HM Treasury in March 2018 on the detail of the proposed fee-levying regime and the proposed fees for the 2018/19 fee year. The rationale for introducing an FMI fee-levying regime is to allocate the costs of FMI supervision to those entities that directly benefit from the BoE's supervision.
The new fee-levying regime will replace the funding of FMI supervision from the CRD. The BoE does not propose to publish a list of FMIs and the categories into which they fall for the purposes of the fee levy. Instead, it will inform each FMI of its own categorization.
The BoE must obtain approval from HM Treasury of the scale of fees the BoE can levy in respect to the supervision of recognised payment systems and specified service providers. A statutory instrument providing such approval was laid before Parliament on June 19, 2018 and will come into force on July 10, 2018, which is the date the fee-levying regime takes effect.
Fees for 2018/19 will be charged pro-rata for the fee year. The full annual process of levying fees will commence from fee year 2019/20.
View the Policy Statement.
View the Banking Act 2009 (Fees) Regulations 2018 (S.I. 2018/734) and explanatory memorandum.
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