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03 regulated-fees-and-levies-rates-proposals-2024-25-policy-statement
03 regulated-fees-and-levies-rates-proposals-2024-25-policy-statement
Content
1: Overview
Background
Summary of responses
Changes to draft policy
Implementation
Online fees calculator
2: Feedback to responses
Allocation to the A6 fee block
Internal model fees
Insurance Part VII transfers
PRA pensions liabilities
Appendices
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1: Overview
1.1 This Prudential Regulation Authority (PRA) policy statement (PS) provides feedback to
responses the PRA received to consultation paper (CP)4/24 – Regulated fees and levies:
Rates proposals 2024/25. It also contains the PRA’s final policy, as follows:
the fees rates to meet the PRA’s 2024/25 Annual Funding Requirement (AFR) for the financial
period Friday 1 March 2024 to Friday 28 February 2025 (‘fee year’); and
amendments to the Fees Part of the PRA Rulebook (Appendix 2).
1.2 This PS is relevant to all firms that currently pay PRA fees or are expecting to do so within the
2024/25 fee year.
1.3 None of the PRA statutory practitioner panels were consulted about the proposals in CP4/24.
Background
1.4 In CP4/24 the PRA proposed:
the fees rates to meet the PRA’s 2024/25 Annual Funding Requirement (AFR);
changes to the internal model application fees, the model maintenance fee and the fee
payable for insurance business transfers under Part VII FSMA;
setting out how the PRA intends to allocate the surplus from the 2023/24 AFR (Chapter 3); and
the retained penalties for 2023/24 (Chapter 4).
1.5 In determining its policy, the PRA considers representations received in response to
consultation, publishing an account of them and the PRA’s response (‘feedback’). Details of any
significant changes are also published. In this PS, the ‘Summary of responses’ contains a general
account of the representations made in response to the CP and the ‘Feedback to responses’
chapter contains the PRA’s feedback.
1.6 In carrying out its policymaking functions, the PRA is required to have regard to various
matters. In CP4/24 the PRA explained how it had regard to the most relevant of these matters in
relation to the proposed policy.
Summary of responses
1.7 The PRA received two responses to the CP. The name of the respondent to the CP who
consented to their name being published is set out at Appendix 1. The other respondent did not
consent to the PRA publishing their name. ‘Respondents made a number of observations and
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Implementation
1.9 The implementation date for the PRA Rulebook: PRA Fees Amendment Instrument 2024
is Tuesday 9 July 2024.
2: Feedback to responses
2.1 Before making any proposed rules, the PRA is required by the Financial Services and
Markets Act (FSMA) 2000 to have regard to any representations made to it in response to the
consultation, and to publish an account, in general terms, of those representations and its
feedback to them.[1]
2.2 The PRA has considered the representations received in response to the CP. This chapter
sets out the PRA’s feedback to those responses, and its final decisions.
2.3 The PRA received two responses to the CP, regarding the following:
2.4 The PRA has considered all the responses set out above and has decided to maintain its
proposed approach as set out in CP4/24.
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2.6 One respondent sought clarification on how the A6 fee block allocation is calculated with
another respondent saying they were unclear on whether the approach to the A5 and A6 fee block
allocations was consistent with the level of engagement and oversight provided by the PRA. In
paragraph 2.6 of the CP the PRA states the allocation to fee blocks is based on the anticipated
work to be performed by the PRA within each area and reflects the PRA’s risk-based approach.
The fee block allocations have been consistently determined by the activities the PRA anticipates
conducting in the forthcoming fee year, so there is a direct link between the allocations and the
level of oversight applied.
3.1 The PRA’s AFR for 2024/25 is £331.3 million, which is £22.0 million higher than the AFR for
2023/24 of £309.3 million. The AFR is unchanged from the AFR proposed in CP4/24.
3.2 Table 1.A sets out the allocation of the PRA’s AFR to fee blocks for 2024/25 and provides
comparison to the draft allocation set out in CP4/24, and the allocation for 2023/24 fee year.
Table 1.A: Allocation of AFR for 2024/25 to fee blocks and comparison to the draft
allocation[2]
AFR
3.3 Table 1.B sets out an analysis of the final tariff data for 2024/25 fee year, used to allocate the
PRA’s AFR to firms within fee blocks compared to the draft data presented in CP4/24.
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Table 1.B: Analysis of tariff data for allocation of fees within fee block compared to draft
tariff data[3]
Fee Tariff basis 2024/25 2024/25 Mvt to 2024/25 2024/25 Mvt to Mvt in fee
block final number draft number number final tariff draft tariff tariff rates from
of firms of firms of firms data data data draft
(£ billion) (£ billion)
3.4 The final fees rates for 2024/25 are largely unchanged from those stated in CP4/24. As
highlighted in CP4/24, the indicative fee rates for the A3 and A4 fee blocks were completed
using 2023/24 fee tariff data, as the Solvency II reporting deadline was after the publication of the
CP which meant the draft rates were a less useful predictor of the final fee rates.
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3.5 The final proposals for the model maintenance fees are unchanged from those proposed in
CP4/24 except for correcting a typo in the draft instrument relating to credit institutions with
modified eligible liabilities in excess of £40,000 million or designated investment firms with total
assets for fees purposes in excess of £100,000 million operating an AMA (advanced
measurement approaches) model.
4. The PRA’s statement of accounts for the year ended 29 February 2024 will be available in the Bank of England Annual
Report and Accounts 2024.
Appendices
Appendix 1: List of respondents who have consented to the publication of their names (PDF)
Note: All content for this PS is included on this webpage. If you would like a PDF version of the
PS, please use the button available below.
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