On 29 May 2020, the Bank of England (BoE) issued a consultation paper setting out proposals for its supervisory fees for financial market infrastructure (FMI) for 2020/21. The BoE is also consulting on certain amendments in relation to special project fees (SPFs).
The proposals include:
- the fee rates to meet the BoE’s 2020/21 funding requirement for its FMI supervisory activity and the policy activity that supports this, as permitted by the BoE’s fee-levying powers;
- how the BoE intends to apportion surpluses from the 2019/20 FMI fees; and
- amendments to the SPF invoicing process and the SPF hourly rate to be charged, where applicable.
The BoE’s annual FMI supervisory fee includes the costs of FMI supervision staff together with relevant policy support, specialist resources, corporate services and other costs associated with the work of the BoE FMI Directorate. The total cost for the 2020/21 fee year of the BoE’s FMI supervisory activity, and policy activity that supports this that is within scope of the BoE’s fee-levying powers, is expected to increase by 14% compared to the 2019/20 fee year. However, the BoE proposes to phase in this increase in the annual FMI supervisory fee over two years. Therefore, the proposed fees for 2020/21 are expected to total £9.1 million. Overall this is an increase of £0.6 million (7%) on the 2019/20 budget. This figure is provisional and may need to be revised at the end of the fee year.
The proposals in the consultation paper have been prepared under a number of resource assumptions that were made prior to recent events in relation to Covid-19. Therefore, there may be variation in the final fee rates for the 2020/21 fee year. Any variances will be addressed at the conclusion of the 2020/21 fee year through either a rebate or a request for additional fees. The BoE will endeavour to keep FMIs within scope of the annual FMI fee regime updated on fee impacts that relate to the response to Covid-19.
The deadline for comments on the consultation is 29 July 2020.