RMA-J Data required for collection of fees: help text (for reporting period ending 31 March)

Read our help text for Gabriel submission RMAR section J (RMA-J) data required for collection of fees. For firms with a reporting period ending on or before 31 March 2019.

Firms must report tariff data for fees and levies in RMA-J once a year. The section J return will appear on your Gabriel schedule for your year-end.
 

The tariff data information is required so that we can calculate the fees and levies payable by the firm in respect of the FCA, the Financial Ombudsman Service (FOS) and the Financial Services Compensation Scheme (FSCS)

Details of existing fees rules and guidance are available in the Fees Manual (FEES)

RMA-J helptexts are subject to change during the year due to our consultations on our fees rules. Before completing the RMA-J, you should therefore also refer to the latest publications on fees. These will explain any proposed changes to the tariff data you must report, and the expected date when any changes will be implemented.

For further information on fees and levies, please visit our fees web pages

General information for reporting fee tariff data in RMA-J

All monetary amounts in RMA-J must be stated in whole numbers in pounds sterling. For example, a figure of five thousand pounds and thirty pence should be entered as '5000'.

What data should be reported in Section RMA-J?

In the applicable reporting period, the rules require that you must provide tariff data in RMA-J for the fee blocks provided on your return. All fields are mandatory and need to be completed with the relevant figure, eg if all your regulated income is eligible for the FSCS and the FOS, the full regulated income should be entered in each field respectively. Please note that you cannot submit the return leaving a field blank in part 1 of RMA-J. Any field for which you have no relevant income should be confirmed by reporting zero.

Notes for completion of the RMA- J return can be found in SUP 16  Annex 18B The form layout of RMAR (including RMA-J) is set out in SUP 16 Annex 18A. The rules setting out which firms must complete RMA-J is contained in SUP 16.12.

Please be aware of the following:

  • Annual income: Although most other sections of the RMAR have a reporting period of 6-monthly or shorter, the data you report in RMA-J should cover the 12 months ending on your latest accounting reference date (ARD). Example: If a firm's ARD is 31 December; the firm must complete RMA-J for the year ending 31 December 2018 in the RMAR it completes for the period 1 July 2018 to 31 December 2018. This data will be used to calculate the firm's fees & levies for the 2019/20 fee year invoice.
  • Note for firms which do not yet have data for a full 12 months ending on their accounting reference date: Firms which do not yet have data for a full 12 months ending on their accounting reference date (for example if they have not traded for a complete financial year by the time of the ARD) should complete Section J with an 'annualised' figure based on the actual income up to their accounting reference date. That is, such firms should pro-rate the actual figure as if the firm had been trading for 12 months. Example: For a firm that has been trading for 2 months with an actual income of £2,000 as at its ARD, i.e. an average income of £1,000 per month, the 'annualised' figure that the firm should report is £1,000 x 12 = £12,000.
  • Relevant business in respect of the FOS: We define relevant business as business conducted with private individuals (consumers) and which is subject to the jurisdiction of the Financial Ombudsman Service (see DISP 2.3). If all regulated income reported for FCA is from individuals, then you should report the same number under FOS as for FCA. If all regulated income is from firms, then the FOS figure would be null.
  • Annual eligible income in respect of the FSCS: Eligible income refers to income conducted with individuals or firms that can make a claim to the Financial Services Compensation Scheme (see COMP 4.2).
  • Note for firms conducting pure protection business for the reporting period ending 2018 onwards - data used to calculate FSCS levies from the 2019/20 levy year Firms need to be aware of the change in reporting eligible income for pure protection policies.  This follows the final policy and rules set out in chapter 2 of our CP18/11 11 ‘Reviewing the funding of the Financial Services Compensation Scheme (FSCS): feedback from CP17/36, final rules and new proposals for consultation. This change takes effect for the 2019/20 levy year. Firms should no longer report income for pure protection contracts in FSCS life distribution & pensions class (SC02). Pure protection income should be reported in the General insurance distribution class (SB02) from the firm’s financial year ending in 2018. It may benefit you to report tailored income for FOS and FSCS if there is a material difference between your total annual income and the income you earn from relevant business in relation to FOS levies or business conducted with eligible claimants in relation to FSCS levies. If you choose not to tailor income it is unlikely you will be able to change this at a later date.
  • FSCS new funding classes: From 2019/20 the following FSCS categories will replace 2018/19 levy classes. The FSCS data reported for your 2018 year-end will be used to calculate your 2019/20 levies for the new FSCS categories:

Table 1: New FSCS categories 2019/20

FSCS class (2018/19 levies) New FSCS category (2019/20 levies)
SE02 - home finance intermediation 4.1 - home finance intermediation
SB02 - general insurance distribution 1.1 - general insurance distribution

SC02 - life distribution and pensions intermediation

SD02 - investment intermediation

2.1 - life distribution and investment intermediation (the data reported in SC02 and SD02 will be combined for calculating levies in this category)

How should Section RMA-J tariff data be calculated?

The definitions of tariff data vary according to the activities the firm is undertaking. The following table gives a summary of the tariff data to be reported, and where this is defined in the Handbook. This will help your firm calculate the figure(s) to insert in the relevant fields in RMA-J. To get an indication of your likely fees and levies, you may wish to use the ‘online fee calculator’ available on our fees web pages.

Table 2: Summary of data to be reported in Section J of the Retail Mediation Activities Return

  FCA Financial Ombudsman Service FSCS
Home finance intermediation

Annual income

This is the data needed for fees in the A.18 fee-block (home finance providers, advisers and arrangers).

The Handbook rules on tariff data for this fee are in FEES Chapter 4 Annex 1A Part 3.

Further guidance on how to calculate this data can be found below.

Relevant annual income

This is the data needed for the levy in FOS industry block 16.

Please only include income from consumers.

The Handbook rules on tariff data for this levy are in FEES Chapter 5 Annex 1R

Further guidance on how to calculate this data can be found below.

 

Annual eligible income

This is the data needed for the levy in FSCS class SE02 Home finance intermediation.

The Handbook rules on tariff data for this levy are in FEES Chapter 6 Annex 3.

General insurance distribution

Annual income

This is the data needed for fees in the A.19 fee-block (general insurance distribution).

The Handbook rules on tariff data for this fee are in FEES Chapter 4 Annex 1A Part 3.

Further guidance on how to calculate this data can be found below.

Relevant annual income

This is the data needed for the levy in FOS industry block 17.

Please only include income from consumers.

The Handbook rules on tariff data for this levy are in FEES Chapter 5 Annex 1R

Further guidance on how to calculate this data can be found below.

Annual eligible income

This is the data needed for the levy in FSCS class SB02 General insurance distribution.

The Handbook rules on tariff data for this levy are in FEES Chapter 6 Annex 3. (please see notes above in relation to reporting income from pure protection contracts).

Life distribution & pensions intermediation

Annual income

This is the data needed for fees in the A.13 fee-block (advisors, arrangers, dealers or brokers).

The Handbook rules on reporting tariff data for this fee are in FEES Chapter 4 Annex 1A Part 3.

Further guidance on how to calculate this data can be found below.

Relevant annual income

This is the data needed for the levy in FOS industry blocks 8 and 9.

Please only include income from consumers.

The Handbook rules on tariff data for this levy are in FEES Chapter 5 Annex 1R.

Further guidance on how to calculate this data can be found below.

Annual eligible income

This is the data needed for the levy in FSCS class SC02 Life distribution and pensions intermediation.

The Handbook rules on tariff data for this levy are in FEES Chapter 6 Annex 3.
(please see notes above in relation to reporting income from pure protection contracts).

Investment intermediation

Annual income

This is the data needed for fees in the A.13 fee-block (advisors arrangers, dealers or brokers).

The Handbook rules on  tariff data for this fee are in FEES Chapter 4 Annex 1A Part 3.

Further guidance on how to calculate this data can be found below.

Relevant annual income

This is the data needed for the levy in FOS industry blocks 8 and 9.

Please include income from consumers only.

The Handbook rules on tariff data for this levy are in FEES Chapter 5 Annex 1R.

Further guidance on how to calculate this data can be found below.

Annual eligible income

This is the data needed for the levy in FSCS class SD02 Investment intermediation.

The Handbook rules on tariff data for this levy are in FEES Chapter 6 Annex 3.

Guidance on calculating and apportioning income for FCA fee block A.13 and FOS industry block I008/9

The income split for FCA and the FOS between Investment intermediation and Life distribution & pensions intermediation should be done on the same basis as for FSCS (FEES Chapter 6 Annex 3, please see the notes above in relation to reporting income from pure protection contracts).

Life distribution and pensions mediation– for the purpose of reporting tariff data for FCA and FOS

Business conducted under any of the activities below in relation to long-term insurance contracts (excluding pure protection contracts); a stakeholder pension scheme or a personal pension scheme:

Investment mediation – for the purpose of reporting tariff data for FCA and FOS

Any of the following activities in relation to designated investment business:

But excluding activities that relate to long-term insurance contracts or rights under a stakeholder pension scheme or a personal pension scheme.

General definition of annual income for fee-blocks A13, A18 and A19

'Annual income' for a particular fee block (the 'relevant fee block') is the gross inflow of economic benefits (i.e. cash, receivables and other assets) recognised in the firm's accounts during the reporting year in respect of, or in relation to, the provision in the UK of the regulated activities specified in FEES 4 Annex 1A R Part 1 as belonging to the relevant fee block.

The figure should be reported for the relevant fee block without netting off the operating costs or business expenses, but including:

  1. all brokerages, commissions, fees, and other related income (for example, administration charges, overriders, profit shares etc) due to the firm in respect of, or in relation to, the provision in the UK of the regulated activities specified in FEES 4 Annex 1A R Part 1 as belonging to the relevant fee block and which the firm has not rebated to clients or passed on to other authorised firms (for example, where there is a commission chain).

PLUS:

  1. any ongoing commission from previous business received by the firm during the reporting year

PLUS:

  1. the fair value' of any goods or services the firm provided to clients. This is the commission equivalent or an estimate of the amount the firm would otherwise have received for any regulated activity under (a) above, but for which it has made a business decision to waive or discount its charges.

Where the firm’s regulated activities are carried on by an appointed representative of the firm

The firm's annual income must include income received by an appointed representative carrying a regulated activity in a relevant fee block on behalf of the firm.

The appointed representative's annual income must be calculated in the same way as the firm's. However, to avoid double counting, the appointed representative's annual income must not include any income also recognised in the firm’s accounts, including income recognised as a result of a commission sharing arrangement with the appointed representative.

Where the relevant fee-block is fee-block A.18

For the purposes of calculating annual income for fee-block A.18, also include the following:

  1. for any home finance mediation activity carried out by the firm for which it receives payment from the lender or provider on a basis other than that in (a), the value of all new mortgage advances and amounts provided under other home finance transactions resulting from that activity multiplied by 0.004;

PLUS:

  1. if the firm is a home finance provider, the value of all new mortgage advances and amounts provided under other home finance transactions which are regulated mortgage contracts, home purchase plans, home reversion plans or regulated sale and rent back mediation activity, multiplied by 0.004, excluding mortgage advances and home finance transactions which result from home finance mediation activity carried on by another firm, where payment has been made by the home finance provider to that other firm under (a);

PLUS:

  1. for firms whose permission includes administering regulated mortgage contracts, but not entering into a regulated mortgage contract and firms whose permission includes administering a home finance transaction but not entering into a home finance transaction, and in either case whose permission does not include advising on a home finance transaction, the relevant amounts are multiplied by 0.15.

Where the relevant fee-block is fee-block A.19

For the purposes of calculating annual income for fee-block A.19, also include the following:

  1. in relation to any activities in (a), for any insurance distribution activity carried out by the firm for which it receives payment from the insurer on a basis other than that in (a), the amount of premiums receivable on its contracts of insurance multiplied by 0.07

PLUS:

  1. if the firm is an insurer in relation to the activities in (a), the amount of premiums receivable on its contracts of insurance multiplied by 0.07, excluding those contracts of insurance which:
  • result from insurance distribution activity by another firm, where payment has been made by the insurer to the firm under (a) or
  • are not general insurance contracts or pure protection contracts.

AND

  • for the purposes of calculating annual income for fee-block A.19:
  • the provision in the UK of the regulated activities specified in FEES 4 Annex 1A Part 1 as belonging to the relevant fee block includes the provision of activities that would have been insurance distribution activity in relation to general insurance contracts or pure protection contracts if they had been carried on after 13 January 2005 or, in relation to connected travel insurance contracts, from 1 January 2009; - a reference to a "firm " includes a reference to any person, including a connected travel insurance intermediary, who carried on activities which would be insurance distribution activity (in respect of general insurance contracts or pure protection contracts) if they had been carried on after 13 January 2005 or, in relation to connected travel insurance contracts, from 1 January 2009. Guidance on the interpretation of this definition is presented in FEES 4 Annex 13 G.

Calculating annual income

Defining relevant income streams

  1. The firm should refer to the fee-block definitions in FEES 4 Annex 1AR, Part 1 to decide which particular income streams should be taken into account when calculating its annual income for the purposes of fee-blocks A.13, A.18 and A.19.
  2. For the avoidance of doubt, the only income streams reportable for a relevant fee-block are those income streams which relate to a regulated activity listed in that fee-block. Income streams that do not relate to a regulated activity listed in the relevant fee-block should not be reported. Firms should exclude from the calculation of their annual income for any particular fee-block all income directly derived from the performance of regulated activities belonging to other fee-blocks.

For example:

  • interest from loans made in the course of providing or administering home finance (A.2) should be excluded from commission earned from arranging home finance agreements (A18)
  • premium interest from carrying out or effecting life insurance contracts (A.3), income from managing the underwriting capacity of a Lloyd’s syndicate as a managing agent at Lloyds (A.5) should be excluded from commissions for arranging general insurance (A.19)
  1. Firms should only include revenue streams that relate to regulated activities which are carried on 'in the United Kingdom'. In many cases, it will be quite straightforward to identify where an activity is carried on. But when there is a cross-border element, for example because a client is outside the United Kingdom or because some other element of the activity happens outside the United Kingdom, the question may arise as to where the activity is carried on. PERG 2.4 generally and PERG 4.11 regarding activities relating to regulated mortgage contracts, PERG 5.12 regarding activities relating to insurance mediation activities and PERG 14.6 regarding home reversion plans and home purchase plans describe the legislation that is relevant to this question and gives the FCA's views on various scenarios.

​​​​Reporting period

  1. The 'reporting year' is the firm's financial year end during the calendar year prior to the FCA fee year. This fee year starts on 1 April. This is specified in part 5 of FEES 4 Annex 1A.
     
  2. The income that should be included is the income that was recognised in the accounts of the relevant reporting year. This means that some income due may not be reported until the following year because it has not yet been recognised in the accounts, while other income may be carried forward from previous years.

Fair value

  1. Except in relation to fee-block A.18 and A.19 where one or more of paragraphs (d) to (f) or (g) to (i) of FEES 4 Annex 11A apply, the firm should report a “fair value” price for any services for which it has made a business decision not to charge to clients.

We consider fair value to refer to the amount at which goods or services could be exchanged in an arm’s length transaction between informed and willing parties, other than in a forced or liquidation sale.

For example, where a firm has forgone or discounted the commission or fee would actually have charged but for the business decision to grant a discount in a particular case or on a temporary basis, it should report the amount it would have otherwise have charged for providing equivalent activities.

In the case of home finance mediation in fee-block A.18 and general insurance intermediation in fee-block A.19 where one or more of paragraphs (e) to (f) or (g) to (i) of FEES 4 Annex 11A apply, instead of asking for firms to estimate fair value, certain ratios are prescribed in FEES 4 Annex 11BR where the client is not charged directly for the service provided.

Inclusions

Annual income should include:

  1. all amounts due to the firm arising out of the regulated activities referred to in the relevant fee block for which the firm holds permission, including regular charges and instalments due to the firm during the reporting year
  2. any payment from a parent to facilitate the discounting or forgoing of any amounts that would otherwise be charged in full to a client, to the extent that the payment exceeds the fair value price reported in accordance with paragraph (6) above
  3. (i) amounts earned by a firm's appointed representative when carrying on a regulated activity for the firm to which FEES 4 Annex 11A applies, and(ii) amounts earned by a person who will become the firm's appointed representative immediately after authorisation
  4. administrative charges and any interest from income related to the regulated activities specified in the relevant fee block.

Additional inclusions in respect of fee-block A.18:

  1. a firm must include in paragraph (a) any survey and booking fees due to it in respect of home finance mediation activity.

Prohibited deductions

  1. Bad debts.
  2. Customer benefits such as cash rewards, complimentary travel insurance, air miles vouchers etc.
  3. Items such as general business expenses (e.g. employees’ salaries and overheads).
  4. Fines or penalties levied against the firm.
  5. Commission a firm pays another party to arrange a transaction with a client unless it receives a fee in respect of the same transaction.
  6. The difference (if positive) between the fee payable by a firm to another party for arranging a transaction and the amount payable to the firm by the end client in respect of that transaction (here, the firm must net any excess payable by the end client to zero).
  7. Payments made to clients by way of redress.

Exclusions

The following should be excluded from the calculation of annual income:

  1. To avoid double-counting, amounts which have been passed on to other firms may be excluded from the calculation of annual income, for example, where there is a commission chain. Transfers of income to other firms may be especially common within groups where, to present a single interface to clients, all amounts due to the group may be collected by one firm for subsequent redistribution to other firms within the group. It is for groups themselves to decide the most convenient way to report such annual income - i.e. whether the firm which receives the full amount should declare that full amount, or whether each firm in the group should report its separate distribution.
  2. Any payment from a parent to facilitate the discounting or forgoing of any amount that would otherwise be charged in full to a client should be excluded to the extent that the payment does not exceed or equal the “fair value” price reported in accordance with paragraph (6) above.
  3. Rebates to customers and fees or commissions passed onto other firms should be excluded.
  4. Authorised professional firms should exclude the income from non-mainstream regulated activities. They may estimate the proportion of their business that is derived from those activities and split the income from individual invoices accordingly.
  5. For the avoidance of doubt, income relating to or in respect of an activity is not part of annual income for the purposes of the definition in FEES 4 Annex 11A to the extent that the activity benefits from the exclusion in article 69 of the Financial Services and Markets Act 2000 (Regulated Activities Order) 2001 (Groups and joint enterprises). Firms should refer to the guidance on the application of this exclusion is contained in PERG 2.9.

Apportioning income

Where a firm cannot separate its income on the basis of activities, it may apportion the income on the basis of the proportionate split of business that the firm otherwise undertakes. For instance:

  1. If a firm receives annual income from a platform-based business it may report this in line with a wider breakdown of its activities.
  2. A firm providing corporate finance advice which does not maintain records of the split between regulated activities and non-regulated activities for individual cases may calculate that regulated business accounts for a certain proportion of its business overall and apply that as a multiplier across its income.
  3. A firm may allocate ongoing commission from previous business on the basis of the type of firm it receives the commission from. This avoids tracking back legacy business which may no longer match the provider's current business model.
  4. An authorised professional firm may estimate the proportion of its business that is derived from regulated activity and split its income for individual invoices accordingly.
  5. If a firm has invested income from regulated activities, then any interest received should be reported as income, in proportion to the volume of regulated business it undertakes to avoid tracking back old payments.
  6. Firms' systems ought to be able to distinguish UK from non-UK business to establish which conduct of business regime it was conducted under. If, however, they do not relate the figures back to income streams for the specific regulated activities in a particular fee-block then the firm may make a proportionate split as described above, calculating its regulated UK income on the basis of the overall split between UK and overseas income.
  7. It is for individual firms to determine how they should calculate the appropriate split of income. The FCA is not prescriptive about the methodology. It requires only that:
  • The approach should be proportionate - the FCA is looking for firms to make their best efforts to estimate the split.
  • The firm must be able on request to provide a sound and clearly expressed rationale for its approach - for example, if all invoices were analysed over a particular period, the firm should be able to justify the period as representative of its business across the year.
  • The methodology should be objective - for example, based on random sampling of invoices or random stratified sampling.
  • The firm must on request be able to provide an audit trail which demonstrates that the choice of methodology was properly considered at an appropriate level or in the appropriate forums within the firm, and the decision periodically reviewed at the same level or in an equivalent forum.