The Bank of England’s fees regime for recognised payment systems and specified service providers supervision 2026/27

Overview

This CP sets out proposals for the Bank of England’s (the Bank’s) supervisory fees for recognised payment systems and specified service providers for 2026/27. This CP is relevant to operators of recognised payment systems and specified service providers that currently pay financial market infrastructure (FMI) supervisory fees to the Bank or firms that are expecting to do so within the 2026/27 fee year.^{footnote [1]} It is also relevant to any prospective Digital Settlement Asset (DSA) service providers, and specified service providers to those DSA service providers.

The proposals cover:

• The fee rates to meet the Bank’s 2026/27 funding requirement for its FMI supervisory activity in respect of recognised payment systems and specified service providers and the policy activity that supports this, as permitted by the Bank’s fee-levying powers.
• The Bank’s proposed hourly rates for special project fees (SPF) for 2026/27.

We signposted in last year’s consultation^{footnote [2]} that HMT is exploring options to increase the statutory fee cap for recognised payment systems and specified service providers, by regulations subject to Parliamentary approval. HMT issued a consultation paper on 15 July 2026 and the consultation period has now closed. HMT is preparing its response and will issue a consultation response document in due course. The Bank is working closely with HMT on this process.

The Bank is consulting ahead of HMT’s process concluding in order to consult on and finalise fees for 2026/27 before the end of the fee year. This consultation is based on both the existing fee cap and the increased fee cap pending the conclusion of HMT’s process on whether to make any changes to the fee cap. Changes to the fee cap would be effected by HMT regulations which would be subject to Parliamentary approval. Central counterparties (CCPs) and central securities depositories (CSDs) were consulted^{footnote [3]} separately earlier this year as they were unaffected by this potential change. The final fee will be confirmed in the fee policy statement, which we will issue once HMT have completed their process, and would explain any transitional pro-rating approach if the fee cap is increased part way through the fee year.

Background

The Bank of England regulates and supervises FMIs to safeguard financial stability to ensure that these key systems are prepared for, and resilient to, the wide range of risks that they face, so that they can absorb rather than amplify shocks. This in turn, provides the basis for sustained economic growth.

The annual supervisory fees set out in this consultation apply to those recognised payment systems and specified service providers within the Bank’s supervisory remit. The fees cover the costs of the Bank’s supervision, including the policy activity that supports this. The fees charged are proportionate to each firm’s impact category and our assessment of the potential disruption that they could pose to financial stability and the level of supervisory oversight required. Under legislation, the fee levied cannot exceed the costs of supervision to the Bank.

As set out in the HMT consultation, currently the supervision fee for recognised payment systems and specified service providers is subject to a cap of £760,000, per in-scope system or service provider in any one year (regulation 2(2) of the 2018 Regulations).^{footnote [4]} This cap has remained the same since 2018 and was based on an estimate of the maximum cost of supervision to the Bank of England for the five-year period following its introduction.

The cost of payments supervision to the Bank of England now exceeds the existing 2018 cap in part due to general inflationary cost pressures and the greater focus on operational resilience supervision (which requires supporting use of specialist resource) that has seen the cost of supervision for all FMIs increase over this timeframe. Driving factors that may further increase costs include – inflationary cost increases, any further necessary changes to the Bank of England’s supervisory approach and ongoing development of our payments policies over the coming years. This is a result of both the need to develop and maintain a simple payments rulebook, and policy amendments needed to reflect industry developments, enable safe and resilient innovation, and ensure end-to-end regulation of systemic payment systems.

The Government recognises the importance of the changes being made to the Bank’s supervisory approach and supporting policy framework in allowing the Bank to deliver on its objectives in the changing payments landscape. The Government proposed to raise the fee cap to £1.7 million per recognised payment system, Digital Settlement Asset (DSA) Service Provider or their respective specified service providers^{footnote [5]} in any one year.^{footnote [6]} This cap is intended to give some headroom over the Bank’s estimate of supervisory costs over the coming years, although changes in circumstance may lead to it needing to be revisited. This would ensure that the Bank’s costs of supervision are fully covered by the fees charged to operators of recognised payment systems, DSA service providers, and service providers in relation to such systems or DSA service providers.

Application of fee ratios across different impact categories of recognised payment systems and specified service providers

The Bank of England varies fees according to the impact category of a system. Smaller or less systemic systems, with lower potential to cause disruption to the financial system, require less intensive supervision. In its 2025/26 annual fee consultation, the Bank of England outlined its intention introduce a third fee category for less systemic payment systems. This is intended to encourage innovation and support new and less systemic payment systems by charging them lower fees, proportionate to the amount of supervisory work and oversight required. It will harmonise fee ratios across all FMI types. Following the conclusion of the 2025/26 consultation, we will apply these updated categories for the 2026/27 fee year.

Fee proposals for 2026/27

Remit of the fee regime

This section sets out proposals on fee rates to meet the Bank’s 2026/27 funding requirement for its FMI supervisory activity and the policy activity that supports this, as permitted by the Bank’s fee-levying powers. The proposed fees will enable the Bank to fund its FMI activity for recognised payment systems and specified service providers to support the Financial Stability Objective. The FMIs that are currently within the scope of the consultation on the FMI supervisory fee are recognised payment systems and specified service providers. More information can be found on the Bank’s website page for Financial market infrastructure supervision. The Bank does not consider that the proposals set out in this consultation paper have any implications for equality matters.

CCPs and CSDs were consulted separately earlier this year as they were unaffected by the potential change to the fee cap. It is our intention to return to an annual consultation that includes CCPs, CSDs and recognised payment systems and specified service providers within a single consultation in 2027/28.

HM Treasury has recently closed a consultation^{footnote [7]} on updating the fee regime to align with the expansion of Bank of England’s regulatory remit to include DSA service providers (and service providers to such DSA service providers) under the Financial Services and Markets Act 2023. Subject to the outcome of the HMT consultation and to Parliamentary approval of the resulting regulations, this fee regime if adopted (including the relevant cap) would also apply to any DSA service providers and service providers to DSA service providers that subsequently become subject recognised or specified (as applicable).

Composition of the fee

The Bank’s annual FMI supervisory fee includes the costs of FMI supervision together with relevant policy support, specialist resources, corporate services, and other costs associated with the work of the FMI Directorate. Information on the Bank’s FMI workplan, which is funded by the fees, is set out in its Annual Report on FMI supervision^{footnote [8]} which reflects the priorities discussed at the annual Chairs and CEOs meeting including supervision, policy, and our continued focus on strengthening operational resilience.

The overall costs of the FMI Directorate have seen a reduction over the past year reflecting a Bank-wide focus on efficiencies in the way that we work to support investment in technology.

Recognising the importance of managing the overall costs incurred by the financial sector, the Bank’s costs in aggregate are subject to tight cost control and are budgeted within constraints set by the Bank’s Court of Directors. Almost all (about 97%) of the Bank’s operational costs are recovered through levies and fees (refer to the annex for more details). These include the Bank of England (BoE) Levy, Prudential Regulation Authority (PRA) Levy, FMI Levy and Other (eg management fees for banknotes and the RTGS tariff).^{footnote [9]} In this way, the costs of running the Bank are allocated to different groups of levy/fee payers in proportion to the costs we incur in fulfilling our statutory objectives.

Proposed fees for 2026/27

The table below sets out the proposed fee for each category of recognised payment system and specified service provider based on the existing fee cap. The existing fee cap limits the amount of cost that can be recovered for this fee year so the figures provide an indication for illustrative purposes of what the amount on a full year basis would have been if the fee cap had been increased from the start of the fee year.

Our intention, subject to the outcome of the HMT consultation and approval by Parliament of resulting HMT regulations, would be to apply any change on a pro-rata basis against any increase in the fee cap for the remainder of the 2026/27 fee year from the date the regulations came into force and in accordance with the regulations. As an example, if the fee cap were to be increased and the legislation changed in eg November, we would recover against the fees charged under the increased fee cap for the remaining three months of the fee year.

Approach to fees for overseas firms

The Bank applies a reduction in fees for payment systems based overseas in respect of which the Bank has deference arrangements with the home authority. These fees are designed to recover costs incurred by the Bank in the supervision of the firm on which the fees are levied. These costs are normally determined solely by reference to the type of FMI and the category to which the FMI is allocated. However, some payment systems are based outside of the UK. The Bank is the host authority for these firms and will seek to establish co-operation arrangements with the firm’s home authority where possible and appropriate, such that the Bank is comfortable to generally defer to the home authority’s supervision. This is in line with the Bank’s general preference for strong and effective cross-border supervisory co-operation. The Bank will still engage directly with the firm where appropriate and will incur costs in relation to its interaction with the home authority. Overall, however, such deference arrangements are likely to reduce the Bank’s costs in respect of the firm compared with a situation in which they are absent. The nature and extent of deference will depend on the specific firm and authority in question.

As such, the Bank will apply a firm-specific reduction to the fees where such deference arrangements lead to a material reduction in the Bank’s costs of supervision. The amount of the reduction will be determined on a case-by-case basis and communicated bilaterally to the firm concerned. For the avoidance of doubt, this mechanism would not give rise to an automatic entitlement to a reduction of fees for overseas-based payment systems and any reductions will be reviewed on an ongoing basis.

Special project fee

The Banking Act 2009 (Fees) Regulations 2018 allow for the Bank of England to levy a Special Project Fee on an operator of a recognised payment system and specified service providers in relation to such system where the Bank of England considers that events require further supervision of such persons (regulation 2(1)(b) and (3)). These could be for work on one-off projects or significant activities that may be time limited or require additional supervisory resource to undertake. The Bank of England levies this fee infrequently and only following engagement with those in scope prior to use.

This fee is currently capped at £500,000 per in-scope system or service provider in any one year and has been since its introduction in 2018. HMT have consulted on increasing the Special Project Fee cap to £650,000 in any one-year period to account for inflationary cost increases during the period since the introduction of the fee, and to account for future inflation. The consultation closed at the end of August and HMT are considering responses.

The proposed hourly costs incurred by the Bank for FMI special projects (including staff costs and overheads) shown in Table C have increased and are in line with the Prudential Regulation Authority’s hourly costs for special projects as in their most recent policy statement.

The SPF will continue to follow a quarterly invoicing process.

The Bank will continue to consult bilaterally with any firms subject to an SPF.

Under or overspend in fees for 2025/26

As set out in the June 2018 policy statement,^{footnote [10]} the Bank will set FMI fees based on the expected business as usual supervisory resource expenditure for the upcoming fee year. Where the Bank’s spend is greater or less than anticipated, the Bank will consider adjusting its annual supervisory levy for the following fee year to account for any under or overspends. Following a final review of supervisory resource allocation in 2025/26, the Bank costs were in line with expectations and there will therefore be no recovery or rebate.

Forward look

The Bank expects to bring forward the timeline for consultation for the 2027/28 fee year for recognised payments systems and specified service providers as we did for CCPs and CSDs in 2026/27. This means that we will aim to consult as part of our annual consultation on FMI Fees in June/July 2027.

Subject to the outcome of the HMT consultation, the HMT regulations (subject to approval by Parliament) and the fee cap being increased and following any transitional arrangements for the current fee year, we would expect any revised fee cap to apply for the full year in 2027/28.

Process and next steps

Approach

The Bank’s annual FMI supervisory fee includes the costs of FMI supervision together with relevant policy support, specialist resources, corporate services, and other costs associated with the work of the FMI Directorate. The proposals in this CP have been prepared under a number of resource assumptions and there may therefore be variation in the final fee rates for the 2026/27 fee year because the final fee will reflect the actual level of supervisory resource expenditure over the course of the year. Any significant variance will be addressed at the conclusion of the 2026/27 fee year through either a rebate or a request for an additional fee payment.

Implementation

The proposed implementation date for the proposals contained in this consultation is Q4 of the 2026/27 fee year (December 2026 to February 2027), where invoices will be issued for the 2026/27 fee year.

Responses

This consultation closes on 22 October 2026. The Bank invites feedback on the proposals set out in this CP. Please address any comments or enquiries to:

FMIFees@bankofengland.co.uk

or, alternatively to: FMI Fees, Financial Market Infrastructure Directorate, Bank of England, 20 Moorgate, London, EC2R 6DA.

Annex

• 2026/27: Bank of England (BoE) Fees and Levies

  This annex sets out how the FMI levy sits alongside the Bank of England’s other fees and levies.

  Under the Bank of England Act 1998, the Bank’s Court is responsible for setting the Bank’s strategy and approving its medium-term spending plans within a financial framework.

  Almost all (about 97%) of the Bank’s operational costs are recovered through levies and fees. These include the BoE Levy, PRA Levy, FMI Levy and Other (eg management fees for banknotes and the RTGS tariff). The remaining 3% is funded through customer banking charges. In this way, the costs of running the Bank are allocated to different groups of levy/fee payers in proportion to the costs we incur in fulfilling our statutory objectives.

  The Bank’s costs are subject to tight control and are budgeted within constraints set by Court. Overall, the Bank’s operating budget, and the core levies financing it, are constrained to increase by no more than CPI in 2026/27. The Bank’s operating costs and the associated core levies which pay for it are set to rise by 3% in 2026/27 compared with 2025/26. Within this 3% constraint, individual levies will move up or down relative to each other as the Bank balances strategic operational investment priorities and the costs of running the Bank’s day-to-day operations.

  	2025/26		2026/27
  	Actuals (£ millions)	Budget (£ millions)	Budget (£ millions)
  BoE Levy (operational policy cost component)	333	328	353	2025/26: Actuals broadly flat to Budget 2026/27: Budgeted costs grow year-on-year by 8% due to the Investment portfolio mix
  PRA Levy	350	350	345	2025/26: Actuals flat to Budget 2026/27: Budgeted costs reduce year-on-year by 1% due to Investment portfolio mix
  FMI Levy	18	17	18	2025/26: Actuals broadly flat to Budget 2026/27: Budgeted costs grow year-on-year by 3%
  Bank’s Core Levies (constrained within CPI)	701	695	715	2025/26: Actuals broadly flat to Budget 2026/27: Budgeted costs grow year-on-year by £20 million, 3%, within the CPI growth constraint

  Cost of Transition: adjustment to the Bank of England Levy related to the transition away from the legacy CRD funding model

  In addition to funding part of the Bank’s operational costs, the Bank of England levy contains an adjustment reflecting the transition away from the old Cash Ratio Deposit (CRD) scheme, as described in the 2024 BoE Levy Framework Document.

  Under the old CRD scheme, financial institutions were required to hold non-interest-bearing deposits at the Bank of England. These deposits were reinvested in gilts, and the income from the gilts was used to fund the Bank’s policy functions. Now that the Bank is instead more stably and directly funded via the levies, there is no need for such non-interest bearing deposits and they were converted into central bank reserves, remunerated at Bank Rate, in March 2024. The corresponding legacy CRD gilt portfolio was transferred to the Banking Department balance sheet at the same time.

  At that time, a transitional adjustment mechanism was agreed to ensure that the Bank’s funding was no longer affected by year-to-year movements in market interest rates. Specifically, when Bank Rate exceeds the investment return on the corresponding legacy CRD gilt portfolio, the financial system is required to return the ‘excess’ interest the Bank pays out on remunerated reserves to the Bank via a ‘Cost of Transition’ adjustment to supplement the Bank of England Levy. Conversely, when Bank Rate is below the investment return on the legacy CRD gilt portfolio, the Bank would use the return it makes on the gilts in excess of the interest it pays out on the corresponding remunerated reserves to reduce the Bank of England levy. This transitional arrangement has no impact on, and is unrelated to, the Bank’s operating costs. Its purpose is solely to ensure that movements in market interest rates do not affect the Bank’s funding or P&L.

  Because Bank Rate, and market-derived expectations of it, have risen, the remuneration paid out by the Bank on the reserves associated with the old CRD scheme is forecast to exceed the income generated by the Bank from the corresponding legacy CRD gilt portfolio. To offset this, the Cost of Transition to the Bank of England Levy in 2026/27 is £307 million related to expected interest differentials over the course of 2026/27. There is a prior year adjustment of £40 million of which £36 million relates to the actual Bank Rate differential over 2025/26 relative to the forward overnight index swap curve that was used to project it, and £4 million related to under recovery of actual Operational Policy Costs in 2025/26.

  The Bank of England Levy is set at £700 million for 2026/27 and reflects the transition away from the legacy CRD scheme.

  The Cost of Transition for 2026/27 represents the excess interest paid by the Bank to Industry on remunerated reserves created through the gross Cost of Transition to the BoE Levy (£874 million), less income earned by the Bank on the legacy gilt portfolio (£258 million) and the Cost of Transition which was collected in 2025/26 (£273 million).

  The resulting £343 million is therefore the net amount the Bank is recovering from Industry through the Bank of England Levy, separate from £357 million of operational policy costs.

  	Anticipated in 2026/27 (£ millions)	+	Prior year adjustment (£ millions)	=	2026/27 Budget (£ millions)
  Cost of transition
  Interest paid by the Bank to Industry on remunerated reserves	431		444		874
  Income received by the Bank on legacy CRD gilt portfolio	(124)		(135)		(258)
  Cost of Transition collected by the Bank from Industry in 2025/26	–		(273)		(273)
  Costs of Transition (net)	307		36		343
  Operational Policy Costs	353		4		357
  Total Bank of England Levy	660		40		700

  The full set of levies for 2026/27, along with a comparison with those of 2025/26 is shown below.

  Budget	2026/27 (£ millions)	2025/26 (£ millions)	Movement (£ millions) (a)	Movement (per cent) (a)
  BoE Levy	700	596	104	17
  of which:
  Operational Policy Cost	353	328	24	8
  Cost of Transition from CRD	307	271	36	N/A (b)
  Prior year adjustment for under recovery	40	-3	43	N/A (b)
  PRA Levy	345	350	-5	-1
  FMI Levy	18	17	0	3
  Other Fees	226	219	7	3
  Total Levies and Fees	1,289	1,183	106	9
  BoE Levy Cost of Transition and prior year adjustments and other levies outside of CPI constraint	-574	-487	-86
  Total Core Levies, constrained within CPI	715	695	20	3

  Footnotes

  • (a) Increase reflects recovery of excess interest paid by the Bank to Industry in the prior year 2025/26 based on the estimated Interest Rate trajectory for 2026/27 as at May 2026.
  • (b) Not meaningful in percentage terms.