Implementing the Bank of England Levy: consultation papers published on 8 November 2023 on Draft Regulations and the Bank of England Levy Framework Document
The Bank of England Levy (Levy) will replace the current Cash Ratio Deposit Scheme (CRD Scheme). In June 2022, His Majesty’s Treasury (HM Treasury) issued a Policy Statement confirming its intention to proceed with an annual levy based arrangement that delivers a more reliable and stable funding scheme for the Bank’s policy functions.
Draft Regulations
The Financial Services and Markets Act 2023 allows for amendments to be made to the Bank of England Act 1998 (1998 Act) to enable the Bank of England (Bank) to charge a levy to eligible institutions. The amendments to the 1998 Act provide that the amount of the Levy that an eligible institution is liable to pay in respect of a Levy year will be determined by the Bank in accordance with regulations made by HM Treasury. Eligible institutions are institutions who are authorised deposit-takers that have eligible liabilities above a £600 million threshold in the relevant Levy year. This is the same eligible liabilities threshold that applies under the CRD scheme.
HM Treasury is now consulting on Draft Regulations implementing the Levy. HM Treasury’s consultation document can be found here: Implementing the Bank of England Levy: a consultation on Draft Regulations. It should be read in conjunction with the Bank’s own consultation paper on its Levy Framework document (see below for details on this).
Responses to HM Treasury’s consultation document are invited by 15 December 2023 and should be sent to: BankofEnglandLevy@hmtreasury.gov.uk. HM Treasury will publish a formal response following the consultation.
Bank of England Levy Framework document
Alongside HM Treasury’s consultation on the Draft Regulations, the Bank is also consulting on its proposed Framework document for the Levy. The Framework document explains how the annual Levy will be charged, what costs the Levy will cover and how it will operate.
The Bank’s consultation document explains the proposed approach to be taken in levying amounts required in connection with the funding of its policy functions, which are the functions exercised by the Bank in pursuit of its Financial Stability and Monetary Policy objectives. The consultation document can be found on Bank of England Levy: Framework document.
Responses to the Bank’s consultation document are invited by 15 December 2023 and should be sent to: BoELevy@bankofengland.co.uk or to the below address. The Bank will publish a formal response following the consultation.
Finance Strategy Team
Bank of England
Threadneedle Street
London
EC2R 8AH