C1C9C10 Part V Performance of Regulated Activities
Pt. 5 modified (7.11.2018) by The EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018 (S.I. 2018/1149), regs. 1(2), 23 (with regs. 4, 22, 26(1)(2)) (as amended (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 6(2))
Pt. 5 modified by S.I. 2018/1149, reg. 69 (as inserted (1.3.2019) by The Financial Services Contracts (Transitional and Saving Provision) (EU Exit) Regulations 2019 (S.I. 2019/405), regs. 1(2), 4)
F1Performance of controlled functions without approval
Ss. 63A-63D and preceding cross-heading inserted (8.6.2010) by Financial Services Act 2010 (c. 28), ss. 11, 26(2)(b)
C263APower to impose penalties
1
If the F23appropriate regulator is satisfied that—
a
a person (“P”) has at any time performed a controlled function without approval, and
b
at that time P knew, or could reasonably be expected to have known, that P was performing a controlled function without approval,
it may impose a penalty on P of such amount as it considers appropriate.
2
For the purposes of this section P performs a controlled function without approval at any time if at that time—
a
P performs a controlled function under an arrangement entered into by an authorised person (“A”), or by a contractor of A, in relation to the carrying on by A of a regulated activity; and
F29b
P, when performing the function, is not acting in accordance with an approval given under section 59.
3
The F23appropriate regulator may not impose a penalty under this section after the end of the limitation period unless, before the end of that period, it has given a warning notice to the person concerned under section 63B(1).
C34
C45
For this purpose the F23appropriate regulator is to be treated as knowing that a person has performed a controlled function without approval if it has information from which that can reasonably be inferred.
F245A
The appropriate regulator”—
a
in relation to a controlled function which is of a description specified in rules made by the FCA, means the FCA, and
b
in relation to a controlled function which is of a description specified in rules made by the PRA, means the PRA.
F275B
The relevant period” is—
a
in relation to the performance of a controlled function without approval before the day on which this subsection comes into force, the period of 3 years, and
b
in relation to the performance of a controlled function without approval on or after that day, the period of 6 years.
6
Any F25other expression which is used both in this section and section 59 has the same meaning in this section as in that section.
C263BProcedure and right to refer to Tribunal
1
If F26a regulator proposes to impose a penalty on a person under section 63A, it must give the person a warning notice.
2
A warning notice must state the amount of the penalty.
3
If F26a regulator decides to impose a penalty on a person under section 63A, it must give the person a decision notice.
4
A decision notice must state the amount of the penalty.
5
If F26a regulator decides to impose a penalty on a person under section 63A, the person may refer the matter to the Tribunal.
C263CStatement of policy
1
F2Each regulator must prepare and issue a statement of its policy with respect to—
a
the imposition of penalties under section 63A; and
b
the amount of penalties under that section.
2
F3Each regulator's policy in determining whether a penalty should be imposed, and what the amount of a penalty should be, must include having regard to—
a
the conduct of the person on whom the penalty is to be imposed;
b
the extent to which the person could reasonably be expected to have known that a controlled function was performed without approval;
c
the length of the period during which the person performed a controlled function without approval; and
d
whether the person on whom the penalty is to be imposed is an individual.
3
F4Each regulator's policy in determining whether a penalty should be imposed on a person must also include having regard to the appropriateness of taking action against the person instead of, or in addition to, taking action against an authorised person.
4
A statement issued under this section must include an indication of the circumstances in which F5the regulator that has issued the statement would expect to be satisfied that a person could reasonably be expected to have known that the person was performing a controlled function without approval.
5
6
If a statement issued under this section is altered or F8replaced by a regulator, the regulator must issue the altered or replaced statement.
7
F9A regulator must, without delay, give the Treasury a copy of any statement which it publishes under this section.
8
9
The F12regulator may charge a reasonable fee for providing a person with a copy of the statement.
C510
In exercising, or deciding whether to exercise, its power under section 63A in the case of any particular person, F13a regulator must have regard to any statement of policy published F14by it under this section and in force at a time when the person concerned performed a controlled function without approval.
C6C7C863DStatement of policy: procedure
1
2
The draft must be accompanied by notice that representations about the proposal may be made to the F17regulator within a specified time.
3
Before issuing the proposed statement, the F18regulator must have regard to any representations made to it in accordance with subsection (2).
4
If the F19regulator issues the proposed statement it must publish an account, in general terms, of—
a
the representations made to it in accordance with subsection (2); and
b
its response to them.
5
6
7
This section also applies to a proposal to alter or replace a statement.
Pt. 5 modified (1.12.2001) by S.I. 2001/3592, arts. 1(2), 114(3)(a), 128(3)(a) (with art. 23(2))