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Financial Services and Markets Act 2000

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Part IIU.K. The Scheme Operator

[F1 Duty of FCAU.K.

Textual Amendments

F1Sch. 17 para. 2 and cross-heading substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 14 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

2[F2(1)]The FCA must take such steps as are necessary to ensure that the body corporate established by the Financial Services Authority under this Schedule as originally enacted is, at all times, capable of exercising the functions conferred on the scheme operator by or under this Act.U.K.

[F3(2)The FCA must exercise any function falling within sub-paragraph (3) in a way which is consistent with enabling the scheme operator, at all times, to qualify as an ADR entity and to meet the quality requirements in Chapter II of the ADR Directive.

(3)The following functions of the FCA fall within this sub-paragraph—

(a)making rules for the purposes of section 226;

(b)approving rules made for the purposes of section 227;

(c)specifying an amount under section 229(4);

(d)approving rules made under section 230;

(e)taking steps under sub-paragraph (1);

(f)appointing or removing members of the board under paragraph 3(2);

(g)taking steps under paragraph 3A(1);

(h)making rules under paragraph 7(3);

(i)making rules under paragraph 13;

(j)consenting to scheme rules under paragraph 14(7), other than rules relating to fees;

(k)approving the fixing, variation, addition or removal of standard terms under paragraph 18, other than terms relating to the making of payments to the scheme operator; and

(l)approving arrangements under paragraph 19(3).]]

ConstitutionU.K.

3(1)The constitution of the scheme operator must provide for it to have—U.K.

(a)a chairman; and

(b)a board (which must include the chairman) whose members are the scheme operator’s directors.

(2)The chairman and other members of the board must be persons appointed, and liable to removal from office, by the [F4FCA] (acting, in the case of the chairman, with the approval of the Treasury).

(3)But the terms of their appointment (and in particular those governing removal from office) must be such as to secure their independence from the [F4FCA] in the operation of the scheme.

(4)The function of making voluntary jurisdiction rules under section 227 F5... and the functions conferred by paragraphs 4, 5, 7, 9 [F6, 9A] or 14 may be exercised only by the board.

(5)The validity of any act of the scheme operator is unaffected by—

(a)a vacancy in the office of chairman; or

(b)a defect in the appointment of a person as chairman or as a member of the board.

Textual Amendments

F4Word in Sch. 17 para. 3 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 15(a) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F5Words in Sch. 17 para. 3(4) omitted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), arts. 1(2)(6), 10(21)(a)

F6Word in Sch. 17 para. 3(4) inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 15(b) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

[F7Relationship with FCAU.K.

Textual Amendments

F7Sch. 17 para. 3A and crossheading inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 16 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

3A(1)The scheme operator and the FCA must each take such steps as it considers appropriate to co-operate with the other in the exercise of their functions under this Part of this Act.U.K.

(2)The scheme operator and the FCA must prepare and maintain a memorandum describing how they intend to comply with sub-paragraph (1).

(3)The scheme operator must ensure that the memorandum as currently in force is published in the way appearing to the scheme operator to be best calculated to bring it to the attention of the public.]

The panel of ombudsmenU.K.

4(1)The scheme operator must appoint and maintain a panel of persons, appearing to it to have appropriate qualifications and experience, to act as ombudsmen for the purposes of the scheme.U.K.

(2)A person’s appointment to the panel is to be on such terms (including terms as to the duration and termination of his appointment and as to remuneration) as the scheme operator considers—

(a)consistent with the independence of the person appointed; and

(b)otherwise appropriate.

The Chief OmbudsmanU.K.

5(1)The scheme operator must appoint one member of the panel to act as Chief Ombudsman.U.K.

(2)The Chief Ombudsman is to be appointed on such terms (including terms as to the duration and termination of his appointment) as the scheme operator considers appropriate.

StatusU.K.

6(1)The scheme operator is not to be regarded as exercising functions on behalf of the Crown.U.K.

(2)The scheme operator’s F8... officers and staff are not to be regarded as Crown servants.

(3)Appointment as Chief Ombudsman or to the panel or as a deputy ombudsman does not confer the status of Crown servant.

Textual Amendments

F8Words in Sch. 17 para. 6(2) omitted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by virtue of Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 17 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

Annual reportsU.K.

7(1)At least once a year—U.K.

(a)the scheme operator must make a report to the [F9FCA] on the discharge of its functions; and

(b)the Chief Ombudsman must make a report to the [F9FCA] on the discharge of his functions.

(2)Each report must distinguish between functions in relation to the scheme’s compulsory jurisdiction F10... and functions in relation to its voluntary jurisdiction.

(3)Each report must also comply with any requirements specified in rules made by the [F9FCA].

(4)The scheme operator must publish each report in the way it considers appropriate.

[F11(5)The Treasury may—

(a)require the scheme operator to comply with any provisions of the Companies Act 2006 about accounts and their audit which would not otherwise apply to it, or

(b)direct that any provision of that Act about accounts and their audit is to apply to the scheme operator with such modifications as are specified in the direction, whether or not the provision would otherwise apply to the scheme manager.

(6)Compliance with any requirement under sub-paragraph (5)(a) or (b) is enforceable by injunction or, in Scotland, an order for specific performance under section 45 of the Court of Session Act 1988.

(7)Proceedings under sub-paragraph (6) may be brought only by the Treasury.]

Textual Amendments

F9Word in Sch. 17 para. 7 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 18(a) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F10Words in Sch. 17 para. 7(2) omitted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), arts. 1(2)(6), 10(21)(b)

F11Sch. 17 para. 7(5)-(7) inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 18(b) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

[F12Audit of accountsU.K.

Textual Amendments

F12Sch. 17 para. 7A and crossheading inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 19 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

7A(1)The scheme operator must send a copy of its annual accounts to the Comptroller and Auditor General as soon as is reasonably practicable.U.K.

(2)The Comptroller and Auditor General must—

(a)examine, certify and report on accounts received under this paragraph, and

(b)send a copy of the certified accounts and the report to the Treasury.

(3)The Treasury must lay the copy of the certified accounts and the report before Parliament.

(4)The scheme operator must send a copy of the certified accounts and the report to the FCA.

(5)Except as provided by paragraph 7(5), the scheme operator is exempt from the requirements of Part 16 of the Companies Act 2006 (audit), and its balance sheet must contain a statement to that effect.

(6)In this paragraph “annual accounts” has the meaning given by section 471 of the Companies Act 2006.]

[F13Information, advice and guidance]U.K.

Textual Amendments

F13Sch. 17 para. 8 crossheading substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 20 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F138The scheme operator may publish [F14such information, guidance or advice] as it considers appropriate and may charge for it or distribute it free of charge.

Textual Amendments

F14Words in Sch. 17 para. 8 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 21 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

BudgetU.K.

9(1)The scheme operator must, before the start of each of its financial years, adopt an annual budget which has been approved by the [F15FCA].U.K.

(2)The scheme operator may, with the approval of the [F15FCA], vary the budget for a financial year at any time after its adoption.

(3)The annual budget must include an indication of—

(a)the distribution of resources deployed in the operation of the scheme, and

(b)the amounts of income of the scheme operator arising or expected to arise from the operation of the scheme,

distinguishing between the scheme’s compulsory F16... and voluntary jurisdiction.

Textual Amendments

F15Word in Sch. 17 para. 9 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 22 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F16Words in Sch. 17 para. 9(3) omitted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), arts. 1(2)(6), 10(21)(c)

Modifications etc. (not altering text)

C1Sch. 17 para. 9(3) excluded (18.6.2001) by S.I. 2001/1821, arts. 1(1), 4(1)

[F17Annual planU.K.

Textual Amendments

F17Sch. 17 para. 9A and crossheading inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 23 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

9A(1)The scheme operator must in respect of each of its financial years prepare an annual plan.U.K.

(2)The plan must be prepared before the start of the financial year.

(3)An annual plan in respect of a financial year must make provision about the use of the resources of the scheme operator.

(4)The plan may include material relating to periods longer than the financial year in question.

(5)Before preparing an annual plan, the scheme operator must consult such persons (if any) as the scheme operator considers appropriate.

(6)The scheme operator must publish each annual plan in the way it considers appropriate.]

Exemption from liability in damagesU.K.

10(1)No person is to be liable in damages for anything done or omitted in the discharge, or purported discharge, of any functions under this Act in relation to the compulsory jurisdiction F18....U.K.

(2)Sub-paragraph (1) does not apply—

(a)if the act or omission is shown to have been in bad faith; or

(b)so as to prevent an award of damages made in respect of an act or omission on the ground that the act or omission was unlawful as a result of section 6(1) of the M1Human Rights Act 1998.

Textual Amendments

F18Words in Sch. 17 para. 10(1) omitted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), arts. 1(2)(6), 10(21)(d)

Modifications etc. (not altering text)

C2Sch. 17 para. 10(1) amended (19.7.2001 for specified purposes otherwise 1.12.2001) by S.I. 2001/2326, arts. 1(1), 13; S.I. 2001/3538, art. 2(1)

Marginal Citations

PrivilegeU.K.

11For the purposes of the law relating to defamation, proceedings in relation to a complaint which is subject to the compulsory jurisdiction F19... are to be treated as if they were proceedings before a court.

Textual Amendments

F19Words in Sch. 17 para. 11 omitted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 (S.I. 2013/1881), arts. 1(2)(6), 10(21)(e)

Modifications etc. (not altering text)

C4Sch. 17 para. 11 amended (19.7.2001 for specified purposes otherwise 1.12.2001) by S.I. 2001/2326, arts. 1(1), 14; S.I. 2001/3538, art. 2(1)

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