SCHEDULES
C8SCHEDULE 3EEA Passport Rights
Part I Defined terms
The single market directives
I11
“The single market directives” means—
F1a
the banking consolidation directive;
c
the insurance directives; F2. . .
F3ca
the reinsurance directive;
e
the insurance mediation directiveF7; and
f
the UCITS directive.
The banking co-ordination directives
F8I2C12
”The banking consolidation directive” means Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions F9as last amended by Directive 2009/111/EC of the European Parliament and of the Council.
The insurance directives
I33
1
“The insurance directives” means the first, second and third non-life insurance directives and the F10life assurance consolidation directive.
2
“First non-life insurance directive” means the Council Directive of 24 July 1973 on the co-ordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of direct insurance other than life assurance (No.73/239/EEC).
3
“Second non-life insurance directive” means the Council Directive of 22 June 1988 on the co-ordination of laws, etc, and laying down provisions to facilitate the effective exercise of freedom to provide services and amending Directive 73/239/EEC (No.88/357/EEC).
4
“Third non-life insurance directive” means the Council Directive of 18 June 1992 on the co-ordination of laws, etc, and amending Directives 73/239/EEC and 88/357/EEC (No.92/49/EEC).
F118
“Life assurance consolidation directive” means Directive 2002/83/EC of the European Parliament and of the Council of 5th November 2002 concerning life assurance.
F31The reinsurance directive
Sch. 3 para. 3A and cross-heading inserted (10.12.2007) by The Reinsurance Directive Regulations 2007 (S.I. 2007/3253), reg. 2(1), Sch. 1 para. 6(b)
3A
“The reinsurance directive” means Directive 2005/68/EC of the European Parliament and of the Council of 16 November 2005 on reinsurance and amending Council Directives 73/239/EEC, 92/49/EEC as well as Directives 98/78/EC and 2002/83/EC.
The investment services directive
4
F12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F32The insurance mediation directive
Sch. 3 para. 4A and cross-heading inserted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473), reg. 2(b)
4A
“The insurance mediation directive” means the European Parliament and Council Directive of 9th December 2002 on insurance mediation (No.2002/92/EC).
F33The UCITS directive
Sch. 3 para. 4B and cross-heading inserted (13.2.2004) by The Collective Investment Schemes (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/2066), reg. 2(2)(b)
4B
“The UCITS directive” means the Council Directive of 20 December 1985 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (No.85/611/EEC).
F34The markets in financial instruments directive
Sch. 3 para. 4C and preceding cross-heading inserted (6.12.2006) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) (Modification of Powers) Regulations 2006 (S.I. 2006/2975), reg. 13
4C
”The markets in financial instruments directive” means Directive 2004/39/ EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments.
EEA firm
I45
“EEA firm” means any of the following if it does not have its F13relevant office in the United Kingdom—
a
F16b
a credit institution (as defined in Article 4.1 of the banking consolidation directive) which is authorised (within the meaning of Article 4.2) by its home state regulator,
c
a financial institution (as defined in Article 4.5 of the banking consolidation directive) which is a subsidiary of the kind mentioned in Article 24 and which fulfils the conditions in that Article;
d
an undertaking pursuing the activity of direct insurance (within the meaning of F17Article 2 of the life assurance consolidation directive or Article 1 of the first non-life insurance directive) which has received authorisation under F18Article 4 of the life assurance consolidation directive or Article 6 of the first non-life insurance directive from its home state regulator.F19; F20. . .
F21da
an undertaking pursuing the activity of reinsurance (within the meaning of Article 2.1(a) of the reinsurance directive) which has received authorisation under (or is deemed to be authorised in accordance with) Article 3 of the reinsurance directive from its home state regulator;
e
an insurance intermediary (as defined in Article 2.5 of the insurance mediation directive), or a reinsurance intermediary (as defined in Article 2.6) which is registered with its home state regulator under Article 3.F22; or
f
a management company (as defined in Article 1a.2 of the UCITS directive) which is authorised (within the meaning of Article 5) by its home state regulator.
F235A
In paragraph 5, “ relevant office ” means—
a
in relation to a firm falling within sub-paragraph (e) of that paragraph which has a registered office, its registered office;
b
in relation to any other firm, its head office.
EEA authorisation
F24I56
“EEA authorisation” means—
a
in relation to an EEA firm falling within paragraph 5(e), registration with its home state regulator under Article 3 of the insurance mediation directive;
b
in relation to any other EEA firm, authorisation granted to an EEA firm by its home state regulator for the purpose of the relevant single market directive.
EEA right
I67
“EEA right” means the entitlement of a person to establish a branch, or provide services, in an EEA State other than that in which he has his F25relevant office—
a
in accordance with the Treaty as applied in the EEA; and
b
subject to the conditions of the relevant single market directive.
F267A
In paragraph 7, “ relevant office ” means—
a
in relation to a person who has a registered office and whose entitlement is subject to the conditions of the insurance mediation directive, his registered office;
b
in relation to any other person, his head office.
EEA State
F27I78
“EEA State” has the meaning given by Schedule 1 to the Interpretation Act 1978.
Home state regulator
I89
“Home state regulator” means the competent authority (within the meaning of the relevant single market directive) of an EEA State (other than the United Kingdom) in relation to the EEA firm concerned.
UK firm
I910
“UK firm” means a person whose F28relevant office is in the UK and who has an EEA right to carry on activity in an EEA State other than the United Kingdom.
F29F2910A
In paragraph 10, “relevant office” means—
a
in relation to a firm whose EEA right derives from the insurance mediation directive and which has a registered office, its registered office;
b
in relation to any other firm, its head office.
F35UK investment firm
Sch. 3 para. 10B inserted (1.4.2007 for certain purposes, otherwise 1.11.2007) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 5
10B
”UK investment firm” means a UK firm—
a
which is an investment firm, and
b
whose EEA right derives from the markets in financial instruments directive.
Host state regulator
I1011
“Host state regulator” means the competent authority (within the meaning of the relevant single market directive) of an EEA State (other than the United Kingdom) in relation to a UK firm’s exercise of EEA rights there.
Tied agent
F3611A
”Tied agent” has the meaning given in Article 4.1.25 of the markets in financial instruments directive.
F3011BF30Management company
“Management company” has the meaning given in Article 2.1(b) of the UCITS directive.
11CUCITS
“UCITS” has the meaning given in Article 1.2 of the UCITS directive.
Part II Exercise of Passport Rights by EEA Firms
Firms qualifying for authorisation
I1112
1
Once an EEA firm which is seeking to establish a branch in the United Kingdom in exercise of an EEA right satisfies the establishment conditions, it qualifies for authorisation.
2
Once an EEA firm which is seeking to provide services in the United Kingdom in exercise of an EEA right satisfies the service conditions, it qualifies for authorisation.
F373
If an EEA firm falling within paragraph 5(a) is seeking to use a tied agent established in the United Kingdom in connection with the exercise of an EEA right deriving from the markets in financial instruments directive, this Part of this Schedule applies as if the firm were seeking to establish a branch in the United Kingdom.
4
But if—
a
an EEA firm already qualifies for authorisation by virtue of sub-paragraph (1); and
b
the EEA right which it is exercising derives from the markets in financial instruments directive,
sub-paragraph (3) does not require the firm to satisfy the establishment conditions in respect of its use of the tied agent in question.
F385
An EEA firm which falls within paragraph 5(da) which establishes a branch in the United Kingdom, or provides services in the United Kingdom, in exercise of an EEA right qualifies for authorisation.
6
Sub-paragraphs (1) and (2) do not apply to an EEA firm falling within paragraph 5(da).
Establishment
I12C213
1
F39If the firm falls within paragraph 5(a), (b), F40(c), (d) or (f), the establishment conditions are that—
a
the Authority has received notice (“a consent notice”) from the firm’s home state regulator that it has given the firm consent to establish a branch in the United Kingdom;
b
the consent notice—
i
is given in accordance with the relevant single market directive;
ii
identifies the activities to which consent relates; and
iii
includes such other information as may be prescribed; F41. . .
F42ba
in the case of a firm falling within paragraph 5(a), the Authority has given the firm notice for the purposes of this paragraph or two months have elapsed beginning with the date when the home state regulator gave the consent notice; and
c
F43in the case of a firm falling within paragraph 5(b), (c), (d) or (f), the firm has been informed of the applicable provisions or two months have elapsed beginning with the date when the Authority received the consent notice.
F441A
If the firm falls within paragraph 5(e), the establishment conditions are that—
a
the firm has given its home state regulator notice of its intention to establish a branch in the United Kingdom;
b
the Authority has received notice (“a regulator’s notice”) from the firm’s home state regulator that the firm intends to establish a branch in the United Kingdom;
c
the firm’s home state regulator has informed the firm that the regulator’s notice has been sent to the Authority; and
d
one month has elapsed beginning with the date on which the firm’s home state regulator informed the firm that the regulator’s notice has been sent to the Authority.
2
If the Authority has received a consent notice, it must—
a
prepare for the firm’s supervision;
b
F45except if the firm falls within paragraph 5(a), notify the firm of the applicable provisions (if any); and
c
if the firm falls within paragraph 5(d), notify its home state regulator of the applicable provisions (if any).
3
A notice under sub-paragraph (2)(b) or (c) must be given before the end of the period of two months beginning with the day on which the Authority received the consent notice.
4
For the purposes of this paragraph—
“applicable provisions” means the host state rules with which the firm is required to comply when carrying on a permitted activity through a branch in the United Kingdom;
“host state rules” means rules—
- a
made in accordance with the relevant single market directive; and
- b
which are the responsibility of the United Kingdom (both as to implementation and as to supervision of compliance) in accordance with that directive; and
- a
“permitted activity” means an activity identified in the consent notice F46or regulator’s notice, as the case may be.
Services
I1314
C31
The service conditions are that—
a
the firm has given its home state regulator notice of its intention to provide services in the United Kingdom (“a notice of intention”);
b
F50ba
if the firm falls within paragraph 5(b) and is seeking to provide services in exercise of the right under Article 31.5 of the markets in financial instruments directive, the Authority has received notice (“a regulator's notice”) from the firm's home state regulator stating that the firm intends to exercise that right in the United Kingdom;
c
d
if the firm falls within paragraph 5(e), one month has elapsed beginning with the date on which the firm’s home state regulator informed the firm that the regulator’s notice has been sent to the Authority.
2
If the Authority has received a regulator’s notice or, where none is required by sub-paragraph (1), has been informed of the firm’s intention to provide services in the United Kingdom, it must F53, unless the firm falls within paragraph 5(e),—
a
prepare for the firm’s supervision; and
b
notify the firm of the applicable provisions (if any).
F542A
Sub-paragraph (2)(b) does not apply in the case of a firm falling within paragraph 5(a).
3
A notice under sub-paragraph (2)(b) must be given before the end of the period of two months beginning on the day on which the Authority received the regulator’s notice, or was informed of the firm’s intention.
4
For the purposes of this paragraph—
“applicable provisions” means the host state rules with which the firm is required to comply when carrying on a permitted activity by providing services in the United Kingdom;
“host state rules” means rules—
- a
made in accordance with the relevant single market directive; and
- b
which are the responsibility of the United Kingdom (both as to implementation and as to supervision of compliance) in accordance with that directive; and
- a
“permitted activity” means an activity identified in—
- a
the regulator’s notice; or
- b
where none is required by sub-paragraph (1), the notice of intention.
- a
Grant of permission
I1415
1
On qualifying for authorisation as a result of F55paragraph 12(1), (2) or (3), a firm has, in respect of each permitted activity which is a regulated activity, permission to carry it on through its United Kingdom branch (if it satisfies the establishment conditions) or by providing services in the United Kingdom (if it satisfies the service conditions).
F561A
Sub-paragraph (1) is to be read subject to paragraph 15A(3).
2
The permission is to be treated as being on terms equivalent to those appearing from the consent notice, regulator’s notice or notice of intention.
3
Sections F5721 and 39(1) of the M1Consumer Credit Act 1974 (business requiring a licence under that Act) do not apply in relation to the carrying on of a permitted activity which is Consumer Credit Act business by a firm which qualifies for authorisation as a result of paragraph 12, unless F58the Office of Fair Trading has exercised the power conferred on F59it by section 203 in relation to the firm.
4
“Consumer Credit Act business” has the same meaning as in section 203.
F605
A firm which qualifies for authorisation as a result of paragraph 12(5) has, in respect of each permitted activity which is a regulated activity, permission to carry it on through its United Kingdom branch or by providing services in the United Kingdom.
6
The permission is to be treated as being on terms equivalent to those appearing in the authorisation granted to the firm under Article 3 of the reinsurance directive by its home state regulator (“its home authorisation”).
7
For the purposes of sub-paragraph (5), “permitted activity” means an activity which the firm is permitted to carry on under its home authorisation.
Power to restrict permission of management companies
15A
1
Sub-paragraph (2) applies if—
a
a firm falling within paragraph 5(f) qualifies for authorisation as a result of paragraph 12(1) (establishment conditions satisfied); but
b
the Authority determines that the way in which the firm intends to invite persons in the United Kingdom to become participants in any collective investment scheme which that firm manages does not comply with the law in force in the United Kingdom.
2
The Authority may give a notice to the firm and the firm’s home state regulator of the Authority’s determination under sub-paragraph (1)(b).
3
Paragraph 15(1) does not give a firm to which the Authority has given (and not withdrawn) a notice under sub-paragraph (2) permission to carry on through the firm’s United Kingdom branch the regulated activity of dealing in units in the collective investment schemes which the firm manages.
4
Any notice given under sub-paragraph (2) must be given before the end of the period of two months beginning with the day on which the Authority received the consent notice.
5
Sections 264(4) and 265(1), (2) and (4) apply to a notice given under sub-paragraph (2) as they apply to a notice given by the Authority under section 264(2).
6
If a decision notice is given to the firm under section 265(4), by virtue of sub-paragraph (5), the firm may refer the matter to the Tribunal.
7
In sub-paragraph (3)—
a
“units” has the meaning given by section 237(2); and
b
the reference to “dealing in” units in a collective investment scheme must be read with—
i
section 22;
ii
any relevant order under that section; and
iii
Schedule 2.
F6115BF62F61Representations and references to the Tribunal
1
Within a reasonable time after the end of the period for making representations, the Authority must decide, in the light of any representations made to it during that period by a person to whom notice has been given under paragraph 15A(4), whether to withdraw the notice.
2
If the Authority decides not to withdraw its notice, it must—
a
give a decision notice to each person to whom the notice under paragraph 15A(4) was given, and
b
inform the firm's home state regulator and the Commission that authorisation has been refused, and of the grounds for the refusal.
3
The management company to whom the decision notice is given may refer the matter to the Tribunal.
15CInformation to home state regulator
1
Where an EEA firm falling within paragraph 5(f) has applied to manage a UCITS established in the United Kingdom, the Authority must without delay inform the home state regulator of that firm of any problem of which they are aware that may materially affect the ability of the firm—
a
to perform its duties properly, or
b
to comply with the home state rules.
2
In sub-paragraph (1), “home state rules” means rules—
a
made by the EEA State concerned in accordance with the UCITS directive; and
b
which are the responsibility of that EEA State (both as to implementation and as to supervision of compliance) in accordance with that directive.
Effect of carrying on regulated activity when not qualified for authorisation
I1516
1
This paragraph applies to an EEA firm which is not qualified for authorisation under paragraph 12.
2
Section 26 does not apply to an agreement entered into by the firm.
3
Section 27 does not apply to an agreement in relation to which the firm is a third party for the purposes of that section.
4
Section 29 does not apply to an agreement in relation to which the firm is the deposit-taker.
Continuing regulation of EEA firms
I1617
Regulations may—
a
modify any provision of this Act which is an applicable provision (within the meaning of paragraph 13 or 14) in its application to an EEA firm qualifying for authorisation;
b
make provision as to any change (or proposed change) of a prescribed kind relating to an EEA firm or to an activity that it carries on in the United Kingdom and as to the procedure to be followed in relation to such cases;
c
provide that the Authority may treat an EEA firm’s notification that it is to cease to carry on regulated activity in the United Kingdom as a request for cancellation of its qualification for authorisation under this Schedule.
Giving up right to authorisation
I1718
Regulations may provide that in prescribed circumstances an EEA firm falling within paragraph 5(c) may, on following the prescribed procedure—
a
have its qualification for authorisation under this Schedule cancelled; and
b
seek to become an authorised person by applying for a Part IV permission.
Part III Exercise of Passport Rights by UK Firms
Establishment
I18C419
1
C52
The first is that the firm has given the Authority, in the specified way, notice of its intention to establish a branch (“a notice of intention”) which—
a
identifies the activities which it seeks to carry on through the branch; and
b
includes such other information as may be specified.
3
F65Subject to sub-paragraph (5B), the activities identified in a notice of intention may include activities which are not regulated activities.
C54
The second is that the Authority has given notice in specified terms (“a consent notice”) to the host state regulator.
F665
The third is—
a
if the EEA right in question derives from the insurance mediation directive, that one month has elapsed beginning with the date on which the firm received notice, in accordance with sub-paragraph (11), that the Authority has given a consent notice;
b
in any other case, that either—
i
the host state regulator has notified the firm (or, where the EEA right in question derives from any of the insurance directives, the Authority) of the applicable provisions; or
ii
two months have elapsed beginning with the date on which the Authority gave the consent notice.
F675ZA
This paragraph does not apply to a UK firm having an EEA right which is subject to the conditions of the reinsurance directive.
F685A
If—
a
the EEA right in question derives from the insurance mediation directive, and
b
the EEA State in which the firm intends to establish a branch has not notified the Commission, in accordance with Article 6(2) of that directive, of its wish to be informed of the intention of any UK firm to establish a branch in its territory,
the second and third conditions do not apply (and so the firm may establish the branch to which its notice of intention relates as soon as the first condition is satisfied).
F695B
If the firm is a UK investment firm, a notice of intention may not include ancillary services unless such services are to be provided in connection with the carrying on of one or more investment services and activities.
5C
In sub-paragraph (5B) “ancillary services” has the meaning given in Article 4.1.3 of the markets in financial instruments directive.
C56
If the firm’s EEA right derives from F70the banking consolidation directive, F71the UCITS directive or, in the case of a credit institution authorised under the banking consolidation directive, the markets in financial instruments directive and the first condition is satisfied, the Authority must give a consent notice to the host state regulator unless it has reason to doubt the adequacy of the firm’s resources or its administrative structure.
C57
If the firm’s EEA right derives from any of the insurance directives and the first condition is satisfied, the Authority must give a consent notice unless it has reason—
a
to doubt the adequacy of the firm’s resources or its administrative structure, or
b
to question the reputation, qualifications or experience of the directors or managers of the firm or the person proposed as the branch’s authorised agent for the purposes of those directives,
in relation to the business to be conducted through the proposed branch.
F727A
If—
a
the firm’s EEA right derives from the insurance mediation directive,
b
the first condition is satisfied, and
c
the second condition applies,
the Authority must give a consent notice, and must do so within one month beginning with the date on which it received the firm’s notice of intention.
F737B
If the firm is a UK investment firm and the first condition is satisfied, the Authority must give a consent notice to the host state regulator within three months beginning with the date on which it received the firm's notice of intention unless the Authority has reason to doubt the adequacy of the firm's resources or its administrative structure.
8
If the Authority proposes to refuse to give a consent notice it must give the firm concerned a warning notice.
9
If the firm’s EEA right derives from any of the insurance directives and the host state regulator has notified it of the applicable provisions, the Authority must inform the firm of those provisions.
10
Rules may specify the procedure to be followed by the Authority in exercising its functions under this paragraph.
11
If the Authority gives a consent notice it must give written notice that it has done so to the firm concerned.
12
If the Authority decides to refuse to give a consent notice—
a
it must, F74within the relevant period, give the person who gave that notice a decision notice to that effect; and
b
that person may refer the matter to the Tribunal.
F7512A
In sub-paragraph (12), “the relevant period” means—
a
if the firm’s EEA right derives from the UCITS directive, two months beginning with the date on which the Authority received the notice of intention;
b
in any other case, three months beginning with that date.
13
In this paragraph, “applicable provisions” means the host state rules with which the firm will be required to comply when conducting business through the proposed branch in the EEA State concerned.
14
In sub-paragraph (13), “host state rules” means rules—
a
made in accordance with the relevant single market directive; and
b
which are the responsibility of the EEA State concerned (both as to implementation and as to supervision of compliance) in accordance with that directive.
15
“Specified” means specified in rules.
Services
I1920
C6C71
F76Subject to sub-paragraph (4D), a UK firm may not exercise an EEA right to provide services unless the firm has given the Authority, in the specified way, notice of its intention to provide services (“a notice of intention”) which—
a
identifies the activities which it seeks to carry out by way of provision of services; and
b
includes such other information as may be specified.
2
F77Subject to sub-paragraph (2A), the activities identified in a notice of intention may include activities which are not regulated activities.
F782A
If the firm is a UK investment firm, a notice of intention may not include ancillary services unless such services are to be provided in connection with the carrying on of one or more investment services and activities.
2B
In sub-paragraph (2A) “ancillary services” has the meaning given in Article 4.1.3 of the markets in financial instruments directive.
3
If the firm’s EEA right derives from F79the banking consolidation directive, F80markets in financial instruments directive or the UCITS directive, the Authority must, within one month of receiving a notice of intention, send a copy of it to the host state regulator F81with such other information as may be specified.
F823A
If the firm’s EEA right derives from any of the insurance directives, the Authority must, within one month of receiving the notice of intention—
C7a
give notice in specified terms (“a consent notice”) to the host state regulator; or
b
give written notice to the firm of—
i
its refusal to give a consent notice; and
ii
its reasons for that refusal.
F833B
If the firm’s EEA right derives from the insurance mediation directive and the EEA State in which the firm intends to provide services has notified the Commission, in accordance with Article 6(2) of that directive, of its wish to be informed of the intention of any UK firm to provide services in its territory—
a
the Authority must, within one month of receiving the notice of intention, send a copy of it to the host state regulator;
b
the Authority, when it sends the copy in accordance with sub-paragraph (a), must give written notice to the firm concerned that it has done so; and
c
the firm concerned must not provide the services to which its notice of intention relates until one month, beginning with the date on which it receives the notice under sub-paragraph (b), has elapsed.
4
When the Authority sends the copy under sub-paragraph (3) F84or gives a consent notice, it must give written notice to the firm concerned.
F854A
If the firm is given notice under sub-paragraph (3A)(b), it may refer the matter to the Tribunal.
4B
If the firm’s EEA right derives from any of the insurance directives F86or from the markets in financial instruments directive, it must not provide the services to which its notice of intention relates until it has received written notice under sub-paragraph (4).
F874BA
If the firm's EEA right derives from the markets in financial instruments directive, the Authority must comply as soon as reasonably practicable with a request for information under the second sub-paragraph of Article 31.6 of that directive from the host state regulator.
4C
Rules may specify the procedure to be followed by the Authority under this paragraph.
F884D
This paragraph does not apply to a UK firm having an EEA right which is subject to the conditions of the reinsurance directive.
F895
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
“Specified” means specified in rules.
F9020ZAF90Information for host state regulator
1
The Authority must keep a record of the confirmation and other information provided to the host state regulator under paragraph 19(4) or paragraph 20(3C) in relation to a UK firm which is a management company.
2
The Authority must inform the host state regulator whenever there is a change in the confirmation or other information referred to in sub-paragraph (1).
Tied agents
F10020A
1
If a UK investment firm is seeking to use a tied agent established in an EEA State (other than the United Kingdom) in connection with the exercise of an EEA right deriving from the markets in financial instruments directive, this Part of this Schedule applies as if the firm were seeking to establish a branch in that State.
2
But if—
a
a UK investment firm has already established a branch in an EEA State other than the United Kingdom in accordance with paragraph 19; and
b
the EEA right which it is exercising derives from the markets in financial instruments directive,
paragraph 19 does not apply in respect of its use of the tied agent in question.
F9120BF91Notice of intention to market
1
The operator of a UCITS established in the United Kingdom may not exercise an EEA right to market the units of that UCITS in the territory of another EEA State unless the operator has given the Authority, in the specified way, notice of its intention to market the units (“notice of intention”) which contains, and is accompanied by, such information as may be specified in rules, or in regulations made by the European Commission under the UCITS directive.
2
The Authority must ensure that the information referred to in sub-paragraph (1) may be transmitted to it electronically.
3
The Authority must verify whether the information submitted with the notice of intention is complete and, within 10 days of the date on which the Authority received the complete information required, send to the host state regulator—
a
a copy of the notice of intention;
b
the accompanying information; and
c
confirmation that the operator and the UCITS fulfil the conditions imposed by the UCITS directive.
4
The Authority must ensure that the host state regulator has electronic access to the information and documents referred to in sub-paragraph (3).
5
The Authority must notify the operator immediately that the information referred to in sub-paragraph (3) has been sent to the competent authorities of the host state regulator.
6
The operator may market the units of the UCITS in the territory of the host state regulator from the moment it receives the notification referred to in sub-paragraph (5).
7
In this paragraph—
“operator” has the same meaning as in section 237 of this Act;
“specified” means specified in rules.
Offence relating to exercise of passport rights
I2021
1
If a UK firm which is not an authorised person contravenes the prohibition imposed by—
a
sub-paragraph (1) of paragraph 19, or
b
F92sub-paragraph (1), (3B)(c) or (4B) of paragraph 20,
it is guilty of an offence.
2
A firm guilty of an offence under sub-paragraph (1) is liable—
a
on summary conviction, to a fine not exceeding the statutory maximum; or
b
on conviction on indictment, to a fine.
3
In proceedings for an offence under sub-paragraph (1), it is a defence for the firm to show that it took all reasonable precautions and exercised all due diligence to avoid committing the offence.
Continuing regulation of UK firms
I2122
1
Regulations may make such provision as the Treasury consider appropriate in relation to a UK firm’s exercise of EEA rights, and may in particular provide for the application (with or without modification) of any provision of, or made under, this Act in relation to an activity of a UK firm.
2
Regulations may—
a
make provision as to any change (or proposed change) of a prescribed kind relating to a UK firm or to an activity that it carries on and as to the procedure to be followed in relation to such cases;
b
make provision with respect to the consequences of the firm’s failure to comply with a provision of the regulations.
3
Where a provision of the kind mentioned in sub-paragraph (2) requires the Authority’s consent to a change (or proposed change)—
a
consent may be refused only on prescribed grounds; and
b
if the Authority decides to refuse consent, the firm concerned may refer the matter to the Tribunal.
I2223
1
F93Sub-paragraphs (2) and (2A) apply if a UK firm—
a
has a Part IV permission; and
b
is exercising an EEA right to carry on any Consumer Credit Act business in an EEA State other than the United Kingdom.
2
The Authority may exercise its power under section 45 in respect of the firm if F94the Office of Fair Trading has informed the Authority that—
a
the firm,
b
any of the firm’s employees, agents or associates (whether past or present), or
c
if the firm is a body corporate, a controller of the firm or an associate of such a controller,
F962A
The Authority may also exercise its power under section 45 in respect of the firm if the Office of Fair Trading has informed the Authority that it has concerns about any of the following—
a
the firm's skills, knowledge and experience in relation to Consumer Credit Act businesses;
b
such skills, knowledge and experience of other persons who are participating in any Consumer Credit Act business being carried on by the firm;
c
practices and procedures that the firm is implementing in connection with any such business.
3
“Associate”, “Consumer Credit Act business” and “controller” have the same meaning as in section 203.
I2324
1
Sub-paragraph (2) applies if a UK firm—
a
is not required to have a Part IV permission in relation to the business which it is carrying on; and
2
If requested to do so by the host state regulator in the EEA State in which the UK firm’s business is being carried on, the Authority may impose any requirement in relation to the firm which it could impose if—
a
the firm had a Part IV permission in relation to the business which it is carrying on; and
b
the Authority was entitled to exercise its power under that Part to vary that permission.
Information to be included in the public record
F10125
The Authority must include in the record that it maintains under section 347 in relation to any UK firm whose EEA right derives from the insurance mediation directive information as to each EEA State in which the UK firm, in accordance with such a right—
a
has established a branch; or
b
is providing services.
F9926F99UK management companies: delegation of functions
Where a UK firm which is a management company and is providing services in the exercise of an EEA right to an EEAUCITS informs the Authority that it has delegated one or more of its functions to a third party, the Authority must transmit that information to the home state regulator of the EEAUCITS without delay.
27UK management companies: withdrawal of authorisation
Where a UK firm which is a management company has exercised an EEA right deriving from the UCITS directive to establish a branch or to provide services in another EEA State, the Authority must consult the home state regulator of any UCITS managed by that management company before taking a decision to withdraw the authorisation of the management company under section 33.
28Management companies: request for information
1
Where a UK firm has applied to manage a UCITS which is established in another EEA State, the home state regulator of the UCITS may—
a
request further information from the Authority regarding the documents referred to in Article 20.1 of the UCITS directive, and
b
ask the Authority whether the type of UCITS for which the UK firm has applied to provide its services falls within the scope of the authorisation of the UK firm.
2
The Authority must respond to a request under sub-paragraph (1)(a) or (b) within 10 working days of the date on which the request was received.
Sch. 3 extended (with modifications) (1.12.2001) by S.I. 2001/2636, arts. 1(2)(b), 25-27; S.I. 2001/3538, art. 2(1)
Sch. 3 extended (with modifications) (Gibraltar) (5.10.2001 for specified purposes, 1.12.2001 in so far as not already in force) by S.I. 2001/3084, arts. 1(1), 2-4 (as amended (16.6.2014) by The Alternative Investment Fund Managers Order 2014 (S.I. 2014/1292), arts. 1(2), 3 (which amending S.I. is itself amended by S.I. 2014/1313, arts. 1, 2(a)); and as amended (31.12.2020) by S.I. 2019/589, regs. 1(3), 5-9 (with reg. 12) (as amended by S.I. 2020/1274, regs. 1, 2)); S.I. 2001/3538, art. 2(1)
Sch. 3 modified (1.12.2001) by S.I. 2001/3592, arts. 1(2), 114(3)(b), 128(3)(b) (with art. 23(2))