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Part VU.K. Performance of Regulated Activities

Modifications etc. (not altering text)

C1Pt. V (ss. 56-71) modified (1.12.2001) by S.I. 2001/3592, arts. 1(2), 114(3)(a), 128(3)(a) (with art. 23(2))

[F1Removal of directors and senior executives and appointment of temporary managerU.K.

Textual Amendments

71D.Sections 71B and 71C: conditionsU.K.

(1)The condition in this subsection is met in relation to a relevant firm or a parent undertaking if—

(a)there is a deterioration in the financial situation of the relevant firm or the parent undertaking which is a significant deterioration, or

(b)there is a serious infringement by the relevant firm or the parent undertaking of—

(i)a relevant requirement, or

(ii)its memorandum or articles of association or other constituent instrument.

(2)The condition in this subsection is met in relation to a relevant firm if it is not reasonably likely that the deterioration would be reversed or the infringement would be brought to an end by any measure of a kind described in Article 27(1) of the recovery and resolution directive which could be taken by the appropriate regulator under the provisions listed in subsection (3).

(3)The provisions mentioned in subsection (2) are—

(a)section 55J (variation or cancellation on initiative of regulator),

(b)section 55L (imposition of requirements by FCA),

(c)section 55M (imposition of requirements by PRA),

(d)section 55PB (requirements relating to general meetings),

(e)section 56 (prohibition orders),

(f)section 63 (withdrawal of approval),

(g)section 63ZA (variation of senior manager’s approval at request of authorised person),

(h)section 63ZB (variation of senior manager’s approval on initiative of regulator),

(i)section 63A (power to impose penalties),

(j)section 66 (disciplinary powers),

(k)Part 12A (powers exercisable in relation to parent undertakings), or

(l)Part 14 (disciplinary measures).

(4)The condition in this subsection is met if the following action would not be sufficient to reverse the deterioration or bring the infringement to an end—

(a)in the case of a relevant firm, the imposition of one or more requirements under section 71B (removal and replacement of directors and senior executives); or

(b)in the case of a parent undertaking which is not a relevant firm, the exercise of any of the appropriate regulator’s powers under Part 12A.

(5)For the purposes of this section—

(a)“relevant requirement” has the meaning given in section 204A;

(b)a deterioration in the financial situation of the relevant firm or the parent undertaking is significant if—

(i)in the case of a relevant firm, or a parent undertaking which is an authorised person, it no longer satisfies, or is likely to fail to satisfy, the threshold conditions relating to its financial resources which apply to it under Schedule 6;

(ii)in the case of a parent undertaking which is not an authorised person, the deterioration threatens the viability of the parent undertaking.]