Search Legislation

Financial Services Act 2012

What Version

 Help about what version

Advanced Features

 Help about advanced features

Changes to legislation:

Financial Services Act 2012, Section 102 is up to date with all changes known to be in force on or before 19 November 2017. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations. Help about Changes to Legislation

Close

Changes to Legislation

Revised legislation carried on this site may not be fully up to date. Changes and effects are recorded by our editorial team in lists which can be found in the ‘Changes to Legislation’ area. Where those effects have yet to be applied to the text of the legislation by the editorial team they are also listed alongside the legislation in the affected provisions. Use the ‘more’ link to open the changes and effects relevant to the provision you are viewing.

Changes and effects yet to be applied to the whole Act associated Parts and Chapters:

 Help about changes and effects
Close

Changes and effects

This section lists the changes and effects yet to be applied to the whole Act, associated Parts and Chapters where applicable. This includes any insertions of whole new Parts, Chapters or provisions yet to be inserted into this Act. These effects are included in this view as they may be (but won’t necessarily be) relevant to the specific provision that you are viewing.

102Application to UK clearing housesE+W+S+N.I.

This section has no associated Explanatory Notes

(1)The Banking Act 2009 is amended as follows.

(2)In section 1 (overview), after the entry in the Table relating to section 89A, insert—

Sections 89B to 89GUK clearing houses.

(3)In section 2 (interpretation: “bank”), after subsection (8) insert—

(9)Section 89B applies this Part to UK clearing houses with modifications.

(4)After section 39 insert—

39ABanks which are clearing houses

Sections 89C to 89E (clearing house rules, membership and recognition) apply in relation to a bank which would be a UK clearing house but for section 89G(2) (exclusion of banks etc from definition of UK clearing house) as they apply in relation to a UK clearing house.

(5)In section 75(5) (power to change law: application to other institutions), after paragraph (ca) insert—

(cb)to UK clearing houses, or.

(6)After section 89A (and in Part 1) insert—

UK clearing housesE+W+S+N.I.
89BApplication to UK clearing houses

(1)This Part applies to UK clearing houses as it applies to banks, subject to—

(a)the modifications specified in subsections (2) to (5), and in the Table in subsection (6), and

(b)any other necessary modifications.

(2)For section 13 substitute—

13Transfer of ownership

(1)The third stabilisation option is to transfer ownership of the UK clearing house to any person.

(2)For that purpose the Bank of England may make one or more share transfer instruments.

(3)For sections 28 and 29 substitute—

28Onward transfer

(1)This section applies where the Bank of England has made a share transfer instrument, in respect of securities issued by a UK clearing house, in accordance with section 13(2) (“the original instrument”).

(2)The Bank of England may make one or more onward share transfer instruments.

(3)An onward share transfer instrument is a share transfer instrument which—

(a)provides for the transfer of—

(i)securities which were issued by the UK clearing house before the original instrument and have been transferred by the original instrument or a supplemental share transfer instrument, or

(ii)securities which were issued by the UK clearing house after the original instrument;

(b)makes other provision for the purposes of, or in connection with, the transfer of securities issued by the UK clearing house (whether the transfer has been or is to be effected by that instrument, by another share transfer instrument or otherwise).

(4)An onward share transfer instrument may not transfer securities to the transferor under the original instrument.

(5)The Bank of England may not make an onward share transfer instrument unless the transferee under the original instrument is—

(a)the Bank of England,

(b)a nominee of the Treasury, or

(c)a company wholly owned by the Bank of England or the Treasury.

(6)Sections 7 and 8 do not apply to an onward share transfer instrument (but it is to be treated in the same way as any other share transfer instrument for all other purposes, including for the purposes of the application of a power under this Part).

(7)Before making an onward share transfer instrument the Bank of England must consult—

(a)if the UK clearing house is a PRA-authorised person, the PRA, and

(b)the FCA.

(8)Section 26 applies where the Bank of England has made an onward share transfer instrument.

29Reverse share transfer

(1)This section applies where the Bank of England has made a share transfer instrument in accordance with section 13(2) (“the original instrument”) providing for the transfer of securities issued by a UK clearing house to a person (“the original transferee”).

(2)The Bank of England may make one or more reverse share transfer instruments in respect of securities issued by the UK clearing house and held by the original transferee (whether or not they were transferred by the original instrument).

(3)If the Bank of England makes an onward share transfer instrument in respect of securities transferred by the original instrument, the Bank may make one or more reverse share transfer instruments in respect of securities issued by the UK clearing house and held by a transferee under the onward share transfer instrument (“the onward transferee”).

(4)A reverse share transfer instrument is a share transfer instrument which—

(a)provides for transfer to the transferor under the original instrument (where subsection (2) applies);

(b)provides for transfer to the original transferee (where subsection (3) applies);

(c)makes other provision for the purposes of, or in connection with, the transfer of securities which are, could be or could have been transferred under paragraph (a) or (b).

(5)The Bank of England may not make a reverse share transfer instrument under subsection (2) unless—

(a)the original transferee is—

(i)the Bank of England,

(ii)a company wholly owned by the Bank of England or the Treasury, or

(iii)a nominee of the Treasury, or

(b)the reverse share transfer instrument is made with the written consent of the original transferee.

(6)The Bank of England may not make a reverse share transfer instrument under subsection (3) unless—

(a)the onward transferee is—

(i)the Bank of England,

(ii)a company wholly owned by the Bank of England or the Treasury, or

(iii)a nominee of the Treasury, or

(b)the reverse share transfer instrument is made with the written consent of the onward transferee.

(7)Sections 7 and 8 do not apply to a reverse share transfer instrument (but it is to be treated in the same way as any other share transfer instrument for all other purposes including for the purposes of the application of a power under this Part).

(8)Before making a reverse share transfer instrument the Bank of England must consult—

(a)if the UK clearing house is a PRA-authorised person, the PRA, and

(b)the FCA.

(9)Section 26 applies where the Bank of England has made a reverse share transfer instrument.

(4)For sections 45 and 46 substitute—

45Transfer of ownership: property transfer

(1)This section applies where the Bank of England has made a share transfer instrument, in respect of securities issued by a UK clearing house, in accordance with section 13(2) (“the original instrument”).

(2)The Bank of England may make one or more property transfer instruments.

(3)A property transfer instrument is an instrument which—

(a)provides for property, rights or liabilities of the UK clearing house to be transferred (whether accruing or arising before or after the original instrument);

(b)makes other provision for the purposes of, or in connection with, the transfer of property, rights or liabilities of the UK clearing house (whether the transfer has been or is to be effected by the instrument or otherwise).

(4)The Bank of England may not make a property transfer instrument in accordance with this section unless the original instrument transferred securities to—

(a)the Bank of England,

(b)a company wholly owned by the Bank of England or the Treasury, or

(c)a nominee of the Treasury.

(5)Sections 7 and 8 do not apply to a property transfer instrument made in accordance with this section.

(6)Section 42 applies where the Bank of England has made a property transfer instrument in accordance with this section.

(7)Before making a property transfer instrument in accordance with this section, the Bank of England must consult—

(a)if the UK clearing house is a PRA-authorised person, the PRA, and

(b)the FCA.

46Transfer of ownership: reverse property transfer

(1)This section applies where the Bank of England has made a property transfer instrument in accordance with section 45(2) (“the original instrument”).

(2)The Bank of England may make one or more reverse property transfer instruments in respect of property, rights or liabilities of the transferee under the original instrument.

(3)A reverse property transfer instrument is a property transfer instrument which—

(a)provides for transfer to the transferor under the original instrument;

(b)makes other provision for the purposes of, or in connection with, the transfer of property, rights or liabilities which are, could be or could have been transferred.

(4)The Bank of England must not make a reverse property transfer instrument unless—

(a)the transferee under the original instrument is—

(i)the Bank of England,

(ii)a company wholly owned by the Bank of England or the Treasury, or

(iii)a nominee of the Treasury, or

(b)the reverse property transfer instrument is made with the written consent of the transferee under the original instrument.

(5)Sections 7 and 8 do not apply to a reverse property transfer instrument made in accordance with this section.

(6)Before making a reverse property transfer instrument in accordance with this section, the Bank of England must consult—

(a)if the UK clearing house is a PRA-authorised person, the PRA, and

(b)the FCA.

(7)Section 42 applies where the Bank of England has made a reverse property transfer instrument in accordance with this section.

(5)For section 81 substitute—

81Transfer of ownership: report

(1)This section applies where the Bank of England makes one or more share transfer instruments in respect of a UK clearing house under section 13(2).

(2)The Bank must report to the Chancellor of the Exchequer about the exercise of the power to make share transfer instruments under that section.

(3)The report must comply with any requirements as to content specified by the Treasury.

(4)The report must be made as soon as is reasonably practicable after the end of one year beginning with the date of the first transfer instrument made under section 13(2).

(6)The table mentioned in subsection (1)(a) is as follows—

TABLE OF MODIFICATIONS
ProvisionModification
Section 1Ignore subsection (2)(b) and (c).

In subsection (3)(c), for “to temporary public ownership” substitute “ of ownership ”.

In subsection (4)(a), for “15, 16, 26 to 31 and 85” substitute “ 15, 26 and 28 to 31 ”.

Section 4Ignore subsection (2)(b) and (c).
Ignore subsection (3)(a), (b) and (ba).

In subsection (5), for “banking” substitute “ financial ”.

In subsection (6), for “protect depositors” substitute “ maintain the continuity of central counterparty clearing services ”.

Ignore subsections (8A), (8B) and (9).
Section 5Ignore subsection (1)(b) and (c).

In subsection (3)—

(a)

for “Sections 12 and 13 require” substitute “ Section 12 requires ”, and

(b)

ignore the words “and temporary public ownership”.

Section 6

In subsection (4)—

(a)

after “Before” insert “ issuing or ”, and

(b)

ignore paragraph (d).

In subsection (5) after “after” insert “ issuing or ”.

Section 7

In subsection (1), for “PRA” substitute “ Bank of England ”.

In subsection (2), for the words following “satisfy the” substitute “ recognition requirements ”.

The Bank of England may treat Condition 1 as met if satisfied that it would be met but for the withdrawal or possible withdrawal of critical clearing services by the UK clearing house.

In subsection (3), for “satisfy the threshold conditions” substitute “ maintain the continuity of any critical clearing services it provides while also satisfying the recognition requirements ”.

In subsection (4), for “PRA” substitute “ Bank of England ”.

Ignore subsection (4A).

In subsection (5)—

(a)

for “PRA” substitute “ Bank of England ”, and

(b)

ignore paragraph (a) unless the UK clearing house is a PRA-authorised person, in which case for “Bank of England” substitute “ PRA ”.

Ignore subsections (7) and (8).

For the purposes of section 7—

(a)

critical clearing services” means central counterparty clearing services the withdrawal of which may, in the Bank of England's opinion, threaten the stability of the financial systems of the United Kingdom, and

(b)

recognition requirements” means the requirements resulting from section 286 of the Financial Services and Markets Act 2000.

Section 8In subsection (1), omit “in accordance with section 11(2) or 12(2)”.
Ignore subsection (2)(c) and (d).
In subsection (3), ignore paragraph (a) unless the UK clearing house is a PRA-authorised person.
In subsection (4), ignore the words “in accordance with section 11(2) or 12(2)”.
Section 9Ignore section 9.
Section 11Ignore subsection (2)(a).
Section 13See above.
Section 14Ignore subsection (5).
Section 16Ignore section 16.
Section 20Ignore subsections (2) and (4).
Section 24In subsection (1), ignore paragraph (c) unless the UK clearing house is a PRA-authorised person.
Section 25Ignore section 25.
Section 26

In subsection (1), for “11(2)” substitute “ 13(2) ”.

In subsection (5), ignore paragraph (a) unless the UK clearing house is a PRA-authorised person.

In subsection (6), for “11(2)” substitute “ 13(2) ”.

Sections 26A and 27Ignore sections 26A and 27.
Sections 28 and 29See above.
Section 30In subsection (5), ignore paragraph (a) unless the UK clearing house is a PRA-authorised person.
Section 31

In subsection (4), for “7, 8 and 51” substitute “ 7 and 8 ”.

In subsection (5), ignore paragraph (a) unless the UK clearing house is a PRA-authorised person.
Section 41In subsection (1), ignore paragraph (c) unless the UK clearing house is a PRA-authorised person.
Section 42In subsection (5), ignore paragraph (a) unless the UK clearing house is a PRA-authorised person.
Section 42A

In subsection (5), for “7, 8 and 50” substitute “ 7 and 8 ”.

In subsection (6), ignore paragraph (a) unless the UK clearing house is a PRA-authorised person.
Section 43

In subsection (6), for “7, 8 and 52” substitute “ 7 and 8 ”.

In subsection (7), ignore paragraph (a) unless the UK clearing house is a PRA-authorised person.
Section 44

In subsection (5), for “7, 8 and 52” substitute “ 7 and 8 ”.

In subsection (6), ignore paragraph (a) unless the UK clearing house is a PRA-authorised person.
Sections 45 and 46See above.
Sections 49 to 53Ignore sections 49 to 53.
Section 54

In subsection (1), for “A compensation scheme order” substitute “ An order under section 89F ”.

In subsection (4)(b), for “compensation scheme order” substitute “ the order under section 89F ”.

Section 55

In subsection (10), for “to which section 62 applies” substitute “ under section 89F ”.

Section 56

In subsection (6), for “to which section 62 applies” substitute “ under section 89F ”.

Section 57

In subsection (1), for “A compensation scheme order” substitute “ An order under section 89F ”.

In subsection (4)(a), for “has had a permission under Part 4A of the Financial Services and Markets Act 2000 (regulated activities) varied or cancelled” substitute “ no longer qualifies as a recognised body under Part 18 of the Financial Services and Markets Act 2000 (recognised investment exchanges and clearing houses) or is subject to a requirement imposed under that Part ”.

Section 58

In subsection (1), for “A resolution fund order” substitute “ An order under section 89F that provides for transferors to become entitled to the proceeds of the disposal of things transferred ”.

Ignore subsection (3).

In subsection (4), for “A resolution fund order” substitute “ An order under section 89F that provides for transferors to become entitled to the proceeds of the disposal of things transferred ”.

In subsection (5), for “A resolution fund order” substitute “ An order under section 89F that provides for transferors to become entitled to the proceeds of the disposal of things transferred ”.

Ignore subsections (6) to (8).
Section 59Ignore section 59.
Section 60In subsection (3)(c), ignore the references to bank insolvency and bank administration.

In subsection (4)—

(a)

ignore paragraphs (a) and (b), and

(b)

in paragraph (c), for “a third party compensation order” substitute “ an order under section 89F ”.

In subsection (5)—

(a)

ignore paragraph (a), and

(b)

in paragraph (c), for “a compensation scheme order or resolution fund order” substitute “ an order under section 89F ”.

Section 61

In subsection (1)—

(a)

ignore paragraphs (a) to (c), and

(b)

treat the subsection as including a reference to orders under section 89F.

Ignore subsection (2)(b).
Section 62Ignore section 62.
Section 65

In subsection (1)(a)(ii), for “order” substitute “ instrument ”.

In subsection (3)—

(a)

in paragraph (a), ignore the words “where subsection (1)(a)(i) applies”, and

(b)

ignore paragraph (b).

Section 66

In subsection (1)—

(a)

in paragraph (a), ignore the reference to section 11(2)(a),

(b)

in paragraph (d)(i), ignore the words following “England”, and

(c)

ignore paragraph (d)(ii).

Section 68

In subsection (1)(a), for “order” substitute “ instrument ”.

Section 69

In subsection (4)—

(a)

in paragraph (a), ignore the words “in relation to sections 63 and 64”, and

(b)

ignore paragraph (b).

Section 70

In subsection (3)—

(a)

in paragraph (a), ignore the words “in relation to section 63”, and

(b)

ignore paragraph (b).

Section 71Ignore subsection (1)(a).
Section 72Ignore subsection (1)(a).
Section 73Ignore subsection (1)(a).
Section 79AIn subsection (2), ignore the words “share transfer instruments and”.
Section 81See above.
Section 81B

In subsection (1), for “or 12(2)” substitute “ , 12(2) or 13(2) ”.

Ignore subsection (3)(c) and (d).
In subsection (6), ignore paragraph (b) unless the clearing house is a PRA-authorised person.
Section 81CIn subsection (2), ignore the words “and the bank administration procedure”.
Ignore subsection (3).
Sections 82 and 83Ignore sections 82 and 83.
89CClearing house rules

(1)A property transfer instrument made in respect of a UK clearing house may make provision about the consequences of a transfer for the rules of the clearing house.

(2)In particular, an instrument may—

(a)modify or amend the rules of a UK clearing house;

(b)in a case where some, but not all, of the business of a UK clearing house is transferred, make provision as to the application of the rules in relation to the parts of the business that are, and are not, transferred.

(3)Provision by virtue of this section may (but need not) be limited so as to have effect—

(a)for a specified period, or

(b)until a specified event occurs or does not occur.

89DClearing house membership

(1)A property transfer instrument made in respect of a UK clearing house may make provision about the consequences of a transfer for membership of the clearing house.

(2)In particular, an instrument may—

(a)make provision modifying the terms on which a person is a member of a UK clearing house;

(b)in a case where some, but not all, of the business of a UK clearing house is transferred, provide for a person who was a member of the transferor to remain a member of the transferor while also becoming a member of the transferee.

89ERecognition of transferee company

(1)The Bank of England may provide for a company to which the business of a UK clearing house is transferred in accordance with section 12(2) to be treated as a recognised clearing house for the purposes of the Financial Services and Markets Act 2000—

(a)for a specified period, or

(b)until a specified event occurs.

(2)The provision may have effect—

(a)for a period specified in the instrument, or

(b)until the occurrence of an event specified or described in the instrument.

(3)The power under this section—

(a)may be exercised only with the consent of the Treasury, and

(b)must be exercised by way of provision in a property transfer instrument (or supplemental instrument).

89FClearing house compensation orders

(1)The Treasury may by order make provision for protecting the financial interests of transferors and others in connection with any transfer under this Part as it applies by virtue of section 89B.

(2)The order may make provision establishing a scheme—

(a)for determining whether transferors should be paid compensation, or providing for transferors to be paid compensation, and establishing a scheme for paying any compensation,

(b)under which transferors become entitled to the proceeds of the disposal of things transferred in specified circumstances, and to a specified extent, and

(c)for compensation to be paid to persons other than transferors.

(3)An order—

(a)is to be made by statutory instrument, and

(b)may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

89GInterpretation: “UK clearing house” &c.

(1)In this Part “UK clearing house” means a clearing house—

(a)which is incorporated in, or formed under the law of any part of, the United Kingdom,

(b)which provides central counterparty clearing services, and

(c)in relation to which a recognition order is in force under Part 18 of the Financial Services and Markets Act 2000.

(2)But “UK clearing house” does not include a clearing house which is also—

(a)a bank,

(b)a building society (within the meaning of section 119 of the Building Societies Act 1986),

(c)a credit union (within the meaning of section 31 of the Credit Unions Act 1979 or Article 2(2) of the Credit Unions (Northern Ireland) Order 1985), or

(d)an investment firm.

(3)Where a stabilisation power is exercised in respect of a UK clearing house, it does not cease to be a UK clearing house for the purposes of this Part if the recognition order referred to in subsection (1)(c) is later revoked.

(4)In this Part—

  • central counterparty clearing services” has the same meaning as in section 155 of the Companies Act 1989 (see subsection (3A) of that section), and

  • PRA-authorised person” has the meaning given by section 2B(5) of the Financial Services and Markets Act 2000.

(7)In the Table in section 259 (statutory instruments), in Part 1 after the entry relating to section 89 insert—

89FClearing house compensation ordersDraft affirmative resolution

(8)In the Table in section 261 (index of defined terms)—

(a)after the entry relating to “bridge bank share transfer instrument” insert—

central counterparty clearing services89G,

(b)after the entry relating to “partial property transfer” insert—

PRA-authorised person89G

(c)at the end insert—

UK clearing house89G.
Annotations: Help about Annotation
Close

Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Commencement Information

I1S. 102(1) in force at 5.6.2014 for specified purposes by S.I. 2014/1447, art. 2(g)

I2S. 102(1)(6) in force at 1.8.2014 in so far as not already in force by S.I. 2014/1847, art. 2

I3S. 102(2)-(5) (7) (8) in force at 1.8.2014 by S.I. 2014/1847, art. 2

I4S. 102(6) in force at 5.6.2014 for specified purposes by S.I. 2014/1447, art. 2(h)

Back to top

Options/Help

Print Options

You have chosen to open The Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open The Whole Act as a PDF

The Whole Act you have selected contains over 200 provisions and might take some time to download.

Would you like to continue?

You have chosen to open The Whole Act without Schedules

The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open The Whole Act without Schedules as a PDF

The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download.

Would you like to continue?

You have chosen to open the Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open the Whole Act without Schedules

The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open Schedules only

The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

Close

Legislation is available in different versions:

Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.

Original (As Enacted or Made):The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.

Close

See additional information alongside the content

Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.

Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.

Close

Opening Options

Different options to open legislation in order to view more content on screen at once

Close

Explanatory Notes

Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.

Close

More Resources

Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • correction slips
  • links to related legislation and further information resources
Close

More Resources

Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • correction slips

Click 'View More' or select 'More Resources' tab for additional information including:

  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • links to related legislation and further information resources