PART 4Conduct of persons working in financial services sector
Offence
37Section 36: interpretation
1
This section has effect for the interpretation of section 36.
2
“Financial institution” means a UK institution which—
a
meets condition A or B, and
b
is not an insurer or a credit union.
3
Condition A is that it has permission under Part 4A of FSMA 2000 to carry on the regulated activity of accepting deposits.
4
Condition B is that—
a
it is for the purposes of FSMA 2000 an investment firm (see section 424A of that Act),
b
it has permission under Part 4A of that Act to carry on the regulated activity of dealing in investments as principal, and
c
when carried on by it, that activity is a PRA-regulated activity.
5
In subsection (2)—
a
“UK institution” means an institution which is incorporated in, or formed under the law of any part of, the United Kingdom;
b
“insurer” means an institution which is authorised under FSMA 2000 to carry on the regulated activity of effecting or carrying out contracts of insurance as principal;
c
“credit union” means a credit union as defined by section 31 of the Credit Unions Act 1979 or a credit union as defined by Article 2(2) of the Credit Unions (Northern Ireland) Order 1985.
6
7
A person is a “senior manager” in relation to a financial institution if, under an arrangement entered into by the institution, or by a contractor of the institution, in relation to the carrying on by the institution of a regulated activity, the person performs a senior management function.
8
A “senior management function” is a function designated as such—
a
by the FCA under subsection (6A) of section 59 of FSMA 2000 (approval for particular arrangements), or
b
by the PRA under subsection (6B) of that section.
9
A financial institution (“F”) is to be regarded as failing where—
a
F enters insolvency,
b
any of the stabilisation options in Part 1 of the Banking Act 2009 is achieved in relation to F, or
c
F is taken for the purposes of the Financial Services Compensation Scheme to be unable, or likely to be unable, to satisfy claims against F.
10
In subsection (9)(a) “insolvency” includes—
a
bankruptcy,
b
liquidation,
c
bank insolvency,
d
administration,
e
bank administration,
f
receivership,
g
a composition between F and F’s creditors, and
h
a scheme of arrangement of F’s affairs.