The Local Authorities (Contracting Out of Investment Functions) Order 1996

Qualifications of contractors

9.—(1) In this article —

“EEA State” means a State which is a contracting party to the agreement on the European Economic Area signed at Oporto on 2nd May 1992(1) as adjusted by the Protocol signed at Brussels on 17th March 1993;(2)

“European institution” has the same meaning as in the Banking Coordination (Second Council Directive) Regulations 1992 (“the 1992 Regulations”);(3)

“European investment firm” has the same meaning as in the Investment Services Regulations 1995 (“the 1995 Regulations”);(4) and

“home-regulated investment business”—

(a)

in relation to a European institution, has the same meaning as in regulation 2(l) of the 1992 Regulations; and

(b)

in relation to a European investment firm, has the same meaning as in regulation 2(l) of the 1995 Regulations.

(2) A reference in this article to the carrying out of home-regulated investment business in the United Kingdom shall be construed —

(a) in relation to a European institution, in accordance with regulation 2(4) of the l992 Regulations; and

(b) in relation to a European investment firm, in accordance with regulation 2(6) of the 1995 Regulations.

(3) In relation to any function which a contractor is authorised to exercise by the authority, the contractor shall ensure that he and his employees are suitably qualified to make investment decisions on the authority’s behalf and have practical experience of financial matters, including making investments, and, without prejudice to the generality of this condition, shall ensure that he is —

(a) an authorised person within the meaning given in section 207 of the Financial Services Act 1986 (“the 1986 Act”);(5)

(b) a European institution or a European investment firm carrying on home-regulated investment business in the United Kingdom; or

(c) a person —

(i) who does not transact investment business (within the meaning of the 1986 Act) from a permanent place of business maintained by him in the United Kingdom;

(ii) whose head office is situated in an EEA State other than the United Kingdom;

(iii) who is recognised by the law of that EEA State as a national of that or another EEA State; and

(iv) who is for the time being authorised under that law to engage in one or more of the activities falling within Part II of Schedule 1 to the 1986 Act, and is not precluded by that law from managing assets belonging to another person.

(1)

Cm 2073.

(2)

Cm 2183.

(3)

S.I. 1992/3218.

(4)

S.I. 1995/3275.

(5)

1986 c. 60; as amended by S.I. 1988/318 and S.I. 1988/803.