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The Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations 2001

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PART IPRELIMINARY

Citation and Commencement

1.  These Regulations may be cited as the Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations 2001 and come into force on 18th June 2001.

Interpretation

2.  In these Regulations—

“the Act” means the Financial Services and Markets Act 2000;

“Authority worker” means—

(a)

a person who is or has been employed by the Authority; or

(b)

an auditor or expert instructed by the Authority;

“criminal investigation” means an investigation of any crime, including an investigation of any alleged or suspected crime and an investigation of whether a crime has been committed;

“dependent territory” means the Channel Islands, the Isle of Man and any territory outside the British Islands for whose external relations the United Kingdom is responsible;

“dependent territory regulatory authority” means an overseas regulatory authority which exercises its functions in, and in relation to, a dependent territory;

“directive restrictions” means the restrictions imposed on the disclosure of information by article 25 of the investment services directive, article 30 of the banking consolidation directive, article 15 of the third life insurance directive, article 16 of the third non-life insurance directive, article 50 of the UCITS directive and article 25 of the listing particulars directive;

“disciplinary proceedings authority” means a person responsible for initiating prescribed disciplinary proceedings or determining the outcome of such proceedings;

“EEA competent authority” means a competent authority of an EEA state other than the United Kingdom for the purposes of any of the single market directives, the UCITS directive or the listing particulars directive;

“EEA regulatory authority” means an EEA competent authority or an overseas regulatory authority which exercises its functions in, and in relation to, an EEA State other than the United Kingdom;

“former regulated activities” means activities carried on before the coming into force of section 19 of the Act and which constitute—

(a)

investment business within the meaning of the Financial Services Act 1986(1);

(b)

deposit-taking business within the meaning of the Banking Act 1987(2);

(c)

insurance business within the meaning of the Insurance Companies Act 1982(3); or

(d)

insurance business within the meaning of the Friendly Societies Act 1992(4);

“former regulated person” means a person who, at any time before the coming into force of section 19 of the Act, was—

(a)

authorised under section 3 or 4 of the Insurance Companies Act 1982;

(b)

an authorised person within the meaning of the Financial Services Act 1986, or an appointed representative within the meaning of section 44(5) (appointed representatives) of that Act;

(c)

an authorised institution within the meaning of the Banking Act 1987;

(d)

a European institution within the meaning of the Banking Coordination (Second Council Directive) Regulations 1992(6);

(e)

a European investment firm within the meaning of the Investment Services Regulations 1995(7);

(f)

an EC company within the meaning of the Insurance Companies Act 1982 able to carry on direct insurance business through a branch in the United Kingdom, or provide insurance in the United Kingdom by virtue of paragraph 1 or 8 of Schedule 2F to that Act(8);

(g)

a friendly society authorised or treated as authorised for the purposes of Part IV of the Friendly Societies Act 1992, or permitted by virtue of section 31(2) or (3) of that Act to carry on activities without authorisation under that Part; or

(h)

a building society authorised or treated as authorised for the purposes of the Building Societies Act 1986(9);

“listing particulars directive” means Council Directive 80/390/EEC(10);

“non-EEA regulatory authority” means an overseas regulatory authority other than an EEA regulatory authority or a dependent territory regulatory authority;

“overseas regulatory authority” means—

(a)

an authority in a country or territory outside the United Kingdom which exercises any function of a kind mentioned in section 195(4) of the Act; or

(b)

an overseas investment exchange or overseas clearing house;

“prescribed disciplinary proceedings” means the disciplinary proceedings prescribed in Schedule 3;

“Secretary of State worker” means—

(a)

a person who is or has been employed by the Secretary of State; or

(b)

an auditor or expert instructed by the Secretary of State;

“single market directive information” means confidential information received by the Authority in the course of discharging its functions as the competent authority under any of the single market directives;

“the UCITS directive” means Council Directive 85/611/EEC(11);

“UCITS directive information” means confidential information received by the Authority in the course of discharging its functions as the competent authority under the UCITS directive.

PART IIDISCLOSURE OF CONFIDENTIAL INFORMATION GENERALLY

Disclosure by and to the Authority, the Secretary of State and the Treasury etc.

3.—(1) A disclosure of confidential information is permitted when it is made to any person—

(a)by the Authority or an Authority worker for the purpose of enabling or assisting the person making the disclosure to discharge any public functions of the Authority or (if different) of the Authority worker;

(b)by the Secretary of State or a Secretary of State worker for the purpose of enabling or assisting the person making the disclosure to discharge any public functions of the Secretary of State or (if different) of the Secretary of State worker;

(c)by the Treasury for the purpose of enabling or assisting the Treasury to discharge any of their public functions.

(2) A disclosure of confidential information is permitted when it is made by any primary recipient, or person obtaining the information directly or indirectly from a primary recipient, to the Authority, the Secretary of State or the Treasury for the purpose of enabling or assisting the Authority, the Secretary of State or the Treasury (as the case may be) to discharge any of its, his or their public functions.

(3) Paragraphs (1) and (2) do not permit disclosure in contravention of any of the directive restrictions.

Disclosure for the purposes of criminal proceedings and investigations

4.  A primary recipient of confidential information, or a person obtaining such information directly or indirectly from a primary recipient, is permitted to disclose such information to any person—

(a)for the purposes of any criminal investigation whatever which is being or may be carried out, whether in the United Kingdom or elsewhere;

(b)for the purposes of any criminal proceedings whatever which have been or may be initiated, whether in the United Kingdom or elsewhere; or

(c)for the purpose of initiating or bringing to an end any such investigation or proceedings, or of facilitating a determination of whether it or they should be initiated or brought to an end.

Disclosure for the purposes of certain other proceedings

5.—(1) Subject to paragraphs (4) and (5), a primary recipient of confidential information, or a person obtaining such information directly or indirectly from a primary recipient, is permitted to disclose such information to—

(a)a person mentioned in paragraph (3) for the purpose of initiating proceedings to which this regulation applies, or of facilitating a determination of whether they should be initiated; or

(b)any person for the purposes of proceedings to which this regulation applies and which have been initiated, or for the purpose of bringing to an end such proceedings, or of facilitating a determination of whether they should be brought to an end.

(2) A person mentioned in paragraph (3) (or a person who is employed by the Authority or the Secretary of State) is permitted to disclose confidential information to any person for a purpose mentioned in paragraph (1)(a).

(3) The persons referred to in paragraphs (1)(a) and (2) are—

(a)the Authority;

(b)the Secretary of State; and

(c)the Department of Enterprise, Trade and Investment in Northern Ireland.

(4) This regulation does not permit the disclosure of information with a view to the institution of, or in connection with, proceedings of the kind referred to in paragraph (6)(e) to the extent that—

(a)the information relates to an authorised person, former authorised person or former regulated person (“A”);

(b)the information also relates to another person (“B”) who, to the knowledge of the primary recipient (or person obtaining confidential information directly or indirectly from him), is or has been involved in an attempt to rescue A, or A’s business, from insolvency or impending insolvency; and

(c)B is not a director, controller or manager of A.

(5) This regulation does not permit disclosure in contravention of any of the directive restrictions.

(6) The proceedings to which this regulation applies are—

(a)civil proceedings arising under or by virtue of the Act, an enactment referred to in section 338 of the Act, the Banking Act 1979(12), the Friendly Societies Act 1974(13), the Insurance Companies Act 1982(14), the Financial Services Act 1986(15), the Building Societies Act 1986(16), the Banking Act 1987(17), the Friendly Societies Act 1992(18) or the Investment Services Regulations 1995(19);

(b)proceedings before the Tribunal;

(c)any other civil proceedings to which the Authority is, or is proposed to be, a party;

(d)proceedings under section 7 or 8 of the Company Directors Disqualification Act 1986(20) or article 10 or 11 of the Companies (Northern Ireland) Order 1989(21) in respect of a director or former director of an authorised person, former authorised person or former regulated person; or

(e)proceedings under Parts I to VI or IX to X of the Insolvency Act 1986(22), the Bankruptcy (Scotland) Act 1985(23) or Parts II to VII or IX or X of the Insolvency (Northern Ireland) Order 1989(24) in respect of an authorised person, former authorised person or former regulated person.

Disclosure in pursuance of a Community obligation

6.  A primary recipient of confidential information, or a person receiving such information directly or indirectly from a primary recipient, is permitted to disclose such information in pursuance of a Community obligation.

Restrictions on use of confidential information

7.  Where confidential information is disclosed under these Regulations to a person other than the Authority, the Secretary of State, the Treasury or the Bank of England, and the disclosure is made subject to any conditions as to the use to which the information may be put, the person to whom the information has been disclosed may not use the information in breach of any such condition, without the consent of the person who disclosed it to him.

PART IIIDISCLOSURE OF SINGLE MARKET DIRECTIVE INFORMATION AND UCITS DIRECTIVE INFORMATION

Application of this Part

8.  This Part applies to single market directive information and UCITS directive information.

Disclosure by the Authority or Authority workers to certain other persons

9.—(1) Subject to paragraphs (2) and (3), the Authority or an Authority worker is permitted to disclose information to which this Part applies to a person specified in the first column in Schedule 1 for the purpose of enabling or assisting that person to discharge any of the functions listed beside him in the second column in that Schedule.

(2) Paragraph (1) does not permit disclosure to a person specified in the first column in Part 3 of Schedule 1 unless the disclosure is provided for by a cooperation agreement of the kind referred to in—

(a)article 25.3 of the investment services directive;

(b)article 30.3 of the banking consolidation directive;

(c)article 15.3 of the third life insurance directive;

(d)article 16.3 of the third non-life insurance directive, or

(e)article 50.4 of the UCITS directive.

(3) Paragraph (1) does not permit disclosure to a person specified in the first column in Part 4 of Schedule 1—

(a)of information obtained from an EEA competent authority, unless that authority has given its express consent to the disclosure; or

(b)of information obtained in the course of an on-the-spot verification of the kind referred to in—

(i)article 24 of the investment services directive,

(ii)article 29 of the banking consolidation directive,

(iii)article 16 of the first life insurance directive, or

(iv)article 14 of the first non-life insurance directive,

unless the EEA competent authority of the state in which the on-the-spot verification was carried out has given its express consent to the disclosure.

Disclosure by Schedule 1 person

10.  A person specified in the first column in Schedule 1 is permitted to disclose information to which this Part applies for the purpose of enabling or assisting him to discharge any of the functions listed beside him in that Schedule.

PART IVDISCLOSURE OF CONFIDENTIAL INFORMATION NOT SUBJECT TO DIRECTIVE RESTRICTIONS

Application of this Part

11.  This Part applies to confidential information other than—

(a)single market directive information;

(b)UCITS directive information; or

(c)confidential information received by the Authority—

(i)in the course of discharging functions conferred by Part VI of the Act on the competent authority; and

(ii)from another competent authority designated for the purpose of the listing particulars directive, in the course of cooperating with that authority as provided for in article 24c.1 of that directive.

Disclosure by and to a Schedule 1 or 2 person or disciplinary proceedings authority

12.—(1) A primary recipient of information to which this Part applies, or a person obtaining such information directly or indirectly from a primary recipient, is permitted to disclose such information to—

(a)a person specified in the first column in Schedule 1 or 2 for the purpose of enabling or assisting that person to discharge any function listed beside him in the second column in Schedule 1 or 2; or

(b)a disciplinary proceedings authority for the purposes of any prescribed disciplinary proceedings which have been or may be initiated, or for the purpose of initiating or bringing to an end any such proceedings, or of facilitating a determination of whether they should be initiated or brought to an end.

(2) A person specified in the first column in Schedule 1 or 2 is permitted to disclose information to which this Part applies to any person for the purpose of enabling or assisting the person making the disclosure to discharge any function listed beside him in the second column in Schedule 1 or 2.

(3) A disciplinary proceedings authority is permitted to disclose information to which this Part applies to any person for any of the purposes mentioned in paragraph (1)(b).

PART VTRANSITIONAL PROVISIONS

Interpretation

13.  In this Part—

“pre-commencement information” means information which is subject to restrictions (with or without qualifications or exceptions) on disclosure by virtue of a pre-commencement provision;

“pre-commencement provision” means—

(a)

any provision in—

(i)

Schedule 2B to the Insurance Companies Act 1982(25);

(ii)

Part VIII of the Financial Services Act 1986(26);

(iii)

Part V of the Banking Act 1987(27); or

(iv)

SRO rules;

which imposes restrictions on the disclosure of information, or creates exceptions or qualifications to such restrictions; or

(b)

regulation 48 of the Investment Services Regulations 1995(28);

“recognised self-regulating organisation” means a body which immediately before the coming into force of section 348 of the Act was a recognised self-regulating organisation within the meaning of section 8(1) of the Financial Services Act 1986, or a recognised self-regulating organisation for friendly societies within the meaning of Schedule 11 to that Act;

“SRO rules” means the rules of a recognised self-regulating organisation;

“transitional information” means information which immediately before the coming into force of section 19 of the Act was subject to restrictions on disclosure by virtue of a pre-commencement provision.

Disclosure of pre-commencement information

14.—(1) Before the coming into force of section 19 of the Act, each pre-commencement provision is to be treated as permitting the disclosure of pre-commencement information—

(a)in accordance with regulation 3(1) as if it were confidential information;

(b)to the Authority, the Secretary of State or the Treasury for the purpose referred to in regulation 3(2);

(c)to any person for the purposes referred to in regulation 4; and

(d)to—

(i)a person mentioned in regulation 5(3) for the purpose referred to in regulation 5(1)(a); or

(ii)any person for the purposes referred to in regulation 5(1)(b),

but only if the proceedings in question are of the kind referred to in regulation 5(6)(a), (b) or (c).

(2) Paragraph (1) is not to be taken as—

(a)precluding disclosure of pre-commencement information where that is otherwise permitted under the pre-commencement provision in question; or

(b)permitting disclosure in contravention of any of the directive restrictions.

Disclosure of transitional information

15.—(1) After the coming into force of section 19 of the Act, sections 348, 349 and 352 of the Act apply in relation to transitional information in the same way as they apply in relation to confidential information within the meaning of section 348(2) of the Act.

(2) Paragraph (1) does not apply to transitional information which—

(a)has been made available to the public by virtue of being disclosed in any circumstances in which, or for any purposes for which, disclosure is not precluded by section 348 of the Act or a pre-commencement provision; or

(b)satisfies the criterion set out in section 348(4)(b) of the Act.

(3) For the purposes of sections 348 and 349 of the Act as they apply by virtue of paragraph (1)—

(a)a person who holds transitional information is to be treated as a primary recipient of the information if he—

(i)obtained it as mentioned in paragraph 1(2) or 5(1)(a) of Schedule 2B to the Insurance Companies Act 1982(29);

(ii)was a primary recipient of the information for the purposes of section 179 of the Financial Services Act 1986(30);

(iii)received it as mentioned in section 82(1)(a) of the Banking Act 1987(31); or

(iv)received it as mentioned in regulation 48(1) of the Investment Services Regulations 1995(32);

(b)any other person who holds transitional information is to be treated as having obtained the information directly or indirectly from a primary recipient.

(4) Transitional information which is subject to directive restrictions imposed by the single market directives or the UCITS directive is to be treated for the purposes of these Regulations as single market directive information or UCITS directive information respectively.

(5) Part IV of these Regulations does not apply to transitional information which is subject to directive restrictions imposed by article 25.3 of the listing particulars directive.

Disclosure by recognised self-regulating organisations

16.  If a recognised self-regulating organisation discloses any information to the Authority for the purpose of enabling or assisting the Authority to discharge functions corresponding to functions of the organisation, the disclosure is not to be taken as a contravention of any duty to which the organisation is subject.

Gordon Brown

David Jamieson

Two of the Lords Commissioners of Her Majesty’s Treasury

15th June 2001

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