The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2002

Explanatory Note

(This note is not part of the Order)

This Order amends the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) (“the Regulated Activities Order”), to take account of the European Parliament and Council Directive of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce in the Internal Market (No. 2000/31/EC) (“the Directive”).

This Order should be read with the Electronic Commerce Directive (Financial Services and Markets) Regulations 2002 (S.I. 2002/1775) and the Financial Services and Markets Act 2000 (Financial Promotion) (Amendment) (Electronic Commerce Directive) Order 2002 (S.I. 2002/2157), which make additional provisions in connection with the Directive. The Order should also be read with forthcoming regulations to be made by the Secretary of State for Trade and Industry, which will give effect to the Directive in other areas.

Under Article 3.2 of the Directive, Member States are prohibited from restricting, for reasons falling within the “co-ordinated field” (as defined in Article 2(h) of the Directive), the freedom to provide “information society services” (as defined in Article 2(a)) from other Member States of the European Economic Area. Excluded from this prohibition by Article 3.3 of the Directive are, interalia, services consisting of the effecting or carrying out of a contract of insurance as principal, where that activity falls within the scope of any of the insurance directives (as defined in section 425 of, and Schedule 3 to, the Financial Services and Markets Act 2000 (c. 8 )).

Article 2 of this Order amends the Regulated Activities Order by inserting a new article 72A, which creates a general exclusion from the definition of “regulated activity” for activities consisting of the provision of information society services from places of establishment in other EEA States. Paragraph (2) of the new article limits the exclusion so that it does not extend to the effecting or carrying out of a contract of insurance as principal, where that activity is carried out by an undertaking which has received official authorisation in accordance with any of the insurance directives, and the insurance concerned falls within the scope of any of those directives.

Article 3 of this Order makes consequential amendments to other articles of the Regulated Activities Order.