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The Financial Conglomerates and Other Financial Groups Regulations 2004

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PART 2Exercise of supplementary supervision of regulated entitiesin a financial conglomerate

Notification of identification as a financial conglomerate and choice of co-ordinator

2.  (1)  Where the Authority has become the co-ordinator for a financial conglomerate, it must notify—

(a)the relevant member of that financial conglomerate;

(b)any competent authority which has given EEA authorisation to a regulated entity which is a member of that financial conglomerate;

(c)the competent authorities of the EEA State in which the parent undertaking of that financial conglomerate has its head office, unless that parent undertaking is a regulated entity; and

(d)the Commission,

that the group has been identified as a financial conglomerate for the purposes of Article 4 of the conglomerates directive and that the Authority is the co-ordinator for that financial conglomerate.

(2) Paragraph (3) applies if—

(a)the Authority is a relevant competent authority in relation to a financial conglomerate, and

(b)the Authority, in conjunction with the other relevant competent authorities, proposes to waive the criteria specified in Article 10(2) of the conglomerates directive (selection of the co-ordinator) and appoint a different competent authority as co-ordinator.

(3) Before the Authority, in conjunction with the other relevant competent authorities, waives the criteria specified in Article 10(2) of the conglomerates directive and appoints a different competent authority as co-ordinator, the Authority must, where there is a directive requirement to do so, give the financial conglomerate an opportunity to make representations.

(4) In this regulation, “the relevant member” of a financial conglomerate is—

(a)the parent undertaking at the head of the financial conglomerate; or

(b)where there is no parent undertaking at the head of the financial conglomerate, the regulated entity which—

(i)is in the most important financial sector (within the meaning given by Article 3(2) of the conglomerates directive); and

(ii)has the largest balance-sheet total in that sector.

Exercise of functions under Part IV of the Act for the purposes of carrying on supplementary supervision

3.  (1)  This regulation applies if the Authority is considering varying the Part IV permission of any person (“A”) where—

(a)A is a member of a financial conglomerate; and

(b)the Authority is acting in the course of carrying on supplementary supervision for the purposes of any provision (other than Article 11, 12, 16, 17 or 18(3)) of the conglomerates directive.

(2) Section 49(2) of the Act (obligation to consult home state regulators of connected persons) does not apply.

(3) Before varying the Part IV permission of A, the Authority must, where there is a directive requirement to do so—

(a)consult the relevant competent authorities in relation to the financial conglomerate of which A is a member;

(b)obtain the consent of those competent authorities; and

(c)consult the financial conglomerate of which A is a member.

Exercise of functions under section 148 of the Act for the purposes of carrying on supplementary supervision

4.  (1)  Paragraph (2) applies if the Authority is considering exercising any of the powers conferred on it by section 148 of the Act (modification or waiver of rules) in the course of carrying on supplementary supervision of a financial conglomerate for the purposes of any provision (other than Article 11, 12, 16, 17 or 18(3)) of the conglomerates directive.

(2) Before the Authority exercises such a power in relation to an authorised person who is a member of a financial conglomerate, the Authority must, where there is a directive requirement to do so—

(a)consult the relevant competent authorities in relation to the financial conglomerate of which that person is a member;

(b)obtain the consent of those competent authorities; and

(c)consult the financial conglomerate of which that person is a member.

Consultation in the case of major sanctions or exceptional measures

5.  (1)  Before the Authority—

(a)varies the Part IV permission of a member of a financial conglomerate (“D”);

(b)publishes a statement under section 205 of the Act (public censure) that it considers that D has contravened a requirement imposed on him by or under the Act;

(c)imposes a penalty on D in respect of such a contravention under section 206 of the Act (financial penalties); or

(d)exercises any of its powers (other than its powers under section 381, 383 or 384(2)) under Part XXV of the Act (injunctions and restitution) in relation to D,

it must, if it considers that the action constitutes a major sanction or an exceptional measure and is of importance for the supervisory tasks of the competent authority of any regulated entity which is a member of the same financial conglomerate as D, consult that competent authority.

(2) But paragraph (1) does not apply—

(a)where the Authority considers that there is an urgent need to act;

(b)where the Authority considers that such consultation may jeopardise the effectiveness of the action mentioned in paragraph (1); or

(c)where regulation 3, 8(3) or (4), 9 or 10 applies.

(3) Where paragraph (1) does not apply by virtue of paragraph (2)(a) or (b), the Authority must, as soon as is reasonably practicable, inform the competent authority referred to in paragraph (1) of the action that it has taken.

Authority functions and service of notifications

6.  (1)  Any function carried out by the Authority (whether in the capacity of a co-ordinator, a relevant competent authority or otherwise) for the purposes of the conglomerates directive (including a function conferred by these Regulations) is to be treated as a function conferred on the Authority by a provision of the Act.

(2) The Financial Services and Markets Act 2000 (Service of Notices) Regulations 2001(1) apply to any notifications given under regulation 2(1)(a) as they apply to any notice, direction or document of any kind given under the Act.

(1)

S.I. 2001/1420.

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