Contravention by relevant EEA firm with UK branch of requirement under markets in financial instruments directive: Authority primarily responsible for securing compliance194A

1

This section applies if—

a

a relevant EEA firm has a branch in the United Kingdom; and

b

the Authority ascertains that the firm has contravened, or is contravening, a requirement falling within subsection (3) (in a case to which Article 62.2 of the markets in financial instruments directive applies).

2

“Relevant EEA firm” means an EEA firm falling within paragraph 5(a) or (b) of Schedule 3 which is exercising in the United Kingdom an EEA right deriving from the markets in financial instruments directive.

3

A requirement falls within this subsection if it is imposed on the firm—

a

by any provision of or made under this Act which implements the markets in financial instruments directive; or

b

by any directly applicable Community regulation made under that directive.

4

The Authority must give the firm written notice which—

a

requires the firm to put an end to the contravention;

b

states that the Authority’s power of intervention will become exercisable in relation to the firm if the firm continues the contravention; and

c

indicates any requirements that the Authority proposes to impose on the firm in exercise of its power of intervention in the event of the power becoming exercisable.

5

The Authority may exercise its power of intervention in respect of the firm if—

a

a reasonable time has expired since the giving of the notice under subsection (4);

b

the firm has failed to put an end to the contravention within that time; and

c

the Authority has informed the firm’s home state regulator of its intention to exercise its power of intervention in respect of the firm.

6

Subsection (5) applies whether or not the Authority’s power of intervention is also exercisable as a result of section 194.

7

If the Authority exercises its power of intervention in respect of a relevant EEA firm by virtue of subsection (5), it must at the earliest opportunity inform the firm’s home state regulator and the Commission of—

a

the fact that the Authority has exercised that power in respect of the firm; and

b

any requirements it has imposed on the firm in exercise of the power.

Contravention by relevant EEA firm of requirement under markets in financial instruments directive: home state regulator primarily responsible for securing compliance195A

1

This section applies if the Authority has clear and demonstrable grounds for believing that a relevant EEA firm has contravened, or is contravening, a requirement falling within subsection (2) (in a case to which Article 62.1 or 62.3 of the markets in financial instruments directive applies).

2

A requirement falls within this subsection if it is imposed on the firm—

a

by or under any provision adopted in the firm’s home state for the purpose of implementing the markets in financial instruments directive; or

b

by any directly applicable Community regulation made under that directive.

3

The Authority must notify the firm’s home state regulator of the situation mentioned in subsection (1).

4

The notice under subsection (3) must—

a

request that the home state regulator take all appropriate measures for the purpose of ensuring that the firm puts an end to the contravention;

b

state that the Authority’s power of intervention is likely to become exercisable in relation to the firm if the firm continues the contravention; and

c

indicate any requirements that the Authority proposes to impose on the firm in exercise of its power of intervention in the event of the power becoming exercisable.

5

The Authority may exercise its power of intervention in respect of the firm if—

a

a reasonable time has expired since the giving of the notice under subsection (3); and

b

conditions A to C are satisfied.

6

Condition A is that—

a

the firm’s home state regulator has failed or refused to take measures for the purpose mentioned in subsection (4)(a); or

b

any measures taken by the home state regulator have proved inadequate for that purpose.

7

Condition B is that the firm is acting in a manner which is clearly prejudicial to the interests of investors in the United Kingdom or the orderly functioning of the markets.

8

Condition C is that the Authority has informed the firm’s home state regulator of its intention to exercise its power of intervention in respect of the firm.

9

Subsection (5) applies whether or not the Authority’s power of intervention is also exercisable as a result of section 194 or 195.

10

If the Authority exercises its power of intervention in respect of a relevant EEA firm by virtue of subsection (5), it must at the earliest opportunity inform the Commission of—

a

the fact that the Authority has exercised that power in respect of the firm; and

b

any requirements it has imposed on the firm in exercise of the power.

11

In this section—

• “home state”, in relation to a relevant EEA firm, means—

  1. a

     in the case of a firm which is a body corporate, the EEA State in which the firm has its registered office or, if it has no registered office, its head office; and

  2. b

     in any other case, the EEA State in which the firm has its head office;

• “relevant EEA firm” has the same meaning as in section 194A.