The Recognised Auction Platforms Regulations 2011

PART 4 Amendments to secondary legislation

Amendment of the Financial Services and Markets Act 2000 (Prescribed Markets and Qualifying Investments) Order 2001

10.—(1) The Financial Services and Markets Act 2000 (Prescribed Markets and Qualifying Investments) Order 2001(1) is amended as follows.

(2) In article 3, insert after the definition of “the Act”—

““auctioned products” has the meaning given in Article 4 of Commission Regulation (EU) No 1031/2010 on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to Directive 2003/87/EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emission allowances trading within the Community;

“emission allowance auctioning regulation” means Commission Regulation (EU) No 1031/2010 of 12 November 2010 on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to the emission allowance trading directive;

“recognised auction platform” means a recognised investment exchange in relation to which there is in force a recognition order made under regulation 2 of the Recognised Auction Platforms Regulations 2011 (recognition orders);”.

(3) In article 4—

(a) in the heading, insert at the end “and auction platforms”;

(b) after paragraph (2), insert—

“(3) There are prescribed, as auction platforms to which subsections (2), (3), (5), (6) and (7) of section 118(2) (as modified by the Recognised Auction Platform Regulations 2011) apply, all recognised auction platforms, and all other auction platforms which have been appointed under the emission allowance auctioning regulation.

(4) There are prescribed, as auction platforms to which subsections (4) and (8) of section 118 (as modified by the Recognised Auction Platform Regulations 2011) apply, all recognised auction platforms.

(5) There are prescribed, as auction platforms to which subsection (8A) of section 118 as inserted by the modifications made to that section by the Recognised Auction Platforms Regulations 2011 applies, all auction platforms which have been appointed under the emission allowance auctioning regulation.”.

(4) In article 5—

(a) renumber the existing provision as paragraph (1);

(b) in paragraph (1), for “article 4” substitute “article 4(1) and (2)”;

(c) after paragraph (1), insert—

“(2) There are prescribed, as qualifying investments in relation to the auction platforms prescribed by article 4(3) and (4), all auctioned products which are financial instruments within the meaning given in Article 4.1(17) of the market in financial instruments directive.

(3) There are prescribed, as qualifying investments in relation to the auction platforms prescribed by article 4(5), all auctioned products which are not financial instruments within the meaning given in Article 4.1(17) of the market in financial instruments directive.”.

Amendment of the Money Laundering Regulations 2007

11.—(1) The Money Laundering Regulations 2007(3) are amended as follows.

(2) In regulation 2(1), insert at the appropriate place—

““auction platform” has the meaning given by regulation 3(13A);

“the emission allowance auctioning regulation” means Commission Regulation (EU) No. 1031/2010 of 12 November 2010 on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to Directive 2003/87/EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emission allowances trading within the Community;”.

(3) In regulation 3—

(a) after paragraph (1), insert—

“(1A) Regulations 2, 20, 21, 23, 24, 35 to 42, and 44 to 48 apply to an auction platform acting in the course of business carried on by it in the United Kingdom, and such an auction platform is a relevant person for the purposes of those provisions.”;

(b) after paragraph (13), insert—

“(13A) “Auction platform” means a platform which auctions two-day spot or five-day futures, within the meanings given by Article 3(4) and (5) of the emission allowance auctioning regulation, when it carries out activities covered by that regulation.”.

(4) In regulation 20(4) and (5), after “financial institution” insert “and an auction platform”.

(5) In regulation 23(1)(a), after paragraph (iv), insert—

“(v) auction platforms;”.

(6) In regulation 24, after paragraph (1), insert—

“(1A) The Authority, when carrying out its supervisory functions in relation to an auction platform—

(a) must effectively monitor the auction platform’s compliance with—

(i) the customer due diligence requirements of Articles 19 and 20(6) of the emission allowance auctioning regulation;

(ii) the monitoring and record keeping requirements of Article 54 of the emission allowance auctioning regulation; and

(iii) the notification requirements of Article 55(2) and (3) of the emission allowance auctioning regulation; and

(b) may monitor the auction platform’s compliance with regulations 20 and 21 of these Regulations.”.

(7) In regulation 42—

(a) in paragraph (1), after “a relevant person” insert “(except an auction platform)”;

(b) after paragraph (1), insert—

“(1A) A designated authority may impose a penalty of such amount as it considers appropriate on an auction platform which fails to comply with—

(a) the customer due diligence requirements of Article 19 or 20(6) of the emission allowance auctioning regulation;

(b) the monitoring and record keeping requirements of Article 54 of the emission allowance auctioning regulation; or

(c) regulation 20(1), (4) or (5) or 21 of these Regulations;

and, for this purpose, “appropriate” means effective, proportionate and dissuasive.”;

(c) in paragraph (2), after “paragraph (1)” insert “or (1A)”.

(8) In regulation 45—

(a) in paragraph (1), after “a person” insert “(except an auction platform)”;

(b) after paragraph (1), insert—

“(1A) An auction platform which fails to comply with the customer due diligence requirements of Article 19 or 20(6) of the emission allowance auctioning regulation, the monitoring and record keeping requirements of Article 54 of that regulation, or regulation 20(1), (4) or (5) or 21 of these Regulations, is guilty of an offence and liable—

(a) on summary conviction, to a fine not exceeding the statutory maximum;

(b) on conviction on indictment, to imprisonment for a term not exceeding two years, to a fine or to both.”;

(c) in paragraph (2), after “paragraph (1)” insert “or (1A)”.

(1)

S.I. 2001/996, amended by S.I. 2005/381; 2008/3053.

(2)

Section 118 was substituted, together with sections 118A to 118D for the original section 118 by S.I. 2005/381.

(3)

S.I. 2007/2157. amended by the Terrorist Asset-Freezing etc. Act 2010 (c.38), sections 45(1), 52(1), Schedule 1, Part 1, paragraph 6(a), and Schedule 2, Part 1 and by S.I. 2007/3299, S.I. 2009/56, S.I. 2009/1835, S.I. 2009/1912, S.I. 2010/22 and S.I. 2011/99; there are other amending instruments but none is relevant.