PART 2Amendments to the Financial Services and Markets Act 2000

Other amendments to the 2000 Act10

1

The 2000 Act is amended as follows.

2

In section 1D(2)(c) M1 (the integrity objective) for “behaviour that amounts to market abuse” substitute “ contraventions by persons of Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation ”.

3

After section 55J(7ZA) M2 (variation or cancellation on initiative of regulator) insert—

7ZB

Without prejudice to the generality of subsections (1) and (2), the FCA may, in relation to an authorised person who is an investment firm, exercise its power under this section if it appears to it that the authorised person has failed to comply with a requirement of the market abuse regulation or of a directly applicable EU regulation made under the market abuse regulation.

4

For section 133(7A)(h) M3 (proceedings before Tribunal: general provision) substitute—

h

a decision to impose a penalty or publish a statement of censure under section 123, impose a prohibition under section 123A or impose a suspension or restriction under section 123B;

5

In section 137Q (price stabilising rules)—

a

after subsection (2)(a) M4 insert—

aa

must not apply to transactions, orders, behaviour, actions or omissions to which the market abuse regulation applies;

b

for subsection (3) M5 substitute—

3

The FCA may make rules which, for the purposes of the relevant exemption provisions, treat a person who acts or engages in conduct in conformity with specified provisions as acting, or engaging in that conduct, in conformity with the relevant provisions of Article 5 (exemption for buy-back programmes and stabilisation) of the market abuse regulation.

3A

“Specified provisions” means such provisions—

a

corresponding to the relevant provisions of Article 5 of the market abuse regulation, and

b

made by a body or authority outside the EEA as may be specified in rules made by the FCA,

as may be specified in rules made by the FCA.

c

in subsection (4) M6—

i

in paragraph (a) for “section 90(9)(b)” substitute “ section 90(9)(d) ”; and

ii

in paragraph (b) for “section 91(4)(a)” substitute “ section 91(4)(c) ”;

d

after subsection (4) insert—

5

In this section references to Article 5 of the market abuse regulation include any directly applicable EU regulation made under that Article.

6

In section 139A(4) M7 (power of the FCA to give guidance), after “short selling regulation” insert “ or the market abuse regulation or a directly applicable EU regulation made under the market abuse regulation ”.

7

In section 140A(1) M8 (interpretation) in the definition of “regulating provisions” omit paragraph (a)(iv).

8

In section 168 (appointment of persons to carry out investigations in particular cases)—

a

in subsection (1)(b) M9 after “section” insert “ 122F, ”;

b

for subsection (2)(d) substitute—

d

a person has contravened Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation.

c

in subsection (4)(ja)(iv) M10 omit “or”; and

d

after subsection (4)(ja) insert—

jb

a person may have contravened any provision made by or under this Act for the purposes of the market abuse regulation; or

9

After section 169(2) (investigations etc in support of overseas regulator) insert—

2A

But where the investigator is—

a

appointed by the FCA, and

b

the appointment is in response to a request to the FCA to investigate a possible contravention by a person of Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation,

the investigator has the same powers as an investigator appointed under section 168(3) (as a result of subsection (2) of that section).

10

In section 174 (admissibility of statements made to investigators)—

a

in subsection (2) M11 after “section 123” insert “ to which this subsection applies ”;

b

after subsection (3) insert—

3A

Subsection (2) applies to proceedings in relation to action to be taken under section 123(2) or (3) against a person who may have contravened Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation.

c

in subsection (4), after “or (5)” insert “ , or a person appointed under section 169 who has the powers conferred by virtue of subsection (2A) of that section ”.

11

For section 177(7) (offences) substitute—

7

In this section—

  • “court” means—

    1. a

      the High Court;

    2. b

      in Scotland, the Court of Session;

  • “investigator appointed by the FCA” means an investigator appointed by the FCA under section 167 M12, 168 M13 or 169 M14;

  • “officer of the FCA” means an officer authorised by the FCA for the purposes of section 165(3).

12

After section 206A(1A) M15 (suspending permission to carry on regulated activities etc) insert—

1B

The power conferred by subsection (1) may not be exercised in relation to a contravention of a requirement imposed under section 122A, 122B, 122C, 122G, 122H, 122I, 123A or 123B.

13

In section 300(4) (extension of functions of Tribunal) for “market abuse by persons subject to the rules” substitute “ a contravention of Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation by a person subject to the rules. ”.

14

In section 381 (injunctions in cases of market abuse)—

a

in subsection (1) M16—

i

in paragraph (a) for “engage in market abuse” substitute “ contravene Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation ”;

ii

in paragraph (b)—

aa

for “engaged in market abuse” substitute “ contravened Article 14 or 15 of the market abuse regulation ”; and

bb

for “market abuse” substitute “ contravention ”; and

iii

in the closing words for “market abuse” substitute “ contravention ”;

b

in subsection (2) M17—

i

in paragraph (a) for “engaged in market abuse” substitute “ contravened Article 14 or 15 of the market abuse regulation ”; and

ii

in paragraph (b) for “market abuse” substitute “ contravention ”;

c

in subsection (3) M18—

i

in paragraph (a) for “engaged in market abuse” substitute “ contravening Article 14 or 15 of the market abuse regulation ”; and

ii

in paragraph (b) for “been engaged in market abuse” substitute “ contravened Article 14 or 15 of the market abuse regulation ”; and

d

in subsection (6) for “market abuse” substitute “ contravention ”.

15

In section 383 (restitution orders in cases of market abuse)—

a

for subsection (1) M19 substitute—

1

The court may, on the application of the FCA, make an order under subsection (4) if it is satisfied that—

a

a person (“the person concerned”) has contravened Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation M20; and

b

the condition mentioned in subsection (2) is fulfilled.

b

omit subsection (3).

16

in section 384 (power of FCA or PRA to require restitution)—

a

for subsection (2) M21 substitute—

2

The FCA may exercise the power in subsection (5) M22 if it is satisfied that—

a

a person (“the person concerned”) has contravened Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation; and

b

the condition mentioned in subsection (3) is fulfilled.

b

in subsection (3) for “market abuse” (in each place) substitute “ contravention of Article 14 or 15 of the market abuse regulation ”;

c

omit subsection (4) M23.

17

In section 391 (publication)—

a

in subsection (7B) M24 omit paragraphs (a) and (b);

b

after subsection (8A) M25 insert—

8B

Where a decision notice or final notice relates to any decision or action under a provision of this Act in relation to the contravention of a requirement imposed by the market abuse regulation or a directly applicable EU regulation made under the market abuse regulation, this section has effect subject to Article 34 of the market abuse regulation (publication of decisions).

18

In section 395(13) (the FCA's and PRA's procedures)—

a

omit paragraph (ba) M26; and

b

after paragraph (bb) M27 insert—

bbza

122I;

19

In section 398(1A) (misleading FCA or PRA: residual cases)—

a

omit “or” following paragraph (e) M28; and

b

in paragraph (f) M29 omit the full stop after “Funds”; and insert—

; or

g

the market abuse regulation.

20

Omit section 415B(3)(c) M30 (consultation in relation to taking certain enforcement action).

21

In section 417(1) (definitions)—

a

omit the definition of “market abuse”;

b

in the appropriate place insert—

“market abuse regulation” means Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC;

22

Omit paragraph 8(3)(b) of Schedule 1ZA M31 (arrangements for discharging functions).