5.—(1) The Regulated Activities Order is amended as follows.
(2) After article 12A (information society services and managers of UCITS and AIFs) M1 insert—
12B. A transformer vehicle M2 does not carry on an activity of a kind specified by article 10 by assuming a risk from an undertaking, provided the assumption of the risk is a specified kind of activity falling within article 13A (transformer vehicles: insurance risk transformation).”M3.
(3) After article 13 (application of sections 327 and 332 of FSMA) insert—
It is a specified kind of activity for a transformer vehicle to assume a risk from an undertaking where—
(a)the undertaking assumes a risk under a contract of insurance (“the underlying risk”); and
(b)the assumption of risk by the transformer vehicle has the legal or economic effect of transferring some or all of the underlying risk to the transformer vehicle.”.
(4) After article 19 (risk-management) M4 insert—
19A. A transformer vehicle does not carry on an activity of a kind specified by article 14 by assuming a risk from an undertaking, provided the assumption of the risk is a specified kind of activity falling within article 13A (transformer vehicles: insurance risk transformation).”.
Marginal Citations
M1Article 21A was inserted by S.I. 2002/1776.
M2“Transformer vehicle” is defined in section 284A(1) of FSMA.
M3A transformer vehicle carrying on the activity specified in article 13A of the Regulated Activities Order is not a reinsurance undertaking for the purposes of the Solvency 2 Directive and does not require authorisation in accordance with Article 14 of that Directive.
M4Article 19 was amended by S.I. 2006/3384.