CHAPTER IIIU.K. MARKET MONITORING AND PRODUCT INTERVENTION POWERS

Article 15U.K.

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2.[F2The FCA] shall monitor the market for insurance-based investment products which are marketed, distributed or sold in or from [F3the United Kingdom].

Textual Amendments

F4Article 16U.K.

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Article 17U.K.

1.[F5The FCA] may prohibit or restrict the following in or from [F6the United Kingdom]:

(a)the marketing, distribution or sale of insurance-based investment products or insurance-based investment products with certain specified features; or

(b)a type of financial activity or practice of an insurance or reinsurance undertaking.

2.[F7The FCA] may take the action referred to in paragraph 1 if it is satisfied on reasonable grounds that:

(a)an insurance-based investment product, or activity or practice gives rise to significant investor protection concerns or poses a threat to the orderly functioning and integrity of financial markets or the stability of whole or part of the financial system within [F8the United Kingdom];

(b)existing regulatory requirements under [F9the law of the United Kingdom, or any part of the United Kingdom,] applicable to the insurance-based investment product, or activity or practice do not sufficiently address the risks referred to in point (a) and the issue would not be better addressed by improved supervision or enforcement of existing requirements;

(c)the action is proportionate taking into account the nature of the risks identified, the level of sophistication of investors or market participants concerned and the likely effect of the action on investors and market participants who may hold, use or benefit from the insurance-based investment product, or activity or practice;

F10(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F11(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Where the conditions set out in the first subparagraph are fulfilled, the [F12FCA] may impose the prohibition or restriction referred to in paragraph 1 on a precautionary basis before an insurance-based investment product has been marketed or sold to investors. A prohibition or restriction may apply in circumstances, or be subject to exceptions, specified by the [F12FCA].

[F133.The FCA must not impose a prohibition or restriction under this Article unless, at least one month before the measure is intended to take effect, the FCA has published details of its decision to impose the measure on its website in accordance with paragraph 5.]

4.In exceptional cases where the [F14FCA] deems it necessary to take urgent action under this Article in order to prevent detriment arising from the insurance-based investment products, activities or practices referred to in paragraph 1, the [F14FCA] may take action on a provisional basis F15..., provided that all the criteria in this Article are met and that, in addition, it is clearly established that [F16delaying the action for one month] would not adequately address the specific concern or threat. The [F14FCA] shall not take action on a provisional basis for a period exceeding three months.

5.The [F17FCA] shall publish on its website notice of any decision to impose any prohibition or restriction referred to in paragraph 1. That notice shall specify details of the prohibition or restriction, a time after the publication of the notice from which the measures will take effect and the evidence upon which it is satisfied each of the conditions in paragraph 2 are met. The prohibition or restriction shall only apply in relation to action taken after the publication of the notice.

6.The [F18FCA] shall revoke a prohibition or restriction if the conditions in paragraph 2 no longer apply.

7.The [F19Treasury may by Regulations specify] criteria and factors to be taken into account by [F20the FCA] in determining when there is a significant investor protection concern or a threat to the orderly functioning and integrity of financial markets or to the stability of the financial system within [F21the United Kingdom].

Those criteria and factors [F22may include]:

(a)the degree of complexity of an insurance-based investment product and the relation to the type of investor to whom it is marketed and sold;

(b)the degree of innovation of an insurance-based investment product, an activity or a practice;

(c)the leverage a product or practice provides;

(d)in relation to the orderly functioning and integrity of financial markets, the size or the notional value of an insurance-based investment product.

Textual Amendments

F23Article 18U.K.

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Textual Amendments