C1 Part XVIIIF3Recognised investment exchanges, clearing houses and CSDs
Pt. 18 applied in part (with modifications) (12.12.2011) by The Recognised Auction Platforms Regulations 2011 (S.I. 2011/2699), reg. 7, Sch. 2 (as amended (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), reg. 1, Sch. para. 37 (with regs. 7(4), 9(1)))
F1CHAPTER 3BDisciplinary measures
Pt. 18 Ch. 3B inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), ss. 33, 122(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(b)(c), Sch. Pts. 2, 3; S.I. 2013/423, art. 3, Sch.
C2C3C10312EPublic censure
1
If the appropriate regulator considers that a recognised body has contravened a relevant requirement imposed on the body, it may publish a statement to that effect.
F41A
In the circumstances described in the second sub-paragraph of Article 24(5) of the CSD regulation, if the Bank of England considers that an EEA CSD has contravened a relevant requirement imposed on it, it may publish a statement to that effect.
2
Where the FCA is the appropriate regulator, a requirement is a “relevant requirement” for the purposes of this Chapter if it is—
a
a requirement that is imposed by or under any provision of this Part that relates to a recognised investment exchange,
b
a requirement that is imposed under any other provision of this Act by the FCA that relates to a recognised investment exchange,
c
a requirement that is imposed by a qualifying EU provision specified, or of a description specified, for the purposes of this subsection by the Treasury by order, or
d
a requirement that is imposed by this Act and whose contravention constitutes an offence that the FCA has power to prosecute under this Act (see section 401).
3
Where the Bank of England is the appropriate regulator, a requirement is a “relevant requirement” for the purposes of this Chapter if it is—
a
a requirement that is imposed by or under any provision of this Part that relates to a recognised clearing house F5, a recognised CSD or an EEA CSD,
b
a requirement that is imposed under any other provision of this Act by the Bank,
c
a requirement that is imposed by F6or under a qualifying EU provision specified, or of a description specified, for the purposes of this subsection by the Treasury by order, or
d
a requirement that is imposed by this Act and whose contravention constitutes an offence that the Bank has power to prosecute under this Act (see section 401, as applied by paragraph 31 of Schedule 17A).
C2C4312FFinancial penalties
F71
If the appropriate regulator considers that a recognised body has contravened a relevant requirement imposed on the body, it may impose on the body a penalty, in respect of the contravention, of such amount as it considers appropriate.
F82
In the circumstances described in the second sub-paragraph of Article 24(5) of the CSD regulation, if the Bank of England considers that an EEA CSD has contravened a relevant requirement imposed on it, it may impose on it a penalty, in respect of the contravention, of such amount as it considers appropriate.
312FAF2Central securities depositories: further disciplinary measures
1
If the Bank of England considers that a contravention by a recognised CSD of a relevant requirement occurred with the consent or connivance of, or was attributable to any neglect on the part of, a member of the management body or other person who effectively controls the business of the recognised CSD, the Bank of England may do one or both of the following—
a
publish a statement to that effect;
b
impose on that person a penalty, in respect of the contravention, of such amount as it considers appropriate.
2
If the Bank of England considers that a member of the management body or other person who effectively controls the business of a recognised CSD is responsible for a contravention by the central securities depository of a relevant requirement, it may do one or more of the following—
a
publish a statement to that effect;
b
impose on that person a penalty, in respect of the contravention, of such amount as it considers appropriate;
c
prohibit that person from holding an office or position involving responsibility for taking decisions about the management of the recognised CSD.
3
A prohibition under subsection (2)(c) may apply—
a
for a specified period,
b
until further notice, or
c
for repeated serious contraventions, permanently.
4
The Bank of England may, on the application of the person subject to a prohibition under subsection (2)(c), vary or revoke the prohibition.
5
In the circumstances described in the second sub-paragraph of Article 24(5) of the CSD regulation, this section applies in relation to an EEA CSD as it applies in relation to a recognised CSD.
C2C5312GProposal to take disciplinary measures
F101
If the appropriate regulator proposes to impose a sanction—
a
on a recognised body under section 312E or 312F, or
b
on a person under section 312FA,
it must give the body or person (as the case may be) a warning notice.
2
A warning notice about a proposal to publish a statement must set out the terms of the statement.
3
A warning notice about a proposal to impose a penalty must state the amount of the penalty.
F94
A warning notice about a proposal to impose a prohibition must specify the extent of the prohibition.
5
In this section, “recognised body” includes an EEA CSD.
C2C6312HDecision notice
F131
If the appropriate regulator decides to impose a sanction—
a
on a recognised body under section 312E or 312F, or
b
on a person under section 312FA,
it must give the body or person (as the case may be) a decision notice.
2
In the case of a statement, the decision notice must set out the terms of the statement.
3
In the case of a penalty, the decision notice must state the amount of the penalty.
F113A
In the case of a prohibition, the decision notice must specify the extent of the prohibition.
3B
The sanction which the appropriate regulator decides to impose may differ from that proposed in the warning notice.
F144
If the appropriate regulator decides to impose a sanction—
a
on a recognised body under section 312E or 312F, or
b
on a person under section 312FA,
the body or person (as the case may be) may refer the matter to the Tribunal.
F125
In this section, “recognised body” includes an EEA CSD.
C2C7312IPublication
After an appropriate regulator publishes a statement under section 312E F15or 312FA, it must send a copy of the statement to—
a
the recognised body F16, EEA CSD or person concerned, and
b
any person to whom a copy of the decision notice was given under section 393(4).
C8312JStatement of policy
1
Each appropriate regulator must prepare and issue a statement of its policy with respect to—
a
c
the period for which prohibitions under section 312FA are to have effect.
2
An appropriate regulator's policy in determining what the amount of a penalty should be F21, or what the period for which a prohibition is to have effect should be, must include having regard to—
a
the seriousness of the contravention in question in relation to the nature of the requirement concerned, F22...
b
the extent to which that contravention was deliberate or reckless F23; and
c
whether the person against whom action is to be taken is an individual.
3
An appropriate regulator may at any time alter or replace a statement issued by it under this section.
4
If a statement issued by an appropriate regulator under this section is altered or replaced, the regulator must issue the altered or replacement statement.
5
In exercising, or deciding whether to exercise, its power under section 312F F24or 312FA in the case of any particular contravention, an appropriate regulator must have regard to any statement of policy published by it under this section and in force at a time when the contravention in question occurred.
6
A statement issued by an appropriate regulator under this section must be published by the regulator in the way appearing to the regulator to be best calculated to bring it to the attention of the public.
7
An appropriate regulator may charge a reasonable fee for providing a person with a copy of the statement.
8
An appropriate regulator must, without delay, give the Treasury a copy of any statement which it publishes under this section.
C9312KStatement of policy: procedure
1
Before issuing a statement under section 312J, an appropriate regulator must publish a draft of the proposed statement in the way appearing to the regulator to be best calculated to bring it to the attention of the public.
2
The draft must be accompanied by notice that representations about the proposal may be made to the regulator within a specified time.
3
Before issuing the proposed statement, the regulator must have regard to any representations made to it in accordance with subsection (2).
4
If the regulator issues the proposed statement it must publish an account, in general terms, of—
a
the representations made to it in accordance with subsection (2), and
b
its response to them.
5
If the statement differs from the draft published under subsection (1) in a way which is, in the opinion of the regulator, significant, the regulator must (in addition to complying with subsection (4)) publish details of the difference.
6
An appropriate regulator may charge a reasonable fee for providing a person with a copy of a draft published under subsection (1).
7
This section also applies to a proposal to alter or replace a statement.
Pt. 18 heading substituted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 2(8) (with regs. 7(4), 9(1))