Financial Services and Markets Act 2000

SCHEDULES

Section 1.

F1 SCHEDULE 1 U.K. The Financial Services Authority

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Textual Amendments

F1 Schs. 1ZA, 1ZB substituted for Sch. 1 (24.1.2013 for specified purposes, 19.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 3 (with Sch. 20); S.I. 2013/113, art. 2(1)(b)(c)(2), Sch. Pts. 2, 3, 4; S.I. 2013/423, art. 3, Sch.

Section 1A

[F1 SCHEDULE 1ZA U.K. The Financial Conduct Authority

PART 1 U.K. General

Modifications etc. (not altering text)

C1 Sch. 1ZA Pt. 1 modified by S.I. 2007/3298, reg. 4(4) (as amended) (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 131(c)

Interpretation U.K.

1 U.K. In this Schedule—

• “the Bank” means the Bank of England;

• “functions”, in relation to the FCA, means functions conferred on the FCA by or under any provision of this Act (see section 1A(6) which affects the meaning of references to such functions).

Constitution U.K.

2 (1) The constitution of the FCA must provide for the FCA to have a governing body. U.K.

(2) The governing body must consist of—

(a) a chair appointed by the Treasury,

(b) a chief executive appointed by the Treasury,

(c) the Bank's Deputy Governor for prudential regulation,

(d) 2 members appointed jointly by the Secretary of State and the Treasury, and

(e) at least one other member appointed by the Treasury.

(3) The members referred to in sub-paragraph (2)(a), (c) and (d) are to be non-executive members.

(4) In exercising its powers under sub-paragraph (2)(e) to appoint executive or non-executive members, the Treasury must secure that the majority of members of the governing body are non-executive members.

(5) An employee of the FCA may not be appointed as a non-executive member.

(6) In the following provisions of this Schedule an “appointed member” means a member of the governing body appointed under sub-paragraph (2)(a), (b), (d) or (e).

3 (1) The terms of service of the appointed members are to be determined by the Treasury. U.K.

(2) In the case of a member appointed under paragraph 2(2)(d), the Treasury must consult the Secretary of State about the terms of service.

(3) Before appointing a person as an appointed member, the Treasury (or as the case requires the Treasury and the Secretary of State) must consider whether the person has any financial or other interests that could have a material effect on the extent of the functions as member that it would be proper for the person to discharge.

(4) The terms of service of an appointed member (“M”) must be such as—

(a) to secure that M is not subject to direction by the Treasury or the Secretary of State,

(b) to require M not to act in accordance with the directions of any other person, and

(c) to prohibit M from acquiring any financial or other interests that have a material effect on the extent of the functions as member that it would be proper for M to discharge.

(5) If an appointed member is an employee of the FCA, the member's interest as employee is to be disregarded for the purposes of sub-paragraphs (3) and (4)(c) and paragraph 4(1)(b).

(6) A person who is an employee of the PRA is disqualified for appointment as an appointed member.

(7) The FCA may pay expenses to the Bank's Deputy Governor for prudential regulation in respect of that person's service as a member.

4 (1) The Treasury may remove an appointed member from office— U.K.

(a) on the grounds of incapacity or serious misconduct, or

(b) on the grounds that in all the circumstances the member's financial or other interests are such as to have a material effect on the extent of the functions as member that it would be proper for the person to discharge.

(2) Before removing from office a member appointed under paragraph 2(2)(d), the Treasury must consult the Secretary of State.

5 U.K. The validity of any act of the FCA is not affected—

(a) by any vacancy in any of the offices mentioned in paragraph 2(2)(a), (b) or (c), or

(b) by a defect in the appointment of a person—

(i) to any of those offices, or

(ii) as an appointed member.

6 U.K. The Bank's Deputy Governor for prudential regulation must not take part in any discussion by or decision of the FCA which relates to—

(a) the exercise of the FCA's functions in relation to a particular person, or

(b) a decision not to exercise those functions.

Remuneration U.K.

7 U.K. The FCA must pay to the appointed members such remuneration as may be determined—

(a) in the case of the non-executive members, by the Treasury;

(b) in the case of the executive members, by the FCA.

Arrangements for discharging functions U.K.

8 (1) The FCA may make arrangements for any of its functions to be discharged by a committee, sub-committee, officer or member of staff of the FCA, but subject to the following provisions. U.K.

(2) In exercising its legislative functions, the FCA must act through its governing body.

(3) For that purpose, the following are the FCA's legislative functions—

(a) making rules;

(b) issuing codes under section 64 or 119;

(c) issuing statements under—

(i) section 63C, 64, 69, 88C, 89S, 93, 124, 131J, 138N, 192H, 192N, 210 or 312J,

(ii) section 345D (whether as a result of section 345(2) or section 249(1)), or

(iii) section 80 of the Financial Services Act 2012;

(d) giving directions under section 316, 318 or 328.

(4) The function of issuing general guidance (as defined in section 139B(5)) may not be discharged by an officer or member of staff of the FCA.

Modifications etc. (not altering text)

C2 Sch. 1ZA para. 8(2) modified (20.2.2013) by The Financial Services Act 2012 (Transitional Provisions) (Rules and Miscellaneous Provisions) Order 2013 (S.I. 2013/161), arts. 1(1), 3(8)(a)(9)

Records U.K.

9 U.K. The FCA must maintain satisfactory arrangements for—

(a) recording decisions made in the exercise of its functions, and

(b) the safe-keeping of those records which it considers ought to be preserved.

Publication of record of meetings of governing body U.K.

10 (1) The FCA must publish a record of each meeting of its governing body— U.K.

(a) before the end of the period of 6 weeks beginning with the day of the meeting, or

(b) if no meeting of the governing body is subsequently held during that period, before the end of the period of 2 weeks beginning with the day of the next meeting.

(2) The record must specify any decision taken at the meeting (including decisions to take no action) and must set out, in relation to each decision, a summary of the deliberations of the governing body.

(3) Sub-paragraphs (1) and (2) do not require the publication of information whose publication within the time required by sub-paragraph (1) would in the opinion of the governing body be against the public interest.

(4) Publication under this section is to be in such manner as the FCA thinks fit.

Modifications etc. (not altering text)

C3 Sch. 1ZA para. 10 applied (20.2.2013) by The Financial Services Act 2012 (Transitional Provisions) (Rules and Miscellaneous Provisions) Order 2013 (S.I. 2013/161), arts. 1(1), 7(3)(a)

Annual report U.K.

11 (1) At least once a year the FCA must make a report to the Treasury on— U.K.

(a) the discharge of its functions,

(b) the extent to which, in its opinion, its operational objectives have been advanced,

(c) the extent to which, in its opinion, it has acted compatibly with its strategic objective,

(d) how, in its opinion, it has complied with the duty in section 1B(4),

(e) its consideration of the matter mentioned in section 1B(5)(b),

(f) its consideration of the principles in section 3B,

(g) how it has complied with section 3D,

(h) any direction received under section 3I or 3J during the period to which the report relates,

(i) how it has complied with section 354A(1) so far as relating to co-operation with persons outside the United Kingdom, and

(j) such other matters as the Treasury may from time to time direct.

(2) Sub-paragraph (1) does not require the inclusion in the report of any information whose publication would in the opinion of the FCA be against the public interest.

(3) The report must be accompanied by—

(a) a statement of the remuneration of the appointed members of the governing body of the FCA during the period to which the report relates, and

(b) such other reports or information, prepared by such persons, as the Treasury may from time to time direct.

(4) The Treasury must lay before Parliament a copy of each report received by them under this paragraph.

Annual public meeting U.K.

12 (1) Not later than 3 months after making a report under paragraph 11, the FCA must hold a public meeting (“the annual meeting”) for the purposes of enabling that report to be considered. U.K.

(2) The FCA must organise the annual meeting so as to allow—

(a) a general discussion of the contents of the report which is being considered, and

(b) a reasonable opportunity for those attending the meeting to put questions to the FCA about the way in which it discharged, or failed to discharge, its functions during the period to which the report relates.

(3) But otherwise the annual meeting is to be organised and conducted in such a way as the FCA considers appropriate.

(4) The FCA must give reasonable notice of its annual meeting.

(5) That notice must—

(a) give details of the time and place at which the meeting is to be held,

(b) set out the proposed agenda for the meeting,

(c) indicate the proposed duration of the meeting,

(d) give details of the FCA's arrangements for enabling persons to attend, and

(e) be published by the FCA in the way appearing to it to be best calculated to bring the notice to the attention of the public.

(6) If the FCA proposes to alter any of the arrangements which have been included in the notice given under sub-paragraph (5), it must—

(a) give reasonable notice of the alteration, and

(b) publish that notice in the way appearing to the FCA to be best calculated to bring it to the attention of the public.

Report of annual meeting U.K.

13 U.K. Not later than one month after its annual meeting, the FCA must publish a report of the proceedings of the meeting.

Accounts and audit U.K.

14 (1) The Treasury may— U.K.

(a) require the FCA to comply with any provisions of the Companies Act 2006 about accounts and their audit which would not otherwise apply to it, or

(b) direct that any provision of that Act about accounts and their audit is to apply to the FCA with such modifications as are specified in the direction, whether or not the provision would otherwise apply to the FCA.

(2) Compliance with any requirement under sub-paragraph (1)(a) or (b) is enforceable by injunction or, in Scotland, an order for specific performance under section 45 of the Court of Session Act 1988.

(3) Proceedings under sub-paragraph (2) may be brought only by the Treasury.

15 (1) The FCA must send a copy of its annual accounts to the Comptroller and Auditor General as soon as is reasonably practicable. U.K.

(2) The Comptroller and Auditor General must—

(a) examine, certify and report on accounts received under this paragraph, and

(b) send a copy of the certified accounts and the report to the Treasury.

(3) The Treasury must lay the copy of the certified accounts and the report before Parliament.

(4) Except as provided by paragraph 14(1), the FCA is exempt from the requirements of Part 16 of the Companies Act 2006 (audit), and its balance sheet must contain a statement to that effect.

(5) In this paragraph “annual accounts” has the meaning given in section 471 of the Companies Act 2006.

PART 2 U.K. Status

Status U.K.

16 U.K. In relation to any of its functions—

(a) the FCA is not to be regarded as acting on behalf of the Crown, and

(b) its members, officers and staff are not to be regarded as Crown servants.

Modifications etc. (not altering text)

C4 Sch. 1ZA para. 16 applied (20.2.2013) by The Financial Services Act 2012 (Transitional Provisions) (Rules and Miscellaneous Provisions) Order 2013 (S.I. 2013/161), arts. 1(1), 7(3)(b)

Exemption from requirement for use of “limited” in name of FCA U.K.

17 U.K. The FCA is to continue to be exempt from the requirements of the Companies Act 2006 relating to the use of “limited” as part of its name.

18 U.K. If the Secretary of State is satisfied that any action taken by the FCA makes it inappropriate for the exemption given by paragraph 17 to continue, the Secretary of State may, after consulting the Treasury, give a direction removing it.

PART 3 U.K. Penalties and fees

Penalties U.K.

19 U.K. In determining its policy with respect to the amounts of penalties to be imposed by it under this Act, the FCA must take no account of the expenses which it incurs, or expects to incur, in discharging its functions.

Modifications etc. (not altering text)

C5 Sch. 1ZA para. 19 applied (with modifications) by S.I. 2008/346, reg. 37 (as substituted (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 134(b))

20 (1) The FCA must in respect of each of its financial years pay to the Treasury its penalty receipts after deducting its enforcement costs. U.K.

(2) The FCA's “penalty receipts” in respect of a financial year are any amounts received by it during the year by way of penalties imposed under this Act.

(3) The FCA's “enforcement costs” in respect of a financial year are the expenses incurred by it during the year in connection with—

(a) the exercise, or consideration of the possible exercise, of any of its enforcement powers in particular cases, or

(b) the recovery of penalties imposed under this Act.

(4) For this purpose the FCA's enforcement powers are—

(a) its powers under any of the provisions mentioned in section 133(7A),

(b) its powers under section 56 (prohibition orders),

(c) its powers under Part 25 of this Act (injunctions and restitution),

(d) its powers under any other enactment specified by the Treasury by order,

(e) its powers in relation to the investigation of relevant offences, and

(f) its powers in England and Wales or Northern Ireland in relation to the prosecution of relevant offences.

(5) “Relevant offences” are—

(a) offences under FSMA 2000,

(b) offences under subordinate legislation made under that Act,

(c) offences falling within section 402(1) of that Act,

(d) offences under Part 7 of the Financial Services Act 2012, and

(e) any other offences specified by the Treasury by order.

(6) The Treasury may give directions to the FCA as to how the FCA is to comply with its duty under sub-paragraph (1).

(7) The directions may in particular—

(a) specify descriptions of expenditure that are, or are not, to be regarded as incurred in connection with either of the matters mentioned in sub-paragraph (3),

(b) relate to the calculation and timing of the deduction in respect of the FCA's enforcement costs, and

(c) specify the time when any payment is required to be made to the Treasury.

(8) The directions may also require the FCA to provide the Treasury at specified times with specified information relating to—

(a) penalties that the FCA has imposed under this Act, or

(b) the FCA's enforcement costs.

(9) The Treasury must pay into the Consolidated Fund any sums received by them under this paragraph.

21 (1) The FCA must prepare and operate a scheme (“the financial penalty scheme”) for ensuring that the amounts that, as a result of the deduction for which paragraph 20(1) provides, are retained by the FCA in respect of amounts paid to it by way of penalties imposed under this Act are applied for the benefit of regulated persons. U.K.

(2) “Regulated persons” means—

(a) authorised persons,

(b) recognised investment exchanges,

(c) issuers of securities admitted to the official list, and

(d) issuers who have requested or approved the admission of financial instruments to trading on a regulated market.

(3) The financial penalty scheme may, in particular, make different provision with respect to different classes of regulated person.

(4) The financial penalty scheme must ensure that those who have become liable to pay a penalty to the FCA in any financial year of the FCA do not receive any benefit under the scheme in the following financial year.

(5) Up-to-date details of the financial penalty scheme must be set out in a document (“the scheme details”).

22 (1) The scheme details must be published by the FCA in the way appearing to it to be best calculated to bring them to the attention of the public. U.K.

(2) Before making the financial penalty scheme, the FCA must publish a draft of the proposed scheme in the way appearing to the FCA to be best calculated to bring it to the attention of the public.

(3) The draft must be accompanied by notice that representations about the proposals may be made to the FCA within a specified time.

(4) Before making the scheme, the FCA must have regard to any representations made to it in accordance with sub-paragraph (3).

(5) If the FCA makes the proposed scheme, it must publish an account, in general terms, of—

(a) the representations made to it in accordance with sub-paragraph (3), and

(b) its response to them.

(6) If the scheme differs from the draft published under sub-paragraph (2) in a way which is, in the opinion of the FCA, significant, the FCA must (in addition to complying with sub-paragraph (5)) publish details of the difference.

(7) The FCA must, without delay, give the Treasury a copy of any scheme details published by it.

(8) The FCA may charge a reasonable fee for providing a person with a copy of—

(a) a draft published under sub-paragraph (2);

(b) scheme details.

(9) Sub-paragraphs (2) to (6) and (8)(a) also apply to a proposal to alter or replace the financial penalty scheme.

Fees U.K.

23 (1) The FCA may make rules providing for the payment to it of such fees, in connection with the discharge of any of its qualifying functions, as it considers will (taking account of its expected income from fees and charges provided for by any other provision of this Act) enable it— U.K.

(a) to meet expenses incurred in carrying out its functions or for any incidental purpose,

(b) to repay the principal of, and pay any interest on, any relevant borrowing and to meet relevant commencement expenses, and

(c) to maintain adequate reserves.

(2) The “qualifying functions” of the FCA are—

(a) its functions under or as a result of this Act or any of the other Acts mentioned in section 1A(6), and

(b) its functions under or as a result of a qualifying EU provision that is specified, or of a description specified, for the purposes of this sub-paragraph by the Treasury by order.

(3) In sub-paragraph (1)(b)—

• “relevant borrowing” means any money borrowed by the FCA which has been used for the purpose of meeting expenses incurred in relation to its assumption of functions under this Act, and

• “relevant commencement expenses” means expenses incurred by the FCA—

  (a)

  in preparation for the exercise of functions by the FCA under this Act, or

  (b)

  for the purpose of facilitating the exercise by the FCA of those functions or otherwise in connection with their exercise by it.

(4) Neither section 1A(6)(d) nor the definition of “functions” in paragraph 1 applies for the purposes of sub-paragraph (2).

(5) For the purposes of sub-paragraph (3) it is irrelevant when the borrowing of the money, the incurring of the expenses or the assumption of functions took place (and, in particular, it is irrelevant if any of those things were done at a time when the FCA was known as the Financial Services Authority).

(6) In the case of rules made under Part 6 of this Act, the rules may, in particular, require the payment of fees in respect of—

(a) the continued inclusion of securities or persons in any list or register required to be kept by the FCA as a result of any provision made by or under that Part,

(b) access to any list or register within paragraph (a), and

(c) the continued admission of financial instruments to trading on a regulated market.

(7) In fixing the amount of any fee which is to be payable to the FCA, no account is to be taken of any sums which the FCA receives, or expects to receive, by way of penalties imposed by it under this Act.

(8) Any fee which is owed to the FCA under any provision made by or under this Act may be recovered as a debt due to the FCA.

Modifications etc. (not altering text)

C6 Sch. 1ZA para. 23 extended (with modifications) by S.I. 2012/3122, reg. 14 (as amended) (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 248(3)

C7 Sch. 1ZA para. 23 modified by S.I. 2009/209, reg. 92(1) (as amended) (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 155(3)(a) (with Sch. 2 para. 156)

C8 Sch. 1ZA para. 23 applied (with modifications) by S.I. 2008/346, Sch. para. 5 (as substituted (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 134(g)(iii))

C9 Sch. 1ZA para. 23 extended (with modifications) by S.I. 2011/99, reg. 59(1) (as amended) (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 196(3)

Services for which fees may not be charged U.K.

24 U.K. The power conferred by paragraph 23 may not be used to require—

(a) a fee to be paid in respect of the discharge of any of the FCA's functions under paragraph 13, 14, 19 or 20 of Schedule 3, or

(b) a fee to be paid by any person whose application for approval under section 59 has been granted.

PART 4 U.K. Miscellaneous

Exemption from liability in damages U.K.

25 (1) None of the following is to be liable in damages for anything done or omitted in the discharge, or purported discharge, of the FCA's functions— U.K.

(a) the FCA;

(b) any person (“P”) who is, or is acting as, a member, officer or member of staff of the FCA;

(c) any person who could be held vicariously liable for things done or omitted by P, but only in so far as the liability relates to P's conduct.

(2) Anything done or omitted by a person mentioned in sub-paragraph (1)(a) or (b) while acting, or purporting to act, as a result of an appointment under any of sections 166 to 169 is to be taken for the purposes of sub-paragraph (1) to have been done or omitted in the discharge, or as the case may be purported discharge, of the FCA's functions.

(3) Sub-paragraph (1) does not apply—

(a) if the act or omission is shown to have been in bad faith, or

(b) so as to prevent an award of damages made in respect of an act or omission on the ground that the act or omission was unlawful as a result of section 6(1) of the Human Rights Act 1998.

Modifications etc. (not altering text)

C10 Sch. 1ZA para. 25 applied (20.2.2013) by The Financial Services Act 2012 (Transitional Provisions) (Rules and Miscellaneous Provisions) Order 2013 (S.I. 2013/161), arts. 1(1), 7(3)(c)

C11 Sch. 1ZA para. 25 modified by S.I. 2008/346, reg. 45 (as amended) (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 134(f)

C12 Sch. 1ZA para. 25 applied by S.I. 2012/3122, reg. 16 (as amended) (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 248(4)

C13 Sch. 1ZA para. 25 extended by S.I. 2011/99, reg. 61 (as amended) (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 196(4)

C14 Sch. 1ZA para. 25 modified by S.I. 2009/209, reg. 94 (as amended) (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 155(4) (with Sch. 2 para. 156)

Accredited financial investigators U.K.

26 U.K. For the purposes of this Act anything done by an accredited financial investigator within the meaning of the Proceeds of Crime Act 2002 who—

(a) is, or is acting as, an officer of, or member of the staff of, the FCA, or

(b) is appointed by the FCA under section 97, 167 or 168 to conduct an investigation,

is to be treated as done in the exercise or discharge of a function of the FCA.

Amounts required by rules to be paid to the FCA U.K.

27 U.K. Any amount (other than a fee) which is required by rules to be paid to the FCA may be recovered as a debt due to the FCA.

Section 2A

SCHEDULE 1ZB U.K. The Prudential Regulation Authority

PART 1 U.K. General

Interpretation U.K.

1 U.K. In this Schedule—

• “the Bank” means the Bank of England;

• “functions”, in relation to the PRA, means functions conferred on the PRA by or under any provision of this Act (see section 2A(6) which affects the meaning of references to such functions).

Constitution U.K.

2 U.K. The constitution of the PRA must provide—

(a) for the Governor of the Bank to be the chair of the PRA,

(b) for the Bank's Deputy Governor for prudential regulation to be the chief executive of the PRA, and

(c) for the PRA to have a governing body.

3 U.K. The governing body must consist of —

(a) the chair,

(b) the chief executive,

(c) the Bank's Deputy Governor for financial stability,

(d) the chief executive of the FCA, and

(e) other members (in this Schedule referred to as “appointed members”).

4 U.K. The validity of any act of the PRA is not affected—

(a) by any vacancy resulting from a vacancy in the office of Governor of the Bank, Deputy Governor of the Bank for prudential regulation, Deputy Governor of the Bank for financial stability, or chief executive of the FCA, or

(b) by a defect in the appointment of a person—

(i) to any of those offices, or

(ii) as an appointed member.

5 U.K. The chief executive of the FCA must not take part in any discussion by or decision of the PRA which relates to—

(a) the exercise of the PRA's functions in relation to a particular person, or

(b) a decision not to exercise those functions.

Appointed members of governing body U.K.

6 U.K. The appointed members must be appointed by the court of directors of the Bank with the approval of the Treasury.

7 U.K. Paragraphs 8 to 12 apply to the exercise by the court of directors of the Bank of its power to appoint appointed members.

8 U.K. The court of directors must secure that the majority of the members of the governing body of the PRA are non-executive members.

9 U.K. For the purposes of paragraph 8, and for the purposes of the PRA's duty in section 3C (duty to follow principles of good governance) none of the following is a non-executive member—

(a) the members referred to in paragraph 3(a), (b) and c), and

(b) a member who is an employee of the PRA or of the Bank.

10 U.K. The court of directors must have regard to generally accepted principles of good practice relating to the making of public appointments.

11 (1) Before appointing a person as an appointed member, the court of directors must consider whether the person has any financial or other interests that could have a material effect on the extent of the functions as member that it would be proper for the person to discharge. U.K.

(2) The terms on which an appointed member (“M”) is appointed must be such as—

(a) to secure that M is not subject to direction by the Bank,

(b) to require M not to act in accordance with the directions of any other person, and

(c) to prohibit M from acquiring any financial or other interests that have a material effect on the extent of the functions as member that it would be proper for M to discharge.

(3) If M is an employee of the PRA, M's interest as employee is to be disregarded for the purposes of sub-paragraphs (1) and (2)(c) and paragraph 14.

12 U.K. An employee of the FCA is disqualified for appointment as an appointed member.

13 U.K. The PRA must pay to the Bank the amount of any expenses incurred by the Bank in connection with the appointment of appointed members.

14 U.K. The court of directors of the Bank may, with the approval of the Treasury, remove an appointed member from office—

(a) on the grounds of incapacity or serious misconduct, or

(b) on the grounds that in all the circumstances the member's financial or other interests are such as to have a material effect on the extent of the functions as member that it would be proper for the person to discharge.

Terms of service U.K.

15 (1) The terms of service of the members of the governing body are to be determined by the Oversight Committee of the Bank. U.K.

(2) The PRA must pay to the members of its governing body such remuneration as may be determined by that Committee.

Modifications etc. (not altering text)

C15 Sch. 1ZB para. 15 modified (temp.) (20.2.2013) by The Financial Services Act 2012 (Transitional Provisions) (Rules and Miscellaneous Provisions) Order 2013 (S.I. 2013/161), arts. 1(1), 12(3)

Arrangements for discharging functions U.K.

16 (1) The PRA may make arrangements for any of its functions to be discharged by a committee, sub-committee, officer or member of staff of the PRA, but subject to the following provision. U.K.

(2) In exercising its legislative functions or its functions under section 2E (strategy), the PRA must act through its governing body.

(3) For that purpose, the following are the PRA's legislative functions—

(a) making rules;

(b) issuing codes under section 64;

(c) issuing statements under—

(i) section 63C, 64, 69, 192H, 192N, 210 or 345D, or

(ii) section 80 of the Financial Services Act 2012;

(d) giving directions under section 316 or 318;

(e) issuing guidance under section 2I.

Modifications etc. (not altering text)

C16 Sch. 1ZB para. 16(2) modified (20.2.2013) by The Financial Services Act 2012 (Transitional Provisions) (Rules and Miscellaneous Provisions) Order 2013 (S.I. 2013/161), arts. 1(1), 3(8)(b)

Records U.K.

17 U.K. The PRA must maintain satisfactory arrangements for—

(a) recording decisions made in the exercise of its functions, and

(b) the safe-keeping of those records which it considers ought to be preserved.

Budget U.K.

18 (1) The PRA must, for each of its financial years, adopt an annual budget which has been approved by the Bank. U.K.

(2) The budget must be adopted before the start of the financial year to which it relates, except that the first budget must be adopted as soon as reasonably practicable after the coming into force of this paragraph.

(3) The PRA may, with the approval of the Bank, vary the budget for a financial year at any time after its adoption.

(4) The PRA must publish each budget, and each variation of a budget, in such manner as the PRA thinks fit.

Annual report U.K.

19 (1) At least once a year the PRA must make a report to the Treasury on— U.K.

(a) the discharge of its functions,

(b) the extent to which, in its opinion, its objectives have been advanced,

(c) its consideration of the principles in section 3B and of the matter mentioned in section 2H(1)(b),

(d) how it has complied with section 3D,

(e) any direction given under section 3I or 3J during the period to which the report relates,

(f) how it has complied with section 354B(1) so far as relating to co-operation with persons outside the United Kingdom, and

(g) such other matters as the Treasury may from time to time direct.

(2) Sub-paragraph (1) does not require the inclusion in the report of any information whose publication would in the opinion of the PRA be against the public interest.

(3) The report must be accompanied by—

(a) a statement of the remuneration of the members of the governing body of the PRA during the period to which the report relates, and

(b) such other reports or information, prepared by such persons, as the Treasury may from time to time direct.

(4) The Treasury must lay before Parliament a copy of each report received by them under this paragraph.

Modifications etc. (not altering text)

C17 Sch. 1ZB para. 19(1) applied (with modifications) (1.4.2013) by The Financial Services Act 2012 (Transitional Provisions) (Miscellaneous Provisions) Order 2013 (S.I. 2013/442), arts. 1(3), 4(2)

Consultation about annual report U.K.

20 (1) In relation to each report made under paragraph 19, the PRA must publish at the same time as the report an invitation to members of the public to make representations to the PRA, within the 3 months beginning with the date of publication— U.K.

(a) about the report,

(b) about the way in which the PRA has discharged, or failed to discharge, its functions during the period to which the report relates, and

(c) about the extent to which, in their opinion, the PRA's objectives have been advanced and the PRA has considered the regulatory principles in section 3B and the matter mentioned in section 2H(1)(b).

(2) The invitation must be published in the way appearing to it to be best calculated to bring the invitation to the attention of the public.

Report on consultation U.K.

21 (1) The PRA must publish a report about its consultation in accordance with paragraph 20. U.K.

(2) The report must contain an account, in general terms, of any representations received in pursuance of the invitation published under that paragraph.

(3) The report must be published not later than 4 months after the date on which the report under paragraph 19 was published.

Accounts and audit U.K.

22 (1) The Treasury may— U.K.

(a) require the PRA to comply with any provisions of the Companies Act 2006 about accounts and their audit which would not otherwise apply to it, or

(b) direct that any provision of that Act about accounts and their audit is to apply to the PRA with such modifications as are specified in the direction, whether or not the provision would otherwise apply to the PRA.

(2) Compliance with any requirement under sub-paragraph (1)(a) or (b) is enforceable by injunction or, in Scotland, an order for specific performance under section 45 of the Court of Session Act 1988.

(3) Proceedings under sub-paragraph (2) may be brought only by the Treasury.

23 (1) The PRA must send a copy of its annual accounts to the Comptroller and Auditor General as soon as is reasonably practicable. U.K.

(2) The Comptroller and Auditor General must—

(a) examine, certify and report on accounts received under this paragraph, and

(b) send a copy of the certified accounts and the report to the Treasury.

(3) The Treasury must lay the copy of the certified accounts and the report before Parliament.

(4) The PRA must send a copy of the certified accounts and the report to the Bank.

(5) Except as provided by paragraph 22(1), the PRA is exempt from the requirements of Part 16 of the Companies Act 2006 (audit), and its balance sheet must contain a statement to that effect.

(6) In this paragraph “annual accounts” has the meaning given in section 471 of the Companies Act 2006.

PART 2 U.K. Status

Status U.K.

24 U.K. In relation to any of its functions—

(a) the PRA is not to be regarded as acting on behalf of the Crown, and

(b) its members, officers and staff are not to be regarded as Crown servants.

Exemption from requirement for use of “limited” in name of PRA U.K.

25 U.K. The PRA is to be exempt from the requirements of the Companies Act 2006 relating to the use of “limited” as part of its name.

26 U.K. If the Secretary of State is satisfied that any action taken by the PRA makes it inappropriate for the exemption given by paragraph 25 to continue, the Secretary of State may, after consulting the Treasury, give a direction removing it.

PART 3 U.K. Penalties and fees

Penalties U.K.

27 U.K. In determining its policy with respect to the amounts of penalties to be imposed by it under this Act, the PRA must take no account of the expenses which it incurs, or expects to incur, in discharging its functions.

28 (1) The PRA must in respect of each of its financial years pay to the Treasury its penalty receipts after deducting its enforcement costs. U.K.

(2) The PRA's “penalty receipts” in respect of a financial year are any amounts received by it during the year by way of penalties imposed under this Act.

(3) The PRA's “enforcement costs” in respect of a financial year are the expenses incurred by it during the year in connection with—

(a) the exercise, or consideration of the possible exercise, of any of its enforcement powers in particular cases, or

(b) the recovery of penalties imposed under this Act.

(4) For this purpose the PRA's enforcement powers are—

(a) its powers under any of the provisions mentioned in section 133(7A),

(b) its powers under section 56 (prohibition orders),

(c) its powers under Part 25 of this Act (injunctions and restitution),

(d) its powers under any other enactment specified by the Treasury by order,

(e) its powers in relation to the investigation of relevant offences, and

(f) its powers in England and Wales or Northern Ireland in relation to the prosecution of relevant offences.

(5) “Relevant offences” are—

(a) offences under FSMA 2000,

(b) offences under subordinate legislation made under that Act, and

(c) any other offences specified by the Treasury by order.

(6) The Treasury may give directions to the PRA as to how the PRA is to comply with its duty under sub-paragraph (1).

(7) The directions may in particular—

(a) specify descriptions of expenditure that are, or are not, to be regarded as incurred in connection with either of the matters mentioned in sub-paragraph (3),

(b) relate to the calculation and timing of the deduction in respect of the PRA's enforcement costs, and

(c) specify the time when any payment is required to be made to the Treasury.

(8) The directions may also require the PRA to provide the Treasury at specified times with information relating to—

(a) penalties that the PRA has imposed under FSMA 2000, or

(b) the PRA's enforcement costs.

(9) The Treasury must pay into the Consolidated Fund any sums received by them under this paragraph.

29 (1) The PRA must prepare and operate a scheme (“the financial penalty scheme”) for ensuring that the amounts that, as a result of the deduction for which paragraph 28(1) provides, are retained by the PRA in respect of amounts paid to it by way of penalties imposed under this Act are applied for the benefit of PRA-authorised persons. U.K.

(2) The financial penalty scheme may, in particular, make different provision with respect to different classes of PRA-authorised person.

(3) The financial penalty scheme must ensure that those who have become liable to pay a penalty to the PRA in any financial year of the PRA do not receive any benefit under the scheme in the following financial year.

(4) Up-to-date details of the financial penalty scheme must be set out in a document (“the scheme details”).

30 (1) The scheme details must be published by the PRA in the way appearing to it to be best calculated to bring them to the attention of the public. U.K.

(2) Before making the financial penalty scheme, the PRA must publish a draft of the proposed scheme in the way appearing to the PRA to be best calculated to bring it to the attention of the public.

(3) The draft must be accompanied by notice that representations about the proposals may be made to the PRA within a specified time.

(4) Before making the scheme, the PRA must have regard to any representations made to it in accordance with sub-paragraph (3).

(5) If the PRA makes the proposed scheme, it must publish an account, in general terms, of—

(a) the representations made to it in accordance with sub-paragraph (3), and

(b) its response to them.

(6) If the scheme differs from the draft published under sub-paragraph (2) in a way which is, in the opinion of the PRA, significant, the PRA must (in addition to complying with sub-paragraph (5)) publish details of the difference.

(7) The PRA must, without delay, give the Treasury a copy of any scheme details published by it.

(8) The PRA may charge a reasonable fee for providing a person with a copy of—

(a) a draft published under sub-paragraph (2);

(b) scheme details.

(9) Sub-paragraphs (2) to (6) and (8)(a) also apply to a proposal to alter or replace the financial penalty scheme.

Fees U.K.

31 (1) The PRA may make rules providing for the payment to it of such fees, in connection with the discharge of any of its qualifying functions, as it considers will (taking account of its expected income from fees and charges provided for by any other provision of this Act) enable it— U.K.

(a) to meet expenses incurred in carrying out its functions or for any incidental purpose,

(b) to repay the principal of, and pay any interest on, any relevant borrowing and to meet relevant commencement expenses, and

(c) to maintain adequate reserves.

(2) The “qualifying functions” of the PRA are—

(a) its functions under or as a result of this Act or any of the other Acts mentioned in section 2A(6), and

(b) its functions under or as a result of a qualifying EU provision that is specified, or of a description specified, for the purposes of this sub-paragraph by the Treasury by order.

(3) In sub-paragraph (1)(b)—

• “relevant borrowing” means any money borrowed by the PRA which has been used for the purpose of meeting expenses incurred in relation to its assumption of functions under this Act, and

• “relevant commencement expenses” means expenses incurred by the PRA, the FCA or the Bank—

  (a)

  in preparation for the exercise of functions by the PRA under this Act, or

  (b)

  for the purpose of facilitating the exercise by the PRA of those functions or otherwise in connection with their exercise by it.

(4) Neither section 2A(6)(d) nor the definition of “functions” in paragraph 1 applies for the purposes of sub-paragraph (2).

(5) For the purposes of sub-paragraph (3) it is irrelevant when the borrowing of the money, the incurring of the expenses or the assumption of functions took place (and, in particular, it is irrelevant if expenses were incurred by the FCA at a time when it was known as the Financial Services Authority).

(6) In fixing the amount of any fee which is to be payable to the PRA, no account is to be taken of any sums which the PRA receives, or expects to receive, by way of penalties imposed by it under this Act.

(7) Any fee which is owed to the PRA under any provision made by or under this Act may be recovered as a debt due to the PRA.

Services for which fees may not be charged U.K.

32 U.K. The power conferred by paragraph 31 may not be used to require—

(a) a fee to be paid in respect of the discharge of any of the PRA's functions under paragraph 13, 14, 19 or 20 of Schedule 3, or

(b) a fee to be paid by any person whose application for approval under section 59 has been granted.

PART 4 U.K. Miscellaneous

Exemption from liability in damages U.K.

33 (1) None of the following is to be liable in damages for anything done or omitted in the discharge, or purported discharge, of the PRA's functions— U.K.

(a) the PRA;

(b) any person (“P”) who is, or is acting as, a member, officer or member of staff of the PRA;

(c) any person who could be held vicariously liable for things done or omitted by P, but only in so far as the liability relates to P's conduct.

(2) Anything done or omitted by a person mentioned in sub-paragraph (1)(a) or (b) while acting, or purporting to act, as a result of an appointment under any of sections 97, 166 to 169 and 284 is to be taken for the purposes of sub-paragraph (1) to have been done or omitted in the discharge, or as the case may be purported discharge, of the PRA's functions.

(3) Sub-paragraph (1) does not apply—

(a) if the act or omission is shown to have been in bad faith, or

(b) so as to prevent an award of damages made in respect of an act or omission on the ground that the act or omission was unlawful as a result of section 6(1) of the Human Rights Act 1998.

Accredited financial investigators U.K.

34 U.K. For the purposes of this Act anything done by an accredited financial investigator within the meaning of the Proceeds of Crime Act 2002 who—

(a) is, or is acting as, an officer of, or member of the staff of, the PRA, or

(b) is appointed by the PRA under section 167 or 168 to conduct an investigation,

is to be treated as done in the exercise or discharge of a function of the PRA.

Amounts required by rules to be paid to the PRA U.K.

35 U.K. Any amount (other than a fee) which is required by rules to be paid to the PRA may be recovered as a debt due to the PRA.]

[F3 Section 3S]

[F2 SCHEDULE 1A U.K. Further provision about the consumer financial education body

Textual Amendments

F2 Sch. 1A inserted (8.4.2010 for certain purposes and 1.4.2011 otherwise) by Financial Services Act 2010 (c. 28), ss. 2(6), 26(1)(b)(k), Sch. 1 para. 1 (with Sch. 1 para. 2); S.I. 2010/2480, art. 3

F3 Words in Sch. 1A substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 15 para. 16 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

Part 1 U.K. General

Ensuring exercise of consumer financial education function etc U.K.

1 (1) The [F4 FCA] must take such steps as are necessary to ensure that the consumer financial education body is, at all times, capable of exercising the consumer financial education function. U.K.

(2) In complying with the duty under sub-paragraph (1) the [F4 FCA] may, in particular, provide services to that body which the [F4 FCA] considers would facilitate the exercise of that function.

Textual Amendments

F4 Word in Sch. 1A para. 1 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 15 para. 2 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

Constitution U.K.

2 (1) The constitution of the consumer financial education body must provide for it to have— U.K.

(a) a chair;

(b) a chief executive; and

(c) a board (which must include the chair and chief executive) whose members are the body's directors.

(2) The members of the board must be persons appointed, and liable to removal from office, by the [F5 FCA] (acting, in the case of the chair or chief executive, with the approval of the Treasury).

(3) But the terms of appointment of members of the board (and in particular those governing removal from office) must be such as to secure their independence from the [F5 FCA] in the exercise of the consumer financial education function.

(4) The [F5 FCA] may appoint a person to be a member of the board only if it is satisfied that the person has knowledge or experience which is likely to be relevant to the exercise by the body of the consumer financial education function.

Textual Amendments

F5 Word in Sch. 1A para. 2 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 15 para. 3 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

Status U.K.

3 (1) The consumer financial education body is not to be regarded as exercising functions on behalf of the Crown. U.K.

(2) The body's F6 ... officers and staff are not to be regarded as Crown servants.

Textual Amendments

F6 Words in Sch. 1A para. 3(2) omitted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by virtue of Financial Services Act 2012 (c. 21), s. 122(3), Sch. 15 para. 4 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

Discharge of function by others U.K.

4 (1) The consumer financial education body may discharge the consumer financial education function by— U.K.

(a) supporting the doing by other persons of anything that it considers would enhance the understanding, knowledge or ability mentioned in [F7 section 3S(3)]; or

(b) arranging for other persons to do anything that it considers would enhance that understanding, knowledge or ability.

(2) The reference in sub-paragraph (1)(a) to support includes financial support.

(3) The reference in sub-paragraph (1)(b) to arrangements includes arrangements under which payments are made to the other persons.

(4) Nothing in this paragraph is to limit other ways in which the consumer financial education body may discharge the consumer financial education function.

Textual Amendments

F7 Words in Sch. 1A para. 4(1)(a) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 15 para. 5 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

5 (1) This paragraph applies if the consumer financial education body arranges for any person (including one established by or under an enactment) to do anything that it considers would enhance the understanding, knowledge or ability mentioned in [F8 section 3S(3)]. U.K.

(2) The person may do that thing despite any limitation on its capacity (whether under a rule of law or otherwise) which, but for this paragraph, would have applied.

Textual Amendments

F8 Words in Sch. 1A para. 5(1) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 15 para. 6 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

[F9 Discharge of functions: considerations U.K.

Textual Amendments

F9 Sch. 1A paras. 6-6B and cross-headings substituted for Sch. 1A para. 6 and cross-heading (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 15 para. 7 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

6 U.K. In discharging the consumer financial education function the consumer financial education body must have regard to the duty of the FCA to advance its operational objectives.

Relationship with the FCA U.K.

6A (1) The consumer financial education body and the FCA must each take such steps as it considers appropriate to co-operate with the other in the exercise of their functions under this Act. U.K.

(2) The consumer financial education body and the FCA must prepare and maintain a memorandum describing how they intend to comply with sub-paragraph (1).

(3) The consumer financial education body must ensure that the memorandum as currently in force is published in the way appearing to it to be best calculated to bring it to the attention of the public.

6B U.K. If the consumer financial education body considers that it has information that, in its opinion, would or might be of assistance to the FCA in advancing one or more of the FCA's operational objectives, it must disclose that information to the FCA.]

Budget U.K.

7 (1) The consumer financial education body must adopt an annual budget which has been approved by the [F10 FCA]. U.K.

(2) The budget must be adopted—

(a) in the case of the body's first financial year, as soon as reasonably practicable after the body is established; and

(b) in the case of each subsequent financial year, before the start of the financial year.

(3) The consumer financial education body may, with the approval of the [F10 FCA], vary the budget for a financial year at any time after its adoption.

(4) Before adopting or varying a budget, the consumer financial education body must consult—

(a) the Treasury;

(b) the Secretary of State;

(c) the Office of Fair Trading; and

(d) such other persons (if any) as the body considers appropriate.

(5) The consumer financial education body must publish each budget, and each variation of a budget, in the way it considers appropriate.

Textual Amendments

F10 Word in Sch. 1A para. 7 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 15 para. 8 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

Annual plan U.K.

8 (1) The consumer financial education body must in respect of each of its financial years prepare an annual plan which has been approved by the [F11 FCA]. U.K.

(2) The plan must be prepared—

(a) in the case of the body's first financial year, as soon as reasonably practicable after the body is established; and

(b) in the case of each subsequent financial year, before the start of the financial year.

(3) The consumer financial education body may, with the approval of the [F11 FCA], vary the plan in respect of a financial year at any time after its preparation.

(4) An annual plan in respect of a financial year must set out—

(a) the objectives of the consumer financial education body for the year;

(b) how the extent to which each of those objectives is met is to be determined;

(c) the relative priorities of each of those objectives; and

(d) how its resources are to be allocated among the activities to be carried on in connection with the discharge of the consumer financial education function.

(5) In sub-paragraph (4) references to objectives for a financial year include objectives for a longer period that includes that year.

(6) Before preparing or varying an annual plan, the consumer financial education body must consult—

(a) the Treasury;

(b) the Secretary of State;

(c) the Office of Fair Trading;

(d) the Practitioner Panel;

[F12 (da) the Smaller Business Practitioner Panel;]

(e) the Consumer Panel; and

(f) such other persons (if any) as the body considers appropriate.

(7) The consumer financial education body must publish each annual plan, and each variation of an annual plan, in the way it considers appropriate.

Textual Amendments

F11 Word in Sch. 1A para. 8 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 15 para. 9(a) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F12 Sch. 1A para. 8(6)(da) 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), s. 122(3), Sch. 15 para. 9(b) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

Annual reports U.K.

9 (1) At least once a year, the consumer financial education body must make a report to the [F13 FCA] in relation to the discharge of the consumer financial education function. U.K.

(2) The report must—

(a) set out the extent to which the body has met its objectives and priorities for the period covered by the report;

(b) include a copy of its latest accounts; and

(c) comply with any requirements specified in rules made by the [F13 FCA].

(3) The consumer financial education body must publish each report in the way it considers appropriate.

(4) Nothing in this paragraph requires the consumer financial education body to make a report at any time in the period of 12 months beginning with its establishment.

[F14 (5) The Treasury may—

(a) require the consumer financial education body to comply with any provision of the Companies Act 2006 about accounts and their audit which would not otherwise apply to it, or

(b) direct that any provision of that Act about accounts and their audit is to apply to the consumer financial education body with such modifications as are specified in the direction, whether or not the provision would otherwise apply to it.

(6) Compliance with any requirement under sub-paragraph (5)(a) or (b) is enforceable by injunction or, in Scotland, an order for specific performance under section 45 of the Court of Session Act 1988.

(7) Proceedings under sub-paragraph (6) may be brought only by the Treasury.]

Textual Amendments

F13 Word in Sch. 1A para. 9 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 15 para. 10(a) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F14 Sch. 1A para. 9(5)-(7) 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), s. 122(3), Sch. 15 para. 10(b) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

[F15 Audit of accounts U.K.

Textual Amendments

F15 Sch. 1A para. 9A and crossheading 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), s. 122(3), Sch. 15 para. 11 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

9A (1) The consumer financial education body must send a copy of its annual accounts to the Comptroller and Auditor General and the Treasury as soon as is reasonably practicable. U.K.

(2) The Comptroller and Auditor General must—

(a) examine, certify and report on accounts received under this paragraph, and

(b) send a copy of the certified accounts and the report to the Treasury.

(3) The Treasury must lay the copy of the certified accounts and the report before Parliament.

(4) The consumer financial education body must send a copy of the certified accounts and the report to the FCA.

(5) Except as provided for by paragraph 9(5), the consumer financial education body is exempt from the requirements of Part 16 of the Companies Act 2006 (audit) and its balance sheet must contain a statement to that effect.

(6) In this paragraph “annual accounts” has the meaning given by section 471 of the Companies Act 2006.]

Exemption from consumer credit rules U.K.

10 (1) A licence is not required under Part 3 of the Consumer Credit Act 1974 in respect of anything done by— U.K.

(a) the consumer financial education body in discharging the consumer financial education function; or

(b) a person acting on its behalf in accordance with arrangements made under paragraph 4(1)(b).

(2) Nothing in Part 4 or 10 of that Act (seeking business or ancillary credit business) is to apply in relation to anything done by—

(a) the consumer financial education body in discharging the consumer financial education function; or

(b) a person acting on its behalf in accordance with arrangements made under paragraph 4(1)(b).

Part 2 U.K. Funding

Meaning of “the relevant costs” U.K.

11 (1) In this Part of this Schedule “the relevant costs” means— U.K.

(a) the expenses incurred by the [F16 FCA] in establishing the consumer financial education body; and

(b) the expenses incurred, or expected to be incurred, by the consumer financial education body in connection with the discharge of the consumer financial education function.

(2) For the purposes of sub-paragraph (1)(a) it does not matter when the expenses were incurred.

Textual Amendments

F16 Word in Sch. 1A para. 11 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 15 para. 12 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

Funding of the relevant costs by authorised persons [F17 , payment service providers or electronic money issuers] U.K.

Textual Amendments

F17 Words in cross-heading preceding Sch. 1A para. 12 substituted (9.2.2011 for certain purposes, otherwise 30.4.2011) by The Electronic Money Regulations 2011 (S.I. 2011/99), regs. 1(2)(a)(xv)(b), 79, Sch. 4 para. 2(6)(a) (with art. 3)

12 (1) For the purpose of meeting a proportion of the relevant costs the [F18 FCA] may makes rules requiring— U.K.

(a) authorised persons [F19 , electronic money issuers] or payment service providers, or

(b) any specified class of authorised person [F20 , electronic money issuer] or payment service provider,

to pay to the [F18 FCA] specified amounts or amounts calculated in a specified way.

(2) Before making the rules the [F18 FCA] must have regard to other anticipated sources of funding of the relevant costs.

(3) The amounts to be paid under the rules may include a component to cover the expenses of the [F18 FCA] in collecting the payments (“collection costs”).

(4) The [F18 FCA] must pay to the consumer financial education body the amounts that it receives under the rules apart from amounts in respect of its collection costs (which it may keep).

[F21 (4A) “Electronic money issuer” means a person who is an electronic money issuer for the purposes of the Electronic Money Regulations 2011 as a result of falling within any of paragraphs (a) to (e) and (h) to (j) of the definition in regulation 2(1).]

(5) “Payment service provider” means a person who is a payment service provider for the purposes of the Payment Services Regulations 2009 as a result of falling within any of paragraphs (a) to (f) of the definition in regulation 2(1).

(6) “Specified” means specified in the rules.

Textual Amendments

F18 Word in Sch. 1A para. 12 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 15 para. 13 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F19 Words in Sch. 1A para. 12(1)(a) inserted (9.2.2011 for certain purposes, otherwise 30.4.2011) by The Electronic Money Regulations 2011 (S.I. 2011/99), regs. 1(2)(a)(xv)(b), 79, Sch. 4 para. 2(6)(b) (with art. 3)

F20 Words in Sch. 1A para. 12(1)(b) inserted (9.2.2011 for certain purposes, otherwise 30.4.2011) by The Electronic Money Regulations 2011 (S.I. 2011/99), regs. 1(2)(a)(xv)(b), 79, Sch. 4 para. 2(6)(c) (with art. 3)

F21 Sch. 1A para. 12(4A) inserted (9.2.2011 for certain purposes, otherwise 30.4.2011) by The Electronic Money Regulations 2011 (S.I. 2011/99), regs. 1(2)(a)(xv)(b), 79, Sch. 4 para. 2(6)(d) (with art. 3)

Funding of the relevant costs by consumer credit licensees etc U.K.

13 (1) For the purpose of meeting a proportion of the relevant costs the OFT may, with the approval of the Secretary of State and the Treasury, from time to time require— U.K.

(a) qualifying consumer credit licensees or applicants, or

(b) any specified class of qualifying consumer credit licensee or applicant,

to pay to the OFT specified amounts or amounts calculated in a specified way.

(2) The requirements are to be imposed by general notice.

(3) “Qualifying consumer credit licensee or applicant” means—

(a) a licensee under a licence which covers to any extent the carrying on of a type of business specified in an order under section 226A(2)(e); or

(b) an applicant for a licence, or for the renewal of a licence, which (if granted or renewed) will fall within paragraph (a) above.

(4) Before giving a general notice the OFT must have regard to other anticipated sources of funding of the relevant costs.

(5) Before giving a general notice, the OFT must consult—

(a) the [F22 FCA];

(b) the consumer financial education body; and

(c) such other persons (if any) as the OFT considers appropriate.

(6) The amounts to be paid under a general notice may include a component to cover the expenses of the OFT in collecting the payments (“collection costs”).

(7) The OFT must pay to the consumer financial education body the amounts that it receives under a general notice apart from amounts in respect of its collection costs (which it may keep).

(8) A general notice may—

(a) specify the time at or by which the payments are to be made;

(b) provide for exceptions from requirements imposed on a class of qualifying consumer credit licensee or applicant;

(c) impose different requirements on different classes of qualifying consumer credit licensee or applicant;

(d) make provision for refunds in specified circumstances.

(9) Expressions which are used in sub-paragraph (3) and in the Consumer Credit Act 1974 have the same meaning in that sub-paragraph as in that Act.

(10) In this paragraph—

• “general notice” means a notice published by the OFT at a time and in a manner appearing to it suitable for securing that the notice is seen within a reasonable time by persons likely to be affected by it;

• “the OFT” means the Office of Fair Trading;

• “specified” means specified in the general notice.

Textual Amendments

F22 Word in Sch. 1A para. 13(5)(a) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 15 para. 14 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

Funding by grants or loans etc made by Treasury or Secretary of State U.K.

14 (1) The Treasury or the Secretary of State may— U.K.

(a) make grants or loans, or

(b) provide any other form of financial assistance,

to the consumer financial education body for the purpose of meeting any expenses incurred by it in connection with the discharge of the consumer financial education function.

(2) Any grant or loan or other form of financial assistance under this paragraph may be made or provided subject to such terms as the Treasury or the Secretary of State consider appropriate.

(3) Any expenses incurred by the Treasury or the Secretary of State under this paragraph are to be met out of money provided by Parliament.

Part 3 U.K. Reviews

Reviews of economy etc of the consumer financial education body U.K.

15 (1) The [F23 FCA] may appoint an independent person to conduct a review of the economy, efficiency and effectiveness with which the consumer financial education body has used its resources in discharging the consumer financial education function. U.K.

(2) The [F23 FCA] must consult the Treasury before acting under this paragraph.

(3) A review is not to be concerned with the merits of the body's general policy or principles in discharging the consumer financial education function.

(4) On completion of a review, the person conducting it must make a written report to the [F23 FCA]—

(a) setting out the result of the review; and

(b) making such recommendations (if any) as the person considers appropriate.

(5) The [F23 FCA] must publish a copy of the report in the way it considers appropriate.

(6) Any expenses reasonably incurred in the conduct of the review are to be met by the [F23 FCA].

(7) “Independent” means appearing to the [F23 FCA] to be independent of the consumer financial education body.

Textual Amendments

F23 Word in Sch. 1A para. 15 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 15 para. 15 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

Right to obtain documents and information U.K.

16 (1) A person conducting a review under paragraph 15— U.K.

(a) has a right of access at any reasonable time to all such documents as the person may reasonably require for the purposes of the review; and

(b) may require any person holding or accountable for any such document to provide such information and explanation as are reasonably required for those purposes.

(2) This paragraph applies only to documents in the custody or under the control of the consumer financial education body.

(3) An obligation imposed on a person as a result of this paragraph is enforceable by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.]

Section 22(2).

SCHEDULE 2 U.K. Regulated Activities

Modifications etc. (not altering text)

C18 Sch. 2 applied by 1974 c. 39, s. 16(6E)(c) (as inserted (1.9.2002) by S.I. 2001/544, arts. 2(1)(2)(b), 90(2); S.I. 2001/3538, art. 2(1))

Part I U.K. [F24 Regulated activities: general]

Textual Amendments

F24 Sch. 2 Pt. 1 heading substituted (12.3.2009) by Dormant Bank and Building Society Accounts Act 2008 (c. 31), ss. 15, 31(1), Sch. 2 para. 1(2); S.I. 2009/490, art. 2 (with art. 3)

General U.K.

1 U.K. The matters with respect to which provision may be made under section 22(1) in respect of activities include, in particular, those described in general terms in this Part of this Schedule.

Dealing in investments U.K.

2 (1) Buying, selling, subscribing for or underwriting investments or offering or agreeing to do so, either as a principal or as an agent. U.K.

(2) In the case of an investment which is a contract of insurance, that includes carrying out the contract.

Arranging deals in investments U.K.

3 U.K. Making, or offering or agreeing to make—

(a) arrangements with a view to another person buying, selling, subscribing for or underwriting a particular investment;

(b) arrangements with a view to a person who participates in the arrangements buying, selling, subscribing for or underwriting investments.

Deposit taking U.K.

4 U.K. Accepting deposits.

Safekeeping and administration of assets U.K.

5 (1) Safeguarding and administering assets belonging to another which consist of or include investments or offering or agreeing to do so. U.K.

(2) Arranging for the safeguarding and administration of assets belonging to another, or offering or agreeing to do so.

Managing investments U.K.

6 U.K. Managing, or offering or agreeing to manage, assets belonging to another person where—

(a) the assets consist of or include investments; or

(b) the arrangements for their management are such that the assets may consist of or include investments at the discretion of the person managing or offering or agreeing to manage them.

Investment advice U.K.

7 U.K. Giving or offering or agreeing to give advice to persons on—

(a) buying, selling, subscribing for or underwriting an investment; or

(b) exercising any right conferred by an investment to acquire, dispose of, underwrite or convert an investment.

Establishing collective investment schemes U.K.

8 U.K. Establishing, operating or winding up a collective investment scheme, including acting as—

(a) trustee of a unit trust scheme;

(b) depositary of a collective investment scheme other than a unit trust scheme; or

(c) sole director of a body incorporated by virtue of regulations under section 262.

Using computer-based systems for giving investment instructions U.K.

9 (1) Sending on behalf of another person instructions relating to an investment by means of a computer-based system which enables investments to be transferred without a written instrument. U.K.

(2) Offering or agreeing to send such instructions by such means on behalf of another person.

(3) Causing such instructions to be sent by such means on behalf of another person.

(4) Offering or agreeing to cause such instructions to be sent by such means on behalf of another person.

[F25 Part 1A U.K. Regulated activities: reclaim funds

Textual Amendments

F25 Sch. 2 Pt. 1A inserted (12.3.2009) by Dormant Bank and Building Society Accounts Act 2008 (c. 31), ss. 15, 31(1), Sch. 2 para. 1(3); S.I. 2009/490, art. 2 (with art. 3)

Activities of reclaim funds U.K.

9A (1) The matters with respect to which provision may be made under section 22(1) in respect of activities include, in particular, any of the activities of a reclaim fund.

(2) “Reclaim fund” has the meaning given by section 5(1) of the Dormant Bank and Building Society Accounts Act 2008.]

Part II U.K. Investments

General U.K.

10 U.K. The matters with respect to which provision may be made under section 22(1) in respect of investments include, in particular, those described in general terms in this Part of this Schedule.

Securities U.K.

11 (1) Shares or stock in the share capital of a company. U.K.

(2) “Company” includes—

(a) any body corporate (wherever incorporated), and

(b) any unincorporated body constituted under the law of a country or territory outside the United Kingdom,

other than an open-ended investment company.

Instruments creating or acknowledging indebtedness U.K.

12 U.K. Any of the following—

(a) debentures;

(b) debenture stock;

(c) loan stock;

(d) bonds;

(e) certificates of deposit;

(f) any other instruments creating or acknowledging a present or future indebtedness.

Modifications etc. (not altering text)

C19 Sch. 2 para. 12(f) extended (24.6.2003) by The Uncertificated Securities (Amendment) (Eligible Debt Securities) Regulations 2003 (S.I. 2003/1633), regs. 1(1), 15, Sch. 2 para. 8(2)(h)

Government and public securities U.K.

13 (1) Loan stock, bonds and other instruments— U.K.

(a) creating or acknowledging indebtedness; and

(b) issued by or on behalf of a government, local authority or public authority.

(2) “Government, local authority or public authority” means—

(a) the government of the United Kingdom, of Northern Ireland, or of any country or territory outside the United Kingdom;

(b) a local authority in the United Kingdom or elsewhere;

(c) any international organisation the members of which include the United Kingdom or another member State.

Instruments giving entitlement to investments U.K.

14 (1) Warrants or other instruments entitling the holder to subscribe for any investment. U.K.

(2) It is immaterial whether the investment is in existence or identifiable.

Certificates representing securities U.K.

15 U.K. Certificates or other instruments which confer contractual or property rights—

(a) in respect of any investment held by someone other than the person on whom the rights are conferred by the certificate or other instrument; and

(b) the transfer of which may be effected without requiring the consent of that person.

Units in collective investment schemes U.K.

16 (1) Shares in or securities of an open-ended investment company. U.K.

(2) Any right to participate in a collective investment scheme.

Options U.K.

17 U.K. Options to acquire or dispose of property.

Futures U.K.

18 U.K. Rights under a contract for the sale of a commodity or property of any other description under which delivery is to be made at a future date.

Contracts for differences U.K.

19 U.K. Rights under—

(a) a contract for differences; or

(b) any other contract the purpose or pretended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in—

(i) the value or price of property of any description; or

(ii) an index or other factor designated for that purpose in the contract.

Contracts of insurance U.K.

20 U.K. Rights under a contract of insurance, including rights under contracts falling within head C of Schedule 2 to the M1 Friendly Societies Act 1992.

Marginal Citations

M1 1992 c. 40.

Participation in Lloyd’s syndicates U.K.

21 (1) The underwriting capacity of a Lloyd’s syndicate. U.K.

(2) A person’s membership (or prospective membership) of a Lloyd’s syndicate.

Deposits U.K.

22 U.K. Rights under any contract under which a sum of money (whether or not denominated in a currency) is paid on terms under which it will be repaid, with or without interest or a premium, and either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person receiving it.

[F26 Loans and other forms of credit] U.K.

Textual Amendments

F26 Sch. 2 para. 23 and crossheading substituted (24.1.2013) by Financial Services Act 2012 (c. 21), ss. 7(3), 122(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(a), Sch. Pt. 1

[F26 23 (1) Rights under any contract under which one person provides another with credit. U.K.

(2) “Credit” includes any cash loan or other financial accommodation.

(3) “Cash” includes money in any form.

(4) It is immaterial for the purposes of sub-paragraph (1) whether or not the obligation of the borrower is secured on property of any kind.]

[F27 Other finance arrangements involving land U.K.

Textual Amendments

F27 Sch. 2 para. 23A inserted (19.2.2006) by Regulation of Financial Services (Land Transactions) Act 2005 (c. 24), ss. 1, 2(2)

23A (1) Rights under any arrangement for the provision of finance under which the person providing the finance either— U.K.

(a) acquires a major interest in land from the person to whom the finance is provided, or

(b) disposes of a major interest in land to that person,

as part of the arrangement.

(2) References in sub-paragraph (1) to a “major interest” in land are to—

(a) in relation to land in England or Wales—

(i) an estate in fee simple absolute, or

(ii) a term of years absolute,

whether subsisting at law or in equity;

(b) in relation to land in Scotland—

(i) the interest of an owner of land, or

(ii) the tenant's right over or interest in a property subject to a lease;

(c) in relation to land in Northern Ireland—

(i) any freehold estate, or

(ii) any leasehold estate,

whether subsisting at law or in equity.

(3) It is immaterial for the purposes of sub-paragraph (1) whether either party acquires or (as the case may be) disposes of the interest in land—

(a) directly, or

(b) indirectly.]

[F28 Contracts for hire of goods U.K.

Textual Amendments

F28 Sch. 2 para. 23B and crossheading inserted (24.1.2013) by Financial Services Act 2012 (c. 21), ss. 7(4), 122(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(a), Sch. Pt. 1

23B (1) Rights under a contract for the bailment or (in Scotland) hiring of goods to a person other than a body corporate. U.K.

(2) “Goods” has the meaning given in section 61(1) of the Sale of Goods Act 1979.

(3) It is immaterial for the purposes of sub-paragraph (1) whether the rights of the person to whom the goods are bailed or hired have been assigned to a body corporate.]

Rights in investments U.K.

24 U.K. Any right or interest in anything which is an investment as a result of any other provision made under section 22(1).

[F29 PART 2A U.K. Regulated activities relating to information about persons' financial standing

Textual Amendments

F29 Sch. 2 Pts. 2A, 2B inserted (24.1.2013) by Financial Services Act 2012 (c. 21), ss. 7(5), 122(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(a), Sch. Pt. 1

General U.K.

24A The matters with respect to which provision may be made under section 22(1A)(a) include, in particular, those described in general terms in this Part of this Schedule.

Providing credit reference services U.K.

24B Furnishing persons with information that—

(a) is relevant to the financial standing of persons other than bodies corporate, and

(b) is collected for that purpose by the person furnishing it.

Providing credit information services U.K.

24C (1) Taking steps on behalf of a person other than a body corporate in connection with information relevant to that person's financial standing that is or may be held by a regulated person.

(2) “Regulated person” means—

(a) a person who is carrying on a regulated activity, or

(b) a person who is carrying on a business in respect of which a licence under section 21 of the Consumer Credit Act 1974 is required.

24D Giving advice to a person other than a body corporate in relation to the taking of any steps of the kind mentioned in paragraph 24C(1).

PART 2B U.K. Regulated activities relating to the setting of benchmarks

General U.K.

24E The matters with respect to which provisions may be made under section 22(1A)(b) include, in particular, those described in general terms in this Part of this Schedule.

Providing information U.K.

24F Providing any information or expression of opinion that—

(a) is required by another person in connection with the determination of a benchmark, and

(b) is provided to that person for that purpose.

Administration U.K.

24G (1) Administering the arrangements for determining a benchmark.

(2) Collecting, analysing or processing information or expressions of opinion for the purpose of the determination of a benchmark.

Determining or publishing benchmark or publishing connected information U.K.

24H (1) Determining a benchmark.

(2) Publishing a benchmark or information connected with a benchmark.]

Part III U.K. Supplemental Provisions

The order-making power U.K.

25 (1) An order under section 22(1) [F30 or (1A)] may— U.K.

(a) provide for exemptions;

(b) confer powers on the Treasury or [F31 either regulator];

(c) authorise the making of regulations or other instruments by the Treasury for purposes of, or connected with, any relevant provision;

(d) authorise the making of rules or other instruments by [F31 either regulator] for purposes of, or connected with, any relevant provision;

(e) make provision in respect of any information or document which, in the opinion of the Treasury or [F31 either regulator], is relevant for purposes of, or connected with, any relevant provision;

(f) make such consequential, transitional or supplemental provision as the Treasury consider appropriate for purposes of, or connected with, any relevant provision.

(2) Provision made as a result of sub-paragraph (1)(f) may amend any primary or subordinate legislation, including any provision of, or made under, this Act.

(3) “Relevant provision” means any provision—

(a) of section 22 or this Schedule; or

(b) made under that section or this Schedule.

Textual Amendments

F30 Words in Sch. 2 para. 25(1) inserted (24.1.2013) by Financial Services Act 2012 (c. 21), ss. 8(2)(a), 122(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(a), Sch. Pt. 1

F31 Words in Sch. 2 para. 25(1) substituted (24.1.2013) by Financial Services Act 2012 (c. 21), ss. 8(2)(b), 122(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(a), Sch. Pt. 1

[F32 Parliamentary control] U.K.

Textual Amendments

F32 Sch. 2 para. 26 and crossheading substituted (24.1.2013) by Financial Services Act 2012 (c. 21), ss. 8(3), 122(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(a), Sch. Pt. 1

[F32 26 (1) This paragraph applies to any order made under section 22(1) or (1A) which contains a statement by the Treasury that, in their opinion, the effect (or one of the effects) of the proposed order would be that an activity which is not a regulated activity would become a regulated activity. U.K.

(2) No order to which this paragraph applies may be made unless—

(a) a draft of the order has been laid before Parliament and approved by a resolution of each House, or

(b) sub-paragraph (4) applies.

(3) Sub-paragraph (4) applies if an order to which this paragraph applies also contains a statement that the Treasury are of the opinion that, by reason of urgency, it is necessary to make the order without a draft being so laid and approved.

(4) Where this sub-paragraph applies the order—

(a) must be laid before Parliament after being made, and

(b) ceases to have effect at the end of the relevant period unless before the end of that period the order is approved by a resolution of each House of Parliament (but without that affecting anything done under the order or the power to make a new order).

(5) The “relevant period” is a period of 28 days beginning with the day on which the order is made.

(6) In calculating the relevant period no account is to be taken of any time during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than 4 days.]

Interpretation U.K.

27 (1) In this Schedule— U.K.

• “buying” includes acquiring for valuable consideration;

• “offering” includes inviting to treat;

• “property” includes currency of the United Kingdom or any other country or territory; and

• “selling” includes disposing for valuable consideration.

(2) In sub-paragraph (1) “disposing” includes—

(a) in the case of an investment consisting of rights under a contract—

(i) surrendering, assigning or converting those rights; or

(ii) assuming the corresponding liabilities under the contract;

(b) in the case of an investment consisting of rights under other arrangements, assuming the corresponding liabilities under the contract or arrangements;

(c) in the case of any other investment, issuing or creating the investment or granting the rights or interests of which it consists.

(3) In this Schedule references to an instrument include references to any record (whether or not in the form of a document).

Sections 31(1)(b) and 37.

SCHEDULE 3 U.K. EEA Passport Rights

Modifications etc. (not altering text)

C20 Sch. 3 extended (with modifications) (1.12.2001) by S.I. 2001/2636, arts. 1(2)(b), 25-27; S.I. 2001/3538, art. 2(1)

Sch. 3 extended (with modifications) (Gibraltar) (5.10.2001 for specified purposes, 1.12.2001 in so far as not already in force) by S.I. 2001/3084, arts. 1(1), 2-4 (as amended (16.6.2014) by The Alternative Investment Fund Managers Order 2014 (S.I. 2014/1292), arts. 1(2), 3 (which amending S.I. is itself amended by S.I. 2014/1313, arts. 1, 2(a)); and as amended (31.12.2020) by S.I. 2019/589, regs. 1(3), 5-9 (with reg. 12) (as amended by S.I. 2020/1274, regs. 1, 2)); S.I. 2001/3538, art. 2(1)

Sch. 3 modified (1.12.2001) by S.I. 2001/3592, arts. 1(2), 114(3)(b), 128(3)(b) (with art. 23(2))

Part I U.K. Defined terms

The single market directives U.K.

1 U.K. “The single market directives” means—

[F33 (a) the banking consolidation directive;]

(c) the insurance directives; F34 . . .

[F35 (ca) the reinsurance directive;]

(d) the [F36 markets in financial instruments directive][F37 ; F38 . . .

(e) the insurance mediation directive][F39 ; and

(f) the UCITS directive.]

Textual Amendments

F33 Sch. 3 para. 1(a) substituted (22.11.2000) for Sch. 3 para. 1(a)(b) by S.I. 2000/2952, reg. 8(5)(a)

F34 Word in Sch. 3 para. 1(c) omitted (14.1.2005) by virtue of The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2004/1473), reg. 2(2)(a)(i)

F35 Sch. 3 para. 1(ca) inserted (10.12.2007) by The Reinsurance Directive Regulations 2007 (S.I. 2007/3253), reg. 2(1), Sch. 1 para. 6(a)

F36 Words in Sch. 3 para. 1(d) substituted (1.4.2007 for certain purposes, otherwise 1.11.2007) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 2

F37 Sch. 3 para. 1(e) and preceding word inserted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2004/1473), reg. 2(2)(a)(ii)

F38 Word in Sch. 3 para. 1(d) omitted (13.2.2004) by virtue of The Collective Investment Schemes (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/2066), reg. 2(2)(a)(i)

F39 Sch. 3 para. 1(f) and preceding word inserted (13.2.2004) after Sch. 3 para. 1(e) by The Collective Investment Schemes (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/2066), reg. 2(2)(a)(i)

Commencement Information

I1 Sch. 3 Pt. I para. 1 wholly in force at 1.12.2001; Sch. 3 Pt. I para. 1 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. I para. 1 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. I para. 1 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; Sch. 3 Pt. I para. 1 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

The banking co-ordination directives U.K.

[F40 2 U.K. ”The banking consolidation directive” means Directive 2006/48/ EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions [F41 as last amended [F42 on 24th November 2010 by Directives 2010/76/ EU and 2010/78/ EU] of the European Parliament and of the Council ] . ]

Textual Amendments

F40 Sch. 3 para. 2 substituted (1.1.2007) by The Capital Requirements Regulations 2006 (S.I. 2006/3221), reg. 29(1), Sch. 3 para. 2(2)

F41 Words in Sch. 3 para. 2 inserted (31.12.2010) by The Capital Requirements (Amendment) Regulations 2010 (S.I. 2010/2628), reg. 14, Sch. 1 para. 2

F42 Words in Sch. 3 para. 2 substituted (16.4.2012) by The Capital Requirements (Amendment) Regulations 2012 (S.I. 2012/917), reg. 1, Sch. 1 para. 2

Modifications etc. (not altering text)

C21 Sch. 3 para. 2 modified (9.2.2011 for certain purposes, otherwise 30.4.2011) by The Electronic Money Regulations 2011 (S.I. 2011/99), regs. 1(2)(a)(xiii)(b), 78 (with art. 3)

Commencement Information

I2 Sch. 3 Pt. I para. 2 wholly in force at 1.12.2001; Sch. 3 Pt. I para. 2 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. I para. 2 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. I para. 2 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; Sch. 3 Pt. I para. 2 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

The insurance directives U.K.

3 (1) “The insurance directives” means the first, second and third non-life insurance directives and the [F43 life assurance consolidation directive]. U.K.

(2) “First non-life insurance directive” means the Council Directive of 24 July 1973 on the co-ordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of direct insurance other than life assurance (No. 73/239/EEC).

(3) “Second non-life insurance directive” means the Council Directive of 22 June 1988 on the co-ordination of laws, etc, and laying down provisions to facilitate the effective exercise of freedom to provide services and amending Directive 73/239/EEC (No. 88/357/EEC).

(4) “Third non-life insurance directive” means the Council Directive of 18 June 1992 on the co-ordination of laws, etc, and amending Directives 73/239/EEC and 88/357/EEC (No. 92/49/EEC).

[F44 (8) “ Life assurance consolidation directive ” means Directive 2002/83/EC of the European Parliament and of the Council of 5th November 2002 concerning life assurance. ]

Textual Amendments

F43 Words in Sch. 3 para. 3(1) substituted (11.1.2005) by The Life Assurance Consolidation Directive (Consequential Amendments) Regulations 2004 (S.I. 2004/3379), reg. 6(6)(a)(i)

F44 Sch. 3 para. 3(8) substituted (11.1.2005) for Sch. 3 para. 3(5)(6)(7) by The Life Assurance Consolidation Directive (Consequential Amendments) Regulations 2004 (S.I. 2004/3379), reg. 6(6)(a)(ii)

Commencement Information

I3 Sch. 3 Pt. I para. 3 wholly in force at 1.12.2001; Sch. 3 Pt. I para. 3 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. I para. 3 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. I para. 3 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; Sch. 3 Pt. I para. 3 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

[F45 The reinsurance directive U.K.

Textual Amendments

F45 Sch. 3 para. 3A and cross-heading inserted (10.12.2007) by The Reinsurance Directive Regulations 2007 (S.I. 2007/3253), reg. 2(1), Sch. 1 para. 6(b)

3A U.K. “ The reinsurance directive ” means Directive 2005/68/EC of the European Parliament and of the Council of 16 November 2005 on reinsurance and amending Council Directives 73/239/EEC , 92/49/EEC as well as Directives 98/78/EC and 2002/83/EC . ]

The investment services directive U.K.

4 U.K. F46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F46 Sch. 3 para. 4 repealed (1.4.2007 for certain purposes and 1.11.2007 otherwise) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 3

[F47 The insurance mediation directive U.K.

Textual Amendments

F47 Sch. 3 para. 4A and cross-heading inserted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473), reg. 2(b)

4A U.K. “ The insurance mediation directive ” means the European Parliament and Council Directive of 9th December 2002 on insurance mediation ( No. 2002/92/EC ). ]

[F48 The UCITS directive U.K.

Textual Amendments

F48 Sch. 3 para. 4B and cross-heading inserted (13.2.2004) by The Collective Investment Schemes (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/2066), reg. 2(2)(b)

[F49 4B U.K. “ The UCITS directive ” means the Directive of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (No 2009/65/EC ). ]]

Textual Amendments

F49 Sch. 3 para. 4B substituted (1.7.2011) by The Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613), reg. 2(33)(a)

[F50 The markets in financial instruments directive U.K.

Textual Amendments

F50 Sch. 3 para. 4C and preceding cross-heading inserted (6.12.2006) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) (Modification of Powers) Regulations 2006 (S.I. 2006/2975), reg. 13

4C U.K. ”The markets in financial instruments directive” means Directive 2004/39/ EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments. ]

The emission allowance auctioning regulation U.K.

[F51 4D. “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 of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community. ]

Textual Amendments

F51 Sch. 3 para. 4D inserted (20.7.2012) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2012 (S.I. 2012/1906), arts. 1, 4(2)

EEA firm U.K.

5 U.K. “EEA firm” means any of the following if it does not have its [F52 relevant office] in the United Kingdom—

(a) an investment firm (as defined in [F53 Article 4.1.1 of the markets in financial instruments directive]) which is authorised (within the meaning of [F54 Article 5]) by its home state regulator;

[F55 (b) a credit institution (as defined in Article 4.1 of the banking consolidation directive) which is authorised (within the meaning of Article 4.2) by its home state regulator,

(c) a financial institution (as defined in Article 4.5 of the banking consolidation directive) which is a subsidiary of the kind mentioned in Article 24 and which fulfils the conditions in that Article;]

(d) an undertaking pursuing the activity of direct insurance (within the meaning of [F56 Article 2 of the life assurance consolidation directive or Article 1 of the first non-life insurance directive]) which has received authorisation under [F57 Article 4 of the life assurance consolidation directive or Article 6 of the first non-life insurance directive] from its home state regulator.[F58 ; F59 . . .

[F60 (da) an undertaking pursuing the activity of reinsurance (within the meaning of Article 2.1(a) of the reinsurance directive) which has received authorisation under (or is deemed to be authorised in accordance with) Article 3 of the reinsurance directive from its home state regulator;]

(e) an insurance intermediary (as defined in Article 2.5 of the insurance mediation directive), or a reinsurance intermediary (as defined in Article 2.6) which is registered with its home state regulator under Article 3; ] F61 ...

[F62 (f) a management company (as defined in paragraph 11B) which is authorised (within the meaning of Article 6 of the UCITS directive) by its home state regulator. ] [F63 ; or

(g) a person who has received authorisation under Article 18.2 of the emission allowance auctioning regulation.]

Textual Amendments

F52 Words in Sch. 3 para. 5 substituted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473). {reg. 2(c)(i)}

F53 Words in Sch. 3 para. 5(a) substituted (1.4.2007 for certain purposes, otherwise 1.11.2007) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 4(a)

F54 Words in Sch. 3 para. 5(a) substituted (1.4.2007 for certain purposes, otherwise 1.11.2007) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 4(b)

F55 Sch. 3 para. 5(b)(c) substituted (1.1.2007) by The Capital Requirements Regulations 2006 (S.I. 2006/3221), reg. 29(1), Sch. 3 para. 2(3)

F56 Words in Sch. 3 para. 5(d) substituted (11.1.2005) by The Life Assurance Consolidation Directive (Consequential Amendments) Regulations 2004 (S.I. 2004/3379), reg. 6(6)(b)(i)

F57 Words in Sch. 3 para. 5(d) substituted (11.1.2005) by The Life Assurance Consolidation Directive (Consequential Amendments) Regulations 2004 (S.I. 2004/3379), reg. 6(6)(b)(ii)

F58 Sch. 3 para. 5(e) and preceding word inserted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473), reg. 2(c)(iii)

F59 Word in Sch. 3 para. 5(d) omitted (13.2.2004) by virtue of The Collective Investment Schemes (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/2066), reg. 2(2)(c)(i)

F60 Sch. 3 para. 5(da) inserted (10.12.2007) by The Reinsurance Directive Regulations 2007 (S.I. 2007/3253), reg. 2(1), Sch. 1 para. 6(c)

F61 Word in Sch. 3 para. 5(e) omitted (20.7.2012) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2012 (S.I. 2012/1906), arts. 1, 4(3)(a)

F62 Sch. 3 para. 5(f) substituted (1.7.2011) by The Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613), reg. 2(33)(b)

F63 Sch. 3 para. 5(g) and preceding word inserted (20.7.2012) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2012 (S.I. 2012/1906), arts. 1, 4(3)(b)

Commencement Information

I4 Sch. 3 Pt. I para. 5 wholly in force at 1.12.2001; Sch. 3 Pt. I para. 5 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. I para. 5 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. I para. 5 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2 Sch.; Sch. 3 Pt. I para. 5 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

[F64 5A U.K. In paragraph 5, “ relevant office ” means—

(a) in relation to a firm falling within sub-paragraph (e) of that paragraph which has a registered office, its registered office;

(b) in relation to any other firm, its head office.]

Textual Amendments

F64 Sch. 3 para. 5A inserted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473), reg. 2(2)(d)

EEA authorisation U.K.

[F65 6 U.K. “ EEA authorisation ” means—

(a) in relation to an EEA firm falling within paragraph 5(e), registration with its home state regulator under Article 3 of the insurance mediation directive;

(b) in relation to any other EEA firm, authorisation granted to an EEA firm by its home state regulator for the purpose of the relevant single market directive [F66 or, as the case may be, the emission allowance auctioning regulation]. ]

Textual Amendments

F65 Sch. 3 para. 6 substituted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473), reg. 2(2)(e)

F66 Words in Sch. 3 para. 6(b) inserted (20.7.2012) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2012 (S.I. 2012/1906), arts. 1, 4(4)

Commencement Information

I5 Sch. 3 Pt. I para. 6 wholly in force at 1.12.2001; Sch. 3 Pt. I para. 6 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. I para. 6 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. I para. 6 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; Sch. 3 Pt. I para. 6 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

EEA right U.K.

7 U.K. “EEA right” means the entitlement of a person to establish a branch, or provide services, in an EEA State other than that in which he has his [F67 relevant office]—

(a) in accordance with the Treaty as applied in the EEA; and

(b) subject to the conditions of the relevant single market directive [F68 or, as the case may be, the emission allowance auctioning regulation].

Textual Amendments

F67 Words in Sch. 3 para. 7 substituted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473), reg. 2(2)(f)

F68 Words in Sch. 3 para. 7(b) inserted (20.7.2012) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2012 (S.I. 2012/1906), arts. 1, 4(4)

Commencement Information

I6 Sch. 3 Pt. I para. 7 wholly in force at 1.12.2001; Sch. 3 Pt. I para. 7 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. I para. 7 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. I para. 7 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; Sch. 3 Pt. I para. 7 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

[F69 7A U.K. In paragraph 7, “ relevant office ” means—

(a) in relation to a person who has a registered office and whose entitlement is subject to the conditions of the insurance mediation directive, his registered office;

(b) in relation to any other person, his head office.]

Textual Amendments

F69 Sch. 3 para. 7A inserted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473), reg. 2(2)(g)

EEA State U.K.

[F70 8 U.K. “ EEA State ” has the meaning given by Schedule 1 to the Interpretation Act 1978. ]

Textual Amendments

F70 Sch. 3 para. 8 substituted (13.2.2007) by The Financial Services (EEA State) Regulations 2007 (S.I. 2007/108), reg. 2

Commencement Information

I7 Sch. 3 Pt. I para. 8 wholly in force at 1.12.2001; Sch. 3 Pt. I para. 8 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. I para. 8 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. I para. 8 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; Sch. 3 Pt. I para. 8 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

Home state regulator U.K.

9 U.K. “Home state regulator” means the competent authority (within the meaning of the relevant single market directive [F71 or, as the case may be, the emission allowance auctioning regulation]) of an EEA State (other than the United Kingdom) in relation to the EEA firm concerned.

Textual Amendments

F71 Words in Sch. 3 para. 9 inserted (20.7.2012) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2012 (S.I. 2012/1906), arts. 1, 4(4)

Commencement Information

I8 Sch. 3 Pt. I para. 9 wholly in force at 1.12.2001; Sch. 3 Pt. I para. 9 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. I para. 9 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. I para. 9 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; Sch. 3 Pt. I para. 9 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

UK firm U.K.

10 U.K. “UK firm” means a person whose [F72 relevant office] is in the UK and who has an EEA right to carry on activity in an EEA State other than the United Kingdom.

Textual Amendments

F72 Words in Sch. 3 para. 10 substituted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473), reg. 2(2)(h)

Commencement Information

I9 Sch. 3 Pt. I para. 10 wholly in force at 1.12.2001; Sch. 3 Pt. I para. 10 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. I para. 10 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3 Sch. 3 Pt. I para. 10 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2 Sch.; Sch. 3 para. 10 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

[F73 10A U.K. In paragraph 10, “ relevant office ” means—

(a) in relation to a firm whose EEA right derives from the insurance mediation directive and which has a registered office, its registered office;

(b) in relation to any other firm, its head office.]

Textual Amendments

F73 Sch. 3 para. 10A inserted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473), reg. 2(2)(i)

[F74 UK investment firm U.K.

Textual Amendments

F74 Sch. 3 para. 10B inserted (1.4.2007 for certain purposes, otherwise 1.11.2007) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 5

10B U.K. ”UK investment firm” means a UK firm—

(a) which is an investment firm, and

(b) whose EEA right derives from the markets in financial instruments directive.]

Host state regulator U.K.

11 U.K. “Host state regulator” means the competent authority (within the meaning of the relevant single market directive [F75 or, as the case may be, the emission allowance auctioning regulation]) of an EEA State (other than the United Kingdom) in relation to a UK firm’s exercise of EEA rights there.

Textual Amendments

F75 Words in Sch. 3 para. 11 inserted (20.7.2012) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2012 (S.I. 2012/1906), arts. 1, 4(4)

Commencement Information

I10 Sch. 3 Pt. I para. 11 wholly in force at 1.12.2001; Sch. 3 Pt. I para. 11 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. I para. 11 in force for certain purposes (25.2.2001) by S.I. 2001/516, art. 2 Sch. Pts. 2, 3; Sch. 3 Pt. I para. 11 in force for specified purposes (18.6.2001) by S.I. 2001/1820, art. 2 Sch.; Sch. 3 Pt. I para. 11 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

[F76 Tied agent U.K.

Textual Amendments

F76 Sch. 3 para. 11A inserted (1.4.2007 for certain purposes, otherwise 1.11.2007) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 6

11A U.K. ”Tied agent” has the meaning given in Article 4.1.25 of the markets in financial instruments directive.]

[F77 Management company U.K.

Textual Amendments

F77 Sch. 3 paras. 11B, 11C inserted (1.7.2011) by The Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613), reg. 2(33)(c)

11B U.K. “Management company” has the meaning given in Article 2.1(b) of the UCITS directive.

UCITS U.K.

11C U.K. “UCITS” has the meaning given in Article 1.2 of the UCITS directive. ]

Part II U.K. Exercise of Passport Rights by EEA Firms

Firms qualifying for authorisation U.K.

12 (1) Once an EEA firm which is seeking to establish a branch in the United Kingdom in exercise of an EEA right satisfies the establishment conditions, it qualifies for authorisation. U.K.

(2) Once an EEA firm which is seeking to provide services in the United Kingdom in exercise of an EEA right satisfies the service conditions, it qualifies for authorisation.

[F78 (3) If an EEA firm falling within paragraph 5(a) is seeking to use a tied agent established in the United Kingdom in connection with the exercise of an EEA right deriving from the markets in financial instruments directive, this Part of this Schedule applies as if the firm were seeking to establish a branch in the United Kingdom.

(4) But if—

(a) an EEA firm already qualifies for authorisation by virtue of sub-paragraph (1); and

(b) the EEA right which it is exercising derives from the markets in financial instruments directive,

sub-paragraph (3) does not require the firm to satisfy the establishment conditions in respect of its use of the tied agent in question.]

[F79 (5) An EEA firm which falls within paragraph 5(da) which establishes a branch in the United Kingdom, or provides services in the United Kingdom, in exercise of an EEA right qualifies for authorisation.

(6) Sub-paragraphs (1) and (2) do not apply to an EEA firm falling within paragraph 5(da). ]

[F80 (7) Sub-paragraph (2) does not apply to an EEA firm which falls within paragraph 5(a), (b) or (g), and only provides services in the exercise of its right under Article 18 of the emission allowance auctioning regulation.

(8) An EEA firm which falls within paragraph 5(g) qualifies for authorisation.

(9) An EEA firm which falls within paragraph 5(a) or (b) but does not qualify for authorisation under sub-paragraph (1) or (2) qualifies for authorisation under this sub-paragraph if it—

(a) has received authorisation from its home state regulator under Article 18.3 of the emission allowance auctioning regulation; and

(b) is seeking to provide services or establish a branch in the United Kingdom in the exercise of the EEA right arising under that provision.]

Textual Amendments

F78 Sch. 3 para. 12(3)(4) inserted (1.4.2007 for certain purposes, otherwise 1.11.2007) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 7

F79 Sch. 3 para. 12(5)(6) inserted (10.12.2007) by The Reinsurance Directive Regulations 2007 (S.I. 2007/3253), reg. 2(1), Sch. 1 para. 6(d)

F80 Sch. 3 para. 12(7)-(9) inserted (20.7.2012) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2012 (S.I. 2012/1906), arts. 1, 4(5)

Commencement Information

I11 Sch. 3 Pt. II para. 12 wholly in force at 1.12.2001; Sch. 3 Pt. II para. 12 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. II para. 12 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. II para. 12 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; Sch. 3 Pt. II para. 12 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

Establishment U.K.

13 (1) [F81 If the firm falls within paragraph 5(a), (b), [F82 (c), (d) or (f)],] the establishment conditions are that— U.K.

(a) the [F83 appropriate UK regulator] has received notice (“a consent notice”) from the firm’s home state regulator that it has given the firm consent to establish a branch in the United Kingdom;

(b) the consent notice—

(i) is given in accordance with the relevant single market directive;

(ii) identifies the activities to which consent relates; and

(iii) includes such other information as may be prescribed; F84 . . .

[F85 (ba) in the case of a firm falling within paragraph 5(a), the [F83 appropriate UK regulator] has given the firm notice for the purposes of this paragraph or two months have elapsed beginning with the date when the home state regulator gave the consent notice; and]

(c) [F86 in the case of a firm falling within paragraph 5(b), (c), (d) or (f),] the firm has been informed of the applicable provisions or two months have elapsed beginning with the date when the [F83 appropriate UK regulator] received the consent notice.

[F87 (1A) If the firm falls within paragraph 5(e), the establishment conditions are that—

(a) the firm has given its home state regulator notice of its intention to establish a branch in the United Kingdom;

(b) the [F88 appropriate UK regulator] has received notice (“a regulator’s notice”) from the firm’s home state regulator that the firm intends to establish a branch in the United Kingdom;

(c) the firm’s home state regulator has informed the firm that the regulator’s notice has been sent to the [F88 appropriate UK regulator]; and

(d) one month has elapsed beginning with the date on which the firm’s home state regulator informed the firm that the regulator’s notice has been sent to the [F88 appropriate UK regulator].]

[F89 (1B) Where the PRA receives a consent notice, it must give a copy to. the FCA without delay.

(1C) Where the FCA receives a consent notice it must in prescribed cases give a copy to the PRA without delay.

(1D) In a case where the FCA is the appropriate UK regulator, the consent of the PRA is required for any notice by the FCA for the purposes of sub-paragraph (1)(ba) which relates to—

(a) a PRA-regulated activity,

(b) a PRA-authorised person, or

(c) a person whose immediate group includes a PRA-authorised person.

(1E) If the FCA—

(a) receives a consent notice, or

(b) receives under sub-paragraph (1B) a copy of a consent notice,

it must prepare for the firm's supervision.

(1F) If the PRA—

(a) receives a consent notice, or

(b) receives under sub-paragraph (1C) a copy of a consent notice which identifies PRA-regulated activities or relates to a PRA-authorised person,

it must prepare for the firm's supervision.]

(2) If the [F90 appropriate UK regulator] has received a consent notice, it must—

F91 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) [F92 except if the firm falls within paragraph 5(a),] notify the firm of the applicable provisions (if any); and

(c) if the firm falls within paragraph 5(d), notify its home state regulator of the applicable provisions (if any).

(3) A notice under sub-paragraph (2)(b) or (c) must be given before the end of the period of two months beginning with the day on which the [F93 appropriate UK regulator] received the consent notice.

(4) For the purposes of this paragraph—

• “applicable provisions” means the host state rules with which the firm is required to comply when carrying on a permitted activity through a branch in the United Kingdom;

• [F94 “the appropriate UK regulator” means whichever of the FCA and the PRA is the competent authority for the purposes of the relevant single market directive;]

• “host state rules” means rules—

  (a)

  made in accordance with the relevant single market directive [F95 or for the purposes of the emission allowance auctioning regulation]; and

  (b)

  which are the responsibility of the United Kingdom (both as to implementation and as to supervision of compliance) in accordance with that directive [F96 or for the purposes of that regulation]; and

• “permitted activity” means an activity identified in the consent notice [F97 or regulator’s notice, as the case may be].

Textual Amendments

F81 Words in Sch. 3 para. 13(1) inserted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473), reg. 3(2)

F82 Words in Sch. 3 para. 13(1) substituted (13.2.2004) by The Collective Investment Schemes (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/2066), reg. 3(1)(a)

F83 Words in Sch. 3 para. 13(1) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 2(2) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F84 Word in Sch. 3 para. 13(1)(b) omitted (1.4.2007 for certain purposes, otherwise 1.11.2007) by virtue of The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 8(a)(i) (with reg. 6)

F85 Sch. 3 para. 13(1)(ba) inserted (1.4.2007 for certain purposes, otherwise 1.11.2007) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 8(a)(ii) (with reg. 6)

F86 Words in Sch. 3 para. 13(1)(c) inserted (1.4.2007 for certain purposes, otherwise 1.11.2007) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 8(a)(iii) (with reg. 6)

F87 Sch. 3 para. 13(1A) inserted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473), reg. 3(3)

F88 Words in Sch. 3 para. 13(1A) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 2(2) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F89 Sch. 3 para. 13(1B)-(1F) inserted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 2(3) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F90 Words in Sch. 3 para. 13(2) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 2(4)(a) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F91 Sch. 3 para. 13(2)(a) omitted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by virtue of Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 2(4)(b) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F92 Words in Sch. 3 para. 13(2)(b) inserted (1.4.2007 for certain purposes, otherwise 1.11.2007) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 8(b) (with reg. 6)

F93 Words in Sch. 3 para. 13(3) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 2(5) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F94 Words in Sch. 3 para. 13(4) inserted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 2(6) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F95 Words in Sch. 3 para. 13(4) inserted (20.7.2012) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2012 (S.I. 2012/1906), arts. 1, 4(6)(a)

F96 Words in Sch. 3 para. 13(4) inserted (20.7.2012) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2012 (S.I. 2012/1906), arts. 1, 4(6)(b)

F97 Sch. 3 para. 13(4): words in definition of "permitted activity" inserted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473), reg. 3(4)

Modifications etc. (not altering text)

C22 Sch. 3 para. 13 extended (1.12.2001) by S.I. 2001/3592, arts. 1(2), 96 (with art. 23(2))

Commencement Information

I12 Sch. 3 Pt. II para. 13 wholly in force at 1.12.2001; Sch. 3 Pt. II para. 13 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. II para. 13 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. II para. 13 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; Sch. 3 Pt. II para. 13 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

Services U.K.

14 (1) The service conditions are that— U.K.

(a) the firm has given its home state regulator notice of its intention to provide services in the United Kingdom (“a notice of intention”);

(b) if the firm falls within [F98 paragraph 5(a), [F99 (d), (e) or (f)]], the [F100 appropriate UK regulator] has received notice (“a regulator’s notice”) from the firm’s home state regulator containing such information as may be prescribed; F101 . . .

[F102 (ba) if the firm falls within paragraph 5(b) and is seeking to provide services in exercise of the right under Article 31.5 of the markets in financial instruments directive, the [F100 appropriate UK regulator] has received notice (“a regulator's notice”) from the firm's home state regulator stating that the firm intends to exercise that right in the United Kingdom;]

(c) if the firm falls within [F103 paragraph 5(d) or (e)], its home state regulator has informed it that the regulator’s notice has been sent to the [F100 appropriate UK regulator][F104 ; and

(d) if the firm falls within paragraph 5(e), one month has elapsed beginning with the date on which the firm’s home state regulator informed the firm that the regulator’s notice has been sent to the [F100 appropriate UK regulator].]

[F105 (1A) “Relevant notice” means—

(a) a regulator's notice, or

(b) where none is required by sub-paragraph (1), a notice informing the appropriate UK regulator of the firm's intention to provide services in the United Kingdom.

(1B) Where the PRA receives a relevant notice, it must give a copy to the FCA without delay.

(1C) Where the FCA receives a relevant notice, it must in prescribed cases give a copy to the PRA without delay.

(1D) If the FCA—

(a) receives a relevant notice, or

(b) receives under sub-paragraph (1B) a copy of a relevant notice,

it must prepare for the firm's supervision.

(1E) If the PRA—

(a) receives a relevant notice, or

(b) receives under sub-paragraph (1C) a copy of a relevant notice which identifies PRA-regulated activities or relates to a PRA-authorised person,

it must, unless the firm falls within paragraph 5(e), prepare for the firm's supervision.]

[F106 (2) If the appropriate UK regulator has received a relevant notice, it must, unless the firm falls within paragraph 5(a) or (e), notify the firm of the applicable provisions (if any).]

F107 (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) A notice under sub-paragraph [F108 (2)] must be given before the end of the period of two months beginning on the day on which the [F109 appropriate UK regulator received the relevant notice].

(4) For the purposes of this paragraph—

• “applicable provisions” means the host state rules with which the firm is required to comply when carrying on a permitted activity by providing services in the United Kingdom;

• [F110 “the appropriate UK regulator” means whichever of the FCA and the PRA is the competent authority for the purposes of the relevant single market directive;]

• “host state rules” means rules—

  (a)

  made in accordance with the relevant single market directive [F111 or for the purposes of the emission allowance auctioning regulation]; and

  (b)

  which are the responsibility of the United Kingdom (both as to implementation and as to supervision of compliance) in accordance with that directive [F112 or for the purposes of that regulation]; and

• “permitted activity” means an activity identified in—

  (a)

  the regulator’s notice; or

  (b)

  where none is required by sub-paragraph (1), the notice of intention.

Textual Amendments

F98 Words in Sch. 3 para. 14(1)(b) substituted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473), reg. 4(2)(a)

F99 Words in Sch. 3 para. 14(1)(b) substituted (13.2.2004) by The Collective Investment Schemes (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/2066), reg. 3(1)(b)

F100 Words in Sch. 3 para. 14(1) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 3(2) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F101 Word in Sch. 3 para. 14(1)(b) omitted (14.1.2005) by virtue of The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473), reg. 4(2)(b)

F102 Sch. 3 para. 14(1)(ba) inserted (1.4.2007 for certain purposes, otherwise 1.11.2007) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 9(a)

F103 Words in Sch. 3 para. 14(1)(c) substituted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473), reg. 4(2)(c)

F104 Sch. 3 para. 14(1)(d) and preceding word inserted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473), reg. 4(2)(d)

F105 Sch. 3 para. 14(1A)-(1E) inserted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 3(3) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F106 Sch. 3 para. 14(2) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 3(4) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F107 Sch. 3 para. 14(2A) omitted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by virtue of Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 3(5) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F108 Word in Sch. 3 para. 14(3) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 3(6)(a) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F109 Words in Sch. 3 para. 14(3) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 3(6)(b) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F110 Words in Sch. 3 para. 14(4) inserted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 3(7) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F111 Words in Sch. 3 para. 14(4) inserted (20.7.2012) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2012 (S.I. 2012/1906), arts. 1, 4(7)(a)

F112 Words in Sch. 3 para. 14(4) inserted (20.7.2012) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2012 (S.I. 2012/1906), arts. 1, 4(7)(b)

Modifications etc. (not altering text)

C23 Sch. 3 para. 14(1) extended (1.12.2001) by S.I. 2001/3592, arts. 1(2), 97 (with art. 23(2))

Commencement Information

I13 Sch. 3 Pt. II para. 14 wholly in force at 1.12.2001; Sch. 3 Pt. II para. 14 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. II para. 14 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. II para. 14 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; Sch. 3 Pt. II para. 14 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

Grant of permission U.K.

15 (1) On qualifying for authorisation as a result of [F113 paragraph 12(1), (2) or (3)], a firm has, in respect of each permitted activity which is a regulated activity, permission to carry it on through its United Kingdom branch (if it satisfies the establishment conditions) or by providing services in the United Kingdom (if it satisfies the service conditions). U.K.

[F114 (1A) Sub-paragraph (1) is to be read subject to [F115 paragraphs 15A(3) and 15ZA(1)].]

(2) The permission is to be treated as being on terms equivalent to those appearing from the consent notice, regulator’s notice or notice of intention.

(3) Sections [F116 21 and 39(1)] of the M2 Consumer Credit Act 1974 (business requiring a licence under that Act) do not apply in relation to the carrying on of a permitted activity which is Consumer Credit Act business by a firm which qualifies for authorisation as a result of paragraph 12, unless [F117 the Office of Fair Trading] has exercised the power conferred on [F118 it] by section 203 in relation to the firm.

(4) “Consumer Credit Act business” has the same meaning as in section 203.

[F119 (5) A firm which qualifies for authorisation as a result of paragraph 12(5) has, in respect of each permitted activity which is a regulated activity, permission to carry it on through its United Kingdom branch or by providing services in the United Kingdom.

(6) The permission is to be treated as being on terms equivalent to those appearing in the authorisation granted to the firm under Article 3 of the reinsurance directive by its home state regulator (“its home authorisation”).

(7) For the purposes of sub-paragraph (5), “ permitted activity ” means an activity which the firm is permitted to carry on under its home authorisation. ]

Textual Amendments

F113 Words in Sch. 3 para. 15(1) substituted (10.12.2007) by The Reinsurance Directive Regulations 2007 (S.I. 2007/3253), reg. 2(1), Sch. 1 para. 6(e)(i)

F114 Sch. 3 para. 15(1A) inserted (13.2.2004) by The Collective Investment Schemes (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/2066), reg 3(1)(c)

F115 Words in Sch. 3 para. 15(1A) substituted (20.7.2012) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2012 (S.I. 2012/1906), arts. 1, 4(8)

F116 Words in Sch. 3 para. 15(3) substituted (6.4.2008) by Consumer Credit Act 2006 (c. 14), ss. 33(9), 71(2); S.I. 2007/3300, art. 3(2), Sch. 2

F117 Words in Sch. 3 para. 15(3) substituted (1.4.2003) by Enterprise Act 2002 (c. 40), ss. 278(1), 279, Sch. 25 para. 40(19)(a); S.I. 2003/766, art. 2, Sch. (with art. 3)

F118 Word in Sch. 3 para. 15(3) substituted (1.4.2003) by Enterprise Act 2002 (c. 40), ss. 278(1), 279, Sch. 25 para. 40(19)(a); S.I. 2003/766, art. 2, Sch. (with art. 3)

F119 Sch. 3 para. 15(5)-(7) inserted (10.12.2007) by The Reinsurance Directive Regulations 2007 (S.I. 2007/3253), reg. 2(1), Sch. 1 para. 6(e)(ii)

Commencement Information

I14 Sch. 3 Pt. II para. 15 wholly in force at 1.12.2001; Sch. 3 Pt. II para. 15 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. II para. 15 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. II para. 15 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; Sch. 3 Pt. II para. 15 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

Marginal Citations

M2 1974 c. 39.

Grant of permission: bidding for emission allowances U.K.

[F120 15ZA. (1) A firm that qualifies for authorisation as a result of paragraph 12(1) or (2) has permission to receive, transmit or submit a bid on behalf of its clients in the exercise of its rights under Article 18.3 of the emission allowance auctioning regulation if it has received authorisation under that provision from its home state regulator.

(2) Permission under sub-paragraph (1) is to be treated as being on terms equivalent to those appearing in the authorisation granted to the firm pursuant to Article 18.3 of the emission allowance auctioning regulation.

(3) A firm which qualifies for authorisation as a result of paragraph 12(9) has permission to receive, transmit and submit a bid on behalf of its clients in the exercise of its rights under Article 18.3 of the emission allowance auctioning regulation.

(4) A firm which qualifies for authorisation as a result of paragraph 12(8) has permission to receive, transmit and submit a bid on its own account or on behalf of clients of its main business under Article 18.2 of the emission allowance auctioning regulation.

(5) The permissions referred to in sub-paragraphs (3) and (4) are to be treated as being on terms equivalent to those appearing in the authorisation granted to the firm pursuant to Article 18.2 or 18.3 of the emission allowance auctioning regulation.]

Textual Amendments

F120 Sch. 3 para. 15ZA inserted (20.7.2012) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2012 (S.I. 2012/1906), arts. 1, 4(9)

[F121 Power to restrict permission of management companies] U.K.

Textual Amendments

F121 Sch. 3 para. 15A and cross-heading inserted (13.2.2004) by The Collective Investment Schemes (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/2066), reg. 3(1)(d)

Application for approval to manage UCITS U.K.

[F122 15A (1) An EEA firm falling within paragraph 5(f) which wishes to manage a UK UCITS must apply to the [F123 appropriate UK regulator] in the specified form for approval to manage that UCITS.

(2) Where the EEA firm satisfies the conditions in paragraph 13 (establishment conditions) or paragraph 14 (service conditions), the [F123 appropriate UK regulator] may only refuse the application if it determines that one of the grounds set out in sub-paragraph (3) applies.

(3) The grounds referred to in sub-paragraph (2) are—

(a) that the EEA firm does not comply with the UCITS home state rules;

(b) that the firm is not authorised by its home state regulator to manage the type of collective investment scheme for which authorisation is requested; or

(c) that the firm has not provided the documentation required under Article 20(1) of the UCITS directive.

(4) The [F123 appropriate UK regulator] must give a notice to the EEA firm, the firm's home state regulator and the Commission of the [F123 appropriate UK regulator's] determination under sub-paragraph (2).

(5) Before giving a notice under sub-paragraph (4), the [F123 appropriate UK regulator] must consult the home state regulator of the firm.

(6) A notice given by the [F123 appropriate UK regulator] under sub-paragraph (4) must—

(a) give the [F123 appropriate UK regulator's] reasons for considering that one of the grounds set out in sub-paragraph (3) is satisfied; and

(b) specify a reasonable period (which may not be less than 28 days) within which any person to whom it is given may make representations to the [F123 appropriate UK regulator].

[F124 (6A) If—

(a) the FCA is the appropriate UK regulator, and

(b) the firm is, or the firm's immediate group includes, a PRA-authorised person,

the FCA must give the PRA a copy of the notice under sub-paragraph (4).]

(7) In this paragraph—

• [F125 “the appropriate UK regulator” means whichever of the FCA and the PRA is the competent authority for the purposes of the UCITS directive;]

• “specified” means specified—

  (a)

  in rules made by the [F123 appropriate UK regulator] to implement the UCITS directive, or

  (b)

  in any directly applicable Community regulation or decision made under the UCITS directive;

• “UCITS home state rules” means requirements which are imposed by or under this Act so far as relating to matters falling within Article 19(3) and (4) of the UCITS directive.]

Textual Amendments

F122 Sch. 3 paras. 15A-15C substituted for Sch. 3 para. 15A (1.7.2011) by The Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613), reg. 2(33)(d)

F123 Words in Sch. 3 para. 15A substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 4(2) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F124 Sch. 3 para. 15A(6A) inserted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 4(3) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F125 Words in Sch. 3 para. 15A(7) inserted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 4(4) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

Representations and references to the Tribunal U.K.

[F126 15B (1) Within a reasonable time after the end of the period for making representations, the [F127 appropriate UK regulator] must decide, in the light of any representations made to it during that period by a person to whom notice has been given under paragraph 15A(4), whether to withdraw the notice.

(2) If the [F127 appropriate UK regulator] decides not to withdraw its notice, it must—

(a) give a decision notice to each person to whom the notice under paragraph 15A(4) was given, and

(b) inform the firm's home state regulator and the Commission that authorisation has been refused, and of the grounds for the refusal.

(3) The management company to whom the decision notice is given may refer the matter to the Tribunal.

[F128 (4) In this paragraph “the appropriate UK regulator” has the same meaning as in paragraph 15A.]

Textual Amendments

F126 Sch. 3 paras. 15A-15C substituted for Sch. 3 para. 15A (1.7.2011) by The Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613), reg. 2(33)(d)

F127 Words in Sch. 3 para. 15B substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 5(2) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F128 Sch. 3 para. 15B(4) inserted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 5(3) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

Information to home state regulator U.K.

15C (1) Where an EEA firm falling within paragraph 5(f) has applied to manage a UCITS established in the United Kingdom, the [F129 appropriate UK regulator, as defined in paragraph 15A(7),] must without delay inform the home state regulator of that firm of any problem of which they are aware that may materially affect the ability of the firm—

(a) to perform its duties properly, or

(b) to comply with the home state rules.

(2) In sub-paragraph (1), “ home state rules ” means rules—

(a) made by the EEA State concerned in accordance with the UCITS directive; and

(b) which are the responsibility of that EEA State (both as to implementation and as to supervision of compliance) in accordance with that directive.]

Textual Amendments

F126 Sch. 3 paras. 15A-15C substituted for Sch. 3 para. 15A (1.7.2011) by The Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613), reg. 2(33)(d)

F129 Words in Sch. 3 para. 15C(1) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 6 (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

Effect of carrying on regulated activity when not qualified for authorisation U.K.

16 (1) This paragraph applies to an EEA firm which is not qualified for authorisation under paragraph 12. U.K.

(2) Section 26 does not apply to an agreement entered into by the firm.

(3) Section 27 does not apply to an agreement in relation to which the firm is a third party for the purposes of that section.

(4) Section 29 does not apply to an agreement in relation to which the firm is the deposit-taker.

Commencement Information

I15 Sch. 3 Pt. II para. 16 wholly in force at 1.12.2001; Sch. 3 Pt. II para. 16 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. II para. 16 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. II para. 16 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; Sch. 3 Pt. II para. 16 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

Continuing regulation of EEA firms U.K.

17 U.K. Regulations may—

[F130 (za) require the FCA and the PRA to notify each other about EEA firms qualifying for authorisation;]

(a) modify any provision of this Act which is an applicable provision (within the meaning of paragraph 13 or 14) in its application to an EEA firm qualifying for authorisation;

(b) make provision as to any change (or proposed change) of a prescribed kind relating to an EEA firm or to an activity that it carries on in the United Kingdom and as to the procedure to be followed in relation to such cases;

(c) provide that [F131 the FCA or the PRA] may treat an EEA firm’s notification that it is to cease to carry on regulated activity in the United Kingdom as a request for cancellation of its qualification for authorisation under this Schedule.

Textual Amendments

F130 Sch. 3 para. 17(za) 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), s. 122(3), Sch. 4 para. 7(a) (with Sch. 20); S.I. 2013/113, art. 2(1)(b), Sch. Pt. 2; S.I. 2013/423, art. 3, Sch.

F131 Words in Sch. 3 para. 17(c) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 7(b) (with Sch. 20); S.I. 2013/113, art. 2(1)(b), Sch. Pt. 2; S.I. 2013/423, art. 3, Sch.

Commencement Information

I16 Sch. 3 Pt. II para. 17 wholly in force at 1.12.2001; Sch. 3 Pt. II para. 17 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. II para. 17 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. II para. 17 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; Sch. 3 Pt. II para. 17 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

Giving up right to authorisation U.K.

18 U.K. Regulations may provide that in prescribed circumstances an EEA firm falling within paragraph 5(c) may, on following the prescribed procedure—

(a) have its qualification for authorisation under this Schedule cancelled; and

(b) seek to become an authorised person by applying for a [F132 Part 4A permission].

Textual Amendments

F132 Words in Sch. 3 para. 18(b) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 8 (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

Commencement Information

I17 Sch. 3 Pt. II para. 18 wholly in force at 1.12.2001; Sch. 3 Pt. II para. 18 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. II para. 18 in force for specified purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. I para. 18 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2 Sch.; Sch. 3 Pt. II para. 18 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

Part III U.K. Exercise of Passport Rights by UK Firms

[F133 Meaning of “the appropriate UK regulator” U.K.

Textual Amendments

F133 Sch. 3 para. 18A and cross-heading inserted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 9 (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

18A U.K. In this Part of this Schedule “the appropriate UK regulator” means—

(a) where the UK firm is a PRA-authorised person, the PRA;

(b) in any other case, the FCA.]

Establishment U.K.

19 (1) [F134 Subject to [F135 sub-paragraphs (5ZA) [F136 , (5ZB)] and (5A)],] a UK firm may not exercise an EEA right to establish a branch unless three conditions are satisfied. U.K.

(2) The first is that the firm has given the [F137 appropriate UK regulator] , in the specified way, notice of its intention to establish a branch (“a notice of intention”) which—

(a) identifies the activities which it seeks to carry on through the branch; and

(b) includes such other information as may be specified.

(3) [F138 Subject to sub-paragraph (5B), the] activities identified in a notice of intention may include activities which are not regulated activities.

[F139 (4) The second is that—

(a) the [F137 appropriate UK regulator] has given notice in specified terms (“a consent notice”) to the host state regulator; and

(b) where the firm is a management company which wishes to pursue the activity of collective portfolio management referred to in Annex II to the UCITS directive, the [F137 appropriate UK regulator] has provided to the host state regulator—

(i) confirmation that the firm has been authorised as a management company pursuant to the provisions of the UCITS directive;

(ii) a description of the scope of the management company's authorisation; and

(iii) details of any restriction on the types of UCITS that the management company is authorised to manage.]

[F140 (5) The third is—

(a) if the EEA right in question derives from the insurance mediation directive, that one month has elapsed beginning with the date on which the firm received notice, in accordance with sub-paragraph (11), that the [F137 appropriate UK regulator] has given a consent notice;

(b) in any other case, that either—

(i) the host state regulator has notified the firm (or, where the EEA right in question derives from any of the insurance directives, the [F137 appropriate UK regulator]) of the applicable provisions; or

(ii) two months have elapsed beginning with the date on which the [F137 appropriate UK regulator] gave the consent notice.]

[F141 (5ZA) This paragraph does not apply to a UK firm having an EEA right which is subject to the conditions of the reinsurance directive.]

[F142 (5ZB) This paragraph does not apply to a UK firm having an EEA right which is subject to the conditions of the emission allowance auctioning regulation, in respect of its exercise of that EEA right.]

[F143 (5A) If—

(a) the EEA right in question derives from the insurance mediation directive, and

(b) the EEA State in which the firm intends to establish a branch has not notified the Commission, in accordance with Article 6(2) of that directive, of its wish to be informed of the intention of any UK firm to establish a branch in its territory,

the second and third conditions do not apply (and so the firm may establish the branch to which its notice of intention relates as soon as the first condition is satisfied).]

[F144 (5B) If the firm is a UK investment firm, a notice of intention may not include ancillary services unless such services are to be provided in connection with the carrying on of one or more investment services and activities.

(5C) In sub-paragraph (5B) “ancillary services” has the meaning given in Article 4.1.3 of the markets in financial instruments directive.]

(6) If the firm’s EEA right derives from [F145 the banking consolidation directive, F146 [F147 . . . or, in the case of a credit institution authorised under the banking consolidation directive, the markets in financial instruments directive]] and the first condition is satisfied, the [F137 appropriate UK regulator] must give a consent notice to the host state regulator unless it has reason to doubt the adequacy of the firm’s resources or its administrative structure.

[F148 (6A) If the firm's EEA right derives from the UCITS directive and the first condition is satisfied, the [F137 appropriate UK regulator] must give a consent notice and information about the compensation scheme to the host state regulator unless it has reason to doubt the adequacy of the firm's resources or its administrative structure, and must do so within two months beginning with the date on which it received the firm's notice of intention.]

(7) If the firm’s EEA right derives from any of the insurance directives and the first condition is satisfied, the [F137 appropriate UK regulator] must give a consent notice unless it has reason—

(a) to doubt the adequacy of the firm’s resources or its administrative structure, or

(b) to question the reputation, qualifications or experience of the directors or managers of the firm or the person proposed as the branch’s authorised agent for the purposes of those directives,

in relation to the business to be conducted through the proposed branch.

[F149 (7A) If—

(a) the firm’s EEA right derives from the insurance mediation directive,

(b) the first condition is satisfied, and

(c) the second condition applies,

the [F137 appropriate UK regulator] must give a consent notice, and must do so within one month beginning with the date on which it received the firm’s notice of intention.]

[F150 (7B) If the firm is a UK investment firm and the first condition is satisfied, the [F137 appropriate UK regulator] must give a consent notice to the host state regulator within three months beginning with the date on which it received the firm's notice of intention unless the [F137 appropriate UK regulator] has reason to doubt the adequacy of the firm's resources or its administrative structure.]

[F151 (7C) Where the PRA is the appropriate UK regulator, it must consult the FCA before deciding whether to give a consent notice, except where sub-paragraph (7A) applies.

(7D) Where the FCA is the appropriate UK regulator, it must consult the PRA before deciding whether to give a consent notice in relation to a UK firm whose immediate group includes a PRA-authorised person.]

(8) If the [F137 appropriate UK regulator] proposes to refuse to give a consent notice it must give the firm concerned a warning notice.

(9) If the firm’s EEA right derives from any of the insurance directives and the host state regulator has notified it of the applicable provisions, the [F137 appropriate UK regulator] must inform the firm of those provisions.

(10) Rules may specify the procedure to be followed by the [F137 appropriate UK regulator] in exercising its functions under this paragraph.

(11) If the [F137 appropriate UK regulator] gives a consent notice it must give written notice that it has done so to the firm concerned.

(12) If the [F137 appropriate UK regulator] decides to refuse to give a consent notice—

(a) it must, [F152 within the relevant period], give the person who gave that notice a decision notice to that effect; and

(b) that person may refer the matter to the Tribunal.

[F153 (12ZA) If the firm's EEA right derives from the UCITS directive, the [F137 appropriate UK regulator] must inform [F154 ESMA and] the Commission if it decides to refuse to give a consent notice, giving the reasons for that refusal.]

[F155 (12A) In sub-paragraph (12), “the relevant period” means—

(a) if the firm’s EEA right derives from the UCITS directive, two months beginning with the date on which the [F137 appropriate UK regulator] received the notice of intention;

(b) in any other case, three months beginning with that date.]

(13) In this paragraph, “applicable provisions” means the host state rules with which the firm will be required to comply when conducting business through the proposed branch in the EEA State concerned.

(14) In sub-paragraph (13), “host state rules” means rules—

(a) made in accordance with the relevant single market directive; and

(b) which are the responsibility of the EEA State concerned (both as to implementation and as to supervision of compliance) in accordance with that directive.

(15) “Specified” means specified in rules.

Textual Amendments

F134 Words in Sch. 3 para. 19(1) inserted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473), reg. 5(2)

F135 Words in Sch. 3 para. 19(1) substituted (10.12.2007) by The Reinsurance Directive Regulations 2007 (S.I. 2007/3253), reg. 2(1), Sch. 1 para. 6(f)

F136 Word in Sch. 3 para. 19(1) inserted (20.7.2012) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2012 (S.I. 2012/1906), arts. 1, 4(10)(a)

F137 Words in Sch. 3 para. 19 substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 10(2) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F138 Words in Sch. 3 para. 19(3) substituted (1.4.2007 for certain purposes, otherwise 1.11.2007) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 10(a)

F139 Sch. 3 para. 19(4) substituted (1.7.2011) by The Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613), reg. 2(33)(e)

F140 Sch. 3 para. 19(5) substituted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473), reg. 5(3)

F141 Sch. 3 para. 19(5ZA) inserted (10.12.2007) by The Reinsurance Directive Regulations 2007 (S.I. 2007/3253), reg. 2(1), Sch. 1 para. 6(g)

F142 Sch. 3 para. 19(5ZB) inserted (20.7.2012) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2012 (S.I. 2012/1906), arts. 1, 4(10)(b)

F143 Sch. 3 para. 19(5A) inserted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473), reg. 5(4)

F144 Sch. 3 para. 19(5B)(5C) inserted (1.4.2007 for certain purposes, otherwise 1.11.2007) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 10(b)

F145 Words in Sch. 3 para. 19(6) substituted (13.2.2004) by The Collective Investment Schemes (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/2066), reg 4(1)(a)(i)

F146 Words in Sch. 3 para. 19(6) omitted (1.7.2011) by virtue of The Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613), reg. 2(33)(f)

F147 Words in Sch. 3 para. 19(6) substituted (1.4.2007 for certain purposes, otherwise 1.11.2007) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 10(c) (with reg. 8)

F148 Sch. 3 para. 19(6A) inserted (1.7.2011) by The Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613), reg. 2(33)(g)

F149 Sch. 3 para. 19(7A) inserted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473), reg. 5(5)

F150 Sch. 3 para. 19(7B) inserted (1.4.2007 for certain purposes, otherwise 1.11.2007) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 10(d) (with reg. 8)

F151 Sch. 3 para. 19(7C)(7D) inserted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 10(3) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F152 Words in Sch. 3 para. 19(12)(a) substituted (13.2.2004) by The Collective Investment Schemes (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/2066), reg 4(1)(a)(ii)

F153 Sch. 3 para. 19(12ZA) inserted after Sch. 3 para. 19(12) (1.7.2011) by The Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613), reg. 2(33)(h)

F154 Words in Sch. 3 para. 19(12ZA) inserted (16.4.2012) by The Financial Services (Omnibus 1 Directive) Regulations 2012 (S.I. 2012/916), regs. 1, 2(15)

F155 Sch. 3 para. 19(12A) inserted (13.2.2004) by The Collective Investment Schemes (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/2066), reg 4(1)(a)(iii)

Modifications etc. (not altering text)

C24 Sch. 3 Pt. III para. 19 applied (1.12.2001) by S.I. 2001/3592, arts. 1(2), 104(3)(a) (with art. 23(2))

Sch. 3 Pt. III para. 19 modified (1.12.2001) by S.I. 2001/2636, arts. 1(2)(b), 77(1)-(3)(7); S.I. 2001/3538, art. 2(1)

C25 Sch. 3 Pt. III para. 19(2)(4)(6)(7) extended (1.12.2001) by S.I. 2001/3592, arts. 1(2), 100 (with art. 23(2))

Commencement Information

I18 Sch. 3 Pt. III para. 19 wholly in force at 1.12.2001; Sch. 3 Pt. III para. 19 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. III para. 19 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. III para. 19 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; Sch. 3 Pt. III para. 19 in force for specified purposes at 3.9.2001 by S.I. 2001/2632, art. 2(2), Sch. Pt. 2; Sch. 3 Pt. III para. 19 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

Services U.K.

20 (1) [F156 Subject to [F157 sub-paragraphs (4D) and (4E)],] a UK firm may not exercise an EEA right to provide services unless the firm has given the [F158 appropriate UK regulator], in the specified way, notice of its intention to provide services (“a notice of intention”) which— U.K.

(a) identifies the activities which it seeks to carry out by way of provision of services; and

(b) includes such other information as may be specified.

(2) [F159 Subject to sub-paragraph (2A), the] activities identified in a notice of intention may include activities which are not regulated activities.

[F160 (2A) If the firm is a UK investment firm, a notice of intention may not include ancillary services unless such services are to be provided in connection with the carrying on of one or more investment services and activities.

(2B) In sub-paragraph (2A) “ancillary services” has the meaning given in Article 4.1.3 of the markets in financial instruments directive.]

(3) If the firm’s EEA right derives from [F161 the banking consolidation directive, [F162 markets in financial instruments directive] or the UCITS directive], the [F158 appropriate UK regulator] must, within one month of receiving a notice of intention, send a copy of it to the host state regulator [F163 with such other information as may be specified].

[F164 (3ZA) If the firm's EEA right derives from the UCITS directive, the [F158 appropriate UK regulator] must provide information about the compensation scheme with the information provided to the host state regulator under sub-paragraph (3).]

[F165 (3A) If the firm’s EEA right derives from any of the insurance directives, the [F158 appropriate UK regulator] must, within one month of receiving the notice of intention—

(a) give notice in specified terms (“a consent notice”) to the host state regulator; or

(b) give written notice to the firm of—

(i) its refusal to give a consent notice; and

(ii) its reasons for that refusal.]

[F166 (3AA) Where the PRA is the appropriate UK regulator, it must consult the FCA before deciding whether to give a consent notice.

(3AB) Where the FCA is the appropriate UK regulator, it must consult the PRA before deciding whether to give a consent notice in relation to a UK firm whose immediate group includes a PRA-authorised person.]

[F167 (3B) If the firm’s EEA right derives from the insurance mediation directive and the EEA State in which the firm intends to provide services has notified the Commission, in accordance with Article 6(2) of that directive, of its wish to be informed of the intention of any UK firm to provide services in its territory—

(a) the [F158 appropriate UK regulator] must, within one month of receiving the notice of intention, send a copy of it to the host state regulator;

(b) the [F158 appropriate UK regulator], when it sends the copy in accordance with sub-paragraph (a), must give written notice to the firm concerned that it has done so; and

(c) the firm concerned must not provide the services to which its notice of intention relates until one month, beginning with the date on which it receives the notice under sub-paragraph (b), has elapsed.]

[F168 (3C) If the firm is a management company which wishes to pursue the activity of collective portfolio management referred to in Annex II to the UCITS directive, the [F158 appropriate UK regulator] must send with the documentation provided to the host state regulator under sub-paragraph (3)—

(a) confirmation that the firm has been authorised as a management company pursuant to the provisions of the UCITS directive;

(b) a description of the scope of the management company's authorisation; and

(c) details of any restriction on the types of UCITS that the management company is authorised to manage.]

(4) When the [F158 appropriate UK regulator] sends the copy under sub-paragraph (3) [F169 or gives a consent notice], it must give written notice to the firm concerned.

[F170 (4A) If the firm is given notice under sub-paragraph (3A)(b), it may refer the matter to the Tribunal.

(4B) If the firm’s EEA right derives from any of the insurance directives [F171 or from the markets in financial instruments directive] [F172 or the UCITS directive], it must not provide the services to which its notice of intention relates until it has received written notice under sub-paragraph (4).

[F173 (4BA) If the firm's EEA right derives from the markets in financial instruments directive, the [F158 appropriate UK regulator] must comply as soon as reasonably practicable with a request for information under the second sub-paragraph of Article 31.6 of that directive from the host state regulator.]

(4C) Rules may specify the procedure to be followed by the [F158 appropriate UK regulator] under this paragraph.]

[F174 (4D) This paragraph does not apply to a UK firm having an EEA right which is subject to the conditions of the reinsurance directive.]

[F175 (4E) This paragraph does not apply to a UK firm having an EEA right which is subject to the conditions of the emission allowance auctioning regulation, in respect of its exercise of that EEA right.]

F176 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) “Specified” means specified in rules.

Textual Amendments

F156 Words in Sch. 3 para. 20(1) inserted (10.12.2007) by The Reinsurance Directive Regulations 2007 (S.I. 2007/3253), reg. 2(1), Sch. 1 para. 6(h)

F157 Words in Sch. 3 para. 20(1) substituted (20.7.2012) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2012 (S.I. 2012/1906), arts. 1, 4(11)(a)

F158 Words in Sch. 3 para. 20 substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 11(2) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F159 Words in Sch. 3 para. 20(2) substituted (1.4.2007 for certain purposes, otherwise 1.11.2007) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 11(a)

F160 Sch. 3 para. 20(2A)(2B) inserted (1.4.2007 for certain purposes, otherwise 1.11.2007) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 11(b)

F161 Words in Sch. 3 para. 20(3) substituted (13.2.2004) by The Collective Investment Schemes (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/2066), reg 4(1)(b)(i)

F162 Words in Sch. 3 para. 20(3) substituted (1.4.2007 for certain purposes, otherwise 1.11.2007) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 11(c)

F163 Words in Sch. 3 para. 20(3) inserted (13.2.2004) by The Collective Investment Schemes (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/2066), reg 4(1)(b)(ii)

F164 Sch. 3 para. 20(3ZA) inserted after Sch. 3 para. 20(3) (1.7.2011) by The Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613), reg. 2(33)(i)

F165 Sch. 3 Pt. III para. 20(3A) inserted (30.4.2001) by S.I. 2001/1376, regs. 1, 2(2)

F166 Sch. 3 para. 20(3AA)(3AB) inserted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 11(3) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F167 Sch. 3 para. 20(3B) inserted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473), reg. 6(1)

F168 Sch. 3 para. 20(3C) inserted (1.7.2011) by The Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613), reg. 2(33)(j)

F169 Words in Sch. 3 Pt. III para. 20(4) inserted (30.4.2001) by S.I. 2001/1376, regs. 1, 2(3)

F170 Sch. 3 Pt. III para. 20(4A)-(4C) inserted (30.4.2001) by S.I. 2001/1376, regs. 1, 2(4)

F171 Words in Sch. 3 para. 20(4B) inserted (1.4.2007 for certain purposes, otherwise 1.11.2007) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 11(d)

F172 Words in Sch. 3 para. 20(4B) inserted (1.7.2011) by The Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613), reg. 2(33)(k)

F173 Sch. 3 para. 20(4BA) inserted (1.4.2007 for certain purposes, otherwise 1.11.2007) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 11(e)

F174 Sch. 3 para. 20(4D) inserted (10.12.2007) by The Reinsurance Directive Regulations 2007 (S.I. 2007/3253), reg. 2(1), Sch. 1 para. 6(i)

F175 Sch. 3 para. 20(4E) inserted (20.7.2012) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2012 (S.I. 2012/1906), arts. 1, 4(11)(b)

F176 Sch. 3 Pt. III para. 20(5) omitted (30.4.2001) by virtue of S.I. 2001/1376, regs. 1, 2(5)

Modifications etc. (not altering text)

C26 Sch. 3 Pt. III para. 20(1) modified (1.12.2001) by S.I. 2001/2636, arts. 1(2)(b), 77(1)(4)-(7); S.I. 2001/3538, art. 2(1)

C27 Sch. 3 Pt. III para. 20(1)(3A)(a) extended (1.12.2001) by S.I. 2001/3592, arts. 1(2), 101 (with art. 23(2))

Commencement Information

I19 Sch. 3 Pt. III para. 20 wholly in force at 1.12.2001; Sch. 3 Pt. III para. 20 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. III para. 20 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. III para. 20 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; Sch. 3 Pt. III para. 20 in force for specified purposes at 3.9.2001 by S.I. 2001/2632, art. 2(2), Sch. Pt. 2; Sch. 3 Pt. III para. 20 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

Information for host state regulator U.K.

[F177 20ZA (1) The [F178 appropriate UK regulator] must keep a record of the confirmation and other information provided to the host state regulator under paragraph 19(4) or paragraph 20(3C) in relation to a UK firm which is a management company.

(2) The [F178 appropriate UK regulator] must inform the host state regulator whenever there is a change in the confirmation or other information referred to in sub-paragraph (1).]

Textual Amendments

F177 Sch. 3 para. 20ZA inserted (1.7.2011) by The Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613), reg. 2(33)(l)

F178 Words in Sch. 3 para. 20ZA substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 12 (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

[F179 Tied agents U.K.

Textual Amendments

F179 Sch. 3 para. 20A and preceding cross-heading inserted (1.4.2007 for certain purposes, otherwise 1.11.2007) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 12

20A (1) If a UK investment firm is seeking to use a tied agent established in an EEA State (other than the United Kingdom) in connection with the exercise of an EEA right deriving from the markets in financial instruments directive, this Part of this Schedule applies as if the firm were seeking to establish a branch in that State. U.K.

(2) But if—

(a) a UK investment firm has already established a branch in an EEA State other than the United Kingdom in accordance with paragraph 19; and

(b) the EEA right which it is exercising derives from the markets in financial instruments directive,

paragraph 19 does not apply in respect of its use of the tied agent in question.]

Notice of intention to market U.K.

[F180 20B (1) The operator of a UCITS established in the United Kingdom may not exercise an EEA right to market the units of that UCITS in the territory of another EEA State unless the operator has given the [F181 appropriate UK regulator], in the specified way, notice of its intention to market the units (“notice of intention”) which contains, and is accompanied by, such information as may be specified in rules, or in regulations made by the European Commission under the UCITS directive.

(2) The [F181 appropriate UK regulator] must ensure that the information referred to in sub-paragraph (1) may be transmitted to it electronically.

(3) The [F181 appropriate UK regulator] must verify whether the information submitted with the notice of intention is complete and, within 10 days of the date on which the [F181 appropriate UK regulator] received the complete information required, send to the host state regulator—

(a) a copy of the notice of intention;

(b) the accompanying information; and

(c) confirmation that the operator and the UCITS fulfil the conditions imposed by the UCITS directive.

(4) The [F181 appropriate UK regulator] must ensure that the host state regulator has electronic access to the information and documents referred to in sub-paragraph (3).

(5) The [F181 appropriate UK regulator] must notify the operator immediately that the information referred to in sub-paragraph (3) has been sent to the competent authorities of the host state regulator.

(6) The operator may market the units of the UCITS in the territory of the host state regulator from the moment it receives the notification referred to in sub-paragraph (5).

(7) In this paragraph—

• “operator” has the same meaning as in section 237 of this Act;

• “specified” means specified in rules.]

Textual Amendments

F180 Sch. 3 para. 20B inserted (1.7.2011) by The Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613), reg. 2(33)(m)

F181 Words in Sch. 3 para. 20B substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 13 (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

Offence relating to exercise of passport rights U.K.

21 (1) If a UK firm which is not an authorised person contravenes the prohibition imposed by— U.K.

(a) sub-paragraph (1) of paragraph 19, or

(b) [F182 sub-paragraph (1), (3B)(c) or (4B)] of paragraph 20,

it is guilty of an offence.

(2) A firm guilty of an offence under sub-paragraph (1) is liable—

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

(b) on conviction on indictment, to a fine.

(3) In proceedings for an offence under sub-paragraph (1), it is a defence for the firm to show that it took all reasonable precautions and exercised all due diligence to avoid committing the offence.

Textual Amendments

F182 Words in Sch. 3 para. 21(1)(b) substituted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473), reg. 6(2)

Commencement Information

I20 Sch. 3 Pt. III para. 21 wholly in force at 1.12.2001; Sch. 3 Pt. III para. 21 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. III para. 21 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. III para. 21 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; Sch. 3 Pt. III para. 21 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

Continuing regulation of UK firms U.K.

22 (1) Regulations may make such provision as the Treasury consider appropriate in relation to a UK firm’s exercise of EEA rights, and may in particular provide for the application (with or without modification) of any provision of, or made under, this Act in relation to an activity of a UK firm. U.K.

(2) Regulations may—

(a) make provision as to any change (or proposed change) of a prescribed kind relating to a UK firm or to an activity that it carries on and as to the procedure to be followed in relation to such cases;

(b) make provision with respect to the consequences of the firm’s failure to comply with a provision of the regulations.

(3) Where a provision of the kind mentioned in sub-paragraph (2) requires [F183 the consent of the FCA or the PRA] to a change (or proposed change)—

(a) consent may be refused only on prescribed grounds; and

(b) if [F184 the FCA or the PRA] decides to refuse consent, the firm concerned may refer the matter to the Tribunal.

Textual Amendments

F183 Words in Sch. 3 para. 22(3) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 14(a) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F184 Words in Sch. 3 para. 22(3)(b) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 14(b) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

Commencement Information

I21 Sch. 3 Pt. III para. 22 wholly in force at 1.12.2001; Sch. 3 Pt. III para. 22 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. III para. 22 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. III para. 22 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; Sch. 3 Pt. III para. 22 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

23 (1) [F185 Sub-paragraphs (2) and (2A) apply] if a UK firm— U.K.

(a) has a [F186 Part 4A permission] ; and

(b) is exercising an EEA right to carry on any Consumer Credit Act business in an EEA State other than the United Kingdom.

(2) [F187 The FCA] may exercise its power under [F188 section 55L or 55M] in respect of the firm if [F189 the Office of Fair Trading] has informed [F187 the FCA] that—

(a) the firm,

(b) any of the firm’s employees, agents or associates (whether past or present), or

(c) if the firm is a body corporate, a controller of the firm or an associate of such a controller,

has done any of the things specified in paragraphs [F190 (a) to (e) of section 25(2A)] of the M3 Consumer Credit Act 1974.

[F191 (2A) [F187 The FCA] may also exercise its power under [F192 section 55L or 55M] in respect of the firm if the Office of Fair Trading has informed [F187 the FCA] that it has concerns about any of the following—

(a) the firm's skills, knowledge and experience in relation to Consumer Credit Act businesses;

(b) such skills, knowledge and experience of other persons who are participating in any Consumer Credit Act business being carried on by the firm;

(c) practices and procedures that the firm is implementing in connection with any such business.]

[F193 (2B) This paragraph does not affect any duty of the FCA to consult the PRA before exercising its power under section 55L or 55M.]

(3) “Associate”, “Consumer Credit Act business” and “controller” have the same meaning as in section 203.

Textual Amendments

F185 Words in Sch. 3 para. 23(1) substituted (6.4.2008) by Consumer Credit Act 2006 (c. 14), ss. 33(10), 71(2); S.I. 2007/3300, art. 3(2), Sch. 2

F186 Words in Sch. 3 para. 23(1)(a) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 15(3) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F187 Words in Sch. 3 para. 23 substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 15(2) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F188 Words in Sch. 3 para. 23(2) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 15(4) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F189 Words in Sch. 3 para. 23(2) substituted (1.4.2003) by Enterprise Act 2002 (c. 40), ss. 278(1), 279, Sch. 25 para. 40(19)(b); S.I. 2003/766, art. 2, Sch. (with art. 3)

F190 Words in Sch. 3 para. 23(2) substituted (6.4.2008) by Consumer Credit Act 2006 (c. 14), ss. 33(11), 71(2); S.I. 2007/3300, art. 3(2), Sch. 2

F191 Sch. 3 para. 23(2A) inserted (6.4.2008) by Consumer Credit Act 2006 (c. 14), ss. 33(12), 71(2); S.I. 2007/3300, art. 3(2), Sch. 2

F192 Words in Sch. 3 para. 23(2A) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 15(4) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F193 Sch. 3 para. 23(2B) inserted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 15(5) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

Commencement Information

I22 Sch. 3 Pt. III para. 23 wholly in force at 1.12.2001; Sch. 3 Pt. III para. 23 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. III para. 23 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c) Sch. Pts. 2, 3; Sch. 3 Pt. III para. 23 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; Sch. 3 Pt. III para. 23 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

Marginal Citations

M3 1974 c. 39.

24 (1) Sub-paragraph (2) applies if a UK firm— U.K.

(a) is not required to have a [F194 Part 4A permission] in relation to the business which it is carrying on; and

(b) is exercising the right conferred by [F195 [F196 Article 24] of the banking consolidation directive] to carry on that business in an EEA State other than the United Kingdom.

(2) If requested to do so by the host state regulator in the EEA State in which the UK firm’s business is being carried on, [F197 either regulator] may impose any requirement in relation to the firm which it could impose if—

(a) the firm had a [F198 Part 4A permission] in relation to the business which it is carrying on; and

(b) [F199 that regulator] was entitled to exercise its power under that Part to vary that permission.

Textual Amendments

F194 Words in Sch. 3 para. 24(1)(a) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 16(2) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F195 Words in Sch. 3 Pt. III para. 24(1)(b) substituted (22.11.2000) by S.I. 2000/2952, reg. 8(5)(f)

F196 Words in Sch. 3 para. 24(1)(b) substituted (1.1.2007) by The Capital Requirements Regulations 2006 (S.I. 2006/3221), reg. 29(1), Sch. 3 para. 2(4)

F197 Words in Sch. 3 para. 24(2) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 16(3)(a) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F198 Words in Sch. 3 para. 24(2)(a) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 16(3)(b) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F199 Words in Sch. 3 para. 24(2)(b) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 16(3)(c) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

Commencement Information

I23 Sch. 3 Pt. III para. 24 wholly in force at 1.12.2001; Sch. 3 Pt. III para. 24 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. III para. 24 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. III para. 24 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; Sch. 3 Pt. III para. 24 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

[F200 Arrangements between FCA and PRA U.K.

Textual Amendments

F200 Sch. 3 para. 24A and crossheading inserted (24.1.2013 for specified purposes, 27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 17 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, arts. 2, 3, Sch.

24A (1) The regulators may make arrangements about— U.K.

(a) how they will consult each other when required to do so by paragraph 19(7C) or (7D) or 20(3AA) or (3AB) or by regulations under paragraph 22;

(b) how each of them will act in response to any advice or representations received from the other.

(2) The arrangements may require one regulator to obtain the consent of the other in specified circumstances before—

(a) giving a consent notice under paragraph 19 or 20, or

(b) exercising specified functions under regulations under paragraph 22.

(3) The arrangements must be in writing, and must specify—

(a) the EEA rights to which they relate, and

(b) the date on which they come into force.

(4) Where arrangements are in force under this paragraph, the regulators must exercise functions in accordance with the arrangements.

(5) The regulators must publish any arrangements under this paragraph in such manner as they think fit.]

[F201 Information to be included in the public record U.K.

Textual Amendments

F201 Sch. 3 para. 25 and preceding cross-heading inserted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473), reg. 7

25 U.K. The [F202 FCA] must include in the record that it maintains under section 347 in relation to any UK firm whose EEA right derives from the insurance mediation directive information as to each EEA State in which the UK firm, in accordance with such a right—

(a) has established a branch; or

(b) is providing services.]

Textual Amendments

F202 Word in Sch. 3 para. 25 substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 18 (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

UK management companies: delegation of functions U.K.

[F203 26 Where a UK firm which is a management company and is providing services in the exercise of an EEA right to an EEA UCITS informs the [F204 appropriate UK regulator] that it has delegated one or more of its functions to a third party, the [F204 appropriate UK regulator] must transmit that information to the home state regulator of the EEA UCITS without delay.

Textual Amendments

F203 Sch. 3 paras. 26-28 inserted (1.7.2011) by The Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613), reg. 2(33)(n)

F204 Words in Sch. 3 para. 26 substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 19 (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

UK management companies: withdrawal of authorisation U.K.

27 Where a UK firm which is a management company has exercised an EEA right deriving from the UCITS directive to establish a branch or to provide services in another EEA State, the [F205 appropriate UK regulator] must consult the home state regulator of any UCITS managed by that management company before taking a decision to withdraw the authorisation of the management company under section 33.

Textual Amendments

F203 Sch. 3 paras. 26-28 inserted (1.7.2011) by The Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613), reg. 2(33)(n)

F205 Words in Sch. 3 para. 27 substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 20 (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

Management companies: request for information U.K.

28 (1) Where a UK firm has applied to manage a UCITS which is established in another EEA State, the home state regulator of the UCITS may—

(a) request further information from the [F206 appropriate UK regulator] regarding the documents referred to in Article 20.1 of the UCITS directive, and

(b) ask the [F206 appropriate UK regulator] whether the type of UCITS for which the UK firm has applied to provide its services falls within the scope of the authorisation of the UK firm.

(2) The [F206 appropriate UK regulator] must respond to a request under sub-paragraph (1)(a) or (b) within 10 working days of the date on which the request was received.]

Textual Amendments

F203 Sch. 3 paras. 26-28 inserted (1.7.2011) by The Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613), reg. 2(33)(n)

F206 Words in Sch. 3 para. 28 substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 21 (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

Section 31(1)(c).

SCHEDULE 4 U.K. Treaty Rights

Modifications etc. (not altering text)

C28 Sch. 4 extended (1.12.2001) by S.I. 2001/2636, arts. 1(2)(b), 28-32; S.I. 2001/3538, art. 2(1)

Definitions U.K.

1 [F207 (1)] In this Schedule— U.K.

• F208 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• “Treaty firm” means a person—

  (a)

  whose head office is situated in an EEA State (its “home state”) other than the United Kingdom; and

  (b)

  which is recognised under the law of that State as its national; and

• “home state regulator”, in relation to a Treaty firm, means the competent authority of the firm’s home state for the purpose of its home state authorisation (as to which see paragraph 3(1)(a)).

[F209 (2) Section 425A (meaning of “consumers”) applies for the purposes of this Schedule.]

Textual Amendments

F207 Sch. 4 para. 1 renumbered (8.4.2010) as Sch. 4 para. 1(1) by virtue of Financial Services Act 2010 (c. 28), ss. 24(1), 26(1)(g)(l), Sch. 2 para. 35(2)

F208 Sch. 4 para. 1(1): definition of "consumers" omitted (8.4.2010) by virtue of Financial Services Act 2010 (c. 28), ss. 24(1), 26(1)(g)(l), Sch. 2 para. 35(3)

F209 Sch. 4 para. 1(2) inserted (8.4.2010) by Financial Services Act 2010 (c. 28), ss. 24(1), 26(1)(g)(l), Sch. 2 para. 35(4)

Firms qualifying for authorisation U.K.

2 U.K. Once a Treaty firm which is seeking to carry on a regulated activity satisfies the conditions set out in paragraph 3(1), it qualifies for authorisation.

Exercise of Treaty rights U.K.

3 (1) The conditions are that— U.K.

(a) the firm has received authorisation (“home state authorisation”) under the law of its home state to carry on the regulated activity in question (“the permitted activity”);

(b) the relevant provisions of the law of the firm’s home state—

(i) afford equivalent protection; or

(ii) satisfy the conditions laid down by [F210 an EU] instrument for the co-ordination or approximation of laws, regulations or administrative provisions of member States relating to the carrying on of that activity; and

(c) the firm has no EEA right to carry on that activity in the manner in which it is seeking to carry it on.

(2) A firm is not to be regarded as having home state authorisation unless its home state regulator has so informed the [F211 appropriate UK regulator] in writing.

[F212 (2A) In sub-paragraph (2) “the appropriate UK regulator” means—

(a) where any of the activities to which the notification under that sub-paragraph relates is a PRA-regulated activity, the PRA;

(b) in any other case, the FCA.

(2B) Where the PRA receives a notification under sub-paragraph (2), it must give a copy to the FCA without delay.

(2C) Where the FCA receives a notification under sub-paragraph (2), it must in prescribed cases give a copy to the PRA without delay.]

(3) Provisions afford equivalent protection if, in relation to the firm’s carrying on of the permitted activity, they afford consumers protection which is at least equivalent to that afforded by or under this Act in relation to that activity.

(4) A certificate issued by the Treasury that the provisions of the law of a particular EEA State afford equivalent protection in relation to the activities specified in the certificate is conclusive evidence of that fact.

Textual Amendments

F210 Words in Sch. 4 para. 3(1)(b)(ii) substituted (22.4.2011 with application in accordance with art. 3 of the amending S.I.) by virtue of The Treaty of Lisbon (Changes in Terminology) Order 2011 (S.I. 2011/1043), art. 6(1)(3)(4)

F211 Words in Sch. 4 para. 3(2) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 23(2) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F212 Sch. 4 para. 3(2A)-(2C) inserted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 23(3) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

Commencement Information

I24 Sch. 4 para. 3 wholly in force at 1.12.2001; Sch. 4 para. 3 not in force at Royal Assent see s. 431(2); Sch. 4 para. 3 force for specified purposes at 3.9.2001 by S.I. 2001/2632, art. 2(2), Sch. Pt. 2; Sch. 4 para. 3 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

[F213 Notification between UK regulators U.K.

Textual Amendments

F213 Sch. 4 para. 3A and crossheading 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), s. 122(3), Sch. 4 para. 24 (with Sch. 20); S.I. 2013/113, art. 2(1)(b), Sch. Pt. 2; S.I. 2013/423, art. 3, Sch.

3A U.K. Regulations may require the PRA and the FCA to notify each other about Treaty firms qualifying for authorisation.]

Permission U.K.

4 (1) On qualifying for authorisation under this Schedule, a Treaty firm has permission to carry on each permitted activity through its United Kingdom branch or by providing services in the United Kingdom. U.K.

(2) The permission is to be treated as being on terms equivalent to those to which the firm’s home state authorisation is subject.

(3) If, on qualifying for authorisation under this Schedule, a firm has [F214 a Part 4A permission] which includes permission to carry on a permitted activity, the [F215 appropriate UK regulator] must give a direction cancelling the permission so far as it relates to that activity.

(4) The [F216 appropriate UK regulator] need not give a direction under sub-paragraph (3) if it considers that there are good reasons for not doing so.

[F217 (5) The appropriate UK regulator” means—

(a) where the Treaty firm is a PRA-authorised person, the FCA or the PRA;

(b) in any other case, the FCA.]

Textual Amendments

F214 Words in Sch. 4 para. 4(3) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 25(2)(a) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F215 Words in Sch. 4 para. 4(3) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 25(2)(b) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F216 Words in Sch. 4 para. 4(4) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 25(3) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F217 Sch. 4 para. 4(5) inserted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 25(4) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

Notice to [F218 UK regulator] U.K.

Textual Amendments

F218 Words in Sch. 4 para. 5 cross-heading substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 26(5) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

5 (1) Sub-paragraph (2) applies to a Treaty firm which— U.K.

(a) qualifies for authorisation under this Schedule, but

(b) is not carrying on in the United Kingdom the regulated activity, or any of the regulated activities, which it has permission to carry on there.

(2) At least seven days before it begins to carry on such a regulated activity, the firm must give [F219 the appropriate UK regulator] written notice of its intention to do so.

[F220 (2A) "The appropriate UK regulator” means—

(a) where any of the activities to which the notice relates is a PRA-regulated activity, the PRA;

(b) in any other case, the FCA.

(2B) Where the PRA receives a notice under sub-paragraph (2), it must give a copy to the FCA without delay.

(2C) Where the FCA receives a notice under sub-paragraph (2) from—

(a) a PRA-authorised person, or

(b) a person whose immediate group includes a PRA-authorised person,

it must give a copy to the PRA without delay.]

(3) If a Treaty firm to which sub-paragraph (2) applies has given notice under that sub-paragraph, it need not give such a notice if it again becomes a firm to which that sub-paragraph applies.

[F221 (4) Subsections (1), (4) and (8) of section 55U apply to a notice under sub-paragraph (2) as they apply to an application for a Part 4A permission.]

Textual Amendments

F219 Words in Sch. 4 para. 5(2) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 26(2) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F220 Sch. 4 para. 5(2A)-(2C) inserted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 26(3) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F221 Sch. 4 para. 5(4) substituted (24.1.2013 for specified purposes, 27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 26(4) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, arts. 2, 3, Sch.

Modifications etc. (not altering text)

C29 Sch. 4 para. 5(1) amended (temp. from 3.9.2001 to 1.12.2001) by S.I. 2001/2659, arts. 1(2), 3(12); S.I. 2001/3538, art. 2(1)

Commencement Information

I25 Sch. 4 para. 5 wholly in force at 1.12.2001; Sch. 4 para. 5 not in force at Royal Assent see s. 431(2); Sch. 4 para. 5 force for specified purposes at 3.9.2001 by S.I. 2001/2632, art. 2(2), Sch. Pt. 2; Sch. 4 para. 5 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

Offences U.K.

6 (1) A person who contravenes paragraph 5(2) is guilty of an offence. U.K.

(2) In proceedings against a person for an offence under sub-paragraph (1) it is a defence for him to show that he took all reasonable precautions and exercised all due diligence to avoid committing the offence.

(3) A person is guilty of an offence if in, or in connection with, a notice given by him under paragraph 5(2) he—

(a) provides information which he knows to be false or misleading in a material particular; or

(b) recklessly provides information which is false or misleading in a material particular.

(4) A person guilty of an offence under this paragraph is liable—

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

(b) on conviction on indictment, to a fine.

Section 36.

SCHEDULE 5 U.K. Persons Concerned in Collective Investment Schemes

Authorisation U.K.

1 (1) A person who for the time being is an operator, trustee or depositary of a recognised collective investment scheme is an authorised person. U.K.

(2) “Recognised” means recognised by virtue of section 264.

(3) An authorised open-ended investment company is an authorised person.

[F222 (4) A body—

(a) incorporated by virtue of regulations made under section 1 of the Open-Ended Investment Companies Act (Northern Ireland) 2002 in respect of which an authorisation order is in force, and

(b) to which the UCITS directive applies,

is an authorised person.

(5) “Authorisation order” means an order made under (or having effect as made under) any provision of those regulations which is made by virtue of section 1(2)(1) of that Act (provision corresponding to Chapter 3 of Part 17 of the Act).]

Textual Amendments

F222 Sch. 5 para. 1(4)(5) inserted (13.2.2004) by The Collective Investment Schemes (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/2066), reg 10(a)

Permission U.K.

2 (1) A person authorised as a result of paragraph 1(1) has permission to carry on, so far as it is a regulated activity— U.K.

(a) any activity, appropriate to the capacity in which he acts in relation to the scheme, of the kind described in paragraph 8 of Schedule 2;

(b) any activity in connection with, or for the purposes of, the scheme.

(2) A person authorised as a result of paragraph 1(3) [F223 or (4)] has permission to carry on, so far as it is a regulated activity—

(a) the operation of the scheme;

(b) any activity in connection with, or for the purposes of, the operation of the scheme.

Textual Amendments

F223 Words in Sch. 5 para. 2(2) inserted (13.2.2004) by The Collective Investment Schemes (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/2066), reg 10(b)

[F224 Section 55B]

SCHEDULE 6 U.K. Threshold Conditions

Textual Amendments

F224 Words in Sch. 6 substituted (1.4.2013) by The Financial Services and Markets Act 2000 (Threshold Conditions) Order 2013 (S.I. 2013/555), arts. 1, 2(1)

Modifications etc. (not altering text)

C30 Sch. 6 modified (3.9.2001) by S.I. 2001/2507, arts. 1(1), 3(1); S.I. 2001/2632, art. 2(2), Sch. Pt. 2

[F225 PART 1 U.K. Introduction

Textual Amendments

F225 Sch. 6 Pts. 1-1G substituted for Sch. 6 Pts. 1, 2 (1.4.2013) by The Financial Services and Markets Act 2000 (Threshold Conditions) Order 2013 (S.I. 2013/555), arts. 1, 2(2)

1A. (1) In this Schedule— U.K.

• “assets” includes contingent assets;

• “consolidated supervision” has the same meaning as in section 3M;

• “consumers” has the meaning given in section 425A;

• “financial crime” is to be read with section 1H(3);

• “functions”, in relation to the FCA or the PRA, means functions conferred on that regulator by or under this Act;

• “liabilities” includes contingent liabilities;

• “relevant directives” has the same meaning as in section 3M;

• “Society” means the society incorporated by Lloyd’s Act 1871 by the name of Lloyd’s;

• “subsidiary undertaking” includes all the instances mentioned in Article 1(1) and (2) of the Seventh Company Law Directive in which an entity may be a subsidiary of an undertaking.

(2) For the purposes of this Schedule, the “non-financial resources” of a person include any systems, controls, plans or policies that the person maintains, any information that the person holds and the human resources that the person has available.

(3) In this Schedule, References to “integrity” of the UK financial system are to be read in accordance section 1D(2).

(4) References to the failure of a person are to be read in accordance with section 2J(3) and (4).

PART 1B U.K. Part 4A permission: authorised persons who are not PRA-authorised persons

Introduction U.K.

2A. If the person concerned (“A”) carries on, or is seeking to carry on, regulated activities which do not consist of or include a PRA-regulated activity, the threshold conditions that are relevant to the discharge by the FCA of its functions in relation to A are the conditions set out in paragraphs 2B to 2F.

Location of offices U.K.

2B. (1) Unless sub-paragraph (3) or (4)(a) applies, if A is a body corporate incorporated in the United Kingdom—

(a) A’s head office, and

(b) if A has a registered office, that office,

must be in the United Kingdom.

(2) If A is not a body corporate but A’s head office is in the United Kingdom, A must carry on business in the United Kingdom.

(3) If—

(a) A is seeking to carry on, or is carrying on, a regulated activity which is any of the investment services and activities,

(b) A is a body corporate with no registered office, and

(c) A’s head office is in the United Kingdom,

A must carry on business in the United Kingdom.

(4) If A is seeking to carry on, or is carrying on, an insurance mediation activity—

(a) where A is a body corporate incorporated in the United Kingdom, A’s registered office, or if A has no registered office, A’s head office, must be in the United Kingdom;

(b) where A is an individual, A is to be treated for the purposes of sub-paragraph (2) as having a head office in the United Kingdom if A is resident in the United Kingdom.

(5) “Insurance mediation activity” means any of the following activities—

(a) dealing in rights under a contract of insurance as agent;

(b) arranging deals in rights under a contract of insurance;

(c) assisting in the administration and performance of a contract of insurance;

(d) advising on buying or selling rights under a contract of insurance;

(e) agreeing to do any of the activities specified in paragraphs (a) to (d).

(6) Sub-paragraph (5) must be read with—

(a) section 22,

(b) any relevant order under that section, and

(c) Schedule 2.

Effective supervision U.K.

2C. (1) A must be capable of being effectively supervised by the FCA having regard to all the circumstances including—

(a) the nature (including the complexity) of the regulated activities that A carries on or seeks to carry on;

(b) the complexity of any products that A provides or will provide in carrying on those activities;

(c) the way in which A’s business is organised;

(d) if A is a member of a group, whether membership of the group is likely to prevent the FCA’s effective supervision of A;

(e) whether A is subject to consolidated supervision required under any of the relevant directives;

(f) if A has close links with another person (“CL”)—

(i) the nature of the relationship between A and CL,

(ii) whether those links are or that relationship is likely to prevent the FCA’s effective supervision of A, and

(iii) if CL is subject to the laws, regulations or administrative provisions of a territory which is not an EEA State (“the foreign provisions”), whether those foreign provisions, or any deficiency in their enforcement, would prevent the FCA’s effective supervision of A.

(2) A has close links with CL if—

(a) CL is a parent undertaking of A,

(b) CL is a subsidiary undertaking of A,

(c) CL is a parent undertaking of a subsidiary undertaking of A,

(d) CL is a subsidiary undertaking of a parent undertaking of A,

(e) CL owns or controls 20% or more of the voting rights or capital of A, or

(f) A owns or controls 20% or more of the voting rights or capital of CL.

Appropriate resources U.K.

2D. (1) The resources of A must be appropriate in relation to the regulated activities that A carries on or seeks to carry on.

(2) The matters which are relevant in determining whether A has appropriate resources include—

(a) the nature and scale of the business carried on, or to be carried on, by A;

(b) the risks to the continuity of the services provided by, or to be provided by, A;

(c) A’s membership of a group and any effect which that membership may have.

(3) The matters which are relevant in determining whether A has appropriate financial resources include—

(a) the provision A makes and, if A is a member of a group, which other members of the group make, in respect of liabilities;

(b) the means by which A manages and, if A is a member of a group, by which other members of the group manage, the incidence of risk in connection with A’s business.

(4) The matters which are relevant in determining whether A has appropriate non-financial resources include—

(a) the skills and experience of those who manage A’s affairs;

(b) whether A’s non-financial resources are sufficient to enable A to comply with—

(i) requirements imposed or likely to be imposed on A by the FCA in the exercise of its functions, or

(ii) any other requirement in relation to whose contravention the FCA would be the appropriate regulator for the purpose of any provision of Part 14 of this Act.

Suitability U.K.

2E. A must be a fit and proper person having regard to all the circumstances, including—

(a) A’s connection with any person;

(b) the nature (including the complexity) of the regulated activities that A carries on or seeks to carry on;

(c) the need to ensure that A’s affairs are conducted in an appropriate manner, having regard in particular to the interests of consumers and the integrity of the UK financial system;

(d) whether A has complied and is complying with requirements imposed by the FCA in the exercise of its functions, or requests made by the FCA, relating to the provision of information to the FCA and, where A has so complied or is so complying, the manner of that compliance;

(e) whether those who manage A’s affairs have adequate skills and experience and have acted and may be expected to act with probity;

(f) whether A’s business is being, or is to be, managed in such a way as to ensure that its affairs will be conducted in a sound and prudent manner;

(g) the need to minimise the extent to which it is possible for the business carried on by A, or to be carried on by A, to be used for a purpose connected with financial crime.

Business model U.K.

2F. (1) A’s business model (that is, A’s strategy for doing business) must be suitable for a person carrying on the regulated activities that A carries on or seeks to carry on.

(2) The matters which are relevant in determining whether A satisfies the condition in sub-paragraph (1) include—

(a) whether the business model is compatible with A’s affairs being conducted, and continuing to be conducted, in a sound and prudent manner;

(b) the interests of consumers;

(c) the integrity of the UK financial system.

PART 1C U.K. Part 4A permission: conditions for which FCA is responsible in relation to PRA-authorised persons

Introduction U.K.

3A. If the person concerned (“B”) carries on, or is seeking to carry on, regulated activities which consist of or include a PRA-regulated activity, the threshold conditions which are relevant to the discharge by the FCA of its functions in relation to B are the conditions set out in paragraphs 3B to 3E.

Effective supervision U.K.

3B. (1) B must be capable of being effectively supervised by the FCA having regard to all the circumstances including—

(a) the nature (including the complexity) of the regulated activities that B carries on or seeks to carry on;

(b) the complexity of any products that B provides or will provide in carrying on those activities;

(c) the way in which B’s business is organised;

(d) if B is a member of a group, whether membership of the group is likely to prevent the FCA’s effective supervision of B;

(e) whether B is subject to consolidated supervision required under any of the relevant directives;

(f) if B has close links with another person (“CL”)—

(i) the nature of the relationship between B and CL,

(ii) whether those links are or that relationship is likely to prevent the FCA’s effective supervision of B, and

(iii) if CL is subject to the laws, regulations or administrative provisions of a territory which is not an EEA State (“the foreign provisions”), whether those foreign provisions, or any deficiency in their enforcement, would prevent the FCA’s effective supervision of B.

(2) B has close links with CL if—

(a) CL is a parent undertaking of B,

(b) CL is a subsidiary undertaking of B,

(c) CL is a parent undertaking of a subsidiary undertaking of B,

(d) CL is a subsidiary undertaking of a parent undertaking of B,

(e) CL owns or controls 20% or more of the voting rights or capital of B, or

(f) B owns or controls 20% or more of the voting rights or capital of CL.

Appropriate non-financial resources U.K.

3C. (1) The non-financial resources of B must be appropriate in relation to the regulated activities that B carries on or seeks to carry on, having regard to the operational objectives of the FCA.

(2) The matters which are relevant in determining whether the condition in sub-paragraph (1) is met include—

(a) the nature and scale of the business carried on, or to be carried on, by B;

(b) the risks to the continuity of the services provided by, or to be provided by, B;

(c) B’s membership of a group and any effect which that membership may have;

(d) the skills and experience of those who manage B’s affairs;

(e) whether B’s non-financial resources are sufficient to enable B to comply with—

(i) requirements imposed or likely to be imposed on B by the FCA in the exercise of its functions, or

(ii) any other requirement in relation to whose contravention the FCA would be the appropriate regulator for the purpose of any provision of Part 14 of this Act.

Suitability U.K.

3D. (1) B must be a fit and proper person, having regard to the operational objectives of the FCA.

(2) The matters which are relevant in determining whether B satisfies the condition in sub-paragraph (1) include—

(a) B’s connection with any person;

(b) the nature (including the complexity) of the regulated activities that B carries on or seeks to carry on;

(c) the need to ensure that B’s affairs are conducted in an appropriate manner, having regard in particular to the interests of consumers and the integrity of the UK financial system;

(d) whether B has complied and is complying with requirements imposed by the FCA in the exercise its functions, or requests made by the FCA, relating to the provision of information to the FCA and, where B has so complied or is so complying, the manner of that compliance;

(e) whether those who manage B’s affairs have adequate skills and experience and have acted and may be expected to act with probity;

(f) the need to minimise the extent to which it is possible for the business carried on by B, or to be carried on by B, to be used for a purpose connected with financial crime.

Business model U.K.

3E. B’s business model (that is, B’s strategy for doing business) must be suitable for a person carrying on the regulated activities that B carries on or seeks to carry on, having regard to the FCA’s operational objectives.

PART 1D U.K. Part 4A permission: conditions for which the PRA is responsible in relation to insurers etc.

Introduction U.K.

4A. (1) If the person concerned (“C”) carries on, or is seeking to carry on, regulated activities which consist of or include a PRA-regulated activity relating to the effecting or carrying out of contracts of insurance, the threshold conditions which are relevant to the discharge by the PRA of its functions in relation to C are the conditions set out in paragraphs 4B to 4F.

(2) If the person concerned (“C”) carries on, or is seeking to carry on, regulated activities which consist of or include a PRA-regulated activity relating to managing the underwriting capacity of a Lloyd’s syndicate as a managing agent at Lloyd’s, the conditions which are relevant to the discharge by the PRA of its functions in relation to C are the conditions set out in paragraphs 4C to 4F except for sub-paragraphs (5)(d) and (5)(e) of paragraph 4D which are not relevant for that purpose.

(3) If the person concerned (“C”) carries on, or is seeking to carry on, regulated activities which consist of or include a PRA-regulated activity relating to the arranging, by the Society, of deals in contracts of insurance written at Lloyd’s, the conditions which are relevant to the discharge by the PRA of its functions in relation to C are the conditions set out in paragraphs 4C to 4F, subject to sub-paragraph (4).

(4) Paragraph 4D has effect in relation to persons of the kind specified by sub-paragraph (3) as if—

(a) for paragraph (d) and (e) of sub-paragraph (5) there were substituted—

“(d) the effect that the carrying on of business by C might be expected to have on the stability of the UK financial system or on those who are or may become policyholders of members of C;

(e) the effect that the failure of C might be expected to have on the stability of the UK financial system or on those who are or may become policyholders of members of C;”, and

(b) sub-paragraph (6) were omitted.

Legal status U.K.

4B. C must be—

(a) a body corporate (other than a limited liability partnership),

(b) a registered friendly society, or

(c) a member of Lloyd’s.

Location of offices U.K.

4C. (1) If C is a body corporate incorporated in the United Kingdom—

(a) C’s head office, and

(b) if C has a registered office, that office,

must be in the United Kingdom.

(2) If C is not a body corporate but C’s head office is in the United Kingdom, C must carry on business in the United Kingdom.

Business to be conducted in a prudent manner U.K.

4D. (1) The business of C must be conducted in a prudent manner.

(2) To satisfy the condition in sub-paragraph (1), C must in particular have appropriate financial and non-financial resources.

(3) To have appropriate financial resources C must satisfy the following conditions—

(a) C’s assets must be appropriate given C’s liabilities, and

(b) the liquidity of C’s resources must be appropriate given C’s liabilities and when they fall due or may fall due.

(4) To have appropriate non-financial resources C must satisfy the following conditions—

(a) C must be willing and able to value C’s assets and liabilities appropriately,

(b) C must have resources to identify, monitor, measure and take action to remove or reduce risks to the safety and soundness of C,

(c) C must have resources to identify, monitor, measure and take action to remove or reduce risks to the accuracy of C’s valuation of C’s assets and liabilities,

(d) the effectiveness with which C’s business is managed must meet a reasonable standard of effectiveness, and

(e) C’s non-financial resources must be sufficient to enable C to comply with—

(i) requirements imposed or likely to be imposed on C by the PRA in the exercise of its functions, and

(ii) any other requirement in relation to whose contravention the PRA would be the appropriate regulator for the purpose of any provision of Part 14 of this Act.

(5) The matters which are relevant in determining whether C satisfies the condition in sub-paragraph (1) or (2) include—

(a) the nature (including the complexity) of the regulated activities that C carries on or seeks to carry on;

(b) the nature and scale of the business carried on or to be carried on by C;

(c) the risks to the continuity of the services provided by, or to be provided by, C;

(d) the effect that the carrying on of the business of effecting or carrying out contracts of insurance by C might be expected to have on the stability of the UK financial system or on those who are or may become C’s policyholders;

(e) the effect that C’s failure or C being closed to new business might be expected to have on the stability of the UK financial system or on those who are or may become C’s policyholders;

(f) C’s membership of a group and any effect which that membership may have.

(6) C is “closed to new business” for the purposes of this paragraph if C has ceased to effect contracts of insurance or has substantially reduced the number of such contracts which C effects.

Suitability U.K.

4E. (1) C must be a fit and proper person, having regard to the PRA’s objectives.

(2) The matters which are relevant in determining whether C satisfies the condition in sub-paragraph (1) include—

(a) whether C has complied and is complying with requirements imposed by the PRA in the exercise of its functions, or requests made by the PRA relating to the provision of information to the PRA and, if C has so complied or is so complying, the manner of that compliance;

(b) whether those who manage C’s affairs have adequate skills and experience and have acted and may be expected to act with probity.

Effective supervision U.K.

4F. (1) C must be capable of being effectively supervised by the PRA.

(2) The matters which are relevant in determining whether C satisfies the condition in sub-paragraph (1) include—

(a) the nature (including the complexity) of the regulated activities that C carries on or seeks to carry on;

(b) the complexity of any products that C provides or will provide in carrying on those activities;

(c) the way in which C’s business is organised;

(d) if C is a member of a group, whether membership of the group is likely to prevent the PRA’s effective supervision of C;

(e) whether C is subject to consolidated supervision required under any of the relevant directives;

(f) if C has close links with another person (“CL”)—

(i) the nature of the relationship between C and CL,

(ii) whether those links are or that relationship is likely to prevent the PRA’s effective supervision of C, and

(iii) if CL is subject to the laws, regulations or administrative provisions of a territory which is not an EEA State (“the foreign provisions”), whether those foreign provisions, or any deficiency in their enforcement, would prevent the PRA’s effective supervision of C.

(3) C has close links with CL if—

(a) CL is a parent undertaking of C,

(b) CL is a subsidiary undertaking of C,

(c) CL is a parent undertaking of a subsidiary undertaking of C,

(d) CL is a subsidiary undertaking of a parent undertaking of C,

(e) CL owns or controls 20% or more of the voting rights or capital of C, or

(f) C owns or controls 20% or more of the voting rights or capital of CL.

PART 1E U.K. Part 4A permission: conditions for which the PRA is responsible in relation to other PRA-authorised persons

Introduction U.K.

5A. If the person concerned (“D”) carries on, or is seeking to carry on, PRA-regulated activities which do not consist of or include a regulated activity relating to—

(a) the effecting or carrying out of contracts of insurance,

(b) managing the underwriting capacity of a Lloyd’s syndicate as a managing agent at Lloyds, or

(c) arranging, by the Society, of deals in contracts of insurance written at Lloyd’s,

the threshold conditions which are relevant to the discharge by the PRA of its functions in relation to D are the conditions set out in paragraphs 5B to 5F.

Legal status U.K.

5B. If D carries on or is seeking to carry on a regulated activity which consists of or includes accepting deposits or issuing electronic money, D must be—

(a) a body corporate, or

(b) a partnership.

Location of offices U.K.

5C. (1) If D is a body corporate incorporated in the United Kingdom—

(a) D’s head office, and

(b) if D has a registered office, that office,

must be in the United Kingdom.

(2) If D is not a body corporate but D’s head office is in the United Kingdom, D must carry on business in the United Kingdom.

Business to be conducted in a prudent manner U.K.

5D. (1) The business of D must be conducted in a prudent manner.

(2) To satisfy the condition in sub-paragraph (1), D must in particular have appropriate financial and non-financial resources.

(3) To have appropriate financial resources D must satisfy the following conditions—

(a) D’s assets must be appropriate given D’s liabilities, and

(b) the liquidity of D’s resources must be appropriate given D’s liabilities and when they fall due or may fall due.

(4) To have appropriate non-financial resources D must satisfy the following conditions—

(a) D must be willing and able to value D’s assets and liabilities appropriately,

(b) D must have resources to identify, monitor, measure and take action to remove or reduce risks to the safety and soundness of D,

(c) D must have resources to identify, monitor, measure and take action to remove or reduce risks to the accuracy of D’s valuation of D’s assets and liabilities,

(d) the effectiveness with which D’s business is managed must meet a reasonable standard of effectiveness, and

(e) D’s non-financial resources must be sufficient to enable D to comply with—

(i) requirem