SCHEDULES
F464SCHEDULE 1 The Financial Services Authority
F464Part I General
F464 Interpretation
F4641
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F464 Constitution
F4642
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F464 Non-executive members of the governing body
F4643
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F464 Functions of the non-executive committee
F4644
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F464 Arrangements for discharging functions
F4645
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F464 Monitoring and enforcement
F4646
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F464 Arrangements for the investigation of complaints
F4647
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F464 Investigation of complaints
F4648
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F464 Records
F4649
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F464 Annual report
F46410
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F464 Annual public meeting
F46411
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F464 Report of annual meeting
F46412
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F464Part II Status
F46413
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F464 Exemption from requirement of “limited” in Authority’s name
F46414
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F46415
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F464Part III Penalties and Fees
F464 Penalties
F46416
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F464 Fees
F46417
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F464 Services for which fees may not be charged
F46418
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F464Part IV Miscellaneous
F464 Exemption from liability in damages
F46419
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F46419A
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F464Amounts required by rules to be paid to the Authority
F46419B
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F464 Disqualification for membership of House of Commons
F46420
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F464 Disqualification for membership of Northern Ireland Assembly
F46421
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C77F464SCHEDULE 1ZAThe Financial Conduct Authority
Sch. 1ZA applied (with modifications) (6.4.2018 immediately after 2016 c. 16 (N.I.), s. 8(2) comes into force) by The Financial Services Act 2012 (Mutual Societies) Order 2018 (S.I. 2018/323), art. 1, Sch. 1 paras. 2(2)(a), 5(1)(2) (with art. 3)
C102C79PART 1General
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)
Sch. 1ZA Pt. 1 modified (26.6.2017) by The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692), regs. 1(2), 46(9), 63(8) (with regs. 8, 15)
Interpretation
1
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
2
1
The constitution of the FCA must provide for the FCA to have a governing body.
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).
F1702A
1
The term of office of a person appointed as chief executive under paragraph 2(2)(b) must not begin before—
a
the person has, in connection with the appointment, appeared before the Treasury Committee of the House of Commons, or
b
(if earlier) the end of the period of 3 months beginning with the day on which the appointment is made.
2
Sub-paragraph (1) does not apply if the person is appointed as chief executive on an acting basis, pending a further appointment being made.
3
The reference to the Treasury Committee of the House of Commons—
a
if the name of that Committee is changed, is a reference to that Committee by its new name, and
b
if the functions of that Committee (or substantially corresponding functions) become functions of a different Committee of the House of Commons, is to be treated as a reference to the Committee by which the functions are exercisable.
4
Any question arising under sub-paragraph (3) is to be determined by the Speaker of the House of Commons.
3
1
The terms of service of the appointed members are to be determined by the Treasury.
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—
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
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
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
7
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
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.
C66C862
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;
F286b
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
c
issuing statements under—
i
ii
section 345D (whether as a result of section 345(2) F156, section 249(1) or 261K(1)), or
iii
section 80 of the Financial Services Act 2012;
d
giving directions under section 316, 318 or 328.
F369e
setting standards under section 333H.
4
The function of issuing general guidance (as defined in section 139B(5) F478or 333P(9)) may not be discharged by an officer or member of staff of the FCA.
F1605
In respect of the exercise of a function under Part 1 of the Competition Act 1998, the power in sub-paragraph (1) is subject to provision in rules made under section 51 of that Act by virtue of paragraph 1A of Schedule 9 to that Act.
Records
9
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
C6910
1
The FCA must publish a record of each meeting of its governing body—
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.
Annual report
11
1
At least once a year the FCA must make a report to the Treasury on—
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,
F393ha
any rules that it has made as a result of section 137C during the period to which the report relates and the kinds of regulated credit agreement (within the meaning of that section) to which the rules apply,
F321hb
how, in its opinion, it has complied with its duties in section 333O,
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
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.
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
13
Not later than one month after its annual meeting, the FCA must publish a report of the proceedings of the meeting.
Accounts and audit
14
1
The Treasury may—
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.
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.
C58PART 2Status
Sch. 1ZA Pt. 2 modified (26.6.2017) by The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692), regs. 1(2), 46(9), 63(8) (with regs. 8, 15)
Status
C8816
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.
Exemption from requirement for use of “limited” in name of FCA
17
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
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 3Penalties and fees
Penalties
C91C75C85C83C104C89C10619
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.
C75C59C85C96C83C104C89C10620
1
The FCA must in respect of each of its financial years pay to the Treasury its penalty receipts after deducting its enforcement costs.
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 F334or under a provision mentioned in sub-paragraph (4A).
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),
F197ca
its powers under the relevant competition provisions (as applied by Part 16A of this Act),
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.
F4864A
The relevant competition provisions” are—
a
section 31E of the Competition Act 1998 (enforcement of commitments);
b
section 34 of that Act (enforcement of directions);
c
section 36 of that Act (penalties);
d
section 40A of that Act (penalties: failure to comply with requirements);
e
section 174A of the Enterprise Act 2002 (penalties).
5
“Relevant offences” are—
a
offences under F184this Act,
b
offences under subordinate legislation made under F287this Act,
c
offences falling within section 402(1) F236...,
F450ca
offences under Part 1 of the Competition Act 1998,
cb
offences under Part 4 of the Enterprise Act 2002,
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.
C75C85C81C83C104C89C10621
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.
2
“Regulated persons” means—
a
authorised persons,
b
recognised investment exchanges,
c
issuers of securities admitted to the official list, F144...
d
issuers who have requested or approved the admission of financial instruments to trading on a regulated marketF146, and
e
designated guidance providers.
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”).
C75C85C83C104C89C10622
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.
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
C101C112C90C55C56C74C82C57C93C83C104C60C89C106C5123
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 F284other than sections F155137SA, 333Q F305, 333R and 333T) enable it—
a
to meet expenses incurred in carrying out its functions F332, other than its excepted 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
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.
F1882ZA
The “excepted functions” of the FCA are—
a
its functions under sections 333E to 333Q, and
b
c
its functions under section 137SA.
F2292A
The functions referred to in sub-paragraph (1)(a) include functions of the FCA under the Competition Act 1998 or the Enterprise Act 2002 as a result of Part 16A of this Act; but this sub-paragraph is not to be regarded as limiting the effect of the definition of “functions” in paragraph 1.
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.
- a
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).
C80C956
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.
Services for which fees may not be charged
24
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.
C94PART 4Miscellaneous
Sch. 1ZA Pt. 4 modified (26.6.2017) by The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692), regs. 1(2), 46(9), 63(8) (with regs. 8, 15)
Exemption from liability in damages
C78C50C113C84C71C108C107C72C76C97C103C67C92C62C5225
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—
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.
F3181A
In sub-paragraph (1) the reference to the FCA's functions includes its functions under Part 5 of the Financial Services (Banking Reform) Act 2013 (regulation of payment systems).
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.
Accredited financial investigators
26
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
27
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.
SCHEDULE 1ZBThe Prudential Regulation Authority
Word in Sch. 1ZB shoulder note substituted (1.3.2017) by Bank of England and Financial Services Act 2016 (c. 14), s. 41(3), Sch. 2 para. 50(2) (with Sch. 3); S.I. 2017/43, reg. 2(g)
PART 1General
Interpretation
1
Constitution
F2912
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F2913
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F2914
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F2915
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Appointed members of governing body
F2916
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F2917
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F2918
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F2919
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F29110
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F29111
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F29112
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F29113
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F29114
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Terms of service
F29115
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Arrangements for discharging functions
F29116
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Records
17
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
F26118
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Annual report
19
C681
At least once a year the PRA must make a report to the F217Chancellor of the Exchequer on—
a
the discharge of its functions,
b
the extent to which, in its opinion, its objectives have been advanced,
F299ba
how it has complied with section 2H(1),
c
its consideration of the principles in section 3B F199...,
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—
F325a
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
b
such other reports or information, prepared by such persons, as the Treasury may from time to time direct.
4
F2475
The Chancellor may comply with sub-paragraph (4) by laying a document containing a report under this paragraph together with a report under section 4 of the Bank of England Act 1998.
Consultation about annual report
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—
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 F183and the PRA has facilitated effective competition in accordance with section 2H and has considered the regulatory principles in section 3B .
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
21
1
The PRA must publish a report about its consultation in accordance with paragraph 20.
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
F20222
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F20223
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART 2Status
Status
F20224
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exemption from requirement for use of “limited” in name of PRA
F20225
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F20226
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART 3Penalties and fees
Penalties
C8727
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.
C8728
1
The PRA must in respect of each of its financial years pay to the Treasury its penalty receipts after deducting its enforcement costs.
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.
C8729
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.
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”).
C8730
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.
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
C8731
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—
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 F4472AB(3), 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.
- a
4
Neither section F2262AB(3)(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
32
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 4Miscellaneous
Exemption from liability in damages
C11133
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—
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.
F3781A
In sub-paragraph (1) the reference to the PRA's functions includes its functions under Part 5 of the Financial Services (Banking Reform) Act 2013 (regulation of payment systems).
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
34
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
35
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.
F107SCHEDULE 1AFurther provision about the consumer financial education body
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
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 1General
Ensuring exercise of consumer financial education function etc
1
1
The F220FCA 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.
2
Constitution
2
1
The constitution of the consumer financial education body must provide for it to have—
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 F268FCA (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 F268FCA in the exercise of the consumer financial education function.
4
The F268FCA 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.
Status
3
1
The consumer financial education body is not to be regarded as exercising functions on behalf of the Crown.
2
The body's F278... officers and staff are not to be regarded as Crown servants.
Discharge of function by others
4
1
The consumer financial education body may discharge the consumer financial education function by—
a
supporting the doing by other persons of anything that it considers would enhance the understanding, knowledge or ability mentioned in F259section 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.
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 F248section 3S(3).
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.
F364Discharge of functions: considerations
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
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
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.
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
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
7
1
The consumer financial education body must adopt an annual budget which has been approved by the F211FCA.
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 F211FCA, 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
F362... 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.
Annual plan
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 F329FCA.
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 F329FCA, 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;
F171c
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
d
the Practitioner Panel;
F469da
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.
Annual reports
9
1
At least once a year, the consumer financial education body must make a report to the F309FCA in relation to the discharge of the consumer financial education function.
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 F309FCA.
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.
F3765
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.
F224Audit of accounts
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.
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.
F165...
Sch. 1A para. 10(1) and crossheading omitted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), arts. 1(2)(6), 10(16)(c)
10
F1651
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
Nothing in Part 4 or 10 of F366the Consumer Credit Act 1974 (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 2Funding
Meaning of “the relevant costs”
11
1
In this Part of this Schedule “the relevant costs” means—
a
the expenses incurred by the F153FCA 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.
Funding of the relevant costs by authorised persons F115, payment service providers or electronic money issuers
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 F281FCA may makes rules requiring—
a
authorised persons F116, electronic money issuers or payment service providers, or
b
any specified class of authorised person F117, electronic money issuer or payment service provider,
to pay to the F281FCA specified amounts or amounts calculated in a specified way.
2
Before making the rules the F281FCA 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 F281FCA in collecting the payments (“collection costs”).
4
The F281FCA 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).
F1184A
“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
6
“Specified” means specified in the rules.
Funding of the relevant costs by consumer credit licensees etc
F43013
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Funding by grants or loans etc made by Treasury or Secretary of State
14
1
The Treasury or the Secretary of State may—
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 3Reviews
Reviews of economy etc of the consumer financial education body
15
1
The F421FCA 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.
2
The F421FCA 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 F421FCA—
a
setting out the result of the review; and
b
making such recommendations (if any) as the person considers appropriate.
5
The F421FCA 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 F421FCA.
7
“Independent” means appearing to the F421FCA to be independent of the consumer financial education body.
Right to obtain documents and information
16
1
A person conducting a review under paragraph 15—
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.
C1C115C64C54C70C114C53C100C63C46C98C61C65C99C49 SCHEDULE 2 Regulated Activities
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))
Sch. 2 applied by S.I. 2008/570, Sch. para. 11(2) (as substituted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 35)
Sch. 2 applied by S.I. 2012/2079 reg. 2(1A) (as inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 44(a)(ii))
Sch. 2 applied by S.I. 2001/497, reg. 113(6) (as inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 23(b))
Sch. 2 applied by S.S.I. 2011/141, Sch. 4 para. 1(2) (as substituted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 43(a))
Sch. 2 applied by S.I. 2001/341, reg. 114(6) (as inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 22(b))
Sch. 2 applied by S.I. 2004/400, reg. 5(7) (as inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 25(b))
Sch. 2 applied by S.I. 2008/1741, reg. 112(5) (as inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 37(b))
Sch. 2 applied by S.I. 2007/2157, reg. 23(6) (as inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 31(5)(b))
Sch. 2 applied by 2003 c. 1, s. 554O(6) (as inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 9(c))
Sch. 2 applied by S.I. 2013/380, Sch. 6 para. 11(9) (as inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 45(b))
Sch. 2 applied by S.I. 2008/700, Sch. para. 12(2) (as substituted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 36)
Sch. 2 applied by 2007 c. 3, s. 564B(1A) (as inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 12(b))
Sch. 2 applied by 2009 c. 4, s. 502(1A) (as inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 16(b))
Sch. 2 applied (16.8.2013) by The Democratic People s Republic of Korea (European Union Financial Sanctions) Regulations 2013 (S.I. 2013/1877), regs. 1(1), 2(2)(c) (with reg. 21)
Part IF91Regulated activities: general
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
1
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
2
1
Buying, selling, subscribing for or underwriting investments or offering or agreeing to do so, either as a principal or as an agent.
2
In the case of an investment which is a contract of insurance, that includes carrying out the contract.
Arranging deals in investments
3
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
4
Accepting deposits.
Safekeeping and administration of assets
5
1
Safeguarding and administering assets belonging to another which consist of or include investments or offering or agreeing to do so.
2
Arranging for the safeguarding and administration of assets belonging to another, or offering or agreeing to do so.
Managing investments
6
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
7
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
8
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
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.
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.
F92Part 1ARegulated activities: reclaim funds
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)
9AActivities of reclaim funds
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 Investments
General
10
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
11
1
Shares or stock in the share capital of a company.
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
12
Any of the following—
a
debentures;
b
debenture stock;
c
loan stock;
d
bonds;
e
certificates of deposit;
C26f
any other instruments creating or acknowledging a present or future indebtedness.
Government and public securities
13
1
Loan stock, bonds and other instruments—
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
14
1
Warrants or other instruments entitling the holder to subscribe for any investment.
2
It is immaterial whether the investment is in existence or identifiable.
Certificates representing securities
15
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
16
1
Shares in or securities of an open-ended investment company.
2
Any right to participate in a collective investment scheme.
Options
17
Options to acquire or dispose of property.
Futures
18
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
19
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
20
Rights under a contract of insurance, including rights under contracts falling within head C of Schedule 2 to the M1Friendly Societies Act 1992.
Participation in Lloyd’s syndicates
21
1
The underwriting capacity of a Lloyd’s syndicate.
2
A person’s membership (or prospective membership) of a Lloyd’s syndicate.
Deposits
22
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.
F437Loans and other forms of credit
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
F43723
1
Rights under any contract under which one person provides another with credit.
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.
F48Other finance arrangements involving land
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—
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.
F237Contracts for hire of goods
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.
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
24
Any right or interest in anything which is an investment as a result of any other provision made under section 22(1).
C100C63C54C70C98C53C46C61C115C99C65C64C114F440PART 2ARegulated activities relating to information about persons' financial standing
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
24AGeneral
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.
24BProviding credit reference services
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
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 F324person who is carrying on a regulated activity.
F2972
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 2BRegulated activities relating to the setting of benchmarks
24EGeneral
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.
24FProviding information
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.
24GAdministration
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.
24HDetermining or publishing benchmark or publishing connected information
1
Determining a benchmark.
2
Publishing a benchmark or information connected with a benchmark.
Part III Supplemental Provisions
The order-making power
25
1
An order under section 22(1) F258or (1A) may—
a
provide for exemptions;
b
confer powers on the Treasury or F163either 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 F163either 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 F163either 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.
F407Parliamentary control
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
F40726
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.
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
27
1
In this Schedule—
“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).
C2SCHEDULE 3EEA Passport Rights
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 Defined terms
The single market directives
I11
“The single market directives” means—
F401c
the Solvency 2 Directive;
F173ca
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
g
the alternative investment fund managers directiveF383; and
h
the mortgages directive.
The banking co-ordination directives
F459 2
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F456The Solvency 2 Directive
Sch. 3 para. 3 and cross-heading substituted (1.1.2016) by The Solvency 2 Regulations 2015 (S.I. 2015/575), reg. 1(2), Sch. 1 para. 17(3)
3
“The Solvency 2 Directive” means Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II).
F82The reinsurance directive
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)
F2803A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The investment services directive
4
F53. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F23The insurance mediation directive
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
“The insurance mediation directive” means the European Parliament and Council Directive of 9th December 2002 on insurance mediation ( No.2002/92/EC).
F12The UCITS directive
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)
F1264B
“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) F222, as amended by Directive 2014/91/EU of the European Parliament and of the Council of 23rd July 2014.
F50The markets in financial instruments directive
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
F1434C
“The markets in financial instruments directive” means Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments.
4DF319The emission allowance auctioning regulation
“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.
F200The alternative investment fund managers directive
Sch. 3 para. 4E and cross-heading inserted (22.7.2013) by The Alternative Investment Fund Managers Regulations 2013 (S.I. 2013/1773), reg. 1, Sch. 1 para. 34(3)
4E
“The alternative investment fund managers directive” means Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers.
F468The mortgages directive
Sch. 3 para. 4F and cross-heading inserted (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), art. 1(5), Sch. 1 para. 1(10)(b) (with Pt. 4)
4F
“The mortgages directive” means Directive 2014/17/EU of the European Parliament and of the Council of 4th February 2014 on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010.
EEA firm
I25
“EEA firm” means any of the following if it does not have its F24relevant office in the United Kingdom—
a
F176b
a credit institution (as defined in Article 4(1)(1) of the capital requirements regulation) which is authorised (within the meaning of Article 8 of the capital requirements directive) by its home state regulator;
F198c
a financial institution (as defined in Article 4(1)(26) of the capital requirements regulation) which is a subsidiary of the kind mentioned in Article 34 of the capital requirements directive and which fulfils the conditions of that Article;
F491d
an undertaking pursuing the activity of direct insurance (within the meaning of Article 2 of the Solvency 2 Directive) which has received authorisation under Article 14 of that directive from its home state regulator;
da
an undertaking pursuing the activity of reinsurance (within the meaning of Article 2 of the Solvency 2 Directive) as a reinsurance undertaking which has received authorisation under Article 14 of that 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; F314 ...
F127f
g
h
i
a mortgage intermediary which is admitted (in accordance with Article 29(1) of the mortgages directive) by its home state regulator to carry out all or part of the credit intermediation activities set out in Article 4(5) of that directive or to provide advisory services (as defined in Article 4(21) of that directive).
F355A
In paragraph 5, “relevant office” means—
a
in relation to a firm falling within sub-paragraph (e) F335or (i) of that paragraph which has a registered office, its registered office;
F323aa
in relation to a firm falling within sub-paragraph (h) of that paragraph, its registered office;
b
in relation to any other firm, its head office.
EEA authorisation
I3F36 6
“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 F289or, as the case may be, the emission allowance auctioning regulation.
EEA right
I47
“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 F37relevant office—
a
in accordance with the Treaty as applied in the EEA; and
b
subject to the conditions of the relevant single market directive F294or, as the case may be, the emission allowance auctioning regulation.
F387A
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 F379or the mortgages directive, his registered office;
F489aa
F559in relation to a person whose entitlement is subject to the conditions of the alternative investment fund managers directive, its registered office;
F559aa
in relation to a person whose entitlement is subject to the conditions of the alternative investment fund managers directive—
i
if the person’s registered office is in an EEA State, its registered office;
ii
if the person’s registered office is not in an EEA State, the registered office or branch of its legal representative (as defined in Article 4(1)(u) of the alternative investment fund managers directive);
b
in relation to any other person, his head office.
EEA State
I5F518
“EEA State ” has the meaning given by Schedule 1 to the Interpretation Act 1978.
Home state regulator
I69
“Home state regulator” means the competent authority (within the meaning of the relevant single market directive F313or, 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.
UK firm
I710
“UK firm” means a person whose F39relevant office is in the UK and who has an EEA right to carry on activity in an EEA State other than the United Kingdom.
F4010A
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;
F470F531aa
in relation to a firm whose EEA right derives from the alternative investment fund managers directive, its registered office;
F531aa
in relation to a firm whose EEA right derives from the alternative investment fund managers directive—
i
if the firm’s registered office is in an EEA State, its registered office;
ii
if the firm’s registered office is not in an EEA State, the registered office or branch of its legal representative (as defined in Article 4(1)(u) of the alternative investment fund managers directive);
b
in relation to any other firm, its head office.
F56UK investment firm
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
”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
I811
“Host state regulator” means the competent authority (within the meaning of the relevant single market directive F420or, 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.
F57Tied agent
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
”Tied agent” has the meaning given in Article F2044.1.29 of the markets in financial instruments directive.
F128Management company
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
“Management company” has the meaning given in Article 2.1(b) of the UCITS directive.
UCITS
F16411C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F403EEAAIFM
Sch. 3 para. 11D and cross-heading inserted (22.7.2013) by The Alternative Investment Fund Managers Regulations 2013 (S.I. 2013/1773), reg. 1, Sch. 1 para. 34(8)
11D
“EEAAIFM” means an EEA firm falling within paragraph 5(h) which is exercising in the United Kingdom a right deriving from the alternative investment fund managers directive.
Part II Exercise of Passport Rights by EEA Firms
Firms qualifying for authorisation
I912
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.
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.
F583
If an EEA firm falling within paragraph 5(a) F180or (b) 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.
F835
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).
F3017
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.
Establishment
I10C313
1
F25If the firm falls within paragraph 5(a), (b), F28(c), (d) F462(f), (h) or (i), the establishment conditions are that—
a
the F283appropriate 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; F59. . .
F60ba
c
d
in the case of a firm falling within paragraph 5(h), its home state regulator has informed it that the consent notice has been sent to the appropriate UK regulatorF419; and
e
in the case of a firm falling within paragraph 5(i)—
i
its home state regulator has informed it that the consent notice has been sent to the appropriate UK regulator, and
ii
one month has elapsed beginning with the date on which the firm’s home state regulator informed the firm that the consent notice has been sent to the appropriate UK regulator.
F261A
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 F357appropriate 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 F357appropriate 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 F357appropriate UK regulator.
F2711B
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 F238appropriate UK regulator has received a consent notice, it must—
F433a
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
b
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 F400appropriate UK regulator received the consent notice.
F1663A
If the appropriate UK regulator has received a consent notice in respect of a firm that falls within paragraph 5(i), it must—
a
notify the firm of the applicable provisions (if any); and
b
use the information received from the firm’s home state regulator to enter the necessary information into the record maintained by the FCA by virtue of section 347(1).
3B
A notice under sub-paragraph (3A)(a) must be given before the end of the period of two months beginning with the day on which the 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;
F416“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 F154or 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 F356or for the purposes of that regulation; and
- a
“permitted activity” means an activity identified in the consent notice F27or regulator’s notice, as the case may be.
Services
I1114
C41
The service conditions are that—
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
F63ba
if the firm falls within paragraph 5(b) and is seeking to provide services in exercise of the right under Article F43834.6 of the markets in financial instruments directive, the F251appropriate 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
F1861A
“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.
F1612
If the appropriate UK regulator has received a relevant notice, it must, unless the firm falls within paragraph 5(a) F159, (e) or (h), notify the firm of the applicable provisions (if any).
F4272A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
F3123ZA
If the appropriate UK regulator has received a relevant notice in respect of a firm that falls within paragraph 5(i), it must use the information received from the firm’s home state regulator to enter the necessary information into the record maintained by the FCA by virtue of section 347(1).
F2393A
In cases where the firm is an EEAAIFM that seeks to market an AIF in exercise of its rights under Article 32 F525, 35, 39 or 40 of the alternative investment fund managers directive, the appropriate UK regulator must ensure that the regulator’s notice may be transmitted to it electronically.
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;
F348“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 F272or 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 F264or for the purposes of that regulation; and
- a
“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.
- a
Grant of permission
I1215
1
On qualifying for authorisation as a result of F84paragraph 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).
F131A
Sub-paragraph (1) is to be read subject to F148paragraphs 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.
F4453
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F4454
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F855
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.
F4606
The permission is to be treated as being on terms equivalent to those appearing in the authorisation granted to the firm under Article 14 of the Solvency 2 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.
15ZAF457Grant of permission: bidding for emission allowances
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.
F34 Power to restrict permission of management companies
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)
15AF130Application for approval to manage UCITS
1
An EEA firm falling within paragraph 5(f) which wishes to manage a UKUCITS must apply to the F219appropriate 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 F219appropriate 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
5
Before giving a notice under sub-paragraph (4), the F219appropriate UK regulator must consult the home state regulator of the firm.
6
A notice given by the F219appropriate UK regulator under sub-paragraph (4) must—
a
give the F219appropriate 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 F219appropriate UK regulator.
F1896A
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—
F182“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 F219appropriate UK regulator to implement the UCITS directive, or
- b
in any directly applicable Community regulation or decision made under the UCITS directive;
- a
“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.
15BF129Representations and references to the Tribunal
1
Within a reasonable time after the end of the period for making representations, the F158appropriate 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 F158appropriate 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.
F3074
In this paragraph “the appropriate UK regulator” has the same meaning as in paragraph 15A.
15CInformation to home state regulator
1
Where an EEA firm falling within paragraph 5(f) has applied to manage a UCITS established in the United Kingdom, the F466appropriate 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.
Effect of carrying on regulated activity when not qualified for authorisation
I1316
1
This paragraph applies to an EEA firm which is not qualified for authorisation under paragraph 12.
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.
Continuing regulation of EEA firms
I1417
Regulations may—
F443za
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 F262the 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.
Giving up right to authorisation
I1518
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 F232Part 4A permission.
Part III Exercise of Passport Rights by UK Firms
F285Meaning of “the appropriate UK regulator”
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
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
I16C519
1
C62
The first is that the firm has given the F345appropriate 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
F64Subject to sub-paragraph (5B), the activities identified in a notice of intention may include activities which are not regulated activities.
F1314
The second is that—
a
the F345appropriate 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 F345appropriate 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.
F425
The third is—
a
b
in any other case, that either—
i
ii
two months have elapsed beginning with the date on which the F345appropriate UK regulator gave the consent notice.
F875ZA
This paragraph does not apply to F446a UK firm which falls within the second sub-paragraph of Article 2(1) of the Solvency 2 Directive.
F4355ZB
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.
F435A
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).
F685B
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.
C66
If the firm’s EEA right derives from F14the F145capital requirements directive, F132F65. . . or, in the case of a credit institution authorised under the F145capital requirements directive, the markets in financial instruments directive and the first condition is satisfied, the F345appropriate 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.
F1336A
If the firm's EEA right derives from the UCITS directive and the first condition is satisfied, the F345appropriate 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.
C67
If the firm’s EEA right derives from F174the Solvency 2 Directive and the first condition is satisfied, the F345appropriate 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 F382that directive,
in relation to the business to be conducted through the proposed branch.
F447A
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 F345appropriate 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.
F667B
If the firm is a UK investment firm and the first condition is satisfied, the F345appropriate 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 F345appropriate UK regulator has reason to doubt the adequacy of the firm's resources or its administrative structure.
F4067BA
Sub-paragraph (7BB) applies where—
a
the firm’s EEA right derives from the alternative investment fund managers directive,
b
the first condition is satisfied, and
c
the appropriate UK regulator is satisfied that the firm complies, and will continue to comply, with—
i
the provisions implementing the alternative investment fund managers directive, and
ii
any directly applicable EU regulation made under that directive.
7BB
The appropriate UK regulator must—
a
within two months of receiving the firm’s notice of intention, give a consent notice to the host state regulator,
b
send with that notice confirmation that the firm has been authorised by it pursuant to F567Article 6.1 of the alternative investment fund managers directive, and
c
immediately notify the firm that it has given the consent notice to the host state regulator.
7BC
If the firm’s EEA right derives from the alternative investment fund managers directive, the third condition does not apply.
F2127BD
If the firm’s EEA right derives from the mortgages directive and the first condition is satisfied, the appropriate UK regulator must give a consent notice to the host state regulator within one month beginning with the date on which it received the firm’s notice of intention.
F4047C
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 F345appropriate UK regulator proposes to refuse to give a consent notice it must give the firm concerned a warning notice.
9
10
Rules may specify the procedure to be followed by the F345appropriate UK regulator in exercising its functions under this paragraph.
11
If the F345appropriate UK regulator gives a consent notice it must give written notice that it has done so to the firm concerned.
F39511A
If the firm’s EEA right derives from the mortgages directive, the appropriate UK regulator must give the written notice referred to in sub-paragraph (11) at the same time as it gives the consent notice to the host state regulator in accordance with sub-paragraph (7BD).
12
If the F345appropriate UK regulator decides to refuse to give a consent notice—
a
F192aa
the appropriate UK regulator must in the case of a credit institution notify EBA and the Commission; and
b
that person may refer the matter to the Tribunal.
F13412ZA
F1612A
In sub-paragraph (12), “the relevant period” means—
a
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.
Services
I1720
C7C81
F88Subject to F250sub-paragraphs (4D) to F417(4I), a UK firm may not exercise an EEA right to provide services unless the firm has given the F302appropriate UK regulator, in the specified way, notice of its intention to provide services (“a notice of intention”) which—
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
F69Subject to sub-paragraph (2A), the activities identified in a notice of intention may include activities which are not regulated activities.
F702A
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 F17the F387capital requirements directive, F71markets in financial instruments directiveF293, the mortgages directive or the UCITS directive, the F302appropriate UK regulator must, within one month of receiving a notice of intention, send a copy of it to the host state regulator F18with such other information as may be specified.
F1353ZA
If the firm's EEA right derives from the UCITS directive, the F302appropriate UK regulator must provide information about the compensation scheme with the information provided to the host state regulator under sub-paragraph (3).
F23A
If the firm’s EEA right derives from F422the Solvency 2 Directive, the F302appropriate UK regulator must, within one month of receiving the notice of intention—
C8a
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.
F4023AA
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.
F453B
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 F302appropriate UK regulator must, within one month of receiving the notice of intention, send a copy of it to the host state regulator;
b
the F302appropriate 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.
F1363C
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 F302appropriate 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.
F2303D
If the firm’s EEA right derives from the alternative investment fund managers directive, the appropriate UK regulator must—
a
if the condition in sub-paragraph (3E) is satisfied—
i
within one month of receiving the firm’s notice of intention, send a copy of the firm’s notice of intention to the host state regulator;
ii
send with that notice confirmation that the firm has been authorised by it pursuant to F572Article 6.1 of that directive, with such other information as may be specified; and
iii
immediately notify the firm that it has given the notice and confirmation to the host state regulator; or
b
give the firm written notice of its refusal to send a copy of the notice of intention to the host state regulator and its reasons for that refusal.
3E
The condition is that the appropriate UK regulator is satisfied that the firm complies, and will continue to comply, with—
a
the provisions implementing the alternative investment fund managers directive, and
b
any directly applicable EU regulation made under that directive.
4
F44A
If the firm is given notice under sub-paragraph (3A)(b) F242or (3D)(b), it may refer the matter to the Tribunal.
4B
If the firm’s EEA right derives from F243the Solvency 2 DirectiveF72 or from F328the alternative investment fund managers directive, the markets in financial instruments directiveF137 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).
F744BA
F1904BB
If the firm’s EEA right derives from the mortgages directive it 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 (4), has elapsed.
4C
Rules may specify the procedure to be followed by the F302appropriate UK regulator under this paragraph.
F894D
This paragraph does not apply to F172a UK firm which falls within the second sub-paragraph of Article 2(1) of the Solvency 2 Directive.
F4414E
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.
F2094F
This paragraph does not apply to—
a
the operator of a UCITS established in the United Kingdom seeking to exercise an EEA right to market the units of that UCITS in the territory of another EEA State; or
b
a UK firm seeking to exercise an EEA right under the alternative investment fund managers directive to market an AIF.
F4674G
This paragraph does not apply to a UK firm exercising an EEA right to enter into a Community co-insurance contract if it is not the leading insurance undertaking.
4H
In this paragraph “Community co-insurance contract” means a contract of insurance which—
a
covers one or more risks that are within any of classes 3 to 16 of Annex I of the Solvency 2 Directive;
b
covers a large risk situated within the EEA which is not covered in whole or in part by another contract of insurance;
c
provides that the risk to which it relates is covered by an overall premium and for the same period by two or more insurance undertakings each for its own part as a co-insurer, at least one of which enters into the contract from a head office or branch established in an EEA State other than that of the leading insurance undertaking; and
d
provides that one of the co-insurers is the leading insurance undertaking.
4I
In this paragraph—
a
“leading insurance undertaking” means the insurance undertaking which under the Community co-insurance contract is specified as such and assumes fully the leader’s role including in particular—
i
being treated as covering the whole risk; and
ii
determining the terms and conditions of insurance and rating;
b
“large risk” has the meaning given in Article 13(27) of the Solvency 2 Directive but as if the risks referred to in point (c) of the first sub-paragraph of Article 13(27) included risks insured by professional associations, joint ventures, or temporary groupings.
F55
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
“Specified” means specified in rules.
20ZAF138Information for host state regulator
1
The F487appropriate 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 F487appropriate 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).
F2063
The appropriate UK regulator must inform the host state regulator whenever it withdraws the authorisation of a credit institution in respect of which a notice under paragraph 19(6) or paragraph 20(3) has been given.
F2604
The appropriate UK regulator must inform the host state regulator whenever it—
a
withdraws the authorisation of a UK firm that exercises an EEA right under the mortgages directive to establish a branch or provide services in an EEA State other than the United Kingdom; or
b
varies the Part 4A permission of such a firm, so that the firm no longer has permission to carry on any activity to which the mortgages directive relates.
5
The appropriate UK regulator must provide the information referred to in sub-paragraph (4) as soon as possible and, at the latest, within 14 days of—
a
the date of the direction given in accordance with section 33(2) withdrawing the firm’s status as an authorised person, or
b
the date on which the variation of the Part 4A permission takes effect.
F75Tied agents
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 F412or UK credit institution 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.
2
But if—
a
a UK investment firm F412or UK credit institution 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.
F4853
In this paragraph “UK credit institution” means a UK firm—
a
which is a credit institution; and
b
whose EEA right derives from the markets in financial instruments directive.
20BF139Notice of intention to market F344a UCITS
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 F306appropriate 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 F306appropriate UK regulator must ensure that the information referred to in sub-paragraph (1) may be transmitted to it electronically.
3
The F306appropriate 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 F306appropriate 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 F306appropriate 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 F306appropriate 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.
F449Notice of intention to market an AIF
Sch. 3 para. 20C and cross-heading inserted (22.7.2013) by The Alternative Investment Fund Managers Regulations 2013 (S.I. 2013/1773), reg. 1, Sch. 1 para. 34(14)
20C
1
2
The first condition is that the full-scope UKAIFM has given the appropriate UK regulator, in the specified way, notice of its intention to market the AIF (“notice of intention”) which contains, and is accompanied by, such information as may be specified.
3
The appropriate UK regulator must ensure that the notice of intention and any accompanying information may be transmitted to it electronically.
4
The second condition is that the appropriate UK regulator has sent a copy of the notice of intention to the host state regulator, and has given written notice to the full-scope UKAIFM that it has done so.
5
Sub-paragraph (6) applies where—
a
the appropriate UK regulator is satisfied that the full-scope UKAIFM complies, and will continue to comply, with—
i
the provisions implementing the alternative investment fund managers directive, and
ii
any directly applicable EU regulation made under that directive, and
F562b
if the UKAIF or EEAAIF is a feeder AIF, its master AIF is a UKAIF or EEAAIF that is managed by—
i
a full-scope UKAIFM, or
ii
an AIFM authorised in another EEA State in accordance with Article 6.1 of the alternative investment fund managers directive.
F562b
if the AIF is a third country AIF or a third country feeder AIF—
i
appropriate co-operation arrangements are in place between the FCA and the supervisory authorities of the relevant third country in order to ensure an efficient exchange of information that allows the FCA to carry out its duties in accordance with the alternative investment fund managers directive,
ii
the relevant third country is not listed as a Non-Cooperative Country and Territory by the Financial Action Task Force,
iii
the relevant third country has signed an agreement with the United Kingdom and with each other EEA State in which the units or shares of the AIF are intended to be marketed, and
iv
the agreement fully complies with the standards laid down in Article 26 of the Organisation for Economic Co-operation and Development’s Model Tax Convention on Income and on Capital 2010(11) and ensures an effective exchange of information on tax matters, including any multilateral tax agreements.
6
The appropriate UK regulator must send a copy of the notice of intention to the host state regulator within 20 working days of receiving it.
7
When sending a copy of the notice of intention to the host state regulator, the appropriate UK regulator must send with the notice confirmation that the full-scope UKAIFM concerned is authorised to manage AIFs with a particular investment strategy, and a statement of that strategy.
8
If the notice of intention relates to an EEAAIF, the appropriate UK regulator must, when it sends a copy of the notice to the host state regulator, also inform the competent authority of the EEAAIF that the full-scope UKAIFM may start marketing the AIF in the EEA States covered by the notice.
9
The appropriate UK regulator must notify the full-scope UKAIFM immediately that the copy of the notice of intention has been sent to the host state regulator.
10
The full-scope UKAIFM may market the AIF in the territory of the host state regulator from the date it receives the notification referred to in sub-paragraph (9).
11
If the appropriate UK regulator refuses to send a copy of the notice of intention to the host state regulator—
a
the appropriate UK regulator must give the AIFM written notice of its refusal and its reasons for that refusal; and
b
the AIFM may refer the matter to the Tribunal.
12
In this paragraph—
“competent authority” has the meaning given in regulation 2 of the Alternative Investment Fund Managers Regulations 2013;
“EEAAIF” has the meaning given in regulation 2 of the Alternative Investment Fund Managers Regulations 2013;
“feeder AIF” has the meaning given in Article 4.1(m) of the alternative investment fund managers directive;
“master AIF” has the meaning given in Article 4.1(y) of that directive;
F556“relevant third country” means—
- (a)
in relation to a third country AIF, the country in which the AIF is authorised or registered or, if the AIF is not authorised or registered, the country in which it has its registered office;
- (b)
in relation to a third country feeder AIF, the country in which the master AIF is authorised or registered or, if the master AIF is not authorised or registered, the country in which it has its registered office;
- (a)
“specified” means specified in rules;
F556“third country AIF” has the meaning given in regulation 2 of the Alternative Investment Fund Managers Regulations 2013;
F556“third country feeder AIF” has the meaning given in regulation 2 of the Alternative Investment Fund Managers Regulations 2013;
F556“third country AIFM” has the meaning given in regulation 2 of the Alternative Investment Fund Managers Regulations 2013.”.
“UKAIF” has the meaning given in regulation 2 of the Alternative Investment Fund Managers Regulations 2013.
Offence relating to exercise of passport rights
I1821
1
If a UK firm which is not an authorised person contravenes the prohibition imposed by—
a
sub-paragraph (1) of paragraph 19, or
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.
Continuing regulation of UK firms
I1922
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.
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 F327the 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 F493the FCA or the PRA decides to refuse consent, the firm concerned may refer the matter to the Tribunal.
F48223
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I2024
1
Sub-paragraph (2) applies if a UK firm—
a
is not required to have a F201Part 4A permission in relation to the business which it is carrying on; and
b
is exercising the right conferred by F477Article 34 of the capital requirements 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, F263either regulator may impose any requirement in relation to the firm which it could impose if—
a
the firm had a F151Part 4A permission in relation to the business which it is carrying on; and
b
F472that regulator was entitled to exercise its power under that Part to vary that permission.
F340Arrangements between FCA and PRA
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—
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.
F47Information to be included in the public record
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
The F413FCA 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 F346or the mortgages 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.
26F140UK management companies: delegation of functions
Where a UK firm which is a management company and is providing services in the exercise of an EEA right to an EEAUCITS informs the F409appropriate UK regulator that it has delegated one or more of its functions to a third party, the F409appropriate UK regulator must transmit that information to the home state regulator of the EEAUCITS without delay.
27UK management companies: withdrawal of authorisation
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 F240appropriate 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.
28Management companies: request for information
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 F315appropriate UK regulator regarding the documents referred to in Article 20.1 of the UCITS directive, and
b
ask the F315appropriate 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 F315appropriate 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.
F241Full-scope UKAIFMs: notification of breach by host state regulator
Sch. 3 para. 29 and cross-heading inserted (22.7.2013) by The Alternative Investment Fund Managers Regulations 2013 (S.I. 2013/1773), reg. 1, Sch. 1 para. 34(15)
29
If a host state regulator informs the FCA in accordance with paragraph 5 of Article 45 of the alternative investment fund managers directive that a full-scope UKAIFM has refused to provide the information or to take the steps referred to in that paragraph, the appropriate UK regulator must—
a
take steps to ensure that the AIFM provides the information or complies with the rules of which it is in breach;
b
request any necessary information from a supervisory authority in a country that is not an EEA State; and
c
notify the host state regulator of the steps taken under paragraph (a).
C9SCHEDULE 4 Treaty Rights
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
1
F1121
In this Schedule—
F113. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“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
- a
“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)).
F1142
Section 425A (meaning of “consumers”) applies for the purposes of this Schedule.
Firms qualifying for authorisation
2
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
I213
1
The conditions are that—
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 F125an 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 F432appropriate UK regulator in writing.
F1792A
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.
F162Notification between UK regulators
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
Regulations may require the PRA and the FCA to notify each other about Treaty firms qualifying for authorisation.
Permission
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.
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
4
The F290appropriate UK regulator need not give a direction under sub-paragraph (3) if it considers that there are good reasons for not doing so.
F3415
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.
Notice to F374UK regulator
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.
I225
C101
Sub-paragraph (2) applies to a Treaty firm which—
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 F452the appropriate UK regulator written notice of its intention to do so.
F3602A
"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.
F1694
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.
Offences
6
1
A person who contravenes paragraph 5(2) is guilty of an offence.
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.
SCHEDULE 5 Persons Concerned in Collective Investment Schemes
Authorisation
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.
2
“Recognised” means recognised by virtue of section 264.
3
An authorised open-ended investment company is an authorised person.
F194
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).
Permission
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—
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) F20or (4) has permission to carry on, so far as it is a regulated activity F429other than the activity of managing an AIF—
a
the operation of the scheme;
b
any activity in connection with, or for the purposes of, the operation of the scheme.
C11 SCHEDULE 6 Threshold Conditions
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)
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
F330PART 1Introduction
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—
“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 1BPart 4A permission: authorised persons who are not PRA-authorised persons
2AIntroduction
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.
2BLocation of offices
1
Unless sub-paragraph (3) F368, (4)(a) or (7) 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.
F1497
If A is seeking to carry on, or is carrying on, the regulated activity of managing an AIF and is, or upon being granted Part 4A permission to carry on that regulated activity would be, F508a full-scope UKAIFM, A’s head office and registered office must be in the United Kingdom.F508a full-scope UKAIFM—
a
A’s head office and registered office must be in the United Kingdom, or
b
A’s registered office must be in a country that is not an EEA State.
2CEffective supervision
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.
F3111A
Paragraphs (a), (b) and (e) of sub-paragraph (1) do not apply where the only regulated activities that the person carries on, or seeks to carry on, are—
a
relevant credit activities, and
b
if any, activities to which, by virtue of section 39(1D), sections 20(1) and (1A) and 23(1A) do not apply when carried on by the person.
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.
2DAppropriate resources
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
F425Except in a case within sub-paragraph (3A), 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.
F2953A
Where the only regulated activities that A carries on or seeks to carry on are—
a
relevant credit activities, and
b
if any, activities to which, by virtue of section 39(1D), sections 20(1) and (1A) and 23(1A) do not apply when carried on by A,
A has adequate financial resources if A is capable of meeting A’s debts as they fall due.
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.
2ESuitability
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.
2FBusiness model
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.
3
F490This paragraph does not apply where the only regulated activities that the person carries on, or seeks to carry on, are—
a
relevant credit activities, and
b
if any, activities to which, by virtue of section 39(1D), sections 20(1) and (1A) and 23(1A) do not apply when carried on by the person.
2GF372Interpretation
1
In this Part of this Schedule, each of the following is a “relevant credit activity”—
a
an activity of the kind specified by article 36A of the Regulated Activities Order (credit broking) when carried on in the case specified in sub-paragraph (3), (4) or (5),
b
an activity of the kind specified by article 39D of that Order (debt adjusting) when carried on—
i
in the case specified in sub-paragraph (3), by a person who also carries on an activity of the kind specified by paragraph (a),
F234ii
by a person in connection with an activity of the kind specified by paragraph (d) or (e) which the person also carries on,
iii
by a not-for-profit body,
c
an activity of the kind specified by article 39E of that Order (debt-counselling) when carried on—
i
in the case specified in sub-paragraph (3), by a person who also carries on an activity of the kind specified by paragraph (a),
F479ii
by a person in connection with an activity of the kind specified by paragraph (d) or (e) which the person also carries on,
iii
by a not-for-profit body,
d
an activity of the kind specified by article 60B of that Order (regulated credit agreements) if—
i
it is carried on by a supplier,
ii
no charge (by way of interest or otherwise) is payable by the borrower in connection with the provision of credit under the regulated credit agreement, and
iii
the regulated credit agreement is not a hire-purchase agreement or a conditional sale agreement,
F257da
an activity of the kind specified by article 60B of that Order (regulated credit agreements) if carried on by a local authority,
e
an activity of the kind specified by article 60N of that Order (regulated consumer hire agreements),
f
an activity of the kind specified by article 89A of that Order (providing credit information services) where carried on by a person F203in connection with an activity of the kind specified by any of paragraphs (a) to (e) which the person also carries on, or
g
an activity of the kind specified by article 64 of that Order (agreeing to carry on specified kinds of activity) so far as relevant to any of the activities specified in paragraphs (a) to (f).
2
F308Except where the activity is carried on by a not-for-profit body, an activity is not a relevant credit activity for the purposes of—
a
paragraph (a) to (e) of sub-paragraph (1), and
b
paragraph (g) of that sub-paragraph so far at it relates to activities of the kind specified by any of those paragraphs,
if it relates to an agreement under which the obligation of the borrower to repay F265or the hirer to pay is secured, or is to be secured, by a legal mortgage on land.
3
The case specified in this sub-paragraph is where a supplier (other than a domestic premises supplier) carries on the activity for the purposes of, or in connection with, the sale of goods or supply of services by the supplier to a customer (who need not be the borrower under the credit agreement or the hirer under the consumer hire agreement).
F3003A
For the purposes of sub-paragraph (3), “domestic premises supplier” means a supplier who—
a
sells, offers to sell or agrees to sell goods, or
b
offers to supply services or contracts to supply services,
to customers who are individuals while the supplier, or the supplier’s representative, is physically present at the dwelling of the individual (but see sub-paragraph (3B)).
3B
A supplier who acts as described in sub-paragraph (3A) on an occasional basis only will not be a domestic premises supplier unless the supplier indicates to the public at large, or any section of the public, the supplier’s willingness to attend (in person or through a representative) the dwelling of potential customers in order to carry on any of the activities mentioned in sub-paragraph (3A)(a) or (b).
4
The case specified in this sub-paragraph is where the activity relates to a green deal plan.
F1785
The case specified in this sub-paragraph is where the activity relates to a consumer hire agreement or a hire-purchase agreement.
6
For the purposes of this paragraph—
“borrower” includes—
- a
any person providing a guarantee or indemnity under an agreement, and
- b
a person to whom the rights and duties of the borrower under an agreement or a person falling within paragraph (a) have passed by assignment or operation of law;
- a
“conditional sale agreement” has the meaning given by article 60L of the Regulated Activities Order;
F434“consumer hire agreement” has the meaning given by article 60N(3) of the Regulated Activities Order;
“customer” means a person to whom a supplier sells goods or supplies services or agrees to do so;
F276...
“green deal plan” has the meaning given by section 1 of the Energy Act 2011;
“hire-purchase agreement” has the meaning given by the Regulated Activities Order;
F246“local authority” means—
- a
in England and Wales, a local authority within the meaning of the Local Government Act 1972, the Greater London Authority, the Common Council of the City of London or the Council of the Isles of Scilly;
- b
in Scotland, a local authority within the meaning of the Local Government (Scotland) Act 1973; and
- c
in Northern Ireland, a district council within the meaning of the Local Government Act (Northern Ireland) 1972;
- a
“not-for-profit body” means a body which, by virtue of its constitution or any enactment—
- a
is required (after payment of outgoings) to apply the whole of its income and any capital it expends for charitable or public purposes, and
- b
is prohibited from directly or indirectly distributing amongst its members any part of its assets (otherwise than for charitable or public purposes);
- a
“Regulated Activities Order” means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;
“regulated credit agreement” has the meaning given by the Regulated Activities Order;
“supplier” means a person whose main business is to sell goods or supply services and not to carry on a regulated activity, other than an activity of the kind specified by article 60N of the Regulated Activities Order (regulated consumer hire agreements).
PART 1CPart 4A permission: conditions for which FCA is responsible in relation to PRA-authorised persons
3AIntroduction
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.
3BEffective supervision
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.
3CAppropriate non-financial resources
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.
3DSuitability
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.
3EBusiness model
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 1DPart 4A permission: conditions for which the PRA is responsible in relation to insurers etc.
4AIntroduction
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;
b
sub-paragraph (6) were omitted.
F1685
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 an assumption of risk falling within article 13A of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, 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, subject to sub-paragraph (6).
6
Paragraphs 4B to 4F have effect in relation to persons of the kind specified by sub-paragraph (5) as if—
a
the persons are special purpose vehicles within the meaning given by Article 13(26) of the Solvency 2 Directive;
b
the persons are not reinsurance undertakings within the meaning given by Article 13(4) of the Solvency 2 Directive;
c
references to contracts of insurance are references to contracts for the assumption of risk; and
d
references to C’s policyholders are references to undertakings from whom C assumes a risk.
4BLegal status
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.
4CLocation of offices
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.
4DBusiness to be conducted in a prudent manner
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.
4ESuitability
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.
4FEffective supervision
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 1EPart 4A permission: conditions for which the PRA is responsible in relation to other PRA-authorised persons
5AIntroduction
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, F249...
c
arranging, by the Society, of deals in contracts of insurance written at Lloyd’s, F215or
F194d
an assumption of risk falling within article 13A of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001,
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.
5BLegal status
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.
5CLocation of offices
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.
5DBusiness to be conducted in a prudent manner
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
requirements imposed or likely to be imposed on D 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 D satisfies the condition in sub-paragraph (1) or (2) include—
a
the nature (including the complexity) of the regulated activities that D carries on or seeks to carry on;
b
the nature and scale of the business carried on or to be carried on by D;
c
the risks to the continuity of the services provided or to be provided by D;
d
the effect that the carrying on of the business carried on or to be carried on by D might be expected to have on the stability of the UK financial system;
e
the effect that D’s failure might be expected to have on the stability of the UK financial system;
f
D’s membership of a group and any effect which that membership may have.
5ESuitability
1
D must be a fit and proper person, having regard to the PRA’s objectives.
2
The matters which are relevant in determining whether D satisfies the condition in sub-paragraph (1) include—
a
whether D 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 D has so complied or is so complying, the manner of that compliance;
b
whether those who manage D’s affairs have adequate skills and experience and have acted and may be expected to act with probity.
5FEffective supervision
1
D must be capable of being effectively supervised by the PRA.
2
The matters which are relevant in determining whether D satisfies the condition in sub-paragraph (1) include—
a
the nature (including the complexity) of the regulated activities that D carries on or seeks to carry on;
b
the complexity of any products that D provides or will provide in carrying on those activities;
c
the way in which D’s business is organised;
d
if D is a member of a group, whether membership of the group is likely to prevent the PRA’s effective supervision of D;
e
whether D is subject to consolidated supervision required under any of the relevant directives;
f
if D has close links with another person (“CL”)—
i
the nature of the relationship between D and CL,
ii
whether those links are or that relationship is likely to prevent the PRA’s effective supervision of D, 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 D.
3
D has close links with CL if—
a
CL is a parent undertaking of D,
b
CL is a subsidiary undertaking of D,
c
CL is a parent undertaking of a subsidiary undertaking of D,
d
CL is a subsidiary undertaking of a parent undertaking of D,
e
CL owns or controls 20% or more of the voting rights or capital of D, or
f
D owns or controls 20% or more of the voting rights or capital of CL.
PART 1FAuthorisation under Schedule 3
6A
1
In relation to an EEA firm qualifying for authorisation under Schedule 3 which carries on PRA-regulated activities which consist of or include a regulated activity relating to the effecting or carrying out of contracts of insurance—
a
the conditions in paragraphs 3B to 3E apply so far as relevant to the discharge by the FCA of its relevant functions, and
b
the conditions in paragraphs 4B, 4D, 4E and 4F apply so far as relevant to the discharge by the PRA of its relevant functions.
2
In relation to an EEA firm qualifying for authorisation under Schedule 3 which carries on PRA-regulated activities which do not consist of or include a regulated activity relating to the effecting or carrying out of contracts of insurance—
a
the conditions in paragraphs 3B to 3E apply so far as relevant to the discharge by the FCA of its relevant functions, and
b
the conditions in paragraphs 5B, 5D, 5E and 5F apply so far as relevant to the discharge by the PRA of its relevant functions.
3
In relation to an EEA firm qualifying for authorisation under Schedule 3 which carries on regulated activities which do not consist of or include a PRA-regulated activity, the conditions in paragraphs 2C, 2D, 2E and 2F apply so far as relevant to the discharge by the FCA of its relevant functions.
4
In this paragraph, “relevant functions”, in relation to the FCA or the PRA, means functions of that regulator in relation to—
a
an application for permission under Part 4A, or
b
the exercise by that regulator of its own-initiative requirement power or own-initiative variation power in relation to a Part 4A permission.
PART 1GAuthorisation under Schedule 4
7A
1
In relation to a person who qualifies for authorisation under Schedule 4 who carries on PRA-regulated activities which consist of or include a regulated activity relating to the effecting or carrying out of contracts of insurance—
a
the conditions in paragraphs 3B to 3E apply so far as relevant to the discharge by the FCA of its relevant functions, and
b
the conditions in paragraphs 4B, 4D, 4E and 4F apply so far as relevant to the discharge by the PRA of its relevant functions.
2
In relation to a person who qualifies for authorisation under Schedule 4 who carries on PRA-regulated activities which do not consist of or include a regulated activity relating to the effecting or carrying out of contracts of insurance—
a
the conditions in paragraphs 3B to 3E apply so far as relevant to the discharge by the FCA of its relevant functions, and
b
the conditions in paragraphs 5B, 5D, 5E and 5F apply so far as relevant to the discharge by the PRA of its relevant functions.
3
In relation to a person who qualifies for authorisation under Schedule 4 who carries on regulated activities which do not consist of or include a PRA-regulated activity, the conditions in paragraphs 2C, 2D, 2E and 2F apply so far as relevant to the discharge by the FCA of its relevant functions.
4
In this paragraph, “relevant functions”, in relation to the FCA or the PRA, means functions of that regulator in relation to—
a
an application for an additional permission, or
b
the exercise by that regulator of its own-initiative requirement power or own-initiative variation power in relation to an additional permission.
Part II Authorisation
Authorisation under Schedule 3
F330...
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part III Additional Conditions
I238
1
If this paragraph applies to the person concerned, he must, for the purposes of such provisions of this Act as may be specified, satisfy specified additional conditions.
2
This paragraph applies to a person who—
a
has his head office outside the EEA; and
b
appears to F353such of the FCA or the PRA as may be specified, to be seeking to carry on a regulated activity relating to insurance business.
3
“Specified” means specified in, or in accordance with, an order made by the Treasury.
F4749
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F223SCHEDULE 7
Sch. 7 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), ss. 16(14)(k), 122(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.
The Authority as Competent Authority for Part VI
General
1
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Authority’s general functions
2
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Duty to consult
3
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rules
4
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Statements of policy
5
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Penalties
6
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees
7
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exemption from liability in damages
8
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F361SCHEDULE 8
Sch. 8 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), ss. 16(14)(l), 122(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.
F361Transfer of functions under Part VI
F361 The power to transfer
F3611
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F361 Supplemental
F3612
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F3613
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F67SCHEDULE 9
Sch. 9 repealed (1.7.2005) by The Prospectus Regulations 2005 (S.I. 2005/1433), reg. 2(1), Sch. 1 para. 16
General application of Part VI
1
The provisions of Part VI apply in relation to a non-listing prospectus as they apply in relation to listing particulars but with the modifications made by this Schedule.
References to listing particulars
2
1
Any reference to listing particulars is to be read as a reference to a prospectus.
2
Any reference to supplementary listing particulars is to be read as a reference to a supplementary prospectus.
General duty of disclosure
3
1
In section 80(1), for “section 79” substitute “
section 87
”
.
2
In section 80(2), omit “as a condition of the admission of the securities to the official list”.
Supplementary prospectuses
4
In section 81(1), for “section 79 and before the commencement of dealings in the securities concerned following their admission to the official list” substitute “
section 87 and before the end of the period during which the offer to which the prospectus relates remains open
”
.
Exemption from liability for compensation
5
1
In paragraphs 1(3) and 2(3) of Schedule 10, for paragraph (d) substitute—
d
the securities were acquired after such a lapse of time that he ought in the circumstances to be reasonably excused and, if the securities are dealt in on an approved exchange, he continued in that belief until after the commencement of dealings in the securities on that exchange.
2
After paragraph 8 of that Schedule, insert—
9 Meaning of “approved exchange”
“Approved exchange” has such meaning as may be prescribed.
Advertisements
6
In section 98(1), for “If listing particulars are, or are to be, published in connection with an application for listing,” substitute “
If a prospectus is, or is to be, published in connection with an application for approval, then, until the end of the period during which the offer to which the prospectus relates remains open,
”
.
Fees
7
Listing rules made under section 99 may require the payment of fees to the competent authority in respect of a prospectus submitted for approval under section 87.
C12SCHEDULE 10 Compensation: Exemptions
Sch. 10 restricted (1.12.2001) by S.I. 2001/2957, arts. 1, 7(3); S.I. 2001/3538, art. 2(1)
Statements believed to be true
1
1
In this paragraph “statement” means—
a
any untrue or misleading statement in listing particulars; or
b
the omission from listing particulars of any matter required to be included by section 80 or 81.
2
A person does not incur any liability under section 90(1) for loss caused by a statement if he satisfies the court that, at the time when the listing particulars were submitted to the F221FCA, he reasonably believed (having made such enquiries, if any, as were reasonable) that—
a
the statement was true and not misleading, or
b
the matter whose omission caused the loss was properly omitted,
and that one or more of the conditions set out in sub-paragraph (3) are satisfied.
3
The conditions are that—
a
he continued in his belief until the time when the securities in question were acquired;
b
they were acquired before it was reasonably practicable to bring a correction to the attention of persons likely to acquire them;
c
before the securities were acquired, he had taken all such steps as it was reasonable for him to have taken to secure that a correction was brought to the attention of those persons;
d
he continued in his belief until after the commencement of dealings in the securities following their admission to the official list and they were acquired after such a lapse of time that he ought in the circumstances to be reasonably excused.
Statements by experts
2
1
In this paragraph “statement” means a statement included in listing particulars which—
a
purports to be made by, or on the authority of, another person as an expert; and
b
is stated to be included in the listing particulars with that other person’s consent.
2
A person does not incur any liability under section 90(1) for loss in respect of any securities caused by a statement if he satisfies the court that, at the time when the listing particulars were submitted to the F221FCA, he reasonably believed that the other person—
a
was competent to make or authorise the statement, and
b
had consented to its inclusion in the form and context in which it was included,
and that one or more of the conditions set out in sub-paragraph (3) are satisfied.
3
The conditions are that—
a
he continued in his belief until the time when the securities were acquired;
b
they were acquired before it was reasonably practicable to bring the fact that the expert was not competent, or had not consented, to the attention of persons likely to acquire the securities in question;
c
before the securities were acquired he had taken all such steps as it was reasonable for him to have taken to secure that that fact was brought to the attention of those persons;
d
he continued in his belief until after the commencement of dealings in the securities following their admission to the official list and they were acquired after such a lapse of time that he ought in the circumstances to be reasonably excused.
Corrections of statements
3
1
In this paragraph “statement” has the same meaning as in paragraph 1.
2
A person does not incur liability under section 90(1) for loss caused by a statement if he satisfies the court—
a
that before the securities in question were acquired, a correction had been published in a manner calculated to bring it to the attention of persons likely to acquire the securities; or
b
that he took all such steps as it was reasonable for him to take to secure such publication and reasonably believed that it had taken place before the securities were acquired.
3
Nothing in this paragraph is to be taken as affecting paragraph 1.
Corrections of statements by experts
4
1
In this paragraph “statement” has the same meaning as in paragraph 2.
2
A person does not incur liability under section 90(1) for loss caused by a statement if he satisfies the court—
a
that before the securities in question were acquired, the fact that the expert was not competent or had not consented had been published in a manner calculated to bring it to the attention of persons likely to acquire the securities; or
b
that he took all such steps as it was reasonable for him to take to secure such publication and reasonably believed that it had taken place before the securities were acquired.
3
Nothing in this paragraph is to be taken as affecting paragraph 2.
Official statements
5
A person does not incur any liability under section 90(1) for loss resulting from—
a
a statement made by an official person which is included in the listing particulars, or
b
a statement contained in a public official document which is included in the listing particulars,
if he satisfies the court that the statement is accurately and fairly reproduced.
False or misleading information known about
6
A person does not incur any liability under section 90(1) or (4) if he satisfies the court that the person suffering the loss acquired the securities in question with knowledge—
a
that the statement was false or misleading,
b
of the omitted matter, or
c
of the change or new matter,
as the case may be.
Belief that supplementary listing particulars not called for
7
A person does not incur any liability under section 90(4) if he satisfies the court that he reasonably believed that the change or new matter in question was not such as to call for supplementary listing particulars.
Meaning of “expert”
8
“Expert” includes any engineer, valuer, accountant or other person whose profession, qualifications or experience give authority to a statement made by him.
F105SCHEDULE 10ALIABILITY OF ISSUERS IN CONNECTION WITH PUBLISHED INFORMATION
Sch. 10A inserted (1.10.2010 with effect in accordance with reg. 3(1) of the amending S.I.) by The Financial Services and Markets Act 2000 (Liability of Issuers) Regulations 2010 (S.I. 2010/1192), reg. 2(3), Sch.
PART 1SCOPE OF THIS SCHEDULE
1Securities to which this Schedule applies
1
This Schedule applies to securities that are, with the consent of the issuer, admitted to trading on a securities market, where—
a
the market is situated or operating in the United Kingdom, or
b
the United Kingdom is the issuer's home State.
2
For the purposes of this Schedule—
a
an issuer of securities is not taken to have consented to the securities being admitted to trading on a securities market by reason only of having consented to their admission to trading on another market as a result of which they are admitted to trading on the first-mentioned market;
b
an issuer who has accepted responsibility (to any extent) for any document prepared for the purposes of the admission of the securities to trading on a securities market (such as a prospectus or listing particulars) is taken to have consented to their admission to trading on that market.
3
For the purposes of this Schedule the United Kingdom is the home State of an issuer—
a
in the case of securities in relation to which the transparency obligations directive applies, if the United Kingdom is the home Member State for the purposes of that directive (see Article 2.1 of the directive);
b
in any other case, if the issuer has its registered office (or, if it does not have a registered office, its head office) in the United Kingdom.
2Published information to which this Schedule applies
1
This Schedule applies to information published by the issuer of securities to which this Schedule applies—
a
by recognised means, or
b
by other means where the availability of the information has been announced by the issuer by recognised means.
2
It is immaterial whether the information is required to be published (by recognised means or otherwise).
3
The following are “recognised means”—
a
a recognised information service;
b
other means required or authorised to be used to communicate information to the market in question, or to the public, when a recognised information service is unavailable.
4
A “recognised information service” means—
a
in relation to a securities market situated or operating in the EEA, a service used for the dissemination of information in accordance with Article 21 of the transparency obligations directive;
b
in relation to a securities market situated or operating outside the EEA, a service used for the dissemination of information corresponding to that required to be disclosed under that directive; or
c
in relation to any securities market, any other service used by issuers of securities for the dissemination of information required to be disclosed by the rules of the market.
PART 2LIABILITY IN CONNECTION WITH PUBLISHED INFORMATION
3Liability of issuer for misleading statement or dishonest omission
1
An issuer of securities to which this Schedule applies is liable to pay compensation to a person who—
a
acquires, continues to hold or disposes of the securities in reliance on published information to which this Schedule applies, and
b
suffers loss in respect of the securities as a result of—
i
any untrue or misleading statement in that published information, or
ii
the omission from that published information of any matter required to be included in it.
2
The issuer is liable in respect of an untrue or misleading statement only if a person discharging managerial responsibilities within the issuer knew the statement to be untrue or misleading or was reckless as to whether it was untrue or misleading.
3
The issuer is liable in respect of the omission of any matter required to be included in published information only if a person discharging managerial responsibilities within the issuer knew the omission to be a dishonest concealment of a material fact.
4
A loss is not regarded as suffered as a result of the statement or omission unless the person suffering it acquired, continued to hold or disposed of the relevant securities—
a
in reliance on the information in question, and
b
at a time when, and in circumstances in which, it was reasonable for him to rely on it.
4
An issuer of securities to which this Schedule applies is not liable under paragraph 3 to pay compensation to a person for loss suffered as a result of an untrue or misleading statement in, or omission from, published information to which this Schedule applies if—
a
the published information is contained in listing particulars or a prospectus (or supplementary listing particulars or a supplementary prospectus), and
b
the issuer is liable under section 90 (compensation for statements in listing particulars or prospectus) to pay compensation to the person in respect of the statement or omission.
5Liability of issuer for dishonest delay in publishing information
1
An issuer of securities to which this Schedule applies is liable to pay compensation to a person who—
a
acquires, continues to hold or disposes of the securities, and
b
suffers loss in respect of the securities as a result of delay by the issuer in publishing information to which this Schedule applies.
2
The issuer is liable only if a person discharging managerial responsibilities within the issuer acted dishonestly in delaying the publication of the information.
6Meaning of dishonesty
For the purposes of paragraphs 3(3) and 5(2) a person's conduct is regarded as dishonest if (and only if)—
a
it is regarded as dishonest by persons who regularly trade on the securities market in question, and
b
the person was aware (or must be taken to have been aware) that it was so regarded.
7Exclusion of certain other liabilities
1
The issuer is not subject—
a
to any liability other than that provided for by paragraph 3 in respect of loss suffered as a result of reliance by any person on—
i
an untrue or misleading statement in published information to which this Schedule applies, or
ii
the omission from any such published information of any matter required to be included in it;
b
to any liability other than that provided for by paragraph 5 in respect of loss suffered as a result of delay in the publication of information to which this Schedule applies.
2
A person other than the issuer is not subject to any liability, other than to the issuer, in respect of any such loss.
3
This paragraph does not affect—
a
civil liability—
i
under section 90 (compensation for statements in listing particulars or prospectus),
ii
under rules made by virtue of section 954 of the Companies Act 2006 (compensation),
iii
for breach of contract,
iv
under the Misrepresentation Act 1967, or
v
arising from a person's having assumed responsibility, to a particular person for a particular purpose, for the accuracy or completeness of the information concerned;
b
liability to a civil penalty; or
c
criminal liability.
4
This paragraph does not affect the powers conferred by sections 382 and 384 (powers of the court to make a restitution order and of the Authority to require restitution).
5
References in this paragraph to liability, in relation to a person, include a reference to another person being entitled as against that person to be granted any civil remedy or to rescind or repudiate an agreement.
PART 3SUPPLEMENTARY PROVISIONS
8Interpretation
1
In this Schedule—
a
“securities” means transferable securities within the meaning of Article F1754.1.44 of the markets in financial instruments directive, other than money-market instruments as defined in Article F2774.1.17 of that directive that have a maturity of less than 12 months (and includes instruments outside the EEA);
b
“securities market” means—
i
a regulated market as defined in Article F3944.1.21 of the markets in financial instruments directive,
ii
a multilateral trading facility as defined in Article F3514.1.22 of the markets in financial instruments directive, or
iii
a market or facility of a corresponding description outside the EEA.
2
References in this Schedule to the issuer of securities are—
a
in relation to a depositary receipt, derivative instrument or other financial instrument representing securities where the issuer of the securities represented has consented to the admission of the instrument to trading as mentioned in paragraph 1(1), to the issuer of the securities represented;
b
in any other case, to the person who issued the securities.
3
References in this Schedule to the acquisition or disposal of securities include—
a
acquisition or disposal of any interest in securities, or
b
contracting to acquire or dispose of securities or of any interest in securities,
except where what is acquired or disposed of (or contracted to be acquired or disposed of) is a depositary receipt, derivative instrument or other financial instrument representing securities.
4
References to continuing to hold securities have a corresponding meaning.
5
For the purposes of this Schedule the following are persons “discharging managerial responsibilities” within an issuer—
a
any director of the issuer (or person occupying the position of director, by whatever name called);
b
in the case of an issuer whose affairs are managed by its members, any member of the issuer;
c
in the case of an issuer that has no persons within paragraph (a) or (b), any senior executive of the issuer having responsibilities in relation to the information in question or its publication.
6
The following definitions (which apply generally for the purposes of Part 6 of this Act) do not apply for the purposes of this Schedule:
a
section 102A(1), (2) and (6) (meaning of “securities” and “issuer”);
b
section 102C (meaning of “home State” in relation to transferable securities).
F73SCHEDULE 11
Sch. 11 repealed (1.7.2005) by The Prospectus Regulations 2005 (S.I. 2005/1433), reg. 2(1), Sch. 1 para. 16
The general rule
1
1
A person offers securities to the public in the United Kingdom if—
a
to the extent that the offer is made to persons in the United Kingdom, it is made to the public; and
b
the offer is not an exempt offer.
2
For this purpose, an offer which is made to any section of the public, whether selected—
a
as members or debenture holders of a body corporate,
b
as clients of the person making the offer, or
c
in any other manner,
is to be regarded as made to the public.
Exempt offers
2
1
For the purposes of this Schedule, an offer of securities is an “exempt offer” if, to the extent that the offer is made to persons in the United Kingdom—
a
the condition specified in any of paragraphs 3 to F624A is satisfied in relation to the offer; or
b
the condition specified in one relevant paragraph is satisfied in relation to part, but not the whole, of the offer and, in relation to each other part of the offer, the condition specified in a different relevant paragraph is satisfied.
2
The relevant paragraphs are 3 to 8, 12 to 18 and 21.
Offers for business purposes
3
The securities are offered to persons—
a
whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses, or
b
who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their businesses,
or are otherwise offered to persons in the context of their trades, professions or occupations.
Offers to limited numbers
4
1
The securities are offered to no more than fifty persons.
2
In determining whether this condition is satisfied, the offer is to be taken together with any other offer of the same securities which was—
a
made by the same person;
b
open at any time within the period of 12 months ending with the date on which the offer is first made; and
c
not an offer to the public in the United Kingdom by virtue of this condition being satisfied.
3
For the purposes of this paragraph—
a
the making of an offer of securities to trustees or members of a partnership in their capacity as such, or
b
the making of such an offer to any other two or more persons jointly,
is to be treated as the making of an offer to a single person.
Clubs and associations
5
The securities are offered to the members of a club or association (whether or not incorporated) and the members can reasonably be regarded as having a common interest with each other and with the club or association in the affairs of the club or association and in what is to be done with the proceeds of the offer.
Restricted circles
6
1
The securities are offered to a restricted circle of persons whom the offeror reasonably believes to be sufficiently knowledgeable to understand the risks involved in accepting the offer.
2
In determining whether a person is sufficiently knowledgeable to understand the risks involved in accepting an offer of securities, any information supplied by the person making the offer is to be disregarded, apart from information about—
a
the issuer of the securities; or
b
if the securities confer the right to acquire other securities, the issuer of those other securities.
Underwriting agreements
7
The securities are offered in connection with a genuine invitation to enter into an underwriting agreement with respect to them.
Offers to public authorities
8
1
The securities are offered to a public authority.
2
“Public authority” means—
a
the government of the United Kingdom;
b
the government of any country or territory outside the United Kingdom;
c
a local authority in the United Kingdom or elsewhere;
d
any international organisation the members of which include the United Kingdom or another EEA State; and
e
such other bodies, if any, as may be specified.
Maximum consideration
9
1
The total consideration payable for the securities cannot exceed 40,000 euros (or an equivalent amount).
2
In determining whether this condition is satisfied, the offer is to be taken together with any other offer of the same securities which was—
a
made by the same person;
b
open at any time within the period of 12 months ending with the date on which the offer is first made; and
c
not an offer to the public in the United Kingdom by virtue of this condition being satisfied.
3
An amount (in relation to an amount denominated in euros) is an “equivalent amount” if it is an amount of equal value, calculated at the latest practicable date before (but in any event not more than 3 days before) the date on which the offer is first made, denominated wholly or partly in another currency or unit of account.
Minimum consideration
10
1
The minimum consideration which may be paid by any person for securities acquired by him pursuant to the offer is at least 40,000 euros (or an equivalent amount).
2
Paragraph 9(3) also applies for the purposes of this paragraph.
Securities denominated in euros
11
1
The securities are denominated in amounts of at least 40,000 euros (or an equivalent amount).
2
Paragraph 9(3) also applies for the purposes of this paragraph.
Takeovers
12
1
The securities are offered in connection with a takeover offer.
2
“Takeover offer” means—
a
an offer to acquire shares in a body incorporated in the United Kingdom which is a takeover offer within the meaning of the takeover provisions (or would be such an offer if those provisions applied in relation to any body corporate);
b
an offer to acquire all or substantially all of the shares, or of the shares of a particular class, in a body incorporated outside the United Kingdom; or
c
an offer made to all the holders of shares, or of shares of a particular class, in a body corporate to acquire a specified proportion of those shares.
3
“The takeover provisions” means—
a
Part XIIIA of the M2Companies Act 1985; or
b
in relation to Northern Ireland, Part XIVA of the M3Companies (Northern Ireland) Order 1986.
4
For the purposes of sub-paragraph (2)(b), any shares which the offeror or any associate of his holds or has contracted to acquire are to be disregarded.
5
For the purposes of sub-paragraph (2)(c), the following are not to be regarded as holders of the shares in question—
a
the offeror;
b
any associate of the offeror; and
c
any person whose shares the offeror or any associate of the offeror has contracted to acquire.
6
“Associate” has the same meaning as in—
a
section 430E of the M4Companies Act 1985; or
b
in relation to Northern Ireland, Article 423E of the M5Companies (Northern Ireland) Order 1986.
Mergers
13
The securities are offered in connection with a merger (within the meaning of Council Directive No.78/855/EEC).
Qualifying persons
16
1
The securities are issued by a body corporate and are offered—
a
by the issuer, by a body corporate connected with the issuer or by a relevant trustee;
b
only to qualifying persons; and
c
on terms that a contract to acquire any such securities may be entered into only by the qualifying person to whom they were offered or, if the terms of the offer so permit, any qualifying person.
2
A person is a “qualifying person”, in relation to an issuer, if he is a genuine employee or former employee of the issuer or of another body corporate in the same group or the wife, husband, widow, widower or child or stepchild under the age of eighteen of such an employee or former employee.
3
In relation to an issuer of securities, “connected with” has such meaning as may be prescribed.
4
“Group” and “relevant trustee” have such meaning as may be prescribed.
Convertible securities
17
1
The securities result from the conversion of convertible securities and listing particulars (or a prospectus) relating to the convertible securities were (or was) published in the United Kingdom under or by virtue of Part VI or such other provisions applying in the United Kingdom as may be specified.
2
“Convertible securities” means securities of a specified kind which can be converted into, or exchanged for, or which confer rights to acquire, other securities.
3
“Conversion” means conversion into or exchange for, or the exercise of rights conferred by the securities to acquire, other securities.
Charities
18
The securities are issued by—
a
a charity within the meaning of—
i
section 96(1) of the M6Charities Act 1993, or
ii
section 35 of the M7Charities Act (Northern Ireland) 1964,
b
a recognised body within the meaning of section 1(7) of the M8Law Reform (Miscellaneous Provisions) (Scotland) Act 1990,
c
a housing association within the meaning of—
i
section 5(1) of the M9Housing Act 1985,
ii
section 1 of the M10Housing Associations Act 1985, or
iii
Article 3 of the M11Housing (Northern Ireland) Order 1992,
d
an industrial or provident society registered in accordance with—
i
section 1(2)(b) of the M12Industrial and Provident Societies Act 1965, or
ii
section 1(2)(b) of the M13Industrial and Provident Societies Act 1969, or
e
a non-profit making association or body, recognised by the country or territory in which it is established, with objectives similar to those of a body falling within any of paragraphs (a) to (c),
and the proceeds of the offer will be used for the purposes of the issuer’s objectives.
Building societies etc.
19
The securities offered are shares which are issued by, or ownership of which entitles the holder to membership of or to obtain the benefit of services provided by—
a
a building society incorporated under the law of, or of any part of, the United Kingdom;
b
any body incorporated under the law of, or of any part of, the United Kingdom relating to industrial and provident societies or credit unions; or
c
a body of a similar nature established in another EEA State.
Euro-securities
20
1
The securities offered are Euro-securities and no advertisement relating to the offer is issued in the United Kingdom, or is caused to be so issued—
a
by the issuer of the Euro-securities;
b
by any credit institution or other financial institution through which the Euro-securities may be acquired pursuant to the offer; or
c
by any body corporate which is a member of the same group as the issuer or any of those institutions.
2
But sub-paragraph (1) does not apply to an advertisement of a prescribed kind.
3
“Euro-securities” means investments which—
a
are to be underwritten and distributed by a syndicate at least two of the members of which have their registered offices in different countries or territories;
b
are to be offered on a significant scale in one or more countries or territories, other than the country or territory in which the issuer has its registered office; and
c
may be acquired pursuant to the offer only through a credit institution or other financial institution.
4
5
“Financial institution” means a financial institution as defined in Article 1 of F7the banking consolidation directive.
6
“Underwritten” means underwritten by whatever means, including by acquisition or subscription, with a view to resale.
Same class securities
21
The securities are of the same class, and were issued at the same time, as securities in respect of which a prospectus has been published under or by virtue of—
a
Part VI;
b
Part III of the M14Companies Act 1985; or
c
such other provisions applying in the United Kingdom as may be specified.
Short date securities
22
The securities are investments of a specified kind with a maturity of less than one year from their date of issue.
Government and public securities
C2723
1
The securities are investments of a specified kind creating or acknowledging indebtedness issued by or on behalf of a public authority.
2
“Public authority” means—
a
the government of the United Kingdom;
b
the government of any country or territory outside the United Kingdom;
c
a local authority in the United Kingdom or elsewhere;
d
any international organisation the members of which include the United Kingdom or another EEA State; and
e
such other bodies, if any, as may be specified.
Non-transferable securities
24
The securities are not transferable.
24AF8Units in a collective investment scheme
The securities are units (as defined by section 237(2)) in a collective investment scheme.
General definitions
25
For the purposes of this Schedule—
“shares” has such meaning as may be specified; and
“specified” means specified in an order made by the Treasury.
F49SCHEDULE 11ATRANSFERABLE SECURITIES
Sch. 11A inserted (1.7.2005) by The Prospectus Regulations 2005 (S.I. 2005/1433), reg. 2(2), Sch. 2
PART 1
1
Units (within the meaning in section 237(2)) in an open-ended collective investment scheme.
2
Non-equity transferable securities issued by
a
the government of an EEA State;
b
a local or regional authority of an EEA State;
c
a public international body of which an EEA State is a member;
d
the European Central Bank;
e
the central bank of an EEA State.
3
Shares in the share capital of the central bank of an EEA State.
4
Transferable securities unconditionally and irrevocably guaranteed by the government, or a local or regional authority, of an EEA State.
5
1
Non-equity transferable securities, issued in a continuous or repeated manner by a credit institution, which satisfy the conditions in sub-paragraph (2).
2
The conditions are that the transferable securities—
a
are not subordinated, convertible or exchangeable;
b
do not give a right to subscribe to or acquire other types of securities and are not linked to a derivative instrument;
c
materialise reception of repayable deposits; and
d
are covered by a deposit guarantee under directive 94/19/EC of the European Parliament and of the Council on deposit-guarantee schemes.
6
Non-fungible shares of capital—
a
the main purpose of which is to provide the holder with a right to occupy any immoveable property, and
b
which cannot be sold without that right being given up.
PART 2
7
1
Transferable securities issued by a body specified in sub-paragraph (2) if, and only if, the proceeds of the offer of the transferable securities to the public will be used solely for the purposes of the issuer's objectives.
2
The bodies are
a
a charity
F142i
as defined by section 1(1) of the Charities Act 2011, or
ii
within the meaning of section 35 of the Charities Act (Northern Ireland) 1964 (c. 33 (N.I.));
F76b
a body entered in the Scottish Charity Register;
c
a housing association within the meaning of—
i
section 5(1) of the Housing Act 1985 (c. 68),
ii
section 1 of the Housing Associations Act 1985 (c. 69), or
iii
Article 3 of the Housing (Northern Ireland) Order 1992 (S.I. 1992/1725 (N.I. 15));
F431d
a registered society that—
i
is registered under the Co-operative and Community Benefit Societies Act 2014 as a community benefit society,
ii
is a pre-commencement society within the meaning of that Act that was registered in accordance with section 2(2)(a)(ii) of that Act, or
iii
is registered in accordance with section 1(2)(b) of the Industrial and Provident Societies Act (Northern Ireland) 1969;
e
a non-profit making association or body recognised by an EEA State with objectives similar to those of a body falling within any of sub-paragraphs (a) to (d).
8
1
Non-equity transferable securities, issued in a continuous or repeated manner by a credit institution, which satisfy the conditions in sub-paragraph (2).
2
The conditions are—
F475a
that the total consideration for the transferable securities being offered in the EEA States is less than 75,000,000 euros (or an equivalent amount); and
b
those mentioned in paragraph 5(2)(a) and (b).
3
In determining whether sub-paragraph (2)(a) is satisfied in relation to an offer (“offer A”), offer A is to be taken together with any other offer of transferable securities of the same class made by the same person which—
a
was open at any time within the period of 12 months ending with the date on which offer A is first made; and
b
had previously satisfied sub-paragraph (2)(a).
4
For the purposes of this paragraph, an amount (in relation to an amount denominated in euros) is an “equivalent amount” if it is an amount of equal value denominated wholly or partly in another currency or unit of account.
5
The equivalent is to be calculated at the latest practicable date before (but in any event not more than 3 working days before) the date on which the offer is first made.
6
“Credit institution” means a credit institution as defined in F254Article 4(1)(1) of the capital requirements regulation.
9
1
2
Sub-paragraphs (3) to (5) of paragraph 8 apply for the purposes of this paragraph but with the references in sub-paragraph (3) to “sub-paragraph (2)(a)” being read as references to “paragraph 9(1)”.
F196SCHEDULE 11BCONNECTED PERSONS
Sch. 11B omitted (3.7.2016) by virtue of The Financial Services and Markets Act 2000 (Market Abuse) Regulations 2016 (S.I. 2016/680), regs. 1, 8(10)
F196PART 1MEANING OF “CONNECTED PERSON”
F1961Introduction
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1962Meaning of “connected person”
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1963Family members
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1964Associated bodies corporate
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1965Control of a body corporate
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1966Supplementary provisions
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F196PART 2CONNECTED PERSONS: REFERENCES TO AN INTEREST IN SHARES OR DEBENTURES
F1967Introduction
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1968General provisions
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1969Rights to acquire shares
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F19610Right to exercise or control exercise of rights
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F19611Bodies corporate
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F19612Trusts
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SCHEDULE 12 Transfer schemes: certificates
C13Part I Insurance Business Transfer Schemes
Sch. 12 Pt. I (paras. 1-6) applied (1.12.2001) by S.I. 2001/3626, arts. 1, 3(c)
1
1
For the purposes of section 111(2) the appropriate certificates, in relation to an insurance business transfer scheme, are—
a
a certificate under paragraph 2;
b
if sub-paragraph (2) applies, a certificate under paragraph 3;
F463ba
if sub-paragraph (2A) applies, a certificate under paragraph 3A.
c
if sub-paragraph (3) applies, a certificate under paragraph 4;
d
if sub-paragraph (4) applies, a certificate under paragraph 5F94;
e
if sub-paragraph (5) applies, the certificates under paragraph 5A.
2
This sub-paragraph applies if—
C14a
b
the establishment from which the business is to be transferred under the proposed insurance business transfer scheme is in an EEA State other than the United Kingdom.
F4362A
This sub-paragraph applies if—
a
the transferor concerned is a UK authorised person which has received authorisation under Article 14 of the Solvency 2 Directive from the appropriate regulator; and
b
as regards any policy which is included in the proposed transfer and which evidences a contract of insurance (other than reinsurance), the contract was concluded in an EEA State other than the United Kingdom.
3
This sub-paragraph applies if—
C14a
b
the proposed transfer relates to business which consists of the effecting or carrying out of contracts of long-term insurance; and
c
as regards any policy which is included in the proposed transfer and which evidences a contract of insurance (other than reinsurance), an EEA State other than the United Kingdom is the State of the commitment.
4
This sub-paragraph applies if—
C14a
b
the business to which the proposed insurance business transfer scheme relates is business which consists of the effecting or carrying out of contracts of general insurance; and
c
as regards any policy which is included in the proposed transfer and which evidences a contract of insurance (other than reinsurance), the risk is situated in an EEA State other than the United Kingdom.
F955
This sub-paragraph applies if—
F336a
the transferor concerned has received authorisation under Article 162 of the Solvency 2 Directive from the appropriate regulator; and
b
the proposed transfer is to a branch or agency, in an EEA State other than the United Kingdom, authorised under that Article.
Certificates as to margin of solvency
C472
1
A certificate under this paragraph is to be given—
a
by the relevant authority; or
b
in a case in which there is no relevant authority, by the F471appropriate regulator.
2
A certificate given under sub-paragraph (1)(a) is one certifying that, taking the proposed transfer into account—
a
the transferee possesses, or will possess before the scheme takes effect, the necessary margin of solvency; or
b
there is no necessary margin of solvency applicable to the transferee.
3
A certificate under sub-paragraph (1)(b) is one certifying that the F233appropriate regulator has received from the authority which it considers to be the authority responsible for supervising persons who effect or carry out contracts of insurance in the place to which the business is to be transferred F273certification that, taking the proposed transfer into account—
a
the transferee possesses or will possess before the scheme takes effect the margin of solvency required under the law applicable in that place; or
b
there is no such margin of solvency applicable to the transferee .
4
“Necessary margin of solvency” means the margin of solvency required in relation to the transferee, taking the proposed transfer into account, under the law which it is the responsibility of the relevant authority to apply.
5
“Margin of solvency” means the excess of the value of the assets of the transferee over the amount of its liabilities.
6
“Relevant authority” means—
a
if the transferee is an EEA firm falling within paragraph 5(d) F96or (da) of Schedule 3, its home state regulator;
F187aa
if the transferee is a non-EEA branch, the supervisory authority of the EEA State in which the transferee is situated or, where appropriate, the supervisory authority of an EEA State which supervises the state of solvency of the entire business of the transferee’s agencies and branches within the EEA in accordance with Article 167 of the Solvency 2 Directive;
b
if the transferee is a Swiss general insurer, the authority responsible in Switzerland for supervising persons who effect or carry out contracts of insurance;
c
i
the PRA, if the transferee is a PRA-authorised person with a Part 4A permission or with permission under Schedule 4;
ii
the FCA, if the transferee is a person with a Part 4A permission or with permission under Schedule 4 but is not a PRA-authorised person.
7
In sub-paragraph (6), any reference to a transferee of a particular description includes a reference to a transferee who will be of that description if the proposed scheme takes effect.
F1577A
“Supervisory authority” has the same meaning as in the Solvency 2 Directive.
8
“Swiss general insurer” means a body—
a
whose head office is in Switzerland;
b
which has permission to carry on regulated activities consisting of the effecting and carrying out of contracts of general insurance; and
c
whose permission is not restricted to the effecting or carrying out of contracts of reinsurance.
F4289
“Non-EEA branch” means a branch or agency which has received authorisation under Article 162 of the Solvency 2 Directive.
Certificates as to F274consultation
Word in Sch. 12 para. 3 heading substituted (1.1.2016) by The Solvency 2 Regulations 2015 (S.I. 2015/575), reg. 1(2), Sch. 1 para. 18(4)
C473
A certificate under this paragraph is one given by the F375appropriate regulator and certifying that the host State regulator has been notified of the proposed scheme and that—
a
that regulator has responded to the notification; or
b
that it has not responded but the period of three months beginning with the notification has elapsed.
F275Certificates as to consent
Sch. 12 para. 3A and cross-heading inserted (1.1.2016) by The Solvency 2 Regulations 2015 (S.I. 2015/575), reg. 1(2), Sch. 1 para. 18(5)
3A
A certificate under this paragraph is one given by the appropriate regulator and certifying that in respect of each contract concluded in an EEA State other than the United Kingdom the authority responsible for supervising persons who effect or carry out contracts of insurance in the EEA State in which that contract was concluded has been notified of the proposed scheme and that—
a
the authority has consented to the proposed scheme; or
b
the authority has not responded but the period of three months beginning with the notification has elapsed.
Certificates as to long-term business
C484
A certificate under this paragraph is one given by the F296appropriate regulator and certifying that the authority responsible for supervising persons who effect or carry out contracts of insurance in the State of the commitment has been notified of the proposed scheme and that—
a
that authority has consented to the proposed scheme; or
b
the period of three months beginning with the notification has elapsed and that authority has not refused its consent.
Certificates as to general business
C485
A certificate under this paragraph is one given by the F476appropriate regulator and certifying that the authority responsible for supervising persons who effect or carry out contracts of insurance in the EEA State in which the risk is situated has been notified of the proposed scheme and that—
a
that authority has consented to the proposed scheme; or
b
the period of three months beginning with the notification has elapsed and that authority has not refused its consent.
F99Certificates as to legality and as to consent
Sch. 12 para. 5A and cross-heading inserted (10.12.2007) by The Reinsurance Directive Regulations 2007 (S.I. 2007/3253), reg. 2(1), Sch. 1 para. 2(5)(f)
5A
1
The certificates under this paragraph are to be given—
a
in the case of the certificate under sub-paragraph (2), by F326the appropriate regulator;
b
in the case of the certificate under sub-paragraph (3), by the relevant authority.
2
A certificate given under this sub-paragraph is one certifying that the relevant authority has been notified of the proposed scheme and that—
a
the relevant authority has consented to the proposed scheme; or
b
the period of three months beginning with the notification has elapsed and that relevant authority has not refused its consent.
3
A certificate given under this sub-paragraph is one certifying that the law of the EEA State in which the transferee is set up permits such a transfer.
F3704
“Relevant authority” means the supervisory authority (within the meaning of the Solvency 2 Directive) of the EEA State in which the transferee is set up.
Interpretation of Part I
I246
1
“State of the commitment”, in relation to a commitment entered into at any date, means—
a
if the policyholder is an individual, the State in which he had his habitual residence at that date;
b
if the policyholder is not an individual, the State in which the establishment of the policyholder to which the commitment relates was situated at that date.
2
“Commitment” means a commitment represented by contracts of insurance of a prescribed class.
3
References to the EEA State in which a risk is situated are—
a
if the insurance relates to a building or to a building and its contents (so far as the contents are covered by the same policy), to the EEA State in which the building is situated;
b
if the insurance relates to a vehicle of any type, to the EEA State of registration;
c
in the case of policies of a duration of four months or less covering travel or holiday risks (whatever the class concerned), to the EEA State in which the policyholder took out the policy;
d
in a case not covered by paragraphs (a) to (c)—
i
if the policyholder is an individual, to the EEA State in which he has his habitual residence at the date when the contract is entered into; and
ii
otherwise, to the EEA State in which the establishment of the policyholder to which the policy relates is situated at that date.
F904
If the insurance relates to a vehicle dispatched from one EEA State to another, in respect of the period of 30 days beginning with the day on which the purchaser accepts delivery a reference to the EEA State in which a risk is situated is a reference to the State of destination (and not, as provided by sub-paragraph (3)(b), to the State of registration).
Part II Banking Business Transfer Schemes
7
1
For the purposes of section 111(2) the appropriate certificates, in relation to a banking business transfer scheme, are—
a
a certificate under paragraph 8; and
b
if sub-paragraph (2) applies, a certificate under paragraph 9.
2
This sub-paragraph applies if F408the transferor concerned or the transferee is an EEA firm falling within paragraph 5(b) of Schedule 3.
Certificates as to financial resources
8
1
A certificate under this paragraph is one given by the relevant authority and certifying that, taking the proposed transfer into account, the transferee possesses, or will possess before the scheme takes effect, adequate financial resources.
2
“Relevant authority” means—
F343a
if the transferee is a PRA-authorised person with a Part 4A permission or with permission under Schedule 4, the PRA;
aa
if the transferee is a person with Part 4A permission or with permission under Schedule 4 but is not a PRA-authorised person, the FCA;
b
if the transferee is an EEA firm falling within paragraph 5(b) of Schedule 3, its home state regulator;
c
if the transferee does not fall within paragraph (a) F216, (aa) or (b), the authority responsible for the supervision of the transferee’s business in the place in which the transferee has its head office.
3
In sub-paragraph (2), any reference to a transferee of a particular description of person includes a reference to a transferee who will be of that description if the proposed banking business transfer scheme takes effect.
Certificates as to consent of home state regulator
9
A certificate under this paragraph is one given by the F316appropriate regulator and certifying that the home State regulator of F408the transferor concerned or of the transferee has been notified of the proposed scheme and that—
a
the home State regulator has responded to the notification; or
b
the period of three months beginning with the notification has elapsed.
F119Part 2AReclaim fund business transfer schemes
Sch. 12 Pt. 2A inserted (12.3.2009) by Dormant Bank and Building Society Accounts Act 2008 (c. 31), ss. 15, 31(1)(2), Sch. 2 para. 5; S.I. 2009/490, art. 2 (with art. 3)
9ACertificate as to financial resources
F3221
For the purposes of section 111(2) the appropriate certificate, in relation to a reclaim fund business transfer scheme, is a certificate given by the F304relevant regulator certifying that, taking the proposed transfer into account, the transferee possesses, or will possess before the scheme takes effect, adequate financial resources.
F2822
In this paragraph the “relevant regulator” means—
a
if the transferee is a PRA-authorised person, the PRA;
b
in any other case, the FCA.
F350PART 2BRing-fencing transfer schemes
Sch. 12 Pt. 2B inserted (1.3.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(5), Sch. 1 para. 13; S.I. 2014/377, art. 2(1)(a), Sch. Pt. 1
9BAppropriate certificates
1
For the purposes of section 111(2) the appropriate certificates, in relation to a ring-fencing transfer scheme, are—
a
a certificate given by the PRA certifying its approval of the application,
b
a certificate under paragraph 9C, and
c
if sub-paragraph (2) applies, a certificate under paragraph 9D.
2
This sub-paragraph applies if the transferee is an EEA firm falling within paragraph 5(a) or (b) of Schedule 3.
9CCertificate as to financial resources
1
A certificate under this paragraph is one given by the relevant authority and certifying that, taking the proposed transfer into account, the transferee possesses, or will possess before the scheme takes effect, adequate financial resources.
2
“Relevant authority” means—
a
if the transferee is a PRA-authorised person with a Part 4A permission or with permission under Schedule 4, the PRA;
b
if the transferee is an EEA firm falling within paragraph 5(a) or (b) of Schedule 3, its home state regulator;
c
if the transferee does not fall within paragraph (a) or (b) but is subject to regulation in a country or territory outside the United Kingdom, the authority responsible for the supervision of the transferee's business in the place in which the transferee has its head office;
d
in any other case, the FCA.
3
In sub-paragraph (2), any reference to a transferee of a particular description includes a reference to a transferee who will be of that description if the proposed ring-fencing transfer scheme takes effect.
9DCertificate as to consent of home state regulator
A certificate under this paragraph is one given by the appropriate regulator and certifying that the home state regulator of the transferee has been notified of the proposed scheme and that—
a
the home state regulator has responded to the notification, or
b
the period of 3 months beginning with the notification has elapsed.
Part III Insurance business transfers effected outside the United Kingdom
10
1
This paragraph applies to a proposal to execute under provisions corresponding to Part VII in a country or territory other than the United Kingdom an instrument transferring all the rights and obligations of the transferor under general or long-term insurance policies, or under such descriptions of such policies as may be specified in the instrument, to the transferee if any of the conditions in sub-paragraphs (2), (3) or (4) is met in relation to it.
2
F3373
The transferor is a company authorised in an EEA State other than the United Kingdom under Article 162 of the Solvency 2 Directive and the transferee is a UK authorised person which has received authorisation under Article 14 of the Solvency 2 Directive.
F2794
The transferor is a Swiss general insurer and the transferee is a UK authorised person which has received authorisation under Article 14 of the Solvency 2 Directive.
5
In relation to a proposed transfer to which this paragraph applies, the F339regulator which supervises the transferee's margin of solvency may, if it is satisfied that the transferee possesses the necessary margin of solvency, issue a certificate to that effect.
6
“Necessary margin of solvency” means the margin of solvency which the transferee, taking the proposed transfer into account, is required by the F484FCA or the PRA to maintain.
7
“Swiss general insurer” has the same meaning as in paragraph 2.
8
“General policy” means a policy evidencing a contract which, if it had been effected by the transferee, would have constituted the carrying on of a regulated activity consisting of the effecting of contracts of general insurance.
9
“Long-term policy” means a policy evidencing a contract which, if it had been effected by the transferee, would have constituted the carrying on of a regulated activity consisting of the effecting of contracts of long-term insurance.
F122SCHEDULE 13
Sch. 13 omitted (6.4.2010) by virtue of The Transfer of Tribunal Functions Order 2010 (S.I. 2010/22), art. 1(2)(e), 5(1), Sch. 2 para. 49
Part I General
Interpretation
1
In this Schedule—
“panel of chairmen” means the panel established under paragraph 3(1);
“lay panel” means the panel established under paragraph 3(4);
“rules” means rules made by the Lord Chancellor under section 132.
Part II The Tribunal
President
2
1
The Lord Chancellor must appoint one of the members of the panel of chairmen to preside over the discharge of the Tribunal’s functions.
2
The member so appointed is to be known as the President of the Financial Services and Markets Tribunal (but is referred to in this Act as “the President”).
3
The Lord Chancellor may appoint one of the members of the panel of chairmen to be Deputy President.
4
The Deputy President is to have such functions in relation to the Tribunal as the President may assign to him.
5
The Lord Chancellor may not appoint a person to be the President or Deputy President unless that person—
F108a
satisfies the judicial-appointment eligibility condition on a 7-year basis;
b
is an advocate or solicitor in Scotland of at least F1097 years’ standing; or
6
If the President (or Deputy President) ceases to be a member of the panel of chairmen, he also ceases to be the President (or Deputy President).
7
The functions of the President may, if he is absent or is otherwise unable to act, be discharged—
a
by the Deputy President; or
b
if there is no Deputy President or he too is absent or otherwise unable to act, by a person appointed for that purpose from the panel of chairmen by the Lord Chancellor.
F778
The Lord Chancellor may appoint a person under sub-paragraph (7)(b) only after consulting the following—
a
the Lord Chief Justice of England and Wales;
b
the Lord President of the Court of Session;
c
the Lord Chief Justice of Northern Ireland.
9
The Lord Chief Justice of England and Wales may nominate a judicial office holder (as defined in section 109(4) of the Constitutional Reform Act 2005) to exercise his functions under this paragraph.
10
The Lord President of the Court of Session may nominate a judge of the Court of Session who is a member of the First or Second Division of the Inner House of that Court to exercise his functions under this paragraph.
11
The Lord Chief Justice of Northern Ireland may nominate any of the following to exercise his functions under this paragraph—
a
the holder of one of the offices listed in Schedule 1 to the Justice (Northern Ireland) Act 2002;
b
a Lord Justice of Appeal (as defined in section 88 of that Act).
Panels
3
1
The Lord Chancellor must appoint a panel of persons for the purposes of serving as chairmen of the Tribunal.
2
A person is qualified for membership of the panel of chairmen if—
F110a
he satisfies the judicial-appointment eligibility condition on a 5-year basis;
b
he is an advocate or solicitor in Scotland of at least F1115 years’ standing; or
3
The panel of chairmen must include at least one member who is a person of the kind mentioned in sub-paragraph (2)(b).
4
The Lord Chancellor must also appoint a panel of persons who appear to him to be qualified by experience or otherwise to deal with matters of the kind that may be referred to the Tribunal.
Terms of office etc
4
1
Subject to the provisions of this Schedule, each member of the panel of chairmen and the lay panel is to hold and vacate office in accordance with the terms of his appointment.
2
The Lord Chancellor may remove a member of either panel (including the President) on the ground of incapacity or misbehaviour.
F782A
The Lord Chancellor may remove a person under sub-paragraph (2) only with the concurrence of the appropriate senior judge.
2B
The appropriate senior judge is the Lord Chief Justice of England and Wales, unless—
a
the person to be removed exercises functions wholly or mainly in Scotland, in which case it is the Lord President of the Court of Session, or
b
the person to be removed exercises functions wholly or mainly in Northern Ireland, in which case it is the Lord Chief Justice of Northern Ireland.
3
A member of either panel—
a
may at any time resign office by notice in writing to the Lord Chancellor;
b
is eligible for re-appointment if he ceases to hold office.
Remuneration and expenses
C345
The Lord Chancellor may pay to any person, in respect of his service—
a
as a member of the Tribunal (including service as the President or Deputy President), or
b
as a person appointed under paragraph 7(4),
such remuneration and allowances as he may determine.
Staff
C356
1
The Lord Chancellor may appoint such staff for the Tribunal as he may determine.
2
The remuneration of the Tribunal’s staff is to be defrayed by the Lord Chancellor.
3
Such expenses of the Tribunal as the Lord Chancellor may determine are to be defrayed by the Lord Chancellor.
Part III Constitution of Tribunal
7
1
On a reference to the Tribunal, the persons to act as members of the Tribunal for the purposes of the reference are to be selected from the panel of chairmen or the lay panel in accordance with arrangements made by the President for the purposes of this paragraph (“the standing arrangements”).
2
The standing arrangements must provide for at least one member to be selected from the panel of chairmen.
C363
If while a reference is being dealt with, a person serving as member of the Tribunal in respect of the reference becomes unable to act, the reference may be dealt with by—
a
the other members selected in respect of that reference; or
b
if it is being dealt with by a single member, such other member of the panel of chairmen as may be selected in accordance with the standing arrangements for the purposes of the reference.
C374
If it appears to the Tribunal that a matter before it involves a question of fact of special difficulty, it may appoint one or more experts to provide assistance.
Part IV Tribunal Procedure
C388
For the purpose of dealing with references, or any matter preliminary or incidental to a reference, the Tribunal must sit at such times and in such place or places as the Lord Chancellor may direct F79, after consulting the President of the Financial Services and Markets Tribunal,.
9
Rules made by the Lord Chancellor under section 132 may, in particular, include provision—
a
as to the manner in which references are to be instituted;
b
for the holding of hearings in private in such circumstances as may be specified in the rules;
c
as to the persons who may appear on behalf of the parties;
d
for a member of the panel of chairmen to hear and determine interlocutory matters arising on a reference;
e
for the suspension of decisions of the Authority which have taken effect;
f
as to the withdrawal of references;
g
as to the registration, publication and proof of decisions and orders.
Practice directions
C3910
The President of the Tribunal may give directions as to the practice and procedure to be followed by the Tribunal in relation to references to it.
Evidence
C4011
1
The Tribunal may by summons require any person to attend, at such time and place as is specified in the summons, to give evidence or to produce any document in his custody or under his control which the Tribunal considers it necessary to examine.
2
The Tribunal may—
a
take evidence on oath and for that purpose administer oaths; or
b
instead of administering an oath, require the person examined to make and subscribe a declaration of the truth of the matters in respect of which he is examined.
3
A person who without reasonable excuse—
a
refuses or fails—
i
to attend following the issue of a summons by the Tribunal, or
ii
to give evidence, or
b
alters, suppresses, conceals or destroys, or refuses to produce a document which he may be required to produce for the purposes of proceedings before the Tribunal,
is guilty of an offence.
4
A person guilty of an offence under sub-paragraph (3)(a) is liable on summary conviction to a fine not exceeding the statutory maximum.
5
A person guilty of an offence under sub-paragraph (3)(b) is liable—
a
on summary conviction, to a fine not exceeding the statutory maximum;
b
on conviction on indictment, to imprisonment for a term not exceeding two years or a fine or both.
Decisions of Tribunal
12
C411
A decision of the Tribunal may be taken by a majority.
C412
The decision must—
a
state whether it was unanimous or taken by a majority;
b
be recorded in a document which—
i
contains a statement of the reasons for the decision; and
ii
is signed and dated by the member of the panel of chairmen dealing with the reference.
C413
The Tribunal must—
a
inform each party of its decision; and
b
as soon as reasonably practicable, send to each party and, if different, to any authorised person concerned, a copy of the document mentioned in sub-paragraph (2).
4
The Tribunal must send the Treasury a copy of its decision.
Costs
13
1
If the Tribunal considers that a party to any proceedings on a reference has acted vexatiously, frivolously or unreasonably it may order that party to pay to another party to the proceedings the whole or part of the costs or expenses incurred by the other party in connection with the proceedings.
2
If, in any proceedings on a reference, the Tribunal considers that a decision of the Authority which is the subject of the reference was unreasonable it may order the Authority to pay to another party to the proceedings the whole or part of the costs or expenses incurred by the other party in connection with the proceedings.
F397SCHEDULE 14 Role of the Competition Commission
Sch. 14 omitted (1.4.2013) by virtue of Financial Services Act 2012 (c. 21), ss. 24(4), 122(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.
F397 Provision of information by Treasury
F3971
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F397 Consideration of matters arising on a report
F3972
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F397
Investigations under section 162: application of Enterprise Act 2002
F3972A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F397
Section 162: modification of Schedule 7 to the Competition Act 1998
F3972B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F397
Reports under section 162: further provision
F3972C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F397 Applied provisions
F3973
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F397 Publication of reports
F3974
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SCHEDULE 15 Information and Investigations: Connected Persons
C15C25C45C110 Part I Rules for Specific Bodies
Sch. 15 Pt. I (paras. 1-7) modified (1.12.2001) by S.I. 2001/2657, arts. 1(1), 15(2) (which was revoked (8.10.2001) by S.I. 2001/3083, arts. 1(2), 23); S.I. 2001/3538, art. 2(1)
Sch. 15 Pt. I (paras. 1-7) modified (1.12.2001) by S.I. 2001/3083, arts. 1(2), 15(2); S.I. 2001/3538, art. 2(1)
Sch. 15 Pt. I (paras. 1-7) amended (temp. from 11.8.2001 to 1.12.2001) by S.I. 2001/2659, arts. 1(2), 2(2); S.I. 2001/3538, art. 2(1)
Sch. 15 Pt. I modified (8.4.2002) by The Financial Services and Markets Act 2000 (Permission and Applications) (Credit Unions etc.) Order 2002 (S.I. 2002/704), art. 8(2)
Corporate bodies
1
If the authorised person (“BC”) is a body corporate, a person who is or has been—
a
an officer or manager of BC or of a parent undertaking of BC;
b
an employee of BC;
c
an agent of BC or of a parent undertaking of BC.
Partnerships
2
If the authorised person (“PP”) is a partnership, a person who is or has been a member, manager, employee or agent of PP.
Unincorporated associations
3
If the authorised person (“UA”) is an unincorporated association of persons which is neither a partnership nor an unincorporated friendly society, a person who is or has been an officer, manager, employee or agent of UA.
Friendly societies
4
1
If the authorised person (“FS”) is a friendly society, a person who is or has been an officer, manager or employee of FS.
2
In relation to FS, “officer” and “manager” have the same meaning as in section 119(1) of the M15Friendly Societies Act 1992.
Building societies
5
1
If the authorised person (“BS”) is a building society, a person who is or has been an officer or employee of BS.
2
In relation to BS, “officer” has the same meaning as it has in section 119(1) of the M16Building Societies Act 1986.
Individuals
6
If the authorised person (“IP”) is an individual, a person who is or has been an employee or agent of IP.
Application to sections 171 and 172
7
For the purposes of sections 171 and 172, if the person under investigation is not an authorised person the references in this Part of this Schedule to an authorised person are to be taken to be references to the person under investigation.
Part II Additional Rules
8
A person who is, or at the relevant time was, the partner, manager, employee, agent, appointed representative, banker, auditor, actuary or solicitor of—
a
the person under investigation (“A”);
b
a parent undertaking of A;
c
a subsidiary undertaking of A;
d
a subsidiary undertaking of a parent undertaking of A; or
e
a parent undertaking of a subsidiary undertaking of A.
F225 SCHEDULE 16 Prohibitions and Restrictions imposed by OFFICE OF FAIR TRADING
Sch. 16 omitted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 (S.I. 2013/1881), arts. 1(2)(6), 10(20) (with art. 11(4))
F225 Preliminary
F2251
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F225 Notice of prohibition or restriction
F2252
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F225 Application to revoke prohibition or restriction
F2253
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F225 Representations to Office of Fair TradingOFT
F2254
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F225 Appeals
F2255
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C42C44 SCHEDULE 17 The Ombudsman Scheme
Sch. 17 applied (1.5.2009 for certain purposes and 1.11.2009 otherwise) by The Payment Services Regulations 2009 (S.I. 2009/209), regs. 1(2), 125 (with reg. 3)
Sch. 17 applied (30.4.2011) by The Electronic Money Regulations 2011 (S.I. 2011/99), reg. 76(2) (with reg. 3)
Part I General
Interpretation
1
In this Schedule—
F358“ADR Directive” means Directive 2013/11/EU of the European Parliament and of the Council of 21 May 2013 on alternative dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC;
“ADR entity” means any entity which is listed by a member State in accordance with Article 20(2) of the ADR Directive;
“ombudsman” means a person who is a member of the panel; and
“the panel” means the panel established under paragraph 4.
Part II The Scheme Operator
F288 Duty of FCA
Sch. 17 para. 2 and cross-heading 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. 11 para. 14 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.
2
F3031
The FCA must take such steps as are necessary to ensure that the body corporate established by the Financial Services Authority under this Schedule as originally enacted is, at all times, capable of exercising the functions conferred on the scheme operator by or under this Act.
F3542
The FCA must exercise any function falling within sub-paragraph (3) in a way which is consistent with enabling the scheme operator, at all times, to qualify as an ADR entity and to meet the quality requirements in Chapter II of the ADR Directive.
3
The following functions of the FCA fall within this sub-paragraph—
a
making rules for the purposes of section 226;
b
approving rules made for the purposes of section 227;
c
specifying an amount under section 229(4);
d
approving rules made under section 230;
e
taking steps under sub-paragraph (1);
f
appointing or removing members of the board under paragraph 3(2);
g
taking steps under paragraph 3A(1);
h
making rules under paragraph 7(3);
i
making rules under paragraph 13;
j
consenting to scheme rules under paragraph 14(7), other than rules relating to fees;
k
approving the fixing, variation, addition or removal of standard terms under paragraph 18, other than terms relating to the making of payments to the scheme operator; and
l
approving arrangements under paragraph 19(3).
Constitution
3
1
The constitution of the scheme operator must provide for it to have—
a
a chairman; and
b
a board (which must include the chairman) whose members are the scheme operator’s directors.
2
The chairman and other members of the board must be persons appointed, and liable to removal from office, by the F266FCA (acting, in the case of the chairman, with the approval of the Treasury).
3
But the terms of their appointment (and in particular those governing removal from office) must be such as to secure their independence from the F266FCA in the operation of the scheme.
4
5
The validity of any act of the scheme operator is unaffected by—
a
a vacancy in the office of chairman; or
b
a defect in the appointment of a person as chairman or as a member of the board.
F292Relationship with FCA
Sch. 17 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. 11 para. 16 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.
3A
1
The scheme operator 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 Part of this Act.
2
The scheme operator and the FCA must prepare and maintain a memorandum describing how they intend to comply with sub-paragraph (1).
3
The scheme operator must ensure that the memorandum as currently in force is published in the way appearing to the scheme operator to be best calculated to bring it to the attention of the public.
The panel of ombudsmen
4
1
The scheme operator must appoint and maintain a panel of persons, appearing to it to have appropriate qualifications and experience, to act as ombudsmen for the purposes of the scheme.
2
A person’s appointment to the panel is to be on such terms (including terms as to the duration and termination of his appointment and as to remuneration) as the scheme operator considers—
a
consistent with the independence of the person appointed; and
b
otherwise appropriate.
The Chief Ombudsman
5
1
The scheme operator must appoint one member of the panel to act as Chief Ombudsman.
2
The Chief Ombudsman is to be appointed on such terms (including terms as to the duration and termination of his appointment) as the scheme operator considers appropriate.
Status
6
1
The scheme operator is not to be regarded as exercising functions on behalf of the Crown.
2
The scheme operator’s F371... officers and staff are not to be regarded as Crown servants.
3
Appointment as Chief Ombudsman or to the panel or as a deputy ombudsman does not confer the status of Crown servant.
Annual reports
7
1
At least once a year—
a
the scheme operator must make a report to the F270FCA on the discharge of its functions; and
b
the Chief Ombudsman must make a report to the F270FCA on the discharge of his functions.
2
Each report must distinguish between functions in relation to the scheme’s compulsory jurisdiction F377... and functions in relation to its voluntary jurisdiction.
3
Each report must also comply with any requirements specified in rules made by the F270FCA.
4
The scheme operator must publish each report in the way it considers appropriate.
F3315
The Treasury may—
a
require the scheme operator 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 scheme operator with such modifications as are specified in the direction, whether or not the provision would otherwise apply to the scheme manager.
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.
F385Audit of accounts
Sch. 17 para. 7A 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. 11 para. 19 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.
7A
1
The scheme operator must send a copy of its annual accounts to the Comptroller and Auditor General as soon as is reasonably practicable.
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 scheme operator must send a copy of the certified accounts and the report to the FCA.
5
Except as provided by paragraph 7(5), the scheme operator 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.
F256Information, advice and guidance
Sch. 17 para. 8 crossheading 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. 11 para. 20 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.
F2568
The scheme operator may publish F492such information, guidance or advice as it considers appropriate and may charge for it or distribute it free of charge.
Budget
9
1
The scheme operator must, before the start of each of its financial years, adopt an annual budget which has been approved by the F458FCA.
2
The scheme operator may, with the approval of the F458FCA, vary the budget for a financial year at any time after its adoption.
C163
The annual budget must include an indication of—
a
the distribution of resources deployed in the operation of the scheme, and
b
the amounts of income of the scheme operator arising or expected to arise from the operation of the scheme,
distinguishing between the scheme’s compulsory F320... and voluntary jurisdiction.
F253Annual plan
Sch. 17 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. 11 para. 23 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.
9A
1
The scheme operator must in respect of each of its financial years prepare an annual plan.
2
The plan must be prepared before the start of the financial year.
3
An annual plan in respect of a financial year must make provision about the use of the resources of the scheme operator.
4
The plan may include material relating to periods longer than the financial year in question.
5
Before preparing an annual plan, the scheme operator must consult such persons (if any) as the scheme operator considers appropriate.
6
The scheme operator must publish each annual plan in the way it considers appropriate.
Exemption from liability in damages
10
C17C321
No person is to be liable in damages for anything done or omitted in the discharge, or purported discharge, of any functions under this Act in relation to the compulsory jurisdiction F386....
2
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 M17Human Rights Act 1998.
Privilege
C18C3311
For the purposes of the law relating to defamation, proceedings in relation to a complaint which is subject to the compulsory jurisdiction F391... are to be treated as if they were proceedings before a court.
Part III The Compulsory Jurisdiction
Introduction
12
This Part of this Schedule applies only in relation to the compulsory jurisdiction.
F352FCA'sF423... rules
Word in Sch. 17 para. 13 cross-heading 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. 11 para. 24(b) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.
Word in Sch. 17 para. 13 heading omitted (7.4.2015) by virtue of The Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 (S.I. 2015/542), reg. 1(2), Sch. 7 para. 1(3)(c) (with reg. 7)
C19C2913
1
a
the complainant has referred it under the ombudsman scheme before the applicable time limit (determined in accordance with the rules) has expired F414, or
b
in the case of a complaint other than a relevant complaint within the meaning of section 404B, the respondent agrees that the complaint should be entertained despite the complainant having referred it under the ombudsman scheme after the applicable time limit has expired.
2
The rules may provide that an ombudsman may extend that time limit in specified circumstances.
3
The F228FCA may make rules providing that a complaint is not to be entertained (except in specified circumstances) if the complainant has not previously communicated its substance to the respondent and given him a reasonable opportunity to deal with it.
4
The F228FCA may make rules requiring an authorised person F123, F124an electronic money issuer within the meaning of the Electronic Money Regulations 2011 or a payment service provider within the meaning of the Payment Services Regulations F4942017, who may become subject to the compulsory jurisdiction as a respondent to establish such procedures as the F228FCA considers appropriate for the resolution of complaints which—
a
may be referred to the scheme; and
The scheme operator’s rules
C20C30C43C105C7314
1
The scheme operator must make rules, to be known as “scheme rules”, which are to set out the procedure for reference of complaints and for their investigation, consideration and determination by an ombudsman.
2
Scheme rules may, among other things—
a
specify matters which are to be taken into account in determining whether an act or omission was fair and reasonable;
b
provide that a complaint may, in specified circumstances, be dismissed without consideration of its merits;
c
provide for the reference of a complaint, in specified circumstances and with the consent of the complainant, to another body with a view to its being determined by that body instead of by an ombudsman;
d
make provision as to the evidence which may be required or admitted, the extent to which it should be oral or written and the consequences of a person’s failure to produce any information or document which he has been required (under section 231 or otherwise) to produce;
e
allow an ombudsman to fix time limits for any aspect of the proceedings and to extend a time limit;
f
provide for certain things in relation to the reference, investigation or consideration (but not determination) of a complaint to be done by a member of the scheme operator’s staff instead of by an ombudsman;
F218fa
allow the correction of any clerical mistake in the written statement of a determination made by an ombudsman;
fb
provide that any irregularity arising from a failure to comply with any provisions of the scheme rules does not of itself render a determination void;
g
make different provision in relation to different kinds of complaint.
3
The circumstances specified under sub-paragraph (2)(b) may include the following—
a
the ombudsman considers the complaint frivolous or vexatious;
b
legal proceedings have been brought concerning the subject-matter of the complaint and the ombudsman considers that the complaint is best dealt with in those proceedings; or
c
the ombudsman is satisfied that there are other compelling reasons why it is inappropriate for the complaint to be dealt with under the ombudsman scheme.
F3333A
The scheme operator must exercise the function of making scheme rules in a way which is consistent with enabling the scheme operator to qualify as an ADR entity and to meet the quality requirements in Chapter II of the ADR Directive.
C21C284
If the scheme operator proposes to make any scheme rules it must publish a draft of the proposed rules in the way appearing to it to be best calculated to bring them to the attention of persons appearing to it to be likely to be affected.
C21C285
The draft must be accompanied by a statement that representations about the proposals may be made to the scheme operator within a time specified in the statement.
C286
Before making the proposed scheme rules, the scheme operator must have regard to any representations made to it under sub-paragraph (5).
7
The consent of the F205FCA is required before any scheme rules may be made.
Fees
C22C3115
1
Scheme rules may require a respondent to pay to the scheme operator such fees as may be specified in the rules.
2
The rules may, among other things—
a
provide for the scheme operator to reduce or waive a fee in a particular case;
b
set different fees for different stages of the proceedings on a complaint;
c
provide for fees to be refunded in specified circumstances;
d
make different provision for different kinds of complaint.
Enforcement of money awards
C2316
A money award, including interest, which has been registered in accordance with scheme rules may—
a
b
be enforced in Northern Ireland as a money judgment under the M18Judgments Enforcement (Northern Ireland) Order 1981;
c
be enforced in Scotland by the sheriff, as if it were a judgment or order of the sheriff and whether or not the sheriff could himself have granted such judgment or order.
F150Part 3AThe consumer credit jurisdiction
Sch. 17 Pt. 3A omitted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 (S.I. 2013/1881), arts. 1(2)(6), 10(21)(f)
F150Introduction
F15016A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F150Procedure for complaints etc.
F15016B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F150Fees
F15016C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F150Enforcement of money awards
F15016D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F150Procedure for consumer credit rules
F15016E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F150Verification of consumer credit rules
F15016F
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F150Consultation
F15016G
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part IV The Voluntary Jurisdiction
Introduction
17
This Part of this Schedule applies only in relation to the voluntary jurisdiction.
Terms of reference to the scheme
18
1
Complaints are to be dealt with and determined under the voluntary jurisdiction on standard terms fixed by the scheme operator with the approval of the F152FCA.
2
Different standard terms may be fixed with respect to different matters or in relation to different cases.
3
The standard terms may, in particular—
a
require the making of payments to the scheme operator by participants in the scheme of such amounts, and at such times, as may be determined by the scheme operator;
b
make provision as to the award of costs on the determination of a complaint.
4
The scheme operator may not vary any of the standard terms or add or remove terms without the approval of the F152FCA.
5
The standard terms may include provision to the effect that (unless acting in bad faith) none of the following is to be liable in damages for anything done or omitted in the discharge or purported discharge of functions in connection with the voluntary jurisdiction—
a
the scheme operator;
b
any member of its governing body;
c
any member of its staff;
d
any person acting as an ombudsman for the purposes of the scheme.
Delegation by and to other schemes
19
1
The scheme operator may make arrangements with a relevant body—
a
for the exercise by that body of any part of the voluntary jurisdiction of the ombudsman scheme on behalf of the scheme; or
b
for the exercise by the scheme of any function of that body as if it were part of the voluntary jurisdiction of the scheme.
2
A “relevant body” is one which the scheme operator is satisfied—
a
is responsible for the operation of a broadly comparable scheme (whether or not established by statute) for the resolution of disputes; and
b
in the case of arrangements under sub-paragraph (1)(a), will exercise the jurisdiction in question in a way compatible with the requirements imposed by or under this Act in relation to complaints of the kind concerned.
3
Such arrangements require the approval of the F181FCA.
Voluntary jurisdiction rules: procedure
20
1
If the scheme operator makes voluntary jurisdiction rules, it must give a copy to the F384FCA without delay.
2
If the scheme operator revokes any such rules, it must give written notice to the F384FCA without delay.
3
The power to make voluntary jurisdiction rules is exercisable in writing.
4
Immediately after making voluntary jurisdiction rules, the scheme operator must arrange for them to be printed and made available to the public.
5
The scheme operator may charge a reasonable fee for providing a person with a copy of any voluntary jurisdiction rules.
Verification of the rules
21
1
The production of a printed copy of voluntary jurisdiction rules purporting to be made by the scheme operator—
a
on which is endorsed a certificate signed by a member of the scheme operator’s staff authorised by the scheme operator for that purpose, and
b
which contains the required statements,
is evidence (or in Scotland sufficient evidence) of the facts stated in the certificate.
2
The required statements are—
a
that the rules were made by the scheme operator;
b
that the copy is a true copy of the rules; and
c
that on a specified date the rules were made available to the public in accordance with paragraph 20(4).
3
A certificate purporting to be signed as mentioned in sub-paragraph (1) is to be taken to have been duly signed unless the contrary is shown.
Consultation
22
C241
If the scheme operator proposes to make voluntary jurisdiction rules, it must publish a draft of the proposed rules in the way appearing to it to be best calculated to bring them to the attention of the public.
C242
The draft must be accompanied by—
a
an explanation of the proposed rules; and
b
a statement that representations about the proposals may be made to the scheme operator within a specified time.
3
Before making any voluntary jurisdiction rules, the scheme operator must have regard to any representations made to it in accordance with sub-paragraph (2)(b).
4
If voluntary jurisdiction rules made by the scheme operator differ from the draft published under sub-paragraph (1) in a way which the scheme operator considers significant, the scheme operator must publish a statement of the difference.
F349SCHEDULE 17A Further provision in relation to exercise of Part 18 functions by Bank of England
Sch. 17A inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), ss. 29(2), 122(3), Sch. 7 (with Sch. 20); S.I. 2013/113, art. 2(1)(b)(c), Sch. Pts. 2, 3; S.I. 2013/423, art. 3, Sch.
Part 1Co-operation between appropriate regulators
Memorandum of understanding between appropriate regulators and PRA
1
1
The appropriate regulators must prepare and maintain a memorandum describing how they intend to work together in exercising their functions in relation to persons who are recognised bodies.
2
The memorandum must in particular make provision about—
a
the need for each party when exercising a function in relation to any person (“A”) who is a recognised body, or any member of A's group, to have regard to the exercise (or possible exercise) of any function by the other party in relation to A or any member of A's group;
b
the role of each party in cases where they are both exercising functions in relation to the same persons;
c
the obtaining and disclosure of information;
d
the co-ordination by the parties of the exercise of their powers to appoint competent persons under Part 11 (information gathering and investigations) to conduct investigations on their behalf.
3
In this paragraph any reference to a function is to any function whether conferred by or under any provision of this Part of this Act or any other provision of this Act or otherwise.
2
1
The F518FCA and the PRA must prepare and maintain a memorandum describing how they intend to work together in exercising their functions in relation to persons who are recognised bodies and who—
a
are PRA-authorised persons; or
b
are members of a group of which a member is a PRA-authorised person.
2
The memorandum must in particular make provision about—
a
the need for each party when exercising a function in relation to any person (“A”) who is a recognised body, or any member of A's group, to have regard to the exercise (or possible exercise) of any function by the other party in relation to A or any member of A's group;
b
the role of each party in cases where they are both exercising functions in relation to the same persons;
c
the obtaining and disclosure of information;
d
the co-ordination by the parties of the exercise of their powers to appoint competent persons under Part 11 (information gathering and investigations) to conduct investigations on their behalf.
3
In this paragraph any reference to a function is to any function whether conferred by or under any provision of this Part of this Act or any other provision of this Act or otherwise.
3
The parties to a memorandum under paragraph 1 or 2 must review the memorandum at least once in each calendar year.
4
The parties to a memorandum under paragraph 1 or 2 must give the Treasury a copy of the memorandum and any revised memorandum.
5
The Treasury must lay before Parliament a copy of any document received by them under paragraph 4.
6
The parties to a memorandum under paragraph 1 or 2 must ensure that the memorandum as currently in force is published in the way appearing to them to be best calculated to bring it to the attention of the public.
Notification by FCA of action in relation to recognised clearing houses
7
The FCA must notify the Bank of England of any direction given by it under section 128 to a recognised clearing house F516or a recognised CSD (market abuse: suspension of investigations).
8
The FCA must notify the Bank of England of any requirement imposed by it under section 313A on a recognised clearing house (power to require suspension or removal of financial instruments from trading).
Part 2Application of provisions of this Act in relation to Bank of England
Introduction
9
1
The provisions of this Act mentioned in this Part of this Schedule are to apply in relation to the Bank of England in accordance with the provision made by this Part of this Schedule.
2
In any case where sub-paragraph (1) applies—
a
any reference in this Act to the FCA or the PRA which is contained in, or relates to, any of those provisions (however expressed) is to be read as a reference to the Bank; and
b
this Act has effect with any other necessary modifications.
Rules
10
1
The following provisions of Part 9A of this Act are to apply in relation to rules made by the Bank under any provision made by or under this Act—
a
section 137T (general supplementary powers);
b
sections 138A and 138B (modification or waiver of rules), but with the omission of subsection (4)(b) of section 138A and subsection (4) of section 138B;
c
section 138C (evidential provisions);
d
section 138D (actions for damages), but with the omission of subsection (2);
e
section 138E (limits on effect of contravening rules);
f
section 138F (notification of rules);
g
section 138G (rule-making instruments);
h
section 138H (verification of rules);
i
section 138J (consultation), but with the omission of subsections (1)(a), (2)(c) and (5)(b); and
j
section 138L (consultation: general exemptions), but with the omission of F505subsection (1).
2
Any reference in any of those provisions to an authorised person is to be read as a reference to a recognised clearing house F517, an EEA CSD or a recognised CSD.
3
Section 138J(2)(d) has effect in relation to rules proposed to be made by the Bank as if the reference to the compatibility of the proposed rules with the provisions mentioned in section 138J(2)(d) were a reference to their compatibility with the Bank's financial stability objective.
4
Section 138L(2) has effect as if for paragraphs (a) and (b) there were substituted “be prejudicial to financial stability”.
Information gathering and investigations
11
1
The powers conferred by section 165(1) and (3) (power to require information) are exercisable by the Bank or (as the case may be) its officers to impose requirements on—
a
a recognised clearing house;
F511aa
a recognised CSD;
ab
an EEA CSD, in relation to any services referred to in the Annex to the CSD regulation which the EEA CSD provides in the United Kingdom, in the circumstances described in Article 24(4) or (5) of the CSD regulation;
b
a person who for the purposes of section 165 is connected with a recognised clearing house F524, a recognised CSD or an EEA CSD (as the case may be).
2
The information or documents that the Bank may require to be provided or produced are limited to—
a
information or documents reasonably required in connection with the exercise by the Bank of functions conferred on it by or under this Part of this Act;
b
information or documents reasonably required in connection with the exercise by the Bank of any of its other functions in pursuance of its financial stability objective; F523...
c
information or documents which the Bank reasonably considers may enable or assist the FCA in discharging functions conferred on the FCA by or under this Act F570; and
d
information or documents reasonably required in connection with the exercise by the Bank of its functions under the EMIR regulation F552, F512Article 4 or 15 of the SFT regulation, any directly applicable regulation made under those articles, the CSD regulation or any directly applicable regulation made under the CSD regulation.
3
In consequence of the provision made by sub-paragraph (2), section 165(4) is not to apply in relation to section 165(1) and (3) as applied by this paragraph.
12
The power conferred by section 166 (reports by skilled person) is exercisable by the Bank as if references in that section to an authorised person were to a recognised clearing house F566, a recognised CSD or an EEA CSD.
13
1
The powers conferred by section 167 (appointment of persons to carry out general investigations) are exercisable by the Bank as if references in that section to an authorised person were to any recognised clearing house other than an overseas clearing house F510or to any recognised CSD.
F5411A
In relation to an EEA CSD, those powers are exercisable only in the circumstances described in Article 24(4) or (5) of the CSD regulation and in relation to any services referred to in the Annex to the CSD regulation which the EEA CSD provides in the United Kingdom.
2
In addition to the powers conferred by section 171, a person conducting an investigation under section 167 as a result of this paragraph is to have the powers conferred by sections 172 and 173 (and for this purpose the references in those sections to an investigator are to be read accordingly).
14
1
The power conferred by section 168(5) (appointment of persons to carry out investigations in particular cases) is exercisable by the Bank.
2
That power is exercisable if it appears to the Bank that there are circumstances suggesting that—
a
a clearing house F528or a central securities depository may be guilty of an offence under section 398(1) or an offence under prescribed regulations relating to money laundering;
b
a clearing house F528or a central securities depository may have contravened a rule made by the Bank under this Part of this Act;
c
a clearing house F528or a central securities depository may have contravened the recognition requirements;
d
a clearing house F528or a central securities depository may have contravened any qualifying EU provision that is specified, or of a description specified, for the purposes of this sub-paragraph by the Treasury by order;
e
a clearing house F528or a central securities depository may have breached the general prohibition.
F560f
in the circumstances described in Article 24(4) or (5) of the CSD regulation, an EEA CSD providing any services referred to in the Annex to the CSD regulation in the United Kingdom may have contravened the CSD regulation.
3
In addition to the powers conferred by section 171, a person conducting an investigation under section 168(5) as a result of this paragraph is to have the powers conferred by sections 172 and 173 (and for this purpose the references in those sections to an investigator are to be read accordingly).
15
An overseas regulator may, in accordance with section 169, request the Bank to exercise the power conferred by section 165 (as applied by paragraph 11 of this Schedule).
16
The power to give information under section 176(1) (entry of premises under warrant) is exercisable by the Bank, or an investigator appointed by the Bank, as if the reference to the second set of conditions were omitted.
Powers in relation to parent undertakings
17
1
The following provisions of Part 12A of this Act are to apply in relation to the Bank—
a
section 192C (power to direct qualifying parent undertaking);
b
section 192D (requirements that may be imposed);
c
section 192E (direction: procedure);
d
section 192G (references to Tribunal);
e
section 192H (statement of policy);
f
section 192I (statement of policy: procedure);
g
section 192J (rules requiring provision of information);
h
sections 192K to 192N (enforcement).
2
For the purposes of those provisions section 192B (meaning of “qualifying parent undertaking”) is to apply as if the reference in subsection (1) to a qualifying authorised person or recognised UK investment exchange were a reference to a recognised clearing house other than an overseas clearing house F522or to a recognised CSD.
3
Section 192C has effect as if—
a
the general condition in subsection (2) were that the Bank considers that it is desirable to give the direction for the purpose of the effective regulation of one or more recognised clearing houses F557or recognised CSDs in the group of the qualifying parent undertaking,
b
subsections (3) and (4) were omitted, and
c
the reference in subsection (5)(a) to authorised persons or recognised investment exchanges were a reference to recognised clearing houses F550or recognised CSDs.
4
Section 192E has effect as if the reference in subsection (1) to an authorised person or recognised investment exchange were a reference to a recognised clearing house F561or a recognised CSD.
5
Section 192I has effect as if F504subsection (1)(a) required consultation with the FCA.
6
Before the Bank gives a notice under section 192E(1) or (8)(b)—
a
if the notice relates to the parent undertaking of an authorised person or recognised investment exchange, the Bank must consult the FCA, and
F548b
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Auditors
18
1
Section 342 (information given by auditor to a regulator) applies in relation to a relevant auditor as if—
a
the references in that section to a recognised investment exchange were to a recognised clearing house F537or a recognised CSD,
b
in the case of an auditor of a recognised clearing house F537or a recognised CSD which is also an authorised person or recognised investment exchange, the references to a regulator included the Bank, and
c
in the case of an auditor of a recognised clearing house F537or a recognised CSD not falling within paragraph (b), the references to a regulator were to the Bank.
2
19
1
Section 343 (information given by auditor: person with close links) applies in relation to a relevant auditor as if—
a
the references in that section to a recognised investment exchange were to a recognised clearing house F555or a recognised CSD,
b
in the case of an auditor of a recognised clearing house F555or a recognised CSD which is an authorised person or which is a recognised investment exchange, the references to a regulator included the Bank, and
c
in the case of an auditor of a recognised clearing house F555or a recognised CSD not falling within paragraph (b), the references to a regulator were to the Bank.
2
A “relevant auditor” is a person who—
a
b
is, or has been, an auditor of a person who has close links with the recognised clearing house F545or the recognised CSD.
20
Section 344 (duty of auditor resigning to give notice) applies to an auditor to whom section 342 applies (whether by virtue of paragraph 18 or otherwise) as if—
a
the references in that section to a recognised investment exchange were to a recognised clearing house F551or a recognised CSD,
b
in the case of an auditor of a recognised clearing house F551or a recognised CSD which is neither an authorised person nor a recognised investment exchange, the reference in the definition of “the appropriate regulator” to the FCA were a reference to the Bank,
c
in the case of an auditor of a recognised clearing house F551or a recognised CSD which is a PRA-authorised person, the reference in the definition of “the appropriate regulator” to the PRA were a reference to the PRA and the Bank, and
d
in the case, not falling within paragraph (c), of an auditor of a recognised clearing house F551or a recognised CSD which is an authorised person or which is a recognised investment exchange, the reference in the definition of “the appropriate regulator” to the FCA were a reference to the FCA and the Bank.
21
Sections 345A to 345E apply to auditors to whom section 342 applies only by virtue of paragraph 18 as if—
a
the references in those sections to an auditor or actuary to whom section 342 applies were to an auditor to whom section 342 applies by virtue of paragraph 18,
b
the references in those sections to a PRA-authorised person were to a recognised clearing house F536or a recognised CSD,
c
in a case where the Bank disqualifies a person from being an auditor of a recognised clearing house F536or a recognised CSD that is also a recognised investment exchange, section 345A(5)(a) required the Bank to notify the FCA, and
d
the references in sections 345D and 345E to a regulator included the Bank.
Public record and disclosure of information
22
Section 347 (record of authorised persons, recognised investment exchanges, etc), so far as it relates to recognised investment exchanges, applies in relation to the Bank as if references in that section to a recognised investment exchange were to a recognised clearing house F500or a recognised CSD.
23
F5641
Sections 348 to 350 and 353 (disclosure of information) apply in relation to information received by the Bank for the purposes of, or in the discharge of, any of its functions relating to recognised clearing houses F509or recognised CSDsF498or any of its functions under the EMIR regulationF547, the CSD regulation or any directly applicable regulation made under the CSD regulation.
F5132
Paragraph 9(2)(a) does not apply to the reference to the PRA in section 348(8).
Insolvency
24
1
The following provisions of Part 24 of this Act are to apply in relation to the Bank—
a
section 356 (powers to participate in proceedings: company voluntary arrangements);
b
section 358 (powers to participate in proceedings: trust deeds for creditors in Scotland);
c
section 359 (administration order);
d
section 362 (powers to participate in administration proceedings);
e
section 362A (consent to appointment of administrator);
f
section 363 (powers to participate in proceedings: receivership);
g
section 365 (powers to participate in proceedings: voluntary winding-up);
h
section 367 (winding-up petitions);
i
section 371 (powers to participate in proceedings: winding-up).
2
Those provisions are to apply as if any reference to an authorised person or recognised investment exchange were a reference to a recognised clearing house F521or a recognised CSD.
25
F5331
In the case of any regulated activity which is carried on for the purposes of, or in connection with, the provision of clearing services, the reference to the FCA in section 375(1) is to be read as including a reference to the Bank.
F5062
In the case of any regulated activity which is carried on for the purposes of, or in connection with, the provision of any service mentioned in section 285(3D), the reference to the FCA in section 375(1) is to be read as including a reference to the Bank.
Injunctions and restitution
26
1
The power to make an application under section 380(1), (2) or (3) (injunctions) is exercisable by the Bank.
2
For the purposes of the application, any reference in that section to a relevant requirement is to—
a
a requirement that is imposed by or under any provision of this Part of this Act that relates to a recognised clearing house F507, a recognised CSD or an EEA CSD (and for this purpose a prohibition imposed under section 312FA(2)(c) (prohibition on person holding office etc. with a central securities depository) is treated as a requirement);
b
a requirement that is imposed under any other provision of this Act by the Bank;
c
a requirement that is imposed by any qualifying EU provision that is specified, or of a description specified, for the purposes of this sub-paragraph by the Treasury by order; or
d
a requirement that is imposed by this Act and whose contravention constitutes an offence that the Bank has power to prosecute under this Act (see section 401, as applied by paragraph 31).
27
1
The power to make an application under section 382(1) (restitution order) is exercisable by the Bank.
2
For the purposes of the application, any reference in that section to a relevant requirement is to be read in accordance with paragraph 26(2) of this Schedule F534(subject to sub-paragraph (3)).
F5303
The power to make an application under section 382(1) is not exercisable by the Bank in respect of the contravention of a requirement imposed by or under Article 4 or 15 of the SFT regulation.
28
1
The power conferred by section 384(5) (power of FCA to require restitution order) is exercisable by the Bank.
2
That power is exercisable if the Bank is satisfied that a recognised clearing house F540, a recognised CSD or an EEA CSD has contravened a relevant requirement, or been knowingly concerned in the contravention of a relevant requirement, and—
a
that profits have accrued to the recognised clearing house F502, the recognised CSD or the EEA CSD as a result of the contravention; or
b
that one or more persons have suffered loss or been otherwise adversely affected as a result of the contravention.
3
For the purposes of that power, “relevant requirement” is to be read in accordance with paragraph 26(2) of this Schedule F568(subject to sub-paragraph (3A)).
F5543A
The power conferred by section 384(5) is not exercisable by the Bank in respect of the contravention of a requirement imposed by or under Article 4 or 15 of the SFT regulation.
4
Where this paragraph applies, section 384(5) and (6) are to have effect as if—
a
any reference to the person concerned were a reference to the recognised clearing house F553, the recognised CSD or the EEA CSD; and
b
any reference to subsection (1) were a reference to sub-paragraph (2) of this paragraph.
Notices
29
The provisions of Part 26 of this Act (notices) apply in relation to a warning or decision notice given by the Bank under section 192L, 312G or 312H as they apply in relation to such a notice given by the FCA under that section.
Offences
30
Section 398 (misleading the FCA: residual cases) applies to information given to the Bank in purported compliance with—
a
a requirement that is imposed by or under any provision of Part 18 of this Act that relates to a recognised clearing house F538, a recognised CSD or an EEA CSD;
b
a requirement that is imposed under any other provision of this Act by the Bank; or
c
a requirement that is imposed by any qualifying EU provision specified, or of a description specified, for the purposes of this paragraph by the Treasury by order.
31
1
Section 401 (proceedings for an offence) applies to the Bank as if for the purposes of subsections (2)(a) and (3)(a) of that section the Bank were an appropriate regulator in respect of each of the following offences—
a
an offence under section 177(3) where the investigation is being, or is likely to be, conducted on behalf of the Bank;
b
an offence under section 177(4) where the requirement is imposed by the Bank;
c
an offence under section 177(6) where the warrant is issued as a result of information on oath given by the Bank or a person appointed by it to conduct an investigation on its behalf;
d
an offence under section 398(1) where the information was given to the Bank.
2
Section 401(3B) has effect subject to the provision made by this paragraph (so that the FCA is not the appropriate regulator for the purposes of subsections (2)(a) and (3)(a) in respect of the above offences).
Records
32
Paragraph 17 of Schedule 1ZB (records) applies in relation to the recording of decisions made by the Bank in the exercise of its functions relating to recognised clearing houses F565, recognised CSDs and EEA CSDs.
Annual report
33
Paragraph 19 of Schedule 1ZB (annual report by PRA) applies in relation to the Bank, but—
a
as if for paragraphs (a) to (f) of sub-paragraph (1) there were substituted—
a
the discharge of its functions relating to recognised clearing houses F546, recognised CSDs and EEA CSDs,
b
the extent to which, in its opinion, in discharging those functions its financial stability objective has been met,”, and
b
as if sub-paragraph (3) were omitted.
Part 3Winding up, administration or insolvency of F267recognised clearing houses
Words in Sch. 17A Pt. III heading substituted (1.4.2013) by The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) Regulations 2013 (S.I. 2013/504), regs. 1(2), 3(16)(e) (with regs. 52-58)
Notice to Bank of England of preliminary steps
34
1
2
3
4
5
Condition 1 is that the Bank of England has been notified—
a
by the applicant for an administration order, that the application has been made,
b
by the petitioner for a winding up order, that the petition has been presented,
c
d
by the person proposing to appoint an administrator, of the proposed appointment.
6
Condition 2 is that a copy of the notice complying with Condition 1 has been filed (in Scotland, lodged) with the court (and made available for public inspection by the court).
7
Condition 3 is that—
a
the period of 2 weeks, beginning with the day on which the notice is received, has ended, or
b
the Bank of England has informed the person who gave the notice that—
i
it has no objection to the order, resolution or appointment being made, and
ii
it does not intend to exercise a stabilisation power under Part 1 of the Banking Act 2009.
8
9
In this paragraph “the court” means—
a
in England and Wales, the High Court,
b
in Scotland, the Court of Session, and
c
in Northern Ireland, the High Court.
Power to give directions to insolvency practitioner
35
1
This paragraph applies where a person has been appointed to act as an insolvency practitioner (within the meaning of section 388 of the Insolvency Act 1986 or Article 3 of the Insolvency (Northern Ireland) Order 1989) in relation to a company which is, or has been, a F514recognised clearing houseF532or a recognised CSD.
2
The Bank of England may give directions to the person if satisfied that it is desirable to give the directions, having regard to the public interest in—
a
protecting and enhancing the stability of the UK financial system,
b
protecting and enhancing public confidence in the stability of the UK financial system, F496...
c
F558d
in the case of a company which is, or has been, a recognised CSD, maintaining the continuity of the services referred to in section 285(3D).
3
Before giving directions the Bank of England must consult—
a
the Treasury, F573and
F544b
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
c
the FCA.
4
Directions are enforceable, on an application by the Bank of England, by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.
5
A person is not liable for damages in respect of action or inaction in accordance with directions.
6
The immunity does not extend to action or inaction—
a
in bad faith, or
b
in contravention of section 6(1) of the Human Rights Act 1998.
Part 4 Fees
36
1
The Bank of England may, in connection with the discharge of any of its qualifying functions, require recognised clearing housesF501, EEA central counterparties F499, third country central counterparties, recognised CSDs, EEA CSDs or settlement internalisers (as defined in point (11) of Article 2(1) of the CSD regulation) to pay fees to the Bank.
2
The “qualifying functions” of the Bank are—
a
its functions under or as a result of this Part of this Act, F569...
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 orderF527; and
c
its functions under or as a result of Part 7 of the Companies Act 1989.
3
The power of the Bank to set fees includes power to set fees for the purpose of meeting expenses incurred by it or the FCA—
a
in preparation for the exercise of functions by the Bank under this Part of this Act, F526...
b
for the purpose of facilitating the exercise by the Bank of those functions or otherwise in connection with their exercise by it F515or
F519c
in preparation for the exercise of functions by the Bank under Article 9(1) of the CSD regulation.
4
It is irrelevant when the expenses were incurred (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).
37
Any fee which is owed to the Bank under paragraph 36 may be recovered as a debt due to the Bank.
SCHEDULE 18 Mutuals
Part I Friendly Societies
The Friendly Societies Act 1974 (c.46)
1
Omit sections 4 (provision for separate registration areas) and 10 (societies registered in one registration area carrying on business in another).
2
In section 7 (societies which may be registered), in subsection (2)(b), for “in the central registration area or in Scotland” substitute “
in the United Kingdom, the Channel Islands or the Isle of Man
”
.
3
In section 11 (additional registration requirements for societies with branches), omit “and where any such society has branches in more than one registration area, section 10 above shall apply to that society”.
4
In section 99(4) (punishment of fraud etc and recovery of property misapplied), omit “in the central registration area”.
The Friendly Societies Act 1992 (c.40)
5
Omit sections 31 to 36A (authorisation of friendly societies business).
6
In section 37 (restrictions on combinations of business), omit subsections (1), (1A) and (7A) to (9).
7
Omit sections 38 to 43 (restrictions on business of certain authorised societies).
8
Omit sections 44 to 50 (regulation of friendly societies business).
Part II Friendly Societies: Subsidiaries and Controlled Bodies
Interpretation
9
In this Part of this Schedule—
“the 1992 Act” means the M19Friendly Societies Act 1992; and
“section 13” means section 13 of that Act.
Qualifying bodies
10
1
Subsections (2) to (5) of section 13 (incorporated friendly societies allowed to form or acquire control or joint control only of qualifying bodies) cease to have effect.
2
As a result, omit—
a
subsections (8) and (11) of that section, and
b
Schedule 7 to the 1992 Act (activities which may be carried on by a subsidiary of, or body jointly controlled by, an incorporated friendly society).
Bodies controlled by societies
11
In section 13(9) (defined terms), after paragraph (a) insert—
aa
an incorporated friendly society also has control of a body corporate if the body corporate is itself a body controlled in one of the ways mentioned in paragraph (a)(i), (ii) or (iii) by a body corporate of which the society has control;
Joint control by societies
12
In section 13(9), after paragraph (c) insert—
cc
an incorporated friendly society also has joint control of a body corporate if—
i
a subsidiary of the society has joint control of the body corporate in a way mentioned in paragraph (c)(i), (ii) or (iii);
ii
a body corporate of which the society has joint control has joint control of the body corporate in such a way; or
iii
the body corporate is controlled in a way mentioned in paragraph (a)(i), (ii) or (iii) by a body corporate of which the society has joint control;
Acquisition of joint control
13
In section 13(9), in the words following paragraph (d), after “paragraph (c)” insert “
or (cc)
”
.
Amendment of Schedule 8 to the 1992 Act
14
1
Schedule 8 to the 1992 Act (provisions supplementing section 13) is amended as follows.
2
Omit paragraph 3(2).
3
After paragraph 3 insert—
3A
1
A body is to be treated for the purposes of section 13(9) as having the right to appoint to a directorship if—
a
a person’s appointment to the directorship follows necessarily from his appointment as an officer of that body; or
b
the directorship is held by the body itself.
2
A body (“B”) and some other person (“P”) together are to be treated, for the purposes of section 13(9), as having the right to appoint to a directorship if—
a
P is a body corporate which has directors and a person’s appointment to the directorship follows necessarily from his appointment both as an officer of B and a director of P;
b
P is a body corporate which does not have directors and a person’s appointment to the directorship follows necessarily from his appointment both as an officer of B and as a member of P’s managing body; or
c
the directorship is held jointly by B and P.
3
For the purposes of section 13(9), a right to appoint (or remove) which is exercisable only with the consent or agreement of another person must be left out of account unless no other person has a right to appoint (or remove) in relation to that directorship.
4
Nothing in this paragraph is to be read as restricting the effect of section 13(9).
4
In paragraph 9 (exercise of certain rights under instruction by, or in the interests of, incorporated friendly society) insert at the end “
or in the interests of any body over which the society has joint control
”
.
Consequential amendments
15
1
Section 52 of the 1992 Act is amended as follows.
2
In subsection (2), omit paragraph (d).
3
In subsection (3), for “(4) below” substitute “
(2)
”
.
4
For subsection (4) substitute—
4
A court may not make an order under subsection (5) unless it is satisfied that one or more of the conditions mentioned in subsection (2) are satisfied.
5
In subsection (5), omit the words from “or, where” to the end.
References in other enactments
16
References in any provision of, or made under, any enactment to subsidiaries of, or bodies jointly controlled by, an incorporated friendly society are to be read as including references to bodies which are such subsidiaries or bodies as a result of any provision of this Part of this Schedule.
Part III Building Societies
The Building Societies Act 1986 (c.53)
17
Omit section 9 (initial authorisation to raise funds and borrow money).
18
Omit Schedule 3 (supplementary provisions about authorisation).
F298Part IV Industrial and Provident Societies
Sch. 18 Pt. IV repealed (1.8.2014) by Co-operative and Community Benefit Societies Act 2014 (c. 14), s. 154, Sch. 7 (with Sch. 5)
F298 The Industrial and Provident Societies Act 1965 (c.12)
F29819
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F29820
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part V Credit Unions
The Credit Unions Act 1979 (c.34)
21
In section 6 (minimum and maximum number of members), omit subsections (2) to (6).
22
In section 11 (loans), omit subsections (2) and (6).
23
Omit sections 11B (loans approved by credit unions), 11C (grant of certificates of approval) and 11D (withdrawal of certificates of approval).
24
In section 12, omit subsections (4) and (5).
25
In section 14, omit subsections (2), (3), (5) and (6).
26
In section 28 (offences), omit subsection (2).
F22SCHEDULE 19
Sch. 19 repealed (20.6.2003) by Enterprise Act 2002 (c. 40), ss. 247(k), 278(2), 279, Sch. 26 (with s. 237); S.I. 2003/1397, art. 2(1), Sch.
Part I Persons and functions for the purposes of section 351
1
The Table set out after this paragraph has effect for the purposes of section 351(3)(b).
Table
Person | Function |
|---|---|
1. The Commission. | Any function of the Commission under Community law relating to competition. |
2. The Comptroller and Auditor General. | Any function of his. |
3. A Minister of the Crown. | Any function of his under a specified enactment. |
4. Director General of Telecommunications. | Any function of his under a specified enactment. |
5. Director General of Gas Supply | Any function of his under a specified enactment |
6. The Director General of Gas for Northern Ireland. | Any function of his under a specified enactment. |
7. The Director General of Electricity Supply. | Any function of his under a specified enactment. |
8. The Director General of Electricity Supply for Northern Ireland. | Any function of his under a specified enactment. |
9. The Director General of Water Services. | Any function of his under a specified enactment. |
10. The Civil Aviation Authority. | Any function of that authority under a specified enactment. |
11. The Rail Regulator. | Any function of his under a specified enactment. |
12. The Director General of Fair Trading. | Any function of his under a specified enactment. |
13. The Competition Commission. | Any function of the Competition Commission under a specified enactment. |
14. The Authority. | Any function of the Authority under a specified enactment. |
15. A person of a description specified in an order made by the Treasury. | Any function of his which is specified in the order. |
Part II The enactments
1
The M20Fair Trading Act 1973
2
The M21Consumer Credit Act 1974
3
The M22 Estate Agents Act 1979
4
The M23 Competition Act 1980
5
The M24 Telecommunications Act 1984
6
The M25 Airports Act 1986
7
The M26 Gas Act 1986
8
The M27 Control of Misleading Advertisements Regulations 1988
9
The M28 Electricity Act 1989
10
The M29 Broadcasting Act 1990
11
The M30 Water Industry Act 1991
12
The M31 Electricity (Northern Ireland) Order 1992
13
The M32 Railways Act 1993
14
Part IV of the M33 Airports (Northern Ireland) Order 1994
15
The M34 Gas (Northern Ireland) Order 1996
16
The M35EC Competition (Articles 88 and 89) Enforcement Regulations 1996
17
The M36 Unfair Terms in Consumer Contracts Regulations 1999
18
This Act.
I2519
An enactment specified for the purposes of this paragraph in an order made by the Treasury.
SCHEDULE 20 Minor and Consequential Amendments
The House of Commons Disqualification Act 1975 (c. 24)
I261
In Part III of Schedule 1 to the House of Commons Disqualification Act 1975 (disqualifying offices)—
a
omit—
Any member of the Financial Services Tribunal in receipt of remuneration
and
b
F101. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Northern Ireland Assembly Disqualification Act 1975 (c. 25)
I272
In Part III of Schedule 1 to the Northern Ireland Assembly Disqualification Act 1975 (disqualifying offices)—
a
omit—
Any member of the Financial Services Tribunal in receipt of remuneration
and
b
F102. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Civil Jurisdiction and Judgments Act 1982 (c. 27)
3
In paragraph 10 of Schedule 5 to the Civil Jurisdiction and Judgments Act 1982 (proceedings excluded from the operation of Schedule 4 to that Act), for “section 188 of the Financial Services Act 1986” substitute “
section 415 of the Financial Services and Markets Act 2000
”
.
The Income and Corporation Taxes Act 1988 (c. 1)
4
1
The Income and Corporation Taxes Act 1988 is amended as follows.
2
In section 76 (expenses of management: insurance companies), in subsection (8), omit the definitions of—
“the 1986 Act”;
“authorised person”;
“investment business”;
“investor”;
“investor protection scheme”;
“prescribed”; and
“recognised self-regulating organisation”.
3
F98. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
F80. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
F93. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
F81. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Finance Act 1991 (c. 31)
5
1
The Finance Act 1991 is amended as follows.
2
In section 47 (investor protection schemes), omit subsections (1), (2) and (4).
3
In section 116 (investment exchanges and clearing houses: stamp duty), in subsection (4)(b), for “Financial Services Act 1986” substitute “
Financial Services and Markets Act 2000
”
.
The Tribunals and Inquiries Act 1992 (c. 53)
I286
F103. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Judicial Pensions and Retirement Act 1993 (c. 8)
I297
1
The Judicial Pensions and Retirement Act 1993 is amended as follows.
2
F104. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
In Schedule 5 (relevant offices in relation to retirement provisions)—
a
omit the entry—
Member of the Financial Services Tribunal appointed by the Lord Chancellor
and
b
F106. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SCHEDULE 21 Transitional Provisions and Savings
Self-regulating organisations
1
1
No new application under section 9 of the 1986 Act (application for recognition) may be entertained.
2
No outstanding application made under that section before the passing of this Act may continue to be entertained.
3
After the date which is the designated date for a recognised self-regulating organisation—
a
the recognition order for that organisation may not be revoked under section 11 of the 1986 Act (revocation of recognition);
b
no application may be made to the court under section 12 of the 1986 Act (compliance orders) with respect to that organisation.
4
The powers conferred by section 13 of the 1986 Act (alteration of rules for protection of investors) may not be exercised.
5
“Designated date” means such date as the Treasury may by order designate.
6
Sub-paragraph (3) does not apply to a recognised self-regulating organisation in respect of which a notice of intention to revoke its recognition order was given under section 11(3) of the 1986 Act before the passing of this Act if that notice has not been withdrawn.
7
Expenditure incurred by the Authority in connection with the winding up of any body which was, immediately before the passing of this Act, a recognised self-regulating organisation is to be treated as having been incurred in connection with the discharge by the Authority of functions under this Act.
8
“Recognised self-regulating organisation” means an organisation which, immediately before the passing of this Act, was such an organisation for the purposes of the 1986 Act.
9
“The 1986 Act” means the M37Financial Services Act 1986.
Self-regulating organisations for friendly societies
2
1
No new application under paragraph 2 of Schedule 11 to the 1986 Act (application for recognition) may be entertained.
2
No outstanding application made under that paragraph before the passing of this Act may continue to be entertained.
3
After the date which is the designated date for a recognised self-regulating organisation for friendly societies—
a
the recognition order for that organisation may not be revoked under paragraph 5 of Schedule 11 to the 1986 Act (revocation of recognition);
b
no application may be made to the court under paragraph 6 of that Schedule (compliance orders) with respect to that organisation.
4
“Designated date” means such date as the Treasury may by order designate.
5
Sub-paragraph (3) does not apply to a recognised self-regulating organisation for friendly societies in respect of which a notice of intention to revoke its recognition order was given under section 11(3) of the 1986 Act (as applied by paragraph 5(2) of that Schedule) before the passing of this Act if that notice has not been withdrawn.
6
Expenditure incurred by the Authority in connection with the winding up of any body which was, immediately before the passing of this Act, a recognised self-regulating organisation for friendly societies is to be treated as having been incurred in connection with the discharge by the Authority of functions under this Act.
7
“Recognised self-regulating organisation for friendly societies” means an organisation which, immediately before the passing of this Act, was such an organisation for the purposes of the 1986 Act.
8
“The 1986 Act” means the M38Financial Services Act 1986.
I30C109SCHEDULE 22Repeals
Sch. 22 wholly in force at 2.7.2002; Sch. 22 not in force at Royal Assent see s. 431(2); Sch. 22 in force for specified purposes at 30.4.2001 by S.I. 2001/1282, art. 2(b); Sch. 22 in force 2.7.2002 in relation to the Credit Union Act 1979 by S.I. 2001/3538, art. 2(5)(b); Sch. 22 in force at in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)
Sch. 22 applied (E.W.) (7.6.2013) by The Energy Supply Company Administration Rules 2013 (S.I. 2013/1046), rules 1, 10(7)(c) (with rules 3, 208)
Chapter | Short title | Extent of repeal |
|---|---|---|
1923 c. 8. | The Industrial Assurance Act 1923. | The whole Act. |
1948 c. 39. | The Industrial Assurance and Friendly Societies Act 1948. | The whole Act. |
1965 c. 12. | The Industrial and Provident Societies Act 1965. | Section 8. |
Section 70. | ||
1974 c. 46. | The Friendly Societies Act 1974. | Section 4. |
Section 10. | ||
In section 11, from “and where” to “that society”. | ||
In section 99(4), “in the central registration area”. | ||
1975 c. 24. | The House of Commons Disqualification Act 1975. | In Schedule 1, in Part III, “Any member of the Financial Services Tribunal in receipt of remuneration”. |
1975 c. 25. | The Northern Ireland Assembly Dis-qualification Act 1975. | In Schedule 1, in Part III, “Any member of the Financial Services Tribunal in receipt of remuneration”. |
1977 c. 46. | The Insurance Brokers (Registration) Act 1977. | The whole Act. |
1979 c. 34. | The Credit Unions Act 1979. | Section 6(2) to (6). |
Section 11(2) and (6). | ||
Sections 11B, 11C and 11D. | ||
Section 12(4) and (5). | ||
In section 14, subsections (2), (3), (5) and (6). | ||
Section 28(2). | ||
1986 c. 53. | The Building Societies Act 1986. | Section 9. |
Schedule 3. | ||
1988 c. 1. | The Income and Corporation Taxes Act 1988. | In section 76, in subsection (8), the definitions of “the 1986 Act”, “authorised person”, “investment business”, “investor”, “investor protection scheme”, “prescribed” and “recognised self-regulating organisation”. |
1991 c. 31. | The Finance Act 1991. | In section 47, subsections (1), (2) and (4). |
1992 c. 40. | The Friendly Societies Act 1992. | In section 13, subsections (2) to (5), (8) and (11). |
Sections 31 to 36. | ||
In section 37, subsections (1), (1A) and (7A) to (9). | ||
Sections 38 to 50. | ||
In section 52, subsection (2)(d) and, in subsection (5), the words from “or where” to the end. | ||
Schedule 7. | ||
In Schedule 8, paragraph 3(2). | ||
1993 c. 8. | The Judicial Pensions and Retirement Act 1993. | In Schedule 5, “Member of the Financial Services Tribunal appointed by the Lord Chancellor”. |
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.