Part XVIIIRecognised investment exchanges, clearing houses , CSDs and other parties

Chapter I Exemption

Applications for recognition

F1292 Overseas investment exchanges and overseas clearing houses.

(1)

An application under section 287 or F2288(1A) by an overseas applicant must contain the address of a place in the United Kingdom for the service on the applicant of notices or other documents required or authorised to be served on it under this Act.

(2)

If it appears to F3the appropriate regulator that an overseas applicant satisfies the requirements of subsection (3) it may make a recognition order declaring the applicant to be—

(a)

a recognised investment exchange;

(b)

a recognised clearing house F4which is not a central counterparty.

(3)

The requirements are that—

F5(a)

investors are afforded protection equivalent to that which they would be afforded if the body concerned were required to comply with—

(i)

recognition requirements, other than any such requirements which are expressed in regulations under section 286 not to apply for the purposes of this paragraph, and

(ii)

F6requirements contained in any of the following—

(aa)

any EU regulation, originally made under the markets in financial instruments directive, which is F7assimilated direct legislation;

(bb)

any EU regulation, originally made under the markets in financial instruments regulation, which is F8assimilated direct legislation;

(cc)

any subordinate legislation (within the meaning of the Interpretation Act 1978) made under the markets in financial instruments regulation on or after IP completion day;

(b)

there are adequate procedures for dealing with a person who is unable, or likely to become unable, to meet his obligations in respect of one or more market contracts connected with the investment exchange or clearing house;

(c)

the applicant is able and willing to co-operate with F9the appropriate regulator by the sharing of information and in other ways;

(d)

adequate arrangements exist for co-operation between F10the appropriate regulator and those responsible for the supervision of the applicant in the country or territory in which the applicant’s head office is situated.

(4)

In considering whether it is satisfied as to the requirements mentioned in subsection (3)(a) and (b), F11the appropriate regulator is to have regard to—

(a)

the relevant law and practice of the country or territory in which the applicant’s head office is situated;

(b)

the rules and practices of the applicant.

(5)

In relation to an overseas applicant and a body or association declared to be a recognised investment exchange or recognised clearing house by a recognition order made by virtue of subsection (2)—

(a)

the reference in section 313(2) to recognition requirements is to be read as a reference to matters corresponding to the matters in respect of which provision is made in the recognition requirements;

(b)

sections 296(1) and 297(2) have effect as if the requirements mentioned in section 296(1)(a) and section 297(2)(a) were those of subsection (3)(a), (b), and (c) of this section;

(c)

section 297(2) has effect as if the grounds on which a recognition order may be revoked under that provision included the ground that in the opinion of F12the appropriate regulator arrangements of the kind mentioned in subsection (3)(d) no longer exist.

F13(6)

Where a recognised clearing house is F14... recognised as a third country central counterparty, any previous recognition order under section 290(1)(c) or 292(2)(b) shall cease to be valid.