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

F1CHAPTER 3CCritical third parties

312RDisciplinary measures

(1)

This section applies if a relevant regulator considers that a critical third party has contravened a requirement imposed by or under this Chapter.

(2)

The relevant regulator may publish a notice—

(a)

prohibiting the critical third party from entering into arrangements, or continuing, to provide services to authorised persons, relevant service providers or FMI entities;

(b)

prohibiting authorised persons, relevant service providers or FMI entities who receive services from the critical third party from continuing to receive those services from that party;

(c)

prohibiting authorised persons, relevant service providers or FMI entities from entering into arrangements for receipt of services from the critical third party;

(d)

providing for the provision of any services by the critical third party to be subject to such conditions or limitations as are specified in the notice;

(e)

providing for any receipt of services by authorised persons, relevant service providers or FMI entities from the critical third party to be subject to such conditions or limitations as are specified in the notice.

(3)

A notice under subsection (2) may make different provision for different cases and may in particular make different provision in respect of different descriptions of services, authorised persons, FMI entities or relevant service providers.

(4)

A relevant regulator may only exercise the powers under subsection (2) if the regulator is satisfied that—

(a)

it is appropriate in the circumstances to take action against the critical third party,

(b)

the exercise of the power will not threaten the stability of, or confidence in, the UK financial system, and

(c)

it is desirable to exercise the power in order to advance one or more of the regulator’s objectives.

(5)

A relevant regulator may either on its own initiative or on an application by the critical third party concerned withdraw or vary a notice given by it under subsection (2) by publishing a further notice.

(6)

Publication under this section is to be made in such manner as the relevant regulator considers best designed to bring the publication to the attention of the public.

(7)

Where a notice includes a prohibition, condition or limitation imposed under subsection (2), publication of a notice under this section must in particular be made in a manner appearing to the relevant regulator to be best designed to bring the notice to the attention of the persons to whom the prohibition, condition or limitation applies.

(8)

A person who breaches a prohibition, condition or limitation imposed by a notice under this section is to be taken to have contravened a requirement imposed on the person under this Act.

(9)

For the purposes of this section the objectives of a relevant regulator are as described in section 312M(2).