Part V

Performance of Regulated Activities

Removal of directors and senior executives and appointment of temporary manager

Removal of directors and senior executives and appointment of temporary manager: procedure
71H
1
A requirement under section 71B or 71C(2) or (8) or the appointment of a temporary manager under section 71C(1) may be expressed to take effect immediately or on a specified date only if the appropriate regulator, having regard to the grounds for imposing the requirement or making the appointment, reasonably considers that it is necessary for the requirement or the appointment to take effect immediately or on that date.
2
If either regulator proposes to impose a requirement on a relevant firm
, institution, financial holding company or mixed financial holding company
under section 71B or a parent undertaking under section 71C(2), or imposes such a requirement with immediate effect, it must give written notice—
a
to that firm
, institution, holding company
or parent undertaking, and
b
to each of the directors or senior executives to whom the requirement relates (“the interested parties”).
3
If either regulator—
a
proposes to appoint a person to act as a temporary manager under section 71C or to vary the terms on which such a person is appointed, or
b
makes such an appointment or variation with immediate effect,
the regulator must give written notice to the relevant firm or the parent undertaking concerned.
4
If either regulator proposes to impose a requirement on the directors under section 71C(8), or imposes such a requirement with immediate effect, the regulator must give written notice to each director.
5
A notice given under subsection (2) must—
a
give details of the requirement,
b
identify each of the directors or senior executives to whom the requirement relates,
c
give the regulator’s reasons for imposing the requirement—
i
in the case of a notice given to the relevant firm
, the financial holding company, the mixed financial holding company
or the parent undertaking, in relation to each interested party;
ii
in the case of a notice given to an interested party, in relation to that interested party,
d
inform the relevant firm
, the financial holding company, the mixed financial holding company
or the parent undertaking and the interested parties that each of them may make representations to the regulator within such period as may be specified in the notice (whether or not the matter has been referred to the Tribunal),
e
state when the requirement takes effect, and
f
inform the relevant firm
, the financial holding company, the mixed financial holding company
or the parent undertaking and each of the interested parties of their right to refer the matter to the Tribunal.
6
A notice given under subsection (3) must—
a
state when the appointment or variation takes effect, and be accompanied by the instrument, or revised instrument, of appointment,
b
give the regulator’s reasons for making the appointment or variation,
c
inform the relevant firm or the parent undertaking that it may make representations to the regulator within such period as may be specified in the notice (whether or not the matter has been referred to the Tribunal), and
d
inform the relevant firm or the parent undertaking of its right to refer the matter to the Tribunal.
7
A notice given under subsection (4) must—
a
give details of the requirement,
b
give the regulator’s reasons for imposing the requirement,
c
state when the requirement takes effect,
d
inform the director that the director may make representations to the regulator within such period as may be specified in the notice (whether or not the matter has been referred to the Tribunal), and
e
inform the director of the director’s right to refer the matter to the Tribunal.
8
The regulator may extend the period allowed by the notice given under subsection (2), (3) or (4) for making representations.
9
If, having considered any representations made by a person to whom notice (the “original notice”) has been given under subsection (2), (3) or (4), the regulator decides—
a
to impose the requirement, make the appointment or vary the terms of an appointment in accordance with the original notice, or
b
not to rescind the imposition of any such requirement or the making of any such appointment or variation which has already taken effect,
the regulator must give written notice to each person to whom the original notice was given.
10
A notice under subsection (9) must inform the person to whom it is given of the right of that person to refer the matter to the Tribunal and give an indication of the procedure on such a reference.
11
If, having considered any representations made by a person to whom notice (the “original notice”) has been given under subsection (2), (3) or (4), the regulator decides—
a
to impose a requirement, make an appointment or a vary the terms of an appointment in a way that is different from the requirement, appointment or variation described in the original notice,
b
not to impose the requirement, make the appointment or vary the terms of an appointment in accordance with the original notice, or
c
to rescind the imposition of any such requirement, or the making of any such appointment or variation that has already taken effect,
the regulator must give written notice to each person to whom the original notice was given.
12
A notice under subsection (11)(a) about the imposition of a requirement under section 71B or 71C(2) must comply with subsection (5).
13
A notice under subsection (11)(a) about the appointment of a person as a temporary manager or the variation of the terms of the appointment of a person as a temporary manager must comply with subsection (6).
14
A notice under subsection (11)(a) about the imposition of a requirement under section 71C(8) must comply with subsection (7).
15
In this section, any reference to “appointment” includes “re-appointment”.
Pt. 5 modified (1.12.2001) by S.I. 2001/3592, arts. 1(2), 114(3)(a), 128(3)(a) (with art. 23(2))
Words in s. 71H(5)(d) inserted (29.12.2020) by The Financial Holding Companies (Approval etc.) and Capital Requirements (Capital Buffers and Macro-prudential Measures) (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1406), regs. 1(4), 2(5)(b) (with reg. 5)
Pt. 5 modified (7.11.2018) by The EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018 (S.I. 2018/1149), regs. 1(2), 23 (with regs. 4, 22, 26(1)(2)) (as amended (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 6(2))
Words in s. 71H(2) inserted (29.12.2020) by The Financial Holding Companies (Approval etc.) and Capital Requirements (Capital Buffers and Macro-prudential Measures) (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1406), regs. 1(4), 2(5)(a)(i) (with reg. 5)
Words in s. 71H(2)(a) inserted (29.12.2020) by The Financial Holding Companies (Approval etc.) and Capital Requirements (Capital Buffers and Macro-prudential Measures) (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1406), regs. 1(4), 2(5)(a)(ii) (with reg. 5)
Words in s. 71H(5)(f) inserted (29.12.2020) by The Financial Holding Companies (Approval etc.) and Capital Requirements (Capital Buffers and Macro-prudential Measures) (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1406), regs. 1(4), 2(5)(b) (with reg. 5)
Words in s. 71H(5)(c)(i) inserted (29.12.2020) by The Financial Holding Companies (Approval etc.) and Capital Requirements (Capital Buffers and Macro-prudential Measures) (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1406), regs. 1(4), 2(5)(b) (with reg. 5)
Ss. 71B-71I and cross-heading inserted (16.12.2016) by The Bank Recovery and Resolution Order 2016 (S.I. 2016/1239), arts. 1(2), 32
Pt. 5 modified by S.I. 2018/1149, reg. 69 (as inserted (1.3.2019) by The Financial Services Contracts (Transitional and Saving Provision) (EU Exit) Regulations 2019 (S.I. 2019/405), regs. 1(2), 4)