Financial Services Act 2021

U.K.

After Schedule 2 to the Financial Services and Markets Act 2000 insert—

Section 31

“SCHEDULE 2A U.K. Gibraltar-based persons carrying on activities in the UK

PART 1 U.K. Interpretation etc

Gibraltar-based person U.K.

1 (1) In this Act, “Gibraltar-based person” means a person listed in sub-paragraph (2) which has its head office and, if it has one, its registered office in Gibraltar (and see also Part 14 of this Schedule).

(2) Those persons are—

(a) an individual,

(b) a body corporate,

(c) a partnership, or

(d) an unincorporated association.

Regulators U.K.

2 (1) In this Schedule—

• “the Gibraltar regulator” means the Gibraltar Financial Services Commission;

• “UK regulator” means the FCA or the PRA.

(2) The Treasury may by regulations amend the definition of “the Gibraltar regulator” if they consider it appropriate to do so in consequence of a change in the law of Gibraltar.

Activities and branches U.K.

3 (1) In this Schedule, “approved activity” means a regulated activity for the time being approved by regulations under paragraph 5.

(2) For the purposes of this Schedule—

(a) “corresponding activity” means an activity corresponding to an approved activity, and

(b) references (however expressed) to an activity corresponding to an approved activity, or an approved activity corresponding to another activity, are to be interpreted in accordance with regulations under paragraph 6.

(3) In this Schedule, “branch” means—

(a) a place where a person carries on an activity for an indefinite period and which does not have legal personality, or

(b) any other description of place specified in regulations made by the Treasury.

UK regulators' objectives U.K.

4 For the purposes of any provision of this Schedule which refers to the FCA's operational objectives or the PRA's objectives, in relation to the exercise of a power in relation to a particular person, it does not matter whether there is a relationship between that person and the persons whose interests will be protected by the exercise of the power.

PART 2 U.K. Approved activities

Approval of regulated activities U.K.

5 (1) The Treasury may by regulations approve a regulated activity for the purposes of this Schedule.

(2) The power under this paragraph includes power to approve a regulated activity—

(a) only so far as it is carried on by a person of a description specified in the regulations,

(b) only so far as it is carried on through a branch in the United Kingdom,

(c) only so far as it is carried on in other circumstances specified in the regulations, or

(d) subject to other limitations.

(3) In making regulations under this paragraph, the Treasury may have regard to any matter that they consider relevant (and see the restrictions in paragraphs 7, 8 and 9 and the requirement in paragraph 10).

Corresponding activities regulated in Gibraltar U.K.

6 (1) The Treasury must by regulations make provision about how each approved activity corresponds to activities which the Gibraltar regulator has authorised, or may authorise, a person to carry on in Gibraltar.

(2) The power under this paragraph includes power to make provision about an activity—

(a) only so far as it is carried on by a person of a description specified in the regulations,

(b) only so far as it is carried on in other circumstances specified in the regulations, or

(c) subject to other limitations.

(3) In making regulations under this paragraph, the Treasury may have regard to any matter that they consider relevant (and see the restrictions in paragraphs 7 and 8 and the requirement in paragraph 10).

Objectives U.K.

7 (1) The Treasury may not make regulations under paragraph 5 or 6 unless they are satisfied that doing so is compatible with each of the following objectives—

(a) to protect and enhance the soundness, stability and resilience of the UK financial system;

(b) to protect and enhance public confidence in the UK financial system;

(c) to prevent the use of the UK financial system for a purpose connected with financial crime;

(d) to ensure that the relevant markets in the United Kingdom function well;

(e) to protect consumers;

(f) to protect the operation of the compensation scheme;

(g) to protect public funds;

(h) to maintain and improve relations between the United Kingdom and other countries and territories with significant financial markets or significant markets for financial services.

(2) In this paragraph—

• “consumers” has the meaning given in section 1G;

• “financial crime” has the meaning given in section 1H;

• “public funds” means the Consolidated Fund and any other account or source of money which cannot be drawn or spent other than by, or with the authority of, the Treasury;

• “the relevant markets” means the markets for services provided by persons carrying on the regulated activity or approved activity (as appropriate) to which the regulations relate.

Alignment of law and practice U.K.

8 (1) The Treasury may not approve a regulated activity under paragraph 5, or identify an activity as corresponding to an approved activity under paragraph 6, unless they are satisfied that, having regard to the objectives in paragraph 7(1), the relevant law and practice of the United Kingdom and Gibraltar are sufficiently aligned.

(2) In this paragraph, “the relevant law and practice” means—

(a) in relation to the United Kingdom, law and practice under which the carrying on of what is or would be the approved activity is authorised and supervised and other law and practice relevant to the carrying on of that activity,

(b) in relation to Gibraltar, law and practice under which the carrying on of what would be the corresponding activity is authorised and supervised and other law and practice relevant to the carrying on of that activity, and

(c) in relation to both the United Kingdom and Gibraltar, law and practice relevant to the objectives in paragraph 7(1).

(3) The reference to alignment between the law and practice of the United Kingdom and Gibraltar in sub-paragraph (1) includes both alignment as regards the effect of the law and practice and alignment of the text of the law and of any guidance or other documents relating to practice.

Co-operation U.K.

9 (1) The Treasury may not approve a regulated activity under paragraph 5 unless they are satisfied that, having regard to the objectives in paragraph 7(1), there is, or will be, adequate co-operation between—

(a) the UK entities listed in sub-paragraph (2), and

(b) the Gibraltar entities listed in sub-paragraph (3).

(2) The UK entities are—

(a) the Treasury,

(b) the FCA,

(c) the PRA, and

(d) the scheme manager.

(3) The Gibraltar entities are—

(a) the government of Gibraltar, and

(b) the Gibraltar regulator.

(4) In determining whether the test in sub-paragraph (1) is satisfied, the Treasury must have regard to—

(a) memoranda describing how the UK entities and the Gibraltar entities intend to co-operate,

(b) arrangements for the UK entities to obtain information and documents from the Gibraltar entities,

(c) arrangements for the verification of such information and documents (whether by, or by a person appointed by, a UK entity or a Gibraltar entity),

(d) arrangements for the Gibraltar entities to obtain information and documents from the UK entities, and

(e) anything else that the Treasury consider relevant.

Consultation U.K.

10 Before making regulations under paragraph 5 or 6, the Treasury must consult—

(a) the government of Gibraltar,

(b) the FCA, and

(c) if the regulations relate to activities which consist of or include PRA-regulated activities, the PRA.

Withdrawal of approval U.K.

11 (1) The restrictions in paragraphs 7, 8 and 9 do not apply in relation to regulations under paragraph 5 to the extent that the regulations—

(a) revoke other regulations under paragraph 5, or

(b) otherwise amend other regulations under paragraph 5 in order to withdraw the Treasury's approval of an activity.

(2) The restrictions in paragraphs 7 and 8 do not apply in relation to regulations under paragraph 6 to the extent that the regulations—

(a) revoke other regulations under paragraph 6, or

(b) otherwise amend other regulations under paragraph 6 in order to provide that an activity which the Gibraltar regulator has authorised, or may authorise, a person to carry on in Gibraltar does not correspond to an approved activity.

PART 3 U.K. Permission to carry on an approved activity

Obtaining permission to carry on an approved activity U.K.

12 (1) If the appropriate UK regulator receives a notification from the Gibraltar regulator that a Gibraltar-based person wants to be able to carry on an approved activity in the United Kingdom (see paragraph 15), the person obtains permission to do so at the end of the period for considering the notification, as it relates to the activity (see paragraph 16).

(2) The person does not obtain permission to carry on an activity under sub-paragraph (1) if, during the period for considering the notification—

(a) the appropriate UK regulator rejects the notification, as it relates to the activity (see paragraph 17), or

(b) the Gibraltar regulator withdraws the notification, as it relates to the activity.

(3) References in this Part of this Schedule to a notification are references to a notification for the purposes of this paragraph.

(4) A permission obtained under this paragraph is referred to in this Act as “a Schedule 2A permission”.

Schedule 2A permission U.K.

13 (1) A Schedule 2A permission for a person to carry on an activity is a permission to do so only if and to the extent that—

(a) the person is a Gibraltar-based person,

(b) the activity is an approved activity, and

(c) the person has permission from the Gibraltar regulator to carry on the corresponding activity in Gibraltar,

subject to the transitional arrangements in Parts 9 and 10 of this Schedule.

(2) A Gibraltar-based person's Schedule 2A permission to carry on an activity is a permission to do so—

(a) on terms equivalent to the terms of the person's permission from the Gibraltar regulator to carry on the corresponding activity in Gibraltar, and

(b) subject to any limitations specified in the notification (for example, as to the circumstances in which the activity is to be carried on in the United Kingdom) (and see also paragraph 21(3)).

(3) The reference in sub-paragraph (2)(a) to the terms of the person's permission from the Gibraltar regulator to carry on the corresponding activity in Gibraltar includes—

(a) any restrictions included in the permission, and

(b) any other restrictions imposed by the Gibraltar regulator on the carrying on by the person of the activity in Gibraltar.

The appropriate UK regulator U.K.

14 In relation to a notification, “the appropriate UK regulator” means—

(a) the PRA, in a case where the approved activities to which the notification relates consist of or include PRA-regulated activities, and

(b) the FCA, in any other case.

Notifying the appropriate UK regulator U.K.

15 (1) A notification must—

(a) name the Gibraltar-based person,

(b) state the address of the person's head office in Gibraltar,

(c) specify the approved activity which the person wants to be able to carry on in the United Kingdom, including any limitations,

(d) specify the corresponding activity, including any restrictions,

(e) state that the person has permission from the Gibraltar regulator to carry on the corresponding activity in Gibraltar,

(f) state that the Gibraltar regulator consents to the person carrying on the approved activity in the United Kingdom,

(g) identify each person who is responsible for managing an aspect of the Gibraltar-based person's affairs relating to the approved activity and describe that person's responsibilities as regards those affairs,

(h) state whether the Gibraltar-based person wants to carry on the activity through a branch in the United Kingdom and, if so—

(i) identify each person who is or will be responsible for managing an aspect of the affairs of the branch, and

(ii) describe that person's responsibilities as regards those affairs, and

(i) contain, or be accompanied by, any further information specified in a direction given by the appropriate UK regulator under paragraph 57 and in force when the notification is given.

(2) A notification may relate to more than one approved activity.

(3) The Treasury may by regulations change the information that a notification must contain.

(4) Regulations under sub-paragraph (3) may amend this paragraph, but may not amend or repeal sub-paragraph (1)(i).

(5) Before making regulations under sub-paragraph (3), the Treasury must consult—

(a) the government of Gibraltar, and

(b) the UK regulators.

(6) In sub-paragraph (1), the references to managing an aspect of a person's affairs or a branch's affairs includes a reference to taking decisions, or participating in the taking of decisions, about how that aspect of the affairs should be carried on.

Considering a notification U.K.

16 (1) Where the appropriate UK regulator receives a notification, it must acknowledge receipt in writing without delay.

(2) The period for considering a notification is—

(a) so far as it relates to an activity that is to be carried on through a branch in the United Kingdom, the period of two months beginning with the day on which the appropriate UK regulator receives the notification, and

(b) so far as it relates to any other activity, the period of one month beginning with that day.

(3) If, before the end of the period described in sub-paragraph (2), the appropriate UK regulator gives the Gibraltar-based person a confirmation notice in respect of an approved activity specified in the notification, then the period for considering the notification as it relates to the activity ends when the notice is given.

(4) A “confirmation notice” is a written notice confirming that the person has a Schedule 2A permission in relation to the approved activity.

(5) A confirmation notice may relate to more than one activity.

Rejecting a notification U.K.

17 (1) The appropriate UK regulator may not reject a notification unless—

(a) it is required to do so under paragraph 18, or

(b) it has power to do under paragraph 19 or 20.

(2) A notification is rejected when the appropriate UK regulator gives a written notice of the rejection to the Gibraltar regulator.

(3) The rejection of a notification does not prevent the Gibraltar regulator from giving a further notification relating to the same person and the same activity.

Duties to reject U.K.

18 (1) The appropriate UK regulator must reject a notification if satisfied that the notification does not satisfy one or more of the requirements in paragraph 15(1).

(2) The appropriate UK regulator must reject a notification, so far as it relates to an activity, if the activity ceases to be an approved activity.

(3) The appropriate UK regulator must reject a notification, so far as it relates to an approved activity, if satisfied that the Gibraltar-based person does not have permission from the Gibraltar regulator to carry on the corresponding activity in Gibraltar.

Power to reject: prohibition order in respect of senior manager U.K.

19 (1) The appropriate UK regulator may reject a notification, so far as it relates to an approved activity, if satisfied that a person with responsibility for managing an aspect of the Gibraltar-based person's affairs—

(a) is prohibited from performing a function by a prohibition order, and

(b) performs a senior management function in relation to the carrying on of the approved activity by the Gibraltar-based person in the United Kingdom, Gibraltar or elsewhere or is expected to do so if the person obtains a Schedule 2A permission to carry on the approved activity in the United Kingdom.

(2) In sub-paragraph (1)—

(a) the reference to managing an aspect of a person's affairs includes a reference to taking decisions, or participating in the taking of decisions, about how that aspect of those affairs should be carried on,

(b) “prohibition order” means—

(i) an order under section 56,

(ii) an order under section 143S, or

(iii) an order under the law of Gibraltar which the appropriate UK regulator considers to be equivalent to an order under section 56 or 143S, and

(c) “senior management function”, in relation to the carrying on of an activity by the Gibraltar-based person, means a function which requires a person to manage an aspect of the Gibraltar-based person's affairs which involves, or might involve, a risk of serious consequences—

(i) for the Gibraltar-based person, or

(ii) for business or other interests in the United Kingdom, Gibraltar or elsewhere.

Power to reject: loss of access right and serious threat to the UK U.K.

20 (1) The appropriate UK regulator may reject a notification if satisfied that the Gibraltar-based person—

(a) lost a relevant access right at any time, and

(b) poses, or is likely to pose, a serious threat to—

(i) the interests of consumers (as defined in section 1G), or

(ii) the soundness, stability and resilience of the UK financial system or a part of that system.

(2) The appropriate UK regulator may reject a notification if satisfied that—

(a) the Gibraltar-based person—

(i) is a member of the same group as a person that lost a relevant access right at any time, or

(ii) has close links with such a person (as defined in paragraph 2C(2) of Schedule 6), and

(b) given the nature of the relationship between that person and the Gibraltar-based person, the Gibraltar-based person poses, or is likely to pose, a serious threat to—

(i) the interests of consumers (as defined in section 1G), or

(ii) the soundness, stability and resilience of the UK financial system or a part of that system.

(3) For the purposes of this paragraph, a person lost a relevant access right if—

(a) its Part 4A permission was cancelled,

(b) its Schedule 2A permission was cancelled, or

(c) it ceased to qualify for authorisation under Schedule 3 (other than by virtue of the repeal of that Schedule).

(4) When deciding whether to reject a notification under this paragraph, the appropriate UK regulator must have regard, among other things, to the reasons why the person lost the relevant access right.

PART 4 U.K. Variation of permission

Variation of permission U.K.

21 (1) A Schedule 2A permission may be varied in accordance with this Part of this Schedule—

(a) on the initiative of the Gibraltar regulator (see paragraphs 22 to 26), or

(b) on the initiative of a UK regulator (see paragraphs 27 to 30).

(2) References in this Part of this Schedule to the variation of a Schedule 2A permission (however expressed) are to its variation by—

(a) adding an approved activity to those to which the permission relates,

(b) removing an approved activity from those to which the permission relates, or

(c) varying the description of an activity to which the permission relates (including by adding, removing or varying a limitation).

(3) Where a limitation is added, removed or varied under this Part of this Schedule, paragraph 13(2)(b) has effect as if it referred to the limitations (if any) that have effect after that change.

Gibraltar regulator's initiative: notification U.K.

22 (1) If the appropriate UK regulator receives a notification from the Gibraltar regulator requesting the variation of a Gibraltar-based person's Schedule 2A permission (see paragraph 24), the permission is varied—

(a) if the notification specifies a time for the variation to take effect which falls after the end of the period for considering the notification as it relates to the variation (see paragraph 25), at that time, or

(b) otherwise, at the end of the period for considering the notification, as it relates to the variation.

(2) A variation requested in a notification does not take effect under sub-paragraph (1) if, during the period for considering the notification—

(a) the appropriate UK regulator rejects the notification, as it relates to the variation (see paragraph 26), or

(b) the Gibraltar regulator withdraws the notification, as it relates to the variation.

(3) References in this Part of this Schedule to a notification are references to a notification for the purposes of this paragraph.

Gibraltar regulator's initiative: the appropriate UK regulator U.K.

23 In relation to a notification, “the appropriate UK regulator” means—

(a) the PRA, in a case where the approved activities to which the notification relates consist of or include PRA-regulated activities, and

(b) the FCA, in any other case.

Gibraltar regulator's initiative: notifying the UK regulator U.K.

24 (1) A notification must—

(a) state the desired variation,

(b) specify the approved activity or approved activities which the Gibraltar-based person wants to carry on following the variation, including any limitations,

(c) specify the corresponding activity, including any restrictions,

(d) state that the person has permission from the Gibraltar regulator to carry on the corresponding activity in Gibraltar,

(e) state that the Gibraltar regulator consents to the variation, and

(f) contain, or be accompanied by, any further information specified in a direction given by the appropriate UK regulator under paragraph 57 and in force when the notification is given.

(2) A notification may state when the desired variation is to have effect.

(3) A notification may relate to more than one variation.

Gibraltar regulator's initiative: considering a notification U.K.

25 (1) Where the appropriate UK regulator receives a notification, it must acknowledge receipt in writing without delay.

(2) The period for considering a notification is—

(a) so far as it relates to a variation in respect of an activity carried on through a branch in the United Kingdom, the period of two months beginning with the day on which the appropriate UK regulator receives the notification, and

(b) so far as it relates to any other variation, the period of one month beginning with that day.

(3) If, before the end of the period described in sub-paragraph (2), the appropriate UK regulator gives the Gibraltar-based person a confirmation notice in respect of a variation specified in the notification, then the period for considering the notification as it relates to the variation ends when the notice is given.

(4) A “confirmation notice” is a written notice confirming that the variation has effect as specified in the notification.

(5) A confirmation notice may relate to more than one variation.

Gibraltar regulator's initiative: rejecting a notification U.K.

26 (1) The appropriate UK regulator may not reject a notification unless—

(a) it is required to do so under sub-paragraph (3) or (4), or

(b) it has power to do under sub-paragraph (5).

(2) A notification is rejected when the appropriate UK regulator gives a written notice of the rejection to the Gibraltar regulator.

(3) The appropriate UK regulator must reject a notification if satisfied that the notification does not satisfy one or more of the requirements in paragraph 24(1).

(4) The appropriate UK regulator must reject a notification if it would be required to do so by paragraph 18(2) or (3) if the notification were a notification under Part 3 of this Schedule relating to—

(a) the Gibraltar-based person, and

(b) the activities that the person would have a Schedule 2A permission to carry on if the permission were varied as specified in the notification.

(5) The appropriate UK regulator may reject a notification if it would have power to do so under paragraph 19 or 20 if the notification were a notification under Part 3 of this Schedule relating to—

(a) the Gibraltar-based person, and

(b) the activities that the person would have a Schedule 2A permission to carry on if the permission were varied as specified in the notification.

(6) The rejection of a notification does not prevent the Gibraltar regulator from giving a further notification.

UK regulator's initiative U.K.

27 (1) A UK regulator may exercise a power under this paragraph in relation to a Gibraltar-based person with a Schedule 2A permission where one of the own-initiative conditions is satisfied (see paragraph 28).

(2) The FCA may vary a Schedule 2A permission.

(3) The PRA may vary a PRA-authorised person's Schedule 2A permission.

(4) In the case of a person who is not a PRA-authorised person, the PRA may vary the person's Schedule 2A permission by adding an approved activity that is a PRA-regulated activity to those to which the permission relates.

(5) Where it adds an approved activity under sub-paragraph (4), the PRA may vary the person's Schedule 2A permission in any of the other ways described in paragraph 21(2).

Own-initiative conditions U.K.

28 (1) For the purposes of this Schedule, “the own-initiative conditions” are—

(a) in relation to the exercise of a power by the FCA, conditions A to C, and

(b) in relation to the exercise of a power by the PRA, conditions A to D.

(2) Condition A is that the UK regulator in question considers that—

(a) it is desirable to exercise the power in order to advance one or more of its objectives, and

(b) the Gibraltar regulator—

(i) is aware, or ought reasonably to be aware, of the reasons why the UK regulator considers that to be the case, and

(ii) has had time to take steps, or indicate what steps (if any) it is likely to take, in response.

(3) Condition B is that the UK regulator in question considers that—

(a) it is desirable to exercise the power in order to advance one or more of its objectives, and

(b) a delay in exercising the power would be materially detrimental to—

(i) the interests of consumers (as defined in section 1G), or

(ii) the soundness, stability and resilience of the UK financial system or a part of that system.

(4) Condition C is that the UK regulator in question considers that—

(a) the Gibraltar-based person is contravening, or has contravened, a rule made by the UK regulator or a requirement imposed on it by the UK regulator under Part 6 of this Schedule, and

(b) the contravention is not minor, having regard to the nature of the contravention or its consequences (or both).

(5) Condition D is that the PRA considers that—

(a) it is desirable to exercise the power in order to advance one or more of the PRA's objectives, and

(b) the Gibraltar-based person poses, or may pose, a risk to the soundness, stability and resilience of the UK financial system, or a part of that system, of a type specified for the purposes of this condition in the policy statement produced by the PRA under paragraph 71.

(6) In the case of the FCA, references in this paragraph to its objectives are references only to its operational objectives.

UK regulator's initiative: procedure U.K.

29 (1) The variation of a Schedule 2A permission under paragraph 27 takes effect—

(a) immediately, if the notice given under sub-paragraph (3) states that is the case,

(b) on such date as may be specified in the notice, or

(c) if no date is specified in the notice, when the matter to which the notice relates is no longer open to review.

(2) The variation of a Schedule 2A permission under paragraph 27 may be expressed to take effect immediately, or on a specified date, only if the UK regulator reasonably considers that it is necessary for the variation to take effect immediately or on that date, having regard to the own-initiative condition on which it is relying for the purposes of paragraph 27(1).

(3) If a UK regulator—

(a) proposes to vary a Schedule 2A permission under paragraph 27, or

(b) varies a Schedule 2A permission under that paragraph with immediate effect,

it must give the Gibraltar-based person a written notice.

(4) The notice must—

(a) give details of the variation,

(b) state the UK regulator's reasons for varying the permission,

(c) inform the Gibraltar-based person that the person may make representations to the UK regulator within the period specified in the notice (whether or not the Gibraltar-based person has referred the matter to the Tribunal),

(d) inform the Gibraltar-based person of when the variation of the permission takes effect, and

(e) inform the Gibraltar-based person of the person's right to refer the matter to the Tribunal.

(5) The UK regulator may extend the period allowed under the notice for making representations.

(6) If, having considered any representations made by the Gibraltar-based person, the UK regulator decides—

(a) to vary the permission in the way proposed, or

(b) if the permission has been varied, not to rescind its variation,

it must give the Gibraltar-based person a written notice.

(7) A notice under sub-paragraph (6) must inform the Gibraltar-based person of the person's right to refer the matter to the Tribunal.

(8) If, having considered any representations made by the Gibraltar-based person, the UK regulator decides—

(a) not to vary the permission in the way proposed,

(b) to vary the permission in a different way, or

(c) to rescind the variation,

it must give the Gibraltar-based person a written notice.

(9) A notice under sub-paragraph (8)(b) must comply with sub-paragraph (4).

(10) If a notice under this paragraph informs a person of the person's right to refer a matter to the Tribunal, it must give an indication of the procedure for such a reference.

(11) For the purposes of sub-paragraph (1)(c), whether a matter is open to review is to be determined in accordance with section 391(8).

Right to refer matters to the Tribunal U.K.

30 A Gibraltar-based person who is aggrieved by the exercise by a UK regulator of a power under paragraph 27 in relation to the person may refer the matter to the Tribunal.

PART 5 U.K. Cancellation of permission

Cancellation of permission U.K.

31 A Schedule 2A permission may be cancelled in accordance with this Part of this Schedule—

(a) on the initiative of the Gibraltar regulator (see paragraphs 32 to 36), or

(b) on the initiative of a UK regulator (see paragraphs 37 to 39).

Gibraltar regulator's initiative: notification U.K.

32 (1) If the appropriate UK regulator receives a notification from the Gibraltar regulator requesting the cancellation of a Gibraltar-based person's Schedule 2A permission (see paragraph 34), the permission is cancelled when the period for considering the notification ends (see paragraph 35).

(2) A Schedule 2A permission is not cancelled under sub-paragraph (1) if, during the period for considering the notification—

(a) the appropriate UK regulator rejects the notification (see paragraph 36), or

(b) the Gibraltar regulator withdraws the notification.

(3) References in this Part of this Schedule to a notification are references to a notification for the purposes of this paragraph.

Gibraltar regulator's initiative: the appropriate UK regulator U.K.

33 In relation to a notification, “the appropriate UK regulator” means—

(a) the PRA, in a case where the Gibraltar-based person is a PRA-authorised person, and

(b) the FCA, in any other case.

Gibraltar regulator's initiative: notifying the UK regulator U.K.

34 A notification must—

(a) state the reason for requesting the cancellation of the permission,

(b) state that the Gibraltar regulator consents to the cancellation, and

(c) contain, or be accompanied by, any further information specified in a direction given by the appropriate UK regulator under paragraph 57 and in force when the notification is given.

Gibraltar regulator's initiative: considering a notification U.K.

35 (1) Where the appropriate UK regulator receives a notification, it must acknowledge receipt in writing without delay.

(2) The period for considering a notification is—

(a) where the Schedule 2A permission relates to one or more activities carried on through a branch in the United Kingdom, the period of two months beginning with the day on which the appropriate UK regulator receives the notification, and

(b) otherwise, the period of one month beginning with that day.

(3) If, before the end of the period described in sub-paragraph (2), the appropriate UK regulator gives the Gibraltar-based person a confirmation notice in respect of the notification, then the period for considering the notification ends when the notice is given.

(4) A “confirmation notice” is a written notice confirming that the Schedule 2A permission is cancelled.

Gibraltar regulator's initiative: rejecting a notification U.K.

36 (1) The appropriate UK regulator may not reject a notification unless—

(a) it is required to do so under sub-paragraph (3), or

(b) it has power to do under sub-paragraph (4) or (5).

(2) A notification is rejected when the appropriate UK regulator gives a written notice of the rejection to the Gibraltar regulator.

(3) The appropriate UK regulator must reject a notification if satisfied that the notification does not satisfy a requirement in paragraph 34.

(4) The FCA may reject a notification if it appears to the FCA that it is desirable to do so in order to advance one or more of its operational objectives.

(5) The PRA may reject a notification if it appears to the PRA that it is desirable to do so in order to advance one or more of its objectives.

(6) The rejection of a notification does not prevent the Gibraltar regulator from giving a further notification.

UK regulator's initiative U.K.

37 (1) The FCA may cancel a Schedule 2A permission where one of the own-initiative conditions is satisfied (see paragraph 28).

(2) The PRA may cancel a PRA-authorised person's Schedule 2A permission where one of the own-initiative conditions is satisfied (see paragraph 28).

(3) The appropriate UK regulator must cancel a Schedule 2A permission where—

(a) the permission no longer enables the person to carry on an approved activity (whether by virtue of paragraph 13 or otherwise), and

(b) the UK regulator is satisfied that it is no longer necessary to keep the permission in force.

(4) In this paragraph, “the appropriate UK regulator” means—

(a) the PRA, in a case where the Gibraltar-based person is a PRA-authorised person, and

(b) the FCA, in any other case.

UK regulator's initiative: procedure U.K.

38 (1) If a UK regulator proposes to cancel a Gibraltar-based person's Schedule 2A permission under paragraph 37, it must give the person a warning notice.

(2) If a UK regulator decides to cancel a Gibraltar-based person's Schedule 2A permission under paragraph 37, it must give the person a decision notice.

Right to refer matters to the Tribunal U.K.

39 If a UK regulator gives a Gibraltar-based person a decision notice under paragraph 38, the person may refer the matter to the Tribunal.

PART 6 U.K. Requirements

Requirements U.K.

40 (1) A requirement may be imposed on a Gibraltar-based person in accordance with this Part of this Schedule—

(a) by a UK regulator as part of the process of considering a notification under Part 3 or 4 of this Schedule (see paragraphs 41 to 43),

(b) on the initiative of the Gibraltar regulator (see paragraphs 44 to 48), or

(c) on the UK regulator's initiative (see paragraphs 49 to 52).

(2) Requirements imposed on a Gibraltar-based person in accordance with this Part of this Schedule may be varied or cancelled in accordance with this Part of this Schedule—

(a) on the initiative of the Gibraltar regulator (see paragraphs 44 to 48), or

(b) on the UK regulator's initiative (see paragraphs 49 to 52).

Imposing requirements in connection with Part 3 or 4 notification U.K.

41 (1) This paragraph applies where a UK regulator has received—

(a) a notification for the purposes of paragraph 12 in respect of the carrying on of an activity by a Gibraltar-based person, or

(b) a notification for the purposes of paragraph 22 in respect of the variation of a Gibraltar-based person's Schedule 2A permission.

(2) A UK regulator may exercise the powers under this paragraph where it considers that it is desirable to do so in order to advance one or more of its objectives.

(3) The FCA may impose requirements on the Gibraltar-based person.

(4) The PRA may impose requirements on the Gibraltar-based person if—

(a) the notification mentioned in sub-paragraph (1) relates to activities which consist of or include PRA-regulated activities, or

(b) the Gibraltar-based person is a PRA-authorised person.

(5) A requirement may not be imposed under this paragraph—

(a) after the end of the period for considering the notification mentioned in sub-paragraph (1), or

(b) so as to take effect before the end of that period.

(6) In the case of the FCA, the reference in this paragraph to its objectives is a reference only to its operational objectives.

Imposing requirements in connection with Part 3 or 4 notification: procedure U.K.

42 (1) If a UK regulator proposes to impose a requirement on a Gibraltar-based person under paragraph 41, it must—

(a) give the person a warning notice,

(b) give the Gibraltar regulator a written notice of the proposed requirement, stating the UK regulator's reasons for imposing the requirement, and

(c) consider any representations made by the Gibraltar regulator within the period specified in the notice.

(2) If a UK regulator decides to impose a requirement on a Gibraltar-based person under paragraph 41, it must give the person a decision notice.

Right to refer matters to the Tribunal U.K.

43 If a UK regulator gives a Gibraltar-based person a decision notice under paragraph 42, the person may refer the matter to the Tribunal.

Gibraltar regulator's initiative: notification U.K.

44 (1) If the appropriate UK regulator receives a notification from the Gibraltar regulator (see paragraph 46)—

(a) asking for a requirement to be imposed on a Gibraltar-based person with a Schedule 2A permission, or

(b) asking for a requirement imposed on a Gibraltar-based person with a Schedule 2A permission to be varied or cancelled,

the requirement is imposed, varied or cancelled as specified in the notification at the end of the period for considering the notification, as it relates to the requirement (see paragraph 47).

(2) The requirement is not imposed, varied or cancelled under sub-paragraph (1) if, during the period for considering the notification—

(a) the appropriate UK regulator rejects the notification, as it relates to the requirement (see paragraph 48), or

(b) the Gibraltar regulator withdraws the notification, as it relates to the requirement.

(3) References in this Part of this Schedule to a notification are references to a notification for the purposes of this paragraph, except where otherwise stated.

Gibraltar regulator's initiative: the appropriate UK regulator U.K.

45 In relation to a notification, “the appropriate UK regulator” means—

(a) the PRA, in a case where the approved activities to which the notification relates consist of or include PRA-regulated activities, and

(b) the FCA, in any other case.

Gibraltar regulator's initiative: notifying the UK regulator U.K.

46 A notification must—

(a) state the requirement to be imposed or the desired variation or cancellation (as appropriate),

(b) state the reason for asking for the requirement to be imposed, varied or cancelled,

(c) state that the Gibraltar regulator consents to the requirement being imposed, varied or cancelled, and

(d) contain, or be accompanied by, any further information specified in a direction given by the appropriate UK regulator under paragraph 57 and in force when the notification is given.

Gibraltar regulator's initiative: considering a notification U.K.

47 (1) Where the appropriate UK regulator receives a notification, it must acknowledge receipt in writing without delay.

(2) The period for considering a notification is—

(a) so far as it relates to a requirement to be imposed on a Gibraltar-based person with a branch in the United Kingdom, the period of two months beginning with the day on which the appropriate UK regulator receives the notification, and

(b) so far as it relates to any other requirement, the period of one month beginning with that day.

(3) If, before the end of the period described in sub-paragraph (2), the appropriate UK regulator gives the Gibraltar-based person a confirmation notice in respect of a requirement specified in the notification, then the period for considering the notification as it relates to the requirement ends when the notice is given.

(4) A “confirmation notice” is a written notice confirming that the requirement is imposed, varied or cancelled as requested in the notification.

Gibraltar regulator's initiative: rejecting a notification U.K.

48 (1) The appropriate UK regulator may not reject a notification so far as it relates to a requirement unless—

(a) it is required to do so under sub-paragraph (3), or

(b) it has power to do under sub-paragraph (4) or (5).

(2) A notification is rejected when the appropriate UK regulator gives a written notice of the rejection to the Gibraltar regulator.

(3) The appropriate UK regulator must reject a notification if satisfied that the notification does not satisfy one or more of the requirements in paragraph 46.

(4) The FCA may reject a notification, so far as it relates to a requirement, if it appears to the FCA that it is desirable to do so in order to advance one or more of its operational objectives.

(5) The PRA may reject a notification, so far as it relates to a requirement, if it appears to the PRA that it is desirable to do so in order to advance one or more of its objectives.

(6) The rejection of a notification does not prevent the Gibraltar regulator from giving a further notification in respect of the same requirement.

UK regulator's initiative: imposing, varying and cancelling requirements U.K.

49 (1) A UK regulator may exercise the powers under this paragraph in relation to a Gibraltar-based person only where one of the own-initiative conditions is satisfied (see paragraph 28).

(2) The FCA may—

(a) impose a requirement on a Gibraltar-based person with a Schedule 2A permission,

(b) vary a requirement imposed by the FCA under this Part of this Schedule, or

(c) cancel such a requirement.

(3) The PRA may—

(a) impose a requirement on a Gibraltar-based person with a Schedule 2A permission where the person is a PRA-authorised person,

(b) vary a requirement imposed by the PRA under this Part of this Schedule, or

(c) cancel such a requirement.

UK regulator's initiative: procedure for imposing or varying requirements U.K.

50 (1) The imposition or variation of a requirement under paragraph 49 takes effect—

(a) immediately, if the notice given under sub-paragraph (3) states that is the case,

(b) on such date as may be specified in the notice, or

(c) if no date is specified in the notice, when the matter to which the notice relates is no longer open to review.

(2) The imposition or variation of a requirement under paragraph 49 may be expressed to take effect immediately, or on a specified date, only if the UK regulator reasonably considers that it is necessary for the imposition or variation of the requirement to take effect immediately or on that date, having regard to the own-initiative condition on which it is relying for the purposes of paragraph 49(1).

(3) If a UK regulator—

(a) proposes to exercise the power under paragraph 49 to impose a requirement on a Gibraltar-based person, or vary a requirement imposed on a Gibraltar-based person, or

(b) exercises that power so as to impose a requirement on a Gibraltar-based person, or vary a requirement imposed on a Gibraltar-based person, with immediate effect,

it must give the person a written notice.

(4) The notice must—

(a) give details of the requirement or its variation,

(b) state the UK regulator's reasons for imposing or varying the requirement,

(c) inform the Gibraltar-based person that the person may make representations to the UK regulator within the period specified in the notice (whether or not the Gibraltar-based person has referred the matter to the Tribunal),

(d) inform the Gibraltar-based person of when the imposition or variation of the requirement takes effect, and

(e) inform the Gibraltar-based person of the person's right to refer the matter to the Tribunal.

(5) The UK regulator may extend the period allowed under the notice for making representations.

(6) If, having considered any representations made by the Gibraltar-based person, the UK regulator decides—

(a) to impose the requirement or vary the requirement in the way proposed, or

(b) if the requirement has been imposed or varied, not to rescind its imposition or variation,

it must give the Gibraltar-based person a written notice.

(7) A notice under sub-paragraph (6) must inform the Gibraltar-based person of the person's right to refer the matter to the Tribunal.

(8) If, having considered any representations made by the Gibraltar-based person, the UK regulator decides—

(a) not to impose the requirement or vary the requirement in the way proposed,

(b) to impose a different requirement or vary the requirement in a different way, or

(c) to rescind a requirement or variation which has effect,

it must give the Gibraltar-based person a written notice.

(9) A notice under sub-paragraph (8)(b) must comply with sub-paragraph (4).

(10) If a notice under this paragraph informs a person of the person's right to refer a matter to the Tribunal, it must give an indication of the procedure for such a reference.

(11) For the purposes of sub-paragraph (1)(c), whether a matter is open to review is to be determined in accordance with section 391(8).

UK regulator's initiative: procedure for cancellation U.K.

51 (1) If a UK regulator proposes to exercise a power under paragraph 49 to cancel a requirement imposed on a Gibraltar-based person, it must give the person a written notice.

(2) The notice must specify the date on which the cancellation takes effect.

Right to refer matters to the Tribunal U.K.

52 A Gibraltar-based person who is aggrieved by the exercise by a UK regulator of a power under paragraph 49 to impose a requirement on the person, or vary a requirement imposed on the person, may refer the matter to the Tribunal.

Assets requirements U.K.

53 (1) This paragraph makes provision about a requirement imposed on a Gibraltar-based person (“G”) by a UK regulator under this Part of this Schedule—

(a) prohibiting the disposal of, or other dealing with, any of G's assets (whether in the United Kingdom, Gibraltar or elsewhere) or restricting such disposals or dealings, or

(b) requiring that some or all of G's assets, or some or all assets belonging to consumers (as defined in section 1G) but held by G or to G's order, must be transferred to and held by a trustee approved by the UK regulator.

(2) If a UK regulator—

(a) imposes a requirement described in sub-paragraph (1)(a), and

(b) gives notice of the requirement to an institution with whom G keeps an account,

the notice has the effects set out in sub-paragraph (3).

(3) Those effects are that—

(a) the institution does not act in breach of a contract with G if, having been instructed by G (or on G's behalf) to transfer a sum or otherwise make a payment out of G's account, it refuses to do so in the reasonably held belief that complying with the instruction would be incompatible with the requirement, and

(b) if the institution complies with such an instruction, it is liable to pay to the UK regulator an amount equal to the amount transferred from, or otherwise paid out of, G's account in contravention of the requirement.

(4) If a UK regulator imposes a requirement described in sub-paragraph (1)(b), no assets held by a person as trustee in accordance with the requirement may, while the requirement is in force, be released or dealt with except with the consent of the UK regulator.

(5) If, while a requirement described in sub-paragraph (1)(b) is in force, G creates a charge over any assets of G held in accordance with the requirement, the charge is (to the extent that it confers security over the assets) void against the liquidator and G's creditors.

(6) Assets held by a person as trustee are to be taken to be held by the trustee in accordance with a requirement mentioned in sub-paragraph (1)(b) only if—

(a) G has given the trustee a written notice that those assets are to be held by the trustee in accordance with the requirement, or

(b) they are assets into which assets to which paragraph (a) applies have been transposed by the trustee on the instruction of G.

(7) A person who contravenes sub-paragraph (4) commits an offence and is liable—

(a) on summary conviction in England and Wales, to a fine;

(b) on summary conviction in Scotland or Northern Ireland, to a fine not exceeding level 5 on the standard scale.

(8) In this paragraph, references to imposing a requirement (however expressed) include imposing a requirement by varying an existing requirement.

(9) In this paragraph, “charge” includes a mortgage (or, in Scotland, a security over property).

(10) Sub-paragraphs (4) and (6) do not affect any equitable interest or remedy in favour of a person who is a beneficiary of a trust as a result of a requirement described in sub-paragraph (1)(b).

Further provision about requirements U.K.

54 (1) A requirement imposed on a Gibraltar-based person under this Part of this Schedule may, among other things, be imposed so as to require the person—

(a) to take specified action, or

(b) to refrain from taking specified action.

(2) A requirement imposed under this Part of this Schedule may extend to activities which are not approved activities.

(3) A requirement imposed on a Gibraltar-based person under this Part of this Schedule may be imposed by reference to the person's relationship with—

(a) the person's group, or

(b) other members of the person's group.

(4) A requirement imposed under this Part of this Schedule may be expressed to expire at the end of a specified period (but the imposition of such a requirement does not affect the UK regulator's powers to impose a new requirement).

(5) A requirement imposed on a Gibraltar-based person under this Part of this Schedule may refer to the past conduct of the person (for example, by requiring the person concerned to review or take remedial action in respect of past conduct).

Contravention of requirement imposed under this Part U.K.

55 (1) Contravention of a requirement imposed under this Part of this Schedule does not—

(a) make a person guilty of an offence,

(b) make a transaction void or unenforceable, or

(c) give rise to a right of action for breach of statutory duty, subject to sub-paragraph (2).

(2) A contravention of a requirement imposed under this Part of this Schedule is actionable at the suit of a person who suffers loss as a result of the contravention where—

(a) the action would be brought at the suit of a private person, or

(b) the conditions in sub-paragraph (3) are met,

subject to the defences and other incidents applying to actions for breach of statutory duty.

(3) The conditions mentioned in sub-paragraph (2)(b) are that—

(a) the action would be brought by a person acting in a fiduciary or representative capacity on behalf of a private person, and

(b) any remedy would be exclusively for the benefit of that private person and could not be obtained through an action brought otherwise than at the suit of the person acting in a fiduciary or representative capacity.

(4) Sub-paragraph (2) does not apply where the requirement contravened is a requirement to have or maintain financial resources.

(5) In this paragraph, “private person” has such meaning as may be prescribed.

PART 7 U.K. Changes

Duty to notify UK regulators of changes U.K.

56 (1) A UK regulator may direct that a change relating to a Gibraltar-based person with a Schedule 2A permission is subject to the requirements in this paragraph.

(2) A direction under sub-paragraph (1) may only be given in relation to a change relating to a matter about which information must be provided in a notification given to the UK regulator for the purposes of paragraph 12 or 22 (see paragraphs 15 and 24).

(3) Where, by virtue of a direction under sub-paragraph (1), a change is subject to the requirements in this paragraph, a Gibraltar-based person with a Schedule 2A permission must notify the following of the change—

(a) the Gibraltar regulator;

(b) the UK regulator that gave the direction.

(4) A direction under sub-paragraph (1) in respect of a change may specify when the action described in sub-paragraph (3) must be taken in connection with the change.

(5) If a direction in respect of a change does not specify when the action described in sub-paragraph (3) must be taken in connection with the change, the action must be taken—

(a) before the change is made, where that is reasonably practicable, or

(b) otherwise, as soon as reasonably practicable after the change is made.

(6) A direction under this paragraph—

(a) may make different provision for different purposes, but

(b) may not make provision in relation to a specific Gibraltar-based person.

(7) A UK regulator that gives a direction under this paragraph may, by a further direction, vary or revoke the direction.

(8) The FCA must consult the Treasury before giving a direction under this paragraph.

(9) The PRA must consult the Treasury and the FCA before giving a direction under this paragraph.

(10) After giving a direction under this paragraph, a UK regulator must—

(a) publish the direction in the way appearing to the UK regulator to be best calculated to bring it to the attention of persons likely to be affected by it, and

(b) give a copy of the direction to the Treasury and the other UK regulator without delay.

PART 8 U.K. UK regulators' directions about information

Directions about information to be included in notifications U.K.

57 (1) A UK regulator may direct that a notification for the purposes of paragraph 12, 22, 32 or 44 in relation to which it is the appropriate UK regulator must include information specified in the direction.

(2) In a direction, a UK regulator may only specify information which it reasonably considers necessary to enable it to discharge functions conferred on it by or under this Act in relation to persons with a Schedule 2A permission.

(3) A UK regulator that gives a direction under this paragraph may, by a further direction, vary or revoke the direction.

(4) A direction under this paragraph—

(a) may make different provision for different purposes, but

(b) may not make provision in relation to a specific person.

(5) The FCA must consult the Treasury before giving a direction under this paragraph.

(6) The PRA must consult the Treasury and the FCA before giving a direction under this paragraph.

(7) After giving a direction under this paragraph, a UK regulator must—

(a) publish the direction in the way appearing to the UK regulator to be best calculated to bring it to the attention of persons likely to be affected by it, and

(b) give a copy of the direction to the Treasury and the other UK regulator without delay.

PART 9 U.K. Transition on withdrawal of approval of regulated activity etc

Transition on withdrawal of approval of regulated activity U.K.

58 (1) Sub-paragraph (2) applies where—

(a) the Treasury withdraw their approval of a regulated activity for the purposes of this Schedule (by revoking or amending regulations under paragraph 5), and

(b) immediately before approval is withdrawn, a person had a Schedule 2A permission to carry on the activity.

(2) The regulated activity is to be treated as approved under this Schedule but—

(a) only so far as carried on by the person,

(b) subject to the time limit in sub-paragraph (3), and

(c) subject to any restriction under paragraph 60.

(3) The regulated activity ceases to be treated as approved under this Schedule by virtue of sub-paragraph (2)—

(a) at the end of the period specified by the Treasury by regulations, or

(b) if earlier, when an event listed in sub-paragraph (4) first occurs.

(4) Those events are—

(a) the person ceases to carry on the regulated activity in the United Kingdom;

(b) the person ceases to have permission from the Gibraltar regulator to carry on the corresponding activity in Gibraltar;

(c) the person ceases to have a Schedule 2A permission in respect of the activity;

(d) the person is given permission under Part 4A of this Act in respect of the activity;

(e) the Treasury approve the activity for the purposes of this Schedule (by making regulations under paragraph 5).

(5) Where the approval of the regulated activity referred to in sub-paragraph (1)(a) is subject to limitations, references in this Part of this Schedule to that activity are to that activity subject to those limitations.

(6) Where the withdrawal of the approval of the regulated activity referred to in sub-paragraph (1)(a) is subject to limitations, references in this Part of this Schedule to that activity are to that activity subject to those limitations.

(7) For the purposes of sub-paragraph (4)(b) and (c), a person does not cease to have permission in respect of an activity while it has permission to carry on the activity by virtue of, and subject to the restrictions in, Part 10 of this Schedule.

Transition on Gibraltar activity ceasing to be corresponding activity U.K.

59 (1) Sub-paragraph (2) applies where—

(a) the Treasury provide that an activity which the Gibraltar regulator has authorised, or may authorise, a person to carry on in Gibraltar (a “Gibraltar activity”) does not correspond to an approved activity (by revoking or amending regulations under paragraph 6), and

(b) immediately before they do so, a person had a Schedule 2A permission to carry on the approved activity by virtue of having permission from the Gibraltar regulator to carry the Gibraltar activity.

(2) For the purposes of this Schedule, the Gibraltar activity is to be treated as corresponding to the approved activity but—

(a) only so far as the approved activity is carried on by the person in the United Kingdom,

(b) subject to the time limit in sub-paragraph (3), and

(c) subject to any restriction under paragraph 60.

(3) The Gibraltar activity ceases to be treated as corresponding to the approved activity by virtue of sub-paragraph (2)—

(a) at the end of the period specified by the Treasury by regulations, or

(b) if earlier, when an event listed in sub-paragraph (4) first occurs.

(4) Those events are—

(a) the person ceases to carry on the approved activity in the United Kingdom;

(b) the person ceases to have permission from the Gibraltar regulator to carry on the Gibraltar activity;

(c) the person ceases to have a Schedule 2A permission in respect of the approved activity;

(d) the person is given permission under Part 4A of this Act in respect of the approved activity;

(e) the Treasury provide that the Gibraltar activity corresponds to the approved activity (by making regulations under paragraph 6).

(5) Where the provision made about the Gibraltar activity in regulations under paragraph 6 immediately before the Treasury make the provision described in sub-paragraph (1)(a) is subject to limitations, references in this Part of this Schedule to the Gibraltar activity are to that activity subject to those limitations.

(6) Where the provision made about the Gibraltar activity in the regulations under paragraph 6 referred to in sub-paragraph (1)(a) is subject to limitations, references in this Part of this Schedule to the Gibraltar activity are to that activity subject to those limitations.

(7) For the purposes of sub-paragraph (4)(b) and (c), a person does not cease to have permission in respect of an activity while it has permission to carry on the activity by virtue of, and subject to the restrictions in, Part 10 of this Schedule.

Restricting transitional permission U.K.

60 (1) Sub-paragraph (2) applies where—

(a) by virtue of paragraph 58(1), a regulated activity is treated as approved under this Schedule so far as carried on by a person, or

(b) by virtue of paragraph 59(1), an activity which the Gibraltar regulator has authorised, or may authorise, a person to carry on in Gibraltar is treated as corresponding to an approved activity so far as the approved activity is carried on by a person.

(2) The appropriate UK regulator may decide that the person may only carry on the regulated activity or approved activity (as appropriate) in the United Kingdom so far as is necessary for one or more of the following purposes—

(a) for the performance of a protected contract;

(b) in order to reduce the financial risk of a party to a protected contract or a third party affected by the performance of a protected contract;

(c) in order to transfer the property, rights or liabilities under a protected contract to a person authorised to carry on a regulated activity by virtue of section 31(1)(a);

(d) in order to comply with a requirement imposed by or under an enactment.

(3) If it proposes to make a decision under sub-paragraph (2), the appropriate UK regulator must give the person a written notice.

(4) The notice must—

(a) give details of the proposed decision, and

(b) inform the person that the person may make representations to the appropriate UK regulator within the period specified in the notice.

(5) The appropriate UK regulator may extend the period allowed under the notice for making representations.

(6) If, having considered any representations made by the person, the appropriate UK regulator decides to restrict the person's activities as described in sub-paragraph (2), it must—

(a) give the person a written notice (“a restriction notice”), and

(b) inform the Gibraltar regulator in writing without delay.

(7) A restriction notice must—

(a) specify the date on which it takes effect,

(b) inform the person of the person's right to refer the matter to the Tribunal (see paragraph 62), and

(c) indicate the procedure on a reference to the Tribunal.

(8) The Treasury may by regulations provide that a restriction notice may not specify a date falling before the end of a period specified or described in the regulations.

(9) In this paragraph—

• “the appropriate UK regulator” means—

  (a)

  in the case of a PRA-authorised person, the PRA, and

  (b)

  in any other case, the FCA;

• “enactment” includes—

  (a)

  [F1 assimilated direct] legislation,

  (b)

  an enactment comprised in subordinate legislation,

  (c)

  an enactment comprised in, or in an instrument made under, a Measure or Act of Senedd Cymru,

  (d)

  an enactment comprised in, or in an instrument made under, an Act of the Scottish Parliament, and

  (e)

  an enactment comprised in, or in an instrument made under, Northern Ireland legislation;

• “protected contract” means a contract specified or described in a direction by the appropriate UK regulator under paragraph 61;

• “subordinate legislation” has the same meaning as in the Interpretation Act 1978 (see section 21 of that Act).

(10) In this paragraph, references to the performance of a protected contract include the performance of an obligation under the contract which is contingent or conditional.

Directions about protected contracts U.K.

61 (1) A UK regulator may direct that a contract specified or described in the direction is a protected contract for the purposes of this Part of this Schedule.

(2) A UK regulator that gives a direction under this paragraph may, by a further direction, vary or revoke the direction.

(3) A direction under this paragraph may make different provision for different purposes, including different provision in connection with—

(a) different activities,

(b) different contracts or descriptions of contract, or

(c) different Gibraltar-based persons or descriptions of Gibraltar-based person.

(4) After giving a direction under this paragraph, a UK regulator must—

(a) publish the direction in the way appearing to the UK regulator to be best calculated to bring it to the attention of persons likely to be affected by it, and

(b) give a copy of the direction to the Treasury and the other UK regulator without delay.

Right to refer matters to the Tribunal U.K.

62 Where a person in respect of whom a decision under paragraph 60(2) is made is aggrieved by the decision, the person may refer the matter to the Tribunal.

Further powers U.K.

63 (1) The Treasury may by regulations extend the period under section 55V(1) or (2) for determining an application which—

(a) is for a Part 4A permission or a variation of a Part 4A permission, and

(b) relates only to the carrying on of an activity which the applicant is carrying on in the United Kingdom by virtue of this Part of this Schedule.

(2) The power under sub-paragraph (1) includes power to amend section 55V.

(3) The Treasury may by regulations extend the period for consideration of an application which—

(a) is for approval under section 59 or variation of approval under section 59, and

(b) relates only to performance of a function in relation to the carrying on of an activity which the applicant is carrying on in the United Kingdom by virtue of this Part of this Schedule.

(4) The power under sub-paragraph (3) includes power to amend sections 61 and 63ZA.

PART 10 U.K. Transition on cancellation of UK or Gibraltar permission

Transition on cancellation of Schedule 2A permission U.K.

64 (1) Sub-paragraphs (2), (4) and (5) apply where—

(a) a person's Schedule 2A permission is cancelled under Part 5 of this Schedule, or

(b) a person's Schedule 2A permission is varied under Part 4 of this Schedule so as to remove permission to carry on an activity (including by adding or varying a limitation).

(2) The person is to be treated as continuing to have the Schedule 2A permission, or the permission to carry on the activity, but—

(a) only so far as is necessary for one or more of the purposes described in sub-paragraph (3), and

(b) subject to the time limit in paragraph 68.

(3) The purposes are—

(a) for the performance of a protected contract;

(b) to reduce the financial risk of a party to a protected contract or a third party affected by the performance of a protected contract;

(c) to transfer the property, rights or liabilities under a protected contract to a person authorised to carry on a regulated activity by virtue of section 31(1)(a);

(d) to comply with a requirement imposed by or under an enactment.

(4) A UK regulator may exercise the powers under paragraph 49(1) (UK regulator's initiative: imposing, varying and cancelling requirements) in relation to the person if it appears to the UK regulator that it is desirable to do so in order to advance—

(a) in the case of the FCA, one or more of its operational objectives, or

(b) in the case of the PRA, one of its objectives.

(5) For the purposes of section 33 (withdrawal of authorisation) a person's Schedule 2A permission is to be treated as being cancelled when the person ceases to be treated as having a Schedule 2A permission by virtue of this paragraph.

(6) In this paragraph—

• “enactment” has the same meaning as in paragraph 60;

• “protected contract” means—

  (a)

  an existing contract, or

  (b)

  a contract specified or described in a direction by the appropriate UK regulator under paragraph 67(1).

(7) In sub-paragraph (6), “existing contract”, in relation to a person referred to in sub-paragraph (1), means a contract entered into before the person's permission is cancelled or varied as described in that sub-paragraph, but—

(a) does not include a contract specified or described in a direction under paragraph 67(2), and

(b) except as otherwise provided in such a direction, does not include—

(i) a variation of a contract agreed on or after that day, or

(ii) a contract renewed on or after that day.

(8) In this paragraph, references to the performance of a protected contract include the performance of an obligation under the contract which is contingent or conditional.

Transition on cancellation of Gibraltar permission U.K.

65 (1) Sub-paragraphs (2) and (4) apply where the Gibraltar regulator—

(a) cancels a Gibraltar-based person's permission to carry on in Gibraltar an activity in relation to which the person has a Schedule 2A permission, or

(b) varies such a permission so as to remove permission to carry on such an activity (including by adding or varying a restriction).

(2) For the purposes of this Schedule, the person is to be treated as continuing to have the permission from the Gibraltar regulator but—

(a) only so far as is necessary for one or more of the purposes described in sub-paragraph (3), and

(b) subject to the time limit in paragraph 68.

(3) The purposes are—

(a) for the performance of a protected contract;

(b) to reduce the financial risk of a party to a protected contract or a third party affected by the performance of a protected contract;

(c) to transfer the property, rights or liabilities under a protected contract to a person authorised to carry on a regulated activity by virtue of section 31(1)(a);

(d) to comply with a requirement imposed by or under an enactment.

(4) A UK regulator may exercise the powers under paragraph 49(1) (UK regulator's initiative: imposing, varying and cancelling requirements) in relation to the person if it appears to the UK regulator that it is desirable to do so in order to advance—

(a) in the case of the FCA, one or more of its operational objectives, or

(b) in the case of the PRA, one of its objectives.

(5) In this paragraph—

• “enactment” has the same meaning as in paragraph 60;

• “protected contract” means—

  (a)

  an existing contract, or

  (b)

  a contract specified or described in a direction by the appropriate UK regulator under paragraph 67(1).

(6) In sub-paragraph (5), “existing contract”, in relation to a person referred to in sub-paragraph (1), means a contract entered into before the person's permission is cancelled or varied as described in that sub-paragraph, but—

(a) does not include a contract specified or described in a direction under paragraph 67(2), and

(b) except as otherwise provided in such a direction, does not include—

(i) a variation of a contract agreed on or after that day, or

(ii) a contract renewed on or after that day.

(7) In this paragraph, references to the performance of a protected contract include the performance of an obligation under the contract which is contingent or conditional.

The appropriate UK regulator U.K.

66 (1) In this Part of this Schedule, “the appropriate UK regulator” means—

(a) the PRA, in a case in which the Gibraltar-based person is a PRA-authorised person but not a paragraph 37(1) person, or

(b) the FCA, in any other case.

(2) In this paragraph, “a paragraph 37(1) person” means a person who is treated as having a Schedule 2A permission by virtue of paragraph 64 following the cancellation of that permission by the FCA under paragraph 37(1).

Directions about protected contracts U.K.

67 (1) A UK regulator may direct that a contract specified or described in the direction is a protected contract for the purposes of paragraph 64 or 65 (or both).

(2) A UK regulator may, by giving a direction, modify the definition of “existing contract” for the purposes of paragraph 64 or 65 (or both) in the ways provided for in the definitions of that term in those paragraphs.

(3) A UK regulator that gives a direction under this paragraph may, by a further direction, vary or revoke the direction.

(4) A UK regulator may give different directions under this paragraph in connection with—

(a) different activities,

(b) different contracts or descriptions of contract, or

(c) different Gibraltar-based persons or descriptions of Gibraltar-based person.

(5) After giving a direction under this paragraph, a UK regulator must—

(a) publish the direction in the way appearing to the UK regulator to be best calculated to bring it to the attention of persons likely to be affected by it, and

(b) give a copy of the direction to the Treasury and the other UK regulator without delay.

End of transition U.K.

68 (1) A Gibraltar-based person ceases to be treated as having a permission by virtue of paragraph 64 or 65—

(a) when an event listed in sub-paragraph (2) first occurs, or

(b) if the appropriate UK regulator specifies an earlier date, on that date.

(2) Those events are—

(a) the person ceases to carry on the regulated activity in the United Kingdom;

(b) the person is given permission under Part 4A of this Act in respect of the regulated activity;

(c) the regulated activity ceases to be an approved activity;

(d) the person obtains (as appropriate)—

(i) a new Schedule 2A permission to carry on the activity referred to in paragraph 64(1), or

(ii) a new permission from the Gibraltar regulator to carry on the activity referred to in paragraph 65(1).

(3) If the appropriate UK regulator specifies a date for the purposes of sub-paragraph (1)(b), it may vary the date but only by specifying a later date.

(4) In sub-paragraph (2), references to “the regulated activity” are references (as appropriate) to—

(a) the regulated activity in respect of which the Gibraltar-based person is treated as having a Schedule 2A permission by virtue of paragraph 64, or

(b) the regulated activity corresponding to the activity in respect of which the Gibraltar-based person is treated as having permission from the Gibraltar regulator by virtue of paragraph 65.

(5) For the purposes of sub-paragraph (2)(c), a regulated activity does not cease to be an approved activity while it is treated as approved in relation to the Gibraltar-based person under Part 9 of this Schedule (with or without the restrictions under that Part).

End of transition: procedure U.K.

69 (1) If a UK regulator proposes to specify or vary a date in relation to a person under paragraph 68(1)(b) or (3), it must give the person a warning notice.

(2) If a UK regulator decides to specify or vary a date in relation to a person under paragraph 68(1)(b) or (3), it must give the person a decision notice.

Right to refer matters to the Tribunal U.K.

70 If a UK regulator gives a Gibraltar-based person a decision notice under paragraph 69, the person may refer the matter to the Tribunal.

PART 11 U.K. Policy statements

Policy statements U.K.

71 (1) Each UK regulator must prepare and issue a statement of its policy with respect to—

(a) its powers to vary or cancel a Schedule 2A permission under Part 4 or 5 of this Schedule other than on a notification by the Gibraltar regulator,

(b) its powers to impose, vary or cancel requirements under Part 6 of this Schedule, other than on a notification by the Gibraltar regulator, and

(c) its power to give directions under Part 7 of this Schedule.

(2) Where a UK regulator has issued a statement under sub-paragraph (1), it may prepare and issue a revised statement.

(3) In exercising a power described in sub-paragraph (1), a UK regulator must have regard to any relevant statement of policy issued under this paragraph and in force at the time.

Policy statements: procedure U.K.

72 (1) Before issuing a statement under paragraph 71(1) or (2), a UK regulator must—

(a) publish a draft of the proposed statement in the way appearing to it to be best calculated to bring it to the attention of the public,

(b) publish a notice stating that representations may be made to the UK regulator within the period specified in the notice, and

(c) have regard to any representations made to it in accordance with the notice.

(2) If the UK regulator issues the proposed statement, it must publish—

(a) the statement, and

(b) an account in general terms of—

(i) the representations made to it in accordance with the notice, and

(ii) its response to them.

(3) If the statement issued differs from the draft published under sub-paragraph (1) in a way which, in the opinion of the UK regulator, is significant, the UK regulator must publish details of the differences (as well as complying with sub-paragraph (2)).

(4) A UK regulator—

(a) must give a copy of a statement issued under paragraph 71(1) or (2) to the Treasury before publishing it, and

(b) may charge a reasonable fee for providing a person with a copy of such a statement or a draft statement published under this paragraph.

(5) Anything published by a UK regulator under this paragraph must be published in the way appearing to the UK regulator to be best calculated to bring it to the attention of the public.

PART 12 U.K. Consultation etc by UK regulators

FCA's duties to consult the PRA U.K.

73 (1) The FCA must consult the PRA before—

(a) rejecting a notification under paragraph 19 in a case in which the person with responsibility for managing an aspect of the Gibraltar-based person's affairs is prohibited by an order under section 56 from performing a function in relation to an activity carried on by a PRA-authorised person, or

(b) rejecting a notification under paragraph 20 in a case in which a relevant access right that was lost related to a PRA-regulated activity.

(2) The FCA must consult the PRA before doing any of the following in a case in which the Gibraltar-based person is a PRA-authorised person or a member of a group that includes a PRA-authorised person—

(a) rejecting a notification under paragraph 26(5);

(b) varying a Schedule 2A permission under paragraph 27;

(c) rejecting a notification under paragraph 36(4);

(d) cancelling a Schedule 2A permission under paragraph 37(1);

(e) imposing a requirement under paragraph 41(3);

(f) rejecting a notification under paragraph 48(4);

(g) imposing, varying or cancelling a requirement under paragraph 49(2).

FCA's duties to obtain consent from the PRA U.K.

74 (1) The FCA must obtain the PRA's consent before exercising its power under paragraph 27 in relation to a PRA-authorised person so as to—

(a) add an activity to those to which the person's Schedule 2A permission relates, or

(b) widen the description of an activity to which the person's Schedule 2A permission relates.

(2) Sub-paragraph (1) does not apply in relation to the regulated activity specified in article 63S of the Financial Services and Markets 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) (administering a benchmark).

(3) Consent given by the PRA for the purposes of this paragraph may be conditional on the way in which the FCA exercises its power.

FCA's duties to inform the PRA U.K.

75 (1) The FCA must inform the PRA in writing without delay after rejecting a notification under—

(a) paragraph 18(2) or (3), 19 or 20;

(b) paragraph 26(4) or (5);

(c) paragraph 36(4);

(d) paragraph 48(4).

(2) The FCA must inform the PRA in writing without delay after imposing, varying or cancelling a requirement under paragraph 41(3) or 49(2).

PRA's duties to consult the FCA U.K.

76 (1) The PRA must consult the FCA before—

(a) giving a confirmation notice under paragraph 16;

(b) rejecting a notification under paragraph 19 or 20;

(c) giving a confirmation notice under paragraph 25;

(d) rejecting a notification under paragraph 26(5);

(e) varying a Schedule 2A permission under paragraph 27;

(f) giving a confirmation notice under paragraph 35;

(g) rejecting a notification under paragraph 36(5);

(h) cancelling a Schedule 2A permission under paragraph 37(2);

(i) imposing a requirement under paragraph 41(4);

(j) giving a confirmation notice under paragraph 47;

(k) rejecting a notification under paragraph 48(5);

(l) imposing, varying or cancelling a requirement under paragraph 49(3);

(m) giving a notice under paragraph 60;

(n) giving a direction under paragraph 61;

(o) giving a direction under paragraph 67.

(2) The PRA must—

(a) consult the FCA before publishing a draft statement under paragraph 72, and

(b) if the final version of the statement is to differ from the draft in a way which, in the opinion of the PRA, is significant, consult the FCA again before issuing it.

PRA's duty to obtain consent from the FCA U.K.

77 (1) The PRA must obtain the FCA's consent before exercising its power under paragraph 27 so as to—

(a) add an activity to those to which a Schedule 2A permission relates, or

(b) widen the description of an activity to which a Schedule 2A permission relates.

(2) Consent given by the FCA for the purposes of this paragraph may be conditional on the way in which the PRA exercises its power.

PRA's duties to inform the FCA U.K.

78 (1) When the PRA receives a notification for the purposes of a provision listed in the first column of the following table, it must give a copy to the FCA without delay, except where it rejects the notification under the provision listed in the second column (notification incomplete)—

Notification for the purposes of	Rejection under
paragraph 12	paragraph 18(1)
paragraph 22	paragraph 26(3)
paragraph 32	paragraph 36(3)
paragraph 44	paragraph 48(3).

(2) The PRA must inform the FCA in writing without delay after rejecting a notification under—

(a) paragraph 18(2) or (3), 19 or 20;

(b) paragraph 26(4) or (5);

(c) paragraph 36(5);

(d) paragraph 48(5).

(3) The PRA must inform the FCA in writing without delay after imposing, varying or cancelling a requirement under paragraph 41(4) or 49(3).

UK regulators' duties to inform the Gibraltar regulator U.K.

79 (1) A UK regulator must inform the Gibraltar regulator in writing before giving a confirmation notice under—

(a) paragraph 16,

(b) paragraph 25,

(c) paragraph 35, or

(d) paragraph 47.

(2) A UK regulator must inform the Gibraltar regulator in writing without delay after—

(a) varying a Schedule 2A permission under paragraph 27,

(b) cancelling a Schedule 2A permission under paragraph 37,

(c) imposing a requirement under paragraph 41, or

(d) imposing, varying or cancelling a requirement under paragraph 49.

PART 13 U.K. Co-operation and Assistance

Duties to co-operate U.K.

80 (1) Each of the FCA, the PRA and the scheme manager must take such steps as they consider appropriate, for the purposes in sub-paragraph (2), to co-operate—

(a) with each other and the Treasury (“the UK entities”), and

(b) with the government of Gibraltar and the Gibraltar regulator (“the Gibraltar entities”).

(2) Those purposes are—

(a) to secure that they, and the Treasury, are able to perform their functions under this Schedule and section 32A, and

(b) to secure that, so far as is reasonably possible, there is co-operation between the UK entities and the Gibraltar entities which the Treasury, having regard to the objectives in paragraph 7(1), consider adequate.

(3) For the purposes of sub-paragraph (2), the FCA, the PRA and the scheme manager must, among other things, have regard to—

(a) the memoranda and arrangements described in paragraph 9(4)(a) to (d),

(b) reports laid before Parliament by the Treasury under section 32A, and

(c) any guidance published by the Treasury.

(4) Each of the FCA, the PRA and the scheme manager must ensure that one or more memoranda describing how it intends to comply with sub-paragraph (1) are prepared and maintained.

(5) The steps taken for the purposes of sub-paragraph (1) may include arrangements for the sharing of information which the FCA, the PRA or the scheme manager is not prevented from disclosing.

(6) When carrying out functions under this Schedule, the FCA and the PRA must, among other things, have regard to any relevant arrangements in force at the time for co-operation between the UK entities or for co-operation between those entities and the Gibraltar entities.

Publication and review of arrangements for co-operation U.K.

81 (1) Each of the FCA, the PRA and the scheme manager must—

(a) ensure that a copy of each memorandum describing how it intends to comply with paragraph 80(1), and of any other document recording arrangements that it enters into for the purpose of complying with paragraph 80(1), is given to the Treasury (unless the Treasury also entered into the arrangement),

(b) ensure that each memorandum is published in the way appearing to it to be best calculated to bring it to the attention of the public, and

(c) review the memoranda that it has in place for the purpose of complying with paragraph 80(1) at least once in each of the reporting periods described in section 32A.

(2) Where the Treasury enter into arrangements with the FCA, the PRA, the scheme manager, the government of Gibraltar or the Gibraltar regulator for a purpose described in paragraph 80(2), they must—

(a) ensure that any memorandum recording the arrangements is published in the way appearing to the Treasury to be best calculated to bring it to the attention of the public, and

(b) review the memoranda that the Treasury have in place for a purpose described in paragraph 80(2) at least once in each of the reporting periods described in section 32A.

(3) The Treasury must lay before Parliament a copy of any memorandum—

(a) given to them under sub-paragraph (1), or

(b) published in accordance with sub-paragraph (2)(a).

Provision of reports to assist the Treasury U.K.

82 (1) A UK regulator or the scheme manager must, on a request from the Treasury, prepare and send to the Treasury a report on a matter specified in the request.

(2) The Treasury may only make a request under this paragraph for a report that they reasonably require in connection with the exercise of their functions under—

(a) this Schedule, or

(b) section 32A.

(3) A request for a report under this paragraph—

(a) must be made in writing, and

(b) may require the UK regulator or scheme manager to send the report to the Treasury before a date specified in the request.

PART 14 U.K. Special cases

Gibraltar-based individuals carrying on insurance distribution activities U.K.

83 (1) For the purposes of paragraph 1, an individual without a head office in Gibraltar is to be treated as having a head office there if the individual—

(a) is normally resident in Gibraltar, and

(b) has permission from the Gibraltar regulator to carry on an insurance distribution activity in Gibraltar.

(2) A notification for the purposes of paragraph 12 in respect of an individual who is a Gibraltar-based person by virtue of this paragraph satisfies paragraph 15(1)(b) if it states the main address where the individual carries on an insurance distribution activity in Gibraltar.

(3) The Treasury may by regulations replace the requirement in sub-paragraph (1)(a) with a different requirement relating to residence in Gibraltar.

(4) In this paragraph, “insurance distribution activity” has the meaning given in paragraph 2B(5) and (6) of Schedule 6.”

Textual Amendments

F1 Words in Sch. 6 substituted (1.1.2024) by The Retained EU Law (Revocation and Reform) Act 2023 (Consequential Amendment) Regulations 2023 (S.I. 2023/1424), reg. 1(2), Sch. para. 100(3)(b)

Commencement Information

I1 Sch. 6 in force at 1.9.2023 for specified purposes by S.I. 2023/934, reg. 2(a)