The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001

Statutory Instruments

2001 No. 544

FINANCIAL SERVICES AND MARKETS

The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001

Approved by both Houses of Parliament

Made

26th February 2001

Laid before Parliament

27th February 2001

Coming into force in accordance with article 2

The Treasury, in exercise of the powers conferred on them by sections 22(1) and (5), 426 and 428(3) of, and paragraph 25 of Schedule 2 to, the Financial Services and Markets Act 2000M1, hereby make the following Order:

Marginal Citations

PART IU.K. GENERAL

CitationU.K.

1.  This Order may be cited as the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.

CommencementU.K.

2.—(1) Except as provided by paragraph (2), this Order comes into force on the day on which section 19 of the Act comes into force.

(2) This Order comes into force—

(a)for the purposes of articles 59, 60 and 87 (funeral plan contracts) on 1st January 2002; and

(b)for the purposes of articles 61 to 63, 88, 90 and 91 (regulated mortgage contracts) [F1on such a day as the Treasury may specify].

[F2(3) Any day specified under paragraph (2)(b) must be caused to be notified in the London, Edinburgh and Belfast Gazettes published not later than one week before that day.]

Textual Amendments

InterpretationU.K.

3.—(1) In this Order—

  • “the Act" means the Financial Services and Markets Act 2000;

  • [F3“acting as an insolvency practitioner” is to be read with section 388 of the Insolvency Act 1986 or, as the case may be, article 3 of the Insolvency (Northern Ireland) Order 1989 and, in any provision of this Order which provides for activities to be excluded from a specified activity, references to things done by a person acting—

    (a)

    as an insolvency practitioner, or

    (b)

    in reasonable contemplation of that person’s appointment as an insolvency practitioner,

    include anything done by the person’s firm in connection with that person so acting;]

  • [F4“agreement provider” has the meaning given by article 63J(3);

  • “agreement seller” has the meaning given by article 63J(3);]

  • [F5“AIFM” has the meaning given by regulation 4 of the Alternative Investment Fund Managers Regulations 2013;]

  • [F6“aircraft operator” has the meaning given in article 6 of the trading scheme order;]

  • [F7“alternative investment fund managers directive” means Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers;]

  • “annuities on human life" does not include superannuation allowances and annuities payable out of any fund applicable solely to the relief and maintenance of persons engaged, or who have been engaged, in any particular profession, trade or employment, or of the dependants of such persons;

  • [F8“assignment”, in relation to a credit agreement, has the meaning given by article 60L;]

  • [F9“auction platform” means a platform on which auctions of greenhouse gas emissions allowances are held in accordance with the emission allowance auctioning regulation [F10or the UK auctioning regulations];]

  • [F8“borrower”—

    (a)

    in relation to a credit agreement other than a regulated mortgage contract [F11or] [F11,] an article 36H agreement (within the meaning given by article 36H) [F12or an agreement that is a green deal plan], has the meaning given by article 60L;

    (b)

    in relation to an article 36H agreement (within the meaning given by that article) other than a regulated mortgage contract, [F13has the meaning given by article 36H];]

    (c)

    [F14in relation to a credit agreement that is a green deal plan, has the meaning given by article 60LB;]

  • “buying" includes acquiring for valuable consideration;

  • “close relative" in relation to a person means—

    (a)

    his spouse [F15or civil partner];

    (b)

    his children and step children, his parents and step-parents, his brothers and sisters and his step-brothers and step-sisters; and

    (c)

    the spouse [F15or civil partner] of any person within sub-paragraph (b);

  • [F16“the Commission Regulation” means [F17Commission Delegated Regulation of 25.4.2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive];]

  • [F8“consumer hire agreement” has the meaning given by article 60N;]

  • “contract of general insurance" means any contract falling within Part I of Schedule 1;

  • “contract of insurance" means any contract of insurance which is a contract of long-term insurance or a contract of general insurance, and includes—

    (a)

    fidelity bonds, performance bonds, administration bonds, bail bonds, customs bonds or similar contracts of guarantee, where these are—

    (i)

    effected or carried out by a person not carrying on a banking business;

    (ii)

    not effected merely incidentally to some other business carried on by the person effecting them; and

    (iii)

    effected in return for the payment of one or more premiums;

    (b)

    tontines;

    (c)

    capital redemption contracts or pension fund management contracts, where these are effected or carried out by a person who—

    (i)

    does not carry on a banking business; and

    (ii)

    otherwise carries on a regulated activity of the kind specified by article 10(1) or (2);

    (d)

    contracts to pay annuities on human life;

    (e)

    contracts of a kind referred to in [F18Article 2(3)(b)(v) of the Solvency 2 Directive]; and

    (f)

    [F19contracts relating to the length of human life that are regulated by or under any enactment relating to social security, in so far as they are effected or carried out at their own risk by undertakings with permission to effect or carry out contracts of long-term insurance as principals;]

    but does not include a funeral plan contract F20...;

  • “contract of long-term insurance" means any contract falling within Part II of Schedule 1;

  • “contractually based investment" means—

    (a)

    rights under a qualifying contract of insurance;

    (b)

    any investment of the kind specified by any of articles 83, 84, 85 and 87; or

    (c)

    any investment of the kind specified by article 89 so far as relevant to an investment falling within (a) or (b);

  • [F8[F21“credit agreement” has the meaning given by article 60B;]

    [F21“credit agreement”—

    (a)

    in relation to an agreement other than a green deal plan, has the meaning given by article 60B;

    (b)

    in relation to a green deal plan, has the meaning given by article 60LB;]]

  • F22...

  • “deposit" has the meaning given by article 5 [F23except where the definition given in article 60L applies];

  • F24...

  • F22...

  • [F25“electronic money” has the meaning given by regulation 2(1) of the Electronic Money Regulations 2011;]

  • [F9“emission allowance auctioning regulation” means Commission Regulation (EU) No 1031/2010 of 12 November 2010 on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to the emission allowance trading directive;]

  • [F9“emission allowance trading directive” means Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowances trading within the Community;]

  • [F26“EU Securitisation Regulation 2017” means Regulation (EU) 2017/2402 of the European Parliament and of the Council of 12 December 2017 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation, and amending Directives 2009/65/EC, 2009/138/EC and 2011/61/EU and Regulations (EC) No 1060/2009 and (EU) No 648/2012 [F27as it forms part of retained EU law];]

  • [F16“financial instrument” means any instrument listed in [F28Part 1 of Schedule 2] read with [F29Articles 5 to 8, 10 and 11] of the Commission Regulation (the text of which is set out in Part 2 of Schedule 2);]

  • [F5“full-scope UK AIFM” has the meaning given by regulation 2(1) of the Alternative Investment Fund Managers Regulations 2013;]

  • “funeral plan contract" has the meaning given by article 59;

  • [F30“green deal plan” has the meaning given by section 1 of the Energy Act 2011;]

  • [F9“greenhouse gas emissions allowances” mean “allowances” as defined in Article 3(a) of the emission allowance trading directive [F31or in article 4(1) of the trading scheme order];]

  • [F8“hire-purchase agreement” has the meaning given by article 60L;]

  • [F8“hirer” is to be read with the definition of “consumer hire agreement” in article 60N;]

  • F32...

  • [F33“home purchase provider” has the meaning given by article 63F(3);]

  • [F33“home purchaser” has the meaning given by article 63F(3);]

  • [F34“home State”—

    (a)

    in relation to a qualifying credit institution, means the State in which the institution has been granted authorisation;

    (b)

    in relation to a legal person (other than a qualifying credit institution) that has a registered office under the person's national law, means the State in which that office is located;

    (c)

    in relation to any other person, means the State in which the person's head office is located;]

  • “instrument" includes any record whether or not in the form of a document;

  • [F35“investment firm” means a person whose regular occupation or business is the provision or performance of investment services and activities on a professional basis, other than—

    (a)

    a person excluded by Schedule 3, read with the Commission Regulation and with Commission Delegated Regulation (EU) 2017/592 of 1 December 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to regulatory technical standards for the criteria to establish when an activity is considered to be ancillary to the main business;

    (b)

    a person whose home State is not the United Kingdom and who would be excluded by Schedule 3, read with the Commission Regulation and with Commission Delegated Regulation (EU) 2017/592, if the person's registered office (or head office, in the case of a person that is not a body corporate or a person that is a body corporate but has no registered office) was in the United Kingdom;]

  • F22...

  • “joint enterprise" means an enterprise into which two or more persons (“the participators") enter for commercial purposes related to a business or businesses (other than the business of engaging in a regulated activity) carried on by them; and, where a participator is a member of a group, each other member of the group is also to be regarded as a participator in the enterprise;

  • [F8“lender”—

    (c)

    in relation to a credit agreement other than a regulated mortgage contract [F36or] [F36,] an article 36H agreement (within the meaning given by article 36H) [F37or an agreement that is a green deal plan], has the meaning given by article 60L;

    (d)

    in relation to an article 36H agreement (within the meaning given by that article) other than a regulated mortgage contract, [F38has the meaning given by article 36H];]

    (e)

    [F39in relation to a credit agreement that is a green deal plan, has the meaning given by article 60LB;]

  • “local authority" means—

    (a)

    M2in England and Wales, a local authority within the meaning of the Local Government Act 1972 , the Greater London Authority, the Common Council of the City of London or the Council of the Isles of Scilly;

    (b)

    M3in Scotland, a local authority within the meaning of the Local Government (Scotland) Act 1973 ;

    (c)

    M4in Northern Ireland, a district council within the meaning of the Local Government Act (Northern Ireland) 1972 ;

  • [F40“management company” has the meaning given by section 237(2) of the Act;]

  • “managing agent" means a person who is permitted by the Council of Lloyd’s in the conduct of his business as an underwriting agent to perform for a member of Lloyd’s one or more of the following functions—

    (a)

    underwriting contracts of insurance at Lloyd’s;

    (b)

    reinsuring such contracts in whole or in part;

    (c)

    paying claims on such contracts;

  • [F41“market operator” means—

    (a)

    a person that manages or operates the business of a UK regulated market (including a person who does so as the UK regulated market itself), or

    (b)

    a person that would fall within paragraph (a) if the person had its registered office (or, if it does not have one, its head office) in the United Kingdom,

    other than a person falling within paragraph (1A);]

  • [F7“markets in financial instruments directive” means Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments (recast);

  • “markets in financial instruments regulation” means Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments [F42as it forms part of retained EU law];]

  • [F43“multilateral trading facility” or “MTF” means—

    (a)

    a UK multilateral trading facility (within the meaning of Article 2.1.14A of the markets in financial instruments regulation) operated by an investment firm, a qualifying credit institution or a market operator, or

    (b)

    a facility which—

    (i)

    is operated by an investment firm, qualifying credit institution or market operator whose home State is not the United Kingdom, and

    (ii)

    if its operator's home State was the United Kingdom, would be a UK multilateral trading facility (within the meaning of Article 2.1.14A of the markets in financial instruments regulation);]

  • [F44“occupational pension scheme” has the meaning given by section 1 of the Pension Schemes Act 1993 but with paragraph (b) of the definition omitted;]

  • [F9“operator” has the same meaning as in the [F45trading scheme order];]

  • [F46“organised trading facility” or “OTF” means—

    (a)

    a UK organised trading facility (within the meaning of Article 2.1.15A of the markets in financial instruments regulation) operated by an investment firm, a qualifying credit institution or a market operator, or

    (b)

    a facility which—

    (i)

    is operated by an investment firm, qualifying credit institution or market operator whose home State is not the United Kingdom, and

    (ii)

    if its operator's home State was the United Kingdom, would be a UK organised trading facility (within the meaning of Article 2.1.15A of the markets in financial instruments regulation);]

  • “overseas person" means a person who—

    (a)

    carries on activities of the kind specified by any of articles 14, 21, 25, [F4725A,] [F4825B, 25C,] [F4925D,] [F5025DA,] [F5125E,] 37 [F52, 39A] 40, 45, [F5351ZA, 51ZB, 51ZC, 51ZD, 51ZE], 52 [F54, 53, 53A] [F55, 53B, 53C, [F5653D,] 61, 63B [F57, 63F and 63J]] or, so far as relevant to any of those articles, article 64 (or activities of a kind which would be so specified but for the exclusion in article 72); but

    (b)

    does not carry on any such activities, or offer to do so, from a permanent place of business maintained by him in the United Kingdom;

  • [F8“owner”, in relation to a hire purchase agreement, has the meaning given by article 60N;]

  • “pension fund management contract" means a contract to manage the investments of pension funds (other than funds solely for the benefit of the officers or employees of the person effecting or carrying out the contract and their dependants or, in the case of a company, partly for the benefit of officers and employees and their dependants of its subsidiary or holding company or a subsidiary of its holding company); and for the purposes of this definition, “subsidiary" and “holding company" are to be construed in accordance with [F58section 1159 of the Companies Act 2006];

  • [F59“the person’s firm”, in relation to a person acting as an insolvency practitioner or in reasonable contemplation of that person’s appointment as an insolvency practitioner, means—

    (a)

    the person’s employer;

    (b)

    where the person is a partner in a partnership other than a limited liability partnership, that partnership;

    (c)

    where the person is a member of a limited liability partnership, that partnership;]

  • [F60“personal pension scheme” means a scheme or arrangement which is not an occupational pension scheme or a stakeholder pension scheme and which is comprised in one or more instruments or agreements, having or capable of having effect so as to provide benefits to or in respect of people—

    (a)

    on retirement,

    (b)

    on having reached a particular age, or

    (c)

    on termination of service in an employment;]

  • [F61“plan provider” has the meaning given by paragraph (3) of article 63B, read with paragraphs (7) and (8) of that article;]

  • [F62“portfolio management” has the meaning given by Article 2.7 of the Commission Regulation;]

  • “property" includes currency of the United Kingdom or any other country or territory;

  • [F62“qualifying contract of insurance" means a contract of long-term insurance which is not—

    (a)

    a reinsurance contract; nor

    (b)

    a contract in respect of which the following conditions are met—

    (i)

    the benefits under the contract are payable only on death or in respect of incapacity due to injury, sickness or infirmity;

    (ii)

    F63...

    (iii)

    the contract has no surrender value, or the consideration consists of a single premium and the surrender value does not exceed that premium; and

    (iv)

    the contract makes no provision for its conversion or extension in a manner which would result in it ceasing to comply with any of the above conditions;

  • [F62“qualifying credit institution” means a credit institution which—

    (a)

    is a person who—

    (i)

    has Part 4A permission to carry on the regulated activity of accepting deposits, or

    (ii)

    satisfies the conditions for being given permission under Part 4A to carry on that activity, or

    (iii)

    is a body corporate incorporated in the United Kingdom and would satisfy those conditions—

    (aa)

    were its head office in the United Kingdom, or

    (bb)

    if it has a registered office, were its registered office, or its registered office and its head office, in the United Kingdom,

    (b)

    is not a friendly society,

    (c)

    is not a society registered as a credit union under—

    (i)

    i)the Co-operative and Community Benefit Societies Act 2014 M5,

    (ii)

    the Credit Unions (Northern Ireland) Order 1985 M6, or

    (iii)

    the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969 M7, and

    (d)

    is not a person excluded from the definition of “investment firm” by Schedule 3, read with the Commission Regulation and with Commission Delegated Regulation (EU) 2017/592 of 1 December 2016 supplementing Directive 2014/65/EU of the European Parliament and the Council with regard to regulatory technical standards for the criteria to establish when an activity is considered to be ancillary to the main business;]

  • [F9“reception”, “transmission” and “submission” have the same meaning in relation to a bid at an auction for an investment of the kind specified in article 82A as in the emission allowance auctioning regulation [F64or the UK auctioning regulations];]

  • [F8“regulated consumer hire agreement” has the meaning given by article 60N;]

  • [F8“regulated credit agreement” has the meaning given by article 60B;]

  • [F65“regulated home purchase plan” has the meaning given by article 63F(3);]

  • [F65“regulated home reversion plan” has the meaning given by article 63B(3);]

  • “regulated mortgage contract" has the meaning given by article 61(3);

  • [F66“regulated sale and rent back agreement” has the meaning given by article 63J(3);]

  • [F67“relevant investment” means—

    (a)

    rights under a qualifying contract of insurance;

    (b)

    rights under any other contract of insurance;

    (c)

    any investment of the kind specified by any of articles 83, 84, 85 and 87; or

    (d)

    any investment of the kind specified by article 89 so far as relevant to an investment falling within (a) or (c);]

  • [F8“relevant recipient of credit” has the meaning given by article 60L;]

  • [F8“restricted-use credit agreement” has the meaning given in article 60L;]

  • [F68“reversion seller” has the meaning given by article 63B(3);]

  • [F26“securitisation repository” means a person registered with [F69FCA (as the competent authority)] under Article 10 of the EU Securitisation Regulation 2017;]

  • “security" means (except where the context otherwise requires) any investment of the kind specified by any of articles 76 to 82 [F70or by article 82B] or, so far as relevant to any such investment, article 89;

  • “selling", in relation to any investment, includes disposing of the investment for valuable consideration, and for these purposes “disposing" includes—

    (a)

    in the case of an investment consisting of rights under a contract—

    (i)

    surrendering, assigning or converting those rights; or

    (ii)

    assuming the corresponding liabilities under the contract;

    (b)

    in the case of an investment consisting of rights under other arrangements, assuming the corresponding liabilities under the arrangements; and

    (c)

    in the case of any other investment, issuing or creating the investment or granting the rights or interests of which it consists;

  • [F5“small registered UK AIFM” has the meaning given by regulation 2(1) of the Alternative Investment Fund Managers Regulations 2013;]

  • “stakeholder pension scheme" has the meaning given by section 1 of the Welfare Reform and Pensions Act 1999 [F71in relation to Great Britain and has the meaning given by article 3 of the Welfare Reform and Pensions (Northern Ireland) Order 1999 in relation to Northern Ireland];

  • [F7“structured deposit” means a deposit which is fully repayable at maturity on terms under which interest or a premium will be paid or is at risk, according to a formula involving factors such as—

    (a)

    an index or combination of indices, excluding variable rate deposits whose return is directly linked to an interest rate index such as Euribor or Libor;

    (b)

    a financial instrument or combination of financial instruments;

    (c)

    a commodity or combination of commodities or other physical or non-physical non-fungible assets; or

    (d)

    a foreign exchange rate or combination of foreign exchange rates;]

  • “syndicate" means one or more persons, to whom a particular syndicate number has been assigned by or under the authority of the Council of Lloyd’s, carrying out or effecting contracts of insurance written at Lloyd’s;

  • [F72“trade repository” means—

    (a)

    a person registered with [F73the FCA] under Article 55 of Regulation (EU) 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories or a person recognised by [F73the FCA] under Article 77 of that Regulation; or

    (b)

    a person registered with [F73the FCA]under Article 5 of the SFT regulation or a person recognised by [F73the FCA] under Article 19 of that Regulation;]

  • [F74“trading scheme order” means the Greenhouse Gas Emissions Trading Scheme Order 2020;]

  • [F74“UK auctioning regulations” means the Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021;]

  • [F75“UK regulated market” has the meaning given by Article 2.1.13A of the markets in financial instruments regulation;]

  • [F75“UK UCITS” has the meaning given by section 237(3) of the Act;]

  • F22...

  • F22...

  • “voting shares", in relation to a body corporate, means shares carrying voting rights attributable to share capital which are exercisable in all circumstances at any general meeting of that body corporate.

[F76(1A) A person falls within this paragraph if—

(a)the person is excluded from the definition of “investment firm” by Schedule 3, read with the Commission Regulation and with Commission Delegated Regulation (EU) 2017/592 of 1 December 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to regulatory technical standards for the criteria to establish when an activity is considered to be ancillary to the main business, or

(b)the person is one whose home State is not the United Kingdom and who would be excluded from that definition by Schedule 3, read with the Commission Regulation and with Commission Delegated Regulation (EU) 2017/592, if the person had its registered office (or, if it does not have one, its head office) in the United Kingdom.]

(2) For the purposes of this Order, a transaction is entered into through a person if he enters into it as agent or arranges, in a manner constituting the carrying on of an activity of the kind specified by article 25(1) [F77, 25A(1), 25B(1) [F78, 25C(1) or 25E(1)]], for it to be entered into by another person as agent or principal.

(3) For the purposes of this Order, a contract of insurance is to be treated as falling within Part II of Schedule 1, notwithstanding the fact that it contains related and subsidiary provisions such that it might also be regarded as falling within Part I of that Schedule, if its principal object is that of a contract falling within Part II and it is effected or carried out by an authorised person who has permission to effect or carry out contracts falling within paragraph I of Part II of Schedule 1.

[F79(4) In this Order any reference to a sourcebook is to a sourcebook in the Handbook of Rules and Guidance published by the FCA containing rules made by the FCA under the Act, as the sourcebook has effect on IP completion day.]]

Textual Amendments

F3Words in art. 3(1) inserted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(2)(a)

F4Words in art. 3(1) inserted (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), arts. 1(2), 3(1)(a)

F7Words in art. 3(1) inserted (1.4.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017 (S.I. 2017/488), arts. 1(2), 2(12)

F8Words in art. 3(1) inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), 3(1)

F16Words in art. 3(1) inserted (1.4.2007 for specified purposes, 1.11.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order 2006 (S.I. 2006/3384), arts. 1(2), 3(b)

F17Words in art. 3(1) substituted (1.4.2017 for specified purposes, 3.1.2018 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017 (S.I. 2017/488), arts. 1(2), 2(2)

F20Words in art. 3 omitted (28.1.2021 for specified purposes, 30.7.2022 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2021 (S.I. 2021/90), arts. 1(2)(3), 2(2)

F23Words in art. 3 inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), 3(2)

F25Words in art. 3(1) substituted (9.2.2011 for specified purposes, 30.4.2011 in so far as not already in force) by The Electronic Money Regulations 2011 (S.I. 2011/99), reg. 1(2), Sch. 4 para. 12(a)(ii) (with reg. 3)

F29Words in art. 3(1) substituted (1.4.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017 (S.I. 2017/488), arts. 1(2), 2(4)

F33Words in art. 3(1) inserted (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 3(1)(a)

F44Words in art. 3(1) substituted (1.10.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2006 (S.I. 2006/1969), arts. 1(2), 2(2)(a)

F48Words in art. 3(1) inserted (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 3(1)(b)(i)

F49Word in art. 3(1) inserted (1.4.2007 for specified purposes, 1.11.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order 2006 (S.I. 2006/3384), arts. 1(2), 3(a)

F50Words in art. 3(1) inserted (1.4.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017 (S.I. 2017/488), arts. 1(2), 2(10)

F51Word in art. 3(1) inserted (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), arts. 1(2), 3(1)(c)(i)

F52Word in art. 3(1) inserted (31.10.2004 for specified purposes, 14.1.2005 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2003 (S.I. 2003/1476), arts. 1(3), 3(1)(a)

F55Words in art. 3(1) substituted (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 3(1)(b)(ii)

F56Word in art. 3(1) inserted (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), arts. 1(2), 3(1)(c)(ii)

F57Words in art. 3(1) substituted (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), arts. 1(2), 3(1)(c)(iii)

F59Words in art. 3(1) inserted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(2)(b)

F60Words in art. 3(1) inserted (1.10.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2006 (S.I. 2006/1969), arts. 1(2), 2(2)(b)

F61Words in art. 3(1) inserted (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 3(1)(c)

F65Words in art. 3(1) inserted (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 3(1)(d)

F66Words in art. 3(1) inserted (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), arts. 1(2), 3(1)(b)

F67Words in art. 3(1) inserted (31.10.2004 for specified purposes, 14.1.2005 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2003 (S.I. 2003/1476), arts. 1(3), 3(1)(b)

F68Words in art. 3(1) inserted (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 3(1)(e)

F70Words in art. 3(1) inserted (1.4.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017 (S.I. 2017/488), arts. 1(2), 2(11)

F77Words in art. 3(2) inserted (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 3(2)

F78Words in art. 3(2) substituted (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), arts. 1(2), 3(2)

Modifications etc. (not altering text)

Marginal Citations

M21972 c. 70. The definition of “local authority" in section 270 of the 1972 Act has been amended by Sch. 17 to the Local Government Act 1985 (c. 51); and by section 1(5) of the Local Government (Wales) Act 1994 (c. 19).

M31973 c. 65. The definition of “local authority" in section 235 of the 1973 Act was substituted by para. 92(66) of Sch. 13 to the Local Government etc. (Scotland) Act 1994 (c. 39).

PART IIU.K. SPECIFIED ACTIVITIES

Chapter IU.K.General

Specified activities: generalU.K.

4.—(1) The following provisions of this Part specify kinds of activity for the purposes of [F80section 22(1)] of the Act (and accordingly any activity of one of those kinds, which is carried on by way of business M8, and relates to an investment of a kind specified by any provision of Part III and applicable to that activity, is a regulated activity for the purposes of the Act).

(2) The kinds of activity specified by articles [F81[F8251ZA, 51ZB, 51ZC, 51ZD, 51ZE], 52 and 63N] are also specified for the purposes of section 22(1)(b) of the Act (and accordingly any activity of one of those kinds, when carried on by way of business, is a regulated activity when carried on in relation to property of any kind).

[F83(2A) The kinds of activity specified by Part 3A are specified for the purposes of section 22(1A)(a) of the Act (and accordingly any activity of one of those kinds, when carried on by way of business, is a regulated activity).]

[F84(2B) The kinds of activity specified in Part 3B are specified for the purposes of section 22(1B) of the Act (and accordingly any activity of one of those kinds, when carried on by way of business in Great Britain, is a regulated activity).]

(3) Subject to paragraph (4), each provision specifying a kind of activity is subject to the exclusions applicable to that provision (and accordingly any reference in this Order to an activity of the kind specified by a particular provision is to be read subject to any such exclusions).

[F85(4) Where an investment firm or [F86qualifying credit institution]—

(a)provides or performs investment services and activities on a professional basis, and

(b)in doing so would be treated as carrying on an activity of a kind specified by a provision of this Part but for an exclusion in any of articles 15, 16, [F8718,] 19, 22, 23, 29, [F8834,] 38, 67, 68, 69, 70 and 72E,

that exclusion is to be disregarded and, accordingly, the investment firm or [F86qualifying credit institution] is to be treated as carrying on an activity of the kind specified by the provision in question.]

[F89(4A) Where a person, other than an ancillary insurance intermediary carrying out insurance distribution activities falling within Article 1.3 of the insurance distribution directive (the text of which is set out in Part 1 of Schedule 4)—

(a)for remuneration, takes up or pursues insurance distribution, or reinsurance distribution, in relation to a risk or commitment located in [F90the United Kingdom], and

(b)in doing so would be treated as carrying on an activity of a specified kind by a provision of this Part but for an exclusion in any of articles 30, 66, 67 and 72AA,

that exclusion is to be disregarded (and accordingly that person is to be treated as carrying on an activity of the kind specified by the provision in question).]

[F91(4AA) In its application to any activity relating to a contract of insurance entered into before IP completion day, paragraph (4A)(a) has effect as if “or an EEA State” were inserted after “the United Kingdom.]

[F92(4B) Where—

(a)a person is a mortgage creditor or a mortgage intermediary; and

(b)in acting as a mortgage creditor or a mortgage intermediary [F93in respect of an agreement entered into, or to be entered into, on or after 21st March 2016], that person would be treated as carrying on an activity of a kind specified by article 25A (arranging regulated mortgage contracts), 36A (credit broking), 53A (advising on regulated mortgage contracts), 53DA (advising on regulated credit agreements for the acquisition of land), 60B (regulated credit agreements) or 61 (entering into and administering regulated mortgage contracts), but for an exclusion or exemption provided for by this Order,

that exclusion or exemption is to be disregarded (and accordingly that person is to be treated as carrying on an activity of the kind specified by the provision in question) to the extent that such exclusion or exemption [F94neither relates to an agreement to which section 423A(3) of the Act applies nor falls within the scope of any of the derogations set out in Article 3(3) of the mortgages directive (as it had effect immediately before IP completion day)].]

[F95(5) In this article—

“ancillary insurance intermediary” has the meaning given by Article 2.1(4) of the insurance distribution directive, the text of which is set out in Part 4 of Schedule 4 [F96, read with the modifications set out in paragraph 3 of Part 6 M9 of that Schedule];

“insurance distribution” has the meaning given by Articles 2.1(1) and 2.2 of the insurance distribution directive, the text of which is set out in Parts 2 and 5 of Schedule 4, respectively [F97, read with the modification set out in paragraph 4 of Part 6 of that Schedule]; and

“reinsurance distribution” has the meaning given by Articles 2.1(2) and 2.2 of the insurance distribution directive, the text of which is set out in Parts 3 and 5 of Schedule 4, respectively [F98, read with the modifications set out in paragraphs 2 and 4 of Part 6 of that Schedule].]

Textual Amendments

F80Words in art. 4(1) substituted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), 3(3)(a)

F83Art. 4(2A) inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), 3(3)(b)

F84Art. 4(2B) inserted (E.W.S.) (29.11.2018 for specified purposes, 1.4.2019 in so far as not already in force) by The Financial Services and Markets Act 2000 (Claims Management Activity) Order 2018 (S.I. 2018/1253), art. 1(2)(3), 4

F85Art. 4(4) substituted (1.4.2007 for specified purposes, 1.11.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order 2006 (S.I. 2006/3384), arts. 1(2), 4(a)

F87Word in art. 4(4)(b) inserted (1.4.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017 (S.I. 2017/488), arts. 1(2), 12(2)(a)

F88Word in art. 4(4)(b) inserted (1.4.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017 (S.I. 2017/488), arts. 1(2), 12(2)(b)

F92Art. 4(4B) inserted (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), art. 1(5), Sch. 1 para. 4(3) (with Pt. 4)

F93Words in art. 4(4B)(b) inserted (17.3.2016 for specified purposes, 21.3.2016 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2016 (S.I. 2016/392), art. 1(2)(3)(c), 2(3) (with Pt. 5)

Marginal Citations

M8The Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) Order 2001 (S.I. 2001/ ), made under section 419 of the Act, makes provision as to the circumstances in which persons are, or are not, to be regarded as carrying on activities by way of business.

M9Part 6 is inserted by these Regulations.

Chapter IIU.K.Accepting Deposits

The activityU.K.

Accepting depositsU.K.

5.—(1) Accepting deposits is a specified kind of activity if—

(a)money received by way of deposit is lent to others; or

(b)any other activity of the person accepting the deposit is financed wholly, or to a material extent, out of the capital of or interest on money received by way of deposit.

(2) In paragraph (1), “deposit" means a sum of money, other than one excluded by any of [F99articles 6 to 9A], paid on terms—

(a)under which it will be repaid, with or without interest or premium, and either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person receiving it; and

(b)which are not referable to the provision of property (other than currency) or services or the giving of security.

(3) For the purposes of paragraph (2), money is paid on terms which are referable to the provision of property or services or the giving of security if, and only if—

(a)it is paid by way of advance or part payment under a contract for the sale, hire or other provision of property or services, and is repayable only in the event that the property or services is or are not in fact sold, hired or otherwise provided;

(b)it is paid by way of security for the performance of a contract or by way of security in respect of loss which may result from the non-performance of a contract; or

(c)without prejudice to sub-paragraph (b), it is paid by way of security for the delivery up or return of any property, whether in a particular state of repair or otherwise.

Textual Amendments

ExclusionsU.K.

Sums paid by certain personsU.K.

6.—(1) A sum is not a deposit for the purposes of article 5 if it is—

(a)paid by any of the following persons—

(i)the Bank of EnglandF100...;

(ii)an authorised person who has permission to accept deposits, or to effect or carry out contracts of insurance;

F101(iii). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F102(iv)National Savings and Investments;]

(v)a municipal bank, that is to say a company which was, immediately before the coming into force of this article, exempt from the prohibition in section 3 of the Banking Act 1987 M10 by virtue of section 4(1) of, and paragraph 4 of Schedule 2 to, that Act;

(vi)Keesler Federal Credit Union;

(vii)a body of persons certified as a school bank by the National Savings Bank or by an authorised person who has permission to accept deposits;

(viii)a local authority;

(xi)any body which by virtue of any enactment has power to issue a precept to a local authority in England and Wales or a requisition to a local authority in Scotland, or to the expenses of which, by virtue of any enactment, a local authority in the United Kingdom is or can be required to contribute (and in this paragraph, “enactment" includes an enactment comprised in, or in an instrument made under, an Act of the Scottish Parliament);

F103(x). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(xi)the European Investment Bank;

(xii)the International Bank for Reconstruction and Development;

(xiii)the International Finance Corporation;

(xiv)the International Monetary Fund;

(xv)the African Development Bank;

(xvi)the Asian Development Bank;

(xvii)the Caribbean Development Bank;

(xviii)the Inter-American Development Bank;

(xix)the European Bank for Reconstruction and Development;

[F104(xx)the Council of Europe Development Bank;]

(b)paid by a person other than one mentioned in sub-paragraph (a) in the course of carrying on a business consisting wholly or to a significant extent of lending money;

(c)paid by one company to another at a time when both are members of the same group or when the same individual is a majority shareholder controller of both of them; or

(d)paid by a person who, at the time when it is paid, is a close relative of the person receiving it or who is, or is a close relative of, a director or manager of that person or who is, or is a close relative of, a controller of that person.

(2) For the purposes of paragraph (1)(c), an individual is a majority shareholder controller of a company if he is a controller of the company by virtue of paragraph (a), (c), (e) or (g) of section 422(2) of the Act, and if in his case the greatest percentage of those referred to in those paragraphs is 50 or more.

(3) In the application of sub-paragraph (d) of paragraph (1) to a sum paid by a partnership, that sub-paragraph is to have effect as if, for the reference to the person paying the sum, there were substituted a reference to each of the partners.

Textual Amendments

Marginal Citations

M101987 c. 22. Section 3 was amended by the Bank of England Act 1998 (c. 11), Sch. 5, paras 1 and 3. “Municipal bank" is defined in section 103 of the Banking Act 1987, which was amended by the Local Government Act 1992 (c. 19), Sch. 3, para. 22, and by the Local Government and Rating Act 1997 (c. 29), Sch. 3, para. 21.

Sums received by solicitors etc.U.K.

7.—(1) A sum is not a deposit for the purposes of article 5 if it is received by a practising solicitor acting in the course of his profession.

(2) In paragraph (1), “practising solicitor" means—

(a)a solicitor who is qualified to act as such under section 1 of the Solicitors Act 1974 M11, article 4 of the Solicitors (Northern Ireland) Order 1976 M12 or section 4 of the Solicitors (Scotland) Act 1980 M13;

(b)a recognised body;

(c)a registered foreign lawyer in the course of providing professional services as a member of a multi-national partnership; [F105or]

(d)[F106a Swiss lawyer who is a registered European lawyer]; F107...

F107(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) In this article—

(a)“a recognised body" means a body corporate recognised by—

(i)the Council of the Law Society under section 9 of the Administration of Justice Act 1985 M14;

(ii)the Incorporated Law Society of Northern Ireland under article 26A of the Solicitors (Northern Ireland) Order 1976 M15; or

(iii)the Council of the Law Society of Scotland under section 34 of the Solicitors (Scotland) Act 1980;

(b)“registered foreign lawyer" has the meaning given by section 89 of the Courts and Legal Services Act 1990 M16 or, in Scotland, section 65 of the Solicitors (Scotland) Act 1980 M17;

(c)“multi-national partnership" has the meaning given by section 89 of the Courts and Legal Services Act 1990 but, in Scotland, is a reference to a “multi-national practice" within the meaning of section 60A of the Solicitors (Scotland) Act 1980 M18“registered European lawyer" has the meaning given by regulation 2(1) of the European Communities (Lawyer’s Practice) Regulations 2000 M19 or regulation 2(1) of the European Communities (Lawyer’s Practice) (Scotland) Regulation 2000 M20;F108...

(d)“registered European lawyer” has the meaning given by regulation 2(1) of the European Communities (Lawyer’s Practice) Regulations 2000F109 or regulation 2(1) of the European Communities (Lawyer’s Practice) (Scotland) Regulation 2000F110; [F111and]

[F112(e)“Swiss lawyer” means a national of the United Kingdom or a Swiss national who—

(i)immediately before IP completion day was authorised in Switzerland to pursue professional activities under the professional title of Avocat, Advokat, Rechtsanwalt, Anwalt, Fürsprecher, Fürsprech or Avvocato, or

(ii)had started training towards but not yet obtained their professional qualifications before IP completion day in order to be authorised in Switzerland to pursue professional activities under one of the professional titles referred to in paragraph (i) but who completed their qualifications and were so authorised before the end of the period of four years beginning with IP completion day.]

Textual Amendments

F105Word in art. 7(2)(c) inserted (31.12.2020) by S.I. 2019/710, reg. 6(a)(i) (as substituted by The Services of Lawyers and Lawyer’s Practice (Revocation etc.) (EU Exit) Regulations 2020 (S.I. 2020/1342), reg. 1(3), Sch. para. 19 (with Sch. para. 13))

F106Words in art. 7(2)(d) substituted (31.12.2020) by S.I. 2019/710, reg. 6(a)(ii) (as substituted by The Services of Lawyers and Lawyer’s Practice (Revocation etc.) (EU Exit) Regulations 2020 (S.I. 2020/1342), reg. 1(3), Sch. para. 19 (with Sch. para. 13))

F107Art. 7(2)(e) and word omitted (31.12.2020) by virtue of S.I. 2019/710, reg. 6(a)(iii) (as substituted by The Services of Lawyers and Lawyer’s Practice (Revocation etc.) (EU Exit) Regulations 2020 (S.I. 2020/1342), reg. 1(3), Sch. para. 19 (with Sch. para. 13))

F108Word in art. 7(3)(c) omitted (31.12.2020) by virtue of S.I. 2019/710, reg. 6(b)(i) (as substituted by The Services of Lawyers and Lawyer’s Practice (Revocation etc.) (EU Exit) Regulations 2020 (S.I. 2020/1342), reg. 1(3), Sch. para. 19 (with Sch. para. 13))

F110Scottish Statutory Instruments 2000 No. 121.

F111Word in art. 7(3)(d) inserted (31.12.2020) by S.I. 2019/710, reg. 6(b)(ii) (as substituted by The Services of Lawyers and Lawyer’s Practice (Revocation etc.) (EU Exit) Regulations 2020 (S.I. 2020/1342), reg. 1(3), Sch. para. 19 (with Sch. para. 13))

F112Art. 7(3)(e) inserted by S.I. 2019/710, reg. 6(b)(iii) (as substituted by The Services of Lawyers and Lawyer’s Practice (Revocation etc.) (EU Exit) Regulations 2020 (S.I. 2020/1342), reg. 1(3), Sch. para. 19 (with Sch. para. 13))

Modifications etc. (not altering text)

Marginal Citations

M12S.I. 1976/582 (N.I. 12); relevant amending instrument is S.I. 1989/1343 (N.I. 14).

M141985 c. 61; section 9 was amended by para. 54 of Sch. 18 to the Courts and Legal Services Act 1990, and by para. 1 of Sch. 4 to the European Communities (Lawyer's Practice) Regulations 2000 (S.I. 2000/1119), and was repealed in part by Part II of Sch. 15 to the Access to Justice Act 1999.

M20Scottish Statutory Instruments 2000 No. 121.

Sums received by persons authorised to deal etc.U.K.

8.  A sum is not a deposit for the purposes of article 5 if it is received by a person who is—

(a)an authorised person with permission to carry on an activity of the kind specified by any of articles 14, 21, 25, 37, [F11351ZA, 51ZB, 51ZC, 51ZD, 51ZE] and 52, or

(b)an exempt person in relation to any such activity,

in the course of, or for the purpose of, [F114carrying on any such activity (or any activity which would be such an activity but for any exclusion made by this Part)] with or on behalf of the person by or on behalf of whom the sum is paid.

Textual Amendments

Sums received in consideration for the issue of debt securitiesU.K.

9.—(1) Subject to paragraph (2), a sum is not a deposit for the purposes of article 5 if it is received by a person as consideration for the issue by him of any investment of the kind specified by article 77 or 78.

(2) The exclusion in paragraph (1) does not apply to the receipt by a person of a sum as consideration for the issue by him of commercial paper unless—

(a)the commercial paper is issued to persons—

(i)whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses; or

(ii)who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their businesses; and

(b)the redemption value of the commercial paper is not less than £100,000 (or an amount of equivalent value denominated wholly or partly in a currency other than sterling), and no part of the commercial paper may be transferred unless the redemption value of that part is not less than £100,000 (or such an equivalent amount).

[F115(3) In paragraph (2), “commercial paper” means an investment of the kind specified by article 77 or 78 having a maturity of less than one year from the date of issue.]

Textual Amendments

[F116Sums received in exchange for electronic moneyU.K.

9A.  A sum is not a deposit for the purposes of article 5 if it is immediately exchanged for electronic money.]

Textual Amendments

[F117F118...[F119Managers of UCITS and AIFs]U.K.

9AA.  Article 5 is subject to the [F120exclusion] in F121... [F122 article 72AA (managers of [F123UK UCITS] and AIFs).]]

Textual Amendments

F118Words in art. 9AA heading omitted (31.12.2020) by virtue of The Electronic Commerce and Solvency 2 (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/1361), regs. 1(2), 5(3)(a)(iii) (as amended by S.I. 2019/1390, regs. 1(2), 6); 2020 c. 1, Sch. 5 para. 1(1)

[F124Funds received for payment servicesU.K.

9AB.—(1) A sum is not a deposit for the purposes of article 5 if it is received by an authorised payment institution, an EEA authorised payment institution[F125, a small payment institution, an electronic money institution or an EEA authorised electronic money institution] from a payment service user with a view to the provision of payment services.

(2) For the purposes of paragraph (1), “authorised payment institution”, “EEA authorised payment institution”, “small payment institution”, “payment services” and “payment service user” have the meanings given in the Payment Services Regulations [F1262017] [F127and “electronic money institution” and “EEA authorised electronic money institution” have the meanings given in the Electronic Money Regulations 2011.]]

Textual Amendments

F125Words in art. 9AB(1) substituted (9.2.2011 for specified purposes, 30.4.2011 in so far as not already in force) by The Electronic Money Regulations 2011 (S.I. 2011/99), reg. 1(2), Sch. 4 para. 12(b)(i) (with reg. 3)

F127Words in art. 9AB(2) inserted (9.2.2011 for specified purposes, 30.4.2011 in so far as not already in force) by The Electronic Money Regulations 2011 (S.I. 2011/99), reg. 1(2), Sch. 4 para. 12(b)(ii) (with reg. 3)

[F128Local authoritiesU.K.

9AC.  Article 5 is subject to the exclusion in article 72G (local authorities).]

Textual Amendments

F128Art. 9AC inserted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(3)

[F129CHAPTER IIAU.K. ELECTRONIC MONEY

Textual Amendments

F129Pt. 2 Ch. 2A inserted (11.4.2002 for specified purposes, 27.4.2002 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2002 (S.I. 2002/682), arts. 1(2), 4 (with arts. 9, 10)

The activityU.K.

Issuing electronic moneyU.K.

9B.  Issuing electronic money [F130by—

(a)a [F131qualifying credit institution], a credit union or a municipal bank; or

(b)a person who is deemed to have been granted authorisation under regulation 74 of the Electronic Money Regulations 2011 or who falls within regulation 76(1) of those Regulations,]

is a specified kind of activity.

Textual Amendments

F130Art. 9B(a)(b) and word inserted (9.2.2011 for specified purposes, 30.4.2011 in so far as not already in force) by The Electronic Money Regulations 2011 (S.I. 2011/99), reg. 1(2), Sch. 4 para. 12(c) (with reg. 3)

[F1329BA.  Articles 9C to 9I and 9K apply only in the case of a person falling within regulation 76(1) of the Electronic Money Regulations 2011.]U.K.

Textual Amendments

F132Art. 9BA inserted (9.2.2011 for specified purposes, 30.4.2011 in so far as not already in force) by The Electronic Money Regulations 2011 (S.I. 2011/99), reg. 1(2), Sch. 4 para. 12(d) (with reg. 3)

ExclusionsU.K.

Persons certified as small issuers etc.U.K.

9C.—(1) There is excluded from article 9B the issuing of electronic money by a person to whom [F133the FCA] has given a certificate under this article (provided the certificate has not been revoked).

(2) An application for a certificate may be made by—

(a)a body corporate, or

(b)a partnership,

other than a credit institution F134... which has its head office in the United Kingdom.

(3) [F135The FCA] must, on the application of such a person (“A”), give A a certificate if it appears to [F136the FCA] that paragraph (4), (5) or (6) applies.

(4) This paragraph applies if—

(a)A does not issue electronic money except on terms that the electronic device on which the monetary value is stored is subject to a maximum storage amount of not more than 150 euro; and

(b)A’s total liabilities with respect to the issuing of electronic money do not (or will not) usually exceed 5 million euro and do not (or will not) ever exceed 6 million euro.

(5) This paragraph applies if—

(a)the condition in paragraph (4)(a) is met;

(b)A’s total liabilities with respect to the issuing of electronic money do not (or will not) exceed 10 million euro; and

(c)electronic money issued by A is accepted as a means of payment only by—

(i)subsidiaries of A which perform operational or other ancillary functions related to electronic money issued or distributed by A; or

(ii)other members of the same group as A (other than subsidiaries of A).

(6) This paragraph applies if—

(a)the conditions in paragraphs (4)(a) and (5)(b) are met; and

(b)electronic money issued by A is accepted as a means of payment, in the course of business, by not more than one hundred persons where—

(i)those persons accept such electronic money only at locations within the same premises or limited local area; or

(ii)those persons have a close financial or business relationship with A, such as a common marketing or distribution scheme.

(7) For the purposes of paragraph (6)(b)(i), locations are to be treated as situated within the same premises or limited local area if they are situated within—

(a)a shopping centre, airport, railway station, bus station, or campus of a university, polytechnic, college, school or similar educational establishment; or

(b)an area which does not exceed four square kilometres;

but sub-paragraphs (a) and (b) are illustrative only and are not to be treated as limiting the scope of paragraph (6)(b)(i).

(8) For the purposes of paragraph (6)(b)(ii), persons are not to be treated as having a close financial or business relationship with A merely because they participate in arrangements for the acceptance of electronic money issued by A.

(9) In this article, references to amounts in euro include references to equivalent amounts in sterling.

(10) A person to whom a certificate has been given under this article (and whose certificate has not been revoked) is referred to in this Chapter as a “certified person”.

Textual Amendments

Applications for certificatesU.K.

9D.  The following provisions of the Act apply to applications to [F137the FCA] for certificates under 9C (and the determination of such applications) as they apply to applications for Part IV permissions (and the determination of such applications)—

[F138(a)section 55U(1)(b) and (4) to (8);

(b)section 55V;

(c)section 55X(2) and (4)(f); and

(d)section 55Z3(1).]

Textual Amendments

Revocation of certificate on [F139FCA’s] own initiativeU.K.

9E.—(1) [F140The FCA] may revoke a certificate given to a person (“A”) under article 9C if—

(a)it appears to it that A does not meet the relevant conditions, or has failed to meet the relevant conditions at any time since the certificate was given; or

(b)the person to whom the certificate was given has contravened any rule or requirement to which he is subject as a result of article 9G.

(2) For the purposes of paragraph (1), A meets the relevant conditions at any time if, at that time, paragraph (4), (5) or (6) of article 9C applies.

(3) Sections [F14155Z and 55Z3(2)] of the Act apply to the revocation of a certificate under paragraph (1) as they apply to the cancellation of a Part IV permission on [F142the FCA’s] own initiative, as if references in those sections to an authorised person were references to a certified person.

Textual Amendments

Revocation of certificate on requestU.K.

9F.—(1) A certified person (“B”) may apply to [F143the FCA] for his certificate to be revoked, and [F143the FCA] must then revoke the certificate and give B written notice that it has done so.

(2) An application under paragraph (1) must be made in such manner as [F143the FCA] may direct.

(3) If—

(a)B has made an application under Part IV of the Act for permission to carry on a regulated activity of the kind specified by article 9B (or for variation of an existing permission so as to add a regulated activity of that kind), and

(b)on making an application for revocation of his certificate under paragraph (1), he requests that the revocation be conditional on the granting of his application under Part IV of the Act,

the revocation of B’s certificate is to be conditional on the granting of his application under Part IV of the Act.

Textual Amendments

Obtaining information from certified persons etc.U.K.

9G.—(1) [F144The FCA] may make rules requiring certified persons to provide information to [F144the FCA] about their activities so far as relating to the issuing of electronic money, including the amount of their liabilities with respect to the issuing of electronic money.

(2) [F145Section 138A] of the Act (modification or waiver of rules) applies in relation to rules made under paragraph (1) as if references in that section to an authorised person were references to a certified person.

(3) [F146Section 138D] of the Act (actions for damages) applies in relation to a rule made under paragraph (1) as if the reference in subsection (1) of that section to an authorised person were a reference to a certified person.

(4) [F147The FCA] may, by notice in writing given to a certified person, require him—

(a)to provide specified information or information of a specified description; or

(b)to produce specified documents or documents of a specified description.

(5) Paragraph (4) applies only to information or documents reasonably required for the purposes of determining whether the certified person meets, or has met, the relevant conditions.

(6) Subsections (2), (5) and (6) of section 165 of the Act ([F148Regulator’s] power to require information) apply to a requirement imposed under paragraph (4) as they apply to a requirement imposed under that section.

(7) Section 166 of the Act (reports by skilled persons) has effect as if—

F149(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)the reference in section 166(2)(a) of the Act to an authorised person included a reference to a certified person.

(8) Subsection (4) of section 168 of the Act (appointment of persons to carry out investigations in particular cases) has effect as if it provided for subsection (5) of that section to apply if it appears to [F150the FCA] that there are circumstances suggesting that a certified person may not meet, or may not have met, the relevant conditions.

(9) Sections 175 (information and documents: supplemental provisions), 176 (entry of premises under warrant) and 177 (offences) of the Act apply to a requirement imposed under paragraph (4) as they apply to a requirement imposed under section 165 of the Act (the reference in section 176(3)(a) to an authorised person being read as a reference to a certified person).

(10) In this article—

(a)“specified”, in paragraph (4), means specified in the notice mentioned in that paragraph;

(b)a certified person (“A”) meets the relevant conditions at any time if, at that time, paragraph (4), (5) or (6) of article 9C applies.

Textual Amendments

SupplementalU.K.

Rules prohibiting the issue of electronic money at a discountU.K.

9H.—(1) [F151The FCA] may make rules applying to authorised persons with permission to carry on an activity of the kind specified by article 9B, prohibiting the issue of electronic money having a monetary value greater than the funds received.

(2) [F152Section 138A] of the Act (modification or waiver of rules) applies in relation to rules made under paragraph (1).

Textual Amendments

False claims to be a certified personU.K.

9I.  A person who is not a certified person is to be treated as guilty of an offence under section 24 of the Act (false claims to be authorised or exempt) if he—

(a)describes himself (in whatever terms) as a certified person;

(b)behaves, or otherwise holds himself out, in a manner which indicates (or which is reasonably likely to be understood as indicating) that he is a certified person.

Exclusion of electronic money from the compensation schemeU.K.

9J.  The compensation scheme established under Part XV of the Act is not to provide for the compensation of persons in respect of claims made in connection with any activity of the kind specified by article 9B.

Record of certified personsU.K.

9K.  The record maintained by [F153the FCA] under section 347 of the Act (public record of authorised persons etc.) must include every certified person.]

Textual Amendments

Funds received for payment servicesU.K.

F1549L.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F154Art. 9L omitted (9.2.2011 for specified purposes, 30.4.2011 in so far as not already in force) by virtue of The Electronic Money Regulations 2011 (S.I. 2011/99), reg. 1(2), Sch. 4 para. 12(e) (with reg. 3)

Chapter IIIU.K.Insurance

The activitiesU.K.

Effecting and carrying out contracts of insuranceU.K.

10.—(1) Effecting a contract of insurance as principal is a specified kind of activity.

(2) Carrying out a contract of insurance as principal is a specified kind of activity.

ExclusionsU.K.

Community co-insurersU.K.

F15511.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Breakdown insuranceU.K.

12.—(1) There is excluded from article 10(1) or (2) the effecting or carrying out, by a person who does not otherwise carry on an activity of the kind specified by that article, of a contract of insurance which—

(a)is a contract under which the benefits provided by that person (“the provider") are exclusively or primarily benefits in kind in the event of accident to or breakdown of a vehicle; and

(b)contains the terms mentioned in paragraph (2).

(2) Those terms are that—

(a)the assistance takes either or both of the forms mentioned in paragraph (3)(a) and (b);

(b)the assistance is not available outside the United Kingdom and the Republic of Ireland except where it is provided without the payment of additional premium by a person in the country concerned with whom the provider has entered into a reciprocal agreement; and

(c)assistance provided in the case of an accident or breakdown occurring in the United Kingdom or the Republic of Ireland is, in most circumstances, provided by the provider’s servants.

(3) The forms of assistance are—

(a)repairs to the relevant vehicle at the place where the accident or breakdown has occurred; this assistance may also include the delivery of parts, fuel, oil, water or keys to the relevant vehicle;

(b)removal of the relevant vehicle to the nearest or most appropriate place at which repairs may be carried out, or to—

(i)the home, point of departure or original destination within the United Kingdom of the driver and passengers, provided the accident or breakdown occurred within the United Kingdom;

(ii)the home, point of departure or original destination within the Republic of Ireland of the driver and passengers, provided the accident or breakdown occurred within the Republic of Ireland or within Northern Ireland;

(iii)the home, point of departure or original destination within Northern Ireland of the driver and passengers, provided the accident or breakdown occurred within the Republic of Ireland;

and this form of assistance may include the conveyance of the driver or passengers of the relevant vehicle, with the vehicle, or (where the vehicle is to be conveyed only to the nearest or most appropriate place at which repairs may be carried out) separately, to the nearest location from which they may continue their journey by other means.

(4) A contract does not fail to meet the condition in paragraph (1)(a) solely because the provider may reimburse the person entitled to the assistance for all or part of any sums paid by him in respect of assistance either because he failed to identify himself as a person entitled to the assistance or because he was unable to get in touch with the provider in order to claim the assistance.

(5) In this article—

  • “the assistance" means the benefits to be provided under a contract of the kind mentioned in paragraph (1);

  • “breakdown" means an event—

    (a)

    which causes the driver of the relevant vehicle to be unable to start a journey in the vehicle or involuntarily to bring the vehicle to a halt on a journey because of some malfunction of the vehicle or failure of it to function, and

    (b)

    after which the journey cannot reasonably be commenced or continued in the relevant vehicle;

  • “the relevant vehicle" means the vehicle (including a trailer or caravan) in respect of which the assistance is required.

[F156F157...[F158Managers of UCITS and AIFs]U.K.

12A.  Article 10 is subject to the [F159exclusion] in F160... [F161 article 72AA (managers of [F162UK UCITS] and AIFs).]]

Textual Amendments

[F163Transformer vehicles: insurance risk transformationU.K.

12B.  A transformer vehicle does not carry on an activity of a kind specified by article 10 by assuming a risk from an undertaking, provided the assumption of the risk is a specified kind of activity falling within article 13A (transformer vehicles: insurance risk transformation).]

Textual Amendments

SupplementalU.K.

Application of sections 327 and 332 of the Act to insurance market activitiesU.K.

13.—(1) In sections 327(5) and (7) and 332(3)(b) of the Act (exemption from the general prohibition for members of the professions, and rules in relation to such persons), the references to “a regulated activity" and “regulated activities" do not include—

(a)any activity of the kind specified by article 10(1) or (2), where—

(i)P is a member of the Society; and

(ii)by virtue of section 316 of the Act (application of the Act to Lloyd’s underwriting), the general prohibition does not apply to the carrying on by P of that activity; or

(b)any activity of the kind specified by article 10(2), where—

(i)P is a former underwriting member; and

(ii)the contract of insurance in question is one underwritten by P at Lloyd’s.

(2) In paragraph (1)—

  • “member of the Society" has the same meaning as in Lloyd’s Act 1982 M21; and

  • “former underwriting member" has the meaning given by section 324(1) of the Act.

Marginal Citations

[F164CHAPTER 3AU.K.Insurance risk transformation

Textual Amendments

Transformer vehicles: insurance risk transformationU.K.

13A.  It is a specified kind of activity for a transformer vehicle to assume a risk from an undertaking where—

(a)the undertaking assumes a risk under a contract of insurance (“the underlying risk”); and

(b)the assumption of risk by the transformer vehicle has the legal or economic effect of transferring some or all of the underlying risk to the transformer vehicle.]

Chapter IVU.K.Dealing in Investments as Principal

The activityU.K.

Dealing in investments as principalU.K.

14.—[F165(1)] Buying, selling, subscribing for or underwriting securities or contractually based investments (other than investments of the kind specified by article 87, or article 89 so far as relevant to that article) as principal is a specified kind of activity.

[F166(2) Paragraph (1) does not apply to a kind of activity to which article 25D [F167or 25DA] applies.]

Textual Amendments

F165Art. 14(1): art. 14 renumbered as art. 14(1) (1.4.2007 for specified purposes, 1.11.2007 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order 2006 (S.I. 2006/3384), arts. 1(2), 5(a)

F166Art. 14(2) inserted (1.4.2007 for specified purposes, 1.11.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order 2006 (S.I. 2006/3384), arts. 1(2), 5(b)

F167Words in art. 14(2) inserted (1.4.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017 (S.I. 2017/488), arts. 1(2), 12(3)

ExclusionsU.K.

Absence of holding out etc.U.K.

15.—(1) Subject to paragraph (3), a person (“A") does not carry on an activity of the kind specified by article 14 by entering into a transaction which relates to a security or is the assignment (or, in Scotland, the assignation) of a qualifying contract of insurance (or an investment of the kind specified by article 89, so far as relevant to such a contract), unless—

(a)A holds himself out as willing, as principal, to buy, sell or subscribe for investments of the kind to which the transaction relates at prices determined by him generally and continuously rather than in respect of each particular transaction;

(b)A holds himself out as engaging in the business of buying investments of the kind to which the transaction relates, with a view to selling them;

(c)A holds himself out as engaging in the business of underwriting investments of the kind to which the transaction relates; or

(d)A regularly solicits members of the public with the purpose of inducing them, as principals or agents, to enter into transactions constituting activities of the kind specified by article 14, and the transaction is entered into as a result of his having solicited members of the public in that manner.

(2) In paragraph (1)(d), “members of the public" means any persons other than—

(a)authorised persons or persons who are exempt persons in relation to activities of the kind specified by article 14;

(b)members of the same group as A;

(c)persons who are or who propose to become participators with A in a joint enterprise;

(d)any person who is solicited by A with a view to the acquisition by A of 20 per cent or more of the voting shares in a body corporate;

(e)if A (either alone or with members of the same group as himself) holds more than 20 per cent of the voting shares in a body corporate, any person who is solicited by A with a view to—

(i)the acquisition by A of further shares in the body corporate; or

(ii)the disposal by A of shares in the body corporate to the person solicited or to a member of the same group as the person solicited;

(f)any person who—

(i)is solicited by A with a view to the disposal by A of shares in a body corporate to the person solicited or to a member of the same group as that person; and

(ii)either alone or with members of the same group holds 20 per cent or more of the voting shares in the body corporate;

(g)any person whose head office is outside the United Kingdom, who is solicited by an approach made or directed to him at a place outside the United Kingdom and whose ordinary business involves him in carrying on activities of the kind specified by any of articles 14, 21, 25, 37, 40, 45, [F16851ZA, 51ZB, 51ZC, 51ZD, 51ZE], 52 and 53 or (so far as relevant to any of those articles) article 64, or would do so apart from any exclusion from any of those articles made by this Order.

(3) This article does not apply where A enters into the transaction as bare trustee or, in Scotland, as nominee for another person and is acting on that other person’s instructions (but the exclusion in article 66(1) applies if the conditions set out there are met).

[F169(4) This article is subject to article 4(4).]

Textual Amendments

F169Art. 15(4) inserted (1.4.2007 for specified purposes, 1.11.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order 2006 (S.I. 2006/3384), arts. 1(2), 6

Dealing in contractually based investmentsU.K.

16.—[F170(1)] A person who is not an authorised person does not carry on an activity of the kind specified by article 14 by entering into a transaction relating to a contractually based investment—

(a)with or through an authorised person, or an exempt person acting in the course of a business comprising a regulated activity in relation to which he is exempt; or

(b)through an office outside the United Kingdom maintained by a party to the transaction, and with or through a person whose head office is situated outside the United Kingdom and whose ordinary business involves him in carrying on activities of the kind specified by any of articles 14, 21, 25, 37, 40, 45, [F17151ZA, 51ZB, 51ZC, 51ZD, 51ZE], 52 and 53 or, so far as relevant to any of those articles, article 64 (or would do so apart from any exclusion from any of those articles made by this Order).

[F172(2) This article is subject to article 4(4).]

Textual Amendments

F170Art. 16(1): art. 16 renumbered as art. 16(1) (1.4.2007 for specified purposes, 1.11.2007 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order 2006 (S.I. 2006/3384), arts. 1(2), 7(a)

F172Art. 16(2) inserted (1.4.2007 for specified purposes, 1.11.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order 2006 (S.I. 2006/3384), arts. 1(2), 7(b)

Acceptance of instruments creating or acknowledging indebtednessU.K.

17.—(1) A person does not carry on an activity of the kind specified by article 14 by accepting an instrument creating or acknowledging indebtedness in respect of any loan, credit, guarantee or other similar financial accommodation or assurance which he has made, granted or provided.

(2) The reference in paragraph (1) to a person accepting an instrument includes a reference to a person becoming a party to an instrument otherwise than as a debtor or a surety.

Issue by a company of its own shares etc.U.K.

18.—(1) There is excluded from article 14 the issue by a company of its own shares or share warrants, and the issue by any person of his own debentures or debenture warrants.

(2) In this article—

(a)“company" means any body corporate other than an open-ended investment company;

(b)“shares" and “debentures" include any investment of the kind specified by article 76 [F173, 77 or 77A];

(c)“share warrants" and “debenture warrants" mean any investment of the kind specified by article 79 which relates to shares in the company concerned or, as the case may be, debentures issued by [F174the person concerned].

[F175(3) This article is subject to article 4(4).]

Textual Amendments

F175Art. 18(3) inserted (1.4.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017 (S.I. 2017/488), arts. 1(2), 12(4)

[F176Dealing by a company in its own sharesU.K.

18A.—(1) A company does not carry on an activity of the kind specified by article 14 by purchasing its own shares where [F177section 724 of the Companies Act 2006] (Treasury shares) applies to the shares purchased.

(2) A company does not carry on an activity of the kind specified by article 14 by dealing in its own shares held as treasury shares, in accordance with [F178section 727 (Treasury shares: disposal) or 729 (Treasury shares: cancellation) of that Act].

(3) In this article “shares held as treasury shares” has the same meaning as in that Act.]

Textual Amendments

Risk managementU.K.

19.—(1) A person (“B") does not carry on an activity of the kind specified by article 14 by entering as principal into a transaction with another person (“C") if—

(a)the transaction relates to investments of the kind specified by any of articles 83 to 85 (or article 89 so far as relevant to any of those articles);

(b)neither B nor C is an individual;

(c)the sole or main purpose for which B enters into the transaction (either by itself or in combination with other such transactions) is that of limiting the extent to which a relevant business will be affected by any identifiable risk arising otherwise than as a result of the carrying on of a regulated activity; and

(d)the relevant business consists mainly of activities other than—

(i)regulated activities; or

(ii)activities which would be regulated activities but for any exclusion made by this Part.

(2) In paragraph (1), “relevant business" means a business carried on by—

(a)B;

(b)a member of the same group as B; or

(c)where B and another person are, or propose to become, participators in a joint enterprise, that other person.

[F179(3) This article is subject to article 4(4).]

Textual Amendments

F179Art. 19(3) inserted (1.4.2007 for specified purposes, 1.11.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order 2006 (S.I. 2006/3384), arts. 1(2), 8

[F180Transformer vehicles: insurance risk transformationU.K.

19A.  A transformer vehicle does not carry on an activity of a kind specified by article 14 by assuming a risk from an undertaking, provided the assumption of the risk is a specified kind of activity falling within article 13A (transformer vehicles: insurance risk transformation).]

Textual Amendments

Other exclusionsU.K.

20.  Article 14 is also subject to the exclusions in articles 66 (trustees etc.), 68 (sale of goods and supply of services), 69 (groups and joint enterprises), 70 (sale of body corporate), 71 (employee share schemes) [F181, 72 (overseas persons) [F182F183...[F18472AA (managers of [F185UK UCITS] and AIFs) and 72H (insolvency practitioners)]]].

Textual Amendments

F184Words in art. 20 substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(4)

Chapter VU.K.Dealing in Investments as Agent

The activityU.K.

Dealing in investments as agentU.K.

21.—[F186(1)] Buying, selling, subscribing for or underwriting securities[F187, structured deposits] or [F188relevant investments] F189... as agent is a specified kind of activity.

[F190(2) Paragraph (1) does not apply to a kind of activity to which article 25D [F191or 25DA] applies.]

Textual Amendments

F186Art. 21(1): art. 21 renumbered as art. 21(1) (1.4.2007 for specified purposes, 1.11.2007 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order 2006 (S.I. 2006/3384), arts. 1(2), 9(a)

F187Words in art. 21(1) inserted (1.4.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017 (S.I. 2017/488), arts. 1(2), 4(1)

F188Words in art. 21 substituted (31.10.2004 for specified purposes, 14.1.2005 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2003 (S.I. 2003/1476), arts. 1(3), 4(1)

F189Words in art. 21(1) omitted (28.1.2021 for specified purposes, 30.7.2022 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2021 (S.I. 2021/90), arts. 1(2)(3), 2(3)

F190Art. 21(2) inserted (1.4.2007 for specified purposes, 1.11.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order 2006 (S.I. 2006/3384), arts. 1(2), 9(b)

F191Words in art. 21(2) inserted (1.4.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017 (S.I. 2017/488), arts. 1(2), 12(3)

ExclusionsU.K.

Deals with or through authorised personsU.K.

22.—(1) A person who is not an authorised person does not carry on an activity of the kind specified by article 21 by entering into a transaction as agent for another person (“the client") with or through an authorised person if—

(a)the transaction is entered into on advice given to the client by an authorised person; or

(b)it is clear, in all the circumstances, that the client, in his capacity as an investor, is not seeking and has not sought advice from the agent as to the merits of the client’s entering into the transaction (or, if the client has sought such advice, the agent has declined to give it but has recommended that the client seek such advice from an authorised person).

[F192(2) But the exclusion in paragraph (1) does not apply if—

(a)the transaction relates to a contract of insurance; or

(b)the agent receives from any person other than the client any pecuniary reward or other advantage, for which he does not account to the client, arising out of his entering into the transaction.]

[F193(3) This article is subject to article 4(4).]

Textual Amendments

F192Art. 22(2) substituted (31.10.2004 for specified purposes, 14.1.2005 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2003 (S.I. 2003/1476), arts. 1(3), 4(2)

F193Art. 22(3) inserted (1.4.2007 for specified purposes, 1.11.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order 2006 (S.I. 2006/3384), arts. 1(2), 10

Modifications etc. (not altering text)

Risk managementU.K.

23.—(1) A person (“B") does not carry on an activity of the kind specified by article 21 by entering as agent for a relevant person into a transaction with another person (“C") if—

(a)the transaction relates to investments of the kind specified by any of articles 83 to 85 (or article 89 so far as relevant to any of those articles);

(b)neither B nor C is an individual;

(c)the sole or main purpose for which B enters into the transaction (either by itself or in combination with other such transactions) is that of limiting the extent to which a relevant business will be affected by any identifiable risk arising otherwise than as a result of the carrying on of a regulated activity; and

(d)the relevant business consists mainly of activities other than—

(i)regulated activities; or

(ii)activities which would be regulated activities but for any exclusion made by this Part.

(2) In paragraph (1), “relevant person" means—

(a)a member of the same group as B; or

(b)where B and another person are, or propose to become, participators in a joint enterprise, that other person;

and “relevant business" means a business carried on by a relevant person.

[F194(3) This article is subject to article 4(4).]

Textual Amendments

F194Art. 23(3) inserted (1.4.2007 for specified purposes, 1.11.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order 2006 (S.I. 2006/3384), arts. 1(2), 11

Other exclusionsU.K.

24.  Article 21 is also subject to the exclusions in articles 67 (profession or non-investment business), 68 (sale of goods and supply of services), 69 (groups and joint enterprises), 70 (sale of body corporate), 71 (employee share schemes) [F195, 72 (overseas persons)][F196, F197... 72B (activities carried on by a provider of relevant goods or services) [F198, 72AA (managers of [F199UK UCITS] and AIFs)[F200, 72D (large risks contracts where risk situated [F201outside the United Kingdom]), 72G (local authorities) and 72H (insolvency practitioners)]]].

Textual Amendments

F196Words in art. 24 substituted (31.10.2004 for specified purposes, 14.1.2005 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2003 (S.I. 2003/1476), arts. 1(3), 4(3)

F200Words in art. 24 substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(5)

[F202Chapter 5AU.K.Bidding in Emissions Auctions

Textual Amendments

The activityU.K.

Bidding in emissions auctionsU.K.

24A.—(1) The reception, transmission or submission of a bid at an auction of an investment of the kind specified by article 82A conducted—

(a)on a recognised auction platform [F203in accordance with the UK auctioning regulations], or

(b)on [F204an] auction platform which has been appointed under the emission allowance auctioning regulation [F205in accordance with that regulation],

is a specified kind of activity.

(2) An activity which falls within paragraph (1) (or would do so but for the exclusions in article 24B) does not form part of any other activity specified under any other article of this Order.

(3) In this article, “recognised auction platform” has the meaning given in regulation 1(3) of the Recognised Auction Platform Regulations 2011.

Textual Amendments

ExclusionsU.K.

Miscellaneous exclusionsU.K.

24B.—(1) There is excluded from article 24A any activity carried on by—

(a)an operator or an aircraft operator having an operator holding account, in either case bidding on its own account, including any parent undertaking, subsidiary undertaking or [F206affiliated undertaking] forming part of the same group of undertakings as the operator or the aircraft operator;

(b)business groupings of persons listed in sub-paragraph (a) bidding on their own account or acting as an agent on behalf of their members; or

(c)public bodies or state-owned entities of the Member States [F207or of the United Kingdom] that control any of the persons listed in sub-paragraph (a).

F208(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) In this article, the expressions “parent undertaking”, “subsidiary undertaking”, [F209"affiliated undertaking"], “business grouping”, “public bodies” and “state-owned entities” have the same meaning as in the [F210UK auctioning regulations].]

Textual Amendments

Chapter VIU.K.Arranging Deals in Investments

The activitiesU.K.

Arranging deals in investmentsU.K.

25.—(1) Making arrangements for another person (whether as principal or agent) to buy, sell, subscribe for or underwrite a particular investment which is—

(a)a security,

(b)a [F211relevant investment], F212...

(c)an investment of the kind specified by article 86, or article 89 so far as relevant to that article [F213, or

(d)a structured deposit,]

is a specified kind of activity.

(2) Making arrangements with a view to a person who participates in the arrangements buying, selling, subscribing for or underwriting investments falling within paragraph (1)(a), (b) [F214, (c) or (d)] (whether as principal or agent) is also a specified kind of activity.

[F215(3) Paragraphs (1) and (2) do not apply to a kind of activity to which article 25D [F216, 25DA or 25DB,] applies.]

Textual Amendments

F211Words in art. 25(1) substituted (31.10.2004 for specified purposes, 14.1.2005 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2003 (S.I. 2003/1476), arts. 1(3), 5(1)

F212Word in art. 25(1)(b) omitted (1.4.2017 for specified purposes, 3.1.2018 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017 (S.I. 2017/488), arts. 1(2), 4(2)(a)(i)

F213Art. 25(1)(d) and preceding word inserted (1.4.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017 (S.I. 2017/488), arts. 1(2), 4(2)(a)(ii)

F214Words in art. 25(2) substituted (1.4.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017 (S.I. 2017/488), arts. 1(2), 4(2)(b)

F215Art. 25(3) inserted (1.4.2007 for specified purposes, 1.11.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order 2006 (S.I. 2006/3384), arts. 1(2), 12

F216Words in art. 25(3) substituted (30.1.2024 for specified purposes and otherwise on the day on which EUR 2017/1129 is revoked by 2023 c. 29, s. 1(1), Sch. 1) by The Public Offers and Admissions to Trading Regulations 2024 (S.I. 2024/105), regs. 2(2)(3), 46(2) (with regs. 48-50)

[F217Arranging regulated mortgage contractsU.K.

25A.—(1) Making arrangements—

(a)for another person to enter into a regulated mortgage contract as borrower; or

(b)for another person to vary the terms of a regulated mortgage contract [F218falling within paragraph (1A)] entered into by him as borrower F219..., in such a way as to vary his obligations under that contract,

is a specified kind of activity.

[F220(1A) A regulated mortgage contract falls within this paragraph if—

(a)the contract was entered into on or after 31st October 2004; or

(b)the contract—

(i)was entered into before 31st October 2004; and

(ii)was a regulated credit agreement immediately before 21st March 2016.]

(2) Making arrangements with a view to a person who participates in the arrangements entering into a regulated mortgage contract as borrower is also a specified kind of activity.

[F221(2A) Making arrangements to enter into a regulated mortgage contract with a borrower on behalf of a lender is also a specified kind of activity.]

(3) In this article [F222“borrower” and “lender” have the meanings] given by article 61(3)(a)(i).]

Textual Amendments

F218Words in art. 25A(1)(b) inserted (17.3.2016 for specified purposes, 21.3.2016 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2016 (S.I. 2016/392), art. 1(2)(3)(c), 2(4)(a)(i) (with Pt. 5)

F219Words in art. 25A(1)(b) omitted (17.3.2016 for specified purposes, 21.3.2016 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2016 (S.I. 2016/392), art. 1(2)(3)(c), 2(4)(a)(ii) (with Pt. 5)

F220Art. 25A(1A) inserted (17.3.2016 for specified purposes, 21.3.2016 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2016 (S.I. 2016/392), art. 1(2)(3)(c), 2(4)(b) (with Pt. 5)

F221Art. 25A(2A) inserted (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), art. 1(5), Sch. 1 para. 4(4)(a) (with Pt. 4)

F222Words in art. 25A(3) substituted (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), art. 1(5), Sch. 1 para. 4(4)(b) (with Pt. 4)

[F223Arranging regulated home reversion plansU.K.

25B.—(1) Making arrangements—

(a)for another person to enter into a regulated home reversion plan as reversion seller or as plan provider; or

(b)for another person to vary the terms of a regulated home reversion plan, entered into on or after 6th April 2007 by him as reversion seller or as plan provider, in such a way as to vary his obligations under that plan,

is a specified kind of activity.

(2) Making arrangements with a view to a person who participates in the arrangements entering into a regulated home reversion plan as reversion seller or as plan provider is also a specified kind of activity.]

Textual Amendments

F223Arts. 25B, 25C inserted (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 4

[F223Arranging regulated home purchase plansU.K.

25C.—(1) Making arrangements—

(a)for another person to enter into a regulated home purchase plan as home purchaser; or

(b)for another person to vary the terms of a regulated home purchase plan, entered into on or after 6th April 2007 by him as home purchaser, in such a way as to vary his obligations under that plan,

is a specified kind of activity.

(2) Making arrangements with a view to a person who participates in the arrangements entering into a regulated home purchase plan as home purchaser is also a specified kind of activity.]

Textual Amendments

F223Arts. 25B, 25C inserted (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 4

[F224Operating a multilateral trading facilityU.K.

25D.—(1) The operation of a multilateral trading facility on which MiFID instruments are traded is a specified kind of activity.

[F225(1A) Paragraph (1) does not apply to a kind of activity to which article 25DB applies.]

(2) In paragraph (1), “MiFID instrument” means any investment—

(a)of the kind specified by article 76, 77, [F22677A,] 78, 79, 80, 81, [F22782B,] 83, 84 or 85; or

(b)of the kind specified by article 89 so far as relevant to an investment falling within sub-paragraph (a),

that is a financial instrument.]

Textual Amendments

F224Art. 25D inserted (1.4.2007 for specified purposes, 1.11.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order 2006 (S.I. 2006/3384), arts. 1(2), 13

F225Art. 25D(1A) inserted (30.1.2024 for specified purposes and otherwise on the day on which EUR 2017/1129 is revoked by 2023 c. 29, s. 1(1), Sch. 1) by The Public Offers and Admissions to Trading Regulations 2024 (S.I. 2024/105), regs. 2(2)(3), 46(3) (with regs. 48-50)

F227Word in art. 25D(2)(a) inserted (1.4.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017 (S.I. 2017/488), arts. 1(2), 12(5)

[F228Operating an organised trading facilityU.K.

25DA.—(1) The operation of an organised trading facility on which non-equity MiFID instruments are traded is a specified kind of activity.

[F229(1A) Paragraph (1) does not apply to a kind of activity to which article 25DB applies.]

(2) In paragraph (1) a “non-equity MiFID instrument” means any investment—

(a)of the kind specified by article 77, 77A, 78, 79, 80, 81, 82B, 83, 84 or 85; or

(b)of the kind specified by article 89 so far as relevant to an investment falling within sub-paragraph (a),

that is a bond, a structured finance product (within the meaning of Article 2.1.28 of the markets in financial instruments regulation), an emission allowance, or a derivative (within the meaning of Article 2.1.29 of the markets in financial instruments regulation).]

Textual Amendments

F228Art. 25DA inserted (1.4.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017 (S.I. 2017/488), arts. 1(2), 3

F229Art. 25DA(1A) inserted (30.1.2024 for specified purposes and otherwise on the day on which EUR 2017/1129 is revoked by 2023 c. 29, s. 1(1), Sch. 1) by The Public Offers and Admissions to Trading Regulations 2024 (S.I. 2024/105), regs. 2(2)(3), 46(4) (with regs. 48-50)

[F230Operating an electronic system for public offers of relevant securitiesU.K.

25DB.—(1) Operating an electronic system by means of which a qualifying public offer is made is a specified kind of activity.

(2) “Qualifying public offer” means an offer of relevant securities to the public in the United Kingdom that meets the following conditions.

(3) Condition A is that, if paragraph 13 of Schedule 1 to the Public Offers and Admissions to Trading Regulations 2024 (which exempts offers made by means of a regulated platform) were disregarded, the offer would be prohibited by regulation 12(1) of those Regulations.

(4) Condition B is that the relevant securities—

(a)fall within paragraph (1)(a) of regulation 5 of the Public Offers and Admissions to Trading Regulations 2024 (which defines “relevant securities” for the purposes of those Regulations) and are investments of a kind specified by Part 3 of this Order, or

(b)fall within paragraph (1)(b) of that regulation as a result of being investments of the kind specified by article 77.

(5) Condition C is that the relevant securities are not issued or to be issued by the person operating the electronic system.

(6) In paragraph (2), the reference to an offer of relevant securities to the public in the United Kingdom is to be read in accordance with regulation 7 of the Public Offers and Admissions to Trading Regulations 2024.

(7) In this article “relevant securities” has the same meaning as in the Public Offers and Admissions to Trading Regulations 2024 (see regulation 5 of those Regulations).]

Textual Amendments

F230Art. 25DB inserted (30.1.2024 for specified purposes and otherwise on the day on which EUR 2017/1129 is revoked by 2023 c. 29, s. 1(1), Sch. 1) by The Public Offers and Admissions to Trading Regulations 2024 (S.I. 2024/105), regs. 2(2)(3), 46(5) (with regs. 48-50)

[F231Arranging regulated sale and rent back agreementsU.K.

25E.—(1) Making arrangements—

(a)for another person to enter into a regulated sale and rent back agreement as an agreement seller or as an agreement provider; or

(b)for another person (“A”) to vary the terms of a regulated sale and rent back agreement, entered into on or after 1st July 2009 by A as agreement seller or agreement provider, in such a way as to vary A’s obligations under that agreement,

is a specified kind of activity.

(2) Making arrangements with a view to a person who participates in the arrangements entering into a regulated sale and rent back agreement as agreement seller or agreement provider is also a specified kind of activity.]

Textual Amendments

F231Art. 25E inserted (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), arts. 1(2), 4

ExclusionsU.K.

Arrangements not causing a dealU.K.

26.  There are excluded from [F232articles 25(1), 25A(1), 25B(1) [F233, 25C(1) and 25E(1)]] arrangements which do not or would not bring about the transaction to which the arrangements relate.

Textual Amendments

F232Words in art. 26 substituted (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 5

F233Words in art. 26 substituted (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), arts. 1(2), 5

Enabling parties to communicateU.K.

27.—[F234(1)] A person does not carry on an activity of the kind specified by [F235article 25(2), 25A(2), 25B(2) [F236, 25C(2) or 25 E(2)]] merely by providing means by which one party to a transaction (or potential transaction) is able to communicate with other such parties.

[F237(2) A person does not carry on an activity of the kind specified by article 25DB merely by providing a means of communication, where the person is not holding out the means of communication as being provided for the making of qualifying public offers within the meaning of that article.]

Textual Amendments

F234Art. 27 renumbered as art. 27(1) (30.1.2024 for specified purposes and otherwise on the day on which EUR 2017/1129 is revoked by 2023 c. 29, s. 1(1), Sch. 1) by The Public Offers and Admissions to Trading Regulations 2024 (S.I. 2024/105), regs. 2(2)(3), 46(6)(a) (with regs. 48-50)

F235Words in art. 27 substituted (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 6

F236Words in art. 27 substituted (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), arts. 1(2), 6

F237Art. 27(2) inserted (30.1.2024 for specified purposes and otherwise on the day on which EUR 2017/1129 is revoked by 2023 c. 29, s. 1(1), Sch. 1) by The Public Offers and Admissions to Trading Regulations 2024 (S.I. 2024/105), regs. 2(2)(3), 46(6)(b) (with regs. 48-50)

Arranging transactions to which the arranger is a partyU.K.

28.—(1) There are excluded from article 25(1) any arrangements for a transaction into which the person making the arrangements enters or is to enter as principal or as agent for some other person.

(2) There are excluded from article 25(2) any arrangements which a person makes with a view to transactions into which he enters or is to enter as principal or as agent for some other person.

[F238(3) But the exclusions in paragraphs (1) and (2) do not apply to arrangements made for or with a view to a transaction which relates to a contract of insurance, unless the person making the arrangements either—

(a)is the only policyholder; or

(b)as a result of the transaction, would become the only policyholder.]

Textual Amendments

F238Art. 28(3) inserted (31.10.2004 for specified purposes, 14.1.2005 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2003 (S.I. 2003/1476), arts. 1(3), 5(2)

[F239Arranging contracts [F240, plans or agreements] to which the arranger is a partyU.K.

28A.—(1) There are excluded from [F241articles 25A(1), 25B(1) [F242, 25C(1) and 25E(1)]] any arrangements—

(a)for a [F243contract [F244, plan or agreement]] into which the person making the arrangements enters or is to enter; or

(b)for a variation of a [F243contract [F244, plan or agreement]] to which that person is (or is to become) a party.

(2) There are excluded from [F245articles 25A(2), 25B(2) [F246, 25C(2) and 25E(2)]] any arrangements which a person makes with a view to contracts [F247, plans or agreements] into which he enters or is to enter.]

Textual Amendments

F240Words in art. 28A title substituted (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), arts. 1(2), 7(1)

F241Words in art. 28A(1) substituted (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 7(2)(a)(i)

F242Words in art. 28A(1) substituted (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), arts. 1(2), 7(2)(a)(i)

F243Words in art. 28A(1) substituted (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 7(2)(a)(ii)

F244Words in art. 28A(1) substituted (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), arts. 1(2), 7(2)(a)(ii)

F245Words in art. 28A(2) substituted (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 7(2)(b)(i)

F246Words in art. 28A(2) substituted (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), arts. 1(2), 7(2)(b)(i)

F247Words in art. 28A(2) substituted (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), arts. 1(2), 7(2)(b)(ii)

Arranging deals with or through authorised personsU.K.

29.—(1) There are excluded from [F248articles 25(1) and (2), [F24925A(1), (2) and (2A)], 25B(1) and (2) [F250, 25C(1) and (2) and 25E(1) and (2)]] arrangements made by a person (“A") who is not an authorised person for or with a view to a transaction which is or is to be entered into by a person (“the client") with or though an authorised person if—

(a)the transaction is or is to be entered into on advice to the client by an authorised person; or

(b)it is clear, in all the circumstances, that the client, in his capacity as an [F251investor, borrower, reversion seller, plan provider, home purchaser, agreement provider or (as the case may be) agreement seller], is not seeking and has not sought advice from A as to the merits of the client’s entering into the transaction (or, if the client has sought such advice, A has declined to give it but has recommended that the client seek such advice from an authorised person).

[F252(2) But the exclusion in paragraph (1) does not apply if—

(a)the transaction relates, or would relate, to a contract of insurance; or

(b)A receives from any person other than the client any pecuniary reward or other advantage, for which he does not account to the client, arising out of his making the arrangements.]

[F253(3) This article is subject to article 4(4) [F254and (4B)].]

Textual Amendments

F248Words in art. 29(1) substituted (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 8(a)

F249Words in art. 29(1) substituted (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), art. 1(5), Sch. 1 para. 4(5)(a) (with Pt. 4)

F250Words in art. 29(1) substituted (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), arts. 1(2), 8(a)

F251Words in art. 29(1)(b) substituted (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), arts. 1(2), 8(b)

F252Art. 29(2) substituted (31.10.2004 for specified purposes, 14.1.2005 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2003 (S.I. 2003/1476), arts. 1(3), 5(3)

F253Art. 29(3) inserted (1.4.2007 for specified purposes, 1.11.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order 2006 (S.I. 2006/3384), arts. 1(2), 14

F254Words in art. 29(3) inserted (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), art. 1(5), Sch. 1 para. 4(5)(b) (with Pt. 4)

Modifications etc. (not altering text)

C10Art. 29 modified (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), art. 1(2), Sch. para. 9

C12Art. 29 modified (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), art. 1(2), Sch. para. 8

[F255Arrangements made in the course of administration by authorised personU.K.

29A.—[F256(1)]  A person who is not an authorised person (“A”) does not carry on an activity of the kind specified by article 25A(1)(b) as a result of—

(a)anything done by an authorised person (“B”) in relation to a regulated mortgage contract which B is administering pursuant to an arrangement of the kind mentioned in article 62(a); or

(b)anything A does in connection with the administration of a regulated mortgage contract in circumstances falling within article 62(b).

[F257(2) A person who is not an authorised person (“A”) does not carry on an activity of the kind specified by article 25B(1)(b) as a result of—

(a)anything done by an authorised person (“B”) in relation to a regulated home reversion plan which B is administering pursuant to an arrangement of the kind mentioned in article 63C(a); or

(b)anything A does in connection with the administration of a regulated home reversion plan in circumstances falling within article 63C(b).

(3) A person who is not an authorised person (“A”) does not carry on an activity of the kind specified by article 25C(1)(b) as a result of—

(a)anything done by an authorised person (“B”) in relation to a regulated home purchase plan which B is administering pursuant to an arrangement of the kind mentioned in article 63G(a); or

(b)anything A does in connection with the administration of a regulated home purchase plan in circumstances falling within article 63G(b).]

[F258(4) A person who is not an authorised person (“A”) does not carry on an activity of the kind specified by article 25E(1)(b) as a result of—

(a)anything done by an authorised person (“B”) in relation to a regulated sale and rent back agreement which B is administering pursuant to an arrangement of the kind mentioned in article 63K(a); or

(b)anything A does in connection with the administration of a regulated sale and rent back agreement in circumstances falling within article 63K(b).]]

Textual Amendments

F256Art. 29A(1): art. 29A renumbered as art. 29A(1) (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 9(a)

F257Art. 29A(2)(3) inserted (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 9(b)

F258Art. 29A(4) inserted (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), arts. 1(2), 9

Modifications etc. (not altering text)

C13Art. 29A(2)(a) applied (with modifications) (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), art. 1(2), Sch. para. 10

C14Art. 29A(3)(a) applied (with modifications) (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), art. 1(2), Sch. para. 10

C15Art. 29A(4)(a) modified (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), art. 1(2), Sch. para. 9

Arranging transactions in connection with lending on the security of insurance policiesU.K.

30.—(1) There are excluded from article 25(1) and (2) arrangements made by a money-lender under which either—

[F259(a)a relevant authorised person or a person acting on his behalf will introduce to the money-lender persons with whom the relevant authorised person has entered, or proposes to enter, into a relevant transaction, or will advise such persons to approach the money-lender, with a view to the money-lender lending money on the security of any contract effected pursuant to a relevant transaction;]

(b)a relevant authorised person gives an assurance to the money-lender as to the amount which, on the security of any contract effected pursuant to a relevant transaction, will or may be received by the money-lender should the money-lender lend money to a person introduced to him pursuant to the arrangements.

(2) In paragraph (1)—

  • “money-lender" means a person who is—

    (a)

    a money-lending company within the meaning of [F260section 209 of the Companies Act 2006];

    (b)

    a body corporate incorporated under the law of, or of any part of, the United Kingdom relating to building societies; or

    (c)

    a person whose ordinary business includes the making of loans or the giving of guarantees in connection with loans;

  • “relevant authorised person" means an authorised person who has permission to effect [F261contracts of insurance] or to sell investments of the kind specified by article 89, so far as relevant to such contracts;

  • “relevant transaction" means the effecting of a [F262contract of insurance] or the sale of an investment of the kind specified by article 89, so far as relevant to such contracts.

[F263(3) This article is subject to article 4(4A).]

Textual Amendments

F261Words in art. 30(2) substituted (31.10.2004 for specified purposes, 14.1.2005 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2003 (S.I. 2003/1476), arts. 1(3), 5(4)(a)

F262Words in art. 30(2) substituted (31.10.2004 for specified purposes, 14.1.2005 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2003 (S.I. 2003/1476), arts. 1(3), 5(4)(b)

F263Art. 30(3) inserted (1.4.2007 for specified purposes, 1.11.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order 2006 (S.I. 2006/3384), arts. 1(2), 15

Arranging the acceptance of debentures in connection with loansU.K.

31.—(1) There are excluded from article 25(1) and (2) arrangements under which a person accepts or is to accept, whether as principal or agent, an instrument creating or acknowledging indebtedness in respect of any loan, credit, guarantee or other similar financial accommodation or assurance which is, or is to be, made, granted or provided by that person or his principal.

(2) The reference in paragraph (1) to a person accepting an instrument includes a reference to a person becoming a party to an instrument otherwise than as a debtor or a surety.

Provision of financeU.K.

32.  There are excluded from article 25(2) arrangements having as their sole purpose the provision of finance to enable a person to buy, sell, subscribe for or underwrite investments.

IntroducingU.K.

33.  There are excluded from [F264articles 25(2), 25A(2), 25B(2) [F265, 25C(2) and 25E(2)]] arrangements where—

(a)they are arrangements under which persons (“clients") will be introduced to another person;

(b)the person to whom introductions are to be made is—

(i)an authorised person;

(ii)an exempt person acting in the course of a business comprising a regulated activity in relation to which he is exempt; or

(iii)a person who is not unlawfully carrying on regulated activities in the United Kingdom and whose ordinary business involves him in engaging in an activity of the kind specified by any of articles 14, 21, 25, [F26625A,] [F26725B, 25C,] [F26825E,] 37 [F269, 39A] 40, 45, [F27051ZA, 51ZB, 51ZC, 51ZD, 51ZE], [F27152, 53][F272, 53A, 53B[F273, 53C and 53D]] (or, so far as relevant to any of those articles, article 64), or would do so apart from any exclusion from any of those articles made by this Order; F274...

(c)the introduction is made with a view to the provision of independent advice or the independent exercise of discretion in relation to investments generally or in relation to any class of investments to which the arrangements relate [F275; and

[F276(d)The arrangements—

(i)are made with a view to a person entering into a transaction which does not relate to a contract of insurance, or

(ii)are of the type specified in article 33B (provision of information – contracts of insurance).]]

Textual Amendments

F264Words in art. 33 substituted (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 10(a)

F265Words in art. 33 substituted (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), arts. 1(2), 10(a)

F267Words in art. 33(b)(iii) inserted (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 10(b)(i)

F268Word in art. 33(b)(iii) inserted (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), arts. 1(2), 10(b)(i)

F269Word in art. 33(b)(iii) inserted (31.10.2004 for specified purposes, 14.1.2005 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2003 (S.I. 2003/1476), arts. 1(3), 5(5)(a)

F272Words in art. 33(b)(iii) substituted (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 10(b)(ii)

F273Words in art. 33(b)(iii) substituted (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), arts. 1(2), 10(b)(ii)

F274Word in art. 33(b)(iii) omitted (31.10.2004 for specified purposes, 14.1.2005 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2003 (S.I. 2003/1476), arts. 1(3), 5(5)(b)

F275Art. 33(d) and preceding word inserted (31.10.2004 for specified purposes, 14.1.2005 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2003 (S.I. 2003/1476), arts. 1(3), 5(5)(c)

[F277Introducing to authorised persons etc.U.K.

33A—(1) There are excluded from article 25A(2) arrangements where—

(a)they are arrangements under which a client is introduced to a person (“N”) who is—

(i)an authorised person who has permission to carry on a regulated activity of the kind specified by any of articles 25A, 53A, and 61(1),

(ii)an appointed representative who may carry on a regulated activity of the kind specified by either of articles 25A and 53A without contravening the general prohibition, or

(iii)an overseas person who carries on activities specified by any of articles 25A, 53A and 61(1); and

(b)the conditions mentioned in paragraph (2) are satisfied.

[F278(1A) There are excluded from article 25B(2) arrangements where—

(a)they are arrangements under which a client is introduced to a person (“N”) who is—

(i)an authorised person who has permission to carry on a regulated activity of the kind specified by any of articles 25B, 53B and 63B(1),

(ii)an appointed representative who may carry on a regulated activity of the kind specified by either of articles 25B and 53B without contravening the general prohibition, or

(iii)an overseas person who carries on activities specified by any of articles 25B, 53B and 63B(1); and

(b)the conditions mentioned in paragraph (2) are satisfied.

(1B) There are excluded from article 25C(2) arrangements where—

(a)they are arrangements under which a client is introduced to a person (“N”) who is—

(i)an authorised person who has permission to carry on a regulated activity of the kind specified by any of articles 25C, 53C and 63F(1),

(ii)an appointed representative who may carry on a regulated activity of the kind specified by either of articles 25C and 53C without contravening the general prohibition, or

(iii)an overseas person who carries on activities specified by any of articles 25C, 53C and 63F(1); and

(b)the conditions mentioned in paragraph (2) are satisfied.]

[F279(1C) There are excluded from article 25E(2) arrangements where—

(a)they are arrangements under which a client is introduced to a person (“N”) who is—

(i)an authorised person who has permission to carry on a regulated activity of the kind specified by any of articles 25E, 53D and 63J(1),

(ii)an appointed representative who may carry on a regulated activity of the kind specified by either of articles 25E or 53D without contravening the general prohibition, or

(iii)an overseas person who carries on activities specified by any of articles 25E, 53D and 63J(1); and

(b)the conditions mentioned in paragraph (2) are satisfied.]

(2) Those conditions are—

(a)that the person making the introduction (“P”) does not receive any money, other than money payable to P on his own account, paid by the client for or in connection with any transaction which the client enters into with or through N as a result of the introduction; and

(b)that before making the introduction P discloses to the client such of the information mentioned in paragraph (3) as applies to P.

(3) That information is—

(a)that P is a member of the same group as N;

(b)details of any payment which P will receive from N, by way of fee or commission, for introducing the client to N;

(c)an indication of any other reward or advantage received or to be received by P that arises out of his introducing clients to N.

[F280(4) In this article, “client” means—

(a)for the purposes of paragraph (1), a borrower within the meaning given by article 61(3)(a)(i), or a person who is or may be contemplating entering into a regulated mortgage contract as such a borrower;

(b)for the purposes of paragraph (1A), a reversion seller, a plan provider or a person who is or may be contemplating entering into a regulated home reversion plan as a reversion seller or as a plan provider;

(c)for the purposes of paragraph (1B), a home purchaser or a person who is or may be contemplating entering into a regulated home purchase plan as a home purchaser[F281;

(d)for the purposes of paragraph (1C), an agreement provider, an agreement seller or a person who is or may be contemplating entering into a regulated sale and rent back agreement as an agreement provider or agreement seller.]]]

Textual Amendments

F278Art. 33A(1A)(1B) inserted (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 11(a)

F279Art. 33A(1C) inserted (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), arts. 1(2), 11(a)

F280Art. 33A(4) substituted (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 11(b)

F281Art. 33A(4)(d) inserted (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), arts. 1(2), 11(b)

[F282Provision of information – contracts of insuranceU.K.

33B.—(1) There is excluded from article 25(1) and (2) (arranging deals in investments) the making of arrangements for, or with a view to, a transaction for the sale or purchase of a contract of insurance, where that activity meets the conditions specified in paragraphs (2) and (3).

(2) The conditions specified in this paragraph are that the activity—

(a)consists of the provision of information about a potential policyholder to a relevant insurer or an insurance or reinsurance intermediary, or

(b)consists of the provision of information to a potential policyholder about—

(i)a contract of insurance, or

(ii)a relevant insurer or insurance or reinsurance intermediary.

(3) The condition specified in this paragraph is that the provider of the information does not take any step other than the provision of information to assist in the conclusion of a contract of insurance.

(4) In this article—

[F283“insurance intermediary” means a person other than—

(a)

an insurance or reinsurance undertaking or an employee of such an undertaking, or

(b)

an ancillary insurance intermediary,

who, for remuneration, takes up or pursues the activity of insurance distribution;]

[F284“reinsurance intermediary” means a person other than—

(a)

a reinsurance undertaking, or

(b)

an employee of a reinsurance undertaking,

who, for remuneration, takes up or pursues the activity of reinsurance distribution;]

“relevant insurer” has the meaning given in article 39B(2) (claims management on behalf of an insurer etc.).

[F285(5) In paragraph (4)—

“ancillary insurance intermediary”, “insurance distribution” and “reinsurance distribution” have the same meaning as in article 4;

“remuneration” means any commission, fee, charge or other payment, including an economic benefit of any kind or any other financial or non-financial advantage or incentive offered or given.]]

Textual Amendments

Arrangements for the issue of shares etc.U.K.

34.—(1) There are excluded from article 25(1) and (2)—

(a)arrangements made by a company for the purposes of issuing its own shares or share warrants; and

(b)arrangements made by any person for the purposes of issuing his own debentures or debenture warrants;

and for the purposes of article 25(1) and (2), a company is not, by reason of issuing its own shares or share warrants, and a person is not, by reason of issuing his own debentures or debenture warrants, to be treated as selling them.

(2) In paragraph (1), “company", “shares", “debentures", “share warrants" and “debenture warrants" have the meanings given by article 18(2).

[F286(3) This article is subject to article 4(4).]

Textual Amendments

F286Art. 34(3) inserted (1.4.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017 (S.I. 2017/488), arts. 1(2), 12(6)

International securities self-regulating organisationsU.K.

35.—(1) There are excluded from article 25(1) and (2) any arrangements made for the purposes of carrying out the functions of a body or association which is approved under this article as an international securities self-regulating organisation, whether the arrangements are made by the organisation itself or by a person acting on its behalf.

(2) The Treasury may approve as an international securities self-regulating organisation any body corporate or unincorporated association with respect to which the conditions mentioned in paragraph (3) appear to them to be met if, having regard to such matters affecting international trade, overseas earnings and the balance of payments or otherwise as they consider relevant, it appears to them that to do so would be desirable and not result in any undue risk to investors.

(3) The conditions are that—

(a)the body or association does not have its head office in the United Kingdom;

(b)the body or association is not eligible for recognition under section 287 or 288 of the Act (applications by investment exchanges and clearing houses) on the ground that (whether or not it has applied, and whether or not it would be eligible on other grounds) it is unable to satisfy the requirements of one or both of paragraphs (a) and (b) of section 292(3) of the Act (requirements for overseas investment exchanges and overseas clearing houses);

[F287(ba)the body or association is also not eligible to become F288... a third country central counterparty (as defined in section 285(1)(d) of the Act);]

[F289(bb)the body or association is also not eligible to become F290... a third country CSD (as defined in section 285(1)(g) of the Act);]

(c)the body or association is able and willing to co-operate with [F291the FCA and the PRA] by the sharing of information and in other ways;

(d)adequate arrangements exist for co-operation between [F291the FCA and the PRA] and those responsible for the supervision of the body or association in the country or territory in which its head office is situated;

(e)the body or association has a membership composed of persons falling within any of the following categories, that is to say, authorised persons, exempt persons, and persons whose head offices are outside the United Kingdom and whose ordinary business involves them in engaging in activities which are activities of a kind specified by this Order (or would be apart from any exclusion made by this Part); and

(f)the body or association facilitates and regulates the activity of its members in the conduct of international securities business.

(4) In paragraph (3)(f), “international securities business" means the business of buying, selling, subscribing for or underwriting investments (or agreeing to do so), either as principal or agent, where—

(a)the investments are securities or [F292relevant investments] and are of a kind which, by their nature, and the manner in which the business is conducted, may be expected normally to be bought or dealt in by persons sufficiently expert to understand the risks involved; and

(b)either the transaction is international or each of the parties may be expected to be indifferent to the location of the other;

and, for the purposes of this definition, it is irrelevant that the investments may ultimately be bought otherwise than in the course of such business by persons not so expert.

(5) Any approval under this article is to be given by notice in writing; and the Treasury may by a further notice in writing withdraw any such approval if for any reason it appears to them that it is not appropriate to it to continue in force.

Textual Amendments

F292Words in art. 35(4)(a) substituted (31.10.2004 for specified purposes, 14.1.2005 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2003 (S.I. 2003/1476), arts. 1(3), 5(6)

Modifications etc. (not altering text)

[F293Trade repositoriesU.K.

35A.—[F294(1)] A trade repository does not carry on an activity of the kind specified by article 25(2) by carrying on its functions of centrally collecting and maintaining records of—

[F295(a)]derivatives under Regulation (EU) 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories[F296; or

(b)securities financing transactions under the SFT regulation].

[F297(2) The reference in paragraph (1)(a) to Regulation (EU) 648/2012 is a reference to that instrument as it [F298forms part of retained EU law.]]]

Textual Amendments

[F299Securitisation repositoriesU.K.

35AB  A securitisation repository does not carry on an activity of the kind specified by article 25(2) by carrying on its functions of centrally collecting and maintaining records of securitisations under the EU Securitisation Regulation 2017.]

Textual Amendments

Providing pensions guidance F300...U.K.

35B.—(1) A person does not carry on an activity of the kind specified in article 25(1) or (2) by reason of providing pensions guidance F301....

[F302(2) For the purposes of paragraph (1), pensions guidance means—

(a)information or guidance provided by the Money and Pensions Service in carrying out its pensions guidance function (see section 3 of the Financial Guidance and Claims Act 2018);

(b)information or guidance provided by another person with whom arrangements under section 5(1), (2) or (3) of the Financial Guidance and Claims Act 2018 are made to carry out the Money and Pensions Service’s pensions guidance function.]

Textual Amendments

Other exclusionsU.K.

36.—[F303(1)] Article 25 is also subject to the exclusions in articles 66 (trustees etc.), 67 (profession or non-investment business), 68 (sale of goods and supply of services), 69 (groups and joint enterprises), 70 (sale of body corporate), 71 (employee share schemes)[F304, 72 (overseas persons)[F305,F306...72B (activities carried on by a provider of relevant goods or services), 72C (provision of information about contracts of insurance on an incidental basis)[F307, 72AA (managers of [F308UK UCITS] and AIFs)[F309, 72D (large risks contracts where risk situated [F310outside the United Kingdom]), 72G (local authorities) and 72H (insolvency practitioners)]]]].

[F311(2) [F312Articles 25A, 25B[F313, 25C and 25E] are] also subject to the exclusions in articles 66 (trustees etc.), 67 (profession or non-investment business), 72 (overseas persons)[F314,F315...[F316 72AA (managers of [F308UK UCITS] and AIFs) and 72G (local authorities)]].]

[F317(2A) Article 25A is also subject to the exclusion in article 72I (registered consumer buy-to-let mortgage firms).]

[F318(3) Article 25D is also subject to [F319the exclusions in articles 72 (overseas persons)[F320, 72AA (managers of [F308UK UCITS] and AIFs) and 72H (insolvency practitioners)]].]

Textual Amendments

F305Words in art. 36(1) substituted (31.10.2004 for specified purposes, 14.1.2005 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2003 (S.I. 2003/1476), arts. 1(3), 5(7)

F309Words in art. 36(1) substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(6)(a)

F312Words in art. 36(2) substituted (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 12

F313Words in art. 36(2) substituted (1.7.2009 for specified purposes, 30.6.2010 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), arts. 1(2), 12

F316Words in art. 36(2) substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(6)(b)

F317Art. 36(2A) inserted (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), art. 1(5), Sch. 1 para. 4(6) (with Pt. 4)

F320Words in art. 36(3) substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(6)(c)

[F321Chapter 6AU.K.Credit Broking

Textual Amendments

F321Pt. II Ch. 6A, 6B inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), 4

The activityU.K.

Credit brokingU.K.

36A.—(1) Each of the following is a specified kind of activity—

(a)effecting an introduction of an individual or relevant recipient of credit who wishes to enter into a credit agreement to a person (“P”) with a view to P entering into by way of business as lender a regulated credit agreement (or an agreement which would be a regulated credit agreement but for any of the relevant provisions);

(b)effecting an introduction of an individual or relevant recipient of credit who wishes to enter into a consumer hire agreement to a person (“P”) with a view to P entering into by way of business as owner a regulated consumer hire agreement or an agreement which would be a regulated consumer hire agreement but for article 60O (exempt agreements: exemptions relating to the nature of the agreement) or 60Q (exempt agreements: exemptions relating to the nature of the hirer);

(c)effecting an introduction of an individual or relevant recipient of credit who wishes to enter into a credit agreement or consumer hire agreement (as the case may be) to a person who carries on an activity of the kind specified in sub-paragraph (a) or (b) by way of business;

(d)presenting or offering an agreement which would (if entered into) be a regulated credit agreement (or an agreement which would be a regulated credit agreement but for any of the relevant provisions);

(e)assisting an individual or relevant recipient of credit by undertaking preparatory work with a view to that person entering into a regulated credit agreement (or an agreement which would be a regulated credit agreement but for any of the relevant provisions);

(f)entering into a regulated credit agreement (or an agreement which would be a regulated credit agreement but for any of the relevant provisions) on behalf of a lender.

(2) Paragraph (1) does not apply in so far as the activity is an activity of the kind specified by article 36H (operating an electronic system in relation to lending).

(3) For the purposes of paragraph (1) it is immaterial whether the credit agreement or consumer hire agreement is subject to the law of a country outside the United Kingdom.

(4) For the purposes of this article, the “relevant provisions” are the following provisions—

(a)article 60C (exempt agreements: exemptions relating to the nature of the agreement);

(b)article 60D (exempt agreements: exemptions relating to the purchase of land for non-residential purposes);

(c)article 60E (exempt agreements: exemptions relating to the nature of the lender)[F322, except for paragraph (5) of that article];

(d)article 60G (exempt agreements: exemptions relating to the total charge for credit);

(e)article 60H (exempt agreements: exemptions relating to the nature of the borrower).

Textual Amendments

ExclusionsU.K.

Introducing by individuals in the course of canvassing off trade premisesU.K.

36B.—(1) There are excluded from article 36A activities carried on by an individual by canvassing off trade premises—

(a)a restricted-use credit agreement used to finance a transaction between the lender or a member of the lender’s group and the borrower whether forming part of that agreement or not, or

(b)a regulated consumer hire agreement.

(2) But paragraph (1) does not apply if A carries on any other activity of a kind specified by article 36A(1)(a) to (c).

(3) A canvasses a restricted-use credit agreement or a regulated consumer hire agreement off trade premises for the purposes of this article if—

(a)A solicits the entry of an individual or relevant recipient of credit (“B”) into such an agreement by making oral representations to B during a visit by A to any place (not excluded by paragraph (4)) where B is, and

(b)that visit is made by A for the purpose of making such oral representations.

(4) A place is excluded from paragraph (3) if it is a place where a business is carried on (whether on a permanent or temporary basis) by—

(a)the lender or owner,

(b)the supplier under the restricted-use credit agreement,

(c)A,

(d)a person who employs A or has appointed A as an agent, or

(e)B.

Activities for which no fee is paidU.K.

36C.—(1) There are excluded from sub-paragraphs (d), (e) and (f) of article 36A(1) activities carried on by a person for which that person does not receive a fee.

(2) For the purposes of this article, “fee” includes pecuniary consideration or any other form of financial consideration.

Transaction to which the broker is a partyU.K.

36D.  There are excluded from article 36A activities in relation to a regulated credit agreement (or an agreement which would be a regulated credit agreement but for the exclusions in articles 60C to 60H) or a regulated consumer hire agreement (or an agreement which would be a regulated consumer hire agreement but for the exclusions in articles 60O to 60Q) into which the person carrying on the activity enters or is to enter as lender or owner.

[F323Activities in relation to certain agreements relating to landU.K.

36E.—(1) There are excluded from article 36A activities carried on with a view to an individual or a relevant recipient of credit entering into an investment property loan, as defined in article 61A(6) (mortgage contracts which are not regulated mortgage contracts).

(2) There are excluded from article 36A activities of a kind specified by article 25A (arranging regulated mortgage contracts) or 25C (arranging regulated home purchase plans).

(3) There are excluded from article 36A other activities not excluded by paragraph (1) or (2) which consist of effecting an introduction with a view to an individual or relevant recipient of credit entering into a relevant agreement, if the person to whom the introduction is made is an authorised person who has permission to—

(a)enter into such an agreement as lender or home purchase provider (as the case may be), or

(b)make an introduction to an authorised person who has permission to enter into such an agreement as lender or home purchase provider (as the case may be).

(4) In paragraph (3) “relevant agreement” means a regulated mortgage contract or a regulated home purchase plan.]

Textual Amendments

F323Art. 36E substituted (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), art. 1(5), Sch. 1 para. 4(7) (with Pt. 4)

[F324Activities carried on by members of the legal profession etcU.K.

36F.—(1) There are excluded from article 36A (credit broking) activities carried on by—

(a)a barrister or advocate acting in that capacity;

(b)a solicitor (within the meaning of the Solicitors Act 1974) in the course of providing advocacy services or litigation services;

(c)a solicitor (within the meaning of the Solicitors (Scotland) Act 1980) in the course of providing advocacy services or litigation services;

(d)a solicitor (within the meaning of the Solicitors (Northern Ireland) Order 1976) in the course of providing advocacy services or litigation services;

(e)a relevant person (other than a person falling within sub-paragraph (a) to (d)) in the course of providing advocacy services or litigation services.

(2) In paragraph (1)—

“advocacy services” means any services which it would be reasonable to expect a person who is exercising, or contemplating exercising, a right of audience in relation to any proceedings, or contemplated proceedings, to provide for the purpose of those proceedings or contemplated proceedings;

“litigation services” means any services which it would be reasonable to expect a person who is exercising, or contemplating exercising, a right to conduct litigation in relation to any proceedings, or contemplated proceedings, to provide for the purpose of those proceedings or contemplated proceedings;

“relevant person” means a person who, for the purposes of the Legal Services Act 2007, is an authorised person in relation to an activity which constitutes the exercise of a right of audience or the conduct of litigation (within the meaning of that Act).]

Textual Amendments

[F325Activities carried on by registered social landlordsU.K.

36FA.—(1) There are excluded from article 36A (credit broking) activities carried on by a registered social landlord, for which the registered social landlord does not receive a fee.

(2) The exclusion in paragraph (1) only applies to activities relating to the introduction of an individual who wishes to enter into a credit agreement, to—

(a)a credit union;

(b)a community benefit society;

(c)a community interest company limited by guarantee;

(d)a registered charity, or a subsidiary of a registered charity;

(e)a subsidiary of a registered social landlord.

(3) For the purposes of this article, “fee” includes pecuniary consideration or any other form of financial consideration.

(4) In this article—

“community benefit society” means a registered society within the meaning of the Co-operative and Community Benefit Societies Act 2014 or a registered society within the meaning of the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969;

“community interest company limited by guarantee” means a community interest company limited by guarantee within the meaning of section 26 of the Companies (Audit, Investigations and Community Enterprise) Act 2004;

“credit union” means a credit union within the meaning of—

(a)

the Credit Unions Act 1979;

(b)

the Credit Unions (Northern Ireland) Order 1985;

“registered charity” means

(a)

in England and Wales, a charity registered under section 30(1) of the Charities Act 2011;

(b)

in Scotland, a charity registered within the meaning of section 13(1) of the Charities and Trustee Investment (Scotland) Act 2005

(c)

in Northern Ireland, a charity registered under section 16(2) of the Charities Act (Northern Ireland) 2008;

“registered social landlord” means—

(a)

in England, a private registered provider within the meaning of section 80(3) of the Housing and Regeneration Act 2008;

(b)

in Wales, a registered social landlord within the meaning of Part 1 of the Housing Act 1996;

(c)

in Scotland, a registered social landlord within the meaning of the Housing (Scotland) Act 2010;

(d)

in Northern Ireland, a housing association within the meaning of Part 2 of the Housing (Northern Ireland) Order 1992;

“subsidiary” means a subsidiary as defined by section 1159 of the Companies Act 2006.]

Textual Amendments

[F326Other exclusions]U.K.

36G.  Article 36A is also subject to [F327the exclusions in articles F328... 72G (local authorities) and 72I (registered consumer buy-to-let mortgage firms)].

Textual Amendments

F326Art. 36G heading substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(7)

F327Words in art. 36G substituted (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), art. 1(5), Sch. 1 para. 4(8) (with Pt. 4)

Chapter 6BU.K.Operating an Electronic System in Relation to Lending

The activityU.K.

Operating an electronic system in relation to lendingU.K.

36H.—(1) Where the [F329conditions in paragraphs (2), (2A) and (2C) are] satisfied, operating an electronic system which enables the operator (“A”) to facilitate persons (“B” and “C”) becoming the lender and borrower under an article 36H agreement is a specified kind of activity.

(2) The condition [F330in this paragraph] is that the system operated by A is capable of determining which agreements should be made available to each of B and C (whether in accordance with general instructions provided to A by B or C or otherwise).

[F331(2A) The condition in this paragraph is that A, or another person (“X”) acting under an arrangement with A or at A’s direction, undertakes to—

(a)receive payments in respect of [F332either interest or capital or both] due under the article 36H agreement from C, and

(b)make payments in respect of [F333either interest or capital or both] due under the article 36H agreement to B.

(2B) For the purposes of paragraph (2A)—

(a)an agreement by A to appoint X to perform the activities in that paragraph is to be treated as an undertaking by A within the meaning of that paragraph;

(b)it is immaterial that—

(i)payments may be subject to conditions;

(ii)A, or X, may be entitled to retain a portion or the entirety of any payment received from C.

(2C) The condition in this paragraph is that A, or another person (“X”) acting under an arrangement with A or at A’s direction, undertakes to perform, or A undertakes to appoint or direct another person to perform either or both of the following activities—

(a)taking steps to procure the payment of a debt under the article 36H agreement;

(b)exercising or enforcing rights under the article 36H agreement on behalf of B.]

[F334(2D) Where A carries on an activity of the kind specified in paragraph (1), it is a specified kind of activity for A to operate an electronic system where—

(a)that system enables A to facilitate a person (“B”) assuming the rights of the lender under an article 36H agreement by assignment or operation of law, and

(b)the conditions in paragraphs (2), (2A) and (2C) are satisfied where C is the borrower under the agreement in sub-paragraph (a).]

(3) The following are specified kinds of activities if carried on by A in the course of, or in connection with, the carrying on by A of the activity specified by paragraph (1) [F335or (2D)]—

(a)presenting or offering article 36H agreements to [F336either B or C] with a view to B becoming the lender under the article 36H agreement [F337or] C becoming the borrower under the article 36H agreement,

(b)furnishing information relevant to the financial standing of a person (“Y”) with a view to assisting in the determination as to whether another person should—

(i)enter into, as the lender, an article 36H agreement with Y, or

(ii)assume the rights of the lender under an article 36H agreement under which Y is the borrower,

(c)taking steps to procure the payment of a debt due under an article 36H agreement,

(d)[F338taking steps to perform duties, or exercise or enforce] rights under an article 36H agreement on behalf of the lender,

(e)[F339taking steps with a view to] ascertaining whether a credit information agency (within the meaning given by article 89A(6)) holds information relevant to the financial standing of an individual or relevant person,

(f)[F340taking steps with a view to] ascertaining the contents of such information,

(g)[F341taking steps with a view to] securing the correction of, the omission of anything from, or the making of any other kind of modification of, such information, F342...

(h)[F343taking steps with a view to] securing that a credit information agency which holds such information—

(i)stops holding the information, or

(ii)does not provide it to any other person [F344, or

(i)giving advice in relation to the taking of any of the steps in sub-paragraphs (e) to (h)].

[F345(4) [F346Subject to article 60C(4C),] an “article 36H agreement” is an agreement by which one person provides another person with credit and in relation to which—

(a)the condition in paragraph (4A) is satisfied, and

(b)the condition in either paragraph (5) or (6) is satisfied, or was satisfied at the time the agreement was entered into.

(4A) The condition in this paragraph is that A does not provide credit, assume the rights (by assignment or operation of law) of a person who provided credit, or receive credit under the agreement.]

(5) The condition in this paragraph is that the lender is an individual or relevant person.

(6) The condition in this paragraph is that the borrower is an individual or relevant person and—

(a)the lender provides the borrower with credit less than or equal to £25,000, or

(b)the agreement is not entered into by the borrower wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by the borrower.

(7) Paragraphs (5) and (6) of article 60C (exempt agreements: exemptions relating to the nature of the agreement) apply for the purposes of paragraph (6)(b).

(8) It is immaterial for the purposes of this article whether the lender is carrying on a regulated activity.

[F347(9) In this article—

“assignment”, in relation to Scotland, means assignation;

“borrower” means a person who receives credit under an article 36H agreement or a person to whom the rights and duties of a borrower under such an agreement have passed by assignment or operation of law;

“credit” has the meaning given by article 60L;

“lender” means—

(a)

a person providing credit under an article 36H agreement, or

(b)

a person who by assignment or operation of law has assumed the rights of a person who provided credit under such an agreement;

“relevant person” means—

(a)

a partnership consisting of two or three persons not all of whom are bodies corporate, or

(b)

an unincorporated body of persons which does not consist entirely of bodies corporate and is not a partnership.]

[F348(10) For the purposes of the application of section 22(1) of the Act (regulated activities) to an activity of a kind specified by this article, article 88D (credit agreement), and article 73 (investments: general) in so far as it relates to that article, [F349have] effect as if the reference to a credit agreement in article 88D includes a reference to an article 36H agreement.]

Textual Amendments

F329Words in art. 36H(1) substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(9)(a)

F330Words in art. 36H(2) inserted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(9)(b)

F331Arts. 36H(2A)-(2C) inserted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(9)(c)

F348Art. 36H(10) inserted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(9)(d)

ExclusionU.K.

Information society servicesU.K.

F35036I.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

[F351Activities in relation to debentures and bondsU.K.

36IA.  There is excluded from article 36H (operating an electronic system in relation to lending) any activity of a kind specified by article 14 (dealing in investments as principal), 25 (arranging deals in investments), 37 (managing investments) or 53 (advising on investments).]

Textual Amendments

F351Art. 36IA inserted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(10)

SupplementalU.K.

Meaning of “consumer”U.K.

36J.—(1) For the purposes of sections 1G, 404E and 425A of the Act (meaning of “consumer”), a person (“C”) is only to be regarded as a person who uses, may use, has, may have used or has or may have contemplated using, services provided by authorised persons in carrying on a regulated activity of the kind specified by article 36H or article 64 in so far as relevant to that activity if—

(a)C is, may be, has been or may have been the lender under a relevant agreement and is an individual or relevant person, or

(b)C is, may be, has been or may have been the borrower under a relevant agreement, C is an individual or relevant person and one of the conditions in paragraph (2) is satisfied, or

(c)C meets the following conditions—

(i)C is, was or would be the lender under a relevant agreement, and

(ii)C is not, was not or would not be, as a result, carrying on a regulated activity.

(2) The conditions in this paragraph are that—

(a)the lender provides, provided or would provide the borrower with credit (within the meaning given by article 60L) less than or equal to £25,000, or

(b)the agreement is not, was not or would not be entered into by the borrower wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by the borrower.

(3) Paragraphs (5) and (6) of article 60C (exempt agreements: exemptions relating to the nature of the agreement) apply for the purposes of paragraph (2)(b).

(4) In paragraph (1)—

“relevant agreement” means an agreement between one person (“the borrower”) and another person (“the lender”) by which the lender provides the borrower with credit (within the meaning given by article 60L);

“relevant person” has the meaning given in article 36H.]

Chapter VIIU.K.Managing Investments

The activityU.K.

Managing investmentsU.K.

37.  Managing assets belonging to another person, in circumstances involving the exercise of discretion, is a specified kind of activity if—

(a)the assets consist of or include any investment which is a security[F352, structured deposit] or a contractually based investment; or

(b)the arrangements for their management are such that the assets may consist of or include such investments, and either the assets have at any time since 29th April 1988 done so, or the arrangements have at any time (whether before or after that date) been held out as arrangements under which the assets would do so.

Textual Amendments

F352Words in art. 37(a) inserted (1.4.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017 (S.I. 2017/488), arts. 1(2), 4(3)

ExclusionsU.K.

AttorneysU.K.

38.—[F353(1)] A person does not carry on an activity of the kind specified by article 37 if—

(a)he is a person appointed to manage the assets in question under a power of attorney; and

(b)all routine or day-to-day decisions, so far as relating to investments of a kind mentioned in article 37(a), are taken on behalf of that person by—

(i)an authorised person with permission to carry on activities of the kind specified by article 37; F354...

(ii)a person who is an exempt person in relation to activities of that kind [F355; or

(iii)an overseas person.]

[F356(2)  This article is subject to article 4(4).]

Textual Amendments

F353Art. 38(1): art. 38 renumbered as art. 38(1) (1.4.2007 for specified purposes, 1.11.2007 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order 2006 (S.I. 2006/3384), arts. 1(2), 17(a)

F356Art. 38(2) inserted (1.4.2007 for specified purposes, 1.11.2007 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order 2006 (S.I. 2006/3384), arts. 1(2), 17(b)

Other exclusionsU.K.

39.  Article 37 is also subject to the exclusions in articles 66 (trustees etc.), 68 (sale of goods and supply of services)[F357, 69 (groups and joint enterprises)][F358F359...[F360, 72AA (managers of [F361UK UCITS] and AIFs) [F362, 72C (provision of information about contracts of insurance on an incidental basis) and 72H (insolvency practitioners)]]].

Textual Amendments

F358Words in art. 39 substituted (31.10.2004 for specified purposes, 14.1.2005 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2003 (S.I. 2003/1476), arts. 1(3), 6

F362Words in art. 39 substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(11)

[F363CHAPTER VIIAU.K.Assisting in the Administration and Performance of a Contract of Insurance

Textual Amendments

F363Pt. 2 Ch. 7A inserted (31.10.2004 for specified purposes, 14.1.2005 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2003 (S.I. 2003/1476), arts. 1(3), 7

The activityU.K.

Assisting in the administration and performance of a contract of insuranceU.K.

39A.  Assisting in the administration and performance of a contract of insurance is a specified kind of activity.

ExclusionsU.K.

Claims management on behalf of an insurer etc.U.K.

39B.—(1) A person does not carry on an activity of the kind specified by article 39A if he acts in the course of carrying on the activity of—

(a)expert appraisal;

(b)loss adjusting on behalf of a relevant insurer; or

(c)managing claims on behalf of a relevant insurer,

and that activity is carried on in the course of carrying on any profession or business.

(2) In this article—

(a)“relevant insurer” means—

(i)a person who has Part IV permission to carry on an activity of the kind specified by article 10;

(ii)a person to whom the general prohibition does not apply by virtue of section 316(1)(a) of the Act (members of the Society of Lloyd's);

(iii)F364...;or

(iv)a relevant reinsurer;

(b)“relevant reinsurer” means a person whose main business consists of accepting risks ceded by—

(i)a person falling within sub-paragraph (i), (ii) or (iii) of the definition of “relevant insurer”; F365...

[F366(ii)F367...; or

(iii)a person established outside the United Kingdom F368... who carries on an activity of the kind specified by article 10 by way of business.]

Textual Amendments

F365Word in art. 39B(2)(b)(i) omitted (10.12.2007) by The Financial Services and Markets Act 2000 (Reinsurance Directive) Order 2007 (S.I. 2007/3254), arts. 1, 2(2)(a)

F366Art. 39B(2)(b)(ii)(iii) substituted for art. 39B(2)(b)(ii) (10.12.2007) by The Financial Services and Markets Act 2000 (Reinsurance Directive) Order 2007 (S.I. 2007/3254), arts. 1, 2(2)(b)

Other exclusionsU.K.

39C.  Article 39A is also subject to the exclusions in articles 66 (trustees etc.), 67 (profession or non-investment business)F369..., 72B (activities carried on by a provider of relevant goods or services), 72C (provision of information about contracts of insurance on an incidental basis) [F370, 72AA (managers of [F371UK UCITS] and AIFs) [F372, 72D (large risks contracts where risk situated [F373outside the United Kingdom]), 72G (local authorities) and 72H (insolvency practitioners)])].]

Textual Amendments

F372Words in art. 39C substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(12)

[F374Chapter 7BU.K.Activities in Relation to Debt

Textual Amendments

F374Pt. II Ch. 7B inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), 5

The activitiesU.K.

Debt adjustingU.K.

39D.—(1) When carried on in relation to debts due under a credit agreement—

(a)negotiating with the lender, on behalf of the borrower, terms for the discharge of a debt,

(b)taking over, in return for payments by the borrower, that person’s obligation to discharge a debt, or

(c)any similar activity concerned with the liquidation of a debt,

is a specified kind of activity.

(2) When carried on in relation to debts due under a consumer hire agreement—

(a)negotiating with the owner, on behalf of the hirer, terms for the discharge of a debt,

(b)taking over, in return for payments by the hirer, that person’s obligation to discharge a debt, or

(c)any similar activity concerned with the liquidation of a debt,

is a specified kind of activity.

Debt-counsellingU.K.

39E.—(1) Giving advice to a borrower about the liquidation of a debt due under a credit agreement is a specified kind of activity.

(2) Giving advice to a hirer about the liquidation of a debt due under a consumer hire agreement is a specified kind of activity.

Debt-collectingU.K.

39F.—(1) Taking steps to procure the payment of a debt due under a credit agreement or a relevant article 36H agreement is a specified kind of activity.

(2) Taking steps to procure the payment of a debt due under a consumer hire agreement is a specified kind of activity.

(3) Paragraph (1) does not apply in so far as the activity is an activity of the kind specified by article 36H (operating an electronic system in relation to lending).

(4) In this article, “relevant article 36H agreement” means an article 36H agreement (within the meaning of article 36H) which has been entered into with the facilitation of an authorised person with permission to carry on a regulated activity of the kind specified by that article.

Debt administrationU.K.

39G.—(1) Subject to paragraph (3), taking steps—

(a)to perform duties under a credit agreement or relevant article 36H agreement on behalf of the lender, or

(b)to exercise or enforce rights under such an agreement on behalf of the lender,

is a specified kind of activity

(2) Subject to paragraph (3), taking steps—

(a)to perform duties under a consumer hire agreement on behalf of the owner, or

(b)to exercise or enforce rights under such an agreement on behalf of the owner,

is a specified kind of activity.

(3) Paragraphs (1) and (2) do not apply in so far as the activity is an activity of the kind specified by article 36H (operating an electronic system in relation to lending) or article 39F (debt-collecting).

(4) In this article, “relevant article 36H agreement” means an article 36H agreement (within the meaning of article 36H) which has been entered into with the facilitation of an authorised person with permission to carry on a regulated activity of the kind specified by that article.

ExclusionsU.K.

Activities where person has a connection to the agreementU.K.

39H.—(1) There are excluded from articles 39D(1), 39E(1) and 39F(1) activities carried on by a person who is—

(a)the lender under the agreement,

(b)the supplier in relation to that agreement,

(c)a person carrying on an activity of the kind specified by article 36A by way of business and who has acquired the business of the person who was the supplier in relation to the agreement, or

(d)a person who would be carrying on an activity of the kind specified by article 36A by way of business but for the exclusion in article 36B where the agreement was made in consequence of an introduction (by that person or another person) to which article 36B applies.

[F375(1A) In so far as it applies to article 39F(1), the exclusion in paragraph (1)(a) does not apply to a lender under a credit agreement which is an exempt agreement by virtue of article 60C(4A).]

(2) There are excluded from articles 39D(2), 39E(2) and 39F(2) activities carried on by a person who is—

(a)the owner under the consumer hire agreement, or

(b)a person who would be carrying on an activity of the kind specified by article 36A by way of business but for the exclusion in article 36B where the agreement was made in consequence of an introduction (by that person or another person) to which article 36B applies.

(3) There is excluded from article 39G(1) steps taken under or in relation to an agreement [F376by] a person who is, in relation to that agreement, a person falling within paragraph (1)(a) to (d).

(4) There is excluded from article 39G(2) steps taken under or in relation to a consumer hire agreement [F377by] a person who is, in relation to that agreement, a person falling within paragraph (2)(a) or (b).

(5) In paragraph (1), “supplier”, in relation to an agreement, means—

(a)a person, other than the lender, whose transaction with the borrower is, or is to be, financed by the agreement, or

(b)a person to whom the rights and duties of a person falling within sub-paragraph (a) have been passed by assignment or operation of law.

Textual Amendments

F376Word in art. 39H(3) substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(13)

F377Word in art. 39H(4) substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(13)

Activities carried on by certain energy suppliersU.K.

39I.—(1) There are excluded from articles 39D, 39E, 39F and 39G activities carried on by a relevant energy supplier acting in that capacity in relation to debts due under a green deal plan associated with the supplier.

(2) A green deal plan is associated with a supplier if the payments under the plan are to be made to the supplier.

(3) In this article—

(a)[F378“green deal plan” has the meaning given by section 1 of the Energy Act 2011;]

(b)“relevant energy supplier” has the meaning given in regulations made for the purpose of section 2(9) of [F379that Act] [F379the Energy Act 2011].

Textual Amendments

Activities carried on in relation to a relevant agreement in relation to landU.K.

39J.  There [F380is] excluded from articles 39D, 39E, 39F and 39G [F381any activity that relates] to a regulated mortgage contract or a regulated home purchase plan [F382to the extent that the activity constitutes an activity of the kind specified by a provision of Part 2 of this Order other than articles 39D, 39E, 39F and 39G, where entering into that contract as lender constitutes an activity of the kind specified by article 61 or entering into that plan as home purchase provider constitutes an activity of the kind under article 63F].

Textual Amendments

F380Word in art. 39J substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(14)(a)

F381Words in art. 39J substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(14)(b)

F382Words in art. 39J inserted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(14)(c)

[F383Activities carried on by members of the legal profession etcU.K.

39K.—(1) There are excluded from articles 39D, 39E, 39F and 39G activities carried on by—

(a)a barrister or advocate acting in that capacity;

(b)a solicitor (within the meaning of the Solicitors Act 1974) in the course of providing advocacy services or litigation services;

(c)a solicitor (within the meaning of the Solicitors (Scotland) Act 1980) in the course of providing advocacy services or litigation services;

(d)a solicitor (within the meaning of the Solicitors (Northern Ireland) Order 1976) in the course of providing advocacy services or litigation services;

(e)a relevant person (other than a person falling within sub-paragraph (a) to (d)) in the course of providing advocacy services or litigation services.

(2) In paragraph (1)—

“advocacy services” means any services which it would be reasonable to expect a person who is exercising, or contemplating exercising, a right of audience in relation to any proceedings, or contemplated proceedings, to provide for the purpose of those proceedings or contemplated proceedings;

“litigation services” means any services which it would be reasonable to expect a person who is exercising, or contemplating exercising, a right to conduct litigation in relation to any proceedings, or contemplated proceedings, to provide for the purpose of those proceedings or contemplated proceedings;

“relevant person” means a person who, for the purposes of the Legal Services Act 2007, is an authorised person in relation to an activity which constitutes the exercise of a right of audience or the conduct of litigation (within the meaning of that Act).]

Textual Amendments

Activities carried on by reason of providing pensions guidance F384...U.K.

39KA.—(1) There are excluded from article 39E activities carried on by reason of providing pensions guidance F385....

[F386(2) For the purposes of paragraph (1), pensions guidance means—

(a)information or guidance provided by the Money and Pensions Service in carrying out its pensions guidance function (see section 3 of the Financial Guidance and Claims Act 2018);

(b)information or guidance provided by another person with whom arrangements under section 5(1), (2) or (3) of the Financial Guidance and Claims Act 2018 are made to carry out the Money and Pensions Service’s pensions guidance function.]

Textual Amendments

[F387Other exclusions]U.K.

39L.  Articles 39D, 39E, 39F and 39G are also subject to the [F388exclusions] in F389...[F390, article 72G (local authorities) and article 72H (insolvency practitioners)].

Textual Amendments

F387Art. 39L heading substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(15)

F388Word in art. 39L substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(16)(a)

F390Words in art. 39L inserted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(16)(b)

SupplementalU.K.

Meaning of “consumer” etc.U.K.

39M.—(1) For the purposes of sections 1G, 404E and 425A of the Act (meaning of “consumer”), in so far as those provisions relate to a person (“A”) carrying on a regulated activity of the kind specified by article 39F (debt-collecting) or 39G (debt administration), or article 64 (agreeing to carry on specified kinds of activity) so far as relevant to that activity the following are to be treated as a “consumer”—

(a)the borrower under the agreement or the hirer under the consumer hire agreement;

(b)someone who has been the borrower or hirer under that agreement;

(c)a person who is treated by A as a person falling within sub-paragraph (a) or (b).

(2) For the purposes of section 328(8) of the Act (meaning of “clients”) in so far as that provision relates to a person (“A”) carrying on a regulated activity of the kind specified by article 39F or 39G, the following are to be treated as a “client”—

(a)the borrower under the agreement or the hirer under the consumer hire agreement;

(b)someone who has been the borrower or hirer under that agreement;

(c)a person who is treated by A as a person falling within sub-paragraph (a) or (b).

(3) In this article, “borrower” includes (in addition to those persons included in the definition in article 60L)—

(a)any person providing a guarantee or indemnity under the agreement, and

(b)a person to whom the rights and duties of a person falling within sub-paragraph (a) have passed by assignment or operation of law.]

Chapter VIIIU.K.Safeguarding and Administering Investments

The activityU.K.

Safeguarding and administering investmentsU.K.

40.—(1) The activity consisting of both—

(a)the safeguarding of assets belonging to another, and

(b)the administration of those assets,

or arranging for one or more other persons to carry on that activity, is a specified kind of activity if the condition in sub-paragraph (a) or (b) of paragraph (2) is met.

(2) The condition is that—

(a)the assets consist of or include any investment which is a security or a contractually based investment; or

(b)the arrangements for their safeguarding and administration are such that the assets may consist of or include such investments, and either the assets have at any time since 1st June 1997 done so, or the arrangements have at any time (whether before or after that date) been held out as ones under which such investments would be safeguarded and administered.

(3) For the purposes of this article—

(a)it is immaterial that title to the assets safeguarded and administered is held in uncertificated form;

(b)it is immaterial that the assets safeguarded and administered may be transferred to another person, subject to a commitment by the person safeguarding and administering them, or arranging for their safeguarding and administration, that they will be replaced by equivalent assets at some future date or when so requested by the person to whom they belong.

ExclusionsU.K.

Acceptance of responsibility by third partyU.K.

41.—(1) There are excluded from article 40 any activities which a person carries on pursuant to arrangements which—

(a)are ones under which a qualifying custodian undertakes to the person to whom the assets belong a responsibility in respect of the assets which is no less onerous than the qualifying custodian would have if the qualifying custodian were safeguarding and administering the assets; and

(b)are operated by the qualifying custodian in the course of carrying on in the United Kingdom an activity of the kind specified by article 40.

(2) In paragraph (1), “qualifying custodian" means a person who is—

(a)an authorised person who has permission to carry on an activity of the kind specified by article 40, or

(b)an exempt person acting in the course of a business comprising a regulated activity in relation to which he is exempt.

Introduction to qualifying custodiansU.K.

42.—(1) There are excluded from article 40 any arrangements pursuant to which introductions are made by a person (“P") to a qualifying custodian with a view to the qualifying custodian providing in the United Kingdom a service comprising an activity of the kind specified by article 40, where the qualifying person (or other person who is to safeguard and administer the assets in question) is not connected with P.

(2) For the purposes of paragraph (1)—

(a)“qualifying custodian" has the meaning given by article 41(2); and

(b)a person is connected with P if either he is a member of the same group as P, or P is remunerated by him.

[F391Depositaries of [F392UK UCITS] and AIFsU.K.

42A.  A person does not carry on an activity of the kind specified by article 40 if the person carries on the activity in relation to—

(a)[F393a UK UCITS], and the person has a Part 4A permission to carry on the activity specified in article 51ZB in respect of that UCITS; or

(b)an AIF, and the person has a Part 4A permission to carry on the activity specified in article 51ZD in respect of that AIF.]

Textual Amendments

Modifications etc. (not altering text)

Activities not constituting administrationU.K.

43.  The following activities do not constitute the administration of assets for the purposes of article 40—

(a)providing information as to the number of units or the value of any assets safeguarded;

(b)converting currency;

(c)receiving documents relating to an investment solely for the purpose of onward transmission to, from or at the direction of the person to whom the investment belongs.

Other exclusionsU.K.

44.  Article 40 is also subject to the exclusions in articles 66 (trustees etc.), 67 (profession or non-investment business), 68 (sale of goods and supply of services), 69 (groups and joint enterprises)[F394, 71 (employee share schemes)][F395F396...[F397, 72AA (managers of [F398UK UCITS] and AIFs) [F399, 72C (provisions of information about contracts of insurance on an incidental basis) and 72H (insolvency practitioners)]]].

Textual Amendments

F395Words in art. 44 substituted (31.10.2004 for specified purposes, 14.1.2005 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2003 (S.I. 2003/1476), arts. 1(3), 8

F399Words in art. 44 substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(17)

Chapter IXU.K.Sending Dematerialised Instructions

The activitiesU.K.

Sending dematerialised instructionsU.K.

45.—(1) Sending, on behalf of another person, dematerialised instructions relating to a security [F400or a contractually based investment] is a specified kind of activity, where those instructions are sent by means of a relevant system [F401within the meaning of the 2001 Regulations].

(2) Causing dematerialised instructions relating to a security [F402or a contractually based investment] to be sent [F403on behalf of another person] by means of such a system is also a specified kind of activity where the person causing them to be sent is a system-participant.

(3) In this Chapter—

[F404(a)