http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/2013-12-18Financial Services (Banking Reform) Act 2013An Act to make further provision about banking and other financial services, including provision about the Financial Services Compensation Scheme; to make provision for the amounts owed in respect of certain deposits to be treated as a preferential debt on insolvency; to make further provision about payment systems and securities settlement systems; to make provision about the accounts of the Bank of England and its wholly owned subsidiaries; to make provision in relation to persons providing claims management services; and for connected purposes.texttext/xmlenStatute Law Database2024-09-062013-12-18 PART 4 Conduct of persons working in financial services sector<Emphasis>Amendments of </Emphasis>FSMA 2000Functions for which approval is required181Section 59 of FSMA 2000 (approval for particular arrangements) is amended as follows.2Omit subsection (5).3For subsection (6) substitute—6The PRA may specify a description of function under subsection (3)(a) only if, in relation to the carrying on of a regulated activity by a PRA-authorised person, it is satisfied that the function is a senior management function as defined in section 59ZA.4After subsection (6) insert—6AIf—aa function of a description specified in rules made by the FCA under subsection (3)(a) or (b) is a controlled function in relation to the carrying on of a regulated activity by a relevant authorised person, andbthe FCA is satisfied that, in relation to the carrying on of a regulated activity by a relevant authorised person, the function is a senior management function as defined in section 59ZA,the FCA must designate the function in the rules as a senior management function.6BIf a function of a description specified in rules made by the PRA under subsection (3)(a) is a controlled function in relation to the carrying on of a regulated activity by a relevant authorised person, the PRA must designate the function in the rules as a senior management function.6CFor the meaning of “relevant authorised person”, see section 71A.5Omit subsections (7) to (7B) and (11).Senior management functions19After section 59 of FSMA 2000 insert—Senior management functions59ZA1This section has effect for determining whether a function is for the purposes of section 59(6) or (6A) a senior management function.2A function is a “senior management function”, in relation to the carrying on of a regulated activity by an authorised person, if—athe function will require the person performing it to be responsible for managing one or more aspects of the authorised person's affairs, so far as relating to the activity, andbthose aspects involve, or might involve, a risk of serious consequences—ifor the authorised person, oriifor business or other interests in the United Kingdom.3In subsection (2)(a) the reference to managing one or more aspects of an authorised person's affairs includes a reference to taking decisions, or participating in the taking of decisions, about how one or more aspects of those affairs should be carried on.Statements of responsibilities201Section 60 of FSMA 2000 (applications for approval) is amended as follows.2After subsection (2) insert—2AIf—athe application is for the approval of a person to perform a designated senior management function, andbthe authorised person concerned is a relevant authorised person (see section 71A),the appropriate regulator must require the application to contain, or be accompanied by, a statement setting out the aspects of the affairs of the authorised person concerned which it is intended that the person will be responsible for managing in performing the function.2BA statement provided under subsection (2A) is known as a “statement of responsibilities”.2CIn subsection (2A) “designated senior management function” means a function designated as a senior management function under section 59(6A) or (6B).3After subsection (6) insert—6ASubsection (6) applies to references to a relevant authorised person as it applies to references to the authorised person concerned.Vetting by relevant authorised persons of candidates for approval21After section 60 of FSMA 2000 insert—Vetting of candidates by relevant authorised persons60A1Before a relevant authorised person may make an application for a regulator's approval under section 59, the authorised person must be satisfied that the person in respect of whom the application is made (“the candidate”) is a fit and proper person to perform the function to which the application relates.2In deciding that question, the authorised person must have regard, in particular, to whether the candidate, or any person who may perform a function on the candidate's behalf—ahas obtained a qualification,bhas undergone, or is undergoing, training,cpossesses a level of competence, ordhas the personal characteristics,required by general rules made by the regulator in relation to persons performing functions of the kind to which the application relates.3For the meaning of “relevant authorised person”, see section 71A.Determination of applications for approval22In section 61 of FSMA 2000 (determination of applications), in subsection (2)—aomit the “or” at the end of paragraph (b), andbafter paragraph (c) insertor dhas the personal characteristics,.Power to give approval subject to conditions or for limited period231Section 61 of FSMA 2000 (determination of applications) is amended as follows.2For subsection (1) substitute—1The regulator to which an application for approval is made under section 60 may grant the application only if—ait is satisfied that the person in respect of whom the application is made (“the candidate”) is a fit and proper person to perform the function to which the application relates, orbin a case where the application is for approval to perform a designated senior management function in relation to the carrying on of a regulated activity by a relevant authorised person (a “relevant senior management application”), it is satisfied that the condition in paragraph (a) will be met if the application is granted subject to one or more conditions (as to which, see subsection (2B)).3In subsection (2), for “deciding that question” substitute “ determining the application ”.4After subsection (2A) insert—2BThe regulator to which a relevant senior management application is made under section 60 may in particular—agrant the application subject to any conditions that the regulator considers appropriate, andbgrant the application so as to give approval only for a limited period.2CA regulator may exercise the power under paragraph (a) or (b) of subsection (2B) only if—awhere the regulator is the FCA, it appears to the FCA that it is desirable to do so in order to advance one or more of its operational objectives, andbwhere the regulator is the PRA, it appears to the PRA that it is desirable to do so in order to advance any of its objectives.2DConsent given by the FCA for the granting of the application may be conditional on the manner in which the PRA exercises its power under subsection (2B).5After subsection (3) insert—3ZAIn the case of a relevant senior management application, the reference in subsection (3)(a) to granting the application is a reference to granting it without imposing conditions or limiting the period for which the approval has effect.6After subsection (5) insert—6In this section—adesignated senior management function” means a function designated as a senior management function under section 59(6A) or (6B);bany reference to a relevant authorised person includes a reference to a person who has applied for permission under Part 4A and will be a relevant authorised person if permission is given.7For the meaning of “relevant authorised person”, see section 71A.7In section 62 of FSMA 2000 (applications for approval: procedure and right to refer to Tribunal)—ain subsection (2), after “the application” insert “ , or to grant the application subject to conditions or for a limited period (or both) ”;bin subsection (3), after “the application” insert “ , or to grant the application subject to conditions or for a limited period (or both) ”;cin subsection (4), after “the application” insert “ , or to grant the application subject to conditions or for a limited period (or both) ”.Changes in responsibilities of senior managers24After section 62 of FSMA 2000 insert—Changes in responsibilities of senior managers62A1This section applies where—aan authorised person has made an application to the appropriate regulator for approval under section 59 for a person to perform a designated senior management function,bthe application contained, or was accompanied by, a statement of responsibilities under section 60(2A), andcthe application has been granted.2If, since the granting of the application, there has been any significant change in the aspects of the authorised person's affairs which the person is responsible for managing in performing the function, the authorised person must provide the appropriate regulator with a revised statement of responsibilities.3The appropriate regulator may require the authorised person—ato provide information which the person is required to give under this section in such form as the appropriate regulator may direct, orbto verify such information in such a way as the appropriate regulator may direct.4In this section—the appropriate regulator” has the same meaning as in section 60;designated senior management function” means a function designated as a senior management function under section 59(6A) or (6B).Duty to notify regulator of grounds for withdrawal of approval25In section 63 of FSMA 2000 (withdrawal of approval), after subsection (2) insert—2AAt least once a year each relevant authorised person must, in relation to every person in relation to whom an approval has been given on the application of the authorised person—aconsider whether there are any grounds on which a regulator could withdraw the approval under this section, andbif the authorised person is of the opinion that there are such grounds, notify the regulator of those grounds.(For the meaning of “relevant authorised person”, see section 71A.)Variation of approval26After section 63 of FSMA 2000 insert—Variation of senior manager's approval at request of relevant authorised person63ZA1Where an application for approval under section 59 is granted subject to conditions, the authorised person concerned may apply to the appropriate regulator to vary the approval by—avarying a condition,bremoving a condition, orcimposing a new condition.2“The appropriate regulator”—ain the case of an application for variation of an approval in a way described in subsection (1)(a) or (b), means whichever of the FCA or the PRA imposed the condition concerned;bin the case of an application for variation of an approval in the way described in subsection (1)(c), means the regulator who gave the approval.3The PRA must consult the FCA before determining an application under this section, unless the application relates to the variation or removal of a condition which was imposed by the PRA in exercise of its power under section 63ZB.4The regulator to which an application is made under this section must, before the end of the period for consideration, determine whether—ato grant the application; orbto give a warning notice under section 62(2).5The period for consideration” means the period of 3 months beginning with the date on which the regulator receives the application.6The FCA may refuse an application under this section if it appears to the FCA that it is desirable to do so in order to advance one or more of its operational objectives.7The PRA may refuse an application under this section if it appears to the PRA that it is desirable to do so in order to advance any of its objectives.8The following provisions apply to an application made under this section for variation of an approval as they apply to an application for approval made under section 60—section 60(2) to (8),section 61(4) and (5),section 62.Variation of senior manager's approval on initiative of regulator63ZB1The FCA may vary an approval under section 59 given by the FCA or the PRA for the performance of a designated senior management function in relation to the carrying on of a regulated activity by a relevant authorised person if the FCA considers that it is desirable to do so in order to advance one or more of its operational objectives.2The PRA may vary an approval under section 59 for the performance of a designated senior management function in relation to the carrying on of a regulated activity by a relevant authorised person if—aeither—ithe PRA gave the approval, oriithe FCA gave the approval and the relevant authorised person is a PRA-authorised person, andbthe PRA considers that it is desirable to do so in order to advance any of its objectives.3A regulator may vary an approval by—aimposing a condition,bvarying a condition,cremoving a condition, ordlimiting the period for which the approval is to have effect.4Before one regulator varies an approval given by the other regulator, it must consult the other regulator.5In this section “designated senior management function” means a function designated as a senior management function under section 59(6A) or (6B).6For the meaning of “relevant authorised person”, see section 71A.Exercise of power under section 63ZB: procedure63ZC1This section applies to an exercise, by either regulator, of the power to vary an approval under section 63ZB.2A variation takes effect—aimmediately, if the notice given under subsection (4) states that that is the case,bon such date as is specified in the notice, orcif no date is specified in the notice, when the matter to which the notice relates is no longer open to review.3A variation may be expressed to take effect immediately (or on a specified date) only if the regulator concerned, having regard to the ground on which it is exercising the power to vary, reasonably considers that it is necessary for the variation to take effect immediately (or on that date).4If either regulator proposes to vary an approval or varies an approval with immediate effect, it must give each of the interested parties written notice.5The notice must—agive details of the variation,bstate the regulator's reasons for the variation,cinform the interested parties that each of them may make representations to the regulator within such period as may be specified in the notice (whether or not any of the interested parties has referred the matter to the Tribunal),dinform the interested parties of when the variation takes effect, andeinform the interested parties of the right of each of them to refer the matter to the Tribunal.6The interested parties”, in relation to an approval, are—athe person on whose application it was given (“A”),bthe person in respect of whom it was given (“B”), andcthe person by whom B's services are retained, if not A.7The regulator giving the notice may extend the period allowed under the notice for making representations.8If having considered the representations made by the interested parties, the regulator decides—ato vary the approval, orbif the variation has taken effect, not to rescind it,it must give each of the interested parties written notice.9If having considered the representations made by the interested parties, the regulator decides—anot to vary the approval,bto vary the approval in a different way, orcif the variation has taken effect, to rescind it,it must give each of the interested parties written notice.10A notice under subsection (8) must inform the interested parties of the right of each of them to refer the matter to the Tribunal.11A notice under subsection (9)(b) must comply with subsection (5).12If a notice informs the interested parties of the right to refer a matter to the Tribunal, it must give an indication of the procedure on such a reference.13For the purposes of subsection (2)(c), whether a matter is open to review is to be determined in accordance with section 391(8).14Approval” means an approval under section 59.Statement of policy27After section 63ZC of FSMA 2000 (inserted by section 26 above) insert—Statement of policy relating to conditional approval and variation63ZD1Each regulator must prepare and issue a statement of its policy with respect to—aits giving of approval under section 59 subject to conditions or for a limited period only, andbits variation under section 63ZA or 63ZB of an approval given under section 59.2A regulator may at any time alter or replace a statement issued by it under this section.3If a statement issued under this section is altered or replaced by a regulator, the regulator must issue the altered or replacement statement.4A statement issued under this section must be published by the regulator concerned in the way appearing to the regulator to be best calculated to bring it to the attention of the public.5A regulator may charge a reasonable fee for providing a person with a copy of a statement published under this section.6A regulator must, without delay, give the Treasury a copy of any statement which it publishes under this section.Statement of policy: procedure63ZE1Before issuing a statement of policy under section 63ZD, a regulator (“the issuing regulator”) must—aconsult the other regulator, andbpublish a draft of the proposed statement in the way appearing to the issuing regulator to be best calculated to bring it to the attention of the public.2The duty of the FCA to consult the PRA under subsection (1)(a) applies only in so far as the statement of policy applies to persons whose approval under section 59 relates to the performance of a function designated by the FCA as a senior management function under section 59(6A) in relation to the carrying on by PRA-authorised persons of regulated activities.3The draft must be accompanied by notice that representations about the proposal may be made to the issuing regulator within a specified time.4Before issuing the proposed statement, the issuing regulator must have regard to any representations made to it in accordance with subsection (3).5If the issuing regulator issues the proposed statement it must publish an account, in general terms, of—athe representations made to it in accordance with subsection (3), andbits response to them.6If the statement differs from the draft published under subsection (1) in a way which is in the opinion of the issuing regulator significant, the issuing regulator—amust before issuing it carry out any consultation required by subsection (1)(a), andbmust (in addition to complying with subsection (5)) publish details of the difference.7The issuing regulator may charge a reasonable fee for providing a person with a draft published under subsection (1)(b).8This section also applies to a proposal to alter or replace a statement.Extension of limitation periods for imposing sanctions281Section 63A of FSMA 2000 (power to impose penalties) is amended as follows.2In subsection (4), for “period of three years” substitute “ relevant period ”.3After subsection (5A) insert—5BThe relevant period” is—ain relation to the performance of a controlled function without approval before the day on which this subsection comes into force, the period of 3 years, andbin relation to the performance of a controlled function without approval on or after that day, the period of 6 years.4Section 66 of FSMA 2000 (disciplinary powers) is amended as follows.5In subsection (4), for “period of three years” substitute “ relevant period ”.6After subsection (5) insert—5ZAThe relevant period” is—ain relation to misconduct which occurs before the day on which this subsection comes into force, the period of 3 years, andbin relation to misconduct which occurs on or after that day, the period of 6 years.Certification of employees by relevant authorised persons29After section 63D of FSMA 2000 insert—<Emphasis>Certification of employees</Emphasis>Certification of employees by relevant authorised persons63E1A relevant authorised person (“A”) must take reasonable care to ensure that no employee of A performs a specified function under an arrangement entered into by A in relation to the carrying on by A of a regulated activity, unless the employee has a valid certificate issued by A under section 63F.2“Specified function”—ain relation to the carrying on of a regulated activity by a PRA-authorised person, means a function of a description specified in rules made by the FCA or the PRA, andbin relation to the carrying on of a regulated activity by any other authorised person, means a function of a description specified in rules made by the FCA.3The FCA may specify a description of function under subsection (2)(a) or (b) only if, in relation to the carrying on of a regulated activity by a relevant authorised person of a particular description—athe function is not a controlled function in relation to the carrying on of that activity by a relevant authorised person of that description, butbthe FCA is satisfied that the function is nevertheless a significant-harm function.4The PRA may specify a description of function under subsection (2)(a) only if, in relation to the carrying on of a regulated activity by a relevant PRA-authorised person of a particular description—athe function is not a controlled function in relation to the carrying on of that activity by a relevant PRA-authorised person of that description, butbthe PRA is satisfied that the function is nevertheless a significant-harm function.5A function is a “significant-harm function”, in relation to the carrying on of a regulated activity by an authorised person, if—athe function will require the person performing it to be involved in one or more aspects of the authorised person's affairs, so far as relating to the activity, andbthose aspects involve, or might involve, a risk of significant harm to the authorised person or any of its customers.6Each regulator must—akeep under review the exercise of its power under subsection (2) to specify any significant-harm function as a specified function, andbexercise that power in a way that it considers will minimise the risk of employees of relevant authorised persons performing significant-harm functions which they are not fit and proper persons to perform.7Subsection (1) does not apply to an arrangement which allows an employee to perform a function if the question of whether the employee is a fit and proper person to perform the function is reserved under any of the single market directives or the emission allowance auctioning regulation to an authority in a country or territory outside the United Kingdom.8In this section—controlled function” has the meaning given by section 59(3);customer”, in relation to an authorised person, means a person who is using, or who is or may be contemplating using, any of the services provided by the authorised person;relevant PRA-authorised person” means a PRA-authorised person that is a relevant authorised person.9In this section any reference to an employee of a person (“A”) includes a reference to a person who—apersonally provides, or is under an obligation personally to provide, services to A under an arrangement made between A and the person providing the services or another person, andbis subject to (or to the right of) supervision, direction or control by A as to the manner in which those services are provided.10For the meaning of “relevant authorised person”, see section 71A.Issuing of certificates63F1A relevant authorised person may issue a certificate to a person under this section only if the authorised person is satisfied that the person is a fit and proper person to perform the function to which the certificate relates.2In deciding whether the person is a fit and proper person to perform the function, the relevant authorised person must have regard, in particular, to whether the person—ahas obtained a qualification,bhas undergone, or is undergoing, training,cpossesses a level of competence, ordhas the personal characteristics,required by general rules made by the appropriate regulator in relation to employees performing functions of that kind.3In subsection (2) “the appropriate regulator” means—ain relation to employees of PRA-authorised persons, the FCA or the PRA, andbin relation to employees of any other authorised person, the FCA.4A certificate issued by a relevant authorised person to a person under this section must—astate that the authorised person is satisfied that the person is a fit and proper person to perform the function to which the certificate relates, andbset out the aspects of the affairs of the authorised person in which the person will be involved in performing the function.5A certificate issued under this section is valid for a period of 12 months beginning with the day on which it is issued.6If, after having considered whether a person is a fit and proper person to perform a specified function, a relevant authorised person decides not to issue a certificate to the person under this section, the authorised person must give the person a notice in writing stating—awhat steps (if any) the authorised person proposes to take in relation to the person as a result of the decision, andbthe reasons for proposing to take those steps.7A relevant authorised person must maintain a record of every employee who has a valid certificate issued by it under this section.8Expressions used in this section and in section 63E have the same meaning in this section as they have in that section.Rules of conduct301Part 5 of FSMA 2000 (performance of regulated activities) is amended as follows.2Omit sections 64 and 65 (and the italic cross-heading preceding them).3Before section 66 insert—<Emphasis>Conduct of approved persons and others</Emphasis>Rules of conduct64A1If it appears to the FCA to be necessary or expedient for the purpose of advancing one or more of its operational objectives, the FCA may make rules about the conduct of the following persons—apersons in relation to whom either regulator has given its approval under section 59;bpersons who are employees of relevant authorised persons (see section 71A).2If it appears to the PRA to be necessary or expedient for the purpose of advancing any of its objectives, the PRA may make rules about the conduct of the following persons—apersons in relation to whom it has given its approval under section 59;bpersons in relation to whom the FCA has given its approval under section 59 in respect of the performance by them of a relevant senior management function in relation to the carrying on by a PRA-authorised person of a regulated activity;cpersons who are employees of relevant PRA-authorised persons.3In subsection (2)—relevant PRA-authorised person” means a PRA-authorised person that is a relevant authorised person (see section 71A), andrelevant senior management function” means a function which the PRA is satisfied is a senior management function as defined in section 59ZA (whether or not the function has been designated as such by the FCA).4Rules made under this section must relate to the conduct of persons in relation to the performance by them of qualifying functions.5In subsection (4) “qualifying function”, in relation to a person, means a function relating to the carrying on of activities (whether or not regulated activities) by—ain the case of an approved person, the person on whose application approval was given, andbin any other case, the person's employer.6In this section any reference to an employee of a person (“P”) includes a reference to a person who—apersonally provides, or is under an obligation personally to provide, services to P under an arrangement made between P and the person providing the services or another person, andbis subject to (or to the right of) supervision, direction or control by P as to the manner in which those services are provided,and “employer” is to be read accordingly.Rules of conduct: responsibilities of relevant authorised persons64B1This section applies where a regulator makes rules under section 64A (“conduct rules”).2Every relevant authorised person must—anotify all relevant persons of the conduct rules that apply in relation to them, andbtake all reasonable steps to secure that those persons understand how those rules apply in relation to them.3The steps which a relevant authorised person must take to comply with subsection (2)(b) include, in particular, the provision of suitable training.4In this section “relevant person”, in relation to an authorised person, means—aany person in relation to whom an approval is given under section 59 on the application of the authorised person, andbany employee of the authorised person.5If a relevant authorised person knows or suspects that a relevant person has failed to comply with any conduct rules, the authorised person must notify the regulator of that fact.6In this section “employee”, in relation to an authorised person, has the same meaning as in section 64A.7For the meaning of “relevant authorised person”, see section 71A.Requirement to notify regulator of disciplinary action31After section 64B of FSMA 2000 (inserted by section 30 above) insert—Requirement for relevant authorised persons to notify regulator of disciplinary action64C1If—aa relevant authorised person takes disciplinary action in relation to a relevant person, andbthe reason, or one of the reasons, for taking that action is a reason specified in rules made by the appropriate regulator for the purposes of this section,the relevant authorised person must notify that regulator of that fact.2Disciplinary action”, in relation to a person, means any of the following—athe issuing of a formal written warning;bthe suspension or dismissal of the person;cthe reduction or recovery of any of the person's remuneration.3The appropriate regulator” means—ain relation to relevant authorised persons that are PRA-authorised persons, the FCA or the PRA;bin relation to any other relevant authorised persons, the FCA.4Relevant person” has the same meaning as in section 64B.5For the meaning of “relevant authorised person”, see section 71A.Definition of “misconduct”321In section 66 of FSMA 2000 (disciplinary powers)—aafter subsection (1) insert—1AFor provision about when a person is guilty of misconduct for the purposes of action by a regulator—asee section 66A, in the case of action by the FCA, andbsee section 66B, in the case of action by the PRA.;bomit subsections (2), (2A), (6) and (7).2After that section insert—Misconduct: action by the FCA66A1For the purposes of action by the FCA under section 66, a person is guilty of misconduct if any of conditions A to C is met in relation to the person.2Condition A is that—athe person has at any time failed to comply with rules made by the FCA under section 64A, andbat that time the person was—ian approved person, oriian employee of a relevant authorised person.3Condition B is that—athe person has at any time been knowingly concerned in a contravention of a relevant requirement by an authorised person, andbat that time the person was—ian approved person in relation to the authorised person, oriiin the case of a relevant authorised person, an employee of the authorised person.4In this section “relevant requirement” means a requirement—aimposed by or under this Act, orbimposed by any qualifying EU provision specified, or of a description specified, for the purposes of this subsection by the Treasury by order.5Condition C is that—athe person has at any time been a senior manager in relation to a relevant authorised person,bthere has at that time been (or continued to be) a contravention of a relevant requirement by the authorised person, andcthe senior manager was at that time responsible for the management of any of the authorised person's activities in relation to which the contravention occurred.6But a person (“P”) is not guilty of misconduct by virtue of subsection (5) if P satisfies the FCA that P had taken such steps as a person in P's position could reasonably be expected to take to avoid the contravention occurring (or continuing).7For the purposes of subsection (5)—senior manager”, in relation to a relevant authorised person, means a person who has approval under section 59 to perform a designated senior management function in relation to the carrying on by the authorised person of a regulated activity;designated senior management function” means a function designated as a senior management function under section 59(6A) or (6B).8In this section—“approved person”—means a person in relation to whom an approval is given under section 59, andin relation to an authorised person, means a person in relation to whom such approval is given on the application of the authorised person;employee”, in relation to a person, has the same meaning as in section 64A.9For the meaning of “relevant authorised person”, see section 71A.Misconduct: action by the PRA66B1For the purposes of action by the PRA under section 66, a person is guilty of misconduct if any of conditions A to C is met in relation to the person.2Condition A is that—athe person has at any time failed to comply with rules made by the PRA under section 64A, andbat that time the person was—ian approved person, oriian employee of a relevant PRA-authorised person.3Condition B is that—athe person has at any time been knowingly concerned in a contravention of a relevant requirement by a PRA-authorised person, andbat that time the person was—ian approved person in respect of the performance of a relevant senior management function in relation to the carrying on by the PRA-authorised person of a regulated activity, oriiin the case of a relevant PRA-authorised person, an employee of the authorised person.4In this section “relevant requirement” means a requirement—aimposed by or under this Act, orbimposed by any qualifying EU provision specified, or of a description specified, for the purposes of this subsection by the Treasury by order.5Condition C is that—athe person has at any time been a senior manager in relation to a relevant PRA-authorised person,bthere has at that time been (or continued to be) a contravention of a relevant requirement by the authorised person, andcthe senior manager was at that time responsible for the management of any of the authorised person's activities in relation to which the contravention occurred.6But a person (“P”) is not guilty of misconduct by virtue of subsection (5) if P satisfies the PRA that P had taken such steps as a person in P's position could reasonably be expected to take to avoid the contravention occurring (or continuing).7For the purposes of subsection (5)—senior manager”, in relation to a relevant PRA-authorised person, means a person who has approval under section 59 to perform a designated senior management function in relation to the carrying on by the authorised person of a regulated activity;designated senior management function” means a function designated as a senior management function under section 59(6A) or (6B).8In this section—“approved person”—means a person in relation to whom—the PRA has given its approval under section 59, orthe FCA has given its approval under section 59 in respect of the performance by the person of a relevant senior management function in relation to the carrying on by a PRA-authorised person of a regulated activity, andin relation to an authorised person, means a person in relation to whom approval under section 59 is given on the application of the authorised person;employee”, in relation to a person, has the same meaning as in section 64A;relevant PRA-authorised person” means a PRA-authorised person that is a relevant authorised person;relevant senior management function” means a function which the PRA is satisfied is a senior management function as defined in section 59ZA (whether or not the function has been designated as such by the FCA).9For the meaning of “relevant authorised person”, see section 71A.Meaning of “relevant authorised person”33In Part 5 of FSMA 2000 (performance of regulated activities), after section 71 insert—<Emphasis> “Relevant authorised person” </Emphasis>Meaning of “relevant authorised person”71A1In this Part “relevant authorised person” means a UK institution which—ameets condition A or B, andbis not an insurer.2Condition A is that the institution has permission under Part 4A to carry on the regulated activity of accepting deposits.3Condition B is that—athe institution is an investment firm,bit has permission under Part 4A to carry on the regulated activity of dealing in investments as principal, andcwhen carried on by it, that activity is a PRA-regulated activity.4The Treasury may by order provide that authorised persons falling within any of the following descriptions are “relevant authorised persons” for the purposes of this Part—anon-UK institutions (or non-UK institutions of a specified description) that are credit institutions;bnon-UK institutions that are investment firms of a specified description.Specified” means specified in the order.5If the Treasury propose to make an order under subsection (4) they must consult—athe FCA,bthe PRA,cany organisations that appear to them to be representative of interests substantially affected by the proposals, anddany other persons that they consider appropriate.6In this section—aUK institution” means an institution which is incorporated in, or formed under the law of any part of, the United Kingdom;bnon-UK institution” means an institution that is not a UK institution;ccredit institution” means any credit institution as defined in Article 4.1(1) of Regulation (EU) No 575/2013 of the European Parliament and of the Council;dinsurer” means an institution which is authorised under this Act to carry on the regulated activity of effecting or carrying out contracts of insurance as principal.7Subsections (2), (3) and (6)(d) are to be read in accordance with Schedule 2, taken with any order under section 22.Recording information about senior managers341Section 347 of FSMA 2000 (the record of authorised persons etc.) is amended as follows.2In subsection (2)—ain paragraph (g), after sub-paragraph (iii) insert—ivin a case where the authorised person concerned is a relevant authorised person, whether or not the person is a senior manager;;bafter that paragraph insert—hin the case of an approved person who is a senior manager in relation to a relevant authorised person—iwhether a final notice has been given to the person under section 390; andiiif so, any information about the matter to which the notice relates which has been published under section 391(4).3After subsection (8) insert—8AIn this section—relevant authorised person” has the same meaning as in Part 5 (see section 71A),senior manager”, in relation to a relevant authorised person, means a person who has approval under section 59 to perform a designated senior management function in relation to the carrying on by the authorised person of a regulated activity, anddesignated senior management function” means a function designated as a senior management function under section 59(6A) or (6B).4For subsection (9) substitute—9The authorised person concerned”, in relation to an approved person, means the person on whose application approval was given.Consequential amendments relating to Part 435Schedule 3 (which contains further amendments relating to the provisions of this Part) has effect.
This XML file does not appear to have any style information associated with it. The document tree is shown below.
<Legislation xmlns="http://www.legislation.gov.uk/namespaces/legislation" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33" NumberOfProvisions="418" RestrictEndDate="2014-02-18" xml:lang="en" xsi:schemaLocation="http://www.legislation.gov.uk/namespaces/legislation http://www.legislation.gov.uk/schema/legislation.xsd" SchemaVersion="1.0" RestrictStartDate="2013-12-18" RestrictExtent="E+W+S+N.I.">
<ukm:Metadata xmlns:dc="http://purl.org/dc/elements/1.1/" xmlns:dct="http://purl.org/dc/terms/" xmlns:atom="http://www.w3.org/2005/Atom" xmlns:ukm="http://www.legislation.gov.uk/namespaces/metadata">
<dc:identifier>http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/2013-12-18</dc:identifier>
<dc:title>Financial Services (Banking Reform) Act 2013</dc:title>
<dc:description>An Act to make further provision about banking and other financial services, including provision about the Financial Services Compensation Scheme; to make provision for the amounts owed in respect of certain deposits to be treated as a preferential debt on insolvency; to make further provision about payment systems and securities settlement systems; to make provision about the accounts of the Bank of England and its wholly owned subsidiaries; to make provision in relation to persons providing claims management services; and for connected purposes.</dc:description>
<dc:type>text</dc:type>
<dc:format>text/xml</dc:format>
<dc:language>en</dc:language>
<dc:publisher>Statute Law Database</dc:publisher>
<dc:modified>2024-09-06</dc:modified>
<dct:valid>2013-12-18</dct:valid>
<atom:link rel="self" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/2013-12-18/data.xml" type="application/xml"/>
<atom:link rel="http://www.legislation.gov.uk/def/navigation/resources" href="http://www.legislation.gov.uk/ukpga/2013/33/resources" title="More Resources"/>
<atom:link rel="http://www.legislation.gov.uk/def/navigation/notes" href="http://www.legislation.gov.uk/id/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/notes" title="Explanatory Notes"/>
<atom:link rel="http://www.legislation.gov.uk/def/navigation/notes/toc" href="http://www.legislation.gov.uk/ukpga/2013/33/notes/contents" title="Explanatory Notes Table of Contents"/>
<atom:link rel="http://www.legislation.gov.uk/def/navigation/act" href="http://www.legislation.gov.uk/ukpga/2013/33/2013-12-18" title="whole act"/>
<atom:link rel="http://www.legislation.gov.uk/def/navigation/introduction" href="http://www.legislation.gov.uk/ukpga/2013/33/introduction/2013-12-18" title="introduction"/>
<atom:link rel="http://www.legislation.gov.uk/def/navigation/body" href="http://www.legislation.gov.uk/ukpga/2013/33/body/2013-12-18" title="body"/>
<atom:link rel="http://www.legislation.gov.uk/def/navigation/schedules" href="http://www.legislation.gov.uk/ukpga/2013/33/schedules/2013-12-18" title="schedules"/>
<atom:link rel="alternate" type="application/rdf+xml" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/2013-12-18/data.rdf" title="RDF/XML"/>
<atom:link rel="alternate" type="application/akn+xml" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/2013-12-18/data.akn" title="AKN"/>
<atom:link rel="alternate" type="application/xhtml+xml" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/2013-12-18/data.xht" title="HTML snippet"/>
<atom:link rel="alternate" type="text/html" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/2013-12-18/data.htm" title="Website (XHTML) Default View"/>
<atom:link rel="alternate" type="text/csv" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/2013-12-18/data.csv" title="CSV"/>
<atom:link rel="alternate" type="application/pdf" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/2013-12-18/data.pdf" title="PDF"/>
<atom:link rel="alternate" type="application/akn+xhtml" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/2013-12-18/data.html" title="HTML5 snippet"/>
<atom:link rel="http://purl.org/dc/terms/tableOfContents" hreflang="en" href="http://www.legislation.gov.uk/ukpga/2013/33/contents/2013-12-18" title="Table of Contents"/>
<atom:link rel="http://purl.org/dc/terms/isReplacedBy" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/2016-03-07" title="2016-03-07"/>
<atom:link rel="http://purl.org/dc/terms/hasVersion" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/enacted" title="enacted"/>
<atom:link rel="http://purl.org/dc/terms/hasVersion" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/2014-07-25" title="2014-07-25"/>
<atom:link rel="http://purl.org/dc/terms/hasVersion" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/2016-03-07" title="2016-03-07"/>
<atom:link rel="http://purl.org/dc/terms/hasVersion" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/2016-05-10" title="2016-05-10"/>
<atom:link rel="http://purl.org/dc/terms/hasVersion" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/2017-03-07" title="2017-03-07"/>
<atom:link rel="http://purl.org/dc/terms/hasVersion" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/2018-09-13" title="2018-09-13"/>
<atom:link rel="http://purl.org/dc/terms/hasVersion" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/2018-12-10" title="2018-12-10"/>
<atom:link rel="http://purl.org/dc/terms/hasVersion" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/2019-07-18" title="2019-07-18"/>
<atom:link rel="http://purl.org/dc/terms/hasVersion" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/2019-08-09" title="2019-08-09"/>
<atom:link rel="http://purl.org/dc/terms/hasVersion" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/2019-12-09" title="2019-12-09"/>
<atom:link rel="http://purl.org/dc/terms/hasVersion" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/2020-12-07" title="2020-12-07"/>
<atom:link rel="http://purl.org/dc/terms/hasVersion" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/2020-12-09" title="2020-12-09"/>
<atom:link rel="http://purl.org/dc/terms/hasVersion" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/2021-12-07" title="2021-12-07"/>
<atom:link rel="http://purl.org/dc/terms/hasVersion" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000" title="current"/>
<atom:link rel="up" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/2013-12-18" title="Part 4"/>
<atom:link rel="prev" href="http://www.legislation.gov.uk/ukpga/2013/33/part/3/2013-12-18" title="Part; Part 3"/>
<atom:link rel="prevInForce" href="http://www.legislation.gov.uk/ukpga/2013/33/introduction/2013-12-18" title="Introduction; Introduction"/>
<atom:link rel="next" href="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/offence/2013-12-18" title="Crossheading; Part 4 Crossheading; Offence"/>
<atom:link rel="nextInForce" href="http://www.legislation.gov.uk/ukpga/2013/33/part/8/2013-12-18" title="Part; Part 8"/>
<ukm:PrimaryMetadata>
<ukm:DocumentClassification>
<ukm:DocumentCategory Value="primary"/>
<ukm:DocumentMainType Value="UnitedKingdomPublicGeneralAct"/>
<ukm:DocumentStatus Value="revised"/>
</ukm:DocumentClassification>
<ukm:Year Value="2013"/>
<ukm:Number Value="33"/>
<ukm:EnactmentDate Date="2013-12-18"/>
<ukm:ISBN Value="9780105433132"/>
<ukm:UnappliedEffects>
<ukm:UnappliedEffect AffectingYear="2015" AffectingNumber="492" AffectingURI="http://www.legislation.gov.uk/id/uksi/2015/492" AffectedNumber="33" Comments="Already added to appended commentary for EXTOES for 2014 SI0490" EffectId="key-31d6ebbf8dd56809c84dbeda9c753fd4" AffectedProvisions="specified provision(s)" AffectedURI="http://www.legislation.gov.uk/id/ukpga/2013/33" AffectedClass="UnitedKingdomPublicGeneralAct" TypeNotes="savings and transitional provisions for commencing SI 2015/490" URI="http://www.legislation.gov.uk/id/effect/key-31d6ebbf8dd56809c84dbeda9c753fd4" AffectingClass="UnitedKingdomStatutoryInstrument" RequiresApplied="false" AffectingProvisions="Order" Modified="2019-01-03T09:36:07Z" Type="savings and transitional provisions for commencing SI 2015/490" Row="23" AffectedYear="2013">
<ukm:AffectedTitle>Financial Services (Banking Reform) Act 2013</ukm:AffectedTitle>
<ukm:AffectedProvisions>specified provision(s)</ukm:AffectedProvisions>
<ukm:AffectingTitle>The Financial Services (Banking Reform) Act 2013 (Transitional and Savings Provisions) Order 2015</ukm:AffectingTitle>
<ukm:AffectingProvisions>Order</ukm:AffectingProvisions>
<ukm:InForceDates>
<ukm:InForce Prospective="true" Qualification=""/>
</ukm:InForceDates>
</ukm:UnappliedEffect>
<ukm:UnappliedEffect Comments="Amendment reflected in appended commentary in EXTOES for 2015 SI0490" TypeNotes="amendment to earlier commencing S.I. 2015/490, art. 2" AffectedNumber="33" Modified="2019-01-03T09:36:07Z" AffectingProvisions="art. 2" AffectingClass="UnitedKingdomStatutoryInstrument" AffectedYear="2013" EffectId="key-ff13df488d691c8ca98c37a43cfb1500" URI="http://www.legislation.gov.uk/id/effect/key-ff13df488d691c8ca98c37a43cfb1500" Type="amendment to earlier commencing S.I. 2015/490, art. 2" AffectedClass="UnitedKingdomPublicGeneralAct" AffectingEffectsExtent="E+W+S+N.I." AffectedProvisions="specified provision(s)" AffectedURI="http://www.legislation.gov.uk/id/ukpga/2013/33" AffectingYear="2015" RequiresApplied="false" Row="24" AffectingURI="http://www.legislation.gov.uk/id/uksi/2015/2055" AffectingNumber="2055">
<ukm:AffectedTitle>Financial Services (Banking Reform) Act 2013</ukm:AffectedTitle>
<ukm:AffectedProvisions>specified provision(s)</ukm:AffectedProvisions>
<ukm:AffectingTitle>The Financial Services (Banking Reform) Act 2013 (Commencement No. 9) (Amendment) Order 2015</ukm:AffectingTitle>
<ukm:AffectingProvisions>
<ukm:Section Ref="article-2" URI="http://www.legislation.gov.uk/id/uksi/2015/2055/article/2">art. 2</ukm:Section>
</ukm:AffectingProvisions>
<ukm:InForceDates>
<ukm:InForce Date="2015-12-16" Qualification="wholly in force"/>
</ukm:InForceDates>
</ukm:UnappliedEffect>
<ukm:UnappliedEffect AffectingNumber="13" AffectingProvisions="Sch. 29 para. 11(2)" Created="2024-07-01T15:31:50Z" AffectingEffectsExtent="S+A+M+E+A+S+A+F+F+E+C+T+E+D" AffectingYear="2024" AffectingURI="http://www.legislation.gov.uk/id/ukpga/2024/13" AffectedProvisions="s. 59(7)" EffectId="key-801017c5ed06026b478a4e0822a8574a" AffectedYear="2013" AffectedNumber="33" URI="http://www.legislation.gov.uk/id/effect/ukpga-2024-13-gatg7ly5-914" AffectedClass="UnitedKingdomPublicGeneralAct" AffectedURI="http://www.legislation.gov.uk/id/ukpga/2013/33" Type="inserted" AffectingClass="UnitedKingdomPublicGeneralAct" RequiresApplied="true" Row="914">
<ukm:AffectedTitle>Financial Services (Banking Reform) Act 2013</ukm:AffectedTitle>
<ukm:AffectedProvisions>
<ukm:Section Ref="section-59-7" URI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/59/7" FoundRef="section-59">s. 59(7)</ukm:Section>
</ukm:AffectedProvisions>
<ukm:AffectingTitle>Digital Markets, Competition and Consumers Act 2024</ukm:AffectingTitle>
<ukm:AffectingProvisions>
<ukm:Section Ref="schedule-29" URI="http://www.legislation.gov.uk/id/ukpga/2024/13/schedule/29">Sch. 29 </ukm:Section>
<ukm:Section Ref="schedule-29-paragraph-11-2" URI="http://www.legislation.gov.uk/id/ukpga/2024/13/schedule/29/paragraph/11/2">para. 11(2)</ukm:Section>
</ukm:AffectingProvisions>
<ukm:CommencementAuthority>
<ukm:Section Ref="section-339-1" URI="http://www.legislation.gov.uk/id/ukpga/2024/13/section/339/1">s. 339(1)</ukm:Section>
</ukm:CommencementAuthority>
<ukm:InForceDates>
<ukm:InForce Applied="false" Prospective="true" Qualification=""/>
</ukm:InForceDates>
</ukm:UnappliedEffect>
<ukm:UnappliedEffect AffectedURI="http://www.legislation.gov.uk/id/ukpga/2013/33" AffectedNumber="33" RequiresApplied="true" AffectedProvisions="s. 61(6)" Created="2024-07-01T15:31:50Z" AffectedClass="UnitedKingdomPublicGeneralAct" Type="inserted" AffectingYear="2024" AffectingNumber="13" URI="http://www.legislation.gov.uk/id/effect/ukpga-2024-13-gatg7ly5-915" Row="915" AffectingEffectsExtent="S+A+M+E+A+S+A+F+F+E+C+T+E+D" AffectedYear="2013" AffectingClass="UnitedKingdomPublicGeneralAct" EffectId="key-b99e804959b58247eadaa96bb8768681" AffectingURI="http://www.legislation.gov.uk/id/ukpga/2024/13" AffectingProvisions="Sch. 29 para. 11(3)">
<ukm:AffectedTitle>Financial Services (Banking Reform) Act 2013</ukm:AffectedTitle>
<ukm:AffectedProvisions>
<ukm:Section Ref="section-61-6" URI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/61/6" FoundRef="section-61">s. 61(6)</ukm:Section>
</ukm:AffectedProvisions>
<ukm:AffectingTitle>Digital Markets, Competition and Consumers Act 2024</ukm:AffectingTitle>
<ukm:AffectingProvisions>
<ukm:Section Ref="schedule-29" URI="http://www.legislation.gov.uk/id/ukpga/2024/13/schedule/29">Sch. 29 </ukm:Section>
<ukm:Section Ref="schedule-29-paragraph-11-3" URI="http://www.legislation.gov.uk/id/ukpga/2024/13/schedule/29/paragraph/11/3">para. 11(3)</ukm:Section>
</ukm:AffectingProvisions>
<ukm:CommencementAuthority>
<ukm:Section Ref="section-339-1" URI="http://www.legislation.gov.uk/id/ukpga/2024/13/section/339/1">s. 339(1)</ukm:Section>
</ukm:CommencementAuthority>
<ukm:InForceDates>
<ukm:InForce Applied="false" Prospective="true" Qualification=""/>
</ukm:InForceDates>
</ukm:UnappliedEffect>
</ukm:UnappliedEffects>
</ukm:PrimaryMetadata>
<ukm:Notes>
<ukm:Note IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/notes"/>
<ukm:Alternatives>
<ukm:Alternative URI="http://www.legislation.gov.uk/ukpga/2013/33/pdfs/ukpgaen_20130033_en.pdf" Date="2014-02-04" Title="Explanatory Note" Size="789993"/>
</ukm:Alternatives>
</ukm:Notes>
<ukm:CorrectionSlips>
<ukm:CorrectionSlip URI="http://www.legislation.gov.uk/ukpga/2013/33/pdfs/ukpgacs_20130033_en_003.pdf" Date="2018-11-26" Title="Correction Slip 3" Size="11459"/>
<ukm:CorrectionSlip URI="http://www.legislation.gov.uk/ukpga/2013/33/pdfs/ukpgacs_20130033_en_001.pdf" Date="2015-03-16" Title="Correction Slip 1" Size="11375"/>
<ukm:CorrectionSlip URI="http://www.legislation.gov.uk/ukpga/2013/33/pdfs/ukpgacs_20130033_en.pdf" Date="2014-03-27" Title="Correction Slip" Size="11591"/>
</ukm:CorrectionSlips>
<ukm:Alternatives>
<ukm:Alternative URI="http://www.legislation.gov.uk/ukpga/2013/33/pdfs/ukpga_20130033_en.pdf" Date="2013-12-20" Size="1498429"/>
</ukm:Alternatives>
<ukm:Statistics>
<ukm:TotalParagraphs Value="422"/>
<ukm:BodyParagraphs Value="210"/>
<ukm:ScheduleParagraphs Value="212"/>
<ukm:AttachmentParagraphs Value="0"/>
<ukm:TotalImages Value="0"/>
</ukm:Statistics>
</ukm:Metadata>
<Primary>
<Body DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/body/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/body" NumberOfProvisions="210" RestrictStartDate="2013-12-18" RestrictEndDate="2014-03-01">
<Part DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/part/4/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/part/4" NumberOfProvisions="37" RestrictEndDate="2016-03-07" Match="false" RestrictStartDate="2014-07-25" id="part-4" RestrictExtent="E+W+S+N.I.">
<Number>
<Strong>PART 4</Strong>
</Number>
<Title>Conduct of persons working in financial services sector</Title>
<Pblock DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/part/4/crossheading/amendments-of-fsma-2000" NumberOfProvisions="34" RestrictEndDate="2016-03-07" Match="false" RestrictStartDate="2014-07-25" id="part-4-crossheading-amendments-of-fsma-2000" RestrictExtent="E+W+S+N.I.">
<Title>
<Emphasis>Amendments of </Emphasis>
FSMA 2000
</Title>
<P1group RestrictEndDate="2016-03-07" Match="false" RestrictStartDate="2014-07-25" RestrictExtent="E+W+S+N.I.">
<Title>Functions for which approval is required</Title>
<P1 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/18/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/18" id="section-18">
<Pnumber PuncAfter="">18</Pnumber>
<P1para>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/18/1/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/18/1" id="section-18-1">
<Pnumber>1</Pnumber>
<P2para>
<Text>Section 59 of FSMA 2000 (approval for particular arrangements) is amended as follows.</Text>
</P2para>
</P2>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/18/2/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/18/2" id="section-18-2">
<Pnumber>2</Pnumber>
<P2para>
<Text>Omit subsection (5).</Text>
</P2para>
</P2>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/18/3/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/18/3" id="section-18-3">
<Pnumber>3</Pnumber>
<P2para>
<Text>For subsection (6) substitute—</Text>
<BlockAmendment TargetClass="primary" TargetSubClass="unknown" Context="main" Format="default">
<P2>
<Pnumber>6</Pnumber>
<P2para>
<Text>The PRA may specify a description of function under subsection (3)(a) only if, in relation to the carrying on of a regulated activity by a PRA-authorised person, it is satisfied that the function is a senior management function as defined in section 59ZA.</Text>
</P2para>
</P2>
</BlockAmendment>
</P2para>
</P2>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/18/4/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/18/4" RestrictEndDate="2018-12-10" id="section-18-4" RestrictExtent="E+W+S+N.I.">
<Pnumber>4</Pnumber>
<P2para>
<Text>After subsection (6) insert—</Text>
<BlockAmendment TargetClass="primary" TargetSubClass="unknown" Context="main" Format="default">
<P2>
<Pnumber>6A</Pnumber>
<P2para>
<Text>If—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>a function of a description specified in rules made by the FCA under subsection (3)(a) or (b) is a controlled function in relation to the carrying on of a regulated activity by a relevant authorised person, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>the FCA is satisfied that, in relation to the carrying on of a regulated activity by a relevant authorised person, the function is a senior management function as defined in section 59ZA,</Text>
</P3para>
</P3>
<Text>the FCA must designate the function in the rules as a senior management function.</Text>
</P2para>
</P2>
<P2>
<Pnumber>6B</Pnumber>
<P2para>
<Text>If a function of a description specified in rules made by the PRA under subsection (3)(a) is a controlled function in relation to the carrying on of a regulated activity by a relevant authorised person, the PRA must designate the function in the rules as a senior management function.</Text>
</P2para>
</P2>
<P2>
<Pnumber>6C</Pnumber>
<P2para>
<Text>For the meaning of “relevant authorised person”, see section 71A.</Text>
</P2para>
</P2>
</BlockAmendment>
</P2para>
</P2>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/18/5/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/18/5" id="section-18-5">
<Pnumber>5</Pnumber>
<P2para>
<Text>Omit subsections (7) to (7B) and (11).</Text>
</P2para>
</P2>
</P1para>
</P1>
</P1group>
<P1group Match="false" RestrictStartDate="2014-07-25">
<Title>Senior management functions</Title>
<P1 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/19/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/19" id="section-19">
<Pnumber PuncAfter="">19</Pnumber>
<P1para>
<Text>After section 59 of FSMA 2000 insert—</Text>
<BlockAmendment TargetClass="primary" TargetSubClass="unknown" Context="main" Format="default">
<P1group>
<Title>Senior management functions</Title>
<P1>
<Pnumber PuncAfter="">59ZA</Pnumber>
<P1para>
<P2>
<Pnumber>1</Pnumber>
<P2para>
<Text>This section has effect for determining whether a function is for the purposes of section 59(6) or (6A) a senior management function.</Text>
</P2para>
</P2>
<P2>
<Pnumber>2</Pnumber>
<P2para>
<Text>
A function is a “
<Term>senior management function</Term>
”, in relation to the carrying on of a regulated activity by an authorised person, if—
</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>the function will require the person performing it to be responsible for managing one or more aspects of the authorised person's affairs, so far as relating to the activity, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>those aspects involve, or might involve, a risk of serious consequences—</Text>
<P4>
<Pnumber>i</Pnumber>
<P4para>
<Text>for the authorised person, or</Text>
</P4para>
</P4>
<P4>
<Pnumber>ii</Pnumber>
<P4para>
<Text>for business or other interests in the United Kingdom.</Text>
</P4para>
</P4>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>3</Pnumber>
<P2para>
<Text>In subsection (2)(a) the reference to managing one or more aspects of an authorised person's affairs includes a reference to taking decisions, or participating in the taking of decisions, about how one or more aspects of those affairs should be carried on.</Text>
</P2para>
</P2>
</P1para>
</P1>
</P1group>
</BlockAmendment>
</P1para>
</P1>
</P1group>
<P1group RestrictEndDate="2016-03-07" Match="false" RestrictStartDate="2014-07-25" RestrictExtent="E+W+S+N.I.">
<Title>Statements of responsibilities</Title>
<P1 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/20/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/20" id="section-20">
<Pnumber PuncAfter="">20</Pnumber>
<P1para>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/20/1/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/20/1" id="section-20-1">
<Pnumber>1</Pnumber>
<P2para>
<Text>Section 60 of FSMA 2000 (applications for approval) is amended as follows.</Text>
</P2para>
</P2>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/20/2/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/20/2" id="section-20-2">
<Pnumber>2</Pnumber>
<P2para>
<Text>After subsection (2) insert—</Text>
<BlockAmendment TargetClass="primary" TargetSubClass="unknown" Context="main" Format="default">
<P2>
<Pnumber>2A</Pnumber>
<P2para>
<Text>If—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>the application is for the approval of a person to perform a designated senior management function, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>the authorised person concerned is a relevant authorised person (see section 71A),</Text>
</P3para>
</P3>
<Text>the appropriate regulator must require the application to contain, or be accompanied by, a statement setting out the aspects of the affairs of the authorised person concerned which it is intended that the person will be responsible for managing in performing the function.</Text>
</P2para>
</P2>
<P2>
<Pnumber>2B</Pnumber>
<P2para>
<Text>A statement provided under subsection (2A) is known as a “statement of responsibilities”.</Text>
</P2para>
</P2>
<P2>
<Pnumber>2C</Pnumber>
<P2para>
<Text>
In subsection (2A) “
<Term>designated senior management function</Term>
” means a function designated as a senior management function under section 59(6A) or (6B).
</Text>
</P2para>
</P2>
</BlockAmendment>
</P2para>
</P2>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/20/3/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/20/3" RestrictEndDate="2018-12-10" id="section-20-3" RestrictExtent="E+W+S+N.I.">
<Pnumber>3</Pnumber>
<P2para>
<Text>After subsection (6) insert—</Text>
<BlockAmendment TargetClass="primary" TargetSubClass="unknown" Context="main" Format="default">
<P2>
<Pnumber>6A</Pnumber>
<P2para>
<Text>Subsection (6) applies to references to a relevant authorised person as it applies to references to the authorised person concerned.</Text>
</P2para>
</P2>
</BlockAmendment>
</P2para>
</P2>
</P1para>
</P1>
</P1group>
<P1group RestrictStartDate="2016-03-07" Match="false">
<Title>Vetting by relevant authorised persons of candidates for approval</Title>
<P1 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/21/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/21" id="section-21">
<Pnumber PuncAfter="">21</Pnumber>
<P1para>
<Text>After section 60 of FSMA 2000 insert—</Text>
<BlockAmendment TargetClass="primary" TargetSubClass="unknown" Context="main" Format="default">
<P1group>
<Title>Vetting of candidates by relevant authorised persons</Title>
<P1>
<Pnumber PuncAfter="">60A</Pnumber>
<P1para>
<P2>
<Pnumber>1</Pnumber>
<P2para>
<Text>Before a relevant authorised person may make an application for a regulator's approval under section 59, the authorised person must be satisfied that the person in respect of whom the application is made (“the candidate”) is a fit and proper person to perform the function to which the application relates.</Text>
</P2para>
</P2>
<P2>
<Pnumber>2</Pnumber>
<P2para>
<Text>In deciding that question, the authorised person must have regard, in particular, to whether the candidate, or any person who may perform a function on the candidate's behalf—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>has obtained a qualification,</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>has undergone, or is undergoing, training,</Text>
</P3para>
</P3>
<P3>
<Pnumber>c</Pnumber>
<P3para>
<Text>possesses a level of competence, or</Text>
</P3para>
</P3>
<P3>
<Pnumber>d</Pnumber>
<P3para>
<Text>has the personal characteristics,</Text>
</P3para>
</P3>
<Text>required by general rules made by the regulator in relation to persons performing functions of the kind to which the application relates.</Text>
</P2para>
</P2>
<P2>
<Pnumber>3</Pnumber>
<P2para>
<Text>For the meaning of “relevant authorised person”, see section 71A.</Text>
</P2para>
</P2>
</P1para>
</P1>
</P1group>
</BlockAmendment>
</P1para>
</P1>
</P1group>
<P1group RestrictStartDate="2016-03-07" Match="false">
<Title>Determination of applications for approval</Title>
<P1 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/22/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/22" id="section-22">
<Pnumber PuncAfter="">22</Pnumber>
<P1para>
<Text>In section 61 of FSMA 2000 (determination of applications), in subsection (2)—</Text>
<P3 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/22/a/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/22/a" id="section-22-a">
<Pnumber>a</Pnumber>
<P3para>
<Text>omit the “or” at the end of paragraph (b), and</Text>
</P3para>
</P3>
<P3 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/22/b/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/22/b" id="section-22-b">
<Pnumber>b</Pnumber>
<P3para>
<Text>after paragraph (c) insert</Text>
<BlockAmendment TargetClass="unknown" TargetSubClass="unknown" Context="unknown" Format="default">
<Text>or </Text>
<P3>
<Pnumber>d</Pnumber>
<P3para>
<Text>has the personal characteristics,</Text>
</P3para>
</P3>
</BlockAmendment>
<AppendText>.</AppendText>
</P3para>
</P3>
</P1para>
</P1>
</P1group>
<P1group RestrictEndDate="2018-09-13" RestrictStartDate="2016-03-07" Match="false" RestrictExtent="E+W+S+N.I.">
<Title>Power to give approval subject to conditions or for limited period</Title>
<P1 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/23/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/23" id="section-23">
<Pnumber PuncAfter="">23</Pnumber>
<P1para>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/23/1/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/23/1" id="section-23-1">
<Pnumber>1</Pnumber>
<P2para>
<Text>Section 61 of FSMA 2000 (determination of applications) is amended as follows.</Text>
</P2para>
</P2>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/23/2/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/23/2" id="section-23-2">
<Pnumber>2</Pnumber>
<P2para>
<Text>For subsection (1) substitute—</Text>
<BlockAmendment TargetClass="primary" TargetSubClass="unknown" Context="main" Format="default">
<P2>
<Pnumber>1</Pnumber>
<P2para>
<Text>The regulator to which an application for approval is made under section 60 may grant the application only if—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>it is satisfied that the person in respect of whom the application is made (“the candidate”) is a fit and proper person to perform the function to which the application relates, or</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>in a case where the application is for approval to perform a designated senior management function in relation to the carrying on of a regulated activity by a relevant authorised person (a “relevant senior management application”), it is satisfied that the condition in paragraph (a) will be met if the application is granted subject to one or more conditions (as to which, see subsection (2B)).</Text>
</P3para>
</P3>
</P2para>
</P2>
</BlockAmendment>
</P2para>
</P2>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/23/3/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/23/3" id="section-23-3">
<Pnumber>3</Pnumber>
<P2para>
<Text>
In subsection (2), for “deciding that question” substitute
<InlineAmendment>“ determining the application ”</InlineAmendment>
.
</Text>
</P2para>
</P2>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/23/4/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/23/4" id="section-23-4">
<Pnumber>4</Pnumber>
<P2para>
<Text>After subsection (2A) insert—</Text>
<BlockAmendment TargetClass="primary" TargetSubClass="unknown" Context="main" Format="default">
<P2>
<Pnumber>2B</Pnumber>
<P2para>
<Text>The regulator to which a relevant senior management application is made under section 60 may in particular—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>grant the application subject to any conditions that the regulator considers appropriate, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>grant the application so as to give approval only for a limited period.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>2C</Pnumber>
<P2para>
<Text>A regulator may exercise the power under paragraph (a) or (b) of subsection (2B) only if—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>where the regulator is the FCA, it appears to the FCA that it is desirable to do so in order to advance one or more of its operational objectives, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>where the regulator is the PRA, it appears to the PRA that it is desirable to do so in order to advance any of its objectives.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>2D</Pnumber>
<P2para>
<Text>Consent given by the FCA for the granting of the application may be conditional on the manner in which the PRA exercises its power under subsection (2B).</Text>
</P2para>
</P2>
</BlockAmendment>
</P2para>
</P2>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/23/5/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/23/5" id="section-23-5">
<Pnumber>5</Pnumber>
<P2para>
<Text>After subsection (3) insert—</Text>
<BlockAmendment TargetClass="primary" TargetSubClass="unknown" Context="main" Format="default">
<P2>
<Pnumber>3ZA</Pnumber>
<P2para>
<Text>In the case of a relevant senior management application, the reference in subsection (3)(a) to granting the application is a reference to granting it without imposing conditions or limiting the period for which the approval has effect.</Text>
</P2para>
</P2>
</BlockAmendment>
</P2para>
</P2>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/23/6/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/23/6" RestrictEndDate="2018-12-10" id="section-23-6" RestrictExtent="E+W+S+N.I.">
<Pnumber>6</Pnumber>
<P2para>
<Text>After subsection (5) insert—</Text>
<BlockAmendment TargetClass="primary" TargetSubClass="unknown" Context="main" Format="default">
<P2>
<Pnumber>6</Pnumber>
<P2para>
<Text>In this section—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>
<Term>designated senior management function</Term>
” means a function designated as a senior management function under section 59(6A) or (6B);
</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>any reference to a relevant authorised person includes a reference to a person who has applied for permission under Part 4A and will be a relevant authorised person if permission is given.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>7</Pnumber>
<P2para>
<Text>For the meaning of “relevant authorised person”, see section 71A.</Text>
</P2para>
</P2>
</BlockAmendment>
</P2para>
</P2>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/23/7/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/23/7" id="section-23-7">
<Pnumber>7</Pnumber>
<P2para>
<Text>In section 62 of FSMA 2000 (applications for approval: procedure and right to refer to Tribunal)—</Text>
<P3 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/23/7/a/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/23/7/a" id="section-23-7-a">
<Pnumber>a</Pnumber>
<P3para>
<Text>
in subsection (2), after “the application” insert
<InlineAmendment>“ , or to grant the application subject to conditions or for a limited period (or both) ”</InlineAmendment>
;
</Text>
</P3para>
</P3>
<P3 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/23/7/b/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/23/7/b" id="section-23-7-b">
<Pnumber>b</Pnumber>
<P3para>
<Text>
in subsection (3), after “the application” insert
<InlineAmendment>“ , or to grant the application subject to conditions or for a limited period (or both) ”</InlineAmendment>
;
</Text>
</P3para>
</P3>
<P3 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/23/7/c/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/23/7/c" id="section-23-7-c">
<Pnumber>c</Pnumber>
<P3para>
<Text>
in subsection (4), after “the application” insert
<InlineAmendment>“ , or to grant the application subject to conditions or for a limited period (or both) ”</InlineAmendment>
.
</Text>
</P3para>
</P3>
</P2para>
</P2>
</P1para>
</P1>
</P1group>
<P1group RestrictStartDate="2016-03-07" Match="false">
<Title>Changes in responsibilities of senior managers</Title>
<P1 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/24/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/24" id="section-24">
<Pnumber PuncAfter="">24</Pnumber>
<P1para>
<Text>After section 62 of FSMA 2000 insert—</Text>
<BlockAmendment TargetClass="primary" TargetSubClass="unknown" Context="main" Format="default">
<P1group>
<Title>Changes in responsibilities of senior managers</Title>
<P1>
<Pnumber PuncAfter="">62A</Pnumber>
<P1para>
<P2>
<Pnumber>1</Pnumber>
<P2para>
<Text>This section applies where—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>an authorised person has made an application to the appropriate regulator for approval under section 59 for a person to perform a designated senior management function,</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>the application contained, or was accompanied by, a statement of responsibilities under section 60(2A), and</Text>
</P3para>
</P3>
<P3>
<Pnumber>c</Pnumber>
<P3para>
<Text>the application has been granted.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>2</Pnumber>
<P2para>
<Text>If, since the granting of the application, there has been any significant change in the aspects of the authorised person's affairs which the person is responsible for managing in performing the function, the authorised person must provide the appropriate regulator with a revised statement of responsibilities.</Text>
</P2para>
</P2>
<P2>
<Pnumber>3</Pnumber>
<P2para>
<Text>The appropriate regulator may require the authorised person—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>to provide information which the person is required to give under this section in such form as the appropriate regulator may direct, or</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>to verify such information in such a way as the appropriate regulator may direct.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>4</Pnumber>
<P2para>
<Text>In this section—</Text>
<UnorderedList Decoration="none" Class="Definition">
<ListItem>
<Para>
<Text>
<Term>the appropriate regulator</Term>
” has the same meaning as in section 60;
</Text>
</Para>
</ListItem>
<ListItem>
<Para>
<Text>
<Term>designated senior management function</Term>
” means a function designated as a senior management function under section 59(6A) or (6B).
</Text>
</Para>
</ListItem>
</UnorderedList>
</P2para>
</P2>
</P1para>
</P1>
</P1group>
</BlockAmendment>
</P1para>
</P1>
</P1group>
<P1group RestrictStartDate="2016-03-07" Match="false">
<Title>Duty to notify regulator of grounds for withdrawal of approval</Title>
<P1 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/25/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/25" id="section-25">
<Pnumber PuncAfter="">25</Pnumber>
<P1para>
<Text>In section 63 of FSMA 2000 (withdrawal of approval), after subsection (2) insert—</Text>
<BlockAmendment TargetClass="primary" TargetSubClass="unknown" Context="main" Format="default">
<P2>
<Pnumber>2A</Pnumber>
<P2para>
<Text>At least once a year each relevant authorised person must, in relation to every person in relation to whom an approval has been given on the application of the authorised person—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>consider whether there are any grounds on which a regulator could withdraw the approval under this section, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>if the authorised person is of the opinion that there are such grounds, notify the regulator of those grounds.</Text>
</P3para>
</P3>
<Text>(For the meaning of “relevant authorised person”, see section 71A.)</Text>
</P2para>
</P2>
</BlockAmendment>
</P1para>
</P1>
</P1group>
<P1group RestrictStartDate="2016-03-07" Match="false">
<Title>Variation of approval</Title>
<P1 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/26/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/26" id="section-26">
<Pnumber PuncAfter="">26</Pnumber>
<P1para>
<Text>After section 63 of FSMA 2000 insert—</Text>
<BlockAmendment TargetClass="primary" TargetSubClass="unknown" Context="main" Format="default">
<P1group>
<Title>Variation of senior manager's approval at request of relevant authorised person</Title>
<P1>
<Pnumber PuncAfter="">63ZA</Pnumber>
<P1para>
<P2>
<Pnumber>1</Pnumber>
<P2para>
<Text>Where an application for approval under section 59 is granted subject to conditions, the authorised person concerned may apply to the appropriate regulator to vary the approval by—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>varying a condition,</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>removing a condition, or</Text>
</P3para>
</P3>
<P3>
<Pnumber>c</Pnumber>
<P3para>
<Text>imposing a new condition.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>2</Pnumber>
<P2para>
<Text>“The appropriate regulator”—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>in the case of an application for variation of an approval in a way described in subsection (1)(a) or (b), means whichever of the FCA or the PRA imposed the condition concerned;</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>in the case of an application for variation of an approval in the way described in subsection (1)(c), means the regulator who gave the approval.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>3</Pnumber>
<P2para>
<Text>The PRA must consult the FCA before determining an application under this section, unless the application relates to the variation or removal of a condition which was imposed by the PRA in exercise of its power under section 63ZB.</Text>
</P2para>
</P2>
<P2>
<Pnumber>4</Pnumber>
<P2para>
<Text>The regulator to which an application is made under this section must, before the end of the period for consideration, determine whether—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>to grant the application; or</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>to give a warning notice under section 62(2).</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>5</Pnumber>
<P2para>
<Text>
<Term>The period for consideration</Term>
” means the period of 3 months beginning with the date on which the regulator receives the application.
</Text>
</P2para>
</P2>
<P2>
<Pnumber>6</Pnumber>
<P2para>
<Text>The FCA may refuse an application under this section if it appears to the FCA that it is desirable to do so in order to advance one or more of its operational objectives.</Text>
</P2para>
</P2>
<P2>
<Pnumber>7</Pnumber>
<P2para>
<Text>The PRA may refuse an application under this section if it appears to the PRA that it is desirable to do so in order to advance any of its objectives.</Text>
</P2para>
</P2>
<P2>
<Pnumber>8</Pnumber>
<P2para>
<Text>The following provisions apply to an application made under this section for variation of an approval as they apply to an application for approval made under section 60—</Text>
<UnorderedList Decoration="none">
<ListItem>
<Para>
<Text>section 60(2) to (8),</Text>
</Para>
</ListItem>
<ListItem>
<Para>
<Text>section 61(4) and (5),</Text>
</Para>
</ListItem>
<ListItem>
<Para>
<Text>section 62.</Text>
</Para>
</ListItem>
</UnorderedList>
</P2para>
</P2>
</P1para>
</P1>
</P1group>
<P1group>
<Title>Variation of senior manager's approval on initiative of regulator</Title>
<P1>
<Pnumber PuncAfter="">63ZB</Pnumber>
<P1para>
<P2>
<Pnumber>1</Pnumber>
<P2para>
<Text>The FCA may vary an approval under section 59 given by the FCA or the PRA for the performance of a designated senior management function in relation to the carrying on of a regulated activity by a relevant authorised person if the FCA considers that it is desirable to do so in order to advance one or more of its operational objectives.</Text>
</P2para>
</P2>
<P2>
<Pnumber>2</Pnumber>
<P2para>
<Text>The PRA may vary an approval under section 59 for the performance of a designated senior management function in relation to the carrying on of a regulated activity by a relevant authorised person if—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>either—</Text>
<P4>
<Pnumber>i</Pnumber>
<P4para>
<Text>the PRA gave the approval, or</Text>
</P4para>
</P4>
<P4>
<Pnumber>ii</Pnumber>
<P4para>
<Text>the FCA gave the approval and the relevant authorised person is a PRA-authorised person, and</Text>
</P4para>
</P4>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>the PRA considers that it is desirable to do so in order to advance any of its objectives.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>3</Pnumber>
<P2para>
<Text>A regulator may vary an approval by—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>imposing a condition,</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>varying a condition,</Text>
</P3para>
</P3>
<P3>
<Pnumber>c</Pnumber>
<P3para>
<Text>removing a condition, or</Text>
</P3para>
</P3>
<P3>
<Pnumber>d</Pnumber>
<P3para>
<Text>limiting the period for which the approval is to have effect.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>4</Pnumber>
<P2para>
<Text>Before one regulator varies an approval given by the other regulator, it must consult the other regulator.</Text>
</P2para>
</P2>
<P2>
<Pnumber>5</Pnumber>
<P2para>
<Text>
In this section “
<Term>designated senior management function</Term>
” means a function designated as a senior management function under section 59(6A) or (6B).
</Text>
</P2para>
</P2>
<P2>
<Pnumber>6</Pnumber>
<P2para>
<Text>For the meaning of “relevant authorised person”, see section 71A.</Text>
</P2para>
</P2>
</P1para>
</P1>
</P1group>
<P1group>
<Title>Exercise of power under section 63ZB: procedure</Title>
<P1>
<Pnumber PuncAfter="">63ZC</Pnumber>
<P1para>
<P2>
<Pnumber>1</Pnumber>
<P2para>
<Text>This section applies to an exercise, by either regulator, of the power to vary an approval under section 63ZB.</Text>
</P2para>
</P2>
<P2>
<Pnumber>2</Pnumber>
<P2para>
<Text>A variation takes effect—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>immediately, if the notice given under subsection (4) states that that is the case,</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>on such date as is specified in the notice, or</Text>
</P3para>
</P3>
<P3>
<Pnumber>c</Pnumber>
<P3para>
<Text>if no date is specified in the notice, when the matter to which the notice relates is no longer open to review.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>3</Pnumber>
<P2para>
<Text>A variation may be expressed to take effect immediately (or on a specified date) only if the regulator concerned, having regard to the ground on which it is exercising the power to vary, reasonably considers that it is necessary for the variation to take effect immediately (or on that date).</Text>
</P2para>
</P2>
<P2>
<Pnumber>4</Pnumber>
<P2para>
<Text>If either regulator proposes to vary an approval or varies an approval with immediate effect, it must give each of the interested parties written notice.</Text>
</P2para>
</P2>
<P2>
<Pnumber>5</Pnumber>
<P2para>
<Text>The notice must—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>give details of the variation,</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>state the regulator's reasons for the variation,</Text>
</P3para>
</P3>
<P3>
<Pnumber>c</Pnumber>
<P3para>
<Text>inform the interested parties that each of them may make representations to the regulator within such period as may be specified in the notice (whether or not any of the interested parties has referred the matter to the Tribunal),</Text>
</P3para>
</P3>
<P3>
<Pnumber>d</Pnumber>
<P3para>
<Text>inform the interested parties of when the variation takes effect, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>e</Pnumber>
<P3para>
<Text>inform the interested parties of the right of each of them to refer the matter to the Tribunal.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>6</Pnumber>
<P2para>
<Text>
<Term>The interested parties</Term>
”, in relation to an approval, are—
</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>the person on whose application it was given (“A”),</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>the person in respect of whom it was given (“B”), and</Text>
</P3para>
</P3>
<P3>
<Pnumber>c</Pnumber>
<P3para>
<Text>the person by whom B's services are retained, if not A.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>7</Pnumber>
<P2para>
<Text>The regulator giving the notice may extend the period allowed under the notice for making representations.</Text>
</P2para>
</P2>
<P2>
<Pnumber>8</Pnumber>
<P2para>
<Text>If having considered the representations made by the interested parties, the regulator decides—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>to vary the approval, or</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>if the variation has taken effect, not to rescind it,</Text>
</P3para>
</P3>
<Text>it must give each of the interested parties written notice.</Text>
</P2para>
</P2>
<P2>
<Pnumber>9</Pnumber>
<P2para>
<Text>If having considered the representations made by the interested parties, the regulator decides—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>not to vary the approval,</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>to vary the approval in a different way, or</Text>
</P3para>
</P3>
<P3>
<Pnumber>c</Pnumber>
<P3para>
<Text>if the variation has taken effect, to rescind it,</Text>
</P3para>
</P3>
<Text>it must give each of the interested parties written notice.</Text>
</P2para>
</P2>
<P2>
<Pnumber>10</Pnumber>
<P2para>
<Text>A notice under subsection (8) must inform the interested parties of the right of each of them to refer the matter to the Tribunal.</Text>
</P2para>
</P2>
<P2>
<Pnumber>11</Pnumber>
<P2para>
<Text>A notice under subsection (9)(b) must comply with subsection (5).</Text>
</P2para>
</P2>
<P2>
<Pnumber>12</Pnumber>
<P2para>
<Text>If a notice informs the interested parties of the right to refer a matter to the Tribunal, it must give an indication of the procedure on such a reference.</Text>
</P2para>
</P2>
<P2>
<Pnumber>13</Pnumber>
<P2para>
<Text>For the purposes of subsection (2)(c), whether a matter is open to review is to be determined in accordance with section 391(8).</Text>
</P2para>
</P2>
<P2>
<Pnumber>14</Pnumber>
<P2para>
<Text>
<Term>Approval</Term>
” means an approval under section 59.
</Text>
</P2para>
</P2>
</P1para>
</P1>
</P1group>
</BlockAmendment>
</P1para>
</P1>
</P1group>
<P1group Match="false" RestrictStartDate="2014-07-25">
<Title>Statement of policy</Title>
<P1 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/27/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/27" id="section-27">
<Pnumber PuncAfter="">27</Pnumber>
<P1para>
<Text>After section 63ZC of FSMA 2000 (inserted by section 26 above) insert—</Text>
<BlockAmendment TargetClass="primary" TargetSubClass="unknown" Context="main" Format="default">
<P1group>
<Title>Statement of policy relating to conditional approval and variation</Title>
<P1>
<Pnumber PuncAfter="">63ZD</Pnumber>
<P1para>
<P2>
<Pnumber>1</Pnumber>
<P2para>
<Text>Each regulator must prepare and issue a statement of its policy with respect to—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>its giving of approval under section 59 subject to conditions or for a limited period only, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>its variation under section 63ZA or 63ZB of an approval given under section 59.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>2</Pnumber>
<P2para>
<Text>A regulator may at any time alter or replace a statement issued by it under this section.</Text>
</P2para>
</P2>
<P2>
<Pnumber>3</Pnumber>
<P2para>
<Text>If a statement issued under this section is altered or replaced by a regulator, the regulator must issue the altered or replacement statement.</Text>
</P2para>
</P2>
<P2>
<Pnumber>4</Pnumber>
<P2para>
<Text>A statement issued under this section must be published by the regulator concerned in the way appearing to the regulator to be best calculated to bring it to the attention of the public.</Text>
</P2para>
</P2>
<P2>
<Pnumber>5</Pnumber>
<P2para>
<Text>A regulator may charge a reasonable fee for providing a person with a copy of a statement published under this section.</Text>
</P2para>
</P2>
<P2>
<Pnumber>6</Pnumber>
<P2para>
<Text>A regulator must, without delay, give the Treasury a copy of any statement which it publishes under this section.</Text>
</P2para>
</P2>
</P1para>
</P1>
</P1group>
<P1group>
<Title>Statement of policy: procedure</Title>
<P1>
<Pnumber PuncAfter="">63ZE</Pnumber>
<P1para>
<P2>
<Pnumber>1</Pnumber>
<P2para>
<Text>Before issuing a statement of policy under section 63ZD, a regulator (“the issuing regulator”) must—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>consult the other regulator, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>publish a draft of the proposed statement in the way appearing to the issuing regulator to be best calculated to bring it to the attention of the public.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>2</Pnumber>
<P2para>
<Text>The duty of the FCA to consult the PRA under subsection (1)(a) applies only in so far as the statement of policy applies to persons whose approval under section 59 relates to the performance of a function designated by the FCA as a senior management function under section 59(6A) in relation to the carrying on by PRA-authorised persons of regulated activities.</Text>
</P2para>
</P2>
<P2>
<Pnumber>3</Pnumber>
<P2para>
<Text>The draft must be accompanied by notice that representations about the proposal may be made to the issuing regulator within a specified time.</Text>
</P2para>
</P2>
<P2>
<Pnumber>4</Pnumber>
<P2para>
<Text>Before issuing the proposed statement, the issuing regulator must have regard to any representations made to it in accordance with subsection (3).</Text>
</P2para>
</P2>
<P2>
<Pnumber>5</Pnumber>
<P2para>
<Text>If the issuing regulator issues the proposed statement it must publish an account, in general terms, of—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>the representations made to it in accordance with subsection (3), and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>its response to them.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>6</Pnumber>
<P2para>
<Text>If the statement differs from the draft published under subsection (1) in a way which is in the opinion of the issuing regulator significant, the issuing regulator—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>must before issuing it carry out any consultation required by subsection (1)(a), and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>must (in addition to complying with subsection (5)) publish details of the difference.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>7</Pnumber>
<P2para>
<Text>The issuing regulator may charge a reasonable fee for providing a person with a draft published under subsection (1)(b).</Text>
</P2para>
</P2>
<P2>
<Pnumber>8</Pnumber>
<P2para>
<Text>This section also applies to a proposal to alter or replace a statement.</Text>
</P2para>
</P2>
</P1para>
</P1>
</P1group>
</BlockAmendment>
</P1para>
</P1>
</P1group>
<P1group Match="false" RestrictStartDate="2014-07-25">
<Title>Extension of limitation periods for imposing sanctions</Title>
<P1 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/28/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/28" id="section-28">
<Pnumber PuncAfter="">28</Pnumber>
<P1para>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/28/1/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/28/1" id="section-28-1">
<Pnumber>1</Pnumber>
<P2para>
<Text>Section 63A of FSMA 2000 (power to impose penalties) is amended as follows.</Text>
</P2para>
</P2>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/28/2/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/28/2" id="section-28-2">
<Pnumber>2</Pnumber>
<P2para>
<Text>
In subsection (4), for “period of three years” substitute
<InlineAmendment>“ relevant period ”</InlineAmendment>
.
</Text>
</P2para>
</P2>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/28/3/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/28/3" id="section-28-3">
<Pnumber>3</Pnumber>
<P2para>
<Text>After subsection (5A) insert—</Text>
<BlockAmendment TargetClass="primary" TargetSubClass="unknown" Context="main" Format="default">
<P2>
<Pnumber>5B</Pnumber>
<P2para>
<Text>The relevant period” is—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>in relation to the performance of a controlled function without approval before the day on which this subsection comes into force, the period of 3 years, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>in relation to the performance of a controlled function without approval on or after that day, the period of 6 years.</Text>
</P3para>
</P3>
</P2para>
</P2>
</BlockAmendment>
</P2para>
</P2>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/28/4/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/28/4" id="section-28-4">
<Pnumber>4</Pnumber>
<P2para>
<Text>Section 66 of FSMA 2000 (disciplinary powers) is amended as follows.</Text>
</P2para>
</P2>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/28/5/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/28/5" id="section-28-5">
<Pnumber>5</Pnumber>
<P2para>
<Text>
In subsection (4), for “period of three years” substitute
<InlineAmendment>“ relevant period ”</InlineAmendment>
.
</Text>
</P2para>
</P2>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/28/6/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/28/6" id="section-28-6">
<Pnumber>6</Pnumber>
<P2para>
<Text>After subsection (5) insert—</Text>
<BlockAmendment TargetClass="primary" TargetSubClass="unknown" Context="main" Format="default">
<P2>
<Pnumber>5ZA</Pnumber>
<P2para>
<Text>The relevant period” is—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>in relation to misconduct which occurs before the day on which this subsection comes into force, the period of 3 years, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>in relation to misconduct which occurs on or after that day, the period of 6 years.</Text>
</P3para>
</P3>
</P2para>
</P2>
</BlockAmendment>
</P2para>
</P2>
</P1para>
</P1>
</P1group>
<P1group RestrictEndDate="2016-03-07" Match="false" RestrictStartDate="2014-07-25">
<Title>Certification of employees by relevant authorised persons</Title>
<P1 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/29/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/29" id="section-29">
<Pnumber PuncAfter="">29</Pnumber>
<P1para>
<Text>After section 63D of FSMA 2000 insert—</Text>
<BlockAmendment TargetClass="primary" TargetSubClass="unknown" Context="main" Format="default">
<Pblock>
<Title>
<Emphasis>Certification of employees</Emphasis>
</Title>
<P1group>
<Title>Certification of employees by relevant authorised persons</Title>
<P1>
<Pnumber PuncAfter="">63E</Pnumber>
<P1para>
<P2>
<Pnumber>1</Pnumber>
<P2para>
<Text>A relevant authorised person (“A”) must take reasonable care to ensure that no employee of A performs a specified function under an arrangement entered into by A in relation to the carrying on by A of a regulated activity, unless the employee has a valid certificate issued by A under section 63F.</Text>
</P2para>
</P2>
<P2>
<Pnumber>2</Pnumber>
<P2para>
<Text>“Specified function”—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>in relation to the carrying on of a regulated activity by a PRA-authorised person, means a function of a description specified in rules made by the FCA or the PRA, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>in relation to the carrying on of a regulated activity by any other authorised person, means a function of a description specified in rules made by the FCA.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>3</Pnumber>
<P2para>
<Text>The FCA may specify a description of function under subsection (2)(a) or (b) only if, in relation to the carrying on of a regulated activity by a relevant authorised person of a particular description—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>the function is not a controlled function in relation to the carrying on of that activity by a relevant authorised person of that description, but</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>the FCA is satisfied that the function is nevertheless a significant-harm function.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>4</Pnumber>
<P2para>
<Text>The PRA may specify a description of function under subsection (2)(a) only if, in relation to the carrying on of a regulated activity by a relevant PRA-authorised person of a particular description—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>the function is not a controlled function in relation to the carrying on of that activity by a relevant PRA-authorised person of that description, but</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>the PRA is satisfied that the function is nevertheless a significant-harm function.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>5</Pnumber>
<P2para>
<Text>
A function is a “
<Term>significant-harm function</Term>
”, in relation to the carrying on of a regulated activity by an authorised person, if—
</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>the function will require the person performing it to be involved in one or more aspects of the authorised person's affairs, so far as relating to the activity, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>those aspects involve, or might involve, a risk of significant harm to the authorised person or any of its customers.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>6</Pnumber>
<P2para>
<Text>Each regulator must—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>keep under review the exercise of its power under subsection (2) to specify any significant-harm function as a specified function, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>exercise that power in a way that it considers will minimise the risk of employees of relevant authorised persons performing significant-harm functions which they are not fit and proper persons to perform.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>7</Pnumber>
<P2para>
<Text>Subsection (1) does not apply to an arrangement which allows an employee to perform a function if the question of whether the employee is a fit and proper person to perform the function is reserved under any of the single market directives or the emission allowance auctioning regulation to an authority in a country or territory outside the United Kingdom.</Text>
</P2para>
</P2>
<P2>
<Pnumber>8</Pnumber>
<P2para>
<Text>In this section—</Text>
<UnorderedList Decoration="none" Class="Definition">
<ListItem>
<Para>
<Text>
<Term>controlled function</Term>
” has the meaning given by section 59(3);
</Text>
</Para>
</ListItem>
<ListItem>
<Para>
<Text>
<Term>customer</Term>
”, in relation to an authorised person, means a person who is using, or who is or may be contemplating using, any of the services provided by the authorised person;
</Text>
</Para>
</ListItem>
<ListItem>
<Para>
<Text>
<Term>relevant PRA-authorised person</Term>
” means a PRA-authorised person that is a relevant authorised person.
</Text>
</Para>
</ListItem>
</UnorderedList>
</P2para>
</P2>
<P2>
<Pnumber>9</Pnumber>
<P2para>
<Text>In this section any reference to an employee of a person (“A”) includes a reference to a person who—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>personally provides, or is under an obligation personally to provide, services to A under an arrangement made between A and the person providing the services or another person, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>is subject to (or to the right of) supervision, direction or control by A as to the manner in which those services are provided.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>10</Pnumber>
<P2para>
<Text>For the meaning of “relevant authorised person”, see section 71A.</Text>
</P2para>
</P2>
</P1para>
</P1>
</P1group>
<P1group>
<Title>Issuing of certificates</Title>
<P1>
<Pnumber PuncAfter="">63F</Pnumber>
<P1para>
<P2>
<Pnumber>1</Pnumber>
<P2para>
<Text>A relevant authorised person may issue a certificate to a person under this section only if the authorised person is satisfied that the person is a fit and proper person to perform the function to which the certificate relates.</Text>
</P2para>
</P2>
<P2>
<Pnumber>2</Pnumber>
<P2para>
<Text>In deciding whether the person is a fit and proper person to perform the function, the relevant authorised person must have regard, in particular, to whether the person—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>has obtained a qualification,</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>has undergone, or is undergoing, training,</Text>
</P3para>
</P3>
<P3>
<Pnumber>c</Pnumber>
<P3para>
<Text>possesses a level of competence, or</Text>
</P3para>
</P3>
<P3>
<Pnumber>d</Pnumber>
<P3para>
<Text>has the personal characteristics,</Text>
</P3para>
</P3>
<Text>required by general rules made by the appropriate regulator in relation to employees performing functions of that kind.</Text>
</P2para>
</P2>
<P2>
<Pnumber>3</Pnumber>
<P2para>
<Text>
In subsection (2) “
<Term>the appropriate regulator</Term>
” means—
</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>in relation to employees of PRA-authorised persons, the FCA or the PRA, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>in relation to employees of any other authorised person, the FCA.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>4</Pnumber>
<P2para>
<Text>A certificate issued by a relevant authorised person to a person under this section must—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>state that the authorised person is satisfied that the person is a fit and proper person to perform the function to which the certificate relates, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>set out the aspects of the affairs of the authorised person in which the person will be involved in performing the function.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>5</Pnumber>
<P2para>
<Text>A certificate issued under this section is valid for a period of 12 months beginning with the day on which it is issued.</Text>
</P2para>
</P2>
<P2>
<Pnumber>6</Pnumber>
<P2para>
<Text>If, after having considered whether a person is a fit and proper person to perform a specified function, a relevant authorised person decides not to issue a certificate to the person under this section, the authorised person must give the person a notice in writing stating—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>what steps (if any) the authorised person proposes to take in relation to the person as a result of the decision, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>the reasons for proposing to take those steps.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>7</Pnumber>
<P2para>
<Text>A relevant authorised person must maintain a record of every employee who has a valid certificate issued by it under this section.</Text>
</P2para>
</P2>
<P2>
<Pnumber>8</Pnumber>
<P2para>
<Text>Expressions used in this section and in section 63E have the same meaning in this section as they have in that section.</Text>
</P2para>
</P2>
</P1para>
</P1>
</P1group>
</Pblock>
</BlockAmendment>
</P1para>
</P1>
</P1group>
<P1group RestrictEndDate="2016-03-07" Match="false" RestrictStartDate="2014-07-25">
<Title>Rules of conduct</Title>
<P1 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/30/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/30" id="section-30">
<Pnumber PuncAfter="">30</Pnumber>
<P1para>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/30/1/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/30/1" RestrictEndDate="2016-03-07" id="section-30-1">
<Pnumber>1</Pnumber>
<P2para>
<Text>Part 5 of FSMA 2000 (performance of regulated activities) is amended as follows.</Text>
</P2para>
</P2>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/30/2/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/30/2" RestrictEndDate="2016-03-07" id="section-30-2">
<Pnumber>2</Pnumber>
<P2para>
<Text>Omit sections 64 and 65 (and the italic cross-heading preceding them).</Text>
</P2para>
</P2>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/30/3/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/30/3" RestrictEndDate="2017-03-07" id="section-30-3">
<Pnumber>3</Pnumber>
<P2para>
<Text>Before section 66 insert—</Text>
<BlockAmendment TargetClass="unknown" TargetSubClass="unknown" Context="unknown" Format="default">
<Pblock>
<Title>
<Emphasis>Conduct of approved persons and others</Emphasis>
</Title>
<P1group>
<Title>Rules of conduct</Title>
<P1>
<Pnumber PuncAfter="">64A</Pnumber>
<P1para>
<P2>
<Pnumber>1</Pnumber>
<P2para>
<Text>If it appears to the FCA to be necessary or expedient for the purpose of advancing one or more of its operational objectives, the FCA may make rules about the conduct of the following persons—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>persons in relation to whom either regulator has given its approval under section 59;</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>persons who are employees of relevant authorised persons (see section 71A).</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>2</Pnumber>
<P2para>
<Text>If it appears to the PRA to be necessary or expedient for the purpose of advancing any of its objectives, the PRA may make rules about the conduct of the following persons—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>persons in relation to whom it has given its approval under section 59;</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>persons in relation to whom the FCA has given its approval under section 59 in respect of the performance by them of a relevant senior management function in relation to the carrying on by a PRA-authorised person of a regulated activity;</Text>
</P3para>
</P3>
<P3>
<Pnumber>c</Pnumber>
<P3para>
<Text>persons who are employees of relevant PRA-authorised persons.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>3</Pnumber>
<P2para>
<Text>In subsection (2)—</Text>
<UnorderedList Decoration="none" Class="Definition">
<ListItem>
<Para>
<Text>
<Term>relevant PRA-authorised person</Term>
” means a PRA-authorised person that is a relevant authorised person (see section 71A), and
</Text>
</Para>
</ListItem>
<ListItem>
<Para>
<Text>
<Term>relevant senior management function</Term>
” means a function which the PRA is satisfied is a senior management function as defined in section 59ZA (whether or not the function has been designated as such by the FCA).
</Text>
</Para>
</ListItem>
</UnorderedList>
</P2para>
</P2>
<P2>
<Pnumber>4</Pnumber>
<P2para>
<Text>Rules made under this section must relate to the conduct of persons in relation to the performance by them of qualifying functions.</Text>
</P2para>
</P2>
<P2>
<Pnumber>5</Pnumber>
<P2para>
<Text>
In subsection (4) “
<Term>qualifying function</Term>
”, in relation to a person, means a function relating to the carrying on of activities (whether or not regulated activities) by—
</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>in the case of an approved person, the person on whose application approval was given, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>in any other case, the person's employer.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>6</Pnumber>
<P2para>
<Text>In this section any reference to an employee of a person (“P”) includes a reference to a person who—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>personally provides, or is under an obligation personally to provide, services to P under an arrangement made between P and the person providing the services or another person, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>is subject to (or to the right of) supervision, direction or control by P as to the manner in which those services are provided,</Text>
</P3para>
</P3>
<Text>and “employer” is to be read accordingly.</Text>
</P2para>
</P2>
</P1para>
</P1>
</P1group>
<P1group>
<Title>Rules of conduct: responsibilities of relevant authorised persons</Title>
<P1>
<Pnumber PuncAfter="">64B</Pnumber>
<P1para>
<P2>
<Pnumber>1</Pnumber>
<P2para>
<Text>This section applies where a regulator makes rules under section 64A (“conduct rules”).</Text>
</P2para>
</P2>
<P2>
<Pnumber>2</Pnumber>
<P2para>
<Text>Every relevant authorised person must—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>notify all relevant persons of the conduct rules that apply in relation to them, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>take all reasonable steps to secure that those persons understand how those rules apply in relation to them.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>3</Pnumber>
<P2para>
<Text>The steps which a relevant authorised person must take to comply with subsection (2)(b) include, in particular, the provision of suitable training.</Text>
</P2para>
</P2>
<P2>
<Pnumber>4</Pnumber>
<P2para>
<Text>
In this section “
<Term>relevant person</Term>
”, in relation to an authorised person, means—
</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>any person in relation to whom an approval is given under section 59 on the application of the authorised person, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>any employee of the authorised person.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>5</Pnumber>
<P2para>
<Text>If a relevant authorised person knows or suspects that a relevant person has failed to comply with any conduct rules, the authorised person must notify the regulator of that fact.</Text>
</P2para>
</P2>
<P2>
<Pnumber>6</Pnumber>
<P2para>
<Text>
In this section “
<Term>employee</Term>
”, in relation to an authorised person, has the same meaning as in section 64A.
</Text>
</P2para>
</P2>
<P2>
<Pnumber>7</Pnumber>
<P2para>
<Text>For the meaning of “relevant authorised person”, see section 71A.</Text>
</P2para>
</P2>
</P1para>
</P1>
</P1group>
</Pblock>
</BlockAmendment>
</P2para>
</P2>
</P1para>
</P1>
</P1group>
<P1group RestrictEndDate="2016-03-07" Match="false" RestrictStartDate="2014-07-25">
<Title>Requirement to notify regulator of disciplinary action</Title>
<P1 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/31/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/31" id="section-31">
<Pnumber PuncAfter="">31</Pnumber>
<P1para>
<Text>After section 64B of FSMA 2000 (inserted by section 30 above) insert—</Text>
<BlockAmendment TargetClass="primary" TargetSubClass="unknown" Context="main" Format="default">
<P1group>
<Title>Requirement for relevant authorised persons to notify regulator of disciplinary action</Title>
<P1>
<Pnumber PuncAfter="">64C</Pnumber>
<P1para>
<P2>
<Pnumber>1</Pnumber>
<P2para>
<Text>If—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>a relevant authorised person takes disciplinary action in relation to a relevant person, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>the reason, or one of the reasons, for taking that action is a reason specified in rules made by the appropriate regulator for the purposes of this section,</Text>
</P3para>
</P3>
<Text>the relevant authorised person must notify that regulator of that fact.</Text>
</P2para>
</P2>
<P2>
<Pnumber>2</Pnumber>
<P2para>
<Text>
<Term>Disciplinary action</Term>
”, in relation to a person, means any of the following—
</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>the issuing of a formal written warning;</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>the suspension or dismissal of the person;</Text>
</P3para>
</P3>
<P3>
<Pnumber>c</Pnumber>
<P3para>
<Text>the reduction or recovery of any of the person's remuneration.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>3</Pnumber>
<P2para>
<Text>
<Term>The appropriate regulator</Term>
” means—
</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>in relation to relevant authorised persons that are PRA-authorised persons, the FCA or the PRA;</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>in relation to any other relevant authorised persons, the FCA.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>4</Pnumber>
<P2para>
<Text>
<Term>Relevant person</Term>
” has the same meaning as in section 64B.
</Text>
</P2para>
</P2>
<P2>
<Pnumber>5</Pnumber>
<P2para>
<Text>For the meaning of “relevant authorised person”, see section 71A.</Text>
</P2para>
</P2>
</P1para>
</P1>
</P1group>
</BlockAmendment>
</P1para>
</P1>
</P1group>
<P1group RestrictStartDate="2016-03-07" Match="false">
<Title>Definition of “misconduct”</Title>
<P1 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/32/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/32" id="section-32">
<Pnumber PuncAfter="">32</Pnumber>
<P1para>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/32/1/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/32/1" RestrictEndDate="2016-03-07" id="section-32-1">
<Pnumber>1</Pnumber>
<P2para>
<Text>In section 66 of FSMA 2000 (disciplinary powers)—</Text>
<P3 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/32/1/a/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/32/1/a" id="section-32-1-a">
<Pnumber>a</Pnumber>
<P3para>
<Text>after subsection (1) insert—</Text>
<BlockAmendment TargetClass="primary" TargetSubClass="unknown" Context="main" Format="default">
<P2>
<Pnumber>1A</Pnumber>
<P2para>
<Text>For provision about when a person is guilty of misconduct for the purposes of action by a regulator—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>see section 66A, in the case of action by the FCA, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>see section 66B, in the case of action by the PRA.</Text>
</P3para>
</P3>
</P2para>
</P2>
</BlockAmendment>
<AppendText>;</AppendText>
</P3para>
</P3>
<P3 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/32/1/b/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/32/1/b" id="section-32-1-b">
<Pnumber>b</Pnumber>
<P3para>
<Text>omit subsections (2), (2A), (6) and (7).</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/32/2/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/32/2" RestrictEndDate="2016-05-10" id="section-32-2">
<Pnumber>2</Pnumber>
<P2para>
<Text>After that section insert—</Text>
<BlockAmendment TargetClass="primary" TargetSubClass="unknown" Context="main" Format="default">
<P1group>
<Title>Misconduct: action by the FCA</Title>
<P1>
<Pnumber PuncAfter="">66A</Pnumber>
<P1para>
<P2>
<Pnumber>1</Pnumber>
<P2para>
<Text>For the purposes of action by the FCA under section 66, a person is guilty of misconduct if any of conditions A to C is met in relation to the person.</Text>
</P2para>
</P2>
<P2>
<Pnumber>2</Pnumber>
<P2para>
<Text>Condition A is that—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>the person has at any time failed to comply with rules made by the FCA under section 64A, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>at that time the person was—</Text>
<P4>
<Pnumber>i</Pnumber>
<P4para>
<Text>an approved person, or</Text>
</P4para>
</P4>
<P4>
<Pnumber>ii</Pnumber>
<P4para>
<Text>an employee of a relevant authorised person.</Text>
</P4para>
</P4>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>3</Pnumber>
<P2para>
<Text>Condition B is that—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>the person has at any time been knowingly concerned in a contravention of a relevant requirement by an authorised person, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>at that time the person was—</Text>
<P4>
<Pnumber>i</Pnumber>
<P4para>
<Text>an approved person in relation to the authorised person, or</Text>
</P4para>
</P4>
<P4>
<Pnumber>ii</Pnumber>
<P4para>
<Text>in the case of a relevant authorised person, an employee of the authorised person.</Text>
</P4para>
</P4>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>4</Pnumber>
<P2para>
<Text>
In this section “
<Term>relevant requirement</Term>
” means a requirement—
</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>imposed by or under this Act, or</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>
imposed by any qualifying
<Acronym Expansion="European Union">EU</Acronym>
provision specified, or of a description specified, for the purposes of this subsection by the Treasury by order.
</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>5</Pnumber>
<P2para>
<Text>Condition C is that—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>the person has at any time been a senior manager in relation to a relevant authorised person,</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>there has at that time been (or continued to be) a contravention of a relevant requirement by the authorised person, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>c</Pnumber>
<P3para>
<Text>the senior manager was at that time responsible for the management of any of the authorised person's activities in relation to which the contravention occurred.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>6</Pnumber>
<P2para>
<Text>But a person (“P”) is not guilty of misconduct by virtue of subsection (5) if P satisfies the FCA that P had taken such steps as a person in P's position could reasonably be expected to take to avoid the contravention occurring (or continuing).</Text>
</P2para>
</P2>
<P2>
<Pnumber>7</Pnumber>
<P2para>
<Text>For the purposes of subsection (5)—</Text>
<UnorderedList Decoration="none" Class="Definition">
<ListItem>
<Para>
<Text>
<Term>senior manager</Term>
”, in relation to a relevant authorised person, means a person who has approval under section 59 to perform a designated senior management function in relation to the carrying on by the authorised person of a regulated activity;
</Text>
</Para>
</ListItem>
<ListItem>
<Para>
<Text>
<Term>designated senior management function</Term>
” means a function designated as a senior management function under section 59(6A) or (6B).
</Text>
</Para>
</ListItem>
</UnorderedList>
</P2para>
</P2>
<P2>
<Pnumber>8</Pnumber>
<P2para>
<Text>In this section—</Text>
<UnorderedList Decoration="none">
<ListItem>
<Para>
<Text>“approved person”—</Text>
</Para>
<OrderedList Type="alpha" Decoration="parens">
<ListItem NumberOverride="a">
<Para>
<Text>means a person in relation to whom an approval is given under section 59, and</Text>
</Para>
</ListItem>
<ListItem NumberOverride="b">
<Para>
<Text>in relation to an authorised person, means a person in relation to whom such approval is given on the application of the authorised person;</Text>
</Para>
</ListItem>
</OrderedList>
</ListItem>
<ListItem>
<Para>
<Text>
<Term>employee</Term>
”, in relation to a person, has the same meaning as in section 64A.
</Text>
</Para>
</ListItem>
</UnorderedList>
</P2para>
</P2>
<P2>
<Pnumber>9</Pnumber>
<P2para>
<Text>For the meaning of “relevant authorised person”, see section 71A.</Text>
</P2para>
</P2>
</P1para>
</P1>
</P1group>
<P1group>
<Title>Misconduct: action by the PRA</Title>
<P1>
<Pnumber PuncAfter="">66B</Pnumber>
<P1para>
<P2>
<Pnumber>1</Pnumber>
<P2para>
<Text>For the purposes of action by the PRA under section 66, a person is guilty of misconduct if any of conditions A to C is met in relation to the person.</Text>
</P2para>
</P2>
<P2>
<Pnumber>2</Pnumber>
<P2para>
<Text>Condition A is that—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>the person has at any time failed to comply with rules made by the PRA under section 64A, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>at that time the person was—</Text>
<P4>
<Pnumber>i</Pnumber>
<P4para>
<Text>an approved person, or</Text>
</P4para>
</P4>
<P4>
<Pnumber>ii</Pnumber>
<P4para>
<Text>an employee of a relevant PRA-authorised person.</Text>
</P4para>
</P4>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>3</Pnumber>
<P2para>
<Text>Condition B is that—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>the person has at any time been knowingly concerned in a contravention of a relevant requirement by a PRA-authorised person, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>at that time the person was—</Text>
<P4>
<Pnumber>i</Pnumber>
<P4para>
<Text>an approved person in respect of the performance of a relevant senior management function in relation to the carrying on by the PRA-authorised person of a regulated activity, or</Text>
</P4para>
</P4>
<P4>
<Pnumber>ii</Pnumber>
<P4para>
<Text>in the case of a relevant PRA-authorised person, an employee of the authorised person.</Text>
</P4para>
</P4>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>4</Pnumber>
<P2para>
<Text>
In this section “
<Term>relevant requirement</Term>
” means a requirement—
</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>imposed by or under this Act, or</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>imposed by any qualifying EU provision specified, or of a description specified, for the purposes of this subsection by the Treasury by order.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>5</Pnumber>
<P2para>
<Text>Condition C is that—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>the person has at any time been a senior manager in relation to a relevant PRA-authorised person,</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>there has at that time been (or continued to be) a contravention of a relevant requirement by the authorised person, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>c</Pnumber>
<P3para>
<Text>the senior manager was at that time responsible for the management of any of the authorised person's activities in relation to which the contravention occurred.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>6</Pnumber>
<P2para>
<Text>But a person (“P”) is not guilty of misconduct by virtue of subsection (5) if P satisfies the PRA that P had taken such steps as a person in P's position could reasonably be expected to take to avoid the contravention occurring (or continuing).</Text>
</P2para>
</P2>
<P2>
<Pnumber>7</Pnumber>
<P2para>
<Text>For the purposes of subsection (5)—</Text>
<UnorderedList Decoration="none" Class="Definition">
<ListItem>
<Para>
<Text>
<Term>senior manager</Term>
”, in relation to a relevant PRA-authorised person, means a person who has approval under section 59 to perform a designated senior management function in relation to the carrying on by the authorised person of a regulated activity;
</Text>
</Para>
</ListItem>
<ListItem>
<Para>
<Text>
<Term>designated senior management function</Term>
” means a function designated as a senior management function under section 59(6A) or (6B).
</Text>
</Para>
</ListItem>
</UnorderedList>
</P2para>
</P2>
<P2>
<Pnumber>8</Pnumber>
<P2para>
<Text>In this section—</Text>
<UnorderedList Decoration="none">
<ListItem>
<Para>
<Text>“approved person”—</Text>
</Para>
<OrderedList Type="alpha" Decoration="parens">
<ListItem NumberOverride="a">
<Para>
<Text>means a person in relation to whom—</Text>
</Para>
<OrderedList Type="roman" Decoration="parens">
<ListItem NumberOverride="i">
<Para>
<Text>the PRA has given its approval under section 59, or</Text>
</Para>
</ListItem>
<ListItem NumberOverride="ii">
<Para>
<Text>the FCA has given its approval under section 59 in respect of the performance by the person of a relevant senior management function in relation to the carrying on by a PRA-authorised person of a regulated activity, and</Text>
</Para>
</ListItem>
</OrderedList>
</ListItem>
<ListItem NumberOverride="b">
<Para>
<Text>in relation to an authorised person, means a person in relation to whom approval under section 59 is given on the application of the authorised person;</Text>
</Para>
</ListItem>
</OrderedList>
</ListItem>
<ListItem>
<Para>
<Text>
<Term>employee</Term>
”, in relation to a person, has the same meaning as in section 64A;
</Text>
</Para>
</ListItem>
<ListItem>
<Para>
<Text>
<Term>relevant PRA-authorised person</Term>
” means a PRA-authorised person that is a relevant authorised person;
</Text>
</Para>
</ListItem>
<ListItem>
<Para>
<Text>
<Term>relevant senior management function</Term>
” means a function which the PRA is satisfied is a senior management function as defined in section 59ZA (whether or not the function has been designated as such by the FCA).
</Text>
</Para>
</ListItem>
</UnorderedList>
</P2para>
</P2>
<P2>
<Pnumber>9</Pnumber>
<P2para>
<Text>For the meaning of “relevant authorised person”, see section 71A.</Text>
</P2para>
</P2>
</P1para>
</P1>
</P1group>
</BlockAmendment>
</P2para>
</P2>
</P1para>
</P1>
</P1group>
<P1group RestrictEndDate="2018-09-13" Match="false" RestrictStartDate="2014-07-25" RestrictExtent="E+W+S+N.I.">
<Title>Meaning of “relevant authorised person”</Title>
<P1 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/33/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/33" id="section-33">
<Pnumber PuncAfter="">33</Pnumber>
<P1para>
<Text>In Part 5 of FSMA 2000 (performance of regulated activities), after section 71 insert—</Text>
<BlockAmendment TargetClass="primary" TargetSubClass="unknown" Context="main" Format="default">
<Pblock>
<Title>
<Emphasis> “Relevant authorised person” </Emphasis>
</Title>
<P1group>
<Title>Meaning of “relevant authorised person”</Title>
<P1>
<Pnumber PuncAfter="">71A</Pnumber>
<P1para>
<P2>
<Pnumber>1</Pnumber>
<P2para>
<Text>
In this Part “
<Term>relevant authorised person</Term>
” means a
<Acronym Expansion="United Kingdom">UK</Acronym>
institution which—
</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>meets condition A or B, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>is not an insurer.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>2</Pnumber>
<P2para>
<Text>Condition A is that the institution has permission under Part 4A to carry on the regulated activity of accepting deposits.</Text>
</P2para>
</P2>
<P2>
<Pnumber>3</Pnumber>
<P2para>
<Text>Condition B is that—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>the institution is an investment firm,</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>it has permission under Part 4A to carry on the regulated activity of dealing in investments as principal, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>c</Pnumber>
<P3para>
<Text>when carried on by it, that activity is a PRA-regulated activity.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>4</Pnumber>
<P2para>
<Text>
The Treasury may by order provide that authorised persons falling within any of the following descriptions are “
<Term>relevant authorised persons</Term>
” for the purposes of this Part—
</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>non-UK institutions (or non-UK institutions of a specified description) that are credit institutions;</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>non-UK institutions that are investment firms of a specified description.</Text>
</P3para>
</P3>
<Text>
<Term>Specified</Term>
” means specified in the order.
</Text>
</P2para>
</P2>
<P2>
<Pnumber>5</Pnumber>
<P2para>
<Text>If the Treasury propose to make an order under subsection (4) they must consult—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>the FCA,</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>the PRA,</Text>
</P3para>
</P3>
<P3>
<Pnumber>c</Pnumber>
<P3para>
<Text>any organisations that appear to them to be representative of interests substantially affected by the proposals, and</Text>
</P3para>
</P3>
<P3>
<Pnumber>d</Pnumber>
<P3para>
<Text>any other persons that they consider appropriate.</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>6</Pnumber>
<P2para>
<Text>In this section—</Text>
<P3>
<Pnumber>a</Pnumber>
<P3para>
<Text>
<Term>UK institution</Term>
” means an institution which is incorporated in, or formed under the law of any part of, the United Kingdom;
</Text>
</P3para>
</P3>
<P3>
<Pnumber>b</Pnumber>
<P3para>
<Text>
<Term>non-UK institution</Term>
” means an institution that is not a UK institution;
</Text>
</P3para>
</P3>
<P3>
<Pnumber>c</Pnumber>
<P3para>
<Text>
<Term>credit institution</Term>
” means any credit institution as defined in Article 4.1(1) of
<Citation URI="http://www.legislation.gov.uk/european/regulation/2013/0575" Class="EuropeanUnionRegulation" Year="2013" Number="0575">Regulation (EU) No 575/2013</Citation>
of the European Parliament and of the Council;
</Text>
</P3para>
</P3>
<P3>
<Pnumber>d</Pnumber>
<P3para>
<Text>
<Term>insurer</Term>
” means an institution which is authorised under this Act to carry on the regulated activity of effecting or carrying out contracts of insurance as principal.
</Text>
</P3para>
</P3>
</P2para>
</P2>
<P2>
<Pnumber>7</Pnumber>
<P2para>
<Text>Subsections (2), (3) and (6)(d) are to be read in accordance with Schedule 2, taken with any order under section 22.</Text>
</P2para>
</P2>
</P1para>
</P1>
</P1group>
</Pblock>
</BlockAmendment>
</P1para>
</P1>
</P1group>
<P1group RestrictStartDate="2016-03-07" Match="false">
<Title>Recording information about senior managers</Title>
<P1 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/34/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/34" id="section-34">
<Pnumber PuncAfter="">34</Pnumber>
<P1para>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/34/1/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/34/1" id="section-34-1">
<Pnumber>1</Pnumber>
<P2para>
<Text>
Section 347 of FSMA 2000 (the record of authorised persons
<Abbreviation Expansion="et cetera" xml:lang="la">etc.</Abbreviation>
) is amended as follows.
</Text>
</P2para>
</P2>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/34/2/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/34/2" id="section-34-2">
<Pnumber>2</Pnumber>
<P2para>
<Text>In subsection (2)—</Text>
<P3 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/34/2/a/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/34/2/a" id="section-34-2-a">
<Pnumber>a</Pnumber>
<P3para>
<Text>in paragraph (g), after sub-paragraph (iii) insert—</Text>
<BlockAmendment TargetClass="unknown" TargetSubClass="unknown" Context="unknown" Format="default">
<P4>
<Pnumber>iv</Pnumber>
<P4para>
<Text>in a case where the authorised person concerned is a relevant authorised person, whether or not the person is a senior manager;</Text>
</P4para>
</P4>
</BlockAmendment>
<AppendText>;</AppendText>
</P3para>
</P3>
<P3 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/34/2/b/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/34/2/b" id="section-34-2-b">
<Pnumber>b</Pnumber>
<P3para>
<Text>after that paragraph insert—</Text>
<BlockAmendment TargetClass="unknown" TargetSubClass="unknown" Context="unknown" Format="default">
<P3>
<Pnumber>h</Pnumber>
<P3para>
<Text>in the case of an approved person who is a senior manager in relation to a relevant authorised person—</Text>
<P4>
<Pnumber>i</Pnumber>
<P4para>
<Text>whether a final notice has been given to the person under section 390; and</Text>
</P4para>
</P4>
<P4>
<Pnumber>ii</Pnumber>
<P4para>
<Text>if so, any information about the matter to which the notice relates which has been published under section 391(4).</Text>
</P4para>
</P4>
</P3para>
</P3>
</BlockAmendment>
</P3para>
</P3>
</P2para>
</P2>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/34/3/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/34/3" id="section-34-3">
<Pnumber>3</Pnumber>
<P2para>
<Text>After subsection (8) insert—</Text>
<BlockAmendment TargetClass="primary" TargetSubClass="unknown" Context="main" Format="default">
<P2>
<Pnumber>8A</Pnumber>
<P2para>
<Text>In this section—</Text>
<UnorderedList Decoration="none" Class="Definition">
<ListItem>
<Para>
<Text>
<Term>relevant authorised person</Term>
” has the same meaning as in Part 5 (see section 71A),
</Text>
</Para>
</ListItem>
<ListItem>
<Para>
<Text>
<Term>senior manager</Term>
”, in relation to a relevant authorised person, means a person who has approval under section 59 to perform a designated senior management function in relation to the carrying on by the authorised person of a regulated activity, and
</Text>
</Para>
</ListItem>
<ListItem>
<Para>
<Text>
<Term>designated senior management function</Term>
” means a function designated as a senior management function under section 59(6A) or (6B).
</Text>
</Para>
</ListItem>
</UnorderedList>
</P2para>
</P2>
</BlockAmendment>
</P2para>
</P2>
<P2 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/34/4/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/34/4" id="section-34-4">
<Pnumber>4</Pnumber>
<P2para>
<Text>For subsection (9) substitute—</Text>
<BlockAmendment TargetClass="primary" TargetSubClass="unknown" Context="main" Format="default">
<P2>
<Pnumber>9</Pnumber>
<P2para>
<Text>The authorised person concerned”, in relation to an approved person, means the person on whose application approval was given.</Text>
</P2para>
</P2>
</BlockAmendment>
</P2para>
</P2>
</P1para>
</P1>
</P1group>
<P1group RestrictEndDate="2016-03-07" Match="false" RestrictStartDate="2014-07-25">
<Title>Consequential amendments relating to Part 4</Title>
<P1 DocumentURI="http://www.legislation.gov.uk/ukpga/2013/33/section/35/2013-12-18" IdURI="http://www.legislation.gov.uk/id/ukpga/2013/33/section/35" id="section-35">
<Pnumber PuncAfter="">35</Pnumber>
<P1para>
<Text>Schedule 3 (which contains further amendments relating to the provisions of this Part) has effect.</Text>
</P1para>
</P1>
</P1group>
</Pblock>
</Part>
</Body>
</Primary>
</Legislation>