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Financial Services and Markets Act 2000

Changes over time for: Financial Services and Markets Act 2000 (Schedules only)

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Version Superseded: 05/04/2024

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SCHEDULES

Section 1.

F1SCHEDULE 1U.K. The Financial Services Authority

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1Schs. 1ZA, 1ZB substituted for Sch. 1 (24.1.2013 for specified purposes, 19.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 3 (with Sch. 20); S.I. 2013/113, art. 2(1)(b)(c)(2), Sch. Pts. 2, 3, 4; S.I. 2013/423, art. 3, Sch.

Section 1A

[F1SCHEDULE 1ZAU.K.The Financial Conduct Authority

Modifications etc. (not altering text)

C1Sch. 1ZA applied (with modifications) (6.4.2018 immediately after 2016 c. 16 (N.I.), s. 8(2) comes into force) by The Financial Services Act 2012 (Mutual Societies) Order 2018 (S.I. 2018/323), art. 1, Sch. 1 paras. 2(2)(a), 5(1)(2) (with art. 3)

PART 1U.K.General

Modifications etc. (not altering text)

InterpretationU.K.

1U.K.In this Schedule—

  • “the Bank” means the Bank of England;

  • “functions”, in relation to the FCA, means functions conferred on the FCA by or under any provision of this Act (see section 1A(6) which affects the meaning of references to such functions).

ConstitutionU.K.

2(1)The constitution of the FCA must provide for the FCA to have a governing body.U.K.

(2)The governing body must consist of—

(a)a chair appointed by the Treasury,

(b)a chief executive appointed by the Treasury,

(c)the Bank's Deputy Governor for prudential regulation,

[F2(ca)the Chair of the Payment Systems Regulator,]

(d)2 members appointed jointly by the Secretary of State and the Treasury, and

(e)at least one other member appointed by the Treasury.

(3)The members referred to in sub-paragraph (2)(a), (c) [F3, (ca)] and (d) are to be non-executive members.

(4)In exercising its powers under sub-paragraph (2)(e) to appoint executive or non-executive members, the Treasury must secure that the majority of members of the governing body are non-executive members.

(5)An employee of the FCA may not be appointed as a non-executive member.

(6)In the following provisions of this Schedule an “appointed member” means a member of the governing body appointed under sub-paragraph (2)(a), (b), (d) or (e).

Textual Amendments

[F42A(1)The term of office of a person appointed as chief executive under paragraph 2(2)(b) must not begin before—U.K.

(a)the person has, in connection with the appointment, appeared before the Treasury Committee of the House of Commons, or

(b)(if earlier) the end of the period of 3 months beginning with the day on which the appointment is made.

[F5(1A)Appointment as chief executive under paragraph 2(2)(b) is to be for a period of 5 years.]

(2)[F6Sub-paragraphs (1) and (1A) do] not apply if the person is appointed as chief executive on an acting basis, pending a further appointment being made.

(3)The reference to the Treasury Committee of the House of Commons—

(a)if the name of that Committee is changed, is a reference to that Committee by its new name, and

(b)if the functions of that Committee (or substantially corresponding functions) become functions of a different Committee of the House of Commons, is to be treated as a reference to the Committee by which the functions are exercisable.

(4)Any question arising under sub-paragraph (3) is to be determined by the Speaker of the House of Commons.]

Textual Amendments

[F72B(1)A person may not be appointed as chief executive under paragraph 2(2)(b) more than twice.U.K.

(2)For this purpose an appointment as chief executive on an acting basis, pending a further appointment being made, is to be ignored.]

Textual Amendments

3(1)The terms of service of the appointed members are to be determined by the Treasury.U.K.

(2)In the case of a member appointed under paragraph 2(2)(d), the Treasury must consult the Secretary of State about the terms of service.

(3)Before appointing a person as an appointed member, the Treasury (or as the case requires the Treasury and the Secretary of State) must consider whether the person has any financial or other interests that could have a material effect on the extent of the functions as member that it would be proper for the person to discharge.

(4)The terms of service of an appointed member (“M”) must be such as—

(a)to secure that M is not subject to direction by the Treasury or the Secretary of State,

(b)to require M not to act in accordance with the directions of any other person, and

(c)to prohibit M from acquiring any financial or other interests that have a material effect on the extent of the functions as member that it would be proper for M to discharge.

(5)If an appointed member is an employee of the FCA, the member's interest as employee is to be disregarded for the purposes of sub-paragraphs (3) and (4)(c) and paragraph 4(1)(b).

(6)A person who is an employee of the PRA [F8or of the Payment Systems Regulator] is disqualified for appointment as an appointed member.

(7)The FCA may pay expenses to [F9a person holding an office mentioned in paragraph 2(2)(c) or (ca)] in respect of that person's service as a member.

Textual Amendments

4(1)The Treasury may remove an appointed member from office—U.K.

(a)on the grounds of incapacity or serious misconduct, or

(b)on the grounds that in all the circumstances the member's financial or other interests are such as to have a material effect on the extent of the functions as member that it would be proper for the person to discharge.

(2)Before removing from office a member appointed under paragraph 2(2)(d), the Treasury must consult the Secretary of State.

5U.K.The validity of any act of the FCA is not affected—

(a)by any vacancy in any of the offices mentioned in paragraph 2(2)(a), (b) [F10, (c) or (ca)], or

(b)by a defect in the appointment of a person—

(i)to any of those offices, or

(ii)as an appointed member.

Textual Amendments

6U.K.The Bank's Deputy Governor for prudential regulation must not take part in any discussion by or decision of the FCA which relates to—

(a)the exercise of the FCA's functions in relation to a particular person, or

(b)a decision not to exercise those functions.

[F116A(1)The Chair of the Payment Systems Regulator must not take part in any discussion by or decision of the FCA which relates to—U.K.

(a)the exercise of the FCA’s functions in relation to a particular person, or

(b)a decision not to exercise those functions.

(2)Sub-paragraph (1) does not apply at any time when the person who is the Chair of the Payment Systems Regulator also holds the office mentioned in paragraph 2(2)(a).]

Textual Amendments

RemunerationU.K.

7U.K.The FCA must pay to the appointed members such remuneration as may be determined—

(a)in the case of the non-executive members, by the Treasury;

(b)in the case of the executive members, by the FCA.

Arrangements for discharging functionsU.K.

8(1)The FCA may make arrangements for any of its functions to be discharged by a committee, sub-committee, officer or member of staff of the FCA, but subject to the following provisions.U.K.

(2)In exercising its legislative functions, the FCA must act through its governing body.

(3)For that purpose, the following are the FCA's legislative functions—

(a)making rules [F12under this Act or under [F13assimilated direct] legislation];

F14(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)issuing statements under—

(i)section [F1563ZD,] 63C, F16... 69, 88C, 89S, 93, 124, 131J, 138N, [F17142V,] 192H, 192N, 210 [F18or 312J],

(ii)section 345D (whether as a result of section 345(2) [F19, section 249(1) or 261K(1)]), or

(iii)section 80 of the Financial Services Act 2012;

(d)giving directions under section 316, 318 or 328.

F20(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F21(f)making technical standards in accordance with Chapter 2A of Part 9A;

(g)making EU Exit instruments under the Financial Regulators’ Powers (Technical Standards) (Amendment etc.) (EU Exit) Regulations 2018.]

[F22(3A)In exercising its functions under sections 9(2) and 10 of the Financial Guidance and Claims Act 2018 (approving and reviewing standards set by [F23Money and Pensions Service]), the FCA must act through its governing body.]

(4)The function of issuing general guidance (as defined in section 139B(5) F24...) may not be discharged by an officer or member of staff of the FCA.

[F25(5)In respect of the exercise of a function under Part 1 of the Competition Act 1998, the power in sub-paragraph (1) is subject to provision in rules made under section 51 of that Act by virtue of paragraph 1A of Schedule 9 to that Act.]

Textual Amendments

F16Word in Sch. 1ZA para. 8(3)(c)(i) omitted (7.3.2016) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(5), Sch. 3 para. 16(b)(ii); S.I. 2015/490, art. 2(1)(b) (with savings and transitional provisions in S.I. 2015/492 (as amended by S.I. 2015/1660))

F17Word in Sch. 1ZA para. 8(3)(c)(i) inserted (1.1.2019) by Financial Services (Banking Reform) Act 2013 (c. 33), ss. 4(6), 148(5); S.I. 2018/1306, art. 2(d)

Modifications etc. (not altering text)

C5Sch. 1ZA para. 8(2) modified (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), arts. 1(2)(6), 64(6)

C6Sch. 1ZA para. 8(2) modified (E.W.S.) (29.11.2018 for specified purposes, 1.4.2019 in so far as not already in force) by The Financial Services and Markets Act 2000 (Claims Management Activity) Order 2018 (S.I. 2018/1253), arts. 1(2)(3), 85(8)

RecordsU.K.

9U.K.The FCA must maintain satisfactory arrangements for—

(a)recording decisions made in the exercise of its functions, and

(b)the safe-keeping of those records which it considers ought to be preserved.

Publication of record of meetings of governing bodyU.K.

10(1)The FCA must publish a record of each meeting of its governing body—U.K.

(a)before the end of the period of 6 weeks beginning with the day of the meeting, or

(b)if no meeting of the governing body is subsequently held during that period, before the end of the period of 2 weeks beginning with the day of the next meeting.

(2)The record must specify any decision taken at the meeting (including decisions to take no action) and must set out, in relation to each decision, a summary of the deliberations of the governing body.

(3)Sub-paragraphs (1) and (2) do not require the publication of information whose publication within the time required by sub-paragraph (1) would in the opinion of the governing body be against the public interest.

(4)Publication under this section is to be in such manner as the FCA thinks fit.

Modifications etc. (not altering text)

Annual reportU.K.

11(1)At least once a year the FCA must make a report to the Treasury on—U.K.

(a)the discharge of its functions,

(b)the extent to which, in its opinion, its operational objectives have been advanced,

(c)the extent to which, in its opinion, it has acted compatibly with its strategic objective,

(d)how, in its opinion, it has complied with the duty in section 1B(4),

[F26(da)how, in its opinion, it has complied with the duty in section 1B(4A),]

(e)its consideration of the matter mentioned in section 1B(5)(b),

(f)its consideration of the principles in section 3B,

(g)how it has complied with section 3D,

(h)any direction received under section 3I or 3J during the period to which the report relates,

[F27(ha)any rules that it has made as a result of section 137C during the period to which the report relates and the kinds of regulated credit agreement (within the meaning of that section) to which the rules apply,]

F28(hb). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F29(hc)how it has satisfied the requirement in section 138EA(2) so far as regarding disclosure requirements in connection with matters relating to sustainability],

(i)how it has complied with section 354A(1) so far as relating to co-operation with persons outside the United Kingdom, F30...

[F31(ia)how, in its opinion, it has complied with its duties under sections 9(2) and 10 of the Financial Guidance and Claims Act 2018, F32...]

[F33(ib)how it has satisfied the requirement in section 416B to have regard to any SDR policy statement of the Treasury published and not withdrawn under section 416A (sustainability disclosure requirements: policy statement)],

[F34(ib)any engagement with the statutory panels of the FCA, the PRA or the Payment Systems Regulator,

(ic)how it has complied with the statement of policy on panel appointments prepared under section 1RA in relation to the process for making appointments and the matters considered in determining who is appointed, and]

(j)such other matters as the Treasury may from time to time direct.

(2)Sub-paragraph (1) does not require the inclusion in the report of any information whose publication would in the opinion of the FCA be against the public interest.

(3)The report must be accompanied by—

(a)a statement of the remuneration of the appointed members of the governing body of the FCA during the period to which the report relates, and

(b)such other reports or information, prepared by such persons, as the Treasury may from time to time direct.

(4)The Treasury must lay before Parliament a copy of each report received by them under this paragraph.

[F35(5)In this paragraph “statutory panel” has the meaning given in section 1RB(5).]

Textual Amendments

F27Sch. 1ZA para. 11(1)(ha) inserted (18.2.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), ss. 131(2), 148(2)

F30Word in Sch. 1ZA para. 11(1)(i) omitted (1.10.2018) by virtue of Financial Guidance and Claims Act 2018 (c. 10), s. 37(5), Sch. 3 para. 21(3)(b); S.I. 2018/1029, reg. 2(q) (with Sch. para. 2)

[F36Other reportsU.K.

Textual Amendments

11A(1)The Treasury may (subject to this paragraph) at any time by direction require the FCA to publish a report containing information about—U.K.

(a)any of the matters mentioned in paragraphs (a) to (ia) of paragraph 11(1);

(b)such other matters that the direction may specify.

(2)The Treasury may give a direction under this paragraph requiring information to be published only if the Treasury consider that—

(a)the information is reasonably necessary for the purpose of reviewing and scrutinising the discharge of the FCA’s functions, and

(b)other available information is not sufficient to meet that purpose.

(3)Subject to sub-paragraph (4), the FCA must publish a report prepared under a direction given under this paragraph in such manner, and within such period, as the direction may require.

(4)Nothing in this paragraph requires the inclusion in the report of any information whose publication would be against the public interest.

(5)A direction under this paragraph may not—

(a)require a report to be published more than once in each quarter;

(b)require the publication of information that is confidential information for the purposes of Part 23 (see section 348(2)).

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

(7)In exercising the power under this paragraph, the Treasury must have regard to the desirability of minimising any adverse effect that the preparation of the report required in accordance with the direction may have on the exercise by the FCA of any of its other functions.

(8)The Treasury must—

(a)lay before Parliament a copy of a direction given under this paragraph, and

(b)publish the direction in such manner as the Treasury think fit.

(9)A direction under this paragraph may be varied or revoked by the giving of a further direction.]

Annual public meetingU.K.

12(1)Not later than 3 months after making a report under paragraph 11, the FCA must hold a public meeting (“the annual meeting”) for the purposes of enabling that report to be considered.U.K.

(2)The FCA must organise the annual meeting so as to allow—

(a)a general discussion of the contents of the report which is being considered, and

(b)a reasonable opportunity for those attending the meeting to put questions to the FCA about the way in which it discharged, or failed to discharge, its functions during the period to which the report relates.

(3)But otherwise the annual meeting is to be organised and conducted in such a way as the FCA considers appropriate.

(4)The FCA must give reasonable notice of its annual meeting.

(5)That notice must—

(a)give details of the time and place at which the meeting is to be held,

(b)set out the proposed agenda for the meeting,

(c)indicate the proposed duration of the meeting,

(d)give details of the FCA's arrangements for enabling persons to attend, and

(e)be published by the FCA in the way appearing to it to be best calculated to bring the notice to the attention of the public.

(6)If the FCA proposes to alter any of the arrangements which have been included in the notice given under sub-paragraph (5), it must—

(a)give reasonable notice of the alteration, and

(b)publish that notice in the way appearing to the FCA to be best calculated to bring it to the attention of the public.

Report of annual meetingU.K.

13U.K.Not later than one month after its annual meeting, the FCA must publish a report of the proceedings of the meeting.

Accounts and auditU.K.

14(1)The Treasury may—U.K.

(a)require the FCA to comply with any provisions of the Companies Act 2006 about accounts and their audit which would not otherwise apply to it, or

(b)direct that any provision of that Act about accounts and their audit is to apply to the FCA with such modifications as are specified in the direction, whether or not the provision would otherwise apply to the FCA.

(2)Compliance with any requirement under sub-paragraph (1)(a) or (b) is enforceable by injunction or, in Scotland, an order for specific performance under section 45 of the Court of Session Act 1988.

(3)Proceedings under sub-paragraph (2) may be brought only by the Treasury.

15(1)The FCA must send a copy of its annual accounts to the Comptroller and Auditor General as soon as is reasonably practicable.U.K.

(2)The Comptroller and Auditor General must—

(a)examine, certify and report on accounts received under this paragraph, and

(b)send a copy of the certified accounts and the report to the Treasury.

(3)The Treasury must lay the copy of the certified accounts and the report before Parliament.

(4)Except as provided by paragraph 14(1), the FCA is exempt from the requirements of Part 16 of the Companies Act 2006 (audit), and its balance sheet must contain a statement to that effect.

(5)In this paragraph “annual accounts” has the meaning given in section 471 of the Companies Act 2006.

PART 2U.K.Status

Modifications etc. (not altering text)

StatusU.K.

16U.K.In relation to any of its functions—

(a)the FCA is not to be regarded as acting on behalf of the Crown, and

(b)its members, officers and staff are not to be regarded as Crown servants.

Modifications etc. (not altering text)

Exemption from requirement for use of “limited” in name of FCAU.K.

17U.K.The FCA is to continue to be exempt from the requirements of the Companies Act 2006 relating to the use of “limited” as part of its name.

18U.K.If the Secretary of State is satisfied that any action taken by the FCA makes it inappropriate for the exemption given by paragraph 17 to continue, the Secretary of State may, after consulting the Treasury, give a direction removing it.

PART 3U.K.Penalties and fees

Modifications etc. (not altering text)

C10Sch. 1ZA Pt. 3 modified (E.W.S.) (29.11.2018 for specified purposes, 1.4.2019 in so far as not already in force) by The Financial Services and Markets Act 2000 (Claims Management Activity) Order 2018 (S.I. 2018/1253), arts. 1(2)(3), 54(4)

PenaltiesU.K.

19U.K.In determining its policy with respect to the amounts of penalties to be imposed by it under this Act, the FCA must take no account of the expenses which it incurs, or expects to incur, in discharging its functions.

Modifications etc. (not altering text)

C12Sch. 1ZA para. 19 applied (with modifications) by S.I. 2008/346, reg. 37 (as substituted (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 134(b))

C14Sch. 1ZA paras. 19-22 applied (with modifications) (12.12.2014) by The Immigration Act 2014 (Bank Accounts) Regulations 2014 (S.I. 2014/3085), regs. 1, 6

C15Sch. 1ZA paras. 19-23 applied (with modifications) (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 1 para. 25(1) (with reg. 7)

C16Sch. 1ZA paras. 19-23 applied (with modifications) (3.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Data Reporting Services Regulations 2017 (S.I. 2017/699), regs. 1(2)(a)(b), 40

C18Sch. 1ZA paras. 19-23 applied (with modifications) (27.2.2018) by The Financial Services and Markets Act 2000 (Benchmarks) Regulations 2018 (S.I. 2018/135), regs. 1(2), 26

C19Sch. 1ZA paras. 19-23 applied (with modifications) (1.1.2019) by The Securitisation Regulations 2018 (S.I. 2018/1288), reg. 1, Sch. 1 para. 11 (with Sch. 1 paras. 13, 14)

C20Sch. 1ZA paras. 19-22 applied (with modifications) (10.6.2019) by The Proxy Advisors (Shareholders Rights) Regulations 2019 (S.I. 2019/926), regs. 1, 20, 28

C24Sch. 1ZA paras. 19-21 applied (with modifications) (30.1.2024 for specified purposes) by The Securitisation Regulations 2024 (S.I. 2024/102), reg. 2(1)(e)(2), Sch. 1 para. 16 (with reg. 52(3), Sch. 3)

20(1)The FCA must in respect of each of its financial years pay to the Treasury its penalty receipts after deducting its enforcement costs.U.K.

(2)The FCA's “penalty receipts” in respect of a financial year are any amounts received by it during the year by way of penalties imposed under this Act.

(3)The FCA's “enforcement costs” in respect of a financial year are the expenses incurred by it during the year in connection with—

(a)the exercise, or consideration of the possible exercise, of any of its enforcement powers in particular cases, or

(b)the recovery of penalties imposed under this Act [F37or under a provision mentioned in sub-paragraph (4A)].

(4)For this purpose the FCA's enforcement powers are—

(a)its powers under any of the provisions mentioned in section 133(7A),

(b)its powers under section 56 (prohibition orders),

[F38(ba)its powers under section 143S (Part 9C prohibition orders),]

[F39(bb)its powers under section 309B (Part 18 prohibition orders),]

(c)its powers under Part 25 of this Act (injunctions and restitution),

[F40(ca)its powers under the relevant competition provisions (as applied by Part 16A of this Act),]

(d)its powers under any other enactment specified by the Treasury by order,

(e)its powers in relation to the investigation of relevant offences, and

(f)its powers in England and Wales or Northern Ireland in relation to the prosecution of relevant offences.

[F41(4A)The relevant competition provisions” are—

(a)section 31E of the Competition Act 1998 (enforcement of commitments);

(b)section 34 of that Act (enforcement of directions);

(c)section 36 of that Act (penalties);

(d)section 40A of that Act (penalties: failure to comply with requirements);

(e)section 174A of the Enterprise Act 2002 (penalties).]

(5)“Relevant offences” are—

(a)offences under [F42this Act],

(b)offences under subordinate legislation made under [F43this Act],

(c)offences falling within section 402(1) F44...,

[F45(ca)offences under Part 1 of the Competition Act 1998,

(cb)offences under Part 4 of the Enterprise Act 2002,]

(d)offences under Part 7 of the Financial Services Act 2012, and

(e)any other offences specified by the Treasury by order.

(6)The Treasury may give directions to the FCA as to how the FCA is to comply with its duty under sub-paragraph (1).

(7)The directions may in particular—

(a)specify descriptions of expenditure that are, or are not, to be regarded as incurred in connection with either of the matters mentioned in sub-paragraph (3),

(b)relate to the calculation and timing of the deduction in respect of the FCA's enforcement costs, and

(c)specify the time when any payment is required to be made to the Treasury.

(8)The directions may also require the FCA to provide the Treasury at specified times with specified information relating to—

(a)penalties that the FCA has imposed under this Act, or

(b)the FCA's enforcement costs.

(9)The Treasury must pay into the Consolidated Fund any sums received by them under this paragraph.

Textual Amendments

Modifications etc. (not altering text)

C14Sch. 1ZA paras. 19-22 applied (with modifications) (12.12.2014) by The Immigration Act 2014 (Bank Accounts) Regulations 2014 (S.I. 2014/3085), regs. 1, 6

C15Sch. 1ZA paras. 19-23 applied (with modifications) (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 1 para. 25(1) (with reg. 7)

C16Sch. 1ZA paras. 19-23 applied (with modifications) (3.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Data Reporting Services Regulations 2017 (S.I. 2017/699), regs. 1(2)(a)(b), 40

C18Sch. 1ZA paras. 19-23 applied (with modifications) (27.2.2018) by The Financial Services and Markets Act 2000 (Benchmarks) Regulations 2018 (S.I. 2018/135), regs. 1(2), 26

C19Sch. 1ZA paras. 19-23 applied (with modifications) (1.1.2019) by The Securitisation Regulations 2018 (S.I. 2018/1288), reg. 1, Sch. 1 para. 11 (with Sch. 1 paras. 13, 14)

C20Sch. 1ZA paras. 19-22 applied (with modifications) (10.6.2019) by The Proxy Advisors (Shareholders Rights) Regulations 2019 (S.I. 2019/926), regs. 1, 20, 28

C24Sch. 1ZA paras. 19-21 applied (with modifications) (30.1.2024 for specified purposes) by The Securitisation Regulations 2024 (S.I. 2024/102), reg. 2(1)(e)(2), Sch. 1 para. 16 (with reg. 52(3), Sch. 3)

C26Sch. 1ZA para. 20 applied (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), arts. 1(5), 23(4) (with Pt. 4)

21(1)The FCA must prepare and operate a scheme (“the financial penalty scheme”) for ensuring that the amounts that, as a result of the deduction for which paragraph 20(1) provides, are retained by the FCA in respect of amounts paid to it by way of penalties imposed under this Act are applied for the benefit of regulated persons.U.K.

(2)“Regulated persons” means—

(a)authorised persons,

(b)recognised investment exchanges,

(c)issuers of securities admitted to the official list, F46... [F47and]

(d)issuers who have requested or approved the admission of financial instruments to trading on a regulated market, F48...

F48(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)The financial penalty scheme may, in particular, make different provision with respect to different classes of regulated person.

(4)The financial penalty scheme must ensure that those who have become liable to pay a penalty to the FCA in any financial year of the FCA do not receive any benefit under the scheme in the following financial year.

(5)Up-to-date details of the financial penalty scheme must be set out in a document (“the scheme details”).

Textual Amendments

F46Word in Sch. 1ZA para. 21(2)(c) omitted (3.3.2015) by virtue of Pension Schemes Act 2015 (c. 8), s. 89(1)(a), Sch. 3 para. 15(a) (with s. 87)

F48Sch. 1ZA para. 21(2)(e) and word omitted (1.1.2019) by virtue of Financial Guidance and Claims Act 2018 (c. 10), s. 37(5), Sch. 3 para. 21(4)(b); S.I. 2018/1330, reg. 2(g)(vi)

Modifications etc. (not altering text)

C14Sch. 1ZA paras. 19-22 applied (with modifications) (12.12.2014) by The Immigration Act 2014 (Bank Accounts) Regulations 2014 (S.I. 2014/3085), regs. 1, 6

C15Sch. 1ZA paras. 19-23 applied (with modifications) (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 1 para. 25(1) (with reg. 7)

C16Sch. 1ZA paras. 19-23 applied (with modifications) (3.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Data Reporting Services Regulations 2017 (S.I. 2017/699), regs. 1(2)(a)(b), 40

C18Sch. 1ZA paras. 19-23 applied (with modifications) (27.2.2018) by The Financial Services and Markets Act 2000 (Benchmarks) Regulations 2018 (S.I. 2018/135), regs. 1(2), 26

C19Sch. 1ZA paras. 19-23 applied (with modifications) (1.1.2019) by The Securitisation Regulations 2018 (S.I. 2018/1288), reg. 1, Sch. 1 para. 11 (with Sch. 1 paras. 13, 14)

C20Sch. 1ZA paras. 19-22 applied (with modifications) (10.6.2019) by The Proxy Advisors (Shareholders Rights) Regulations 2019 (S.I. 2019/926), regs. 1, 20, 28

C24Sch. 1ZA paras. 19-21 applied (with modifications) (30.1.2024 for specified purposes) by The Securitisation Regulations 2024 (S.I. 2024/102), reg. 2(1)(e)(2), Sch. 1 para. 16 (with reg. 52(3), Sch. 3)

C28Sch. 1ZA para. 21 modified (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), arts. 1(5), 23(5) (with Pt. 4)

22(1)The scheme details must be published by the FCA in the way appearing to it to be best calculated to bring them to the attention of the public.U.K.

(2)Before making the financial penalty scheme, the FCA must publish a draft of the proposed scheme in the way appearing to the FCA to be best calculated to bring it to the attention of the public.

(3)The draft must be accompanied by notice that representations about the proposals may be made to the FCA within a specified time.

(4)Before making the scheme, the FCA must have regard to any representations made to it in accordance with sub-paragraph (3).

(5)If the FCA makes the proposed scheme, it must publish an account, in general terms, of—

(a)the representations made to it in accordance with sub-paragraph (3), and

(b)its response to them.

(6)If the scheme differs from the draft published under sub-paragraph (2) in a way which is, in the opinion of the FCA, significant, the FCA must (in addition to complying with sub-paragraph (5)) publish details of the difference.

(7)The FCA must, without delay, give the Treasury a copy of any scheme details published by it.

(8)The FCA may charge a reasonable fee for providing a person with a copy of—

(a)a draft published under sub-paragraph (2);

(b)scheme details.

(9)Sub-paragraphs (2) to (6) and (8)(a) also apply to a proposal to alter or replace the financial penalty scheme.

Modifications etc. (not altering text)

C14Sch. 1ZA paras. 19-22 applied (with modifications) (12.12.2014) by The Immigration Act 2014 (Bank Accounts) Regulations 2014 (S.I. 2014/3085), regs. 1, 6

C15Sch. 1ZA paras. 19-23 applied (with modifications) (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 1 para. 25(1) (with reg. 7)

C16Sch. 1ZA paras. 19-23 applied (with modifications) (3.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Data Reporting Services Regulations 2017 (S.I. 2017/699), regs. 1(2)(a)(b), 40

C18Sch. 1ZA paras. 19-23 applied (with modifications) (27.2.2018) by The Financial Services and Markets Act 2000 (Benchmarks) Regulations 2018 (S.I. 2018/135), regs. 1(2), 26

C19Sch. 1ZA paras. 19-23 applied (with modifications) (1.1.2019) by The Securitisation Regulations 2018 (S.I. 2018/1288), reg. 1, Sch. 1 para. 11 (with Sch. 1 paras. 13, 14)

C20Sch. 1ZA paras. 19-22 applied (with modifications) (10.6.2019) by The Proxy Advisors (Shareholders Rights) Regulations 2019 (S.I. 2019/926), regs. 1, 20, 28

FeesU.K.

23(1)The FCA may make rules providing for the payment to it of such fees, in connection with the discharge of any of its qualifying functions, as it considers will (taking account of its expected income from fees and charges provided for by any other provision of this Act [F49other than sections [F50137SA,] [F51, 137SB] F52... [F53and 333T]]) enable it—U.K.

(a)to meet expenses incurred in carrying out its functions [F54, other than its excepted functions,] or for any incidental purpose,

(b)to repay the principal of, and pay any interest on, any relevant borrowing and to meet relevant commencement expenses, and

(c)to maintain adequate reserves.

(2)The “qualifying functions” of the FCA are—

(a)its functions under or as a result of this Act or any of the [F55other enactments mentioned in section 1A(6)(a) to (ca)] [F56and (e)] [F57but not its excepted functions], and

(b)its functions under or as a result of a [F58qualifying provision] that is specified, or of a description specified, for the purposes of this sub-paragraph by the Treasury by order.

[F59(2ZA)The “excepted functions” of the FCA are—

F60(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)its functions under [F61section 333T] so far as relating to the collection of payments. [F62, and

(c)its functions under [F63sections 137SA and 137SB].]]

[F64(2A)The functions referred to in sub-paragraph (1)(a) include functions of the FCA under the Competition Act 1998 or the Enterprise Act 2002 as a result of Part 16A of this Act; but this sub-paragraph is not to be regarded as limiting the effect of the definition of “functions” in paragraph 1.]

(3)In sub-paragraph (1)(b)—

  • “relevant borrowing” means any money borrowed by the FCA which has been used for the purpose of meeting expenses incurred in relation to its assumption of functions under this Act, and

  • “relevant commencement expenses” means expenses incurred by the FCA—

    (a)

    in preparation for the exercise of functions by the FCA under this Act, or

    (b)

    for the purpose of facilitating the exercise by the FCA of those functions or otherwise in connection with their exercise by it.

(4)Neither section 1A(6)(d) nor the definition of “functions” in paragraph 1 applies for the purposes of sub-paragraph (2).

(5)For the purposes of sub-paragraph (3) it is irrelevant when the borrowing of the money, the incurring of the expenses or the assumption of functions took place (and, in particular, it is irrelevant if any of those things were done at a time when the FCA was known as the Financial Services Authority).

(6)In the case of rules made under Part 6 of this Act, the rules may, in particular, require the payment of fees in respect of—

(a)the continued inclusion of securities or persons in any list or register required to be kept by the FCA as a result of any provision made by or under that Part,

(b)access to any list or register within paragraph (a), and

(c)the continued admission of financial instruments to trading on a regulated market.

(7)In fixing the amount of any fee which is to be payable to the FCA, no account is to be taken of any sums which the FCA receives, or expects to receive, by way of penalties imposed by it under this Act.

(8)Any fee which is owed to the FCA under any provision made by or under this Act may be recovered as a debt due to the FCA.

Textual Amendments

F49Words in Sch. 1ZA para. 23(1) inserted (3.3.2015) by Pension Schemes Act 2015 (c. 8), s. 89(1)(a), Sch. 3 para. 16(a) (with s. 87)

F54Words in Sch. 1ZA para. 23(1)(a) inserted (3.3.2015) by Pension Schemes Act 2015 (c. 8), s. 89(1)(a), Sch. 3 para. 16(b) (with s. 87)

F57Words in Sch. 1ZA para. 23(2)(a) inserted (3.3.2015) by Pension Schemes Act 2015 (c. 8), s. 89(1)(a), Sch. 3 para. 16(c) (with s. 87)

F59Sch. 1ZA para. 23(2ZA) inserted (3.3.2015) by Pension Schemes Act 2015 (c. 8), s. 89(1)(a), Sch. 3 para. 16(d) (with s. 87)

F62Sch. 1ZA para. 23(2ZA)(c) and word inserted (10.5.2018) by Financial Guidance and Claims Act 2018 (c. 10), s. 37(1)(e)(iv), Sch. 3 para. 21(5)(b)(iii)

F63Words in Sch. 1ZA para. 23(2ZA)(c) substituted (1.10.2018) by Financial Guidance and Claims Act 2018 (c. 10), s. 37(5), Sch. 3 para. 21(5)(b)(iv); S.I. 2018/1029, reg. 2(q)

Modifications etc. (not altering text)

C15Sch. 1ZA paras. 19-23 applied (with modifications) (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 1 para. 25(1) (with reg. 7)

C16Sch. 1ZA paras. 19-23 applied (with modifications) (3.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Data Reporting Services Regulations 2017 (S.I. 2017/699), regs. 1(2)(a)(b), 40

C18Sch. 1ZA paras. 19-23 applied (with modifications) (27.2.2018) by The Financial Services and Markets Act 2000 (Benchmarks) Regulations 2018 (S.I. 2018/135), regs. 1(2), 26

C19Sch. 1ZA paras. 19-23 applied (with modifications) (1.1.2019) by The Securitisation Regulations 2018 (S.I. 2018/1288), reg. 1, Sch. 1 para. 11 (with Sch. 1 paras. 13, 14)

C30Sch. 1ZA para. 23 extended (with modifications) by S.I. 2012/3122, reg. 14 (as amended) (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 248(3)

C32Sch. 1ZA para. 23 applied (with modifications) by S.I. 2008/346, Sch. para. 5 (as substituted (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 134(g)(iii))

C33Sch. 1ZA para. 23 extended (with modifications) by S.I. 2011/99, reg. 59(1) (as amended) (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 196(3)

C34Sch. 1ZA para. 23 applied (with modifications) (12.12.2014) by The Immigration Act 2014 (Bank Accounts) Regulations 2014 (S.I. 2014/3085), regs. 1, 7

C35Sch. 1ZA para. 23 modified (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), arts. 1(5), 25(a) (with Pt. 4)

C38Sch. 1ZA para. 23 modified (18.9.2016) by The Payment Accounts Regulations 2015 (S.I. 2015/2038), regs. 1(2)(b), 39

C39Sch. 1ZA para. 23 modified (13.8.2017) by The Payment Services Regulations 2017 (S.I. 2017/752), regs. 1(2)(a), 118(1) (with reg. 3)

C40Sch. 1ZA para. 23 modified (10.5.2018) by Financial Guidance and Claims Act 2018 (c. 10), s. 37(1)(f), Sch. 5 para. 13

C42Sch. 1ZA para. 23 applied (with modifications) (10.6.2019) by The Proxy Advisors (Shareholders Rights) Regulations 2019 (S.I. 2019/926), regs. 1, 20, 28

C43Sch. 1ZA para. 23(6) applied by 2009 c. 1, s. 39B(2) (as inserted (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 39)

C44Sch. 1ZA para. 23(6) applied by 2009 c. 1, s. 48L(6A) (as inserted (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 53(6))

Services for which fees may not be chargedU.K.

24U.K.The power conferred by paragraph 23 may not be used to require—

F65(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)a fee to be paid by any person whose application for approval under section 59 has been granted.

[F66(c)a fee to be paid by any person whose application under section 309I for approval under section 309G has been granted.]

Textual Amendments

PART 4U.K.Miscellaneous

Modifications etc. (not altering text)

Exemption from liability in damagesU.K.

25(1)None of the following is to be liable in damages for anything done or omitted in the discharge, or purported discharge, of the FCA's functions—U.K.

(a)the FCA;

(b)any person (“P”) who is, or is acting as, a member, officer or member of staff of the FCA;

(c)any person who could be held vicariously liable for things done or omitted by P, but only in so far as the liability relates to P's conduct.

[F67(1A)In sub-paragraph (1) the reference to the FCA's functions includes its functions under

[F68(a)] Part 5 of the Financial Services (Banking Reform) Act 2013 (regulation of payment systems),

[F69(b)Part 3 of the Finance Act 2022 (economic crime (anti-money laundering) levy).]]

(2)Anything done or omitted by a person mentioned in sub-paragraph (1)(a) or (b) while acting, or purporting to act, as a result of an appointment under any of sections 166 to 169 is to be taken for the purposes of sub-paragraph (1) to have been done or omitted in the discharge, or as the case may be purported discharge, of the FCA's functions.

(3)Sub-paragraph (1) does not apply—

(a)if the act or omission is shown to have been in bad faith, or

(b)so as to prevent an award of damages made in respect of an act or omission on the ground that the act or omission was unlawful as a result of section 6(1) of the Human Rights Act 1998.

Textual Amendments

F68Words in Sch. 1ZA para. 25(1A) renumbered as Sch. 1ZA para. 25(1A)(a) (with effect in accordance with reg. 1(2) of the amending S.I.) by The Economic Crime (Anti-Money Laundering) Levy (Amendment) Regulations 2023 (S.I. 2023/369), regs. 1(2), 13(a)

Modifications etc. (not altering text)

C52Sch. 1ZA para. 25 applied (with modifications) (12.12.2014) by The Immigration Act 2014 (Bank Accounts) Regulations 2014 (S.I. 2014/3085), regs. 1, 8

C53Sch. 1ZA para. 25 modified (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), arts. 1(5), 25(b) (with Pt. 4)

C55Sch. 1ZA para. 25 modified (18.9.2016) by The Payment Accounts Regulations 2015 (S.I. 2015/2038), regs. 1(2)(b), 41

C56Sch. 1ZA para. 25 applied (with modifications) (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 1 para. 25 (with reg. 7)

C57Sch. 1ZA para. 25 applied (with modifications) (3.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Data Reporting Services Regulations 2017 (S.I. 2017/699), regs. 1(2)(a)(b), 40

C58Sch. 1ZA para. 25 modified (13.8.2017) by The Payment Services Regulations 2017 (S.I. 2017/752), regs. 1(2)(a), 121 (with reg. 3)

C60Sch. 1ZA para. 25 applied (with modifications) (27.2.2018) by The Financial Services and Markets Act 2000 (Benchmarks) Regulations 2018 (S.I. 2018/135), regs. 1(2), 26

Accredited financial investigatorsU.K.

26U.K.For the purposes of this Act anything done by an accredited financial investigator within the meaning of the Proceeds of Crime Act 2002 who—

(a)is, or is acting as, an officer of, or member of the staff of, the FCA, or

(b)is appointed by the FCA under section 97, 167 or 168 to conduct an investigation,

is to be treated as done in the exercise or discharge of a function of the FCA.

Amounts required by rules to be paid to the FCAU.K.

27U.K.Any amount (other than a fee) which is required by rules to be paid to the FCA may be recovered as a debt due to the FCA.

[F70Engagement with Parliamentary CommitteesU.K.

Textual Amendments

28(1)This paragraph applies where the FCA issues a relevant consultation.U.K.

(2)For the purposes of this paragraph the FCA issues a relevant consultation if it—

(a)publishes a draft of proposed rules under section 138I,

(b)publishes a proposal under a duty imposed by another provision of this Act or by any other enactment, or

(c)publishes other proposals about the exercise of any of its general functions.

(3)The FCA must, as soon as reasonably practicable after issuing the consultation, notify in writing the chair of each relevant Parliamentary Committee that the consultation has been issued.

(4)The notification must specify the parts of the consultation (if any) that address the ways in which the proposals subject to consultation—

(a)advance the FCA’s operational objectives,

(b)are compatible with the FCA’s strategic objective,

(c)demonstrate that the FCA has had regard to the regulatory principles in section 3B when preparing the proposals, and

(d)engage with matters to which the FCA must have regard under regulations made under section 138EA.

(5)The reference in sub-paragraph (4)(a) to the FCA’s operational objectives includes, in its application as a secondary objective, the competitiveness and growth objective (see section 1EB).

(6)The notification must also specify any other part of the consultation which the FCA considers should be drawn to the attention of the relevant Parliamentary Committees.

(7)References in this paragraph to the relevant Parliamentary Committees are references to—

(a)the Treasury Committee of the House of Commons,

(b)the Committee of the House of Lords which—

(i)is charged with responsibility by that House for the purposes of this paragraph, and

(ii)has notified the FCA that it is a relevant Parliamentary Committee for those purposes, and

(c)the Joint Committee of both Houses which—

(i)is charged with responsibility by those Houses for the purposes of this paragraph, and

(ii)has notified the FCA that it is a relevant Parliamentary Committee for those purposes.

(8)References in this paragraph to the Treasury Committee of the House of Commons—

(a)if the name of that Committee is changed, are references to that Committee by its new name, and

(b)if the functions of that Committee (or substantially corresponding functions) become functions of a different Committee of the House of Commons, are to be treated as references to the Committee by which the functions are exercisable.

(9)Any question arising under sub-paragraph (8) is to be determined by the Speaker of the House of Commons.

29(1)This paragraph applies where—U.K.

(a)the FCA issues a public consultation, and

(b)a Committee of the House of Commons or the House of Lords, or a joint Committee of both Houses, has provided to the FCA representations in response to the consultation.

(2)For the purposes of this paragraph, the FCA issues a public consultation if it publishes the draft of any proposals for the purpose of bringing them to the attention of the public (whether or not under a duty to do so imposed by an enactment).

(3)The FCA must give to the chair of the Committee concerned a written response to the representations.

(4)The duty to respond imposed by sub-paragraph (3) applies only so far as the FCA would not be under a corresponding duty to do so imposed by another enactment.

(5)The FCA is not required under sub-paragraph (3) to provide any information whose publication would in the opinion of the FCA be against the public interest.]

Section [F712AB]

SCHEDULE 1ZBU.K.The Prudential Regulation Authority

Textual Amendments

PART 1U.K.General

InterpretationU.K.

1U.K.In this Schedule—

  • F72...

  • “functions”, in relation to the PRA, means functions conferred on the PRA by or under any provision of this Act (see section [F732AB(3)] which affects the meaning of references to such functions).

Textual Amendments

ConstitutionU.K.

F742U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F743U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F744U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F745U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Appointed members of governing bodyU.K.

F746U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F747U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F748U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F749U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F7410U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F7411U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F7412U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F7413U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F7414U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Terms of serviceU.K.

F7415U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Arrangements for discharging functionsU.K.

F7416U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

RecordsU.K.

17U.K.The PRA must maintain satisfactory arrangements for—

(a)recording decisions made in the exercise of its functions, and

(b)the safe-keeping of those records which it considers ought to be preserved.

BudgetU.K.

F7518U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Annual reportU.K.

19(1)At least once a year the PRA must make a report to the [F76Chancellor of the Exchequer] on—U.K.

(a)the discharge of its functions,

(b)the extent to which, in its opinion, its objectives have been advanced,

[F77(ba)how it has complied with section 2H(1),]

[F78(bb)how it has complied with the statement of policy on panel appointments prepared under section 2NA in relation to the process for making appointments and the matters considered in determining who is appointed,]

(c)its consideration of the principles in section 3B F79...,

(d)how it has complied with section 3D,

(e)any direction given under section 3I or 3J during the period to which the report relates,

[F80(ea)how it has satisfied the requirement in section 138EA(2) so far as regarding disclosure requirements in connection with matters relating to sustainability],

(f)how it has complied with section 354B(1) so far as relating to co-operation with persons outside the United Kingdom, F81...

[F82(fa)any engagement with the statutory panels of the FCA, the PRA or the Payment Systems Regulator,]

[F83(fb)how it has satisfied the requirement in section 416B to have regard to any SDR policy statement of the Treasury under section 416A (sustainability disclosure requirements: policy statement), and]

(g)such other matters as the Treasury may from time to time direct.

[F84(1A)In the report the PRA must also report in general terms on—

(a)the extent to which, in its opinion, ring-fenced bodies have complied with the ring-fencing provisions,

(b)steps taken by ring-fenced bodies in order to comply with the ring-fencing provisions,

(c)steps taken by it to enforce the ring-fencing provisions,

(d)the extent to which ring-fenced bodies are carrying on the regulated activity of dealing in investments as principal (whether in the United Kingdom or elsewhere) in circumstances where as a result of an order under section 142D(2) that activity is not an excluded activity,

(e)the extent to which ring-fenced bodies are carrying on activities that would be excluded activities by virtue of an order under section 142D(4) but for an exemption or exclusion made by such an order,

(f)the extent to which ring-fenced bodies are doing things that they would be prohibited from doing by an order under section 142E but for an exemption made by such an order, and

(g)the extent to which ring-fenced bodies appear to it to have acted in accordance with any guidance which it has given to ring-fenced bodies and which relates to the operation of the ring-fencing provisions.

(1B)In sub-paragraph (1A)—

(a)references to “ring-fenced bodies” relate only to ring-fenced bodies that are PRA-authorised persons, and

(b)“the ring-fencing provisions” means ring-fencing rules and the duty imposed as a result of section 142G.]

(2)[F85Sub-paragraphs (1) and (1A) do not] require the inclusion in the report of any information whose publication would in the opinion of the PRA be against the public interest.

(3)The report must be accompanied by—

F86(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)such other reports or information, prepared by such persons, as the Treasury may from time to time direct.

(4)The [F87Chancellor of the Exchequer] must lay before Parliament a copy of each report received by [F88the Chancellor] under this paragraph.

[F89(5)The Chancellor may comply with sub-paragraph (4) by laying a document containing a report under this paragraph together with a report under section 4 of the Bank of England Act 1998.]

[F90(6)In this paragraph “statutory panel” has the meaning given in section 1RB(5).]

Textual Amendments

Modifications etc. (not altering text)

Consultation about annual reportU.K.

20(1)In relation to each report made under paragraph 19, the PRA must publish at the same time as the report an invitation to members of the public to make representations to the PRA, within the 3 months beginning with the date of publication—U.K.

(a)about the report,

(b)about the way in which the PRA has discharged, or failed to discharge, its functions during the period to which the report relates, and

(c)about the extent to which, in their opinion, the PRA's objectives have been advanced [F91[F92including its secondary objectives under] section 2H and has considered the regulatory principles in section 3B] .

(2)The invitation must be published in the way appearing to it to be best calculated to bring the invitation to the attention of the public.

Textual Amendments

Report on consultationU.K.

21(1)The PRA must publish a report about its consultation in accordance with paragraph 20.U.K.

(2)The report must contain an account, in general terms, of any representations received in pursuance of the invitation published under that paragraph.

(3)The report must be published not later than 4 months after the date on which the report under paragraph 19 was published.

[F93Other reportsU.K.

Textual Amendments

21A(1)The Treasury may (subject to this paragraph) at any time by direction require the PRA to publish a report containing information about—U.K.

(a)any of the matters mentioned in paragraphs (a) to (f) of paragraph 19(1);

(b)such other matters that the direction may specify.

(2)The Treasury may give a direction under this paragraph requiring information to be published only if the Treasury consider that—

(a)the information is reasonably necessary for the purpose of reviewing and scrutinising the discharge of the PRA’s functions, and

(b)other available information is not sufficient to meet that purpose.

(3)Subject to sub-paragraph (4), the PRA must publish a report prepared under a direction given under this paragraph in such manner, and within such period, as the direction may require.

(4)Nothing in this paragraph requires the inclusion in the report of any information whose publication would be against the public interest.

(5)A direction under this paragraph may not—

(a)require a report to be published more than once in each quarter;

(b)require the publication of information that is confidential information for the purposes of Part 23 (see section 348(2)).

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

(7)In exercising the power under this paragraph, the Treasury must have regard to the desirability of minimising any adverse effect that the preparation of the report required in accordance with the direction may have on the exercise by the PRA of any of its other functions.

(8)The Treasury must—

(a)lay before Parliament a copy of a direction given under this paragraph, and

(b)publish the direction in such manner as the Treasury think fit.

(9)A direction under this paragraph may be varied or revoked by the giving of a further direction.]

Accounts and auditU.K.

F9422U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F9423U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

PART 2U.K.Status

StatusU.K.

F9424U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Exemption from requirement for use of “limited” in name of PRAU.K.

F9425U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F9426U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

PART 3U.K.Penalties and fees

PenaltiesU.K.

27U.K.In determining its policy with respect to the amounts of penalties to be imposed by it under this Act, the PRA must take no account of the expenses which it incurs, or expects to incur, in discharging its functions.

Modifications etc. (not altering text)

C66Sch. 1ZB paras. 27-31 applied (with modifications) (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 1 para. 26 (with reg. 7)

C67Sch. 1ZB paras. 27-31 applied (with modifications) (1.1.2019) by The Securitisation Regulations 2018 (S.I. 2018/1288), reg. 1, Sch. 1 para. 12 (with Sch. 1 paras. 13, 14)

C68Sch. 1ZB paras. 27-30 applied (with modifications) (30.1.2024 for specified purposes) by The Securitisation Regulations 2024 (S.I. 2024/102), reg. 2(1)(e)(2), Sch. 1 para. 17 (with reg. 52(3), Sch. 3)

28(1)The PRA must in respect of each of its financial years pay to the Treasury its penalty receipts after deducting its enforcement costs.U.K.

(2)The PRA's “penalty receipts” in respect of a financial year are any amounts received by it during the year by way of penalties imposed under this Act.

(3)The PRA's “enforcement costs” in respect of a financial year are the expenses incurred by it during the year in connection with—

(a)the exercise, or consideration of the possible exercise, of any of its enforcement powers in particular cases, or

(b)the recovery of penalties imposed under this Act.

(4)For this purpose the PRA's enforcement powers are—

(a)its powers under any of the provisions mentioned in section 133(7A),

(b)its powers under section 56 (prohibition orders),

(c)its powers under Part 25 of this Act (injunctions and restitution),

(d)its powers under any other enactment specified by the Treasury by order,

(e)its powers in relation to the investigation of relevant offences, and

(f)its powers in England and Wales or Northern Ireland in relation to the prosecution of relevant offences.

(5)“Relevant offences” are—

(a)offences under FSMA 2000,

(b)offences under subordinate legislation made under that Act, and

(c)any other offences specified by the Treasury by order.

(6)The Treasury may give directions to the PRA as to how the PRA is to comply with its duty under sub-paragraph (1).

(7)The directions may in particular—

(a)specify descriptions of expenditure that are, or are not, to be regarded as incurred in connection with either of the matters mentioned in sub-paragraph (3),

(b)relate to the calculation and timing of the deduction in respect of the PRA's enforcement costs, and

(c)specify the time when any payment is required to be made to the Treasury.

(8)The directions may also require the PRA to provide the Treasury at specified times with information relating to—

(a)penalties that the PRA has imposed under FSMA 2000, or

(b)the PRA's enforcement costs.

(9)The Treasury must pay into the Consolidated Fund any sums received by them under this paragraph.

Modifications etc. (not altering text)

C66Sch. 1ZB paras. 27-31 applied (with modifications) (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 1 para. 26 (with reg. 7)

C67Sch. 1ZB paras. 27-31 applied (with modifications) (1.1.2019) by The Securitisation Regulations 2018 (S.I. 2018/1288), reg. 1, Sch. 1 para. 12 (with Sch. 1 paras. 13, 14)

C68Sch. 1ZB paras. 27-30 applied (with modifications) (30.1.2024 for specified purposes) by The Securitisation Regulations 2024 (S.I. 2024/102), reg. 2(1)(e)(2), Sch. 1 para. 17 (with reg. 52(3), Sch. 3)

29(1)The PRA must prepare and operate a scheme (“the financial penalty scheme”) for ensuring that the amounts that, as a result of the deduction for which paragraph 28(1) provides, are retained by the PRA in respect of amounts paid to it by way of penalties imposed under this Act are applied for the benefit of PRA-authorised persons.U.K.

(2)The financial penalty scheme may, in particular, make different provision with respect to different classes of PRA-authorised person.

(3)The financial penalty scheme must ensure that those who have become liable to pay a penalty to the PRA in any financial year of the PRA do not receive any benefit under the scheme in the following financial year.

(4)Up-to-date details of the financial penalty scheme must be set out in a document (“the scheme details”).

Modifications etc. (not altering text)

C66Sch. 1ZB paras. 27-31 applied (with modifications) (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 1 para. 26 (with reg. 7)

C67Sch. 1ZB paras. 27-31 applied (with modifications) (1.1.2019) by The Securitisation Regulations 2018 (S.I. 2018/1288), reg. 1, Sch. 1 para. 12 (with Sch. 1 paras. 13, 14)

C68Sch. 1ZB paras. 27-30 applied (with modifications) (30.1.2024 for specified purposes) by The Securitisation Regulations 2024 (S.I. 2024/102), reg. 2(1)(e)(2), Sch. 1 para. 17 (with reg. 52(3), Sch. 3)

30(1)The scheme details must be published by the PRA in the way appearing to it to be best calculated to bring them to the attention of the public.U.K.

(2)Before making the financial penalty scheme, the PRA must publish a draft of the proposed scheme in the way appearing to the PRA to be best calculated to bring it to the attention of the public.

(3)The draft must be accompanied by notice that representations about the proposals may be made to the PRA within a specified time.

(4)Before making the scheme, the PRA must have regard to any representations made to it in accordance with sub-paragraph (3).

(5)If the PRA makes the proposed scheme, it must publish an account, in general terms, of—

(a)the representations made to it in accordance with sub-paragraph (3), and

(b)its response to them.

(6)If the scheme differs from the draft published under sub-paragraph (2) in a way which is, in the opinion of the PRA, significant, the PRA must (in addition to complying with sub-paragraph (5)) publish details of the difference.

(7)The PRA must, without delay, give the Treasury a copy of any scheme details published by it.

(8)The PRA may charge a reasonable fee for providing a person with a copy of—

(a)a draft published under sub-paragraph (2);

(b)scheme details.

(9)Sub-paragraphs (2) to (6) and (8)(a) also apply to a proposal to alter or replace the financial penalty scheme.

Modifications etc. (not altering text)

C66Sch. 1ZB paras. 27-31 applied (with modifications) (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 1 para. 26 (with reg. 7)

C67Sch. 1ZB paras. 27-31 applied (with modifications) (1.1.2019) by The Securitisation Regulations 2018 (S.I. 2018/1288), reg. 1, Sch. 1 para. 12 (with Sch. 1 paras. 13, 14)

C68Sch. 1ZB paras. 27-30 applied (with modifications) (30.1.2024 for specified purposes) by The Securitisation Regulations 2024 (S.I. 2024/102), reg. 2(1)(e)(2), Sch. 1 para. 17 (with reg. 52(3), Sch. 3)

FeesU.K.

31(1)The PRA may make rules providing for the payment to it of such fees, in connection with the discharge of any of its qualifying functions, as it considers will (taking account of its expected income from fees and charges provided for by any other provision of this Act) enable it—U.K.

(a)to meet expenses incurred in carrying out its functions or for any incidental purpose,

(b)to repay the principal of, and pay any interest on, any relevant borrowing and to meet relevant commencement expenses, and

(c)to maintain adequate reserves.

(2)The “qualifying functions” of the PRA are—

(a)its functions under or as a result of this Act or any of the [F95other enactments] mentioned in section [F962AB(3)], and

(b)its functions under or as a result of a [F97qualifying provision] that is specified, or of a description specified, for the purposes of this sub-paragraph by the Treasury by order.

(3)In sub-paragraph (1)(b)—

  • “relevant borrowing” means any money borrowed by the PRA which has been used for the purpose of meeting expenses incurred in relation to its assumption of functions under this Act, and

  • “relevant commencement expenses” means expenses incurred by the PRA, the FCA or the Bank—

    (a)

    in preparation for the exercise of functions by the PRA under this Act, or

    (b)

    for the purpose of facilitating the exercise by the PRA of those functions or otherwise in connection with their exercise by it.

(4)Neither section [F982AB(3)(d)] nor the definition of “functions” in paragraph 1 applies for the purposes of sub-paragraph (2).

(5)For the purposes of sub-paragraph (3) it is irrelevant when the borrowing of the money, the incurring of the expenses or the assumption of functions took place (and, in particular, it is irrelevant if expenses were incurred by the FCA at a time when it was known as the Financial Services Authority).

(6)In fixing the amount of any fee which is to be payable to the PRA, no account is to be taken of any sums which the PRA receives, or expects to receive, by way of penalties imposed by it under this Act.

(7)Any fee which is owed to the PRA under any provision made by or under this Act may be recovered as a debt due to the PRA.

Textual Amendments

Modifications etc. (not altering text)

C66Sch. 1ZB paras. 27-31 applied (with modifications) (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 1 para. 26 (with reg. 7)

C67Sch. 1ZB paras. 27-31 applied (with modifications) (1.1.2019) by The Securitisation Regulations 2018 (S.I. 2018/1288), reg. 1, Sch. 1 para. 12 (with Sch. 1 paras. 13, 14)

Services for which fees may not be chargedU.K.

32U.K.The power conferred by paragraph 31 may not be used to require—

F99(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)a fee to be paid by any person whose application for approval under section 59 has been granted.

Textual Amendments

PART 4U.K.Miscellaneous

Exemption from liability in damagesU.K.

33(1)None of the following is to be liable in damages for anything done or omitted in the discharge, or purported discharge, of the PRA's functions—U.K.

(a)the PRA;

(b)any person (“P”) who is, or is acting as, a member, officer or member of staff of the PRA;

(c)any person who could be held vicariously liable for things done or omitted by P, but only in so far as the liability relates to P's conduct.

[F100(1A)In sub-paragraph (1) the reference to the PRA's functions includes its functions under Part 5 of the Financial Services (Banking Reform) Act 2013 (regulation of payment systems).]

(2)Anything done or omitted by a person mentioned in sub-paragraph (1)(a) or (b) while acting, or purporting to act, as a result of an appointment under any of sections 97, 166 to 169 [F101, 284 and 377G] is to be taken for the purposes of sub-paragraph (1) to have been done or omitted in the discharge, or as the case may be purported discharge, of the PRA's functions.

(3)Sub-paragraph (1) does not apply—

(a)if the act or omission is shown to have been in bad faith, or

(b)so as to prevent an award of damages made in respect of an act or omission on the ground that the act or omission was unlawful as a result of section 6(1) of the Human Rights Act 1998.

Textual Amendments

F101Words in Sch. 1ZB para. 33(2) substituted (29.8.2023) by virtue of Financial Services and Markets Act 2023 (c. 29), s. 86(2)(e), Sch. 12 para. 11

Modifications etc. (not altering text)

C69Sch. 1ZB para. 33 applied (with modifications) (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 1 para. 26 (with reg. 7)

Accredited financial investigatorsU.K.

34U.K.For the purposes of this Act anything done by an accredited financial investigator within the meaning of the Proceeds of Crime Act 2002 who—

(a)is, or is acting as, an officer of, or member of the staff of, the PRA, or

(b)is appointed by the PRA under section 167 or 168 to conduct an investigation,

is to be treated as done in the exercise or discharge of a function of the PRA.

Amounts required by rules to be paid to the PRAU.K.

35U.K.Any amount (other than a fee) which is required by rules to be paid to the PRA may be recovered as a debt due to the PRA.]

[F102Engagement with Parliamentary CommitteesU.K.

Textual Amendments

36(1)This paragraph applies where the PRA issues a relevant consultation.U.K.

(2)For the purposes of this paragraph the PRA issues a relevant consultation if it—

(a)publishes a draft of proposed rules under section 138J,

(b)publishes a proposal under a duty imposed by another provision of this Act or by any other enactment, or

(c)publishes other proposals about the exercise of any of its general functions.

(3)The PRA must, as soon as reasonably practicable after issuing the consultation, notify in writing the chair of each relevant Parliamentary Committee that the consultation has been issued.

(4)The notification must specify the parts of the consultation (if any) that address the ways in which the proposals subject to consultation—

(a)advance the PRA’s objectives,

(b)demonstrate that the PRA has had regard to the regulatory principles in section 3B when preparing the proposals, and

(c)engage with matters to which the PRA must have regard under regulations made under section 138EA.

(5)The reference in sub-paragraph (4)(a) to the PRA’s objectives includes, in their application as secondary objectives, the competition objective and the competitiveness and growth objective (see section 2H).

(6)The notification must also specify any other part of the consultation which the PRA considers should be drawn to the attention of the relevant Parliamentary Committees.

(7)References in this paragraph to the relevant Parliamentary Committees are references to—

(a)the Treasury Committee of the House of Commons,

(b)the Committee of the House of Lords which—

(i)is charged with responsibility by that House for the purposes of this paragraph, and

(ii)has notified the PRA that it is a relevant Parliamentary Committee for those purposes, and

(c)the Joint Committee of both Houses which—

(i)is charged with responsibility by those Houses for the purposes of this paragraph, and

(ii)has notified the PRA that it is a relevant Parliamentary Committee for those purposes.

(8)References in this paragraph to the Treasury Committee of the House of Commons—

(a)if the name of that Committee is changed, are references to that Committee by its new name, and

(b)if the functions of that Committee (or substantially corresponding functions) become functions of a different Committee of the House of Commons, are to be treated as references to the Committee by which the functions are exercisable.

(9)Any question arising under sub-paragraph (8) is to be determined by the Speaker of the House of Commons.

37(1)This paragraph applies where—U.K.

(a)the PRA issues a public consultation, and

(b)a Committee of the House of Commons or the House of Lords, or a joint Committee of both Houses, has provided to the PRA representations in response to the consultation.

(2)For the purposes of this paragraph, the PRA issues a public consultation if it publishes the draft of any proposals for the purpose of bringing the proposals to the attention of the public (whether or not under a duty to do so imposed by an enactment).

(3)The PRA must give to the chair of the Committee concerned a written response to the representations.

(4)The duty to respond imposed by sub-paragraph (3) applies only so far as the PRA would not be under a corresponding duty to do so imposed by another enactment.

(5)The PRA is not required under sub-paragraph (3) to provide any information whose publication would in the opinion of the PRA be against the public interest.]

Section 3S

F103SCHEDULE 1AU.K.Further provision about the consumer financial education body

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Section 22(2).

SCHEDULE 2U.K. Regulated Activities

Modifications etc. (not altering text)

C71Sch. 2 applied by 1974 c. 39, s. 16(6E)(c) (as inserted (1.9.2002) by S.I. 2001/544, arts. 2(1)(2)(b), 90(2); S.I. 2001/3538, art. 2(1))

C72Sch. 2 applied by S.I. 2008/570, Sch. para. 11(2) (as substituted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 35)

C73Sch. 2 applied by S.I. 2012/2079 reg. 2(1A) (as inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 44(a)(ii))

C74Sch. 2 applied by S.I. 2001/497, reg. 113(6) (as inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 23(b))

C75Sch. 2 applied by S.S.I. 2011/141, Sch. 4 para. 1(2) (as substituted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 43(a))

C76Sch. 2 applied by S.I. 2001/341, reg. 114(6) (as inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 22(b))

C77Sch. 2 applied by S.I. 2004/400, reg. 5(7) (as inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 25(b))

C78Sch. 2 applied by S.I. 2008/1741, reg. 112(5) (as inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 37(b))

C79Sch. 2 applied by S.I. 2007/2157, reg. 23(6) (as inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 31(5)(b))

C80Sch. 2 applied by 2003 c. 1, s. 554O(6) (as inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 9(c))

C81Sch. 2 applied by S.I. 2013/380, Sch. 6 para. 11(9) (as inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 45(b))

C82Sch. 2 applied by S.I. 2008/700, Sch. para. 12(2) (as substituted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 36)

C83Sch. 2 applied by 2007 c. 3, s. 564B(1A) (as inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 12(b))

C84Sch. 2 applied by 2009 c. 4, s. 502(1A) (as inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), art. 1(2)(6), Sch. para. 16(b))

Part IU.K.[F104Regulated activities: general]

Textual Amendments

GeneralU.K.

1U.K.The matters with respect to which provision may be made under section 22(1) in respect of activities include, in particular, those described in general terms in this Part of this Schedule.

Dealing in investmentsU.K.

2(1)Buying, selling, subscribing for or underwriting investments or offering or agreeing to do so, either as a principal or as an agent.U.K.

(2)In the case of an investment which is a contract of insurance, that includes carrying out the contract.

Arranging deals in investmentsU.K.

3U.K.Making, or offering or agreeing to make—

(a)arrangements with a view to another person buying, selling, subscribing for or underwriting a particular investment;

(b)arrangements with a view to a person who participates in the arrangements buying, selling, subscribing for or underwriting investments.

Deposit takingU.K.

4U.K.Accepting deposits.

Safekeeping and administration of assetsU.K.

5(1)Safeguarding and administering assets belonging to another which consist of or include investments or offering or agreeing to do so.U.K.

(2)Arranging for the safeguarding and administration of assets belonging to another, or offering or agreeing to do so.

Managing investmentsU.K.

6U.K.Managing, or offering or agreeing to manage, assets belonging to another person where—

(a)the assets consist of or include investments; or

(b)the arrangements for their management are such that the assets may consist of or include investments at the discretion of the person managing or offering or agreeing to manage them.

Investment adviceU.K.

7U.K.Giving or offering or agreeing to give advice to persons on—

(a)buying, selling, subscribing for or underwriting an investment; or

(b)exercising any right conferred by an investment to acquire, dispose of, underwrite or convert an investment.

Establishing collective investment schemesU.K.

8U.K.Establishing, operating or winding up a collective investment scheme, including acting as—

(a)trustee of a unit trust scheme;

(b)depositary of a collective investment scheme other than a unit trust scheme; or

(c)sole director of a body incorporated by virtue of regulations under section 262.

Using computer-based systems for giving investment instructionsU.K.

9(1)Sending on behalf of another person instructions relating to an investment by means of a computer-based system which enables investments to be transferred without a written instrument.U.K.

(2)Offering or agreeing to send such instructions by such means on behalf of another person.

(3)Causing such instructions to be sent by such means on behalf of another person.

(4)Offering or agreeing to cause such instructions to be sent by such means on behalf of another person.

[F105Part 1AU.K.Regulated activities: reclaim funds

Textual Amendments

Activities of reclaim fundsU.K.

9A(1)The matters with respect to which provision may be made under section 22(1) in respect of activities include, in particular, any of the activities of a reclaim fund.

(2)“Reclaim fund” has the meaning given by section 5(1) of the Dormant Bank and Building Society Accounts Act 2008.]

Part IIU.K. Investments

GeneralU.K.

10U.K.The matters with respect to which provision may be made under section 22(1) in respect of investments include, in particular, those described in general terms in this Part of this Schedule.

SecuritiesU.K.

11(1)Shares or stock in the share capital of a company.U.K.

(2)“Company” includes—

(a)any body corporate (wherever incorporated), and

(b)any unincorporated body constituted under the law of a country or territory outside the United Kingdom,

other than an open-ended investment company.

Instruments creating or acknowledging indebtednessU.K.

12U.K.Any of the following—

(a)debentures;

(b)debenture stock;

(c)loan stock;

(d)bonds;

(e)certificates of deposit;

(f)any other instruments creating or acknowledging a present or future indebtedness.

Modifications etc. (not altering text)

Government and public securitiesU.K.

13(1)Loan stock, bonds and other instruments—U.K.

(a)creating or acknowledging indebtedness; and

(b)issued by or on behalf of a government, local authority or public authority.

(2)“Government, local authority or public authority” means—

(a)the government of the United Kingdom, of Northern Ireland, or of any country or territory outside the United Kingdom;

(b)a local authority in the United Kingdom or elsewhere;

(c)any international organisation the members of which include the United Kingdom F106....

Textual Amendments

Instruments giving entitlement to investmentsU.K.

14(1)Warrants or other instruments entitling the holder to subscribe for any investment.U.K.

(2)It is immaterial whether the investment is in existence or identifiable.

Certificates representing securitiesU.K.

15U.K.Certificates or other instruments which confer contractual or property rights—

(a)in respect of any investment held by someone other than the person on whom the rights are conferred by the certificate or other instrument; and

(b)the transfer of which may be effected without requiring the consent of that person.

Units in collective investment schemesU.K.

16(1)Shares in or securities of an open-ended investment company.U.K.

(2)Any right to participate in a collective investment scheme.

OptionsU.K.

17U.K.Options to acquire or dispose of property.

FuturesU.K.

18U.K.Rights under a contract for the sale of a commodity or property of any other description under which delivery is to be made at a future date.

Contracts for differencesU.K.

19U.K.Rights under—

(a)a contract for differences; or

(b)any other contract the purpose or pretended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in—

(i)the value or price of property of any description; or

(ii)an index or other factor designated for that purpose in the contract.

Contracts of insuranceU.K.

20U.K.Rights under a contract of insurance, including rights under contracts falling within head C of Schedule 2 to the M1Friendly Societies Act 1992.

Marginal Citations

Participation in Lloyd’s syndicatesU.K.

21(1)The underwriting capacity of a Lloyd’s syndicate.U.K.

(2)A person’s membership (or prospective membership) of a Lloyd’s syndicate.

DepositsU.K.

22U.K.Rights under any contract under which a sum of money (whether or not denominated in a currency) is paid on terms under which it will be repaid, with or without interest or a premium, and either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person receiving it.

[F107Loans and other forms of credit]U.K.

Textual Amendments

F107Sch. 2 para. 23 and crossheading substituted (24.1.2013) by Financial Services Act 2012 (c. 21), ss. 7(3), 122(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(a), Sch. Pt. 1

[F10723(1)Rights under any contract under which one person provides another with credit.U.K.

(2)“Credit” includes any cash loan or other financial accommodation.

(3)“Cash” includes money in any form.

(4)It is immaterial for the purposes of sub-paragraph (1) whether or not the obligation of the borrower is secured on property of any kind.]

[F108Other finance arrangements involving landU.K.

Textual Amendments

23A(1)Rights under any arrangement for the provision of finance under which the person providing the finance either—U.K.

(a)acquires a major interest in land from the person to whom the finance is provided, or

(b)disposes of a major interest in land to that person,

as part of the arrangement.

(2)References in sub-paragraph (1) to a “major interest” in land are to—

(a)in relation to land in England or Wales—

(i)an estate in fee simple absolute, or

(ii)a term of years absolute,

whether subsisting at law or in equity;

(b)in relation to land in Scotland—

(i)the interest of an owner of land, or

(ii)the tenant's right over or interest in a property subject to a lease;

(c)in relation to land in Northern Ireland—

(i)any freehold estate, or

(ii)any leasehold estate,

whether subsisting at law or in equity.

(3)It is immaterial for the purposes of sub-paragraph (1) whether either party acquires or (as the case may be) disposes of the interest in land—

(a)directly, or

(b)indirectly.]

[F109Contracts for hire of goodsU.K.

Textual Amendments

F109 Sch. 2 para. 23B and crossheading inserted (24.1.2013) by Financial Services Act 2012 (c. 21), ss. 7(4), 122(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(a), Sch. Pt. 1

23B(1)Rights under a contract for the bailment or (in Scotland) hiring of goods to a person other than a body corporate.U.K.

(2)“Goods” has the meaning given in section 61(1) of the Sale of Goods Act 1979.

(3)It is immaterial for the purposes of sub-paragraph (1) whether the rights of the person to whom the goods are bailed or hired have been assigned to a body corporate.]

Rights in investmentsU.K.

24U.K.Any right or interest in anything which is an investment as a result of any other provision made under section 22(1).

[F110PART 2AU.K.Regulated activities relating to information about persons' financial standing

Textual Amendments

GeneralU.K.

24AThe matters with respect to which provision may be made under section 22(1A)(a) include, in particular, those described in general terms in this Part of this Schedule.

Providing credit reference servicesU.K.

24BFurnishing persons with information that—

(a)is relevant to the financial standing of persons other than bodies corporate, and

(b)is collected for that purpose by the person furnishing it.

Providing credit information servicesU.K.

24C(1)Taking steps on behalf of a person other than a body corporate in connection with information relevant to that person's financial standing that is or may be held by a [F111person who is carrying on a regulated activity].

F112(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F111Words in Sch. 2 para. 24C(1) substituted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), arts. 1(2)(6), 10(17)(a)

F112Sch. 2 para. 24C(2) omitted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), arts. 1(2)(6), 10(17)(b)

24DGiving advice to a person other than a body corporate in relation to the taking of any steps of the kind mentioned in paragraph 24C(1).]

F113PART 2BU.K.Regulated activities relating to the setting of benchmarks

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Part IIIU.K. Supplemental Provisions

The order-making powerU.K.

25(1)An order under section 22(1) [F114[F115or (1A)]] [F114to (1B)] may—U.K.

(a)provide for exemptions;

(b)confer powers on the Treasury or [F116either regulator];

(c)authorise the making of regulations or other instruments by the Treasury for purposes of, or connected with, any relevant provision;

(d)authorise the making of rules or other instruments by [F116either regulator] for purposes of, or connected with, any relevant provision;

(e)make provision in respect of any information or document which, in the opinion of the Treasury or [F116either regulator], is relevant for purposes of, or connected with, any relevant provision;

(f)make such consequential, transitional or supplemental provision as the Treasury consider appropriate for purposes of, or connected with, any relevant provision [F117, including provision which applies (with or without modification) provision in this Act or other primary or subordinate legislation that relates to investment activity or financial services to a regulated activity that does not relate to investment activity or financial services].

(2)Provision made as a result of sub-paragraph (1)(f) may amend any primary or subordinate legislation, including any provision of, or made under, this Act.

(3)“Relevant provision” means any provision—

(a)of section 22 or this Schedule; or

(b)made under that section or this Schedule.

Textual Amendments

F114Words in Sch. 2 para. 25(1) substituted (E.W.S.) (6.10.2018) by Financial Guidance and Claims Act 2018 (c. 10), ss. 27(13)(a)(i), 37(5); S.I. 2018/1045, reg. 2(a)

F115Words in Sch. 2 para. 25(1) inserted (24.1.2013) by Financial Services Act 2012 (c. 21), ss. 8(2)(a), 122(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(a), Sch. Pt. 1

F116Words in Sch. 2 para. 25(1) substituted (24.1.2013) by Financial Services Act 2012 (c. 21), ss. 8(2)(b), 122(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(a), Sch. Pt. 1

F117Words in Sch. 2 para. 25(1)(f) inserted (E.W.S.) (6.10.2018) by Financial Guidance and Claims Act 2018 (c. 10), ss. 27(13)(a)(ii), 37(5); S.I. 2018/1045, reg. 2(a)

[F118Parliamentary control]U.K.

Textual Amendments

F118Sch. 2 para. 26 and crossheading substituted (24.1.2013) by Financial Services Act 2012 (c. 21), ss. 8(3), 122(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(a), Sch. Pt. 1

[F11826(1)This paragraph applies to any order made under section 22(1) [F119or (1A)] [F119to (1B)] which contains a statement by the Treasury that, in their opinion, the effect (or one of the effects) of the proposed order would be that an activity which is not a regulated activity would become a regulated activity.U.K.

(2)No order to which this paragraph applies may be made unless—

(a)a draft of the order has been laid before Parliament and approved by a resolution of each House, or

(b)sub-paragraph (4) applies.

(3)Sub-paragraph (4) applies if an order to which this paragraph applies also contains a statement that the Treasury are of the opinion that, by reason of urgency, it is necessary to make the order without a draft being so laid and approved.

(4)Where this sub-paragraph applies the order—

(a)must be laid before Parliament after being made, and

(b)ceases to have effect at the end of the relevant period unless before the end of that period the order is approved by a resolution of each House of Parliament (but without that affecting anything done under the order or the power to make a new order).

(5)The “relevant period” is a period of 28 days beginning with the day on which the order is made.

(6)In calculating the relevant period no account is to be taken of any time during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than 4 days.]

Textual Amendments

InterpretationU.K.

27(1)In this Schedule—U.K.

  • “buying” includes acquiring for valuable consideration;

  • “offering” includes inviting to treat;

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

  • “selling” includes disposing for valuable consideration.

(2)In sub-paragraph (1) “disposing” includes—

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

(i)surrendering, assigning or converting those rights; or

(ii)assuming the corresponding liabilities under the contract;

(b)in the case of an investment consisting of rights under other arrangements, assuming the corresponding liabilities under the contract or arrangements;

(c)in the case of any other investment, issuing or creating the investment or granting the rights or interests of which it consists.

(3)In this Schedule references to an instrument include references to any record (whether or not in the form of a document).

Section 31

[F120SCHEDULE 2AU.K.Gibraltar-based persons carrying on activities in the UK

Textual Amendments

PART 1U.K.Interpretation etc

Gibraltar-based personU.K.

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

(2)Those persons are—

(a)an individual,

(b)a body corporate,

(c)a partnership, or

(d)an unincorporated association.

RegulatorsU.K.

2(1)In this Schedule—U.K.

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

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

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

Activities and branchesU.K.

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

(2)For the purposes of this Schedule—

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

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

(3)In this Schedule, “branch” means—

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

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

UK regulators' objectivesU.K.

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

PART 2U.K.Approved activities

Approval of regulated activitiesU.K.

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

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

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

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

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

(d)subject to other limitations.

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

Corresponding activities regulated in GibraltarU.K.

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

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

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

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

(c)subject to other limitations.

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

ObjectivesU.K.

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

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

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

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

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

(e)to protect consumers;

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

(g)to protect public funds;

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

(2)In this paragraph—

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

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

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

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

Alignment of law and practiceU.K.

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

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

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

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

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

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

Co-operationU.K.

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

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

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

(2)The UK entities are—

(a)the Treasury,

(b)the FCA,

(c)the PRA, and

(d)the scheme manager.

(3)The Gibraltar entities are—

(a)the government of Gibraltar, and

(b)the Gibraltar regulator.

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

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

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

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

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

(e)anything else that the Treasury consider relevant.

ConsultationU.K.

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

(a)the government of Gibraltar,

(b)the FCA, and

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

Withdrawal of approvalU.K.

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

(a)revoke other regulations under paragraph 5, or

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

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

(a)revoke other regulations under paragraph 6, or

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

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

Obtaining permission to carry on an approved activityU.K.

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

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

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

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

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

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

Schedule 2A permissionU.K.

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

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

(b)the activity is an approved activity, and

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

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

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

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

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

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

(a)any restrictions included in the permission, and

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

The appropriate UK regulatorU.K.

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

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

(b)the FCA, in any other case.

Notifying the appropriate UK regulatorU.K.

15(1)A notification must—U.K.

(a)name the Gibraltar-based person,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(a)the government of Gibraltar, and

(b)the UK regulators.

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

Considering a notificationU.K.

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

(2)The period for considering a notification is—

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

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

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

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

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

Rejecting a notificationU.K.

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

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

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

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

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

Duties to rejectU.K.

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

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

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

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

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

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

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

(2)In sub-paragraph (1)—

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

(b)“prohibition order” means—

(i)an order under section 56,

(ii)an order under section 143S, or

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

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

(i)for the Gibraltar-based person, or

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

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

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

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

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

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

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

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

(a)the Gibraltar-based person—

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

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

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

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

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

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

(a)its Part 4A permission was cancelled,

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

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

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

PART 4U.K.Variation of permission

Variation of permissionU.K.

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

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

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

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

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

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

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

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

Gibraltar regulator's initiative: notificationU.K.

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

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

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

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

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

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

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

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

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

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

(b)the FCA, in any other case.

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

24(1)A notification must—U.K.

(a)state the desired variation,

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

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

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

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

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

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

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

Gibraltar regulator's initiative: considering a notificationU.K.

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

(2)The period for considering a notification is—

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

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

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

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

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

Gibraltar regulator's initiative: rejecting a notificationU.K.

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

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

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

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

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

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

(a)the Gibraltar-based person, and

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

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

(a)the Gibraltar-based person, and

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

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

UK regulator's initiativeU.K.

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

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

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

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

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

Own-initiative conditionsU.K.

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

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

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

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

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

(b)the Gibraltar regulator—

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

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

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

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

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

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

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

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

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

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

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

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

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

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

UK regulator's initiative: procedureU.K.

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

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

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

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

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

(3)If a UK regulator—

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

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

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

(4)The notice must—

(a)give details of the variation,

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

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

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

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

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

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

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

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

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

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

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

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

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

(c)to rescind the variation,

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

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

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

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

Right to refer matters to the TribunalU.K.

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

PART 5U.K.Cancellation of permission

Cancellation of permissionU.K.

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

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

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

Gibraltar regulator's initiative: notificationU.K.

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

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

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

(b)the Gibraltar regulator withdraws the notification.

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

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

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

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

(b)the FCA, in any other case.

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

34U.K.A notification must—

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

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

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

Gibraltar regulator's initiative: considering a notificationU.K.

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

(2)The period for considering a notification is—

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

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

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

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

Gibraltar regulator's initiative: rejecting a notificationU.K.

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

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

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

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

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

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

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

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

UK regulator's initiativeU.K.

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

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

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

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

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

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

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

(b)the FCA, in any other case.

UK regulator's initiative: procedureU.K.

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

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

Right to refer matters to the TribunalU.K.

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

PART 6U.K.Requirements

RequirementsU.K.

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

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

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

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

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

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

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

Imposing requirements in connection with Part 3 or 4 notificationU.K.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(a)give the person a warning notice,

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

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

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

Right to refer matters to the TribunalU.K.

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

Gibraltar regulator's initiative: notificationU.K.

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

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

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

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

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

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

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

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

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

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

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

(b)the FCA, in any other case.

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

46U.K.A notification must—

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

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

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

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

Gibraltar regulator's initiative: considering a notificationU.K.

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

(2)The period for considering a notification is—

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

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

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

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

Gibraltar regulator's initiative: rejecting a notificationU.K.

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

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

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

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

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

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

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

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

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

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

(2)The FCA may—

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

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

(c)cancel such a requirement.

(3)The PRA may—

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

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

(c)cancel such a requirement.

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

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

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

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

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

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

(3)If a UK regulator—

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

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

it must give the person a written notice.

(4)The notice must—

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

UK regulator's initiative: procedure for cancellationU.K.

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

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

Right to refer matters to the TribunalU.K.

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

Assets requirementsU.K.

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

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

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

(2)If a UK regulator—

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

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

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

(3)Those effects are that—

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

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

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

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

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

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

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

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

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

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

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

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

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

Further provision about requirementsU.K.

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

(a)to take specified action, or

(b)to refrain from taking specified action.

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

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

(a)the person's group, or

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

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

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

Contravention of requirement imposed under this PartU.K.

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

(a)make a person guilty of an offence,

(b)make a transaction void or unenforceable, or

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

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

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

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

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

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

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

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

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

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

PART 7U.K.Changes

Duty to notify UK regulators of changesU.K.

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

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

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

(a)the Gibraltar regulator;

(b)the UK regulator that gave the direction.

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

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

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

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

(6)A direction under this paragraph—

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

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

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

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

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

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

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

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

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

Directions about information to be included in notificationsU.K.

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

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

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

(4)A direction under this paragraph—

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

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

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

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

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

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

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

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

Transition on withdrawal of approval of regulated activityU.K.

58(1)Sub-paragraph (2) applies where—U.K.

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

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

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

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

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

(c)subject to any restriction under paragraph 60.

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

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

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

(4)Those events are—

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

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

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

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

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

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

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

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

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

59(1)Sub-paragraph (2) applies where—U.K.

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

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

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

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

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

(c)subject to any restriction under paragraph 60.

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

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

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

(4)Those events are—

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

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

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

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

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

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

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

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

Restricting transitional permissionU.K.

60(1)Sub-paragraph (2) applies where—U.K.

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

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

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

(a)for the performance of a protected contract;

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

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

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

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

(4)The notice must—

(a)give details of the proposed decision, and

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

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

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

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

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

(7)A restriction notice must—

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

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

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

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

(9)In this paragraph—

  • “the appropriate UK regulator” means—

    (a)

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

    (b)

    in any other case, the FCA;

  • “enactment” includes—

    (a)

    assimilated legislation,

    (b)

    an enactment comprised in subordinate legislation,

    (c)

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

    (d)

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

    (e)

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

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

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

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

Directions about protected contractsU.K.

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

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

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

(a)different activities,

(b)different contracts or descriptions of contract, or

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

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

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

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

Right to refer matters to the TribunalU.K.

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

Further powersU.K.

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

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

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

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

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

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

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

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

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

Transition on cancellation of Schedule 2A permissionU.K.

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

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

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

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

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

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

(3)The purposes are—

(a)for the performance of a protected contract;

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

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

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

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

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

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

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

(6)In this paragraph—

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

  • “protected contract” means—

    (a)

    an existing contract, or

    (b)

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

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

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

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

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

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

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

Transition on cancellation of Gibraltar permissionU.K.

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

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

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

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

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

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

(3)The purposes are—

(a)for the performance of a protected contract;

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

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

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

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

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

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

(5)In this paragraph—

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

  • “protected contract” means—

    (a)

    an existing contract, or

    (b)

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

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

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

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

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

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

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

The appropriate UK regulatorU.K.

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

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

(b)the FCA, in any other case.

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

Directions about protected contractsU.K.

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

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

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

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

(a)different activities,

(b)different contracts or descriptions of contract, or

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

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

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

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

End of transitionU.K.

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

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

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

(2)Those events are—

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

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

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

(d)the person obtains (as appropriate)—

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

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

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

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

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

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

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

End of transition: procedureU.K.

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

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

Right to refer matters to the TribunalU.K.

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

PART 11U.K.Policy statements

Policy statementsU.K.

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

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

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

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

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

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

Policy statements: procedureU.K.

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

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

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

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

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

(a)the statement, and

(b)an account in general terms of—

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

(ii)its response to them.

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

(4)A UK regulator—

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

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

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

PART 12U.K.Consultation etc by UK regulators

FCA's duties to consult the PRAU.K.

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

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

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

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

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

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

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

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

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

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

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

FCA's duties to obtain consent from the PRAU.K.

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

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

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

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

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

FCA's duties to inform the PRAU.K.

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

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

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

(c)paragraph 36(4);

(d)paragraph 48(4).

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

PRA's duties to consult the FCAU.K.

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

(a)giving a confirmation notice under paragraph 16;

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

(c)giving a confirmation notice under paragraph 25;

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

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

(f)giving a confirmation notice under paragraph 35;

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

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

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

(j)giving a confirmation notice under paragraph 47;

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

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

(m)giving a notice under paragraph 60;

(n)giving a direction under paragraph 61;

(o)giving a direction under paragraph 67.

(2)The PRA must—

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

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

PRA's duty to obtain consent from the FCAU.K.

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

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

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

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

PRA's duties to inform the FCAU.K.

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

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

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

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

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

(c)paragraph 36(5);

(d)paragraph 48(5).

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

UK regulators' duties to inform the Gibraltar regulatorU.K.

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

(a)paragraph 16,

(b)paragraph 25,

(c)paragraph 35, or

(d)paragraph 47.

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

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

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

(c)imposing a requirement under paragraph 41, or

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

PART 13U.K.Co-operation and Assistance

Duties to co-operateU.K.

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

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

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

(2)Those purposes are—

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

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

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

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

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

(c)any guidance published by the Treasury.

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

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

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

Publication and review of arrangements for co-operationU.K.

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

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

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

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

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

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

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

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

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

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

Provision of reports to assist the TreasuryU.K.

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

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

(a)this Schedule, or

(b)section 32A.

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

(a)must be made in writing, and

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

PART 14U.K.Special cases

Gibraltar-based individuals carrying on insurance distribution activitiesU.K.

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

(a)is normally resident in Gibraltar, and

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

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

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

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

Sections 31(1)(b) and 37.

SCHEDULE 3U.K. EEA Passport Rights

Modifications etc. (not altering text)

C92Sch. 3 extended (with modifications) (1.12.2001) by S.I. 2001/2636, arts. 1(2)(b), 25-27; S.I. 2001/3538, art. 2(1)

Sch. 3 extended (with modifications) (Gibraltar) (5.10.2001 for specified purposes, 1.12.2001 in so far as not already in force) by S.I. 2001/3084, arts. 1(1), 2-4 (as amended (16.6.2014) by The Alternative Investment Fund Managers Order 2014 (S.I. 2014/1292), arts. 1(2), 3 (which amending S.I. is itself amended by S.I. 2014/1313, arts. 1, 2(a)); and as amended (31.12.2020) by S.I. 2019/589, regs. 1(3), 5-9 (with reg. 12) (as amended by S.I. 2020/1274, regs. 1, 2)); S.I. 2001/3538, art. 2(1)

Sch. 3 modified (1.12.2001) by S.I. 2001/3592, arts. 1(2), 114(3)(b), 128(3)(b) (with art. 23(2))

Part IU.K. Defined terms

The single market directivesU.K.

1U.K.“The single market directives” means—

[F121(a)the [F122capital requirements directive];]

[F123(c)the Solvency 2 Directive;]

F124(ca). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d)the [F125markets in financial instruments directive][F126; F127. . .

(e)[F128the insurance distribution directive]][F129; F130...

(f)the UCITS directive] [F131; F132...

(g)the alternative investment fund managers directive] [F133; and

(h)the mortgages directive.]

Textual Amendments

F121Sch. 3 para. 1(a) substituted (22.11.2000) for Sch. 3 para. 1(a)(b) by S.I. 2000/2952, reg. 8(5)(a)

F124Sch. 3 para. 1(ca) omitted (1.1.2016) by virtue of The Solvency 2 Regulations 2015 (S.I. 2015/575), reg. 1(2), Sch. 1 para. 17(2)(b)

F125Words in Sch. 3 para. 1(d) substituted (1.4.2007 for certain purposes, otherwise 1.11.2007) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 2

F129Sch. 3 para. 1(f) and preceding word inserted (13.2.2004) after Sch. 3 para. 1(e) by The Collective Investment Schemes (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/2066), reg. 2(2)(a)(i)

F132Word in Sch. 3 para. 1(f) omitted (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by virtue of The Mortgage Credit Directive Order 2015 (S.I. 2015/910), art. 1(5), Sch. 1 para. 1(10)(a)(i) (with Pt. 4)

F133Sch. 3 para. 1(h) and word inserted (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), art. 1(5), Sch. 1 para. 1(10)(a)(ii) (with Pt. 4)

Commencement Information

I1Sch. 3 Pt. I para. 1 wholly in force at 1.12.2001; Sch. 3 Pt. I para. 1 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. I para. 1 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. I para. 1 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; Sch. 3 Pt. I para. 1 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

The banking co-ordination directivesU.K.

F134 2 U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

[F135The Solvency 2 DirectiveU.K.

Textual Amendments

F135Sch. 3 para. 3 and cross-heading substituted (1.1.2016) by The Solvency 2 Regulations 2015 (S.I. 2015/575), reg. 1(2), Sch. 1 para. 17(3)

3U.K.“The Solvency 2 Directive” means Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II).]

[F136The reinsurance directive]U.K.

Textual Amendments

F136Sch. 3 para. 3A and cross-heading inserted (10.12.2007) by The Reinsurance Directive Regulations 2007 (S.I. 2007/3253), reg. 2(1), Sch. 1 para. 6(b)

F1373AU.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F137Sch. 3 para. 3A omitted (1.1.2016) by virtue of The Solvency 2 Regulations 2015 (S.I. 2015/575), reg. 1(2), Sch. 1 para. 17(4)

The investment services directiveU.K.

4U.K.F138. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

[F139The insurance distribution directiveU.K.

Textual Amendments

4AU.K.“The insurance distribution directive” means Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution (recast) as amended by Directive (EU) 2018/411 of the European Parliament and of the Council of 14 March 2018].

[F140The UCITS directiveU.K.

Textual Amendments

[F1414BU.K. “The UCITS directive ” means the Directive of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (No 2009/65/EC) [F142, as amended by Directive 2014/91/EU of the European Parliament and of the Council of 23rd July 2014].]]

Textual Amendments

F141Sch. 3 para. 4B substituted (1.7.2011) by The Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613), reg. 2(33)(a)

[F143The markets in financial instruments directive]U.K.

Textual Amendments

[F1444CU.K.“The markets in financial instruments directive” means Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments.]

Textual Amendments

F144Sch. 3 para. 4C substituted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 54(2) (with reg. 7)

The emission allowance auctioning regulationU.K.

[F1454D. “The emission allowance auctioning regulation” means Commission Regulation ( EU ) No 1031/2010 of 12 November 2010 on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to Directive 2003/87/ EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community.]

Textual Amendments

[F146The alternative investment fund managers directiveU.K.

Textual Amendments

4E.U.K.“The alternative investment fund managers directive” means Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers.]

[F147The mortgages directiveU.K.

Textual Amendments

F147Sch. 3 para. 4F and cross-heading inserted (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), art. 1(5), Sch. 1 para. 1(10)(b) (with Pt. 4)

4F.U.K.“The mortgages directive” means Directive 2014/17/EU of the European Parliament and of the Council of 4th February 2014 on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010.]

EEA firmU.K.

5U.K.“EEA firm” means any of the following if it does not have its [F148relevant office] in the United Kingdom—

(a)an investment firm (as defined in [F149Article 4.1.1 of the markets in financial instruments directive]) which is authorised (within the meaning of [F150Article 5]) by its home state regulator;

[F151(b)a credit institution (as defined in Article 4(1)(1) of the capital requirements regulation) which is authorised (within the meaning of Article 8 of the capital requirements directive) by its home state regulator;]

[F152(c)a financial institution (as defined in Article 4(1)(26) of the capital requirements regulation) which is a subsidiary of the kind mentioned in Article 34 of the capital requirements directive and which fulfils the conditions of that Article;]

[F153(d)an undertaking pursuing the activity of direct insurance (within the meaning of Article 2 of the Solvency 2 Directive) which has received authorisation under Article 14 of that directive from its home state regulator;

(da)an undertaking pursuing the activity of reinsurance (within the meaning of Article 2 of the Solvency 2 Directive) as a reinsurance undertaking which has received authorisation under Article 14 of that directive from its home state regulator;]

[F154(e)an insurance intermediary (as defined in Article 2.1(3) of the insurance distribution directive), an ancillary insurance intermediary (as defined in Article 2.1(4) of that directive) or a reinsurance intermediary (as defined in Article 2.1(5) of that directive), which is registered with its home state regulator under Article 3 of that directive;]

[F155(f) a management company (as defined in paragraph 11B) which is authorised (within the meaning of Article 6 of the UCITS directive) by its home state regulator] [F156; F157...

(g)a person who has received authorisation under Article 18.2 of the emission allowance auctioning regulation] [F158; F159...

(h)an AIFM (as defined in Article 4.1(b) of the alternative investment fund managers directive) which is authorised (in accordance with [F160Article 6.1 of] that directive) by its home state regulator] [F161; or

(i)a mortgage intermediary which is admitted (in accordance with Article 29(1) of the mortgages directive) by its home state regulator to carry out all or part of the credit intermediation activities set out in Article 4(5) of that directive or to provide advisory services (as defined in Article 4(21) of that directive).]

Textual Amendments

F148Words in Sch. 3 para. 5 substituted (14.1.2005) by The Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473). {reg. 2(c)(i)}

F149Words in Sch. 3 para. 5(a) substituted (1.4.2007 for certain purposes, otherwise 1.11.2007) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 4(a)

F150Words in Sch. 3 para. 5(a) substituted (1.4.2007 for certain purposes, otherwise 1.11.2007) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(4), Sch. 4 para. 4(b)

F153Sch. 3 para. 5(d)(da) substituted for Sch. 3 para. 5(d)(da) (1.1.2016) by The Solvency 2 Regulations 2015 (S.I. 2015/575), reg. 1(2), Sch. 1 para. 17(5)

F155Sch. 3 para. 5(f) substituted (1.7.2011) by The Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613), reg. 2(33)(b)

F159Word in Sch. 3 para. 5(g) omitted (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by virtue of The Mortgage Credit Directive Order 2015 (S.I. 2015/910), art. 1(5), Sch. 1 para. 1(10)(c)(i) (with Pt. 4)

F160Words in Sch. 3 para. 5(h) omitted (coming into force in accorance with reg. 1(3) of the amending S.I.) by The Alternative Investment Fund Managers (Amendment) Regulations 2013 (S.I. 2013/1797), reg. 1(3), Sch. 1 para. 1(5)(a)

F161Sch. 3 para. 5(i) and word inserted (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), art. 1(5), Sch. 1 para. 1(10)(c)(ii) (with Pt. 4)

Commencement Information

I2Sch. 3 Pt. I para. 5 wholly in force at 1.12.2001; Sch. 3 Pt. I para. 5 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. I para. 5 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. I para. 5 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2 Sch.; Sch. 3 Pt. I para. 5 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

[F1625AU.K. In paragraph 5, “relevant office” means—

(a)in relation to a firm falling within sub-paragraph (e) [F163or (i)] of that paragraph which has a registered office, its registered office;

[F164(aa)in relation to a firm falling within sub-paragraph (h) of that paragraph, its registered office;]

(b)in relation to any other firm, its head office.]

Textual Amendments

F163Words in Sch. 3 para. 5A(a) inserted (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), art. 1(5), Sch. 1 para. 1(10)(d) (with Pt. 4)

EEA authorisationU.K.

F165 6U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

EEA rightU.K.

7U.K.“EEA right” means the entitlement of a person to establish a branch, or provide services, in an EEA State other than that in which he has his [F166relevant office]—

(a)in accordance with the Treaty as applied in the EEA; and

(b)subject to the conditions of the relevant single market directive [F167or, as the case may be, the emission allowance auctioning regulation].

Textual Amendments

Commencement Information

I3Sch. 3 Pt. I para. 7 wholly in force at 1.12.2001; Sch. 3 Pt. I para. 7 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. I para. 7 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. I para. 7 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; Sch. 3 Pt. I para. 7 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

[F1687AU.K. In paragraph 7, “relevant office” means—

(a)in relation to a person who has a registered office and whose entitlement is subject to the conditions of the [F169insurance distribution directive] [F170or the mortgages directive], his registered office;

[F171(aa)[F172in relation to a person whose entitlement is subject to the conditions of the alternative investment fund managers directive, its registered office;]]

[F172(aa)in relation to a person whose entitlement derives from the alternative investment fund managers directive—

(i)if the person’s registered office is in an EEA State, its registered office;

(ii)if the person’s registered office is not in an EEA State, the registered office or branch of its legal representative (as defined in Article 4(1)(u) of the alternative investment fund managers directive);]

(b)in relation to any other person, his head office.]

Textual Amendments

F170Words in Sch. 3 para. 7A(a) inserted (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3 2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), art. 1(5), Sch. 1 para. 1(10)(e) (with Pt. 4)

F172Sch. 3 para. 7AA(aa) substituted (coming into force in accordance with reg. 1(3) of the amending S.I.) by The Alternative Investment Fund Managers (Amendment) Regulations 2013 (S.I. 2013/1797), reg. 1(3), Sch. 1 para. 1(5)(b) (as amended by S.I. 2019/328, regs. 1(3), 20(2)(d) (as amended by S.I. 2019/325, reg. 58))

EEA StateU.K.

[F1738U.K. “EEA State ” has the meaning given by Schedule 1 to the Interpretation Act 1978.]

Textual Amendments

Commencement Information

I4Sch. 3 Pt. I para. 8 wholly in force at 1.12.2001; Sch. 3 Pt. I para. 8 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. I para. 8 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. I para. 8 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; Sch. 3 Pt. I para. 8 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

Home state regulatorU.K.

9U.K.“Home state regulator” means the competent authority (within the meaning of the relevant single market directive [F174or, as the case may be, the emission allowance auctioning regulation]) of an EEA State (other than the United Kingdom) in relation to the EEA firm concerned.

Textual Amendments

Commencement Information

I5Sch. 3 Pt. I para. 9 wholly in force at 1.12.2001; Sch. 3 Pt. I para. 9 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. I para. 9 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3; Sch. 3 Pt. I para. 9 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; Sch. 3 Pt. I para. 9 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

UK firmU.K.

10U.K.“UK firm” means a person whose [F175relevant office] is in the UK and who has an EEA right to carry on activity in an EEA State other than the United Kingdom.

Textual Amendments

Commencement Information

I6Sch. 3 Pt. I para. 10 wholly in force at 1.12.2001; Sch. 3 Pt. I para. 10 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. I para. 10 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b)(c), Sch. Pts. 2, 3 Sch. 3 Pt. I para. 10 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2 Sch.; Sch. 3 para. 10 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

[F17610AU.K. In paragraph 10, “relevant office” means—

(a)in relation to a firm whose EEA right derives from the [F177insurance distribution directive] and which has a registered office, its registered office;

[F178[F179(aa)in relation to a firm whose EEA right derives from the alternative investment fund managers directive, its registered office;]]

[F179(aa)in relation to a firm whose EEA right derives from the alternative investment fund managers directive—

(i)if the firm’s registered office is in an EEA State, its registered office;

(ii)if the firm’s registered office is not in an EEA State, the registered office or branch of its legal representative (as defined in Article 4(1)(u) of the alternative investment fund managers directive);]

(b)in relation to any other firm, its head office.]

Textual Amendments

F179Sch. 3 para. 10A(aa) substituted (coming into force in accordance with reg. 1(3) of the amending S.I.) by The Alternative Investment Fund Managers (Amendment) Regulations 2013 (S.I. 2013/1797), reg. 1(3), Sch. 1 para. 1(5)(c)

[F180UK investment firmU.K.

Textual Amendments

10BU.K.”UK investment firm” means a UK firm—

(a)which is an investment firm, and

(b)whose EEA right derives from the markets in financial instruments directive.]

Host state regulatorU.K.

11U.K.“Host state regulator” means the competent authority (within the meaning of the relevant single market directive [F181or, as the case may be, the emission allowance auctioning regulation]) of an EEA State (other than the United Kingdom) in relation to a UK firm’s exercise of EEA rights there.

Textual Amendments

Commencement Information

I7Sch. 3 Pt. I para. 11 wholly in force at 1.12.2001; Sch. 3 Pt. I para. 11 not in force at Royal Assent see s. 431(2); Sch. 3 Pt. I para. 11 in force for certain purposes (25.2.2001) by S.I. 2001/516, art. 2 Sch. Pts. 2, 3; Sch. 3 Pt. I para. 11 in force for specified purposes (18.6.2001) by S.I. 2001/1820, art. 2 Sch.; Sch. 3 Pt. I para. 11 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

[F182Tied agentU.K.

Textual Amendments

11AU.K.”Tied agent” has the meaning given in Article [F1834.1.29] of the markets in financial instruments directive.]

Textual Amendments

F183Word in Sch. 3 para. 11A substituted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 2 para. 54(3) (with reg. 7)

[F184Management companyU.K.

Textual Amendments

F184Sch. 3 paras. 11B, 11C inserted (1.7.2011) by The Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613), reg. 2(33)(c)

11BU.K. “Management company” has the meaning given in Article 2.1(b) of the UCITS directive.

UCITS]U.K.

F18511CU.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F185Sch. 3 para. 11C omitted (28.6.2018 for specified purposes, 21.7.2018 in so far as not already in force) by virtue of The Money Market Funds Regulations 2018 (S.I. 2018/698), regs. 1(2), 2(19)

[F186EEAAIFM]U.K.

Textual Amendments

F18711D.U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F188Part IIU.K. Exercise of Passport Rights by EEA Firms

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F189Part IIIU.K. Exercise of Passport Rights by UK Firms

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Section 31(1)(c).

F190SCHEDULE 4U.K. Treaty Rights

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Section 36.

SCHEDULE 5U.K. Persons Concerned in Collective Investment Schemes

AuthorisationU.K.

1F191(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

F191(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)An authorised open-ended investment company is an authorised person.

[F192(4)A body—

(a)incorporated by virtue of regulations made under section 1 of the Open-Ended Investment Companies Act (Northern Ireland) 2002 in respect of which an authorisation order is in force, and

[F193(b)which is a UCITS as defined in section 236A,]

is an authorised person.

(5)“Authorisation order” means an order made under (or having effect as made under) any provision of those regulations which is made by virtue of section 1(2)(1) of that Act (provision corresponding to Chapter 3 of Part 17 of the Act).]

Textual Amendments

PermissionU.K.

2F194(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

(2)A person authorised as a result of paragraph 1(3) [F195or (4)] has permission to carry on, so far as it is a regulated activity [F196other than the activity of managing an AIF]—

(a)the operation of the scheme;

(b)any activity in connection with, or for the purposes of, the operation of the scheme.

Textual Amendments

[F197Section 55B]

SCHEDULE 6U.K. Threshold Conditions

Textual Amendments

Modifications etc. (not altering text)

C93Sch. 6 modified (3.9.2001) by S.I. 2001/2507, arts. 1(1), 3(1); S.I. 2001/2632, art. 2(2), Sch. Pt. 2

[F198PART 1U.K.Introduction

Textual Amendments

1A.(1)In this Schedule—U.K.

  • “assets” includes contingent assets;

  • “consolidated supervision” has the same meaning as in section 3M;

  • “consumers” has the meaning given in section 425A;

  • “financial crime” is to be read with section 1H(3);

  • “functions”, in relation to the FCA or the PRA, means functions conferred on that regulator by or under this Act;

  • [F199“implementing provisions” has the same meaning as in section 3M;]

  • “liabilities” includes contingent liabilities;

  • “relevant directives” has the same meaning as in section 3M;

  • [F200“relevant implementing provisions” means—

    (a)

    any implementing provision contained in subordinate legislation (within the meaning of the Interpretation Act 1978) made otherwise than by any of the following–

    (i)

    statutory instrument, and

    (ii)

    statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979 (S.I. 1979/1573 (N.I. 12)); or

    (b)

    any other implementing provision (as amended from time to time));]

  • “Society” means the society incorporated by Lloyd’s Act 1871 by the name of Lloyd’s;

  • “subsidiary undertaking” includes all the instances mentioned in Article 1(1) and (2) of the Seventh Company Law Directive in which an entity may be a subsidiary of an undertaking.

(2)For the purposes of this Schedule, the “non-financial resources” of a person include any systems, controls, plans or policies that the person maintains, any information that the person holds and the human resources that the person has available.

(3)In this Schedule, References to “integrity” of the UK financial system are to be read in accordance section 1D(2).

(4)References to the failure of a person are to be read in accordance with section 2J(3) and (4).

Textual Amendments

PART 1BU.K.Part 4A permission: authorised persons who are not PRA-authorised persons

IntroductionU.K.

2A.If the person concerned (“A”) carries on, or is seeking to carry on, regulated activities which do not consist of or include a PRA-regulated activity, the threshold conditions that are relevant to the discharge by the FCA of its functions in relation to A are the conditions set out in paragraphs 2B to 2F.

Location of officesU.K.

2B.(1)Unless sub-paragraph (3) [F201, (4)(a) or (7)] applies, if A is a body corporate incorporated in the United Kingdom—

(a)A’s head office, and

(b)if A has a registered office, that office,

must be in the United Kingdom.

(2)If A is not a body corporate but A’s head office is in the United Kingdom, A must carry on business in the United Kingdom.

(3)If—

(a)A is seeking to carry on, or is carrying on, a regulated activity which is any of the investment services and activities,

(b)A is a body corporate with no registered office, and

(c)A’s head office is in the United Kingdom,

A must carry on business in the United Kingdom.

(4)If A is seeking to carry on, or is carrying on, an insurance [F202distribution] activity—

(a)where A is a body corporate incorporated in the United Kingdom, A’s registered office, or if A has no registered office, A’s head office, must be in the United Kingdom;

(b)where A is an individual, A is to be treated for the purposes of sub-paragraph (2) as having a head office in the United Kingdom if A is resident in the United Kingdom.

(5)“Insurance [F203distribution] activity” means any of the following activities—

(a)dealing in rights under a contract of insurance as agent;

(b)arranging deals in rights under a contract of insurance;

(c)assisting in the administration and performance of a contract of insurance;

(d)advising on buying or selling rights under a contract of insurance;

(e)agreeing to do any of the activities specified in paragraphs (a) to (d).

(6)Sub-paragraph (5) must be read with—

(a)section 22,

(b)any relevant order under that section, and

(c)Schedule 2.

[F204(7)If A is seeking to carry on, or is carrying on, the regulated activity of managing an AIF and is, or upon being granted Part 4A permission to carry on that regulated activity would be, [F205a full-scope UKAIFM, A’s head office and registered office must be in the United Kingdom] [F205a full-scope UKAIFM—

(a)A’s head office and registered office must be in the United Kingdom, or

(b)A’s registered office must be in a third country].]

Textual Amendments

F205Words in Sch. 6 para. 2B(7) substituted (coming into force in accordance with reg. 1(3) of the amending S.I.) by The Alternative Investment Fund Managers (Amendment) Regulations 2013 (S.I. 2013/1797), reg. 1(3), Sch. 2 para. 1(6) (as amended by S.I. 2019/328, regs. 1(3), 20(2)(e) (as amended by S.I. 2019/325, reg. 58))

Effective supervisionU.K.

2C.(1)A must be capable of being effectively supervised by the FCA having regard to all the circumstances including—

(a)the nature (including the complexity) of the regulated activities that A carries on or seeks to carry on;

(b)the complexity of any products that A provides or will provide in carrying on those activities;

(c)the way in which A’s business is organised;

(d)if A is a member of a group, whether membership of the group is likely to prevent the FCA’s effective supervision of A;

(e)whether A is subject to consolidated supervision required under any [F206relevant implementing provisions];

(f)if A has close links with another person (“CL”)—

(i)the nature of the relationship between A and CL,

(ii)whether those links are or that relationship is likely to prevent the FCA’s effective supervision of A, and

(iii)if CL is subject to the laws, regulations or administrative provisions of a [F207country or territory outside the United Kingdom] (“the foreign provisions”), whether those foreign provisions, or any deficiency in their enforcement, would prevent the FCA’s effective supervision of A.

[F208(1A)Paragraphs (a), (b) and (e) of sub-paragraph (1) do not apply where the only regulated activities that the person carries on, or seeks to carry on, are—

(a)relevant credit activities, and

(b)if any, activities to which, by virtue of section 39(1D), sections 20(1) and (1A) and 23(1A) do not apply when carried on by the person.]

(2)A has close links with CL if—

(a)CL is a parent undertaking of A,

(b)CL is a subsidiary undertaking of A,

(c)CL is a parent undertaking of a subsidiary undertaking of A,

(d)CL is a subsidiary undertaking of a parent undertaking of A,

(e)CL owns or controls 20% or more of the voting rights or capital of A, or

(f)A owns or controls 20% or more of the voting rights or capital of CL.

Textual Amendments

Appropriate resourcesU.K.

2D.(1)The resources of A must be appropriate in relation to the regulated activities that A carries on or seeks to carry on.

(2)The matters which are relevant in determining whether A has appropriate resources include—

(a)the nature and scale of the business carried on, or to be carried on, by A;

(b)the risks to the continuity of the services provided by, or to be provided by, A;

(c)A’s membership of a group and any effect which that membership may have.

(3)[F209Except in a case within sub-paragraph (3A), the matters] which are relevant in determining whether A has appropriate financial resources include—

(a)the provision A makes and, if A is a member of a group, which other members of the group make, in respect of liabilities;

(b)the means by which A manages and, if A is a member of a group, by which other members of the group manage, the incidence of risk in connection with A’s business.

[F210(3A)Where the only regulated activities that A carries on or seeks to carry on are—

(a)relevant credit activities, and

(b)if any, activities to which, by virtue of section 39(1D), sections 20(1) and (1A) and 23(1A) do not apply when carried on by A,

A has adequate financial resources if A is capable of meeting A’s debts as they fall due.]

(4)The matters which are relevant in determining whether A has appropriate non-financial resources include—

(a)the skills and experience of those who manage A’s affairs;

(b)whether A’s non-financial resources are sufficient to enable A to comply with—

(i)requirements imposed or likely to be imposed on A by the FCA in the exercise of its functions, or

(ii)any other requirement in relation to whose contravention the FCA would be the appropriate regulator for the purpose of any provision of Part 14 of this Act.

Textual Amendments

F209Words in Sch. 6 para. 2D(3) substituted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 (S.I. 2013/1881), arts. 1(2)(6), 10(19)(b)(i)

F210Sch. 6 para. 2D(3A) substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), arts. 1(3)(4), 5(3)

SuitabilityU.K.

2E.A must be a fit and proper person having regard to all the circumstances, including—

(a)A’s connection with any person;

(b)the nature (including the complexity) of the regulated activities that A carries on or seeks to carry on;

(c)the need to ensure that A’s affairs are conducted in an appropriate manner, having regard in particular to the interests of consumers and the integrity of the UK financial system;

(d)whether A has complied and is complying with requirements imposed by the FCA in the exercise of its functions, or requests made by the FCA, relating to the provision of information to the FCA and, where A has so complied or is so complying, the manner of that compliance;

(e)whether those who manage A’s affairs have adequate skills and experience and have acted and may be expected to act with probity;

(f)whether A’s business is being, or is to be, managed in such a way as to ensure that its affairs will be conducted in a sound and prudent manner;

(g)the need to minimise the extent to which it is possible for the business carried on by A, or to be carried on by A, to be used for a purpose connected with financial crime.

Business modelU.K.

2F.(1)A’s business model (that is, A’s strategy for doing business) must be suitable for a person carrying on the regulated activities that A carries on or seeks to carry on.

(2)The matters which are relevant in determining whether A satisfies the condition in sub-paragraph (1) include—

(a)whether the business model is compatible with A’s affairs being conducted, and continuing to be conducted, in a sound and prudent manner;

(b)the interests of consumers;

(c)the integrity of the UK financial system.

(3)[F211This paragraph does not apply where the only regulated activities that the person carries on, or seeks to carry on, are—

(a)relevant credit activities, and

(b)if any, activities to which, by virtue of section 39(1D), sections 20(1) and (1A) and 23(1A) do not apply when carried on by the person.]

Textual Amendments

F211Sch. 6 para. 2F(3) substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), arts. 1(3)(4), 5(4)

InterpretationU.K.

[F2122G.(1)In this Part of this Schedule, each of the following is a “relevant credit activity”—

(a)an activity of the kind specified by article 36A of the Regulated Activities Order (credit broking) when carried on in the case specified in sub-paragraph (3), (4) or (5),

(b)an activity of the kind specified by article 39D of that Order (debt adjusting) when carried on—

(i)in the case specified in sub-paragraph (3), by a person who also carries on an activity of the kind specified by paragraph (a),

[F213(ii)by a person in connection with an activity of the kind specified by paragraph (d) or (e) which the person also carries on,]

(iii)by a not-for-profit body,

(c)an activity of the kind specified by article 39E of that Order (debt-counselling) when carried on—

(i)in the case specified in sub-paragraph (3), by a person who also carries on an activity of the kind specified by paragraph (a),

[F214(ii)by a person in connection with an activity of the kind specified by paragraph (d) or (e) which the person also carries on,]

(iii)by a not-for-profit body,

(d)an activity of the kind specified by article 60B of that Order (regulated credit agreements) if—

(i)it is carried on by a supplier,

(ii)no charge (by way of interest or otherwise) is payable by the borrower in connection with the provision of credit under the regulated credit agreement, and

(iii)the regulated credit agreement is not a hire-purchase agreement or a conditional sale agreement,

[F215(da)an activity of the kind specified by article 60B of that Order (regulated credit agreements) if carried on by a local authority,]

(e)an activity of the kind specified by article 60N of that Order (regulated consumer hire agreements),

(f)an activity of the kind specified by article 89A of that Order (providing credit information services) where carried on by a person [F216in connection with an activity of the kind specified by any of paragraphs (a) to (e) which the person also carries on], or

(g)an activity of the kind specified by article 64 of that Order (agreeing to carry on specified kinds of activity) so far as relevant to any of the activities specified in paragraphs (a) to (f).

(2)[F217Except where the activity is carried on by a not-for-profit body,] an activity is not a relevant credit activity for the purposes of—

(a)paragraph (a) to (e) of sub-paragraph (1), and

(b)paragraph (g) of that sub-paragraph so far at it relates to activities of the kind specified by any of those paragraphs,

if it relates to an agreement under which the obligation of the borrower to repay [F218or the hirer to pay] is secured, or is to be secured, by a legal mortgage on land.

(3)The case specified in this sub-paragraph is where a supplier (other than a domestic premises supplier) carries on the activity for the purposes of, or in connection with, the sale of goods or supply of services by the supplier to a customer (who need not be the borrower under the credit agreement or the hirer under the consumer hire agreement).

[F219(3A)For the purposes of sub-paragraph (3), “domestic premises supplier” means a supplier who—

(a)sells, offers to sell or agrees to sell goods, or

(b)offers to supply services or contracts to supply services,

to customers who are individuals while the supplier, or the supplier’s representative, is physically present at the dwelling of the individual (but see sub-paragraph (3B)).

(3B)A supplier who acts as described in sub-paragraph (3A) on an occasional basis only will not be a domestic premises supplier unless the supplier indicates to the public at large, or any section of the public, the supplier’s willingness to attend (in person or through a representative) the dwelling of potential customers in order to carry on any of the activities mentioned in sub-paragraph (3A)(a) or (b).]

(4)The case specified in this sub-paragraph is where the activity relates to a green deal plan.

[F220(5)The case specified in this sub-paragraph is where the activity relates to a consumer hire agreement or a hire-purchase agreement.]

(6)For the purposes of this paragraph—

  • “borrower” includes—

    (a)

    any person providing a guarantee or indemnity under an agreement, and

    (b)

    a person to whom the rights and duties of the borrower under an agreement or a person falling within paragraph (a) have passed by assignment or operation of law;

  • “conditional sale agreement” has the meaning given by article 60L of the Regulated Activities Order;

  • [F221“consumer hire agreement” has the meaning given by article 60N(3) of the Regulated Activities Order;]

  • “customer” means a person to whom a supplier sells goods or supplies services or agrees to do so;

  • F222...

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

  • “hire-purchase agreement” has the meaning given by the Regulated Activities Order;

  • [F223“local authority” means—

    (a)

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

    (b)

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

    (c)

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

  • “not-for-profit body” means a body which, by virtue of its constitution or any enactment—

    (a)

    is required (after payment of outgoings) to apply the whole of its income and any capital it expends for charitable or public purposes, and

    (b)

    is prohibited from directly or indirectly distributing amongst its members any part of its assets (otherwise than for charitable or public purposes);

  • “Regulated Activities Order” means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;

  • “regulated credit agreement” has the meaning given by the Regulated Activities Order;

  • “supplier” means a person whose main business is to sell goods or supply services and not to carry on a regulated activity, other than an activity of the kind specified by article 60N of the Regulated Activities Order (regulated consumer hire agreements).]

Textual Amendments

F212Sch. 6 para. 2G inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 (S.I. 2013/1881), arts. 1(2)(6), 10(19)(d)

F213Sch. 6 para. 2G(1)(b)(ii) substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), arts. 1(3)(4), 5(5)(a)(i)

F214Sch. 6 para. 2G(1)(c)(ii) substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), arts. 1(3)(4), 5(5)(a)(ii)

F215Sch. 6 para. 2G(1)(da) inserted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), arts. 1(3)(4), 5(5)(a)(iii)

F216Words in Sch. 6 para. 2G(1)(f) substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), arts. 1(3)(4), 5(5)(a)(iv)

F217Words in Sch. 6 para. 2G(2) substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), arts. 1(3)(4), 5(5)(b)(i)

F218Words in Sch. 6 para. 2G(2) inserted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), arts. 1(3)(4), 5(5)(b)(ii)

F223Words in Sch. 6 para. 2G(6) inserted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), arts. 1(3)(4), 5(5)(c)

PART 1CU.K.Part 4A permission: conditions for which FCA is responsible in relation to PRA-authorised persons

IntroductionU.K.

3A.If the person concerned (“B”) carries on, or is seeking to carry on, regulated activities which consist of or include a PRA-regulated activity, the threshold conditions which are relevant to the discharge by the FCA of its functions in relation to B are the conditions set out in paragraphs 3B to 3E.

Effective supervisionU.K.

3B.(1)B must be capable of being effectively supervised by the FCA having regard to all the circumstances including—

(a)the nature (including the complexity) of the regulated activities that B carries on or seeks to carry on;

(b)the complexity of any products that B provides or will provide in carrying on those activities;

(c)the way in which B’s business is organised;

(d)if B is a member of a group, whether membership of the group is likely to prevent the FCA’s effective supervision of B;

(e)whether B is subject to consolidated supervision required under any [F224relevant implementing provisions];

(f)if B has close links with another person (“CL”)—

(i)the nature of the relationship between B and CL,

(ii)whether those links are or that relationship is likely to prevent the FCA’s effective supervision of B, and

(iii)if CL is subject to the laws, regulations or administrative provisions of a [F225country or territory outside the United Kingdom] (“the foreign provisions”), whether those foreign provisions, or any deficiency in their enforcement, would prevent the FCA’s effective supervision of B.

(2)B has close links with CL if—

(a)CL is a parent undertaking of B,

(b)CL is a subsidiary undertaking of B,

(c)CL is a parent undertaking of a subsidiary undertaking of B,

(d)CL is a subsidiary undertaking of a parent undertaking of B,

(e)CL owns or controls 20% or more of the voting rights or capital of B, or

(f)B owns or controls 20% or more of the voting rights or capital of CL.

Textual Amendments

Appropriate non-financial resourcesU.K.

3C.(1)The non-financial resources of B must be appropriate in relation to the regulated activities that B carries on or seeks to carry on, having regard to the operational objectives of the FCA.

(2)The matters which are relevant in determining whether the condition in sub-paragraph (1) is met include—

(a)the nature and scale of the business carried on, or to be carried on, by B;

(b)the risks to the continuity of the services provided by, or to be provided by, B;

(c)B’s membership of a group and any effect which that membership may have;

(d)the skills and experience of those who manage B’s affairs;

(e)whether B’s non-financial resources are sufficient to enable B to comply with—

(i)requirements imposed or likely to be imposed on B by the FCA in the exercise of its functions, or

(ii)any other requirement in relation to whose contravention the FCA would be the appropriate regulator for the purpose of any provision of Part 14 of this Act.

SuitabilityU.K.

3D.(1)B must be a fit and proper person, having regard to the operational objectives of the FCA.

(2)The matters which are relevant in determining whether B satisfies the condition in sub-paragraph (1) include—

(a)B’s connection with any person;

(b)the nature (including the complexity) of the regulated activities that B carries on or seeks to carry on;

(c)the need to ensure that B’s affairs are conducted in an appropriate manner, having regard in particular to the interests of consumers and the integrity of the UK financial system;

(d)whether B has complied and is complying with requirements imposed by the FCA in the exercise its functions, or requests made by the FCA, relating to the provision of information to the FCA and, where B has so complied or is so complying, the manner of that compliance;

(e)whether those who manage B’s affairs have adequate skills and experience and have acted and may be expected to act with probity;

(f)the need to minimise the extent to which it is possible for the business carried on by B, or to be carried on by B, to be used for a purpose connected with financial crime.

Business modelU.K.

3E.B’s business model (that is, B’s strategy for doing business) must be suitable for a person carrying on the regulated activities that B carries on or seeks to carry on, having regard to the FCA’s operational objectives.

PART 1DU.K.Part 4A permission: conditions for which the PRA is responsible in relation to insurers etc.

IntroductionU.K.

4A.(1)If the person concerned (“C”) carries on, or is seeking to carry on, regulated activities which consist of or include a PRA-regulated activity relating to the effecting or carrying out of contracts of insurance, the threshold conditions which are relevant to the discharge by the PRA of its functions in relation to C are the conditions set out in paragraphs 4B to 4F.

(2)If the person concerned (“C”) carries on, or is seeking to carry on, regulated activities which consist of or include a PRA-regulated activity relating to managing the underwriting capacity of a Lloyd’s syndicate as a managing agent at Lloyd’s, the conditions which are relevant to the discharge by the PRA of its functions in relation to C are the conditions set out in paragraphs 4C to 4F except for sub-paragraphs (5)(d) and (5)(e) of paragraph 4D which are not relevant for that purpose.

(3)If the person concerned (“C”) carries on, or is seeking to carry on, regulated activities which consist of or include a PRA-regulated activity relating to the arranging, by the Society, of deals in contracts of insurance written at Lloyd’s, the conditions which are relevant to the discharge by the PRA of its functions in relation to C are the conditions set out in paragraphs 4C to 4F, subject to sub-paragraph (4).

(4)Paragraph 4D has effect in relation to persons of the kind specified by sub-paragraph (3) as if—

(a)for paragraph (d) and (e) of sub-paragraph (5) there were substituted—

“(d)the effect that the carrying on of business by C might be expected to have on the stability of the UK financial system or on those who are or may become policyholders of members of C;

(e)the effect that the failure of C might be expected to have on the stability of the UK financial system or on those who are or may become policyholders of members of C;”, and

(b)sub-paragraph (6) were omitted.

[F226(5)If the person concerned (“C”) carries on, or is seeking to carry on, regulated activities which consist of or include a PRA-regulated activity relating to an assumption of risk falling within article 13A of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, the threshold conditions which are relevant to the discharge by the PRA of its functions in relation to C are the conditions set out in paragraphs 4B to 4F, subject to sub-paragraph (6).

(6)Paragraphs 4B to 4F have effect in relation to persons of the kind specified by sub-paragraph (5) as if—

[F227(a)the persons are undertakings, whether incorporated or not, other than an existing insurance or reinsurance undertaking, which assume risks from insurance or reinsurance undertakings and which fully fund their exposure to such risks through the proceeds of a debt issuance or any other financing mechanism where the repayment rights of the providers of such debt or financing mechanism are subordinated to the reinsurance obligations of such an undertaking;]

[F228(b)the persons are not insurance undertakings;]

(c)references to contracts of insurance are references to contracts for the assumption of risk; and

(d)references to C’s policyholders are references to undertakings from whom C assumes a risk.]

[F229(7)In paragraph (6)(a), references to undertakings which assume risks from insurance or reinsurance undertakings include references to undertakings which assume risks from third country insurance or reinsurance undertakings and Gibraltarian insurance or reinsurance undertakings; and for these purposes “third country insurance undertakings”, “third country reinsurance undertakings”, “Gibraltarian insurance undertakings” and “Gibraltarian reinsurance undertakings” have the same meaning as in the Solvency 2 Regulations 2015 (S.I. 2015/575), as amended under the European Union (Withdrawal) Act 2018 (see, in particular, regulation 2(1)).]

Textual Amendments

Legal statusU.K.

4B.C must be—

(a)a body corporate (other than a limited liability partnership),

(b)a registered friendly society, or

(c)a member of Lloyd’s.

Location of officesU.K.

4C.(1)If C is a body corporate incorporated in the United Kingdom—

(a)C’s head office, and

(b)if C has a registered office, that office,

must be in the United Kingdom.

(2)If C is not a body corporate but C’s head office is in the United Kingdom, C must carry on business in the United Kingdom.

Business to be conducted in a prudent mannerU.K.

4D.(1)The business of C must be conducted in a prudent manner.

(2)To satisfy the condition in sub-paragraph (1), C must in particular have appropriate financial and non-financial resources.

(3)To have appropriate financial resources C must satisfy the following conditions—

(a)C’s assets must be appropriate given C’s liabilities, and

(b)the liquidity of C’s resources must be appropriate given C’s liabilities and when they fall due or may fall due.

(4)To have appropriate non-financial resources C must satisfy the following conditions—

(a)C must be willing and able to value C’s assets and liabilities appropriately,

(b)C must have resources to identify, monitor, measure and take action to remove or reduce risks to the safety and soundness of C,

(c)C must have resources to identify, monitor, measure and take action to remove or reduce risks to the accuracy of C’s valuation of C’s assets and liabilities,

(d)the effectiveness with which C’s business is managed must meet a reasonable standard of effectiveness, and

(e)C’s non-financial resources must be sufficient to enable C to comply with—

(i)requirements imposed or likely to be imposed on C by the PRA in the exercise of its functions, and

(ii)any other requirement in relation to whose contravention the PRA would be the appropriate regulator for the purpose of any provision of Part 14 of this Act.

(5)The matters which are relevant in determining whether C satisfies the condition in sub-paragraph (1) or (2) include—

(a)the nature (including the complexity) of the regulated activities that C carries on or seeks to carry on;

(b)the nature and scale of the business carried on or to be carried on by C;

(c)the risks to the continuity of the services provided by, or to be provided by, C;

(d)the effect that the carrying on of the business of effecting or carrying out contracts of insurance by C might be expected to have on the stability of the UK financial system or on those who are or may become C’s policyholders;

(e)the effect that C’s failure or C being closed to new business might be expected to have on the stability of the UK financial system or on those who are or may become C’s policyholders;

(f)C’s membership of a group and any effect which that membership may have.

(6)C is “closed to new business” for the purposes of this paragraph if C has ceased to effect contracts of insurance or has substantially reduced the number of such contracts which C effects.

SuitabilityU.K.

4E.(1)C must be a fit and proper person, having regard to the PRA’s objectives.

(2)The matters which are relevant in determining whether C satisfies the condition in sub-paragraph (1) include—

(a)whether C has complied and is complying with requirements imposed by the PRA in the exercise of its functions, or requests made by the PRA relating to the provision of information to the PRA and, if C has so complied or is so complying, the manner of that compliance;

(b)whether those who manage C’s affairs have adequate skills and experience and have acted and may be expected to act with probity.

Effective supervisionU.K.

4F.(1)C must be capable of being effectively supervised by the PRA.

(2)The matters which are relevant in determining whether C satisfies the condition in sub-paragraph (1) include—

(a)the nature (including the complexity) of the regulated activities that C carries on or seeks to carry on;

(b)the complexity of any products that C provides or will provide in carrying on those activities;

(c)the way in which C’s business is organised;

(d)if C is a member of a group, whether membership of the group is likely to prevent the PRA’s effective supervision of C;

(e)whether C is subject to consolidated supervision required under any [F230relevant implementing provisions];

(f)if C has close links with another person (“CL”)—

(i)the nature of the relationship between C and CL,

(ii)whether those links are or that relationship is likely to prevent the PRA’s effective supervision of C, and

(iii)if CL is subject to the laws, regulations or administrative provisions of a [F231country or territory outside the United Kingdom] (“the foreign provisions”), whether those foreign provisions, or any deficiency in their enforcement, would prevent the PRA’s effective supervision of C.

(3)C has close links with CL if—

(a)CL is a parent undertaking of C,

(b)CL is a subsidiary undertaking of C,

(c)CL is a parent undertaking of a subsidiary undertaking of C,

(d)CL is a subsidiary undertaking of a parent undertaking of C,

(e)CL owns or controls 20% or more of the voting rights or capital of C, or

(f)C owns or controls 20% or more of the voting rights or capital of CL.

Textual Amendments

PART 1EU.K.Part 4A permission: conditions for which the PRA is responsible in relation to other PRA-authorised persons

IntroductionU.K.

5A.If the person concerned (“D”) carries on, or is seeking to carry on, PRA-regulated activities which do not consist of or include a regulated activity relating to—

(a)the effecting or carrying out of contracts of insurance,

(b)managing the underwriting capacity of a Lloyd’s syndicate as a managing agent at Lloyds, F232...

(c)arranging, by the Society, of deals in contracts of insurance written at Lloyd’s, [F233or]

[F234(d)an assumption of risk falling within article 13A of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001,]

the threshold conditions which are relevant to the discharge by the PRA of its functions in relation to D are the conditions set out in paragraphs 5B to 5F.

Textual Amendments

F232Word in Sch. 6 para. 5A(b) omitted (8.12.2017) by virtue of The Risk Transformation Regulations 2017 (S.I. 2017/1212), regs. 1(2), 4(2)(b)(i)

F233Word in Sch. 6 para. 5A(c) inserted (8.12.2017) by The Risk Transformation Regulations 2017 (S.I. 2017/1212), regs. 1(2), 4(2)(b)(ii)

Legal statusU.K.

5B.If D carries on or is seeking to carry on a regulated activity which consists of or includes accepting deposits or issuing electronic money, D must be—

(a)a body corporate, or

(b)a partnership.

Location of officesU.K.

5C.(1)If D is a body corporate incorporated in the United Kingdom—

(a)D’s head office, and

(b)if D has a registered office, that office,

must be in the United Kingdom.

(2)If D is not a body corporate but D’s head office is in the United Kingdom, D must carry on business in the United Kingdom.

Business to be conducted in a prudent mannerU.K.

5D.(1)The business of D must be conducted in a prudent manner.

(2)To satisfy the condition in sub-paragraph (1), D must in particular have appropriate financial and non-financial resources.

(3)To have appropriate financial resources D must satisfy the following conditions—

(a)D’s assets must be appropriate given D’s liabilities, and

(b)the liquidity of D’s resources must be appropriate given D’s liabilities and when they fall due or may fall due.

(4)To have appropriate non-financial resources D must satisfy the following conditions—

(a)D must be willing and able to value D’s assets and liabilities appropriately,

(b)D must have resources to identify, monitor, measure and take action to remove or reduce risks to the safety and soundness of D,

(c)D must have resources to identify, monitor, measure and take action to remove or reduce risks to the accuracy of D’s valuation of D’s assets and liabilities,

(d)the effectiveness with which D’s business is managed must meet a reasonable standard of effectiveness, and

(e)D’s non-financial resources must be sufficient to enable D to comply with—

(i)requirements imposed or likely to be imposed on D by the PRA in the exercise of its functions, and

(ii)any other requirement in relation to whose contravention the PRA would be the appropriate regulator for the purpose of any provision of Part 14 of this Act.

(5)The matters which are relevant in determining whether D satisfies the condition in sub-paragraph (1) or (2) include—

(a)the nature (including the complexity) of the regulated activities that D carries on or seeks to carry on;

(b)the nature and scale of the business carried on or to be carried on by D;

(c)the risks to the continuity of the services provided or to be provided by D;

(d)the effect that the carrying on of the business carried on or to be carried on by D might be expected to have on the stability of the UK financial system;

(e)the effect that D’s failure might be expected to have on the stability of the UK financial system;

(f)D’s membership of a group and any effect which that membership may have.

SuitabilityU.K.

5E.(1)D must be a fit and proper person, having regard to the PRA’s objectives.

(2)The matters which are relevant in determining whether D satisfies the condition in sub-paragraph (1) include—

(a)whether D has complied and is complying with requirements imposed by the PRA in the exercise of its functions, or requests made by the PRA relating to the provision of information to the PRA and, if D has so complied or is so complying, the manner of that compliance;

(b)whether those who manage D’s affairs have adequate skills and experience and have acted and may be expected to act with probity.

Effective supervisionU.K.

5F.(1)D must be capable of being effectively supervised by the PRA.

(2)The matters which are relevant in determining whether D satisfies the condition in sub-paragraph (1) include—

(a)the nature (including the complexity) of the regulated activities that D carries on or seeks to carry on;

(b)the complexity of any products that D provides or will provide in carrying on those activities;

(c)the way in which D’s business is organised;

(d)if D is a member of a group, whether membership of the group is likely to prevent the PRA’s effective supervision of D;

(e)whether D is subject to consolidated supervision required under any [F235relevant implementing provisions];

(f)if D has close links with another person (“CL”)—

(i)the nature of the relationship between D and CL,

(ii)whether those links are or that relationship is likely to prevent the PRA’s effective supervision of D, and

(iii)if CL is subject to the laws, regulations or administrative provisions of a [F236country or territory outside the United Kingdom] (“the foreign provisions”), whether those foreign provisions, or any deficiency in their enforcement, would prevent the PRA’s effective supervision of D.

(3)D has close links with CL if—

(a)CL is a parent undertaking of D,

(b)CL is a subsidiary undertaking of D,

(c)CL is a parent undertaking of a subsidiary undertaking of D,

(d)CL is a subsidiary undertaking of a parent undertaking of D,

(e)CL owns or controls 20% or more of the voting rights or capital of D, or

(f)D owns or controls 20% or more of the voting rights or capital of CL.]

Textual Amendments

F237PART 1FU.K.Authorisation under Schedule 3

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F238PART 1GU.K.Authorisation under Schedule 4

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Part IIU.K. Authorisation

Authorisation under Schedule 3U.K.

F198...U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Part IIIU.K. Additional Conditions

8(1)If this paragraph applies to the person concerned, he must, for the purposes of such provisions of this Act as may be specified, satisfy specified additional conditions.U.K.

(2)This paragraph applies to a person who—

(a)has his head office outside the [F239United Kingdom]; and

(b)appears to [F240such of the FCA or the PRA as may be specified,] to be seeking to carry on a regulated activity relating to insurance business.

(3)“Specified” means specified in, or in accordance with, an order made by the Treasury.

Textual Amendments

F240Words in Sch. 6 para. 8(2)(b) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 26 (with Sch. 20); S.I. 2013/423, art. 3, Sch.

Commencement Information

I8Sch. 6 Pt. III para. 8 wholly in force at 3.9.2001; Sch. 6 Pt. III para. 8 not in force at Royal Assent see s. 431(2); Sch. 6 Pt. III para. 8 in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b), Sch. Pt. 2; Sch. 6 Pt. III para. 8 in force in so far as not already in force at 3.9.2001 by S.I. 2001/2632, art. 2(2), Sch. Pt. 2

F2419U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F241Sch. 6 para. 9 omitted (1.4.2013) by virtue of Financial Services Act 2012 (c. 21), ss. 11(3), 122(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

Section 55JA

[F242SCHEDULE 6AU.K.Variation or cancellation of Part 4A permission on initiative of FCA: additional power

Textual Amendments

Additional powerU.K.

1(1)If it appears to the FCA that an FCA-authorised person with a Part 4A permission is carrying on no regulated activity to which the permission relates, the FCA may exercise its power under this paragraph.U.K.

(2)The FCA's power under this paragraph is the power—

(a)to vary the Part 4A permission by—

(i)removing a regulated activity from those to which the permission relates, or

(ii)varying the description of a regulated activity to which the permission relates, or

(b)to cancel the Part 4A permission.

(3)The circumstances in which the FCA may form the view that an authorised person is carrying on no regulated activity include (but are not limited to) circumstances where the person fails—

(a)to pay any periodic fee or levy as is required by the FCA Handbook, or

(b)to provide such information to the FCA as is required by the FCA Handbook.

(4)“The FCA Handbook” means the Handbook made by the FCA under this Act (as that Handbook is amended from time to time).

(5)If, as a result of a variation of a permission under this paragraph, there are no longer any regulated activities for which the person has permission, the FCA must, once it is satisfied that it is no longer necessary to keep the permission in force, cancel it.

(6)The power to vary a permission under this paragraph extends to including in the permission as varied any provision that could be included if a fresh permission were being given in response to an application to the FCA under section 55A.

(7)The FCA's power under this paragraph must be exercised in accordance with paragraph 2.

Procedure etcU.K.

2(1)The FCA may exercise its power under paragraph 1 in relation to an authorised person with a Part 4A permission only if the following conditions are met.U.K.

(2)The first condition is that the FCA has given a notice in writing to the person—

(a)stating that it appears to the FCA that the person is carrying on no regulated activity to which the permission relates,

(b)inviting the person to respond in a specified manner, and

(c)warning of the potential consequences that may arise under this Schedule of a failure to do so.

(3)The second condition is that—

(a)at least 14 days beginning with the date on which the notice was given have elapsed, and

(b)the person has failed to respond in the specified manner.

(4)The third condition is that the FCA has given a further notice in writing to the person setting out—

(a)in a case where the FCA proposes to vary the permission—

(i)the proposed variation,

(ii)the date on which the FCA proposes to vary the permission (and, if different, the date on which the variation is to take effect), and

(iii)any specified steps the person may take that would (if taken) result in the FCA deciding not to vary the permission as proposed;

(b)in a case where the FCA proposes to cancel the permission—

(i)the date on which the FCA proposes to cancel the permission (and, if different, the date on which the cancellation is to take effect), and

(ii)any specified steps the person may take that would (if taken) result in the FCA deciding not to cancel the permission.

(5)The fourth condition is that the date specified in the notice under sub-paragraph (4) is not earlier than the end of the period of 14 days beginning with the date on which the notice is given.

(6)Where the FCA decides to publicise a notice given under this paragraph (or any details relating to it), it may do so in such manner as it considers appropriate.

Notice of decisionU.K.

3(1)Where the FCA decides to vary or cancel an authorised person's Part 4A permission under paragraph 1, the FCA must give the person a notice in writing setting out—U.K.

(a)in a case where the FCA varies the permission, the variation,

(b)the date on which the variation or cancellation takes effect, and

(c)the person's power to make an application under paragraph 4.

(2)Where the FCA—

(a)has given the person a notice under paragraph 2(4), but

(b)decides not to vary or cancel the permission (whether or not because the specified steps referred to in that notice have been taken),

the FCA must give the person a notice in writing of that decision.

(3)A notice given under this paragraph may include such other information as the FCA considers appropriate.

(4)Where the FCA decides to publicise a notice given under this paragraph (or any details relating to it), it may do so in such manner as it considers appropriate.

Application for decision to be annulledU.K.

4(1)This paragraph applies where the FCA decides to vary or cancel an authorised person's Part 4A permission under paragraph 1.U.K.

(2)If the person is aggrieved by the FCA's decision, the person may apply to the FCA to have the decision annulled.

(3)An application under this paragraph must be made before the end of the period of 12 months beginning with the day on which the variation or cancellation took effect.

(4)An application under this paragraph must be determined before the end of the period of 6 months beginning with the date on which the FCA received the completed application.

(5)The applicant may withdraw the application, by giving the FCA written notice, at any time before the FCA determines it.

(6)The FCA may direct that an application under this paragraph must—

(a)contain specified information, or

(b)take a specified form.

Annulment etcU.K.

5(1)This paragraph applies where the FCA receives an application under paragraph 4 in relation to a decision to vary or cancel an authorised person's Part 4A permission under paragraph 1.U.K.

(2)The FCA may—

(a)annul the decision unconditionally,

(b)annul the decision subject to such conditions as it considers appropriate, or

(c)refuse to annul the decision.

(3)The FCA may annul the decision (unconditionally or subject to conditions) only if satisfied that, in all the circumstances, it is just and reasonable to do so.

(4)The FCA's power under sub-paragraph (2)(b) includes the power—

(a)to remove or describe differently a regulated activity specified in the permission, and

(b)to withdraw or vary an approval given under section 59 that has effect in relation to the carrying on of a regulated activity specified in the permission,

provided that the activity in question was one to which the permission related immediately before the decision was taken.

(5)Where the FCA annuls the decision it must give the person a notice in writing setting out—

(a)where the annulment is subject to conditions, the conditions, and

(b)the date on which the annulment takes effect.

(6)If the FCA proposes to refuse to annul the decision it must give the person a warning notice.

(7)If the FCA decides to refuse to annul the decision it must give the person a decision notice.

EffectU.K.

6(1)Where the FCA—U.K.

(a)varies or cancels an authorised person's Part 4A permission under paragraph 1, but

(b)that decision is subsequently annulled under paragraph 5,

the variation or cancellation is treated as if it had not taken place, subject as follows.

(2)The FCA does not become subject to any statutory obligation by virtue of sub-paragraph (1).

(3)Where, by virtue of sub-paragraph (1)—

(a)a person becomes subject to a statutory obligation, and

(b)the FCA has functions in relation to the obligation,

the FCA may, in exercising those functions, treat the person as if the person had not become subject to the obligation.

(4)If the FCA treats a person as not having become subject to an obligation, it must notify the person of that fact in such manner as it considers appropriate.

(5)In a case where paragraph 5(4)(a) applies—

(a)the permission is treated as if it had been varied in accordance with the FCA's own-initiative variation power, and

(b)that variation is treated as if it took effect on the date on which the annulment took effect.

(6)In a case where paragraph 5(4)(b) applies—

(a)the approval is treated as if it had been withdrawn in accordance with section 63 or varied in accordance with section 63ZB (as the case may be), and

(b)that withdrawal or variation is treated as if it took effect on the date on which the annulment took effect.

(7)In this paragraph “statutory obligation” means any obligation arising under or by virtue of this Act or any other enactment.

(8)In sub-paragraph (7) “enactment” includes—

(a)the enactments listed in section 3T, and

(b)any [F243assimilated direct] legislation.

Textual Amendments

Right to refer matter to TribunalU.K.

7(1)This paragraph applies where the FCA—U.K.

(a)decides to vary or cancel an authorised person's Part 4A permission under paragraph 1,

(b)receives an application from the person under paragraph 4 in respect of that decision, and

(c)has disposed of that application under paragraph 5(2).

(2)Either party may refer the matter to the Tribunal.

(3)In determining a reference made under this paragraph, the Tribunal may give such directions, and may make such provision, as it considers reasonable for placing the person and other persons in the same position (as nearly as may be) as if the permission had not been varied or cancelled.

SupplementaryU.K.

8(1)Nothing in this Schedule affects the generality of any other provision made under or by virtue of this Act that confers power on the FCA to vary or cancel an authorised person's Part 4A permission.U.K.

(2)Nothing in paragraph 6(5) and (6) gives rise to a right to make a reference to the Tribunal.

(3)Sections 55U to 55X (applications made under Part 4A: procedure) do not apply in relation to an application made under paragraph 4.

(4)Section 55Z (cancellation of Part 4A permission: procedure) does not apply in relation to a proposal, or decision, to cancel an authorised person's Part 4A permission under paragraph 1.

(5)Section 55Z3(1) (right to refer matters to the Tribunal) does not apply in relation to the determination of an application under paragraph 4.

(6)In this Schedule “specified” means specified in a direction given by the FCA under this Schedule.

(7)A direction made by the FCA under this Schedule may make different provision for different cases.

(8)The FCA may revoke or amend a direction it makes under this Schedule.]

[F244SCHEDULE 6BU.K.Designated activities

Textual Amendments

IntroductoryU.K.

1The matters with respect to which provision may be made under section 71K in respect of activities include (but are not limited to) those described in general terms in this Schedule.

DerivativesU.K.

2Activities related to entering into derivative contracts (including those contracts not cleared by a central counterparty).

3Holding positions in commodity derivatives.

Short sellingU.K.

4Engaging in short selling in relation to specified financial instruments (“shorted instruments”) including where—

(a)a person enters into a transaction which creates, or relates to, another financial instrument, and

(b)the effect (or one of the effects) of the transaction is to confer a financial advantage on that person in the event of a decrease in the price or value of the shorted instrument.

SecuritisationU.K.

5Acting as one of the following in a securitisation—

(a)an originator,

(b)a sponsor,

(c)an original lender, or

(d)a securitisation special purpose entity.

6Selling a securitisation position to a retail client located in the United Kingdom.

Financial marketsU.K.

7Offering securities to the public.

8Applying for, securing or maintaining the admission of securities to trading on a securities market.

Using a benchmarkU.K.

9Issuing an instrument which references a benchmark.

10Determining the amount payable under an instrument or financial contract by reference to a benchmark or otherwise being a party to a financial contract which references a benchmark.

11Measuring the performance of an investment fund through a benchmark.

Contributing to a benchmarkU.K.

12Acting as a “benchmark contributor” including persons in the United Kingdom or a third country.

13Contributing data to a regulated benchmark administrator for the purpose of the administrator determining a benchmark.]

Section 72(2).

F245SCHEDULE 7U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F245Sch. 7 omitted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by virtue of Financial Services Act 2012 (c. 21), ss. 16(14)(k), 122(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

Section 72(3).

F246SCHEDULE 8U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F246Sch. 8 omitted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by virtue of Financial Services Act 2012 (c. 21), ss. 16(14)(l), 122(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F247SCHEDULE 9U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Section 90(2) and (5).

SCHEDULE 10U.K. Compensation: Exemptions

Modifications etc. (not altering text)

C94Sch. 10 restricted (1.12.2001) by S.I. 2001/2957, arts. 1, 7(3); S.I. 2001/3538, art. 2(1)

Statements believed to be trueU.K.

1(1)In this paragraph “statement” means—U.K.

(a)any untrue or misleading statement in listing particulars; or

(b)the omission from listing particulars of any matter required to be included by section 80 or 81.

(2)A person does not incur any liability under section 90(1) for loss caused by a statement if he satisfies the court that, at the time when the listing particulars were submitted to the [F248FCA], he reasonably believed (having made such enquiries, if any, as were reasonable) that—

(a)the statement was true and not misleading, or

(b)the matter whose omission caused the loss was properly omitted,

and that one or more of the conditions set out in sub-paragraph (3) are satisfied.

(3)The conditions are that—

(a)he continued in his belief until the time when the securities in question were acquired;

(b)they were acquired before it was reasonably practicable to bring a correction to the attention of persons likely to acquire them;

(c)before the securities were acquired, he had taken all such steps as it was reasonable for him to have taken to secure that a correction was brought to the attention of those persons;

(d)he continued in his belief until after the commencement of dealings in the securities following their admission to the official list and they were acquired after such a lapse of time that he ought in the circumstances to be reasonably excused.

Textual Amendments

F248Word in Sch. 10 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), ss. 16(13), 122(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

Statements by expertsU.K.

2(1)In this paragraph “statement” means a statement included in listing particulars which—U.K.

(a)purports to be made by, or on the authority of, another person as an expert; and

(b)is stated to be included in the listing particulars with that other person’s consent.

(2)A person does not incur any liability under section 90(1) for loss in respect of any securities caused by a statement if he satisfies the court that, at the time when the listing particulars were submitted to the [F248FCA], he reasonably believed that the other person—

(a)was competent to make or authorise the statement, and

(b)had consented to its inclusion in the form and context in which it was included,

and that one or more of the conditions set out in sub-paragraph (3) are satisfied.

(3)The conditions are that—

(a)he continued in his belief until the time when the securities were acquired;

(b)they were acquired before it was reasonably practicable to bring the fact that the expert was not competent, or had not consented, to the attention of persons likely to acquire the securities in question;

(c)before the securities were acquired he had taken all such steps as it was reasonable for him to have taken to secure that that fact was brought to the attention of those persons;

(d)he continued in his belief until after the commencement of dealings in the securities following their admission to the official list and they were acquired after such a lapse of time that he ought in the circumstances to be reasonably excused.

Textual Amendments

F248Word in Sch. 10 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), ss. 16(13), 122(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

Corrections of statementsU.K.

3(1)In this paragraph “statement” has the same meaning as in paragraph 1.U.K.

(2)A person does not incur liability under section 90(1) for loss caused by a statement if he satisfies the court—

(a)that before the securities in question were acquired, a correction had been published in a manner calculated to bring it to the attention of persons likely to acquire the securities; or

(b)that he took all such steps as it was reasonable for him to take to secure such publication and reasonably believed that it had taken place before the securities were acquired.

(3)Nothing in this paragraph is to be taken as affecting paragraph 1.

Corrections of statements by expertsU.K.

4(1)In this paragraph “statement” has the same meaning as in paragraph 2.U.K.

(2)A person does not incur liability under section 90(1) for loss caused by a statement if he satisfies the court—

(a)that before the securities in question were acquired, the fact that the expert was not competent or had not consented had been published in a manner calculated to bring it to the attention of persons likely to acquire the securities; or

(b)that he took all such steps as it was reasonable for him to take to secure such publication and reasonably believed that it had taken place before the securities were acquired.

(3)Nothing in this paragraph is to be taken as affecting paragraph 2.

Official statementsU.K.

5U.K.A person does not incur any liability under section 90(1) for loss resulting from—

(a)a statement made by an official person which is included in the listing particulars, or

(b)a statement contained in a public official document which is included in the listing particulars,

if he satisfies the court that the statement is accurately and fairly reproduced.

False or misleading information known aboutU.K.

6U.K.A person does not incur any liability under section 90(1) or (4) if he satisfies the court that the person suffering the loss acquired the securities in question with knowledge—

(a)that the statement was false or misleading,

(b)of the omitted matter, or

(c)of the change or new matter,

as the case may be.

Belief that supplementary listing particulars not called forU.K.

7U.K.A person does not incur any liability under section 90(4) if he satisfies the court that he reasonably believed that the change or new matter in question was not such as to call for supplementary listing particulars.

Meaning of “expert”U.K.

8U.K.“Expert” includes any engineer, valuer, accountant or other person whose profession, qualifications or experience give authority to a statement made by him.

Section 90A

[F249SCHEDULE 10AU.K.LIABILITY OF ISSUERS IN CONNECTION WITH PUBLISHED INFORMATION

Textual Amendments

F249Sch. 10A inserted (1.10.2010 with effect in accordance with reg. 3(1) of the amending S.I.) by The Financial Services and Markets Act 2000 (Liability of Issuers) Regulations 2010 (S.I. 2010/1192), reg. 2(3), Sch.

PART 1U.K.SCOPE OF THIS SCHEDULE

Securities to which this Schedule appliesU.K.

1(1)This Schedule applies to securities that are, with the consent of the issuer, admitted to trading on a securities market, where—

(a)the market is situated or operating in the United Kingdom, or

(b)the United Kingdom is the issuer's home State.

(2)For the purposes of this Schedule—

(a)an issuer of securities is not taken to have consented to the securities being admitted to trading on a securities market by reason only of having consented to their admission to trading on another market as a result of which they are admitted to trading on the first-mentioned market;

(b)an issuer who has accepted responsibility (to any extent) for any document prepared for the purposes of the admission of the securities to trading on a securities market (such as a prospectus or listing particulars) is taken to have consented to their admission to trading on that market.

[F250(3)For the purposes of this Schedule the United Kingdom is the home State of an issuer if—

(a)the transparency rules impose requirements on the issuer in relation to the securities, or

(b)the issuer has its registered office (or, if it does not have a registered office, its head office) in the United Kingdom.]

Textual Amendments

Published information to which this Schedule appliesU.K.

2(1)This Schedule applies to information published by the issuer of securities to which this Schedule applies—

(a)by recognised means, or

(b)by other means where the availability of the information has been announced by the issuer by recognised means.

(2)It is immaterial whether the information is required to be published (by recognised means or otherwise).

(3)The following are “recognised means”—

(a)a recognised information service;

(b)other means required or authorised to be used to communicate information to the market in question, or to the public, when a recognised information service is unavailable.

(4)A “recognised information service” means—

(a)in relation to a securities market situated or operating in the [F251United Kingdom], a service used for the dissemination of information in accordance with [F252transparency rules];

(b)in relation to a securities market situated or operating outside the [F253United Kingdom], a service used for the dissemination of information corresponding to that required to be disclosed under [F254transparency rules]; or

(c)in relation to any securities market, any other service used by issuers of securities for the dissemination of information required to be disclosed by the rules of the market.

Textual Amendments

PART 2U.K.LIABILITY IN CONNECTION WITH PUBLISHED INFORMATION

Liability of issuer for misleading statement or dishonest omissionU.K.

3(1)An issuer of securities to which this Schedule applies is liable to pay compensation to a person who—

(a)acquires, continues to hold or disposes of the securities in reliance on published information to which this Schedule applies, and

(b)suffers loss in respect of the securities as a result of—

(i)any untrue or misleading statement in that published information, or

(ii)the omission from that published information of any matter required to be included in it.

(2)The issuer is liable in respect of an untrue or misleading statement only if a person discharging managerial responsibilities within the issuer knew the statement to be untrue or misleading or was reckless as to whether it was untrue or misleading.

(3)The issuer is liable in respect of the omission of any matter required to be included in published information only if a person discharging managerial responsibilities within the issuer knew the omission to be a dishonest concealment of a material fact.

(4)A loss is not regarded as suffered as a result of the statement or omission unless the person suffering it acquired, continued to hold or disposed of the relevant securities—

(a)in reliance on the information in question, and

(b)at a time when, and in circumstances in which, it was reasonable for him to rely on it.

4U.K.An issuer of securities to which this Schedule applies is not liable under paragraph 3 to pay compensation to a person for loss suffered as a result of an untrue or misleading statement in, or omission from, published information to which this Schedule applies if—

(a)the published information is contained in listing particulars or a prospectus (or supplementary listing particulars or a supplementary prospectus), and

(b)the issuer is liable under section 90 (compensation for statements in listing particulars or prospectus) to pay compensation to the person in respect of the statement or omission.

Liability of issuer for dishonest delay in publishing informationU.K.

5(1)An issuer of securities to which this Schedule applies is liable to pay compensation to a person who—

(a)acquires, continues to hold or disposes of the securities, and

(b)suffers loss in respect of the securities as a result of delay by the issuer in publishing information to which this Schedule applies.

(2)The issuer is liable only if a person discharging managerial responsibilities within the issuer acted dishonestly in delaying the publication of the information.

Meaning of dishonestyU.K.

6For the purposes of paragraphs 3(3) and 5(2) a person's conduct is regarded as dishonest if (and only if)—

(a)it is regarded as dishonest by persons who regularly trade on the securities market in question, and

(b)the person was aware (or must be taken to have been aware) that it was so regarded.

Exclusion of certain other liabilitiesU.K.

7(1)The issuer is not subject—

(a)to any liability other than that provided for by paragraph 3 in respect of loss suffered as a result of reliance by any person on—

(i)an untrue or misleading statement in published information to which this Schedule applies, or

(ii)the omission from any such published information of any matter required to be included in it;

(b)to any liability other than that provided for by paragraph 5 in respect of loss suffered as a result of delay in the publication of information to which this Schedule applies.

(2)A person other than the issuer is not subject to any liability, other than to the issuer, in respect of any such loss.

(3)This paragraph does not affect—

(a)civil liability—

(i)under section 90 (compensation for statements in listing particulars [F255or prospectus]),

[F256(ia)under regulation 30 of the Public Offers and Admissions to Trading Regulations 2024 (compensation for statements in prospectus etc),]

(ii)under rules made by virtue of section 954 of the Companies Act 2006 (compensation),

(iii)for breach of contract,

(iv)under the Misrepresentation Act 1967, or

(v)arising from a person's having assumed responsibility, to a particular person for a particular purpose, for the accuracy or completeness of the information concerned;

(b)liability to a civil penalty; or

(c)criminal liability.

(4)This paragraph does not affect the powers conferred by sections 382 and 384 (powers of the court to make a restitution order and of the Authority to require restitution).

(5)References in this paragraph to liability, in relation to a person, include a reference to another person being entitled as against that person to be granted any civil remedy or to rescind or repudiate an agreement.

Textual Amendments

F256Sch. 10A para. 7(3)(a)(ia) inserted (30.1.2024 for specified purposes) by The Public Offers and Admissions to Trading Regulations 2024 (S.I. 2024/105), reg. 2(2)(3), Sch. 3 para. 22(b) (with regs. 48-50)

PART 3U.K.SUPPLEMENTARY PROVISIONS

InterpretationU.K.

8(1)In this Schedule—

[F257(a)“securities” means transferable securities as defined in Article 2(1)(24) of the markets in financial instruments regulation, other than money market instruments as defined in Article 2(1)(25A) of that regulation that have a maturity of less than 12 months (and includes instruments outside the United Kingdom);]

(b)“securities market” means—

[F258(i)a regulated market as defined in Article 2(1)(13) of the markets in financial instruments regulation, or

(ii)a multilateral trading facility as defined in Article 2(1)(14) of that regulation.]

(2)References in this Schedule to the issuer of securities are—

(a)in relation to a depositary receipt, derivative instrument or other financial instrument representing securities where the issuer of the securities represented has consented to the admission of the instrument to trading as mentioned in paragraph 1(1), to the issuer of the securities represented;

(b)in any other case, to the person who issued the securities.

(3)References in this Schedule to the acquisition or disposal of securities include—

(a)acquisition or disposal of any interest in securities, or

(b)contracting to acquire or dispose of securities or of any interest in securities,

except where what is acquired or disposed of (or contracted to be acquired or disposed of) is a depositary receipt, derivative instrument or other financial instrument representing securities.

(4)References to continuing to hold securities have a corresponding meaning.

(5)For the purposes of this Schedule the following are persons “discharging managerial responsibilities” within an issuer—

(a)any director of the issuer (or person occupying the position of director, by whatever name called);

(b)in the case of an issuer whose affairs are managed by its members, any member of the issuer;

(c)in the case of an issuer that has no persons within paragraph (a) or (b), any senior executive of the issuer having responsibilities in relation to the information in question or its publication.

(6)The following definitions (which apply generally for the purposes of Part 6 of this Act) do not apply for the purposes of this Schedule:

(a)section 102A(1), (2) and (6) (meaning of “securities” and “issuer”);

F259(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F260SCHEDULE 11U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Section [F26785(6A)]

[F265[F266SCHEDULE 11AU.K.TRANSFERABLE SECURITIES

Textual Amendments

F266Sch. 11A omitted so far as still in force (30.1.2024 for specified purposes) by virtue of The Public Offers and Admissions to Trading Regulations 2024 (S.I. 2024/105), reg. 2(2)(3), Sch. 3 para. 23 (with regs. 48-50)

F268PART 1U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

PART 2U.K.

7F269(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

(2)[F270The bodies recognised for the purposes of Article 1(2)(e) of the prospectus regulation are]

(a)a charity

[F271(i)as defined by section 1(1) of the Charities Act 2011, or

(ii)within the meaning of] section 35 of the Charities Act (Northern Ireland) 1964 (c. 33 (N.I.));

[F272(b)a body entered in the Scottish Charity Register;]

(c)a housing association within the meaning of—

(i)section 5(1) of the Housing Act 1985 (c. 68),

(ii)section 1 of the Housing Associations Act 1985 (c. 69), or

(iii)Article 3 of the Housing (Northern Ireland) Order 1992 (S.I. 1992/1725 (N.I. 15));

[F273(d)a registered society that—

(i)is registered under the Co-operative and Community Benefit Societies Act 2014 as a community benefit society,

(ii)is a pre-commencement society within the meaning of that Act that was registered in accordance with section 2(2)(a)(ii) of that Act, or

(iii)is registered in accordance with section 1(2)(b) of the Industrial and Provident Societies Act (Northern Ireland) 1969;]

F274(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F271Words in Sch. 11A para. 7(2)(a) substituted (14.3.2012) by Charities Act 2011 (c. 25), ss. 354(1)(2), 355, Sch. 7 para. 86 (with s. 20(2), Sch. 8)

F2758U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2769U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

Section 96B(2)

F277SCHEDULE 11BU.K.CONNECTED PERSONS

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Sections 111(2) and 115.

SCHEDULE 12U.K. Transfer schemes: certificates

Part IU.K. Insurance Business Transfer Schemes

Modifications etc. (not altering text)

C96Sch. 12 Pt. I (paras. 1-6) applied (1.12.2001) by S.I. 2001/3626, arts. 1, 3(c)

[F2781U.K.For the purposes of section 111(2) the appropriate certificate, in relation to an insurance business transfer scheme, is a certificate under paragraph 2.]

Textual Amendments

Modifications etc. (not altering text)

Certificates as to margin of solvencyU.K.

2(1)A certificate under this paragraph is to be given—U.K.

(a)by the relevant authority; or

(b)in a case in which there is no relevant authority, by the [F279appropriate regulator].

(2)A certificate given under sub-paragraph (1)(a) is one certifying that, taking the proposed transfer into account—

(a)the transferee possesses, or will possess before the scheme takes effect, the necessary margin of solvency; or

(b)there is no necessary margin of solvency applicable to the transferee.

(3)A certificate under sub-paragraph (1)(b) is one certifying that the [F280appropriate regulator] has received from the authority which it considers to be the authority responsible for supervising persons who effect or carry out contracts of insurance in the place to which the business is to be transferred [F281certification] that, taking the proposed transfer into account—

(a)the transferee possesses or will possess before the scheme takes effect the margin of solvency required under the law applicable in that place; or

(b)there is no such margin of solvency applicable to the transferee .

(4)“Necessary margin of solvency” means the margin of solvency required in relation to the transferee, taking the proposed transfer into account, under the law which it is the responsibility of the relevant authority to apply.

(5)“Margin of solvency” means the excess of the value of the assets of the transferee over the amount of its liabilities.

(6)“Relevant authority” means—

F282(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F283(aa). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)if the transferee is a Swiss general insurer, the authority responsible in Switzerland for supervising persons who effect or carry out contracts of insurance;

(c)if the transferee is an authorised person not falling within [F284paragraph F285... ] (b) [F286—

(i)the PRA, if the transferee is a PRA-authorised person with a Part 4A permission F287...;

(ii)the FCA, if the transferee is a person with a Part 4A permission F288... but is not a PRA-authorised person.]

(7)In sub-paragraph (6), any reference to a transferee of a particular description includes a reference to a transferee who will be of that description if the proposed scheme takes effect.

F289(7A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8)“Swiss general insurer” means a body—

(a)whose head office is in Switzerland;

(b)which has permission to carry on regulated activities consisting of the effecting and carrying out of contracts of general insurance; and

(c)whose permission is not restricted to the effecting or carrying out of contracts of reinsurance.

F290(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F279Words in Sch. 12 para. 2(1)(b) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 6 para. 11(2)(a) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F280Words in Sch. 12 para. 2(3) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 6 para. 11(2)(b) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F281Word in Sch. 12 para. 2(3) inserted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 6 para. 11(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F286Sch. 12 para. 2(6)(c)(i)(ii) substituted for words (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 6 para. 11(4) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

Modifications etc. (not altering text)

C98Sch. 12 paras. 2, 3 applied (with modifications) by S.I. 2001/3626, art. 5(2A) (as inserted (1.9.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) (No. 3) Order 2013 (S.I. 2013/1765), arts. 1, 5(4)(c))

Certificates as to [F291consultation] U.K.

Textual Amendments

F291Word in Sch. 12 para. 3 heading substituted (1.1.2016) by The Solvency 2 Regulations 2015 (S.I. 2015/575), reg. 1(2), Sch. 1 para. 18(4)

F2923U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Certificates as to consentU.K.

F2923A.U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Certificates as to long-term businessU.K.

F2924U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Certificates as to general businessU.K.

F2925U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Certificates as to legality and as to consentU.K.

F2925AU.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Interpretation of Part IU.K.

F2926U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Part IIU.K. Banking Business Transfer Schemes

[F2937U.K.For the purposes of section 111(2) the appropriate certificate, in relation to a banking business transfer scheme, is a certificate under paragraph 8.]

Textual Amendments

Certificates as to financial resourcesU.K.

8(1)A certificate under this paragraph is one given by the relevant authority and certifying that, taking the proposed transfer into account, the transferee possesses, or will possess before the scheme takes effect, adequate financial resources.U.K.

(2)“Relevant authority” means—

[F294(a)if the transferee is a PRA-authorised person with a Part 4A permission F295..., the PRA;

(aa)if the transferee is a person with Part 4A permission F296... but is not a PRA-authorised person, the FCA;]

F297(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)if the transferee does not fall within paragraph [F298(a) or (aa)], the authority responsible for the supervision of the transferee’s business in the place in which the transferee has its head office.

(3)In sub-paragraph (2), any reference to a transferee of a particular description of person includes a reference to a transferee who will be of that description if the proposed banking business transfer scheme takes effect.

Textual Amendments

F294Sch. 12 para. 8(2)(a)(aa) substituted for Sch. 12 para. 8(2)(a) (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 6 para. 16(a) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

Certificates as to consent of home state regulatorU.K.

F2999U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

[F300Part 2AU.K.Reclaim fund business transfer schemes

Textual Amendments

Certificate as to financial resourcesU.K.

9A[F301(1)]For the purposes of section 111(2) the appropriate certificate, in relation to a reclaim fund business transfer scheme, is a certificate given by the [F302relevant regulator] certifying that, taking the proposed transfer into account, the transferee possesses, or will possess before the scheme takes effect, adequate financial resources.

[F303(2)In this paragraph the “relevant regulator” means—

(a)if the transferee is a PRA-authorised person, the PRA;

(b)in any other case, the FCA.]]

Textual Amendments

F301 Sch. 12 para. 9A renumbered as Sch. 12 para. 9A(1) (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 6 para. 18(2) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F302Words in Sch. 12 para. 9A(1) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 6 para. 18(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

[F304PART 2BU.K.Ring-fencing transfer schemes

Textual Amendments

Appropriate certificatesU.K.

[F3059BFor the purposes of section 111(2) the appropriate certificates, in relation to a ring-fencing transfer scheme, are—

(a)a certificate given by the PRA certifying its approval of the application, and

(b)a certificate under paragraph 9C.]

Textual Amendments

Certificate as to financial resourcesU.K.

9C(1)A certificate under this paragraph is one given by the relevant authority and certifying that, taking the proposed transfer into account, the transferee possesses, or will possess before the scheme takes effect, adequate financial resources.

(2)“Relevant authority” means—

(a)if the transferee is a PRA-authorised person with a Part 4A permission F306..., the PRA;

F307(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)if the transferee does not fall within paragraph (a) F308... but is subject to regulation in a country or territory outside the United Kingdom, the authority responsible for the supervision of the transferee's business in the place in which the transferee has its head office;

(d)in any other case, the FCA.

(3)In sub-paragraph (2), any reference to a transferee of a particular description includes a reference to a transferee who will be of that description if the proposed ring-fencing transfer scheme takes effect.]

Textual Amendments

Certificate as to consent of home state regulatorU.K.

F3099D. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Part IIIU.K. Insurance business transfers effected outside the United Kingdom

10(1)This paragraph applies to a proposal to execute under provisions corresponding to Part VII in a country or territory other than the United Kingdom an instrument transferring all the rights and obligations of the transferor under general or long-term insurance policies, or under such descriptions of such policies as may be specified in the instrument, to the transferee if [F310the condition in sub-paragraph (4)] is met in relation to it.U.K.

F311(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F312(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F313(4)The transferor is a Swiss general insurer and the transferee is [F314a UK authorised person as defined in section 105(8)].]

(5)In relation to a proposed transfer to which this paragraph applies, the [F315regulator which supervises the transferee's margin of solvency] may, if it is satisfied that the transferee possesses the necessary margin of solvency, issue a certificate to that effect.

(6)“Necessary margin of solvency” means the margin of solvency which the transferee, taking the proposed transfer into account, is required by the [F316FCA or the PRA] to maintain.

(7)“Swiss general insurer” has the same meaning as in paragraph 2.

(8)“General policy” means a policy evidencing a contract which, if it had been effected by the transferee, would have constituted the carrying on of a regulated activity consisting of the effecting of contracts of general insurance.

(9)“Long-term policy” means a policy evidencing a contract which, if it had been effected by the transferee, would have constituted the carrying on of a regulated activity consisting of the effecting of contracts of long-term insurance.

Textual Amendments

F315Words in Sch. 12 para. 10(5) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 6 para. 19(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F316Words in Sch. 12 para. 10(6) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 6 para. 19(4) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F317SCHEDULE 13U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Section 162.

F327SCHEDULE 14U.K. Role of the Competition Commission

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F327Sch. 14 omitted (1.4.2013) by virtue of Financial Services Act 2012 (c. 21), ss. 24(4), 122(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

Sections 165(11) and 171(4).

SCHEDULE 15U.K. Information and Investigations: Connected Persons

Modifications etc. (not altering text)

C108Sch. 15 applied (8.6.2023 for specified purposes, 7.10.2023 in so far as not already in force) by The Financial Services and Markets Act 2000 (Financial Promotion) (Amendment) Order 2023 (S.I. 2023/612), art. 1(2), Sch. para. 1(t) (with art. 11)

Part IU.K. Rules for Specific Bodies

Modifications etc. (not altering text)

C109Sch. 15 Pt. I (paras. 1-7) modified (1.12.2001) by S.I. 2001/2657, arts. 1(1), 15(2) (which was revoked (8.10.2001) by S.I. 2001/3083, arts. 1(2), 23); S.I. 2001/3538, art. 2(1)

Sch. 15 Pt. I (paras. 1-7) modified (1.12.2001) by S.I. 2001/3083, arts. 1(2), 15(2); S.I. 2001/3538, art. 2(1)

Sch. 15 Pt. I (paras. 1-7) amended (temp. from 11.8.2001 to 1.12.2001) by S.I. 2001/2659, arts. 1(2), 2(2); S.I. 2001/3538, art. 2(1)

Corporate bodiesU.K.

1U.K.If the authorised person (“BC”) is a body corporate, a person who is or has been—

(a)an officer or manager of BC or of a parent undertaking of BC;

(b)an employee of BC;

(c)an agent of BC or of a parent undertaking of BC.

PartnershipsU.K.

2U.K.If the authorised person (“PP”) is a partnership, a person who is or has been a member, manager, employee or agent of PP.

Unincorporated associationsU.K.

3U.K.If the authorised person (“UA”) is an unincorporated association of persons which is neither a partnership nor an unincorporated friendly society, a person who is or has been an officer, manager, employee or agent of UA.

Friendly societiesU.K.

4(1)If the authorised person (“FS”) is a friendly society, a person who is or has been an officer, manager or employee of FS.U.K.

(2)In relation to FS, “officer” and “manager” have the same meaning as in section 119(1) of the M15Friendly Societies Act 1992.

Marginal Citations

Building societiesU.K.

5(1)If the authorised person (“BS”) is a building society, a person who is or has been an officer or employee of BS.U.K.

(2)In relation to BS, “officer” has the same meaning as it has in section 119(1) of the M16Building Societies Act 1986.

Marginal Citations

IndividualsU.K.

6U.K.If the authorised person (“IP”) is an individual, a person who is or has been an employee or agent of IP.

Application to sections 171 and 172U.K.

7U.K.For the purposes of sections 171 and 172, if the person under investigation is not an authorised person the references in this Part of this Schedule to an authorised person are to be taken to be references to the person under investigation.

Part IIU.K. Additional Rules

8U.K.A person who is, or at the relevant time was, the partner, manager, employee, agent, appointed representative, banker, auditor, actuary or solicitor of—

(a)the person under investigation (“A”);

(b)a parent undertaking of A;

(c)a subsidiary undertaking of A;

(d)a subsidiary undertaking of a parent undertaking of A; or

(e)a parent undertaking of a subsidiary undertaking of A.

Section 203(8).

F328 SCHEDULE 16U.K. Prohibitions and Restrictions imposed by OFFICE OF FAIR TRADING

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F328Sch. 16 omitted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 (S.I. 2013/1881), arts. 1(2)(6), 10(20) (with art. 11(4))

Section 225(4).

SCHEDULE 17U.K. The Ombudsman Scheme

Modifications etc. (not altering text)

C113Sch. 17 applied (1.5.2009 for certain purposes and 1.11.2009 otherwise) by The Payment Services Regulations 2009 (S.I. 2009/209), regs. 1(2), 125 (with reg. 3)

Part IU.K. General

InterpretationU.K.

1U.K.In this Schedule—

  • F329...

  • [F330“ADR entity” means [F331a person whose name appears on a list maintained in accordance with regulation 10 of the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015];]

  • “ombudsman” means a person who is a member of the panel; and

  • “the panel” means the panel established under paragraph 4.

Textual Amendments

Part IIU.K. The Scheme Operator

[F332 Duty of FCAU.K.

Textual Amendments

F332Sch. 17 para. 2 and cross-heading substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 14 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

2[F333(1)]The FCA must take such steps as are necessary to ensure that the body corporate established by the Financial Services Authority under this Schedule as originally enacted is, at all times, capable of exercising the functions conferred on the scheme operator by or under this Act.U.K.

[F334(2)The FCA must exercise any function falling within sub-paragraph (3) in a way which is consistent with enabling the scheme operator, at all times, to qualify as an ADR entity and to meet the [F335requirements in Schedule 3 to the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015].

(3)The following functions of the FCA fall within this sub-paragraph—

(a)making rules for the purposes of section 226;

(b)approving rules made for the purposes of section 227;

(c)specifying an amount under section 229(4);

(d)approving rules made under section 230;

(e)taking steps under sub-paragraph (1);

(f)appointing or removing members of the board under paragraph 3(2);

(g)taking steps under paragraph 3A(1);

(h)making rules under paragraph 7(3);

(i)making rules under paragraph 13;

(j)consenting to scheme rules under paragraph 14(7), other than rules relating to fees;

(k)approving the fixing, variation, addition or removal of standard terms under paragraph 18, other than terms relating to the making of payments to the scheme operator; and

(l)approving arrangements under paragraph 19(3).]]

Textual Amendments

ConstitutionU.K.

3(1)The constitution of the scheme operator must provide for it to have—U.K.

(a)a chairman; and

(b)a board (which must include the chairman) whose members are the scheme operator’s directors.

(2)The chairman and other members of the board must be persons appointed, and liable to removal from office, by the [F336FCA] (acting, in the case of the chairman, with the approval of the Treasury).

(3)But the terms of their appointment (and in particular those governing removal from office) must be such as to secure their independence from the [F336FCA] in the operation of the scheme.

(4)The function of making voluntary jurisdiction rules under section 227 F337... and the functions conferred by paragraphs 4, 5, 7, 9 [F338, 9A] or 14 may be exercised only by the board.

(5)The validity of any act of the scheme operator is unaffected by—

(a)a vacancy in the office of chairman; or

(b)a defect in the appointment of a person as chairman or as a member of the board.

Textual Amendments

F336Word in Sch. 17 para. 3 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 15(a) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F337Words in Sch. 17 para. 3(4) omitted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), arts. 1(2)(6), 10(21)(a)

F338Word in Sch. 17 para. 3(4) inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 15(b) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

[F339Relationship with FCAU.K.

Textual Amendments

F339Sch. 17 para. 3A and crossheading inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 16 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

3A(1)The scheme operator and the FCA must each take such steps as it considers appropriate to co-operate with the other in the exercise of their functions under this Part of this Act.U.K.

(2)The scheme operator and the FCA must prepare and maintain a memorandum describing how they intend to comply with sub-paragraph (1).

(3)The scheme operator must ensure that the memorandum as currently in force is published in the way appearing to the scheme operator to be best calculated to bring it to the attention of the public.]

The panel of ombudsmenU.K.

4(1)The scheme operator must appoint and maintain a panel of persons, appearing to it to have appropriate qualifications and experience, to act as ombudsmen for the purposes of the scheme.U.K.

(2)A person’s appointment to the panel is to be on such terms (including terms as to the duration and termination of his appointment and as to remuneration) as the scheme operator considers—

(a)consistent with the independence of the person appointed; and

(b)otherwise appropriate.

The Chief OmbudsmanU.K.

5(1)The scheme operator must appoint one member of the panel to act as Chief Ombudsman.U.K.

(2)The Chief Ombudsman is to be appointed on such terms (including terms as to the duration and termination of his appointment) as the scheme operator considers appropriate.

StatusU.K.

6(1)The scheme operator is not to be regarded as exercising functions on behalf of the Crown.U.K.

(2)The scheme operator’s F340... officers and staff are not to be regarded as Crown servants.

(3)Appointment as Chief Ombudsman or to the panel or as a deputy ombudsman does not confer the status of Crown servant.

Textual Amendments

F340Words in Sch. 17 para. 6(2) omitted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by virtue of Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 17 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

Annual reportsU.K.

7(1)At least once a year—U.K.

(a)the scheme operator must make a report to the [F341FCA] on the discharge of its functions; and

(b)the Chief Ombudsman must make a report to the [F341FCA] on the discharge of his functions.

(2)Each report must distinguish between functions in relation to the scheme’s compulsory jurisdiction F342... and functions in relation to its voluntary jurisdiction.

(3)Each report must also comply with any requirements specified in rules made by the [F341FCA].

(4)The scheme operator must publish each report in the way it considers appropriate.

[F343(5)The Treasury may—

(a)require the scheme operator to comply with any provisions of the Companies Act 2006 about accounts and their audit which would not otherwise apply to it, or

(b)direct that any provision of that Act about accounts and their audit is to apply to the scheme operator with such modifications as are specified in the direction, whether or not the provision would otherwise apply to the scheme manager.

(6)Compliance with any requirement under sub-paragraph (5)(a) or (b) is enforceable by injunction or, in Scotland, an order for specific performance under section 45 of the Court of Session Act 1988.

(7)Proceedings under sub-paragraph (6) may be brought only by the Treasury.]

Textual Amendments

F341Word in Sch. 17 para. 7 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 18(a) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F342Words in Sch. 17 para. 7(2) omitted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), arts. 1(2)(6), 10(21)(b)

F343Sch. 17 para. 7(5)-(7) inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 18(b) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

[F344Audit of accountsU.K.

Textual Amendments

F344Sch. 17 para. 7A and crossheading inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 19 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

7A(1)The scheme operator must send a copy of its annual accounts to the Comptroller and Auditor General as soon as is reasonably practicable.U.K.

(2)The Comptroller and Auditor General must—

(a)examine, certify and report on accounts received under this paragraph, and

(b)send a copy of the certified accounts and the report to the Treasury.

(3)The Treasury must lay the copy of the certified accounts and the report before Parliament.

(4)The scheme operator must send a copy of the certified accounts and the report to the FCA.

(5)Except as provided by paragraph 7(5), the scheme operator is exempt from the requirements of Part 16 of the Companies Act 2006 (audit), and its balance sheet must contain a statement to that effect.

(6)In this paragraph “annual accounts” has the meaning given by section 471 of the Companies Act 2006.]

[F345Information, advice and guidance]U.K.

Textual Amendments

F345Sch. 17 para. 8 crossheading substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 20 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F3458U.K.The scheme operator may publish [F346such information, guidance or advice] as it considers appropriate and may charge for it or distribute it free of charge.

Textual Amendments

F346Words in Sch. 17 para. 8 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 21 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

BudgetU.K.

9(1)The scheme operator must, before the start of each of its financial years, adopt an annual budget which has been approved by the [F347FCA].U.K.

(2)The scheme operator may, with the approval of the [F347FCA], vary the budget for a financial year at any time after its adoption.

(3)The annual budget must include an indication of—

(a)the distribution of resources deployed in the operation of the scheme, and

(b)the amounts of income of the scheme operator arising or expected to arise from the operation of the scheme,

distinguishing between the scheme’s compulsory F348... and voluntary jurisdiction.

Textual Amendments

F347Word in Sch. 17 para. 9 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 22 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F348Words in Sch. 17 para. 9(3) omitted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), arts. 1(2)(6), 10(21)(c)

Modifications etc. (not altering text)

C115Sch. 17 para. 9(3) excluded (18.6.2001) by S.I. 2001/1821, arts. 1(1), 4(1)

[F349Annual planU.K.

Textual Amendments

F349Sch. 17 para. 9A and crossheading inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 23 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

9A(1)The scheme operator must in respect of each of its financial years prepare an annual plan.U.K.

(2)The plan must be prepared before the start of the financial year.

(3)An annual plan in respect of a financial year must make provision about the use of the resources of the scheme operator.

(4)The plan may include material relating to periods longer than the financial year in question.

(5)Before preparing an annual plan, the scheme operator must consult such persons (if any) as the scheme operator considers appropriate.

(6)The scheme operator must publish each annual plan in the way it considers appropriate.]

Exemption from liability in damagesU.K.

10(1)No person is to be liable in damages for anything done or omitted in the discharge, or purported discharge, of any functions under this Act in relation to the compulsory jurisdiction F350....U.K.

(2)Sub-paragraph (1) does not apply—

(a)if the act or omission is shown to have been in bad faith; or

(b)so as to prevent an award of damages made in respect of an act or omission on the ground that the act or omission was unlawful as a result of section 6(1) of the M17Human Rights Act 1998.

Textual Amendments

F350Words in Sch. 17 para. 10(1) omitted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881), arts. 1(2)(6), 10(21)(d)

Modifications etc. (not altering text)

C116Sch. 17 para. 10(1) amended (19.7.2001 for specified purposes otherwise 1.12.2001) by S.I. 2001/2326, arts. 1(1), 13; S.I. 2001/3538, art. 2(1)

C118Sch. 17 para. 10(1) applied (with modifications) (E.W.S.) (29.11.2018 for specified purposes, 1.4.2019 in so far as not already in force) by The Financial Services and Markets Act 2000 (Claims Management Activity) Order 2018 (S.I. 2018/1253), arts. 1(2)(3), 76

C119Sch. 17 para. 10(1) applied (with modifications) (28.1.2021 for specified purposes, 30.7.2022 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2021 (S.I. 2021/90), arts. 1(2)(3), 11

Marginal Citations

PrivilegeU.K.

11U.K.For the purposes of the law relating to defamation, proceedings in relation to a complaint which is subject to the compulsory jurisdiction F351... are to be treated as if they were proceedings before a court.

Textual Amendments

F351Words in Sch. 17 para. 11 omitted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 (S.I. 2013/1881), arts. 1(2)(6), 10(21)(e)

Modifications etc. (not altering text)

C120Sch. 17 para. 11 amended (19.7.2001 for specified purposes otherwise 1.12.2001) by S.I. 2001/2326, arts. 1(1), 14; S.I. 2001/3538, art. 2(1)

C122Sch. 17 para. 11 applied (with modifications) (E.W.S.) (29.11.2018 for specified purposes, 1.4.2019 in so far as not already in force) by The Financial Services and Markets Act 2000 (Claims Management Activity) Order 2018 (S.I. 2018/1253), arts. 1(2)(3), 77

C123Sch. 17 para. 11 modified (28.1.2021 for specified purposes, 30.7.2022 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2021 (S.I. 2021/90), arts. 1(2)(3), 13

Part IIIU.K. The Compulsory Jurisdiction

IntroductionU.K.

12U.K.This Part of this Schedule applies only in relation to the compulsory jurisdiction.

F352 [F353FCA's] ... rulesU.K.

Textual Amendments

F353Word in Sch. 17 para. 13 cross-heading substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 24(b) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

13(1)The [F354FCA] must make rules providing that a complaint is not to be entertained unless [F355— U.K.

(a)]the complainant has referred it under the ombudsman scheme before the applicable time limit (determined in accordance with the rules) has expired [F356, or

(b)in the case of a complaint other than a relevant complaint within the meaning of section 404B, the respondent agrees that the complaint should be entertained despite the complainant having referred it under the ombudsman scheme after the applicable time limit has expired.]

(2)The rules may provide that an ombudsman may extend that time limit in specified circumstances.

(3)The [F354FCA] may make rules providing that a complaint is not to be entertained (except in specified circumstances) if the complainant has not previously communicated its substance to the respondent and given him a reasonable opportunity to deal with it.

(4)The [F354FCA] may make rules requiring an authorised person [F357, [F358an electronic money issuer within the meaning of the Electronic Money Regulations 2011] or a payment service provider within the meaning of the Payment Services Regulations [F3592017],] who may become subject to the compulsory jurisdiction as a respondent to establish such procedures as the [F354FCA] considers appropriate for the resolution of complaints which—

(a)may be referred to the scheme; and

(b)arise out of activity to which the [F360FCA's] powers under [F361Part 9A] do not apply.

Textual Amendments

F354Word in Sch. 17 para. 13 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 24(a) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F357Words in Sch. 17 para. 13(4) inserted (2.3.2009 for certain purposes, 1.5.2009 for certain further purposes and 1.11.2009 otherwise) by The Payment Services Regulations 2009 (S.I. 2009/209), regs. 1(2), 126, Sch. 6 para. 1(2) (with reg. 3)

F358Words in Sch. 17 para. 13(4) inserted (9.2.2011 for certain purposes and 30.4.2011 otherwise) by The Electronic Money Regulations 2011 (S.I. 2011/99), regs. 1(2)(a)(xv)(b), 79, Sch. 4 para. 2(8) (with reg. 3)

F359Word in Sch. 17 para. 13(4) substituted (13.1.2018) by The Payment Services Regulations 2017 (S.I. 2017/752), reg. 1(6), Sch. 8 para. 2(10) (with reg. 3)

F360Word in Sch. 17 para. 13 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 24(b) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F361Words in Sch. 17 para. 13(4)(b) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 24(c) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

Modifications etc. (not altering text)

C124Sch. 17 para. 13 amended (19.7.2001 for specified purposes otherwise 1.12.2001) by S.I. 2001/2326, arts. 1(1), 4; S.I. 2001/3538, art. 2(1)

C126Sch. 17 para. 13 modified (28.1.2021 for specified purposes, 30.7.2022 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2021 (S.I. 2021/90), arts. 1(2)(3), 8

The scheme operator’s rulesU.K.

14(1)The scheme operator must make rules, to be known as “scheme rules”, which are to set out the procedure for reference of complaints and for their investigation, consideration and determination by an ombudsman.U.K.

(2)Scheme rules may, among other things—

(a)specify matters which are to be taken into account in determining whether an act or omission was fair and reasonable;

(b)provide that a complaint may, in specified circumstances, be dismissed without consideration of its merits;

(c)provide for the reference of a complaint, in specified circumstances and with the consent of the complainant, to another body with a view to its being determined by that body instead of by an ombudsman;

(d)make provision as to the evidence which may be required or admitted, the extent to which it should be oral or written and the consequences of a person’s failure to produce any information or document which he has been required (under section 231 or otherwise) to produce;

(e)allow an ombudsman to fix time limits for any aspect of the proceedings and to extend a time limit;

(f)provide for certain things in relation to the reference, investigation or consideration (but not determination) of a complaint to be done by a member of the scheme operator’s staff instead of by an ombudsman;

[F362(fa)allow the correction of any clerical mistake in the written statement of a determination made by an ombudsman;

(fb)provide that any irregularity arising from a failure to comply with any provisions of the scheme rules does not of itself render a determination void;]

(g)make different provision in relation to different kinds of complaint.

(3)The circumstances specified under sub-paragraph (2)(b) may include the following—

(a)the ombudsman considers the complaint frivolous or vexatious;

(b)legal proceedings have been brought concerning the subject-matter of the complaint and the ombudsman considers that the complaint is best dealt with in those proceedings; or

(c)the ombudsman is satisfied that there are other compelling reasons why it is inappropriate for the complaint to be dealt with under the ombudsman scheme.

[F363(3A)The scheme operator must exercise the function of making scheme rules in a way which is consistent with enabling the scheme operator to qualify as an ADR entity and to meet the [F364requirements in Schedule 3 to the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015].]

(4)If the scheme operator proposes to make any scheme rules it must publish a draft of the proposed rules in the way appearing to it to be best calculated to bring them to the attention of persons appearing to it to be likely to be affected.

(5)The draft must be accompanied by a statement that representations about the proposals may be made to the scheme operator within a time specified in the statement.

(6)Before making the proposed scheme rules, the scheme operator must have regard to any representations made to it under sub-paragraph (5).

(7)The consent of the [F365FCA] is required before any scheme rules may be made.

Textual Amendments

F362Sch. 17 para. 14(2)(fa)(fb) inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 25(a) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

F365Word in Sch. 17 para. 14(7) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 25(b) (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

Modifications etc. (not altering text)

C127Sch. 17 para. 14 amended (19.7.2001 for specified purposes otherwise 1.12.2001) by S.I. 2001/2326, arts. 1(1), 5; S.I. 2001/3538, art. 2(1)

C129Sch. 17 para. 14 modified by The Payment Services Regulations 2009 (S.I. 2009/209), Sch. 7 para. 3(2) (as inserted (1.10.2009 for certain purposes and 1.11.2009 otherwise) by S.I. 2009/2475, reg. 13)

C130Sch. 17 para. 14 modified (13.1.2018) by The Payment Services Regulations 2017 (S.I. 2017/752), reg. 1(6), Sch. 7 para. 3(2) (with reg. 3)

C131Sch. 17 para. 14 modified by S.I. 2011/99, Sch. 5 para. 3(2) (as inserted (13.1.2018) by The Payment Systems and Services and Electronic Money (Miscellaneous Amendments) Regulations 2017 (S.I. 2017/1173), regs. 1(4), 5(d))

C132Sch. 17 para. 14 modified (28.1.2021 for specified purposes, 30.7.2022 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2021 (S.I. 2021/90), arts. 1(2)(3), 8

C133Sch. 17 para. 14(4)(5) amended (19.7.2001) by S.I. 2001/2326, arts. 1(1)(a), 16(a); S.I. 2001/3538, art. 2(1)

FeesU.K.

15(1)Scheme rules may require a respondent [F366or other persons of a specified description] to pay to the scheme operator such fees as may be specified in the rules.U.K.

(2)The rules may, among other things—

(a)provide for the scheme operator to reduce or waive a fee in a particular case;

(b)set different fees for different stages of the proceedings on a complaint;

(c)provide for fees to be refunded in specified circumstances;

(d)make different provision for different kinds of complaint.

[F367(3)The reference in sub-paragraph (1) to persons of a specified description is a reference to such descriptions of persons as may be specified in regulations made by the Treasury.

(4)The power conferred by sub-paragraph (3) to specify descriptions of persons may not be exercised so as to provide for eligible complainants to fall within a specified description of persons.

(5)The reference in sub-paragraph (4) to “eligible complainants” is a reference to complainants who are eligible in relation to the compulsory or voluntary jurisdiction of the ombudsman scheme (see section 226(6) and 227(7)).

(6)Before making regulations under sub-paragraph (3) the Treasury must consult the scheme operator.]

Textual Amendments

Modifications etc. (not altering text)

C135Sch. 17 para. 15 amended (19.7.2001 for specified purposes otherwise 1.12.2001) by S.I. 2001/2326, arts. 1(1), 12(2)(3); S.I. 2001/3538, art. 2(1)

Enforcement of money awardsU.K.

16U.K.A money award, including interest, which has been registered in accordance with scheme rules may—

(a)if [F368the county court] so orders in England and Wales, be recovered [F369under section 85 of the County Courts Act 1984] (or otherwise) as if it were payable under an order of that court;

(b)be enforced in Northern Ireland as a money judgment under the M18Judgments Enforcement (Northern Ireland) Order 1981;

(c)be enforced in Scotland by the sheriff, as if it were a judgment or order of the sheriff and whether or not the sheriff could himself have granted such judgment or order.

Textual Amendments

F368Words in Sch. 17 para. 16(a) substituted (22.4.2014) by Crime and Courts Act 2013 (c. 22), s. 61(3), Sch. 9 para. 52; S.I. 2014/954, art. 2(c) (with art. 3) (with transitional provisions and savings in S.I. 2014/956, arts. 3-11)

Modifications etc. (not altering text)

C137Sch. 17 para. 16 applied (19.7.2001 for specified purposes otherwise 1.12.2001) by S.I. 2001/2326, arts. 1(1), 16(4)(6); S.I. 2001/3538, art. 2(1)

C138Sch. 17 para. 16 applied (E.W.S.) (29.11.2018 for specified purposes, 1.4.2019 in so far as not already in force) by The Financial Services and Markets Act 2000 (Claims Management Activity) Order 2018 (S.I. 2018/1253), arts. 1(2)(3), 72(5)(b)

Marginal Citations

F370Part 3AU.K.The consumer credit jurisdiction

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F370Sch. 17 Pt. 3A omitted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 (S.I. 2013/1881), arts. 1(2)(6), 10(21)(f)

Part IVU.K. The Voluntary Jurisdiction

IntroductionU.K.

17U.K.This Part of this Schedule applies only in relation to the voluntary jurisdiction.

Terms of reference to the schemeU.K.

18(1)Complaints are to be dealt with and determined under the voluntary jurisdiction on standard terms fixed by the scheme operator with the approval of the [F371FCA].U.K.

(2)Different standard terms may be fixed with respect to different matters or in relation to different cases.

(3)The standard terms may, in particular—

(a)require the making of payments to the scheme operator by participants in the scheme of such amounts, and at such times, as may be determined by the scheme operator;

(b)make provision as to the award of costs on the determination of a complaint.

(4)The scheme operator may not vary any of the standard terms or add or remove terms without the approval of the [F371FCA].

(5)The standard terms may include provision to the effect that (unless acting in bad faith) none of the following is to be liable in damages for anything done or omitted in the discharge or purported discharge of functions in connection with the voluntary jurisdiction—

(a)the scheme operator;

(b)any member of its governing body;

(c)any member of its staff;

(d)any person acting as an ombudsman for the purposes of the scheme.

Textual Amendments

F371Word in Sch. 17 para. 18 substituted (24.1.2013 for specified purposes, 19.3.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 28 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.; S.I. 2013/651, art. 2(b)

Delegation by and to other schemesU.K.

19(1)The scheme operator may make arrangements with a relevant body—U.K.

(a)for the exercise by that body of any part of the voluntary jurisdiction of the ombudsman scheme on behalf of the scheme; or

(b)for the exercise by the scheme of any function of that body as if it were part of the voluntary jurisdiction of the scheme.

(2)A “relevant body” is one which the scheme operator is satisfied—

(a)is responsible for the operation of a broadly comparable scheme (whether or not established by statute) for the resolution of disputes; and

(b)in the case of arrangements under sub-paragraph (1)(a), will exercise the jurisdiction in question in a way compatible with the requirements imposed by or under this Act in relation to complaints of the kind concerned.

(3)Such arrangements require the approval of the [F372FCA].

Textual Amendments

F372Word in Sch. 17 para. 19(3) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 29 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

Voluntary jurisdiction rules: procedureU.K.

20(1)If the scheme operator makes voluntary jurisdiction rules, it must give a copy to the [F373FCA] without delay.U.K.

(2)If the scheme operator revokes any such rules, it must give written notice to the [F373FCA] without delay.

(3)The power to make voluntary jurisdiction rules is exercisable in writing.

(4)Immediately after making voluntary jurisdiction rules, the scheme operator must arrange for them to be printed and made available to the public.

(5)The scheme operator may charge a reasonable fee for providing a person with a copy of any voluntary jurisdiction rules.

Textual Amendments

F373Word in Sch. 17 para. 20 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 30 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.

Verification of the rulesU.K.

21(1)The production of a printed copy of voluntary jurisdiction rules purporting to be made by the scheme operator—U.K.

(a)on which is endorsed a certificate signed by a member of the scheme operator’s staff authorised by the scheme operator for that purpose, and

(b)which contains the required statements,

is evidence (or in Scotland sufficient evidence) of the facts stated in the certificate.

(2)The required statements are—

(a)that the rules were made by the scheme operator;

(b)that the copy is a true copy of the rules; and

(c)that on a specified date the rules were made available to the public in accordance with paragraph 20(4).

(3)A certificate purporting to be signed as mentioned in sub-paragraph (1) is to be taken to have been duly signed unless the contrary is shown.

ConsultationU.K.

22(1)If the scheme operator proposes to make voluntary jurisdiction rules, it must publish a draft of the proposed rules in the way appearing to it to be best calculated to bring them to the attention of the public.U.K.

(2)The draft must be accompanied by—

(a)an explanation of the proposed rules; and

(b)a statement that representations about the proposals may be made to the scheme operator within a specified time.

(3)Before making any voluntary jurisdiction rules, the scheme operator must have regard to any representations made to it in accordance with sub-paragraph (2)(b).

(4)If voluntary jurisdiction rules made by the scheme operator differ from the draft published under sub-paragraph (1) in a way which the scheme operator considers significant, the scheme operator must publish a statement of the difference.

Modifications etc. (not altering text)

C139Sch. 17 para. 22(1)(2) amended (19.7.2001) by S.I. 2001/2326, arts. 1(1)(a), 16(b); S.I. 2001/3538, art. 2(1)

Section 285A

[F374SCHEDULE 17AU.K. Further provision in relation to exercise of Part 18 functions [F375, or other FMI functions,] by Bank of England

Textual Amendments

F374Sch. 17A inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), ss. 29(2), 122(3), Sch. 7 (with Sch. 20); S.I. 2013/113, art. 2(1)(b)(c), Sch. Pts. 2, 3; S.I. 2013/423, art. 3, Sch.

F375Words in Sch. 17A heading inserted (1.1.2024 at 1.00 a.m. for specified purposes, 1.8.2024 in so far as not already in force) by Financial Services and Markets Act 2023 (c. 29), ss. 50(5), 86(3); S.I. 2023/1382, regs. 10(f), 11(b)

Part 1U.K.Co-operation between appropriate regulators

Memorandum of understanding between appropriate regulators and PRAU.K.

1(1)The appropriate regulators must prepare and maintain a memorandum describing how they intend to work together in exercising their functions in relation to persons who are recognised bodies.U.K.

(2)The memorandum must in particular make provision about—

(a)the need for each party when exercising a function in relation to any person (“A”) who is a recognised body, or any member of A's group, to have regard to the exercise (or possible exercise) of any function by the other party in relation to A or any member of A's group;

(b)the role of each party in cases where they are both exercising functions in relation to the same persons;

(c)the obtaining and disclosure of information;

(d)the co-ordination by the parties of the exercise of their powers to appoint competent persons under Part 11 (information gathering and investigations) to conduct investigations on their behalf.

(3)In this paragraph any reference to a function is to any function whether conferred by or under any provision of this Part of this Act or any other provision of this Act or otherwise.

2(1)The [F376FCA] and the PRA must prepare and maintain a memorandum describing how they intend to work together in exercising their functions in relation to persons who are recognised bodies and who—U.K.

(a)are PRA-authorised persons; or

(b)are members of a group of which a member is a PRA-authorised person.

(2)The memorandum must in particular make provision about—

(a)the need for each party when exercising a function in relation to any person (“A”) who is a recognised body, or any member of A's group, to have regard to the exercise (or possible exercise) of any function by the other party in relation to A or any member of A's group;

(b)the role of each party in cases where they are both exercising functions in relation to the same persons;

(c)the obtaining and disclosure of information;

(d)the co-ordination by the parties of the exercise of their powers to appoint competent persons under Part 11 (information gathering and investigations) to conduct investigations on their behalf.

(3)In this paragraph any reference to a function is to any function whether conferred by or under any provision of this Part of this Act or any other provision of this Act or otherwise.

Textual Amendments

3U.K.The parties to a memorandum under paragraph 1 or 2 must review the memorandum at least once in each calendar year.

4U.K.The parties to a memorandum under paragraph 1 or 2 must give the Treasury a copy of the memorandum and any revised memorandum.

5U.K.The Treasury must lay before Parliament a copy of any document received by them under paragraph 4.

6U.K.The parties to a memorandum under paragraph 1 or 2 must ensure that the memorandum as currently in force is published in the way appearing to them to be best calculated to bring it to the attention of the public.

[F3776A(1)If the Bank makes a Part 18 prohibition order relating to an individual, the Bank must—U.K.

(a)provide the FCA with information falling within section 347(2)(f) in relation to the order, and

(b)where the FCA has notified the Bank that it considers it appropriate to include in the record maintained under section 347 information of a certain description, disclose to the FCA such information of that description relating to the order or the individual as the Bank has in its possession.

(2)The duty to provide information under sub-paragraph (1)—

(a)does not apply to information which the Bank reasonably believes is in the possession of the FCA;

(b)does not require or authorise the disclosure of information whose disclosure is prohibited by or under section 348;

(c)is without prejudice to any other power of the Bank to disclose information.]

Textual Amendments

Notification by FCA of action in relation to recognised clearing housesU.K.

7U.K.The FCA must notify the Bank of England of any direction given by it under section 128 to a recognised clearing house [F378or a recognised CSD] (market abuse: suspension of investigations).

Textual Amendments

8U.K.The FCA must notify the Bank of England of any requirement imposed by it under section 313A on a recognised clearing house (power to require suspension or removal of financial instruments from trading).

Part 2U.K.Application of provisions of this Act in relation to Bank of England

IntroductionU.K.

9(1)The provisions of this Act mentioned in this Part of this Schedule are to apply in relation to the Bank of England in accordance with the provision made by this Part of this Schedule.U.K.

(2)In any case where sub-paragraph (1) applies—

(a)any reference in this Act to the FCA or the PRA which is contained in, or relates to, any of those provisions (however expressed) is to be read as a reference to the Bank; and

(b)this Act has effect with any other necessary modifications.

[F379Public consultationsU.K.

Textual Amendments

F379Sch. 17A para. 9A and cross-heading inserted (1.1.2024 at 1.00 a.m. for specified purposes, 1.8.2024 in so far as not already in force) by Financial Services and Markets Act 2023 (c. 29), ss. 50(6), 86(3); S.I. 2023/1382, regs. 10(f), 11(b)

9A(1)Section 1RB (requirements in connection with public consultations) applies in relation to the Bank but as if, in subsection (4), after “proposals” there were inserted “in connection with the carrying on by the Bank of its FMI functions.U.K.

(2)For this purpose, paragraph 9(2)(a) does not apply so far as relating to the following references in section 1RB—

(a)in subsection (2), the reference after “statutory panels of” to the FCA and the PRA;

(b)in subsection (5)(a), the reference to the FCA;

(c)in subsection (5)(b), the reference to the PRA.]

[F380RequirementsU.K.

Textual Amendments

F380Sch. 17A para. 9B and cross-heading inserted (1.1.2024 at 1.00 a.m.) by Financial Services and Markets Act 2023 (c. 29), ss. 10, 86(3); S.I. 2023/1382, reg. 10(b)

9B(1)The powers conferred by section 55L(3) (FCA own-initiative power to impose requirements on authorised persons) are exercisable by the Bank to impose requirements on a relevant FMI entity.U.K.

(2)In this paragraph “relevant FMI entity” means—

(a)a recognised central counterparty,

(b)a recognised CSD, or

(c)a systemic third country CCP as defined by section 300G(7).

(3)The power under sub-paragraph (1) is exercisable only if it appears to the Bank that either (or both) of the following conditions is met.

(4)The first condition is that it is desirable to exercise the power in order to advance the Financial Stability Objective.

(5)The second condition is that the relevant FMI entity—

(a)has failed, or is likely to fail, to satisfy the recognition requirements, or

(b)has failed to comply with any other obligation imposed on it by or under this Act.

(6)The power conferred by sub-paragraph (1) may not be exercised so as to restrict or prohibit discretionary payments to employees or shareholders of a recognised central counterparty (and for this purpose “discretionary payment” has the meaning given by paragraph 13(11) of Schedule 11 to the Financial Services and Markets Act 2023 and “employee” has the meaning given by paragraph 154 of that Schedule).

(7)The powers conferred by section 55L(5) (FCA power to impose requirements on application of authorised persons with Part 4A permission) are exercisable by the Bank to impose requirements on a relevant FMI entity on the application of that entity.

(8)A power conferred by this paragraph is exercisable whether or not there is a relationship between the entity in relation to which it is exercised and the persons whose interests will be protected by its exercise.

(9)The following provisions apply in relation to requirements imposed by the Bank under this paragraph as they apply in relation to requirements imposed by the FCA under section 55L, with the modifications in sub-paragraph (10)—

(a)section 55L(6) (power to refuse application to impose etc requirements);

(b)section 55N (further provision in relation to requirements);

(c)section 55P (prohibitions and restrictions);

(d)section 55Q (exercise of power in support of overseas regulator);

(e)section 55R(1) (persons connected with applicant);

(f)section 55U(3) to (8) (applications for requirement to be imposed etc);

(g)section 55V(1) to (6) (determination of applications);

(h)section 55X(2) and (4)(f) (warning and decision notices on refusal of applications);

(i)section 55Y (exercise of own-initiative power: procedure);

(j)section 55Z3(1) and (2) (right to refer matters to the Tribunal).

(10)The modifications are—

(a)any reference to the FCA is to be read as a reference to the Bank;

(b)any references to own-initiative powers are to be read as references to the power conferred by sub-paragraph (1);

(c)any references to an authorised person are to be read as references to relevant FMI entities;

(d)in section 55L(6), the reference to the FCA’s operational objectives is to be read as a reference to the Bank’s Financial Stability Objective;

(e)section 55N has effect as if the reference to regulated activities in subsection (2) were a reference to activities in respect of which a recognition order is in force.]

RulesU.K.

10(1)The following provisions of Part 9A of this Act are to apply in relation to rules made by the Bank under any provision made by or under this Act—U.K.

(a)section 137T (general supplementary powers);

(b)sections 138A and 138B (modification or waiver of rules), but with the omission of [F381subsection (4)(b) of section 138A and subsection (4) of section 138B;] [F381subsection (5) of section 138A, subsection (4) of section 138B, and, apart from in relation to rules made under section 300F, subsection (4)(b) of section 138A;]

[F382(ba)section 138BA (disapplication or modification of rules in individual cases);]

(c)section 138C (evidential provisions);

(d)section 138D (actions for damages), but with the omission of [F383subsection (2)] [F383subsections (2) and (3), and any references to those subsections];

(e)section 138E (limits on effect of contravening rules);

[F384(ea)section 138EA (matters to consider when making rules);]

(f)section 138F (notification of rules) [F385but with the omission of subsections (1A) and (2)];

(g)section 138G (rule-making instruments);

(h)section 138H (verification of rules);

(i)section 138J (consultation), but with the omission of subsections (1)(a), (2)(c) and (5)(b); [F386and]

[F387(ia)section 138JA(2), (3) (4), (10) and (11) (duties in relation to PRA Cost Benefit Analysis Panel);

(ib)section 138JB (statement of policy in relation to cost benefit analyses);]

(j)section 138L (consultation: general exemptions), but with the omission of [F388subsection (1)];

[F389(k)section 141A (power to make consequential amendments of references to rules);

(l)section 141B (power to consequentially amend enactments).]

(2)Any reference in any of those provisions to an authorised person is to be read as a reference to a recognised clearing house F390[F391... or a recognised CSD] [F392or other persons in respect of whom FMI functions are exercised].

[F393(2A)Section 137T has effect as if, in paragraph (b), for “the other regulator” there were substituted “the FCA or the PRA”.

(2B)Section 138A has effect as if the reference in subsection (4)(b) to any of the regulator’s objectives were a reference to the Bank’s Financial Stability Objective.

(2C)Section 138BA has effect as if subsection (3)(b) and (c) were omitted.

(2D)Section 138EA(5) has effect as if, for paragraphs (a) and (b), there were substituted “complying with a recommendation of the Financial Policy Committee of the Bank of England under section 9O of the Bank of England Act 1998 (making of recommendations within the Bank).]

(3)Section 138J(2)(d) has effect in relation to rules proposed to be made by the Bank as if the reference to the compatibility of the proposed rules with the provisions mentioned in section 138J(2)(d) were a reference to their compatibility with the Bank's financial stability objective.

[F394(3A)Section 138J(8A) has effect as if, in paragraph (a), for sub-paragraphs (i) and (ii) there were substituted “be prejudicial to advancing the Financial Stability Objective, or”.]

(4)Section 138L(2) has effect as if for paragraphs (a) and (b) there were substituted “be prejudicial to financial stability”.

[F395(4A)Sub-paragraphs (1) to (4) do not apply in relation to rules made by the Bank under section 312M (in relation to which see paragraph 10A).]

F396(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F381Words in Sch. 17A para. 10(1)(b) substituted (1.1.2024 at 1.00 a.m. for specified purposes, 1.8.2024 in so far as not already in force) by Financial Services and Markets Act 2023 (c. 29), ss. 50(7)(a), 86(3); S.I. 2023/1382, regs. 10(f), 11(b)

F382Sch. 17A para. 10(ba) inserted (1.1.2024 at 1.00 a.m. for specified purposes, 1.8.2024 in so far as not already in force) by Financial Services and Markets Act 2023 (c. 29), ss. 50(7)(b), 86(3); S.I. 2023/1382, regs. 10(f), 11(b)

F383Words in Sch. 17A para. 10(1)(d) substituted (1.1.2024 at 1.00 a.m. for specified purposes, 1.8.2024 in so far as not already in force) by Financial Services and Markets Act 2023 (c. 29), ss. 50(7)(c), 86(3); S.I. 2023/1382, regs. 10(f), 11(b)

F384Sch. 17A para. 10(1)(ea) inserted (1.1.2024 at 1.00 a.m. for specified purposes) by Financial Services and Markets Act 2023 (c. 29), ss. 50(7)(d), 86(3); S.I. 2023/1382, reg. 10(f)

F385Words in Sch. 17A para. 10(1)(f) inserted (1.1.2024 at 1.00 a.m. for specified purposes, 1.8.2024 in so far as not already in force) by Financial Services and Markets Act 2023 (c. 29), ss. 50(7)(e), 86(3); S.I. 2023/1382, regs. 10(f), 11(b)

F386Word in Sch. 17A para. 10(1)(i) omitted (1.1.2024 at 1.00 a.m. for specified purposes, 1.8.2024 in so far as not already in force) by virtue of Financial Services and Markets Act 2023 (c. 29), ss. 50(7)(f), 86(3); S.I. 2023/1382, regs. 10(f), 11(b)

F387Sch. 17A para. 10(ia)(ib) inserted (1.1.2024 at 1.00 a.m. for specified purposes, 1.8.2024 in so far as not already in force) by Financial Services and Markets Act 2023 (c. 29), ss. 50(7)(g), 86(3); S.I. 2023/1382, regs. 10(f), 11(b)

F388Words in Sch. 17A para. 10(1)(j) substituted (1.3.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(5), Sch. 10 para. 5; S.I. 2014/377, art. 2(1)(a), Sch. Pt. 1

F389Sch. 17A para. 10(k)(l) inserted (1.1.2024 at 1.00 a.m. for specified purposes, 1.8.2024 in so far as not already in force) by Financial Services and Markets Act 2023 (c. 29), ss. 50(7)(h), 86(3); S.I. 2023/1382, regs. 10(f), 11(b)

F391Words in Sch. 17A para. 10(2) inserted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 2(39)(b) (with regs. 7(4), 9(1))

F392Words in Sch. 17A para. 10(2) inserted (1.1.2024 at 1.00 a.m. for specified purposes) by Financial Services and Markets Act 2023 (c. 29), ss. 50(7)(i), 86(3); S.I. 2023/1382, reg. 10(f)

F393Sch. 17A para. 10(2A)-(2D) inserted (1.1.2024 at 1.00 a.m. for specified purposes) by Financial Services and Markets Act 2023 (c. 29), ss. 50(7)(j), 86(3); S.I. 2023/1382, reg. 10(f)

F394Sch. 17A para. 10(3A) inserted (1.1.2024 at 1.00 a.m. for specified purposes, 1.8.2024 in so far as not already in force) by Financial Services and Markets Act 2023 (c. 29), ss. 50(7)(k), 86(3); S.I. 2023/1382, regs. 10(f), 11(b)

[F39710AU.K.The following provisions of Part 9A of this Act are to apply in relation to rules made by the Bank under section 312M, subject to the modifications specified in this subsection—

(a)section 137T (general supplementary powers) as if—

(i)the reference in paragraph (a) to “authorised persons, activity or investment” were a reference to “critical third parties or services”, and

(ii)for paragraph (b) there were substituted—

“(b)may make provision by reference to rules made by the FCA or PRA or standards issued by any other person, as those rules or standards have effect from time to time,”;

(b)sections 138A and 138B (modification or waiver of rules) as if—

(i)the reference in subsection (4)(b) of section 138A to any of regulator’s objectives were a reference to the Bank’s Financial Stability Objective,

(ii)subsection (5) of section 138A were omitted, and

(iii)subsection (4) of section 138B were omitted;

(c)section 138BA (disapplication or modification of rules in individual cases) as if subsection (3)(b) and (c) were omitted;

(d)section 138C (evidential provisions);

(e)section 138E (limits on effect of contravening rules);

(f)section 138EA (matters to consider when making rules) as if, for paragraphs (a) and (b) of subsection (5), there were substituted “complying with a recommendation of the Financial Policy Committee of the Bank of England under section 9O of the Bank of England Act 1998 (making of recommendations within the Bank).”;

(g)section 138F (notification of rules) as if subsections (1A) and (2) were omitted;

(h)section 138G (rule-making instruments);

(i)section 138H (verification of rules);

(j)section 138J (consultation) as if—

(i)the reference in subsection (1)(a) to the “FCA” were a reference to the “FCA and the PRA”;

(ii)the reference in subsection (2)(d) to the compatibility of the proposed rules with the provisions mentioned in that subsection were a reference to their compatibility with the Bank’s Financial Stability Objective; and

(iii)in subsection (8A), in paragraph (a), for sub-paragraphs (i) and (ii) there were substituted “be prejudicial to advancing the Financial Stability Objective, or”;

(k)section 138JA(2), (3) (4), (10) and (11) (duty to consult PRA Cost Benefit Analysis Panel);

(l)section 138JB (statement of policy in relation to cost benefit analyses);

(m)section 138L (consultation: general exemptions) as if—

(i)subsection (1) were omitted, and

(ii)in subsection (2) for paragraphs (a) and (b) there were substituted “be prejudicial to financial stability.”;

(n)section 141A (power to make consequential amendments of references to rules);

(o)section 141B (power to consequentially amend enactments).]

Textual Amendments

Information gathering and investigationsU.K.

11(1)The powers conferred by section 165(1) and (3) (power to require information) are exercisable by the Bank or (as the case may be) its officers to impose requirements on—U.K.

(a)a recognised clearing house;

[F398(aa)a recognised CSD;

[F399(ab)a third country CSD, in relation to any services referred to in the Annex to the CSD regulation which the third country CSD provides in the United Kingdom;]]

[F400(ac)a third country central counterparty and any person to whom that central counterparty has outsourced operational functions, services or activities.]

(b)a person who for the purposes of section 165 is connected with a recognised clearing house [F401, a third country central counterparty] [F402[F403or a recognised CSD] (as the case may be)].

(2)The information or documents that the Bank may require to be provided or produced are limited to—

(a)information or documents reasonably required in connection with the exercise by the Bank of functions conferred on it by or under this Part of this Act;

(b)information or documents reasonably required in connection with the exercise by the Bank of any of its other functions in pursuance of its financial stability objective; F404...

(c)information or documents which the Bank reasonably considers may enable or assist the FCA in discharging functions conferred on the FCA by or under this Act [F405; and

[F406(d)information or documents reasonably required in connection with the exercise by the Bank of its functions—

(i)under—

(aa)the EMIR regulation,

(bb)the CSD regulation,

(cc)any EU regulation originally made under the CSD Regulation which is [F407assimilated direct] legislation, or

(dd)any subordinate legislation made under the CSD Regulation on or after IP completion day;

(ii)in connection with Article 4 or 15 of the SFT regulation; or

(iii)under any subordinate legislation made under the SFT regulation on or after IP completion day.]

(3)In consequence of the provision made by sub-paragraph (2), section 165(4) is not to apply in relation to section 165(1) and (3) as applied by this paragraph.]

Textual Amendments

F398Sch. 17A para. 11(1)(aa)(ab) inserted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 2(39)(c)(i) (with regs. 7(4), 9(1))

F402Words in Sch. 17A para. 11(1)(b) inserted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 2(39)(c)(ii) (with regs. 7(4), 9(1))

F406Sch. 17A para. 11(2)(d) substituted (31.12.2020) by The Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/632), regs. 1(3), 116(b) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 33(j)); 2020 c. 1, Sch. 5 para. 1(1)

12U.K.The power conferred by section 166 (reports by skilled person) is exercisable by the Bank as if references in that section to an authorised person were to a [F408recognised clearing house, third country central counterparty or a recognised CSD].

Textual Amendments

[F40912A(1)Section 166A applies in relation to rules made by the Bank under section 300F.U.K.

(2)For this purpose any reference in section 166A to an authorised person is to be read as a reference to a relevant FMI entity (as defined by paragraph 9B(2)).]

Textual Amendments

F409Sch. 17A para. 12A inserted (1.1.2024 at 1.00 a.m. for specified purposes, 1.8.2024 in so far as not already in force) by Financial Services and Markets Act 2023 (c. 29), ss. 50(8), 86(3); S.I. 2023/1382, regs. 10(f), 11(b)

13(1)The powers conferred by section 167 (appointment of persons to carry out general investigations) are exercisable by the Bank as if references in that section to an authorised person were to any recognised clearing house other than an overseas clearing house [F410or to any Tier 2 third country central counterparty] [F411or to any recognised CSD].U.K.

F412(1A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)In addition to the powers conferred by section 171, a person conducting an investigation under section 167 as a result of this paragraph is to have the powers conferred by sections 172 and 173 (and for this purpose the references in those sections to an investigator are to be read accordingly).

Textual Amendments

F411Words in Sch. 17A para. 13(1) inserted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 2(39)(e)(i) (with regs. 7(4), 9(1))

14(1)The power conferred by section 168(5) (appointment of persons to carry out investigations in particular cases) is exercisable by the Bank.U.K.

(2)That power is exercisable if it appears to the Bank that there are circumstances suggesting that—

(a)a clearing house [F413or a central securities depository] may be guilty of [F414an offence under section 398(1) or] an offence under prescribed regulations relating to money laundering;

(b)a [F415clearing house [F413or a central securities depository]] [F415person] may have contravened a rule made by the Bank under this Part of this Act;

(c)a clearing house [F413or a central securities depository] may have contravened the recognition requirements;

(d)a clearing house [F413or a central securities depository] may have contravened any [F416qualifying provision] that is specified, or of a description specified, for the purposes of this sub-paragraph by the Treasury by order;

(e)a clearing house [F413or a central securities depository] may have breached the general prohibition.

F417(f). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F418[F419(g)a third country central counterparty may be guilty of an offence under section 398(1);]

[F419(g)a person may be guilty of an offence under section 398(1), as applied by paragraph 30 of this Schedule;]

(h)a Tier 2 third country central counterparty may have contravened the requirements of the EMIR regulation.]

[F420(i)an individual may not be a fit and proper person to perform functions in relation to an activity carried on by a relevant recognised body;

(j)an individual may have performed, or agreed to perform, a function in breach of a Part 18 prohibition order;

(k)a relevant recognised body may have failed to comply with section 309F(1);

(l)a relevant recognised body may have failed to comply with section 309G(1);

(m)a person in relation to whom the Bank has given approval under section 309G may not be a fit and proper person to perform the function to which that approval relates;

(n)a person may have performed a designated senior management function without approval under section 309G (see section 309U(3));

(o)a person may be guilty of misconduct for the purposes of section 309Z2.]

(3)In addition to the powers conferred by section 171, a person conducting an investigation under section 168(5) as a result of this paragraph is to have the powers conferred by sections 172 and 173 (and for this purpose the references in those sections to an investigator are to be read accordingly).

Textual Amendments

F413Words in Sch. 17A para. 14(2)(a)-(e) inserted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 2(39)(f)(i) (with regs. 7(4), 9(1))

F414Words in Sch. 17A para. 14(2)(a) omitted (1.1.2024 at 1.00 a.m. for specified purposes) by virtue of Financial Services and Markets Act 2023 (c. 29), ss. 50(9)(a), 86(3); S.I. 2023/1382, reg. 10(f)

F419Sch. 17A para. 14(2)(g) substituted (1.1.2024 at 1.00 a.m. for specified purposes, 1.8.2024 in so far as not already in force) by Financial Services and Markets Act 2023 (c. 29), ss. 50(9)(b), 86(3); S.I. 2023/1382, regs. 10(f), 11(b)

15U.K.An overseas regulator may, in accordance with section 169, request the Bank to exercise the power conferred by section 165 (as applied by paragraph 11 of this Schedule).

16U.K.The power to give information under section 176(1) (entry of premises under warrant) is exercisable by the Bank, or an investigator appointed by the Bank, as if the reference to the second set of conditions were omitted.

Powers in relation to parent undertakingsU.K.

17(1)The following provisions of Part 12A of this Act are to apply in relation to the Bank—U.K.

(a)section 192C (power to direct qualifying parent undertaking);

(b)section 192D (requirements that may be imposed);

(c)section 192E (direction: procedure);

(d)section 192G (references to Tribunal);

(e)section 192H (statement of policy);

(f)section 192I (statement of policy: procedure);

(g)section 192J (rules requiring provision of information);

(h)sections 192K to 192N (enforcement).

(2)For the purposes of those provisions section 192B (meaning of “qualifying parent undertaking”) is to apply as if the reference in subsection (1) to a qualifying authorised person or recognised UK investment exchange were a reference to a recognised clearing house other than an overseas clearing house [F421or to a recognised CSD].

(3)Section 192C has effect as if—

(a)the general condition in subsection (2) were that the Bank considers that it is desirable to give the direction for the purpose of the effective regulation of one or more recognised clearing houses [F422or recognised CSDs] in the group of the qualifying parent undertaking,

(b)subsections (3) and (4) were omitted, and

(c)the reference in subsection (5)(a) to authorised persons or recognised investment exchanges were a reference to recognised clearing houses [F423or recognised CSDs].

(4)Section 192E has effect as if the reference in subsection (1) to an authorised person or recognised investment exchange were a reference to a recognised clearing house [F424or a recognised CSD].

(5)Section 192I has effect as if [F425subsection (1)(a) required consultation with the FCA.]

(6)Before the Bank gives a notice under section 192E(1) or (8)(b)—

(a)if the notice relates to the parent undertaking of an authorised person or recognised investment exchange, the Bank must consult the FCA, and

F426(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F422Words in Sch. 17A para. 17(3)(a) inserted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 2(39)(g)(ii) (with regs. 7(4), 9(1))

F423Words in Sch. 17A para. 17(3)(c) inserted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 2(39)(g)(ii) (with regs. 7(4), 9(1))

F425Words in Sch. 17A para. 17(5) substituted (1.3.2017) by Bank of England and Financial Services Act 2016 (c. 14), s. 41(3), Sch. 2 para. 51(3)(a) (with Sch. 3); S.I. 2017/43, reg. 2(g)

AuditorsU.K.

18(1)Section 342 (information given by auditor to a regulator) applies in relation to a relevant auditor as if—U.K.

(a)the references in that section to a recognised investment exchange were to a recognised clearing house [F427or a recognised CSD],

(b)in the case of an auditor of a recognised clearing house [F427or a recognised CSD] which is also an authorised person or recognised investment exchange, the references to a regulator included the Bank, and

(c)in the case of an auditor of a recognised clearing house [F427or a recognised CSD] not falling within paragraph (b), the references to a regulator were to the Bank.

(2)A “relevant auditor” is a person who is, or has been, an auditor of a recognised clearing house [F427or a recognised CSD] appointed under or as a result of a statutory provision [F428, the EMIR regulation or the CSD regulation].

Textual Amendments

F428Words in Sch. 17A para. 18(2) substituted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 2(39)(h)(ii) (with regs. 7(4), 9(1))

19(1)Section 343 (information given by auditor: person with close links) applies in relation to a relevant auditor as if—U.K.

(a)the references in that section to a recognised investment exchange were to a recognised clearing house [F429or a recognised CSD],

(b)in the case of an auditor of a recognised clearing house [F429or a recognised CSD] which is an authorised person or which is a recognised investment exchange, the references to a regulator included the Bank, and

(c)in the case of an auditor of a recognised clearing house [F429or a recognised CSD] not falling within paragraph (b), the references to a regulator were to the Bank.

(2)A “relevant auditor” is a person who—

(a)is, or has been, an auditor of a recognised clearing house [F429or a recognised CSD] appointed under or as a result of a statutory provision [F430, the EMIR regulation or the CSD regulation], and

(b)is, or has been, an auditor of a person who has close links with the recognised clearing house [F431or the recognised CSD].

Textual Amendments

F430Words in Sch. 17A para. 19(2)(a) substituted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 2(39)(i)(ii) (with regs. 7(4), 9(1))

F431Words in Sch. 17A para. 19(2)(b) inserted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 2(39)(i)(iii) (with regs. 7(4), 9(1))

20U.K.Section 344 (duty of auditor resigning to give notice) applies to an auditor to whom section 342 applies (whether by virtue of paragraph 18 or otherwise) as if—

(a)the references in that section to a recognised investment exchange were to a recognised clearing house [F432or a recognised CSD],

(b)in the case of an auditor of a recognised clearing house [F432or a recognised CSD] which is neither an authorised person nor a recognised investment exchange, the reference in the definition of “the appropriate regulator” to the FCA were a reference to the Bank,

(c)in the case of an auditor of a recognised clearing house [F432or a recognised CSD] which is a PRA-authorised person, the reference in the definition of “the appropriate regulator” to the PRA were a reference to the PRA and the Bank, and

(d)in the case, not falling within paragraph (c), of an auditor of a recognised clearing house [F432or a recognised CSD] which is an authorised person or which is a recognised investment exchange, the reference in the definition of “the appropriate regulator” to the FCA were a reference to the FCA and the Bank.

Textual Amendments

21U.K.Sections 345A to 345E apply to auditors to whom section 342 applies only by virtue of paragraph 18 as if—

(a)the references in those sections to an auditor or actuary to whom section 342 applies were to an auditor to whom section 342 applies by virtue of paragraph 18,

(b)the references in those sections to a PRA-authorised person were to a recognised clearing house [F433or a recognised CSD],

(c)in a case where the Bank disqualifies a person from being an auditor of a recognised clearing house [F433or a recognised CSD] that is also a recognised investment exchange, section 345A(5)(a) required the Bank to notify the FCA, and

(d)the references in sections 345D and 345E to a regulator included the Bank.

Textual Amendments

Public record and disclosure of informationU.K.

22U.K.Section 347 (record of authorised persons, recognised investment exchanges, etc),.

[F434(a)] so far as it relates to recognised investment exchanges, applies in relation to the Bank as if references in that section to a recognised investment exchange were to a recognised clearing house [F435, third country central counterparty] [F436, a third country CSD] [F437or a recognised CSD]

[F438(b)so far as it relates to approved persons, applies in relation to the Bank as if references in that section to an approved person were to a person in relation to whom the Bank has given approval under section 309G.]

Textual Amendments

F434Words in Sch. 17A para. 22 renumbered as Sch. 17A para. 22(a) (29.6.2023 for specified purposes) by Financial Services and Markets Act 2023 (c. 29), s. 86(1)(e), Sch. 10 para. 20(4)(a)

F437Words in Sch. 17A para. 22 inserted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 2(39)(l) (with regs. 7(4), 9(1))

23[F439(1)]Sections 348 to 350 and 353 (disclosure of information) apply in relation to information received by the Bank for the purposes of, or in the discharge of, [F440any of its functions under Chapter 3C of Part 18 of this Act,] any of its functions relating to recognised clearing houses [F441or recognised CSDs] [F442or any of its functions under the EMIR regulation] [F443, the CSD regulation [F444, any EU regulation originally made under the CSD regulation which is [F445assimilated direct] legislation, or any subordinate legislation made under the CSD regulation on or after IP completion day]].U.K.

[F446(2)Paragraph 9(2)(a) does not apply to the reference to the PRA in section 348(8).]

Textual Amendments

F440Words in Sch. 17A para. 23(1) inserted (29.8.2023) by Financial Services and Markets Act 2023 (c. 29), ss. 19(10), 86(3); S.I. 2023/779, reg. 4(n)

F441Words in Sch. 17A para. 23(1) inserted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 2(39)(m) (with regs. 7(4), 9(1))

F443Words in Sch. 17A para. 23 inserted (21.11.2014) by The Central Securities Depositories Regulations 2014 (S.I. 2014/2879), regs. 1(1), 6(4)(b)

[F447Co-operationU.K.

Textual Amendments

23ASection 354B (co-operation) applies in relation to the Bank for the purposes of, or in the discharge of, any of its functions under—

(a)the EMIR regulation;

(b)the CSD regulation;

(c)the SFT regulation;

(d)any EU regulation, originally made under the CSD regulation or the SFT regulation, which is [F448assimilated direct] legislation; or

(e)any subordinate legislation (within the meaning of the Interpretation Act 1978) made under the CSD regulation, or the SFT regulation, on or after IP completion day.]

Textual Amendments

InsolvencyU.K.

24(1)The following provisions of Part 24 of this Act are to apply in relation to the Bank—U.K.

[F449(za)sections 355A and 355B (powers to participate in proceedings under Part 26A of the Companies Act 2006);]

(a)section 356 (powers to participate in proceedings: company voluntary arrangements);

(b)section 358 (powers to participate in proceedings: trust deeds for creditors in Scotland);

(c)section 359 (administration order);

(d)section 362 (powers to participate in administration proceedings);

(e)section 362A (consent to appointment of administrator);

(f)section 363 (powers to participate in proceedings: receivership);

(g)section 365 (powers to participate in proceedings: voluntary winding-up);

(h)section 367 (winding-up petitions);

(i)section 371 (powers to participate in proceedings: winding-up).

(2)Those provisions are to apply as if any reference to an authorised person or recognised investment exchange [F450(other than the reference to “an authorised person” in section 355B(2)(a))] were a reference to a recognised clearing house [F451or a recognised CSD].

Textual Amendments

F449Sch. 17A para. 24(1)(za) inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 9 para. 19(a) (with ss. 2(2), 5(2))

F450Words in Sch. 17A para. 24(2) inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 9 para. 19(b) (with ss. 2(2), 5(2))

F451Words in Sch. 17A para. 24(2) inserted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 2(39)(n) (with regs. 7(4), 9(1))

25[F452(1)]In the case of any regulated activity which is carried on for the purposes of, or in connection with, the provision of clearing services, the reference to the FCA in section 375(1) is to be read as including a reference to the Bank.U.K.

[F453(2)In the case of any regulated activity which is carried on for the purposes of, or in connection with, the provision of any service mentioned in section 285(3D), the reference to the FCA in section 375(1) is to be read as including a reference to the Bank.]

Textual Amendments

F452Sch. 17A para. 25 renumbered as Sch. 17A para. 25(1) (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 2(39)(o)(i) (with regs. 7(4), 9(1))

Injunctions and restitutionU.K.

26(1)The power to make an application under section 380(1), (2) or (3) (injunctions) is exercisable by the Bank.U.K.

(2)For the purposes of the application, any reference in that section to a relevant requirement is to—

(a)a requirement that is imposed by or under any provision of this Part of this Act that relates to a recognised clearing house [F454[F455or a recognised CSD] (and for this purpose a prohibition imposed under section 312FA(2)(c) (prohibition on person holding office etc. with a central securities depository) is treated as a requirement)];

[F456(aa) a requirement that is imposed on a critical third party by the Bank by or under any provision of Chapter 3C of this Part of this Act;]

(b)a requirement that is imposed under any other provision of this Act by the Bank;

(c)a requirement that is imposed by any [F457qualifying provision] that is specified, or of a description specified, for the purposes of this sub-paragraph by the Treasury by order; or

(d)a requirement that is imposed by this Act and whose contravention constitutes an offence that the Bank has power to prosecute under this Act (see section 401, as applied by paragraph 31).

Textual Amendments

F454Words in Sch. 17A para. 26(2)(a) inserted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 2(39)(p) (with regs. 7(4), 9(1))

27(1)The power to make an application under section 382(1) (restitution order) is exercisable by the Bank.U.K.

(2)For the purposes of the application, any reference in that section to a relevant requirement is to be read in accordance with paragraph 26(2) of this Schedule [F458(subject to sub-paragraph (3))].

[F459(3) The power to make an application under section 382(1) is not exercisable by the Bank in respect of the contravention of a requirement imposed by or under Article 4 or 15 of the SFT regulation.]

Textual Amendments

28(1)The power conferred by section 384(5) (power of FCA to require restitution order) is exercisable by the Bank.U.K.

(2)That power is exercisable if the Bank is satisfied that a recognised clearing house [F460, a recognised CSD or a critical third party] has contravened a relevant requirement, or been knowingly concerned in the contravention of a relevant requirement, and—

(a)that profits have accrued to the recognised clearing house [F461, the recognised CSD or the critical third party] as a result of the contravention; or

(b)that one or more persons have suffered loss or been otherwise adversely affected as a result of the contravention.

(3)For the purposes of that power, “relevant requirement” is to be read in accordance with paragraph 26(2) of this Schedule [F462(subject to sub-paragraph (3A))].

[F463(3A) The power conferred by section 384(5) is not exercisable by the Bank in respect of the contravention of a requirement imposed by or under Article 4 or 15 of the SFT regulation.]

(4)Where this paragraph applies, section 384(5) and (6) are to have effect as if—

(a)any reference to the person concerned were a reference to the recognised clearing house [F464, the recognised CSD or the critical third party]; and

(b)any reference to subsection (1) were a reference to sub-paragraph (2) of this paragraph.

Textual Amendments

F460Words in Sch. 17A para. 28(2) substituted (29.8.2023) by Financial Services and Markets Act 2023 (c. 29), ss. 19(12)(a), 86(3); S.I. 2023/779, reg. 4(n)

F461Words in Sch. 17A para. 28(2)(a) substituted (29.8.2023) by Financial Services and Markets Act 2023 (c. 29), ss. 19(12)(b), 86(3); S.I. 2023/779, reg. 4(n)

F464Words in Sch. 17A para. 28(4)(a) substituted (29.8.2023) by Financial Services and Markets Act 2023 (c. 29), ss. 19(12)(c), 86(3); S.I. 2023/779, reg. 4(n)

NoticesU.K.

29U.K.The provisions of Part 26 of this Act (notices) apply,

[F465(a)]in relation to a warning or decision notice given by the Bank under section [F46655X(2) or (4),] 192L, [F467309C, 309D, 309M, 309P, 309V, 309Z4,] 312G [F468, 312H or 312S] as they apply in relation to such a notice given by the FCA under that section.

[F469(b)in relation to a notice under section 309R(5), (8) or (10)(b) as they apply in relation to such a notice given by the FCA under those provisions.]

Textual Amendments

F465Words in Sch. 17A para. 29 renumbered as Sch. 17A para. 29(a) (29.6.2023 for specified purposes) by Financial Services and Markets Act 2023 (c. 29), s. 86(1)(e), Sch. 10 para. 20(5)(a)

F466Words in Sch. 17A para. 29 inserted (1.1.2024 at 1.00 a.m. for specified purposes, 1.8.2024 in so far as not already in force) by Financial Services and Markets Act 2023 (c. 29), ss. 50(10), 86(3); S.I. 2023/1382, regs. 10(f), 11(b)

F468Words in Sch. 17A para. 29 substituted (29.8.2023) by Financial Services and Markets Act 2023 (c. 29), ss. 19(13), 86(3); S.I. 2023/779, reg. 4(n)

OffencesU.K.

30U.K.Section 398 (misleading the FCA: residual cases) applies to information given to the Bank in purported compliance with—

(a)a requirement that is imposed by or under any provision of Part 18 of this Act that relates to a recognised clearing house [F470, a third country central counterparty] [F471or a recognised CSD];

[F472(aa)a requirement that is imposed by or under any provision of Chapter 3C of Part 18 of this Act that relates to critical third parties;]

(b)a requirement that is imposed under any other provision of this Act by the Bank; or

(c)a requirement that is imposed by any [F473qualifying provision] specified, or of a description specified, for the purposes of this paragraph by the Treasury by order.

Textual Amendments

31(1)Section 401 (proceedings for an offence) applies to the Bank as if for the purposes of subsections (2)(a) and (3)(a) of that section the Bank were an appropriate regulator in respect of each of the following offences—U.K.

(a)an offence under section 177(3) where the investigation is being, or is likely to be, conducted on behalf of the Bank;

(b)an offence under section 177(4) where the requirement is imposed by the Bank;

(c)an offence under section 177(6) where the warrant is issued as a result of information on oath given by the Bank or a person appointed by it to conduct an investigation on its behalf;

[F474(ca)an offence under section 309E;]

(d)an offence under section 398(1) where the information was given to the Bank.

(2)Section 401(3B) has effect subject to the provision made by this paragraph (so that the FCA is not the appropriate regulator for the purposes of subsections (2)(a) and (3)(a) in respect of the above offences).

Textual Amendments

[F475International obligationsU.K.

Textual Amendments

F475Sch. 17A para. 31A and cross-heading inserted (1.1.2024 at 1.00 a.m. for specified purposes, 1.8.2024 in so far as not already in force) by Financial Services and Markets Act 2023 (c. 29), ss. 50(11), 86(3); S.I. 2023/1382, regs. 10(f), 11(b)

31A(1)The following provisions of Part 28 of this Act apply in relation to the exercise by the Bank of its FMI functions with the modifications in sub-paragraphs (2) and (3)—U.K.

(a)section 409A (consultation in relation to deference decisions), and

(b)section 409B (notification in relation to international trade obligations).

(2)Section 409A applies as if—

(a)in subsection (4), in paragraph (b), for the words after “proposes to” to the end there were substituted “exercise any of its other FMI functions”;

(b)in subsection (6)(a), the reference to the duty imposed by section 138J were a reference to that duty as it applies in relation to the Bank under paragraph 10(1) of this Schedule;

(c)in subsection (9), for paragraphs (a) to (f) there were substituted “in order to comply with a recommendation of the Financial Policy Committee of the Bank of England under section 9O of the Bank of England Act 1998 (making of recommendations within the Bank).”;

(d)subsections (7) and (10) were omitted.

(3)Section 409B applies as if—

(a)in subsection (4), in paragraph (b), for the words after “proposes to” to the end there were substituted “exercise any of its other FMI functions”;

(b)in subsection (5)(a), the reference to the duty imposed by section 138J were a reference to that duty as it applies in relation to the Bank under paragraph 10(1) of this Schedule;

(c)in subsection (8), for paragraphs (a) to (c) there were substituted “in order to comply with a recommendation of the Financial Policy Committee of the Bank of England under section 9O of the Bank of England Act 1998 (making of recommendations within the Bank).”;

(d)subsections (6) and (9) were omitted.]

[F476Transitional provisionsU.K.

Textual Amendments

31BU.K.Section 427 (transitional provisions), so far as it relates to an order under section 426 which makes provision in connection with this Part of this Act, applies in relation to the Bank.]

RecordsU.K.

32U.K.Paragraph 17 of Schedule 1ZB (records) applies in relation to the recording of decisions made by the Bank in the exercise of its functions relating to recognised clearing houses [F477, [F478third country central counterparties,] recognised CSDs [F479, critical third parties] and [F480third country CSDs]].

Textual Amendments

F477Words in Sch. 17A para. 32 inserted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 2(39)(s) (with regs. 7(4), 9(1))

F479Words in Sch. 17A para. 32 inserted (29.8.2023) by Financial Services and Markets Act 2023 (c. 29), ss. 19(15), 86(3); S.I. 2023/779, reg. 4(n)

Annual reportU.K.

33U.K.Paragraph 19 of Schedule 1ZB (annual report by PRA) applies in relation to the Bank, but—

(a)as if for paragraphs (a) to [F481(f)] [F481(fa)] of sub-paragraph (1) there were substituted—

“(a)the discharge of its functions relating to recognised clearing houses [F482, [F483third country central counterparties,] recognised CSDs [F484, critical third parties] and [F485third country CSDs]],

(b)the extent to which, in its opinion, in discharging those functions its [F486financial stability objective has been met] [F486Financial Stability Objective and its objective under section 30D(2) of the Bank of England Act 1998 have been advanced],

[F487(c)the efforts it has made to engage with persons (other than those mentioned in paragraph (a)) appearing to the Bank to have an interest in the discharge of those functions, and

(d)the results of that engagement,]”, and”

(b)as if [F488sub-paragraph (3)] [F488sub-paragraphs (1A), (1B), (3) and (6)] were omitted.

Textual Amendments

F481Word in Sch. 17A para. 33(a) substituted (1.1.2024 at 1.00 a.m. for specified purposes, 1.8.2024 in so far as not already in force) by Financial Services and Markets Act 2023 (c. 29), ss. 50(12), 86(3) (as amended by S.I. 2023/1410, regs. 1(2), 5); S.I. 2023/1382, regs. 10(f), 11(b)

F482Words in Sch. 17A para. 33(a) inserted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 2(39)(t) (with regs. 7(4), 9(1))

F484Words in Sch. 17A para. 33(a) inserted (29.8.2023) by Financial Services and Markets Act 2023 (c. 29), ss. 19(16), 86(3); S.I. 2023/779, reg. 4(n)

F486Words in Sch. 17A para. 33(a) substituted (1.1.2024 at 1.00 a.m. for specified purposes, 1.8.2024 in so far as not already in force) by Financial Services and Markets Act 2023 (c. 29), ss. 50(12)(a), 86(3); S.I. 2023/1382, regs. 10(f), 11(b)

F487Words in Sch. 17A para. 33(a) inserted (1.1.2024 at 1.00 a.m. for specified purposes, 1.8.2024 in so far as not already in force) by Financial Services and Markets Act 2023 (c. 29), ss. 50(12)(b), 86(3); S.I. 2023/1382, regs. 10(f), 11(b)

F488Words in Sch. 17A para. 33(b) substituted (1.1.2024 at 1.00 a.m. for specified purposes, 1.8.2024 in so far as not already in force) by Financial Services and Markets Act 2023 (c. 29), ss. 50(13), 86(3); S.I. 2023/1382, regs. 10(f), 11(b)

[F489Other reportsU.K.

Textual Amendments

F489Sch. 17A paras. 33A, 33B and cross-headings inserted (1.1.2024 at 1.00 a.m. for specified purposes, 1.8.2024 in so far as not already in force) by Financial Services and Markets Act 2023 (c. 29), ss. 50(14), 86(3); S.I. 2023/1382, regs. 10(f), 11(b)

33AU.K.Paragraph 21A of Schedule 1ZB (other reports by PRA) applies in relation to the Bank, but as if—

(a)the reference in sub-paragraph (1)(a) to paragraphs (a) to (f) of paragraph 19(1) were a reference to those paragraphs as substituted in relation to the Bank under paragraph 33 of this Schedule;

(b)the reference in sub-paragraph (1)(b) to such other matters were a references to such other matters so far as relating to the exercise of the Bank’s FMI functions;

(c)the reference in sub-paragraph (5)(b) to section 348 were a reference to that section as it applies in relation to the Bank under paragraph 23 of this Schedule.

Engagement with Parliamentary CommitteesU.K.

33B(1)Paragraph 36 of Schedule 1ZB (PRA engagement with Parliamentary Committees) applies in relation to the Bank, but as if—U.K.

(a)in sub-paragraph (2)(a), the reference to section 138J were a reference to that section as it applies in relation to the Bank under paragraph 10(1) of this Schedule;

(b)in sub-paragraph (2)(b), the reference to a proposal were to a proposal so far as relating to the exercise of the Bank’s FMI functions;

(c)in sub-paragraph (2)(c), the reference to general functions were a reference to the Bank’s FMI functions;

(d)in sub-paragraph (4)(a), the reference to the PRA’s objectives were a reference to the Financial Stability Objective and the Bank’s secondary innovation objective (see section 30D(2) of the Bank of England Act 1998);

(e)in sub-paragraph (4)(b), the reference to section 3B were a reference to section 30E of the Bank of England Act 1998;

(f)in sub-paragraph (4)(c), the reference to section 138EA were a reference to that section as it applies in relation to the Bank under paragraph 10(1) of this Schedule;

(g)in sub-paragraph (5A)(b)(ii) and (c)(ii), the references to the PRA being notified were references to the Bank being notified.

(2)Paragraph 37 of Schedule 1ZB applies in relation to the Bank, but as if, in sub-paragraph (2), after “the draft of any proposals” there were inserted “so far as relating to the exercise by the Bank of its FMI functions”.]

Part 3U.K.Winding up, administration or insolvency of [F490recognised clearing houses]

Textual Amendments

Notice to Bank of England of preliminary stepsU.K.

34(1)An application for an administration order in respect of a [F491recognised clearing house] [F492or a recognised CSD] may not be determined unless the conditions below are satisfied.U.K.

(2)A petition for a winding up order in respect of a [F491recognised clearing house] [F492or a recognised CSD] may not be determined unless the conditions below are satisfied.

(3)A resolution for voluntary winding up of a [F491recognised clearing house] [F492or a recognised CSD] may not be made unless the conditions below are satisfied.

(4)An administrator of a [F491recognised clearing house] [F492or a recognised CSD] may not be appointed unless the conditions below are satisfied.

(5)Condition 1 is that the Bank of England has been notified—

(a)by the applicant for an administration order, that the application has been made,

(b)by the petitioner for a winding up order, that the petition has been presented,

(c)by the [F491recognised clearing house] [F493or the recognised CSD], that a resolution for voluntary winding up may be made, or

(d)by the person proposing to appoint an administrator, of the proposed appointment.

(6)Condition 2 is that a copy of the notice complying with Condition 1 has been filed (in Scotland, lodged) with the court (and made available for public inspection by the court).

(7)Condition 3 is that—

(a)the period of 2 weeks, beginning with the day on which the notice is received, has ended, or

(b)the Bank of England has informed the person who gave the notice that—

(i)it has no objection to the order, resolution or appointment being made, and

(ii)it does not intend to exercise a stabilisation power under [F494Schedule 11 to the Financial Services and Markets Act 2023].

(8)Arranging for the giving of notice in order to satisfy Condition 1 can be a step with a view to minimising the potential loss to a [F491recognised clearing house's] [F495or a recognised CSD’s] creditors for the purpose of section 214 of the Insolvency Act 1986 (wrongful trading).

(9)In this paragraph “the court” means—

(a)in England and Wales, the High Court,

(b)in Scotland, the Court of Session, and

(c)in Northern Ireland, the High Court.

Textual Amendments

F493Words in Sch. 17A para. 34(5)(c) inserted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 2(39)(u)(ii) (with regs. 7(4), 9(1))

Power to give directions to insolvency practitionerU.K.

35(1)This paragraph applies where a person has been appointed to act as an insolvency practitioner (within the meaning of section 388 of the Insolvency Act 1986 or Article 3 of the Insolvency (Northern Ireland) Order 1989) in relation to a company which is, or has been, a [F496recognised clearing house] [F497or a recognised CSD].U.K.

(2)The Bank of England may give directions to the person if satisfied that it is desirable to give the directions, having regard to the public interest in—

(a)protecting and enhancing the stability of the UK financial system,

(b)protecting and enhancing public confidence in the stability of the UK financial system, F498...

(c)[F499in the case of a company which is, or has been, a recognised clearing house,] maintaining the continuity of F500... clearing services [F501and]

[F502(d)in the case of a company which is, or has been, a recognised CSD, maintaining the continuity of the services referred to in section 285(3D)].

(3)Before giving directions the Bank of England must consult—

(a)the Treasury, [F503and]

F504(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)the FCA.

(4)Directions are enforceable, on an application by the Bank of England, by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.

(5)A person is not liable for damages in respect of action or inaction in accordance with directions.

(6)The immunity does not extend to action or inaction—

(a)in bad faith, or

(b)in contravention of section 6(1) of the Human Rights Act 1998.

Textual Amendments

Part 4U.K. Fees

36(1)The Bank of England may, in connection with the discharge of any of its qualifying functions, require recognised clearing houses[F505, F506... [F507third country central counterparties, recognised CSDs F508... or settlement internalisers (as defined in point (11) of Article 2(1) of the CSD regulation)]] to pay fees to the Bank.U.K.

(2)The “qualifying functions” of the Bank are—

(a)its functions under or as a result of this Part of this Act, F509...

(b)its functions under or as a result of a [F510qualifying provision] that is specified, or of a description specified, for the purposes of this sub-paragraph by the Treasury by order[F511; F512...

[F513(ba)its functions under or as a result of regulations made under section 8 of the European Union (Withdrawal) Act 2018; and]

(c)its functions under or as a result of Part 7 of the Companies Act 1989.]

(3)The power of the Bank to set fees includes power to set fees for the purpose of meeting expenses incurred by it or the FCA—

(a)in preparation for the exercise of functions by the Bank under this Part of this Act, F514...

(b)for the purpose of facilitating the exercise by the Bank of those functions or otherwise in connection with their exercise by it [F515or]

[F516(c)in preparation for the exercise of functions by the Bank under Article 9(1) of the CSD regulation].

(4)It is irrelevant when the expenses were incurred (and, in particular, it is irrelevant if expenses were incurred by the FCA at a time when it was known as the Financial Services Authority).

[F517(5)The power conferred by this paragraph may not be used to require a fee to be paid by any person whose application under section 309I for approval under section 309G has been granted.]

Textual Amendments

F507Words in Sch. 17A para. 36(1) substituted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 2(39)(w)(i) (with regs. 7(4), 9(1))

F514Word in Sch. 17A para. 36(3)(a) omitted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 2(39)(w)(ii)(aa) (with regs. 7(4), 9(1))

F515Word in Sch. 17A para. 36(3)(b) inserted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 2(39)(w)(ii)(bb) (with regs. 7(4), 9(1))

F516 Sch. 17A para. 36(3)(c) inserted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 2(39)(w)(ii)(cc) (with regs. 7(4), 9(1))

37U.K.Any fee which is owed to the Bank under paragraph 36 may be recovered as a debt due to the Bank.]

Sections 334, 336 and 338.

SCHEDULE 18U.K. Mutuals

Part IU.K. Friendly Societies

The Friendly Societies Act 1974 (c.46)U.K.

1U.K.Omit sections 4 (provision for separate registration areas) and 10 (societies registered in one registration area carrying on business in another).

2U.K.In section 7 (societies which may be registered), in subsection (2)(b), for “in the central registration area or in Scotland” substitute “ in the United Kingdom, the Channel Islands or the Isle of Man ”.

3U.K.In section 11 (additional registration requirements for societies with branches), omit “and where any such society has branches in more than one registration area, section 10 above shall apply to that society”.

4U.K.In section 99(4) (punishment of fraud etc and recovery of property misapplied), omit “in the central registration area”.

The Friendly Societies Act 1992 (c.40)U.K.

5U.K.Omit sections 31 to 36A (authorisation of friendly societies business).

6U.K.In section 37 (restrictions on combinations of business), omit subsections (1), (1A) and (7A) to (9).

7U.K.Omit sections 38 to 43 (restrictions on business of certain authorised societies).

8U.K.Omit sections 44 to 50 (regulation of friendly societies business).

Part IIU.K. Friendly Societies: Subsidiaries and Controlled Bodies

InterpretationU.K.

9U.K.In this Part of this Schedule—

  • “the 1992 Act” means the M19Friendly Societies Act 1992; and

  • “section 13” means section 13 of that Act.

Marginal Citations

Qualifying bodiesU.K.

10(1)Subsections (2) to (5) of section 13 (incorporated friendly societies allowed to form or acquire control or joint control only of qualifying bodies) cease to have effect.U.K.

(2)As a result, omit—

(a)subsections (8) and (11) of that section, and

(b)Schedule 7 to the 1992 Act (activities which may be carried on by a subsidiary of, or body jointly controlled by, an incorporated friendly society).

Bodies controlled by societiesU.K.

11U.K.In section 13(9) (defined terms), after paragraph (a) insert—

“(aa)an incorporated friendly society also has control of a body corporate if the body corporate is itself a body controlled in one of the ways mentioned in paragraph (a)(i), (ii) or (iii) by a body corporate of which the society has control;”.

Joint control by societiesU.K.

12U.K.In section 13(9), after paragraph (c) insert—

“(cc)an incorporated friendly society also has joint control of a body corporate if—

(i)a subsidiary of the society has joint control of the body corporate in a way mentioned in paragraph (c)(i), (ii) or (iii);

(ii)a body corporate of which the society has joint control has joint control of the body corporate in such a way; or

(iii)the body corporate is controlled in a way mentioned in paragraph (a)(i), (ii) or (iii) by a body corporate of which the society has joint control;”.

Acquisition of joint controlU.K.

13U.K.In section 13(9), in the words following paragraph (d), after “paragraph (c)” insert “ or (cc) ”.

Amendment of Schedule 8 to the 1992 ActU.K.

14(1)Schedule 8 to the 1992 Act (provisions supplementing section 13) is amended as follows.U.K.

(2)Omit paragraph 3(2).

(3)After paragraph 3 insert—

“3A(1)A body is to be treated for the purposes of section 13(9) as having the right to appoint to a directorship if—

(a)a person’s appointment to the directorship follows necessarily from his appointment as an officer of that body; or

(b)the directorship is held by the body itself.

(2)A body (“B”) and some other person (“P”) together are to be treated, for the purposes of section 13(9), as having the right to appoint to a directorship if—

(a)P is a body corporate which has directors and a person’s appointment to the directorship follows necessarily from his appointment both as an officer of B and a director of P;

(b)P is a body corporate which does not have directors and a person’s appointment to the directorship follows necessarily from his appointment both as an officer of B and as a member of P’s managing body; or

(c)the directorship is held jointly by B and P.

(3)For the purposes of section 13(9), a right to appoint (or remove) which is exercisable only with the consent or agreement of another person must be left out of account unless no other person has a right to appoint (or remove) in relation to that directorship.

(4)Nothing in this paragraph is to be read as restricting the effect of section 13(9).”

(4)In paragraph 9 (exercise of certain rights under instruction by, or in the interests of, incorporated friendly society) insert at the end “ or in the interests of any body over which the society has joint control ”.

Consequential amendmentsU.K.

15(1)Section 52 of the 1992 Act is amended as follows.U.K.

(2)In subsection (2), omit paragraph (d).

(3)In subsection (3), for “(4) below” substitute “ (2) ”.

(4)For subsection (4) substitute—

“(4)A court may not make an order under subsection (5) unless it is satisfied that one or more of the conditions mentioned in subsection (2) are satisfied.”

(5)In subsection (5), omit the words from “or, where” to the end.

References in other enactmentsU.K.

16U.K.References in any provision of, or made under, any enactment to subsidiaries of, or bodies jointly controlled by, an incorporated friendly society are to be read as including references to bodies which are such subsidiaries or bodies as a result of any provision of this Part of this Schedule.

Part IIIU.K. Building Societies

The Building Societies Act 1986 (c.53)U.K.

17U.K.Omit section 9 (initial authorisation to raise funds and borrow money).

18U.K.Omit Schedule 3 (supplementary provisions about authorisation).

F518Part IVU.K. Industrial and Provident Societies

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Part VU.K. Credit Unions

The Credit Unions Act 1979 (c.34)U.K.

21U.K.In section 6 (minimum and maximum number of members), omit subsections (2) to (6).

22U.K.In section 11 (loans), omit subsections (2) and (6).

23U.K.Omit sections 11B (loans approved by credit unions), 11C (grant of certificates of approval) and 11D (withdrawal of certificates of approval).

24U.K.In section 12, omit subsections (4) and (5).

25U.K.In section 14, omit subsections (2), (3), (5) and (6).

26U.K.In section 28 (offences), omit subsection (2).

F519SCHEDULE 19U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Section 377G

[F520SCHEDULE 19AU.K.The manager of a write-down order

Textual Amendments

Application of ScheduleU.K.

1(1)This Schedule applies where—

(a)a write-down order has been made under section 377A in relation to an insurer, and

(b)one or more persons have been appointed under section 377G to act as the manager of the order.

(2)Where only one person acts as the manager, a reference in this Schedule to “the manager” is to that person.

(3)Where two or more persons act jointly as the manager—

(a)a reference in this Schedule to the manager is a reference to those persons acting jointly;

(b)where an offence of omission is committed by the manager, each of the persons appointed to act jointly—

(i)commits the offence, and

(ii)may be proceeded against and punished individually.

(4)Where persons act jointly in respect of only some of the functions of the manager, sub-paragraph (3) applies only in relation to those functions.

(5)Where two or more persons act concurrently as the manager, a reference in this Schedule to the manager is a reference to any of the persons appointed (or any combination of them).

(6)In this Schedule, “creditor” includes a contingent or prospective creditor.

Status of the managerU.K.

2The manager is an officer of the court.

Monitoring the insurer’s affairsU.K.

3(1)The manager must monitor the insurer’s affairs for the purpose of forming a view as to whether—

(a)it remains the case that the write-down order is reasonably likely to lead to a better outcome for the insurer’s policyholders and other creditors (taken as a whole) than if the write-down order were not in effect, or

(b)that will remain the case, or once again be the case, if the directors of the insurer were to take certain action or refrain from taking certain action.

(2)If the manager forms the view mentioned in sub-paragraph (1)(b), the manager may make such recommendations to the directors of the insurer as the manager thinks appropriate.

(3)In forming a view mentioned in sub-paragraph (1), the manager is entitled to rely on information provided by the insurer, unless the manager has reason to doubt its accuracy.

(4)If directed to do so by the FCA or the PRA, the manager must provide a report to that regulator on such matters relating to the insurer’s affairs, and at such intervals, as that regulator may specify.

Application by manager to revoke or vary a write-down orderU.K.

4(1)This paragraph applies if the manager forms the view that it is in the interests of the insurer’s policyholders and other creditors (taken as a whole) for the write-down order to be—

(a)revoked, or

(b)varied in one or more respects.

(2)The manager must apply to the court for such orders (whether under section 377I or otherwise) as the manager thinks likely to achieve the best outcome for the insurer’s policyholders and other creditors (taken as a whole).

(3)In forming the view mentioned in sub-paragraph (1), the manager may have regard, among other things—

(a)to whether recommendations under paragraph 3(2) have been made (and if so, whether they have been acted upon);

(b)to whether recommendations, or further recommendations, under paragraph 3(2) could be made (and if so, the likelihood that they will be acted upon).

Provision of information and assistance to the managerU.K.

5(1)The manager may require a relevant person to provide such information or assistance as the manager may reasonably require for the purpose of carrying out the manager’s functions.

(2)Each of the following is a “relevant person” for these purposes—

(a)a director of the insurer, or of a body corporate in the same group as the insurer;

(b)an employee of the insurer, or of a body corporate in the same group as the insurer;

(c)a person providing a service to the insurer, or to a body corporate in the same group as the insurer;

(d)a person who has at any relevant time been a person falling within paragraph (a), (b) or (c).

(3)A relevant person must comply with a requirement under this paragraph to provide information as soon as is practicable.

(4)The obligation imposed by sub-paragraph (3) is enforceable, on the application of the manager—

(a)by an injunction, or

(b)in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.

Application by manager for directionsU.K.

6The manager may apply to the court for directions about the carrying out of the manager’s functions.

Challenges to the manager’s actionsU.K.

7(1)Any of the following persons may apply to the court on the ground that an act, omission or decision of the manager has unfairly harmed the interests of the applicant—

(a)a director of the insurer;

(b)a shareholder of the insurer;

(c)a policyholder or other creditor of the insurer;

(d)any other person affected by the write-down order.

(2)Any of the following persons may apply to the court on the ground that an act, omission or decision of the manager is not in the interests of the insurer’s policyholders and other creditors (taken as a whole)—

(a)the FCA;

(b)the PRA;

(c)the scheme manager of the Financial Services Compensation Scheme (see section 212(1));

(d)a provisional liquidator of the insurer.

(3)Before making an application under sub-paragraph (2)—

(a)the FCA must consult the PRA;

(b)the PRA must consult the FCA;

(c)the scheme manager of the Financial Services Compensation Scheme must notify the FCA and the PRA.

(4)On an application under this paragraph the court may—

(a)confirm, reverse or modify any act or decision of the manager,

(b)give the manager directions, or

(c)make such other order as the court thinks appropriate (but may not, under this paragraph, order the manager to pay any compensation).

(5)Where an application under this paragraph relates to a failure by the manager to apply to the court for the variation or termination of the write-down order, the court may treat the application as an application for an order under section 377I made by a person entitled to apply for an order under that section.]

Section 377J

[F521SCHEDULE 19BU.K.Further provision about write-down orders

Textual Amendments

PART 1U.K.Restrictions on enforcement

Application of this Part of this ScheduleU.K.

1(1)This Part of this Schedule applies in relation to an insurer—

(a)during the period—

(i)beginning with the date on which an application is made for a write-down order in relation to the insurer, and

(ii)ending with the date on which the order is made or the application is withdrawn or dismissed;

(b)during the period—

(i)beginning with the date on which a write-down order is made in relation to the insurer, and

(ii)ending with the last day of the period of six months beginning with the day on which the write-down order takes effect (see section 377A(3)(a));

(c)during such further period as the court may order.

(2)This Part of this Schedule ceases to apply—

(a)where the court orders that it should cease to apply (and in accordance with the terms of the order), or

(b)where the write-down order ceases to have effect (because, in accordance with section 377H, each reduction in the value of a liability of the insurer ceases to have effect).

(3)The court—

(a)may make an order under sub-paragraph (1)(c) or (2)(a) only on an application by a person mentioned in sub-paragraph (4);

(b)may not specify in an order under sub-paragraph (1)(c) a period longer than six months (but may make one or more further such orders).

(4)The persons are—

(a)a person entitled to make an application for a write-down order in relation to the insurer (see section 377C(1));

(b)a person appointed under section 377G to act as the manager of the write-down order;

(c)a provisional liquidator of the insurer;

(d)the FCA.

(5)Before making an application for an order under this Part of this Schedule—

(a)a person other than the PRA or the Treasury must consult the PRA;

(b)the PRA must consult the FCA.

Moratorium on proceedingsU.K.

2(1)Where this Part of this Schedule applies in relation to an insurer, except with the permission of the court—

(a)no step may be taken to enforce security over the insurer’s property;

(b)no step may be taken to repossess goods in the insurer’s possession under a hire-purchase agreement;

(c)a landlord may not exercise a right of forfeiture by peaceable re-entry in relation to premises let to the insurer;

(d)in Scotland, a landlord may not exercise a right of irritancy in relation to premises let to the insurer;

(e)no legal process (including legal proceedings, execution, distress or diligence) may be instituted, carried out or continued against the insurer or its property.

(2)Where the court gives permission for something to be done that would otherwise be prevented by this paragraph, it may impose a condition on, or a requirement in connection with, the permission.

(3)In this paragraph, “landlord” includes a person to whom rent is payable.

ExceptionsU.K.

3(1)This Part of this Schedule does not apply in relation to—

(a)arrangements entered into after the date on which this Part of this Schedule first applied in relation to the insurer;

(b)employment tribunal proceedings or any legal process arising out of such proceedings;

(c)proceedings, not within paragraph (b), involving a claim between an employer and a worker.

(2)Nothing in this Part of this Schedule—

(a)prevents the FCA or the PRA from exercising a function it has in relation to the insurer or any other person;

(b)prevents a consumer from taking steps to enforce a money award or direction under section 229 or 404B.

(3)Nothing in this Part of this Schedule affects the operation of—

(a)Part 7 of the Companies Act 1989 (financial markets and insolvency);

(b)the Financial Markets and Insolvency Regulations 1996 (S.I. 1996/1469);

(c)the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 (S.I. 1999/2979);

(d)the Financial Collateral Arrangements (No.2) Regulations 2003 (S.I. 2003/3226).

(4)The Treasury may by regulations amend sub-paragraph (3).

(5)In this paragraph—

  • “agency worker” has the meaning given by section 13(2) of the Employment Relations Act 1999;

  • “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions;

  • “employer”—

    (a)

    in relation to an agency worker, has the meaning given by section 13(2) of the Employment Relations Act 1999;

    (b)

    otherwise, has the meaning given by section 230(4) of the Employment Rights Act 1996;

  • “worker” means an individual who is—

    (a)

    a worker within the meaning of section 230(3) of the Employment Rights Act 1996, or

    (b)

    an agency worker.

PART 2U.K.Dealing with assets etc

Application of this Part of this ScheduleU.K.

4This Part of this Schedule applies while a write-down order has effect in relation to one or more liabilities of an insurer.

Dealing with assetsU.K.

5The insurer may not dispose of, or otherwise deal with, any of its assets (whether in the United Kingdom or elsewhere) except—

(a)in the ordinary way of the insurer’s business, or

(b)with the consent of the PRA.

Paying variable remunerationU.K.

6The insurer may not pay variable remuneration that is not regulated by a collective bargaining agreement, except with the consent of the PRA.

DistributionsU.K.

7The insurer may not make a distribution, within the meaning of Part 23 of the Companies Act 2006, except with the consent of the PRA.

PART 3U.K.Treatment of written-down liabilities for certain purposes

Application of this Part of this ScheduleU.K.

8(1)This Part of this Schedule applies in relation to a liability of an insurer while the value of the liability is reduced under a write-down order.

(2)Where the write-down order is varied, this Part of this Schedule applies as if references to the write-down order were to the order as varied.

Relevant insolvency provisionsU.K.

9(1)In determining the value of the liability for the purposes of a relevant insolvency provision, no account is to be taken of the contingent or prospective value of the liability, or interest on the liability, arising from any expectation that the write-down order will be varied, further varied or cease to have effect (whether in relation to the liability or generally).

(2)The relevant insolvency provisions are—

(a)section 123 of the 1986 Act or Article 103 of the 1989 Order, or any statutory provision which applies that section or that Article;

(b)Article 11 of Commission Delegated Regulation (EU) 2015/35 of 10 October 2014 supplementing Directive 2009/138/EC of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency 2);

(c)PRA rules applicable to non-directive insurers, within the meaning given by the Rulebook made by the PRA under this Act (as that Rulebook has effect from time to time).

(3)The Treasury may by regulations amend sub-paragraph (2).

Reinsurance contractsU.K.

10(1)This paragraph applies where—

(a)the liability is a liability under a contract of insurance the insurer carries out as principal (“contract A”), and

(b)the insurer enters into a reinsurance contract under which contract A, or any liability under contract A, is reinsured (“contract B”).

(2)In determining the value of the liability for the purposes of contract B, no account is to be taken of the reduction in value of the liability under the write-down order.

PART 4U.K.Interest

11(1)This Part of this Schedule applies where—U.K.

(a)the value of a liability of an insurer is reduced under a write-down order,

(b)while the write-down order has effect in relation to the liability, an amount of the liability is due and payable (or would be due and payable but for the write-down order), and

(c)the amount remains due and payable after the reduction ceases to have effect.

(2)The amount carries statutory interest, within the meaning of the Late Payment of Commercial Debts (Interest) Act 1998, for the period—

(a)beginning with the date on which the write-down order took effect or, if later, the date on which the amount became due and payable (or would have become due and payable but for the write-down order), and

(b)ending with the day on which the amount is paid.

(3)Where a write-down order is varied, this section applies as if references to the write-down order were to the order as varied.]

Section 377K

[F522SCHEDULE 19CU.K.Insurers in financial difficulties: enforcement of contracts

Textual Amendments

PART 1U.K.Introductory

Application of this ScheduleU.K.

1This Schedule applies in relation to an insurer while the insurer is in financial difficulties.

“Financial difficulties”U.K.

2(1)An insurer is in “financial difficulties” for the purposes of this Schedule if—

(a)Part 1 of Schedule 19B (write-down orders: restrictions on enforcement) has effect in relation to the insurer (see paragraph 1(1) and (2) of that Schedule);

(b)the insurer is in administration, within the meaning of Schedule B1 to the 1986 Act or Schedule B1 to the 1989 Order, or awaiting administration;

(c)a petition for the winding up of the insurer has been presented and has not been withdrawn or determined.

(2)For the purposes of sub-paragraph (1)(b), an insurer is awaiting administration while an application for an administration order in respect of the insurer has been made to the court and—

(a)the application has not yet been granted or dismissed, or

(b)the application has been granted but the administration order has not yet taken effect.

(3)For the purposes of this Schedule, an insurer “enters into financial difficulties”—

(a)in a case to which sub-paragraph (1)(a) applies, on the date on which Part 1 of Schedule 19B first has effect in relation to the insurer;

(b)in a case to which sub-paragraph (1)(b) applies, on the date on which the application for the administration order is made to the court;

(c)in a case to which sub-paragraph (1)(c) applies, on the date on which the winding-up petition is presented.

PART 2U.K.Policyholder surrender rights

Restriction on policyholder surrender rightsU.K.

3(1)Where this Schedule applies in relation to an insurer, the total value of a policyholder’s rights under a relevant contract of insurance which the policyholder may surrender in a relevant period must not exceed the surrender limit for that period.

(2)For these purposes—

  • “relevant contract of insurance” means a contract of long-term insurance which is not a contract in respect of which the following conditions are met—

    (a)

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

    (b)

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

    (c)

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

  • “relevant period” means—

    (a)

    the period of 12 months beginning with the date on which the insurer entered into financial difficulties, and

    (b)

    each subsequent period of 12 months;

  • “surrender limit”, in relation to a relevant contract of insurance and relevant period, is an amount equal to 5% of the total surrender value of the contract on the day on which the relevant period began.

Switching rightsU.K.

4(1)This paragraph applies where the value of a right under a relevant contract of insurance is wholly or partly determined by reference to property of any description.

(2)The reference in paragraph 3(1) to the surrender of rights by a policyholder includes the exercise by the policyholder of a contractual right to change the property by reference to which the value of a right is (wholly or partly) determined.

Consent to exceed surrender limitU.K.

5(1)Paragraph 3(1) does not apply if, or to the extent that, consent for the surrender of an amount that would exceed the surrender limit for the relevant period has been given by—

(a)the court,

(b)a relevant office-holder, or

(c)where there is no relevant office-holder, the insurer.

(2)For these purposes, “relevant office-holder” means—

(a)a provisional liquidator of the insurer;

(b)an administrator of the insurer;

(c)a person appointed to act as the manager of a write-down order that has effect in relation to the insurer.

(3)The court, a relevant office-holder or the insurer (as the case may be) may give consent under sub-paragraph (1) only if satisfied that not doing so would cause the policyholder hardship.

(4)Where a provisional liquidator of an insurer has been appointed, the manager of a write-down order that has effect in relation to the insurer must obtain the consent of the provisional liquidator before giving consent under sub-paragraph (1).

(5)As soon as reasonably practicable after giving consent under sub-paragraph (1), a relevant office-holder or the insurer must notify the PRA.

PART 3U.K.Termination etc of relevant contracts

Relevant contractsU.K.

6(1)For the purposes of this Part of this Schedule, a contract to which an insurer is a party is a “relevant contract” if it is—

(a)a contract for the supply of goods or services to the insurer,

(b)a financial contract, or

(c)a reinsurance contract under which contracts of insurance the insurer carries out as principal are reinsured.

(2)“Financial contract” means—

(a)a contract for the provision of financial services consisting of—

(i)lending (including the factoring and financing of commercial transactions),

(ii)financial leasing, or

(iii)providing guarantees or commitments;

(b)a securities contract, including—

(i)a contract for the purchase, sale or loan of a security or group or index of securities;

(ii)an option on a security or group or index of securities;

(iii)a repurchase or reverse repurchase transaction on any such security, group or index;

(c)a commodities contract, including—

(i)a contract for the purchase, sale or loan of a commodity or group or index of commodities for future delivery;

(ii)an option on a commodity or group or index of commodities;

(iii)a repurchase or reverse repurchase transaction on any such commodity, group or index;

(d)a futures or forwards contract, including a contract (other than a commodities contract) for the purchase, sale or transfer of a commodity or property of any other description, service, right or interest for a specified price at a future date;

(e)a swap agreement, including—

(i)a swap or option relating to interest rates, spot or other foreign exchange agreements, currency, an equity index or equity, a debt index or debt, commodity indexes or commodities, weather, emissions or inflation;

(ii)a total return, credit spread or credit swap;

(iii)any agreement or transaction similar to an agreement that is referred to in sub-paragraph (i) or (ii) and is the subject of recurrent dealing in the swaps or derivatives markets.

(3)But a master agreement for any contract or agreement referred to in sub-paragraph (2) is not a relevant contract for the purposes of this Part of this Schedule.

(4)For the purposes of sub-paragraph (2), “commodities” includes—

(a)units recognised for compliance with the requirements of EU Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading,

(b)allowances under paragraph 5 of Schedule 2 to the Climate Change Act 2008 relating to a trading scheme dealt with under Part 1 of that Schedule (schemes limiting activities relating to emissions of greenhouse gas), and

(c)renewables obligation certificates issued—

(i)by the Gas and Electricity Markets Authority under an order made under section 32B of the Electricity Act 1989, or

(ii)by the Northern Ireland Authority for Utility Regulation under the Energy (Northern Ireland) Order 2003 (S.I. 2003/419 (N.I. 6)) and pursuant to an order made under Articles 52 to 55F of that Order.

Restriction on termination etcU.K.

7(1)Where this Schedule applies in relation to an insurer, a provision of a relevant contract, entered into by the insurer before the insurer first enters into financial difficulties, ceases to have effect if, and to the extent that, under the provision—

(a)the contract would terminate, a supply would cease, or any other thing would occur, because the insurer is in financial difficulties, or

(b)another party to the contract would be entitled to terminate the contract, cease a supply, or do any other thing, because the insurer is in financial difficulties.

(2)Where—

(a)under a provision of a relevant contract, another party to the contract is entitled to terminate the contract, cease a supply, or do any other thing because of an event occurring before the insurer was in financial difficulties, and

(b)the entitlement arises before the insurer was in financial difficulties,

the entitlement may not be exercised while the insurer is in financial difficulties.

(3)A supplier of goods or services to an insurer must not—

(a)make it a condition of a supply of goods or services, while the insurer is in financial difficulties, that any outstanding charges in respect of a supply made to the insurer before the insurer is in financial difficulties are paid, or

(b)do anything which has that effect.

Consent to terminate relevant contractsU.K.

8(1)Sub-paragraph (2) applies where—

(a)a provision of a relevant contract ceases to have effect under paragraph 7(1), or

(b)an entitlement under a provision of a relevant contract is not exercisable under paragraph 7(2).

(2)A party to the contract (other than the insurer) may terminate the contract, or do another thing in relation to the contract, if consent to terminate the contract or do that other thing (as the case may be) has been given by—

(a)the court,

(b)a relevant office holder, or

(c)where there is no relevant office-holder, the insurer.

(3)For these purposes, “relevant office-holder” means an administrator or provisional liquidator of the insurer (but does not include a person appointed to act as the manager of a write-down order that has effect in relation to the insurer).

(4)The court, a relevant office-holder or the insurer (as the case may be) may give consent under sub-paragraph (2) only if satisfied that not doing so would cause hardship to any person.

(5)As soon as reasonably practicable after giving consent under sub-paragraph (2), a relevant office-holder or the insurer must notify the PRA.

PART 4U.K.Exclusions and disapplication of this Schedule

ExclusionsU.K.

9(1)Nothing in this Schedule affects the operation of—

(a)Part 7 of the Companies Act 1989 (financial markets and insolvency);

(b)the Financial Markets and Insolvency Regulations 1996 (S.I. 1996/1469);

(c)the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 (S.I. 1999/2979);

(d)the Financial Collateral Arrangements (No.2) Regulations 2003 (S.I. 2003/3226).

(2)Nothing in this Schedule affects any protected arrangements within the meaning of section 48P of the Banking Act 2009.

Disapplication of this Schedule by the courtU.K.

10(1)The court may order that this Schedule, or a specified provision of this Schedule—

(a)does not apply (insofar as it would otherwise) in relation to one or more contracts to which the insurer is a party, or

(b)applies with specified modifications in relation to one or more such contracts.

(2)An order under this paragraph—

(a)must specify the contracts to which it applies;

(b)may specify all of the contracts to which the insurer is a party (and to which one or more provisions of this Schedule would otherwise apply).

(3)For the purposes of an order under this paragraph—

  • “contract” includes a contract of insurance;

  • “specified” means specified or described in the order.

(4)The court may make an order under this paragraph only if satisfied that one or more of the following grounds is made out—

(a)not making the order would be likely to cause hardship to any person (other than the insurer);

(b)where the insurer is in financial difficulties by virtue of paragraph 2(1)(a) (write-down order), making the order is reasonably likely to lead to a better outcome for the insurer’s policyholders and other creditors (taken as a whole) than not making the order;

(c)where the insurer is in financial difficulties by virtue of paragraph 2(1)(b) (administration), making the order is reasonably likely to promote the purpose of administration.

(5)The “purpose of administration” means—

(a)where the insurer is in, or is awaiting, administration under Part 2 of the 1986 Act (as modified, in relation to insurers, by the Financial Services and Markets Act 2000 (Administration Orders Relating to Insurers) Order 2010 (S.I. 2010/3023)), an objective specified in paragraph 3 or 3A of Schedule B1 to the 1986 Act;

(b)where the insurer is in, or is awaiting, administration under Part 3 of the 1989 Order (as modified, in relation to insurers, by the Financial Services and Markets Act 2000 (Administration Orders Relating to Insurers) (Northern Ireland) Order 2007 (S.I. 2007/846)), an objective specified in paragraph 4 of Schedule B1 to the 1989 Order.

ProcedureU.K.

11(1)An order under paragraph 10 may be made on the court’s own motion or on an application by—

(a)where the insurer is in financial difficulties by virtue of paragraph 2(1)(a) (write-down order), a person mentioned in paragraph 1(4) of Schedule 19B;

(b)where the insurer is in financial difficulties by virtue of paragraph 2(1)(b) (administration), a person mentioned in sub-paragraph (2);

(c)where the insurer is in financial difficulties by virtue of paragraph 2(1)(c) (winding up), a person entitled to petition for the winding up of the insurer;

(d)a provisional liquidator of the insurer;

(e)the FCA.

(2)For the purposes of sub-paragraph (1)(b), the persons are—

(a)where an administrator has been appointed, the administrator;

(b)where the insurer is in, or is awaiting, administration under Part 2 of the 1986 Act, a person mentioned in paragraph 12(1) of Schedule B1 to that Act;

(c)where the insurer is in, or is awaiting, administration under Part 3 of the 1989 Order, a person mentioned in paragraph 13(1) of Schedule B1 to that Order.

(3)Before making an application for an order under paragraph 10—

(a)a person other than a person mentioned in sub-paragraph (4) must obtain the consent of the PRA;

(b)a person mentioned in sub-paragraph (4) must consult the PRA.

(4)The persons mentioned in this sub-paragraph are—

(a)the FCA;

(b)an administrator of the insurer;

(c)a provisional liquidator of the insurer;

(d)a person appointed to act as the manager of the write-down order by virtue of which the insurer is in financial difficulties for the purposes of this Schedule.

(5)Consent under sub-paragraph (3)(a)—

(a)must be in writing, and

(b)must be filed with the court with the relevant application.

(6)The PRA must consult the FCA before giving or refusing consent under sub-paragraph (3)(a).

PART 5U.K.Powers to amend this Schedule

12U.K.The Treasury may by regulations amend this Schedule so as to—

(a)vary or omit any of paragraphs (a), (b) and (c) of paragraph 2(1);

(b)change the percentage figure specified in the definition of “surrender limit” in paragraph 3(2);

(c)amend paragraph 6 (meaning of “relevant contract”);

(d)amend paragraph 9 (exclusions from the operation of this Schedule).]

Section 432(1).

SCHEDULE 20U.K. Minor and Consequential Amendments

The House of Commons Disqualification Act 1975 (c. 24)U.K.

1U.K.In Part III of Schedule 1 to the House of Commons Disqualification Act 1975 (disqualifying offices)—

(a)omit—

“Any member of the Financial Services Tribunal in receipt of remuneration”;

and

(b)F523. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Commencement Information

I10Sch. 20 para. 1 wholly in force at 1.12.2001; Sch. 20 para. 1 not in force at Royal Assent see s. 431(2); Sch. 20 para. 1(b) in force at 3.9.2001 by S.I. 2001/2632, art. 2(2), Sch. Pt. 2; Sch. 20 para. 1 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

The Northern Ireland Assembly Disqualification Act 1975 (c. 25)U.K.

2U.K.In Part III of Schedule 1 to the Northern Ireland Assembly Disqualification Act 1975 (disqualifying offices)—

(a)omit—

“Any member of the Financial Services Tribunal in receipt of remuneration”;

and

(b)F524. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Commencement Information

I11Sch. 20 para. 2 wholly in force at 1.12.2001; Sch. 20 para. 2 not in force at Royal Assent see s. 431(2); Sch. 20 para. 2(b) in force at 3.9.2001 by S.I. 2001/2632, art. 2(2), Sch. Pt. 2; Sch. 20 para. 2 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

The Civil Jurisdiction and Judgments Act 1982 (c. 27)U.K.

3U.K.In paragraph 10 of Schedule 5 to the Civil Jurisdiction and Judgments Act 1982 (proceedings excluded from the operation of Schedule 4 to that Act), for “section 188 of the Financial Services Act 1986” substitute “ section 415 of the Financial Services and Markets Act 2000 ”.

The Income and Corporation Taxes Act 1988 (c. 1)U.K.

4(1)The Income and Corporation Taxes Act 1988 is amended as follows.U.K.

(2)In section 76 (expenses of management: insurance companies), in subsection (8), omit the definitions of—

  • “the 1986 Act”;

  • “authorised person”;

  • “investment business”;

  • “investor”;

  • “investor protection scheme”;

  • “prescribed”; and

  • “recognised self-regulating organisation”.

(3)F525. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)F526. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)F527. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)F528. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F525Sch. 20 para. 4(3) repealed (1.4.2010 with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), 1181(1), 1184(1)(3)(4), {Sch. 3 Pt. 1} (subject to Sch. 2)

F526Sch. 20 para. 4(4) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), ss. 1031, 1034(1), Sch. 3 Pt. 1 (with transitional provisions and savings in Sch. 2)

F527Sch. 20 para. 4(5) omitted (13.8.2009) by virtue of The Finance Act 2009, Schedule 47 (Consequential Amendments) Order 2009 (S.I. 2009/2035), art. 2, {Sch. para. 60(h)}

F528Sch. 20 para. 4(6) repealed (19.7.2007) by Finance Act 2007 (c. 11), s. 114, Sch. 27 Pt. 6(5)

The Finance Act 1991 (c. 31)U.K.

5(1)The Finance Act 1991 is amended as follows.U.K.

(2)In section 47 (investor protection schemes), omit subsections (1), (2) and (4).

(3)In section 116 (investment exchanges and clearing houses: stamp duty), in subsection (4)(b), for “Financial Services Act 1986” substitute “ Financial Services and Markets Act 2000 ”.

The Tribunals and Inquiries Act 1992 (c. 53)U.K.

6U.K.F529. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Commencement Information

I12Sch. 20 para. 6 in force at 3.7.2001; Sch. 20 para. 6 not in force at Royal Assent see s. 431(2); Sch. 20 para. 6 in force at 3.7.2001 by S.I. 2001/2364, art. 2(a) (with transitional savings in art. 3)

The Judicial Pensions and Retirement Act 1993 (c. 8)U.K.

7(1)The Judicial Pensions and Retirement Act 1993 is amended as follows.U.K.

(2)F530. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)In Schedule 5 (relevant offices in relation to retirement provisions)—

(a)omit the entry—

“Member of the Financial Services Tribunal appointed by the Lord Chancellor”;

and

(b)F531. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Commencement Information

I13Sch. 20 para. 7 wholly in force at 1.12.2001; Sch. 20 para. 7 not in force at Royal Assent see s. 431(2); Sch. 20 para. 7(except sub-para. (3)(a)) in force at 3.9.2001 by S.I. 2001/2632, art. 2(2), Sch. Pt. 2; Sch. 20 para. 7 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

Section 432(2).

SCHEDULE 21U.K. Transitional Provisions and Savings

Self-regulating organisationsU.K.

1(1)No new application under section 9 of the 1986 Act (application for recognition) may be entertained.U.K.

(2)No outstanding application made under that section before the passing of this Act may continue to be entertained.

(3)After the date which is the designated date for a recognised self-regulating organisation—

(a)the recognition order for that organisation may not be revoked under section 11 of the 1986 Act (revocation of recognition);

(b)no application may be made to the court under section 12 of the 1986 Act (compliance orders) with respect to that organisation.

(4)The powers conferred by section 13 of the 1986 Act (alteration of rules for protection of investors) may not be exercised.

(5)“Designated date” means such date as the Treasury may by order designate.

(6)Sub-paragraph (3) does not apply to a recognised self-regulating organisation in respect of which a notice of intention to revoke its recognition order was given under section 11(3) of the 1986 Act before the passing of this Act if that notice has not been withdrawn.

(7)Expenditure incurred by the Authority in connection with the winding up of any body which was, immediately before the passing of this Act, a recognised self-regulating organisation is to be treated as having been incurred in connection with the discharge by the Authority of functions under this Act.

(8)“Recognised self-regulating organisation” means an organisation which, immediately before the passing of this Act, was such an organisation for the purposes of the 1986 Act.

(9)“The 1986 Act” means the M37Financial Services Act 1986.

Marginal Citations

Self-regulating organisations for friendly societiesU.K.

2(1)No new application under paragraph 2 of Schedule 11 to the 1986 Act (application for recognition) may be entertained.U.K.

(2)No outstanding application made under that paragraph before the passing of this Act may continue to be entertained.

(3)After the date which is the designated date for a recognised self-regulating organisation for friendly societies—

(a)the recognition order for that organisation may not be revoked under paragraph 5 of Schedule 11 to the 1986 Act (revocation of recognition);

(b)no application may be made to the court under paragraph 6 of that Schedule (compliance orders) with respect to that organisation.

(4)“Designated date” means such date as the Treasury may by order designate.

(5)Sub-paragraph (3) does not apply to a recognised self-regulating organisation for friendly societies in respect of which a notice of intention to revoke its recognition order was given under section 11(3) of the 1986 Act (as applied by paragraph 5(2) of that Schedule) before the passing of this Act if that notice has not been withdrawn.

(6)Expenditure incurred by the Authority in connection with the winding up of any body which was, immediately before the passing of this Act, a recognised self-regulating organisation for friendly societies is to be treated as having been incurred in connection with the discharge by the Authority of functions under this Act.

(7)“Recognised self-regulating organisation for friendly societies” means an organisation which, immediately before the passing of this Act, was such an organisation for the purposes of the 1986 Act.

(8)“The 1986 Act” means the M38Financial Services Act 1986.

Marginal Citations

Section 432(3).

SCHEDULE 22U.K.Repeals

Modifications etc. (not altering text)

Commencement Information

I14Sch. 22 wholly in force at 2.7.2002; Sch. 22 not in force at Royal Assent see s. 431(2); Sch. 22 in force for specified purposes at 30.4.2001 by S.I. 2001/1282, art. 2(b); Sch. 22 in force 2.7.2002 in relation to the Credit Union Act 1979 by S.I. 2001/3538, art. 2(5)(b); Sch. 22 in force at in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

ChapterShort titleExtent of repeal
1923 c. 8.The Industrial Assurance Act 1923.The whole Act.
1948 c. 39.The Industrial Assurance and Friendly Societies Act 1948.The whole Act.
1965 c. 12.The Industrial and Provident Societies Act 1965.Section 8.
Section 70.
1974 c. 46.The Friendly Societies Act 1974.Section 4.
Section 10.
In section 11, from “and where” to “that society”.
In section 99(4), “in the central registration area”.
1975 c. 24.The House of Commons Disqualification Act 1975.In Schedule 1, in Part III, “Any member of the Financial Services Tribunal in receipt of remuneration”.
1975 c. 25.The Northern Ireland Assembly Dis-qualification Act 1975.In Schedule 1, in Part III, “Any member of the Financial Services Tribunal in receipt of remuneration”.
1977 c. 46.The Insurance Brokers (Registration) Act 1977.The whole Act.
1979 c. 34.The Credit Unions Act 1979.Section 6(2) to (6).
Section 11(2) and (6).
Sections 11B, 11C and 11D.
Section 12(4) and (5).
In section 14, subsections (2), (3), (5) and (6).
Section 28(2).
1986 c. 53.The Building Societies Act 1986.Section 9.
Schedule 3.
1988 c. 1.The Income and Corporation Taxes Act 1988.In section 76, in subsection (8), the definitions of “the 1986 Act”, “authorised person”, “investment business”, “investor”, “investor protection scheme”, “prescribed” and “recognised self-regulating organisation”.
1991 c. 31.The Finance Act 1991.In section 47, subsections (1), (2) and (4).
1992 c. 40.The Friendly Societies Act 1992.In section 13, subsections (2) to (5), (8) and (11).
Sections 31 to 36.
In section 37, subsections (1), (1A) and (7A) to (9).
Sections 38 to 50.
In section 52, subsection (2)(d) and, in subsection (5), the words from “or where” to the end.
Schedule 7.
In Schedule 8, paragraph 3(2).
1993 c. 8.The Judicial Pensions and Retirement Act 1993.In Schedule 5, “Member of the Financial Services Tribunal appointed by the Lord Chancellor”.

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