Financial Services and Markets Act 2000

199 Additional procedure for EEA firms in certain cases. U.K.

(1) This section applies if it appears to [F1 a regulator] that its power of intervention is exercisable in relation to an EEA firm exercising EEA rights in the United Kingdom (“an incoming EEA firm”) in respect of the contravention of a relevant requirement.

(2) A requirement is relevant if—

[F2 (a) it is imposed—

(i) by [F3 that regulator] under this Act, or

(ii) under any directly applicable Community regulation or decision made under a single market directive; and]

[F4 (b) as respects its contravention, the single market directive in question provides that a procedure of the kind set out in the following provisions of this section (so far as they are relevant in the firm's case) is to apply.]

(3) [F5 The regulator] must, in writing, require the firm to remedy the situation.

[F6 (3A) If the firm falls within paragraph 5(da) [F7 , (f) or (h)] of Schedule 3, [F5 the regulator] must at the same time as it gives notice to the firm under subsection (3) refer its findings to the firm's home state regulator.

F5 (3B) Subsections (4) [F8 and (5)] apply to an incoming EEA firm other than a firm falling within paragraph 5(da) F9 ... of Schedule 3.]

(4) If the firm fails to comply with the requirement under subsection (3) within a reasonable time, [F5 the regulator] must give a notice to that effect to the firm’s home state regulator requesting it—

(a) to take all appropriate measures for the purpose of ensuring that the firm remedies the situation which has given rise to the notice; and

(b) to inform [F5 the regulator] of the measures it proposes to take or has taken or the reasons for not taking such measures.

(5) Except as mentioned in subsection (6), [F5 the regulator] may not exercise its power of intervention [F10 before informing the firm's home state regulator and] unless satisfied—

(a) that the firm’s home state regulator has failed or refused to take measures for the purpose mentioned in subsection (4)(a); or

(b) that the measures taken by the home state regulator have proved inadequate for that purpose.

[F11 (5A) Subsections (6) to (8) apply to an incoming EEA firm other than a firm falling within paragraph 5(da) or (h) of Schedule 3.]

(6) If [F5 the regulator] decides that it should exercise its power of intervention in respect of the incoming EEA firm as a matter of urgency in order to protect the interests of consumers, it may exercise that power—

(a) before complying with subsections (3) and (4); or

(b) where it has complied with those subsections, before it is satisfied as mentioned in subsection (5).

[F12 (7) In such case, the regulator must at the earliest opportunity—

(a) where the single market directive or directly applicable Community regulation in question is the capital requirements directive or the capital requirements regulation, inform the firm’s home state regulator, the Commission, EBA and any other affected regulators of other EEA States;

(b) in the case of any other single market directive or directly applicable Community regulation, inform the firm’s home state regulator, ESMA and the Commission.

(7A) Where the single market directive or directly applicable Community regulation in question is the capital requirements directive or the capital requirements regulation the regulator must rescind any requirement imposed on the firm where the home state regulator has taken appropriate measures in accordance with section 199B(4).]

(8) If—

(a) [F5 the regulator] has (by virtue of subsection (6)) exercised its power of intervention before complying with subsections (3) and (4) or before it is satisfied as mentioned in subsection (5), and

(b) the Commission decides under any of the single market directives [F13 (other than the markets in financial instruments directive)] that [F5 the regulator] must rescind or vary any requirement imposed in the exercise of its power of intervention,

[F5 the regulator] must in accordance with the decision rescind or vary the requirement.

[F14 (9) In the case of a firm falling within paragraph 5(da) of Schedule 3, [F5 the regulator] may not exercise its power of intervention before informing the firm's home state regulator and unless satisfied—

(a) that the firm's home state regulator has failed or refused to take all appropriate measures for the purpose of ensuring that the firm remedies the situation which gave rise to the notice under subsection (3); or

(b) that the measures taken by the home state regulator have proved inadequate for that purpose.]

[F15 (10) If an incoming EEA firm is exercising EEA rights under the UCITS directive, then [F5 the regulator] must inform [F16 ESMA and] the Commission of any measures it has taken in the exercise of its power of intervention.]

[F17 (11) If, in the case of a home state regulator of an incoming EEA firm exercising EEA rights under the UCITS directive, [F5 the regulator] is satisfied as mentioned in subsection (5), it may refer the matter to ESMA (and ESMA may act in accordance with the powers conferred on it under Article 19 of Regulation ( EU ) No. 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority)).]

[F18 (12) Subsection (3) is not to be regarded as requiring the PRA to take action in relation to the contravention of a relevant requirement in a case where it is satisfied that the FCA is required to act, and is acting or has acted, under subsection (3)—

(a) in relation to that requirement, or

(b) where that requirement is imposed by rules made by the PRA, in relation to an identical requirement imposed by rules made by the FCA.]

Textual Amendments

F1 Words in s. 199(1) substituted (27.2.2013 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. 4 para. 39(2) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F2 S. 199(2)(a) substituted (1.7.2011) by The Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613), reg. 2(9)(a)

F3 Words in s. 199(2)(a)(i) substituted (27.2.2013 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. 4 para. 39(3) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F4 S. 199(2)(b) substituted (10.12.2007) by The Reinsurance Directive Regulations 2007 (S.I. 2007/3253), reg. 2(1), Sch. 1 para. 4(a)

F5 Words in s. 199(3)-(11) substituted (27.2.2013 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. 4 para. 39(4) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F6 S. 199(3A)(3B) inserted (10.12.2007) by The Reinsurance Directive Regulations 2007 (S.I. 2007/3253), reg. 2(1), Sch. 1 para. 4(b)

F7 Words in s. 199(3A) substituted (22.7.2013) by The Alternative Investment Fund Managers Regulations 2013 (S.I. 2013/1773), reg. 1, Sch. 1 para. 14(a)

F8 Words in s. 199(3B) substituted (22.7.2013) by The Alternative Investment Fund Managers Regulations 2013 (S.I. 2013/1773), reg. 1, Sch. 1 para. 14(b)

F9 Words in s. 199(3B) omitted (24.8.2012) by virtue of The Undertakings for Collective Investment in Transferable Securities (Amendment) Regulations 2012 (S.I. 2012/2015), regs. 1, 3

F10 Words in s. 199(5) inserted (10.12.2007) by The Reinsurance Directive Regulations 2007 (S.I. 2007/3253), reg. 2(1), Sch. 1 para. 4(c)

F11 S. 199(5A) inserted (22.7.2013) by The Alternative Investment Fund Managers Regulations 2013 (S.I. 2013/1773), reg. 1, Sch. 1 para. 14(c)

F12 S. 199(7)(7A) substituted for s. 199(7) (coming into force in accordance with Sch. 1 of the amending S.I.) by The Capital Requirements Regulations 2013 (S.I. 2013/3115), reg. 1(3), Sch. 2 para. 16(a)

F13 Words in s. 199(2)(b)(8)(b) inserted (1.4.2007 for certain purposes and 1.11.2007 otherwise) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(1), Sch. 1 para. 4

F14 S. 199(9) inserted (10.12.2007) by The Reinsurance Directive Regulations 2007 (S.I. 2007/3253), reg. 2(1), Sch. 1 para. 4(d)

F15 S. 199(10) inserted (1.7.2011) by The Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613), reg. 2(9)(d)

F16 Words in s. 199(10) inserted (16.4.2012) by The Financial Services (Omnibus 1 Directive) Regulations 2012 (S.I. 2012/916), regs. 1, 2(9)(b)

F17 S. 199(11) inserted (16.4.2012) by The Financial Services (Omnibus 1 Directive) Regulations 2012 (S.I. 2012/916), regs. 1, 2(9)(c)

F18 S. 199(12) inserted (27.2.2013 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. 4 para. 39(5) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

Modifications etc. (not altering text)

C1 S. 199 extended (1.12.2001) by S.I. 2001/2636, arts. 1(2)(b), 37, 52(4); S.I. 2001/3538, art. 2(1)

S. 199 extended (1.12.2001) by S.I. 2001/3592, arts. 1(2), 22(6) (with art. 23(2))

C2 S. 199 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), regs. 1(2)(3)(4)(6), 10(3)(4) (with reg. 7)

C3 S. 199(10) excluded by S.I. 2001/3084, art. 2(8)(b) (as inserted (24.8.2012) by The Financial Services and Markets Act 2000 (Gibraltar) (Amendment) Order 2012 (S.I. 2012/2017), arts. 1, 2(2)(e))

Commencement Information

I1 S. 199 wholly in force at 1.12.2001; s. 199 not in force at Royal Assent see s. 431(2); s. 199 in force for specified purposes at 3.9.2001 by S.I. 2001/2632, art. 2(2), Sch. Pt. 2; s. 199 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)