The Uncertificated Securities Regulations 2001

Regulation 13

[F1 SCHEDULE 2 U.K. PREVENTION OF EXCESSIVE REGULATORY PROVISION

Textual Amendments

F1 Sch. 2 substituted (1.4.2013) by The Uncertificated Securities (Amendment) Regulations 2013 (S.I. 2013/632), regs. 1, 2(14), Sch. (with reg. 3)

Refusal of approval on ground of excessive regulatory provision U.K.

1.— (1) The Bank of England must not approve a person as an Operator of a relevant system if it appears to it that a proposed regulatory provision of that person in connection with the relevant system will impose an excessive requirement on the persons affected (directly or indirectly) by it. U.K.

(2) Expressions used in sub-paragraph (1) that are defined for the purposes of paragraph 2 (power of the Bank of England to disallow excessive regulatory provision) have the same meaning as in that paragraph.

Power of the Bank of England to disallow excessive regulatory provision U.K.

2.— (1) This paragraph applies where an Operator proposes to make any regulatory provision in connection with its business as an Operator of a relevant system. U.K.

(2) If it appears to the Bank of England—

(a) that the proposed provision will impose a requirement on persons affected (directly or indirectly) by it, and

(b) that the requirement is excessive,

the Bank of England may direct that the proposed provision must not be made.

(3) A requirement is excessive if—

(a) it is not required under EU law or any enactment or rule of law in the United Kingdom, and

(b) either—

(i) it is not justified as pursuing a reasonable regulatory objective, or

(ii) it is disproportionate to the regulatory objective to be achieved.

(4) In considering whether a requirement is excessive the Authority must have regard to all the relevant circumstances including—

(a) the effect of existing legal and other requirements,

(b) the global character of financial services,

(c) the desirability of fostering innovation, and

(b) the impact of the proposed provision on market confidence.

(5) In this paragraph “requirement” includes any obligation or burden.

(6) Any provision made in contravention of a direction under this paragraph is of no effect.

Duty to notify proposal to make regulatory provision U.K.

3.— (1) An Operator that proposes to make any regulatory provision must give written notice of the proposal to the Bank of England without delay. U.K.

(2) The Bank of England may by rules—

(a) specify descriptions of regulatory provision in relation to which, or circumstances in which, the duty in sub-paragraph (1) does not apply, or

(b) provide that the duty applies only to such descriptions of regulatory provision or in such circumstances as the rules specify.

(3) The Bank of England may also by rules—

(a) make provision as to the form and contents of the notice required, and

(b) require the Operator to provide such information relating to the proposal as may be specified in the rules or as the Bank of England may reasonably require.

Restriction on making provision before the Bank of England decides whether to act U.K.

4.— (1) Where notice of a proposal to make regulatory provision is required under paragraph 3, the provision must not be made— U.K.

(a) before that notice is given, or

(b) subject to sub-paragraph (4)(a), before the end of the initial period.

(2) The initial period is—

(a) the period of 30 days beginning with the day upon which the Bank of England receives notice of the proposal, or

(b) if any consultation period announced by the Operator in relation to the proposal ends after that 30-day period, the end of the consultation period.

(3) If, before the end of the initial period the Bank of England notifies the Operator that it is calling in the proposal, the provisions of paragraph 5 (consideration by the Bank of England whether to disallow proposed provision) apply as to when the provision may be made.

(4) If—

(a) before the end of the initial period the Bank of England notifies the Operator that it is not calling in the proposal, or

(b) the initial period ends without the Bank of England having notified the Operator that it is calling in the proposal,

the Operator may then make the proposed provision.

(5) Any provision made in contravention of this paragraph is of no effect.

Consideration by the Bank of England whether to disallow proposed provision U.K.

5.— (1) This paragraph applies where the Bank of England notifies an Operator that it is calling in a proposal to make regulatory provision. U.K.

(2) The Bank of England must publish a notice—

(a) giving details of the proposed provision,

(b) stating that it has called in the proposal in order to consider whether to disallow it, and

(c) specifying a period during which representations with respect to that question may be made to it.

(3) The Bank of England may extend the period for making representations.

(4) The Bank of England must notify the Operator of its decision whether to disallow the provision not later than 30 days after the end of the period for making representations, and must publish the decision and the reasons for it.

(5) The Operator must not make the provision unless and until—

(a) the Bank of England notifies the Operator of its decision not to disallow the provision, or

(b) the 30-day period specified in sub-paragraph (4) ends without the Bank of England having notified the Operator of any decision.

(6) If the Bank of England notifies the Operator of its decision to disallow the provision and that decision is questioned in legal proceedings—

(a) the Operator must not make the provision until those proceedings, and any proceedings on appeal, are finally determined,

(b) if the Bank of England’s decision is quashed and the matter is remitted to it for reconsideration, the court may give directions as to the period within which the Bank of England is to complete its reconsideration, and

(c) the Operator must not make the provision until—

(i) the Bank of England notifies it of its decision on reconsideration not to disallow the provision, or

(ii) the period specified by the court ends without the Bank of England having notified any decision.

(7) Any provision made in contravention of sub-paragraph (5) or (6) is of no effect.

Power to disallow excessive regulatory provision: supplementary U.K.

6.— (1) In paragraphs 2 to 5 — U.K.

(a) “regulatory provision” means any rule, arrangements, guidance, policy or practice, and

(b) references to making provision shall be read accordingly as including, as the case may require, making rules, issuing guidance, entering into arrangements or adopting a policy or practice.

(2) For the purposes of those paragraphs a variation of a proposal is treated as new proposal.]