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PART 2 U.K.Exercise of supplementary supervision of regulated entitiesin a financial conglomerate

Notification of identification as a financial conglomerate and choice of co-ordinatorU.K.

2.—(1) Where [F1a regulator] has become the co-ordinator for a financial conglomerate, it must notify—

(a)the relevant member of that financial conglomerate;

[F2(aa)the other regulator;]

F3(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F4(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F5(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

that the group has been identified as a financial conglomerate F6... of the conglomerates directive and that [F7the regulator] is the co-ordinator for that financial conglomerate.

(2) Paragraph (3) applies if—

(a)[F8a regulator] is a relevant competent authority in relation to a financial conglomerate, and

(b)[F9that regulator], in conjunction with the other relevant competent authorities, proposes to waive the criteria specified in [F10paragraph (2A)] and appoint a different competent authority as co-ordinator.

[F11(2A) The criteria are—

(a)where the financial conglomerate is headed by a regulated entity, the task of the co-ordinator must be exercised by the competent authority which has authorised that regulated entity;

(b)where a financial conglomerate is not headed by a regulated entity, the task of coordinator must be exercised by the competent authority identified in accordance with the following principles—

(i)where the parent of a regulated entity is a mixed financial holding company, the task of coordinator must be exercised by the competent authority which has authorised that regulated entity;

(ii)where the financial conglomerate is a group without a parent undertaking at the top, or in any other case, the task of coordinator must be exercised by the competent authority which authorised the regulated entity with the largest balance sheet total in the most important financial sector.]

(3) Before [F12the regulator], in conjunction with the other relevant competent authorities, waives the criteria specified in [F13paragraph (2A)] and appoints a different competent authority as co-ordinator, [F12the regulator] mustF14... give the financial conglomerate an opportunity to make representations.

[F15(3A) The relevant competent authorities may by common agreement waive the criteria referred to in paragraph (2A) if the authorities consider that their application would be inappropriate, taking into account the structure of the conglomerate and the relative importance of its activities.

(3B) Before the authorities waive the criteria in accordance with paragraph (3A), the authorities must give the financial conglomerate an opportunity to make representations.]

(4) In this regulation, “the relevant member” of a financial conglomerate is—

(a)the parent undertaking at the head of the financial conglomerate; or

(b)where there is no parent undertaking at the head of the financial conglomerate, the regulated entity which—

(i)is in the most important financial sector F16...; and

(ii)has the largest balance-sheet total in that sector.

Textual Amendments

Exercise of functions under Part IV of the Act for the purposes of carrying on supplementary supervisionU.K.

3.—(1) This regulation applies if [F17a regulator] is considering varying the Part IV permission of any person (“A”) where—

(a)A is a member of a financial conglomerate; and

(b)[F18that regulator] is acting in the course of carrying on supplementary supervision F19....

(2) [F20Section 55R(2)] of the Act (obligation to consult home state regulators of connected persons) does not apply.

(3) Before varying the Part IV permission of A, [F18that regulator] must F21...—

(a)consult the relevant competent authorities in relation to the financial conglomerate of which A is a member; [F22and]

F23(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)consult the financial conglomerate of which A is a member.

Textual Amendments

Exercise of functions under [F24section 138A] of the Act for the purposes of carrying on supplementary supervisionU.K.

4.—(1) Paragraph (2) applies if [F25a regulator] is considering exercising any of the powers conferred on it by [F26section 138A] of the Act (modification or waiver of rules) in the course of carrying on supplementary supervision of a financial conglomerate F27....

(2) Before [F28a regulator] exercises such a power in relation to an authorised person who is a member of a financial conglomerate, [F29the regulator] must F30...—

(a)consult the relevant competent authorities in relation to the financial conglomerate of which that person is a member; [F31and]

F32(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)consult the financial conglomerate of which that person is a member.

Textual Amendments

Consultation in the case of major sanctions or exceptional measuresU.K.

5.—(1) Before [F33a regulator]—

(a)varies the Part IV permission of a member of a financial conglomerate (“D”);

(b)publishes a statement under section 205 of the Act (public censure) that it considers that D has contravened a requirement imposed on him by or under the Act;

(c)imposes a penalty on D in respect of such a contravention under section 206 of the Act (financial penalties); or

(d)exercises any of its powers (other than its powers under section 381, 383 or 384(2)) under Part XXV of the Act (injunctions and restitution) in relation to D,

it must, if it considers that the action constitutes a major sanction or an exceptional measure and is of importance for the supervisory tasks of the competent authority of any regulated entity which is a member of the same financial conglomerate as D, consult that competent authority.

(2) But paragraph (1) does not apply—

(a)where the [F34relevant regulator] considers that there is an urgent need to act;

(b)where [F34relevant regulator] considers that such consultation may jeopardise the effectiveness of the action mentioned in paragraph (1); or

(c)where regulation 3, 8(3) or (4), 9 or 10 applies.

(3) Where paragraph (1) does not apply by virtue of paragraph (2)(a) or (b), the [F35relevant regulator] must, as soon as is reasonably practicable, inform the competent authority referred to in paragraph (1) of the action that it has taken.

Textual Amendments

[F36Regulator] functions and service of notificationsU.K.

6.—(1) Any function carried out by [F37a regulator] (whether in the capacity of a co-ordinator, a relevant competent authority or otherwise) for the purposes of [F38these Regulations] is to be treated as a function conferred on the [F39regulator] by a provision of the Act.

(2) The Financial Services and Markets Act 2000 (Service of Notices) Regulations 2001 M1 apply to any notifications given under regulation 2(1)(a) as they apply to any notice, direction or document of any kind given under the Act.

Textual Amendments

Marginal Citations