The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) Regulations 2013

PART 6 Acquisition of control over recognised central counterparties

Interpretation of Part 6

11.  In this Part—

“Article 31 notice” means a notification under the first sub-paragraph of Article 31(2) of the EMIR regulation;

“assessment period” means the period for assessment of an Article 31 notice established under Article 31 of the EMIR regulation;

“proposed acquisition” has the meaning given by the first sub-paragraph of Article 31(2) of the EMIR regulation;

“shares” has the meaning given by section 422 of the Act(1) (controller), but section 422A of the Act(2) (disregarded holdings) does not apply;

“voting power” has the meaning given by section 422 of the Act.

Procedure in relation to proposed acquisition

12.—(1) If the Bank gives a person (“P”) notice under Article 31(5) of the EMIR regulation that it opposes a proposed acquisition, P may refer the Bank’s decision to the Tribunal.

(2) The notice under Article 31(5) of the EMIR regulation—

(a) must inform P that P may make representations to the Bank within such period as may be specified in the notice (whether or not P has referred the matter to the Tribunal); and

(b) must inform P of P’s right to refer the matter to the Tribunal, and give an indication of the procedure on such a reference.

(3) The Bank may extend the period allowed under the notice for making representations.

(4) If, having considered any representations made by P, the Bank decides to rescind the notice under Article 31(5) of the EMIR regulation, it must give P written notice.

(5) If, having considered any representations made by P, the Bank decides not to rescind the notice under Article 31(5) of the EMIR regulation, it must give P written notice which must comply with paragraph (2)(b).

Restriction notices

13.—(1) The Bank may give notice in writing (a “restriction notice”) to a person (“P”) in the following circumstances.

(2) The circumstances are that—

(a) P has taken a decision in relation to which P is required to give the Bank an Article 31 notice; and

(b) P has made the proposed acquisition—

(i) without giving the Article 31 notice,

(ii) before the expiry date of the assessment period (unless the Bank has approved the acquisition), or

(iii) in contravention of the Bank’s decision under Article 31(5) of the EMIR regulation.

(3) In a restriction notice, the Bank may direct that shares or voting power to which the notice relates are, until further notice, subject to one or more of the following restrictions—

(a) except by court order, an agreement to transfer or a transfer of any such shares or voting power or, in the case of unissued shares, any agreement to transfer or transfer of the right to be issued with them, is void;

(b) no voting power is to be exercisable;

(c) no further shares are to be issued in pursuance of any right of the holder of any such shares or voting power or in pursuance of any offer made to their holder;

(d) except in a liquidation, no payment is to be made of any sums due from the body corporate on any such shares, whether in respect of capital or otherwise.

(4) A restriction notice takes effect—

(a) immediately; or

(b) on such date as may be specified in the notice.

(5) A restriction notice does not extinguish rights which would be enjoyable but for the notice.

(6) A copy of the restriction notice must be served on—

(a) P;

(b) the recognised central counterparty in question; and

(c) in the case of shares or voting power held in a parent undertaking of a recognised central counterparty, the parent undertaking.

(7) A person to whom the Bank gives a restriction notice may refer the matter to the Tribunal.

Orders for sale of shares

14.—(1) The court may, on the application of the Bank, order the sale of shares or the disposition of voting power in the following circumstances.

(2) The circumstances are that—

(a) a person (“P”) has taken a decision in relation to which P is required to give the Bank an Article 31 notice; and

(b) P has made the proposed acquisition—

(i) without giving the Article 31 notice,

(ii) before the expiry date of the assessment period (unless the Bank has approved the acquisition), or

(iii) in contravention of the Bank’s decision under Article 31(5) of the EMIR regulation.

(3) Where the court orders the sale of shares or disposition of voting power it may—

(a) if a restriction notice has been given in relation to the shares or voting power, order that the restrictions cease to apply; and

(b) make any further order.

(4) Where the court makes an order under this regulation, it must take into account the level of holding that P would have been entitled to acquire, or to continue to hold, without contravening the Bank’s decision under Article 31(5) of the EMIR regulation.

(5) If shares are sold or voting power disposed of in pursuance of an order under this regulation, any proceeds, less the costs of the sale or disposition, must be paid into court for the benefit of the persons beneficially interested in them; and any such person may apply to the court for payment of a whole or part of the proceeds.

(6) The jurisdiction conferred by this regulation may be exercised by the High Court.

Offences

15.—(1) A person who fails to comply with an obligation to notify the Bank under the Article 31 of the EMIR regulation is guilty of an offence.

(2) A person who gives an Article 31 notice to the Bank and makes the acquisition to which the notice relates before the expiry date of the assessment period is guilty of an offence unless the Bank has approved the acquisition.

(3) A person who makes an acquisition in contravention of the Bank’s decision under Article 31(5) of the EMIR regulation is guilty of an offence.

(4) A person who makes an acquisition after the Bank’s approval for the acquisition has ceased to be effective by virtue of the expiry of any period (including an extended period) fixed for concluding the acquisition under Article 31(7) is guilty of an offence.

(5) A person who provides information to the Bank which is false in a material particular is guilty of an offence.

(6) A person guilty of an offence under paragraph (1), (2), (4) or (5) is liable—

(a) on summary conviction to a fine not exceeding the statutory maximum; or

(b) on conviction on indictment, to a fine.

(7) A person guilty of an offence under paragraph (3) is liable—

(a) on summary conviction, to a fine not exceeding the statutory maximum; or

(b) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine, or both.

(8) It is a defence for a person charged with an offence under paragraph (1) to show the person had, at the time of the alleged offence, no knowledge of the act or circumstances by virtue of which the duty to notify the Bank arose.

(1)

Section 422 was substituted by S.I. 2009/534.

(2)

Section 422A was inserted by S.I. 2009/534 and amended by S.I. 2011/1613.