The Money Market Funds Regulations 2018

Amendments to the Financial Services and Markets Act 2000

2.—(1) The Financial Services and Markets Act 2000 is amended as follows.

(2) In section 55J (variation or cancellation on initiative of regulator)(1)—

(a) in subsection (6A)(2), in paragraph (e)—

(i) omit the “or” at the end of sub-paragraph (iii);

(ii) at the end of sub-paragraph (iv) insert “; or”;

(iii) after that sub-paragraph insert—

“(v) a provision of the MMF Regulation or any directly applicable regulation or decision made under that Regulation.”;

(b) in subsection (7ZA)(3)—

(i) omit the “or” at the end of paragraph (a);

(ii) at the end of paragraph (b) insert “or”;

(iii) after that paragraph insert—

“(c) by the MMF Regulation or any directly applicable regulation or decision made under that Regulation,”.

(3) In section 194 (general grounds on which power of intervention is exercisable)(4)—

(a) in subsection (5)—

(i) omit the “or” at the end of paragraph (b);

(ii) at the end of paragraph (c) insert “; or”;

(iii) after that paragraph insert—

“(d) the MMF Regulation or any directly applicable regulation or decision made under that Regulation.”;

(b) after that subsection insert—

“(6) The FCA may exercise its powers of intervention in respect of an EEA UCITS if it appears to the FCA that the EEA UCITS has contravened, or is likely to contravene, a requirement imposed by the MMF Regulation or any directly applicable regulation or decision made under that Regulation.

(7) A reference in subsection (6) to an EEA UCITS includes, in a case where the UCITS is not a body corporate, a reference to its management company.”.

(4) In section 237 (collective investment schemes: other definitions), in subsection (3)(5) omit the definitions of “EEA UCITS” and “UCITS”.

(5) In section 242 (applications for authorisation of unit trust schemes)—

(a) for subsection (1) substitute—

“(1) The manager and trustee, or proposed manager and trustee, of a unit trust scheme may apply to the FCA for—

(a) an order declaring the scheme to be an authorised unit trust scheme;

(b) an order declaring the scheme to be an authorised money market fund.”;

(b) in subsection (3), for “The application” substitute “An application”.

(6) In section 243 (authorisation orders)(6)—

(a) in the heading, at the end insert “: authorised unit trust schemes”;

(b) in subsection (1), for “242” substitute “242(1)(a)”;

(c) omit subsection (3).

(7) After that section insert—

“243A    Authorisation orders: authorised money market funds

(1) If, on an application under section 242(1)(b) in respect of a unit trust scheme, conditions A and B are met the FCA may make an order declaring the scheme to be an authorised money market fund.

(2) Condition A is that the FCA is satisfied that the scheme will be able to comply with the requirements imposed on a money market fund under the MMF Regulation.

(3) Condition B is that—

(a) the scheme is an authorised unit trust scheme, or

(b) the scheme—

(i) is the subject of an application under section 242(1)(a), and

(ii) the conditions in section 243(1)(a) to (c) are met in relation to that application.

(4) If the FCA makes an order under subsection (1), it must give written notice of the order to the applicant.

(5) In this Chapter “authorisation order” means—

(a) an order under section 243(1), or

(b) an order under subsection (1) of this section.”.

(8) In section 244 (determination of applications)(7)—

(a) in subsection (1), for “242” substitute “242(1)(a)”;

(b) in subsection (1A), for the words from “section 242” to “UCITS” substitute “section 242(1)(a) in respect of a unit trust scheme which is a UCITS, or an application under section 242(1)(b),”.

(9) In section 257 (directions), in subsection (1)(b)(8)—

(a) omit the “or” at the end of sub-paragraph (i);

(b) at the end of sub-paragraph (ii) insert “or”;

(c) after sub-paragraph (ii) insert—

“(iii) by the MMF Regulation or any directly applicable regulation or decision made under that Regulation;”.

(10) In section 261C (applications for authorisation of contractual schemes)(9)—

(a) for subsection (1) substitute—

“(1) The operator and depositary, or proposed operator and depositary, of a contractual scheme may apply to the FCA for—

(a) an order declaring the scheme to be an authorised contractual scheme;

(b) an order declaring the scheme to be an authorised money market fund.”;

(b) in subsection (2) for “The application” substitute “An application under subsection (1)(a)”;

(c) after that subsection insert—

“(2A) An application under subsection (1)(b) must—

(a) be made in such a manner as the FCA may direct, and

(b) contain or be accompanied by such information as the FCA may reasonably require for the purpose of determining the application.”.

(11) In section 261D (authorisation orders)(10)—

(a) in the heading, at the end insert “: authorised contractual schemes”;

(b) in subsection (1), for “261C” substitute “261C(1)(a)”;

(c) omit subsection (3).

(12) In section 261E (authorisation orders: holding of units)(11), in the heading, for “Authorisation orders” substitute “Authorised contractual schemes”.

(13) After that section insert—

“261EA    Authorisation orders: authorised money market funds

(1) If, on an application under section 261C(1)(b) in respect of a contractual scheme, conditions A and B are met the FCA may make an order declaring the scheme to be an authorised money market fund.

(2) Condition A is that the FCA is satisfied that the scheme will be able to comply with the requirements imposed on a money market fund under the MMF Regulation.

(3) Condition B is that—

(a) the scheme is an authorised contractual scheme, or

(b) the scheme—

(i) is the subject of an application under section 261C(1)(a), and

(ii) the conditions in section 261D(1)(a) to (c) are met in relation to that application.

(4) If the FCA makes an order under subsection (1), it must give written notice of the order to the applicant.

(5) In this Chapter “authorisation order” means—

(a) an order under section 261D(1), or

(b) an order under subsection (1) of this section.”.

(14) In section 261F (determination of applications)(12)—

(a) in subsection (1), for “261C” substitute “261C(1)(a)”;

(b) in subsection (2), for the words from “261C” to “UCITS” substitute “261C(1)(a) in respect of a contractual scheme which is a UCITS, or an application under section 261C(1)(b),”.

(15) In section 261X (directions), in subsection (1)(b)(13)—

(a) omit the “or” at the end of sub-paragraph (i);

(b) at the end of sub-paragraph (ii) insert “or”;

(c) after sub-paragraph (ii) insert—

“(iii) by the MMF Regulation or any directly applicable regulation or decision made under that Regulation;”.

(16) In section 398 (misleading the FCA or PRA), in subsection (1A)(14)—

(a) omit the “or” at the end of paragraph (g);

(b) at the end of paragraph (h), insert “; or”;

(c) after that paragraph insert—

“(i) the MMF Regulation.”.

(17) In section 417 (definitions), in subsection (1)(15), at the appropriate places insert the following definitions—

““MMF Regulation” means Regulation (EU) 2017/1131 of the European Parliament and of the Council of 14 June 2017 on money market funds;”;

““UCITS” has the meaning given in Article 1.2 of the UCITS directive;”.

(18) In section 425 (expressions relating to authorisation elsewhere in the single market)(16), in subsection (1)—

(a) omit the “and” at the end of paragraph (a);

(b) after that paragraph insert—

“(aa) “EEA UCITS” means a UCITS which is authorised pursuant to Article 5 of the UCITS directive in an EEA State other than the United Kingdom; and”.

(19) In Schedule 3 (EEA Passport Rights), omit paragraph 11C(17).

(1)

Substituted by section 11(2) of the Financial Services Act 2012.

(2)

Inserted by S.I. 2003/1773 and amended by S.I. 2015/1882.

(3)

Inserted by S.I. 2016/225.

(4)

Amended by the section 12 of the Financial Services Act 2012, S.I. 2013/1773 and S.I. 2015/1882.

(5)

Amended by S.I. 2011/1613 and S.I. 2013/1388.

(6)

Amended by S.I. 2011/1613.

(7)

Amended by S.I. 2011/1613.

(8)

Substituted by S.I. 2011/1613.

(9)

Inserted by S.I. 2013/1388.

(10)

Inserted by S.I. 2013/1388 and amended by S.I. 2013/1773.

(11)

Inserted by S.I. 2013/1388.

(12)

Inserted by S.I. 2013/1388.

(13)

Inserted by S.I. 2013/1388.

(14)

Inserted by S.I. 2013/1773 and amended by S.I. 2015/1882, S.I. 2016/680, S.I. 2017/701 and S.I. 2018/135.

(15)

Amended by section 49(1) of the Financial Services Act 2012, S.I. 2013/1773 and S.I. 2013/2115. There are other amendments but none is relevant.

(16)

Amended by S.I. 2003/2066 and S.I. 2013/1773. There are other amendments but none is relevant.

(17)

Inserted by S.I. 2011/1613.