Regulation (EU) No 1286/2014 of the European Parliament and of the CouncilShow full title

CHAPTER III U.K. MARKET MONITORING AND PRODUCT INTERVENTION POWERS

Article 15 U.K.

1. In accordance with Article 9(2) of Regulation (EU) No 1094/2010, EIOPA shall monitor the market for insurance-based investment products which are marketed, distributed or sold in the Union.

2. Competent authorities shall monitor the market for insurance-based investment products which are marketed, distributed or sold in or from their Member State.

Article 16 U.K.

1. In accordance with Article 9(5) of Regulation (EU) No 1094/2010, EIOPA may, where the conditions in paragraphs 2 and 3 of this Article are fulfilled, temporarily prohibit or restrict in the Union:

(a) the marketing, distribution or sale of certain insurance-based investment products or insurance-based investment products with certain specified features; or

(b) a type of financial activity or practice of an insurance or reinsurance undertaking.

A prohibition or restriction may apply in circumstances, or be subject to exceptions, specified by EIOPA.

2. EIOPA shall take a decision under paragraph 1 only if all of the following conditions are fulfilled:

(a) the proposed action addresses a significant investor protection concern or a threat to the orderly functioning and integrity of financial markets or to the stability of the whole or part of the financial system in the Union;

(b) regulatory requirements under Union law that are applicable to the relevant insurance-based investment product or activity do not address the threat;

(c) a competent authority or competent authorities have not taken action to address the threat or the actions that have been taken do not adequately address the threat.

Where the conditions set out in the first subparagraph are fulfilled, EIOPA may impose the prohibition or restriction referred to in paragraph 1 on a precautionary basis before an insurance-based investment product has been marketed or sold to investors.

3. When taking action under this Article, EIOPA shall ensure that the action does not:

(a) have a detrimental effect on the efficiency of financial markets or on investors that is disproportionate to the benefits of the action; or

(b) create a risk of regulatory arbitrage.

Where a competent authority or competent authorities have taken a measure under Article 17, EIOPA may take any of the measures referred to in paragraph 1 of this Article without issuing the opinion provided for in Article 18.

4. Before deciding to take any action under this Article, EIOPA shall notify competent authorities of the action it proposes.

5. EIOPA shall publish on its website notice of any decision to take any action under this Article. The notice shall specify details of the prohibition or restriction and specify a time after the publication of the notice from which the measures will take effect. A prohibition or restriction shall only apply to action taken after the measures take effect.

6. EIOPA shall review a prohibition or restriction imposed under paragraph 1 at appropriate intervals and at least every three months. If the prohibition or restriction is not renewed after that three-month period it shall expire.

7. Action adopted by EIOPA under this Article shall prevail over any previous action taken by a competent authority.

8. The Commission shall adopt delegated acts in accordance with Article 30 specifying criteria and factors to be taken into account by EIOPA in determining when there is a significant investor protection concern or a threat to the orderly functioning and integrity of financial markets or to the stability of the whole or part of the financial system of the Union referred to in point (a) of the first subparagraph of paragraph 2.

Those criteria and factors shall include:

(a) the degree of complexity of the insurance-based investment product and the relation to the type of investor to whom it is marketed and sold;

(b) the size or the notional value of the insurance-based investment product;

(c) the degree of innovation of the insurance-based investment product, activity or a practice; and

(d) the leverage a product or practice provides.

Article 17 U.K.

1. A competent authority may prohibit or restrict the following in or from its Member State:

(a) the marketing, distribution or sale of insurance-based investment products or insurance-based investment products with certain specified features; or

(b) a type of financial activity or practice of an insurance or reinsurance undertaking.

2. A competent authority may take the action referred to in paragraph 1 if it is satisfied on reasonable grounds that:

(a) an insurance-based investment product, or activity or practice gives rise to significant investor protection concerns or poses a threat to the orderly functioning and integrity of financial markets or the stability of whole or part of the financial system within at least one Member State;

(b) existing regulatory requirements under Union law applicable to the insurance-based investment product, or activity or practice do not sufficiently address the risks referred to in point (a) and the issue would not be better addressed by improved supervision or enforcement of existing requirements;

(c) the action is proportionate taking into account the nature of the risks identified, the level of sophistication of investors or market participants concerned and the likely effect of the action on investors and market participants who may hold, use or benefit from the insurance-based investment product, or activity or practice;

(d) the competent authority has properly consulted competent authorities in other Member States that may be significantly affected by the action; and

(e) the action does not have a discriminatory effect on services or activities provided from another Member State.

Where the conditions set out in the first subparagraph are fulfilled, the competent authority may impose the prohibition or restriction referred to in paragraph 1 on a precautionary basis before an insurance-based investment product has been marketed or sold to investors. A prohibition or restriction may apply in circumstances, or be subject to exceptions, specified by the competent authority.

3. The competent authority shall not impose a prohibition or restriction under this Article unless, not less than one month before the measure is intended to take effect, it has notified all other competent authorities involved and EIOPA in writing or through another medium agreed between the authorities of the details of:

(a) the insurance-based investment product, or activity or practice to which the proposed action relates;

(b) the precise nature of the proposed prohibition or restriction and when it is intended to take effect; and

(c) the evidence upon which it has based its decision and upon which it is satisfied that each of the conditions in paragraph 2 are met.

4. In exceptional cases where the competent authority deems it necessary to take urgent action under this Article in order to prevent detriment arising from the insurance-based investment products, activities or practices referred to in paragraph 1, the competent authority may take action on a provisional basis with no less than 24 hours' written notice before the measure is intended to take effect to all other competent authorities and EIOPA, provided that all the criteria in this Article are met and that, in addition, it is clearly established that a one-month notification period would not adequately address the specific concern or threat. The competent authority shall not take action on a provisional basis for a period exceeding three months.

5. The competent authority shall publish on its website notice of any decision to impose any prohibition or restriction referred to in paragraph 1. That notice shall specify details of the prohibition or restriction, a time after the publication of the notice from which the measures will take effect and the evidence upon which it is satisfied each of the conditions in paragraph 2 are met. The prohibition or restriction shall only apply in relation to action taken after the publication of the notice.

6. The competent authority shall revoke a prohibition or restriction if the conditions in paragraph 2 no longer apply.

7. The Commission shall adopt delegated acts in accordance with Article 30 specifying criteria and factors to be taken into account by competent authorities in determining when there is a significant investor protection concern or a threat to the orderly functioning and integrity of financial markets or to the stability of the financial system within at least one Member State referred to in point (a) of the first subparagraph of paragraph 2.

Those criteria and factors shall include:

(a) the degree of complexity of an insurance-based investment product and the relation to the type of investor to whom it is marketed and sold;

(b) the degree of innovation of an insurance-based investment product, an activity or a practice;

(c) the leverage a product or practice provides;

(d) in relation to the orderly functioning and integrity of financial markets, the size or the notional value of an insurance-based investment product.

Article 18 U.K.

1. EIOPA shall perform a facilitation and coordination role in relation to action taken by competent authorities under Article 17. In particular EIOPA shall ensure that action taken by a competent authority is justified and proportionate and that, where appropriate, a consistent approach is taken by competent authorities.

2. After receiving notification under Article 17 of any action that is to be imposed under that Article, EIOPA shall adopt an opinion on whether the prohibition or restriction is justified and proportionate. If EIOPA considers that the taking of a measure by other competent authorities is necessary to address the risk, it shall state this in its opinion. The opinion shall be published on EIOPA's website.

3. Where a competent authority proposes to take, or takes, action contrary to an opinion adopted by EIOPA under paragraph 2 or declines to take action contrary to such an opinion, it shall immediately publish on its website a notice fully explaining its reasons for so doing.