The Immigration Act 2014 (Bank Accounts) Regulations 2014

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations make provision, largely by applying and making provisions corresponding to provisions of the Financial Services and Markets Act 2000 (c. 8) (the “2000 Act”), to enable the Financial Conduct Authority (the “FCA”) to enforce the prohibition in section 40(1) (Prohibition on opening current account for disqualified persons) of the Immigration Act 2014 (c. 22) (the “Act”).

Section 40(1) of the Act prohibits certain banks and building societies (referred to in the Regulations as “current account authorised persons”) from opening current accounts for “disqualified persons”. A person is “disqualified” for the purposes of section 40, per subsections 40(2) and 40(3)(b), (a) if he or she is in the UK, (b) if he or she requires leave to enter or remain in the UK but does not have such leave, and (c) if he or she is a person for whom the Secretary of State considers that a current account should not be opened by a current account authorised person.

Enforcement action may be taken against current account authorised persons and, in certain circumstances, against the approved persons of current account authorised persons (approved persons include for example persons in certain senior management roles).

Part 2 makes provision about the FCA. In particular it provides for the FCA to have certain functions in relation to the supervision of compliance with these Regulations and section 40 of the Act, including with respect to putting in place arrangements designed to enable it to enforce the prohibition in section 40(1) and the requirements of the Regulations, as well as with respect to complaints, penalties and fees. This Part also provides for the FCA to be exempt from damages where it is carrying out its functions under the Regulations.

Part 3 makes provision about reporting and information. It makes provision for record keeping on the part of current account authorised persons, applies reporting obligations to the FCA on the part of current account authorised persons, and provides for the FCA to obtain relevant information from current account authorised persons and from organisations or authorities specified by the Secretary of State (pursuant to section 40(3)(a) of the Act) with whom current account authorised persons are required to check to identify disqualified persons. This Part also applies restrictions on disclosure of relevant information by the FCA.

Part 4 provides for the FCA with investigatory powers by applying certain provisions of Part 11 of the 2000 Act giving the FCA investigatory powers with appropriate modifications.

Part 5 provides for disciplinary measures and offences for breach of the prohibition in section 40 of the Act or the requirements of these Regulations. Regulations 15 and 16 permit the FCA to publish a statement where it considers that a current account authorised person has breached a relevant requirement or where an approved person has been knowingly concerned in such a breach. Regulation 17 provides the FCA with the ability to impose financial penalties for such conduct. Regulations 18 and 19 enable the FCA to restrict permissions under the 2000 Act to carry out activities regulated under that Act and to suspend or restrict approvals of performance of functions controlled under the 2000 Act. Regulation 20 makes it an offence to mislead the FCA. Regulation 21 limits the extent to which a person can be liable for both misleading the FCA (under regulation 20) and to a penalty imposed pursuant to regulation 17. Regulations 22 and 23 make provision for proceedings under regulation 20.

Part 6 sets out procedural requirements to be followed by the FCA when taking disciplinary action under Part 5, including with respect to warning notices and decision notices where the FCA proposes or decides to take disciplinary action and the ability of persons concerned to refer to the Upper Tribunal.

Part 7 applies the provisions in the 2000 Act on references to the Upper Tribunal with appropriate modifications.

A full impact assessment of the effect that these Regulations will have on the costs of business and the voluntary sector is available from Her Majesty’s Treasury, 1 Horse Guards Road, London SW1A 2HQ or on www.gov.uk and is published alongside the Regulations on www.legislation.gov.uk.