F1Part 8AShort selling

Annotations:
Amendments (Textual)
F1

Pt. 8A inserted (8.6.2010) by Financial Services Act 2010 (c. 28), ss. 8, 26(2)(b)

Short selling rules

F5 131B Short selling rules

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F5 131C Short selling rules: definitions etc

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F5 131D Short selling rules: procedure in urgent cases

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Power to require information

131EPower to require information

1

The F24FCA may, by notice in writing, require a person F22...—

a

to provide specified information or information of a specified description; or

b

to produce specified documents or documents of a specified description.

2

This section applies only to information and documents that the F24FCA reasonably requires for the purpose of F3the exercise by it of functions under the short selling regulationF14or to respond to a request referred to in subsection (5A).

3

Information or documents required under this section must be provided or produced—

a

before the end of such reasonable period as may be specified; and

b

at such place as may be specified.

4

The F24FCA may require any information provided under this section to be provided in such form as it may reasonably require.

5

The F24FCA may require—

a

any information provided, whether in a document or otherwise, to be verified in such manner as it may reasonably require; or

b

any document produced to be authenticated in such manner as it may reasonably require.

F165A

The F24FCA's powers under this section may be exercised on a request made in the exercise of F9relevant functions by—

F6a

an overseas regulator, or

b

ESMA.

F105B

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F46

In this section—

  • overseas regulator” means—

    1. a

      the competent authority of an EEA State for the purposes of the short selling regulation, as that regulation has effect in the European Union (the “EU short selling regulation”); or

    2. b

      the authority of a third country which is not an EEA State which exercises functions corresponding to those of a competent authority under the EU short selling regulation;

  • relevant functions” means—

    1. a

      in relation to a competent authority of an EEA State, its functions under the EU short selling regulation;

    2. b

      in relation to ESMA, its functions under the EU short selling regulation;

    3. c

      in relation to an authority of a third country which is not an EEA state, its functions corresponding to the functions referred to in paragraph (a);

  • specified” means specified in the notice.

F187

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131FPower to require information: supplementary

F81

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2

If a document is produced in response to a requirement imposed under section 131E, the F24FCA may—

a

take copies of or extracts from the document; or

b

require the person producing the document, or any relevant person, to provide an explanation of the document.

3

In subsection (2)(b) “ relevant person ”, in relation to a person who is required to produce a document, means a person who—

a

has been or is or is proposed to be a director or controller of that person;

b

has been or is an auditor of that person;

c

has been or is an actuary, accountant or lawyer appointed or instructed by that person; or

d

has been or is an employee of that person.

4

If a person who is required under section 131E to produce a document fails to do so, the F24FCA may require the person to state, to the best of the person's knowledge and belief, where the document is.

5

A lawyer may be required under section 131E to provide the name and address of the lawyer's client.

6

A person (“P”) may not be required under section 131E to disclose information or produce a document in respect of which P owes an obligation of confidence by virtue of carrying on the business of banking unless—

F19a

the F24FCA suspects that P or a member of P’s group has contravened any provision of the short selling regulation;

F19b

the F24FCA suspects that the person to whom the obligation of confidence is owed or a member of that person’s group has contravened any provision of the short selling regulation; or

c

the person to whom the obligation of confidence is owed consents to the disclosure or production.

F206A

Where the FCA is exercising its powers under section 131E in response to a request from an overseas regulator or ESMA, references to the short selling regulation are to be read as including the EU short selling regulation, within the meaning of section 131E(6).

7

If a person claims a lien on a document, its production under section 131E does not affect the lien.

131FAF26Investigations in support of F13overseas regulator

F211

The FCA may appoint one or more competent persons to investigate any matter if it is requested to do so by—

a

the competent authority of an EEA state acting in the exercise of its functions under the short selling regulation, as that regulation has effect in the European Union; or

b

an authority of a third country which is not an EEA state which is acting in the exercise of functions corresponding to those referred to in paragraph (a).

F272

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3

Sections 170 to 177 (which relate to investigations) apply in relation to an investigator appointed under subsection (1) as they apply in relation to an investigator appointed under section 168(5).

4

The F24FCA may direct an investigator appointed under subsection (1) to permit a representative of F23the authority making the request under subsection (1) (“the requesting regulator”) to attend, and take part in, any interview conducted for the purposes of the investigation.

5

The F24FCA is not to give a direction under subsection (4) unless it is satisfied that any information obtained by the F12requesting regulator” as a result of the interview will be subject to safeguards equivalent to those contained in Part 23.

6

The F24FCA must prepare a statement of its policy with respect to the conduct of interviews in relation to which a direction under subsection (4) has been given.

7

The statement requires the approval of the Treasury.

8

If the Treasury approve the statement, the F24FCA must publish it.

9

No direction may be given under subsection (4) before the statement has been published.

10

The F24FCA may at any time alter or replace a statement issued under subsection (6), and subsections (7) and (8) apply to an altered statement or to a replacement statement.

131FBEntry of premises under warrant

1

A justice of the peace may issue a warrant under this section if satisfied on information on oath given by or on behalf of the F24FCA that there are reasonable grounds for believing that the conditions in subsection (2) are satisfied.

2

The conditions are—

a

that a relevant person on whom a requirement has been imposed under section 131E or 131F has failed (wholly or in part) to comply with it; and

b

that on the premises specified in the warrant—

i

there are documents which have been required; or

ii

there is information which has been required.

3

A warrant under this section shall authorise a constable—

a

to enter the premises specified in the warrant;

b

to search the premises and take possession of any documents or information appearing to be documents or information of a kind in respect of which a warrant under this section was issued (“the relevant kind”) or to take, in relation to any such documents or information, any other steps which may appear to be necessary for preserving them or preventing interference with them;

c

to take copies of, or extracts from, any documents or information appearing to be of the relevant kind;

d

to require any person on the premises to provide an explanation of any document or information appearing to be of the relevant kind or to state where it may be found; and

e

to use such force as may be reasonably necessary.

4

A warrant under this section may be executed by any constable.

5

The warrant may authorise persons to accompany any constable who is executing it.

6

The powers in subsection (3) may be exercised by a person authorised by the warrant to accompany a constable; but that person may exercise those powers only in the company of, and under the supervision of, a constable.

7

In England and Wales, sections 15(5) to (8) and 16(3) to (12) of the Police and Criminal Evidence Act 1984 (execution of search warrants and safeguards) apply to warrants issued under this section.

8

In Northern Ireland, Articles 17(5) to (8) and 18(3) to (12) of the Police and Criminal Evidence (Northern Ireland) Order 1989 apply to warrants issued under this section.

9

In the application of this section to Scotland—

a

for the reference to a justice of the peace substitute a reference to a justice of the peace or a sheriff; and

b

for the references to information on oath substitute references to evidence on oath.

10

The F24FCA may give information under subsection (1) or under section 176(1) at the request of an F15overseas regulator where the regulator makes the request in the exercise of F2relevant functions.

F711

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12

In this section—

  • F17“overseas regulator” and “relevant functions” have the meanings given in section 131E(6);

  • “relevant person” means—

    1. a

      an authorised person,

    2. b

      a person who has been an authorised person,

    3. c

      a person who is for the purposes of section 165 connected with an authorised person or with a person within paragraph (b).

131FCRetention of documents taken under section 131FB

1

Any document of which possession is taken under section 131FB (“a seized document”) may be retained so long as it is necessary to retain it (rather than copies of it) in the circumstances.

2

A person claiming to be the owner of a seized document may apply to a magistrates’ court or (in Scotland) the sheriff for an order for the delivery of the document to the person appearing to the court or sheriff to be the owner.

3

If on an application under subsection (2) the court or (in Scotland) the sheriff cannot ascertain who is the owner of the seized document the court or sheriff (as the case may be) may make such order as the court or sheriff thinks fit.

4

An order under subsection (2) or (3) does not affect the right of any person to take legal proceedings against any person in possession of a seized document for the recovery of the document.

5

Any right to bring proceedings (as described in subsection (4)) may only be exercised within 6 months of the date of the order made under subsection (2) or (3).

Breach of short selling F28regulationetc

Annotations:
Amendments (Textual)
F28

Word in cross-heading preceding s. 131G substituted (1.11.2012) by The Financial Services and Markets Act 2000 (Short Selling) Regulations 2012 (S.I. 2012/2554), regs. 1(1), 2(6)

131GPower to impose penalty or issue censure

1

This section applies if the F24FCA is satisfied that a person has contravened—

a

any provision of F11 the short selling regulation ; or

b

any requirement imposed on the person under section 131E or 131F.

2

The F24FCA may impose a penalty of such amount as it considers appropriate on—

a

the person who contravened the provision or requirement; or

b

any person who was knowingly concerned in the contravention.

3

It may, instead of imposing a penalty on a person, publish a statement censuring the person.

4

The F24FCA may not take action against a person under this section after the end of the limitation period unless, before the end of that period, it has given a warning notice to the person under section 131H.

5

The limitation period ” means the period of three years beginning with the first day on which the F24FCA knew of the contravention.

6

For this purpose the F24FCA is to be treated as knowing of a contravention if it has information from which the contravention can reasonably be inferred.

131HProcedure and right to refer to Tribunal

1

If the F24FCA proposes to take action against a person under section 131G, it must give the person a warning notice.

2

A warning notice about a proposal to impose a penalty must state the amount of the penalty.

3

A warning notice about a proposal to publish a statement must set out the terms of the statement.

4

If the F24FCA decides to take action against a person under section 131G, it must give the person a decision notice.

5

A decision notice about the imposition of a penalty must state the amount of the penalty.

6

A decision notice about the publication of a statement must set out the terms of the statement.

7

If the F24FCA decides to take action against a person under section 131G, the person may refer the matter to the Tribunal.

131IDuty on publication of statement

After a statement under section 131G(3) is published, the F24FCA must send a copy of the statement to—

a

the person in respect of whom it is made; and

b

any person to whom a copy of the decision notice was given under section 393(4).

131JImposition of penalties under section 131G: statement of policy

1

The F24FCA must prepare and issue a statement of its policy with respect to—

a

the imposition of penalties under section 131G; and

b

the amount of penalties under that section.

2

The F24FCA's policy in determining what the amount of a penalty should be must include having regard to—

a

the seriousness of the contravention;

b

the extent to which the contravention was deliberate or reckless; and

c

whether the person on whom the penalty is to be imposed is an individual.

3

The F24FCA may at any time alter or replace a statement issued under this section.

4

If a statement issued under this section is altered or replaced, the F24FCA must issue the altered or replaced statement.

5

The F24FCA must, without delay, give the Treasury a copy of any statement which it publishes under this section.

6

A statement issued under this section must be published by the F24FCA in the way appearing to the F24FCA to be best calculated to bring it to the attention of the public.

7

The F24FCA may charge a reasonable fee for providing a person with a copy of the statement.

8

In exercising, or deciding whether to exercise, a power under section 131G in the case of any particular contravention, the F24FCA must have regard to any statement of policy published under this section and in force at a time when the contravention occurred.

131KStatement of policy: procedure

1

Before issuing a statement under section 131J, the F24FCA must publish a draft of the proposed statement in the way appearing to the F24FCA to be best calculated to bring it to the attention of the public.

2

The draft must be accompanied by notice that representations about the proposal may be made to the F24FCA within a specified time.

3

Before issuing the proposed statement, the F24FCA must have regard to any representations made to it in accordance with subsection (2).

4

If the F24FCA issues the proposed statement it must publish an account, in general terms, of—

a

the representations made to it in accordance with subsection (2); and

b

its response to them.

5

If the statement differs from the draft published under subsection (1) in a way which is, in the opinion of the F24FCA, significant, the F24FCA must (in addition to complying with subsection (4)) publish details of the difference.

6

The F24FCA may charge a reasonable fee for providing a person with a copy of a draft published under subsection (1).

7

This section also applies to a proposal to alter or replace a statement.

131LF25Offences

1

If a relevant person (“A”) fails to comply with a requirement imposed on A under section 131E or 131F the F24FCA may certify that fact in writing to the court.

2

If the court is satisfied that A failed without reasonable excuse to comply with the requirement, it may deal with A (and where A is a body corporate, any director or officer) as if A (or as the case may be the director or officer) were in contempt; and “officer”, in relation to a limited liability partnership, means a member of the limited liability partnership.

3

A relevant person (“B”) who, in purported compliance with a requirement imposed on B under section 131E or 131F—

a

provides information which B knows to be false or misleading in a material particular, or

b

recklessly provides information which is false or misleading in a material particular,

is guilty of an offence.

4

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

a

on summary conviction, to imprisonment for a term not exceeding three months or a fine not exceeding the statutory maximum, or both;

b

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

5

Any person who intentionally obstructs the exercise of any rights conferred by a warrant under section 131FB is guilty of an offence and liable on summary conviction to imprisonment for a term not exceeding three months or a fine not exceeding level 5 on the standard scale, or both.

6

In relation to any contravention by a person, the F24FCA may not exercise both—

a

its powers under section 131G(2), and

b

its powers under subsection (1).

7

In this section—

  • “court” means—

    1. a

      the High Court;

    2. b

      in Scotland, the Court of Session;

  • “relevant person” means—

    1. a

      an authorised person,

    2. b

      a person who has been an authorised person,

    3. c

      a person who is for the purposes of section 165 connected with an authorised person or with a person within paragraph (b).