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Part IIIU.K. Authorisation and Exemption

AuthorisationU.K.

31 Authorised persons.U.K.

(1)The following persons are authorised for the purposes of this Act—

(a)a person who has a [F1Part 4A permission] to carry on one or more regulated activities;

(b)an EEA firm qualifying for authorisation under Schedule 3;

(c)a Treaty firm qualifying for authorisation under Schedule 4;

(d)a person who is otherwise authorised by a provision of, or made under, this Act.

(2)In this Act “authorised person” means a person who is authorised for the purposes of this Act.

Textual Amendments

F1Words in s. 31(1)(a) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), ss. 11(1), 122(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

Modifications etc. (not altering text)

Commencement Information

I1S. 31 wholly in force at 1.12.2001; s. 31 not in force at Royal Assent see s. 431(2); s. 31(1)(b) in force for specified purposes at 25.2.2001 by S.I. 2001/516, art. 2(c), Sch. Pt. 3; s. 31(1)(b) in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; s. 31(1)(c) in force for specified purposes at 3.9.2001 by S.I. 2001/2632, art. 2(2), Sch. Pt. 2; s. 31 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

32 Partnerships and unincorporated associations.U.K.

(1)If a firm is authorised—

(a)it is authorised to carry on the regulated activities concerned in the name of the firm; and

(b)its authorisation is not affected by any change in its membership.

(2)If an authorised firm is dissolved, its authorisation continues to have effect in relation to any [F2individual or] firm which succeeds to the business of the dissolved firm.

[F3(3)For the purposes of this section, an individual or firm is to be regarded as succeeding to the business of a dissolved firm only if succession is to the whole or substantially the whole of the business of the former firm.]

(4)“Firm” means—

(a)a partnership; or

(b)an unincorporated association of persons.

(5)“Partnership” does not include a partnership which is constituted under the law of any place outside the United Kingdom and is a body corporate.

Textual Amendments

Ending of authorisationU.K.

33 Withdrawal of authorisation F4....U.K.

(1)This section applies if—

(a)an authorised person’s [F5Part 4A permission] is cancelled; and

(b)as a result, there is no regulated activity for which he has permission.

(2)The [F6appropriate regulator] must give a direction withdrawing that person’s status as an authorised person.

[F7(2A)In subsection (2) “the appropriate regulator” means—

(a)in the case of a PRA-authorised person, the PRA, and

(b)in any other case, the FCA.]

Textual Amendments

F4Words in s. 33 heading omitted (1.4.2013) by virtue of Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 2(5) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

34 EEA firms.U.K.

(1)An EEA firm ceases to qualify for authorisation under Part II of Schedule 3 if it ceases to be an EEA firm as a result of—

(a)having its EEA authorisation withdrawn; or

(b)ceasing to have an EEA right in circumstances in which EEA authorisation is not required.

(2)At the request of an EEA firm, [F8the appropriate regulator] may give a direction cancelling its authorisation under Part II of Schedule 3.

[F9(2A)In subsection (2) “the appropriate regulator” means—

(a)in the case of a PRA-authorised person, the PRA, and

(b)in any other case, the FCA.]

(3)If an EEA firm has a [F10Part 4A permission], it does not cease to be an authorised person merely because it ceases to qualify for authorisation under Part II of Schedule 3.

Textual Amendments

F8Words in s. 34(2) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 27(2) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F9S. 34(2A) inserted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 27(3) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F10Words in s. 34(3) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 27(4) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

Modifications etc. (not altering text)

C2S. 34(2) modified (1.12.2001) by S.I. 2001/2511, regs. 1(1), 8; S.I. 2001/3538, art. 2(1)

35 Treaty firms.U.K.

(1)A Treaty firm ceases to qualify for authorisation under Schedule 4 if its home State authorisation is withdrawn.

(2)At the request of a Treaty firm, [F11the appropriate regulator] may give a direction cancelling its Schedule 4 authorisation.

[F12(2A)In subsection (2) “the appropriate regulator” means—

(a)in the case of a PRA-authorised person, the PRA, and

(b)in any other case, the FCA.]

(3)If a Treaty firm has a [F13Part 4A permission], it does not cease to be an authorised person merely because it ceases to qualify for authorisation under Schedule 4.

Textual Amendments

F11Words in s. 35(2) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 28(2) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F12S. 35(2A) inserted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 28(3) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F13Words in s. 35(3) substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 28(4) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

36 Persons authorised as a result of paragraph 1(1) of Schedule 5.U.K.

(1)At the request of a person authorised as a result of paragraph 1(1) of Schedule 5, the [F14FCA] may give a direction cancelling his authorisation as such a person.

(2)If a person authorised as a result of paragraph 1(1) of Schedule 5 has a [F15Part 4A permission], he does not cease to be an authorised person merely because he ceases to be a person so authorised.

Textual Amendments

Exercise of EEA rights by UK firmsU.K.

37 Exercise of EEA rights by UK firms.U.K.

Part III of Schedule 3 makes provision in relation to the exercise outside the United Kingdom of EEA rights by UK firms.

Commencement Information

I2S. 37 wholly in force at 1.12.2001; s. 37 not in force at Royal Assent see s. 431(2); s. 37 in force for specified purposes at 25.2.2001 by S.I. 2001/516, art. 2(c), Sch. Pt. 3; s. 37 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; s. 37 in force for specified purposes at 3.9.2001 by S.I. 2001/2632, art. 2, Sch. Pt. 2; s. 37 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

ExemptionU.K.

38 Exemption orders.U.K.

(1)The Treasury may by order (“an exemption order”) provide for—

(a)specified persons, or

(b)persons falling within a specified class,

to be exempt from the general prohibition.

(2)But a person cannot be an exempt person as a result of an exemption order if he has a [F16Part 4A permission].

(3)An exemption order may provide for an exemption to have effect—

(a)in respect of all regulated activities;

(b)in respect of one or more specified regulated activities;

(c)only in specified circumstances;

(d)only in relation to specified functions;

(e)subject to conditions.

(4)“Specified” means specified by the exemption order.

Textual Amendments

F16Words in s. 38(2) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 4 (with Sch. 20); S.I. 2013/423, art. 3, Sch.

Modifications etc. (not altering text)

C3S. 38(2) modified (31.10.2001) by S.I. 2001/3374, art. 1, Sch. para. 3

C8S. 38(2) modified (1.7.2009 for certain purposes, otherwise 30.6.2010) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2009 (S.I. 2009/1342), arts. 1(2), 34, {Sch. paras. 1, 3}

39 Exemption of appointed representatives.U.K.

(1)If a person (other than an authorised person)—

(a)is a party to a contract with an authorised person (“his principal”) which—

(i)permits or requires him to carry on business of a prescribed description, and

(ii)complies with such requirements as may be prescribed, and

(b)is someone for whose activities in carrying on the whole or part of that business his principal has accepted responsibility in writing,

he is exempt from the general prohibition in relation to any regulated activity comprised in the carrying on of that business for which his principal has accepted responsibility.

[F17(1A)But a person is not exempt as a result of subsection (1)—

(a)if his principal is an investment firm or a credit institution, and

(b)so far as the business for which his principal has accepted responsibility is investment services business,

unless he is entered on the applicable register.

(1B)The “applicable register” is—

(a)in the case of a person established in an EEA State (other than the United Kingdom) which permits investment firms authorised by the competent authority of that State to appoint tied agents, the register of tied agents maintained in that State pursuant to Article 23 of the markets in financial instruments directive;

(b)in the case of a person established in an EEA State which does not permit investment firms authorised as mentioned in paragraph (a) to appoint tied agents—

(i)if his principal has his relevant office in the United Kingdom, the record maintained by the [F18FCA] by virtue of section 347(1)(ha), and

(ii)if his principal is established in an EEA State (other than the United Kingdom) which permits investment firms authorised by the competent authority of the State to appoint tied agents, the register of tied agents maintained by that State pursuant to Article 23 of the markets in financial instruments directive; and

(c)in any other case, the record maintained by the [F18FCA] by virtue of section 347(1)(ha).]

[F19(1C)Subsection (1D) applies where an authorised person (“A”)—

(a)has permission under Part 4A, or permission resulting from any other provision of this Act, only in relation to one or more qualifying activities,

(b)is a party to a contract with another authorised person (A's “principal”) which—

(i)permits or requires A to carry on business of a prescribed description (“the relevant business”), and

(ii)complies with such requirements as may be prescribed, and

(c)is someone for whose activities in carrying on the whole or part of the relevant business A's principal has accepted responsibility in writing.

(1D)Sections 20(1) and (1A) and 23(1A) do not apply in relation to the carrying on by A of a relevant additional activity.

(1E)In subsections (1C) and (1D)—

(a)“qualifying activity” means a regulated activity which is of a prescribed kind and relates—

(i)to rights under a contract of the kind mentioned in paragraph 23 of Schedule 2, other than one under which the obligation of the borrower to repay is secured on land, or

(ii)to rights under a contract of the kind mentioned in paragraph 23B of that Schedule;

(b)“relevant additional activity” means a regulated activity which—

(i)is not one to which A's permission relates, and

(ii)is comprised in the carrying on of the business for which A's principal has accepted responsibility.]

[F20(2)In this Act “appointed representative” means—

(a)a person who is exempt as a result of subsection (1), or

(b)a person carrying on a regulated activity in circumstances where, as a result of subsection (1D), sections 20(1) and (1A) and 23(1A) do not apply.]

(3)The principal of an appointed representative is responsible, to the same extent as if he had expressly permitted it, for anything done or omitted by the representative in carrying on the business for which he has accepted responsibility.

[F21(4)In determining whether an authorised person has complied with—

(a)a provision contained in or made under this Act, or

(b)a qualifying EU provision that is specified, or of a description specified, for the purposes of this subsection by the Treasury by order,

anything which a relevant person has done or omitted as respects business for which the authorised person has accepted responsibility is to be treated as having been done or omitted by the authorised person.]

(5)“Relevant person” means a person who at the material time is or was an appointed representative by virtue of being a party to a contract with the authorised person.

(6)Nothing in subsection (4) is to cause the knowledge or intentions of an appointed representative to be attributed to his principal for the purpose of determining whether the principal has committed an offence, unless in all the circumstances it is reasonable for them to be attributed to him.

[F22(7)A person carries on “investment services business” if—

(a)the business includes providing services or carrying on activities of the kind mentioned in Article 4.1.25 of the markets in financial instruments directive, and

(b)as a result of providing such services or carrying on such activities he is a tied agent or would be if he were established in an EEA State.

(8)In this section—

Textual Amendments

F18Word in s. 39(1B) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 5(2) (with Sch. 20); S.I. 2013/113, art. 2(1)(b), Sch. Pt. 2; S.I. 2013/423, art. 3, Sch.

F19S. 39(1C)-(1E) inserted (1.4.2013) by Financial Services Act 2012 (c. 21), ss. 10(2), 122(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F21S. 39(4) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 5(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(b), Sch. Pt. 2; S.I. 2013/423, art. 3, Sch.

Modifications etc. (not altering text)

C10S. 39(2) modified (31.10.2001) by S.I. 2001/3374, art. 1, Sch. para. 7

Commencement Information

I3S. 39 wholly in force at 1.12.2001; s. 39 not in force at Royal Assent see s. 431(2); s. 39(1) in force for certain purposes at 25.2.2001 by S.I. 2001/516, art. 2(b), Sch. Pt. 2; s. 39 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)

[F2339ACertain tied agents operating outside United KingdomU.K.

(1)This section applies to an authorised person whose relevant office is in the United Kingdom if—

(a)he is a party to a contract with a person (other than an authorised person) who is established—

(i)in the United Kingdom, or

(ii)in an EEA State which does not permit investment firms authorised by the competent authority of the State to appoint tied agents; and

(b)the contract is a relevant contract.

(2)A contract is a “relevant contract” if it satisfies conditions A to C.

(3)Condition A is that the contract permits or requires the person mentioned in subsection (1)(a) (the “agent”) to carry on investment services business.

(4)Condition B is that either—

(a)it is a condition of the contract that such business may only be carried on by the agent in an EEA State other than the United Kingdom; or

(b)in a case not falling within paragraph (a), the [F24FCA] is satisfied that no such business is, or is likely to be, carried on by the agent in the United Kingdom.

(5)Condition C is that the business is of a description that, if carried on in the United Kingdom, would be prescribed for the purposes of section 39(1)(a)(i).

(6)An authorised person to whom this section applies who—

(a)enters into or continues to perform a relevant contract with an agent which does not comply with the applicable requirements,

(b)enters into or continues to perform a relevant contract without accepting or having accepted responsibility in writing for the agent's activities in carrying on investment services business,

(c)enters into a relevant contract with an agent who is not entered on the record maintained by the [F24FCA] by virtue of section 347(1)(ha), or

(d)continues to perform a relevant contract with an agent when he knows or ought to know that the agent is not entered on that record,

is to be taken for the purposes of this Act to have contravened a requirement imposed on him by or under this Act.

(7)The “applicable requirements” are the requirements prescribed for the purposes of subsection (1)(a)(ii) of section 39 which have effect in the case of a person to whom subsection (1A) of that section applies.

(8)A person carries on “investment services business” if—

(a)his business includes providing services or carrying on activities of the kind mentioned in Article 4.1.25 of the markets in financial instruments directive, and

(b)as a result of providing such services or carrying on such activities he is a tied agent.

(9)In this section—

Textual Amendments