Part III Authorisation and Exemption

Authorisation

I1C1231 Authorised persons.

1

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

a

a person who has a F7Part 4A permission to carry on one or more regulated activities;

F23b

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F24c

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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.

32 Partnerships and unincorporated associations.

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 F1individual or firm which succeeds to the business of the dissolved firm.

F23

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.

Ending of authorisation

33 Withdrawal of authorisation F6....

1

This section applies if—

a

an authorised person’s F9Part 4A permission is cancelled; and

b

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

2

The F10appropriate regulator must give a direction withdrawing that person’s status as an authorised person.

F82A

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.

F2534EEA firms.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F2635 Treaty firms.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36F27Authorised open-ended investment companies

Schedule 5 makes provision about authorised open-ended investment companies.

Exercise of EEA rights by UK firms

F2837 Exercise of EEA rights by UK firms.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Exemption

38 Exemption orders.

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.

C1C2C3C4C5C6C13C14C16C182

But a person cannot be an exempt person as a result of an exemption order if he has a F11Part 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.

I2C15C17C1939 Exemption of appointed representatives.

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.

F141ZA

But a person is not exempt as a result of subsection (1) if subsection (1A) F17, (1AA) or (1BA) applies to the person.

F31A

F15This subsection applies to a person —

a

if his principal is an investment firm F22, a F29qualifying credit institution, or F30a firm which has a Part 4A permission to carry on regulated activities as an exempt investment firm within the meaning of regulation 8 of the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), 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.

F191AA

This subsection applies to a person—

a

if the person’s principal is an investment firm F18, a F31qualifying credit institution, or a person mentioned in Article 3.1 (optional exemptions) of the markets in financial instruments directive, and

b

so far as the business for which the person’s principal has accepted responsibility is selling, or advising clients on, structured deposits F32...,

unless the person is entered on the applicable register.

1B

F20In subsections (1A) and (1AA) The “applicable register” is F33the record maintained by the FCA by virtue of section 347(1)(ha).

F161BA

This subsection applies to a person (“A”)—

a

if A’s principal is a mortgage intermediary, and

b

so far as the business for which A’s principal has accepted responsibility is of a kind F34that—

i

F35is specified in article 25A (arranging regulated mortgage contracts), article 36A (credit broking), article 53A (advising on regulated mortgage contracts) or article 53DA (advising on regulated credit agreements the purpose of which is to acquire land) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001; and

F36ii

relates to mortgage agreements entered into on or after 21st March 2016,

unless A meets the requirements of subsection (1BB).

1BB

The requirements of this subsection are—

a

that A is entered on the record maintained by the FCA by virtue of section 347(1)(hb);

b

that A’s principal is a person who has a Part 4A permission to carry on one or more of the regulated activities mentioned in subsection (1BA)(b)(i); and

c

that A’s principal is not a tied mortgage intermediary.

F121C

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.

C7C8C9C10C11F132

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.

F54

In determining whether an authorised person has complied with—

a

a provision contained in or made under this Act, or

b

a F37qualifying 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.

F387

A person carries on “investment services business” if, under the full and unconditional responsibility of only one investment firm on whose behalf the person acts, the person—

a

promotes investment services or ancillary services to the firm's clients or prospective clients,

b

receives and transmits instructions or orders from clients in respect of investment services or financial instruments,

c

places financial instruments, or

d

provides advice to clients or prospective clients in respect of investment services or financial instruments.

F398

In this section—

  • “ancillary services” means any of the services and activities listed in Part 3A of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544);

  • “financial instruments” means those instruments specified in Part 1 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;

  • “investment services” means any of the services and activities listed in Part 3 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, relating to any of the instruments listed in Part 1 of that Schedule;

  • “structured deposit” has the meaning given by Article 2.1.23 of the markets in financial instruments regulation.

39AF4Certain tied agents operating outside United Kingdom

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 F40established in the United Kingdom; 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 F41the FCA 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,

F21c

enters into a relevant contract with an agent who is not entered on—

i

the record maintained by the FCA by virtue of section 347(1)(ha), or

F42ii

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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 F43... ,

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.

F448

Section 39(7) applies for the purposes of this section.

9

In this section—

  • F45...

  • “relevant office” means—

    1. a

      in relation to a body corporate, its registered office or, if it has no registered office, its head office, and

    2. b

      in relation to a person other than a body corporate, the person's head office.