Part XIII Incoming Firms: Intervention by FCA or PRA
Exercise of power of intervention
197 Procedure on exercise of power of intervention.
(1)
A requirement takes effect—
(a)
immediately, if the notice given under subsection (3) states that that is the case;
(b)
on such date as may be specified in the notice; or
(c)
if no date is specified in the notice, when the matter to which it relates is no longer open to review.
(2)
A requirement may be expressed to take effect immediately (or on a specified date) only if the F1regulator, having regard to the ground on which it is exercising its power of intervention, considers that it is necessary for the requirement to take effect immediately (or on that date).
(3)
If F2a regulator proposes to impose a requirement under section 196 on an incoming firm, or imposes such a requirement with immediate effect, it must give the firm written notice.
(4)
The notice must—
(a)
give details of the requirement;
(b)
inform the firm of when the requirement takes effect;
(c)
state the F3regulator's reasons for imposing the requirement and for its determination as to when the requirement takes effect;
(d)
inform the firm that it may make representations to the F4regulator within such period as may be specified in the notice (whether or not it has referred the matter to the Tribunal); and
(e)
inform it of its right to refer the matter to the Tribunal.
(5)
The F5regulator may extend the period allowed under the notice for making representations.
(6)
If, having considered any representations made by the firm, the F5regulator decides—
(a)
to impose the requirement proposed, or
(b)
if it has been imposed, not to rescind the requirement,
it must give it written notice.
(7)
If, having considered any representations made by the firm, the F5regulator decides—
(a)
not to impose the requirement proposed,
(b)
to impose a different requirement from that proposed, or
(c)
to rescind a requirement which has effect,
it must give it written notice.
(8)
A notice given under subsection (6) must inform the firm of its right to refer the matter to the Tribunal.
(9)
A notice under subsection (7)(b) must comply with subsection (4).
(10)
If a notice informs a person of his right to refer a matter to the Tribunal, it must give an indication of the procedure on such a reference.
198 Power to apply to court for injunction in respect of certain overseas insurance companies.
F6(1)
This section applies if the appropriate regulator has received a request made in respect of an incoming EEA firm in accordance with Article 140 of the Solvency 2 Directive.
(2)
The court may, on an application made to it by the F7appropriate regulator with respect to the firm, grant an injunction restraining (or in Scotland an interdict prohibiting) the firm disposing of or otherwise dealing with any of its assets.
(3)
If the court grants an injunction, it may by subsequent orders make provision for such incidental, consequential and supplementary matters as it considers necessary to enable the F7appropriate regulator to perform any of its functions under this Act.
F8(3A)
“The appropriate regulator” means whichever regulator is, at the time when the request is received, the F9supervisory authority for the purposes of Article 140 of the Solvency 2 Directive.
(4)
“The court” means—
(a)
the High Court; or
(b)
in Scotland, the Court of Session.
199 Additional procedure for EEA firms in certain cases.
(1)
This section applies if it appears to F10a regulator that its power of intervention is exercisable in relation to an EEA firm exercising EEA rights in the United Kingdom (“an incoming EEA firm”) in respect of the contravention of a relevant requirement.
(2)
A requirement is relevant if—
F11(a)
it is imposed—
(i)
by F12that regulator under this Act, or
(ii)
under any directly applicable Community regulation or decision made under a single market directive; and
F13(b)
as respects its contravention, the single market directive in question provides that a procedure of the kind set out in the following provisions of this section (so far as they are relevant in the firm's case) is to apply.
(3)
F14The regulator must, in writing, require the firm to remedy the situation.
F15(3A)
F14(3B)
(4)
If the firm fails to comply with the requirement under subsection (3) within a reasonable time, F14the regulator must give a notice to that effect to the firm’s home state regulator requesting it—
(a)
to take all appropriate measures for the purpose of ensuring that the firm remedies the situation which has given rise to the notice; and
(b)
to inform F14the regulator of the measures it proposes to take or has taken or the reasons for not taking such measures.
(5)
Except as mentioned in subsection (6), F14the regulator may not exercise its power of intervention F19before informing the firm's home state regulator and unless satisfied—
(a)
that the firm’s home state regulator has failed or refused to take measures for the purpose mentioned in subsection (4)(a); or
(b)
that the measures taken by the home state regulator have proved inadequate for that purpose.
F20(5A)
Subsections (6) to (8) apply to an incoming EEA firm other than a firm falling within paragraph 5(da) or (h) of Schedule 3.
(6)
If F14the regulator decides that it should exercise its power of intervention in respect of the incoming EEA firm as a matter of urgency in order to protect the interests of consumers, it may exercise that power—
(a)
before complying with subsections (3) and (4); or
(b)
where it has complied with those subsections, before it is satisfied as mentioned in subsection (5).
F21(7)
In such case, the regulator must at the earliest opportunity—
(a)
where the single market directive or directly applicable Community regulation in question is the capital requirements directive or the capital requirements regulation, inform the firm’s home state regulator, the Commission, EBA and any other affected regulators of other EEA States;
(b)
in the case of any other single market directive or directly applicable Community regulation, inform the firm’s home state regulator, ESMA and the Commission.
(7A)
Where the single market directive or directly applicable Community regulation in question is the capital requirements directive or the capital requirements regulation the regulator must rescind any requirement imposed on the firm where the home state regulator has taken appropriate measures in accordance with section 199B(4).
(8)
If—
(a)
F14the regulator has (by virtue of subsection (6)) exercised its power of intervention before complying with subsections (3) and (4) or before it is satisfied as mentioned in subsection (5), and
(b)
F14the regulator must in accordance with the decision rescind or vary the requirement.
F23(9)
In the case of a firm falling within paragraph 5(da) of Schedule 3, F14the regulator may not exercise its power of intervention before informing the firm's home state regulator and unless satisfied—
(a)
that the firm's home state regulator has failed or refused to take all appropriate measures for the purpose of ensuring that the firm remedies the situation which gave rise to the notice under subsection (3); or
(b)
that the measures taken by the home state regulator have proved inadequate for that purpose.
F24(10)
F26(11)
If, in the case of a home state regulator of an incoming EEA firm exercising EEA rights under the UCITS directive, F14the regulator is satisfied as mentioned in subsection (5), it may refer the matter to ESMA (and ESMA may act in accordance with the powers conferred on it under Article 19 of Regulation ( EU ) No. 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority)).
F27(12)
Subsection (3) is not to be regarded as requiring the PRA to take action in relation to the contravention of a relevant requirement in a case where it is satisfied that the FCA is required to act, and is acting or has acted, under subsection (3)—
(a)
in relation to that requirement, or
(b)
where that requirement is imposed by rules made by the PRA, in relation to an identical requirement imposed by rules made by the FCA.
F28199AManagement companies: loss of authorisation
(1)
This section applies in relation to an EEA firm falling within paragraph 5(f) of Schedule 3 (“a management company”) which is providing services in the United Kingdom in the exercise of an EEA right deriving from the UCITS directive.
(2)
If the F29appropriate regulator has been informed by the home state regulator of the management company that it is withdrawing the management company's authorisation, the F29appropriate regulator must exercise its powers under this Act in such manner as it thinks fit to safeguard the interests of investors in a collective investment scheme managed by the management company in the United Kingdom.
(3)
Measures taken under subsection (2) may include decisions preventing the management company from initiating any further transactions in the United Kingdom.
F30(4)
In this section—
“the appropriate regulator” means whichever of the FCA and the PRA is the competent authority for the purposes of the UCITS directive;
“collective investment scheme” has the same meaning as in Part 17.