C1 Part XVIII Recognised Investment Exchanges and Clearing Houses
C2F1CHAPTER 3APASSPORT RIGHTS
Pt. 18 Ch. 3A (ss. 312A-312D) inserted (1.4.2007 for certain purposes and 1.11.2007 otherwise) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(2), Sch. 2 para. 15 (with reg. 5)
Pt. 18 Ch. 3A applied (with modifications) (12.12.2011) by The Recognised Auction Platforms Regulations 2011 (S.I. 2011/2699), reg. 8, Sch. 3 (as amended (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 5 para. 14(1) (with reg. 7))
EEA market operators in United Kingdom
312AExercise of passport rights by EEA market operator
1
An EEA market operator may, in pursuance of the right under the applicable provision, make arrangements in the United Kingdom to facilitate access to, or use of, a specified regulated market or specified multilateral trading facility operated by it if—
a
the operator has given its home state regulator notice of its intention to make such arrangements; and
b
the home state regulator has given F14the FCA notice of the operator's intention.
2
In making arrangements under subsection (1), the operator is exempt from the general prohibition as respects any regulated activity which is carried on as a part of its business of operating the market or facility in question, or in connection with, or for the purposes of, that business.
3
”Specified” means specified in the notice referred to in subsection (1)(a).
4
This section does not apply to an overseas investment exchange.
312B Removal of passport rights from EEA market operator
1
The F5FCA may prohibit an EEA market operator from making or, as the case may be, continuing arrangements in the United Kingdom, in pursuance of the applicable provision, to facilitate access to, or use of, a regulated market or multilateral trading facility operated by the operator if—
a
the F5FCA has clear and demonstrable grounds for believing that the operator has contravened a relevant requirement, and
b
the F5FCA has first complied with subsections (3) to (9).
2
A requirement is relevant if it is imposed—
a
by the operator's home state regulator in the implementation of the markets in financial instruments directive or any F2EU legislation made under that directive;
b
by provision implementing that directive, or any F2EU legislation made under it, in the operator's home state; or
c
by any directly applicable Community regulation made under that directive.
3
The F9FCA must notify the operator and its home state regulator of its finding under subsection (1)(a).
4
The notice to the home state regulator under subsection (3) must—
a
request that the home state regulator take all appropriate measures for the purpose of ensuring that the operator puts an end to the contravention; and
b
state that the F11FCA proposes to exercise the power under subsection (1) if the operator continues the contravention.
5
The F3FCA may not exercise the power under subsection (1) unless satisfied—
a
either—
i
that the home state regulator has failed or refused to take measures for the purpose mentioned in subsection (4)(a); or
ii
that the measures taken by the home state regulator have proved inadequate for that purpose; and
b
that the operator is acting in a manner which is clearly prejudicial to the interests of investors in the United Kingdom or the orderly functioning of the financial markets.
6
If the F13FCA is satisfied as mentioned in subsection (5), it must give written notice to—
a
the operator, and
b
the home state regulator,
of its intention to exercise the power under subsection (1).
7
A notice under subsection (6) must—
a
state why the F16FCA intends to exercise its power under subsection (1), and
b
in the case of the notice to the operator, inform the operator that it may make representations to the F8FCA before the end of the representation period.
8
The representation period is—
a
the period of two months beginning with the date on which the notice is given to the operator; or
b
such longer period as the F7FCA may allow in a particular case.
9
If, having considered any representations made by the operator, the F15FCA decides to exercise the power under subsection (1), it must—
a
notify the operator in writing that it will be prohibited from making or, as the case may be, continuing the arrangements mentioned in that subsection from the date specified in the notice; and
b
notify the home state regulator of the action to be taken in relation to the operator.
10
11
The exemption conferred on an operator by section 312A(2) ceases to apply if the F15FCA exercises the power under subsection (1) in relation to the operator.
12
The right to make the arrangements mentioned in subsection (1) may be reinstated in relation to the operator (together with the exemption mentioned in subsection (11)) if the F6FCA is satisfied that the contravention which led to the F6FCA exercising the power under subsection (1) has been remedied.
F1213
If the F10FCA 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)).
Pt. 18 applied in part (with modifications) (12.12.2011) by The Recognised Auction Platforms Regulations 2011 (S.I. 2011/2699), reg. 7, Sch. 2 (as amended (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), reg. 1, Sch. para. 37 (with regs. 7(4), 9(1)))