C1 Part XVIII Recognised Investment Exchanges and Clearing Houses
Chapter I Exemption
General
285 Exemption for recognised investment exchanges and clearing houses.
1
In this Act—
a
b
“recognised clearing house” means—
i
a central counterparty in relation to which a recognition order is in force (in this Part referred to as a “recognised central counterparty”), or
ii
a clearing house which provides clearing services in the United Kingdom without doing so as a central counterparty, and in relation to which a recognition order is in force;
c
“EEA central counterparty” means a person established in an EEA State other than the United Kingdom who has been authorised by the competent authority of that State as a central counterparty pursuant to Article 17 of the EMIR regulation; and
d
“third country central counterparty” means a person established in a State which is not an EEA State who has been recognised by ESMA as a central counterparty pursuant to Article 25 of the EMIR regulation.
2
A recognised investment exchange is exempt from the general prohibition as respects any regulated activity—
a
which is carried on as a part of the exchange’s business as an investment exchange; or
F8b
which is carried on for the purposes of, or in connection with, the provision by the exchange of services designed to facilitate the provision of clearing services by another person.
3
F9A recognised clearing house which is not a recognised central counterparty is exempt from the general prohibition as respects any regulated F10activity—
a
which is carried on for the purposes of, or in connection with, the provision of clearing services by the clearing house, or
b
which is carried on for the purposes of, or in connection with, the provision by the clearing house of services designed to facilitate the provision of clearing services by another person.
F63A
A recognised central counterparty is exempt from the general prohibition as respects any regulated activity which is carried on for the purposes of, or in connection with, the services or activities specified in its recognition order.
3B
An EEA central counterparty is exempt from the general prohibition as respects any regulated activity which is carried on for the purposes of, or in connection with, the services or activities specified in its authorisation granted pursuant to Article 17 of the EMIR regulation.
3C
A third country central counterparty is exempt from the general prohibition as respects any regulated activity which is carried on for the purposes of, or in connection with, the services or activities specified in its recognition by ESMA pursuant to Article 25 of the EMIR regulation.
F74
The Treasury may by order amend paragraph (b) of subsection (2) or (3).
285AF2Powers exercisable in relation to recognised investment exchanges and clearing houses
1
For the purposes of this Part, the FCA is “the appropriate regulator” in relation to recognised investment exchanges.
2
For the purposes of this Part, the Bank of England is “the appropriate regulator” in relation to recognised clearing houses.
3
In Schedule 17A—
a
Part 1 makes provision for a memorandum of understanding between the appropriate regulators F13, and between the FCA and the PRA, with respect to the exercise of their functions in relation to recognised investment exchanges and clearing houses;
b
Part 2 applies certain provisions of this Act in relation to the Bank of England in consequence of the conferring of functions on the Bank under this Part of this Act;
c
Part 3 makes provision relating to the winding up, administration or insolvency of F12recognised clearing houses; and
d
Part 4 makes provision about fees.
286 Qualification for recognition.
1
The Treasury may make regulations setting out the requirements—
a
which must be satisfied by an investment exchange or clearing house if it is to qualify as a body in respect of which F4the appropriate regulator may make a recognition order under this Part; and
b
which, if a recognition order is made, it must continue to satisfy if it is to remain a recognised body.
2
But if regulations contain provision as to the default rules of an investment exchange or clearing house, or as to proceedings taken under such rules by such a body, they require the approval of the Secretary of State.
3
“Default rules” means rules of an investment exchange or clearing house which provide for the taking of action in the event of a person’s appearing to be unable, or likely to become unable, to meet his obligations in respect of one or more market contracts connected with the exchange or clearing house.
4
“Market contract” means—
a
b
such other kind of contract as may be prescribed.
F144A
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F144B
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F144C
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F144D
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F144E
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F34F
Regulations under subsection (1) may confer power on the appropriate regulator to make rules for the purposes of the regulations or of any specified provision made by the regulations.
5
Requirements resulting from this section are referred to in this Part as “recognition requirements”.
F16
In the case of an investment exchange, requirements resulting from this section are in addition to requirements which must be satisfied by the exchange as a result of section 290(1A) before F5the FCA may make a recognition order declaring the exchange to be a recognised investment exchange.
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)))