C7 Part XVIIIF211Recognised investment exchanges, clearing houses F355, CSDs and other parties
Words in Pt. 18 heading substituted (29.8.2023) by Financial Services and Markets Act 2023 (c. 29), ss. 18(2), 86(3); S.I. 2023/779, reg. 4(m)
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)))
Chapter I Exemption
General
285F212Exemption for recognised bodies etc.
1
In this Act—
a
“recognised investment exchange” means an investment exchange in relation to which a recognition order is in force;
F160b
“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;
F286c
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
d
F287“third country central counterparty” means a person established in a country other than the United Kingdom who has been recognised by the Bank of England as a central counterparty pursuant to Article 25 of the EMIR Regulation;
F215e
“recognised CSD” means a central securities depository in relation to which a recognition order is in force;
F282g
“third country CSD” means a central securities depository, established in a country other than the United Kingdom, which is recognised by the Bank of England pursuant to Article 25 of the CSD 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
F157b
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
F158A recognised clearing house which is not a recognised central counterparty is exempt from the general prohibition as respects any regulated F159activity—
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.
F2753ZA
Subsections (2) and (3) do not apply in respect of the regulated activity specified in article 63S of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (administering a benchmark).
F1553A
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.
F2883B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 F289the Bank of England pursuant to Article 25 of the EMIR regulation.
F2143D
A recognised CSD is exempt from the general prohibition as respects any regulated activity which is carried on for the purposes of, or in connection with—
a
the core services listed in Section A of the Annex to the CSD regulation which the central securities depository is authorised to provide pursuant to Article 16 or 19(1)(a) or (c) of that regulation, or
b
any non-banking-type ancillary services listed in or permitted under Section B of that Annex which the central securities depository is authorised to provide, including services notified under Article 19 of the CSD regulation.
F2833E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2833F
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3G
A third country CSD 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 and activities covered by its recognition by F284the Bank of England pursuant to Article 25 of the CSD regulation.
3H
But a recognised CSD F285... or a third country CSD is not exempt from the general prohibition as respects any regulated activity which is carried on for the purposes of, or in connection with, any banking-type ancillary service listed in or permitted under Section C of the Annex to the CSD regulation.
F1564
The Treasury may by order amend paragraph (b) of subsection (2) or (3).
285AF18F213Powers exercisable in relation to recognised bodiesF372etc
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 F290and recognised CSDs.
3
In Schedule 17A—
a
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 F375or as a consequence of conferring other FMI functions on the Bank;
c
d
Part 4 makes provision about fees.
286 Qualification for recognition.
1
The Treasury may make regulations setting out the requirements—
a
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 F219, clearing house or central securities depository, 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 F220, clearing house or central securities depository 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 F220, clearing house or central securities depository.
4
“Market contract” means—
a
b
such other kind of contract as may be prescribed.
F2724A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2724B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2724C
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2724D
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2724E
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F194F
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 F22the FCA may make a recognition order declaring the exchange to be a recognised investment exchange.
Applications for recognition
I1287 Application by an investment exchange.
1
Any body corporate or unincorporated association may apply to F23the FCA for an order declaring it to be a recognised investment exchange for the purposes of this Act.
2
The application must be made in such manner as F24the FCA may direct and must be accompanied by—
a
a copy of the applicant’s rules;
b
a copy of any guidance issued by the applicant;
c
the required particulars; and
d
such other information as F24the FCA may reasonably require for the purpose of determining the application.
3
The required particulars are—
a
particulars of any arrangements which the applicant has made, or proposes to make, for the provision F25by another person of clearing services in respect of transactions effected on the exchange;
b
c
a programme of operations which includes the types of business the applicant proposes to undertake and the applicant's proposed organisational structure;
d
such particulars of the persons who effectively direct the business and operations of the exchange as F27the FCA may reasonably require;
e
such particulars of the ownership of the exchange, and in particular of the identity and scale of interests of the persons who are in a position to exercise significant influence over the management of the exchange, whether directly or indirectly, as F28the FCA may reasonably require.
F34
Subsection (3)(c) to (e) does not apply to an application by an overseas applicant.
F291287AApplication by an investment exchange: persons connected with an applicant
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I2288 Application by a clearing house.
F221A1
This section applies only in relation to an application by a clearing house.
F1621
A body corporate or unincorporated association which is established in the United Kingdom may, where it intends to provide clearing services as a central counterparty, apply to the Bank of England in accordance with Article 17 of the EMIR regulation for an order granting authorisation for the purposes of that Article and declaring it to be a recognised central counterparty for the purposes of this Act.
1A
A body corporate or unincorporated association may, where it intends to provide clearing services in the United Kingdom without doing so as a central counterparty, apply to the Bank of England for an order declaring it to be for the purposes of this Act a recognised clearing house which is not a recognised central counterparty.
2
F163An application under subsection (1A) must be made in such manner as F29the Bank of England may direct and must be accompanied by—
a
a copy of the applicant’s rules;
b
a copy of any guidance issued by the applicant;
c
the required particulars; and
d
such other information as F30the Bank may reasonably require for the purpose of determining the application.
3
The required particulars are—
a
if the applicant makes, or proposes to make, clearing arrangements with a recognised investment exchange, particulars of those arrangements;
b
if the applicant proposes to provide clearing services F31or services falling within section 285(3)(b) for persons other than recognised investment exchanges, particulars of the criteria which it will apply when determining to whom it will provide those services.
288AF207Application by a central securities depository
Where a legal person which is established in the United Kingdom intends—
a
to operate a securities settlement system referred to in point (3) of Section A of the Annex to the CSD regulation, and
b
to provide at least one other core service listed in Section A of that Annex,
it may apply to the Bank of England in accordance with Article 17 of the CSD regulation F292, and any technical standards originally made or adopted under that Article which are F376assimilated direct legislation and any technical standards made under that Article by the Bank on or after IP completion day, for an order granting authorisation for the purposes of Article 16 of that regulation and declaring it to be a recognised CSD for the purposes of this Act.
289 Applications: supplementary.
1
At any time after receiving an application and before determining it, F32the appropriate regulator may require the applicant to provide such further information as it reasonably considers necessary to enable it to determine the application.
2
3
Different directions may be given, or requirements imposed, by F128the appropriate regulator with respect to different applications.
F1644
In relation to an application under section 288(1), this section does not apply to information which can be required under Article 17 of the EMIR regulation.
F2225
In relation to an application under section 288A, this section applies only in relation to information which the Bank of England may require in connection with recognition requirements which do not F293derive from any of the following—
a
the CSD Regulation;
b
any EU regulation, originally made under the CSD regulation, which is F377assimilated direct legislation;
c
any subordinate legislation (within the meaning of the Interpretation Act 1978) made under the CSD regulation on or after IP completion day.
I3290 Recognition orders.
F1661
If it appears to the appropriate regulator that the applicant satisfies the recognition requirements applicable in its case, the regulator may—
a
where the application is made under section 287, make a recognition order declaring the applicant to be a recognised investment exchange;
b
where the application is made under section 288(1) and Article 17 of the EMIR regulation allows authorisation to be granted, make a recognition order (“a central counterparty recognition order”) granting authorisation for the purposes of that Article and declaring the applicant to be a recognised central counterparty; F227...
c
where the application is made under section 288(1A), make a recognition order declaring the applicant to be a recognised clearing house which is not a recognised central counterparty F226; or
d
where the application is made under section 288A, make a recognition order (a “CSD recognition order”) granting authorisation for the purposes of Article 16 of the CSD regulation and declaring the applicant to be a recognised CSD.
F294F41A
In the case of an application for an order declaring the applicant to be a recognised investment exchange, the reference in subsection (1) to the recognition requirements applicable in its case includes a reference to requirements contained in any of the following—
a
any EU regulation, originally made under the markets in financial instruments directive, which is F378assimilated direct legislation;
b
any EU regulation, originally made under the markets in financial instruments regulation, which is F379assimilated direct legislation;
c
any subordinate legislation (within the meaning of the Interpretation Act 1978) made under the markets in financial instruments regulation on or after IP completion day.
1B
In the case mentioned in subsection (1A), the application must be determined by F33the FCA before the end of the period of six months beginning with the date on which it receives the completed application.
1C
Subsection (1B) does not apply in the case of an application by an overseas applicant.
F1651D
A central counterparty recognition order must specify the services or activities linked to clearing which the applicant may provide or perform and the classes of financial instruments covered by the order.
F2231E
A CSD recognition order must specify—
a
the core services listed in Section A of the Annex to the CSD regulation which the applicant is authorised to provide pursuant to Article 16 or 19(1)(a) or (c) of that regulation, and
b
any non-banking-type ancillary services listed in or permitted under Section B of that Annex which the applicant is authorised to provide, including services notified under Article 19 of the CSD regulation.
1F
A CSD recognition order must also record the terms of any of the following authorisations granted to the CSD under the CSD regulation or notifications made by the CSD under that regulation—
a
an authorisation under Article 19(1) of the CSD regulation to outsource a core service under Article 30 of that regulation,
b
an authorisation under Article 19(1)(d) of the CSD regulation (settlement of cash leg of securities settlement system in the books of another settlement agent),
c
an authorisation under Article 19(1)(e) of the CSD regulation (setting up interoperable link),
d
a notification under Article 19(5) of the CSD regulation (other CSD links),
e
an authorisation under Article 54 or 56 of the CSD regulation to provide (in accordance with Article 54(2)(a) or (b)) any banking-type ancillary service listed in or permitted under Section C of the Annex to that regulation, and
f
an authorisation to provide investment services and activities in addition to the services explicitly listed in Sections A and B of the Annex to the CSD regulation.
F342
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
4
A recognition order must specify a date on which it is to take effect.
F2244A
If the Bank of England has not made a decision in relation to an application under section 288A within six months of that application being complete, the applicant may refer the matter to the Tribunal.
4B
For the purposes of subsection (4A), an application is “complete” when the Bank of England informs the applicant that it is complete pursuant to Article 17(3) of the CSD regulation.
5
Section 298 has effect in relation to a decision to refuse to make a recognition order F168in respect of an investment exchange or a clearing house which is not a central counterparty—
a
as it has effect in relation to a decision to revoke such an order; and
b
as if references to a recognised body were references to the applicant.
F2255A
Section 298 has effect in relation to a decision to refuse an application under section 288A—
a
as it has effect in relation to a decision to make a revocation order under section 297(1B); and
b
as if references to a recognised body were references to the applicant.
F366
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1697
Where—
a
a body corporate or unincorporated association has made an application under section 288(1), and
b
the Bank of England has determined that application in accordance with Article 17 of the EMIR regulation,
any previous recognition order under section 290(1)(c) or 292(2)(b) shall cease to be valid.
290ZAF186Variation of central counterparty recognition order
1
On an application made to it in accordance with Article 15 of the EMIR regulation, the Bank of England may in accordance with Article 17 of that regulation vary a central counterparty recognition order by specifying an additional service or activity or class of financial instruments.
2
Where Article 20(5) of the EMIR regulation applies, the Bank of England may vary a central counterparty recognition order by removing a service or activity or class of financial instruments from those specified in the order.
3
The Bank of England may at any time vary a central counterparty recognition order for the purpose of correcting an error in, or omission from, the order.
290ZBF208Variation of CSD recognition order
1
Where the Bank of England—
a
grants an authorisation in accordance with Article 19(1), 54 or 56 of the CSD regulation,
b
receives a notification under Article 19 of that regulation, or
c
decides to withdraw authorisation for a service, activity or financial instrument in accordance with Article 20(4) or 57(4) of that regulation,
the Bank of England must vary the CSD recognition order accordingly.
2
Where an authorisation to provide investment services and activities in addition to the services explicitly listed in Sections A and B of the Annex to the CSD regulation is granted, varied or withdrawn, the Bank of England must vary the CSD recognition order accordingly.
3
The Bank of England may at any time vary a CSD recognition order for the purpose of correcting an error in, or omission from, the order.
290AF5Refusal of recognition on ground of excessive regulatory provision
1
F37The appropriate regulator must not make a recognition order if it appears to F38it that an existing or proposed regulatory provision of the applicant in connection with—
a
the applicant's business as an investment exchange, F39...
b
the provision by the applicant of clearing services, F40or
c
the provision by the applicant of services falling within section 285(2)(b) or (3)(b),
imposes or will impose an excessive requirement on the persons affected (directly or indirectly) by it.
2
The reference in section 290(1) (making of recognition order) to satisfying the applicable recognition requirements shall be read accordingly.
3
Expressions used in subsection (1) above that are defined for the purposes of section 300A (power of F41appropriate regulator to disallow excessive regulatory provision) have the same meaning as in that section.
4
The provisions of section 300A(3) and (4) (determination whether regulatory provision excessive) apply for the purposes of this section as for the purposes of section 300A.
5
Section 298 has effect in relation to a decision under this section to refuse a recognition order—
a
as it has effect in relation to a decision to revoke such an order, and
b
as if references to a recognised body were references to the applicant.
F1706
This section does not apply to an application for recognition as an overseas investment exchange, an overseas clearing house F228, a recognised central counterparty or a recognised CSD.
C1C2291 Liability in relation to recognised body’s regulatory functions.
1
A recognised body and its officers and staff are not to be liable in damages for anything done or omitted in the discharge of the recognised body’s regulatory functions unless it is shown that the act or omission was in bad faith.
2
But subsection (1) does not prevent an award of damages made in respect of an act or omission on the ground that the act or omission was unlawful as a result of section 6(1) of the M3Human Rights Act 1998.
3
“Regulatory functions” means the functions of the recognised body so far as relating to, or to matters arising out of, the obligations to which the body is subject under or by virtue of this Act.
I4C20F349292 Overseas investment exchanges and overseas clearing houses.
1
An application under section 287 or F172288(1A) by an overseas applicant must contain the address of a place in the United Kingdom for the service on the applicant of notices or other documents required or authorised to be served on it under this Act.
2
If it appears to F42the appropriate regulator that an overseas applicant satisfies the requirements of subsection (3) it may make a recognition order declaring the applicant to be—
a
a recognised investment exchange;
b
a recognised clearing house F173which is not a central counterparty.
3
The requirements are that—
F273a
investors are afforded protection equivalent to that which they would be afforded if the body concerned were required to comply with—
i
recognition requirements, other than any such requirements which are expressed in regulations under section 286 not to apply for the purposes of this paragraph, and
ii
F296requirements contained in any of the following—
aa
any EU regulation, originally made under the markets in financial instruments directive, which is F380assimilated direct legislation;
bb
any EU regulation, originally made under the markets in financial instruments regulation, which is F381assimilated direct legislation;
cc
any subordinate legislation (within the meaning of the Interpretation Act 1978) made under the markets in financial instruments regulation on or after IP completion day;
b
there are adequate procedures for dealing with a person who is unable, or likely to become unable, to meet his obligations in respect of one or more market contracts connected with the investment exchange or clearing house;
c
the applicant is able and willing to co-operate with F129the appropriate regulator by the sharing of information and in other ways;
d
adequate arrangements exist for co-operation between F130the appropriate regulator and those responsible for the supervision of the applicant in the country or territory in which the applicant’s head office is situated.
4
In considering whether it is satisfied as to the requirements mentioned in subsection (3)(a) and (b), F131the appropriate regulator is to have regard to—
a
the relevant law and practice of the country or territory in which the applicant’s head office is situated;
b
the rules and practices of the applicant.
5
In relation to an overseas applicant and a body or association declared to be a recognised investment exchange or recognised clearing house by a recognition order made by virtue of subsection (2)—
a
the reference in section 313(2) to recognition requirements is to be read as a reference to matters corresponding to the matters in respect of which provision is made in the recognition requirements;
b
sections 296(1) and 297(2) have effect as if the requirements mentioned in section 296(1)(a) and section 297(2)(a) were those of subsection (3)(a), (b), and (c) of this section;
c
section 297(2) has effect as if the grounds on which a recognition order may be revoked under that provision included the ground that in the opinion of F132the appropriate regulator arrangements of the kind mentioned in subsection (3)(d) no longer exist.
F1716
Where a recognised clearing house is F295... recognised as a third country central counterparty, any previous recognition order under section 290(1)(c) or 292(2)(b) shall cease to be valid.
F11Publication of information by recognised investment exchange
S. 292A and cross-heading 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. 5
292APublication of information by recognised investment exchange
1
A recognised investment exchange must as soon as practicable after a recognition order is made in respect of it publish such particulars of the ownership of the exchange as the F43FCA may reasonably require.
2
The particulars published under subsection (1) must include particulars of the identity and scale of interests of the persons who are in a position to exercise significant influence over the management of the exchange, whether directly or indirectly.
3
If an ownership transfer takes place in relation to a recognised investment exchange, the exchange must as soon as practicable after becoming aware of the transfer publish such particulars relating to the transfer as the F133FCA may reasonably require.
4
”Ownership transfer”, in relation to an exchange, means a transfer of ownership which gives rise to a change in the persons who are in a position to exercise significant influence over the management of the exchange, whether directly or indirectly.
5
A recognised investment exchange must publish such particulars of any decision it makes to suspend or remove a financial instrument from trading on a regulated market operated by it as the F134FCA may reasonably require.
6
The F135FCA may determine the manner of publication under subsections (1), (3) and (5) and the timing of publication under subsection (5).
7
This section does not apply to an overseas investment exchange.
Supervision
I5293 Notification requirements.
1
The F44appropriate regulator may make rules requiring a recognised body to give it—
a
notice of such events relating to the body as may be specified; and
b
such information in respect of those events as may be specified.
2
The rules may also require a recognised body to give the F44appropriate regulator, at such times or in respect of such periods as may be specified, such information relating to the body as may be specified.
3
An obligation imposed by the rules extends only to a notice or information which the F44appropriate regulator may reasonably require for the exercise of its functions under this Act F231or F276for the purposes ofDirective 2016/1148/EU of the European Parliament and of the Council of 6 July 2016 concerning measures for a high common level of security network and information systems across the UnionF297as that directive had effect immediately before IP completion day.
4
The rules may require information to be given in a specified form and to be verified in a specified manner.
5
If a recognised body—
a
alters or revokes any of its rules or guidance, or
b
makes new rules or issues new guidance,
it must give written notice to the F45appropriate regulator without delay.
F2295A
In relation to a recognised CSD, in subsection (5), “guidance” means guidance issued, or any recommendation made, in writing or other legible form and intended to have continuing effect, by the recognised CSD to—
a
all or any class of its members, or
b
persons using or seeking to use its services,
with respect to any of the services or activities specified in its recognition order.
6
If a recognised investment exchange makes a change—
a
in the arrangements it makes for the provision F46by another person of clearing services in respect of transactions effected on the exchange, or
b
in the criteria which it applies when determining to whom it will provide F47services falling within section 285(2)(b),
it must give written notice to F48the FCA and the Bank of England without delay.
7
If a recognised clearing house makes a change—
a
in the recognised investment exchanges for whom it provides clearing services F49or services falling within section 285(3)(b), or
b
in the criteria which it applies when determining to whom (other than recognised investment exchanges) it will provide clearing services F50or services falling within section 285(3)(b),
it must give written notice to F51the Bank of England and the FCA without delay.
F2307A
8
Subsections (5) to (7) do not apply to an overseas investment exchange F383, an overseas clearing house or a third country central counterparty.
9
“Specified” means specified in F52the appropriate regulator's rules.
293AF53Information: compliance with F280specified requirements
F2321
The appropriate regulator may require a recognised body to give the appropriate regulator such information as the appropriate regulator reasonably requires in order to satisfy itself that the body is complying with any F299qualifying provision that is specified, or of a description specified, for the purposes of this section by the Treasury by order.
F2332
The Bank of England may require F300a third country CSD which provides any services referred to in the Annex to the CSD regulation in the United Kingdom to give the Bank reports on those services and statistical information relating to those services, at such times or in respect of such periods as may be specified by the Bank.
3
A requirement under subsection (2) extends only to information which the Bank may reasonably require for the exercise of its functions under the CSD regulation or F301, any EU regulation originally made under the CSD regulation which is F384assimilated direct legislation, or any subordinate legislation (within the meaning of the Interpretation Act 1978) made under the CSD regulation on or after IP completion day.
C3I6294 Modification or waiver of rules.
1
The F54appropriate regulator may, on the application or with the consent of a recognised body, direct that rules made under section 293 or 295—
a
are not to apply to the body; or
b
are to apply to the body with such modifications as may be specified in the direction.
2
An application must be made in such manner as the F136appropriate regulator may direct.
3
Subsections (4) to (6) apply to a direction given under subsection (1).
4
The F137appropriate regulator may not give a direction unless it is satisfied that—
a
compliance by the recognised body with the rules, or with the rules as unmodified, would be unduly burdensome or would not achieve the purpose for which the rules were made; and
b
the direction would not result in undue risk to persons whose interests the rules are intended to protect.
5
A direction may be given subject to conditions.
6
The F138appropriate regulator may—
a
revoke a direction; or
b
vary it on the application, or with the consent, of the recognised body to which it relates.
F2347
In this section, “recognised body”, in relation to rules made under section 293, includes F302a third country CSD.
I7295 Notification: overseas investment exchanges and overseas clearing houses.
1
At least once a year, every overseas investment exchange and overseas clearing house must provide F55the appropriate regulator with a report.
2
The report must contain a statement as to whether any events have occurred which are F56likely to affect the appropriate regulator's assessment of whether it is satisfied as to the requirements set out in section 292(3).
3
The report must also contain such information as may be specified in rules made by F57the appropriate regulator.
F584
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
295AF209On-site inspection of F281United Kingdom branches of third country CSDs
1
F3052
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
The Bank of England’s power under subsection (1) is enforceable, on the application of the Bank of England, by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.
C4C15296F68Appropriate regulator's power to give directions.
1
This section applies if it appears to F59the appropriate regulator that a recognised body—
a
has failed, or is likely to fail, to satisfy the recognition requirements; or
b
has failed to comply with any other obligation imposed on it by or under this Act.
F61A
This section also applies F60if it appears to the appropriate regulator that a recognised body has failed, or is likely to fail, to comply with any obligation imposed on it by F235or underF310any qualifying provision specified (or of a description specified) F311for the purposes of this subsection in an order made by the Treasury.
F3121B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F3061C
This section also applies if it appears to the Bank of England that a Tier 2 third country central counterparty has failed to comply with an obligation imposed on it by or under this Act, or by or under the EMIR regulation.
2
F61The regulator concerned may direct F236the recognised body F313... to take specified steps for the purpose of securing the body’s compliance with—
a
the recognition requirements; or
b
any obligation of the kind in question.
F3072ZA
Where this section applies by virtue of subsection (1C), the Bank of England may direct the Tier 2 third country central counterparty to take specified steps for the purpose of securing compliance with the obligations referred to in that subsection.
F72A
In the case of F62a recognised body other than an overseas investment exchange or overseas clearing house, those steps may include—
a
the granting to F63the regulator concerned of access to the premises of F64the body for the purpose of inspecting—
i
those premises; or
ii
any documents on the premises which appear to F63the regulator concerned to be relevant for the purpose mentioned in subsection (2);
b
the suspension of the carrying on of any regulated activity by F65the body for the period specified in the direction.
F3142B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F3082C
In the case of a Tier 2 third country central counterparty, those steps may include—
a
the granting to the Bank of England of access to any premises of the Tier 2 third country central counterparty for the purposes of inspecting—
i
those premises; or
ii
any documents on the premises which appear to the Bank of England to be relevant for the purposes mentioned in subsection (2ZA);
b
the suspension for the period specified in the direction of the carrying on in the United Kingdom by the Tier 2 third country central counterparty of any activity in respect of which the third country central counterparty is exempt from the general prohibition.
2D
The Bank of England may not inspect the premises or documents on the premises of a Tier 2 third country central counterparty without first informing the relevant third country competent authority, and inspections must be conducted in accordance with cooperation arrangements established under Article 25.7 of the EMIR regulation.
2E
In subsection (2D), relevant third country competent authority means a regulatory authority of a country other than the United Kingdom which is responsible for the authorisation and supervision of central counterparties in its territory.
3
4
The fact that a rule made by a recognised body has been altered in response to a direction given by F67an appropriate regulator does not prevent it from being subsequently altered or revoked by the recognised body.
296AF187Additional power to direct F191recognised central counterparties
1
The Bank of England may direct a F192recognised central counterparty to take, or refrain from taking, specified action if the Bank is satisfied that it is necessary to give the direction, having regard to the public interest in—
a
protecting and enhancing the stability of the UK financial system,
b
maintaining public confidence in the stability of the UK financial system,
c
d
maintaining and enhancing the financial resilience of the F194recognised central counterparty.
2
The direction may, in particular—
a
specify the time for compliance with the direction,
b
require the rules of the F194recognised central counterparty to be amended, and
c
override such rules (whether generally or in their application to a particular case).
3
The direction may not require the F194recognised central counterparty—
a
to take any steps for the purpose of securing its compliance with—
i
the recognition requirements, or
ii
any obligation of a kind mentioned in section 296(1)(b) or (1A), or
b
to accept a transfer of property, rights or liabilities of another F194recognised central counterparty.
4
If the direction is given in reliance on section 298(7) the Bank must, within a reasonable time of giving the direction, give the F194recognised central counterparty a statement of its reasons—
a
for giving the direction, and
b
for relying on section 298(7).
5
The direction is enforceable, on the application of the Bank, by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.
6
The Bank may revoke a direction given under this section.
C5297 Revoking recognition.
1
F1741A
A central counterparty recognition order may be revoked by an order made by the Bank of England in accordance with Article 20 of the EMIR regulation.
F2371B
A CSD recognition order may be revoked by an order made by the Bank of England in accordance with Article 20 of the CSD regulation.
2
If it appears to F70the appropriate regulator that a recognised body F177which is not a recognised central counterpartyF239or a recognised CSD—
a
is failing, or has failed, to satisfy the recognition requirements, or
b
is failing, or has failed, to comply with any other obligation imposed on it by or under this Act,
it may make an order revoking the recognition order for that body even though the body does not wish the order to be made.
F82A
If it appears to F71the appropriate regulator that a recognised body F175which is not a recognised central counterpartyF238or a recognised CSDF72...—
a
has not carried on the business of an investment exchange F73or (as the case may be) of a clearing house during the period of twelve months beginning with the day on which the recognition order took effect in relation to it,
b
has not carried on the business of an investment exchange F74or (as the case may be) of a clearing house at any time during the period of six months ending with the relevant day, or
c
it may make an order revoking the recognition order for that body even though the body does not wish the order to be made.
2B
The “relevant day”, for the purposes of paragraph (b) of subsection (2A), is the day on which the power to make an order under that subsection is exercised.
2C
Subsection (2A) does not apply to an overseas investment exchange F75or overseas clearing house.
F2032D
If it appears to the Bank of England that a recognised central counterparty F240or a recognised CSD has failed, or is likely to fail, to comply with an obligation imposed on it by or under Article 4 or 15 of the SFT regulation it may make an order revoking the recognition order for that body even though the body does not wish the order to be made.
3
An order under this section (“a revocation order”) must specify the date on which it is to take effect.
4
In the case of a revocation order made under subsection (2) F9or (2A), the specified date must not be earlier than the end of the period of three months beginning with the day on which the order is made.
5
A revocation order may contain such transitional provisions as F76the appropriate regulator thinks necessary or expedient.
F3176
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C6I8C9C18298 Directions and revocation: procedure.
1
Before giving a direction under section 296 F77or 296A, or making a revocation order under section F243297(1B), (2),F205(2A) or (2D), F80the appropriate regulator must—
a
give written notice of its intention to do so to the recognised body concerned;
F178b
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F179c
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
A notice under subsection (1) must—
a
state why F81the appropriate regulator intends to give the direction or make the order; and
b
draw attention to the right to make representations conferred by subsection (3).
3
Before the end of the period for making representations—
a
the recognised body,
F180b
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F181c
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
may make representations to F82the appropriate regulator.
F1824
The period for making representations is such period as is specified in the notice (which may, in any particular case, be extended by the appropriate regulator).
5
In deciding whether to—
a
give a direction, or
b
make a revocation order,
F83the appropriate regulator must have regard to any representations made in accordance with subsection (3).
6
When F84the appropriate regulator has decided whether to give a direction under section 296 F78or 296A or to make the proposed revocation order, it must—
aa
F183b
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2046A
If the appropriate regulator—
a
gives a direction under section 296 to a recognised body because it has failed, or is likely to fail, to comply with an obligation imposed on it by or under Article 4 or 15 of the SFT regulation;
F245aa
gives any other direction under section 296 to a recognised CSD;
F319ab
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ac
makes a revocation order under section 297(1B);
b
makes a revocation order under section 297(2A)(c) because a recognised body has failed, or is likely to fail, to comply with an obligation imposed on it by or under Article 4 or 15 of the SFT regulation; or
c
makes a revocation order under section 297(2D),
the body concerned may refer the matter to the Tribunal.
7
If F85the appropriate regulatorF184reasonably considers it necessary to do so, it may give a direction under section 296 F79or 296A—
a
without following the procedure set out in this section; or
b
if F85the appropriate regulator has begun to follow that procedure, regardless of whether the period for making representations has expired.
F2427A
Subsection (7) does not apply in relation to a direction given to a recognised CSD F320... under section 296.
F3217B
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
If F86the appropriate regulator has, in relation to a particular matter, followed the procedure set out in subsections (1) to (5), it need not follow it again if, in relation to that matter, it decides to take action other than that specified in its notice under subsection (1).
F3229
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
299 Complaints about recognised bodies.
1
The F87appropriate regulator must make arrangements for the investigation of any relevant complaint about a recognised body.
2
“Relevant complaint” means a complaint which the F139appropriate regulator considers is relevant to the question of whether the body concerned should remain a recognised body.
300 Extension of functions of Tribunal.
1
If the Treasury are satisfied that the condition mentioned in subsection (2) is satisfied, they may by order confer functions on the Tribunal with respect to disciplinary proceedings—
a
of one or more investment exchanges in relation to which a recognition order under section 290 is in force or of such investment exchanges generally, F248...
b
of one or more clearing houses in relation to which a recognition order under that section is in force or of such clearing houses generally F247or
c
of one or more central securities depositories in relation to which a recognition order under that section is in force or of such central securities depositories generally.
2
The condition is that it is desirable to exercise the power conferred under subsection (1) with a view to ensuring that—
a
decisions taken in disciplinary proceedings with respect to which functions are to be conferred on the Tribunal are consistent with—
i
decisions of the Tribunal in cases arising under Part VIII; and
ii
decisions taken in other disciplinary proceedings with respect to which the Tribunal has functions as a result of an order under this section; or
b
the disciplinary proceedings are in accordance with the Convention rights.
3
An order under this section may modify or exclude any provision made by or under this Act with respect to proceedings before the Tribunal.
4
“Disciplinary proceedings” means proceedings under the rules of an investment exchange F246, clearing house or central securities depository in relation to F202a contravention of Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation by a person subject to the rules.
5
“The Convention rights” has the meaning given in section 1 of the M5Human Rights Act 1998.
F12Power to disallow excessive regulatory provision
S. 300A and cross-heading inserted (20.12.2006) by Investment Exchanges and Clearing Houses Act 2006 (c. 55), ss. 1, 5(2) (with s. 5(3))
300APower of F89appropriate regulator to disallow excessive regulatory provision
1
This section applies where a recognised body proposes to make any regulatory provision in connection F88with—
a
its business as an investment exchange,
b
the provision by it of clearing services, or
c
the provision by it of services falling within section 285(2)(b) or (3)(b).
2
If it appears to the F90appropriate regulator—
a
that the proposed provision will impose a requirement on persons affected (directly or indirectly) by it, and
b
that the requirement is excessive,
the F90appropriate regulator may direct that the proposed provision must not be made.
3
A requirement is excessive if—
a
it is not required under F323... any enactment or rule of law in the United Kingdom, and
b
either—
i
it is not justified as pursuing a reasonable regulatory objective, or
ii
it is disproportionate to the end to be achieved.
4
In considering whether a requirement is excessive the F91appropriate regulator must have regard to all the relevant circumstances, including—
a
the effect of existing legal and other requirements,
b
the global character of financial services and markets and the international mobility of activity,
c
the desirability of facilitating innovation, and
d
the impact of the proposed provision on market confidence.
5
In this section “requirement” includes any obligation or burden.
6
Any provision made in contravention of a direction under this section is of no effect.
300BF10Duty to notify proposal to make regulatory provision
1
A recognised body that proposes to make any regulatory provision must give written notice of the proposal to the F92appropriate regulator without delay.
2
The F92appropriate regulator may by rules under section 293 (notification requirements)—
a
specify descriptions of regulatory provision in relation to which, or circumstances in which, the duty in subsection (1) above does not apply, or
b
provide that the duty applies only to specified descriptions of regulatory provision or in specified circumstances.
3
The F92appropriate regulator may also by rules under that section—
a
make provision as to the form and contents of the notice required, and
b
require the body to provide such information relating to the proposal as may be specified in the rules or as the F92appropriate regulator may reasonably require.
300CRestriction on making provision before F93appropriate regulator decides whether to act
1
Where notice of a proposal to make regulatory provision is required to be given to the F140appropriate regulator under section 300B, the provision must not be made—
a
before that notice is given, or
b
subject to the following provisions of this section, before the end of the initial period.
2
The initial period is—
a
the period of 30 days beginning with the day on which the F141appropriate regulator receives notice of the proposal, or
b
if any consultation period announced by the body in relation to the proposal ends after that 30-day period, the end of the consultation period.
3
4
If—
a
before the end of the initial period the F143appropriate regulator notifies the body that it is not calling in the proposal, or
b
the initial period ends without the F144appropriate regulator having notified the body that it is calling in the proposal,
the body may then make the proposed provision.
5
Any provision made in contravention of this section is of no effect.
300DConsideration by F102appropriate regulator whether to disallow proposed provision
1
This section applies where the F94appropriate regulator notifies a recognised body that it is calling in a proposal to make regulatory provision.
2
The F94appropriate regulator must publish a notice—
a
giving details of the proposed provision,
b
stating that it has called in the proposal in order to consider whether to disallow it, and
c
specifying a period during which representations with respect to that question may be made to it.
3
The F94appropriate regulator may extend the period for making representations.
4
The F94appropriate regulator must notify the body of its decision whether to disallow the provision not later than 30 days after the end of the period for making representations, and must publish the decision and the reasons for it.
5
The body must not make the provision unless and until—
a
the F95appropriate regulator notifies it of its decision not to disallow it, or
b
the 30-day period specified in subsection (4) ends without the F96appropriate regulator having notified any decision.
6
If F97the appropriate regulator notifies the body of its decision to disallow the provision and that decision is questioned in legal proceedings—
a
the body must not make the provision until those proceedings, and any proceedings on appeal, are finally determined,
b
7
Any provision made in contravention of subsection (5) or (6) is of no effect.
300EPower to disallow excessive regulatory provision: supplementary
1
In sections 300A to 300D—
a
“regulatory provision” means any rule, guidance, arrangements, policy or practice, and
b
references to making provision shall be read accordingly as including, as the case may require, issuing guidance, entering into arrangements or adopting a policy or practice.
2
For the purposes of those sections a variation of a proposal is treated as a new proposal.
3
F373General rule-making powers
Ss. 300F, 300G and cross-heading inserted (1.1.2024 at 1.00 a.m.) by Financial Services and Markets Act 2023 (c. 29), ss. 9(2), 86(3); S.I. 2023/1382, reg. 10(a)
300FRules relating to central counterparties and central securities depositories
1
The Bank of England may make such rules applying to FMI entities—
a
with respect to the carrying on by them of relevant regulated activities, or
b
with respect to the carrying on by them of an activity which is not a relevant regulated activity,
as appear to the Bank to be necessary or expedient for the purpose of advancing its Financial Stability Objective.
2
Each of the following is an “FMI entity” for the purposes of this section—
a
a recognised central counterparty;
b
a recognised CSD;
c
a third country central counterparty;
d
a third country CSD.
3
The power to make rules under subsection (1), so far as applying to a third country central counterparty or a third country CSD, is subject to section 300G.
4
In this section “relevant regulated activity”—
a
in relation to a recognised central counterparty, means a regulated activity described in section 285(3A);
b
in relation to a recognised CSD, means a regulated activity described in section 285(3D);
c
in relation to a third country central counterparty, means a regulated activity described in section 285(3C);
d
in relation to a third country CSD, means a regulated activity described in section 285(3G).
5
Rules under this section may include—
a
provision applying to an FMI entity even though there is no relationship between the entity to which the rules will apply and the persons whose interests will be protected by the rules;
b
requirements which take into account, in the case of an FMI entity which is a member of a group, any activity of another member of the group.
300GSection 300F: rules in relation to overseas FMI entities
1
The power to make rules under section 300F, so far as applying to an FMI entity of the kind mentioned in subsection (2)(c) or (d) of that section (an “overseas FMI entity”), is exercisable—
a
only by the application of corresponding rules, and
b
except in the case of systemic third country CCPs (see subsection (6)), only so far as authorised by regulations made by the Treasury.
2
The reference in subsection (1)(a) to “corresponding rules” is—
a
in relation to rules that would apply to a third country central counterparty, rules under section 300F that apply to a recognised central counterparty;
b
in relation to rules that would apply to a third country CSD, rules under section 300F that apply to a recognised CSD.
3
Rules may be applied in accordance with subsection (1)(a)—
a
by applying all corresponding rules or only such corresponding rules as the Bank considers appropriate;
b
with such modifications as the Bank considers appropriate for the purpose of ensuring the effectiveness of the rules in their application to the overseas FMI entities concerned (having regard in particular to the establishment of such entities in countries other than the United Kingdom).
4
Regulations under subsection (1)(b) may authorise the making of rules generally in respect of overseas FMI entities or only in respect of overseas FMI entities which—
a
are specified or described in the regulations, or
b
satisfy conditions specified in the regulations.
5
Regulations under subsection (1)(b) may—
a
provide for the power to make rules under section 300F, so far as applying to an overseas FMI entity, to be subject to such limitations or conditions as may be specified in the regulations;
b
make provision by reference to matters to be determined by the Bank;
c
provide for exemptions.
6
The restriction imposed by subsection (1)(b) does not apply in the case of systemic third country CCPs (and accordingly references to overseas FMI entities in subsections (4) and (5) do not include references to systemic third country CCPs).
7
A “systemic third country CCP” means any third country central counterparty that the Bank has determined is systemically important, or is likely to become systemically important, to the financial stability of the United Kingdom.
8
The Bank must publish notice of any determination made under subsection (7).
9
A determination under subsection (7) must be made in accordance with such criteria of general application as are set out in regulations made by the Treasury for the purposes of this section.
10
In making a determination under subsection (7) the Bank must also have regard to any statement of policy prepared and published by the Bank for the purposes of providing further specification of the criteria of general application mentioned in subsection (9).
11
The Bank—
a
may alter or replace a statement of policy prepared for the purposes of this section;
b
must publish a statement as altered or replaced.
12
Publication under this section is to be made in such manner as the Bank considers best designed to bring the publication to the attention of the public.
13
The Treasury must consult the Bank before making regulations under subsection (9).
14
The Treasury may by regulations provide for other provisions of this Act to apply in relation to third country central counterparties, or third country CSDs, to which rules under section 300F apply, with such modifications as may be specified in the regulations.
300HF357Rules relating to investment exchanges and data reporting service providers
1
The FCA may make such rules applying to recognised UK investment exchanges or data reporting service providers—
a
with respect to the carrying on by them of relevant activities, or
b
with respect to the carrying on by them of an activity which is not a relevant activity,
as appear to the FCA to be necessary or expedient for the purpose of advancing one or more of its operational objectives.
2
In this section “relevant activity”—
a
in relation to a recognised UK investment exchange, means a regulated activity described in section 285(2);
b
in relation to a data reporting service provider, means providing a data reporting service.
3
Rules under this section may include—
a
provision applying to a recognised UK investment exchange or data reporting service provider even though there is no relationship between that person and the persons whose interests will be protected by the rules;
b
requirements which take into account, in the case of a recognised UK investment exchange or data reporting service provider which is a member of a group, any activity of another member of the group.
F3854
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
In this section—
“data reporting service” and “data reporting service provider” have the meanings given by regulation 2 of the F391Data Reporting Services Regulations 2024;
“recognised UK investment exchange” means a recognised investment exchange that is not an overseas investment exchange as defined in section 313(1).
F374Bank of England rules
Ss. 300I-300M and cross-heading inserted (1.1.2024 at 1.00 a.m.) by Financial Services and Markets Act 2023 (c. 29), ss. 49(2), 86(3); S.I. 2023/1382, reg. 10(e)
300IDuty of Bank of England to review rules
1
The Bank of England must keep under review generally any rules made by the Bank under this Act.
2
Subsection (1) does not apply to rules made for the purpose of complying with a recommendation of the Financial Policy Committee of the Bank of England under section 9O of the Bank of England Act 1998 (making of recommendations within the Bank).
300JStatement of policy relating to review of rules
1
The Bank of England must prepare and publish a statement of policy with respect to its review of rules under section 300I.
2
The statement must provide information about—
a
how representations (including by a statutory panel) can be made to the Bank with respect to its review of rules under section 300I, and
b
the arrangements to ensure that those representations are considered.
3
In this section “statutory panel” has the meaning given by section 1RB(5).
4
If a statement published under this section is altered or replaced, the Bank must publish the altered or replaced statement.
5
A statement prepared under this section must be published by the Bank in the way appearing to the Bank to be best designed to bring it to the attention of the public.
300KRequirement to review specified rules
1
The Treasury may by direction require the Bank of England to carry out a review of specified rules made by the Bank under this Act if—
a
the rules have been in force for at least 12 months,
b
the Treasury consider that it is in the public interest that the rules are reviewed, and
c
it does not appear to the Treasury that—
i
the Bank is carrying out, or plans to carry out, a review of those rules, or
ii
if the Bank proposes to carry out a review, the proposals are appropriate for the purposes of carrying out an effective review.
2
Subsection (1) only applies to rules falling within section 300I(1).
3
The Treasury must consult the Bank before giving a direction under subsection (1).
4
In exercising the power under this section, the Treasury must have regard to the desirability of minimising any adverse effect that the carrying out of the review may have on the exercise by the Bank of any of its other functions.
5
A direction under subsection (1) may—
a
specify the period within which a review must be carried out;
b
determine the scope and conduct of a review;
c
require the provision of interim reports during the carrying out of a review.
6
Provision made in a direction under subsection (5)(b) may include a requirement—
a
for a review to be carried out by a person appointed by the Bank who is independent of the Bank;
b
for any such appointment to be made only with the approval of the Treasury.
7
As soon as practicable after giving a direction under subsection (1) the Treasury must—
a
lay before Parliament a copy of the direction, and
b
publish the direction in such manner as the Treasury think fit.
8
Subsection (7) does not apply where the Treasury consider that publication of the direction would be against the public interest.
9
A direction under subsection (1) may be varied or revoked by the giving of a further direction.
300LReport on certain reviews
1
This section applies where the Treasury have given a direction to the Bank of England under section 300K to carry out a review.
2
The Bank must make a written report to the Treasury as to the opinion of the Bank in relation to the following matters—
a
whether the rules under review advance—
i
the Bank’s Financial Stability Objective, and
ii
the Bank’s secondary innovation objective (see section 30D(2) of the Bank of England Act 1998);
b
whether and to what extent the rules are functioning effectively and achieving their intended purpose;
c
whether any amendments need to be made to the rules and, if so, what those amendments should be;
d
whether any rules should be revoked (with or without replacement);
e
whether any other action should be taken and, if so, what that action should be.
3
As soon as practicable after receiving the report the Treasury must—
a
lay before Parliament a copy of the report, and
b
publish the report in such manner as the Treasury think fit.
4
When complying with subsection (3) the Treasury may withhold material from the report if the Treasury consider that publication of the material would be against the public interest.
300MPower of Treasury to require making of rules by regulations
1
The Treasury may by regulations require the Bank of England to exercise a power under this Act to make rules in relation to a specified activity or a specified description of person.
2
Regulations under this section may—
a
specify matters that the rules must cover;
b
specify a period within which the rules must be made.
3
But except so far as permitted by subsection (2), regulations under this section may not require rules to be made—
a
in a specified form or with specified content, or
b
to achieve or advance a specified outcome.
4
If no period is specified under subsection (2)(b) the rules must be made as soon as reasonably practicable after the coming into force of the regulations.
Other matters
301 Supervision of certain contracts.
1
The Secretary of State and the Treasury, acting jointly, may by regulations provide for—
a
Part VII of the M6Companies Act 1989 (financial markets and insolvency), and
b
Part V of the M7Companies (No. 2)(Northern Ireland) Order 1990,
to apply to relevant contracts as it applies to contracts connected with a recognised body.
2
“Relevant contracts” means contracts of a prescribed description in relation to which settlement arrangements are provided by a person for the time being included in a list (“the list”) maintained by F103the Bank of England for the purposes of this section.
3
Regulations may be made under this section only if the Secretary of State and the Treasury are satisfied, having regard to the extent to which the relevant contracts concerned are contracts of a kind dealt in by persons supervised by F104the FCA or the Bank of England, that it is appropriate for the arrangements mentioned in subsection (2) to be supervised by F105the Bank.
4
The approval of the Treasury is required for—
a
the conditions set by the F106Bank of England for admission to the list; and
b
the arrangements for admission to, and removal from, the list.
5
If the Treasury withdraw an approval given by them under subsection (4), all regulations made under this section and then in force are to be treated as suspended.
6
But if—
a
the F107Bank of England changes the conditions or arrangements (or both), and
b
the Treasury give a fresh approval under subsection (4),
the suspension of the regulations ends on such date as the Treasury may, in giving the fresh approval, specify.
7
The F108Bank of England must—
a
publish the list as for the time being in force; and
b
provide a certified copy of it to any person who wishes to refer to it in legal proceedings.
8
A certified copy of the list is evidence (or in Scotland sufficient evidence) of the contents of the list.
9
A copy of the list which purports to be certified by or on behalf of the F109Bank of England is to be taken to have been duly certified unless the contrary is shown.
10
Regulations under this section may, in relation to a person included in the list—
a
apply (with such exceptions, additions and modifications as appear to the Secretary of State and the Treasury to be necessary or expedient) such provisions of, or made under, this Act as they consider appropriate;
F17CHAPTER 1ACONTROL OVER RECOGNISED INVESTMENT EXCHANGE
Pt. 18 Ch. 1A substituted (21.3.2009) by virtue of The Financial Services and Markets Act 2000 (Controllers) Regulations 2009 (S.I. 2009/534), reg. 5, Sch. 2 (with reg. 8)
Notices of acquisitions of control over recognised investment exchanges
301AObligation to notify F110the FCA: acquisitions of control
1
A person who decides to acquire or increase control over a recognised investment exchange must give F145the FCA notice in writing before making the acquisition.
2
A person who acquires or increases control over a recognised investment exchange in circumstances where notice is not required under subsection (1) must give F146the FCA notice in writing before the end of 14 days beginning with—
a
the day the person acquired or increased the control; or
b
if later, the day on which the person first became aware that the control had been acquired or increased.
3
For the purposes of calculations relating to this section, the holding of shares or voting power by a person (“A1”) includes any shares or voting power held by another (“A2”) if A1 and A2 are acting in concert.
4
A notice given under this section is a “section 301A notice” and a person giving notice is a “section 301A notice-giver”.
F1955
Nothing in this Chapter applies to an overseas investment exchange.
301BRequirements for section 301A notices
1
A section 301A notice must be in such form, include such information and be accompanied by such documents as the F111FCA may reasonably require.
2
The F111FCA must publish a list of its requirements as to the form, information and accompanying documents for a section 301A notice.
3
The F111FCA may impose different requirements for different cases and may vary or waive requirements in particular cases.
301CAcknowledgment of receipt
1
The F112FCA must acknowledge receipt of a section 301A notice in writing before the end of the second working day following receipt.
2
If the F147FCA receives an incomplete section 301A notice it must inform the section 301A notice-giver as soon as reasonably practicable.
Acquiring and increasing control
301DAcquiring and increasing control
1
For the purposes of this Chapter, a person (“A”) acquires control over a recognised investment exchange (“B”) if any of the cases in subsection (2) begin to apply.
2
The cases are where A holds—
a
20% or more of the shares in B or in a parent undertaking of B (“P”);
b
20% or more of the voting power in B or P; or
c
shares or voting power in B or P as a result of which A is able to exercise significant influence over the management of B.
3
For the purposes of this Chapter, a person (“A”) increases control over a recognised investment exchange (“B”) whenever—
a
the percentage of shares which A holds in B or in a parent undertaking of B (“P”) increases from less than 50% to 50% or more;
b
the percentage of voting power A holds in B or P increases from less than 50% to 50% or more; or
c
A becomes a parent undertaking of B.
301EDisregarded holdings
1
For the purpose of section 301D, shares and voting power that a person holds in a recognised investment exchange (“B”) or in a parent undertaking of B (“P”) are disregarded in the following circumstances.
2
Shares held only for the purposes of clearing and settling within a short settlement cycle are disregarded.
3
Shares held by a custodian or its nominee in a custodian capacity are disregarded, provided that the custodian or nominee is only able to exercise voting power represented by the shares in accordance with instructions given in writing.
4
Shares representing no more than 5% of the total voting power in B or P held by an investment firm are disregarded, provided that it—
a
holds the shares in the capacity of a market maker (as defined in F324Article 2(1)(6) of the markets in financial instruments regulation);
F325b
has a Part 4A permission to carry on a regulated activity which is any of the investment services or activities; and
c
neither intervenes in the management of B or P nor exerts any influence on B or P to buy the shares or back the share price.
5
Shares held by a F326qualifying credit institution or investment firm in its trading book are disregarded, provided that—
a
the shares represent no more than 5% of the total voting power in B or P; and
b
F200... the voting power is not exercised nor otherwise used to intervene in the management of B or P.
6
Shares held by a F327qualifying credit institution or an investment firm are disregarded, provided that—
a
the shares are held as a result of performing the investment services and activities of—
i
underwriting a share issue; or
ii
placing shares on a firm commitment basis F328...; and
b
the F329qualifying credit institution or investment firm—
i
does not exercise voting power represented by the shares or otherwise intervene in the management of the issuer; and
ii
retains the holding for a period of less than one year.
7
Where a management company (as defined in F330section 237(2)) and its parent undertaking both hold shares or voting power, each may disregard holdings of the other, provided that each exercises its voting power independently of the other.
8
But subsection (7) does not apply if the management company—
F197a
manages holdings for its parent undertaking or a controlled undertaking of the parent undertaking;
b
has no discretion as to the exercise of the voting power attached to such holdings; and
c
may only exercise the voting power in relation to such holdings under direct or indirect instruction from—
i
the parent undertaking; or
F198ii
a controlled undertaking of the parent undertaking.
9
Where an investment firm and its parent undertaking both hold shares or voting power, the parent undertaking may disregard holdings managed by the investment firm on a client by client basis and the investment firm may disregard holdings of the parent undertaking, provided that the investment firm—
a
has permission to provide portfolio management;
b
exercises its voting power independently from the parent undertaking; and
c
may only exercise the voting power under instructions given in writing, or has appropriate mechanisms in place for ensuring that individual portfolio management services are conducted independently of any other services.
F2019A
Shares acquired for stabilisation purposes in accordance with F277the market abuse regulation and Commission Delegated Regulation (EU) No. 1052/2016 of 8 March 2016 supplementing Regulation (EU) No. 596/2014 of the European Parliament and the Council with regard to the regulatory technical standards for conditions applicable to buy-back programmes and stabilisation measures are disregarded, provided that the voting power attached to those shares is not exercised or otherwise used to intervene in the management of B or P.
F19610
For the purposes of this section, an undertaking is a controlled undertaking of the parent undertaking if it is controlled by the parent undertaking; and for this purpose the question of whether one undertaking controls another is to be determined in accordance with section 89J(4) and (5).
Assessment procedure
301FAssessment: general
1
Where the F113FCA receives a section 301A notice, it must—
a
determine whether to approve the acquisition to which it relates; or
b
propose to object to the acquisition.
2
In making its determination the F113FCA must—
a
consider the suitability of the section 301A notice-giver and the financial soundness of the acquisition in order to ensure the sound and prudent management of the recognised investment exchange in question; and
b
have regard to the likely influence that the section 301A notice-giver will have on the recognised investment exchange.
3
The F113FCA may only object to an acquisition if it is not satisfied that the approval requirement is met.
4
The approval requirement is that the acquisition in question by the notice-giver does not pose a threat to the sound and prudent management of any financial market operated by the recognised investment exchange.
301GAssessment: Procedure
1
2
The F115FCA must inform the section 301A notice-giver in writing of—
a
the duration of the assessment period; and
b
its expiry date.
3
The F115FCA must, within two working days of acting under section 301F (and in any event no later than the expiry date of the assessment period)—
a
notify the section 301A notice-giver that it has determined to approve the acquisition; or
b
in the case of a proposed objection to an acquisition, give a warning notice.
4
The F115FCA is treated as having approved the acquisition if, at the expiry of the assessment period, it has neither—
a
given notice under subsection (3); nor
b
informed the section 301A notice-giver that the notice is incomplete.
5
If the F115FCA decides to object to an acquisition it must give the section 301A notice-giver a decision notice.
6
Following receipt of a decision notice under this section, the section 301A notice-giver may refer F116the FCA's decision to the Tribunal.
301HDuration of approval
1
Approval of an acquisition is effective for such period as F117the FCA may specify in writing.
2
Where F148the FCA has specified a period under subsection (1), it may extend the period.
3
Where F149the FCA has not specified a period, the approval is effective for one year beginning with the date—
a
of the notice given under section 301G(3)(a);
b
on which F149the FCA is treated as having given approval under section 301G(5); or
c
of a decision on a reference to the Tribunal which results in the person receiving approval.
Enforcement procedures
301IObjections by the F118FCA
1
The F118FCA may object to a person's control over a recognised investment exchange in any of the circumstances specified in subsection (2).
2
The circumstances are that the F118FCA reasonably believes that—
a
the person acquired or increased control without giving notice under section 301A in circumstances where notice was required; and
b
there are grounds for objecting to control on the basis of the approval requirement in section 301F(4).
3
If the F118FCA proposes to object to a person's control over a recognised investment exchange, it must give that person a warning notice.
4
If the F118FCA decides to object to a person's control over a UK authorised person, it must give that person a decision notice.
5
A person to whom the F118FCA gives a decision notice under this section may refer the matter to the Tribunal.
301JRestriction notices
1
The F119FCA may give notice in writing (a “restriction notice”) to a person in the following circumstances.
2
The circumstances are that—
a
the person has control over a recognised investment exchange by virtue of holding shares or voting power; and
b
in relation to the shares or voting power, the F150FCA has given the person a warning notice or a decision notice under section 301G or 301I or a final notice which confirms a decision notice given under section 301G or 301I.
3
In a restriction notice, the F151FCA may direct that shares or voting power to which the notice relates are, until further notice, subject to one or more of the following restrictions—
a
except by court order, an agreement to transfer or a transfer of any such shares or voting power or, in the case of unissued shares, any agreement to transfer or transfer of the right to be issued with them, is void;
b
no voting power is to be exercisable;
c
no further shares are to be issued in pursuance of any right of the holder of any such shares or voting power or in pursuance of any offer made to their holder;
d
except in a liquidation, no payment is to be made of any sums due from the body corporate on any such shares, whether in respect of capital or otherwise.
4
A restriction notice takes effect—
a
immediately; or
b
on such date as may be specified in the notice.
5
A restriction notice does not extinguish rights which would be enjoyable but for the notice.
6
A copy of the restriction notice must be served on—
a
the recognised investment exchange in question; and
b
in the case of shares or voting power held in a parent undertaking of a recognised investment exchange, the parent undertaking.
7
A person to whom the F152FCA gives a restriction notice may refer the matter to the Tribunal.
301KOrders for sale of shares
1
The court may, on the application of F120the FCA, order the sale of shares or the disposition of voting power in the following circumstances.
2
The circumstances are that—
a
a person has control over a recognised investment exchange by virtue of holding the shares or voting power; and
b
the acquisition or continued holding of the shares or voting power by that person is in contravention of a final notice which confirms a decision notice given under section 301G or section 301I.
3
Where the court orders the sale of shares or disposition of voting power it may—
a
if a restriction notice has been given in relation to the shares or voting power, order that the restrictions cease to apply; and
b
make any further order.
4
Where the court makes an order under this section, it must take into account the level of holding that the person would have been entitled to acquire, or to continue to hold, without contravening the final notice.
5
If shares are sold or voting power disposed of in pursuance of an order under this section, any proceeds, less the costs of the sale or disposition, must be paid into court for the benefit of the persons beneficially interested in them; and any such person may apply to the court for payment of a whole or part of the proceeds.
6
The jurisdiction conferred by this section may be exercised by the High Court and the Court of Session.
Offences
301LOffences under this Chapter
1
A person who fails to comply with an obligation to notify F121the FCA under section 301A(1) or (2) is guilty of an offence.
2
3
A person who makes an acquisition in contravention of a warning notice or a decision notice given under section 301G or a final notice which confirms a decision notice under that section is guilty of an offence.
4
A person who makes an acquisition after F123the FCA's approval for the acquisition has ceased to be effective by virtue of section 301H is guilty of an offence.
5
A person who provides information to F124the FCA which is false in a material particular is guilty of an offence.
6
A person who breaches a direction contained in a restriction notice given under section 301J is guilty of an offence.
7
A person guilty of an offence under subsection (1), (2) or (4) to (6) is liable—
a
on summary conviction to a fine not exceeding the statutory maximum; or
b
on conviction on indictment, to a fine.
8
A person guilty of an offence under subsection (3) is liable—
a
on summary conviction, to a fine not exceeding the statutory maximum; or
b
on conviction on indictment, to imprisonment for a term not exceeding two years or a fine, or both.
9
It is a defence for a person charged with an offence under subsection (1) in relation to section 301A(2) to show that the person had, at the time of the alleged offence, no knowledge of the act or circumstances by virtue of which the duty to notify F125the FCA arose.
Interpretation
301MInterpretation
1
In this Chapter—
“acquisition” means the acquisition of control or of an increase in control over a recognised investment exchange;
F331...
“shares” and “voting power” have the same meaning as in section 422.
2
For the purposes of this Chapter, a “working day” is a day other than—
a
a Saturday or a Sunday; or
b
a day which is a bank holiday in England and Wales under the Banking and Financial Dealings Act 1971.
Chapter II Competition Scrutiny
F153302 Interpretation.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Role of F16Office of Fair Trading
S. 303: cross-heading substituted (1.4.2003) by Enterprise Act 2002 (c. 40), ss. 278, 279, Sch. 25 para. 40(10)(f); S.I. 2003/766, art. 2, Sch. (with art. 3)
F153303 Initial report by F13OFT.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F153304 Further reports by F14OFT.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F153305 Investigations by F15OFT.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Role of Competition Commission
F153306 Consideration by Competition Commission.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Role of the Treasury
F153307 Recognition orders: role of the Treasury.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F153308 Directions by the Treasury.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F153309 Statements by the Treasury.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F153310 Procedure on exercise of certain powers by the Treasury.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F350CHAPTER 2APerformance of functions of recognised bodies
Pt. 18 Ch. 2A inserted (29.6.2023 for specified purposes) by Financial Services and Markets Act 2023 (c. 29), s. 86(1)(e), Sch. 10 para. 1
Relevant recognised bodies
309ARecognised bodies to which this Chapter applies
1
The Treasury may by regulations specify as a “relevant recognised body” for the purposes of this Chapter a type of recognised body mentioned in subsection (2).
2
The types of recognised bodies are—
a
recognised investment exchanges;
b
recognised central counterparties;
c
recognised CSDs.
3
Before making regulations under subsection (1), the Treasury—
a
must consult the FCA if it proposes to specify recognised investment exchanges (or recognised investment exchanges of a specified description);
b
must consult the Bank of England if it proposes to specify recognised central counterparties or recognised CSDs (or recognised central counterparties or recognised CSDs of a specified description);
c
in any case, must consult such persons as appear to it to be representative of interests likely to be affected by the application of this Chapter to the types, or descriptions, of bodies it proposes to specify.
4
In this Chapter, references to “the appropriate regulator” are to be read in accordance with section 285A (accordingly, the appropriate regulator in relation to a recognised investment exchange is the FCA, and in any other case is the Bank of England).
5
Nothing in this Chapter applies to overseas investment exchanges.
Prohibition
309BPart 18 prohibition orders
1
This section applies if it appears to the appropriate regulator that an individual is not a fit and proper person to perform functions in relation to an activity carried on by a relevant recognised body.
2
The appropriate regulator may make an order (a “Part 18 prohibition order”) prohibiting the individual from performing a specified function, any function falling within a specified description or any function.
3
A Part 18 prohibition order may relate to—
a
a specified activity, any activity falling within a specified description or all activities (but see subsection (5));
b
all persons falling within subsection (4), or a particular paragraph of that subsection, or all persons within a specified class of person falling within a particular paragraph of that subsection.
4
A person falls within this subsection if the person is—
a
a relevant recognised body (whether or not the appropriate regulator making the order is the appropriate regulator in relation to relevant recognised bodies of that type),
b
an authorised person,
c
an exempt person (other than a relevant recognised body), or
d
a person to whom, as a result of Part 20, the general prohibition does not apply in relation to a regulated activity.
5
6
In this section, “specified” means specified in the Part 18 prohibition order.
309CProcedure for making Part 18 prohibition orders
1
If the appropriate regulator proposes to make a Part 18 prohibition order it must—
a
comply with such consultation requirements as may be prescribed, and
b
give the individual to whom the order would apply a warning notice.
2
A warning notice under subsection (1)(b) must set out the terms of the prohibition.
3
If the appropriate regulator decides to make a Part 18 prohibition order it must give the individual to whom the order applies a decision notice.
4
The decision notice must—
a
name the individual to whom the Part 18 prohibition order applies, and
b
set out the terms of the order.
5
If the appropriate regulator decides to make a Part 18 prohibition order, the individual to whom the order applies may refer the matter to the Tribunal.
309DVarying and withdrawing Part 18 prohibition orders
1
This section applies where the appropriate regulator has made a Part 18 prohibition order in relation to an individual.
2
The appropriate regulator may vary or revoke the Part 18 prohibition order on the application of the individual.
3
Before varying or revoking a Part 18 prohibition order, the appropriate regulator must comply with such consultation requirements as may be prescribed.
4
On an application for the variation or revocation of a Part 18 prohibition order—
a
if the appropriate regulator decides to grant the application, it must give the applicant written notice of its decision;
b
if the appropriate regulator proposes to refuse the application, it must give the applicant a warning notice;
c
if the appropriate regulator decides to refuse the application, it must give the applicant a decision notice.
5
If the appropriate regulator gives the applicant a decision notice under subsection (4)(c), the applicant may refer the matter to the Tribunal.
309EOffence of breaching prohibition
1
An individual who performs a function, or agrees to perform a function, in breach of a Part 18 prohibition order is guilty of an offence.
2
An individual who commits an offence under this section is liable—
a
on summary conviction in England and Wales, to a fine;
b
on summary conviction in Scotland, to a fine not exceeding level 5 on the standard scale;
c
on summary conviction in Northern Ireland, to a fine not exceeding level 5 on the standard scale.
3
In proceedings for an offence under this section, it is a defence for the individual to show that the individual took all reasonable precautions and exercised all due diligence to avoid committing the offence.
309FDuty in relation to prohibited individuals
1
2
A contravention of subsection (1) is actionable at the suit of a private person who suffers loss as a result of the contravention, subject to the defences and other incidents applying to actions for breach of statutory duty.
3
In prescribed cases, a contravention of subsection (1) which would be actionable at the suit of a private person is actionable at the suit of a person who is not a private person, subject to the defences and other incidents applying to actions for breach of statutory duty.
4
In this section “private person” has such meaning as may be prescribed.
Approval
309GRequirement for approval
1
A relevant recognised body must take reasonable care to ensure that a person does not perform a designated senior management function in relation to the carrying on of an activity by the body, unless the person is acting in accordance with an approval given by the appropriate regulator under this section.
2
Subsection (1) applies only in relation to a function performed under—
a
an arrangement entered into by the relevant recognised body, or
b
an arrangement entered into by a contractor of the relevant recognised body.
3
“Designated senior management function” means a function of a description specified in rules made by the appropriate regulator.
4
The appropriate regulator may specify a description of function under subsection (3) only if it is satisfied that the function is a senior management function.
5
A function is a “senior management function” in relation to the carrying on of a relevant recognised body’s activities if—
a
the function will require the person performing it to be responsible for managing one or more aspects of the body’s affairs, and
b
those aspects involve, or might involve, a risk of serious consequences—
i
for the body, or
ii
for business or other interests in the United Kingdom.
6
In subsection (5)(a), the reference to managing one or more aspects of a relevant recognised body’s affairs includes a reference to taking decisions, or participating in the taking of decisions, about how one or more aspects of those affairs should be carried on.
7
In subsection (2), “arrangement”—
a
means any kind of arrangement for the performance of a function of a relevant recognised body which is entered into by the body, or by a contractor of the body, and another person, and
b
includes, in particular, an arrangement under which the other person is appointed to an office, becomes a partner or is employed (whether under a contract of service or otherwise).
309HRules under section 309G(3): transitional provision
1
In relation to rules made by the Bank of England or the FCA under section 309G(3), the power conferred by section 137T(c) to make transitional provision includes, in particular, power—
a
to provide for anything done under this Chapter, or under Part 5 (performance of regulated activities), in relation to a senior management function of a particular description to be treated as having been done in relation to a senior management function of a different description;
b
to provide for anything done under this Chapter, or under Part 5 (including any application or order made, any requirement imposed and any approval or notice given) to cease to have effect, to continue to have effect, or to continue to have effect with modifications, or subject to time limits or conditions;
c
d
to make saving provision.
2
3
Regulations under subsection (2) may—
a
confer functions on the Bank of England or the FCA (including the function of making rules);
b
modify legislation (including any provision of, or made under, this Act).
4
309IApplications for approval
1
A relevant recognised body may apply for approval from the appropriate regulator under section 309G for a person to perform a designated senior management function in relation to the carrying on of the body’s activities.
2
The application must be made in such manner as the appropriate regulator may direct.
3
The application must contain—
a
a statement setting out the aspects of the applicant’s affairs which it is intended that the person will be responsible for managing in performing the function, and
b
such other information as the appropriate regulator may reasonably require.
4
A statement provided under subsection (3)(a) is known as a “statement of responsibilities”.
5
At any time after the application is received, and before it is determined, the appropriate regulator may require the applicant to provide it with such further information as it reasonably considers necessary to enable it to determine the application.
6
The appropriate regulator may require the applicant to present information provided under this section in such form, or to verify the information in such a way, as the appropriate regulator may direct.
7
Different directions may be given, and different requirements may be imposed, in relation to different applications or categories of application.
8
In subsection (1), “relevant recognised body” includes—
a
if recognised investment exchanges are a type of recognised body to which this Chapter applies, a person who has applied for recognition as such under section 287;
b
if recognised central counterparties are a type of recognised body to which this Chapter applies, a person who has applied for recognition as such under section 288;
c
if recognised CSDs are a type of recognised body to which this Chapter applies, a person who has applied for recognition as such under section 288A.
309JVetting by relevant recognised bodies
1
Before making an application under section 309I for approval for a person to perform a designated senior management function, a relevant recognised body must be satisfied that the person is a fit and proper person to perform the function.
2
In deciding that question, the relevant recognised body must have regard, among other things, to whether the person, or any person who may perform a function on the person’s behalf—
a
has obtained a specified qualification;
b
has undergone, or is undergoing, specified training;
c
possesses a specified level of competence;
d
has specified personal characteristics.
3
In subsection (2), “specified” means specified in rules made by the appropriate regulator.
4
Before making rules for the purposes of this section, the appropriate regulator must comply with such consultation requirements as may be prescribed.
309KDetermining applications: power to grant approval
1
The appropriate regulator may grant an application under section 309I for approval for a person to perform a designated senior management function only if—
a
it is satisfied that the person is a fit and proper person to perform the function, or
2
3
The appropriate regulator may, if it appears to it that it is desirable to do so in order to advance a relevant objective—
a
grant the application subject to any conditions that it considers appropriate;
b
grant the application so as to give approval only for a limited period.
4
For the purposes of subsection (3), “relevant objective” means—
a
if the appropriate regulator is the FCA, any of its operational objectives;
b
if the appropriate regulator is the Bank of England, the Financial Stability Objective.
5
Before granting approval under this section (whether or not subject to conditions or for a limited period), the appropriate regulator must comply with such consultation requirements as may be prescribed.
309LDetermining applications: period for approval
1
The appropriate regulator must, before the end of the period for consideration, determine whether—
a
to grant an application under section 309I for approval for a person to perform a function, without imposing conditions or limiting the period for which the approval has effect, or
2
3
Where the application under section 309I is made by a person in reliance on section 309I(8) (applicants for recognition to be treated as relevant recognised bodies), “the period for consideration” means whichever of the following periods ends later—
a
the period described in subsection (2), and
b
the period within which the person’s application for recognition must be determined—
i
in the case of an application under section 287, in accordance with section 290(1B);
ii
in the case of an application under section 288, in accordance with Article 17(7) of the EMIR regulation;
iii
in the case of an application under section 288A, in accordance with section 290(4A).
4
If the appropriate regulator imposes a requirement under section 309I(5), the period described in subsection (2) stops running on the day on which the requirement is imposed but starts running again—
a
on the day on which the required information is received by the appropriate regulator, or
b
if the information is not provided on a single day, on the last of the days on which it is received by the appropriate regulator.
5
An applicant may withdraw an application under section 309I, by giving written notice to the appropriate regulator, at any time before the appropriate regulator determines the application, but only with the consent of—
a
the person in relation to whom the application is made, and
b
the person by whom that person is to be retained to perform the function to which the application relates, if not the applicant.
309MDetermining applications: further procedure
1
If the appropriate regulator decides to grant an application under section 309I without imposing conditions or limiting the period for which approval is given, it must give written notice of its decision to each of the interested parties.
2
If the appropriate regulator proposes to refuse the application, or to grant the application subject to conditions or for a limited period (or both), it must give a warning notice to each of the interested parties.
3
If the appropriate regulator decides to refuse the application, or to grant the application subject to conditions or for a limited period (or both), it must give a decision notice to each of the interested parties.
4
If the appropriate regulator decides to refuse the application, or to grant the application subject to conditions or for a limited period (or both), each of the interested parties may refer the matter to the Tribunal.
5
In this section, “the interested parties”, in relation to an application under section 309I for approval for a person to perform a function, are—
a
the applicant,
b
the person in relation to whom the application is made, and
c
the person by whom that person is to be retained to perform the function to which the application relates, if not the applicant.
309NChanges in responsibilities
1
This section applies where, on an application made by a relevant recognised body under section 309I, the appropriate regulator has given approval for a person to perform a designated senior management function (and has not withdrawn the approval).
2
Each time there is a notifiable change in the aspects of the relevant recognised body’s affairs which the person is responsible for managing in performing the function, the relevant recognised body must provide the appropriate regulator with a revised statement of responsibilities (see section 309I(4)).
3
Whether a change is “notifiable” is to be determined by the relevant recognised body in accordance with rules made by the appropriate regulator.
4
The appropriate regulator may require the relevant recognised body to present information provided under this section in such form, or to verify the information in such a way, as the appropriate regulator may direct.
309OWithdrawing approval
1
This section applies if an approval under section 309G has been given by the appropriate regulator in relation to the performance by a person of a designated senior management function.
2
The appropriate regulator may withdraw the approval if it considers that the person is not a fit and proper person to perform the function.
3
In considering whether to withdraw an approval, the appropriate regulator may take into account any matter which may be taken into account in considering an application under section 309I.
4
The relevant recognised body on whose application the approval was given must, at specified intervals—
a
consider whether there are grounds on which the appropriate regulator could withdraw the approval under this section, and
b
if it considers that there are such grounds, notify the appropriate regulator of those grounds.
5
For the purposes of subsection (4), a “specified interval” is an interval specified in rules made by the appropriate regulator for the purposes of this section.
309PProcedure for withdrawing approval
1
If the appropriate regulator proposes to withdraw an approval given under section 309G, it must—
a
comply with such consultation requirements as may be prescribed, and
b
give each of the interested parties a warning notice.
2
If the appropriate regulator decides to withdraw the approval, it must give each of the interested parties a decision notice.
3
If the appropriate regulator decides to withdraw the approval, each of the interested parties may refer the matter to the Tribunal.
4
In this section, “the interested parties”, in relation to an approval given under section 309G, are—
a
the relevant recognised body on whose application the approval was given,
b
the person in relation to whom the approval was given, and
c
the person by whom that person’s services are retained, if not the relevant recognised body.
309QVarying approval at request of relevant recognised body
1
Where an approval under section 309G has effect subject to conditions, the relevant recognised body that applied for the approval may apply to the appropriate regulator to vary the approval by—
a
varying a condition,
b
removing a condition, or
c
imposing a new condition.
2
Where an approval under section 309G has effect for a limited period, the relevant recognised body that applied for the approval may apply to the appropriate regulator to vary the approval by—
a
varying the period, or
b
removing the limit on the period for which the approval is to have effect.
3
The appropriate regulator must, before the end of the consultation period, determine whether—
a
to grant the application, or
4
The “consultation period” is—
a
such period as may be prescribed (and different periods may be prescribed in relation to different types of relevant recognised bodies), or
b
if no such period is prescribed, the period of 3 months beginning with the day on which the appropriate regulator receives the application to vary the approval.
5
The appropriate regulator may refuse an application under this section, if it appears to it that it is desirable to do so in order to advance a relevant objective.
6
For the purposes of subsection (5), “relevant objective” means—
a
if the appropriate regulator is the FCA, any of its operational objectives;
b
if the appropriate regulator is the Bank of England, the Financial Stability Objective.
7
An application may not be made under this section to vary or remove a condition or limit that was imposed under section 309Z2.
8
Except as provided for below, the following sections apply to an application under this section for variation of an approval as they apply to an application under section 309I—
309RVarying approval on the appropriate regulator’s initiative
1
The appropriate regulator may vary an approval under section 309G if it considers it desirable to do so in order to advance a relevant objective.
2
For these purposes, “relevant objective” means—
a
if the appropriate regulator is the FCA, any of its operational objectives;
b
if the appropriate regulator is the Bank of England, the Financial Stability Objective.
3
The appropriate regulator may vary the approval by doing the following—
a
imposing a condition,
b
varying a condition,
c
removing a condition,
d
where the approval has effect for an unlimited period, limiting the period of the approval, or
e
where the approval has effect for a limited period, varying that period or removing the limit on the period.
4
A variation under this section takes effect—
a
immediately, if the notice given under subsection (5) states that to be the case,
b
on a date specified in the notice, or
c
if no date is specified in the notice, when the matter to which the notice relates is no longer open to review.
5
If the appropriate regulator proposes to vary an approval or varies an approval with immediate effect, it must give each of the interested parties written notice—
a
setting out details of the variation,
b
stating the reasons for the variation,
c
stating that each of the interested parties may make representations to the appropriate regulator within the period specified in the notice (whether or not any of the interested parties has referred the matter to the Tribunal),
d
stating when the variation takes effect, and
e
setting out each interested party’s right to refer the matter to the Tribunal.
6
A variation may be expressed to take effect immediately or on a specified date only if the appropriate regulator, having regard to its reason for varying the approval, reasonably considers that it is necessary for the variation to take effect immediately or on that date (as appropriate).
7
The appropriate regulator may extend the period allowed under the notice for making representations.
8
The appropriate regulator must give each of the interested parties written notice if, having considered the representations made, it decides—
a
to vary the approval, or
b
if the variation has taken effect, not to rescind it.
9
A notice under subsection (8) must inform the interested parties of the right of each of them to refer the matter to the Tribunal.
10
The appropriate regulator must give each of the interested parties written notice if, having considered the representations made, it decides—
a
not to vary the approval,
b
to vary the approval in a different way, or
c
if the variation has taken effect, to rescind it.
11
12
A notice under this section which informs the interested parties of the right to refer a matter to the Tribunal must give an indication of the procedure on such a reference.
13
In this section, “the interested parties” has the same meaning as in section 309P.
14
For the purposes of subsection (4)(c), whether a matter is open to review is to be determined in accordance with section 391(8).
309SStatement of policy on approval
1
The appropriate regulator must prepare and issue a statement of its policy with respect to—
a
the giving of approval under section 309G subject to conditions or for a limited period only, and
2
The appropriate regulator—
a
may alter or replace a statement issued under this section, and
b
if it does so, must issue the altered or replacement statement.
3
Before the appropriate regulator issues a statement of policy under this section, it must publish a draft of the proposed statement in the way appearing to it to be best calculated to bring it to the attention of the public.
4
The draft statement must be accompanied by a notice stating that representations about the proposal may be made to the appropriate regulator within a period specified in the notice.
5
Before issuing the proposed statement, the appropriate regulator must have regard to any representations made to it in accordance with subsection (4).
6
If the appropriate regulator issues the proposed statement it must publish the following in the way appearing to it to be best calculated to bring them to the attention of the public—
a
the statement,
b
an account, in general terms, of the representations made to it in accordance with subsection (4) and its response to them, and
c
if the statement issued differs from the draft published under subsection (3) in a way which the appropriate regulator considers to be significant, details of the difference.
7
The appropriate regulator may charge a reasonable fee for providing a person with—
a
a copy of a draft statement published under subsection (3), or
b
a copy of a statement published under subsection (6)(a).
8
The appropriate regulator must, without delay, give the Treasury a copy of each statement it publishes under subsection (6)(a).
309TBreach of statutory duty by relevant recognised bodies
1
A contravention of section 309G(1) is actionable at the suit of a private person who suffers loss as a result of the contravention, subject to the defences and other incidents applying to actions for breach of statutory duty.
2
In prescribed cases, a contravention of section 309G(1) which would be actionable at the suit of a private person is actionable at the suit of a person who is not a private person, subject to the defences and other incidents applying to actions for breach of statutory duty.
3
In this section “private person” has such meaning as may be prescribed.
309UPower to impose penalties
1
The appropriate regulator may impose a penalty on a person if it is satisfied that—
a
the person has at any time performed a designated senior management function without approval, and
b
at that time the person knew, or could reasonably be expected to have known, that they were performing a designated senior management function without approval.
2
The penalty may be of such amount as the appropriate regulator considers appropriate.
3
A person performs a designated senior management function without approval at a time if—
a
the person performs a designated senior management function under an arrangement entered into by a relevant recognised body, or by a contractor of a relevant recognised body, in relation to the carrying on of an activity by the body, and
b
when performing the function, the person is not acting in accordance with an approval given under section 309G.
4
The appropriate regulator may not impose a penalty on a person under this section after the end of the limitation period unless it gave the person a warning notice under section 309V before the end of that period.
5
For the purposes of subsection (4)—
a
“the limitation period” means the period of 6 years beginning with the first day on which the appropriate regulator knew that the person concerned had performed a designated senior management function without approval, and
b
the appropriate regulator is to be treated as knowing that a person has performed a designated senior management function without approval if it has information from which that can reasonably be inferred.
309VProcedure for imposing penalties
1
If the appropriate regulator proposes to impose a penalty on a person under section 309U, it must give the person a warning notice.
2
A warning notice under this section must state the amount of the penalty.
3
If the appropriate regulator decides to impose a penalty on a person under section 309U, it must give the person a decision notice.
4
A decision notice under this section must state the amount of the penalty.
5
If the appropriate regulator decides to impose a penalty on a person under section 309U, the person may refer the matter to the Tribunal.
309WStatement of policy on penalties
1
The appropriate regulator must prepare and issue a statement of its policy with respect to—
a
the imposition of penalties under section 309U, and
b
the amount of penalties under that section.
2
The appropriate regulator’s policy in determining whether a penalty should be imposed, and what the amount of a penalty should be, must include having regard to—
a
the conduct of the person on whom the penalty is to be imposed,
b
the extent to which the person could reasonably be expected to have known that a designated senior management function was performed without approval,
c
the length of the period during which the person performed a designated senior management function without approval, and
d
whether the person on whom the penalty is to be imposed is an individual.
3
The appropriate regulator’s policy in determining whether a penalty should be imposed on a person must also include having regard to the appropriateness of taking action against the person instead of, or in addition to, taking action against a relevant recognised body.
4
A statement issued under this section must include an indication of the circumstances in which the appropriate regulator would expect to be satisfied that a person could reasonably be expected to have known that the person was performing a designated senior management function without approval.
5
The appropriate regulator—
a
may alter or replace a statement issued under this section, and
b
if it does so, must issue the altered or replacement statement.
6
When imposing, or deciding whether to impose, a penalty on a person under section 309U, the appropriate regulator must have regard to any statement of policy published under this section (which was in force at a time when the person performed a designated senior management function without approval).
309XProcedure for statement of policy on penalties
1
2
The draft statement must be accompanied by a notice stating that representations about the proposal may be made to the appropriate regulator within the period specified in the notice.
3
Before issuing the proposed statement, the appropriate regulator must have regard to any representations made to it in accordance with subsection (2).
4
If the appropriate regulator issues the proposed statement it must publish the following in the way appearing to it to be best calculated to bring them to the attention of the public—
a
the statement,
b
an account, in general terms, of the representations made to the appropriate regulator in accordance with subsection (2) and the appropriate regulator’s response to them, and
c
if the statement issued differs from the draft published under subsection (1) in a way which the appropriate regulator considers to be significant, details of the difference.
5
The appropriate regulator may charge a reasonable fee for providing a person with—
a
a copy of a draft statement published under subsection (1), or
b
a copy of a statement published under subsection (4)(a).
6
The appropriate regulator must, without delay, give the Treasury a copy of a statement which it publishes under subsection (4)(a).
Certification of employees
309YCertification of employees by relevant recognised bodies
1
A relevant recognised body must take reasonable care to ensure that none of its employees performs a specified function in relation to the carrying on of an activity by the body, unless the employee has a valid certificate issued by the body under section 309Z.
2
Subsection (1) applies only in relation to a function performed under an arrangement entered into by the body.
3
In this section, “specified function” means a function of a description specified in rules made by the appropriate regulator.
4
The appropriate regulator may specify a description of function under subsection (3) only if, in relation to the carrying on of an activity by a relevant recognised body of a particular description—
a
the function is not a designated senior management function in relation to the carrying on of that activity by a relevant recognised body of that description, and
b
the appropriate regulator is satisfied that the function is a significant-harm function.
5
A function is a “significant-harm function”, in relation to the carrying on of an activity by a relevant recognised body, if—
a
the function will require the person performing it to be involved in one or more aspects of the body’s affairs, so far as relating to the activity, and
b
those aspects involve, or might involve, a risk of significant harm to the body or to any of its consumers.
6
In this section, “consumers”, in relation to a relevant recognised body, means—
a
persons who use, have used or may use a service provided by the body, or
b
persons who have relevant rights or interests in relation to any such service.
7
A person (“P”) has a “relevant right or interest” in relation to a service provided by a relevant recognised body if P has a right or interest—
a
which is derived from, or is otherwise attributable to, the use of the service by others, or
b
which may be adversely affected by the use of the service by persons acting on P’s behalf or in a fiduciary capacity in relation to P.
8
For these purposes—
a
if a person is providing a service as a trustee, the persons who are, have been or may be beneficiaries of the trust are to be treated as persons who use, have used or may use the service;
b
a person who deals with another person (“A”) in the course of A providing a service is to be treated as using the service.
309ZIssuing certificates
1
A relevant recognised body may issue a certificate to a person under this section in relation to a function only if the body is satisfied that the person is a fit and proper person to perform the function.
2
In deciding that question the body must have regard, among other things, to whether the person—
a
has obtained a specified qualification,
b
has undergone, or is undergoing, specified training,
c
possesses a specified level of competence, or
d
has specified personal characteristics.
3
In subsection (2), “specified” means specified in rules made by the appropriate regulator.
4
A certificate issued by a relevant recognised body to a person under this section must—
a
state that the body is satisfied that the person is a fit and proper person to perform the function to which the certificate relates, and
b
set out the aspects of the body’s affairs in which the person will be involved in performing the function.
5
A certificate issued under this section is valid for a period of 12 months beginning with the day on which it is issued.
6
If, after having considered whether a person is a fit and proper person to perform a function, a relevant recognised body decides not to issue a certificate to the person under this section, the body must give the person a notice in writing stating—
a
what steps (if any) the body proposes to take in relation to the person as a result of the decision, and
b
the reasons for proposing to take those steps.
7
A relevant recognised body must maintain a record of every employee who has a valid certificate issued by it under this section.
Rules of conduct
309Z1Rules of conduct
1
If it appears to the appropriate regulator to be necessary or expedient for the purposes of advancing a relevant objective, the appropriate regulator may make rules about the conduct of the following persons in relation to the performance by them of qualifying functions—
a
persons in relation to whom the appropriate regulator has given its approval under section 309G (“Part 18 approved persons”);
b
directors of relevant recognised bodies;
c
employees of relevant recognised bodies.
2
Rules under subsection (1) may include provision requiring a relevant recognised body to—
a
notify persons mentioned in subsection (1) of the rules that apply to them;
b
take specified steps to secure that such persons understand how those rules apply in relation to them.
3
4
In this section—
“qualifying function” means a function relating to the carrying on of activities by the following—
- a
in the case of a Part 18 approved person, the relevant recognised body on whose application approval was given;
- b
in the case of a director or employee of a relevant recognised body, who is not a Part 18 approved person, the relevant recognised body;
- a
“relevant objective” means—
- a
if the appropriate regulator is the FCA, any of its operational objectives;
- b
if the appropriate regulator is the Bank of England, the Financial Stability Objective.
- a
“specified” means specified in the rules.
Disciplinary action by appropriate regulator
309Z2Power to take disciplinary action for misconduct
1
Subsection (2) applies if—
a
it appears to the appropriate regulator that a person is guilty of misconduct (see section 309Z3), and
b
the appropriate regulator is satisfied that it is appropriate in all the circumstances to take action against the person.
2
The appropriate regulator may do one or more of the following—
a
publish a statement of the person’s misconduct;
b
impose a penalty on the person of such amount as the appropriate regulator considers appropriate;
c
suspend an approval of the performance of a function by the person under section 309G for such period as the appropriate regulator considers appropriate;
d
impose such conditions as the appropriate regulator considers appropriate in relation to such an approval for such period as the appropriate regulator considers appropriate;
e
limit the period for which such an approval is to have effect.
3
a
it may not suspend an approval for more than 2 years;
b
it may not impose conditions which have effect for more than 2 years;
c
it may impose a condition so as to, among other things, require a person to take, or refrain from taking, specified action;
d
it may impose a suspension, condition or limitation that has effect in relation to part of a function.
4
The appropriate regulator that has taken action described in subsection (2)(c), (d) or (e) may (at any time)—
a
withdraw a suspension, condition or limitation;
b
vary a suspension or condition so as to reduce the period for which it has effect or otherwise to limit its effect;
c
vary a limitation so as to increase the period for which the approval is to have effect.
5
The appropriate regulator may not take action under this section after the end of the period of 6 years beginning with the first day on which the appropriate regulator knew of the misconduct unless, before the end of that period, it gave a warning notice to the person concerned under section 309Z4.
6
For the purposes of subsection (5), the appropriate regulator is to be treated as knowing of misconduct if it has information from which the misconduct can reasonably be inferred.
7
8
309Z3Meaning of “misconduct”
1
For the purposes of section 309Z2, a person is guilty of misconduct if any of conditions A to C is met.
2
Condition A is that—
a
the person has at any time failed to comply with rules made under section 309Z1, and
b
at that time the person was—
i
a Part 18 approved person,
ii
an employee of a relevant recognised body, or
iii
a director of a relevant recognised body.
3
Condition B is that—
a
the person has at any time after the passing of this Act been knowingly concerned in a contravention by a relevant recognised body of a relevant requirement, and
b
at that time the person was—
i
a Part 18 approved person in relation to the relevant recognised body,
ii
an employee of the relevant recognised body, or
iii
a director of the relevant recognised body.
4
Condition C is that—
a
the person has at any time been a Part 18 approved person in relation to a relevant recognised body,
b
at that time there was, or continued to be, a contravention by the body of a relevant requirement,
c
the person was at that time responsible for the management of any of the body’s activities in relation to which the contravention occurred, and
d
the person did not take such steps as a person in that position could reasonably be expected to take to avoid the contravention occurring or continuing.
5
In this section—
“Part 18 approved person”—
- a
means a person in relation to whom an approval is given under section 309G, and
- b
in relation to a relevant recognised body, means a person in relation to whom such approval is given on the application of the relevant recognised body;
- a
“relevant requirement” has the meaning given by section 312E(2) and (3).
309Z4Procedure for disciplinary action
1
If the appropriate regulator proposes to take action against a person under section 309Z2, it must—
a
give the person a warning notice, and
2
A warning notice under this section about a proposal to publish a statement of a person’s misconduct must set out the terms of the statement.
3
A warning notice under this section about a proposal to impose a penalty must state the amount of the penalty.
4
A warning notice under this section about—
a
a proposal to suspend an approval given under section 309G, or
b
a proposal to impose a condition in relation to such an approval,
must state the period for which the suspension or condition is to have effect.
5
A warning notice under this section about a proposal to limit the period for which an approval under section 309G is to have effect must state the length of that period.
6
If the appropriate regulator decides to take action against a person under section 309Z2, it must—
a
give the person a decision notice, and
7
A decision notice under this section about the publication of a statement of a person’s misconduct must set out the terms of the statement.
8
A decision notice under this section about the imposition of a penalty must state the amount of the penalty.
9
A decision notice under this section about—
a
the suspension of an approval given under section 309G, or
b
the imposition of a condition in relation to such an approval,
must state the period for which the suspension or condition is to have effect.
10
A decision notice under this section about limiting the period for which an approval under section 309G is to have effect must state the length of that period.
11
If the appropriate regulator decides to take action against a person under section 309Z2—
a
the person may refer the matter to the Tribunal, and
12
After a statement of a person’s misconduct is published under section 309Z2, the appropriate regulator must send a copy of it to—
a
the person concerned, and
b
any person to whom a copy of the decision notice was given.
13
In this section—
“Part 18 approved person”, in relation to a relevant recognised body, has the meaning given by section 309Z3(5);
“the other interested parties”, in relation to a Part 18 approved person in relation to a relevant recognised body, are—
- a
the relevant recognised body, and
- b
the person by whom the Part 18 approved person’s services are retained, if different from the relevant recognised body.
- a
309Z5Statement of policy about disciplinary action
1
The appropriate regulator must prepare and issue a statement of its policy with respect to—
a
the imposition of penalties, suspensions, conditions or limitations under section 309Z2,
b
the amount of penalties under that section,
c
the period for which suspensions or conditions under that section are to have effect, and
2
The appropriate regulator’s policy in determining what the amount of a penalty should be, or what the period for which a suspension or restriction is to have effect should be, must include having regard to—
a
the seriousness of the misconduct in question,
b
the extent to which that misconduct was deliberate or reckless, and
c
whether the person against whom action is to be taken is an individual.
3
The appropriate regulator—
a
may alter or replace a statement issued under this section, and
b
if it does so, must issue the altered or replacement statement.
4
In exercising, or deciding whether to exercise, its power under section 309Z2 in the case of particular misconduct, the appropriate regulator must have regard to any statement of policy published under this section and in force at the time when the misconduct in question occurred.
309Z6Procedure for statement of policy about disciplinary action
1
2
The draft statement must be accompanied by a notice stating that representations about the proposal may be made to the appropriate regulator within a period specified in the notice.
3
Before issuing the proposed statement, the appropriate regulator must have regard to any representations made to it in accordance with subsection (2).
4
If the appropriate regulator issues the proposed statement it must publish the following in the way appearing to the appropriate regulator to be best calculated to bring it to the attention of the public—
a
the statement,
b
an account, in general terms, of the representations made to the appropriate regulator in accordance with subsection (2) and the appropriate regulator’s response to them, and
c
if the statement differs from the draft published under subsection (1) in a way which the appropriate regulator considers significant, details of the difference.
5
The appropriate regulator may charge a reasonable fee for providing a person with—
a
a copy of a draft statement published under subsection (1), or
b
a copy of a statement published under subsection (4)(a).
6
The appropriate regulator must, without delay, give the Treasury a copy of any statement which it publishes under subsection (4)(a).
Interpretation
309Z7Interpretation of Chapter 2A
1
In this Chapter—
“director”, in relation to a relevant recognised body, means a member of the board of directors of the body or, if there is no such board, the equivalent body responsible for the management of the body;
“employee”, in relation to a relevant recognised body, includes a person who—
- a
personally provides, or is under an obligation personally to provide, services to the body under an arrangement made between the body and the person providing the services or another person, and
- b
is subject to, or to the right of, supervision, direction or control by the body as to the manner in which those services are provided;
- a
“relevant recognised body” has the meaning given in section 309A;
“senior management function” and “designated senior management function” have the meanings given in section 309G (see subsections (3) and (5) of that section).
2
Application of this Chapter to credit rating agencies
309Z8Power to apply this Chapter to credit rating agencies
1
The Treasury may by regulations provide for this Chapter, or any provision of this Chapter, to apply (with or without modifications) in relation to—
a
registered credit rating agencies, or
b
registered credit rating agencies of descriptions specified in the regulations.
2
Regulations under subsection (1) must provide for the FCA to be the appropriate regulator in relation to a registered credit rating agency to which any provision of this Chapter is applied by the regulations.
3
Regulations under subsection (1) may modify legislation (including any provision of, or made under, this Act).
4
Before making regulations under subsection (1), the Treasury must consult—
a
the FCA, and
b
such other persons who appear to the Treasury to be representative of persons likely to be affected by the application of this Chapter to registered credit rating agencies, or registered credit rating agencies of descriptions specified in the regulations.
5
In this section—
“legislation” means primary legislation, subordinate legislation (within the meaning of the Interpretation Act 1978) and F387assimilated direct legislation, but does not include rules or other instruments made by any regulator;
“modify” includes amend, repeal or revoke;
“registered credit rating agency” means a credit rating agency registered in accordance with Regulation (EC) No 1060/2009 of the European Parliament and the Council of 16 September 2009 on credit rating agencies.
Chapter III Exclusion from the Competition Act 1998
F154311 The Chapter I prohibition.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F154312 The Chapter II prohibition.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CHAPTER 3APASSPORT RIGHTS
EEA market operators in United Kingdom
F279312AExercise of passport rights by EEA market operator
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F279312BRemoval of passport rights from EEA market operator
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recognised investment exchanges operating in EEA States (other than the United Kingdom)
F279312CExercise of passport rights by recognised investment exchange
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interpretation
F279312DInterpretation of Chapter 3A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C21F20CHAPTER 3BDisciplinary measures F351in respect of recognised bodies
Pt. 18 Ch. 3B inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), ss. 33, 122(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(b)(c), Sch. Pts. 2, 3; S.I. 2013/423, art. 3, Sch.
Words in Pt. 18 Ch. 3B heading inserted (29.6.2023 for specified purposes) by Financial Services and Markets Act 2023 (c. 29), s. 86(1)(e), Sch. 10 para. 9
Pt. 18 Ch. 3B applied (with modifications) (5.4.2024) by The Data Reporting Services Regulations 2024 (S.I. 2024/107), regs. 1(2), 19; S.I. 2023/1382, reg. 4(c)
C8C10C19312EPublic censure
1
F3321A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
Where the FCA is the appropriate regulator, a requirement is a “relevant requirement” for the purposes of this Chapter if it is—
a
a requirement that is imposed by or under any provision of this Part that relates to a recognised investment exchange F360or data reporting service provider,
b
a requirement that is imposed under any other provision of this Act by the FCA that relates to a recognised investment exchange,
c
a requirement that is imposed by a F333qualifying provision specified, or of a description specified, for the purposes of this subsection by the Treasury by order, or
d
a requirement that is imposed by this Act and whose contravention constitutes an offence that the FCA has power to prosecute under this Act (see section 401).
3
Where the Bank of England is the appropriate regulator, a requirement is a “relevant requirement” for the purposes of this Chapter if it is—
a
a requirement that is imposed by or under any provision of this Part that relates to a recognised clearing house F334, third country central counterparty or a recognised CSD,
b
a requirement that is imposed under any other provision of this Act by the Bank,
c
d
a requirement that is imposed by this Act and whose contravention constitutes an offence that the Bank has power to prosecute under this Act (see section 401, as applied by paragraph 31 of Schedule 17A).
F3614
In this Chapter “data reporting service provider” has the meaning given by regulation 2 of the F392Data Reporting Services Regulations 2024.
C8C11312FFinancial penalties
F2501
If the appropriate regulator considers that a recognised body F362or data reporting service provider has contravened a relevant requirement imposed on the body F363or provider, it may impose on the body F363or provider a penalty, in respect of the contravention, of such amount as it considers appropriate.
F3362
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F352312FAF210Central securities depositories: further disciplinary measures
1
If the Bank of England considers that a contravention by a recognised CSD of a relevant requirement occurred with the consent or connivance of, or was attributable to any neglect on the part of, a member of the management body or other person who effectively controls the business of the recognised CSD, the Bank of England may do one or both of the following—
a
publish a statement to that effect;
b
impose on that person a penalty, in respect of the contravention, of such amount as it considers appropriate.
2
If the Bank of England considers that a member of the management body or other person who effectively controls the business of a recognised CSD is responsible for a contravention by the central securities depository of a relevant requirement, it may do one or more of the following—
a
publish a statement to that effect;
b
impose on that person a penalty, in respect of the contravention, of such amount as it considers appropriate;
c
prohibit that person from holding an office or position involving responsibility for taking decisions about the management of the recognised CSD.
3
A prohibition under subsection (2)(c) may apply—
a
for a specified period,
b
until further notice, or
c
for repeated serious contraventions, permanently.
4
The Bank of England may, on the application of the person subject to a prohibition under subsection (2)(c), vary or revoke the prohibition.
F3375
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C8C12312GProposal to take disciplinary measures
F2521
If the appropriate regulator proposes to impose a sanction—
a
on a recognised body F364or data reporting service provider under section 312E or 312F, or
b
on a person under section 312FA,
it must give the body F365, provider or person (as the case may be) a warning notice.
2
A warning notice about a proposal to publish a statement must set out the terms of the statement.
3
A warning notice about a proposal to impose a penalty must state the amount of the penalty.
F2514
A warning notice about a proposal to impose a prohibition must specify the extent of the prohibition.
F3385
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C8C13312HDecision notice
F2541
If the appropriate regulator decides to impose a sanction—
a
on a recognised body F366or data reporting service provider under section 312E or 312F, or
b
on a person under section 312FA,
it must give the body F367, provider or person (as the case may be) a decision notice.
2
In the case of a statement, the decision notice must set out the terms of the statement.
3
In the case of a penalty, the decision notice must state the amount of the penalty.
F2533A
In the case of a prohibition, the decision notice must specify the extent of the prohibition.
3B
The sanction which the appropriate regulator decides to impose may differ from that proposed in the warning notice.
F2554
If the appropriate regulator decides to impose a sanction—
a
on a recognised body F368or data reporting service provider under section 312E or 312F, or
b
on a person under section 312FA,
the body F369, provider or person (as the case may be) may refer the matter to the Tribunal.
F3395
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C8C14312IPublication
After an appropriate regulator publishes a statement under section 312E F256or 312FA, it must send a copy of the statement to—
b
any person to whom a copy of the decision notice was given under section 393(4).
C16312JStatement of policy
1
Each appropriate regulator must prepare and issue a statement of its policy with respect to—
a
c
the period for which prohibitions under section 312FA are to have effect.
2
An appropriate regulator's policy in determining what the amount of a penalty should be F262, or what the period for which a prohibition is to have effect should be, must include having regard to—
a
the seriousness of the contravention in question in relation to the nature of the requirement concerned, F263...
b
the extent to which that contravention was deliberate or reckless F264; and
c
whether the person against whom action is to be taken is an individual.
3
An appropriate regulator may at any time alter or replace a statement issued by it under this section.
4
If a statement issued by an appropriate regulator under this section is altered or replaced, the regulator must issue the altered or replacement statement.
5
In exercising, or deciding whether to exercise, its power under section 312F F265or 312FA in the case of any particular contravention, an appropriate regulator must have regard to any statement of policy published by it under this section and in force at a time when the contravention in question occurred.
6
A statement issued by an appropriate regulator under this section must be published by the regulator in the way appearing to the regulator to be best calculated to bring it to the attention of the public.
7
An appropriate regulator may charge a reasonable fee for providing a person with a copy of the statement.
8
An appropriate regulator must, without delay, give the Treasury a copy of any statement which it publishes under this section.
C17312KStatement of policy: procedure
1
Before issuing a statement under section 312J, an appropriate regulator must publish a draft of the proposed statement in the way appearing to the regulator to be best calculated to bring it to the attention of the public.
2
The draft must be accompanied by notice that representations about the proposal may be made to the regulator within a specified time.
3
Before issuing the proposed statement, the regulator must have regard to any representations made to it in accordance with subsection (2).
4
If the regulator issues the proposed statement it must publish an account, in general terms, of—
a
the representations made to it in accordance with subsection (2), and
b
its response to them.
5
If the statement differs from the draft published under subsection (1) in a way which is, in the opinion of the regulator, significant, the regulator must (in addition to complying with subsection (4)) publish details of the difference.
6
An appropriate regulator may charge a reasonable fee for providing a person with a copy of a draft published under subsection (1).
7
This section also applies to a proposal to alter or replace a statement.
F356CHAPTER 3CCritical third parties
Pt. 18 Ch. 3C inserted (29.8.2023) by Financial Services and Markets Act 2023 (c. 29), ss. 18(3), 86(3); S.I. 2023/779, reg. 4(m)
312LCritical third parties
1
The Treasury may by regulations designate a person who provides services to one or more authorised persons, relevant service providers or FMI entities as a “critical third party”.
2
The Treasury may designate a person under subsection (1) only if in the Treasury’s opinion a failure in, or disruption to, the provision of those services (either individually or, where more than one service is provided, taken together) could threaten the stability of, or confidence in, the UK financial system.
3
The Treasury must have regard to the following factors when forming an opinion for the purposes of subsection (2)—
a
the materiality of the services provided to the delivery, by any person, of essential activities, services or operations (wherever carried out);
b
the number and type of authorised persons, relevant service providers or FMI entities to which the person provides services.
4
Before making regulations under subsection (1) the Treasury must—
a
consult each of the relevant regulators and such other persons as the Treasury consider appropriate,
b
give notice in writing to the person to be designated specifying a reasonable period within which that person may make representations in writing about the proposal to the Treasury, and
c
have regard to any representations made to them in accordance with paragraph (b).
5
The Treasury may not designate the Bank of England under subsection (1).
6
Each of the following is a relevant regulator for the purposes of this Chapter—
a
the FCA,
b
the PRA, and
c
the Bank of England.
7
Activities, services or operations are “essential” for the purposes of subsection (3) if they are essential to—
a
the economy of the United Kingdom, or
b
the stability of, or confidence in, the UK financial system.
8
In this Chapter—
“critical third party” means a person designated under subsection (1);
“FMI entity” means—
- a
a recognised clearing house;
- b
a recognised CSD;
- c
a recognised investment exchange which is not an overseas investment exchange;
- d
a recognised payment system under section 184 of the Banking Act 2009;
- e
a person specified as a service provider in relation to a recognised payment system under section 206A of the Banking Act 2009;
- a
“relevant service provider” means—
- a
an electronic money institution as defined by regulation 2(1) of the Electronic Money Regulations 2011 (S.I. 2011/99);
- b
an authorised payment institution, small payment institution or registered account information services provider as defined by regulation 2(1) of the Payment Services Regulations 2017 (S.I. 2017/752);
- a
“service” includes facility.
312MPower to make rules
1
A relevant regulator may make such rules imposing duties on critical third parties in connection with the provision of services to authorised persons, relevant service providers and FMI entities as appear to the regulator to be necessary or expedient for the purpose of advancing any of its objectives.
2
The reference in subsection (1) to a relevant regulator’s objectives is a reference to—
a
where the regulator is the FCA, one or more of its operational objectives;
b
where the regulator is the PRA, one or more of its objectives;
c
where the regulator is the Bank, the Bank’s Financial Stability Objective.
3
In the application of Part 9A to rules made by the FCA or the PRA under this section, the following provisions apply with the modifications specified in this subsection—
a
section 137T (general supplementary powers) applies as if—
i
the reference in paragraph (a) to “authorised persons, activity or investment” were a reference to “critical third parties or services”, and
ii
in paragraph (b) for the words from “as” to the end there were substituted “or the Bank, or standards issued by any other person, as those rules or standards have effect from time to time,”
;
b
section 138B (publication of directions) applies as if subsection (4) were omitted;
c
section 138F (notification of rules) applies as if subsections (1A) and (2) were omitted;
d
section 138I (consultation) applies as if the reference in subsection (1)(a) to the “PRA” were a reference to the “PRA and the Bank”;
e
section 138J (consultation) applies as if the reference in subsection (1)(a) to the “FCA” were a reference to the “FCA and the Bank”.
312NPower of direction
1
A relevant regulator may, if it appears to the regulator to be necessary or expedient for the purpose of advancing any of its objectives, direct a critical third party to—
a
do anything specified in the direction, or
b
refrain from doing anything specified in the direction.
2
A direction under this section—
a
must be given by notice in writing,
b
may be expressed to have effect during a specified period or until revoked, and
c
may specify the way in which, and the time by which, a thing is to be done.
3
Subsection (4) applies if a direction is given to a critical third party for the purpose of resolving or reducing a threat to the stability or integrity of the UK financial system.
4
The critical third party (including the critical third party’s officers and staff) has immunity from liability in damages in respect of action or inaction in accordance with the direction.
5
A direction given for the purpose mentioned in subsection (3) must—
a
include a statement that it is given for that purpose, and
b
inform the critical third party of the effect of subsection (4).
6
An immunity conferred by this section does not extend to action or inaction—
a
in bad faith, or
b
in contravention of section 6(1) of the Human Rights Act 1998.
7
A relevant regulator may at any time revoke a direction under this section by giving notice in writing to the critical third party to which the direction relates.
8
The revocation of the direction does not affect the validity of anything previously done in accordance with it.
9
For the purposes of this section the objectives of a relevant regulator are as described in section 312M(2).
312ODirections: procedure
1
If a relevant regulator proposes to give a direction under section 312N, or gives such a direction with immediate effect, it must give written notice to the critical third party to which the direction is given (or is to be given) (the “relevant critical third party”).
2
A direction under section 312N takes effect—
a
immediately, if the notice under subsection (1) states that this is the case,
b
on such other date as may be specified in the notice, or
c
if neither paragraph (a) or (b) applies, when the matter to which the notice relates is no longer open to review.
3
A direction may be expressed to take effect immediately, or on a specified date, only if the relevant regulator reasonably considers that it is necessary for the direction to take effect immediately or on that date.
4
The notice under subsection (1) must—
a
give details of the direction,
b
state the relevant regulator’s reasons for the direction and for its determination as to when the direction takes effect,
c
inform the relevant critical third party that it may make representations to the regulator within such period as may be specified in the notice (whether or not the critical third party has referred the matter to the Tribunal), and
d
inform the relevant critical third party of its right to refer the matter to the Tribunal (including giving an indication of the procedure on such a reference).
5
The relevant regulator may extend the period allowed under the notice for making representations.
6
If, having considered any representations made by the relevant critical third party, the regulator decides—
a
to give the direction proposed, or
b
if the direction has been given, not to revoke the direction,
it must give the critical third party written notice.
7
If, having considered any representations made by the relevant critical third party, the regulator decides—
a
not to give the direction proposed,
b
to give a different direction, or
c
to revoke a direction which has effect,
it must give the critical third party written notice.
8
A notice given under subsection (6) must inform the relevant critical third party of its right to refer the matter to the Tribunal (including giving an indication of the procedure on such a reference).
9
A notice under subsection (7)(b) must comply with subsection (4).
10
For the purposes of subsection (2)(c), whether a matter is open to review is to be determined in accordance with section 391(8).
312PInformation gathering and investigations
1
The provisions of Part 11 (information gathering and investigations) mentioned in this section are to apply in relation to this Chapter in accordance with the provision made by this section.
2
In any case where subsection (1) applies—
a
any reference in Part 11 to the FCA or PRA which is contained in, or relates to, any of those provisions (however expressed) is to be read as a reference to a relevant regulator, and
b
Part 11 has effect with any other necessary modifications.
3
The powers conferred by section 165(1) and (3) (power to require information) are exercisable by a relevant regulator or (as the case may be) a relevant regulator’s officers to impose requirements on a critical third party or a person connected with a critical third party.
4
The information or documents that a relevant regulator may require to be produced or provided in accordance with subsection (3) are limited to information and documents reasonably required in connection with the exercise by the relevant regulator of functions conferred on it by or under this Chapter (and accordingly section 165(4) does not apply).
5
The power conferred by section 166 (reports by skilled person) is exercisable by a relevant regulator in relation to a critical third party or a person connected with a critical third party.
6
The power conferred by section 166A (appointment of skilled person) is exercisable by a relevant regulator in relation to a critical third party.
7
The power conferred by section 168(5) (appointment of persons to carry out investigations in particular cases) is exercisable by a relevant regulator if it appears to the relevant regulator that there are circumstances suggesting that a person may have contravened any requirement imposed by or under this Chapter.
8
In addition to the powers conferred by section 171, a person conducting an investigation under section 168(5) as a result of subsection (7) is to have the powers conferred by sections 172 and 173 (and for this purpose any references in those sections to an investigator are to be read accordingly).
9
The power under section 176(1) (entry of premises under warrant) is exercisable on information on oath given by or on behalf of a relevant regulator, or an investigator appointed by a relevant regulator, as if the reference to the third set of conditions were omitted.
10
For the purposes of this section a person is connected with a critical third party if that person is or has at any relevant time been—
a
a member of the critical third party’s group,
b
a controller of the critical third party, or
c
in relation to the critical third party, a person mentioned in Part 1 of Schedule 15 (reading references in that Part to the authorised person as references to the critical third party).
312QPower of censure
If a relevant regulator considers that a critical third party has contravened a requirement imposed by or under this Chapter the regulator may publish a statement to that effect.
312RDisciplinary measures
1
This section applies if a relevant regulator considers that a critical third party has contravened a requirement imposed by or under this Chapter.
2
The relevant regulator may publish a notice—
a
prohibiting the critical third party from entering into arrangements, or continuing, to provide services to authorised persons, relevant service providers or FMI entities;
b
prohibiting authorised persons, relevant service providers or FMI entities who receive services from the critical third party from continuing to receive those services from that party;
c
prohibiting authorised persons, relevant service providers or FMI entities from entering into arrangements for receipt of services from the critical third party;
d
providing for the provision of any services by the critical third party to be subject to such conditions or limitations as are specified in the notice;
e
providing for any receipt of services by authorised persons, relevant service providers or FMI entities from the critical third party to be subject to such conditions or limitations as are specified in the notice.
3
A notice under subsection (2) may make different provision for different cases and may in particular make different provision in respect of different descriptions of services, authorised persons, FMI entities or relevant service providers.
4
A relevant regulator may only exercise the powers under subsection (2) if the regulator is satisfied that—
a
it is appropriate in the circumstances to take action against the critical third party,
b
the exercise of the power will not threaten the stability of, or confidence in, the UK financial system, and
c
it is desirable to exercise the power in order to advance one or more of the regulator’s objectives.
5
A relevant regulator may either on its own initiative or on an application by the critical third party concerned withdraw or vary a notice given by it under subsection (2) by publishing a further notice.
6
Publication under this section is to be made in such manner as the relevant regulator considers best designed to bring the publication to the attention of the public.
7
Where a notice includes a prohibition, condition or limitation imposed under subsection (2), publication of a notice under this section must in particular be made in a manner appearing to the relevant regulator to be best designed to bring the notice to the attention of the persons to whom the prohibition, condition or limitation applies.
8
A person who breaches a prohibition, condition or limitation imposed by a notice under this section is to be taken to have contravened a requirement imposed on the person under this Act.
9
For the purposes of this section the objectives of a relevant regulator are as described in section 312M(2).
312SProcedure and right to refer to Tribunal
1
If a relevant regulator proposes to publish a statement or notice under section 312Q or 312R, it must give the critical third party, authorised persons, relevant service providers or FMI entities to whom the statement or notice would relate a warning notice.
2
A warning notice must set out the terms of the proposed statement or notice.
3
If a relevant regulator decides to publish a statement or notice under section 312Q or 312R it must give the critical third party, authorised persons, relevant service providers or FMI entities to whom the statement or notice relates a decision notice.
4
A decision notice must set out the terms of the statement or notice.
5
If a relevant regulator decides to act under section 312N or 312Q a critical third party who is aggrieved may refer the matter to the Tribunal.
6
If a relevant regulator decides to act under section 312R a critical third party, authorised person, relevant service provider or FMI entity who is aggrieved may refer the matter to the Tribunal.
312TStatement of policy relating to disciplinary measures
1
The relevant regulators must prepare and publish a statement of policy with respect to the exercise of powers under section 312Q and section 312R.
2
The relevant regulators may alter or replace a statement published under this section.
3
The relevant regulators must publish a statement as altered or replaced under subsection (2).
4
Publication under this section is to be made in such manner as the relevant regulators consider best designed to bring the publication to the attention of the public.
312UDuty to ensure co-ordinated exercise of functions etc
1
The relevant regulators must co-ordinate the exercise of their respective functions conferred by or under this Chapter.
2
In complying with the duty in subsection (1) each relevant regulator must obtain information and advice from any of the other relevant regulators who may be expected to have relevant information or relevant expertise.
3
The duty in subsection (1) applies only to the extent that compliance with the duty does not impose a burden on the relevant regulators that is disproportionate to the benefits of compliance.
4
Before exercising any power conferred by or under this Chapter a relevant regulator must consult each of the other relevant regulators (where not otherwise required to do so).
312VMemorandum of understanding
1
The relevant regulators must prepare and maintain a memorandum which describes in general terms—
a
the role of the relevant regulators in relation to the exercise of functions conferred by or under this Chapter, and
b
how they intend to comply with section 312U in relation to the exercise of such functions.
2
The relevant regulators must review the memorandum at least once in each calendar year.
3
The relevant regulators may revise a memorandum under this section.
4
The relevant regulators must give the Treasury a copy of the memorandum and any revised memorandum.
5
The Treasury must lay before Parliament a copy of any document received by them under this section.
6
The relevant regulators must ensure that the memorandum as in force for the time being is published in the way appearing to them to be best calculated to bring it to the attention of the public.
7
The memorandum need not relate to any aspect of compliance with section 312U if the relevant regulators consider—
a
that publication of information about that aspect would be against the public interest, or
b
that aspect is a technical or operational matter not affecting the public.
312WApplication of provisions of this Act to this Chapter
The following provisions do not apply for the purposes of this Chapter—
a
section 3D (duty to ensure co-ordinated exercise of functions);
b
section 3E (memorandum of understanding);
c
section 138D (actions for damages).
Chapter IV
Interpretation
313 Interpretation of Part XVIII.
1
In this Part—
F353“application” means an application for a recognition order made under section 287F267, 288 or 288A;F354“applicant” means aF268person whohas applied for a recognition order;F190...
F188“central counterparty” means a body corporate or unincorporated association which interposes itself between the counterparties to the contracts traded on one or more financial markets, becoming the buyer to every seller and the seller to every buyer;
F188“central counterparty recognition order” means a recognition order made under section 290(1)(b);
F188“clearing”, in relation to a central counterparty, means the process of establishing positions, including the calculation of net obligations and ensuring that financial instruments, cash, or both, are available to secure the exposures arising from those positions; and “clearing services”, in relation to a central counterparty, is to be read accordingly;
F371“critical third party” has the same meaning as in Chapter 3C (see section 312L(8);
F271“CSD recognition order” means a recognition order made under section 290(1)(d);
F342...
F188“the EMIR regulation” means Regulation (EU) 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories F278as F341it forms part of F388assimilated law, and any F343reference to requirements contained in or to functions under the EMIR regulation includes a reference (as the case may be) to requirements contained in or to functions under—
- (a)
any EU regulation, originally made under the EMIR regulation, which is F389assimilated direct legislation; or
- (b)
any subordinate legislation (within the meaning of the Interpretation Act 1978) made under the EMIR regulation on or after IP completion day;
- (a)
F390“FMI functions”, in relation to the Bank of England, has the meaning given by section 30D(3) of the Bank of England Act 1998;
F344“multilateral trading facility” means a UK multilateral trading facility as defined by Article 2(1)(14A) of the markets in financial instruments regulation;
F345“organised trading facility” means a UK organised trading facility as defined by Article 2(1)(15A) of the markets in financial instruments regulation;
F199...
“overseas applicant” means a body corporate or association which has neither its head office nor its registered office in the United Kingdom and which has applied for a recognition order;
“overseas investment exchange” means a body corporate or association which has neither its head office nor its registered office in the United Kingdom and in relation to which a recognition order is in force;
F189“overseas clearing house” means a body corporate or association which is not a central counterparty and has neither its head office nor its registered office in the United Kingdom and in relation to which a recognition order is in force;
“recognised body” means a recognised investment exchange F269, a recognised clearing house or a recognised CSDF347, and in Chapter 3B also includes a third country central counterparty;
F188“recognised central counterparty” has the meaning given in section 285;
“recognised clearing house” has the meaning given in section 285;
F271“recognised CSD” has the meaning given in section 285;
“recognised investment exchange” has the meaning given in section 285;
“recognition order” means an order made under section 290 or 292;
“recognition requirements” has the meaning given by section 286;
F346“regulated market” means a UK regulated market as defined by Article 2(1)(13A) of the markets in financial instruments regulation;
“remedial direction” has the meaning given in section 308(8);
“revocation order” has the meaning given in section 297.
F348“Tier 2 third country central counterparty” means a third country central counterparty which has been determined by the Bank of England to be systemically important or likely to become systemically important in accordance with Article 25.2a of the EMIR regulation;
F274“trading venue” means a multilateral trading facility, a regulated market or an organised trading facility.
F190...
F2661A
For the purposes of this Part, a clearing house does not include a central securities depository.
2
References in this Part to rules of an investment exchange (or a clearing house F270or central securities depository) are to rules made, or conditions imposed, by the investment exchange (or the clearing house F270or central securities depository) with respect to—
a
recognition requirements;
b
admission of persons to, or their exclusion from the use of, its facilities; or
c
matters relating to its constitution.
3
References in this Part to guidance issued by an investment exchange are references to guidance issued, or any recommendation made, in writing or other legible form and intended to have continuing effect, by the investment exchange to—
a
all or any class of its members or users, or
b
persons seeking to become members of the investment exchange or to use its facilities,
with respect to any of the matters mentioned in subsection (2)(a) to (c).
4
References in this Part to guidance issued by a clearing house are to guidance issued, or any recommendation made, in writing or other legible form and intended to have continuing effect, by the clearing house to—
a
all or any class of its members, or
b
persons using or seeking to use its services,
with respect to the provision by it or its members of clearing services F126or services falling within section 285(3)(b).
Pt. 18 heading substituted (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), regs. 1, 2(8) (with regs. 7(4), 9(1))