Financial Services and Markets Act 2000

[F1 195A Contravention by relevant EEA firm or EEA UCITS of directive requirements: home state regulator primarily responsible for securing compliance U.K.

(1) This section applies if [F2 the appropriate regulator] has clear and demonstrable grounds for believing—

(a) that a relevant EEA firm has contravened, or is contravening, a requirement falling within subsection (2) (in a case to which Article 62.1 or 62.3 of the markets in financial instruments directive applies);

(b) that a relevant EEA UCITS has contravened, or is contravening, a requirement falling within subsection (3) (in a case to which Article 108.4 of the UCITS directive applies).

(2) A requirement falls within this subsection if it is imposed on the firm—

(a) by or under any provision adopted in the firm's home state for the purpose of implementing the markets in financial instruments directive; or

(b) by any directly applicable Community regulation made under that directive.

(3) A requirement falls within this subsection if it is imposed on the EEA UCITS—

(a) by or under any provision adopted in the home state of the EEA UCITS for the purpose of implementing the UCITS directive; or

(b) by any directly applicable Community regulation or decision made under that directive.

(4) [F2 The appropriate regulator] must notify the home state regulator of the firm or EEA UCITS in writing of the situation mentioned in subsection (1).

(5) The notice under subsection (4) must—

(a) request that the home state regulator take all appropriate measures for the purpose of ensuring that the firm or EEA UCITS puts an end to the contravention;

(b) state that [F2 the appropriate regulator's] powers of intervention are likely to become exercisable in relation to the firm or EEA UCITS if it continues the contravention; and

(c) indicate any requirements that [F2 the appropriate regulator] proposes to impose on the firm or EEA UCITS in exercise of its power of intervention in the event of the power becoming exercisable.

(6) [F2 The appropriate regulator] may exercise its power of intervention in respect of the firm or EEA UCITS if—

(a) a reasonable time has expired since the giving of the notice under subsection (4); and

(b) conditions A to C are satisfied.

(7) Condition A is that—

(a) the home state regulator of the firm or EEA UCITS has failed or refused to take measures for the purpose mentioned in subsection (5)(a); or

(b) any measures taken by the home state regulator have proved inadequate for that purpose.

(8) Condition B is that the firm or EEA UCITS is acting in a manner which is clearly prejudicial to the interests of investors in the United Kingdom or the orderly functioning of the markets.

(9) Condition C is that [F2 the appropriate regulator] has informed the home state regulator of the firm or EEA UCITS of its intention to exercise its power of intervention in respect of the firm or EEA UCITS.

(10) Subsection (6) applies whether or not [F2 the appropriate regulator's] power of intervention is also exercisable as a result of section 194 or 195.

(11) If [F2 the appropriate regulator] exercises its power of intervention in respect of a relevant EEA firm or EEA UCITS by virtue of subsection (6), it must at the earliest opportunity inform [F3 ESMA and] the Commission of—

(a) the fact that [F2 the appropriate regulator] has exercised that power in respect of that firm or EEA UCITS; and

(b) any requirements it has imposed on the firm or EEA UCITS in exercise of the power.

[F4 (11A) If circumstances exist which enable [F2 the appropriate regulator] to exercise its power of intervention under subsection (6), [F2 the appropriate regulator] may refer the matter to ESMA (and ESMA may act in accordance with the powers conferred on it under Article 19 of Regulation ( EU ) No. 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority)).]

[F5 (11B) Subsection (4) is not to be regarded as requiring the PRA to notify the home state regulator in relation to the contravention of a requirement falling within subsection (2) or (3) in a case where the PRA is satisfied that the FCA is required to act, and is acting or has acted, under subsection (4) in relation to that requirement.]

(12) In this section—

• [F6 “the appropriate regulator” means—

  (a)

  where the relevant EEA firm is a PRA-authorised person, the FCA or, subject to subsection (11B), the PRA;

  (b)

  in any other case, the FCA;]

• “home state” means—

  (a)

  in relation to a relevant EEA firm—

  (i)

  in the case of a firm which is a body corporate, the EEA State in which the firm has its registered office or, if it has no registered office, its head office; and

  (ii)

  in any other case, the EEA State in which the firm has its head office;

  (b)

  in relation to a relevant EEA UCITS, the EEA State in which the UCITS is authorised pursuant to Article 5 of the UCITS directive;

• “relevant EEA firm” means an EEA firm falling within paragraph 5(a) or (b) of Schedule 3 which is exercising in the United Kingdom a right deriving from the markets in financial instruments directive;

• “relevant EEA UCITS” means a UCITS which is authorised pursuant to Article 5 of the UCITS directive in an EEA State other than the United Kingdom, and references to an EEA UCITS include, in a case where the UCITS is not a body corporate, references to its management company.]

Textual Amendments

F1 S. 195A substituted (1.7.2011) by The Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613), reg. 2(8)

F2 Words in s. 195A substituted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 35(2) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F3 Words in s. 195A(11) inserted (16.4.2012) by The Financial Services (Omnibus 1 Directive) Regulations 2012 (S.I. 2012/916), regs. 1, 2(8)(a)

F4 S. 195A(11A) inserted (16.4.2012) by The Financial Services (Omnibus 1 Directive) Regulations 2012 (S.I. 2012/916), regs. 1, 2(8)(b)

F5 S. 195A(11B) inserted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 35(3) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

F6 Words in s. 195A(12) inserted (27.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 4 para. 35(4) (with Sch. 20); S.I. 2013/423, arts. 2, 3, Sch.

Modifications etc. (not altering text)

C1 S. 195A(11) excluded by S.I. 2001/3084, art. 2(8)(b) (as inserted (24.8.2012) by The Financial Services and Markets Act 2000 (Gibraltar) (Amendment) Order 2012 (S.I. 2012/2017), arts. 1, 2(2)(e))