Financial Services and Markets Act 2000

[F1 195B. Contravention by relevant EEA firm of requirement in mortgages directive: home state regulator primarily responsible for securing compliance U.K.

(1) In this section “relevant EEA firm” means an EEA firm falling within paragraph 5(i) of Schedule 3 which is exercising in the United Kingdom an EEA right deriving from the mortgages directive.

(2) This section applies if—

(a) a relevant EEA firm has a branch, or is providing services, in the United Kingdom; and

(b) the appropriate regulator has clear and demonstrable grounds for concluding that the firm has contravened, or is contravening, a requirement to which Article 34(4) of the mortgages directive applies.

(3) The appropriate regulator must notify the relevant EEA firm’s home state regulator of the situation mentioned in subsection (2).

(4) The notice under subsection (3) must—

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

(b) state that the appropriate regulator’s powers of intervention are likely to become exercisable in relation to the relevant EEA firm if it continues the contravention; and

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

(5) The appropriate regulator may exercise its power of intervention in respect of the relevant EEA firm if—

(a) a period of one month beginning with the date on which it gave the notification referred to in subsection (3) has expired, and

(b) conditions A to C are satisfied.

(6) Condition A is that—

(a) the home state regulator of the relevant EEA firm has failed or refused to take measures for the purpose mentioned in subsection (4)(a); or

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

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

(8) Condition C is that the appropriate regulator has informed the home state regulator of the relevant EEA firm of its intention to exercise its powers of intervention in respect of the firm.

(9) Subsection (5) applies whether or not the appropriate regulator’s power of intervention is also exercisable as a result of section 194 or 195.

(10) If the appropriate regulator exercises its power of intervention in respect of the relevant EEA firm by virtue of subsection (5), it must inform the Commission and EBA, without undue delay, of—

(a) the fact that the appropriate regulator has exercised that power in respect of that firm; and

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

(11) If circumstances exist which enable the appropriate regulator to exercise its power of intervention under subsection (5), the appropriate regulator may refer the matter to EBA (and EBA may act in accordance with the powers conferred on it under Article 19 of Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24th November 2010 establishing a European Supervisory Authority (European Banking Authority)).

(12) Subsection (3) is not to be regarded as requiring the PRA to notify the home state regulator in relation to the situation mentioned in subsection (2) in a case where the PRA is satisfied that the FCA is required to act, and is acting, or has acted, under subsection (3) in relation to that situation.

(13) In this section “appropriate regulator” means—

(a) where the relevant EEA firm is a PRA-authorised person, the FCA or, subject to subsection (12), the PRA;

(b) in any other case, the FCA.]

Textual Amendments

F1 S. 195B inserted (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), art. 1(5), Sch. 1 para. 1(6) (with Pt. 4)