Part III Authorisation and Exemption

Exemption

F139AF1Certain tied agents operating outside United Kingdom

1

This section applies to an authorised person whose relevant office is in the United Kingdom if—

a

he is a party to a contract with a person (other than an authorised person) who is established—

i

in the United Kingdom, or

ii

in an EEA State which does not permit investment firms authorised by the competent authority of the State to appoint tied agents; and

b

the contract is a relevant contract.

2

A contract is a “relevant contract” if it satisfies conditions A to C.

3

Condition A is that the contract permits or requires the person mentioned in subsection (1)(a) (the “agent”) to carry on investment services business.

4

Condition B is that either—

a

it is a condition of the contract that such business may only be carried on by the agent in an EEA State other than the United Kingdom; or

b

in a case not falling within paragraph (a), the Authority is satisfied that no such business is, or is likely to be, carried on by the agent in the United Kingdom.

5

Condition C is that the business is of a description that, if carried on in the United Kingdom, would be prescribed for the purposes of section 39(1)(a)(i).

6

An authorised person to whom this section applies who—

a

enters into or continues to perform a relevant contract with an agent which does not comply with the applicable requirements,

b

enters into or continues to perform a relevant contract without accepting or having accepted responsibility in writing for the agent's activities in carrying on investment services business,

c

enters into a relevant contract with an agent who is not entered on the record maintained by the Authority by virtue of section 347(1)(ha), or

d

continues to perform a relevant contract with an agent when he knows or ought to know that the agent is not entered on that record,

is to be taken for the purposes of this Act to have contravened a requirement imposed on him by or under this Act.

7

The “applicable requirements” are the requirements prescribed for the purposes of subsection (1)(a)(ii) of section 39 which have effect in the case of a person to whom subsection (1A) of that section applies.

8

A person carries on “investment services business” if—

a

his business includes providing services or carrying on activities of the kind mentioned in Article 4.1.25 of the markets in financial instruments directive, and

b

as a result of providing such services or carrying on such activities he is a tied agent.

9

In this section—

  • “competent authority” has the meaning given in Article 4.1.22 of the markets in financial instruments directive;

  • “relevant office” means—

    1. a

      in relation to a body corporate, its registered office or, if it has no registered office, its head office, and

    2. b

      in relation to a person other than a body corporate, the person's head office.