Financial Services and Markets Act 2023 (c. 29)

SCHEDULES

SCHEDULE 11 U.K. Central counterparties

PART 8 U.K. General

Valid from 31/12/2023

Information U.K.

148 (1) The Bank may disclose information that it thinks relevant to the financial stability of—

(a) individual CCPs, or

(b) one or more aspects of the UK financial system.

(2) Information about the business or other affairs of a specified or identifiable person may be disclosed under sub-paragraph (1) only to—

(a) the Treasury;

(b) the FCA;

(c) the scheme manager of the Financial Services Compensation Scheme (established under Part 15 of FSMA 2000);

(d) the Payment Systems Regulator (established under section 40 of the Financial Services (Banking Reform) Act 2013);

(e) an authority in a country or territory outside the United Kingdom which exercises functions similar to those of the Treasury, the Bank, the PRA or the FCA in relation to financial stability.

(3) Except as provided by sub-paragraph (4), the disclosure of information under this paragraph does not breach—

(a) any obligation of confidence owed by the person making the disclosure, or

(b) any other restriction on the disclosure of information (however imposed).

(4) This paragraph does not authorise a disclosure of information if the disclosure would contravene the data protection legislation (but in determining whether a disclosure would do so, take into account the duties imposed by this paragraph).

(5) In this paragraph “the data protection legislation” has the same meaning as in the Data Protection Act 2018 (see section 3 of that Act).

Commencement Information

I1 Sch. 11 para. 148 not in force at Royal Assent, see s. 86(3)

Valid from 31/12/2023

Restrictions on disclosure of confidential information U.K.

149 (1) Sections 348, 349, 352 and 353 of FSMA 2000 (disclosure of information) apply for the purposes of this Schedule with the following modifications.

(2) Section 348 of that Act has effect as if —

(a) in subsection (2)(b), after “Act” there were inserted “or of the Bank of England under Schedule 11 to the Financial Services and Markets Act 2023”,

(b) in subsection (3)(a), at the end there were inserted “or the Financial Services and Markets Act 2023”,

(c) in subsection (5)—

(i) after paragraph (c) there were inserted—

“(ca) a person appointed to make a report under paragraph 120 of Schedule 11 to the Financial Services and Markets Act 2023 (reports by skilled persons);

(cb) a person appointed to act as a temporary manager under paragraph 6 of Schedule 11 to the Financial Services and Markets Act 2023,”

(ii) in paragraph (e) for “to (c)” there were substituted “to (cb)”, and

(d) after subsection (6)(b) there were inserted—

“(c) a competent person appointed by the Bank of England under Part 6 of Schedule 11 to the Financial Services and Markets Act 2023.”

(3) Section 349 of that Act has effect as if, in subsection (2)(c), for “or the PRA” there were substituted “the PRA or the Bank of England”.

(4) Section 353 of that Act has effect as if in subsection (1)—

(a) in paragraph (a)—

(i) after “under this Act” there were inserted “or the Financial Services and Markets Act 2023”, and

(ii) for “it” there were substituted “those Acts”;

(b) in paragraph (b) after “to the” there were inserted “Bank of England, the”.

Commencement Information

I2 Sch. 11 para. 149 not in force at Royal Assent, see s. 86(3)

Valid from 31/12/2023

Remedies on judicial review U.K.

150 (1) Where an application is made for judicial review of a decision of the Bank to exercise the stabilisation powers in relation to a CCP or CCP group company (“relevant proceedings”)—

(a) a ruling by the court that the decision is unlawful does not affect a relevant transfer or a relevant provision in a stabilisation instrument made by the Bank pursuant to that decision, and

(b) the court may not quash any provision in a stabilisation instrument made by the Bank if that provision makes a relevant transfer or a relevant provision.

(2) For the purposes of sub-paragraph (1)—

(a) “stabilisation instrument” means—

(i) a share transfer instrument,

(ii) a property transfer instrument, or

(iii) a resolution instrument;

(b) a “relevant provision” in a stabilisation instrument means—

(i) in relation to a tear-up instrument, provision under paragraph 31(2),

(ii) in relation to a cash call instrument, provision under paragraph 32(2),

(iii) in relation to a variation instrument, provision under paragraph 33(2),

(iv) in relation to a write-down instrument, provision under paragraph 34(2) or 35, and

(v) in relation to an instrument of control, provision under paragraph 38(2);

(c) a transfer is a “relevant transfer” if it transfers to any person—

(i) property, rights or liabilities of the CCP or CCP group company, or of a bridge central counterparty, or

(ii) securities issued by the CCP, or CCP group company, or of a bridge central counterparty.

(3) Sub-paragraph (1) does not affect the power of the court, subject to section 244 of the Banking Act 2009 (immunity), to award damages as a remedy in relevant proceedings.

Commencement Information

I3 Sch. 11 para. 150 not in force at Royal Assent, see s. 86(3)

Valid from 31/12/2023

Giving of notices, documents etc under this Schedule U.K.

151 Regulations under section 414 of FSMA 2000 (service of notices), and subsection (4) of that section, apply in relation to any notice, direction or document of any kind required to be given under any provision of this Schedule (however that requirement is expressed) as if those provisions were provisions of that Act.

Commencement Information

I4 Sch. 11 para. 151 not in force at Royal Assent, see s. 86(3)

Valid from 31/12/2023

“Financial assistance” U.K.

152 (1) In this Schedule “financial assistance” includes giving guarantees or indemnities and any other kind of financial assistance (actual or contingent).

(2) The Treasury may by regulations provide that a specified activity or transaction, or class of activity or transaction, is to be or not to be treated as financial assistance for a specified purpose of this Schedule; and sub-paragraph (1) is subject to this sub-paragraph.

(3) Regulations under this paragraph are subject to the negative procedure.

Commencement Information

I5 Sch. 11 para. 152 not in force at Royal Assent, see s. 86(3)

Valid from 31/12/2023

Modifications to the law U.K.

153 (1) The Treasury may by regulations modify the law for the purpose of enabling the powers under this Schedule to be used effectively, having regard to the special resolution objectives.

(2) Regulations may be made—

(a) for the general purpose of the exercise of powers under this Schedule,

(b) to facilitate a particular proposed or possible use of a power, or

(c) in connection with a particular exercise of a power.

(3) Regulations under sub-paragraph (2)(c) may make provision which has retrospective effect in so far as the Treasury consider it necessary or desirable for giving effect to the particular exercise of a power under this Schedule in connection with which the regulations are made (but in relying on this sub-paragraph the Treasury must have regard to the fact that it is in the public interest to avoid retrospective legislation).

(4) In sub-paragraph (1) “modify the law” means—

(a) disapply or modify the effect of a provision of an enactment (other than a provision made by or under this Act),

(b) disapply or modify the effect of a rule of law not set out in legislation, or

(c) amend any provision of an instrument or regulations made in the exercise of a stabilisation power.

(5) Specific powers under this Schedule are without prejudice to the generality of this paragraph.

(6) Regulations under this paragraph are—

(a) subject to the affirmative procedure, or

(b) if the Treasury consider it necessary for the regulations to come into force without delay, subject to the made affirmative procedure.

(7) Where regulations under this paragraph are subject to the made affirmative procedure the statutory instrument containing the regulations must be laid before Parliament after being made.

(8) Regulations contained in a statutory instrument laid before Parliament under sub-paragraph (7) cease to have effect at the end of the period of 28 days beginning with the day on which the instrument is made unless, during that period, the instrument is approved by a resolution of each House of Parliament.

(9) In calculating the period of 28 days, no account is to be taken of any whole days that fall within a period during which—

(a) Parliament is dissolved or prorogued, or

(b) either House of Parliament is adjourned for more than four days.

(10) If regulations cease to have effect as a result of sub-paragraph (8), that does not—

(a) affect the validity of anything previously done under the regulations, or

(b) prevent the making of new regulations.

Commencement Information

I6 Sch. 11 para. 153 not in force at Royal Assent, see s. 86(3)

Interpretation U.K.

154 In this Schedule—

• “Bank” means the Bank of England;

• “bridge central counterparty” has the meaning given by paragraph 29(1);

• “cash call instrument” has the meaning given by paragraph 32;

• “CCP” means a recognised central counterparty (see paragraph 155);

• “CCP group company” has the meaning given by paragraph 156;

• “central counterparty” means a body corporate or an 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;

• “clearing member” has the meaning given in Article 2 of EMIR and, unless otherwise provided, includes an interoperable CCP;

• “clearing” and “clearing services”, in relation to a CCP, have the meaning given by section 313 of FSMA 2000;

• “critical clearing services” means clearing services the withdrawal of which the Bank considers may threaten the stability of the UK financial system;

• “director” includes, in relation to a CCP which has no board of directors, a member of the equivalent management body responsible for the management of the CCP concerned;

• “EMIR” means Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories;

• “employee” includes the holder of an office;

• “extraordinary public financial support” means financial assistance that is provided by the Treasury or the Bank in order to preserve or restore the viability, liquidity or solvency of a CCP, a CCP group company or a group which includes a CCP, other than—

  (a)

  ordinary market assistance offered by the Bank on its usual terms, or

  (b)

  a liquidity facility which is provided—

  (i)

  to a CCP that is facing temporary liquidity problems but is solvent, and

  (ii)

  by the Bank on its own initiative and on its own terms;

• “financial assistance” has the meaning given by paragraph 152;

• “group” has the meaning given by section 474 of the Companies Act 2006;

• “instrument of control” has the meaning given by paragraph 38;

• “interoperable CCP” means a CCP with which an interoperability arrangement (within the meaning of Article 2 of EMIR) has been established;

• “parent” means a parent undertaking within the meaning given by section 1162 of the Companies Act 2006;

• “partial property transfer” has the meaning given by paragraph 75(1);

• “PRA-authorised person” has the meaning given by section 2B(5) of FSMA 2000;

• “recognition requirements” means the requirements resulting from section 286 of FSMA 2000;

• “resolution instrument” has the meaning given by paragraph 79;

• “securities” has the meaning given by paragraph 40;

• “service contract” has the meaning given by section 227 of the Companies Act 2006;

• “senior manager”, in relation to a CCP, means a person who—

  (a)

  exercises executive functions within that CCP, and

  (b)

  is responsible, and directly accountable to the directors, for the day to day management of that CCP;

• “special resolution objectives” means the objectives set out in paragraph 15;

• “stabilisation instrument” has the meaning given by paragraph 84;

• “stabilisation options” means the options described in paragraph 1(3);

• “stabilisation powers” means the powers described in paragraph 1(4);

• “subsidiary” means a subsidiary undertaking within the meaning given by section 1162 of the Companies Act 2006.

• “tear-up instrument” has the meaning given by paragraph 31;

• “third-country instrument” has the meaning given by paragraph 145;

• “third-country resolution action” has the meaning given by paragraph 145;

• “transfer date”—

  (a)

  in relation to a share transfer instrument, means the date on or at which a share transfer instrument (or the relevant part of it) takes effect, or

  (b)

  in relation to a property transfer instrument, means the date on or at which a property transfer instrument (or the relevant part of it) takes effect;

• “UK financial system” has the meaning given by section 1I of FSMA 2000;

• “variation instrument” has the meaning given by paragraph 33;

• “write-down instrument” has the meaning given by paragraph 34.

Commencement Information

I7 Sch. 11 para. 154 not in force at Royal Assent, see s. 86(3)

I8 Sch. 11 para. 154 in force at 29.8.2023 by S.I. 2023/779, reg. 4(ddd)(xiii)

Valid from 31/12/2023

Recognised central counterparty U.K.

155 (1) In this Schedule “recognised central counterparty” has the meaning given by section 285 of FSMA 2000.

(2) But “recognised central counterparty” does not include a recognised clearing house (within the meaning of section 285 of FSMA 2000) which is also—

(a) a bank,

(b) a building society (within the meaning of section 119 of the Building Societies Act 1986),

(c) a credit union (within the meaning of section 31 of the Credit Unions Act 1979 or Article 2(2) of the Credit Unions (Northern Ireland) Order 1985), or

(d) an investment firm.

(3) Where a stabilisation power is exercised in respect of a recognised central counterparty, the body does not cease to be a recognised central counterparty for the purposes of this Schedule if the recognition order under Part 18 of FSMA 2000 is later revoked.

Commencement Information

I9 Sch. 11 para. 155 not in force at Royal Assent, see s. 86(3)

Valid from 31/12/2023

Interpretation: “CCP group company”, etc U.K.

156 (1) In this Schedule “CCP group company” means an undertaking—

(a) which is (or, but for the exercise of a stabilisation power, would be) in the same group as a CCP, and

(b) in respect of which any conditions specified in regulations made by the Treasury are met.

(2) Regulations under this paragraph may require the Bank to consult specified persons before determining whether the conditions are met.

(3) Regulations under this paragraph are subject to the affirmative procedure.

(4) Undertakings are in the same group for the purposes of paragraph 117 and this paragraph if they are group undertakings in respect of each other.

(5) Expressions defined in the Companies Act 2006 have the same meaning in paragraph 117 and this paragraph as in that Act.

Commencement Information

I10 Sch. 11 para. 156 not in force at Royal Assent, see s. 86(3)