The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2001

Made1st November 2001

Laid before Parliament1st November 2001

Coming into forcein accordance with article 1

The Treasury, in exercise of the powers conferred on them by sections 22(1) and (5) and 428(3) of, and paragraph 25 of Schedule 2 to, the Financial Services and Markets Act 20001, hereby make the following Order:

Citation and commencement1

This Order may be cited as the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2001, and comes into force—

a

other than for the purposes of article 8, on 1st December 2001;

b

for the purposes of article 8, on 1st September 2002.

Amendment of the Financial Services and Markets Act 2000 (Regulated Activities) Order 20012

The Financial Services and Markets Act 2000 (Regulated Activities) Order 20012 (“the principal Order”) is amended as provided in the following provisions of this Order.

Accepting deposits: sums received by persons authorised to deal etc.3

In article 8 of the principal Order, for “carrying on that activity” substitute “carrying on any such activity (or any activity which would be such an activity but for any exclusion made by this Part)”.

Dealing as principal: issue by a company of its own shares etc.4

In article 18(2)(c) of the principal Order, for “that company” substitute “the person concerned”.

Arranging deals in investments: arranging transactions in connection with lending on the security of insurance policies5

For sub-paragraph (a) of paragraph (1) of article 30 of the principal Order substitute—

a
a relevant authorised person or a person acting on his behalf will introduce to the money-lender persons with whom the relevant authorised person has entered, or proposes to enter, into a relevant transaction, or will advise such persons to approach the money-lender, with a view to the money-lender lending money on the security of any contract effected pursuant to a relevant transaction;

Managing investments: attorneys6

In article 38(b) of the principal Order—

a

omit “or” after sub-paragraph (i); and

b

after sub-paragraph (ii) insert:

; or
iii
an overseas person.

Causing dematerialised instructions to be sent7

In article 45(2) of the principal Order, after “sent” the first time it occurs insert “on behalf of another person”.

Regulated mortgage contracts8

In article 61 of the principal Order—

a

in paragraph (2), after “entered into” insert “by way of business”;

b

for paragraph (3)(a) substitute—

a
a contract is a “regulated mortgage contract” if, at the time it is entered into, the following conditions are met—
i
the contract is one under which a person (“the lender”) provides credit to an individual or to trustees (“the borrower”);
ii
the contract provides for the obligation of the borrower to repay to be secured by a first legal mortgage on land (other than timeshare accommodation) in the United Kingdom;
iii
at least 40% of that land is used, or is intended to be used, as or in connection with a dwelling by the borrower or (in the case of credit provided to trustees) by an individual who is a beneficiary of the trust, or by a related person;

c

in paragraph (4), for “paragraph (3)(a)(ii)” substitute “paragraph 3(a)”.

Activities carried on in the course of a profession or non-investment business9

In article 67(1)(a) of the principal Order, for “regulated activities” substitute “the carrying on of regulated activities in the United Kingdom”.

Activities carried on in connection with the sale of goods or supply of services10

In article 68(3) of the principal Order, for “as agent by a supplier with a customer” substitute “by a supplier as agent for a customer”.

Anne McGuireJohn HeppellTwo of the Lords Commissioners of Her Majesty’s Treasury1st November 2001

(This note is not part of the Order)

This Order amends the Financial Services and Markets Act 2000 (Regulated Activities Order) 2001 (S.I.2001/544) (“the principal Order”).

Article 3 amends article 8 of the principal Order, which provides an exclusion from the regulated activity of accepting deposits for sums received by persons who are authorised (or exempt) in relation to certain investment activities. The amendment widens the exclusion so that it applies to sums received in the course of, or for the purposes of, not only certain regulated activities but also activities which would be such activities but for exclusions in the principal Order.

Article 4 makes a minor amendment to article 18 of the principal Order (exclusion from the activity of dealing as principal, for companies issuing their own shares and share warrants and persons issuing their own debentures and debenture warrants).

Article 5 amends article 30 of the principal Order, which provides an exclusion from the regulated activity of arranging deals for certain arrangements made by money-lenders in connection with lending on the security of insurance policies. The amendment widens the exclusion so that it applies to arrangements involving introductions of existing (as well as new) customers of the money-lender, and arrangements involving the giving of advice to persons to approach the money-lender.

Article 6 extends the exclusion in article 38 of the principal Order (management of investments by attorneys) to cases where relevant decisions are taken on behalf of the attorney by an overseas person.

Article 7 clarifies article 45(2) of the principal Order (causing dematerialised instructions to be sent).

Article 8 clarifies the definitions of “regulated mortgage contract” in article 61 of the principal Order, and the scope of the regulated activity of “administering” such contracts.

Article 9 amends article 67 of the principal Order, which provides exclusions for certain activities carried on in the course of a profession or non-investment business. The amendment provides that the exclusions apply where the profession or business does not consist of carrying on regulated activities in the United Kingdom.

Article 10 makes a minor clarification to article 68(3) of the principal Order (exclusion for certain activities carried on in connection with the sale of goods or supply of services).