The Uncertificated Securities Regulations 2001

Regulation 13

SCHEDULE 2 U.K. PREVENTION OF RESTRICTIVE PRACTICES

Examination of rules and practices U.K.

1.—(1) The Treasury shall not approve a person as Operator of a relevant system unless they are satisfied that the rules and any guidance of which copies are furnished with the application for approval— U.K.

(a) do not have, and are not intended or likely to have, to any significant extent the effect of restricting, distorting or preventing competition; or

(b) if they have or are intended to have that effect to any significant extent, that the effect is not greater than is necessary for the protection of investors, or for compliance with [F1 Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions].

(2) Subject to subparagraph (5), the powers conferred by subparagraph (3) shall be exercisable by the Treasury if at any time it appears to them that—

(a) any rules made or guidance issued by an Operator;

(b) any practices of an Operator in his capacity as such; or

(c) any practices of a system-user,

have, or are intended or likely to have, to a significant extent the effect of restricting, distorting or preventing competition and that the effect is greater than is necessary for the protection of investors or for compliance with Directive 2000/12/EC of the European Parliament and of the Council.

(3) The powers exercisable under this paragraph are—

(a) to withdraw approval from the Operator;

(b) to direct the Operator to take specified steps for the purpose of securing that the rules, guidance or practices in question do not have the effect mentioned in subparagraph (2); or

(c) to make alterations in the rules of the Operator for that purpose.

(4) The practices referred to in subparagraph (2)(c) are practices in relation to business in respect of which system-users are subject to the rules of the Operator and which are required or contemplated by his rules or guidance or otherwise attributable to his conduct in his capacity as Operator.

(5) The provisions of Schedule 3 shall apply as regards the procedure to be followed before—

(a) refusing to approve a person as Operator of a relevant system pursuant to subparagraph (1); or

(b) exercising any of the powers conferred by subparagraph (3).

Textual Amendments

F1 Words in Sch. 2 para. 1(1)(b) substituted (1.1.2007) by The Capital Requirements Regulations 2006 (S.I. 2006/3221), reg. 1(1), Sch. 6 para. 12

Commencement Information

I1 Sch. 2 para. 1 in force at 26.11.2001, see reg. 1

Modification of paragraph 1 where delegation order is made U.K.

2.—(1) This paragraph applies instead of paragraph 1 where the function of approving a person as Operator has been delegated to the designated agency by virtue of regulation 11. U.K.

(2) The designated agency—

(a) shall send to the Treasury a copy of the rules and any guidance copies of which accompany the application for approval together with any other information supplied with or in connection with the application; and

(b) shall not grant the approval without the leave of the Treasury,

and the Treasury shall not give leave in any case in which they would (apart from the delegation of functions to the designated agency) have been precluded by paragraph 1(1) from granting approval.

(3) The designated agency shall send to the Treasury a copy of any notice received by it from an Operator under regulation 10(5).

(4) If at any time it appears to the Treasury that there are circumstances such that (apart from the delegation of functions to the designated agency) they would have been able to exercise any of the powers conferred by paragraph 1(3) they may, notwithstanding the delegation of functions to the designated agency but subject to paragraph 1(5)—

(a) themselves exercise the power conferred by paragraph 1(3)(a); or

(b) direct the designated agency to exercise the power conferred by paragraph 1(3)(b) or (c) in such manner as they may specify.

(5) The provisions of Schedule 3 shall apply as regards the procedure to be followed before the Treasury exercise their power to refuse leave under subparagraph (2), or their power to give a direction under subparagraph (4), in respect of an Operator.

Commencement Information

I2 Sch. 2 para. 2 in force at 26.11.2001, see reg. 1

Reports by the [F2 Office of Fair Trading] U.K.

Textual Amendments

F2 Words in Sch. 2 para. 3 cross-heading substituted (20.6.2003) by The Enterprise Act 2002 (Consequential and Supplemental Provisions) Order 2003 (S.I. 2003/1398), art. 1, Sch. para. 43(2)(a)(vi)

3.—(1) The Treasury shall before deciding— U.K.

(a) whether to refuse to approve a person as Operator of a relevant system pursuant to paragraph 1(1); or

(b) whether to refuse leave for the granting of an approval pursuant to paragraph 2(2),

send to the [F3 Office of Fair Trading (in this Schedule referred to as “the OFT")] a copy of the rules and of any guidance which the Treasury are required to consider in making that decision together with such other information as the Treasury consider will assist in discharging [F3 its] functions under subparagraph (2).

(2) The [F4 OFT] shall report to the Treasury whether, in [F5 its] opinion, the rules and guidance copies of which are sent to [F6 it] under subparagraph (1) have, or are intended or likely to have, to any significant extent the effect of restricting, distorting or preventing competition and, if so, what that effect is likely to be; and in making any decision as is mentioned in subparagraph (1) the Treasury shall have regard to the [F4 OFT's] report.

(3) The Treasury shall send to the [F4 OFT] copies of any notice received by them under regulation 10(5) or paragraph 2(3) together with such other information as the Treasury consider will assist the [F4 OFT] in discharging [F5 its] functions under subparagraphs (4) and (5).

(4) The [F4 OFT] shall keep under review—

(a) the rules, guidance and practices mentioned in paragraph 1(2); and

(b) the matters specified in the notices of which copies are sent to [F6 it] under subparagraph (3),

and if at any time [F7 it] is of the opinion that any such rules or guidance taken together with any such matters, have, or are intended or likely to have, to any significant extent the effect mentioned in subparagraph (2), [F7 it] shall report [F5 its] opinion to the Treasury stating what in [F5 its] opinion that effect is or is likely to be.

(5) The [F4 OFT] may report to the Treasury [F5 its] opinion that any such matter as is mentioned in subparagraph (4)(b) does not in [F5 its] opinion have, and is not intended or likely to have, to any significant extent the effect mentioned in subparagraph (2).

(6) The [F4 OFT] may from time to time consider whether any such practices as are mentioned in paragraph 1(2) have, or are intended or likely to have, to any significant extent the effect mentioned in subparagraph (2) and, if so, what that effect is or is likely to be; and if [F7 it] is of that opinion [F7 it] shall make a report to the Treasury stating [F5 its] opinion and what the effect is or is likely to be.

(7) The Treasury shall not exercise their powers under paragraph 1(3) or 2(4) except after receiving a report from the [F4 OFT] under subparagraph (4) or (6).

(8) The [F4 OFT] may, if [F7 it] thinks fit, publish any report made by [F8 it] under this paragraph but shall exclude from a published report, so far as practicable, any matter which relates to the affairs of a particular person (other than the person seeking approval as an Operator) the publication of which would or might in [F5 its] opinion seriously and prejudicially affect the interests of that person.

Textual Amendments

F3 Words in Sch. 2 para. 3(1) substituted (20.6.2003) by The Enterprise Act 2002 (Consequential and Supplemental Provisions) Order 2003 (S.I. 2003/1398), art. 1, Sch. para. 43(2)(a)(i)

F4 Word in Sch. 2 para. 3(2)-(8) substituted (20.6.2003) by The Enterprise Act 2002 (Consequential and Supplemental Provisions) Order 2003 (S.I. 2003/1398), art. 1, Sch. para. 43(2)(a)(ii)

F5 Word in Sch. 2 para. 3(2)-(6)(8) substituted (20.6.2003) by The Enterprise Act 2002 (Consequential and Supplemental Provisions) Order 2003 (S.I. 2003/1398), art. 1, Sch. para. 43(2)(a)(iii)

F6 Word in Sch. 2 para. 3(2)(4)(b) substituted (20.6.2003) by The Enterprise Act 2002 (Consequential and Supplemental Provisions) Order 2003 (S.I. 2003/1398), art. 1, Sch. para. 43(2)(a)(iv)

F7 Word in Sch. 2 para. 3(4)(6)(8) substituted (20.6.2003) by The Enterprise Act 2002 (Consequential and Supplemental Provisions) Order 2003 (S.I. 2003/1398), art. 1, Sch. para. 43(2)(a)(v)

F8 Word in Sch. 2 para. 3(8) substituted (29.12.2003) by The Enterprise Act 2002 and Media Mergers (Consequential Amendments) Order 2003 (S.I. 2003/3180), reg. 1(1), Sch. para. 9

Commencement Information

I3 Sch. 2 para. 3 in force at 26.11.2001, see reg. 1

Investigations by the [F9 Office of Fair Trading] U.K.

Textual Amendments

F9 Sch. 2 paras. 4A, 4B inserted (20.6.2003) by The Enterprise Act 2002 (Consequential and Supplemental Provisions) Order 2003 (S.I. 2003/1398), art. 1, Sch. para. 43(2)(c)

4.—(1) For the purpose of investigating any matter with a view to [F10 its] consideration under paragraph 3 the [F11 OFT] may by a notice in writing— U.K.

(a) require any person to produce, at any time and place specified in the notice, to the [F11 OFT] or to any person appointed by [F12 it] for the purpose, any documents which are specified or described in the notice and which are documents in [F10 its] custody or under [F10 its] control and relating to any matter relevant to the investigation; or

(b) require any person carrying on business to furnish to the [F11 OFT] such information as may be specified or described in the notice, and specify the time within which, and the manner and form in which, any such information is to be furnished.

(2) A person shall not under this paragraph be required to produce any document or disclose any information which he would be entitled to refuse to produce or disclose on grounds of legal professional privilege in proceedings in the High Court or on grounds of confidentiality as between client and professional legal adviser in proceedings in the Court of Session.

F13 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F10 Word in Sch. 2 para. 4(1) substituted (20.6.2003) by The Enterprise Act 2002 (Consequential and Supplemental Provisions) Order 2003 (S.I. 2003/1398), art. 1, Sch. para. 43(2)(b)(ii)

F11 Word in Sch. 2 para. 4(1) substituted (20.6.2003) by The Enterprise Act 2002 (Consequential and Supplemental Provisions) Order 2003 (S.I. 2003/1398), art. 1, Sch. para. 43(2)(b)(i)

F12 Word in Sch. 2 para. 4(1)(a) substituted (20.6.2003) by The Enterprise Act 2002 (Consequential and Supplemental Provisions) Order 2003 (S.I. 2003/1398), art. 1, Sch. para. 43(2)(b)(iii)

F13 Sch. 2 para. 4(3) revoked (20.6.2003) by The Enterprise Act 2002 (Consequential and Supplemental Provisions) Order 2003 (S.I. 2003/1398), art. 1, Sch. para. 43(2)(b)(iv)

Commencement Information

I4 Sch. 2 para. 4 in force at 26.11.2001, see reg. 1

[F14 Enforcement U.K.

Textual Amendments

F14 Sch. 2 paras. 4A, 4B inserted (20.6.2003) by The Enterprise Act 2002 (Consequential and Supplemental Provisions) Order 2003 (S.I. 2003/1398), art. 1, Sch. para. 43(2)(c)

4A.— (1) The court may, on an application by the OFT, enquire into whether any person (“the defaulter”) has refused or otherwise failed, without reasonable excuse, to comply with a notice under paragraph 4(1). U.K.

(2) An application under sub-paragraph (1) shall include details of the possible failure which the OFT considers has occurred.

(3) In enquiring into a case under sub-paragraph (1), the court shall hear any witness who may be produced against or on behalf of the defaulter and any statement which may be offered in defence.

(4) Sub-paragraphs (5) and (6) apply where the court is satisfied, after hearing any witnesses and statements as mentioned in sub-paragraph (3), that the defaulter has refused or otherwise failed, without reasonable excuse, to comply with a notice under paragraph 4(1).

(5) The court may punish the defaulter as it would have been able to punish him had he been guilty of contempt of court.

(6) Where the defaulter is a body corporate or is a partnership constituted under the law of Scotland, the court may punish any director, officer or (as the case may be) partner of the defaulter as it would have been able to punish that director, officer or partner had he been guilty of contempt of court.

(7) In this paragraph “the court”—

(a) in relation to England and Wales or Northern Ireland, means the High Court, and

(b) in relation to Scotland, means the Court of Session.]

[F14 4B.— (1) A person commits an offence if he intentionally alters, suppresses or destroys a document which he has been required to produce by a notice under paragraph 4(1). U.K.

(2) A person who commits an offence under sub-paragraph (1) shall be liable—

(a) on summary conviction, to a fine not exceeding the statutory maximum;

(b) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both.]

U.K.

Exemptions from the Fair Trading Act 1973 U.K.

F15 5.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.K.

Textual Amendments

F15 Sch. 2 para. 5 revoked (20.6.2003) by The Enterprise Act 2002 (Consequential and Supplemental Provisions) Order 2003 (S.I. 2003/1398), art. 1, Sch. para. 43(2)(d)

Exemptions from the Competition Act 1998 U.K.

6.—(1) The Chapter I prohibition does not apply to — U.K.

(a) an agreement for the constitution of an Operator; or

(b) an agreement for the constitution of a person who has applied for approval as an Operator in accordance with these Regulations and whose application has not yet been determined,

to the extent to which the agreement relates to rules made or guidance issued by the Operator.

(2) The Chapter I prohibition does not apply to a decision made by an Operator to the extent to which the decision relates to any of the rules made or guidance issued by that Operator or to the Operator’s specified practices.

(3) The Chapter I prohibition does not apply to the specified practices of—

(a) an Operator; or

(b) a person who is subject to the rules of an Operator.

(4) The Chapter I prohibition does not apply to any agreement the parties to which consist of or include—

(a) an Operator; or

(b) a person who is subject to the rules of an Operator,

to the extent to which the agreement consists of provisions the inclusion of which is required or contemplated by these Regulations or by any rules made or guidance issued by the Operator or by the Operator’s specified practices.

(5) In this paragraph—

“the Chapter I prohibition” means the prohibition imposed by section 2(1) of the Competition Act 1998(1); and

“specified practices” means—

(a)

any practices of an Operator in its capacity as such; or

(b)

any practices of persons who are members of, or otherwise subject to rules made by, an Operator and which are practices—

(i)

in relation to business in respect of which the persons in question are subject to the rules of the Operator where those practices are required or contemplated by the rules of the Operator or by guidance issued by the Operator; or

(ii)

otherwise attributable to the conduct of the Operator as such;

and expressions used in this paragraph which are also used in Part I of the Competition Act 1998 are to be interpreted in the same way as for the purposes of that Part of that Act.

Commencement Information

I5 Sch. 2 para. 6 in force at 26.11.2001, see reg. 1

Supplementary provisions U.K.

7.—(1) Any direction given under this Schedule shall, on the application of the person by whom it was given, be enforceable by injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988. U.K.

(2) The fact that any rules made by an Operator have been altered by or pursuant to a direction given by the Treasury under this Schedule shall not preclude their subsequent alteration or revocation by the Operator.

(3) In determining under this Schedule whether any guidance has, or is likely to have, any particular effect the Treasury and the Director may assume that the persons to whom it is addressed will act in conformity with it.

Commencement Information

I6 Sch. 2 para. 7 in force at 26.11.2001, see reg. 1

(1)

1998 c. 41.