SCHEDULE

PART IRecognition requirements for investment exchanges

Safeguards for investors

4.

(1)

The exchange must ensure that business conducted by means of its facilities is conducted in an orderly manner and so as to afford proper protection to investors.

(2)

Without prejudice to the generality of sub-paragraph (1), the exchange must ensure that—

(a)

access to the exchange’s facilities is subject to criteria designed to protect the orderly functioning of the market and the interests of investors F1and is in accordance with paragraph 7B;

F2(aa)

it has transparent F3and non-discretionary rules and procedures—

(i)

to provide for fair and orderly trading, and

(ii)

to establish objective criteria for the efficient execution of orders;

F4(b)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)

appropriate arrangements are made for relevant information to be made available (whether by the exchange or, where appropriate, by issuers of the investments) to persons engaged in dealing in investments on the exchange;

(d)

satisfactory arrangements F5, which comply with paragraph 7D, are made for securing the timely discharge (whether by performance, compromise or otherwise) of the rights and liabilities of the parties to transactions effected on the exchange (being rights and liabilities in relation to those transactions);

(e)

satisfactory arrangements are made for recording transactions effected on the exchange, and transactions (whether or not effected on the exchange) which are cleared or to be cleared by means of its facilities;

F6(ea)

appropriate arrangements are made to—

(i)

identify conflicts between the interests of the exchange, its owners and operators and the interests of the persons who make use of its facilities or the interests of the F7financial markets F7trading venues operated by it, and

(ii)

manage such conflicts so as to avoid adverse consequences for the operation of the F7financial markets F7trading venues operated by the exchange and for the persons who make use of its facilities;

(f)

appropriate measures F8(including the monitoring of transactions effected on the exchange) are adopted to reduce the extent to which the exchange’s facilities can be used for a purpose connected with market abuse or financial crime, and to facilitate their detection and monitor their incidence; F9and

F10(fa)

it immediately reports to the FCA any significant breaches of its rules or disorderly trading conditions or conduct that may indicate behaviour which is prohibited under the market abuse regulation or system disruptions in relation to a financial instrument; and

(g)

where the exchange’s facilities include making provision for the safeguarding and administration of assets belonging to users of those facilities, satisfactory arrangements are made for that purpose.

(3)

In sub-paragraph (2)(c), “relevant information” means information which is relevant in determining the current value of the investments.