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The Financial Conglomerates and Other Financial Groups Regulations 2004

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Point in time view as at 01/01/2014.

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The Financial Conglomerates and Other Financial Groups Regulations 2004, PART 3 is up to date with all changes known to be in force on or before 16 August 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations. Help about Changes to Legislation

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PART 3U.K.Supplementary supervision of third-country financial conglomeratesand third-country groups

Supervision of third-country financial conglomerates and third-country groups—interpretationU.K.

7.—(1) For the purposes of this Part—

[F1“alternative investment fund manager” means—

(a)

any EEA firm falling within paragraph 5(h) of Schedule 3 to the Act; or

(b)

any UK firm whose EEA right derives from the alternative investment fund managers directive]

“asset management company” means—

(a)

any EEA firm falling within paragraph 5(f) of Schedule 3 to the Act M1; or

(b)

any UK firm whose EEA right derives from the UCITS directive;

“credit institution” means—

(a)

any EEA firm falling within paragraph 5(b) of Schedule 3 to the Act; or

(b)

any UK firm whose EEA right derives from [F2capital requirements directive];

“investment firm” means—

(a)

any EEA firm falling within paragraph 5(a) of Schedule 3 to the Act; or

(b)

any UK firm whose EEA right derives from the [F3markets in financial instruments directive];

“third-country competent authority” means the authority of a country or territory which is not an EEA State which is empowered by law or regulation to supervise (whether on an individual or group-wide basis) regulated entities;

“third-country financial conglomerate” means a group—

(a)

which, subject to Article 3 of the conglomerates directive, meets the conditions in Article 2(14) of that directive, and

(b)

in which the parent undertaking has its head office outside the EEA;

“third-country group” means a group of which the parent undertaking has its head office outside the EEA.

(2) For the purposes of this Part a regulated entity is in a third-country group if the parent undertaking of the group in which it is a member has its head office outside the EEA.

Textual Amendments

Marginal Citations

M1Paragraph 5 of Schedule 3 was amended by S.I. 2000/2952, S.I. 2003/1473 and S.I. 2003/2066.

Supervision of third-country financial conglomeratesU.K.

8.—(1) Where [F4a regulator] is, for the purposes of Article 18(1) of the conglomerates directive (parent undertakings outside the Community), verifying whether the regulated entities in a third-country financial conglomerate are subject to supervision, by a third-country competent authority, which is equivalent to that provided for by the provisions of the conglomerates directive, it must, where there is a directive requirement to do so, before completing this verification—

(a)consult the other relevant competent authorities in relation to that third-county financial conglomerate; [F5and]

[F6(b)take into account any applicable guidelines prepared through the Joint Committee of the ESAs in accordance with Articles 16 and 56 of Regulation (EU) No. 1093/2010, of Regulation (EU) No. 1094/2010 and of Regulation (EU) No. 1095/2010.]

(2) Paragraphs (3) and (4) apply if [F4a regulator], for the purposes of Article 18(3) of the conglomerates directive (application of other methods for the purposes of ensuring appropriate supplementary supervision of the regulated entities in a third-country financial conglomerate), exercises its powers to—

(a)vary the Part IV permission of a regulated entity in a third-country financial conglomerate;

(b)disapply from, or apply in a modified form to, such a regulated entity the rules specified in subsection (1) of [F7section 138A] of the Act (modification or waiver of rules) in accordance with that section;

(c)impose conditions under [F8section 187 of the Act (approval with conditions)] on a person who is, or proposes to be, a controller of such a regulated entity; or

(d)give a notice under [F9section 191A (objection by the appropriate regulator) or section 191B (restriction notices) of the Act] to a person who is, or proposes to be, a controller of such a regulated entity.

(3) Where there is a directive requirement to do so, [F10a regulator] must before taking the action specified in paragraph (2)—

(a)where [F11that regulator] is the co-ordinator, consult the relevant competent authorities in relation to that third-country financial conglomerate; or

(b)where [F11that regulator] is not the co-ordinator, obtain the consent of the co-ordinator for that third-country financial conglomerate to take that action.

(4) If [F12a regulator] decides to take that action, it must, where there is a directive requirement to do so, notify—

(a)the competent authority of each regulated entity in that third-country financial conglomerate, and

(b)the Commission,

that it has done so.

Textual Amendments

F6Reg. 8(1)(b) substituted for reg. 8(1)(b)(c) (16.4.2012) by The Financial Services (Omnibus 1 Directive) Regulations 2012 (S.I. 2012/916), regs. 1, 4(4)(b)

Supervision of third-country banking groupsU.K.

9.—(1) Where [F13a regulator] is, for the purposes of [F14Article 127 of the capital requirements directive (assessment of equivalence of third countries’ consolidated supervision)], verifying whether a credit institution in a third-country group is subject to supervision by a third-country competent authority which is equivalent to that governed by the principles laid down in [F15the capital requirements directive and Chapter 2 of Title II of Part 1of the capital requirements regulation], it must, where there is a directive requirement to do so, before completing this verification—

(a)consult any competent authority which supervises a credit institution in that third-country group;

(b)consult [F16the European Banking Committee] for the purposes of obtaining any applicable guidance prepared by that Committee in accordance with [F17the first sub-paragraph of Article 127(2) of the capital requirements directive]; and

(c)take into account any such guidance.

(2) Paragraphs (3) and (4) apply if [F13a regulator] exercises, for the purposes of [F18Article 127(3) of the capital requirements directive], its powers to—

(a)vary the Part IV permission of a credit institution in a third-country group;

(b)disapply from, or apply in modified form to, such a credit institution, the rules specified in subsection (1) of [F19section 138A] of the Act in accordance with that section;

(c)impose conditions under [F20section 187] of the Act on a person who is, or proposes to be, a controller of such a credit institution; or

(d)give a notice under [F21section 191A or 191B] of the Act to a person who is, or proposes to be, a controller of such a credit institution.

(3) Where there is a directive requirement to do so, [F22a regulator] must before exercising its powers to take the action specified in paragraph (2)—

(a)where [F23that regulator] would be responsible for supervising that third-country group for the purposes of [F24Article 111 of the capital requirements directive] (competent authorities responsible for exercising supervision on a consolidated basis) if alternative techniques were not applied, consult the competent authorities which are involved in the supervision of any of the credit institutions in that third-country group; and

(b)where [F23that regulator] would not be so responsible, obtain the consent of the competent authority which would be responsible for supervising that third-country group for the purposes of [F25Article 111 of the capital requirements directive] if alternative techniques were not applied.

(4) If [F26a regulator] decides to take that action, it must, where there is a directive requirement to do so, notify—

(a)any competent authority which supervises a credit institution in that third-country group; and

(b)the Commission,

that it has done so.

(5) Where [F26a regulator] has, for the purposes of Article 30 of the conglomerates directive (asset management companies), included an asset management company in the scope of supervision of a credit institution in a third-country group, each reference in this regulation to a “credit institution” is to be treated as including a reference to that asset management company.

[F27(6) Where a regulator has, for the purposes of Article 30a of the conglomerates directive (alternative investment fund managers), included an alternative investment fund manager in the scope of supervision of a credit institution in a third-country group, each reference in this regulation to a “credit institution” is to be treated as including a reference to that alternative investment fund manager.]

Textual Amendments

[F28Supervision of third-country groups subject to the capital requirements regulation and capital requirement directive]U.K.

10.—[F29(1) Paragraph (2) applies if a regulator is, for the purposes of Article 127 of the capital requirements directive, verifying whether an institution is subject to supervision by a third-country competent authority which is equivalent to that governed by the principles laid down in the capital requirements directive and Chapter 2 of Title II of Part 1 of the capital requirements regulation.]

(2) [F30A regulator] must, where there is a directive requirement to do so, before completing the verification referred to in paragraph (1)—

(a)consult any competent authority which supervises an investment firm or a credit institution (if any) in that third-country group;

(b)consult [F31the European Banking Committee] for the purposes of obtaining any applicable guidance prepared by that Committee in accordance with [F32Article 127(2) of the capital requirements directive]; and

(c)take into account any such guidance.

(3) Paragraphs (4) and (5) apply if [F30a regulator] exercises, for the purposes of [F33Article 127(3) of the capital requirements directive], its powers to—

(a)vary the Part IV permission of an investment firm or credit institution in a third-country group;

(b)disapply from or apply in modified form to, such an investment firm or credit institution the rules specified in subsection (1) of [F34section 138A] of the Act in accordance with that section;

(c)impose conditions under [F35section 187] of the Act on a person who is, or proposes to be, a controller of such an investment firm or credit institution; or

(d)give a notice under [F36section 191A or 191B] of the Act to a person who is, or proposes to be, a controller of such an investment firm or credit institution.

(4) Where there is a directive requirement to do so, [F37a regulator] must, before exercising its powers to take the action specified in paragraph (3)—

(a)where [F38that regulator] would be responsible for supervision of that third-country group for the purposes of [F39Article 111 of the capital requirements directive], if alternative techniques were not applied, consult the competent authorities which are involved in the supervision of any of the investment firms or credit institutions (if any) in that third-country group; and

(b)where [F38that regulator] would not be so responsible, obtain the consent of the competent authority which would be responsible for supervision of that third-country group for the purposes of [F40Article 111 of the capital requirements directive], if alternative techniques were not applied.

(5) If [F41a regulator] decides to take that action, it must, where there is a directive requirement to do so, notify—

(a)any competent authority which supervises an investment firm or a credit institution (if any) in that third-country group; and

(b)the Commission,

that it has done so.

(6) If [F41a regulator] has, for the purposes of Article 30 of the conglomerates directive, included an asset management company in the scope of supervision of—

(a)credit institutions and investment firms in a third-country group; or

(b)investment firms in a third-country group,

each reference in this regulation to an “investment firm” is to be treated as including a reference to that asset management company.

[F42(7) Where a regulator has, for the purposes of Article 30a of the conglomerates directive, included an alternative investment fund manager in the scope of supervision of—

(a)credit institutions and investment firms in a third-country group; or

(b)investment firms in a third-country group,

each reference in this regulation to an “investment firm” is to be treated as including a reference to that alternative investment fund manager.]

Textual Amendments

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