The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) Regulations 2013

PART 5 U.K. Designation of competent authorities and powers of FCA

Designation of competent authorities U.K.

6.—(1) The Bank is responsible for all functions of the competent authority for central counterparties imposed by the EMIR regulation, including—

(a) functions under Title 2 (clearing, reporting and risk mitigation of OTC derivatives);

(b) functions under Title 3 (authorisation and supervision of central counterparties) and in particular [F1 Articles 22 and 25];

(c) functions under Title 4 (requirements for central counterparties);

(d) functions under Title 5 (interoperability arrangements);

F2 (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(g) supervision of the obligations imposed on central counterparties by that Regulation.

F4 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) The FCA is responsible for all functions of the competent authority for financial counterparties, non-financial counterparties and trading venues imposed by the EMIR regulation, including—

(a) except where paragraph (8)(a) applies, supervision of the obligations imposed on financial counterparties, non-financial counterparties and trading venues by Title 2;

(b) considering notifications under Article 4(2) (clearing obligation: exemption in relation to intragroup transactions);

(c) acting as competent authority for the purposes of Article 10(5) (non-financial counterparties: requirements in relation to OTC derivative contracts);

(d) considering notifications and determining applications under Article 11(5) to (10) (risk mitigation techniques for OTC derivative contracts not cleared by a central counterparty: exemptions) and the functions referred to in Article 11(11);

F5 (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F5 (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F5 (g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) The FCA is responsible for the supervision of clearing members of a central counterparty for the purposes of the EMIR regulation, including functions under—

F6 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F7 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) Article 48(3) (default procedures: supervision of defaulting clearing member); and

(d) Article 52(1) (risk management).

(5) The FCA is responsible for the supervision of the obligations imposed by the EMIR regulation on entities referred to in Article 4(1)(a)(v) of the EMIR regulation (third country entities).

(6) The FCA is responsible for all functions of the competent authority in relation to trade repositories imposed by the EMIR regulation, including functions under—

(a) Title 6 (registration and supervision of trade repositories) F8 ...; [F9 and]

(b) Title 7 (requirements for trade repositories); F10 ...

F10 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) The FCA is the competent authority for the purposes of Article 89(2) of the EMIR regulation (transitional provisions in relation to pension scheme arrangements).

(8) The PRA is the competent authority responsible for—

(a) supervision of financial counterparties authorised by the PRA in relation to the obligations imposed by Article 11(3) and (4) of the EMIR regulation; and

(b) supervision of any clearing members of a central counterparty authorised by the PRA in relation to the following functions under the EMIR regulation—

F11 (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F12 (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(iii) Article 48(3); and

(iv) Article 52(1).

(9) In this regulation, “supervision” includes monitoring, investigation and enforcement.

Textual Amendments

F1 Words in reg. 6(1)(b) substituted (31.12.2020) by The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2019 (S.I. 2019/335), regs. 1(1), 4(a)(i) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F2 Reg. 6(1)(e) omitted (31.12.2020) by virtue of The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2019 (S.I. 2019/335), regs. 1(1), 4(a)(ii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F3 Reg. 6(1)(f) omitted (31.12.2020) by virtue of The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2019 (S.I. 2019/335), regs. 1(1), 4(a)(ii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F4 Reg. 6(2) omitted (31.12.2020) by virtue of The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2019 (S.I. 2019/335), regs. 1(1), 4(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F5 Reg. 6(3)(e)-(g) omitted (31.12.2020) by virtue of The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2019 (S.I. 2019/335), regs. 1(1), 4(c) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F6 Reg. 6(4)(a) omitted (31.12.2020) by virtue of The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2019 (S.I. 2019/335), regs. 1(1), 4(d) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F7 Reg. 6(4)(b) omitted (31.12.2020) by virtue of The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2019 (S.I. 2019/335), regs. 1(1), 4(d) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F8 Words in reg. 6(6)(a) omitted (31.12.2020) by virtue of The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2019 (S.I. 2019/335), regs. 1(1), 4(e)(i) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F9 Word in reg. 6(6)(a) inserted (31.12.2020) by The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2019 (S.I. 2019/335), regs. 1(1), 4(e)(ii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F10 Reg. 6(6)(c) and word omitted (31.12.2020) by virtue of The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2019 (S.I. 2019/335), regs. 1(1), 4(e)(iii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F11 Reg. 6(8)(b)(i) omitted (31.12.2020) by virtue of The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2019 (S.I. 2019/335), regs. 1(1), 4(f) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F12 Reg. 6(8)(b)(ii) omitted (31.12.2020) by virtue of The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2019 (S.I. 2019/335), regs. 1(1), 4(f) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Commencement Information

I1 Reg. 6 in force at 1.4.2013 in accordance with reg. 1(2)

Power of the FCA to require information U.K.

7.—(1) In this regulation a “non-authorised counterparty” is—

(a) a financial counterparty which is not an authorised person; F13 ...

(b) a non-financial counterparty[F14 ; or

(c) an entity referred to in Article 4(1)(a)(v) of the EMIR regulation which is not an authorised person.]

(2) Where—

(a) a non-authorised counterparty is subject to an obligation under the EMIR regulation, or

(b) it is necessary for the FCA to determine whether a person is subject to an obligation under the EMIR regulation,

paragraph (3) applies.

(3) The FCA may, by notice in writing, require the counterparty or person—

(a) to provide specified information or information of a specified description; or

(b) to produce specified documents or documents of a specified description,

so that it can verify whether the non-authorised counterparty or person has complied with, or is subject to, the EMIR regulation.

(4) The information or documents must be provided or produced—

(a) before the end of such reasonable period as may be specified;

(b) at such place as may be specified.

(5) This regulation applies only to information and documents reasonably required in connection with the exercise by the FCA of its functions under the EMIR regulation.

(6) The FCA may require any information provided under this regulation to be provided in such a form as it may reasonably require.

(7) The FCA may require—

(a) any information provided, whether in a document or otherwise, to be verified in such a manner, or

(b) any document produced to be authenticated in such a manner,

as it may reasonably require.

(8) A requirement imposed under this regulation is a “relevant requirement” for the purposes of sections 380 (injunctions) and 382 (restitution orders) of the Act(1).

(9) In this regulation, “specified” means specified in the notice.

Textual Amendments

F13 Word in reg. 7(1) omitted (26.8.2013) by virtue of The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) (No. 2) Regulations 2013 (S.I. 2013/1908), regs. 1(3)(c), 4(2)(a)

F14 Reg. 7(1)(c) and word inserted (26.8.2013) by The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) (No. 2) Regulations 2013 (S.I. 2013/1908), regs. 1(3)(c), 4(2)(b)

Commencement Information

I2 Reg. 7 in force at 1.4.2013 in accordance with reg. 1(2)

[F15 Applications, notifications and reports to FCA] U.K.

8.—(1) Paragraphs (2) and (5) to (8) apply—

(a) where a person (“P”) is seeking exemption from the clearing obligation as set out in Article 4(1) or 10(1) of the EMIR regulation in reliance on Article 4(2), [F16 4a(2),] 10(2) or 89(2) of that Regulation; or

(b) to a notification to the FCA under [F17 point (a) of the second subparagraph of Article 4a(1), the fourth subparagraph of Article 9(1) or point (a) of the second subparagraph of Article 10(1)] of the EMIR regulation.

[F18 (1A) Paragraphs (2), (6) and (8) apply where a financial counterparty is required to make a report under Article 12(4) or 15(2) of Commission Delegated Regulation (EU) 149/2013 of 19 December 2012 supplementing the EMIR regulation.]

(2) An application [F19 , notification or report] to the FCA must—

(a) be made in such manner as the FCA may direct; and

(b) contain, or be accompanied by, such other information as the FCA may reasonably require.

(3) Paragraphs (4) to (8) apply where a person (“P”) is seeking exemption from the risk management procedures as set out in Article 11(3) of the EMIR regulation in reliance on [F20 Article 11(8) or (9)] of that Regulation.

(4) An application or notification to the FCA must contain, or be accompanied by, such information in addition to any information required to be provided under the EMIR regulation as the FCA may reasonably require.

(5) At any time after receiving an application or notification and before determining it, the FCA may require P to provide it with such further information as it reasonably considers necessary to enable it to determine the application or consider the notification.

(6) Different directions may be given, and different requirements imposed, in relation to different applications [F21 , notifications or reports] or categories of application [F22 , notification or report].

(7) The FCA may require P to provide information under this regulation in such form, or to verify it in such a way, as the FCA may reasonably direct.

(8) A requirement imposed under this regulation is a “relevant requirement” for the purposes of sections 380 (injunctions) and 382 (restitution orders) of the Act.

Textual Amendments

F15 Reg. 8 heading substituted (26.8.2013) by The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) (No. 2) Regulations 2013 (S.I. 2013/1908), regs. 1(3)(c), 4(3)(a)

F16 Word in reg. 8(1)(a) inserted (9.7.2019) by The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) (Amendment) Regulations 2019 (S.I. 2019/1031), regs. 1(2), 2(3)(a)

F17 Words in reg. 8(1)(b) substituted (9.7.2019) by The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) (Amendment) Regulations 2019 (S.I. 2019/1031), regs. 1(2), 2(3)(b)

F18 Reg. 8(1A) inserted (26.8.2013) by The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) (No. 2) Regulations 2013 (S.I. 2013/1908), regs. 1(3)(c), 4(3)(b)

F19 Words in reg. 8(2) substituted (26.8.2013) by The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) (No. 2) Regulations 2013 (S.I. 2013/1908), regs. 1(3)(c), 4(3)(c)

F20 Words in reg. 8(3) substituted (31.12.2020) by The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2019 (S.I. 2019/335), regs. 1(1), 5 (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F21 Words in reg. 8(6) substituted (26.8.2013) by The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) (No. 2) Regulations 2013 (S.I. 2013/1908), regs. 1(3)(c), 4(3)(d)(i)

F22 Words in reg. 8(6) substituted (26.8.2013) by The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) (No. 2) Regulations 2013 (S.I. 2013/1908), regs. 1(3)(c), 4(3)(d)(ii)

Commencement Information

I3 Reg. 8 in force at 1.4.2013 in accordance with reg. 1(2)

Penalties [F23 and statements] U.K.

9.—(1) If the FCA considers that—

(a) a financial counterparty;

(b) a non-financial counterparty; or

(c) any other person,

has contravened a relevant requirement imposed on it, the FCA may [F24 publish a statement to that effect or] impose on it a penalty, in respect of the contravention, of such amount as it considers appropriate.

(2) If the FCA considers that—

(a) a financial counterparty;

(b) a non-financial counterparty; or

(c) any other person,

has in purported compliance with a requirement imposed on it under regulation 7 or 8 knowingly or recklessly given the FCA information which is false or misleading in a material particular, the FCA may [F25 publish a statement to that effect or] impose on it a penalty of such amount as it considers appropriate.

(3) Where the FCA has imposed a penalty under paragraph (1) or (2), it must in addition publish a statement to that effect unless such disclosure would seriously jeopardise the financial markets or cause disproportionate damage to the parties involved.

(4) A penalty under paragraph (1) or (2) is payable to the FCA.

(5) The FCA must in respect of each of its financial years pay to the Treasury any amounts received by it during the year by way of penalties imposed under this regulation.

(6) The Treasury may give directions to the FCA as to how the FCA is to comply with its duty under paragraph (5).

(7) The directions may in particular—

(a) specify the time when any payment is required to be made to the Treasury, or

(b) require the FCA to provide the Treasury at specified times with information relating to penalties that the FCA has imposed under this regulation.

(8) The Treasury must pay into the Consolidated Fund any sums received by them under this regulation.

(9) This regulation does not apply to an authorised person except in so far as it relates to a contravention of regulation 8.

(10) In this regulation, a “relevant requirement” means a requirement imposed—

(a) by or under the EMIR regulation if it is enforceable by the FCA pursuant to regulation 6 [F26 (but not including a requirement enforceable by the FCA pursuant to paragraph (6)(a) or (b) of that regulation)];

(b) under regulation 7 or 8.

Textual Amendments

F23 Words in reg. 9 heading inserted (26.8.2013) by The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) (No. 2) Regulations 2013 (S.I. 2013/1908), regs. 1(3)(c), 4(4)(a)

F24 Words in reg. 9(1) inserted (26.8.2013) by The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) (No. 2) Regulations 2013 (S.I. 2013/1908), regs. 1(3)(c), 4(4)(b)

F25 Words in reg. 9(2) inserted (26.8.2013) by The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) (No. 2) Regulations 2013 (S.I. 2013/1908), regs. 1(3)(c), 4(4)(c)

F26 Words in reg. 9(10)(a) inserted (31.12.2020) by The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2019 (S.I. 2019/335), regs. 1(1), 6 (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Commencement Information

I4 Reg. 9 in force at 1.4.2013 in accordance with reg. 1(2)

Penalties under regulation 9: procedure U.K.

10.—(1) If the FCA proposes to take action against a person under regulation 9, it must give the person concerned a warning notice.

(2) A warning notice about a proposal to impose a penalty must state the amount of the penalty.

(3) A warning notice about a proposal to publish a statement must set out the terms of the proposed statement.

(4) If, having considered any representations made in response to the warning notice, the FCA decides to take action against a person under regulation 9, it must without delay give the person concerned a decision notice.

(5) A decision notice about the imposition of a penalty must state the amount of the penalty.

(6) A decision notice about the publication of a statement must set out the terms of the statement.

(7) If the FCA decides to take action against a person under regulation 9, the person may refer the matter to the Tribunal.

(8) Sections 210 (statements of policy) and 211 (statements of policy: procedure) of the Act(2) apply in respect of the imposition of penalties under regulation 9 and the amount of such penalties as they apply in respect of the imposition of penalties under Part 14 of the Act (disciplinary measures) and the amount of penalties under that Part.

(9) After a statement under regulation 9(3) is published, the FCA must send a copy of it to the person concerned and to any person to whom a copy of the decision notice was given under section 393(4) of the Act(3) (as applied by regulation 56).

Commencement Information

I5 Reg. 10 in force at 1.4.2013 in accordance with reg. 1(2)

(1)

Sections 380 and 382 were amended by Schedule 9 to the Financial Services Act 2012 and S.I. 2007/126, 2011/1613 and 2012/1906 and 2554.

(2)

Section 210 was amended by Schedule 2 to the Financial Services Act 2010 and Schedule 9 to the Financial Services Act 2012. Section 211 was amended by Schedule 9 to the Financial Services Act 2012.

(3)

Section 393(4) was amended by Schedule 9 to the Financial Services Act 2012.