Amendments to the Financial Services and Markets Act 20002

1

The Financial Services and Markets Act 2000 is amended as follows.

2

In section 55J (variation or cancellation on initiative of regulator)6—

a

in subsection (6A)7, in paragraph (e)—

i

omit the “or” at the end of sub-paragraph (iii);

ii

at the end of sub-paragraph (iv) insert “; or”;

iii

after that sub-paragraph insert—

v

a provision of the MMF Regulation or any directly applicable regulation or decision made under that Regulation.

b

in subsection (7ZA)8—

i

omit the “or” at the end of paragraph (a);

ii

at the end of paragraph (b) insert “or”;

iii

after that paragraph insert—

c

by the MMF Regulation or any directly applicable regulation or decision made under that Regulation,

3

In section 194 (general grounds on which power of intervention is exercisable)9—

a

in subsection (5)—

i

omit the “or” at the end of paragraph (b);

ii

at the end of paragraph (c) insert “; or”;

iii

after that paragraph insert—

d

the MMF Regulation or any directly applicable regulation or decision made under that Regulation.

b

after that subsection insert—

6

The FCA may exercise its powers of intervention in respect of an EEAUCITS if it appears to the FCA that the EEAUCITS has contravened, or is likely to contravene, a requirement imposed by the MMF Regulation or any directly applicable regulation or decision made under that Regulation.

7

A reference in subsection (6) to an EEAUCITS includes, in a case where the UCITS is not a body corporate, a reference to its management company.

4

In section 237 (collective investment schemes: other definitions), in subsection (3)10 omit the definitions of “EEAUCITS” and “UCITS”.

5

In section 242 (applications for authorisation of unit trust schemes)—

a

for subsection (1) substitute—

1

The manager and trustee, or proposed manager and trustee, of a unit trust scheme may apply to the FCA for—

a

an order declaring the scheme to be an authorised unit trust scheme;

b

an order declaring the scheme to be an authorised money market fund.

b

in subsection (3), for “The application” substitute “An application”.

6

In section 243 (authorisation orders)11—

a

in the heading, at the end insert “: authorised unit trust schemes”;

b

in subsection (1), for “242” substitute “242(1)(a)”;

c

omit subsection (3).

7

After that section insert—

243AAuthorisation orders: authorised money market funds

1

If, on an application under section 242(1)(b) in respect of a unit trust scheme, conditions A and B are met the FCA may make an order declaring the scheme to be an authorised money market fund.

2

Condition A is that the FCA is satisfied that the scheme will be able to comply with the requirements imposed on a money market fund under the MMF Regulation.

3

Condition B is that—

a

the scheme is an authorised unit trust scheme, or

b

the scheme—

i

is the subject of an application under section 242(1)(a), and

ii

the conditions in section 243(1)(a) to (c) are met in relation to that application.

4

If the FCA makes an order under subsection (1), it must give written notice of the order to the applicant.

5

In this Chapter “authorisation order” means—

a

an order under section 243(1), or

b

an order under subsection (1) of this section.

8

In section 244 (determination of applications)12—

a

in subsection (1), for “242” substitute “242(1)(a)”;

b

in subsection (1A), for the words from “section 242” to “UCITS” substitute “section 242(1)(a) in respect of a unit trust scheme which is a UCITS, or an application under section 242(1)(b),”.

9

In section 257 (directions), in subsection (1)(b)13—

a

omit the “or” at the end of sub-paragraph (i);

b

at the end of sub-paragraph (ii) insert “or”;

c

after sub-paragraph (ii) insert—

iii

by the MMF Regulation or any directly applicable regulation or decision made under that Regulation;

10

In section 261C (applications for authorisation of contractual schemes)14—

a

for subsection (1) substitute—

1

The operator and depositary, or proposed operator and depositary, of a contractual scheme may apply to the FCA for—

a

an order declaring the scheme to be an authorised contractual scheme;

b

an order declaring the scheme to be an authorised money market fund.

b

in subsection (2) for “The application” substitute “An application under subsection (1)(a)”;

c

after that subsection insert—

2A

An application under subsection (1)(b) must—

a

be made in such a manner as the FCA may direct, and

b

contain or be accompanied by such information as the FCA may reasonably require for the purpose of determining the application.

11

In section 261D (authorisation orders)15—

a

in the heading, at the end insert “: authorised contractual schemes”;

b

in subsection (1), for “261C” substitute “261C(1)(a)”;

c

omit subsection (3).

12

In section 261E (authorisation orders: holding of units)16, in the heading, for “Authorisation orders” substitute “Authorised contractual schemes”.

13

After that section insert—

261EAAuthorisation orders: authorised money market funds

1

If, on an application under section 261C(1)(b) in respect of a contractual scheme, conditions A and B are met the FCA may make an order declaring the scheme to be an authorised money market fund.

2

Condition A is that the FCA is satisfied that the scheme will be able to comply with the requirements imposed on a money market fund under the MMF Regulation.

3

Condition B is that—

a

the scheme is an authorised contractual scheme, or

b

the scheme—

i

is the subject of an application under section 261C(1)(a), and

ii

the conditions in section 261D(1)(a) to (c) are met in relation to that application.

4

If the FCA makes an order under subsection (1), it must give written notice of the order to the applicant.

5

In this Chapter “authorisation order” means—

a

an order under section 261D(1), or

b

an order under subsection (1) of this section.

14

In section 261F (determination of applications)17—

a

in subsection (1), for “261C” substitute “261C(1)(a)”;

b

in subsection (2), for the words from “261C” to “UCITS” substitute “261C(1)(a) in respect of a contractual scheme which is a UCITS, or an application under section 261C(1)(b),”.

15

In section 261X (directions), in subsection (1)(b)18—

a

omit the “or” at the end of sub-paragraph (i);

b

at the end of sub-paragraph (ii) insert “or”;

c

after sub-paragraph (ii) insert—

iii

by the MMF Regulation or any directly applicable regulation or decision made under that Regulation;

16

In section 398 (misleading the FCA or PRA), in subsection (1A)19—

a

omit the “or” at the end of paragraph (g);

b

at the end of paragraph (h), insert “; or”;

c

after that paragraph insert—

i

the MMF Regulation.

17

In section 417 (definitions), in subsection (1)20, at the appropriate places insert the following definitions—

  • “MMF Regulation” means Regulation (EU) 2017/1131 of the European Parliament and of the Council of 14 June 2017 on money market funds;

  • “UCITS” has the meaning given in Article 1.2 of the UCITS directive;

18

In section 425 (expressions relating to authorisation elsewhere in the single market)21, in subsection (1)—

a

omit the “and” at the end of paragraph (a);

b

after that paragraph insert—

aa

“EEAUCITS” means a UCITS which is authorised pursuant to Article 5 of the UCITS directive in an EEA State other than the United Kingdom; and

19

In Schedule 3 (EEA Passport Rights), omit paragraph 11C22.