The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2018

Made10th July 2018

Coming into force in accordance with article 1(2)

The Treasury make the following Order in exercise of the powers conferred by sections 22(1), (1A) and (5), 419, and 428(3) of, and paragraph 25(1)(f) of Schedule 2 to, the Financial Services and Markets Act 20001.

In the opinion of the Treasury2 one of the effects of the following Order is that an activity which is not a regulated activity (within the meaning of the Financial Services and Markets Act 2000) will become a regulated activity.

In accordance with section 429(1) of, and paragraph 26(2) of Schedule 2 to, the Financial Services and Markets Act 2000, a draft of this Order was laid before Parliament and approved by a resolution of each House of Parliament.

Citation and commencement1

1

This Order may be cited as the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2018.

2

This Order comes into force on the day after the day on which is it made.

Amendments to the Financial Services and Markets Act 2000 (Regulated Activities) Order 20012

1

Article 77A (alternative finance investment bonds) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 20013 is amended as follows.

2

In paragraph (2)(f)—

a

in sub-paragraph (i) omit “or”;

b

in sub-paragraph (ii) for “within the meaning of Article 4.1(14) of Directive 2004/39/EC of the European Parliament and of the Council on markets in financial instruments”, substitute “as defined by Article 4.1.21 of the markets in financial instruments directive”;

c

after sub-paragraph (ii), insert—

iii
trading on a multilateral trading facility (as defined by Article 4.1.22 of the markets in financial instruments directive); or
iv
trading on an organised trading facility (as defined by Article 4.1.23 of the markets in financial instruments directive).

Amendment to the Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) Order 20013

1

The Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) Order 20014 is amended as follows.

2

After article 4 insert—

Administering a benchmark4A
A person who carries on an activity of the kind specified by article 63S5 of the Regulated Activities Order (administering a benchmark) is to be regarded as carrying on that activity by way of business.

Andrew StephensonCraig WhittakerTwo of the Lords Commissioners of Her Majesty’s Treasury10th July 2018

EXPLANATORY NOTE

(This note is not part of the Order)

This Order makes amendments to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) (“the RAO”) to amend the criteria by which alternative investment finance bonds qualify as a specified investment under the RAO. The RAO specifies kinds of activities and investments for the purposes of the Financial Services and Markets Act 2000 (c.8) (“the Act”). Section 19 of the Act prohibits persons from carrying on any regulated activity in the United Kingdom unless they are authorised or exempt.

Article 2 of this Order expands upon the conditions set out in article 77A(2) of the RAO, allowing for a broader range of alternative finance investment bonds. This amendment provides that arrangements involving securities which are traded on a multilateral trading facility or an organised trading facility may satisfy the conditions in article 77A and may be treated as alternative investment finance bonds. This amendment is made so that alternative finance investment bonds are afforded equivalent treatment to conventional bonds in this respect.

Article 3 amends the Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) Order 2001 (S.I. 2001/1177) so that a person administering a benchmark as specified in the RAO will be regarded as carrying on the activity by way of business. This means the person will be required to be authorised under the Financial Services and Markets Act 2000 in order to do so.

An impact assessment has not been produced for this instrument as no significant impact on the costs of business or the voluntary sector is foreseen.