419 Carrying on regulated activities by way of business.
(1) The Treasury may by order make provision—
(a) as to the circumstances in which a person who would otherwise not be regarded as carrying on a regulated activity by way of business is to be regarded as doing so;
(b) as to the circumstances in which a person who would otherwise be regarded as carrying on a regulated activity by way of business is to be regarded as not doing so.
(2) An order under subsection (1) may be made so as to apply—
(a) generally in relation to all regulated activities;
(b) in relation to a specified category of regulated activity; or
(c) in relation to a particular regulated activity.
(3) An order under subsection (1) may be made so as to apply—
(a) for the purposes of all provisions;
(b) for a specified group of provisions; or
(c) for a specified provision.
(4) “Provision” means a provision of, or made under, this Act.
(5) Nothing in this section is to be read as affecting the provisions of section 428(3).
(1) In this Act “claims management services” means advice or other services in relation to the making of a claim.
(2) In subsection (1) “other services” includes—
(a) financial services or assistance,
(b) legal representation,
(c) referring or introducing one person to another, and
(d) making inquiries,
but giving, or preparing to give, evidence (whether or not expert evidence) is not, by itself, a claims management service.
(3) In this section “claim” means a claim for compensation, restitution, repayment or any other remedy or relief in respect of loss or damage or in respect of an obligation, whether the claim is made or could be made—
(a) by way of legal proceedings,
(b) in accordance with a scheme of regulation (whether voluntary or compulsory), or
(c) in pursuance of a voluntary undertaking.
(4) The Treasury may by order provide that a claim for a specified benefit is to be treated as a claim for the purposes of this section.
(5) The Treasury may specify a benefit under subsection (4) only if it appears to the Treasury to be a social security benefit, payable under the law of any part of the United Kingdom, designed to provide compensation for industrial injury.
419B Carrying on claims management activity in Great Britain
(1) The Treasury may by order make provision as to the circumstances in which a person is, or is not, to be treated as carrying on—
(a) a regulated claims management activity, or
(b) an activity of a kind specified in an order under section 21(10B),
in Great Britain.
(2) Subsections (2) to (5) of section 419 apply in relation to an order under subsection (1) as they apply in relation to an order under subsection (1) of that section, but as if the references to regulated activities in subsection (2) of that section were references to regulated claims management activities or, as the case may be, to activities of a kind specified in an order under section 21(10B).
(1) In this Act, except in relation to an incorporated friendly society, “parent undertaking” and “subsidiary undertaking” have the same meaning as in the Companies Acts (see section 1162 of, and Schedule 7 to, the Companies Act 2006).
(2) But—
(a) “parent undertaking” also includes an individual who would be a parent undertaking for the purposes of those provisions if he were taken to be an undertaking (and “subsidiary undertaking” is to be read accordingly);
(b) “subsidiary undertaking” also includes, in relation to a body incorporated in or formed under the law of an EEA State ..., an undertaking which is a subsidiary undertaking within the meaning of any rule of law in force in that State for purposes connected with implementation of the Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC (and “parent undertaking” is to be read accordingly).
(3) In this Act “subsidiary undertaking”, in relation to an incorporated friendly society, means a body corporate of which the society has control within the meaning of section 13(9)(a) or (aa) of the Friendly Societies Act 1992 (and “parent undertaking” is to be read accordingly).
(1) In this Act “group”, in relation to a person (“A”), means A and any person who is—
(a) a parent undertaking of A;
(b) a subsidiary undertaking of A;
(c) a subsidiary undertaking of a parent undertaking of A;
(d) a parent undertaking of a subsidiary undertaking of A;
(e) an undertaking in which A or an undertaking mentioned in paragraph (a), (b), (c) or (d) has a participating interest;
(f) if A or an undertaking mentioned in paragraph (a) or (d) is a building society, an associated undertaking of the society; or
(g) if A or an undertaking mentioned in paragraph (a) or (d) is an incorporated friendly society, a body corporate of which the society has joint control (within the meaning of section 13(9)(c) or (cc) of the Friendly Societies Act 1992).
(2) “Participating interest” has the meaning given in section 421A; but also includes an interest held by an individual which would be a participating interest for the purposes of those provisions if he were taken to be an undertaking.
(3) “Associated undertaking” has the meaning given in section 119(1) of the Building Societies Act 1986.
In this Act “immediate group”, in relation to a person (“A”), means—
(a) A;
(b) a parent undertaking of A;
(c) a subsidiary undertaking of A;
(d) a subsidiary undertaking of a parent undertaking of A;
(e) a parent undertaking of a subsidiary undertaking of A.
(1) In section 421 a “participating interest” means an interest held by an undertaking in the shares of another undertaking which it holds on a long-term basis for the purpose of securing a contribution to its activities by the exercise of control or influence arising from or related to that interest.
(2) A holding of 20% or more of the shares of an undertaking is presumed to be a participating interest unless the contrary is shown.
(3) The reference in subsection (1) to an interest in shares includes—
(a) an interest which is convertible into an interest in shares, and
(b) an option to acquire shares or any such interest;
and an interest or option falls within paragraph (a) or (b) notwithstanding that the shares to which it relates are, until the conversion or the exercise of the option, unissued.
(4) For the purposes of this section an interest held on behalf of an undertaking shall be treated as held by it.
(5) In this section “undertaking” has the same meaning as in the Companies Acts (see section 1161(1) of the Companies Act 2006).
(1) In this Act “controller”, in relation to an undertaking (“B”), means a person (“A”) who falls within any of the cases in subsection (2).
(2) The cases are where A holds—
(a) 10% or more of the shares in B or in a parent undertaking of B (“P”);
(b) 10% or more of the voting power in B or P; or
(c) shares or voting power in B or P as a result of which A is able to exercise significant influence over the management of B.
(3) For the purposes of calculations relating to this section, the holding of shares or voting power by a person (“A1”) includes any shares or voting power held by another (“A2”) if A1 and A2 are acting in concert.
(4) In this section “shares”—
(a) in relation to an undertaking with a share capital, means allotted shares;
(b) in relation to an undertaking with capital but no share capital, means rights to share in the capital of the undertaking;
(c) in relation to an undertaking without capital, means interests—
(i) conferring any right to share in the profits, or liability to contribute to the losses, of the undertaking; or
(ii) giving rise to an obligation to contribute to the debts or expenses of the undertaking in the event of a winding up.
(5) In this section “voting power”—
(a) includes, in relation to a person (“H”)—
(i) voting power held by a third party with whom H has concluded an agreement, which obliges H and the third party to adopt, by concerted exercise of the voting power they hold, a lasting common policy towards the management of the undertaking in question;
(ii) voting power held by a third party under an agreement concluded with H providing for the temporary transfer for consideration of the voting power in question;
(iii) voting power attaching to shares which are lodged as collateral with H, provided that H controls the voting power and declares an intention to exercise it;
(iv) voting power attaching to shares in which H has a life interest;
(v) voting power which is held, or may be exercised within the meaning of subparagraphs (i) to (iv), by a controlled undertaking of H;
(vi) voting power attaching to shares deposited with H which H has discretion to exercise in the absence of specific instructions from the shareholders;
(vii) voting power held in the name of a third party on behalf of H;
(viii) voting power which H may exercise as a proxy where H has discretion about the exercise of the voting power in the absence of specific instructions from the shareholders; and
(b) in relation to an undertaking which does not have general meetings at which matters are decided by the exercise of voting rights, means the right under the constitution of the undertaking to direct the overall policy of the undertaking or alter the terms of its constitution.
(6) For the purposes of this section, an undertaking “B” is a controlled undertaking of H if any of the conditions in section 89J(4)(a) to (d) (read with section 89J(5)) is met (reading references in those provisions to A as references to H).
(1) For the purposes of section 422, shares and voting power that a person holds in an undertaking (“B”) or in a parent undertaking of B (“P”) are disregarded in the following circumstances.
(2) Shares held only for the purposes of clearing and settling within a short settlement cycle are disregarded.
(3) Shares held by a custodian or its nominee in a custodian capacity are disregarded, provided that the custodian or nominee is only able to exercise voting power attached to the shares in accordance with instructions given in writing.
(4) Shares representing no more than 5% of the total voting power in B or P held by an investment firm are disregarded, provided that it—
(a) holds the shares in the capacity of a market maker (as defined in article 2.1.6 of the markets in financial instruments regulation);
(b) has a Part 4A permission to carry on one or more investment services and activities;
(c) neither intervenes in the management of B or P nor exerts any influence on B or P to buy the shares or back the share price.
(5) Shares held by a qualifying credit institution or investment firm in its trading book are disregarded, provided that—
(a) the shares represent no more than 5% of the total voting power in B or P; and
(b) ... the voting power is not used to intervene in the management of B or P.
(6) Shares held by a qualifying credit institution or an investment firm are disregarded, provided that—
(a) the shares are held as a result of performing the investment services and activities of—
(i) underwriting shares; or
(ii) placing shares on a firm commitment basis ...; and
(b) the qualifying credit institution or investment firm—
(i) does not exercise voting power represented by the shares or otherwise intervene in the management of the issuer; and
(ii) retains the holding for a period of less than one year.
(7) Where a management company (as defined in section 237(2)) and its parent undertaking both hold shares or voting power, each may disregard holdings of the other, provided that each exercises its voting power independently of the other.
(8) But subsection (7) does not apply if the management company—
(a) manages holdings for its parent undertaking or a controlled undertaking of its parent undertaking;
(b) has no discretion to exercise the voting power attached to such holdings; and
(c) may only exercise the voting power in relation to such holdings under direct or indirect instruction from—
(i) its parent undertaking; or
(ii) a controlled undertaking of the parent undertaking.
(9) Where an investment firm and its parent undertaking both hold shares or voting power, the parent undertaking may disregard holdings managed by the investment firm on a client by client basis and the investment firm may disregard holdings of the parent undertaking, provided that the investment firm—
(a) has permission to provide portfolio management;
(b) exercises its voting power independently from the parent undertaking; and
(c) may only exercise the voting power under instructions given in writing, or has appropriate mechanisms in place for ensuring that individual portfolio management services are conducted independently of any other services.
(9A) Shares acquired for stabilisation purposes in accordance with the market abuse regulation and Commission Delegated Regulation (EU) No. 1052/2016 of 8 March 2016 supplementing Regulation (EU) No. 596/2014 of the European Parliament and the Council with regard to the regulatory technical standards for conditions applicable to buy-back programmes and stabilisation measures are disregarded, provided that the voting power attached to those shares is not exercised or otherwise used to intervene in the management of B or P.
(10) For the purposes of this section “qualifying credit institution” includes a credit institution which is authorised under the law of Gibraltar relied on immediately before IP completion day to implement the capital requirements directive.
(11) For the purposes of this section, an undertaking is a controlled undertaking of the parent undertaking if it is controlled by the parent undertaking; and for this purpose the question of whether one undertaking controls another is to be determined in accordance with section 89J(4) and (5).
(1) In this Act, except in relation to a unit trust scheme or a registered friendly society, “manager” means an employee who—
(a) under the immediate authority of his employer is responsible, either alone or jointly with one or more other persons, for the conduct of his employer’s business; or
(b) under the immediate authority of his employer or of a person who is a manager by virtue of paragraph (a) exercises managerial functions or is responsible for maintaining accounts or other records of his employer.
(2) If the employer is not an individual, references in subsection (1) to the authority of the employer are references to the authority—
(a) in the case of a body corporate, of the directors;
(b) in the case of a partnership, of the partners; and
(c) in the case of an unincorporated association, of its officers or the members of its governing body.
(3) “Manager”, in relation to a body corporate, means a person (other than an employee of the body) who is appointed by the body to manage any part of its business and includes an employee of the body corporate (other than the chief executive) who, under the immediate authority of a director or chief executive of the body corporate, exercises managerial functions or is responsible for maintaining accounts or other records of the body corporate.
(1) In this Act—
“mortgage agreement” means an agreement to which subsection (2) applies, but to which subsection (3) does not apply, under which a mortgage creditor grants or promises to grant, to a consumer, a credit in the form of a deferred payment, loan or other similar financial accommodation;
“mortgage creditor” means a person who grants or promises to grant—
in the course of the person's trade, business or profession, and
under an agreement to which subsection (2) applies but to which subsection (3) does not apply,
credit in the form of a deferred payment, loan or other similar financial accommodation;
“mortgage intermediary” means a person who, in the course of the person's trade, business or profession, and acting neither as a mortgage creditor or notary nor in an introductory capacity, does any of the following for any agreed form of financial consideration—
presenting or offering mortgage agreements to consumers;
assisting consumers by undertaking preparatory work or other pre-contractual administration in respect of mortgage agreements (otherwise than as referred to in paragraph (a));
concluding mortgage agreements with consumers on behalf of mortgage creditors;
“tied mortgage intermediary” means a mortgage intermediary who acts on behalf of and under the full and unconditional responsibility of—
only one mortgage creditor,
only one group of mortgage creditors, or
a number of mortgage creditors or groups of mortgage creditors which does not represent the majority of the market.
(2) This subsection applies to the following agreements—
(a) an agreement secured by a mortgage on, or (in Scotland) a heritable security over, residential immovable property, or by any other charge or right over or related to such property;
(b) an agreement the purpose of which is to acquire or retain property rights in land or in an existing or projected building.
(3) This subsection applies to the following agreements—
(a) an agreement under which the creditor—
(i) contributes a lump sum, periodic payments or other forms of credit disbursement in return for a sum deriving from the future sale of a residential immovable property or a right relating to residential immovable property, and
(ii) will not seek repayment of the credit until the occurrence of one or more specified life events of the consumer, unless the consumer breaches contractual obligations so as to allow the creditor to terminate the agreement;
(b) an agreement under which credit is granted by an employer to its employees as a secondary activity where the agreement is offered free of interest or at an annual rate lower than that prevailing on the market and not offered to the public generally;
(c) an agreement under which credit is granted free of interest and without any other charges except those that recover costs directly related to the securing of the credit;
(d) an agreement in the form of an overdraft facility under which the credit has to be repaid within one month;
(e) an agreement which is the outcome of a settlement reached in or before a court or other statutory authority;
(f) an agreement which—
(i) relates to the deferred payment, free of charge, of an existing debt, and
(ii) is not secured by a mortgage, by another comparable security commonly used in the United Kingdom on residential immovable property or by a right related to residential immovable property.
(4) In this section—
“acting in an introductory capacity” means merely introducing (directly or indirectly) a consumer to a mortgage creditor or mortgage intermediary;
“annual rate” means the total cost to the borrower expressed as an annual percentage of the total amount of credit;
“consumer” means an individual who is acting for purposes outside those of any trade, business or profession carried on by the individual;
“group of mortgage creditors” means a group of mortgage creditors that are to be consolidated for the purposes of drawing up consolidated accounts in accordance with—
the requirements of Part 15 of the Companies Act 2006, if the parent undertaking (within the meaning of that Act) is a company, or
if it is not, the legal requirements that apply to the drawing up of consolidated accounts for the parent undertaking;
“specified” means specified in rules made by the FCA.
(5) A reference in this section to any immovable property, land or building—
(a) in relation to an agreement entered into before IP completion day, is a reference to any immovable property, land or building in the United Kingdom or within the territory of an EEA State;
(b) in relation to an agreement entered into on or after IP completion day, is a reference to any immovable property, land or building in the United Kingdom.
(1) In this Act, references to—
(a) contracts of insurance,
(b) reinsurance,
(c) contracts of long-term insurance,
(d) contracts of general insurance,
are to be read with section 22 and Schedule 2.
(2) In this Act “policy” and “policyholder”, in relation to a contract of insurance, have such meaning as the Treasury may by order specify.
(3) The law applicable to a contract of insurance, the effecting of which constitutes the carrying on of a regulated activity, is to be determined, if it is of a prescribed description, in accordance with regulations made by the Treasury.
(1) In this Act (except as otherwise provided), “investment firm” has the meaning given in paragraph 2.1A of the markets in financial instruments regulation.
(2) Subsection (1) is subject to subsection (5).
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) References in this Act to an “investment firm” do not include references to—
(a) a person excluded from the definition of “investment firm” in Article 3(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) by paragraph (a) or (b) of that definition; or
(b) a firm which has a Part 4A permission to carry on regulated activities as an exempt investment firm within the meaning of regulation 8 of the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701).
425A Consumers: regulated activities etc carried on by authorised persons
(1) This section has effect for the purposes of the provisions of this Act which apply this section.
(2) “Consumers” means persons who—
(a) who use, have used or may use any of the services within subsection (3); ...
(b) who have relevant rights or interests in relation to any of those services ; or
(c) whose rights, interests or obligations are affected by the level of a regulated benchmark ; or
(d) in respect of whom a person carries on an activity which is specified in article 89G of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (seeking out etc claims) whether that activity, as carried on by that person, is a regulated activity or is, by reason of an exclusion provided for under the 2001 Order or the 2000 Act, not a regulated activity.
(3) The services within this subsection are services provided by—
(a) authorised persons in carrying on regulated activities;
(b) authorised persons who are investment firms, or qualifying credit institutions, in providing relevant ancillary services; or
(c) persons acting as appointed representatives.
(4) A person (“P”) has a “relevant right or interest” in relation to any services within subsection (3) if P has a right or interest—
(a) which is derived from, or is otherwise attributable to, the use of the services by others; or
(b) which may be adversely affected by the use of the services by persons acting on P's behalf or in a fiduciary capacity in relation to P.
(5) If a person is providing a service within subsection (3) as a trustee, the persons who are, have been or may be beneficiaries of the trust are to be treated as persons who use, have used or may use the service.
(6) A person who deals with another person (“A”) in the course of A providing a service within subsection (3) is to be treated as using the service.
(7) In this section—
...
“regulated benchmark” means a benchmark, as defined in section 22 ... (6A), in relation to which any provision made under section 22(1A) ... (c) has effect.
“relevant ancillary service” means any service of a kind mentioned in Part 3A of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) the provision of which does not involve the carrying on of a regulated activity.
425B Consumers: regulated activities carried on by others
(1) This section has effect for the purposes of the provisions of this Act which apply this section.
(2) “ Consumers ” means persons who, in relation to regulated activities carried on otherwise than by authorised persons, would be consumers as defined by section 425A if the activities were carried on by authorised persons.
(1) In this Act “qualifying provision” means a provision of any of the following—
(a) assimilated direct legislation;
(b) technical standards made in accordance with Chapter 2A of Part 9A;
(ba) other subordinate legislation made under assimilated direct legislation;
(c) subordinate legislation ... made by virtue of regulations made under section 8 of the European Union (Withdrawal) Act 2018.
(2) In this section, “subordinate legislation” has the same meaning as in the Interpretation Act 1978 (see section 21 of that Act).
(1) A Minister of the Crown may by order make such incidental, consequential, transitional or supplemental provision as he considers necessary or expedient for the general purposes, or any particular purpose, of this Act or in consequence of any provision made by or under this Act or for giving full effect to this Act or any such provision.
(2) An order under subsection (1) may, in particular, make provision—
(a) for enabling any person by whom any powers will become exercisable, on a date set by or under this Act, by virtue of any provision made by or under this Act to take before that date any steps which are necessary as a preliminary to the exercise of those powers;
(b) for applying (with or without modifications) or amending, repealing or revoking any provision of or made under an Act passed before this Act or in the same Session;
(c) dissolving any body corporate established by any Act passed, or instrument made, before the passing of this Act;
(d) for making savings, or additional savings, from the effect of any repeal or revocation made by or under this Act.
(3) Amendments made under this section are additional, and without prejudice, to those made by or under any other provision of this Act.
(4) No other provision of this Act restricts the powers conferred by this section.
(1) Subsections (2) and (3) apply to an order under section 426 which makes transitional provisions or savings.
(2) The order may, in particular—
(a) if it makes provision about the authorisation and permission of persons who before commencement were entitled to carry on any activities, also include provision for such persons not to be treated as having any authorisation or permission (whether on an application to a regulator or otherwise);
(b) make provision enabling a regulator to require persons of such descriptions as it may direct to re-apply for permissions having effect by virtue of the order;
(c) make provision for the continuation as rules of such provisions (including primary and subordinate legislation) as may be designated in accordance with the order by a regulator, including provision for the modification by a regulator of provisions designated;
(d) make provision about the effect of requirements imposed, liabilities incurred and any other things done before commencement, including provision for and about investigations, penalties and the taking or continuing of any other action in respect of contraventions;
(e) make provision for the continuation of disciplinary and other proceedings begun before commencement, including provision about the decisions available to bodies before which such proceedings take place and the effect of their decisions;
(f) make provision as regards the FCA’s obligation to maintain a record under section 347 as respects persons in relation to whom provision is made by the order.
(3) The order may—
(a) confer functions on the Treasury, the Secretary of State, a regulator, the scheme manager, the scheme operator, members of the panel established under paragraph 4 of Schedule 17 or the Competition and Markets Authority;
(b) confer jurisdiction on the Tribunal;
(c) provide for fees to be charged in connection with the carrying out of functions conferred under the order;
(d) modify, exclude or apply (with or without modifications) any primary or subordinate legislation (including any provision of, or made under, this Act).
(4) In subsection (2) “commencement” means the commencement of such provisions of this Act as may be specified by the order.
(1) Any power to make an order which is conferred on a Minister of the Crown by this Act and any power to make regulations which is conferred by this Act is exercisable by statutory instrument.
(2) The Lord Chancellor’s power to make rules under section 132 is exercisable by statutory instrument.
(3) Any statutory instrument made under this Act may—
(za) make provision by reference to any rules or other instruments as they have effect from time to time;
(a) contain such incidental, supplemental, consequential and transitional provision as the person making it considers appropriate; and
(b) make different provision for different cases.
(4) In subsection (3)(za) “rules” includes rules made by the Bank of England under this Act.
429 Parliamentary control of statutory instruments.
(1) No order is to be made under—
(a) section 1J, 3B(4), 3F(6), 55C, ... 138K(6)(c), 144(4), 192(b) or (e) , 192B(6), 204A(7), 213(1A), 236(5), 285(4), 380(12), 382(15), 384(13), 404G . . . or 419 , 419 or 419B, or
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
unless a draft of the order has been laid before Parliament and approved by a resolution of each House.
(2) No regulations are to be made under section 3RE, 90B 131O(7), , 137AA(3), 137GA(2) 138BA, 138EA(3), 141B, 142W, 143C(2), 143D(2), 143G(1), 144C(1), ... , 214A, 214B , 214D , 262, 271S, 282C, 284A, 300M, ... 309Z8 , 333T or 417(5) or paragraph 5, 6, 58(3)(a), 59(3)(a) or 60(8) of Schedule 2A unless a draft of the regulations has been laid before Parliament and approved by a resolution of each House.
(2A) Regulations to which subsection (2B) applies are not to be made unless a draft of the regulations has been laid before Parliament and approved by a resolution of each House.
(2B) This subsection applies to regulations which contain—
(a) provision made under section 59AB(2) which modifies, excludes or applies with modifications any provision of primary legislation;
(aa) provision made under section 71Q which amends or repeals a provision of this Act;
(ab) provision made under section 71R which amends, repeals or revokes a provision of this Act or another Act of Parliament, an Act of the Scottish Parliament, an Act or Measure of Senedd Cymru, or Northern Ireland legislation;
(ac) provision made under section 117H which amends or repeals any provision of primary legislation;
(b) provision made under section 137FBA(3);
(ba) provision made under section 143B(2) which amends this Act;
(bb) provision made under section 309H(2) which modifies, excludes or applies with modifications any provision of primary legislation;
(c) provision made under section 410A, other than provision made only by virtue of subsection (2) of that section;
(d) provision made under paragraph 15(3) of Schedule 17;
(d) provision made under paragraph 3(4) or 9(3) of Schedule 19B;
(e) provision made under paragraph 12 of Schedule 19C.
(3) An order to which, if it is made, subsection (4) or (5) will apply is not to be made unless a draft of the order has been laid before Parliament and approved by a resolution of each House.
(4) This subsection applies to an order under section 21 if—
(a) it is the first order to be made, or to contain provisions made, under section 21(4);
(b) it varies an order made under section 21(4) so as to make section 21(1) apply in circumstances in which it did not previously apply;
(c) it is the first order to be made, or to contain provision made, under section 21(5);
(d) it varies a previous order made under section 21(5) so as to make section 21(1) apply in circumstances in which it did not, as a result of that previous order, apply;
(e) it is the first order to be made, or to contain provisions made, under section 21(9) or (10) , (10) or (10B);
(f) it adds one or more activities to those that are controlled activities for the purposes of section 21; or
(g) it adds one or more investments to those which are controlled investments for the purposes of section 21 ; or
(h) it adds one or more activities to those that are controlled claims management activities for the purposes of section 21.
(5) This subsection applies to an order under section 38 if—
(a) it is the first order to be made, or to contain provisions made, under that section; or
(b) it contains provisions restricting or removing an exemption provided by an earlier order made under that section.
(6) An order containing a provision to which, if the order is made, subsection (7) will apply is not to be made unless a draft of the order has been laid before Parliament and approved by a resolution of each House.
(7) This subsection applies to a provision contained in an order if—
(a) it is the first to be made in the exercise of the power conferred by subsection (1) of section 326 or it removes a body from those for the time being designated under that subsection; or
(b) it is the first to be made in the exercise of the power conferred by subsection (6) of section 327 or it adds a description of regulated activity or investment to those for the time being specified for the purposes of that subsection.
(7A) An order to which, if it is made, subsection (7B) will apply is not to be made unless a draft of the order has been laid before Parliament and approved by a resolution of each House.
(7B) This subsection applies to an order under section 419A(4) if—
(a) it is the first order to be made, or to contain provisions made, under that subsection; or
(b) it adds one or more benefits to those that are specified benefits for the purposes of section 419A.
(8) Any other statutory instrument made under this Act, apart from one made under section 3G(1), , 312L 137D(1)(b), 165A(2)(d) , 192A(4) or 431(2) or to which section 22B , 23A , 71S or 142Z or paragraph 26 of Schedule 2 applies, shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(9) Any provision that may be made in a statutory instrument under this Act subject to annulment in pursuance of a resolution of either House of Parliament may be made in a statutory instrument which is subject to a procedure before Parliament for the approval of the instrument in draft before it is made or its approval after it is made.
(1) This Act, except Chapter IV of Part XVII, extends to Northern Ireland.
(2) Except where Her Majesty by Order in Council provides otherwise, the extent of any amendment or repeal made by or under this Act is the same as the extent of the provision amended or repealed.
(3) Her Majesty may by Order in Council provide for any provision of or made under this Act relating to a matter which is the subject of other legislation which extends to any of the Channel Islands or the Isle of Man to extend there with such modifications (if any) as may be specified in the Order.
(1) The following provisions come into force on the passing of this Act—
(a) this section;
(b) sections 428, 430 and 433;
(c) paragraphs 1 and 2 of Schedule 21.
(2) The other provisions of this Act come into force on such day as the Treasury may by order appoint; and different days may be appointed for different purposes.
432 Minor and consequential amendments, transitional provisions and repeals.
(1) Schedule 20 makes minor and consequential amendments.
(2) Schedule 21 makes transitional provisions.
(3) The enactments set out in Schedule 22 are repealed.
Section 1A
PART 1 General
Interpretation
1 In this Schedule—
“the Bank” means the Bank of England;
“functions”, in relation to the FCA, means functions conferred on the FCA by or under any provision of this Act (see section 1A(6) which affects the meaning of references to such functions).
Constitution
2 (1) The constitution of the FCA must provide for the FCA to have a governing body.
(2) The governing body must consist of—
(a) a chair appointed by the Treasury,
(b) a chief executive appointed by the Treasury,
(c) the Bank's Deputy Governor for prudential regulation,
(ca) the Chair of the Payment Systems Regulator,
(d) 2 members appointed jointly by the Secretary of State and the Treasury, and
(e) at least one other member appointed by the Treasury.
(3) The members referred to in sub-paragraph (2)(a), (c) , (ca) and (d) are to be non-executive members.
(4) In exercising its powers under sub-paragraph (2)(e) to appoint executive or non-executive members, the Treasury must secure that the majority of members of the governing body are non-executive members.
(5) An employee of the FCA may not be appointed as a non-executive member.
(6) In the following provisions of this Schedule an “appointed member” means a member of the governing body appointed under sub-paragraph (2)(a), (b), (d) or (e).
2A (1) The term of office of a person appointed as chief executive under paragraph 2(2)(b) must not begin before—
(a) the person has, in connection with the appointment, appeared before the Treasury Committee of the House of Commons, or
(b) (if earlier) the end of the period of 3 months beginning with the day on which the appointment is made.
(1A) Appointment as chief executive under paragraph 2(2)(b) is to be for a period of 5 years.
(2) Sub-paragraphs (1) and (1A) do not apply if the person is appointed as chief executive on an acting basis, pending a further appointment being made.
(3) The reference to the Treasury Committee of the House of Commons—
(a) if the name of that Committee is changed, is a reference to that Committee by its new name, and
(b) if the functions of that Committee (or substantially corresponding functions) become functions of a different Committee of the House of Commons, is to be treated as a reference to the Committee by which the functions are exercisable.
(4) Any question arising under sub-paragraph (3) is to be determined by the Speaker of the House of Commons.
2B (1) A person may not be appointed as chief executive under paragraph 2(2)(b) more than twice.
(2) For this purpose an appointment as chief executive on an acting basis, pending a further appointment being made, is to be ignored.
3 (1) The terms of service of the appointed members are to be determined by the Treasury.
(2) In the case of a member appointed under paragraph 2(2)(d), the Treasury must consult the Secretary of State about the terms of service.
(3) Before appointing a person as an appointed member, the Treasury (or as the case requires the Treasury and the Secretary of State) must consider whether the person has any financial or other interests that could have a material effect on the extent of the functions as member that it would be proper for the person to discharge.
(4) The terms of service of an appointed member (“M”) must be such as—
(a) to secure that M is not subject to direction by the Treasury or the Secretary of State,
(b) to require M not to act in accordance with the directions of any other person, and
(c) to prohibit M from acquiring any financial or other interests that have a material effect on the extent of the functions as member that it would be proper for M to discharge.
(5) If an appointed member is an employee of the FCA, the member's interest as employee is to be disregarded for the purposes of sub-paragraphs (3) and (4)(c) and paragraph 4(1)(b).
(6) A person who is an employee of the PRA or of the Payment Systems Regulator is disqualified for appointment as an appointed member.
(7) The FCA may pay expenses to a person holding an office mentioned in paragraph 2(2)(c) or (ca) in respect of that person's service as a member.
4 (1) The Treasury may remove an appointed member from office—
(a) on the grounds of incapacity or serious misconduct, or
(b) on the grounds that in all the circumstances the member's financial or other interests are such as to have a material effect on the extent of the functions as member that it would be proper for the person to discharge.
(2) Before removing from office a member appointed under paragraph 2(2)(d), the Treasury must consult the Secretary of State.
5 The validity of any act of the FCA is not affected—
(a) by any vacancy in any of the offices mentioned in paragraph 2(2)(a), (b) , (c) or (ca), or
(b) by a defect in the appointment of a person—
(i) to any of those offices, or
(ii) as an appointed member.
6 The Bank's Deputy Governor for prudential regulation must not take part in any discussion by or decision of the FCA which relates to—
(a) the exercise of the FCA's functions in relation to a particular person, or
(b) a decision not to exercise those functions.
6A (1) The Chair of the Payment Systems Regulator must not take part in any discussion by or decision of the FCA which relates to—
(a) the exercise of the FCA’s functions in relation to a particular person, or
(b) a decision not to exercise those functions.
(2) Sub-paragraph (1) does not apply at any time when the person who is the Chair of the Payment Systems Regulator also holds the office mentioned in paragraph 2(2)(a).
Remuneration
7 The FCA must pay to the appointed members such remuneration as may be determined—
(a) in the case of the non-executive members, by the Treasury;
(b) in the case of the executive members, by the FCA.
Arrangements for discharging functions
8 (1) The FCA may make arrangements for any of its functions to be discharged by a committee, sub-committee, officer or member of staff of the FCA, but subject to the following provisions.
(2) In exercising its legislative functions, the FCA must act through its governing body.
(3) For that purpose, the following are the FCA's legislative functions—
(a) making rules under this Act or under assimilated direct legislation;
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c) issuing statements under—
(i) section 63ZD, 63C, ... 69, 88C, 89S, 93, 124, ... 138N, 142V, 192H, 192N, 210 or 312J,
(ii) section 345D (whether as a result of section 345(2) , section 249(1) or 261K(1)), or
(iii) section 80 of the Financial Services Act 2012;
(d) giving directions under section 316, 318 or 328.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(f) making technical standards in accordance with Chapter 2A of Part 9A;
(g) making EU Exit instruments under the Financial Regulators’ Powers (Technical Standards) (Amendment etc.) (EU Exit) Regulations 2018.
(3A) In exercising its functions under sections 9(2) and 10 of the Financial Guidance and Claims Act 2018 (approving and reviewing standards set by Money and Pensions Service), the FCA must act through its governing body.
(4) The function of issuing general guidance (as defined in section 139B(5) ...) may not be discharged by an officer or member of staff of the FCA.
(5) In respect of the exercise of a function under Part 1 of the Competition Act 1998, the power in sub-paragraph (1) is subject to provision in rules made under section 51 of that Act by virtue of paragraph 1A of Schedule 9 to that Act.
Records
9 The FCA must maintain satisfactory arrangements for—
(a) recording decisions made in the exercise of its functions, and
(b) the safe-keeping of those records which it considers ought to be preserved.
Publication of record of meetings of governing body
10 (1) The FCA must publish a record of each meeting of its governing body—
(a) before the end of the period of 6 weeks beginning with the day of the meeting, or
(b) if no meeting of the governing body is subsequently held during that period, before the end of the period of 2 weeks beginning with the day of the next meeting.
(2) The record must specify any decision taken at the meeting (including decisions to take no action) and must set out, in relation to each decision, a summary of the deliberations of the governing body.
(3) Sub-paragraphs (1) and (2) do not require the publication of information whose publication within the time required by sub-paragraph (1) would in the opinion of the governing body be against the public interest.
(4) Publication under this section is to be in such manner as the FCA thinks fit.
Annual report
11 (1) At least once a year the FCA must make a report to the Treasury on—
(a) the discharge of its functions,
(b) the extent to which, in its opinion, its operational objectives have been advanced,
(c) the extent to which, in its opinion, it has acted compatibly with its strategic objective,
(d) how, in its opinion, it has complied with the duty in section 1B(4),
(da) how, in its opinion, it has complied with the duty in section 1B(4A),
(e) its consideration of the matter mentioned in section 1B(5)(b),
(f) its consideration of the principles in section 3B,
(g) how it has complied with section 3D,
(h) any direction received under section 3I or 3J during the period to which the report relates,
(ha) any rules that it has made as a result of section 137C during the period to which the report relates and the kinds of regulated credit agreement (within the meaning of that section) to which the rules apply,
(hb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(hc) how it has satisfied the requirement in section 138EA(2) so far as regarding disclosure requirements in connection with matters relating to sustainability,
(i) how it has complied with section 354A(1) so far as relating to co-operation with persons outside the United Kingdom, ...
(ia) how, in its opinion, it has complied with its duties under sections 9(2) and 10 of the Financial Guidance and Claims Act 2018, ...
(ib) how it has satisfied the requirement in section 416B to have regard to any SDR policy statement of the Treasury published and not withdrawn under section 416A (sustainability disclosure requirements: policy statement),
(ib) any engagement with the statutory panels of the FCA, the PRA or the Payment Systems Regulator,
(ic) how it has complied with the statement of policy on panel appointments prepared under section 1RA in relation to the process for making appointments and the matters considered in determining who is appointed, and
(j) such other matters as the Treasury may from time to time direct.
(2) Sub-paragraph (1) does not require the inclusion in the report of any information whose publication would in the opinion of the FCA be against the public interest.
(3) The report must be accompanied by—
(a) a statement of the remuneration of the appointed members of the governing body of the FCA during the period to which the report relates, and
(b) such other reports or information, prepared by such persons, as the Treasury may from time to time direct.
(4) The Treasury must lay before Parliament a copy of each report received by them under this paragraph.
(5) In this paragraph “statutory panel” has the meaning given in section 1RB(5).
Other reports
11A (1) The Treasury may (subject to this paragraph) at any time by direction require the FCA to publish a report containing information about—
(a) any of the matters mentioned in paragraphs (a) to (ia) of paragraph 11(1);
(b) such other matters that the direction may specify.
(2) The Treasury may give a direction under this paragraph requiring information to be published only if the Treasury consider that—
(a) the information is reasonably necessary for the purpose of reviewing and scrutinising the discharge of the FCA’s functions, and
(b) other available information is not sufficient to meet that purpose.
(3) Subject to sub-paragraph (4), the FCA must publish a report prepared under a direction given under this paragraph in such manner, and within such period, as the direction may require.
(4) Nothing in this paragraph requires the inclusion in the report of any information whose publication would be against the public interest.
(5) A direction under this paragraph may not—
(a) require a report to be published more than once in each quarter;
(b) require the publication of information that is confidential information for the purposes of Part 23 (see section 348(2)).
(6) The Treasury must consult the FCA before giving a direction under this paragraph.
(7) In exercising the power under this paragraph, the Treasury must have regard to the desirability of minimising any adverse effect that the preparation of the report required in accordance with the direction may have on the exercise by the FCA of any of its other functions.
(8) The Treasury must—
(a) lay before Parliament a copy of a direction given under this paragraph, and
(b) publish the direction in such manner as the Treasury think fit.
(9) A direction under this paragraph may be varied or revoked by the giving of a further direction.
Annual public meeting
12 (1) Not later than 3 months after making a report under paragraph 11, the FCA must hold a public meeting (“the annual meeting”) for the purposes of enabling that report to be considered.
(2) The FCA must organise the annual meeting so as to allow—
(a) a general discussion of the contents of the report which is being considered, and
(b) a reasonable opportunity for those attending the meeting to put questions to the FCA about the way in which it discharged, or failed to discharge, its functions during the period to which the report relates.
(3) But otherwise the annual meeting is to be organised and conducted in such a way as the FCA considers appropriate.
(4) The FCA must give reasonable notice of its annual meeting.
(5) That notice must—
(a) give details of the time and place at which the meeting is to be held,
(b) set out the proposed agenda for the meeting,
(c) indicate the proposed duration of the meeting,
(d) give details of the FCA's arrangements for enabling persons to attend, and
(e) be published by the FCA in the way appearing to it to be best calculated to bring the notice to the attention of the public.
(6) If the FCA proposes to alter any of the arrangements which have been included in the notice given under sub-paragraph (5), it must—
(a) give reasonable notice of the alteration, and
(b) publish that notice in the way appearing to the FCA to be best calculated to bring it to the attention of the public.
Report of annual meeting
13 Not later than one month after its annual meeting, the FCA must publish a report of the proceedings of the meeting.
Accounts and audit
14 (1) The Treasury may—
(a) require the FCA to comply with any provisions of the Companies Act 2006 about accounts and their audit which would not otherwise apply to it, or
(b) direct that any provision of that Act about accounts and their audit is to apply to the FCA with such modifications as are specified in the direction, whether or not the provision would otherwise apply to the FCA.
(2) Compliance with any requirement under sub-paragraph (1)(a) or (b) is enforceable by injunction or, in Scotland, an order for specific performance under section 45 of the Court of Session Act 1988.
(3) Proceedings under sub-paragraph (2) may be brought only by the Treasury.
15 (1) The FCA must send a copy of its annual accounts to the Comptroller and Auditor General as soon as is reasonably practicable.
(2) The Comptroller and Auditor General must—
(a) examine, certify and report on accounts received under this paragraph, and
(b) send a copy of the certified accounts and the report to the Treasury.
(3) The Treasury must lay the copy of the certified accounts and the report before Parliament.
(4) Except as provided by paragraph 14(1), the FCA is exempt from the requirements of Part 16 of the Companies Act 2006 (audit), and its balance sheet must contain a statement to that effect.
(5) In this paragraph “annual accounts” has the meaning given in section 471 of the Companies Act 2006.
PART 2 Status
Status
16 In relation to any of its functions—
(a) the FCA is not to be regarded as acting on behalf of the Crown, and
(b) its members, officers and staff are not to be regarded as Crown servants.
Exemption from requirement for use of “limited” in name of FCA
17 The FCA is to continue to be exempt from the requirements of the Companies Act 2006 relating to the use of “limited” as part of its name.
18 If the Secretary of State is satisfied that any action taken by the FCA makes it inappropriate for the exemption given by paragraph 17 to continue, the Secretary of State may, after consulting the Treasury, give a direction removing it.
PART 3 Penalties and fees
Penalties
19 In determining its policy with respect to the amounts of penalties to be imposed by it under this Act, the FCA must take no account of the expenses which it incurs, or expects to incur, in discharging its functions.
20 (1) The FCA must in respect of each of its financial years pay to the Treasury its penalty receipts after deducting its enforcement costs.
(2) The FCA's “penalty receipts” in respect of a financial year are any amounts received by it during the year by way of penalties imposed under this Act.
(3) The FCA's “enforcement costs” in respect of a financial year are the expenses incurred by it during the year in connection with—
(a) the exercise, or consideration of the possible exercise, of any of its enforcement powers in particular cases, or
(b) the recovery of penalties imposed under this Act or under a provision mentioned in sub-paragraph (4A).
(4) For this purpose the FCA's enforcement powers are—
(a) its powers under any of the provisions mentioned in section 133(7A),
(b) its powers under section 56 (prohibition orders),
(ba) its powers under section 143S (Part 9C prohibition orders),
(bb) its powers under section 309B (Part 18 prohibition orders),
(c) its powers under Part 25 of this Act (injunctions and restitution),
(ca) its powers under the relevant competition provisions (as applied by Part 16A of this Act),
(d) its powers under any other enactment specified by the Treasury by order,
(e) its powers in relation to the investigation of relevant offences, and
(f) its powers in England and Wales or Northern Ireland in relation to the prosecution of relevant offences.
(4A) The relevant competition provisions” are—
(a) section 31E of the Competition Act 1998 (enforcement of commitments);
(b) section 34 of that Act (enforcement of directions);
(c) section 36 of that Act (penalties);
(d) section 40A of that Act (penalties: failure to comply with requirements);
(e) section 174A of the Enterprise Act 2002 (penalties).
(5) “Relevant offences” are—
(a) offences under this Act,
(b) offences under subordinate legislation made under this Act,
(c) offences falling within section 402(1) ...,
(ca) offences under Part 1 of the Competition Act 1998,
(cb) offences under Part 4 of the Enterprise Act 2002,
(d) offences under Part 7 of the Financial Services Act 2012, and
(e) any other offences specified by the Treasury by order.
(6) The Treasury may give directions to the FCA as to how the FCA is to comply with its duty under sub-paragraph (1).
(7) The directions may in particular—
(a) specify descriptions of expenditure that are, or are not, to be regarded as incurred in connection with either of the matters mentioned in sub-paragraph (3),
(b) relate to the calculation and timing of the deduction in respect of the FCA's enforcement costs, and
(c) specify the time when any payment is required to be made to the Treasury.
(8) The directions may also require the FCA to provide the Treasury at specified times with specified information relating to—
(a) penalties that the FCA has imposed under this Act, or
(b) the FCA's enforcement costs.
(9) The Treasury must pay into the Consolidated Fund any sums received by them under this paragraph.
21 (1) The FCA must prepare and operate a scheme (“the financial penalty scheme”) for ensuring that the amounts that, as a result of the deduction for which paragraph 20(1) provides, are retained by the FCA in respect of amounts paid to it by way of penalties imposed under this Act are applied for the benefit of regulated persons.
(2) “Regulated persons” means—
(a) authorised persons,
(b) recognised investment exchanges,
(c) issuers of securities admitted to the official list, ... and
(d) issuers who have requested or approved the admission of financial instruments to trading on a regulated market, ...
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) The financial penalty scheme may, in particular, make different provision with respect to different classes of regulated person.
(4) The financial penalty scheme must ensure that those who have become liable to pay a penalty to the FCA in any financial year of the FCA do not receive any benefit under the scheme in the following financial year.
(5) Up-to-date details of the financial penalty scheme must be set out in a document (“the scheme details”).
22 (1) The scheme details must be published by the FCA in the way appearing to it to be best calculated to bring them to the attention of the public.
(2) Before making the financial penalty scheme, the FCA must publish a draft of the proposed scheme in the way appearing to the FCA to be best calculated to bring it to the attention of the public.
(3) The draft must be accompanied by notice that representations about the proposals may be made to the FCA within a specified time.
(4) Before making the scheme, the FCA must have regard to any representations made to it in accordance with sub-paragraph (3).
(5) If the FCA makes the proposed scheme, it must publish an account, in general terms, of—
(a) the representations made to it in accordance with sub-paragraph (3), and
(b) its response to them.
(6) If the scheme differs from the draft published under sub-paragraph (2) in a way which is, in the opinion of the FCA, significant, the FCA must (in addition to complying with sub-paragraph (5)) publish details of the difference.
(7) The FCA must, without delay, give the Treasury a copy of any scheme details published by it.
(8) The FCA may charge a reasonable fee for providing a person with a copy of—
(a) a draft published under sub-paragraph (2);
(b) scheme details.
(9) Sub-paragraphs (2) to (6) and (8)(a) also apply to a proposal to alter or replace the financial penalty scheme.
Fees
23 (1) The FCA may make rules providing for the payment to it of such fees, in connection with the discharge of any of its qualifying functions, as it considers will (taking account of its expected income from fees and charges provided for by any other provision of this Act other than sections 137SA, , 137SB ... and 333T) enable it—
(a) to meet expenses incurred in carrying out its functions , other than its excepted functions, or for any incidental purpose,
(b) to repay the principal of, and pay any interest on, any relevant borrowing and to meet relevant commencement expenses, and
(c) to maintain adequate reserves.
(2) The “qualifying functions” of the FCA are—
(a) its functions under or as a result of this Act or any of the other enactments mentioned in section 1A(6)(a) to (ca) and (e) but not its excepted functions, and
(b) its functions under or as a result of a qualifying provision that is specified, or of a description specified, for the purposes of this sub-paragraph by the Treasury by order.
(2ZA) The “excepted functions” of the FCA are—
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b) its functions under section 333T so far as relating to the collection of payments. , and
(c) its functions under sections 137SA and 137SB.
(2A) The functions referred to in sub-paragraph (1)(a) include functions of the FCA under the Competition Act 1998 or the Enterprise Act 2002 as a result of Part 16A of this Act; but this sub-paragraph is not to be regarded as limiting the effect of the definition of “functions” in paragraph 1.
(3) In sub-paragraph (1)(b)—
“relevant borrowing” means any money borrowed by the FCA which has been used for the purpose of meeting expenses incurred in relation to its assumption of functions under this Act, and
“relevant commencement expenses” means expenses incurred by the FCA—
in preparation for the exercise of functions by the FCA under this Act, or
for the purpose of facilitating the exercise by the FCA of those functions or otherwise in connection with their exercise by it.
(4) Neither section 1A(6)(d) nor the definition of “functions” in paragraph 1 applies for the purposes of sub-paragraph (2).
(5) For the purposes of sub-paragraph (3) it is irrelevant when the borrowing of the money, the incurring of the expenses or the assumption of functions took place (and, in particular, it is irrelevant if any of those things were done at a time when the FCA was known as the Financial Services Authority).
(6) In the case of rules made under Part 6 of this Act, the rules may, in particular, require the payment of fees in respect of—
(a) the continued inclusion of securities or persons in any list or register required to be kept by the FCA as a result of any provision made by or under that Part,
(b) access to any list or register within paragraph (a), and
(c) the continued admission of financial instruments to trading on a regulated market.
(7) In fixing the amount of any fee which is to be payable to the FCA, no account is to be taken of any sums which the FCA receives, or expects to receive, by way of penalties imposed by it under this Act.
(8) Any fee which is owed to the FCA under any provision made by or under this Act may be recovered as a debt due to the FCA.
Services for which fees may not be charged
24 The power conferred by paragraph 23 may not be used to require—
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b) a fee to be paid by any person whose application for approval under section 59 has been granted.
(c) a fee to be paid by any person whose application under section 309I for approval under section 309G has been granted.
PART 4 Miscellaneous
Exemption from liability in damages
25 (1) None of the following is to be liable in damages for anything done or omitted in the discharge, or purported discharge, of the FCA's functions—
(a) the FCA;
(b) any person (“P”) who is, or is acting as, a member, officer or member of staff of the FCA;
(c) any person who could be held vicariously liable for things done or omitted by P, but only in so far as the liability relates to P's conduct.
(1A) In sub-paragraph (1) the reference to the FCA's functions includes its functions under
(a) Part 5 of the Financial Services (Banking Reform) Act 2013 (regulation of payment systems),
(b) Part 3 of the Finance Act 2022 (economic crime (anti-money laundering) levy).
(2) Anything done or omitted by a person mentioned in sub-paragraph (1)(a) or (b) while acting, or purporting to act, as a result of an appointment under any of sections 166 to 169 is to be taken for the purposes of sub-paragraph (1) to have been done or omitted in the discharge, or as the case may be purported discharge, of the FCA's functions.
(3) Sub-paragraph (1) does not apply—
(a) if the act or omission is shown to have been in bad faith, or
(b) so as to prevent an award of damages made in respect of an act or omission on the ground that the act or omission was unlawful as a result of section 6(1) of the Human Rights Act 1998.
Accredited financial investigators
26 For the purposes of this Act anything done by an accredited financial investigator within the meaning of the Proceeds of Crime Act 2002 who—
(a) is, or is acting as, an officer of, or member of the staff of, the FCA, or
(b) is appointed by the FCA under section 97, 167 or 168 to conduct an investigation,
is to be treated as done in the exercise or discharge of a function of the FCA.
Amounts required by rules to be paid to the FCA
27 Any amount (other than a fee) which is required by rules to be paid to the FCA may be recovered as a debt due to the FCA.
Engagement with Parliamentary Committees
28 (1) This paragraph applies where the FCA issues a relevant consultation.
(2) For the purposes of this paragraph the FCA issues a relevant consultation if it—
(a) publishes a draft of proposed rules under section 138I,
(b) publishes a proposal under a duty imposed by another provision of this Act or by any other enactment, or
(c) publishes other proposals about the exercise of any of its general functions.
(3) The FCA must, as soon as reasonably practicable after issuing the consultation, notify in writing the chair of each relevant Parliamentary Committee that the consultation has been issued.
(4) The notification must specify the parts of the consultation (if any) that address the ways in which the proposals subject to consultation—
(a) advance the FCA’s operational objectives,
(b) are compatible with the FCA’s strategic objective,
(c) demonstrate that the FCA has had regard to the regulatory principles in section 3B when preparing the proposals, and
(d) engage with matters to which the FCA must have regard under regulations made under section 138EA.
(5) The reference in sub-paragraph (4)(a) to the FCA’s operational objectives includes, in its application as a secondary objective, the competitiveness and growth objective (see section 1EB).
(6) The notification must also specify any other part of the consultation which the FCA considers should be drawn to the attention of the relevant Parliamentary Committees.
(7) References in this paragraph to the relevant Parliamentary Committees are references to—
(a) the Treasury Committee of the House of Commons,
(b) the Committee of the House of Lords which—
(i) is charged with responsibility by that House for the purposes of this paragraph, and
(ii) has notified the FCA that it is a relevant Parliamentary Committee for those purposes, and
(c) the Joint Committee of both Houses which—
(i) is charged with responsibility by those Houses for the purposes of this paragraph, and
(ii) has notified the FCA that it is a relevant Parliamentary Committee for those purposes.
(8) References in this paragraph to the Treasury Committee of the House of Commons—
(a) if the name of that Committee is changed, are references to that Committee by its new name, and
(b) if the functions of that Committee (or substantially corresponding functions) become functions of a different Committee of the House of Commons, are to be treated as references to the Committee by which the functions are exercisable.
(9) Any question arising under sub-paragraph (8) is to be determined by the Speaker of the House of Commons.
29 (1) This paragraph applies where—
(a) the FCA issues a public consultation, and
(b) a Committee of the House of Commons or the House of Lords, or a joint Committee of both Houses, has provided to the FCA representations in response to the consultation.
(2) For the purposes of this paragraph, the FCA issues a public consultation if it publishes the draft of any proposals for the purpose of bringing them to the attention of the public (whether or not under a duty to do so imposed by an enactment).
(3) The FCA must give to the chair of the Committee concerned a written response to the representations.
(4) The duty to respond imposed by sub-paragraph (3) applies only so far as the FCA would not be under a corresponding duty to do so imposed by another enactment.
(5) The FCA is not required under sub-paragraph (3) to provide any information whose publication would in the opinion of the FCA be against the public interest.
Section 2AB
PART 1 General
Interpretation
1 In this Schedule—
...
“functions”, in relation to the PRA, means functions conferred on the PRA by or under any provision of this Act (see section 2AB(3) which affects the meaning of references to such functions).
Constitution
2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Appointed members of governing body
6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Terms of service
15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Arrangements for discharging functions
16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Records
17 The PRA must maintain satisfactory arrangements for—
(a) recording decisions made in the exercise of its functions, and
(b) the safe-keeping of those records which it considers ought to be preserved.
Budget
18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Annual report
19 (1) At least once a year the PRA must make a report to the Chancellor of the Exchequer on—
(a) the discharge of its functions,
(b) the extent to which, in its opinion, its objectives have been advanced,
(ba) how it has complied with section 2H(1),
(bb) how it has complied with the statement of policy on panel appointments prepared under section 2NA in relation to the process for making appointments and the matters considered in determining who is appointed,
(c) its consideration of the principles in section 3B ...,
(d) how it has complied with section 3D,
(e) any direction given under section 3I or 3J during the period to which the report relates,
(ea) how it has satisfied the requirement in section 138EA(2) so far as regarding disclosure requirements in connection with matters relating to sustainability,
(f) how it has complied with section 354B(1) so far as relating to co-operation with persons outside the United Kingdom, ...
(fa) any engagement with the statutory panels of the FCA, the PRA or the Payment Systems Regulator,
(fb) how it has satisfied the requirement in section 416B to have regard to any SDR policy statement of the Treasury under section 416A (sustainability disclosure requirements: policy statement), and
(g) such other matters as the Treasury may from time to time direct.
(1A) In the report the PRA must also report in general terms on—
(a) the extent to which, in its opinion, ring-fenced bodies have complied with the ring-fencing provisions,
(b) steps taken by ring-fenced bodies in order to comply with the ring-fencing provisions,
(c) steps taken by it to enforce the ring-fencing provisions,
(d) the extent to which ring-fenced bodies are carrying on the regulated activity of dealing in investments as principal (whether in the United Kingdom or elsewhere) in circumstances where as a result of an order under section 142D(2) that activity is not an excluded activity,
(e) the extent to which ring-fenced bodies are carrying on activities that would be excluded activities by virtue of an order under section 142D(4) but for an exemption or exclusion made by such an order,
(f) the extent to which ring-fenced bodies are doing things that they would be prohibited from doing by an order under section 142E but for an exemption made by such an order, and
(g) the extent to which ring-fenced bodies appear to it to have acted in accordance with any guidance which it has given to ring-fenced bodies and which relates to the operation of the ring-fencing provisions.
(1B) In sub-paragraph (1A)—
(a) references to “ring-fenced bodies” relate only to ring-fenced bodies that are PRA-authorised persons, and
(b) “the ring-fencing provisions” means ring-fencing rules and the duty imposed as a result of section 142G.
(2) Sub-paragraphs (1) and (1A) do not require the inclusion in the report of any information whose publication would in the opinion of the PRA be against the public interest.
(3) The report must be accompanied by—
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b) such other reports or information, prepared by such persons, as the Treasury may from time to time direct.
(4) The Chancellor of the Exchequer must lay before Parliament a copy of each report received by the Chancellor under this paragraph.
(5) The Chancellor may comply with sub-paragraph (4) by laying a document containing a report under this paragraph together with a report under section 4 of the Bank of England Act 1998.
(6) In this paragraph “statutory panel” has the meaning given in section 1RB(5).
Consultation about annual report
20 (1) In relation to each report made under paragraph 19, the PRA must publish at the same time as the report an invitation to members of the public to make representations to the PRA, within the 3 months beginning with the date of publication—
(a) about the report,
(b) about the way in which the PRA has discharged, or failed to discharge, its functions during the period to which the report relates, and
(c) about the extent to which, in their opinion, the PRA's objectives have been advanced including its secondary objectives under section 2H and has considered the regulatory principles in section 3B .
(2) The invitation must be published in the way appearing to it to be best calculated to bring the invitation to the attention of the public.
Report on consultation
21 (1) The PRA must publish a report about its consultation in accordance with paragraph 20.
(2) The report must contain an account, in general terms, of any representations received in pursuance of the invitation published under that paragraph.
(3) The report must be published not later than 4 months after the date on which the report under paragraph 19 was published.
Other reports
21A (1) The Treasury may (subject to this paragraph) at any time by direction require the PRA to publish a report containing information about—
(a) any of the matters mentioned in paragraphs (a) to (f) of paragraph 19(1);
(b) such other matters that the direction may specify.
(2) The Treasury may give a direction under this paragraph requiring information to be published only if the Treasury consider that—
(a) the information is reasonably necessary for the purpose of reviewing and scrutinising the discharge of the PRA’s functions, and
(b) other available information is not sufficient to meet that purpose.
(3) Subject to sub-paragraph (4), the PRA must publish a report prepared under a direction given under this paragraph in such manner, and within such period, as the direction may require.
(4) Nothing in this paragraph requires the inclusion in the report of any information whose publication would be against the public interest.
(5) A direction under this paragraph may not—
(a) require a report to be published more than once in each quarter;
(b) require the publication of information that is confidential information for the purposes of Part 23 (see section 348(2)).
(6) The Treasury must consult the PRA before giving a direction under this paragraph.
(7) In exercising the power under this paragraph, the Treasury must have regard to the desirability of minimising any adverse effect that the preparation of the report required in accordance with the direction may have on the exercise by the PRA of any of its other functions.
(8) The Treasury must—
(a) lay before Parliament a copy of a direction given under this paragraph, and
(b) publish the direction in such manner as the Treasury think fit.
(9) A direction under this paragraph may be varied or revoked by the giving of a further direction.
Accounts and audit
22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART 2 Status
Status
24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exemption from requirement for use of “limited” in name of PRA
25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART 3 Penalties and fees
Penalties
27 In determining its policy with respect to the amounts of penalties to be imposed by it under this Act, the PRA must take no account of the expenses which it incurs, or expects to incur, in discharging its functions.
28 (1) The PRA must in respect of each of its financial years pay to the Treasury its penalty receipts after deducting its enforcement costs.
(2) The PRA's “penalty receipts” in respect of a financial year are any amounts received by it during the year by way of penalties imposed under this Act.
(3) The PRA's “enforcement costs” in respect of a financial year are the expenses incurred by it during the year in connection with—
(a) the exercise, or consideration of the possible exercise, of any of its enforcement powers in particular cases, or
(b) the recovery of penalties imposed under this Act.
(4) For this purpose the PRA's enforcement powers are—
(a) its powers under any of the provisions mentioned in section 133(7A),
(b) its powers under section 56 (prohibition orders),
(c) its powers under Part 25 of this Act (injunctions and restitution),
(d) its powers under any other enactment specified by the Treasury by order,
(e) its powers in relation to the investigation of relevant offences, and
(f) its powers in England and Wales or Northern Ireland in relation to the prosecution of relevant offences.
(5) “Relevant offences” are—
(a) offences under FSMA 2000,
(b) offences under subordinate legislation made under that Act, and
(c) any other offences specified by the Treasury by order.
(6) The Treasury may give directions to the PRA as to how the PRA is to comply with its duty under sub-paragraph (1).
(7) The directions may in particular—
(a) specify descriptions of expenditure that are, or are not, to be regarded as incurred in connection with either of the matters mentioned in sub-paragraph (3),
(b) relate to the calculation and timing of the deduction in respect of the PRA's enforcement costs, and
(c) specify the time when any payment is required to be made to the Treasury.
(8) The directions may also require the PRA to provide the Treasury at specified times with information relating to—
(a) penalties that the PRA has imposed under FSMA 2000, or
(b) the PRA's enforcement costs.
(9) The Treasury must pay into the Consolidated Fund any sums received by them under this paragraph.
29 (1) The PRA must prepare and operate a scheme (“the financial penalty scheme”) for ensuring that the amounts that, as a result of the deduction for which paragraph 28(1) provides, are retained by the PRA in respect of amounts paid to it by way of penalties imposed under this Act are applied for the benefit of PRA-authorised persons.
(2) The financial penalty scheme may, in particular, make different provision with respect to different classes of PRA-authorised person.
(3) The financial penalty scheme must ensure that those who have become liable to pay a penalty to the PRA in any financial year of the PRA do not receive any benefit under the scheme in the following financial year.
(4) Up-to-date details of the financial penalty scheme must be set out in a document (“the scheme details”).
30 (1) The scheme details must be published by the PRA in the way appearing to it to be best calculated to bring them to the attention of the public.
(2) Before making the financial penalty scheme, the PRA must publish a draft of the proposed scheme in the way appearing to the PRA to be best calculated to bring it to the attention of the public.
(3) The draft must be accompanied by notice that representations about the proposals may be made to the PRA within a specified time.
(4) Before making the scheme, the PRA must have regard to any representations made to it in accordance with sub-paragraph (3).
(5) If the PRA makes the proposed scheme, it must publish an account, in general terms, of—
(a) the representations made to it in accordance with sub-paragraph (3), and
(b) its response to them.
(6) If the scheme differs from the draft published under sub-paragraph (2) in a way which is, in the opinion of the PRA, significant, the PRA must (in addition to complying with sub-paragraph (5)) publish details of the difference.
(7) The PRA must, without delay, give the Treasury a copy of any scheme details published by it.
(8) The PRA may charge a reasonable fee for providing a person with a copy of—
(a) a draft published under sub-paragraph (2);
(b) scheme details.
(9) Sub-paragraphs (2) to (6) and (8)(a) also apply to a proposal to alter or replace the financial penalty scheme.
Fees
31 (1) The PRA may make rules providing for the payment to it of such fees, in connection with the discharge of any of its qualifying functions, as it considers will (taking account of its expected income from fees and charges provided for by any other provision of this Act) enable it—
(a) to meet expenses incurred in carrying out its functions or for any incidental purpose,
(b) to repay the principal of, and pay any interest on, any relevant borrowing and to meet relevant commencement expenses, and
(c) to maintain adequate reserves.
(2) The “qualifying functions” of the PRA are—
(a) its functions under or as a result of this Act or any of the other enactments mentioned in section 2AB(3), and
(b) its functions under or as a result of a qualifying provision that is specified, or of a description specified, for the purposes of this sub-paragraph by the Treasury by order.
(3) In sub-paragraph (1)(b)—
“relevant borrowing” means any money borrowed by the PRA which has been used for the purpose of meeting expenses incurred in relation to its assumption of functions under this Act, and
“relevant commencement expenses” means expenses incurred by the PRA, the FCA or the Bank—
in preparation for the exercise of functions by the PRA under this Act, or
for the purpose of facilitating the exercise by the PRA of those functions or otherwise in connection with their exercise by it.
(4) Neither section 2AB(3)(d) nor the definition of “functions” in paragraph 1 applies for the purposes of sub-paragraph (2).
(5) For the purposes of sub-paragraph (3) it is irrelevant when the borrowing of the money, the incurring of the expenses or the assumption of functions took place (and, in particular, it is irrelevant if expenses were incurred by the FCA at a time when it was known as the Financial Services Authority).
(6) In fixing the amount of any fee which is to be payable to the PRA, no account is to be taken of any sums which the PRA receives, or expects to receive, by way of penalties imposed by it under this Act.
(7) Any fee which is owed to the PRA under any provision made by or under this Act may be recovered as a debt due to the PRA.
Services for which fees may not be charged
32 The power conferred by paragraph 31 may not be used to require—
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b) a fee to be paid by any person whose application for approval under section 59 has been granted.
PART 4 Miscellaneous
Exemption from liability in damages
33 (1) None of the following is to be liable in damages for anything done or omitted in the discharge, or purported discharge, of the PRA's functions—
(a) the PRA;
(b) any person (“P”) who is, or is acting as, a member, officer or member of staff of the PRA;
(c) any person who could be held vicariously liable for things done or omitted by P, but only in so far as the liability relates to P's conduct.
(1A) In sub-paragraph (1) the reference to the PRA's functions includes its functions under Part 5 of the Financial Services (Banking Reform) Act 2013 (regulation of payment systems).
(2) Anything done or omitted by a person mentioned in sub-paragraph (1)(a) or (b) while acting, or purporting to act, as a result of an appointment under any of sections 97, 166 to 169 , 284 and 377G is to be taken for the purposes of sub-paragraph (1) to have been done or omitted in the discharge, or as the case may be purported discharge, of the PRA's functions.
(3) Sub-paragraph (1) does not apply—
(a) if the act or omission is shown to have been in bad faith, or
(b) so as to prevent an award of damages made in respect of an act or omission on the ground that the act or omission was unlawful as a result of section 6(1) of the Human Rights Act 1998.
Accredited financial investigators
34 For the purposes of this Act anything done by an accredited financial investigator within the meaning of the Proceeds of Crime Act 2002 who—
(a) is, or is acting as, an officer of, or member of the staff of, the PRA, or
(b) is appointed by the PRA under section 167 or 168 to conduct an investigation,
is to be treated as done in the exercise or discharge of a function of the PRA.
Amounts required by rules to be paid to the PRA
35 Any amount (other than a fee) which is required by rules to be paid to the PRA may be recovered as a debt due to the PRA.
Engagement with Parliamentary Committees
36 (1) This paragraph applies where the PRA issues a relevant consultation.
(2) For the purposes of this paragraph the PRA issues a relevant consultation if it—
(a) publishes a draft of proposed rules under section 138J,
(b) publishes a proposal under a duty imposed by another provision of this Act or by any other enactment, or
(c) publishes other proposals about the exercise of any of its general functions.
(3) The PRA must, as soon as reasonably practicable after issuing the consultation, notify in writing the chair of each relevant Parliamentary Committee that the consultation has been issued.
(4) The notification must specify the parts of the consultation (if any) that address the ways in which the proposals subject to consultation—
(a) advance the PRA’s objectives,
(b) demonstrate that the PRA has had regard to the regulatory principles in section 3B when preparing the proposals, and
(c) engage with matters to which the PRA must have regard under regulations made under section 138EA.
(5) The reference in sub-paragraph (4)(a) to the PRA’s objectives includes, in their application as secondary objectives, the competition objective and the competitiveness and growth objective (see section 2H).
(6) The notification must also specify any other part of the consultation which the PRA considers should be drawn to the attention of the relevant Parliamentary Committees.
(7) References in this paragraph to the relevant Parliamentary Committees are references to—
(a) the Treasury Committee of the House of Commons,
(b) the Committee of the House of Lords which—
(i) is charged with responsibility by that House for the purposes of this paragraph, and
(ii) has notified the PRA that it is a relevant Parliamentary Committee for those purposes, and
(c) the Joint Committee of both Houses which—
(i) is charged with responsibility by those Houses for the purposes of this paragraph, and
(ii) has notified the PRA that it is a relevant Parliamentary Committee for those purposes.
(8) References in this paragraph to the Treasury Committee of the House of Commons—
(a) if the name of that Committee is changed, are references to that Committee by its new name, and
(b) if the functions of that Committee (or substantially corresponding functions) become functions of a different Committee of the House of Commons, are to be treated as references to the Committee by which the functions are exercisable.
(9) Any question arising under sub-paragraph (8) is to be determined by the Speaker of the House of Commons.
37 (1) This paragraph applies where—
(a) the PRA issues a public consultation, and
(b) a Committee of the House of Commons or the House of Lords, or a joint Committee of both Houses, has provided to the PRA representations in response to the consultation.
(2) For the purposes of this paragraph, the PRA issues a public consultation if it publishes the draft of any proposals for the purpose of bringing the proposals to the attention of the public (whether or not under a duty to do so imposed by an enactment).
(3) The PRA must give to the chair of the Committee concerned a written response to the representations.
(4) The duty to respond imposed by sub-paragraph (3) applies only so far as the PRA would not be under a corresponding duty to do so imposed by another enactment.
(5) The PRA is not required under sub-paragraph (3) to provide any information whose publication would in the opinion of the PRA be against the public interest.
Section 22(2).
Part I Regulated activities: general
General
1 The matters with respect to which provision may be made under section 22(1) in respect of activities include, in particular, those described in general terms in this Part of this Schedule.
Dealing in investments
2 (1) Buying, selling, subscribing for or underwriting investments or offering or agreeing to do so, either as a principal or as an agent.
(2) In the case of an investment which is a contract of insurance, that includes carrying out the contract.
Arranging deals in investments
3 Making, or offering or agreeing to make—
(a) arrangements with a view to another person buying, selling, subscribing for or underwriting a particular investment;
(b) arrangements with a view to a person who participates in the arrangements buying, selling, subscribing for or underwriting investments.
Deposit taking
4 Accepting deposits.
Safekeeping and administration of assets
5 (1) Safeguarding and administering assets belonging to another which consist of or include investments or offering or agreeing to do so.
(2) Arranging for the safeguarding and administration of assets belonging to another, or offering or agreeing to do so.
Managing investments
6 Managing, or offering or agreeing to manage, assets belonging to another person where—
(a) the assets consist of or include investments; or
(b) the arrangements for their management are such that the assets may consist of or include investments at the discretion of the person managing or offering or agreeing to manage them.
Investment advice
7 Giving or offering or agreeing to give advice to persons on—
(a) buying, selling, subscribing for or underwriting an investment; or
(b) exercising any right conferred by an investment to acquire, dispose of, underwrite or convert an investment.
Establishing collective investment schemes
8 Establishing, operating or winding up a collective investment scheme, including acting as—
(a) trustee of a unit trust scheme;
(b) depositary of a collective investment scheme other than a unit trust scheme; or
(c) sole director of a body incorporated by virtue of regulations under section 262.
Using computer-based systems for giving investment instructions
9 (1) Sending on behalf of another person instructions relating to an investment by means of a computer-based system which enables investments to be transferred without a written instrument.
(2) Offering or agreeing to send such instructions by such means on behalf of another person.
(3) Causing such instructions to be sent by such means on behalf of another person.
(4) Offering or agreeing to cause such instructions to be sent by such means on behalf of another person.
Part 1A Regulated activities: reclaim funds
Activities of reclaim funds
9A (1) The matters with respect to which provision may be made under section 22(1) in respect of activities include, in particular, any of the activities of a reclaim fund.
(2) “Reclaim fund” has the meaning given by section 5(1) of the Dormant Bank and Building Society Accounts Act 2008.
Part II Investments
General
10 The matters with respect to which provision may be made under section 22(1) in respect of investments include, in particular, those described in general terms in this Part of this Schedule.
Securities
11 (1) Shares or stock in the share capital of a company.
(2) “Company” includes—
(a) any body corporate (wherever incorporated), and
(b) any unincorporated body constituted under the law of a country or territory outside the United Kingdom,
other than an open-ended investment company.
Instruments creating or acknowledging indebtedness
12 Any of the following—
(a) debentures;
(b) debenture stock;
(c) loan stock;
(d) bonds;
(e) certificates of deposit;
(f) any other instruments creating or acknowledging a present or future indebtedness.
Government and public securities
13 (1) Loan stock, bonds and other instruments—
(a) creating or acknowledging indebtedness; and
(b) issued by or on behalf of a government, local authority or public authority.
(2) “Government, local authority or public authority” means—
(a) the government of the United Kingdom, of Northern Ireland, or of any country or territory outside the United Kingdom;
(b) a local authority in the United Kingdom or elsewhere;
(c) any international organisation the members of which include the United Kingdom ....
Instruments giving entitlement to investments
14 (1) Warrants or other instruments entitling the holder to subscribe for any investment.
(2) It is immaterial whether the investment is in existence or identifiable.
Certificates representing securities
15 Certificates or other instruments which confer contractual or property rights—
(a) in respect of any investment held by someone other than the person on whom the rights are conferred by the certificate or other instrument; and
(b) the transfer of which may be effected without requiring the consent of that person.
Units in collective investment schemes
16 (1) Shares in or securities of an open-ended investment company.
(2) Any right to participate in a collective investment scheme.
Options
17 Options to acquire or dispose of property.
Futures
18 Rights under a contract for the sale of a commodity or property of any other description under which delivery is to be made at a future date.
Contracts for differences
19 Rights under—
(a) a contract for differences; or
(b) any other contract the purpose or pretended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in—
(i) the value or price of property of any description; or
(ii) an index or other factor designated for that purpose in the contract.
Contracts of insurance
20 Rights under a contract of insurance, including rights under contracts falling within head C of Schedule 2 to the Friendly Societies Act 1992.
Participation in Lloyd’s syndicates
21 (1) The underwriting capacity of a Lloyd’s syndicate.
(2) A person’s membership (or prospective membership) of a Lloyd’s syndicate.
Deposits
22 Rights under any contract under which a sum of money (whether or not denominated in a currency) is paid on terms under which it will be repaid, with or without interest or a premium, and either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person receiving it.
Loans and other forms of credit
23 (1) Rights under any contract under which one person provides another with credit.
(2) “Credit” includes any cash loan or other financial accommodation.
(3) “Cash” includes money in any form.
(4) It is immaterial for the purposes of sub-paragraph (1) whether or not the obligation of the borrower is secured on property of any kind.
Other finance arrangements involving land
23A (1) Rights under any arrangement for the provision of finance under which the person providing the finance either—
(a) acquires a major interest in land from the person to whom the finance is provided, or
(b) disposes of a major interest in land to that person,
as part of the arrangement.
(2) References in sub-paragraph (1) to a “major interest” in land are to—
(a) in relation to land in England or Wales—
(i) an estate in fee simple absolute, or
(ii) a term of years absolute,
whether subsisting at law or in equity;
(b) in relation to land in Scotland—
(i) the interest of an owner of land, or
(ii) the tenant's right over or interest in a property subject to a lease;
(c) in relation to land in Northern Ireland—
(i) any freehold estate, or
(ii) any leasehold estate,
whether subsisting at law or in equity.
(3) It is immaterial for the purposes of sub-paragraph (1) whether either party acquires or (as the case may be) disposes of the interest in land—
(a) directly, or
(b) indirectly.
Contracts for hire of goods
23B (1) Rights under a contract for the bailment or (in Scotland) hiring of goods to a person other than a body corporate.
(2) “Goods” has the meaning given in section 61(1) of the Sale of Goods Act 1979.
(3) It is immaterial for the purposes of sub-paragraph (1) whether the rights of the person to whom the goods are bailed or hired have been assigned to a body corporate.
Rights in investments
24 Any right or interest in anything which is an investment as a result of any other provision made under section 22(1).
PART 2A Regulated activities relating to information about persons' financial standing
General
24A The matters with respect to which provision may be made under section 22(1A)(a) include, in particular, those described in general terms in this Part of this Schedule.
Providing credit reference services
24B Furnishing persons with information that—
(a) is relevant to the financial standing of persons other than bodies corporate, and
(b) is collected for that purpose by the person furnishing it.
Providing credit information services
24C (1) Taking steps on behalf of a person other than a body corporate in connection with information relevant to that person's financial standing that is or may be held by a person who is carrying on a regulated activity.
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24D Giving advice to a person other than a body corporate in relation to the taking of any steps of the kind mentioned in paragraph 24C(1).
Part III Supplemental Provisions
The order-making power
25 (1) An order under section 22(1) or (1A) to (1B) may—
(a) provide for exemptions;
(b) confer powers on the Treasury or either regulator;
(c) authorise the making of regulations or other instruments by the Treasury for purposes of, or connected with, any relevant provision;
(d) authorise the making of rules or other instruments by either regulator for purposes of, or connected with, any relevant provision;
(e) make provision in respect of any information or document which, in the opinion of the Treasury or either regulator, is relevant for purposes of, or connected with, any relevant provision;
(f) make such consequential, transitional or supplemental provision as the Treasury consider appropriate for purposes of, or connected with, any relevant provision , including provision which applies (with or without modification) provision in this Act or other primary or subordinate legislation that relates to investment activity or financial services to a regulated activity that does not relate to investment activity or financial services.
(2) Provision made as a result of sub-paragraph (1)(f) may amend any primary or subordinate legislation, including any provision of, or made under, this Act.
(3) “Relevant provision” means any provision—
(a) of section 22 or this Schedule; or
(b) made under that section or this Schedule.
Parliamentary control
26 (1) This paragraph applies to any order made under section 22(1) or (1A) to (1B) which contains a statement by the Treasury that, in their opinion, the effect (or one of the effects) of the proposed order would be that an activity which is not a regulated activity would become a regulated activity.
(2) No order to which this paragraph applies may be made unless—
(a) a draft of the order has been laid before Parliament and approved by a resolution of each House, or
(b) sub-paragraph (4) applies.
(3) Sub-paragraph (4) applies if an order to which this paragraph applies also contains a statement that the Treasury are of the opinion that, by reason of urgency, it is necessary to make the order without a draft being so laid and approved.
(4) Where this sub-paragraph applies the order—
(a) must be laid before Parliament after being made, and
(b) ceases to have effect at the end of the relevant period unless before the end of that period the order is approved by a resolution of each House of Parliament (but without that affecting anything done under the order or the power to make a new order).
(5) The “relevant period” is a period of 28 days beginning with the day on which the order is made.
(6) In calculating the relevant period no account is to be taken of any time during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than 4 days.
Interpretation
27 (1) In this Schedule—
“buying” includes acquiring for valuable consideration;
“offering” includes inviting to treat;
“property” includes currency of the United Kingdom or any other country or territory; and
“selling” includes disposing for valuable consideration.
(2) In sub-paragraph (1) “disposing” includes—
(a) in the case of an investment consisting of rights under a contract—
(i) surrendering, assigning or converting those rights; or
(ii) assuming the corresponding liabilities under the contract;
(b) in the case of an investment consisting of rights under other arrangements, assuming the corresponding liabilities under the contract or arrangements;
(c) in the case of any other investment, issuing or creating the investment or granting the rights or interests of which it consists.
(3) In this Schedule references to an instrument include references to any record (whether or not in the form of a document).
SCHEDULE 2A Gibraltar-based persons carrying on activities in the UK
Section 31
PART 1 Interpretation etc
Gibraltar-based person
1 (1) In this Act, “Gibraltar-based person” means a person listed in sub-paragraph (2) which has its head office and, if it has one, its registered office in Gibraltar (and see also Part 14 of this Schedule).
(2) Those persons are—
(a) an individual,
(b) a body corporate,
(c) a partnership, or
(d) an unincorporated association.
Regulators
2 (1) In this Schedule—
“the Gibraltar regulator” means the Gibraltar Financial Services Commission;
“UK regulator” means the FCA or the PRA.
(2) The Treasury may by regulations amend the definition of “the Gibraltar regulator” if they consider it appropriate to do so in consequence of a change in the law of Gibraltar.
Activities and branches
3 (1) In this Schedule, “approved activity” means a regulated activity for the time being approved by regulations under paragraph 5.
(2) For the purposes of this Schedule—
(a) “corresponding activity” means an activity corresponding to an approved activity, and
(b) references (however expressed) to an activity corresponding to an approved activity, or an approved activity corresponding to another activity, are to be interpreted in accordance with regulations under paragraph 6.
(3) In this Schedule, “branch” means—
(a) a place where a person carries on an activity for an indefinite period and which does not have legal personality, or
(b) any other description of place specified in regulations made by the Treasury.
UK regulators' objectives
4 For the purposes of any provision of this Schedule which refers to the FCA's operational objectives or the PRA's objectives, in relation to the exercise of a power in relation to a particular person, it does not matter whether there is a relationship between that person and the persons whose interests will be protected by the exercise of the power.
PART 2 Approved activities
Approval of regulated activities
5 (1) The Treasury may by regulations approve a regulated activity for the purposes of this Schedule.
(2) The power under this paragraph includes power to approve a regulated activity—
(a) only so far as it is carried on by a person of a description specified in the regulations,
(b) only so far as it is carried on through a branch in the United Kingdom,
(c) only so far as it is carried on in other circumstances specified in the regulations, or
(d) subject to other limitations.
(3) In making regulations under this paragraph, the Treasury may have regard to any matter that they consider relevant (and see the restrictions in paragraphs 7, 8 and 9 and the requirement in paragraph 10).
Corresponding activities regulated in Gibraltar
6 (1) The Treasury must by regulations make provision about how each approved activity corresponds to activities which the Gibraltar regulator has authorised, or may authorise, a person to carry on in Gibraltar.
(2) The power under this paragraph includes power to make provision about an activity—
(a) only so far as it is carried on by a person of a description specified in the regulations,
(b) only so far as it is carried on in other circumstances specified in the regulations, or
(c) subject to other limitations.
(3) In making regulations under this paragraph, the Treasury may have regard to any matter that they consider relevant (and see the restrictions in paragraphs 7 and 8 and the requirement in paragraph 10).
Objectives
7 (1) The Treasury may not make regulations under paragraph 5 or 6 unless they are satisfied that doing so is compatible with each of the following objectives—
(a) to protect and enhance the soundness, stability and resilience of the UK financial system;
(b) to protect and enhance public confidence in the UK financial system;
(c) to prevent the use of the UK financial system for a purpose connected with financial crime;
(d) to ensure that the relevant markets in the United Kingdom function well;
(e) to protect consumers;
(f) to protect the operation of the compensation scheme;
(g) to protect public funds;
(h) to maintain and improve relations between the United Kingdom and other countries and territories with significant financial markets or significant markets for financial services.
(2) In this paragraph—
“consumers” has the meaning given in section 1G;
“financial crime” has the meaning given in section 1H;
“public funds” means the Consolidated Fund and any other account or source of money which cannot be drawn or spent other than by, or with the authority of, the Treasury;
“the relevant markets” means the markets for services provided by persons carrying on the regulated activity or approved activity (as appropriate) to which the regulations relate.
Alignment of law and practice
8 (1) The Treasury may not approve a regulated activity under paragraph 5, or identify an activity as corresponding to an approved activity under paragraph 6, unless they are satisfied that, having regard to the objectives in paragraph 7(1), the relevant law and practice of the United Kingdom and Gibraltar are sufficiently aligned.
(2) In this paragraph, “the relevant law and practice” means—
(a) in relation to the United Kingdom, law and practice under which the carrying on of what is or would be the approved activity is authorised and supervised and other law and practice relevant to the carrying on of that activity,
(b) in relation to Gibraltar, law and practice under which the carrying on of what would be the corresponding activity is authorised and supervised and other law and practice relevant to the carrying on of that activity, and
(c) in relation to both the United Kingdom and Gibraltar, law and practice relevant to the objectives in paragraph 7(1).
(3) The reference to alignment between the law and practice of the United Kingdom and Gibraltar in sub-paragraph (1) includes both alignment as regards the effect of the law and practice and alignment of the text of the law and of any guidance or other documents relating to practice.
Co-operation
9 (1) The Treasury may not approve a regulated activity under paragraph 5 unless they are satisfied that, having regard to the objectives in paragraph 7(1), there is, or will be, adequate co-operation between—
(a) the UK entities listed in sub-paragraph (2), and
(b) the Gibraltar entities listed in sub-paragraph (3).
(2) The UK entities are—
(a) the Treasury,
(b) the FCA,
(c) the PRA, and
(d) the scheme manager.
(3) The Gibraltar entities are—
(a) the government of Gibraltar, and
(b) the Gibraltar regulator.
(4) In determining whether the test in sub-paragraph (1) is satisfied, the Treasury must have regard to—
(a) memoranda describing how the UK entities and the Gibraltar entities intend to co-operate,
(b) arrangements for the UK entities to obtain information and documents from the Gibraltar entities,
(c) arrangements for the verification of such information and documents (whether by, or by a person appointed by, a UK entity or a Gibraltar entity),
(d) arrangements for the Gibraltar entities to obtain information and documents from the UK entities, and
(e) anything else that the Treasury consider relevant.
Consultation
10 Before making regulations under paragraph 5 or 6, the Treasury must consult—
(a) the government of Gibraltar,
(b) the FCA, and
(c) if the regulations relate to activities which consist of or include PRA-regulated activities, the PRA.
Withdrawal of approval
11 (1) The restrictions in paragraphs 7, 8 and 9 do not apply in relation to regulations under paragraph 5 to the extent that the regulations—
(a) revoke other regulations under paragraph 5, or
(b) otherwise amend other regulations under paragraph 5 in order to withdraw the Treasury's approval of an activity.
(2) The restrictions in paragraphs 7 and 8 do not apply in relation to regulations under paragraph 6 to the extent that the regulations—
(a) revoke other regulations under paragraph 6, or
(b) otherwise amend other regulations under paragraph 6 in order to provide that an activity which the Gibraltar regulator has authorised, or may authorise, a person to carry on in Gibraltar does not correspond to an approved activity.
PART 3 Permission to carry on an approved activity
Obtaining permission to carry on an approved activity
12 (1) If the appropriate UK regulator receives a notification from the Gibraltar regulator that a Gibraltar-based person wants to be able to carry on an approved activity in the United Kingdom (see paragraph 15), the person obtains permission to do so at the end of the period for considering the notification, as it relates to the activity (see paragraph 16).
(2) The person does not obtain permission to carry on an activity under sub-paragraph (1) if, during the period for considering the notification—
(a) the appropriate UK regulator rejects the notification, as it relates to the activity (see paragraph 17), or
(b) the Gibraltar regulator withdraws the notification, as it relates to the activity.
(3) References in this Part of this Schedule to a notification are references to a notification for the purposes of this paragraph.
(4) A permission obtained under this paragraph is referred to in this Act as “a Schedule 2A permission”.
Schedule 2A permission
13 (1) A Schedule 2A permission for a person to carry on an activity is a permission to do so only if and to the extent that—
(a) the person is a Gibraltar-based person,
(b) the activity is an approved activity, and
(c) the person has permission from the Gibraltar regulator to carry on the corresponding activity in Gibraltar,
subject to the transitional arrangements in Parts 9 and 10 of this Schedule.
(2) A Gibraltar-based person's Schedule 2A permission to carry on an activity is a permission to do so—
(a) on terms equivalent to the terms of the person's permission from the Gibraltar regulator to carry on the corresponding activity in Gibraltar, and
(b) subject to any limitations specified in the notification (for example, as to the circumstances in which the activity is to be carried on in the United Kingdom) (and see also paragraph 21(3)).
(3) The reference in sub-paragraph (2)(a) to the terms of the person's permission from the Gibraltar regulator to carry on the corresponding activity in Gibraltar includes—
(a) any restrictions included in the permission, and
(b) any other restrictions imposed by the Gibraltar regulator on the carrying on by the person of the activity in Gibraltar.
The appropriate UK regulator
14 In relation to a notification, “the appropriate UK regulator” means—
(a) the PRA, in a case where the approved activities to which the notification relates consist of or include PRA-regulated activities, and
(b) the FCA, in any other case.
Notifying the appropriate UK regulator
15 (1) A notification must—
(a) name the Gibraltar-based person,
(b) state the address of the person's head office in Gibraltar,
(c) specify the approved activity which the person wants to be able to carry on in the United Kingdom, including any limitations,
(d) specify the corresponding activity, including any restrictions,
(e) state that the person has permission from the Gibraltar regulator to carry on the corresponding activity in Gibraltar,
(f) state that the Gibraltar regulator consents to the person carrying on the approved activity in the United Kingdom,
(g) identify each person who is responsible for managing an aspect of the Gibraltar-based person's affairs relating to the approved activity and describe that person's responsibilities as regards those affairs,
(h) state whether the Gibraltar-based person wants to carry on the activity through a branch in the United Kingdom and, if so—
(i) identify each person who is or will be responsible for managing an aspect of the affairs of the branch, and
(ii) describe that person's responsibilities as regards those affairs, and
(i) contain, or be accompanied by, any further information specified in a direction given by the appropriate UK regulator under paragraph 57 and in force when the notification is given.
(2) A notification may relate to more than one approved activity.
(3) The Treasury may by regulations change the information that a notification must contain.
(4) Regulations under sub-paragraph (3) may amend this paragraph, but may not amend or repeal sub-paragraph (1)(i).
(5) Before making regulations under sub-paragraph (3), the Treasury must consult—
(a) the government of Gibraltar, and
(b) the UK regulators.
(6) In sub-paragraph (1), the references to managing an aspect of a person's affairs or a branch's affairs includes a reference to taking decisions, or participating in the taking of decisions, about how that aspect of the affairs should be carried on.
Considering a notification
16 (1) Where the appropriate UK regulator receives a notification, it must acknowledge receipt in writing without delay.
(2) The period for considering a notification is—
(a) so far as it relates to an activity that is to be carried on through a branch in the United Kingdom, the period of two months beginning with the day on which the appropriate UK regulator receives the notification, and
(b) so far as it relates to any other activity, the period of one month beginning with that day.
(3) If, before the end of the period described in sub-paragraph (2), the appropriate UK regulator gives the Gibraltar-based person a confirmation notice in respect of an approved activity specified in the notification, then the period for considering the notification as it relates to the activity ends when the notice is given.
(4) A “confirmation notice” is a written notice confirming that the person has a Schedule 2A permission in relation to the approved activity.
(5) A confirmation notice may relate to more than one activity.
Rejecting a notification
17 (1) The appropriate UK regulator may not reject a notification unless—
(a) it is required to do so under paragraph 18, or
(b) it has power to do under paragraph 19 or 20.
(2) A notification is rejected when the appropriate UK regulator gives a written notice of the rejection to the Gibraltar regulator.
(3) The rejection of a notification does not prevent the Gibraltar regulator from giving a further notification relating to the same person and the same activity.
Duties to reject
18 (1) The appropriate UK regulator must reject a notification if satisfied that the notification does not satisfy one or more of the requirements in paragraph 15(1).
(2) The appropriate UK regulator must reject a notification, so far as it relates to an activity, if the activity ceases to be an approved activity.
(3) The appropriate UK regulator must reject a notification, so far as it relates to an approved activity, if satisfied that the Gibraltar-based person does not have permission from the Gibraltar regulator to carry on the corresponding activity in Gibraltar.
Power to reject: prohibition order in respect of senior manager
19 (1) The appropriate UK regulator may reject a notification, so far as it relates to an approved activity, if satisfied that a person with responsibility for managing an aspect of the Gibraltar-based person's affairs—
(a) is prohibited from performing a function by a prohibition order, and
(b) performs a senior management function in relation to the carrying on of the approved activity by the Gibraltar-based person in the United Kingdom, Gibraltar or elsewhere or is expected to do so if the person obtains a Schedule 2A permission to carry on the approved activity in the United Kingdom.
(2) In sub-paragraph (1)—
(a) the reference to managing an aspect of a person's affairs includes a reference to taking decisions, or participating in the taking of decisions, about how that aspect of those affairs should be carried on,
(b) “prohibition order” means—
(i) an order under section 56,
(ii) an order under section 143S, or
(iii) an order under the law of Gibraltar which the appropriate UK regulator considers to be equivalent to an order under section 56 or 143S, and
(c) “senior management function”, in relation to the carrying on of an activity by the Gibraltar-based person, means a function which requires a person to manage an aspect of the Gibraltar-based person's affairs which involves, or might involve, a risk of serious consequences—
(i) for the Gibraltar-based person, or
(ii) for business or other interests in the United Kingdom, Gibraltar or elsewhere.
Power to reject: loss of access right and serious threat to the UK
20 (1) The appropriate UK regulator may reject a notification if satisfied that the Gibraltar-based person—
(a) lost a relevant access right at any time, and
(b) poses, or is likely to pose, a serious threat to—
(i) the interests of consumers (as defined in section 1G), or
(ii) the soundness, stability and resilience of the UK financial system or a part of that system.
(2) The appropriate UK regulator may reject a notification if satisfied that—
(a) the Gibraltar-based person—
(i) is a member of the same group as a person that lost a relevant access right at any time, or
(ii) has close links with such a person (as defined in paragraph 2C(2) of Schedule 6), and
(b) given the nature of the relationship between that person and the Gibraltar-based person, the Gibraltar-based person poses, or is likely to pose, a serious threat to—
(i) the interests of consumers (as defined in section 1G), or
(ii) the soundness, stability and resilience of the UK financial system or a part of that system.
(3) For the purposes of this paragraph, a person lost a relevant access right if—
(a) its Part 4A permission was cancelled,
(b) its Schedule 2A permission was cancelled, or
(c) it ceased to qualify for authorisation under Schedule 3 (other than by virtue of the repeal of that Schedule).
(4) When deciding whether to reject a notification under this paragraph, the appropriate UK regulator must have regard, among other things, to the reasons why the person lost the relevant access right.
PART 4 Variation of permission
Variation of permission
21 (1) A Schedule 2A permission may be varied in accordance with this Part of this Schedule—
(a) on the initiative of the Gibraltar regulator (see paragraphs 22 to 26), or
(b) on the initiative of a UK regulator (see paragraphs 27 to 30).
(2) References in this Part of this Schedule to the variation of a Schedule 2A permission (however expressed) are to its variation by—
(a) adding an approved activity to those to which the permission relates,
(b) removing an approved activity from those to which the permission relates, or
(c) varying the description of an activity to which the permission relates (including by adding, removing or varying a limitation).
(3) Where a limitation is added, removed or varied under this Part of this Schedule, paragraph 13(2)(b) has effect as if it referred to the limitations (if any) that have effect after that change.
Gibraltar regulator's initiative: notification
22 (1) If the appropriate UK regulator receives a notification from the Gibraltar regulator requesting the variation of a Gibraltar-based person's Schedule 2A permission (see paragraph 24), the permission is varied—
(a) if the notification specifies a time for the variation to take effect which falls after the end of the period for considering the notification as it relates to the variation (see paragraph 25), at that time, or
(b) otherwise, at the end of the period for considering the notification, as it relates to the variation.
(2) A variation requested in a notification does not take effect under sub-paragraph (1) if, during the period for considering the notification—
(a) the appropriate UK regulator rejects the notification, as it relates to the variation (see paragraph 26), or
(b) the Gibraltar regulator withdraws the notification, as it relates to the variation.
(3) References in this Part of this Schedule to a notification are references to a notification for the purposes of this paragraph.
Gibraltar regulator's initiative: the appropriate UK regulator
23 In relation to a notification, “the appropriate UK regulator” means—
(a) the PRA, in a case where the approved activities to which the notification relates consist of or include PRA-regulated activities, and
(b) the FCA, in any other case.
Gibraltar regulator's initiative: notifying the UK regulator
24 (1) A notification must—
(a) state the desired variation,
(b) specify the approved activity or approved activities which the Gibraltar-based person wants to carry on following the variation, including any limitations,
(c) specify the corresponding activity, including any restrictions,
(d) state that the person has permission from the Gibraltar regulator to carry on the corresponding activity in Gibraltar,
(e) state that the Gibraltar regulator consents to the variation, and
(f) contain, or be accompanied by, any further information specified in a direction given by the appropriate UK regulator under paragraph 57 and in force when the notification is given.
(2) A notification may state when the desired variation is to have effect.
(3) A notification may relate to more than one variation.
Gibraltar regulator's initiative: considering a notification
25 (1) Where the appropriate UK regulator receives a notification, it must acknowledge receipt in writing without delay.
(2) The period for considering a notification is—
(a) so far as it relates to a variation in respect of an activity carried on through a branch in the United Kingdom, the period of two months beginning with the day on which the appropriate UK regulator receives the notification, and
(b) so far as it relates to any other variation, the period of one month beginning with that day.
(3) If, before the end of the period described in sub-paragraph (2), the appropriate UK regulator gives the Gibraltar-based person a confirmation notice in respect of a variation specified in the notification, then the period for considering the notification as it relates to the variation ends when the notice is given.
(4) A “confirmation notice” is a written notice confirming that the variation has effect as specified in the notification.
(5) A confirmation notice may relate to more than one variation.
Gibraltar regulator's initiative: rejecting a notification
26 (1) The appropriate UK regulator may not reject a notification unless—
(a) it is required to do so under sub-paragraph (3) or (4), or
(b) it has power to do under sub-paragraph (5).
(2) A notification is rejected when the appropriate UK regulator gives a written notice of the rejection to the Gibraltar regulator.
(3) The appropriate UK regulator must reject a notification if satisfied that the notification does not satisfy one or more of the requirements in paragraph 24(1).
(4) The appropriate UK regulator must reject a notification if it would be required to do so by paragraph 18(2) or (3) if the notification were a notification under Part 3 of this Schedule relating to—
(a) the Gibraltar-based person, and
(b) the activities that the person would have a Schedule 2A permission to carry on if the permission were varied as specified in the notification.
(5) The appropriate UK regulator may reject a notification if it would have power to do so under paragraph 19 or 20 if the notification were a notification under Part 3 of this Schedule relating to—
(a) the Gibraltar-based person, and
(b) the activities that the person would have a Schedule 2A permission to carry on if the permission were varied as specified in the notification.
(6) The rejection of a notification does not prevent the Gibraltar regulator from giving a further notification.
UK regulator's initiative
27 (1) A UK regulator may exercise a power under this paragraph in relation to a Gibraltar-based person with a Schedule 2A permission where one of the own-initiative conditions is satisfied (see paragraph 28).
(2) The FCA may vary a Schedule 2A permission.
(3) The PRA may vary a PRA-authorised person's Schedule 2A permission.
(4) In the case of a person who is not a PRA-authorised person, the PRA may vary the person's Schedule 2A permission by adding an approved activity that is a PRA-regulated activity to those to which the permission relates.
(5) Where it adds an approved activity under sub-paragraph (4), the PRA may vary the person's Schedule 2A permission in any of the other ways described in paragraph 21(2).
Own-initiative conditions
28 (1) For the purposes of this Schedule, “the own-initiative conditions” are—
(a) in relation to the exercise of a power by the FCA, conditions A to C, and
(b) in relation to the exercise of a power by the PRA, conditions A to D.
(2) Condition A is that the UK regulator in question considers that—
(a) it is desirable to exercise the power in order to advance one or more of its objectives, and
(b) the Gibraltar regulator—
(i) is aware, or ought reasonably to be aware, of the reasons why the UK regulator considers that to be the case, and
(ii) has had time to take steps, or indicate what steps (if any) it is likely to take, in response.
(3) Condition B is that the UK regulator in question considers that—
(a) it is desirable to exercise the power in order to advance one or more of its objectives, and
(b) a delay in exercising the power would be materially detrimental to—
(i) the interests of consumers (as defined in section 1G), or
(ii) the soundness, stability and resilience of the UK financial system or a part of that system.
(4) Condition C is that the UK regulator in question considers that—
(a) the Gibraltar-based person is contravening, or has contravened, a rule made by the UK regulator or a requirement imposed on it by the UK regulator under Part 6 of this Schedule, and
(b) the contravention is not minor, having regard to the nature of the contravention or its consequences (or both).
(5) Condition D is that the PRA considers that—
(a) it is desirable to exercise the power in order to advance one or more of the PRA's objectives, and
(b) the Gibraltar-based person poses, or may pose, a risk to the soundness, stability and resilience of the UK financial system, or a part of that system, of a type specified for the purposes of this condition in the policy statement produced by the PRA under paragraph 71.
(6) In the case of the FCA, references in this paragraph to its objectives are references only to its operational objectives.
UK regulator's initiative: procedure
29 (1) The variation of a Schedule 2A permission under paragraph 27 takes effect—
(a) immediately, if the notice given under sub-paragraph (3) states that is the case,
(b) on such date as may be specified in the notice, or
(c) if no date is specified in the notice, when the matter to which the notice relates is no longer open to review.
(2) The variation of a Schedule 2A permission under paragraph 27 may be expressed to take effect immediately, or on a specified date, only if the UK regulator reasonably considers that it is necessary for the variation to take effect immediately or on that date, having regard to the own-initiative condition on which it is relying for the purposes of paragraph 27(1).
(3) If a UK regulator—
(a) proposes to vary a Schedule 2A permission under paragraph 27, or
(b) varies a Schedule 2A permission under that paragraph with immediate effect,
it must give the Gibraltar-based person a written notice.
(4) The notice must—
(a) give details of the variation,
(b) state the UK regulator's reasons for varying the permission,
(c) inform the Gibraltar-based person that the person may make representations to the UK regulator within the period specified in the notice (whether or not the Gibraltar-based person has referred the matter to the Tribunal),
(d) inform the Gibraltar-based person of when the variation of the permission takes effect, and
(e) inform the Gibraltar-based person of the person's right to refer the matter to the Tribunal.
(5) The UK regulator may extend the period allowed under the notice for making representations.
(6) If, having considered any representations made by the Gibraltar-based person, the UK regulator decides—
(a) to vary the permission in the way proposed, or
(b) if the permission has been varied, not to rescind its variation,
it must give the Gibraltar-based person a written notice.
(7) A notice under sub-paragraph (6) must inform the Gibraltar-based person of the person's right to refer the matter to the Tribunal.
(8) If, having considered any representations made by the Gibraltar-based person, the UK regulator decides—
(a) not to vary the permission in the way proposed,
(b) to vary the permission in a different way, or
(c) to rescind the variation,
it must give the Gibraltar-based person a written notice.
(9) A notice under sub-paragraph (8)(b) must comply with sub-paragraph (4).
(10) If a notice under this paragraph informs a person of the person's right to refer a matter to the Tribunal, it must give an indication of the procedure for such a reference.
(11) For the purposes of sub-paragraph (1)(c), whether a matter is open to review is to be determined in accordance with section 391(8).
Right to refer matters to the Tribunal
30 A Gibraltar-based person who is aggrieved by the exercise by a UK regulator of a power under paragraph 27 in relation to the person may refer the matter to the Tribunal.
PART 5 Cancellation of permission
Cancellation of permission
31 A Schedule 2A permission may be cancelled in accordance with this Part of this Schedule—
(a) on the initiative of the Gibraltar regulator (see paragraphs 32 to 36), or
(b) on the initiative of a UK regulator (see paragraphs 37 to 39).
Gibraltar regulator's initiative: notification
32 (1) If the appropriate UK regulator receives a notification from the Gibraltar regulator requesting the cancellation of a Gibraltar-based person's Schedule 2A permission (see paragraph 34), the permission is cancelled when the period for considering the notification ends (see paragraph 35).
(2) A Schedule 2A permission is not cancelled under sub-paragraph (1) if, during the period for considering the notification—
(a) the appropriate UK regulator rejects the notification (see paragraph 36), or
(b) the Gibraltar regulator withdraws the notification.
(3) References in this Part of this Schedule to a notification are references to a notification for the purposes of this paragraph.
Gibraltar regulator's initiative: the appropriate UK regulator
33 In relation to a notification, “the appropriate UK regulator” means—
(a) the PRA, in a case where the Gibraltar-based person is a PRA-authorised person, and
(b) the FCA, in any other case.
Gibraltar regulator's initiative: notifying the UK regulator
34 A notification must—
(a) state the reason for requesting the cancellation of the permission,
(b) state that the Gibraltar regulator consents to the cancellation, and
(c) contain, or be accompanied by, any further information specified in a direction given by the appropriate UK regulator under paragraph 57 and in force when the notification is given.
Gibraltar regulator's initiative: considering a notification
35 (1) Where the appropriate UK regulator receives a notification, it must acknowledge receipt in writing without delay.
(2) The period for considering a notification is—
(a) where the Schedule 2A permission relates to one or more activities carried on through a branch in the United Kingdom, the period of two months beginning with the day on which the appropriate UK regulator receives the notification, and
(b) otherwise, the period of one month beginning with that day.
(3) If, before the end of the period described in sub-paragraph (2), the appropriate UK regulator gives the Gibraltar-based person a confirmation notice in respect of the notification, then the period for considering the notification ends when the notice is given.
(4) A “confirmation notice” is a written notice confirming that the Schedule 2A permission is cancelled.
Gibraltar regulator's initiative: rejecting a notification
36 (1) The appropriate UK regulator may not reject a notification unless—
(a) it is required to do so under sub-paragraph (3), or
(b) it has power to do under sub-paragraph (4) or (5).
(2) A notification is rejected when the appropriate UK regulator gives a written notice of the rejection to the Gibraltar regulator.
(3) The appropriate UK regulator must reject a notification if satisfied that the notification does not satisfy a requirement in paragraph 34.
(4) The FCA may reject a notification if it appears to the FCA that it is desirable to do so in order to advance one or more of its operational objectives.
(5) The PRA may reject a notification if it appears to the PRA that it is desirable to do so in order to advance one or more of its objectives.
(6) The rejection of a notification does not prevent the Gibraltar regulator from giving a further notification.
UK regulator's initiative
37 (1) The FCA may cancel a Schedule 2A permission where one of the own-initiative conditions is satisfied (see paragraph 28).
(2) The PRA may cancel a PRA-authorised person's Schedule 2A permission where one of the own-initiative conditions is satisfied (see paragraph 28).
(3) The appropriate UK regulator must cancel a Schedule 2A permission where—
(a) the permission no longer enables the person to carry on an approved activity (whether by virtue of paragraph 13 or otherwise), and
(b) the UK regulator is satisfied that it is no longer necessary to keep the permission in force.
(4) In this paragraph, “the appropriate UK regulator” means—
(a) the PRA, in a case where the Gibraltar-based person is a PRA-authorised person, and
(b) the FCA, in any other case.
UK regulator's initiative: procedure
38 (1) If a UK regulator proposes to cancel a Gibraltar-based person's Schedule 2A permission under paragraph 37, it must give the person a warning notice.
(2) If a UK regulator decides to cancel a Gibraltar-based person's Schedule 2A permission under paragraph 37, it must give the person a decision notice.
Right to refer matters to the Tribunal
39 If a UK regulator gives a Gibraltar-based person a decision notice under paragraph 38, the person may refer the matter to the Tribunal.
PART 6 Requirements
Requirements
40 (1) A requirement may be imposed on a Gibraltar-based person in accordance with this Part of this Schedule—
(a) by a UK regulator as part of the process of considering a notification under Part 3 or 4 of this Schedule (see paragraphs 41 to 43),
(b) on the initiative of the Gibraltar regulator (see paragraphs 44 to 48), or
(c) on the UK regulator's initiative (see paragraphs 49 to 52).
(2) Requirements imposed on a Gibraltar-based person in accordance with this Part of this Schedule may be varied or cancelled in accordance with this Part of this Schedule—
(a) on the initiative of the Gibraltar regulator (see paragraphs 44 to 48), or
(b) on the UK regulator's initiative (see paragraphs 49 to 52).
Imposing requirements in connection with Part 3 or 4 notification
41 (1) This paragraph applies where a UK regulator has received—
(a) a notification for the purposes of paragraph 12 in respect of the carrying on of an activity by a Gibraltar-based person, or
(b) a notification for the purposes of paragraph 22 in respect of the variation of a Gibraltar-based person's Schedule 2A permission.
(2) A UK regulator may exercise the powers under this paragraph where it considers that it is desirable to do so in order to advance one or more of its objectives.
(3) The FCA may impose requirements on the Gibraltar-based person.
(4) The PRA may impose requirements on the Gibraltar-based person if—
(a) the notification mentioned in sub-paragraph (1) relates to activities which consist of or include PRA-regulated activities, or
(b) the Gibraltar-based person is a PRA-authorised person.
(5) A requirement may not be imposed under this paragraph—
(a) after the end of the period for considering the notification mentioned in sub-paragraph (1), or
(b) so as to take effect before the end of that period.
(6) In the case of the FCA, the reference in this paragraph to its objectives is a reference only to its operational objectives.
Imposing requirements in connection with Part 3 or 4 notification: procedure
42 (1) If a UK regulator proposes to impose a requirement on a Gibraltar-based person under paragraph 41, it must—
(a) give the person a warning notice,
(b) give the Gibraltar regulator a written notice of the proposed requirement, stating the UK regulator's reasons for imposing the requirement, and
(c) consider any representations made by the Gibraltar regulator within the period specified in the notice.
(2) If a UK regulator decides to impose a requirement on a Gibraltar-based person under paragraph 41, it must give the person a decision notice.
Right to refer matters to the Tribunal
43 If a UK regulator gives a Gibraltar-based person a decision notice under paragraph 42, the person may refer the matter to the Tribunal.
Gibraltar regulator's initiative: notification
44 (1) If the appropriate UK regulator receives a notification from the Gibraltar regulator (see paragraph 46)—
(a) asking for a requirement to be imposed on a Gibraltar-based person with a Schedule 2A permission, or
(b) asking for a requirement imposed on a Gibraltar-based person with a Schedule 2A permission to be varied or cancelled,
the requirement is imposed, varied or cancelled as specified in the notification at the end of the period for considering the notification, as it relates to the requirement (see paragraph 47).
(2) The requirement is not imposed, varied or cancelled under sub-paragraph (1) if, during the period for considering the notification—
(a) the appropriate UK regulator rejects the notification, as it relates to the requirement (see paragraph 48), or
(b) the Gibraltar regulator withdraws the notification, as it relates to the requirement.
(3) References in this Part of this Schedule to a notification are references to a notification for the purposes of this paragraph, except where otherwise stated.
Gibraltar regulator's initiative: the appropriate UK regulator
45 In relation to a notification, “the appropriate UK regulator” means—
(a) the PRA, in a case where the approved activities to which the notification relates consist of or include PRA-regulated activities, and
(b) the FCA, in any other case.
Gibraltar regulator's initiative: notifying the UK regulator
46 A notification must—
(a) state the requirement to be imposed or the desired variation or cancellation (as appropriate),
(b) state the reason for asking for the requirement to be imposed, varied or cancelled,
(c) state that the Gibraltar regulator consents to the requirement being imposed, varied or cancelled, and
(d) contain, or be accompanied by, any further information specified in a direction given by the appropriate UK regulator under paragraph 57 and in force when the notification is given.
Gibraltar regulator's initiative: considering a notification
47 (1) Where the appropriate UK regulator receives a notification, it must acknowledge receipt in writing without delay.
(2) The period for considering a notification is—
(a) so far as it relates to a requirement to be imposed on a Gibraltar-based person with a branch in the United Kingdom, the period of two months beginning with the day on which the appropriate UK regulator receives the notification, and
(b) so far as it relates to any other requirement, the period of one month beginning with that day.
(3) If, before the end of the period described in sub-paragraph (2), the appropriate UK regulator gives the Gibraltar-based person a confirmation notice in respect of a requirement specified in the notification, then the period for considering the notification as it relates to the requirement ends when the notice is given.
(4) A “confirmation notice” is a written notice confirming that the requirement is imposed, varied or cancelled as requested in the notification.
Gibraltar regulator's initiative: rejecting a notification
48 (1) The appropriate UK regulator may not reject a notification so far as it relates to a requirement unless—
(a) it is required to do so under sub-paragraph (3), or
(b) it has power to do under sub-paragraph (4) or (5).
(2) A notification is rejected when the appropriate UK regulator gives a written notice of the rejection to the Gibraltar regulator.
(3) The appropriate UK regulator must reject a notification if satisfied that the notification does not satisfy one or more of the requirements in paragraph 46.
(4) The FCA may reject a notification, so far as it relates to a requirement, if it appears to the FCA that it is desirable to do so in order to advance one or more of its operational objectives.
(5) The PRA may reject a notification, so far as it relates to a requirement, if it appears to the PRA that it is desirable to do so in order to advance one or more of its objectives.
(6) The rejection of a notification does not prevent the Gibraltar regulator from giving a further notification in respect of the same requirement.
UK regulator's initiative: imposing, varying and cancelling requirements
49 (1) A UK regulator may exercise the powers under this paragraph in relation to a Gibraltar-based person only where one of the own-initiative conditions is satisfied (see paragraph 28).
(2) The FCA may—
(a) impose a requirement on a Gibraltar-based person with a Schedule 2A permission,
(b) vary a requirement imposed by the FCA under this Part of this Schedule, or
(c) cancel such a requirement.
(3) The PRA may—
(a) impose a requirement on a Gibraltar-based person with a Schedule 2A permission where the person is a PRA-authorised person,
(b) vary a requirement imposed by the PRA under this Part of this Schedule, or
(c) cancel such a requirement.
UK regulator's initiative: procedure for imposing or varying requirements
50 (1) The imposition or variation of a requirement under paragraph 49 takes effect—
(a) immediately, if the notice given under sub-paragraph (3) states that is the case,
(b) on such date as may be specified in the notice, or
(c) if no date is specified in the notice, when the matter to which the notice relates is no longer open to review.
(2) The imposition or variation of a requirement under paragraph 49 may be expressed to take effect immediately, or on a specified date, only if the UK regulator reasonably considers that it is necessary for the imposition or variation of the requirement to take effect immediately or on that date, having regard to the own-initiative condition on which it is relying for the purposes of paragraph 49(1).
(3) If a UK regulator—
(a) proposes to exercise the power under paragraph 49 to impose a requirement on a Gibraltar-based person, or vary a requirement imposed on a Gibraltar-based person, or
(b) exercises that power so as to impose a requirement on a Gibraltar-based person, or vary a requirement imposed on a Gibraltar-based person, with immediate effect,
it must give the person a written notice.
(4) The notice must—
(a) give details of the requirement or its variation,
(b) state the UK regulator's reasons for imposing or varying the requirement,
(c) inform the Gibraltar-based person that the person may make representations to the UK regulator within the period specified in the notice (whether or not the Gibraltar-based person has referred the matter to the Tribunal),
(d) inform the Gibraltar-based person of when the imposition or variation of the requirement takes effect, and
(e) inform the Gibraltar-based person of the person's right to refer the matter to the Tribunal.
(5) The UK regulator may extend the period allowed under the notice for making representations.
(6) If, having considered any representations made by the Gibraltar-based person, the UK regulator decides—
(a) to impose the requirement or vary the requirement in the way proposed, or
(b) if the requirement has been imposed or varied, not to rescind its imposition or variation,
it must give the Gibraltar-based person a written notice.
(7) A notice under sub-paragraph (6) must inform the Gibraltar-based person of the person's right to refer the matter to the Tribunal.
(8) If, having considered any representations made by the Gibraltar-based person, the UK regulator decides—
(a) not to impose the requirement or vary the requirement in the way proposed,
(b) to impose a different requirement or vary the requirement in a different way, or
(c) to rescind a requirement or variation which has effect,
it must give the Gibraltar-based person a written notice.
(9) A notice under sub-paragraph (8)(b) must comply with sub-paragraph (4).
(10) If a notice under this paragraph informs a person of the person's right to refer a matter to the Tribunal, it must give an indication of the procedure for such a reference.
(11) For the purposes of sub-paragraph (1)(c), whether a matter is open to review is to be determined in accordance with section 391(8).
UK regulator's initiative: procedure for cancellation
51 (1) If a UK regulator proposes to exercise a power under paragraph 49 to cancel a requirement imposed on a Gibraltar-based person, it must give the person a written notice.
(2) The notice must specify the date on which the cancellation takes effect.
Right to refer matters to the Tribunal
52 A Gibraltar-based person who is aggrieved by the exercise by a UK regulator of a power under paragraph 49 to impose a requirement on the person, or vary a requirement imposed on the person, may refer the matter to the Tribunal.
Assets requirements
53 (1) This paragraph makes provision about a requirement imposed on a Gibraltar-based person (“G”) by a UK regulator under this Part of this Schedule—
(a) prohibiting the disposal of, or other dealing with, any of G's assets (whether in the United Kingdom, Gibraltar or elsewhere) or restricting such disposals or dealings, or
(b) requiring that some or all of G's assets, or some or all assets belonging to consumers (as defined in section 1G) but held by G or to G's order, must be transferred to and held by a trustee approved by the UK regulator.
(2) If a UK regulator—
(a) imposes a requirement described in sub-paragraph (1)(a), and
(b) gives notice of the requirement to an institution with whom G keeps an account,
the notice has the effects set out in sub-paragraph (3).
(3) Those effects are that—
(a) the institution does not act in breach of a contract with G if, having been instructed by G (or on G's behalf) to transfer a sum or otherwise make a payment out of G's account, it refuses to do so in the reasonably held belief that complying with the instruction would be incompatible with the requirement, and
(b) if the institution complies with such an instruction, it is liable to pay to the UK regulator an amount equal to the amount transferred from, or otherwise paid out of, G's account in contravention of the requirement.
(4) If a UK regulator imposes a requirement described in sub-paragraph (1)(b), no assets held by a person as trustee in accordance with the requirement may, while the requirement is in force, be released or dealt with except with the consent of the UK regulator.
(5) If, while a requirement described in sub-paragraph (1)(b) is in force, G creates a charge over any assets of G held in accordance with the requirement, the charge is (to the extent that it confers security over the assets) void against the liquidator and G's creditors.
(6) Assets held by a person as trustee are to be taken to be held by the trustee in accordance with a requirement mentioned in sub-paragraph (1)(b) only if—
(a) G has given the trustee a written notice that those assets are to be held by the trustee in accordance with the requirement, or
(b) they are assets into which assets to which paragraph (a) applies have been transposed by the trustee on the instruction of G.
(7) A person who contravenes sub-paragraph (4) commits an offence and is liable—
(a) on summary conviction in England and Wales, to a fine;
(b) on summary conviction in Scotland or Northern Ireland, to a fine not exceeding level 5 on the standard scale.
(8) In this paragraph, references to imposing a requirement (however expressed) include imposing a requirement by varying an existing requirement.
(9) In this paragraph, “charge” includes a mortgage (or, in Scotland, a security over property).
(10) Sub-paragraphs (4) and (6) do not affect any equitable interest or remedy in favour of a person who is a beneficiary of a trust as a result of a requirement described in sub-paragraph (1)(b).
Further provision about requirements
54 (1) A requirement imposed on a Gibraltar-based person under this Part of this Schedule may, among other things, be imposed so as to require the person—
(a) to take specified action, or
(b) to refrain from taking specified action.
(2) A requirement imposed under this Part of this Schedule may extend to activities which are not approved activities.
(3) A requirement imposed on a Gibraltar-based person under this Part of this Schedule may be imposed by reference to the person's relationship with—
(a) the person's group, or
(b) other members of the person's group.
(4) A requirement imposed under this Part of this Schedule may be expressed to expire at the end of a specified period (but the imposition of such a requirement does not affect the UK regulator's powers to impose a new requirement).
(5) A requirement imposed on a Gibraltar-based person under this Part of this Schedule may refer to the past conduct of the person (for example, by requiring the person concerned to review or take remedial action in respect of past conduct).
Contravention of requirement imposed under this Part
55 (1) Contravention of a requirement imposed under this Part of this Schedule does not—
(a) make a person guilty of an offence,
(b) make a transaction void or unenforceable, or
(c) give rise to a right of action for breach of statutory duty, subject to sub-paragraph (2).
(2) A contravention of a requirement imposed under this Part of this Schedule is actionable at the suit of a person who suffers loss as a result of the contravention where—
(a) the action would be brought at the suit of a private person, or
(b) the conditions in sub-paragraph (3) are met,
subject to the defences and other incidents applying to actions for breach of statutory duty.
(3) The conditions mentioned in sub-paragraph (2)(b) are that—
(a) the action would be brought by a person acting in a fiduciary or representative capacity on behalf of a private person, and
(b) any remedy would be exclusively for the benefit of that private person and could not be obtained through an action brought otherwise than at the suit of the person acting in a fiduciary or representative capacity.
(4) Sub-paragraph (2) does not apply where the requirement contravened is a requirement to have or maintain financial resources.
(5) In this paragraph, “private person” has such meaning as may be prescribed.
PART 7 Changes
Duty to notify UK regulators of changes
56 (1) A UK regulator may direct that a change relating to a Gibraltar-based person with a Schedule 2A permission is subject to the requirements in this paragraph.
(2) A direction under sub-paragraph (1) may only be given in relation to a change relating to a matter about which information must be provided in a notification given to the UK regulator for the purposes of paragraph 12 or 22 (see paragraphs 15 and 24).
(3) Where, by virtue of a direction under sub-paragraph (1), a change is subject to the requirements in this paragraph, a Gibraltar-based person with a Schedule 2A permission must notify the following of the change—
(a) the Gibraltar regulator;
(b) the UK regulator that gave the direction.
(4) A direction under sub-paragraph (1) in respect of a change may specify when the action described in sub-paragraph (3) must be taken in connection with the change.
(5) If a direction in respect of a change does not specify when the action described in sub-paragraph (3) must be taken in connection with the change, the action must be taken—
(a) before the change is made, where that is reasonably practicable, or
(b) otherwise, as soon as reasonably practicable after the change is made.
(6) A direction under this paragraph—
(a) may make different provision for different purposes, but
(b) may not make provision in relation to a specific Gibraltar-based person.
(7) A UK regulator that gives a direction under this paragraph may, by a further direction, vary or revoke the direction.
(8) The FCA must consult the Treasury before giving a direction under this paragraph.
(9) The PRA must consult the Treasury and the FCA before giving a direction under this paragraph.
(10) After giving a direction under this paragraph, a UK regulator must—
(a) publish the direction in the way appearing to the UK regulator to be best calculated to bring it to the attention of persons likely to be affected by it, and
(b) give a copy of the direction to the Treasury and the other UK regulator without delay.
PART 8 UK regulators' directions about information
Directions about information to be included in notifications
57 (1) A UK regulator may direct that a notification for the purposes of paragraph 12, 22, 32 or 44 in relation to which it is the appropriate UK regulator must include information specified in the direction.
(2) In a direction, a UK regulator may only specify information which it reasonably considers necessary to enable it to discharge functions conferred on it by or under this Act in relation to persons with a Schedule 2A permission.
(3) A UK regulator that gives a direction under this paragraph may, by a further direction, vary or revoke the direction.
(4) A direction under this paragraph—
(a) may make different provision for different purposes, but
(b) may not make provision in relation to a specific person.
(5) The FCA must consult the Treasury before giving a direction under this paragraph.
(6) The PRA must consult the Treasury and the FCA before giving a direction under this paragraph.
(7) After giving a direction under this paragraph, a UK regulator must—
(a) publish the direction in the way appearing to the UK regulator to be best calculated to bring it to the attention of persons likely to be affected by it, and
(b) give a copy of the direction to the Treasury and the other UK regulator without delay.
PART 9 Transition on withdrawal of approval of regulated activity etc
Transition on withdrawal of approval of regulated activity
58 (1) Sub-paragraph (2) applies where—
(a) the Treasury withdraw their approval of a regulated activity for the purposes of this Schedule (by revoking or amending regulations under paragraph 5), and
(b) immediately before approval is withdrawn, a person had a Schedule 2A permission to carry on the activity.
(2) The regulated activity is to be treated as approved under this Schedule but—
(a) only so far as carried on by the person,
(b) subject to the time limit in sub-paragraph (3), and
(c) subject to any restriction under paragraph 60.
(3) The regulated activity ceases to be treated as approved under this Schedule by virtue of sub-paragraph (2)—
(a) at the end of the period specified by the Treasury by regulations, or
(b) if earlier, when an event listed in sub-paragraph (4) first occurs.
(4) Those events are—
(a) the person ceases to carry on the regulated activity in the United Kingdom;
(b) the person ceases to have permission from the Gibraltar regulator to carry on the corresponding activity in Gibraltar;
(c) the person ceases to have a Schedule 2A permission in respect of the activity;
(d) the person is given permission under Part 4A of this Act in respect of the activity;
(e) the Treasury approve the activity for the purposes of this Schedule (by making regulations under paragraph 5).
(5) Where the approval of the regulated activity referred to in sub-paragraph (1)(a) is subject to limitations, references in this Part of this Schedule to that activity are to that activity subject to those limitations.
(6) Where the withdrawal of the approval of the regulated activity referred to in sub-paragraph (1)(a) is subject to limitations, references in this Part of this Schedule to that activity are to that activity subject to those limitations.
(7) For the purposes of sub-paragraph (4)(b) and (c), a person does not cease to have permission in respect of an activity while it has permission to carry on the activity by virtue of, and subject to the restrictions in, Part 10 of this Schedule.
Transition on Gibraltar activity ceasing to be corresponding activity
59 (1) Sub-paragraph (2) applies where—
(a) the Treasury provide that an activity which the Gibraltar regulator has authorised, or may authorise, a person to carry on in Gibraltar (a “Gibraltar activity”) does not correspond to an approved activity (by revoking or amending regulations under paragraph 6), and
(b) immediately before they do so, a person had a Schedule 2A permission to carry on the approved activity by virtue of having permission from the Gibraltar regulator to carry the Gibraltar activity.
(2) For the purposes of this Schedule, the Gibraltar activity is to be treated as corresponding to the approved activity but—
(a) only so far as the approved activity is carried on by the person in the United Kingdom,
(b) subject to the time limit in sub-paragraph (3), and
(c) subject to any restriction under paragraph 60.
(3) The Gibraltar activity ceases to be treated as corresponding to the approved activity by virtue of sub-paragraph (2)—
(a) at the end of the period specified by the Treasury by regulations, or
(b) if earlier, when an event listed in sub-paragraph (4) first occurs.
(4) Those events are—
(a) the person ceases to carry on the approved activity in the United Kingdom;
(b) the person ceases to have permission from the Gibraltar regulator to carry on the Gibraltar activity;
(c) the person ceases to have a Schedule 2A permission in respect of the approved activity;
(d) the person is given permission under Part 4A of this Act in respect of the approved activity;
(e) the Treasury provide that the Gibraltar activity corresponds to the approved activity (by making regulations under paragraph 6).
(5) Where the provision made about the Gibraltar activity in regulations under paragraph 6 immediately before the Treasury make the provision described in sub-paragraph (1)(a) is subject to limitations, references in this Part of this Schedule to the Gibraltar activity are to that activity subject to those limitations.
(6) Where the provision made about the Gibraltar activity in the regulations under paragraph 6 referred to in sub-paragraph (1)(a) is subject to limitations, references in this Part of this Schedule to the Gibraltar activity are to that activity subject to those limitations.
(7) For the purposes of sub-paragraph (4)(b) and (c), a person does not cease to have permission in respect of an activity while it has permission to carry on the activity by virtue of, and subject to the restrictions in, Part 10 of this Schedule.
Restricting transitional permission
60 (1) Sub-paragraph (2) applies where—
(a) by virtue of paragraph 58(1), a regulated activity is treated as approved under this Schedule so far as carried on by a person, or
(b) by virtue of paragraph 59(1), an activity which the Gibraltar regulator has authorised, or may authorise, a person to carry on in Gibraltar is treated as corresponding to an approved activity so far as the approved activity is carried on by a person.
(2) The appropriate UK regulator may decide that the person may only carry on the regulated activity or approved activity (as appropriate) in the United Kingdom so far as is necessary for one or more of the following purposes—
(a) for the performance of a protected contract;
(b) in order to reduce the financial risk of a party to a protected contract or a third party affected by the performance of a protected contract;
(c) in order to transfer the property, rights or liabilities under a protected contract to a person authorised to carry on a regulated activity by virtue of section 31(1)(a);
(d) in order to comply with a requirement imposed by or under an enactment.
(3) If it proposes to make a decision under sub-paragraph (2), the appropriate UK regulator must give the person a written notice.
(4) The notice must—
(a) give details of the proposed decision, and
(b) inform the person that the person may make representations to the appropriate UK regulator within the period specified in the notice.
(5) The appropriate UK regulator may extend the period allowed under the notice for making representations.
(6) If, having considered any representations made by the person, the appropriate UK regulator decides to restrict the person's activities as described in sub-paragraph (2), it must—
(a) give the person a written notice (“a restriction notice”), and
(b) inform the Gibraltar regulator in writing without delay.
(7) A restriction notice must—
(a) specify the date on which it takes effect,
(b) inform the person of the person's right to refer the matter to the Tribunal (see paragraph 62), and
(c) indicate the procedure on a reference to the Tribunal.
(8) The Treasury may by regulations provide that a restriction notice may not specify a date falling before the end of a period specified or described in the regulations.
(9) In this paragraph—
“the appropriate UK regulator” means—
in the case of a PRA-authorised person, the PRA, and
in any other case, the FCA;
“enactment” includes—
assimilated legislation,
an enactment comprised in subordinate legislation,
an enactment comprised in, or in an instrument made under, a Measure or Act of Senedd Cymru,
an enactment comprised in, or in an instrument made under, an Act of the Scottish Parliament, and
an enactment comprised in, or in an instrument made under, Northern Ireland legislation;
“protected contract” means a contract specified or described in a direction by the appropriate UK regulator under paragraph 61;
“subordinate legislation” has the same meaning as in the Interpretation Act 1978 (see section 21 of that Act).
(10) In this paragraph, references to the performance of a protected contract include the performance of an obligation under the contract which is contingent or conditional.
Directions about protected contracts
61 (1) A UK regulator may direct that a contract specified or described in the direction is a protected contract for the purposes of this Part of this Schedule.
(2) A UK regulator that gives a direction under this paragraph may, by a further direction, vary or revoke the direction.
(3) A direction under this paragraph may make different provision for different purposes, including different provision in connection with—
(a) different activities,
(b) different contracts or descriptions of contract, or
(c) different Gibraltar-based persons or descriptions of Gibraltar-based person.
(4) After giving a direction under this paragraph, a UK regulator must—
(a) publish the direction in the way appearing to the UK regulator to be best calculated to bring it to the attention of persons likely to be affected by it, and
(b) give a copy of the direction to the Treasury and the other UK regulator without delay.
Right to refer matters to the Tribunal
62 Where a person in respect of whom a decision under paragraph 60(2) is made is aggrieved by the decision, the person may refer the matter to the Tribunal.
Further powers
63 (1) The Treasury may by regulations extend the period under section 55V(1) or (2) for determining an application which—
(a) is for a Part 4A permission or a variation of a Part 4A permission, and
(b) relates only to the carrying on of an activity which the applicant is carrying on in the United Kingdom by virtue of this Part of this Schedule.
(2) The power under sub-paragraph (1) includes power to amend section 55V.
(3) The Treasury may by regulations extend the period for consideration of an application which—
(a) is for approval under section 59 or variation of approval under section 59, and
(b) relates only to performance of a function in relation to the carrying on of an activity which the applicant is carrying on in the United Kingdom by virtue of this Part of this Schedule.
(4) The power under sub-paragraph (3) includes power to amend sections 61 and 63ZA.
PART 10 Transition on cancellation of UK or Gibraltar permission
Transition on cancellation of Schedule 2A permission
64 (1) Sub-paragraphs (2), (4) and (5) apply where—
(a) a person's Schedule 2A permission is cancelled under Part 5 of this Schedule, or
(b) a person's Schedule 2A permission is varied under Part 4 of this Schedule so as to remove permission to carry on an activity (including by adding or varying a limitation).
(2) The person is to be treated as continuing to have the Schedule 2A permission, or the permission to carry on the activity, but—
(a) only so far as is necessary for one or more of the purposes described in sub-paragraph (3), and
(b) subject to the time limit in paragraph 68.
(3) The purposes are—
(a) for the performance of a protected contract;
(b) to reduce the financial risk of a party to a protected contract or a third party affected by the performance of a protected contract;
(c) to transfer the property, rights or liabilities under a protected contract to a person authorised to carry on a regulated activity by virtue of section 31(1)(a);
(d) to comply with a requirement imposed by or under an enactment.
(4) A UK regulator may exercise the powers under paragraph 49(1) (UK regulator's initiative: imposing, varying and cancelling requirements) in relation to the person if it appears to the UK regulator that it is desirable to do so in order to advance—
(a) in the case of the FCA, one or more of its operational objectives, or
(b) in the case of the PRA, one of its objectives.
(5) For the purposes of section 33 (withdrawal of authorisation) a person's Schedule 2A permission is to be treated as being cancelled when the person ceases to be treated as having a Schedule 2A permission by virtue of this paragraph.
(6) In this paragraph—
“enactment” has the same meaning as in paragraph 60;
“protected contract” means—
an existing contract, or
a contract specified or described in a direction by the appropriate UK regulator under paragraph 67(1).
(7) In sub-paragraph (6), “existing contract”, in relation to a person referred to in sub-paragraph (1), means a contract entered into before the person's permission is cancelled or varied as described in that sub-paragraph, but—
(a) does not include a contract specified or described in a direction under paragraph 67(2), and
(b) except as otherwise provided in such a direction, does not include—
(i) a variation of a contract agreed on or after that day, or
(ii) a contract renewed on or after that day.
(8) In this paragraph, references to the performance of a protected contract include the performance of an obligation under the contract which is contingent or conditional.
Transition on cancellation of Gibraltar permission
65 (1) Sub-paragraphs (2) and (4) apply where the Gibraltar regulator—
(a) cancels a Gibraltar-based person's permission to carry on in Gibraltar an activity in relation to which the person has a Schedule 2A permission, or
(b) varies such a permission so as to remove permission to carry on such an activity (including by adding or varying a restriction).
(2) For the purposes of this Schedule, the person is to be treated as continuing to have the permission from the Gibraltar regulator but—
(a) only so far as is necessary for one or more of the purposes described in sub-paragraph (3), and
(b) subject to the time limit in paragraph 68.
(3) The purposes are—
(a) for the performance of a protected contract;
(b) to reduce the financial risk of a party to a protected contract or a third party affected by the performance of a protected contract;
(c) to transfer the property, rights or liabilities under a protected contract to a person authorised to carry on a regulated activity by virtue of section 31(1)(a);
(d) to comply with a requirement imposed by or under an enactment.
(4) A UK regulator may exercise the powers under paragraph 49(1) (UK regulator's initiative: imposing, varying and cancelling requirements) in relation to the person if it appears to the UK regulator that it is desirable to do so in order to advance—
(a) in the case of the FCA, one or more of its operational objectives, or
(b) in the case of the PRA, one of its objectives.
(5) In this paragraph—
“enactment” has the same meaning as in paragraph 60;
“protected contract” means—
an existing contract, or
a contract specified or described in a direction by the appropriate UK regulator under paragraph 67(1).
(6) In sub-paragraph (5), “existing contract”, in relation to a person referred to in sub-paragraph (1), means a contract entered into before the person's permission is cancelled or varied as described in that sub-paragraph, but—
(a) does not include a contract specified or described in a direction under paragraph 67(2), and
(b) except as otherwise provided in such a direction, does not include—
(i) a variation of a contract agreed on or after that day, or
(ii) a contract renewed on or after that day.
(7) In this paragraph, references to the performance of a protected contract include the performance of an obligation under the contract which is contingent or conditional.
The appropriate UK regulator
66 (1) In this Part of this Schedule, “the appropriate UK regulator” means—
(a) the PRA, in a case in which the Gibraltar-based person is a PRA-authorised person but not a paragraph 37(1) person, or
(b) the FCA, in any other case.
(2) In this paragraph, “a paragraph 37(1) person” means a person who is treated as having a Schedule 2A permission by virtue of paragraph 64 following the cancellation of that permission by the FCA under paragraph 37(1).
Directions about protected contracts
67 (1) A UK regulator may direct that a contract specified or described in the direction is a protected contract for the purposes of paragraph 64 or 65 (or both).
(2) A UK regulator may, by giving a direction, modify the definition of “existing contract” for the purposes of paragraph 64 or 65 (or both) in the ways provided for in the definitions of that term in those paragraphs.
(3) A UK regulator that gives a direction under this paragraph may, by a further direction, vary or revoke the direction.
(4) A UK regulator may give different directions under this paragraph in connection with—
(a) different activities,
(b) different contracts or descriptions of contract, or
(c) different Gibraltar-based persons or descriptions of Gibraltar-based person.
(5) After giving a direction under this paragraph, a UK regulator must—
(a) publish the direction in the way appearing to the UK regulator to be best calculated to bring it to the attention of persons likely to be affected by it, and
(b) give a copy of the direction to the Treasury and the other UK regulator without delay.
End of transition
68 (1) A Gibraltar-based person ceases to be treated as having a permission by virtue of paragraph 64 or 65—
(a) when an event listed in sub-paragraph (2) first occurs, or
(b) if the appropriate UK regulator specifies an earlier date, on that date.
(2) Those events are—
(a) the person ceases to carry on the regulated activity in the United Kingdom;
(b) the person is given permission under Part 4A of this Act in respect of the regulated activity;
(c) the regulated activity ceases to be an approved activity;
(d) the person obtains (as appropriate)—
(i) a new Schedule 2A permission to carry on the activity referred to in paragraph 64(1), or
(ii) a new permission from the Gibraltar regulator to carry on the activity referred to in paragraph 65(1).
(3) If the appropriate UK regulator specifies a date for the purposes of sub-paragraph (1)(b), it may vary the date but only by specifying a later date.
(4) In sub-paragraph (2), references to “the regulated activity” are references (as appropriate) to—
(a) the regulated activity in respect of which the Gibraltar-based person is treated as having a Schedule 2A permission by virtue of paragraph 64, or
(b) the regulated activity corresponding to the activity in respect of which the Gibraltar-based person is treated as having permission from the Gibraltar regulator by virtue of paragraph 65.
(5) For the purposes of sub-paragraph (2)(c), a regulated activity does not cease to be an approved activity while it is treated as approved in relation to the Gibraltar-based person under Part 9 of this Schedule (with or without the restrictions under that Part).
End of transition: procedure
69 (1) If a UK regulator proposes to specify or vary a date in relation to a person under paragraph 68(1)(b) or (3), it must give the person a warning notice.
(2) If a UK regulator decides to specify or vary a date in relation to a person under paragraph 68(1)(b) or (3), it must give the person a decision notice.
Right to refer matters to the Tribunal
70 If a UK regulator gives a Gibraltar-based person a decision notice under paragraph 69, the person may refer the matter to the Tribunal.
PART 11 Policy statements
Policy statements
71 (1) Each UK regulator must prepare and issue a statement of its policy with respect to—
(a) its powers to vary or cancel a Schedule 2A permission under Part 4 or 5 of this Schedule other than on a notification by the Gibraltar regulator,
(b) its powers to impose, vary or cancel requirements under Part 6 of this Schedule, other than on a notification by the Gibraltar regulator, and
(c) its power to give directions under Part 7 of this Schedule.
(2) Where a UK regulator has issued a statement under sub-paragraph (1), it may prepare and issue a revised statement.
(3) In exercising a power described in sub-paragraph (1), a UK regulator must have regard to any relevant statement of policy issued under this paragraph and in force at the time.
Policy statements: procedure
72 (1) Before issuing a statement under paragraph 71(1) or (2), a UK regulator must—
(a) publish a draft of the proposed statement in the way appearing to it to be best calculated to bring it to the attention of the public,
(b) publish a notice stating that representations may be made to the UK regulator within the period specified in the notice, and
(c) have regard to any representations made to it in accordance with the notice.
(2) If the UK regulator issues the proposed statement, it must publish—
(a) the statement, and
(b) an account in general terms of—
(i) the representations made to it in accordance with the notice, and
(ii) its response to them.
(3) If the statement issued differs from the draft published under sub-paragraph (1) in a way which, in the opinion of the UK regulator, is significant, the UK regulator must publish details of the differences (as well as complying with sub-paragraph (2)).
(4) A UK regulator—
(a) must give a copy of a statement issued under paragraph 71(1) or (2) to the Treasury before publishing it, and
(b) may charge a reasonable fee for providing a person with a copy of such a statement or a draft statement published under this paragraph.
(5) Anything published by a UK regulator under this paragraph must be published in the way appearing to the UK regulator to be best calculated to bring it to the attention of the public.
PART 12 Consultation etc by UK regulators
FCA's duties to consult the PRA
73 (1) The FCA must consult the PRA before—
(a) rejecting a notification under paragraph 19 in a case in which the person with responsibility for managing an aspect of the Gibraltar-based person's affairs is prohibited by an order under section 56 from performing a function in relation to an activity carried on by a PRA-authorised person, or
(b) rejecting a notification under paragraph 20 in a case in which a relevant access right that was lost related to a PRA-regulated activity.
(2) The FCA must consult the PRA before doing any of the following in a case in which the Gibraltar-based person is a PRA-authorised person or a member of a group that includes a PRA-authorised person—
(a) rejecting a notification under paragraph 26(5);
(b) varying a Schedule 2A permission under paragraph 27;
(c) rejecting a notification under paragraph 36(4);
(d) cancelling a Schedule 2A permission under paragraph 37(1);
(e) imposing a requirement under paragraph 41(3);
(f) rejecting a notification under paragraph 48(4);
(g) imposing, varying or cancelling a requirement under paragraph 49(2).
FCA's duties to obtain consent from the PRA
74 (1) The FCA must obtain the PRA's consent before exercising its power under paragraph 27 in relation to a PRA-authorised person so as to—
(a) add an activity to those to which the person's Schedule 2A permission relates, or
(b) widen the description of an activity to which the person's Schedule 2A permission relates.
(2) Sub-paragraph (1) does not apply in relation to the regulated activity specified in article 63S of the Financial Services and Markets 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) (administering a benchmark).
(3) Consent given by the PRA for the purposes of this paragraph may be conditional on the way in which the FCA exercises its power.
FCA's duties to inform the PRA
75 (1) The FCA must inform the PRA in writing without delay after rejecting a notification under—
(a) paragraph 18(2) or (3), 19 or 20;
(b) paragraph 26(4) or (5);
(c) paragraph 36(4);
(d) paragraph 48(4).
(2) The FCA must inform the PRA in writing without delay after imposing, varying or cancelling a requirement under paragraph 41(3) or 49(2).
PRA's duties to consult the FCA
76 (1) The PRA must consult the FCA before—
(a) giving a confirmation notice under paragraph 16;
(b) rejecting a notification under paragraph 19 or 20;
(c) giving a confirmation notice under paragraph 25;
(d) rejecting a notification under paragraph 26(5);
(e) varying a Schedule 2A permission under paragraph 27;
(f) giving a confirmation notice under paragraph 35;
(g) rejecting a notification under paragraph 36(5);
(h) cancelling a Schedule 2A permission under paragraph 37(2);
(i) imposing a requirement under paragraph 41(4);
(j) giving a confirmation notice under paragraph 47;
(k) rejecting a notification under paragraph 48(5);
(l) imposing, varying or cancelling a requirement under paragraph 49(3);
(m) giving a notice under paragraph 60;
(n) giving a direction under paragraph 61;
(o) giving a direction under paragraph 67.
(2) The PRA must—
(a) consult the FCA before publishing a draft statement under paragraph 72, and
(b) if the final version of the statement is to differ from the draft in a way which, in the opinion of the PRA, is significant, consult the FCA again before issuing it.
PRA's duty to obtain consent from the FCA
77 (1) The PRA must obtain the FCA's consent before exercising its power under paragraph 27 so as to—
(a) add an activity to those to which a Schedule 2A permission relates, or
(b) widen the description of an activity to which a Schedule 2A permission relates.
(2) Consent given by the FCA for the purposes of this paragraph may be conditional on the way in which the PRA exercises its power.
PRA's duties to inform the FCA
78 (1) When the PRA receives a notification for the purposes of a provision listed in the first column of the following table, it must give a copy to the FCA without delay, except where it rejects the notification under the provision listed in the second column (notification incomplete)—
Notification for the purposes of | Rejection under
paragraph 12 | paragraph 18(1)
paragraph 22 | paragraph 26(3)
paragraph 32 | paragraph 36(3)
paragraph 44 | paragraph 48(3).
(2) The PRA must inform the FCA in writing without delay after rejecting a notification under—
(a) paragraph 18(2) or (3), 19 or 20;
(b) paragraph 26(4) or (5);
(c) paragraph 36(5);
(d) paragraph 48(5).
(3) The PRA must inform the FCA in writing without delay after imposing, varying or cancelling a requirement under paragraph 41(4) or 49(3).
UK regulators' duties to inform the Gibraltar regulator
79 (1) A UK regulator must inform the Gibraltar regulator in writing before giving a confirmation notice under—
(a) paragraph 16,
(b) paragraph 25,
(c) paragraph 35, or
(d) paragraph 47.
(2) A UK regulator must inform the Gibraltar regulator in writing without delay after—
(a) varying a Schedule 2A permission under paragraph 27,
(b) cancelling a Schedule 2A permission under paragraph 37,
(c) imposing a requirement under paragraph 41, or
(d) imposing, varying or cancelling a requirement under paragraph 49.
PART 13 Co-operation and Assistance
Duties to co-operate
80 (1) Each of the FCA, the PRA and the scheme manager must take such steps as they consider appropriate, for the purposes in sub-paragraph (2), to co-operate—
(a) with each other and the Treasury (“the UK entities”), and
(b) with the government of Gibraltar and the Gibraltar regulator (“the Gibraltar entities”).
(2) Those purposes are—
(a) to secure that they, and the Treasury, are able to perform their functions under this Schedule and section 32A, and
(b) to secure that, so far as is reasonably possible, there is co-operation between the UK entities and the Gibraltar entities which the Treasury, having regard to the objectives in paragraph 7(1), consider adequate.
(3) For the purposes of sub-paragraph (2), the FCA, the PRA and the scheme manager must, among other things, have regard to—
(a) the memoranda and arrangements described in paragraph 9(4)(a) to (d),
(b) reports laid before Parliament by the Treasury under section 32A, and
(c) any guidance published by the Treasury.
(4) Each of the FCA, the PRA and the scheme manager must ensure that one or more memoranda describing how it intends to comply with sub-paragraph (1) are prepared and maintained.
(5) The steps taken for the purposes of sub-paragraph (1) may include arrangements for the sharing of information which the FCA, the PRA or the scheme manager is not prevented from disclosing.
(6) When carrying out functions under this Schedule, the FCA and the PRA must, among other things, have regard to any relevant arrangements in force at the time for co-operation between the UK entities or for co-operation between those entities and the Gibraltar entities.
Publication and review of arrangements for co-operation
81 (1) Each of the FCA, the PRA and the scheme manager must—
(a) ensure that a copy of each memorandum describing how it intends to comply with paragraph 80(1), and of any other document recording arrangements that it enters into for the purpose of complying with paragraph 80(1), is given to the Treasury (unless the Treasury also entered into the arrangement),
(b) ensure that each memorandum is published in the way appearing to it to be best calculated to bring it to the attention of the public, and
(c) review the memoranda that it has in place for the purpose of complying with paragraph 80(1) at least once in each of the reporting periods described in section 32A.
(2) Where the Treasury enter into arrangements with the FCA, the PRA, the scheme manager, the government of Gibraltar or the Gibraltar regulator for a purpose described in paragraph 80(2), they must—
(a) ensure that any memorandum recording the arrangements is published in the way appearing to the Treasury to be best calculated to bring it to the attention of the public, and
(b) review the memoranda that the Treasury have in place for a purpose described in paragraph 80(2) at least once in each of the reporting periods described in section 32A.
(3) The Treasury must lay before Parliament a copy of any memorandum—
(a) given to them under sub-paragraph (1), or
(b) published in accordance with sub-paragraph (2)(a).
Provision of reports to assist the Treasury
82 (1) A UK regulator or the scheme manager must, on a request from the Treasury, prepare and send to the Treasury a report on a matter specified in the request.
(2) The Treasury may only make a request under this paragraph for a report that they reasonably require in connection with the exercise of their functions under—
(a) this Schedule, or
(b) section 32A.
(3) A request for a report under this paragraph—
(a) must be made in writing, and
(b) may require the UK regulator or scheme manager to send the report to the Treasury before a date specified in the request.
PART 14 Special cases
Gibraltar-based individuals carrying on insurance distribution activities
83 (1) For the purposes of paragraph 1, an individual without a head office in Gibraltar is to be treated as having a head office there if the individual—
(a) is normally resident in Gibraltar, and
(b) has permission from the Gibraltar regulator to carry on an insurance distribution activity in Gibraltar.
(2) A notification for the purposes of paragraph 12 in respect of an individual who is a Gibraltar-based person by virtue of this paragraph satisfies paragraph 15(1)(b) if it states the main address where the individual carries on an insurance distribution activity in Gibraltar.
(3) The Treasury may by regulations replace the requirement in sub-paragraph (1)(a) with a different requirement relating to residence in Gibraltar.
(4) In this paragraph, “insurance distribution activity” has the meaning given in paragraph 2B(5) and (6) of Schedule 6.
Sections 31(1)(b) and 37.
Part I Defined terms
The single market directives
1 “The single market directives” means—
(a) the capital requirements directive;
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(ca) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(d) the markets in financial instruments directive; ...
(e) the insurance distribution directive; ...
(f) the UCITS directive; ...
(g) the alternative investment fund managers directive; and
(h) the mortgages directive.
The banking co-ordination directives
2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Solvency 2 Directive
3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The reinsurance directive
3A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The investment services directive
4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The insurance distribution directive
4A “The insurance distribution directive” means Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution (recast) as amended by Directive (EU) 2018/411 of the European Parliament and of the Council of 14 March 2018.
The UCITS directive
4B “The UCITS directive ” means the Directive of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (No 2009/65/EC) , as amended by Directive 2014/91/EU of the European Parliament and of the Council of 23rd July 2014.
The markets in financial instruments directive
4C “The markets in financial instruments directive” means Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments.
The emission allowance auctioning regulation
4D. “The emission allowance auctioning regulation” means Commission Regulation ( EU ) No 1031/2010 of 12 November 2010 on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to Directive 2003/87/ EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community.
The alternative investment fund managers directive
4E. “The alternative investment fund managers directive” means Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers.
The mortgages directive
4F. “The mortgages directive” means Directive 2014/17/EU of the European Parliament and of the Council of 4th February 2014 on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010.
EEA firm
5 “EEA firm” means any of the following if it does not have its relevant office in the United Kingdom—
(a) an investment firm (as defined in Article 4.1.1 of the markets in financial instruments directive) which is authorised (within the meaning of Article 5) by its home state regulator;
(b) a credit institution (as defined in Article 4(1)(1) of the capital requirements regulation) which is authorised (within the meaning of Article 8 of the capital requirements directive) by its home state regulator;
(c) a financial institution (as defined in Article 4(1)(26) of the capital requirements regulation) which is a subsidiary of the kind mentioned in Article 34 of the capital requirements directive and which fulfils the conditions of that Article;
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(da) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(e) an insurance intermediary (as defined in Article 2.1(3) of the insurance distribution directive), an ancillary insurance intermediary (as defined in Article 2.1(4) of that directive) or a reinsurance intermediary (as defined in Article 2.1(5) of that directive), which is registered with its home state regulator under Article 3 of that directive;
(f) a management company (as defined in paragraph 11B) which is authorised (within the meaning of Article 6 of the UCITS directive) by its home state regulator; ...
(g) a person who has received authorisation under Article 18.2 of the emission allowance auctioning regulation; ...
(h) an AIFM (as defined in Article 4.1(b) of the alternative investment fund managers directive) which is authorised (in accordance with Article 6.1 of that directive) by its home state regulator; or
(i) a mortgage intermediary which is admitted (in accordance with Article 29(1) of the mortgages directive) by its home state regulator to carry out all or part of the credit intermediation activities set out in Article 4(5) of that directive or to provide advisory services (as defined in Article 4(21) of that directive).
5A In paragraph 5, “relevant office” means—
(a) in relation to a firm falling within sub-paragraph (e) or (i) of that paragraph which has a registered office, its registered office;
(aa) in relation to a firm falling within sub-paragraph (h) of that paragraph, its registered office;
(b) in relation to any other firm, its head office.
EEA authorisation
6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EEA right
7 “EEA right” means the entitlement of a person to establish a branch, or provide services, in an EEA State other than that in which he has his relevant office—
(a) in accordance with the Treaty as applied in the EEA; and
(b) subject to the conditions of the relevant single market directive or, as the case may be, the emission allowance auctioning regulation.
7A In paragraph 7, “relevant office” means—
(a) in relation to a person who has a registered office and whose entitlement is subject to the conditions of the insurance distribution directive or the mortgages directive, his registered office;
(aa) in relation to a person whose entitlement is subject to the conditions of the alternative investment fund managers directive, its registered office;
(b) in relation to any other person, his head office.
EEA State
8 “EEA State ” has the meaning given by Schedule 1 to the Interpretation Act 1978.
Home state regulator
9 “Home state regulator” means the competent authority (within the meaning of the relevant single market directive or, as the case may be, the emission allowance auctioning regulation) of an EEA State (other than the United Kingdom) in relation to the EEA firm concerned.
UK firm
10 “UK firm” means a person whose relevant office is in the UK and who has an EEA right to carry on activity in an EEA State other than the United Kingdom.
10A In paragraph 10, “relevant office” means—
(a) in relation to a firm whose EEA right derives from the insurance distribution directive and which has a registered office, its registered office;
(aa) in relation to a firm whose EEA right derives from the alternative investment fund managers directive, its registered office;
(b) in relation to any other firm, its head office.
UK investment firm
10B ”UK investment firm” means a UK firm—
(a) which is an investment firm, and
(b) whose EEA right derives from the markets in financial instruments directive.
Host state regulator
11 “Host state regulator” means the competent authority (within the meaning of the relevant single market directive or, as the case may be, the emission allowance auctioning regulation) of an EEA State (other than the United Kingdom) in relation to a UK firm’s exercise of EEA rights there.
Tied agent
11A ”Tied agent” has the meaning given in Article 4.1.29 of the markets in financial instruments directive.
Management company
11B “Management company” has the meaning given in Article 2.1(b) of the UCITS directive.
UCITS
11C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EEAAIFM
11D. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SCHEDULE 5 Persons Concerned in Collective Investment Schemes
Section 36.
Authorisation
1 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) An authorised open-ended investment company is an authorised person.
(4) A body—
(a) incorporated by virtue of regulations made under section 1 of the Open-Ended Investment Companies Act (Northern Ireland) 2002 in respect of which an authorisation order is in force, and
(b) which is a UCITS as defined in section 236A,
is an authorised person.
(5) “Authorisation order” means an order made under (or having effect as made under) any provision of those regulations which is made by virtue of section 1(2)(1) of that Act (provision corresponding to Chapter 3 of Part 17 of the Act).
Permission
2 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2) A person authorised as a result of paragraph 1(3) or (4) has permission to carry on, so far as it is a regulated activity other than the activity of managing an AIF—
(a) the operation of the scheme;
(b) any activity in connection with, or for the purposes of, the operation of the scheme.
Section 55B
PART 1 Introduction
1A. (1) In this Schedule—
“assets” includes contingent assets;
“consolidated supervision” has the same meaning as in section 3M;
“consumers” has the meaning given in section 425A;
“financial crime” is to be read with section 1H(3);
“functions”, in relation to the FCA or the PRA, means functions conferred on that regulator by or under this Act;
“implementing provisions” has the same meaning as in section 3M;
“liabilities” includes contingent liabilities;
“relevant directives” has the same meaning as in section 3M;
“relevant implementing provisions” means—
any implementing provision contained in subordinate legislation (within the meaning of the Interpretation Act 1978) made otherwise than by any of the following–
statutory instrument, and
statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979 (S.I. 1979/1573 (N.I. 12)); or
any other implementing provision (as amended from time to time));
“Society” means the society incorporated by Lloyd’s Act 1871 by the name of Lloyd’s;
“subsidiary undertaking” includes all the instances mentioned in Article 1(1) and (2) of the Seventh Company Law Directive in which an entity may be a subsidiary of an undertaking.
(2) For the purposes of this Schedule, the “non-financial resources” of a person include any systems, controls, plans or policies that the person maintains, any information that the person holds and the human resources that the person has available.
(3) In this Schedule, References to “integrity” of the UK financial system are to be read in accordance section 1D(2).
(4) References to the failure of a person are to be read in accordance with section 2J(3) and (4).
PART 1B Part 4A permission: authorised persons who are not PRA-authorised persons
Introduction
2A. If the person concerned (“A”) carries on, or is seeking to carry on, regulated activities which do not consist of or include a PRA-regulated activity, the threshold conditions that are relevant to the discharge by the FCA of its functions in relation to A are the conditions set out in paragraphs 2B to 2F.
Location of offices
2B. (1) Unless sub-paragraph (3) , (4)(a) or (7) applies, if A is a body corporate incorporated in the United Kingdom—
(a) A’s head office, and
(b) if A has a registered office, that office,
must be in the United Kingdom.
(2) If A is not a body corporate but A’s head office is in the United Kingdom, A must carry on business in the United Kingdom.
(3) If—
(a) A is seeking to carry on, or is carrying on, a regulated activity which is any of the investment services and activities,
(b) A is a body corporate with no registered office, and
(c) A’s head office is in the United Kingdom,
A must carry on business in the United Kingdom.
(4) If A is seeking to carry on, or is carrying on, an insurance distribution activity—
(a) where A is a body corporate incorporated in the United Kingdom, A’s registered office, or if A has no registered office, A’s head office, must be in the United Kingdom;
(b) where A is an individual, A is to be treated for the purposes of sub-paragraph (2) as having a head office in the United Kingdom if A is resident in the United Kingdom.
(5) “Insurance distribution activity” means any of the following activities—
(a) dealing in rights under a contract of insurance as agent;
(b) arranging deals in rights under a contract of insurance;
(c) assisting in the administration and performance of a contract of insurance;
(d) advising on buying or selling rights under a contract of insurance;
(e) agreeing to do any of the activities specified in paragraphs (a) to (d).
(6) Sub-paragraph (5) must be read with—
(a) section 22,
(b) any relevant order under that section, and
(c) Schedule 2.
(7) If A is seeking to carry on, or is carrying on, the regulated activity of managing an AIF and is, or upon being granted Part 4A permission to carry on that regulated activity would be, a full-scope UKAIFM, A’s head office and registered office must be in the United Kingdom.
Effective supervision
2C. (1) A must be capable of being effectively supervised by the FCA having regard to all the circumstances including—
(a) the nature (including the complexity) of the regulated activities that A carries on or seeks to carry on;
(b) the complexity of any products that A provides or will provide in carrying on those activities;
(c) the way in which A’s business is organised;
(d) if A is a member of a group, whether membership of the group is likely to prevent the FCA’s effective supervision of A;
(e) whether A is subject to consolidated supervision required under any relevant implementing provisions;
(f) if A has close links with another person (“CL”)—
(i) the nature of the relationship between A and CL,
(ii) whether those links are or that relationship is likely to prevent the FCA’s effective supervision of A, and
(iii) if CL is subject to the laws, regulations or administrative provisions of a country or territory outside the United Kingdom (“the foreign provisions”), whether those foreign provisions, or any deficiency in their enforcement, would prevent the FCA’s effective supervision of A.
(1A) Paragraphs (a), (b) and (e) of sub-paragraph (1) do not apply where the only regulated activities that the person carries on, or seeks to carry on, are—
(a) relevant credit activities, and
(b) if any, activities to which, by virtue of section 39(1D), sections 20(1) and (1A) and 23(1A) do not apply when carried on by the person.
(2) A has close links with CL if—
(a) CL is a parent undertaking of A,
(b) CL is a subsidiary undertaking of A,
(c) CL is a parent undertaking of a subsidiary undertaking of A,
(d) CL is a subsidiary undertaking of a parent undertaking of A,
(e) CL owns or controls 20% or more of the voting rights or capital of A, or
(f) A owns or controls 20% or more of the voting rights or capital of CL.
Appropriate resources
2D. (1) The resources of A must be appropriate in relation to the regulated activities that A carries on or seeks to carry on.
(2) The matters which are relevant in determining whether A has appropriate resources include—
(a) the nature and scale of the business carried on, or to be carried on, by A;
(b) the risks to the continuity of the services provided by, or to be provided by, A;
(c) A’s membership of a group and any effect which that membership may have.
(3) Except in a case within sub-paragraph (3A), the matters which are relevant in determining whether A has appropriate financial resources include—
(a) the provision A makes and, if A is a member of a group, which other members of the group make, in respect of liabilities;
(b) the means by which A manages and, if A is a member of a group, by which other members of the group manage, the incidence of risk in connection with A’s business.
(3A) Where the only regulated activities that A carries on or seeks to carry on are—
(a) relevant credit activities, and
(b) if any, activities to which, by virtue of section 39(1D), sections 20(1) and (1A) and 23(1A) do not apply when carried on by A,
A has adequate financial resources if A is capable of meeting A’s debts as they fall due.
(4) The matters which are relevant in determining whether A has appropriate non-financial resources include—
(a) the skills and experience of those who manage A’s affairs;
(b) whether A’s non-financial resources are sufficient to enable A to comply with—
(i) requirements imposed or likely to be imposed on A by the FCA in the exercise of its functions, or
(ii) any other requirement in relation to whose contravention the FCA would be the appropriate regulator for the purpose of any provision of Part 14 of this Act.
Suitability
2E. A must be a fit and proper person having regard to all the circumstances, including—
(a) A’s connection with any person;
(b) the nature (including the complexity) of the regulated activities that A carries on or seeks to carry on;
(c) the need to ensure that A’s affairs are conducted in an appropriate manner, having regard in particular to the interests of consumers and the integrity of the UK financial system;
(d) whether A has complied and is complying with requirements imposed by the FCA in the exercise of its functions, or requests made by the FCA, relating to the provision of information to the FCA and, where A has so complied or is so complying, the manner of that compliance;
(e) whether those who manage A’s affairs have adequate skills and experience and have acted and may be expected to act with probity;
(f) whether A’s business is being, or is to be, managed in such a way as to ensure that its affairs will be conducted in a sound and prudent manner;
(g) the need to minimise the extent to which it is possible for the business carried on by A, or to be carried on by A, to be used for a purpose connected with financial crime.
Business model
2F. (1) A’s business model (that is, A’s strategy for doing business) must be suitable for a person carrying on the regulated activities that A carries on or seeks to carry on.
(2) The matters which are relevant in determining whether A satisfies the condition in sub-paragraph (1) include—
(a) whether the business model is compatible with A’s affairs being conducted, and continuing to be conducted, in a sound and prudent manner;
(b) the interests of consumers;
(c) the integrity of the UK financial system.
(3) This paragraph does not apply where the only regulated activities that the person carries on, or seeks to carry on, are—
(a) relevant credit activities, and
(b) if any, activities to which, by virtue of section 39(1D), sections 20(1) and (1A) and 23(1A) do not apply when carried on by the person.
Interpretation
2G. (1) In this Part of this Schedule, each of the following is a “relevant credit activity”—
(a) an activity of the kind specified by article 36A of the Regulated Activities Order (credit broking) when carried on in the case specified in sub-paragraph (3), (4) or (5),
(b) an activity of the kind specified by article 39D of that Order (debt adjusting) when carried on—
(i) in the case specified in sub-paragraph (3), by a person who also carries on an activity of the kind specified by paragraph (a),
(ii) by a person in connection with an activity of the kind specified by paragraph (d) or (e) which the person also carries on,
(iii) by a not-for-profit body,
(c) an activity of the kind specified by article 39E of that Order (debt-counselling) when carried on—
(i) in the case specified in sub-paragraph (3), by a person who also carries on an activity of the kind specified by paragraph (a),
(ii) by a person in connection with an activity of the kind specified by paragraph (d) or (e) which the person also carries on,
(iii) by a not-for-profit body,
(d) an activity of the kind specified by article 60B of that Order (regulated credit agreements) if—
(i) it is carried on by a supplier,
(ii) no charge (by way of interest or otherwise) is payable by the borrower in connection with the provision of credit under the regulated credit agreement, and
(iii) the regulated credit agreement is not a hire-purchase agreement or a conditional sale agreement,
(da) an activity of the kind specified by article 60B of that Order (regulated credit agreements) if carried on by a local authority,
(e) an activity of the kind specified by article 60N of that Order (regulated consumer hire agreements),
(f) an activity of the kind specified by article 89A of that Order (providing credit information services) where carried on by a person in connection with an activity of the kind specified by any of paragraphs (a) to (e) which the person also carries on, or
(g) an activity of the kind specified by article 64 of that Order (agreeing to carry on specified kinds of activity) so far as relevant to any of the activities specified in paragraphs (a) to (f).
(2) Except where the activity is carried on by a not-for-profit body, an activity is not a relevant credit activity for the purposes of—
(a) paragraph (a) to (e) of sub-paragraph (1), and
(b) paragraph (g) of that sub-paragraph so far at it relates to activities of the kind specified by any of those paragraphs,
if it relates to an agreement under which the obligation of the borrower to repay or the hirer to pay is secured, or is to be secured, by a legal mortgage on land.
(3) The case specified in this sub-paragraph is where a supplier (other than a domestic premises supplier) carries on the activity for the purposes of, or in connection with, the sale of goods or supply of services by the supplier to a customer (who need not be the borrower under the credit agreement or the hirer under the consumer hire agreement).
(3A) For the purposes of sub-paragraph (3), “domestic premises supplier” means a supplier who—
(a) sells, offers to sell or agrees to sell goods, or
(b) offers to supply services or contracts to supply services,
to customers who are individuals while the supplier, or the supplier’s representative, is physically present at the dwelling of the individual (but see sub-paragraph (3B)).
(3B) A supplier who acts as described in sub-paragraph (3A) on an occasional basis only will not be a domestic premises supplier unless the supplier indicates to the public at large, or any section of the public, the supplier’s willingness to attend (in person or through a representative) the dwelling of potential customers in order to carry on any of the activities mentioned in sub-paragraph (3A)(a) or (b).
(4) The case specified in this sub-paragraph is where the activity relates to a green deal plan.
(5) The case specified in this sub-paragraph is where the activity relates to a consumer hire agreement or a hire-purchase agreement.
(6) For the purposes of this paragraph—
“borrower” includes—
any person providing a guarantee or indemnity under an agreement, and
a person to whom the rights and duties of the borrower under an agreement or a person falling within paragraph (a) have passed by assignment or operation of law;
“conditional sale agreement” has the meaning given by article 60L of the Regulated Activities Order;
“consumer hire agreement” has the meaning given by article 60N(3) of the Regulated Activities Order;
“customer” means a person to whom a supplier sells goods or supplies services or agrees to do so;
...
“green deal plan” has the meaning given by section 1 of the Energy Act 2011;
“hire-purchase agreement” has the meaning given by the Regulated Activities Order;
“local authority” means—
in England and Wales, a local authority within the meaning of the Local Government Act 1972, the Greater London Authority, the Common Council of the City of London or the Council of the Isles of Scilly;
in Scotland, a local authority within the meaning of the Local Government (Scotland) Act 1973; and
in Northern Ireland, a district council within the meaning of the Local Government Act (Northern Ireland) 1972;
“not-for-profit body” means a body which, by virtue of its constitution or any enactment—
is required (after payment of outgoings) to apply the whole of its income and any capital it expends for charitable or public purposes, and
is prohibited from directly or indirectly distributing amongst its members any part of its assets (otherwise than for charitable or public purposes);
“Regulated Activities Order” means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;
“regulated credit agreement” has the meaning given by the Regulated Activities Order;
“supplier” means a person whose main business is to sell goods or supply services and not to carry on a regulated activity, other than an activity of the kind specified by article 60N of the Regulated Activities Order (regulated consumer hire agreements).
PART 1C Part 4A permission: conditions for which FCA is responsible in relation to PRA-authorised persons
Introduction
3A. If the person concerned (“B”) carries on, or is seeking to carry on, regulated activities which consist of or include a PRA-regulated activity, the threshold conditions which are relevant to the discharge by the FCA of its functions in relation to B are the conditions set out in paragraphs 3B to 3E.
Effective supervision
3B. (1) B must be capable of being effectively supervised by the FCA having regard to all the circumstances including—
(a) the nature (including the complexity) of the regulated activities that B carries on or seeks to carry on;
(b) the complexity of any products that B provides or will provide in carrying on those activities;
(c) the way in which B’s business is organised;
(d) if B is a member of a group, whether membership of the group is likely to prevent the FCA’s effective supervision of B;
(e) whether B is subject to consolidated supervision required under any relevant implementing provisions;
(f) if B has close links with another person (“CL”)—
(i) the nature of the relationship between B and CL,
(ii) whether those links are or that relationship is likely to prevent the FCA’s effective supervision of B, and
(iii) if CL is subject to the laws, regulations or administrative provisions of a country or territory outside the United Kingdom (“the foreign provisions”), whether those foreign provisions, or any deficiency in their enforcement, would prevent the FCA’s effective supervision of B.
(2) B has close links with CL if—
(a) CL is a parent undertaking of B,
(b) CL is a subsidiary undertaking of B,
(c) CL is a parent undertaking of a subsidiary undertaking of B,
(d) CL is a subsidiary undertaking of a parent undertaking of B,
(e) CL owns or controls 20% or more of the voting rights or capital of B, or
(f) B owns or controls 20% or more of the voting rights or capital of CL.
Appropriate non-financial resources
3C. (1) The non-financial resources of B must be appropriate in relation to the regulated activities that B carries on or seeks to carry on, having regard to the operational objectives of the FCA.
(2) The matters which are relevant in determining whether the condition in sub-paragraph (1) is met include—
(a) the nature and scale of the business carried on, or to be carried on, by B;
(b) the risks to the continuity of the services provided by, or to be provided by, B;
(c) B’s membership of a group and any effect which that membership may have;
(d) the skills and experience of those who manage B’s affairs;
(e) whether B’s non-financial resources are sufficient to enable B to comply with—
(i) requirements imposed or likely to be imposed on B by the FCA in the exercise of its functions, or
(ii) any other requirement in relation to whose contravention the FCA would be the appropriate regulator for the purpose of any provision of Part 14 of this Act.
Suitability
3D. (1) B must be a fit and proper person, having regard to the operational objectives of the FCA.
(2) The matters which are relevant in determining whether B satisfies the condition in sub-paragraph (1) include—
(a) B’s connection with any person;
(b) the nature (including the complexity) of the regulated activities that B carries on or seeks to carry on;
(c) the need to ensure that B’s affairs are conducted in an appropriate manner, having regard in particular to the interests of consumers and the integrity of the UK financial system;
(d) whether B has complied and is complying with requirements imposed by the FCA in the exercise its functions, or requests made by the FCA, relating to the provision of information to the FCA and, where B has so complied or is so complying, the manner of that compliance;
(e) whether those who manage B’s affairs have adequate skills and experience and have acted and may be expected to act with probity;
(f) the need to minimise the extent to which it is possible for the business carried on by B, or to be carried on by B, to be used for a purpose connected with financial crime.
Business model
3E. B’s business model (that is, B’s strategy for doing business) must be suitable for a person carrying on the regulated activities that B carries on or seeks to carry on, having regard to the FCA’s operational objectives.
PART 1D Part 4A permission: conditions for which the PRA is responsible in relation to insurers etc.
Introduction
4A. (1) If the person concerned (“C”) carries on, or is seeking to carry on, regulated activities which consist of or include a PRA-regulated activity relating to the effecting or carrying out of contracts of insurance, the threshold conditions which are relevant to the discharge by the PRA of its functions in relation to C are the conditions set out in paragraphs 4B to 4F.
(2) If the person concerned (“C”) carries on, or is seeking to carry on, regulated activities which consist of or include a PRA-regulated activity relating to managing the underwriting capacity of a Lloyd’s syndicate as a managing agent at Lloyd’s, the conditions which are relevant to the discharge by the PRA of its functions in relation to C are the conditions set out in paragraphs 4C to 4F except for sub-paragraphs (5)(d) and (5)(e) of paragraph 4D which are not relevant for that purpose.
(3) If the person concerned (“C”) carries on, or is seeking to carry on, regulated activities which consist of or include a PRA-regulated activity relating to the arranging, by the Society, of deals in contracts of insurance written at Lloyd’s, the conditions which are relevant to the discharge by the PRA of its functions in relation to C are the conditions set out in paragraphs 4C to 4F, subject to sub-paragraph (4).
(4) Paragraph 4D has effect in relation to persons of the kind specified by sub-paragraph (3) as if—
(a) for paragraph (d) and (e) of sub-paragraph (5) there were substituted—
(d) the effect that the carrying on of business by C might be expected to have on the stability of the UK financial system or on those who are or may become policyholders of members of C;
(e) the effect that the failure of C might be expected to have on the stability of the UK financial system or on those who are or may become policyholders of members of C;
, and
(b) sub-paragraph (6) were omitted.
(5) If the person concerned (“C”) carries on, or is seeking to carry on, regulated activities which consist of or include a PRA-regulated activity relating to an assumption of risk falling within article 13A of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, the threshold conditions which are relevant to the discharge by the PRA of its functions in relation to C are the conditions set out in paragraphs 4B to 4F, subject to sub-paragraph (6).
(6) Paragraphs 4B to 4F have effect in relation to persons of the kind specified by sub-paragraph (5) as if—
(a) the persons are undertakings, whether incorporated or not, other than an existing insurance or reinsurance undertaking, which assume risks from insurance or reinsurance undertakings and which fully fund their exposure to such risks through the proceeds of a debt issuance or any other financing mechanism where the repayment rights of the providers of such debt or financing mechanism are subordinated to the reinsurance obligations of such an undertaking;
(b) the persons are not insurance undertakings;
(c) references to contracts of insurance are references to contracts for the assumption of risk; and
(d) references to C’s policyholders are references to undertakings from whom C assumes a risk.
(7) In paragraph (6)(a), references to undertakings which assume risks from insurance or reinsurance undertakings include references to undertakings which assume risks from overseas insurance undertakings or overseas reinsurance undertakings and Gibraltar insurance undertakings or Gibraltar reinsurance undertakings ....
(8) In this paragraph—
“Gibraltar insurance undertaking” means an undertaking which—
has its head office in Gibraltar; and
is authorised by the Gibraltar Financial Services Commission to effect or carry out contracts of insurance (other than contracts of reinsurance) under paragraph 24 of Schedule 2 to the Financial Services Act 2019 of Gibraltar;
“Gibraltar reinsurance undertaking” means an undertaking which—
has its head office in Gibraltar; and
is authorised by the Gibraltar Financial Services Commission to effect or carry out contracts of insurance that are limited to reinsurance contracts under paragraph 24 of Schedule 2 to the Financial Services Act 2019 of Gibraltar;
“overseas insurance undertaking” means a person who—
is established in a country or territory other than—
the United Kingdom, or
Gibraltar;
is not an authorised person;
is not an authorised person for the purposes of the Financial Services Act 2019 of Gibraltar; and
effects or carries out contracts of insurance as principal;
“overseas reinsurance undertaking” means a person who—
is established in a country or territory other than—
the United Kingdom, or
Gibraltar;
is not an authorised person;
is not an authorised person for the purposes of the Financial Services Act 2019 of Gibraltar; and
effects or carries out contracts of insurance that are limited to reinsurance contracts as principal.
Legal status
4B. C must be—
(a) a body corporate (other than a limited liability partnership),
(b) a registered friendly society, or
(c) a member of Lloyd’s.
Location of offices
4C. (1) If C is a body corporate incorporated in the United Kingdom—
(a) C’s head office, and
(b) if C has a registered office, that office,
must be in the United Kingdom.
(2) If C is not a body corporate but C’s head office is in the United Kingdom, C must carry on business in the United Kingdom.
Business to be conducted in a prudent manner
4D. (1) The business of C must be conducted in a prudent manner.
(2) To satisfy the condition in sub-paragraph (1), C must in particular have appropriate financial and non-financial resources.
(3) To have appropriate financial resources C must satisfy the following conditions—
(a) C’s assets must be appropriate given C’s liabilities, and
(b) the liquidity of C’s resources must be appropriate given C’s liabilities and when they fall due or may fall due.
(4) To have appropriate non-financial resources C must satisfy the following conditions—
(a) C must be willing and able to value C’s assets and liabilities appropriately,
(b) C must have resources to identify, monitor, measure and take action to remove or reduce risks to the safety and soundness of C,
(c) C must have resources to identify, monitor, measure and take action to remove or reduce risks to the accuracy of C’s valuation of C’s assets and liabilities,
(d) the effectiveness with which C’s business is managed must meet a reasonable standard of effectiveness, and
(e) C’s non-financial resources must be sufficient to enable C to comply with—
(i) requirements imposed or likely to be imposed on C by the PRA in the exercise of its functions, and
(ii) any other requirement in relation to whose contravention the PRA would be the appropriate regulator for the purpose of any provision of Part 14 of this Act.
(5) The matters which are relevant in determining whether C satisfies the condition in sub-paragraph (1) or (2) include—
(a) the nature (including the complexity) of the regulated activities that C carries on or seeks to carry on;
(b) the nature and scale of the business carried on or to be carried on by C;
(c) the risks to the continuity of the services provided by, or to be provided by, C;
(d) the effect that the carrying on of the business of effecting or carrying out contracts of insurance by C might be expected to have on the stability of the UK financial system or on those who are or may become C’s policyholders;
(e) the effect that C’s failure or C being closed to new business might be expected to have on the stability of the UK financial system or on those who are or may become C’s policyholders;
(f) C’s membership of a group and any effect which that membership may have.
(6) C is “closed to new business” for the purposes of this paragraph if C has ceased to effect contracts of insurance or has substantially reduced the number of such contracts which C effects.
Suitability
4E. (1) C must be a fit and proper person, having regard to the PRA’s objectives.
(2) The matters which are relevant in determining whether C satisfies the condition in sub-paragraph (1) include—
(a) whether C has complied and is complying with requirements imposed by the PRA in the exercise of its functions, or requests made by the PRA relating to the provision of information to the PRA and, if C has so complied or is so complying, the manner of that compliance;
(b) whether those who manage C’s affairs have adequate skills and experience and have acted and may be expected to act with probity.
Effective supervision
4F. (1) C must be capable of being effectively supervised by the PRA.
(2) The matters which are relevant in determining whether C satisfies the condition in sub-paragraph (1) include—
(a) the nature (including the complexity) of the regulated activities that C carries on or seeks to carry on;
(b) the complexity of any products that C provides or will provide in carrying on those activities;
(c) the way in which C’s business is organised;
(d) if C is a member of a group, whether membership of the group is likely to prevent the PRA’s effective supervision of C;
(e) whether C is subject to consolidated supervision required under any relevant implementing provisions;
(f) if C has close links with another person (“CL”)—
(i) the nature of the relationship between C and CL,
(ii) whether those links are or that relationship is likely to prevent the PRA’s effective supervision of C, and
(iii) if CL is subject to the laws, regulations or administrative provisions of a country or territory outside the United Kingdom (“the foreign provisions”), whether those foreign provisions, or any deficiency in their enforcement, would prevent the PRA’s effective supervision of C.
(3) C has close links with CL if—
(a) CL is a parent undertaking of C,
(b) CL is a subsidiary undertaking of C,
(c) CL is a parent undertaking of a subsidiary undertaking of C,
(d) CL is a subsidiary undertaking of a parent undertaking of C,
(e) CL owns or controls 20% or more of the voting rights or capital of C, or
(f) C owns or controls 20% or more of the voting rights or capital of CL.
PART 1E Part 4A permission: conditions for which the PRA is responsible in relation to other PRA-authorised persons
Introduction
5A. If the person concerned (“D”) carries on, or is seeking to carry on, PRA-regulated activities which do not consist of or include a regulated activity relating to—
(a) the effecting or carrying out of contracts of insurance,
(b) managing the underwriting capacity of a Lloyd’s syndicate as a managing agent at Lloyds, ...
(c) arranging, by the Society, of deals in contracts of insurance written at Lloyd’s, or
(d) an assumption of risk falling within article 13A of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001,
the threshold conditions which are relevant to the discharge by the PRA of its functions in relation to D are the conditions set out in paragraphs 5B to 5F.
Legal status
5B. If D carries on or is seeking to carry on a regulated activity which consists of or includes accepting deposits or issuing electronic money, D must be—
(a) a body corporate, or
(b) a partnership.
Location of offices
5C. (1) If D is a body corporate incorporated in the United Kingdom—
(a) D’s head office, and
(b) if D has a registered office, that office,
must be in the United Kingdom.
(2) If D is not a body corporate but D’s head office is in the United Kingdom, D must carry on business in the United Kingdom.
Business to be conducted in a prudent manner
5D. (1) The business of D must be conducted in a prudent manner.
(2) To satisfy the condition in sub-paragraph (1), D must in particular have appropriate financial and non-financial resources.
(3) To have appropriate financial resources D must satisfy the following conditions—
(a) D’s assets must be appropriate given D’s liabilities, and
(b) the liquidity of D’s resources must be appropriate given D’s liabilities and when they fall due or may fall due.
(4) To have appropriate non-financial resources D must satisfy the following conditions—
(a) D must be willing and able to value D’s assets and liabilities appropriately,
(b) D must have resources to identify, monitor, measure and take action to remove or reduce risks to the safety and soundness of D,
(c) D must have resources to identify, monitor, measure and take action to remove or reduce risks to the accuracy of D’s valuation of D’s assets and liabilities,
(d) the effectiveness with which D’s business is managed must meet a reasonable standard of effectiveness, and
(e) D’s non-financial resources must be sufficient to enable D to comply with—
(i) requirements imposed or likely to be imposed on D by the PRA in the exercise of its functions, and
(ii) any other requirement in relation to whose contravention the PRA would be the appropriate regulator for the purpose of any provision of Part 14 of this Act.
(5) The matters which are relevant in determining whether D satisfies the condition in sub-paragraph (1) or (2) include—
(a) the nature (including the complexity) of the regulated activities that D carries on or seeks to carry on;
(b) the nature and scale of the business carried on or to be carried on by D;
(c) the risks to the continuity of the services provided or to be provided by D;
(d) the effect that the carrying on of the business carried on or to be carried on by D might be expected to have on the stability of the UK financial system;
(e) the effect that D’s failure might be expected to have on the stability of the UK financial system;
(f) D’s membership of a group and any effect which that membership may have.
Suitability
5E. (1) D must be a fit and proper person, having regard to the PRA’s objectives.
(2) The matters which are relevant in determining whether D satisfies the condition in sub-paragraph (1) include—
(a) whether D has complied and is complying with requirements imposed by the PRA in the exercise of its functions, or requests made by the PRA relating to the provision of information to the PRA and, if D has so complied or is so complying, the manner of that compliance;
(b) whether those who manage D’s affairs have adequate skills and experience and have acted and may be expected to act with probity.
Effective supervision
5F. (1) D must be capable of being effectively supervised by the PRA.
(2) The matters which are relevant in determining whether D satisfies the condition in sub-paragraph (1) include—
(a) the nature (including the complexity) of the regulated activities that D carries on or seeks to carry on;
(b) the complexity of any products that D provides or will provide in carrying on those activities;
(c) the way in which D’s business is organised;
(d) if D is a member of a group, whether membership of the group is likely to prevent the PRA’s effective supervision of D;
(e) whether D is subject to consolidated supervision required under any relevant implementing provisions;
(f) if D has close links with another person (“CL”)—
(i) the nature of the relationship between D and CL,
(ii) whether those links are or that relationship is likely to prevent the PRA’s effective supervision of D, and
(iii) if CL is subject to the laws, regulations or administrative provisions of a country or territory outside the United Kingdom (“the foreign provisions”), whether those foreign provisions, or any deficiency in their enforcement, would prevent the PRA’s effective supervision of D.
(3) D has close links with CL if—
(a) CL is a parent undertaking of D,
(b) CL is a subsidiary undertaking of D,
(c) CL is a parent undertaking of a subsidiary undertaking of D,
(d) CL is a subsidiary undertaking of a parent undertaking of D,
(e) CL owns or controls 20% or more of the voting rights or capital of D, or
(f) D owns or controls 20% or more of the voting rights or capital of CL.
Part II Authorisation
Authorisation under Schedule 3
... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part III Additional Conditions
8 (1) If this paragraph applies to the person concerned, he must, for the purposes of such provisions of this Act as may be specified, satisfy specified additional conditions.
(2) This paragraph applies to a person who—
(a) has his head office outside the United Kingdom; and
(b) appears to such of the FCA or the PRA as may be specified, to be seeking to carry on a regulated activity relating to insurance business.
(3) “Specified” means specified in, or in accordance with, an order made by the Treasury.
9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SCHEDULE 6A Variation or cancellation of Part 4A permission on initiative of FCA: additional power
Section 55JA
Additional power
1 (1) If it appears to the FCA that an FCA-authorised person with a Part 4A permission is carrying on no regulated activity to which the permission relates, the FCA may exercise its power under this paragraph.
(2) The FCA's power under this paragraph is the power—
(a) to vary the Part 4A permission by—
(i) removing a regulated activity from those to which the permission relates, or
(ii) varying the description of a regulated activity to which the permission relates, or
(b) to cancel the Part 4A permission.
(3) The circumstances in which the FCA may form the view that an authorised person is carrying on no regulated activity include (but are not limited to) circumstances where the person fails—
(a) to pay any periodic fee or levy as is required by the FCA Handbook, or
(b) to provide such information to the FCA as is required by the FCA Handbook.
(4) “The FCA Handbook” means the Handbook made by the FCA under this Act (as that Handbook is amended from time to time).
(5) If, as a result of a variation of a permission under this paragraph, there are no longer any regulated activities for which the person has permission, the FCA must, once it is satisfied that it is no longer necessary to keep the permission in force, cancel it.
(6) The power to vary a permission under this paragraph extends to including in the permission as varied any provision that could be included if a fresh permission were being given in response to an application to the FCA under section 55A.
(7) The FCA's power under this paragraph must be exercised in accordance with paragraph 2.
Procedure etc
2 (1) The FCA may exercise its power under paragraph 1 in relation to an authorised person with a Part 4A permission only if the following conditions are met.
(2) The first condition is that the FCA has given a notice in writing to the person—
(a) stating that it appears to the FCA that the person is carrying on no regulated activity to which the permission relates,
(b) inviting the person to respond in a specified manner, and
(c) warning of the potential consequences that may arise under this Schedule of a failure to do so.
(3) The second condition is that—
(a) at least 14 days beginning with the date on which the notice was given have elapsed, and
(b) the person has failed to respond in the specified manner.
(4) The third condition is that the FCA has given a further notice in writing to the person setting out—
(a) in a case where the FCA proposes to vary the permission—
(i) the proposed variation,
(ii) the date on which the FCA proposes to vary the permission (and, if different, the date on which the variation is to take effect), and
(iii) any specified steps the person may take that would (if taken) result in the FCA deciding not to vary the permission as proposed;
(b) in a case where the FCA proposes to cancel the permission—
(i) the date on which the FCA proposes to cancel the permission (and, if different, the date on which the cancellation is to take effect), and
(ii) any specified steps the person may take that would (if taken) result in the FCA deciding not to cancel the permission.
(5) The fourth condition is that the date specified in the notice under sub-paragraph (4) is not earlier than the end of the period of 14 days beginning with the date on which the notice is given.
(6) Where the FCA decides to publicise a notice given under this paragraph (or any details relating to it), it may do so in such manner as it considers appropriate.
Notice of decision
3 (1) Where the FCA decides to vary or cancel an authorised person's Part 4A permission under paragraph 1, the FCA must give the person a notice in writing setting out—
(a) in a case where the FCA varies the permission, the variation,
(b) the date on which the variation or cancellation takes effect, and
(c) the person's power to make an application under paragraph 4.
(2) Where the FCA—
(a) has given the person a notice under paragraph 2(4), but
(b) decides not to vary or cancel the permission (whether or not because the specified steps referred to in that notice have been taken),
the FCA must give the person a notice in writing of that decision.
(3) A notice given under this paragraph may include such other information as the FCA considers appropriate.
(4) Where the FCA decides to publicise a notice given under this paragraph (or any details relating to it), it may do so in such manner as it considers appropriate.
Application for decision to be annulled
4 (1) This paragraph applies where the FCA decides to vary or cancel an authorised person's Part 4A permission under paragraph 1.
(2) If the person is aggrieved by the FCA's decision, the person may apply to the FCA to have the decision annulled.
(3) An application under this paragraph must be made before the end of the period of 12 months beginning with the day on which the variation or cancellation took effect.
(4) An application under this paragraph must be determined before the end of the period of 6 months beginning with the date on which the FCA received the completed application.
(5) The applicant may withdraw the application, by giving the FCA written notice, at any time before the FCA determines it.
(6) The FCA may direct that an application under this paragraph must—
(a) contain specified information, or
(b) take a specified form.
Annulment etc
5 (1) This paragraph applies where the FCA receives an application under paragraph 4 in relation to a decision to vary or cancel an authorised person's Part 4A permission under paragraph 1.
(2) The FCA may—
(a) annul the decision unconditionally,
(b) annul the decision subject to such conditions as it considers appropriate, or
(c) refuse to annul the decision.
(3) The FCA may annul the decision (unconditionally or subject to conditions) only if satisfied that, in all the circumstances, it is just and reasonable to do so.
(4) The FCA's power under sub-paragraph (2)(b) includes the power—
(a) to remove or describe differently a regulated activity specified in the permission, and
(b) to withdraw or vary an approval given under section 59 that has effect in relation to the carrying on of a regulated activity specified in the permission,
provided that the activity in question was one to which the permission related immediately before the decision was taken.
(5) Where the FCA annuls the decision it must give the person a notice in writing setting out—
(a) where the annulment is subject to conditions, the conditions, and
(b) the date on which the annulment takes effect.
(6) If the FCA proposes to refuse to annul the decision it must give the person a warning notice.
(7) If the FCA decides to refuse to annul the decision it must give the person a decision notice.
Effect
6 (1) Where the FCA—
(a) varies or cancels an authorised person's Part 4A permission under paragraph 1, but
(b) that decision is subsequently annulled under paragraph 5,
the variation or cancellation is treated as if it had not taken place, subject as follows.
(2) The FCA does not become subject to any statutory obligation by virtue of sub-paragraph (1).
(3) Where, by virtue of sub-paragraph (1)—
(a) a person becomes subject to a statutory obligation, and
(b) the FCA has functions in relation to the obligation,
the FCA may, in exercising those functions, treat the person as if the person had not become subject to the obligation.
(4) If the FCA treats a person as not having become subject to an obligation, it must notify the person of that fact in such manner as it considers appropriate.
(5) In a case where paragraph 5(4)(a) applies—
(a) the permission is treated as if it had been varied in accordance with the FCA's own-initiative variation power, and
(b) that variation is treated as if it took effect on the date on which the annulment took effect.
(6) In a case where paragraph 5(4)(b) applies—
(a) the approval is treated as if it had been withdrawn in accordance with section 63 or varied in accordance with section 63ZB (as the case may be), and
(b) that withdrawal or variation is treated as if it took effect on the date on which the annulment took effect.
(7) In this paragraph “statutory obligation” means any obligation arising under or by virtue of this Act or any other enactment.
(8) In sub-paragraph (7) “enactment” includes—
(a) the enactments listed in section 3T, and
(b) any assimilated direct legislation.
Right to refer matter to Tribunal
7 (1) This paragraph applies where the FCA—
(a) decides to vary or cancel an authorised person's Part 4A permission under paragraph 1,
(b) receives an application from the person under paragraph 4 in respect of that decision, and
(c) has disposed of that application under paragraph 5(2).
(2) Either party may refer the matter to the Tribunal.
(3) In determining a reference made under this paragraph, the Tribunal may give such directions, and may make such provision, as it considers reasonable for placing the person and other persons in the same position (as nearly as may be) as if the permission had not been varied or cancelled.
Supplementary
8 (1) Nothing in this Schedule affects the generality of any other provision made under or by virtue of this Act that confers power on the FCA to vary or cancel an authorised person's Part 4A permission.
(2) Nothing in paragraph 6(5) and (6) gives rise to a right to make a reference to the Tribunal.
(3) Sections 55U to 55X (applications made under Part 4A: procedure) do not apply in relation to an application made under paragraph 4.
(4) Section 55Z (cancellation of Part 4A permission: procedure) does not apply in relation to a proposal, or decision, to cancel an authorised person's Part 4A permission under paragraph 1.
(5) Section 55Z3(1) (right to refer matters to the Tribunal) does not apply in relation to the determination of an application under paragraph 4.
(6) In this Schedule “specified” means specified in a direction given by the FCA under this Schedule.
(7) A direction made by the FCA under this Schedule may make different provision for different cases.
(8) The FCA may revoke or amend a direction it makes under this Schedule.
Introductory
1 The matters with respect to which provision may be made under section 71K in respect of activities include (but are not limited to) those described in general terms in this Schedule.
Derivatives
2 Activities related to entering into derivative contracts (including those contracts not cleared by a central counterparty).
3 Holding positions in commodity derivatives.
Short selling
4 Engaging in short selling in relation to specified financial instruments (“shorted instruments”) including where—
(a) a person enters into a transaction which creates, or relates to, another financial instrument, and
(b) the effect (or one of the effects) of the transaction is to confer a financial advantage on that person in the event of a decrease in the price or value of the shorted instrument.
Securitisation
5 Acting as one of the following in a securitisation—
(a) an originator,
(b) a sponsor,
(c) an original lender, or
(d) a securitisation special purpose entity.
6 Selling a securitisation position to a retail client located in the United Kingdom.
Financial markets
7 Offering securities to the public.
8 Applying for, securing or maintaining the admission of securities to trading on a securities market.
Using a benchmark
9 Issuing an instrument which references a benchmark.
10 Determining the amount payable under an instrument or financial contract by reference to a benchmark or otherwise being a party to a financial contract which references a benchmark.
11 Measuring the performance of an investment fund through a benchmark.
Contributing to a benchmark
12 Acting as a “benchmark contributor” including persons in the United Kingdom or a third country.
13 Contributing data to a regulated benchmark administrator for the purpose of the administrator determining a benchmark.
SCHEDULE 6C LISTED DESIGNATED ACTIVITY REGULATIONS AND REQUIREMENTS FOR PURPOSES OF CERTAIN PROVISIONS
Sections 71T, 71U
PART 1 PROVISIONS DESIGNATING RELEVANT DESIGNATED ACTIVITIES
Part 2 of the Short Selling Regulations 2025.
Part 2 of the Consumer Composite Investments (Designated Activities) Regulations 2024.
Part 2 of the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026.
PART2 RELEVANT PART 5A REQUIREMENTS FOR PURPOSES OF SPECIFIED PROVISIONS
Provision of this Act | Designated activity regulations | Descriptions of requirement
Part 11 | (1) Short Selling Regulations 2025. (2) Consumer Composite Investments (Designated Activities) Regulations 2024. (3) Part 2 of the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026. | (1) Requirements imposed by designated activity rules. (2) Requirements imposed by directions under section 71O.
Part 14 | (1) Short Selling Regulations 2025. (2) Consumer Composite Investments (Designated Activities) Regulations 2024. (3) Part 2 of the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026. | (1) Requirements imposed by designated activity rules. (2) Requirements imposed by directions under section 71O. (3) Requirements imposed by or under Part 11 by reason of the person concerned being, or having been, subject to a requirement of a kind mentioned in paragraph (1) or (2). (4) Requirements imposed under section 206B.
PART 3 RELEVANT PART 5A DIRECTIONS FOR PURPOSES OF CHAPTER 2 OF PART 5A
Designated activity regulations | Excluded directions
Short Selling Regulations 2025.
Consumer Composite Investments (Designated Activities) Regulations 2024. | A direction that the FCA publishes under section 71O(9) instead of proceeding under section 71O(8).
Part 2 of the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026.
General application of Part VI
1 The provisions of Part VI apply in relation to a non-listing prospectus as they apply in relation to listing particulars but with the modifications made by this Schedule.
References to listing particulars
2 (1) Any reference to listing particulars is to be read as a reference to a prospectus.
(2) Any reference to supplementary listing particulars is to be read as a reference to a supplementary prospectus.
General duty of disclosure
3 (1) In section 80(1), for “section 79” substitute “ section 87 ”.
(2) In section 80(2), omit “as a condition of the admission of the securities to the official list”.
Supplementary prospectuses
4 In section 81(1), for “section 79 and before the commencement of dealings in the securities concerned following their admission to the official list” substitute “ section 87 and before the end of the period during which the offer to which the prospectus relates remains open ”.
Exemption from liability for compensation
5 (1) In paragraphs 1(3) and 2(3) of Schedule 10, for paragraph (d) substitute—
(d) the securities were acquired after such a lapse of time that he ought in the circumstances to be reasonably excused and, if the securities are dealt in on an approved exchange, he continued in that belief until after the commencement of dealings in the securities on that exchange.
(2) After paragraph 8 of that Schedule, insert—
Meaning of “approved exchange”
9 “Approved exchange” has such meaning as may be prescribed.
Advertisements
6 In section 98(1), for “If listing particulars are, or are to be, published in connection with an application for listing,” substitute “ If a prospectus is, or is to be, published in connection with an application for approval, then, until the end of the period during which the offer to which the prospectus relates remains open, ”.
Fees
7 Listing rules made under section 99 may require the payment of fees to the competent authority in respect of a prospectus submitted for approval under section 87.
Section 90(2) and (5).
Statements believed to be true
1 (1) In this paragraph “statement” means—
(a) any untrue or misleading statement in listing particulars; or
(b) the omission from listing particulars of any matter required to be included by section 80 or 81.
(2) A person does not incur any liability under section 90(1) for loss caused by a statement if he satisfies the court that, at the time when the listing particulars were submitted to the FCA, he reasonably believed (having made such enquiries, if any, as were reasonable) that—
(a) the statement was true and not misleading, or
(b) the matter whose omission caused the loss was properly omitted,
and that one or more of the conditions set out in sub-paragraph (3) are satisfied.
(3) The conditions are that—
(a) he continued in his belief until the time when the securities in question were acquired;
(b) they were acquired before it was reasonably practicable to bring a correction to the attention of persons likely to acquire them;
(c) before the securities were acquired, he had taken all such steps as it was reasonable for him to have taken to secure that a correction was brought to the attention of those persons;
(d) he continued in his belief until after the commencement of dealings in the securities following their admission to the official list and they were acquired after such a lapse of time that he ought in the circumstances to be reasonably excused.
Statements by experts
2 (1) In this paragraph “statement” means a statement included in listing particulars which—
(a) purports to be made by, or on the authority of, another person as an expert; and
(b) is stated to be included in the listing particulars with that other person’s consent.
(2) A person does not incur any liability under section 90(1) for loss in respect of any securities caused by a statement if he satisfies the court that, at the time when the listing particulars were submitted to the FCA, he reasonably believed that the other person—
(a) was competent to make or authorise the statement, and
(b) had consented to its inclusion in the form and context in which it was included,
and that one or more of the conditions set out in sub-paragraph (3) are satisfied.
(3) The conditions are that—
(a) he continued in his belief until the time when the securities were acquired;
(b) they were acquired before it was reasonably practicable to bring the fact that the expert was not competent, or had not consented, to the attention of persons likely to acquire the securities in question;
(c) before the securities were acquired he had taken all such steps as it was reasonable for him to have taken to secure that that fact was brought to the attention of those persons;
(d) he continued in his belief until after the commencement of dealings in the securities following their admission to the official list and they were acquired after such a lapse of time that he ought in the circumstances to be reasonably excused.
Corrections of statements
3 (1) In this paragraph “statement” has the same meaning as in paragraph 1.
(2) A person does not incur liability under section 90(1) for loss caused by a statement if he satisfies the court—
(a) that before the securities in question were acquired, a correction had been published in a manner calculated to bring it to the attention of persons likely to acquire the securities; or
(b) that he took all such steps as it was reasonable for him to take to secure such publication and reasonably believed that it had taken place before the securities were acquired.
(3) Nothing in this paragraph is to be taken as affecting paragraph 1.
Corrections of statements by experts
4 (1) In this paragraph “statement” has the same meaning as in paragraph 2.
(2) A person does not incur liability under section 90(1) for loss caused by a statement if he satisfies the court—
(a) that before the securities in question were acquired, the fact that the expert was not competent or had not consented had been published in a manner calculated to bring it to the attention of persons likely to acquire the securities; or
(b) that he took all such steps as it was reasonable for him to take to secure such publication and reasonably believed that it had taken place before the securities were acquired.
(3) Nothing in this paragraph is to be taken as affecting paragraph 2.
Official statements
5 A person does not incur any liability under section 90(1) for loss resulting from—
(a) a statement made by an official person which is included in the listing particulars, or
(b) a statement contained in a public official document which is included in the listing particulars,
if he satisfies the court that the statement is accurately and fairly reproduced.
False or misleading information known about
6 A person does not incur any liability under section 90(1) or (4) if he satisfies the court that the person suffering the loss acquired the securities in question with knowledge—
(a) that the statement was false or misleading,
(b) of the omitted matter, or
(c) of the change or new matter,
as the case may be.
Belief that supplementary listing particulars not called for
7 A person does not incur any liability under section 90(4) if he satisfies the court that he reasonably believed that the change or new matter in question was not such as to call for supplementary listing particulars.
Meaning of “expert”
8 “Expert” includes any engineer, valuer, accountant or other person whose profession, qualifications or experience give authority to a statement made by him.
SCHEDULE 10A LIABILITY OF ISSUERS IN CONNECTION WITH PUBLISHED INFORMATION
Section 90A
PART 1 SCOPE OF THIS SCHEDULE
Securities to which this Schedule applies
1 (1) This Schedule applies to securities that are, with the consent of the issuer, admitted to trading on a securities market, where—
(a) the market is situated or operating in the United Kingdom, or
(b) the United Kingdom is the issuer's home State.
(2) For the purposes of this Schedule—
(a) an issuer of securities is not taken to have consented to the securities being admitted to trading on a securities market by reason only of having consented to their admission to trading on another market as a result of which they are admitted to trading on the first-mentioned market;
(b) an issuer who has accepted responsibility (to any extent) for any document prepared for the purposes of the admission of the securities to trading on a securities market (such as a prospectus or listing particulars) is taken to have consented to their admission to trading on that market.
(3) For the purposes of this Schedule the United Kingdom is the home State of an issuer if—
(a) the transparency rules impose requirements on the issuer in relation to the securities, or
(b) the issuer has its registered office (or, if it does not have a registered office, its head office) in the United Kingdom.
Published information to which this Schedule applies
2 (1) This Schedule applies to information published by the issuer of securities to which this Schedule applies—
(a) by recognised means, or
(b) by other means where the availability of the information has been announced by the issuer by recognised means.
(2) It is immaterial whether the information is required to be published (by recognised means or otherwise).
(3) The following are “recognised means”—
(a) a recognised information service;
(b) other means required or authorised to be used to communicate information to the market in question, or to the public, when a recognised information service is unavailable.
(4) A “recognised information service” means—
(a) in relation to a securities market situated or operating in the United Kingdom, a service used for the dissemination of information in accordance with transparency rules;
(b) in relation to a securities market situated or operating outside the United Kingdom, a service used for the dissemination of information corresponding to that required to be disclosed under transparency rules; or
(c) in relation to any securities market, any other service used by issuers of securities for the dissemination of information required to be disclosed by the rules of the market.
PART 2 LIABILITY IN CONNECTION WITH PUBLISHED INFORMATION
Liability of issuer for misleading statement or dishonest omission
3 (1) An issuer of securities to which this Schedule applies is liable to pay compensation to a person who—
(a) acquires, continues to hold or disposes of the securities in reliance on published information to which this Schedule applies, and
(b) suffers loss in respect of the securities as a result of—
(i) any untrue or misleading statement in that published information, or
(ii) the omission from that published information of any matter required to be included in it.
(2) The issuer is liable in respect of an untrue or misleading statement only if a person discharging managerial responsibilities within the issuer knew the statement to be untrue or misleading or was reckless as to whether it was untrue or misleading.
(3) The issuer is liable in respect of the omission of any matter required to be included in published information only if a person discharging managerial responsibilities within the issuer knew the omission to be a dishonest concealment of a material fact.
(4) A loss is not regarded as suffered as a result of the statement or omission unless the person suffering it acquired, continued to hold or disposed of the relevant securities—
(a) in reliance on the information in question, and
(b) at a time when, and in circumstances in which, it was reasonable for him to rely on it.
4 An issuer of securities to which this Schedule applies is not liable under paragraph 3 to pay compensation to a person for loss suffered as a result of an untrue or misleading statement in, or omission from, published information to which this Schedule applies if—
(a) the published information is contained in listing particulars or a prospectus (or supplementary listing particulars or a supplementary prospectus), and
(b) the issuer is liable under section 90 (compensation for statements in listing particulars or prospectus) to pay compensation to the person in respect of the statement or omission.
Liability of issuer for dishonest delay in publishing information
5 (1) An issuer of securities to which this Schedule applies is liable to pay compensation to a person who—
(a) acquires, continues to hold or disposes of the securities, and
(b) suffers loss in respect of the securities as a result of delay by the issuer in publishing information to which this Schedule applies.
(2) The issuer is liable only if a person discharging managerial responsibilities within the issuer acted dishonestly in delaying the publication of the information.
Meaning of dishonesty
6 For the purposes of paragraphs 3(3) and 5(2) a person's conduct is regarded as dishonest if (and only if)—
(a) it is regarded as dishonest by persons who regularly trade on the securities market in question, and
(b) the person was aware (or must be taken to have been aware) that it was so regarded.
Exclusion of certain other liabilities
7 (1) The issuer is not subject—
(a) to any liability other than that provided for by paragraph 3 in respect of loss suffered as a result of reliance by any person on—
(i) an untrue or misleading statement in published information to which this Schedule applies, or
(ii) the omission from any such published information of any matter required to be included in it;
(b) to any liability other than that provided for by paragraph 5 in respect of loss suffered as a result of delay in the publication of information to which this Schedule applies.
(2) A person other than the issuer is not subject to any liability, other than to the issuer, in respect of any such loss.
(3) This paragraph does not affect—
(a) civil liability—
(i) under section 90 (compensation for statements in listing particulars ...),
(ia) under regulation 30 of the Public Offers and Admissions to Trading Regulations 2024 (compensation for statements in prospectus etc),
(ii) under rules made by virtue of section 954 of the Companies Act 2006 (compensation),
(iii) for breach of contract,
(iv) under the Misrepresentation Act 1967, or
(v) arising from a person's having assumed responsibility, to a particular person for a particular purpose, for the accuracy or completeness of the information concerned;
(b) liability to a civil penalty; or
(c) criminal liability.
(4) This paragraph does not affect the powers conferred by sections 382 and 384 (powers of the court to make a restitution order and of the Authority to require restitution).
(5) References in this paragraph to liability, in relation to a person, include a reference to another person being entitled as against that person to be granted any civil remedy or to rescind or repudiate an agreement.
PART 3 SUPPLEMENTARY PROVISIONS
Interpretation
8 (1) In this Schedule—
(a) “securities” means transferable securities as defined in Article 2(1)(24) of the markets in financial instruments regulation, other than money market instruments as defined in Article 2(1)(25A) of that regulation that have a maturity of less than 12 months (and includes instruments outside the United Kingdom);
(b) “securities market” means—
(i) a regulated market as defined in Article 2(1)(13) of the markets in financial instruments regulation, or
(ii) a multilateral trading facility as defined in Article 2(1)(14) of that regulation.
(2) References in this Schedule to the issuer of securities are—
(a) in relation to a depositary receipt, derivative instrument or other financial instrument representing securities where the issuer of the securities represented has consented to the admission of the instrument to trading as mentioned in paragraph 1(1), to the issuer of the securities represented;
(b) in any other case, to the person who issued the securities.
(3) References in this Schedule to the acquisition or disposal of securities include—
(a) acquisition or disposal of any interest in securities, or
(b) contracting to acquire or dispose of securities or of any interest in securities,
except where what is acquired or disposed of (or contracted to be acquired or disposed of) is a depositary receipt, derivative instrument or other financial instrument representing securities.
(4) References to continuing to hold securities have a corresponding meaning.
(5) For the purposes of this Schedule the following are persons “discharging managerial responsibilities” within an issuer—
(a) any director of the issuer (or person occupying the position of director, by whatever name called);
(b) in the case of an issuer whose affairs are managed by its members, any member of the issuer;
(c) in the case of an issuer that has no persons within paragraph (a) or (b), any senior executive of the issuer having responsibilities in relation to the information in question or its publication.
(6) The following definitions (which apply generally for the purposes of Part 6 of this Act) do not apply for the purposes of this Schedule:
(a) section 102A(1), (2) and (6) (meaning of “securities” and “issuer”);
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .