142P Subsequent variation of requirement or direction
(1) A regulator may at any time with the consent of the person concerned vary—
(a) a requirement imposed by it as a result of section 142L(2)(a) or (b) or (3)(a) or (b), or
(b) a direction given by it as a result of section 142L(2)(c) or (d) or (3)(c) or (d).
(2) The person concerned may at any time apply to the appropriate regulator for the variation of—
(a) a requirement imposed by it as a result of section 142L(2)(a) or (b) or (3)(a) or (b), or
(b) a direction given by it as a result of section 142L(2)(c) or (d) or (3)(c) or (d).
(3) Sections 55U, 55V, 55X and 55Z3 apply to an application under subsection (2) as they apply to an application for the variation of a requirement imposed by the appropriate regulator under section 55L or 55M.
(1) Where a notice under section 142M or a warning notice or decision notice under section 142N relates to a requirement to be imposed in pursuance of a direction to be given as a result of section 142L(2)(c) or (3)(c), the appropriate regulator must—
(a) consult the other regulator before giving the notice, and
(b) give a copy of the notice to the other regulator.
(2) The appropriate regulator must consult the other regulator before varying under section 142P a direction given as a result of section 142L(2)(c) or (3)(c).
(3) Directions given by the FCA as a result of section 142L(3)(c) are subject to any directions given to the FCA under section 3I.
142R Relationship with regulators' powers under Parts 4A and 12A
(1) Subsection (2) applies in relation to—
(a) a ring-fenced body which is a member of a mixed group, and
(b) a parent undertaking of such a ring-fenced body.
(2) A regulator may not exercise its general powers in relation to the ring-fenced body or parent undertaking so as to achieve either of the results in subsection (3).
(3) Those results are—
(a) that no existing group member is a parent undertaking of the ring-fenced body;
(b) that the ring-fenced body is not a member of a mixed group.
(4) In subsection (3)(a) “existing group member” means a person who is a member of the ring-fenced body's group at the time when the requirement is imposed or the direction given.
(5) Except as provided by subsections (1) to (4), the provisions of sections 142K to 142Q do not limit the general powers of either regulator.
(6) For the purposes of this section, a regulator's “general powers” are its powers under the following provisions—
(a) section 55L or 55M (imposition of requirements in connection with Part 4A permission);
(b) section 192C (power to direct qualifying parent undertaking).
(7) For the purposes of this section, a ring-fenced body is a member of a mixed group if a member of the ring-fenced body's group carries on an excluded activity.
(1) This section applies if a regulator is satisfied that a person who is or has been a qualifying parent undertaking (“P”) has contravened a requirement of a direction given to P by that regulator as a result of section 142L(2)(d) or (3)(d).
(2) The regulator may impose a penalty of such amount as it considers appropriate on—
(a) P, or
(b) any person who was knowingly concerned in the contravention.
(3) The regulator may, instead of imposing a penalty on a person, publish a statement censuring the person.
(4) The regulator may not take action against a person under this section after the end of the limitation period unless, before the end of that period, it has given a warning notice to the person under section 142T.
(5) “The limitation period” means the period of 3 years beginning with the first day on which the regulator knew of the contravention.
(6) For this purpose a regulator is to be treated as knowing of a contravention if it has information from which the contravention can reasonably be inferred.
(7) The requirements that a regulator may be required to impose as a result of a direction under section 142L(2)(c) or (3)(c) include requirements that the regulator would not but for the direction have power to impose.
(1) If a regulator proposes to take action against a person under section 142S, it must give the person a warning notice.
(2) A warning notice about a proposal to impose a penalty must state the amount of the penalty.
(3) A warning notice about a proposal to publish a statement must set out the terms of the statement.
(4) If the regulator decides to take action against a person under section 142S, it must give the person a decision notice.
(5) A decision notice about the imposition of a penalty must state the amount of the penalty.
(6) A decision notice about the publication of a statement must set out the terms of the statement.
(7) If the regulator decides to take action against a person under section 142S, the person may refer the matter to the Tribunal.
After a statement under section 142S(3) is published, the regulator must send a copy of the statement to—
(a) the person in respect of whom it is made, and
(b) any person to whom a copy of the decision notice was given under section 393(4).
142V Imposition of penalties under section 142S: statement of policy
(1) Each regulator must prepare and issue a statement of policy with respect to—
(a) the imposition of penalties under section 142S, and
(b) the amount of penalties under that section.
(2) A regulator's policy in determining what the amount of a penalty should be must include having regard to—
(a) the seriousness of the contravention,
(b) the extent to which the contravention was deliberate or reckless, and
(c) whether the person on whom the penalty is to be imposed is an individual.
(3) A regulator may at any time alter or replace a statement issued under this section.
(4) If a statement issued under this section is altered or replaced, the regulator must issue the altered or replacement statement.
(5) In exercising, or deciding whether to exercise, a power under section 142S(2) in the case of any particular contravention, a regulator must have regard to any statement of policy published under this section and in force at a time when the contravention occurred.
(6) A statement under this section must be published by the regulator concerned in the way appearing to the regulator to be best calculated to bring it to the attention of the public.
(7) A regulator may charge a reasonable fee for providing a person with a copy of the statement published under this section.
(8) A regulator must, without delay, give the Treasury a copy of any statement which it publishes under this section.
(9) Section 192I applies in relation to a statement under this section as it applies in relation to a statement under section 192H.
(1) The Treasury may by regulations require a ring-fenced body to make arrangements for any one or more of the following purposes—
(a) ensuring that, except in prescribed cases, the ring-fenced body cannot become liable to meet, or contribute to the meeting of, pension liabilities which arise in connection with persons' service on or after a date specified in the regulations (“the specified date”) in any employment, other than service in an employment in respect of which the employer is a ring-fenced body;
(b) ensuring that, except in prescribed cases, the default of a person other than another ring-fenced body would not result in the ring-fenced body becoming liable to meet, or contribute to the meeting of, pension liabilities arising in connection with persons' service in any employment before the specified date;
(c) to the extent that it is not possible to ensure the result mentioned in paragraph (a) or (b), minimising any potential liability falling within paragraph (a) or (b).
(2) The regulations may make provision enabling the trustees or managers of a relevant pension scheme in respect of which the employer or one of the employers is a ring-fenced body—
(a) to transfer to another relevant pension scheme all or part of the pension liabilities arising in connection with persons' service before the specified date together with all or part of the assets of the scheme, or
(b) to divide the scheme into two or more sections in relation to which prescribed conditions are met.
(3) The regulations may make provision—
(a) enabling a ring-fenced body to apply to the court in a case where the ring-fenced body has been unable to reach agreement with another person (“P”) about the making of arrangements with P on commercial terms for one or more of the purposes in subsection (1), and
(b) enabling the court on such an application to order P to enter into arrangements with the ring-fenced body for those purposes on such terms as the court considers fair and reasonable in the circumstances.
(4) The regulations must provide that any terms specified by the court by virtue of provision made under subsection (3)—
(a) must be terms which, in the court's opinion, represent terms on which the arrangements might be entered into if they were being entered into for commercial reasons between willing parties dealing at arm's length, and
(b) may involve the payment of any sum by instalments.
(5) The regulations may make other provision—
(a) about the making by a ring-fenced body of arrangements for one or more of the purposes in subsection (1);
(b) about any transfer or division falling within subsection (2).
(6) The regulations may in particular—
(a) require a ring-fenced body to cease to participate in a relevant pension scheme unless the scheme is divided into two or more sections in relation to which prescribed conditions are met;
(b) provide that assets or liabilities of a relevant pension scheme may not be transferred under the arrangements to another occupational pension scheme unless the other scheme meets prescribed conditions;
(c) require ring-fenced bodies to establish new occupational pension schemes in prescribed circumstances;
(d) provide that any provision of a relevant pension scheme that might prevent the making of the arrangements, other than a provision requiring the consent of the trustees or managers of the scheme, is not to have effect in prescribed circumstances;
(e) make provision enabling the trustees or managers of a relevant pension scheme, with the consent of the employers in relation to the scheme, to modify the scheme by resolution for the purpose of enabling the arrangements to be made;
(f) require the trustees or managers of a relevant pension scheme or any employer in relation to a relevant pension scheme to give notice of prescribed matters to prescribed persons;
(g) make provision enabling the court, on an application made in accordance with the regulations by a ring-fenced body, if it appears to the court that the trustees or managers of a relevant pension scheme, or an employer in relation to such a scheme, have unreasonably refused their consent to any step that would enable the arrangements to be made, to order that the step may be taken without that consent;
(h) confer exemption from any provision of the regulations in prescribed cases;
(i) confer functions on the PRA;
(j) provide that a ring-fenced body which contravenes a prescribed requirement of the regulations is to be taken to have contravened a requirement imposed by the PRA under this Act;
(k) modify, exclude or apply (with or without modification) any primary or subordinate legislation.
(7) The Treasury may by regulations require an authorised person who will or may be a ring-fenced body or an authorised person who will or may be a member of a ring-fenced body's group to do all it can to obtain from the Pensions Regulator a clearance statement in relation to any arrangements to be made for the purpose of complying with—
(a) regulations under this section, or
(b) any provision made by or under this Part (other than this section) when the provision comes into force.
(8) A “clearance statement” is a statement issued by the Pensions Regulator under any of the following provisions—
(a) section 42 of the Pensions Act 2004 (clearance statements relating to contribution notice under section 38);
(b) section 46 of that Act (clearance statements relating to financial support directions);
(c) Article 38 of the Pensions (Northern Ireland) Order 2005 (clearance statements relating to contribution notices under article 34);
(d) Article 42 of that Order (clearance statements relating to financial support directions).
(9) In relation to a ring-fenced body that is not a PRA-authorised person, references in subsection (6) to the PRA are to be read as references to the FCA.
(10) Regulations under this section may not require ring-fenced bodies to achieve the results mentioned in subsection (1) before 1 January 2026, but this does not prevent the regulations requiring steps to be taken at any time after the regulations come into force.
142X Further interpretative provisions for section 142W
(1) The following provisions have effect for the interpretation of section 142W and this section.
(2) “Relevant pension scheme” means an occupational pension scheme that is not a money purchase scheme.
(3) “Occupational pension scheme” has the meaning given in section 1 of the Pension Schemes Act 1993 or section 1 of the Pension Schemes (Northern Ireland) Act 1993 and, in relation to such a scheme, “member” and “trustees or managers” have the same meaning as in Part 1 of the Pensions Act 1995 or Part 2 of the Pensions (Northern Ireland) Order 1995.
(4) “Money purchase scheme” has the meaning given in section 181(1) of the Pension Schemes Act 1993 or section 176(1) of the Pension Schemes (Northern Ireland) Act 1993.
(5) “Employer”, in relation to a relevant pension scheme, means—
(a) a person who is for the purposes of Part 1 of the Pensions Act 1995 or Part 2 of the Pensions (Northern Ireland) Order 1995 an employer in relation to the scheme, and
(b) any other person who has or may have any liability under the scheme.
(6) “Employment” has the meaning given in section 181(1) of the Pension Schemes Act 1993 or section 176(1) of the Pension Schemes (Northern Ireland) Act 1993.
(7) “Pension liabilities” means liabilities attributable to or associated with the provision under a relevant pension scheme of pensions or other benefits.
(8) “The court” means—
(a) in relation to England and Wales or Northern Ireland, the High Court, and
(b) in relation to Scotland, the Court of Session.
142Y Power of Treasury in relation to loss-absorbency requirements
(1) The Treasury may by order make provision about the exercise by either regulator of its functions under this Act, so far as they are (apart from the order) capable of being exercised in relation to a relevant body so as to require the relevant body—
(a) to issue any debt instrument, or
(b) to ensure that any part of the relevant body's debt consists of debt owed by it in respect of debt instruments, or debt instruments of a particular kind.
(2) A “relevant body” is—
(a) a ring-fenced body,
(b) any other body corporate that has a Part 4A permission relating to the regulated activity of accepting deposits, or
(c) a body corporate that is a member of the group of a body falling within paragraph (a) or (b).
(3) “Debt instrument” means—
(a) a bond,
(b) any other instrument creating or acknowledging a debt, or
(c) an instrument giving rights to acquire a debt instrument.
(4) An order under this section may in particular—
(a) require the regulator to exercise its functions so as to require relevant bodies to do either or both of the things mentioned in subsection (1);
(b) limit the extent to which the regulator may require a relevant body's debt to consist of debt owed in respect of debt instruments or of debt instruments of a kind specified in the order;
(c) require the regulator—
(i) to make, or not to make, provision by reference to specified matters, or
(ii) to have regard, or not to have regard, to specified matters;
(d) require the regulator to consult, or obtain the consent of, the Treasury before making rules of a specified description or exercising any other specified function;
(e) impose on the regulator in connection with the exercise of a specified function procedural requirements which would not otherwise apply to the exercise of the function;
(f) refer to a publication issued by a regulator, another body in the United Kingdom or an international organisation, as the publication has effect from time to time.
(5) “Specified” means specified in the order.
142Z Affirmative procedure in relation to certain orders under Part 9B
(1) This section applies to an order containing provision made under any of the following provisions of this Part—
(a) section 142A(2)(b);
(b) section 142B(2) or (5);
(c) section 142C;
(d) section 142D(2) or (4);
(e) section 142E;
(f) section 142I;
(g) section 142Y.
(2) No order to which this section 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) subsection (4) applies.
(3) Subsection (4) applies if an order under 142D(4) or 142E 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 subsection 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 either House is adjourned for more than 4 days.
(1) This section has effect for the interpretation of this Part.
(2) Any reference to—
(a) the regulated activity of accepting deposits, or
(b) the regulated activity of dealing in investments as principal,
is to be read in accordance with Schedule 2, taken with any order under section 22.
(3) Any reference to the group restructuring powers is to be read in accordance with section 142L(1).
(4) Any reference to a qualifying parent undertaking is to be read in accordance with section 142L(4).
(1) In this Part, “FCA investment firm” means an investment firm that—
(a) is an authorised person within the meaning of section 31(1)(a),
(b) is not for the time being designated by the PRA under article 3 of the Financial Services and Markets Act 2000 (PRA-regulated Activities) Order 2013 (S.I. 2013/556), and
(c) has its registered office or, if it has no registered office, its head office in the United Kingdom.
(2) But the following are not FCA investment firms—
(a) a person excluded from the definition of “investment firm” in Article 3(1) of the Financial Services and Markets 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) by paragraph (a) or (b) of that definition;
(b) an investment 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).
(1) In this Part—
“authorised parent undertaking” means a parent undertaking that—
is incorporated in the United Kingdom or has its principal place of business in the United Kingdom, and
is an authorised person;
“on a consolidated basis” means as if all members of an FCA investment firm's group are a single FCA investment firm;
“Directive 2013/36/EU UK law” means the law of the United Kingdom which was relied on immediately before 1 January 2022 to implement the capital requirements directive and its implementing measures as it has effect—
on IP completion day, in the case of rules made by the FCA or the PRA under this Act, and
as amended from time to time, in all other cases;
“EU tertiary legislation” has the meaning given in section 20 of the European Union (Withdrawal) Act 2018;
“governance arrangements” includes organisational structure, lines of responsibility and internal control mechanisms;
“integrity”, in relation to the UK financial system, has the meaning given in section 1D;
“investment firm” has the meaning given in Article 4(1)(2) of the capital requirements regulation;
“non-authorised parent undertaking” means a parent undertaking that—
is incorporated in the United Kingdom or has its principal place of business in the United Kingdom, and
is not an authorised person.
(2) The Treasury may by regulations make provision about the meaning of the following terms for the purposes of this Part—
“on a consolidated basis”;
“group”;
“parent undertaking”;
“subsidiary undertaking”.
(3) Regulations under subsection (2) may, among other things, amend, repeal or otherwise modify provisions of this Act.
(4) In this Part, references to instruments made under the capital requirements regulation include EU tertiary legislation made under that regulation which forms part of assimilated law.
143C Duty to make rules applying to FCA investment firms
(1) In the exercise of its power to make general rules, the FCA must make rules applying to FCA investment firms which impose the following types of prudential requirements—
(a) requirements relating to the types and amounts of capital and liquid assets that such firms must hold in order to manage the risks specified in or under subsection (2);
(b) requirements relating to the management of risks arising from the strength or extent of such firms' relationships with, or direct exposure to, a single client or group of connected clients;
(c) reporting requirements related to requirements described in paragraph (a) or (b);
(d) public disclosure requirements related to requirements described in paragraph (a) or (b);
(e) requirements in respect of governance arrangements related to the risks specified in or under subsection (2);
(f) requirements in respect of remuneration policies and practices related to the risks specified in or under subsection (2).
(2) The risks referred to in subsection (1)(a), (e) and (f) are—
(a) the risks to consumers (as defined in section 1G) arising from FCA investment firms,
(b) the risks to the integrity of the UK financial system arising from FCA investment firms,
(c) the risks to which FCA investment firms are exposed, and
(d) any other risks specified by the Treasury by regulations.
(3) General rules made for the purpose of subsection (1) may, among other things—
(a) impose requirements to be satisfied on an individual basis or on a consolidated basis;
(b) impose requirements relating to the processes for consolidation;
(c) make provision relating to transactions between an FCA investment firm and a member of its group, including provision requiring the disclosure of information;
(d) provide for exceptions from requirements;
(e) make provision by reference to the capital requirements regulation, to an instrument made under the capital requirements regulation or to Directive 2013/36/EU UK law, as amended from time to time.
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
143D Duty to make rules applying to parent undertakings
(1) In the exercise of its power to make general rules, the FCA must make rules applying to authorised parent undertakings of FCA investment firms which impose the following types of prudential requirements—
(a) requirements relating to the types and amounts of capital and liquid assets that such undertakings must hold in order to manage the risks specified in or under subsection (2);
(b) requirements relating to the management of risks arising from the strength or extent of such undertakings' relationships with, or direct exposure to, a single client or group of connected clients;
(c) reporting requirements related to requirements described in paragraph (a) or (b);
(d) public disclosure requirements related to requirements described in paragraph (a) or (b);
(e) requirements in respect of governance arrangements related to the risks specified in or under subsection (2);
(f) requirements in respect of remuneration policies and practices related to the risks specified in or under subsection (2).
(2) The risks referred to in subsection (1)(a), (e) and (f) are—
(a) the risks to consumers (as defined in section 1G) arising from FCA investment firms, from parent undertakings of FCA investment firms and from FCA investment firms belonging to groups,
(b) the risks to the integrity of the UK financial system arising from FCA investment firms, from parent undertakings of FCA investment firms and from FCA investment firms belonging to groups,
(c) the risks to which FCA investment firms are exposed by virtue of their relationship with their parent undertaking, and
(d) any other risks specified by the Treasury by regulations.
(3) The FCA must make rules applying to non-authorised parent undertakings of FCA investment firms which impose requirements described in subsection (1), where such rules appear to it to be necessary or expedient for the purpose of advancing one or more of its operational objectives.
(4) Rules made for the purpose of subsection (1) or under subsection (3) may, among other things—
(a) impose requirements to be satisfied on an individual basis or on a consolidated basis;
(b) impose requirements relating to the processes for consolidation;
(c) make provision relating to transactions between a parent undertaking of an FCA investment firm and a member of its group, including provision requiring the disclosure of information;
(d) provide for exceptions from requirements;
(e) make provision by reference to the capital requirements regulation, to an instrument made under the capital requirements regulation or to Directive 2013/36/EU UK law, as amended from time to time.
(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7) Section 137H (rules about remuneration) applies where the FCA makes rules under subsection (3) prohibiting persons, or persons of a specified description, from being remunerated in a specified way as it applies where the FCA makes general rules imposing such a prohibition.
(8) Section 137I (Treasury direction to consider compliance with remuneration policies) applies where the FCA makes rules under subsection (3) requiring non-authorised parent undertakings, or non-authorised parent undertakings of a specified description, to act in accordance with a remuneration policy as it applies where the FCA makes general rules imposing such requirements on authorised persons, but as if—
(a) the references in that section to authorised persons were references to non-authorised parent undertakings of FCA investment firms, and
(b) subsection (7) of that section were omitted.
(9) Section 141A (power to make consequential amendments of references to rules etc) applies to the exercise by the FCA of its power to make, alter or revoke rules under subsection (3) as it applies in relation to the exercise by the FCA of its power to make, alter or revoke rules under Part 9A.
(10) This section is subject to section 143E.
143E Powers to make rules applying to parent undertakings
(1) Subsections (1) and (3) of section 143D do not require the FCA to make rules applying to parent undertakings of FCA investment firms which belong to a group which includes a relevant body, but the FCA may make rules described in those subsections applying to such parent undertakings.
(2) In subsection (1), “relevant body” means—
(a) an undertaking (as defined in section 1161(1) of the Companies Act 2006) that has its head office in the United Kingdom and that has permission under Part 4A to accept deposits, other than—
(i) an undertaking that also has permission under Part 4A to effect or carry out contracts of insurance, or
(ii) a credit union within the meaning of section 1 of the Credit Unions Act 1979;
(b) an investment firm that is for the time being designated by the PRA under article 3 of the Financial Services and Markets Act 2000 (PRA-regulated Activities) Order 2013 (S.I. 2013/556).
(3) The FCA may make rules applying to parent undertakings of FCA investment firms which impose requirements for the disclosure of information about such undertakings' branches and subsidiary undertakings outside the United Kingdom.
(4) The FCA's powers to make rules under subsections (1) and (3) are powers to do so—
(a) in relation to authorised parent undertakings, in exercise of its power to make general rules, and
(b) in relation to non-authorised parent undertakings, where such rules appear to it to be necessary or expedient for the purpose of advancing one or more of its operational objectives.
(5) Section 143D(4) applies in relation to rules made by the FCA in exercise of the powers conferred by, or described in, this section as it applies in relation to rules made in the performance of the FCA's duties under that section.
(6) Section 143D ... (7), (8) and (9) apply in relation to rules made under this section applying to non-authorised parent undertakings as they apply in relation to rules made under section 143D(3).
(1) In this Act, “Part 9C rules” means rules made, or to be made, by the FCA—
(a) in the performance of its duties under section 143C or 143D, or
(b) in exercise of the powers conferred by, or described in, section 143E.
(2) The FCA must publish a list of all Part 9C rules in force in the way appearing to the FCA to be best calculated to bring it to the attention of people likely to be affected by the rules.
(3) The FCA's opinion as to whether a rule is a Part 9C rule is conclusive for all purposes.
143G Matters to consider when making Part 9C rules
(1) When making Part 9C rules, the FCA must, among other things, have regard to—
(a) any relevant standards set by an international standard-setting body, and
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(d) any other matter specified by the Treasury by regulations.
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) When making Part 9C rules, the FCA must consider, and consult the Treasury about, the likely effect of the rules on relevant equivalence decisions.
(4) For the purpose of this section, an equivalence decision is “relevant” if the Treasury have, by notice in writing, informed the FCA that it is relevant for that purpose.
(5) In this section—
“equivalence decision” means a decision as to whether the law and practice of one country or territory is equivalent to the law and practice of another country or territory, either generally or as it relates to a particular matter;
“territory” includes the European Union and any other international organisation or authority comprising countries or territories.
(6) This section is subject to section 143I.
143H Explanation to accompany consultation on rules
(1) A draft of proposed Part 9C rules published in accordance with section 138I(1)(b) must be accompanied by—
(a) an explanation of the provision that the FCA has considered it appropriate to include in the rules given the risks specified in or under section 143C(2) or 143D(2), and
(b) an explanation of the ways in which having regard to the matters specified in or under section 143G(1) has affected the proposed rules,
(as well as being accompanied by the information listed in section 138I(2)).
(2) If the FCA makes the proposed Part 9C rules, it must publish—
(a) a summary of the purpose of the proposed rules, and
(b) explanations complying with subsection (1),
(as well as the information required by section 138I(4) and (5)).
(3) This section is subject to section 143I.
(1) Sections 143G and 143H do not apply where the FCA makes Part 9C rules—
(a) in order to comply with a direction given by the Financial Policy Committee of the Bank of England under section 9H of the Bank of England Act 1998 (directions requiring macro-prudential measures), or
(b) in order to act in accordance with a recommendation made by that Committee under section 9Q of that Act (recommendations about the exercise of the FCA's functions).
(2) Section 143H does not apply in relation to Part 9C rules if the FCA considers that the delay involved in complying with that section would be prejudicial to the interests of consumers (as defined in section 425A).
(3) If the FCA proposes Part 9C rules that change existing Part 9C rules and the changes consist of or include changes which, in the FCA's opinion, are not material—
(a) the explanations described in section 143H(1) are not required in relation to the rules to the extent that they make those changes, but
(b) the draft of the rules must be accompanied by a statement of the FCA's opinion.
(4) If the FCA makes Part 9C rules that change existing Part 9C rules and the changes consist of or include changes which, in the FCA's opinion, are not material—
(a) the summary and explanations described in section 143H(2) are not required in relation to the rules to the extent that they make those changes, but
(b) the FCA must publish a statement of its opinion.
(5) For the purposes of this section, whether a change to Part 9C rules is material is to be determined by the FCA by reference to, among other things, the risks specified in or under section 143C(2) or 143D(2) and the matters specified in or under section 143G(1).
(1) This section applies where—
(a) two or more FCA investment firms are subsidiary undertakings of the same parent undertaking,
(b) the parent undertaking's head office is in a country or territory outside the United Kingdom, and
(c) in the FCA's opinion, the law and practice in the other country or territory does not impose requirements on the parent undertaking which have equivalent effect to requirements imposed by Part 9C rules.
(2) Where this section applies, the FCA may exercise its power under section 55L(3) to impose a requirement on the FCA investment firms to secure that a parent undertaking with its head office in the United Kingdom is established.
143K Imposition of requirements on non-authorised parent undertakings
(1) The FCA may, on the application of a non-authorised parent undertaking of an FCA investment firm—
(a) impose a requirement on the parent undertaking,
(b) vary a requirement imposed on the parent undertaking under this section, or
(c) cancel such a requirement.
(2) The FCA may exercise its power under subsection (3) in relation to a non-authorised parent undertaking of an FCA investment firm if it appears to the FCA that—
(a) it is necessary or expedient to do so in order to manage risks specified in or under section 143D(2), and
(b) it is desirable to do so in order to advance one or more of its operational objectives.
(3) The FCA's power under this subsection is a power—
(a) to impose a requirement,
(b) to vary a requirement imposed under this section, or
(c) to cancel such a requirement.
(4) The FCA may refuse an application under subsection (1) if it appears to the FCA that it is desirable to do so in order to advance one or more of the FCA's operational objectives.
(5) A requirement may, in particular, be imposed under this section—
(a) so as to require the parent undertaking to take specified action, or
(b) so as to require the parent undertaking to refrain from taking specified action.
(6) A requirement may be imposed by reference to the parent undertaking's relationship with—
(a) its group, or
(b) other members of its group.
(7) A requirement may refer to the past conduct of the parent undertaking (for example, by requiring the parent undertaking to review or take remedial action in respect of past conduct).
(8) A requirement may be expressed to expire at the end of a specified period, but the imposition of a requirement that expires at the end of a specified period does not affect the FCA's power to impose a new requirement.
(9) A requirement ceases to be in force if the person on whom it is imposed ceases to be a non-authorised parent undertaking of an FCA investment firm.
(10) For the purposes of a provision of this section which refers to the FCA's operational objectives, in relation to the exercise of a power in relation to a particular parent undertaking, it does not matter whether there is a relationship between the parent undertaking and the persons whose interests will be protected by the exercise of the power.
(1) An application under section 143K(1) for the imposition or variation of a requirement must contain a statement of the desired requirement or variation.
(2) An application under section 143K(1)—
(a) must be made in such manner as the FCA may direct, and
(b) must contain, or be accompanied by, such other information as the FCA may reasonably require.
(3) At any time after the application is received and before it is determined, the FCA may require the applicant to provide it with such further information as the FCA reasonably considers necessary to enable it to determine the application.
(4) The FCA may require an applicant to provide information which the applicant is required to provide the FCA under this section in such form, or to verify it in such a way, as the FCA may direct.
(5) Different directions may be given, and different requirements imposed, in relation to different applications or categories of application.
143M Determination of applications under section 143K
(1) The FCA must determine an application under section 143K(1)—
(a) if the application is complete, before the end of the period of six months beginning with the day on which the FCA received the application, or
(b) if the application is incomplete, before the end of the period of 12 months beginning with the day on which the FCA received the application.
(2) The applicant may withdraw the application, by giving the FCA a written notice, at any time before the FCA determines it.
(3) If the FCA grants an application under section 143K(1), it must give the applicant a written notice.
(4) The notice must state the date from which the requirement or variation has effect.
(1) If the FCA proposes to refuse an application under section 143K(1), it must give the applicant a warning notice.
(2) If the FCA decides to refuse an application under section 143K(1), it must give the applicant a decision notice.
143O Exercise of own-initiative power under section 143K
(1) The imposition or variation of a requirement by the FCA under section 143K(2) takes effect—
(a) immediately, if the notice given under subsection (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 the requirement may be expressed to take effect immediately, or on a specified date, only if the FCA reasonably considers that it is necessary for it to take effect immediately or on that date, having regard to the ground on which it is exercising its power under section 143K(2).
(3) If the FCA—
(a) proposes to exercise its power under section 143K(2) so as to impose a requirement on a parent undertaking or to vary a requirement imposed on a parent undertaking, or
(b) exercises that power so as to impose a requirement on a parent undertaking, or to vary a requirement imposed on a parent undertaking, with immediate effect,
it must give the parent undertaking a written notice.
(4) The notice must—
(a) give details of the requirement or its variation,
(b) state the FCA's reasons for imposing or varying the requirement,
(c) inform the parent undertaking that it may make representations to the FCA within the period specified in the notice (whether or not the parent undertaking has referred the matter to the Tribunal),
(d) inform the parent undertaking of when the imposition or variation of the requirement takes effect, and
(e) inform the parent undertaking of its right to refer the matter to the Tribunal.
(5) The FCA may extend the period allowed under the notice for making representations.
(6) If, having considered any representations made by the parent undertaking, the FCA 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 parent undertaking a written notice.
(7) A notice under subsection (6) must inform the parent undertaking of its right to refer the matter to the Tribunal.
(8) If, having considered any representations made by the parent undertaking, the FCA 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 parent undertaking a written notice.
(9) A notice under subsection (8)(b) must comply with subsection (4).
(10) If a notice under this section 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 subsection (1)(c), whether a matter is open to review is to be determined in accordance with section 391(8).
(1) An applicant who is aggrieved by the determination of an application under section 143K(1) may refer the matter to the Tribunal.
(2) A parent undertaking aggrieved by the exercise by the FCA of its power under section 143K(2) to impose a requirement on the parent undertaking, or vary a requirement imposed on the parent undertaking, may refer the matter to the Tribunal.
(1) This section makes provision about a requirement imposed on a non-authorised parent undertaking of an FCA investment firm (“N”) under section 143K—
(a) prohibiting the disposal of, or other dealing with, any of N's assets (whether in the United Kingdom or elsewhere) or restricting such disposals or dealings, or
(b) requiring that some or all of N's assets, or some or all assets belonging to consumers (as defined in section 1G) but held by N or to N's order, must be transferred to and held by a trustee approved by the FCA.
(2) If the FCA—
(a) imposes a requirement described in subsection (1)(a), and
(b) gives notice of the requirement to an institution with whom N keeps an account,
the notice has the effects set out in subsection (3).
(3) Those effects are that—
(a) the institution does not act in breach of a contract with N if, having been instructed by N (or on N's behalf) to transfer a sum or otherwise make a payment out of N'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 FCA an amount equal to the amount transferred from, or otherwise paid out of, N's account in contravention of the requirement.
(4) If the FCA imposes a requirement described in subsection (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 FCA.
(5) If, while a requirement described in subsection (1)(b) is in force, N creates a charge over any assets of N held in accordance with the requirement, the charge is (to the extent that it confers security over the assets) void against the liquidator and N'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 subsection (1)(b) only if—
(a) N 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 N.
(7) A person who contravenes subsection (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 section, 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) Subsections (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 subsection (1)(b).
143R Managers of non-authorised parent undertakings
A non-authorised parent undertaking of an FCA investment firm must take reasonable care to ensure that members of its management body—
(a) are of sufficiently good repute, and
(b) possess sufficient knowledge, skills and experience to perform their duties effectively.
(1) Subsection (2) applies where it appears to the FCA that an individual—
(a) is not of sufficiently good repute, or
(b) does not possess sufficient knowledge, skills and experience,
to perform a function in relation to an activity carried on by a non-authorised parent undertaking of an FCA investment firm.
(2) The FCA may make an order (“a Part 9C prohibition order”) prohibiting the individual from performing the function.
(3) A Part 9C prohibition order may relate to—
(a) all functions in relation to an activity carried on by a non-authorised parent undertaking of an FCA investment firm, or
(b) a function specified in the order or of a description specified in the order.
(4) A Part 9C prohibition order may relate to—
(a) all activities of a non-authorised parent undertaking of an FCA investment firm, or
(b) an activity specified in the order or of a description specified in the order.
(5) A Part 9C prohibition order may relate to—
(a) all non-authorised parent undertakings of FCA investment firms, or
(b) an undertaking specified, or within a description specified, in the order.
(6) A non-authorised parent undertaking of an FCA investment firm must take reasonable care to ensure that none of its functions is performed by a person who is prohibited from performing that function by a Part 9C prohibition order.
143T Procedure for making a Part 9C prohibition order
(1) If the FCA proposes to make a Part 9C prohibition order it must give the individual to whom the order would apply a warning notice.
(2) The warning notice must set out the terms of the prohibition.
(3) If the FCA decides to make a Part 9C prohibition order it must give the individual to whom the order applies a decision notice.
(4) The decision notice must—
(a) name the individual to whom the Part 9C prohibition order applies, and
(b) set out the terms of the order.
(5) If the FCA decides to make a Part 9C prohibition order, the individual to whom the order applies may refer the matter to the Tribunal.
143U Varying and withdrawing a Part 9C prohibition order
(1) The FCA may vary or revoke a Part 9C prohibition order on the application of the individual named in the order.
(2) On an application for the variation or revocation of a Part 9C prohibition order—
(a) if the FCA decides to grant the application, it must give the applicant written notice of its decision,
(b) if the FCA proposes to refuse the application, it must give the applicant a warning notice, and
(c) if the FCA decides to refuse the application, it must give the applicant a decision notice.
(3) If the FCA gives the applicant a decision notice under subsection (2)(c), the applicant may refer the matter to the Tribunal.
143V Offence of breaching a Part 9C prohibition order
(1) An individual who performs a function, or agrees to perform a function, in breach of a Part 9C prohibition order commits an offence.
(2) An individual who commits an offence under this section is liable—
(a) on summary conviction in England and Wales, to a fine, and
(b) on summary conviction in Scotland or Northern Ireland, to a fine not exceeding level 5 on the standard scale.
(3) In proceedings for an offence under this section, it is a defence for the individual to show that they took all reasonable precautions and exercised all due diligence to avoid committing the offence.
(1) This section applies if the FCA is satisfied that a non-authorised parent undertaking of an FCA investment firm has contravened—
(a) a provision of Part 9C rules,
(b) a requirement imposed under section 143K,
(c) section 143R, or
(d) section 143S(6).
(2) The FCA may impose a penalty of such amount as it considers appropriate on any of the following—
(a) the non-authorised parent undertaking;
(b) a person who was knowingly concerned in the contravention.
(3) The FCA may (instead of or in addition to imposing a penalty under subsection (2)) publish a statement to the effect that the person has contravened, or been knowingly concerned in a contravention of, a provision of Part 9C rules.
(4) Subsection (5) applies to—
(a) a member of the management body of the non-authorised parent undertaking, or
(b) a person not falling within paragraph (a) who is an employee of the non-authorised parent undertaking,
who was, at any time, knowingly concerned in the contravention.
(5) The FCA may impose, for such period as it considers appropriate, restrictions (including a ban) on the exercise by the person of functions of an FCA investment firm or a parent undertaking of an FCA investment firm.
(6) The FCA may—
(a) vary a restriction imposed under subsection (5) so as to reduce the period for which it has effect or otherwise to limit its effect, or
(b) cancel the restriction.
(7) The FCA may not take action against a person under this section after the end of the limitation period unless, before the end of that period, it has given a warning notice to the person under section 143X.
(8) In subsection (7), “the limitation period” means the period of six years beginning with the first day on which the FCA knew of the contravention.
(9) For the purpose of subsection (8), the FCA is to be treated as knowing of a contravention if it has information from which the contravention can reasonably be inferred.
(10) In this section, “management body” means the board of directors or, if there is no such board, the equivalent body responsible for the management of the undertaking concerned.
(11) The reference in subsection (4) to an employee of a person (“P”) includes a person who—
(a) personally provides, or is under an obligation personally to provide, services to P under an arrangement made between P and the person providing the services or another person, and
(b) is subject to (or to the right of) supervision, direction or control by P as to the manner in which those services are provided.
(1) If the FCA proposes to take action against a person under section 143W(2), (3) or (5) it must give the person a warning notice.
(2) A warning notice about a proposal to impose a penalty must state the amount of the penalty.
(3) A warning notice about a proposal to publish a statement must set out the terms of the statement.
(4) A warning notice about a proposal to impose a restriction under section 143W(5) must state—
(a) the terms of the restriction, and
(b) the period for which the restriction is to have effect.
(5) If the FCA decides to take action against a person under section 143W(2), (3) or (5) it must give the person a decision notice.
(6) A decision notice about the imposition of a penalty must state the amount of the penalty.
(7) A decision notice about the publication of a statement must state the terms of the statement.
(8) After the statement is published, the FCA must send a copy of the statement to—
(a) the person in respect of whom it is made, and
(b) any person to whom a copy of the decision notice was given under section 393(4).
(9) A decision notice about the imposition of a restriction under section 143W(5) must state—
(a) the terms of the restriction, and
(b) the period for which the restriction is to have effect.
(10) If the FCA decides to take action against a person under section 143W(2), (3) or (5), the person may refer the matter to the Tribunal.
(11) If the FCA decides to vary or cancel a restriction under section 143W(6), it must give written notice of its decision to the applicant.
143Y Statement of policy for penalties under section 143W
(1) The FCA must prepare and issue a statement of policy with respect to—
(a) the imposition of penalties under section 143W, and
(b) the amount of penalties under that section.
(2) The FCA's policy in determining what the amount of a penalty should be must include having regard to—
(a) the seriousness of the contravention,
(b) the extent to which the contravention was deliberate or reckless, and
(c) whether the person on whom the penalty is to be imposed is an individual.
(3) The FCA may at any time alter or replace a statement issued under this section.
(4) If a statement issued under this section is altered or replaced, the FCA must issue the altered or replacement statement.
(5) In exercising, or deciding whether to exercise, a power under section 143W(2) in the case of any particular contravention, the FCA must have regard to any statement of policy published under this section and in force at a time when the contravention occurred.
(6) A statement under this section must be published by the FCA in the way appearing to the FCA to be best calculated to bring it to the attention of the public.
(7) The FCA must, without delay, give the Treasury a copy of any statement which it publishes under this section.
(8) The FCA may charge a reasonable fee for providing a person with a copy of a statement published under this section.
(1) Before issuing a statement of policy under section 143Y, the FCA must publish a draft of the proposed statement in the way appearing to the FCA to be best calculated to bring it to the attention of the public.
(2) The draft must be accompanied by notice that representations about the proposal may be made to the FCA within a specified time.
(3) Before issuing the proposed statement, the FCA must have regard to any representations made to it in accordance with subsection (2).
(4) If the FCA issues the proposed statement, it must publish an account in general terms of—
(a) the representations made to it in accordance with subsection (2), and
(b) its response to them.
(5) If the statement differs from the draft published under subsection (1) in a way which is, in the FCA's opinion, significant, the FCA must publish details of the difference (in addition to complying with subsection (4)).
(6) The FCA may charge a reasonable fee for providing a person with a copy of a draft published under subsection (1).
(7) This section also applies to a proposal to alter or replace a statement.
(1) In this Act, “CRR rules” means rules of a type described in subsection (2) to the extent that they make provision about a matter described in subsection (3).
(2) The types of rules are—
(a) general rules made, or to be made, by the PRA applying to CRR firms or a description of CRR firm;
(b) rules made, or to be made, under section 192XA.
(3) The matters are any matter that is the subject of—
(a) a relevant provision of the capital requirements regulation, or
(b) a CRR Basel standard.
(4) For the purposes of subsection (3)(a), a provision is “relevant” if—
(a) it has been or may be revoked by regulations made under section 3(1) of the Financial Services Act 2021, ...
(b) it has been revoked by regulations made under section 3(3) or (5) of that Act , or
(c) it has been or may be revoked by section 1 of the Financial Services and Markets Act 2023.
(5) In subsection (3)—
(a) the reference to a matter that is the subject of a provision of the capital requirements regulation includes a matter that is the subject of an instrument made under the provision, and
(b) the reference to a matter that is the subject of a CRR Basel standard includes such a matter as it relates to any CRR firm (even where the standard in question does not apply to all CRR firms).
(1) In this Part—
“CRR Basel standard” has the meaning given in section 4 of the Financial Services Act 2021;
“CRR firm” has the same meaning as in the capital requirements regulation;
“EU tertiary legislation” has the meaning given in section 20 of the European Union (Withdrawal) Act 2018.
(2) In this Part, references to instruments made under the capital requirements regulation include EU tertiary legislation made under that regulation which forms part of assimilated law.