(1) A requirement imposed under section 320 takes effect—
(a) immediately, if the notice given under subsection (2) states that that is the case;
(b) in any other case, on such date as may be specified in that notice.
(2) If the PRA proposes to impose a requirement on a former underwriting member (“A”) under section 320, or imposes such a requirement on him which takes effect immediately, it must give him written notice.
(3) The notice must—
(a) give details of the requirement;
(b) state the PRA's reasons for imposing it;
(c) inform A that he may make representations to the PRA within such period as may be specified in the notice (whether or not he has referred the matter to the Tribunal);
(d) inform him of the date on which the requirement took effect or will take effect; and
(e) inform him of his right to refer the matter to the Tribunal.
(4) The PRA may extend the period allowed under the notice for making representations.
(5) If, having considered any representations made by A, the PRA decides—
(a) to impose the proposed requirement, or
(b) if it has been imposed, not to revoke it,
it must give him written notice.
(6) If the PRA decides—
(a) not to impose a proposed requirement, or
(b) to revoke a requirement that has been imposed,
it must give A written notice.
(7) If the PRA decides to grant an application by A for the variation or revocation of a requirement, it must give him written notice of its decision.
(8) If the PRA proposes to refuse an application by A for the variation or revocation of a requirement it must give him a warning notice.
(9) If the PRA, having considered any representations made in response to the warning notice, decides to refuse the application, it must give A a decision notice.
(10) A notice given under—
(a) subsection (5), or
(b) subsection (9) in the case of a decision to refuse the application,
must inform A of his right to refer the matter to the Tribunal.
(11) If the PRA decides to refuse an application for a variation or revocation of the requirement, the applicant may refer the matter to the Tribunal.
(12) If a notice informs a person of his right to refer a matter to the Tribunal, it must give an indication of the procedure on such a reference.
(13) Before giving a notice under any provision of this section, the PRA must consult the FCA.
322 Rules applicable to former underwriting members.
(1) The PRA may make rules imposing such requirements on persons to whom the rules apply as appear to it to be appropriate for protecting policyholders against the risk that those persons may not be able to meet their liabilities.
(2) The rules may apply to—
(a) former underwriting members generally; or
(b) to a class of former underwriting member specified in them.
(3) Section 319 applies to the making of proposed rules under this section as it applies to the giving of a proposed direction under section 316.
(4) Part 9A (except sections 137T, 138F, 138G and 138H) does not apply to rules made under this section.
(5) In the event that the activity of effecting or carrying out contracts of insurance as principal is not to any extent a PRA-regulated activity, the function conferred on the PRA by subsection (1) is exercisable instead by the FCA.
The Treasury may by order provide for the application of any provision of Part VII (with or without modification) in relation to schemes for the transfer of the whole or any part of the business carried on by one or more members of the Society or former underwriting members.
(1) In this Part—
“arranging deals”, in relation to the investments to which this Part applies, has the same meaning as in paragraph 3 of Schedule 2;
“former underwriting member” means a person ceasing to be an underwriting member of the Society on, or at any time after, 24 December 1996; and
“participation in Lloyd’s syndicates”, in relation to the secondary market activity, means the investment described in sub-paragraph (1) of paragraph 21 of Schedule 2.
(2) A term used in this Part which is defined in Lloyd’s Act 1982 has the same meaning as in that Act.
(1) The FCA must keep itself informed about—
(a) the way in which designated professional bodies supervise and regulate the carrying on of exempt regulated activities by members of the professions in relation to which they are established;
(b) the way in which such members are carrying on exempt regulated activities.
(2) In this Part—
“exempt regulated activities” means regulated activities which may, as a result of this Part, be carried on by members of a profession which is supervised and regulated by a designated professional body without breaching the general prohibition; and
“members”, in relation to a profession, means persons who are entitled to practise the profession in question and, in practising it, are subject to the rules of the body designated in relation to that profession, whether or not they are members of that body.
(3) The FCA must keep under review the desirability of exercising any of its powers under this Part.
(4) Each designated professional body must co-operate with the FCA, by the sharing of information and in other ways, in order to enable the FCA to perform its functions under this Part.
(1) The Treasury may by order designate bodies for the purposes of this Part.
(2) A body designated under subsection (1) is referred to in this Part as a designated professional body.
(3) The Treasury may designate a body under subsection (1) only if they are satisfied that—
(a) the basic condition, and
(b) one or more of the additional conditions,
are met in relation to it.
(4) The basic condition is that the body has rules applicable to the carrying on by members of the profession in relation to which it is established of regulated activities which, if the body were to be designated, would be exempt regulated activities.
(5) The additional conditions are that—
(a) the body has power under any enactment to regulate the practice of the profession;
(b) being a member of the profession is a requirement under any enactment for the exercise of particular functions or the holding of a particular office;
(c) the body has been recognised for the purpose of any enactment other than this Act and the recognition has not been withdrawn;
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6) “Enactment” includes an Act of the Scottish Parliament, Northern Ireland legislation and subordinate legislation (whether made under an Act, an Act of the Scottish Parliament or Northern Ireland legislation).
(7) “Recognised” means recognised by—
(a) a Minister of the Crown;
(b) the Scottish Ministers;
(c) a Northern Ireland Minister;
(d) a Northern Ireland department or its head.
(1) The general prohibition does not apply to the carrying on of a regulated activity by a person (“P”) if—
(a) the conditions set out in subsections (2) to (7) are satisfied; ...
(aa) where the activity is the provision of a service listed in Part 3 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 relating to a financial instrument, the condition set out in subsection (7A) is also satisfied; and
(b) there is not in force—
(i) a direction under section 328, or
(ii) an order under section 329,
which prevents this subsection from applying to the carrying on of that activity by him.
(2) P must be—
(a) a member of a profession; or
(b) controlled or managed by one or more such members.
(3) P must not receive from a person other than his client any pecuniary reward or other advantage, for which he does not account to his client, arising out of his carrying on of any of the activities.
(4) The manner of the provision by P of any service in the course of carrying on the activities must be incidental to the provision by him of professional services.
(5) P must not carry on, or hold himself out as carrying on, a regulated activity other than—
(a) one which rules made as a result of section 332(3) allow him to carry on; or
(b) one in relation to which he is an exempt person.
(6) The activities must not be of a description, or relate to an investment of a description, specified in an order made by the Treasury for the purposes of this subsection.
(7) The activities must be the only regulated activities carried on by P (other than regulated activities in relation to which he is an exempt person).
(7A) The condition mentioned in subsection (1)(aa) is that—
(a) the service is provided in an incidental manner in the course of a professional activity ...; and
(b) the professional activity concerned is the provision of professional services.
(7B) In subsection (7A) a service is provided in an incidental manner in the course of a professional activity ... if the applicable conditions are satisfied.
(7C) The applicable conditions for the purposes of subsection (7B) are those set out in paragraph 6(a) to (c) of Schedule 3 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.
(8) “Professional services” means services—
(a) which do not constitute carrying on a regulated activity, and
(b) the provision of which is supervised and regulated by a designated professional body.
(9) The exemption in this section does not apply to the carrying on of a regulated claims management activity in Great Britain.
328 Directions in relation to the general prohibition.
(1) The FCA may direct that section 327(1) is not to apply to the extent specified in the direction.
(2) A direction under subsection (1)—
(a) must be in writing;
(b) may be given in relation to different classes of person or different descriptions of regulated activity.
(3) A direction under subsection (1) must be published in the way appearing to the FCA to be best calculated to bring it to the attention of the public.
(4) The FCA may charge a reasonable fee for providing a person with a copy of the direction.
(5) The FCA must, without delay, give the Treasury a copy of any direction which it gives under this section.
(6) The FCA may exercise the power conferred by subsection (1) only if it is satisfied ...—
(a) that it is desirable to do so in order to protect the interests of clients; ...
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7) In considering whether it is satisfied of the matter specified in subsection (6)(a), the FCA must have regard amongst other things to the effectiveness of any arrangements made by any designated professional body—
(a) for securing compliance with rules made under section 332(1);
(b) for dealing with complaints against its members in relation to the carrying on by them of exempt regulated activities;
(c) in order to offer redress to clients who suffer, or claim to have suffered, loss as a result of misconduct by its members in their carrying on of exempt regulated activities;
(d) for co-operating with the FCA under section 325(4).
(8) In this Part “clients” means—
(a) persons who use, have used or are or may be contemplating using, any of the services provided by a member of a profession in the course of carrying on exempt regulated activities;
(b) persons who have rights or interests which are derived from, or otherwise attributable to, the use of any such services by other persons; or
(c) persons who have rights or interests which may be adversely affected by the use of any such services by persons acting on their behalf or in a fiduciary capacity in relation to them.
(9) If a member of a profession is carrying on an exempt regulated activity in his capacity 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 are or may be contemplating using services provided by that person in his carrying on of that activity.
329 Orders in relation to the general prohibition.
(1) Subsection (2) applies if it appears to the FCA that a person to whom, as a result of section 327(1), the general prohibition does not apply is not a fit and proper person to carry on regulated activities in accordance with that section.
(2) The FCA may make an order disapplying section 327(1) in relation to that person to the extent specified in the order.
(3) The FCA may, on the application of the person named in an order under subsection (1), vary or revoke it.
(4) “Specified” means specified in the order.
(5) If a partnership is named in an order under this section, the order is not affected by any change in its membership.
(6) If a partnership named in an order under this section is dissolved, the order continues to have effect in relation to any partnership which succeeds to the business of the dissolved partnership.
(7) For the purposes of subsection (6), a partnership is to be regarded as succeeding to the business of another partnership only if—
(a) the members of the resulting partnership are substantially the same as those of the former partnership; and
(b) succession is to the whole or substantially the whole of the business of the former partnership.
(1) Before giving a direction under section 328(1), the FCA must publish a draft of the proposed direction.
(2) The draft must be accompanied by—
(a) a cost benefit analysis; and
(b) notice that representations about the proposed direction may be made to the FCA within a specified time.
(3) Before giving the proposed direction, the FCA must have regard to any representations made to it in accordance with subsection (2)(b).
(4) If the FCA gives the proposed direction it must publish an account, in general terms, of—
(a) the representations made to it in accordance with subsection (2)(b); and
(b) its response to them.
(5) If the direction differs from the draft published under subsection (1) in a way which is, in the opinion of the FCA, significant—
(a) the FCA must (in addition to complying with subsection (4)) publish details of the difference; and
(b) those details must be accompanied by a cost benefit analysis.
(6) Subsections (1) to (5) do not apply if the FCA considers that the delay involved in complying with them would prejudice the interests of consumers.
(7) Neither subsection (2)(a) nor subsection (5)(b) applies if the FCA considers—
(a) that, making the appropriate comparison, there will be no increase in costs; or
(b) that, making that comparison, there will be an increase in costs but the increase will be of minimal significance.
(8) The FCA may charge a reasonable fee for providing a person with a copy of a draft published under subsection (1).
(9) When the FCA is required to publish a document under this section it must do so in the way appearing to it to be best calculated to bring it to the attention of the public.
(10) Cost benefit analysis” means—
(a) an analysis of the costs together with an analysis of the benefits that will arise—
(i) if the proposed direction is given, or
(ii) if subsection (5)(b) applies, from the direction that has been given, and
(b) subject to subsection (10A), an estimate of those costs and of those benefits.
(10A) If, in the opinion of the FCA—
(a) the costs or benefits referred to in subsection (10) cannot reasonably be estimated, or
(b) it is not reasonably practicable to produce an estimate,
the cost benefit analysis need not estimate them, but must include a statement of the FCA's opinion and an explanation of it.
(11) “The appropriate comparison” means—
(a) in relation to subsection (2)(a), a comparison between the overall position if the direction is given and the overall position if it is not given;
(b) in relation to subsection (5)(b), a comparison between the overall position after the giving of the direction and the overall position before it was given.
331 Procedure on making or varying orders under section 329.
(1) If the FCA proposes to make an order under section 329, it must give the person concerned a warning notice.
(2) The warning notice must set out the terms of the proposed order.
(3) If the FCA decides to make an order under section 329, it must give the person concerned a decision notice.
(4) The decision notice must—
(a) name the person to whom the order applies;
(b) set out the terms of the order; and
(c) be given to the person named in the order.
(5) Subsections (6) to (8) apply to an application for the variation or revocation of an order under section 329.
(6) If the FCA decides to grant the application, it must give the applicant written notice of its decision.
(7) If the FCA proposes to refuse the application, it must give the applicant a warning notice.
(8) If the FCA decides to refuse the application, it must give the applicant a decision notice.
(9) A person—
(a) against whom the FCA have decided to make an order under section 329, or
(b) whose application for the variation or revocation of such an order the FCA had decided to refuse,
may refer the matter to the Tribunal.
(10) The FCA may not make an order under section 329 unless—
(a) the period within which the decision to make to the order may be referred to the Tribunal has expired and no such reference has been made; or
(b) if such a reference has been made, the reference has been determined.
332 Rules in relation to persons to whom the general prohibition does not apply.
(1) The FCA may make rules applicable to persons to whom, as a result of section 327(1), the general prohibition does not apply.
(2) The power conferred by subsection (1) is to be exercised for the purpose of ensuring that clients are aware that such persons are not authorised persons.
(3) A designated professional body must make rules—
(a) applicable to members of the profession in relation to which it is established who are not authorised persons; and
(b) governing the carrying on by those members of regulated activities (other than regulated activities in relation to which they are exempt persons).
(4) Rules made in compliance with subsection (3) must be designed to secure that, in providing a particular professional service to a particular client, the member carries on only regulated activities which arise out of, or are complementary to, the provision by him of that service to that client.
(5) Rules made by a designated professional body under subsection (3) require the approval of the FCA.
333 False claims to be a person to whom the general prohibition does not apply.
(1) A person who—
(a) describes himself (in whatever terms) as a person to whom the general prohibition does not apply, in relation to a particular regulated activity, as a result of this Part, or
(b) behaves, or otherwise holds himself out, in a manner which indicates (or which is reasonably likely to be understood as indicating) that he is such a person,
is guilty of an offence if he is not such a person.
(2) In proceedings for an offence under this section it is a defence for the accused to show that he took all reasonable precautions and exercised all due diligence to avoid committing the offence.
(3) A person guilty of an offence under this section is liable on summary conviction to imprisonment for a term not exceeding six months or a fine not exceeding level 5 on the standard scale, or both.
(4) But where the conduct constituting the offence involved or included the public display of any material, the maximum fine for the offence is level 5 on the standard scale multiplied by the number of days for which the display continued.
333S Financial assistance for action against illegal money lending
(1) The Treasury may make grants or loans, or give any other form of financial assistance, to any person for the purpose of taking action against illegal money lending.
(2) Taking action against illegal money lending includes—
(a) investigating illegal money lending and offences connected with illegal money lending;
(b) prosecuting, or taking other enforcement action in respect of, illegal money lending and offences connected with illegal money lending;
(c) providing education, information and advice about illegal money lending, and providing support to victims of illegal money lending;
(d) undertaking or commissioning research into the effectiveness of activities of the kind described in paragraphs (a) to (c);
(e) providing advice, assistance and support (including financial support) to, and oversight of, persons engaged in activities of the kind described in paragraphs (a) to (c).
(3) A grant, loan or other form of financial assistance under subsection (1) may be made or given on such terms as the Treasury consider appropriate.
(4) “Illegal money lending” means carrying on a regulated activity within article 60B of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) (regulated credit agreements) in circumstances which constitute an authorisation offence.
333T Funding of action against illegal money lending
(1) The Treasury must, from time to time, notify the FCA of the amount of the Treasury's illegal money lending costs.
(2) The FCA must make rules requiring authorised persons, or any specified class of authorised person, to pay to the FCA specified amounts, or amounts calculated in a specified way, with a view to recovering the amount notified under subsection (1).
(3) The amounts to be paid under the rules may include a component to recover the expenses of the FCA in collecting the payments (“collection costs”).
(4) Before the FCA publishes a draft of the rules it must consult the Treasury.
(5) The rules may be made only with the consent of the Treasury.
(6) The Treasury may notify the FCA of matters that they will take into account when deciding whether or not to give consent for the purposes of subsection (5).
(7) The FCA must have regard to any matters notified under subsection (6) before publishing a draft of rules to be made under this section.
(8) The FCA must pay to the Treasury the amounts that it receives under rules made under this section apart from amounts in respect of its collection costs (which it may keep).
(9) The Treasury must pay into the Consolidated Fund the amounts received by them under subsection (8).
(10) In this section the “Treasury's illegal money lending costs” means the expenses incurred, or expected to be incurred, by the Treasury—
(a) in connection with providing grants, loans, or other financial assistance to any person (under section 333S or otherwise) for the purpose of taking action against illegal money lending;
(b) in undertaking or commissioning research relating to taking action against illegal money lending.
(11) The Treasury may by regulations amend the definition of the “Treasury's illegal money lending costs”.
(12) In this section “illegal money lending” and “taking action against illegal money lending” have the same meaning as in section 333S.
(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) The enactments relating to friendly societies which are mentioned in Part I of Schedule 18 are amended as set out in that Part.
(4) Part II of Schedule 18—
(a) removes certain restrictions on the ability of incorporated friendly societies to form subsidiaries and control corporate bodies; and
(b) makes connected amendments.
339A General duties of PRA in relation to auditors
(1) The arrangements maintained by the PRA under section 2K (supervision of PRA-authorised persons) must include arrangements for—
(a) the sharing with auditors of PRA-authorised persons of information that the PRA is not prevented from disclosing, and
(b) the exchange of opinions with auditors of PRA-authorised persons.
(2) The PRA must issue and maintain a code of practice describing how it will comply with subsection (1).
(3) The PRA may at any time alter or replace a code issued under this section.
(4) If a code is altered or replaced, the PRA must issue the altered or replacement code.
(5) When the PRA issues a code under this section the PRA must—
(a) give a copy of the code to the Treasury, and
(b) publish the code in such manner as the PRA thinks fit.
(6) The Treasury must lay before Parliament a copy of the code.
(7) “Auditor” means an auditor appointed under or as a result of a statutory provision.
339B Duty to meet auditors of certain institutions
(1) The FCA must make arrangements for meetings to take place at least once a year between—
(a) the FCA, and
(b) the auditor of any PRA-authorised person to which section 339C applies.
(2) The PRA must make arrangements for meetings to take place at least once a year between—
(a) the PRA, and
(b) the auditor of any PRA-authorised person to which section 339C applies.
(3) The annual report of each regulator must include the number of meetings that have taken place during the period to which the report relates between the regulator and auditors of PRA-authorised persons to which section 339C applies.
(4) In subsection (3) “the annual report” means—
(a) in relation to the FCA, every report which it is required by paragraph 11 of Schedule 1ZA to make to the Treasury, and
(b) in relation to the PRA, every report which it is required by paragraph 19 of Schedule 1ZB to make to the Treasury.
(5) In this section “auditor” means an auditor appointed under or as a result of a statutory provision.
339C PRA-authorised persons to which this section applies
(1) This section applies to a PRA-authorised person which—
(a) is a UK institution,
(b) meets condition A or B,
(c) is not an insurer or a credit union, and
(d) is, in the opinion of the PRA, important to the stability of the UK financial system.
(2) Condition A is that the person has permission under Part 4A to carry on the regulated activity of accepting deposits.
(3) Condition B is that—
(a) the person is an investment firm that has permission under Part 4A to carry on the regulated activity of dealing in investments as principal, and
(b) when carried on by the person, that activity is a PRA-regulated activity.
(4) In this section—
(a) “UK institution” means an institution which is incorporated in, or formed under the law of any part of, the United Kingdom;
(b) “insurer” means an institution which is authorised under this Act to carry on the regulated activity of effecting or carrying out contracts of insurance as principal;
(c) “credit union” means a credit union as defined by section 31 of the Credit Unions Act 1979 or a credit union as defined by Article 2(2) of the Credit Unions (Northern Ireland) Order 1985.
(5) Subsections (2), (3) and (4)(b) are to be read in accordance with Schedule 2, taken together with any order under section 22.
(1) The appropriate regulator may make rules requiring an authorised person, or an authorised person falling within a specified class—
(a) to appoint an auditor, or
(b) to appoint an actuary,
if he is not already under an obligation to do so imposed by another enactment.
(2) The appropriate regulator may make rules requiring an authorised person, or an authorised person falling within a specified class—
(a) to produce periodic financial reports; and
(b) to have them reported on by an auditor or an actuary.
(3A) The PRA—
(a) must make rules imposing on auditors of PRA-authorised persons such duties as may be specified in relation to co-operation with the PRA in connection with the supervision by the PRA of PRA-authorised persons, and
(b) may make rules—
(i) imposing such other duties on auditors of PRA-authorised persons as may be specified, and
(ii) imposing such duties on actuaries acting for PRA-authorised persons as may be specified.
(3B) The FCA may make rules imposing on auditors of, or actuaries acting for, authorised persons such duties as may be specified.
(4) Rules under subsection (1) may make provision—
(a) specifying the manner in which and time within which an auditor or actuary is to be appointed;
(b) requiring the regulator making the rules to be notified of an appointment;
(c) enabling the regulator making the rules to make an appointment if no appointment has been made or notified;
(d) as to remuneration;
(e) as to the term of office, removal and resignation of an auditor or actuary.
(5) An auditor or actuary appointed as a result of rules under subsection (1), or on whom duties are imposed by rules under subsection (3A) or (3B)—
(a) must act in accordance with such provision as may be made by rules; and
(b) is to have such powers in connection with the discharge of his functions as may be provided by rules.
(5A) In subsections (1) and (2) “the appropriate regulator” means—
(a) in the case of a PRA-authorised person, the PRA;
(b) in any other case, the FCA.
(6) In subsections (1) to (3B) “auditor” or “actuary” means an auditor, or actuary, who satisfies such requirements as to qualifications, experience and other matters (if any) as may be specified.
(7) “Specified” means specified in rules.
(8) The powers conferred by this section enable only the making of such rules as appear to the regulator making them to be necessary or expedient—
(a) in the case of the FCA, for the purpose of advancing one or more of its operational objectives, or
(b) in the case of the PRA, for the purpose of advancing any of its objectives.
(1) An appointed auditor of, or an appointed actuary acting for, an authorised person—
(a) has a right of access at all times to the authorised person’s books, accounts and vouchers; and
(b) is entitled to require from the authorised person’s officers such information and explanations as he reasonably considers necessary for the performance of his duties as auditor or actuary.
(2) “Appointed” means appointed under or as a result of this Act.
342 Information given by auditor or actuary to a regulator.
(1) This section applies to a person who is, or has been, an auditor of an authorised person or recognised investment exchange, appointed under or as a result of a statutory provision.
(2) This section also applies to a person who is, or has been, an actuary acting for an authorised person and appointed under or as a result of a statutory provision.
(3) An auditor or actuary does not contravene any duty to which he is subject merely because he gives to a regulator—
(a) information on a matter of which he has, or had, become aware in his capacity as auditor of, or actuary acting for, the authorised person or recognised investment exchange, or
(b) his opinion on such a matter,
if he is acting in good faith and he reasonably believes that the information or opinion is relevant to any functions of that regulator.
(4) Subsection (3) applies whether or not the auditor or actuary is responding to a request from the regulator.
(5) The Treasury may make regulations prescribing circumstances in which an auditor or actuary must communicate matters to a regulator as mentioned in subsection (3).
(6) It is the duty of an auditor or actuary to whom any such regulations apply to communicate a matter to a regulator in the circumstances prescribed by the regulations.
(6A) If the authorised person concerned is a credit institution or an investment firm, and an auditor or actuary communicates a matter to a regulator in accordance with the regulations, the matter must be disclosed simultaneously to the management body of the authorised person, unless there are compelling reasons not to do so.
(7) The matters to be communicated to a regulator in accordance with the regulations may include matters relating to persons other than the authorised person or recognised investment exchange concerned.
(8) In subsection (6A) “investment firm” has the same meaning as in Article 4(1) of the capital requirements regulation.
343 Information given by auditor or actuary to a regulator: persons with close links.
(1) This section applies to a person who—
(a) is, or has been, an auditor of an authorised person or recognised investment exchange, appointed under or as a result of a statutory provision; and
(b) is, or has been, an auditor of a person (“CL”) who has close links with the authorised person or recognised investment exchange.
(2) This section also applies to a person who—
(a) is, or has been, an actuary acting for an authorised person and appointed under or as a result of a statutory provision; and
(b) is, or has been, an actuary acting for a person (“CL”) who has close links with the authorised person.
(3) An auditor or actuary does not contravene any duty to which he is subject merely because he gives to a regulator—
(a) information on a matter concerning the authorised person or recognised investment exchange of which he has, or had, become aware in his capacity as auditor of, or actuary acting for, CL, or
(b) his opinion on such a matter,
if he is acting in good faith and he reasonably believes that the information or opinion is relevant to any functions of that regulator.
(4) Subsection (3) applies whether or not the auditor or actuary is responding to a request from the regulator.
(5) The Treasury may make regulations prescribing circumstances in which an auditor or actuary must communicate matters to a regulator as mentioned in subsection (3).
(6) It is the duty of an auditor or actuary to whom any such regulations apply to communicate a matter to a regulator in the circumstances prescribed by the regulations.
(6A) If the authorised person concerned is a credit institution or an investment firm, and an auditor or actuary communicates a matter to a regulator in accordance with the regulations, the matter must be disclosed simultaneously to the management body of the authorised person, unless there are compelling reasons not to do so.
(7) The matters to be communicated to a regulator in accordance with the regulations may include matters relating to persons other than the authorised person or recognised investment exchange concerned.
(8) CL has close links with the authorised person or recognised investment exchange concerned (“A”) if CL is—
(a) a parent undertaking of A;
(b) a subsidiary undertaking of A;
(c) a parent undertaking of a subsidiary undertaking of A; or
(d) a subsidiary undertaking of a parent undertaking of A.
(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(10) In subsection (6A) “investment firm” has the same meaning as in Article 4(1) of the capital requirements regulation.
344 Duty of auditor or actuary resigning etc. to give notice.
(1) This section applies to an auditor or actuary to whom section 342 applies.
(2) He must without delay notify the appropriate regulator if he—
(a) is removed from office by an authorised person or recognised investment exchange;
(b) resigns before the expiry of his term of office with such a person; or
(c) is not re-appointed by such a person.
(3) If he ceases to be an auditor of, or actuary acting for, such a person, he must without delay notify the appropriate regulator—
(a) of any matter connected with his so ceasing which he thinks ought to be drawn to the regulator's attention; or
(b) that there is no such matter.
(4) In this section “the appropriate regulator” means—
(a) in the case of an auditor of, or an actuary acting for, a PRA-authorised person, the PRA;
(b) in any other case, the FCA.
(1) Subsection (2) applies if it appears to the FCA that an auditor or actuary to whom section 342 applies—
(a) has failed to comply with a duty imposed on the auditor or actuary by rules made by the FCA, or
(b) has failed to comply with a duty imposed under this Act to communicate information to the FCA.
(2) The FCA may do one or more of the following—
(a) disqualify the auditor or actuary from being the auditor of, or (as the case may be) from acting as an actuary for, any authorised person or any particular class of authorised person;
(b) disqualify the auditor from being the auditor of any recognised investment exchange or any particular class of recognised investment exchange;
(c) publish a statement to the effect that it appears to the FCA that the auditor or (as the case may be) actuary has failed to comply with the duty;
(d) impose on the auditor or actuary a penalty, payable to the FCA, of such amount as the FCA considers appropriate.
(3) If an auditor or actuary has been disqualified by the PRA under section 345A(4)(a), the FCA may disqualify the auditor or actuary, so long as the disqualification under that provision remains in force, from being the auditor of, or (as the case may be) from acting as an actuary for—
(a) any FCA-authorised person,
(b) any particular class of FCA-authorised person,
(c) any recognised investment exchange, or
(d) any particular class of recognised investment exchange.
(4) In subsection (3) “FCA-authorised person” means an authorised person who is not a PRA-authorised person.
(5) Where under subsection (2) or (3) the FCA disqualifies a person from being the auditor of an authorised person or recognised investment exchange or class of authorised person or recognised investment exchange and that authorised person or recognised investment exchange is also, or any person within that class is also, a recognised clearing house or a recognised CSD, the FCA must —
(a) notify the Bank of England, and
(b) notify the disqualified person that it has made a notification under paragraph (a).
(6) The FCA may remove any disqualification imposed under paragraph (a) or (b) of subsection (2) if satisfied that the disqualified person will in future comply with the duty in question.
(7) The FCA may at any time remove any disqualification imposed under subsection (3).
(1) The following provisions of this section have effect only if the Treasury, by order made after consultation with the PRA, so provide.
(2) Subsection (3) applies if it appears to the PRA that an auditor or actuary to whom section 342 applies—
(a) has failed to comply with a duty imposed on the auditor or actuary by rules made by the PRA, or
(b) has failed to comply with a duty imposed under this Act to communicate information to the PRA.
(3) The PRA may exercise one or more of the specified powers.
(4) The specified powers are such one or more of the following as may be specified in the order under subsection (1)—
(a) to disqualify the auditor or actuary from being the auditor of, or (as the case may be) from acting as an actuary for, any PRA-authorised person or any particular class of PRA-authorised person;
(b) to publish a statement to the effect that it appears to the PRA that the auditor or (as the case may be) actuary has failed to comply with the duty;
(c) to impose on the auditor or actuary a penalty, payable to the PRA, of such amount as the PRA considers appropriate.
(5) Where the PRA disqualifies a person under subsection (4)(a) it must—
(a) notify the FCA, and
(b) notify the person concerned that it has made a notification under paragraph (a).
(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7) The PRA may remove any disqualification imposed under subsection (4)(a) if satisfied that the disqualified person will in future comply with the duty in question.
(1) If the FCA proposes to act under section 345(2) or the PRA proposes to act under section 345A(3), it must give the auditor or actuary to whom the action would relate 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 FCA decides to act under section 345(2) or the PRA decides to act under section 345A(3), it must give the auditor or actuary to whom the action would relate a decision notice.
(5) A decision notice about the imposition of a penalty must state the amount of the penalty.
(6) A decision notice about the publication of a statement must set out the terms of the statement.
(7) If the FCA decides to act under section 345(2) or the PRA decides to act under section 345A(3), the auditor or actuary concerned may refer the matter to the Tribunal.
After a statement under section 345(2)(c) or 345A(4)(b) is published, the regulator that published it must send a copy of the statement to—
(a) the auditor or actuary, and
(b) any person to whom a copy of the decision notice was given under section 393(4).
345D Imposition of penalties on auditors or actuaries: statement of policy
(1) The FCA must prepare and issue a statement of its policy with respect to—
(a) the imposition of penalties under section 345(2)(d), and
(b) the amount of penalties under that provision.
(2) If by virtue of an order under section 345A(1), the PRA has power to impose penalties under section 345A(4)(c), the PRA must prepare and issue a statement of its policy with respect to—
(a) the imposition of penalties under section 345A(4)(c), and
(b) the amount of penalties under that provision.
(3) 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, and
(b) the extent to which the contravention was deliberate or reckless.
(4) A regulator may at any time alter or replace a statement issued under this section.
(5) If a statement issued under this section is altered or replaced, the regulator must issue the altered or replacement statement.
(6) A regulator must, without delay, give the Treasury a copy of any statement which it publishes under this section.
(7) A statement issued under this section must be published by the regulator in the way appearing to the regulator to be best calculated to bring it to the attention of the public.
(8) In deciding whether to exercise a power under section 345(2)(d) in the case of any particular contravention, the FCA must have regard to any statement of policy published by it under this section and in force at a time when the contravention occurred.
(9) In deciding whether to exercise a power under section 345A(4)(c) in the case of any particular contravention, the PRA must have regard to any statement of policy published by it under this section and in force at a time when the contravention occurred.
(10) A regulator may charge a reasonable fee for providing a person with a copy of the statement.
(1) Before a regulator issues a statement under section 345D, the regulator must publish a draft of the proposed statement in the way appearing to the regulator 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 regulator within a specified time.
(3) Before issuing the proposed statement, the regulator must have regard to any representations made to it in accordance with subsection (2).
(4) If the regulator 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 opinion of the regulator, significant, the regulator must (in addition to complying with subsection (4)) publish details of the difference.
(6) A regulator may charge a reasonable fee for providing a person with a copy of a draft under subsection (1).
(7) This section also applies to a proposal to alter or replace a statement.
346 Provision of false or misleading information to auditor or actuary.
(1) An authorised person who knowingly or recklessly gives an appointed auditor or actuary information which is false or misleading in a material particular is guilty of an offence and liable—
(a) on summary conviction, to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum, or both;
(b) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine, or both.
(2) Subsection (1) applies equally to an officer, controller or manager of an authorised person.
(3) “Appointed” means appointed under or as a result of this Act.
(1) The FCA must maintain a record of every—
(a) person who appears to the FCA to be an authorised person;
(b) authorised unit trust scheme;
(ba) authorised contractual scheme;
(c) authorised open-ended investment company;
(d) recognised scheme;
(e) recognised investment exchange;
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(g) individual to whom a prohibition order or Part 9C prohibition order , Part 9C prohibition order or Part 18 prohibition order relates;
(h) approved person; . . .
(hza) Part 18 approved person;
(ha) person to whom subsection (2A) applies; ...
(hb) appointed representative to whom subsection (2B) applies;
(hc) appointed representative to whom subsection (2C) applies; and
(i) person falling within such other class (if any) as the FCA may determine.
(2) The record must include such information as the FCA considers appropriate and at least the following information—
(a) in the case of a person appearing to the FCA to be an authorised person—
(i) information as to the services which he holds himself out as able to provide; and
(ii) any address of which the FCA is aware at which a notice or other document may be served on him;
(b) in the case of an authorised unit trust scheme, the name and address of the manager and trustee of the scheme;
(ba) in the case of an authorised contractual scheme, the name and address of the operator and depositary of the scheme;
(c) in the case of an authorised open-ended investment company, the name and address of—
(i) the company;
(ii) if it has only one director, the director; and
(iii) its depositary (if any);
(d) in the case of a recognised scheme, the name and address of—
(i) the operator of the scheme; and
(ii) any representative of the operator in the United Kingdom;
(e) in the case of a recognised investment exchange ... the name and address of the exchange ...;
(f) in the case of an individual to whom a prohibition order , Part 9C prohibition order or Part 18 prohibition order relates—
(i) his name; and
(ii) details of the effect of the order;
(g) in the case of a person who is an approved person—
(i) his name;
(ii) the name of the authorised person concerned;
(iii) if the approved person is performing a controlled function under an arrangement with a contractor of the authorised person concerned, the name of the contractor.
(iv) ... whether or not the person is a senior manager;
(h) in the case of an approved person who is a senior manager in relation to an authorised person—
(i) whether a final notice has been given to the person under section 390; and
(ii) if so, any information about the matter to which the notice relates which has been published under section 391(4).
(ha) in the case of a person who is a Part 18 approved person—
(i) the person’s name;
(ii) the name of the relevant recognised body concerned;
(iii) if the Part 18 approved person is performing a designated senior management function under an arrangement with a contractor of the relevant recognised body concerned, the name of the contractor;
(iv) whether a final notice has been given to the person under section 390;
(v) if so, any information about the matter to which the notice relates which has been published under section 391(4);
(i) in the case of a mortgage intermediary—
(i) the names of the persons within the management who are responsible for the activities specified by article 25A (arranging regulated mortgage contracts), article 36A (credit broking), article 53A (advising on regulated mortgage contracts) and article 53DA (advising on regulated credit agreements the purpose of which is to acquire land) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001; and
(ii) whether the mortgage intermediary is a tied mortgage intermediary or not;
(j) in the case of an appointed representative to whom subsection (2B) applies, the name of the mortgage intermediary on whose behalf the appointed representative acts;
(2A) This subsection applies to—
(a) an appointed representative to whom subsection (1A) or (1AA) of section 39 applies for whom the applicable register (as defined by subsection (1B) of that section) is the record maintained by virtue of subsection (1)(ha) above; and
(b) a person mentioned in subsection (1)(a) of section 39A if—
(i) the contract with an authorised person to which he is party complies with the applicable requirements (as defined by subsection (7) of that section), and
(ii) the authorised person has accepted responsibility in writing for the person's activities in carrying on investment services business (as defined by subsection (8) of that section); ...
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2B) This subsection applies to an appointed representative to whom section 39(1BA) applies or to whom that subsection would apply if the requirements of section 39(1BB) were not met.
(2C) This subsection applies to an appointed representative of an authorised person who has a Part 4A permission by virtue of regulation 4 or 7 of the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/XXXX).
(3) If it appears to the FCA that a person in respect of whom there is an entry in the record as a result of one of the paragraphs of subsection (1) has ceased to be a person to whom that paragraph applies, the FCA may remove the entry from the record.
(3A) But if a person ceases to be a person to whom one of the paragraphs of subsection (1) applies as a result of a cancellation of that person's Part 4A permission under section 55J because one or more of the conditions in section 55K(1)(b) to (d) was met, the power conferred by subsection (3) is not exercisable for a period of five years from the date on which the person ceased to be a person to whom subsection (1) applied.
(3B) Where the power conferred by subsection (3) is not exercisable in respect of an entry in the record as a result of subsection (3A) the FCA must—
(a) make a note in the record that it considers the person to whom the entry relates has ceased to be person to whom one of the paragraphs of subsection (1) applies as a result of a cancellation of that person’s Part 4A permission for a reason mentioned in subsection (3A)(a) or (b); and
(b) state why it considers that is the case.
(4) But if the FCA decides not to remove the entry, it must—
(a) make a note to that effect in the record; and
(b) state why it considers that the person has ceased to be a person to whom that paragraph applies in any case where it has not already done so under subsection (3B).
(4A) If the FCA cancels or varies the Part 4A permission of a mortgage intermediary and as a result the person to whom the entry relates no longer has a Part 4A permission to carry on a relevant mortgage activity within the meaning of section 55J(6C), the FCA must delete mention of such permission from the record without undue delay.
(5) The FCA must—
(a) make the record available for inspection by members of the public in a legible form at such times and in such place or places as the FCA may determine; and
(b) provide a certified copy of the record, or any part of it, to any person who asks for it—
(i) on payment of the fee (if any) fixed by the FCA; and
(ii) in a form (either written or electronic) in which it is legible to the person asking for it.
(6) The FCA may—
(a) publish the record, or any part of it;
(b) exploit commercially the information contained in the record, or any part of that information.
(7) “Authorised unit trust scheme”, “authorised contractual scheme”, “authorised open-ended investment company” and “recognised scheme” have the same meaning as in Part XVII, and associated expressions are to be read accordingly.
(8) “Approved person” (except in the expression “Part 18 approved person”) means a person in relation to whom the FCA or the PRA has given its approval under section 59 and “controlled function” and “arrangement” have the same meaning as in that section.
(8ZA) “Part 18 approved person” means a person in relation to whom the FCA has given its approval under section 309G.
(8A) In this section—
...
...
“senior manager”, in relation to an authorised person, means a person who has approval under section 59 to perform a designated senior management function in relation to the carrying on by the authorised person of a regulated activity, and
“designated senior management function” has the meaning given by section 59ZB. —
in relation to an authorised person, has the meaning given by section 59ZB;
in relation to a relevant recognised body, has the meaning given by section 309G(3);
“relevant recognised body” has the same meaning as in Chapter 2A of Part 18 (see section 309A).
(9) The authorised person concerned”, in relation to an approved person, means the person on whose application approval under section 59 was given.
(10) “The relevant recognised body concerned”, in relation to a Part 18 approved person, means the relevant recognised body on whose application approval under section 309G was given.
347A Duty of PRA to disclose information relevant to the record
(1) The PRA must, for the purpose of assisting the FCA to comply with its duty under section 347—
(a) notify the FCA if the information included in the record as required under section 347(2)(a) appears to the PRA to be incomplete or inaccurate,
(b) if it makes a prohibition order relating to an individual, provide the FCA with information falling within section 347(2)(f) in relation to that order,
(c) where it is the appropriate regulator in relation to an approved person, provide the FCA with information falling within section 347(2)(g) in relation to that approved person, and
(d) where the FCA has notified the PRA that it considers it appropriate to include in the record information of a certain description, disclose to the FCA such information of that description as the PRA has in its possession.
(2) The duty to provide information under this section does not apply to information which the PRA reasonably believes is in the possession of the FCA.
(3) Subsection (1) does not require or authorise the disclosure of information whose disclosure is prohibited by or under section 348.
(4) This section is without prejudice to any other power to disclose information.
(5) In this section references to the “record” are to the record maintained under section 347.
348 Restrictions on disclosure of confidential information by FCA, PRA etc.
(1) Confidential information must not be disclosed by a primary recipient, or by any person obtaining the information directly or indirectly from a primary recipient, without the consent of—
(a) the person from whom the primary recipient obtained the information; and
(b) if different, the person to whom it relates.
(2) In this Part “confidential information” means information which—
(a) relates to the business or other affairs of any person;
(b) was received by the primary recipient for the purposes of, or in the discharge of, any functions of the FCA, the PRA ... or the Secretary of State under any provision made by or under this Act; and
(c) is not prevented from being confidential information by subsection (4).
(2A) Where the primary recipient is a person appointed under section 377G to act as the manager of a write-down order, subsection (2)(b) has effect as if the reference to the discharge of functions of the FCA, PRA or Secretary of State were to the functions of that person.
(3) It is immaterial for the purposes of subsection (2) whether or not the information was received—
(a) by virtue of a requirement to provide it imposed by or under this Act;
(b) for other purposes as well as purposes mentioned in that subsection.
(4) Information is not confidential information if—
(a) it has been made available to the public by virtue of being disclosed in any circumstances in which, or for any purposes for which, disclosure is not precluded by this section; or
(b) it is in the form of a summary or collection of information so framed that it is not possible to ascertain from it information relating to any particular person.
(5) Each of the following is a primary recipient for the purposes of this Part—
(a) the FCA;
(aa) the Bank of England;
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c) the Secretary of State;
(zd) a person appointed to act as a temporary manager by the FCA or the PRA under section 71C;
(d) a person appointed to collect or update information under section 166A or to make a report under section 166;
(da) a person appointed under section 377G to act as the manager of a write-down order;
(e) any person who is or has been employed by a person mentioned in paragraphs (a) to (c);
(ea) a person who is or has been engaged to provide services to a person mentioned in those paragraphs;
(f) any auditor or expert instructed by a person mentioned in those paragraphs.
(6) In subsection (5)(f) “expert” includes—
(a) a competent person appointed by the FCA under section 97;
(b) a competent person appointed by the FCA, the PRA or the Secretary of State to conduct an investigation under Part XI;
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7) Nothing in this section applies to information received by a primary recipient for the purposes of, or in the discharge of, any functions of the FCA under the Competition Act 1998 or the Enterprise Act 2002 by virtue of Part 16A of this Act.
(For provision about the disclosure of such information, see Part 9 of the Enterprise Act 2002.)
(8) In this section references to the Bank of England include the Bank acting in its capacity as the PRA.
(1) Section 348 does not prevent a disclosure of confidential information which is—
(a) made for the purpose of facilitating the carrying out of a public function; and
(b) permitted by regulations made by the Treasury under this section.
(2) The regulations may, in particular, make provision permitting the disclosure of confidential information or of confidential information of a prescribed kind—
(a) by prescribed recipients, or recipients of a prescribed description, to any person for the purpose of enabling or assisting the recipient to discharge prescribed public functions;
(b) by prescribed recipients, or recipients of a prescribed description, to prescribed persons, or persons of prescribed descriptions, for the purpose of enabling or assisting those persons to discharge prescribed public functions;
(c) by the FCA or the PRA to the Treasury or the Secretary of State for any purpose;
(d) by any recipient if the disclosure is with a view to or in connection with prescribed proceedings.
(3) The regulations may also include provision—
(a) making any permission to disclose confidential information subject to conditions (which may relate to the obtaining of consents or any other matter);
(b) restricting the uses to which confidential information disclosed under the regulations may be put.
(3A) Section 348 does not apply to—
(a) the disclosure by the Panel on Takeovers and Mergers of confidential information disclosed to it by the FCA or the PRA in reliance on subsection (1);
(b) the disclosure of such information by a person obtaining it directly or indirectly from the Panel on Takeovers and Mergers.
(3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) In relation to confidential information, each of the following is a “recipient”—
(a) a primary recipient;
(b) a person obtaining the information directly or indirectly from a primary recipient.
(5) “Public functions” includes—
(a) functions conferred by or in accordance with any provision contained in any enactment or subordinate legislation;
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c) similar functions to those referred to in paragraph (a) conferred on persons by or under provisions having effect as part of the law of a country or territory outside the United Kingdom;
(d) functions exercisable in relation to prescribed disciplinary proceedings.
(6) “Enactment” includes—
(a) an Act of the Scottish Parliament;
(b) Northern Ireland legislation.
(7) “Subordinate legislation” has the meaning given in the Interpretation Act 1978 and also includes an instrument made under an Act of the Scottish Parliament or under Northern Ireland legislation.
(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .