55O Imposition of requirements on acquisition of control
(1) This section applies if it appears to the appropriate regulator that—
(a) a person has acquired control over a UK authorised person who has a Part 4A permission, but
(b) there are no grounds for exercising its own-initiative requirement power or (as the case may be) the power under section 55NA(5)(b).
(2) If it appears to the appropriate regulator that the likely effect of the acquisition of control on the UK authorised person, or on any of its activities, is uncertain, the appropriate regulator may—
(a) impose on the UK authorised person a requirement that could be imposed by that regulator under section 55L , 55M or 55NA (as the case may be) on the giving of permission, or
(b) vary a requirement imposed by that regulator under that section on the UK authorised person.
(3) “The appropriate regulator” means—
(a) in a case where the UK authorised person is a PRA-authorised person and the case does not relate to a requirement that is imposed (or that could be imposed) under section 55NA, the FCA or the PRA;
(b) in any other case, the FCA.
(4) This section does not affect any duty of the appropriate regulator to consult or obtain the consent of the other regulator in connection with the imposition of the requirement.
(5) Any reference to a person having acquired control is to be read in accordance with Part 12.
(1) This section applies if—
(a) on a person being given a Part 4A permission, either regulator imposes an assets requirement on that person,
(b) an assets requirement is imposed on an authorised person, or
(c) an assets requirement previously imposed on such a person is varied.
(2) A person on whom an assets requirement is imposed is referred to in this section as “A”.
(3) The “appropriate regulator” is the regulator which imposed the requirement.
(4) “Assets requirement” means a requirement under section 55L or 55M—
(a) prohibiting the disposal of, or other dealing with, any of A's assets (whether in the United Kingdom or elsewhere) or restricting such disposals or dealings, or
(b) that all or any of A's assets, or all or any assets belonging to consumers but held by A or to A's order, must be transferred to and held by a trustee approved by the appropriate regulator.
(5) If the appropriate regulator—
(a) imposes a requirement of the kind mentioned in subsection (4)(a), and
(b) gives notice of the requirement to any institution with whom A keeps an account,
the notice has the effects mentioned in subsection (6).
(6) Those effects are that—
(a) the institution does not act in breach of any contract with A if, having been instructed by A (or on A's behalf) to transfer any sum or otherwise make any payment out of A'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 appropriate regulator an amount equal to the amount transferred from, or otherwise paid out of, A's account in contravention of the requirement.
(7) If the appropriate regulator imposes a requirement of the kind mentioned in subsection (4)(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 appropriate regulator.
(8) If, while a requirement of the kind mentioned in subsection (4)(b) is in force, A creates a charge over any assets of A held in accordance with the requirement, the charge is (to the extent that it confers security over the assets) void against the liquidator and any of A's creditors.
(9) Assets held by a person as trustee (“T”) are to be taken to be held by T in accordance with any requirement mentioned in subsection (4)(b) only if—
(a) A has given T written notice that those assets are to be held by T in accordance with the requirement, or
(b) they are assets into which assets to which paragraph (a) applies have been transposed by T on the instructions of A.
(10) A person who contravenes subsection (7) is guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.
(11) “Charge” includes a mortgage (or in Scotland a security over property).
(12) Subsections (7) and (9) 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 of the kind mentioned in subsection (4)(b).
(1) This section applies where—
(a) either regulator has imposed a general meeting requirement on an authorised person who is a bank, building society or investment firm,
(b) the authorised person has not complied with the general meeting requirement, and
(c) the appropriate regulator considers that the authorised person has infringed, or is likely in the near future to infringe—
(i) a relevant requirement within the meaning of section 204A; or
(ii) one or more of Articles 3 to 7, 14 to 17 or 24 to 26 of Regulation (EU) No 600/2014 of 15th May 2014 of the European Parliament and of the Council on Markets in Financial Instruments.
(2) A general meeting requirement is a requirement under section 55L or 55M that the authorised person call a general meeting of its shareholders or members.
(3) The appropriate regulator may call a general meeting of the shareholders or members of the authorised person.
(4) The appropriate regulator may propose business for consideration and decision at the general meeting.
(5) The meeting must be called in the same manner, as far as practicable, as that in which meetings are required to be called by the board of directors (or the equivalent management body) of the authorised person.
(6) For the purposes of this section—
“bank” has the meaning given in section 2 of the Banking Act 2009;
“building society” has the meaning given in the Building Societies Act 1986;
“investment firm” has the meaning given in Article 4(1)(2) of the capital requirements regulation;
“the appropriate regulator” means the regulator who imposed the general meeting requirement.
55Q Exercise of power in support of overseas regulator
(1) Either UK regulator's own-initiative powers may be exercised in respect of an authorised person at the request of, or for the purpose of assisting, an overseas regulator of a prescribed kind.
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) Subsection (1) does not affect any duty of one UK regulator to consult or obtain the consent of the other UK regulator in relation to the exercise of its own-initiative powers.
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) In deciding whether or not to exercise its own-initiative powers in response to a request, the UK regulator may take into account in particular—
(a) whether in the country or territory of the overseas regulator concerned, corresponding assistance would be given to a United Kingdom regulatory authority;
(b) whether the case concerns the breach of a law, or other requirement, which has no close parallel in the United Kingdom or involves the assertion of a jurisdiction not recognised by the United Kingdom;
(c) the seriousness of the case and its importance to persons in the United Kingdom;
(d) whether it is otherwise appropriate in the public interest to give the assistance sought.
(6) The UK regulator may decide not to exercise its own-initiative powers, in response to a request, unless the overseas regulator concerned undertakes to make such contribution towards the cost of their exercise as the UK regulator considers appropriate.
(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(8) In subsections (5) and (6) “request” means a request of a kind mentioned in subsection (1).
(9) In this section—
(a) “UK regulator” means the FCA or the PRA;
(b) “overseas regulator” means a regulator outside the United Kingdom;
(c) “own-initiative powers”, in relation to the FCA or the PRA, means its own-initiative variation power and its own-initiative requirement power.
For the purpose of any provision of this Part which refers to the FCA's operational objectives, the purpose for which the FCA must exercise its functions under Part 8B, or the PRA's objectives in relation to the exercise of a power in relation to a particular person, it does not matter whether there is a relationship between that person and the persons whose interests will be protected by the exercise of the power.
(1) An application for a Part 4A permission must—
(a) contain a statement of the regulated activity or regulated activities which the applicant proposes to carry on and for which the applicant wishes to have permission, and
(b) give the address of a place in the United Kingdom for service on the applicant of any notice or other document which is required or authorised to be served on the applicant under this Act.
(2) An application for the variation of a Part 4A permission must contain a statement—
(a) of the desired variation, and
(b) of the regulated activity or regulated activities which the applicant proposes to carry on if the permission is varied.
(3) An application for the variation of a requirement imposed under section 55L or 55M or for the imposition of a new requirement must contain a statement of the desired variation or requirement.
(3A) An application for permission under section 55NA, or for the variation of permission under that section, must contain a statement of the desired permission or variation.
(4) An application under this Part must—
(a) be made in such manner as the regulator to which it is to be made may direct, and
(b) contain, or be accompanied by, such other information as that regulator may reasonably require.
(5) At any time after the application is received and before it is determined, the appropriate regulator may require the applicant to provide it with such further information as it reasonably considers necessary to enable it to determine the application or, as the case requires, to decide whether to give consent.
(6) In subsection (5), the “appropriate regulator” means—
(a) in a case where the application is made to the FCA, the FCA;
(b) in a case where the application is made to the PRA, the FCA or the PRA.
(7) Different directions may be given, and different requirements imposed, in relation to different applications or categories of application.
(8) Each regulator may require an applicant to provide information which the applicant is required to provide to it under this section in such form, or to verify it in such a way, as the regulator may direct.
(9) The PRA must consult the FCA before—
(a) giving a direction under this section in relation to a class of applications, or
(b) imposing a requirement under this section in relation to a class of applications.
(1) An application under this Part must be determined by the regulator to which it is required to be made (“the appropriate regulator”) before the end of the period of 6 months beginning with the date on which it received the completed application.
(2) The appropriate regulator may determine an incomplete application if it considers it appropriate to do so; and it must in any event determine such an application within 12 months beginning with the date on which it received the application.
(3) Where the application cannot be determined by the appropriate regulator without the consent of the other regulator, the other regulator's decision must also be made within the period required by subsection (1) or (2).
(4) The applicant may withdraw the application, by giving the appropriate regulator written notice, at any time before the appropriate regulator determines it.
(5) If the appropriate regulator grants an application—
(a) for Part 4A permission,
(b) for the variation or cancellation of a Part 4A permission,
(c) for the variation or cancellation of a requirement imposed under section 55L or 55M, ...
(d) for the imposition of a new requirement under either of those sections , or
(e) for permission under section 55NA or for the variation or cancellation of permission granted under that section,
it must give the applicant written notice.
(6) The notice must state the date from which the permission, variation, cancellation or requirement has effect.
(7) A notice under this section which is given by the PRA and relates to the grant of an application for Part 4A permission or for the variation of a Part 4A permission must state that the FCA has given its consent to the grant of the application.
(8) In the case of an application for permission under this Part which—
(a) relates to the regulated activity of managing an AIF, and
(b) would if granted result in the applicant becoming a full-scope UKAIFM,
this section has effect subject to regulation 5 of the Alternative Investment Fund Managers Regulations 2013 and, accordingly, subsections (1) to (3) do not apply.
(9) In the case of an application which—
(a) is for a Part 4A permission or a variation of a Part 4A permission, and
(b) relates only to the undertaking of insurance distribution activity,
subsection (1) has effect as if the reference to “6 months” were to “3 months”.
(10) In this section, “insurance distribution activity” has the meaning given in article 92 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.
55W Applications under this Part: communications between regulators
The PRA must as soon as practicable notify the FCA of the receipt or withdrawal of—
(a) an application for permission under section 55A,
(b) an application under section 55I, or
(c) an application under section 55M(5).
55X Determination of applications: warning notices and decision notices
(1) If a regulator proposes—
(a) to give a Part 4A permission but to exercise its power under section 55E(5)(a) or (b) or 55F(4)(a) or (b),
(b) to give a Part 4A permission but to exercise its power under section 55L(1) or 55M(1) in connection with the application for permission,
(c) to vary a Part 4A permission on the application of an authorised person but to exercise its power under section 55E(5)(a) or (b) or 55F(4)(a) or (b),
(d) to vary a Part 4A permission but to exercise its power under section 55L(1) or 55M(1) in connection with the application for variation, ...
(e) in the case of the FCA, to exercise its power under section 55L(1) in connection with an application to the PRA for a Part 4A permission or the variation of a Part 4A permission,
(f) to give permission under section 55NA but to exercise its power under subsection (4)(b) of that section, or
(g) to vary permission under section 55NA on the application of an authorised person but to exercise its power under subsection (4)(b) of that section,
it must give the applicant a warning notice.
(2) If a regulator proposes to refuse an application made under this Part, it must ... give the applicant a warning notice.
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) If a regulator decides—
(a) to give a Part 4A permission but to exercise its power under section 55E(5)(a) or (b) or 55F(4)(a) or (b),
(b) to give a Part 4A permission but to exercise its power under section 55L(1) or 55M(1) in connection with the giving of the permission,
(c) to vary a Part 4A permission on the application of an authorised person but to exercise its power under section 55E(5)(a) or (b) or 55F(4)(a) or (b),
(d) to vary a Part 4A permission on the application of an authorised person but to exercise its power under section 55L(1) or 55M(1) in connection with the variation,
(e) in the case of the FCA, to exercise its power under section 55L(1) in connection with an application to the PRA for a Part 4A permission or the variation of a Part 4A permission, ...
(ea) to give permission under section 55NA but to exercise its power under subsection (4)(b) of that section,
(eb) to vary permission under section 55NA on the application of an authorised person but to exercise its power under subsection (4)(b) of that section, or
(f) to refuse an application under this Part,
it must give the applicant a decision notice.
(5) This section does not apply to applications to which section 55XA applies.
55XA Applications relating to administering a benchmark
(1) If the FCA decides—
(a) to give a Part 4A permission to carry on the regulated activity specified in article 63S of the RAO (administering a benchmark) but to exercise its power in section 55E(5)(a) or (b) in connection with the application for permission,
(b) to give a Part 4A permission to carry on the regulated activity specified in article 63S of the RAO (administering a benchmark) but to exercise its power in section 55L(1) in connection with the application for permission,
(c) to vary a Part 4A permission to include permission to carry on the regulated activity specified in article 63S of the RAO (administering a benchmark) on the application of an authorised person but to exercise its power in section 55E(5)(a) or (b) in connection with the application for variation,
(d) to vary a Part 4A permission to include permission to carry on the regulated activity specified in article 63S of the RAO (administering a benchmark) on the application of an authorised person but to exercise its power in section 55L(1) in connection with the application for variation,
(e) to refuse an application for a Part 4A permission to carry on the regulated activity specified in article 63S of the RAO (administering a benchmark), or
(f) to refuse an application for a variation of a Part 4A permission to include permission to carry on the regulated activity specified in article 63S of the RAO (administering a benchmark),
it must give the applicant a written notice.
(2) A written notice under subsection (1) must—
(a) give details of the decision made by the FCA,
(b) state the FCA's reasons for the decision,
(c) state whether the decision takes effect immediately or on such date as may be specified in the notice,
(d) inform the applicant that the applicant may either—
(i) request a review of the decision, and make written representations for the purpose of the review, within such period as may be specified in the notice, or
(ii) refer the matter to the Tribunal within such period as may be specified in the notice, and
(e) indicate the procedure on a reference to the Tribunal.
(3) If the applicant requests a review of the decision made by the FCA (“the original decision”), the FCA must consider any written representations made by the applicant and review the original decision.
(4) On a review under subsection (3) the FCA may make any decision (“the new decision”) the FCA could have made on the application.
(5) The FCA must give the applicant written notice of its decision on the review.
(6) If the new decision is to do any of the things mentioned in subsection (1)(a) to (f), the written notice under subsection (5) must—
(a) give details of the new decision made by the FCA,
(b) state the FCA's reasons for the new decision,
(c) inform the applicant that the applicant may, within such period as may be specified in the notice, refer the new decision to the Tribunal, and
(d) indicate the procedure on a reference to the Tribunal.
(8) In this section “the RAO” means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.
(1) This section applies to an exercise of either regulator's own-initiative variation power or own-initiative requirement power in relation to an authorised person (“A”).
(1A) This section also applies to an exercise of the FCA’s power under subsection (5)(b) of section 55NA to vary of its own initiative a permission given under that section to an authorised person (“A”).
(1B) References in this section to a regulator’s own initiative variation power are to be taken as including the power mentioned in subsection (1A).
(2) A variation of a permission or the imposition or variation of a requirement takes effect—
(a) immediately, if the notice given under subsection (4) states that 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.
(3) A variation of a permission, or the imposition or variation of a requirement, may be expressed to take effect immediately (or on a specified date) only if the regulator concerned, having regard to the ground on which it is exercising its own-initiative variation power or own-initiative requirement power, reasonably considers that it is necessary for the variation, or the imposition or variation of the requirement, to take effect immediately (or on that date).
(4) If either regulator—
(a) proposes to vary a Part 4A permission or to impose or vary a requirement,
(b) varies a Part 4A permission, or imposes or varies a requirement, with immediate effect,
(c) proposes to vary a permission under section 55NA, or
(d) varies permission under section 55NA with immediate effect,
it must give A written notice.
(5) The notice must—
(a) give details of the variation of the permission or the requirement or its variation,
(b) state the regulator's reasons for the variation of the permission or the imposition or variation of the requirement,
(c) inform A that A may make representations to the regulator within such period as may be specified in the notice (whether or not A has referred the matter to the Tribunal),
(d) inform A of when the variation of the permission or the imposition or variation of the requirement takes effect, and
(e) inform A of A's right to refer the matter to the Tribunal.
(6) The regulator may extend the period allowed under the notice for making representations.
(7) If, having considered any representations made by A, the regulator decides—
(a) to vary the permission, or impose or vary the requirement, in the way proposed, or
(b) if the permission has been varied or the requirement imposed or varied, not to rescind the variation of the permission or the imposition or variation of the requirement,
it must give A written notice.
(8) If, having considered any representations made by A, the regulator decides—
(a) not to vary the permission, or impose or vary the requirement, in the way proposed,
(b) to vary the permission or requirement in a different way, or impose a different requirement, or
(c) to rescind a variation or requirement which has effect,
it must give A written notice.
(9) A notice under subsection (7) must inform A of A's right to refer the matter to the Tribunal.
(10) A notice under subsection (8)(b) must comply with subsection (5).
(11) If a notice informs A of A's right to refer a matter to the Tribunal, it must give an indication of the procedure on such a reference.
(12) For the purposes of subsection (2)(c), whether a matter is open to review is to be determined in accordance with section 391(8).
55Z Cancellation of Part 4A permission or permission under section 55NA: procedure
(1) If a regulator proposes to cancel an authorised person's Part 4A permission or permission under section 55NA otherwise than at the person's request, it must give the person a warning notice.
(2) If a regulator decides to cancel an authorised person's Part 4A permission or permission under section 55NA otherwise than at the person's request, it must give the person a decision notice.
(1) An applicant who is aggrieved by the determination of an application made under this Part may refer the matter to the Tribunal.
(2) An authorised person who is aggrieved by the exercise by either regulator of its own-initiative variation power or its own-initiative requirement power may refer the matter to the Tribunal.
(2A) An authorised person who is aggrieved by the exercise by the FCA of its power under section 55NA(5)(b) may refer the matter to the Tribunal.
(3) Where there is a review under section 55XA(3) of a determination within section 55XA(1), subsection (1) applies only in relation to the determination made on the review.
In this Part—
“own-initiative requirement power”, in relation to the FCA or the PRA, is to be read in accordance with section 55L(4) or 55M(4);
“own-initiative variation power”, in relation to the FCA or the PRA, is to be read in accordance with section 55J(12).
(1) The FCA may make a prohibition order if it appears to it that an individual is not a fit and proper person to perform functions in relation to a regulated activity carried on by—
(a) an authorised person,
(b) a person who is an exempt person in relation to that activity, or
(c) a person to whom, as a result of Part 20, the general prohibition does not apply in relation to that activity.
(1A) The PRA may make a prohibition order if it appears to it that an individual is not a fit and proper person to perform functions in relation to a regulated activity carried on by—
(a) a PRA-authorised person, or
(b) a person who is an exempt person in relation to a PRA-regulated activity carried on by the person.
(2) A “prohibition order” is an order prohibiting the individual from performing a specified function, any function falling within a specified description or any function.
(3) A prohibition order may relate to—
(a) a specified regulated activity, any regulated activity falling within a specified description or all regulated activities;
(b) all persons falling within subsection (3A) or a particular paragraph of that subsection or all persons within a specified class of person falling within a particular paragraph of that subsection.
(3A) A person falls within this subsection if the person is—
(a) an authorised person,
(b) an exempt person, or
(c) a person to whom, as a result of Part 20, the general prohibition does not apply in relation to a regulated activity.
(4) An individual who performs or agrees to perform a function in breach of a prohibition order is guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.
(5) In proceedings for an offence under subsection (4) 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.
(6) A person falling within subsection (3A) must take reasonable care to ensure that no function of his, in relation to the carrying on of a regulated activity, is performed by a person who is prohibited from performing that function by a prohibition order.
(7) The regulator that has made a prohibition order may, on the application of the individual named in the order, vary or revoke it.
(7A) If—
(a) the FCA proposes to vary or revoke a prohibition order, and
(b) as a result of the proposed variation or revocation, an individual—
(i) will no longer be prohibited from performing a function of interest to the PRA, or
(ii) will be prohibited from performing such a function,
the FCA must consult the PRA before varying or revoking the order.
(7B) A function is of interest to the PRA if it is performed in relation to a regulated activity carried on by—
(a) a PRA-authorised person, or
(b) a person who is an exempt person in relation to a PRA-regulated activity carried on by the person.
(7C) The PRA must consult the FCA before varying or revoking a prohibition order.
(7D) If—
(a) the FCA proposes to vary or revoke a prohibition order which makes provision in relation to a recognised body, and
(b) the FCA is not the appropriate regulator in relation to recognised bodies of that type,
the FCA must consult the appropriate regulator.
(7E) If the PRA proposes to vary or revoke a prohibition order which makes provision in relation to a recognised body, the PRA must consult the appropriate regulator in relation to recognised bodies of that type.
(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(9) “Specified” means specified in the prohibition order.
(9) In this section—
“the appropriate regulator”, in relation to a recognised body, has the meaning given by section 285A;
“recognised body” has the meaning given by section 313;
“specified” means specified in the prohibition order.
57 Prohibition orders: procedure and right to refer to Tribunal.
(1) If a regulator proposes to make a prohibition order it must give the individual concerned a warning notice.
(2) The warning notice must set out the terms of the prohibition.
(3) If a regulator decides to make a prohibition order it must give the individual concerned a decision notice.
(4) The decision notice must—
(a) name the individual to whom the prohibition order applies;
(b) set out the terms of the order; and
(c) be given to the individual named in the order.
(5) A person against whom a decision to make a prohibition order is made may refer the matter to the Tribunal.
(6) If—
(a) the FCA proposes to make a prohibition order, and
(b) as a result of the proposed order, an individual will be prohibited from performing a function of interest to the PRA,
the FCA must consult the PRA before giving a warning notice under this section.
(7) A function is of interest to the PRA if it is performed in relation to a regulated activity carried on by—
(a) a PRA-authorised person, or
(b) a person who is an exempt person in relation to a PRA-regulated activity carried on by the person.
(8) The PRA must consult the FCA before giving a warning notice under this section.
(9) If—
(a) the FCA proposes to make a prohibition order which makes provision in relation to a recognised body, and
(b) the FCA is not the appropriate regulator in relation to recognised bodies of that type,
the FCA must consult the appropriate regulator before giving a warning notice under this section.
(10) If the PRA proposes to make a prohibition order which makes provision in relation to a recognised body, the PRA must consult the appropriate regulator in relation to recognised bodies of that type before giving a warning notice under this section.
(11) In this section—
“the appropriate regulator”, in relation to a recognised body, has the meaning given by section 285A;
“recognised body” has the meaning given by section 313;
58 Applications relating to prohibitions: procedure and right to refer to Tribunal.
(1) This section applies to an application for the variation or revocation of a prohibition order.
(2) If the appropriate regulator decides to grant the application, it must give the applicant written notice of its decision.
(3) If the appropriate regulator proposes to refuse the application, it must give the applicant a warning notice.
(4) If the appropriate regulator decides to refuse the application, it must give the applicant a decision notice.
(5) If the appropriate regulator gives the applicant a decision notice, he may refer the matter to the Tribunal.
(6) The appropriate regulator” means the regulator to which the application is made.
(1) An authorised person (“A”) must take reasonable care to ensure that no person performs a controlled function under an arrangement entered into by A in relation to the carrying on by A of a regulated activity, unless that person is acting in accordance with an approval given by the appropriate regulator under this section.
(2) An authorised person (“A”) must take reasonable care to ensure that no person performs a controlled function under an arrangement entered into by a contractor of A in relation to the carrying on by A of a regulated activity, unless that person is acting in accordance with an approval given by the appropriate regulator under this section.
(3) “Controlled function”—
(a) in relation to the carrying on of a regulated activity by a PRA-authorised person, means a function of a description specified in rules made by the FCA or the PRA, and
(b) in relation to the carrying on of a regulated activity by any other authorised person, means a function of a description specified in rules made by the FCA.
(4) “The appropriate regulator”—
(a) in relation to a controlled function which is of a description specified in rules made by the FCA, means the FCA, and
(b) in relation to a controlled function which is of a description specified in rules made by the PRA, means the PRA with the consent of the FCA.
(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6) The PRA may specify a description of function under subsection (3)(a) only if, in relation to the carrying on of a regulated activity by a PRA-authorised person, it is satisfied that the function is a senior management function as defined in section 59ZA.
(6A) If the FCA is satisfied that a function of a description specified in rules made by the FCA under subsection (3)(a) or (b) is a senior management function as defined in section 59ZA, the FCA must designate the function in the rules as a senior management function.
(6B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7C) A regulator may not exercise the power in subsection (3) so as to provide for a function to be a controlled function in relation to the carrying on of the regulated activity of managing an AIF by an AIFM which—
(a) is also an AIF;
(b) does not manage any AIF other than itself;
(c) is a body corporate; and
(d) is not a collective investment scheme.
(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(10) “Arrangement”—
(a) means any kind of arrangement for the performance of a function of A which is entered into by A or any contractor of his with another person; and
(b) includes, in particular, that other person’s appointment to an office, his becoming a partner or his employment (whether under a contract of service or otherwise).
(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1) This section has effect for determining whether a function is for the purposes of section 59(6) or (6A) a senior management function.
(2) A function is a “senior management function”, in relation to the carrying on of a regulated activity by an authorised person, if—
(a) the function will require the person performing it to be responsible for managing one or more aspects of the authorised person's affairs, so far as relating to the activity, and
(b) those aspects involve, or might involve, a risk of serious consequences—
(i) for the authorised person, or
(ii) for business or other interests in the United Kingdom.
(3) In subsection (2)(a) the reference to managing one or more aspects of an authorised person's affairs includes a reference to taking decisions, or participating in the taking of decisions, about how one or more aspects of those affairs should be carried on.
For the purposes of this Part the following are “designated senior management functions”—
(a) a function of a description specified in rules made by the FCA under section 59(3)(a) or (b) which is designated as a senior management function by the FCA under section 59(6A);
(b) a function of a description specified in rules made by the PRA under section 59(3)(a).
59A Specifying functions as controlled functions: supplementary
(1) The FCA must—
(a) keep under review the exercise of its power under section 59(3)(a) to specify any senior management function as a controlled function, and
(b) exercise that power in a way that it considers will minimise the likelihood that approvals fall to be given by both the FCA and the PRA in respect of the performance by a person of senior management functions in relation to the carrying on of a regulated activity by the same PRA-authorised person.
(2) The FCA and the PRA must each consult the other before exercising any power under section 59(3)(a).
(3) Any reference in this section to the exercise of a power includes its exercise by way of amendment or revocation of provision previously made in the exercise of the power.
(3A) “Senior management function” has the meaning given by section 59ZA.
(4) “Approval” means an approval under section 59.
(5) Any expression which is used both in this section and section 59 has the same meaning in this section as in that section.
59AB Specifying functions as controlled functions: transitional provision
(1) In relation to rules made by the FCA or the PRA under section 59, the power conferred by section 137T(c) to make transitional provision includes in particular power—
(a) to provide for anything done under this Part or Chapter 2A of Part 18 in relation to controlled functions of a particular description to be treated as having been done in relation to controlled functions of a different description;
(b) to provide for anything done under this Part or Chapter 2A of Part 18 (including any application or order made, any requirement imposed and any approval or notice given) to cease to have effect, to continue to have effect, or to continue to have effect with modifications, or subject to time limits or conditions;
(c) to provide for rules made by the regulator making the rules under section 59 to apply with modifications;
(d) to make saving provision.
(2) The Treasury may by regulations make whatever incidental, consequential, transitional, supplemental or saving provision the Treasury consider appropriate in connection with the making of rules by the FCA or the PRA under section 59.
(3) Regulations under subsection (2) may—
(a) confer functions on the FCA or the PRA (including the function of making rules);
(b) modify, exclude or apply (with or without modifications) any primary or subordinate legislation (including any provision of, or made under, this Act).
(1) The FCA may arrange with the PRA that in such cases as may be described in the arrangements the PRA may give approval under section 59 without obtaining the consent of the FCA.
(2) Arrangements under this section must be in writing, and must specify the date on which they come into force.
(3) The regulators must publish any arrangements under this section in such manner as they think fit.
(4) Section 59(4)(b) has effect subject to any arrangements in force under this section.
(1) An application for the appropriate regulator's approval under section 59 may be made by the authorised person concerned.
(2) The application must—
(a) be made in such manner as the appropriate regulator may direct; and
(b) contain, or be accompanied by, such information as the appropriate regulator may reasonably require.
(2A) If—
(a) the application is for the approval of a person to perform a designated senior management function, ...
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
the appropriate regulator must require the application to contain, or be accompanied by, a statement setting out the aspects of the affairs of the authorised person concerned which it is intended that the person will be responsible for managing in performing the function.
(2B) A statement provided under subsection (2A) is known as a “statement of responsibilities”.
(2C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) At any time after the application is received and before it is determined, the appropriate regulator may require the applicant to provide it with such further information as it reasonably considers necessary to enable it to determine the application or, as the case requires, to decide whether to give consent.
(4) The appropriate regulator may require an applicant to present information which he is required to give under this section in such form, or to verify it in such a way, as the appropriate regulator may direct.
(5) Different directions may be given, and different requirements imposed, in relation to different applications or categories of application.
(6) “The authorised person concerned” includes a person who has applied for permission under Part 4A and will be the authorised person concerned if permission is given.
(6A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7) The PRA must consult the FCA before—
(a) giving a direction under subsection (2)(a) in relation to a class of applicants, or
(b) imposing a requirement under subsection (2)(b) on a class of applicants.
(8) The PRA must as soon as practicable notify the FCA of the receipt or withdrawal of an application to the PRA, unless the case is one in which by virtue of arrangements under section 59B the consent of the FCA is not required.
(9) “The appropriate regulator”—
(a) in relation to a controlled function which is of a description specified in rules made by the FCA, means the FCA;
(b) in relation to a controlled function which is of a description specified in rules made by the PRA, means the PRA, and for the purposes of subsection (3) also includes the FCA in cases where the consent of the FCA is required.
60A Vetting of candidates by ... authorised persons
(1) Before an authorised person may make an application for a regulator's approval under section 59, the authorised person must be satisfied that the person in respect of whom the application is made (“the candidate”) is a fit and proper person to perform the function to which the application relates.
(2) In deciding that question, the authorised person must have regard, in particular, to whether the candidate, or any person who may perform a function on the candidate's behalf—
(a) has obtained a qualification,
(b) has undergone, or is undergoing, training,
(c) possesses a level of competence, or
(d) has the personal characteristics,
required by general rules made by the regulator in relation to persons performing functions of the kind to which the application relates.
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1) The regulator to which an application for approval is made under section 60 may grant the application only if—
(a) it is satisfied that the person in respect of whom the application is made (“the candidate”) is a fit and proper person to perform the function to which the application relates, or
(b) in a case where the application is for approval to perform a designated senior management function ... (a “senior management application”), it is satisfied that the condition in paragraph (a) will be met if the application is granted subject to one or more conditions (as to which, see subsection (2B)).
(2) In determining the application, the regulator may have regard (among other things) to whether the candidate, or any person who may perform a function on his behalf—
(a) has obtained a qualification,
(b) has undergone, or is undergoing, training, ...
(c) possesses a level of competence, or
(d) has the personal characteristics,
required by general rules made by that regulator in relation to persons performing functions of the kind to which the application relates.
(2A) Subsections (1) and (2) apply in relation to the giving by the FCA of any required consent as they apply in relation to the grant of the application.
(2B) The regulator to which a ... senior management application is made under section 60 may in particular—
(a) grant the application subject to any conditions that the regulator considers appropriate, and
(b) grant the application so as to give approval only for a limited period.
(2C) A regulator may exercise the power under paragraph (a) or (b) of subsection (2B) only if—
(a) where the regulator is the FCA, it appears to the FCA that it is desirable to do so in order to advance one or more of its operational objectives, and
(b) where the regulator is the PRA, it appears to the PRA that it is desirable to do so in order to advance any of its objectives.
(2D) Consent given by the FCA for the granting of the application may be conditional on the manner in which the PRA exercises its power under subsection (2B).
(3) The regulator to which an application is made under section 60 must, before the end of the period for consideration, determine whether—
(a) to grant the application; or
(b) to give a warning notice under section 62(2).
(3ZA) In the case of a ... senior management application, the reference in subsection (3)(a) to granting the application is a reference to granting it without imposing conditions or limiting the period for which the approval has effect.
(3A) The period for consideration”—
(a) in any case where the application under section 60 is made by a person applying for permission under Part 4A (see section 60(6)), means whichever ends last of—
(i) the period within which the application for that permission must be determined under section 55V(1) or (2), and
(ii) the period of 3 months beginning with the date on which the regulator receives the application under section 60, and
(b) in any other case, means the period of 3 months beginning with the date on which the regulator receives the application under section 60.
(4) If a regulator imposes a requirement under section 60(3), the period for consideration stops running on the day on which the requirement is imposed but starts running again—
(a) on the day on which the required information is received by a regulator; or
(b) if the information is not provided on a single day, on the last of the days on which it is received by a regulator.
(5) A person who makes an application under section 60 may withdraw his application by giving written notice to the regulator to which the application was made at any time before the regulator determines it, but only with the consent of—
(a) the candidate; and
(b) the person by whom the candidate is to be retained to perform the function concerned, if not the applicant.
(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
62 Applications for approval: procedure and right to refer to Tribunal.
(1) If the regulator to which an application is made under section 60 (“an application”) decides to grant the application, it must give written notice of its decision to each of the interested parties.
(2) If the regulator to which an application is made proposes to refuse the application , or to grant the application subject to conditions or for a limited period (or both), it must give a warning notice to each of the interested parties.
(3) If the regulator to which an application is made decides to refuse the application , or to grant the application subject to conditions or for a limited period (or both), it must give a decision notice to each of the interested parties.
(4) If the regulator to which an application is made decides to refuse the application , or to grant the application subject to conditions or for a limited period (or both), each of the interested parties may refer the matter to the Tribunal.
(5) “The interested parties”, in relation to an application, are—
(a) the applicant;
(b) the person in respect of whom the application is made (“A”); and
(c) the person by whom A’s services are to be retained, if not the applicant.
62A Changes in responsibilities of senior managers
(1) This section applies where—
(a) an authorised person has made an application to the appropriate regulator for approval under section 59 for a person to perform a designated senior management function,
(b) the application contained, or was accompanied by, a statement of responsibilities under section 60(2A), and
(c) the application has been granted.
(2) If, since the granting of the application, there has been any significant change in the aspects of the authorised person's affairs which the person is responsible for managing in performing the function, the authorised person must provide the appropriate regulator with a revised statement of responsibilities.
(3) The appropriate regulator may require the authorised person—
(a) to provide information which the person is required to give under this section in such form as the appropriate regulator may direct, or
(b) to verify such information in such a way as the appropriate regulator may direct.
(4) In this section—
“the appropriate regulator” has the same meaning as in section 60 , except that the reference in section 60(9)(b) to subsection (3) is to be treated as a reference to subsection (2) of this section;
...
(1) The FCA may withdraw an approval under section 59 given by the FCA or the PRA in relation to the performance by a person of a function if the FCA considers that the person is not a fit and proper person to perform the function.
(1A) The PRA may withdraw an approval under section 59 in relation to the performance by a person (“A”) of a function if—
(a) the PRA gave the approval, or the FCA gave the approval and the function is a relevant senior management function performed in relation to the carrying on by a PRA-authorised person of a regulated activity, and
(b) the PRA considers that A is not a fit and proper person to perform the function.
(1B) In subsection (1A) “relevant senior management function” means a function which the PRA is satisfied is a senior management function as defined in section 59ZA (whether or not the function has been designated as such by the FCA).
(1C) Before one regulator withdraws an approval given by the other regulator, it must consult the other regulator.
(2) When considering whether to withdraw an approval, the FCA or the PRA may take into account any matter which could be taken into account in considering an application made under section 60 in respect of the performance of the function to which the approval relates (on the assumption, if it is not the case, that the application was one falling to be considered by it).
(2A) At least once a year each ... authorised person must, in relation to every person in relation to whom an approval has been given on the application of the authorised person—
(a) consider whether there are any grounds on which a regulator could withdraw the approval under this section, and
(b) if the authorised person is of the opinion that there are such grounds, notify the regulator of those grounds.
...
(3) If a regulator proposes to withdraw an approval, it must give each of the interested parties a warning notice.
(4) If a regulator decides to withdraw an approval, it must give each of the interested parties a decision notice.
(5) If a regulator decides to withdraw an approval, each of the interested parties may refer the matter to the Tribunal.
(6) “The interested parties”, in relation to an approval, are—
(a) the person on whose application it was given (“A”);
(b) the person in respect of whom it was given (“B”); and
(c) the person by whom B’s services are retained, if not A.
63ZA Variation of senior manager's approval at request of ... authorised person
(1) Where an approval under section 59 has effect subject to conditions, the authorised person concerned may apply to the appropriate regulator to vary the approval by—
(a) varying a condition,
(b) removing a condition, or
(c) imposing a new condition.
(1A) Where an approval under section 59 has effect for a limited period, the authorised person concerned may apply to the appropriate regulator to vary the approval by—
(a) varying the period for which the approval is to have effect, or
(b) removing the limit on the period for which the approval is to have effect.
(2) “The appropriate regulator”—
(a) in the case of an application for variation of an approval in a way described in subsection (1)(a) or (b), means
(i) whichever of the FCA or the PRA imposed the condition concerned , or
(ii) if the condition has been varied before (under this section or section 63ZB), whichever of the FCA or the PRA last varied it;
(b) in the case of an application for variation of an approval in the way described in subsection (1)(c), means the regulator who gave the approval.
(c) in the case of an application for variation of an approval in a way described in subsection (1A), means—
(i) whichever of the FCA or the PRA imposed the limit on the period for which the approval has effect, or
(ii) if the limit has been varied before (under this section or section 63ZB), whichever of the FCA or the PRA last varied it.
(3) The PRA must consult the FCA before determining an application under this section, unless the application relates to the variation or removal of a condition , or a limit on the period for which an approval has effect, which was imposed (or last varied) by the PRA in exercise of its power under section 63ZB.
(4) The regulator to which an application is made under this section must, before the end of the period for consideration, determine whether—
(a) to grant the application; or
(b) to give a warning notice under section 62(2).
(5) “The period for consideration” means the period of 3 months beginning with the date on which the regulator receives the application.
(6) The FCA may refuse an application under this section if it appears to the FCA that it is desirable to do so in order to advance one or more of its operational objectives.
(7) The PRA may refuse an application under this section if it appears to the PRA that it is desirable to do so in order to advance any of its objectives.
(7A) An application may not be made under this section for the variation or removal of a condition, or a limit on the period for which an approval has effect, where the condition or limit has effect by virtue of section 66.
(8) The following provisions apply to an application made under this section for variation of an approval as they apply to an application for approval made under section 60—
section 60(2) to (8),
section 61(4) and (5),
section 62 , but as if in subsections (2), (3) and (4) the words “, or to grant the application subject to conditions or for a limited period (or both)” were omitted.
63ZB Variation of senior manager's approval on initiative of regulator
(1) The FCA may vary an approval under section 59 given by the FCA or the PRA for the performance of a designated senior management function in relation to the carrying on of a regulated activity by an authorised person if the FCA considers that it is desirable to do so in order to advance one or more of its operational objectives.
(2) The PRA may vary an approval under section 59 for the performance of a designated senior management function in relation to the carrying on of a regulated activity by an authorised person if—
(a) either—
(i) the PRA gave the approval, or
(ii) the FCA gave the approval and the ... authorised person is a PRA-authorised person, and
(b) the PRA considers that it is desirable to do so in order to advance any of its objectives.
(3) A regulator may vary an approval by—
(a) imposing a condition,
(b) varying a condition,
(c) removing a condition, ...
(d) where the approval has effect for an unlimited period, limiting the period for which the approval is to have effect , or
(e) where the approval has effect for a limited period, varying that period or removing the limit on the period for which the approval is to have effect.
(4) Before one regulator varies an approval given by the other regulator, it must consult the other regulator.
(4A) Before one regulator varies an approval which was last varied by the other regulator, it must consult the other regulator.
(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
63ZC Exercise of power under section 63ZB: procedure
(1) This section applies to an exercise, by either regulator, of the power to vary an approval under section 63ZB.
(2) A variation takes effect—
(a) immediately, if the notice given under subsection (4) states that that is the case,
(b) on such date as is 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.
(3) A variation may be expressed to take effect immediately (or on a specified date) only if the regulator concerned, having regard to the ground on which it is exercising the power to vary, reasonably considers that it is necessary for the variation to take effect immediately (or on that date).
(4) If either regulator proposes to vary an approval or varies an approval with immediate effect, it must give each of the interested parties written notice.
(5) The notice must—
(a) give details of the variation,
(b) state the regulator's reasons for the variation,
(c) inform the interested parties that each of them may make representations to the regulator within such period as may be specified in the notice (whether or not any of the interested parties has referred the matter to the Tribunal),
(d) inform the interested parties of when the variation takes effect, and
(e) inform the interested parties of the right of each of them to refer the matter to the Tribunal.
(6) “The interested parties”, in relation to an approval, are—
(a) the person on whose application it was given (“A”),
(b) the person in respect of whom it was given (“B”), and
(c) the person by whom B's services are retained, if not A.
(7) The regulator giving the notice may extend the period allowed under the notice for making representations.
(8) If having considered the representations made by the interested parties, the regulator decides—
(a) to vary the approval, or
(b) if the variation has taken effect, not to rescind it,
it must give each of the interested parties written notice.
(9) If having considered the representations made by the interested parties, the regulator decides—
(a) not to vary the approval,
(b) to vary the approval in a different way, or
(c) if the variation has taken effect, to rescind it,
it must give each of the interested parties written notice.
(10) A notice under subsection (8) must inform the interested parties of the right of each of them to refer the matter to the Tribunal.
(11) A notice under subsection (9)(b) must comply with subsection (5).
(12) If a notice informs the interested parties of the right to refer a matter to the Tribunal, it must give an indication of the procedure on such a reference.
(13) For the purposes of subsection (2)(c), whether a matter is open to review is to be determined in accordance with section 391(8).
(14) “Approval” means an approval under section 59.
63ZD Statement of policy relating to conditional approval and variation
(1) Each regulator must prepare and issue a statement of its policy with respect to—
(a) its giving of approval under section 59 subject to conditions or for a limited period only, and
(b) its variation under section 63ZA or 63ZB of an approval given under section 59.
(2) A regulator may at any time alter or replace a statement issued by it under this section.
(3) If a statement issued under this section is altered or replaced by a regulator, the regulator must issue the altered or replacement statement.
(4) A statement issued 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.
(5) A regulator may charge a reasonable fee for providing a person with a copy of a statement published under this section.
(6) A regulator must, without delay, give the Treasury a copy of any statement which it publishes under this section.
(1) Before issuing a statement of policy under section 63ZD, a regulator (“the issuing regulator”) must—
(a) consult the other regulator, and
(b) publish a draft of the proposed statement in the way appearing to the issuing regulator to be best calculated to bring it to the attention of the public.
(2) The duty of the FCA to consult the PRA under subsection (1)(a) applies only in so far as the statement of policy applies to persons whose approval under section 59 relates to the performance of a function designated by the FCA as a senior management function under section 59(6A) in relation to the carrying on by PRA-authorised persons of regulated activities.
(3) The draft must be accompanied by notice that representations about the proposal may be made to the issuing regulator within a specified time.
(4) Before issuing the proposed statement, the issuing regulator must have regard to any representations made to it in accordance with subsection (3).
(5) If the issuing regulator issues the proposed statement it must publish an account, in general terms, of—
(a) the representations made to it in accordance with subsection (3), and
(b) its response to them.
(6) If the statement differs from the draft published under subsection (1) in a way which is in the opinion of the issuing regulator significant, the issuing regulator—
(a) must before issuing it carry out any consultation required by subsection (1)(a), and
(b) must (in addition to complying with subsection (5)) publish details of the difference.
(7) The issuing regulator may charge a reasonable fee for providing a person with a draft published under subsection (1)(b).
(8) This section also applies to a proposal to alter or replace a statement.