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65 provisions
35 Interpretation of Part 8
In this Part—
“regulated person” means a person who is not an authorised person and is—
an original lender,
an originator,
a person engaged in the activity specified in regulation 4(1)(b),
a sponsor,
an SSPE,
a third party verifier, or
a securitisation repository;
“a regulator” means the FCA or the PRA;
“relevant requirement” means a requirement imposed—
by designated activity rules made by virtue of regulation 5,
by a direction under section 71O of FSMA 2000 given by virtue of regulation 6,
by regulation 8A (restriction on establishment of an SSPE),
by or under Part 4 (simple, transparent and standardised securitisations), Part 5 (securitisation repositories) or Part 6 (registration of third party verifying STS compliance),
by regulation 38 in a case where the temporary prohibition was imposed by the FCA, or
by the FCA under any other provision of these Regulations or under a provision of FSMA 2000 applied by these Regulations.
(1) The FCA must maintain arrangements designed to enable it to determine whether regulated persons are complying with relevant requirements.
(2) The FCA must also maintain arrangements for enforcing compliance by regulated persons with relevant requirements.
36A Monitoring and enforcement by Pensions Regulator
(1) The Pensions Regulator must maintain arrangements designed to enable it to determine whether trustees or managers of occupational pension schemes are complying with the requirements of regulations 8A(2), 32B and 32C.
(2) The Pensions Regulator must also maintain arrangements for enforcing compliance by trustees or managers of occupational pension schemes with those requirements.
37 Temporary prohibition relating to management functions
(1) If the FCA considers that an individual has contravened, or has been knowingly concerned in the contravention of, a relevant requirement, the FCA may impose a temporary prohibition on that individual from holding an office or position involving responsibility for taking decisions about the management of an originator, sponsor or SSPE.
(2) If the PRA considers that an individual has contravened, or has been knowingly concerned in the contravention of—
(a) PRA securitisation rules,
(b) regulation 38, in a case where the temporary prohibition was imposed by the PRA, or
(c) a requirement imposed under section 55M of FSMA 2000 (imposition of requirements by PRA) which relates to securitisations,
the PRA may impose a temporary prohibition on that individual from holding an office or position involving responsibility for taking decisions about the management of an originator, sponsor or SSPE.
(3) A temporary prohibition imposed under paragraph (1) or (2) expires at the end of such period as the regulator imposing it may specify, but the imposition of a temporary prohibition does not affect the regulator’s power to impose a further temporary prohibition under that paragraph.
(4) A temporary prohibition under paragraph (1) or (2) may relate to the management of—
(a) a named originator, sponsor or SSPE,
(b) an originator, sponsor or SSPE of a specified description, or
(c) any originator, sponsor or SSPE.
(5) A regulator may revoke a temporary prohibition imposed by it under this regulation, or vary it so as to reduce the period for which it has effect.
(6) In this regulation, “PRA securitisation rules” means rules made by the PRA under section 137G of FSMA 2000 which make provision of the kind mentioned in regulation 5(2) in relation to securitisations.
38 Temporary prohibition relating to management functions: obligations on originator, sponsor or SSPE
An originator, sponsor or SSPE must take reasonable care to ensure that no individual holds an office or position involving responsibility for taking decisions about the management of that entity in contravention of a temporary prohibition imposed under regulation 37(1) or (2).
39 Imposition of temporary ban on STS notifications
(1) If the FCA considers that—
(a) an originator, sponsor or SSPE has failed to meet the requirements of designated activity rules made by virtue of regulation 5, so far as those rules relate to STS securitisations, or
(b) an originator or sponsor has made a misleading STS notification,
the FCA may, for such period as it considers appropriate, temporarily ban the originator or sponsor from making an STS notification.
(2) The FCA may—
(a) revoke a temporary ban imposed under paragraph (1), or
(b) vary the period for which the temporary ban has effect.
(3) The FCA must consult the PRA before imposing a temporary ban on an originator or sponsor who is a PRA-authorised person, or varying such a ban so as to extend the period for which it has effect.
40 Procedure for imposition, variation or revocation of a temporary ban on STS notifications
(1) Where the FCA exercises its functions under regulation 39, its decision takes effect—
(a) immediately, if the notice under paragraph (3) states that is the case,
(b) on such other date as may be specified in the notice, or
(c) if no date is specified in the notice, when the matter to which the notice relates is no longer open to review.
(2) A decision of the FCA made under regulation 39 may be expressed to take effect immediately (or on a specified date) only if the FCA, having regard to the ground on which it is exercising this power, reasonably considers that it is necessary for the decision to take effect immediately (or on that date).
(3) If the FCA proposes to exercise, or exercises, its functions under regulation 39, it must give the originator or sponsor a written notice.
(4) The notice must—
(a) give details of the temporary ban or variation,
(b) state the FCA’s reasons for the temporary ban, or the revocation of the temporary ban or the variation of the temporary ban,
(c) inform the originator or sponsor that they may make representations to the FCA within such period as may be specified in the notice (whether or not the originator or sponsor has referred the matter to the Tribunal),
(d) inform the originator or sponsor when the temporary ban, or the revocation or variation of the temporary ban, takes effect, and
(e) inform the originator or sponsor of their right to refer the matter to the Tribunal and an indication of the procedure for such a reference.
(5) The FCA may extend the period allowed under the notice for making representations.
(6) If, having considered any representations made by a person to whom the notice was given, the FCA decides—
(a) to impose the temporary ban, or revoke or vary the temporary ban, in the way proposed,
(b) not to impose the temporary ban, or revoke or vary the temporary ban, in the way proposed,
(c) to revoke the temporary ban, or the variation of the temporary ban, which has taken effect,
(d) if the temporary ban has been imposed or varied, not to revoke the temporary ban or variation of the temporary ban, or
(e) to impose or vary the temporary ban in a different way,
it must give the person written notice.
(7) A notice given under paragraph (6)(a), (d) or (e) must inform the person to whom it is given of the person’s right to refer the matter to the Tribunal and provide an indication of the procedure for such a reference.
(8) For the purposes of paragraph (1)(c), whether a matter is open to review is to be determined in accordance with section 391(8) of FSMA 2000.
(1) If the FCA considers that—
(a) a regulated person has contravened a relevant requirement,
(b) a member of the management body of a regulated person, other than a securitisation repository, was knowingly concerned in the contravention by the regulated person of a relevant requirement,
(c) another member of the senior management of a regulated person, other than a securitisation repository, was knowingly concerned in the contravention by the regulated person of a relevant requirement, or
(d) a regulated person has failed to comply with regulation 38 as an originator, sponsor or SSPE, in a case where the temporary prohibition was imposed by the FCA,
the FCA may publish a statement to that effect.
(2) If a regulator considers that an individual on whom a temporary prohibition has been imposed under regulation 37 by that regulator has breached the prohibition, the regulator may publish a statement to that effect.
(3) If the PRA considers that a regulated person has failed to comply with regulation 38 as an originator, sponsor or SSPE, in a case where the temporary prohibition was imposed by the PRA, the PRA may publish a statement to that effect.
(1) If the FCA considers that—
(a) a regulated person has contravened a relevant requirement,
(b) a member of the management body of a regulated person, other than a securitisation repository, was knowingly concerned in the contravention by the regulated person of a relevant requirement,
(c) another member of the senior management of a regulated person, other than a securitisation repository, was knowingly concerned in the contravention by the regulated person of a relevant requirement, or
(d) a regulated person has failed to comply with regulation 38 as an originator sponsor or SSPE, in a case where the temporary prohibition was imposed by the FCA,
the FCA may impose a penalty of such amount as it considers appropriate.
(2) If a regulator decides that an individual on whom a temporary prohibition has been imposed under regulation 37 by that regulator has breached the prohibition, the regulator may impose a penalty of such amount as it considers appropriate on that individual.
(3) If the PRA considers that a regulated person has failed to comply with regulation 38 as an originator, sponsor or SSPE, in a case where the temporary prohibition was imposed by the PRA, the PRA may impose a penalty of such amount as it considers appropriate.
(4) A penalty imposed by a regulator under this regulation is payable to that regulator and may be recovered as a debt owed to that regulator.
(1) If the FCA proposes—
(a) to refuse under regulation 27 an application under regulation 26 for registration as a third party verification service,
(b) to withdraw the registration of a third party verification service under regulation 31,
(c) to refuse an application to withdraw a person’s registration to provide a third party verification service under regulation 32,
(d) to impose a temporary prohibition under regulation 37,
(e) to publish a statement in respect of a person under regulation 41,
(f) to impose a penalty on a person under regulation 42,
it must give the person a warning notice.
(2) If the PRA proposes—
(a) to impose a temporary prohibition under regulation 37,
(b) to publish a statement in respect of a person under regulation 41,
(c) to impose a penalty on a person under regulation 42,
it must give the person a warning notice.
(3) A warning notice about a proposal to impose a temporary prohibition in relation to management functions under regulation 37 must set out the terms of the proposed prohibition.
(4) A warning notice about a proposal to publish a statement under regulation 41 must set out the terms of the statement.
(5) A warning notice about a proposal to impose a penalty under regulation 42 must state the amount of the proposed penalty.
(6) A warning notice must inform the person concerned that the person may make representations to the regulator who gave the notice within such period as may be specified in the notice (whether or not the person concerned has referred the matter to the Tribunal).
(1) If, having considered any representations made in response to the warning notice, the FCA decides—
(a) to refuse under regulation 27 an application under regulation 26 for registration as a third party verification service,
(b) to withdraw a person’s registration to provide a third party verification service under regulation 31,
(c) to refuse an application to withdraw a person’s registration to provide a third party verification service under regulation 32,
(d) to impose a temporary prohibition under regulation 37 (whether or not in the terms proposed),
(e) to publish a statement in respect of a person under regulation 41 (whether or not in the terms proposed),
(f) to impose a penalty on a person under regulation 42 (whether or not of the amount proposed),
the FCA must give the person concerned a decision notice.
(2) If, having considered any representations made in response to the warning notice, the PRA decides—
(a) to impose a temporary prohibition under regulation 37,
(b) to publish a statement in respect of a person under regulation 41,
(c) to impose a penalty on a person under regulation 42,
it must give the person a decision notice.
(3) A decision notice about a decision to impose a temporary prohibition in relation to management functions under regulation 37 must set out the terms of the prohibition.
(4) A decision notice about a decision to publish a statement under regulation 41 must set out the terms of the statement.
(5) A decision notice about a decision to impose a penalty under regulation 42 must state the amount of the penalty.
(6) After a statement under regulation 41 (public censure) is published, the regulator that published it must send a copy of it to the person concerned and to any person to whom a copy of the decision notice is given under section 393(4) of FSMA 2000 (third party rights), as applied by Schedule 1.
45 Consultation in relation to certain enforcement action
(1) The FCA must consult the PRA before giving a warning notice under regulation 43(1)(a), (b), (c), (e) or (f) or a decision notice under regulation 44(1)(a) (b), (c), (e) or (f) in relation to a person who—
(a) is a PRA-authorised person, or
(b) has a qualifying relationship with a PRA-authorised person.
(2) The FCA must consult the PRA before giving a warning notice under regulation 43(1)(d) or a decision notice under regulation 44(1)(d) if as a result of the prohibition in question an individual would be prohibited from performing a management function in relation to a PRA-authorised person.
(3) The PRA must consult the FCA before giving a warning notice under regulation 43(2).
(4) A person has a qualifying relationship with a PRA-authorised person for the purposes of this regulation if the person is a member of the PRA-authorised person’s immediate group.
(5) In this regulation “immediate group” has the meaning given in section 421ZA of FSMA 2000.
(1) Each regulator must prepare and issue a statement of policy with respect to—
(a) the imposition of a prohibition under regulation 37,
(b) the period of a prohibition under that regulation,
(c) the imposition of penalties under regulation 42, and
(d) the amount of penalties under that regulation.
(2) The policy must require the regulator, in determining the amount of the penalty to be imposed on any person, to take account of all relevant circumstances including, where appropriate—
(a) the impact, gravity and duration of the contravention for which the penalty is to be imposed;
(b) the extent of the person’s responsibility for the contravention;
(c) the financial position of the person;
(d) the amount of profit gained or loss avoided as a result of the contravention, so far as this can be determined;
(e) the amount of loss sustained as a result of the contravention by any other person, so far as this can be determined;
(f) the level of co-operation by the person with the regulator (without prejudice to the need to ensure that the person accounts for or makes good any profit sustained or loss avoided as a result of the contravention);
(g) any previous contravention by the person for which a penalty was or could have been imposed under regulation 42.
(3) A regulator may at any time alter or replace a statement issued by it under this regulation.
(4) If a statement issued under this regulation is altered or replaced by a regulator, the regulator must issue the altered or replacement statement.
(5) A regulator must, without delay, give the Treasury a copy of any statement which it issues under this regulation.
(6) A statement issued under this regulation by a regulator 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.
(7) The regulator may charge a reasonable fee for providing a person with a copy of the statement.
(8) In exercising, or deciding whether to exercise, its power under regulation 37 (temporary prohibition relating to management functions) or under regulation 42 (financial penalties) in the case of any particular contravention, a regulator must have regard to any statement of policy published by it under this regulation and in force at the time when the contravention in question occurred.
(1) Before a regulator issues a statement under regulation 46, 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 a notice that representations about the proposed statement 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 paragraph (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 paragraph (2), and
(b) its response to them.
(5) If the statement differs from the draft published under paragraph (1) in a way which is, in the opinion of the regulator, significant, the regulator must (in addition to complying with paragraph (4)) publish details of the difference.
(6) The regulator may charge a reasonable fee for providing a person with a copy of a draft published by it under paragraph (1).
(1) A person who is convicted of an offence under section 398 of FSMA 2000 as applied by paragraph 13 of Schedule 1 to these Regulations is not subsequently liable to a penalty under regulation 42 (financial penalties) in respect of the same act or omission.
(2) A person on whom a penalty has been imposed under regulation 42 (financial penalties) is not subsequently liable for an offence under section 398 of FSMA 2000 as applied by paragraph 13 of Schedule 1 to these Regulations in respect of the same act or omission.
(1) A person to whom a decision notice is given under regulation 44 may refer the matter to the Tribunal.
(2) If the FCA decides temporarily to withdraw a registration to provide a third party verification service under regulation 29, or varies the details of the temporary withdrawal so as to extend the period for which it has effect, the person concerned may refer the matter to the Tribunal.
(3) If the FCA imposes a temporary ban under regulation 39, or varies such a ban so as to extend the period for which it has effect, the person concerned may refer the matter to the Tribunal.
50 Amendment or application with modifications of provisions of FSMA 2000 etc
In Schedule 1—
(a) Part 1 contains amendments of FSMA 2000;
(b) Part 2 applies with modifications provisions of FSMA 2000 and secondary legislation made under it.
(1) In relation to pre-2019 securitisations—
(a) Part 2 (designated activities) applies only for the purposes of enabling the FCA by rules or directions to impose, on persons other than PRA-authorised persons, requirements with respect to the matters mentioned in regulation 5(2), other than requirements with respect to STS criteria or STS notifications, and
(b) Part 4 (simple, transparent and standardised securitisations) does not apply.
(2) The revocation of the EU Securitisation Regulation 2017 by section 1(1) of, and Schedule 1 to, the Financial Services and Markets Act 2023 does not affect the continued application in relation to pre-2019 securitisations of paragraphs 2 to 4A of Article 43 of that Regulation (which relate to the use of the designation “STS” or “simple, transparent and standardised”), as those paragraphs had effect immediately before the main commencement day.
(3) The provisions of Part 8 of these Regulations, of FSMA 2000, and of FSMA 2000 as applied by Schedule 1 to these Regulations, apply in relation to a contravention on or after the main commencement day of Article 43(2) of the EU Securitisation Regulation 2017, as remaining in force by virtue of paragraph (2), as those provisions apply in relation to a contravention of regulation 12 (use of STS designation).
(4) If the FCA or the PRA, in the exercise of any of its rule-making powers, makes rules which require an investor to apply in relation to pre-2019 securitisations—
(a) the due diligence requirements contained in the provisions specified in Article 43(5) of the EU Securitisation Regulation 2017, subject to the modifications specified there, or
(b) the requirements contained in the provisions specified in Article 43(6) of the EU Securitisation Regulation 2017, subject to the modifications specified there,
the revocation of the EU Securitisation Regulation 2017 by section 1(1) of, and Schedule 1 to, the Financial Services and Markets Act 2023 does not affect the continued exercise by the FCA or the PRA (as the case may be) for the purposes of the rules in question of any functions that it had immediately before the main commencement day under the provisions so specified as so modified.
(5) In this regulation “pre-2019 securitisations” means—
(a) securitisations the securities of which were issued before 1 January 2019, or
(b) securitisations in relation to which the following conditions are met—
(i) the securitisations do not involve the issue of securities,
(ii) the initial securitisation positions of the securitisations were created before 1 January 2019, and
(iii) no new securitisations positions of the securitisations have been created on or after that day.
52A Occupational pension schemes: savings relating to pre-commencement securitisations
(1) Regulations 32B to 32D (due diligence requirements for occupational pension schemes) do not apply in relation to pre-commencement securitisations.
(2) The revocation of the EU Securitisation Regulation 2017 by section 1(1) of, and Schedule 1 to, the Financial Services and Markets Act 2023 does not affect—
(a) the continued application, in relation to the obligations of trustees or managers of occupational pension schemes in connection with securitisation positions of pre-commencement securitisations other than pre-2019 securitisations, of Article 5 of the EU Securitisation Regulation 2017 (due-diligence requirements for institutional investors), as that Article had effect immediately before the main commencement day;
(b) the continued application, in relation to the holding by occupational pension schemes of securitisation positions of pre-2019 securitisations, of paragraph 5 of Article 43 of the EU Securitisation Regulation 2017 (transitional provisions), as that paragraph had effect immediately before the main commencement day.
(3) In its application by virtue of paragraph (2)(a), Article 5 of the EU Securitisation Regulation 2017 is to be read as if—
(a) references to any provision of Articles 6 to 9 of the EU Securitisation Regulation 2017 were references to that provision so far as applied in relation to pre-commencement securitisations by relevant rules, and
(b) in paragraph 5, the reference to “another institutional investor” did not include an AIFM unless the AIFM falls within paragraph (e) of the definition of “institutional investor” in regulation 3 of these Regulations.
(4) In paragraph (3)(a) “relevant rules” means—
(a) in the case of a PRA-authorised person, rules made by the PRA under section 137G of FSMA 2000;
(b) in any other case, designated activity rules made by the FCA by virtue of regulation 5.
(5) In regulation 36A (monitoring and enforcement by Pensions Regulator), the reference to the requirements of regulations 32B and 32C includes a reference to the requirements of Article 5 of the EU Securitisation Regulation 2017, so far as remaining in force by virtue of paragraph (2).
(6) In this regulation—
“AIFM” has the meaning given in regulation 4 of the Alternative Investment Fund Managers Regulations 2013;
“pre-2019 securitisations” has the same meaning as in regulation 52;
“pre-commencement securitisations” means—
securitisations the securities of which were issued before the main commencement day, or
securitisations in relation to which the following conditions are met—
the securitisations do not involve the issue of securities,
the intitial securitisation positions of the securitisations were created before the main commencement day, and
no new securitisation positions of the securitisations have been created on or after that day.
Schedule A1 Supplementary provision about due diligence requirements for the trustees or managers of an occupational pension scheme
Regulation 32B(4)
Information | Frequency with which, or occasion on which, information is to be made available
1 In the case of a securitisation which is neither an ABCP programme nor an ABCP transaction, details of the underlying exposures. | At least quarterly.
2 In the case of a securitisation which is an ABCP programme or an ABCP transaction, information on the underlying receivables or credit claims. | At least monthly.
3 Reports for investors providing periodic updates on— (a) the credit quality and performance of the underlying exposures; (b) any relevant financial or other triggers contained in the transaction documentation, including information on events which trigger changes to the priority of payments or the substitution of any counterparty to the transaction; (c) data on the cash flows generated by the underlying exposures and by the liabilities of the securitisation; (d) the calculation and modality of retention of a material net economic interest in the transaction by the originator, sponsor or original lender. | At least quarterly in the case of a securitisation which is neither an ABCP programme nor an ABCP transaction. At least monthly in the case of a securitisation which is an ABCP programme or an ABCP transaction.
4 All information on the legal documentation needed to understand the transaction, including detail of the legal provisions governing— (a) the structure of the transaction, (b) any credit enhancement or liquidity support features, (c) the cash flows and loss waterfalls, (d) investors’ voting rights, and (e) any triggers or other events that could result in a material impact on the performance of the securitisation position. | In the case of primary market investments— (a) before pricing or a commitment to invest, in draft or initial form, (b) no later than 15 days after closing of the transaction, in final form, and (c) an updated version as soon as practicable following any material change. In the case of secondary market investments— (a) before a commitment to invest, in final form, and (b) an updated version as soon as practicable following any material change.
5 Information describing any changes or events materially affecting the transaction, including breaches of obligations under the transaction documents | As soon as practicable following that material change or event.
6 Any approved prospectus or other offering or marketing document prepared with the co-operation of the originator or sponsor. | In the case of primary market investments— (a) before pricing or a commitment to invest, in draft or initial form, and (b) no later than 15 days after closing of the transaction, in final form In the case of secondary market investments, before a commitment to invest, in final form.
7 If there is an STS notification, or a notification falling within regulation 12(3)(b), in respect of the transaction, that notification. | In the case of primary market investments— (a) before pricing or a commitment to invest, in draft or initial form, (b) no later than 15 days after closing of the transaction, in final form, and (c) an updated version as soon as practicable following any material change. In the case of secondary market investments— (a) before a commitment to invest, in final form, and (b) an updated version as soon as practicable following any material change.
SCHEDULE 1 Amendment, or application with modifications, of provisions of FSMA 2000 and secondary legislation made under it
Regulation 50
PART 1 Amendments of FSMA 2000
1 FSMA 2000 is amended as follows.
2 In section 39 (exemption of appointed representatives), in subsection (4)—
(a) omit the “or” immediately following paragraph (a), and
(b) after that paragraph insert—
(aa) a provision contained in or made under the Securitisation Regulations 2024, or
.
3 In section 66A (misconduct: action by the FCA), in subsection (4)—
(a) omit the “or” immediately following paragraph (ab), and
(b) after that paragraph insert—
(ac) imposed by or under the Securitisation Regulations 2024, or
.
4 In section 66B (misconduct: action by the PRA), in subsection (4)—
(a) omit the “or” immediately following paragraph (a), and
(b) after that paragraph insert—
(aa) imposed by or under the Securitisation Regulations 2024, or
.
5 In section 168 (appointment of persons to carry out investigations in particular cases), in subsection (4), after paragraph (ic) insert—
(id) a person may have contravened any provision made by or under the Securitisation Regulations 2024;
.
6 (1) Section 204A (meaning of “relevant requirement” and “appropriate regulator” for purposes of Part 14) is amended as follows.
(2) In subsection (2), after paragraph (aa) insert—
(ab) by or under the Securitisation Regulations 2024,
.
(3) In subsection (3), after paragraph (f) insert—
(g) a requirement imposed by regulation 38 of the Securitisation Regulations 2024 on a PRA-authorised person in a case where the temporary prohibition imposed under regulation 37(1) or (2) of those Regulations was imposed by the PRA.
.
(4) In subsection (6), after paragraph (aa) insert—
(ab) by or under the Securitisation Regulations 2024;
.
PART 2 Application with modifications of provisions of FSMA 2000 and secondary legislation
Interpretation
7 In this Part of this Schedule “regulated person” has the meaning given in regulation 35.
Hearings and appeals
8 (1) Part 9 of FSMA 2000 (hearings and appeals) applies in respect of references made to the Tribunal under these Regulations as it applies in respect of references made to the Tribunal under FSMA 2000 in respect of a decision of the FCA or the PRA, but with the modifications set out in sub-paragraphs (2) and (3).
(2) Section 133 of FSMA 2000 (proceedings before Tribunal: general provision) is to be read as if—
(a) in subsection (1), the words “(whether made under this or any other Act)” were omitted, and
(b) for subsection (7A) there were substituted—
(7A) A reference is a “disciplinary reference” for the purposes of this section if it is in respect of a decision to—
(a) impose a temporary prohibition under regulation 37 of the Securitisation Regulations 2024;
(b) publish a statement under regulation 41 of those Regulations;
(c) impose a penalty under regulation 42 of those Regulations.
.
(3) Section 133A of FSMA 2000 (proceedings before Tribunal: decision and supervisory notices, etc) is to be read as if in subsection (1) the words “as a result of section 388(2)” were omitted.
FCA rules and guidance
9 (1) The provisions of Part 9A of FSMA 2000 listed in sub-paragraph (2) apply in relation to rules made by the FCA under regulation 22 or 34(1) of these Regulations as they apply in relation to rules made by the FCA under FSMA 2000, but subject to the modification in sub-paragraph (3).
(2) Those provisions are—
(a) section 137T (general supplementary powers);
(b) section 138A (modification or waiver of rules);
(c) section 138C (evidential provisions);
(d) section 138E (limits on effect of contravening rules);
(e) sections 138F, 138G and 138H (notification, making and verification of rules);
(f) sections 138I and 138L (consultation);
(g) section 141A (power to make consequential amendments of references to rules).
(3) The modification is that section 137T (general supplementary powers) is to be read as if any reference to authorised persons were—
(a) in the case of rules under regulation 22, a reference to securitisation repositories registered under Part 5;
(b) in the case of rules under regulation 34(1), a reference to small registered UK AIFMs.
Information gathering and investigations
10 (1) Part 11 of FSMA 2000 (information gathering and investigations) applies in relation to the FCA’s and the PRA’s functions under these Regulations as it applies in relation to the FCA’s and the PRA’s functions under FSMA 2000, but with the modifications set out in sub-paragraphs (2) to (11).
(2) Part 11 is to be read as if any reference to an authorised person included a reference to a regulated person.
(3) Section 167 (appointment of persons to carry out general investigations) is to be read as if in subsection (5), for “regulated activities” there were substituted “the activities subject to regulation as a result of the Securitisation Regulations 2024”.
(4) Section 169 (investigations etc in support of overseas regulator) is to be read as if—
(a) subsection (2A) were omitted, and
(b) for subsection (13) there were substituted—
(13) “Overseas regulator” means an authority in a country or territory outside the United Kingdom which has functions corresponding to those of the FCA or the PRA under the Securitisation Regulations 2024.
.
(5) Section 169A (support of overseas regulator with respect to financial stability) does not apply.
(6) Section 170 (investigations: general) is to be read as if subsection (3)(b) were omitted.
(7) Section 171 (powers of persons appointed under section 167) is to be read as if subsections (3A) and (7) were omitted.
(8) Section 173 (powers of persons appointed as a result of section 168(2)) does not apply.
(9) Section 174 (admissibility of statements made to investigators) is to be read as if—
(a) in subsection (2), the words from “or in proceedings” to “this subsection applies” were omitted,
(b) subsection (3A) were omitted,
(c) in subsection (4), the words from “or (5)” to the end were omitted, and
(d) in subsection (5) “, 173” were omitted.
(10) Section 176 (entry of premises under warrant) is to be read as if—
(a) in subsection (1), “the Secretary of State” were omitted,
(b) subsection (3)(b) were omitted,
(c) in subsection (10), “or (5)” were omitted, and
(d) in subsection (11)—
(i) in paragraph (a), “87C, 87J,” and “,165A, 169A” were omitted, and
(ii) in paragraph (b), “, 173” were omitted.
Injunctions and restitution
11 (1) Part 25 of FSMA 2000 (injunctions and restitution) applies in respect of—
(a) a relevant requirement as defined in regulation 35, or
(b) a requirement imposed by the PRA under regulation 37, or
(c) the requirement imposed by regulation 38 in a case where the temporary prohibition was imposed by the PRA,
as it applies in respect of a relevant requirement as defined for the purposes of a provision of that Part, but with the modifications set out in this paragraph.
(2) Part 25 is to be read as if—
(a) each reference to the Act included a reference to these Regulations,
(b) each reference to a section of the Act were a reference to that Act as applied by these Regulations,
(c) references to the Secretary of State were omitted, and
(d) each reference to an authorised person included a reference to a regulated person.
(3) Section 380 (injunctions) is to be read as if—
(a) references to the appropriate regulator were references to the PRA where the requirement falls within sub-paragraph (1)(b) or (c) and references to the FCA in any other case, and
(b) subsections (7) to (12) were omitted.
(4) Section 381 (injunctions in case of market abuse) does not apply.
(5) Section 382 (restitution orders) is to be read as if—
(a) references to the appropriate regulator were references to the PRA where the requirement falls within sub-paragraph (1)(b) or (c) and references to the FCA in any other case, and
(b) subsections (10) to (15) were omitted.
(6) Section 383 (restitution orders in cases of market abuse) does not apply.
(7) Section 384 (power of FCA or PRA to require restitution) is to be read as if—
(a) references to the appropriate regulator were references to the PRA where the requirement falls within sub-paragraph (1)(b) or (c) and references to the FCA in any other case,
(b) subsections (2) and (3) and references to those subsections were omitted, and
(c) subsections (7) to (13) were omitted.
Notices
12 (1) Part 26 of FSMA 2000 (notices), other than sections 391A, 391B, 391C, 391D, 391E and 391F, applies with respect to the giving of notices by the FCA or the PRA under regulations 7, 11, 30, 40, 43 and 44 of these Regulations and under FSMA 2000 as applied by these Regulations as it applies with respect to the giving of notices by the FCA or the PRA under FSMA 2000, but with the following modifications.
(2) Section 387 (warning notices) is to be read as if subsections (1A) and (3A) were omitted.
(3) Section 388 (decision notices) is to be read as if subsections (1A) and (2) were omitted.
(4) Section 391 (publication) is to be read as if—
(a) references to a supervisory notice were references to a notice under regulation 7, 11(2) or (5), 30(3) or (6)(a), (d) or (e) or 40(3) or (6)(a), (d) or (e);
(b) in subsection (1), the reference to a warning notice falling within subsection (1ZB) were a reference to a warning notice given under regulation 43;
(c) subsections (1ZA), (1ZB), (4A), (5A), (6A), (7A), (7B), (8A), (8B), (8C), (8D) and (8E) were omitted.
(5) Section 392 (application of sections 393 and 394) is to be read as if—
(a) for paragraphs (a) and (b) there were substituted—
(a) a warning notice given in accordance with regulation 43 of the Securitisation Regulations 2024 or section 385 as applied by those Regulations;
(b) a decision notice given in accordance with regulation 44 of those Regulations, or section 386 as applied by those Regulations.
.
(6) Section 395 (the FCA’s and PRA’s procedures) is to be read as if references to a supervisory notice were references to a notice under regulation 7, 11(2) or (5), 30(3) or (6)(a), (d) or (e) or under regulation 40(3) or (6)(a), (d) or (e).
Offences
13 (1) Section 398 of FSMA 2000 applies in relation to requirements imposed by or under these Regulations as it applies in relation to requirements imposed by or under FSMA 2000.
(2) Section 400 of FSMA 2000 (offences by bodies corporate etc) applies in respect of offences under FSMA 2000 as applied by these Regulations as it applies in respect of offences under FSMA 2000.
(3) Section 401 of FSMA 2000 (proceedings for offences) applies in respect of offences under FSMA 2000 as applied by these Regulations as it applies in respect of offences under FSMA 2000 but as if—
(a) subsection (1)(c) were omitted;
(b) references to the Secretary of State were omitted;
(c) subsections (3A), (3AB) and (3B) were omitted.
(4) Section 403 of FSMA 2000 (jurisdiction and procedure in respect of offences) applies in respect of offences under FSMA 2000 as applied by these Regulations as it applies in respect of offences under FSMA 2000.
Limitation on power to require documents
14 Section 413 of FSMA 2000 (protected items) applies for the purposes of these Regulations as it applies for the purposes of FSMA 2000.
Consultation in relation to taking of certain enforcement action
15 Section 415B of FSMA 2000 (consultation in relation to taking certain enforcement action) applies in respect of—
(a) notices given by the FCA or the PRA under regulation 43 or 44 of these Regulations, and
(b) applications to the court by the FCA or the PRA under a provision of FSMA 2000 as applied by these Regulations.
Penalties
16 (1) Paragraphs 19 to 21 (penalties) of Schedule 1ZA to FSMA 2000 apply with respect to penalties imposed by the FCA under these Regulations and under FSMA 2000 as applied by these Regulations as they apply with respect to penalties imposed by the FCA under FSMA 2000, but with the following modifications.
(2) For the purposes of paragraph 20, the FCA’s enforcement powers are to be taken to include—
(a) its powers under the provisions mentioned in section 133(7A) as applied by this Schedule and under Part 25 of FSMA 2000 as applied by this Schedule;
(b) its powers in relation to the investigation of offences under any provision of FSMA 2000 as applied by this Schedule;
(c) its powers in England and Wales or Northern Ireland in relation to the prosecution of such offences.
(3) For the purposes of paragraph 21, “regulated persons” include regulated persons within the meaning of this Part of this Schedule.
17 (1) Paragraphs 27 to 30 (penalties) of Schedule 1ZB to FSMA 2000 apply with respect to penalties imposed by the PRA under these Regulations and under FSMA 2000 as applied by these Regulations as they apply with respect to penalties imposed by the FCA under FSMA 2000, but with the following modifications.
(2) For the purposes of paragraph 28, the PRA’s enforcement powers are to be taken to include—
(a) its powers under the provisions mentioned in section 133(7A) as applied by this Schedule;
(b) its powers in relation to the investigation of offences under any provision of FSMA 2000 as applied by this Schedule;
(c) its powers in England and Wales or Northern Ireland in relation to the prosecution of such offences.
(3) For the purposes of paragraph 29, “PRA-authorised persons” include regulated persons within the meaning of this Part of this Schedule.
Financial Services and Markets Act 2000 (Service of Notices) Regulations 2001
18 The Financial Services and Markets Act 2000 (Service of Notices) Regulations 2001 (“the Notice Regulations”) apply in respect of a notice or document given by the FCA or the PRA under these Regulations or under FSMA 2000 as applied by these Regulations as they apply in respect of a notice or document given by the FCA or the PRA under FSMA 2000, as if—
(a) that notice or document were a “relevant document” under the Notice Regulations;
(b) each reference to “the Act” included a reference to these Regulations and to FSMA 2000 as applied by these Regulations;
(c) each reference to a section of FSMA 2000 were a reference to that section as applied by these Regulations;
(d) each reference to an investigating authority were a reference to the FCA or the PRA.
SCHEDULE 2 Amendments to other legislation and consequential amendments
Regulation 51
Amendment to EMIR
1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amendment to the Capital Requirements Regulation
2 For Article 242(10)(b) (meaning of “simple, transparent and standardised securitisation” or “STS securitisation”) of the Capital Requirements Regulation substitute—
(b) an overseas STS securitisation as defined in regulation 12(2) of the Securitisation Regulations 2024;
.
Amendment to the Solvency 2 Delegated Regulation
3 For Article 1(18b)(b) (meaning of “STS securitisation”) of Commission Delegated Regulation (EU) 2015/35 of 10 October 2014 supplementing Directive 2009/138/EC on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) substitute—
(b) an overseas STS securitisation as defined in regulation 12(2) of the Securitisation Regulations 2024;
.
Amendment to the Money Market Funds Regulation
4 For Article 11(1)(d) of Regulation (EU) 2017/1131 of the European Parliament and of the Council of 14 June 2017 on money market funds (eligible securitisations and ABCPs) substitute—
(d) an overseas STS securitisation as defined in regulation 12(2) of the Securitisation Regulations 2024.
.
Regulation 53
Interpretation
1 (1) — In this Schedule “the EU-derived securitisation legislation” means—
(a) the EU Securitisation Regulation 2017 and any provision made under it,
(b) any technical standards to which Chapter 2A of Part 9A of FSMA 2000 applies which were originally made under the EU Securitisation Regulation 2017, and
(c) the Securitisation Regulations 2018.
(2) Any reference in this Schedule to the revocation of the EU-derived securitisation legislation is a reference to its revocation by section 1(1) of, and Schedule 1 to, the Financial Services and Markets Act 2023.
STS securitisations on list maintained by FCA under EU Securitisation Regulation 2017
2 (1) On the main commencement day, the FCA must include on the list referred to in regulation 10(2) any securitisations that immediately before that day were included on the list maintained by the FCA under Article 27(5) of the EU Securitisation Regulation 2017.
(2) Sub-paragraph (1) is subject to regulation 10(3) (which requires the FCA in certain circumstances to remove a securitisation from the list).
(3) A securitisation within sub-paragraph (1) is to be regarded for the purposes of these Regulations as meeting the STS criteria at any time on or after the main commencement day if, and only if, the securitisation complies with Articles 19 to 22 or Articles 23 to 26 of the EU Securitisation Regulation 2017, as they had effect immediately before the main commencement day.
(4) References in these Regulations to compliance with the STS criteria are, in relation to a securitisation within sub-paragraph (1), to be read in accordance with sub-paragraph (3).
(5) In relation to a securitisation that is included on the list referred to in regulation 10(2) as a result of sub-paragraph (1)—
(a) the reference in regulation 32B(5)(c) to any applicable designated activity rules relating to the notification mentioned in regulation 10(1) is to be read as a reference to Article 27 of the EU Securitisation Regulation 2017, and
(b) the references in regulation 32B(8) and paragraph 7 of Schedule A1 to the STS notification is to be read as a reference to the notification to the FCA under Article 27(1) of the EU Securitisation Regulation 2017.
Temporary bans on STS notifications
3 (1) Where immediately before the main commencement day a temporary ban has effect under regulation 21 of the Securitisation Regulations 2018, the temporary ban is to be treated for the remainder of the period for which it is to have effect as having been imposed under regulation 39 of these Regulations, but this is subject to the powers of the FCA under regulation 39(2).
(2) In regulation 39(1)(a) a reference to failure to meet the requirements of designated activity rules made by virtue of regulation 5, so far as those rules relate to STS securitisations, is to be read as including a reference to—
(a) a failure before the main commencement day to meet the requirements of Article 19, 20, 21, 23, 24, 25 or 26 of the EU Securitisation Regulation 2017, in a case where no decision notice has been given before the main commencement day, or
(b) the making of a misleading notification pursuant to Article 27(1) of the EU Securitisation Regulation 2017, in a case where no decision notice has been given before that day.
Securitisation repositories
4 (1) This paragraph applies where, immediately before the main commencement day, a securitisation repository is registered with the FCA for the purposes of Article 5 of the EU Securitisation Regulation 2017 under Article 10 of that Regulation.
(2) On and after the main commencement day, the securitisation repository is to be taken to have been registered under regulation 14 of these Regulations, but this is subject to the provisions of these Regulations relating to the withdrawal of registration.
5 Where immediately before the main commencement day a securitisation repository is subject to a requirement imposed under regulation 64A of the Over the Counter Derivatives, Central Counterparties and Trade Depositories (Amendment, etc, and Transitional Provision) Regulations 2019 as applied by Article 15 of the EU Securitisation Regulation 2017, the requirement is to be taken on or after that day to have been imposed under regulation 23 of these Regulations.
Third party verification services
6 (1) This paragraph applies where, immediately before the main commencement day, a person is authorised by the FCA for the purposes of Article 28 of the EU Securitisation Regulation 2017 to provide a third party verification service.
(2) On and after the main commencement day, the person is to be taken to have been registered under regulation 25 of these Regulations, but this is subject to the provisions of these Regulations relating to the withdrawal of registration.
References to Tribunal
7 (1) This paragraph applies where immediately before the main commencement day—
(a) a person has a right to make a reference to the Tribunal in respect of any decision of the FCA to refuse—
(i) registration as a securitisation repository under Article 10 of the EU Securitisation Regulation 2017, or
(ii) authorisation for the purposes of Article 28 of the EU Securitisation Regulation 2017 to provide a third party verification service, or
(b) such a reference has been made but not determined.
(2) These Regulations and the revocation of the EU-derived securitisation legislation do not affect the reference to the Tribunal.
(3) If the Tribunal refers the matter to the FCA for decision, paragraph 4 or 6 applies in relation to registration or authorisation in accordance with a direction of the Tribunal as it applies in relation to registration or authorisation having effect immediately before the main commencement day.
Temporary prohibitions relating to management functions
8 (1) Where, immediately before the main commencement day, a temporary prohibition has effect under regulation 5 of the Securitisation Regulations 2018, the temporary prohibition is to be treated for the remainder of the period for which it is to have effect has having been imposed under regulation 37 of these Regulations by the regulator which imposed it, but this is subject to the powers of the regulator under regulation 37(4).
(2) In regulation 37(1), the reference to a contravention of a relevant requirement is to be read as including a contravention before the main commencement day of a relevant requirement as defined in regulation 2(1) of the Securitisation Regulations 2018 as respects which the FCA was the appropriate regulator.
(3) In regulation 37(2), the reference to a contravention of PRA securitisation rules is to be read as including a contravention before the main commencement day of a relevant requirement as defined in regulation 2(1) of the Securitisation Regulations 2018 as respects which the PRA was the appropriate regulator.
(4) Sub-paragraphs (2) and (3) do not apply where, before the main commencement day, a decision notice has been given relating to the imposition of a temporary prohibition under regulation 5 of the Securitisation Regulations 2018 by reference to the contravention in question.
Disciplinary measures in respect of contraventions before main commencement day
9 (1) The revocation of the EU-derived securitisation legislation does not affect the exercise by the FCA or the PRA, in respect of things done or omitted before the main commencement day, of their powers—
(a) under regulation 7 of the Securitisation Regulations 2018 (public censure) or regulation 8 of those Regulations (financial penalties),
(b) under any provision of the Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc, and Transitional Provisions) (EU Exit) Regulations 2019 as applied by the Securitisation Regulations 2018, or
(c) under any provision of FSMA 2000 as applied by the Securitisation Regulations 2018.
(2) Sub-paragraph (1) does not limit the application of section 16 of the Interpretation Act 1978.
Directions given under regulation 25 of Securitisation Regulations 2018
10 (1) Any direction given by the FCA or the PRA under regulation 25 of the Securitisation Regulations 2018 (transparency requirements for originators, sponsors and SSPEs of private securitisations) that is in force immediately before the main commencement day is to remain in force on and after that day until revoked under this paragraph.
(2) On and after the main commencement day, the direction to which sub-paragraph (1) applies to be read as if—
(a) the reference to the information under Article 7(1)(a) to (g) of the EU Securitisation Regulation 2017 were a reference to the information referred to in any provisions of the appropriate rules that require the originator, sponsor or SSPE to provide information in relation to a securitisation,
(b) other expressions defined by reference to the EU Securitisation Regulation 2017 had the same meaning as in these Regulations, and
(c) the reference to an entity designated under subparagraph 1 of Article 7(2) of the EU Securitisation Regulation 2017 were a reference to an entity designated under an equivalent provision of the appropriate rules.
(3) The provisions of Part 8 of these Regulations, of FSMA 2000, and of FSMA 2000 as applied by Schedule 1 to these Regulations, apply in relation to a failure on or after the main commencement day to comply with a direction to which sub-paragraph (1) applies as those provisions apply in relation to a contravention of the appropriate rules.
(4) In this paragraph “the appropriate rules” means—
(a) in the case of a PRA-authorised person, rules made by the PRA under section 137G of FSMA 2000 relating to securitisations;
(b) in any other case, designated activity rules made by virtue of regulation 5.
(5) The FCA or the PRA may by a further direction amend a direction to which sub-paragraph (1) applies that was given by it.
(6) The FCA or the PRA may by notice revoke a direction to which sub-paragraph (1) applies that was given by it.