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Financial Services and Markets Act 2000

Type Public General Act

Publication 2000-06-14

Last updated 2026-09-05

State In force

Department Statute Law Database

Source legislation.gov.uk

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An Act to make provision about the regulation of financial services and markets; to provide for the transfer of certain statutory functions relating to building societies, friendly societies, industrial and provident societies and certain other mutual societies; and for connected purposes.

Reform history JSON API

(2) Publication is to be in such manner as the regulator thinks fit.

Role of the Treasury

140H

(1) This section applies where—

(a) the CMA has given section 140B advice and the regulator has published a response under section 140G, and

(b) the CMA remains of the opinion that one or more of the things mentioned in section 140B(4) may cause or contribute to, the effect mentioned in section 140B(5).

(2) The CMA may refer the section 140B advice to the Treasury by sending the Treasury—

(a) a copy of the section 140B advice and of the response, and

(b) a request to consider the advice and the response.

(3) In referring the section 140B advice, the CMA may give advice to the Treasury as to what action, if any, ought to be taken by the regulator.

(4) If section 140B advice is referred to them, the Treasury may give a direction to the regulator to which the advice was given requiring the regulator to take such action as may be specified in the direction.

(5) In considering whether to give a direction and, if so, what action to specify, the Treasury must have regard to—

(a) any advice the CMA has given under subsection (3),

(b) any action which the section 140B advice suggests that the regulator should take, and

(6) The direction may not require the regulator to do anything that it has no power to do, but the existence of the direction is relevant to the exercise of any discretion conferred on the regulator.

(7) Before giving a direction under this section, the Treasury must consult the regulator to which it is to be given.

(8) If the Treasury give a direction under this section they must—

(a) publish in such manner as they think fit a statement giving details of the direction and of their reasons for giving it, and

(b) lay a copy of the statement before Parliament.

CHAPTER 5 — Power to make consequential amendments

Power to make consequential amendments of references to rules etc.

141A

(1) This section applies if—

(a) a provision of primary or subordinate legislation (whenever passed or made) contains a reference (however expressed) to rules of either regulator or to guidance of the FCA,

(b) it appears to the Treasury or the Secretary of State that the reference requires amendment in consequence of the exercise by that regulator of its power under this Part to make, alter or revoke its rules or the exercise by the FCA of its power to make, alter or revoke its guidance.

(2) The Treasury or the Secretary of State may by order make such amendment of the legislation referred to in subsection (1)(a) as appears to them to be necessary or expedient in consequence of the exercise by the regulator of the power mentioned in subsection (1)(b).

(3) The power conferred by subsection (2) includes power—

(a) to replace a reference to the rules of one regulator with a reference to the rules of the other regulator or to the rules of both regulators;

(b) to replace a reference to the rules of both regulators with a reference to the rules of one regulator.

(4) In subsection (1)(a) “subordinate legislation” does not include rules of either regulator.

(5) A regulator's power under Part 2 of the Powers Regulations to amend its rules is treated for the purposes of this section as a power under this Part; and for this purpose “the Powers Regulations” means the Financial Regulators' Powers (Technical Standards etc.) (Amendment etc.) (EU Exit) Regulations 2018 (S.I. 2018/1115).

Power to consequentially amend enactments

141B

(1) The Treasury may by regulations make provision amending an enactment that is consequential on rules.

(2) In this section—

“enactment” includes—an enactment comprised in subordinate legislation, assimilated direct legislation,an enactment comprised in, or in an instrument made under, a Measure or Act of Senedd Cymru,an enactment comprised in, or in an instrument made under, an Act of the Scottish Parliament, andan enactment comprised in, or in an instrument made under, Northern Ireland legislation;

“subordinate legislation” has the same meaning as in the Interpretation Act 1978 (see section 21 of that Act) but does not include rules of either regulator.

PART 9B — Ring-fencing

Introductory

“Ring-fenced body”

142A

(1) In this Act “ring-fenced body” means a UK institution which carries on one or more core activities (see section 142B) in relation to which it has a Part 4A permission.

(2) But “ring-fenced body” does not include—

(a) a building society within the meaning of the Building Societies Act 1986, or

(b) a UK institution of a class exempted by order made by the Treasury.

(3) An order under subsection (2)(b) may be made in relation to a class of UK institution only if the Treasury are of the opinion that the exemption conferred by the order would not be likely to have a significant adverse effect on the continuity of the provision in the United Kingdom of core services.

(4) Subject to that, in deciding whether and, if so, how to exercise their powers under subsection (2)(b), the Treasury must have regard to the desirability of minimising any adverse effect that the ring-fencing provisions might be expected to have on competition in the market for services provided in the course of carrying on core activities, including any adverse effect on the ease with which new entrants can enter the market.

(5) In subsection (4) “the ring-fencing provisions” means ring-fencing rules and the duty imposed as a result of section 142G.

(6) An order under subsection (2)(b) may provide for the exemption to be subject to conditions.

(7) In this section “UK institution” means a body corporate incorporated in the United Kingdom.

Core activities

142B

(1) References in this Act to a “core activity” are to be read in accordance with this section.

(2) The regulated activity of accepting deposits (whether carried on in the United Kingdom or elsewhere) is a core activity unless it is carried on in circumstances specified by the Treasury by order.

(3) An order under subsection (2) may be made only if the Treasury are of the opinion that it is not necessary for either of the following purposes that the regulated activity of accepting deposits should be a core activity when carried on in the specified circumstances.

(4) Those purposes are—

(a) to secure an appropriate degree of protection for the depositors concerned, or

(b) to protect the continuity of the provision in the United Kingdom of services provided in the course of carrying on the regulated activity of accepting deposits.

(5) The Treasury may by order provide for a regulated activity other than that of accepting deposits to be a core activity, either generally or when carried on in circumstances specified in the order.

(6) An order under subsection (5) may be made only if the Treasury are of the opinion—

(a) that an interruption of the provision of services provided in the United Kingdom in the carrying on of the regulated activity concerned could adversely affect the stability of the UK financial system or of a significant part of that system, and

(b) that the continuity of the provision of those services can more effectively be protected by treating the activity as a core activity.

Core services

142C

(1) References in this Act to “core services” are to be read in accordance with this section.

(2) The following are core services—

(a) facilities for the accepting of deposits or other payments into an account which is provided in the course of carrying on the core activity of accepting deposits;

(b) facilities for withdrawing money or making payments from such an account;

(3) The Treasury may by order provide that any other specified services provided in the course of carrying on the core activity of accepting deposits are also core services.

(4) If an order under section 142B(5) provides for an activity other than that of accepting deposits to be a core activity, the Treasury must by order provide that specified services provided in the course of carrying on that activity are core services.

(5) The services specified by order under subsection (4) must be services in relation to which the Treasury are of the opinion mentioned in section 142B(6)(a).

Excluded activities

142D

(1) References in this Act to an “excluded activity” are to be read in accordance with this section.

(2) The regulated activity of dealing in investments as principal (whether carried on in the United Kingdom or elsewhere) is an excluded activity unless it is carried on in circumstances specified by the Treasury by order.

(3) An order under subsection (2) may be made only if the Treasury are of the opinion that allowing ring-fenced bodies to deal in investments as principal in the specified circumstances would not be likely to result in any significant adverse effect on the continuity of the provision in the United Kingdom of core services.

(4) The Treasury may by order provide for an activity other than the regulated activity of dealing in investments as principal to be an excluded activity, either generally or when carried on in circumstances specified in the order.

(5) An activity to which an order under subsection (4) relates—

(a) need not be a regulated activity, and

(b) may be an activity carried on in the United Kingdom or elsewhere.

(6) In deciding whether to make an order under subsection (4) in relation to any activity, the Treasury must—

(a) have regard to the risks to which a ring-fenced body would be exposed if it carried on the activity concerned, and

(b) consider whether the carrying on of that activity by a ring-fenced body would make it more likely that the failure of the body would have an adverse effect on the continuity of the provision in the United Kingdom of core services.

(7) An order under subsection (4) may be made only if the Treasury are of the opinion that the making of the order is necessary or expedient for the purpose of protecting the continuity of the provision in the United Kingdom of core services.

Power of Treasury to impose prohibitions

142E

(1) The Treasury may by order prohibit ring-fenced bodies from—

(a) entering into transactions of a specified kind or with persons falling within a specified class;

(b) establishing or maintaining a branch in a specified country or territory;

(2) In deciding whether to make an order under this section imposing a prohibition, the Treasury must—

(a) have regard to the risks to which a ring-fenced body would be exposed if it did the thing to which the prohibition relates, and

(b) consider whether the doing of that thing by a ring-fenced body would make it more likely that the failure of the body would have an adverse effect on the continuity of the provision in the United Kingdom of core services.

(3) An order under this section may be made only if the Treasury are of the opinion that the making of the order is necessary or expedient for the purpose of protecting the continuity of the provision in the United Kingdom of core services.

(4) An order under this section may in particular—

(a) provide for any prohibition to be subject to exemptions specified in the order;

(b) provide for any exemption to be subject to conditions specified in the order.

Orders under section 142A, 142B, 142D or 142E

142F

(1) An order made under section 142A, 142B, 142D or 142E may—

(a) authorise or require the making of rules by a regulator for the purposes of, or for purposes connected with, any provision of the order;

(b) authorise the making of other instruments by a regulator for the purposes of, or for purposes connected with, any provision of the order;

(c) refer to a publication issued by a regulator, another body in the United Kingdom or an international organisation, as the publication has effect from time to time.

(2) If the order confers powers on a regulator or authorises or requires the making of rules or other instruments by a regulator, the order may also—

(a) impose conditions on the exercise of any power conferred on the regulator;

(b) impose consultation requirements on the regulator;

Ring-fenced bodies not to carry on excluded activities or contravene prohibitions

142G

(1) A ring-fenced body which—

(a) carries on an excluded activity or purports to do so, or

(b) contravenes any provision of an order under section 142E,

is to be taken to have contravened a requirement imposed on the body by the appropriate regulator under this Act.

(2) The contravention does not—

(a) make a person guilty of an offence;

(b) make a transaction void or unenforceable;

(3) In such cases as the Treasury may specify by order, the contravention is actionable at the suit of a person who suffers loss as a result of the contravention, subject to the defences and other incidents applying to actions for breach of statutory duty.

(4) In this section “the appropriate regulator” means—

(a) in relation to a ring-fenced body which is a PRA-authorised person, the PRA;

(b) in relation to any other ring-fenced body, the FCA.

Ring-fencing rules

142H

(1) In the exercise of its power to make general rules, the appropriate regulator must in particular make rules—

(a) requiring a ring-fenced body to make arrangements to ensure the effective provision to the ring-fenced body of services and facilities that it requires in relation to the carrying on of a core activity, and

(b) making provision for the group ring-fencing purposes applying to ring-fenced bodies and to authorised persons who are members of a ring-fenced body's group.

(2) Section 142E(1)(c) does not affect the power of the appropriate regulator to make general rules imposing restrictions on the extent of the shares or voting power that a ring-fenced body may hold in another company, except where a restriction on the extent of the shares or voting power that the ring-fenced body may hold in the company is imposed by order under section 142E(1)(c).

(3) General rules that are required by this section or make provision falling within subsection (2) are in this Act referred to as “ring-fencing rules”.

(4) The “group ring-fencing purposes” are—

(a) ensuring as far as reasonably practicable that the carrying on of core activities by a ring-fenced body is not adversely affected by the acts or omissions of other members of its group;

(b) ensuring as far as reasonably practicable that in carrying on its business a ring-fenced body—

(i) is able to take decisions independently of other members of its group, and

(ii) does not depend on resources which are provided by a member of its group and which would cease to be available to the ring-fenced body in the event of the insolvency of the other member;

(c) ensuring as far as reasonably practicable that the ring-fenced body would be able to continue to carry on core activities in the event of the insolvency of one or more other members of its group.

(5) Ring-fencing rules made for the group ring-fencing purposes must include—

(a) provision restricting the power of a ring-fenced body to enter into contracts with other members of its group otherwise than on arm's length terms;

(b) provision restricting the payments that a ring-fenced body may make (by way of dividend or otherwise) to other members of its group;

(c) provision requiring the disclosure to the appropriate regulator of information relating to transactions between a ring-fenced body and other members of its group;

(d) provision requiring a ring-fenced body to ensure that its board of directors (or if there is no such board, the equivalent management body) includes to a specified extent—

(i) members who are treated by the rules as being independent of other members of the ring-fenced body's group,

(ii) members who are treated by the rules as being independent of the ring-fenced body itself, and

(iii) non-executive members;

(e) provision requiring a ring-fenced body to act in accordance with a remuneration policy meeting specified requirements;

(f) provision requiring a ring-fenced body to act in accordance with a human resources policy meeting specified requirements;

(g) provision requiring arrangements made by the ring-fenced body for the identification, monitoring and management of risk to meet specified requirements;

(h) such other provision as the appropriate regulator considers necessary or expedient for any of the purposes in subsection (4).

(6) The reference in subsection (5)(e) to a remuneration policy is a reference to a policy about the remuneration of officers, employees and other persons who (in each case) are of a specified description.

(7) The reference in subsection (5)(f) to a human resources policy is a reference to a policy about the appointment and management of officers, employees and other persons who (in each case) are of a specified description.

(8) In this section—

“the appropriate regulator” means—in relation to a PRA-authorised person, the PRA;in relation to any other authorised person, the FCA;

“shares” has the meaning given in section 422;

“specified” means specified in the rules;

“voting power” has the meaning given in section 422.

Powers of Treasury in relation to ring-fencing rules

142I

(1) The Treasury may by order require the appropriate regulator, as defined in section 142H(8), to include (or not to include) in ring-fencing rules specified provision relating to—

(a) any of the matters mentioned in section 142H(5)(a) to (g), or

(b) any other specified matter.

(2) The power to make an order under this section is exercisable only if the Treasury consider it necessary or expedient to do so—

(a) for any of the group ring-fencing purposes as defined in section 142H(4), or

(b) otherwise for securing the independence of ring-fenced bodies from other members of their groups.

(3) “Specified” means specified in the order.

Review of ring-fencing rules etc

142J

(1) The PRA must carry out reviews of its ring-fencing rules and of any rules made by it under section 192JA (rules applying to parent undertakings of ring-fenced bodies).

(2) The first review must be completed before the end of the period of 5 years beginning with the day on which the first ring-fencing rules come into force.

(3) Subsequent reviews must be completed before the end of the period of 5 years beginning with the day on which the previous review was completed.

(4) The PRA must give the Treasury a report of each review.

(5) The Treasury must lay a copy of the report before Parliament.

(6) The PRA must publish the report in such manner as it thinks fit.

(7) If (because any ring-fenced body is not a PRA-authorised person) section 142H has the effect of requiring the FCA to make ring-fencing rules, subsections (1) to (6) apply to the FCA as they apply to the PRA.

Group restructuring powers

Cases in which group restructuring powers become exercisable

142K

(1) The appropriate regulator may exercise the group restructuring powers only if it is satisfied that one or more of Conditions A to D is met in relation to a ring-fenced body that is a member of a group.

(2) Condition A is that the carrying on of core activities by the ring-fenced body is being adversely affected by the acts or omissions of other members of its group.

(3) Condition B is that in carrying on its business the ring-fenced body—

(a) is unable to take decisions independently of other members of its group, or

(b) depends on resources which are provided by a member of its group and which would cease to be available in the event of the insolvency of the other member.

(4) Condition C is that in the event of the insolvency of one or more other members of its group the ring-fenced body would be unable to continue to carry on the core activities carried on by it.

(5) Condition D is that the ring-fenced body or another member of its group has engaged, or is engaged, in conduct which is having, or would apart from this section be likely to have, an adverse effect on the advancement by the appropriate regulator—

(a) in the case of the PRA, of the objective in section 2B(3)(c), or

(b) in the case of the FCA, of the continuity objective.

(6) The appropriate regulator may not exercise the group restructuring powers in relation to any person if—

(a) either regulator has previously exercised the group restructuring powers in relation to that person, and

(b) the decision notice in relation to the current exercise is given before the second anniversary of the day on which the decision notice in relation to the previous exercise was given.

(7) In this section and sections 142L to 142Q “the appropriate regulator” means—

(a) where the ring-fenced body is a PRA-authorised person, the PRA;

(b) where it is not, the FCA.

Group restructuring powers

142L

(1) In this Part “the group restructuring powers” means one or more of the powers conferred by this section.

(2) Where the appropriate regulator is the PRA, the powers conferred by this section are as follows—

(a) in relation to the ring-fenced body, power to impose a requirement on the ring-fenced body requiring it to take any of the steps mentioned in subsection (5),

(b) in relation to any member of the ring-fenced body's group which is a PRA-authorised person, power to impose a requirement on the PRA-authorised person requiring it to take any of the steps mentioned in subsection (6),

(c) in relation to any member of the ring-fenced body's group which is an authorised person but not a PRA-authorised person, power to direct the FCA to impose a requirement on the authorised person requiring it to take any of the steps mentioned in subsection (6), and

(d) in relation to a qualifying parent undertaking, power to give a direction under this paragraph to the parent undertaking requiring it to take any of the steps mentioned in subsection (6).

(3) Where the appropriate regulator is the FCA, the powers conferred by this section are as follows—

(a) in relation to the ring-fenced body, power to impose a requirement on the ring-fenced body requiring it to take any of the steps mentioned in subsection (5),

(b) in relation to any member of the ring-fenced body's group which is an authorised person but not a PRA-authorised person, power to impose a requirement on the authorised person requiring it to take any of the steps mentioned in subsection (6),

(c) in relation to any member of the ring-fenced body's group which is a PRA-authorised person, power to direct the PRA to impose a requirement on the authorised person requiring it to take any of the steps mentioned in subsection (6), and

(d) in relation to a qualifying parent undertaking, power to give a direction under this paragraph to the parent undertaking requiring it to take any of the steps mentioned in subsection (6).

(4) A parent undertaking of a ring-fenced body by reference to which the group restructuring powers are exercisable is for the purposes of this Part a “qualifying parent undertaking” if—

(a) it is a body corporate which is incorporated in the United Kingdom and has a place of business in the United Kingdom, and

(b) it is not itself an authorised person.

(5) The steps that the ring-fenced body may be required to take are—

(a) to dispose of specified property or rights to an outside person;

(b) to apply to the court under Part 7 for an order sanctioning a ring-fencing transfer scheme relating to the transfer of the whole or part of the business of the ring-fenced body to an outside person;

(6) The steps that another authorised person or a qualifying parent undertaking may be required to take are—

(a) to dispose of any shares in, or securities of, the ring-fenced body to an outside person;

(b) to dispose of any interest in any other body corporate that is a member of the ring-fenced body's group to an outside person;

(d) to apply to the court under Part 7 for an order sanctioning a ring-fencing transfer scheme relating to the transfer of the whole or part of the business of the authorised person or qualifying parent undertaking to an outside person.

(7) In subsections (5) and (6) “outside person” means a person who, after the implementation of the disposal or scheme in question, will not be a member of the group of the ring-fenced body by reference to which the powers are exercised (whether or not that body is to remain a ring-fenced body after the implementation of the disposal or scheme in question).

(8) It is immaterial whether a requirement to be imposed on an authorised person by the appropriate regulator, or by the other regulator at the direction of the appropriate regulator, is one that the regulator imposing it could impose under section 55L or 55M.

Procedure: preliminary notices

142M

(1) If the appropriate regulator proposes to exercise the group restructuring powers in relation to any authorised person or qualifying parent undertaking (“the person concerned”), the regulator must give each of the relevant persons a notice (a “preliminary notice”).

(2) The preliminary notice must—

(a) state that it is a preliminary notice,

(b) state that the regulator proposes to exercise the group restructuring powers,

(d) be in writing, and

(e) give reasons for the proposed action (which must include the regulator's reasons for being satisfied as to the matters mentioned in section 142K(1)).

(3) The appropriate regulator must give a copy of the preliminary notice to the Treasury.

(4) The preliminary notice must specify a reasonable period (which may not be less than 14 days) within which any of the relevant persons may make representations to the regulator.

(5) The relevant persons are—

(a) the person concerned,

(b) the ring-fenced body, if not the person concerned, and

(c) any other authorised person who will, in the opinion of the appropriate regulator, be significantly affected by the exercise of the group restructuring powers.

Procedure: warning notice and decision notice

142N

(1) If the appropriate regulator has given a preliminary notice under section 142M, it must either—

(a) if, having considered any representations made by any of the relevant persons, it still proposes to exercise the group restructuring powers, give each of the relevant persons a warning notice during the warning notice period, or

(b) before the end of the warning notice period, give each of them a written notice stating that it has decided not to exercise the powers and give a copy of that notice to the Treasury.

(2) The “warning notice period” is the period—

(a) beginning 3 months after the end of the period specified under section 142M(4) as that within which any representations must be made, and

(b) ending 6 months after the end of that period.

(3) Before giving a warning notice under subsection (1)(a), the appropriate regulator must—

(a) give the Treasury a draft of the notice,

(b) provide the Treasury with any information that the Treasury may require in order to decide whether to give their consent, and

(4) The action specified in the warning notice may be different from that specified in the preliminary notice if—

(a) the appropriate regulator considers that different action is appropriate as a result of any change in circumstances since the preliminary notice was given, or

(b) the person concerned consents to the change.

(5) The regulator must, in particular, have regard to anything that—

(a) has been done by the person concerned since the giving of the preliminary notice, and

(b) represents action that would have been required in pursuance of the proposals in that notice.

(6) If the regulator decides to exercise the group restructuring powers it must give each of the relevant persons a decision notice.

(7) The decision notice must specify the date or dates by which each of the following must be completed—

(a) any disposal of shares, securities or other property that is required by the notice;

(b) any transfer of liabilities for which the notice requires arrangements to be made.

(8) The giving of consent for the purpose of subsection (4)(b) does not affect any right to refer to the Tribunal the matter to which any decision notice resulting from the warning notice relates.

(9) “The relevant persons” has the same meaning as in section 142M.

References to Tribunal

142O

(1) A notified person who is aggrieved by—

(a) the imposition by either regulator of a requirement as a result of section 142L(2)(a) or (b) or (3)(a) or (b),

(b) a requirement to be imposed as a result of the giving by one regulator to the other of a direction under section 142L(2)(c) or (3)(c), or

may refer the matter to the Tribunal.

(2) “Notified person” means a person to whom a decision notice under section 142N(6) was given or ought to have been given.

Subsequent variation of requirement or direction

142P

(1) A regulator may at any time with the consent of the person concerned vary—

(a) a requirement imposed by it as a result of section 142L(2)(a) or (b) or (3)(a) or (b), or

(b) a direction given by it as a result of section 142L(2)(c) or (d) or (3)(c) or (d).

(2) The person concerned may at any time apply to the appropriate regulator for the variation of—

(a) a requirement imposed by it as a result of section 142L(2)(a) or (b) or (3)(a) or (b), or

(b) a direction given by it as a result of section 142L(2)(c) or (d) or (3)(c) or (d).

(3) Sections 55U, 55V, 55X and 55Z3 apply to an application under subsection (2) as they apply to an application for the variation of a requirement imposed by the appropriate regulator under section 55L or 55M.

Consultation etc. between regulators

142Q

(1) Where a notice under section 142M or a warning notice or decision notice under section 142N relates to a requirement to be imposed in pursuance of a direction to be given as a result of section 142L(2)(c) or (3)(c), the appropriate regulator must—

(a) consult the other regulator before giving the notice, and

(b) give a copy of the notice to the other regulator.

(2) The appropriate regulator must consult the other regulator before varying under section 142P a direction given as a result of section 142L(2)(c) or (3)(c).

(3) Directions given by the FCA as a result of section 142L(3)(c) are subject to any directions given to the FCA under section 3I.

Relationship with regulators' powers under Parts 4A and 12A

142R

(1) Subsection (2) applies in relation to—

(a) a ring-fenced body which is a member of a mixed group, and

(b) a parent undertaking of such a ring-fenced body.

(2) A regulator may not exercise its general powers in relation to the ring-fenced body or parent undertaking so as to achieve either of the results in subsection (3).

(3) Those results are—

(a) that no existing group member is a parent undertaking of the ring-fenced body;

(b) that the ring-fenced body is not a member of a mixed group.

(4) In subsection (3)(a) “existing group member” means a person who is a member of the ring-fenced body's group at the time when the requirement is imposed or the direction given.

(5) Except as provided by subsections (1) to (4), the provisions of sections 142K to 142Q do not limit the general powers of either regulator.

(6) For the purposes of this section, a regulator's “general powers” are its powers under the following provisions—

(a) section 55L or 55M (imposition of requirements in connection with Part 4A permission);

(b) section 192C (power to direct qualifying parent undertaking).

(7) For the purposes of this section, a ring-fenced body is a member of a mixed group if a member of the ring-fenced body's group carries on an excluded activity.

Failure of parent undertaking to comply with direction

Power to impose penalty or issue censure

142S

(1) This section applies if a regulator is satisfied that a person who is or has been a qualifying parent undertaking (“P”) has contravened a requirement of a direction given to P by that regulator as a result of section 142L(2)(d) or (3)(d).

(2) The regulator may impose a penalty of such amount as it considers appropriate on—

(a) P, or

(b) any person who was knowingly concerned in the contravention.

(3) The regulator may, instead of imposing a penalty on a person, publish a statement censuring the person.

(4) The regulator may not take action against a person under this section after the end of the limitation period unless, before the end of that period, it has given a warning notice to the person under section 142T.

(5) “The limitation period” means the period of 3 years beginning with the first day on which the regulator knew of the contravention.

(6) For this purpose a regulator is to be treated as knowing of a contravention if it has information from which the contravention can reasonably be inferred.

(7) The requirements that a regulator may be required to impose as a result of a direction under section 142L(2)(c) or (3)(c) include requirements that the regulator would not but for the direction have power to impose.

Procedure and right to refer to Tribunal

142T

(1) If a regulator proposes to take action against a person under section 142S, it must give the person a warning notice.

(2) A warning notice about a proposal to impose a penalty must state the amount of the penalty.

(3) A warning notice about a proposal to publish a statement must set out the terms of the statement.

(4) If the regulator decides to take action against a person under section 142S, it must give the person a decision notice.

(5) A decision notice about the imposition of a penalty must state the amount of the penalty.

(6) A decision notice about the publication of a statement must set out the terms of the statement.

(7) If the regulator decides to take action against a person under section 142S, the person may refer the matter to the Tribunal.

Duty on publication of statement

142U

After a statement under section 142S(3) is published, the regulator must send a copy of the statement to—

(a) the person in respect of whom it is made, and

(b) any person to whom a copy of the decision notice was given under section 393(4).

Imposition of penalties under section 142S: statement of policy

142V

(1) Each regulator must prepare and issue a statement of policy with respect to—

(a) the imposition of penalties under section 142S, and

(b) the amount of penalties under that section.

(2) A regulator's policy in determining what the amount of a penalty should be must include having regard to—

(a) the seriousness of the contravention,

(b) the extent to which the contravention was deliberate or reckless, and

(3) A regulator may at any time alter or replace a statement issued under this section.

(4) If a statement issued under this section is altered or replaced, the regulator must issue the altered or replacement statement.

(5) In exercising, or deciding whether to exercise, a power under section 142S(2) in the case of any particular contravention, a regulator must have regard to any statement of policy published under this section and in force at a time when the contravention occurred.

(6) A statement under this section must be published by the regulator concerned in the way appearing to the regulator to be best calculated to bring it to the attention of the public.

(7) A regulator may charge a reasonable fee for providing a person with a copy of the statement published under this section.

(8) A regulator must, without delay, give the Treasury a copy of any statement which it publishes under this section.

(9) Section 192I applies in relation to a statement under this section as it applies in relation to a statement under section 192H.

Pension liabilities

142W

(1) The Treasury may by regulations require a ring-fenced body to make arrangements for any one or more of the following purposes—

(a) ensuring that, except in prescribed cases, the ring-fenced body cannot become liable to meet, or contribute to the meeting of, pension liabilities which arise in connection with persons' service on or after a date specified in the regulations (“the specified date”) in any employment, other than service in an employment in respect of which the employer is a ring-fenced body;

(b) ensuring that, except in prescribed cases, the default of a person other than another ring-fenced body would not result in the ring-fenced body becoming liable to meet, or contribute to the meeting of, pension liabilities arising in connection with persons' service in any employment before the specified date;

(c) to the extent that it is not possible to ensure the result mentioned in paragraph (a) or (b), minimising any potential liability falling within paragraph (a) or (b).

(2) The regulations may make provision enabling the trustees or managers of a relevant pension scheme in respect of which the employer or one of the employers is a ring-fenced body—

(a) to transfer to another relevant pension scheme all or part of the pension liabilities arising in connection with persons' service before the specified date together with all or part of the assets of the scheme, or

(b) to divide the scheme into two or more sections in relation to which prescribed conditions are met.

(3) The regulations may make provision—

(a) enabling a ring-fenced body to apply to the court in a case where the ring-fenced body has been unable to reach agreement with another person (“P”) about the making of arrangements with P on commercial terms for one or more of the purposes in subsection (1), and

(b) enabling the court on such an application to order P to enter into arrangements with the ring-fenced body for those purposes on such terms as the court considers fair and reasonable in the circumstances.

(4) The regulations must provide that any terms specified by the court by virtue of provision made under subsection (3)—

(a) must be terms which, in the court's opinion, represent terms on which the arrangements might be entered into if they were being entered into for commercial reasons between willing parties dealing at arm's length, and

(b) may involve the payment of any sum by instalments.

(5) The regulations may make other provision—

(a) about the making by a ring-fenced body of arrangements for one or more of the purposes in subsection (1);

(b) about any transfer or division falling within subsection (2).

(6) The regulations may in particular—

(a) require a ring-fenced body to cease to participate in a relevant pension scheme unless the scheme is divided into two or more sections in relation to which prescribed conditions are met;

(b) provide that assets or liabilities of a relevant pension scheme may not be transferred under the arrangements to another occupational pension scheme unless the other scheme meets prescribed conditions;

(d) provide that any provision of a relevant pension scheme that might prevent the making of the arrangements, other than a provision requiring the consent of the trustees or managers of the scheme, is not to have effect in prescribed circumstances;

(e) make provision enabling the trustees or managers of a relevant pension scheme, with the consent of the employers in relation to the scheme, to modify the scheme by resolution for the purpose of enabling the arrangements to be made;

(f) require the trustees or managers of a relevant pension scheme or any employer in relation to a relevant pension scheme to give notice of prescribed matters to prescribed persons;

(g) make provision enabling the court, on an application made in accordance with the regulations by a ring-fenced body, if it appears to the court that the trustees or managers of a relevant pension scheme, or an employer in relation to such a scheme, have unreasonably refused their consent to any step that would enable the arrangements to be made, to order that the step may be taken without that consent;

(h) confer exemption from any provision of the regulations in prescribed cases;

(i) confer functions on the PRA;

(j) provide that a ring-fenced body which contravenes a prescribed requirement of the regulations is to be taken to have contravened a requirement imposed by the PRA under this Act;

(k) modify, exclude or apply (with or without modification) any primary or subordinate legislation.

(7) The Treasury may by regulations require an authorised person who will or may be a ring-fenced body or an authorised person who will or may be a member of a ring-fenced body's group to do all it can to obtain from the Pensions Regulator a clearance statement in relation to any arrangements to be made for the purpose of complying with—

(a) regulations under this section, or

(b) any provision made by or under this Part (other than this section) when the provision comes into force.

(8) A “clearance statement” is a statement issued by the Pensions Regulator under any of the following provisions—

(a) section 42 of the Pensions Act 2004 (clearance statements relating to contribution notice under section 38);

(b) section 46 of that Act (clearance statements relating to financial support directions);

(c) Article 38 of the Pensions (Northern Ireland) Order 2005 (clearance statements relating to contribution notices under article 34);

(d) Article 42 of that Order (clearance statements relating to financial support directions).

(9) In relation to a ring-fenced body that is not a PRA-authorised person, references in subsection (6) to the PRA are to be read as references to the FCA.

(10) Regulations under this section may not require ring-fenced bodies to achieve the results mentioned in subsection (1) before 1 January 2026, but this does not prevent the regulations requiring steps to be taken at any time after the regulations come into force.

Further interpretative provisions for section 142W

142X

(1) The following provisions have effect for the interpretation of section 142W and this section.

(2) “Relevant pension scheme” means an occupational pension scheme that is not a money purchase scheme.

(3) “Occupational pension scheme” has the meaning given in section 1 of the Pension Schemes Act 1993 or section 1 of the Pension Schemes (Northern Ireland) Act 1993 and, in relation to such a scheme, “member” and “trustees or managers” have the same meaning as in Part 1 of the Pensions Act 1995 or Part 2 of the Pensions (Northern Ireland) Order 1995.

(4) “Money purchase scheme” has the meaning given in section 181(1) of the Pension Schemes Act 1993 or section 176(1) of the Pension Schemes (Northern Ireland) Act 1993.

(5) “Employer”, in relation to a relevant pension scheme, means—

(a) a person who is for the purposes of Part 1 of the Pensions Act 1995 or Part 2 of the Pensions (Northern Ireland) Order 1995 an employer in relation to the scheme, and

(b) any other person who has or may have any liability under the scheme.

(6) “Employment” has the meaning given in section 181(1) of the Pension Schemes Act 1993 or section 176(1) of the Pension Schemes (Northern Ireland) Act 1993.

(7) “Pension liabilities” means liabilities attributable to or associated with the provision under a relevant pension scheme of pensions or other benefits.

(8) “The court” means—

(a) in relation to England and Wales or Northern Ireland, the High Court, and

(b) in relation to Scotland, the Court of Session.

Loss-absorbency requirements

Power of Treasury in relation to loss-absorbency requirements

142Y

(1) The Treasury may by order make provision about the exercise by either regulator of its functions under this Act, so far as they are (apart from the order) capable of being exercised in relation to a relevant body so as to require the relevant body—

(a) to issue any debt instrument, or

(b) to ensure that any part of the relevant body's debt consists of debt owed by it in respect of debt instruments, or debt instruments of a particular kind.

(2) A “relevant body” is—

(a) a ring-fenced body,

(b) any other body corporate that has a Part 4A permission relating to the regulated activity of accepting deposits, or

(3) “Debt instrument” means—

(a) a bond,

(b) any other instrument creating or acknowledging a debt, or

(4) An order under this section may in particular—

(a) require the regulator to exercise its functions so as to require relevant bodies to do either or both of the things mentioned in subsection (1);

(b) limit the extent to which the regulator may require a relevant body's debt to consist of debt owed in respect of debt instruments or of debt instruments of a kind specified in the order;

(i) to make, or not to make, provision by reference to specified matters, or

(ii) to have regard, or not to have regard, to specified matters;

(d) require the regulator to consult, or obtain the consent of, the Treasury before making rules of a specified description or exercising any other specified function;

(e) impose on the regulator in connection with the exercise of a specified function procedural requirements which would not otherwise apply to the exercise of the function;

(f) refer to a publication issued by a regulator, another body in the United Kingdom or an international organisation, as the publication has effect from time to time.

(5) “Specified” means specified in the order.

General

Affirmative procedure in relation to certain orders under Part 9B

142Z

(1) This section applies to an order containing provision made under any of the following provisions of this Part—

(a) section 142A(2)(b);

(b) section 142B(2) or (5);

(d) section 142D(2) or (4);

(e) section 142E;

(f) section 142I;

(g) section 142Y.

(2) No order to which this section applies may be made unless—

(a) a draft of the order has been laid before Parliament and approved by a resolution of each House, or

(b) subsection (4) applies.

(3) Subsection (4) applies if an order under 142D(4) or 142E contains a statement that the Treasury are of the opinion that, by reason of urgency, it is necessary to make the order without a draft being so laid and approved.

(4) Where this subsection applies the order—

(a) must be laid before Parliament after being made, and

(b) ceases to have effect at the end of the relevant period unless before the end of that period the order is approved by a resolution of each House of Parliament (but without that affecting anything done under the order or the power to make a new order).

(5) The “relevant period” is a period of 28 days beginning with the day on which the order is made.

(6) In calculating the relevant period no account is to be taken of any time during which Parliament is dissolved or prorogued or during which either House is adjourned for more than 4 days.

Interpretation of Part 9B

142Z1

(1) This section has effect for the interpretation of this Part.

(2) Any reference to—

(a) the regulated activity of accepting deposits, or

(b) the regulated activity of dealing in investments as principal,

is to be read in accordance with Schedule 2, taken with any order under section 22.

(3) Any reference to the group restructuring powers is to be read in accordance with section 142L(1).

(4) Any reference to a qualifying parent undertaking is to be read in accordance with section 142L(4).

PART 9C — Prudential regulation of FCA investment firms

Interpretation

FCA investment firms

143A

(1) In this Part, “FCA investment firm” means an investment firm that—

(a) is an authorised person within the meaning of section 31(1)(a),

(b) is not for the time being designated by the PRA under article 3 of the Financial Services and Markets Act 2000 (PRA-regulated Activities) Order 2013 (S.I. 2013/556), and

(2) But the following are not FCA investment firms—

(a) a person excluded from the definition of “investment firm” in Article 3(1) of the Financial Services and Markets 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) by paragraph (a) or (b) of that definition;

(b) an investment firm which has a Part 4A permission to carry on regulated activities as an exempt investment firm within the meaning of regulation 8 of the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701).

Other terms used in this Part

143B

(1) In this Part—

“authorised parent undertaking” means a parent undertaking that—is incorporated in the United Kingdom or has its principal place of business in the United Kingdom, andis an authorised person;

“on a consolidated basis” means as if all members of an FCA investment firm's group are a single FCA investment firm;

“Directive 2013/36/EU UK law” means the law of the United Kingdom which was relied on immediately before 1 January 2022 to implement the capital requirements directive and its implementing measures as it has effect—on IP completion day, in the case of rules made by the FCA or the PRA under this Act, andas amended from time to time, in all other cases;

“EU tertiary legislation” has the meaning given in section 20 of the European Union (Withdrawal) Act 2018;

“governance arrangements” includes organisational structure, lines of responsibility and internal control mechanisms;

“integrity”, in relation to the UK financial system, has the meaning given in section 1D;

“investment firm” has the meaning given in Article 4(1)(2) of the capital requirements regulation;

“non-authorised parent undertaking” means a parent undertaking that—is incorporated in the United Kingdom or has its principal place of business in the United Kingdom, andis not an authorised person.

(2) The Treasury may by regulations make provision about the meaning of the following terms for the purposes of this Part—

“on a consolidated basis”;

“group”;

“parent undertaking”;

“subsidiary undertaking”.

(3) Regulations under subsection (2) may, among other things, amend, repeal or otherwise modify provisions of this Act.

(4) In this Part, references to instruments made under the capital requirements regulation include EU tertiary legislation made under that regulation which forms part of assimilated law.

Rules

Duty to make rules applying to FCA investment firms

143C

(1) In the exercise of its power to make general rules, the FCA must make rules applying to FCA investment firms which impose the following types of prudential requirements—

(a) requirements relating to the types and amounts of capital and liquid assets that such firms must hold in order to manage the risks specified in or under subsection (2);

(b) requirements relating to the management of risks arising from the strength or extent of such firms' relationships with, or direct exposure to, a single client or group of connected clients;

(d) public disclosure requirements related to requirements described in paragraph (a) or (b);

(e) requirements in respect of governance arrangements related to the risks specified in or under subsection (2);

(f) requirements in respect of remuneration policies and practices related to the risks specified in or under subsection (2).

(2) The risks referred to in subsection (1)(a), (e) and (f) are—

(a) the risks to consumers (as defined in section 1G) arising from FCA investment firms,

(b) the risks to the integrity of the UK financial system arising from FCA investment firms,

(d) any other risks specified by the Treasury by regulations.

(3) General rules made for the purpose of subsection (1) may, among other things—

(a) impose requirements to be satisfied on an individual basis or on a consolidated basis;

(b) impose requirements relating to the processes for consolidation;

(c) make provision relating to transactions between an FCA investment firm and a member of its group, including provision requiring the disclosure of information;

(d) provide for exceptions from requirements;

(e) make provision by reference to the capital requirements regulation, to an instrument made under the capital requirements regulation or to Directive 2013/36/EU UK law, as amended from time to time.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Duty to make rules applying to parent undertakings

143D

(1) In the exercise of its power to make general rules, the FCA must make rules applying to authorised parent undertakings of FCA investment firms which impose the following types of prudential requirements—

(a) requirements relating to the types and amounts of capital and liquid assets that such undertakings must hold in order to manage the risks specified in or under subsection (2);

(b) requirements relating to the management of risks arising from the strength or extent of such undertakings' relationships with, or direct exposure to, a single client or group of connected clients;

(d) public disclosure requirements related to requirements described in paragraph (a) or (b);

(e) requirements in respect of governance arrangements related to the risks specified in or under subsection (2);

(f) requirements in respect of remuneration policies and practices related to the risks specified in or under subsection (2).

(2) The risks referred to in subsection (1)(a), (e) and (f) are—

(a) the risks to consumers (as defined in section 1G) arising from FCA investment firms, from parent undertakings of FCA investment firms and from FCA investment firms belonging to groups,

(b) the risks to the integrity of the UK financial system arising from FCA investment firms, from parent undertakings of FCA investment firms and from FCA investment firms belonging to groups,

(c) the risks to which FCA investment firms are exposed by virtue of their relationship with their parent undertaking, and

(d) any other risks specified by the Treasury by regulations.

(3) The FCA must make rules applying to non-authorised parent undertakings of FCA investment firms which impose requirements described in subsection (1), where such rules appear to it to be necessary or expedient for the purpose of advancing one or more of its operational objectives.

(4) Rules made for the purpose of subsection (1) or under subsection (3) may, among other things—

(a) impose requirements to be satisfied on an individual basis or on a consolidated basis;

(b) impose requirements relating to the processes for consolidation;

(c) make provision relating to transactions between a parent undertaking of an FCA investment firm and a member of its group, including provision requiring the disclosure of information;

(d) provide for exceptions from requirements;

(e) make provision by reference to the capital requirements regulation, to an instrument made under the capital requirements regulation or to Directive 2013/36/EU UK law, as amended from time to time.

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) Section 137H (rules about remuneration) applies where the FCA makes rules under subsection (3) prohibiting persons, or persons of a specified description, from being remunerated in a specified way as it applies where the FCA makes general rules imposing such a prohibition.

(8) Section 137I (Treasury direction to consider compliance with remuneration policies) applies where the FCA makes rules under subsection (3) requiring non-authorised parent undertakings, or non-authorised parent undertakings of a specified description, to act in accordance with a remuneration policy as it applies where the FCA makes general rules imposing such requirements on authorised persons, but as if—

(a) the references in that section to authorised persons were references to non-authorised parent undertakings of FCA investment firms, and

(b) subsection (7) of that section were omitted.

(9) Section 141A (power to make consequential amendments of references to rules etc) applies to the exercise by the FCA of its power to make, alter or revoke rules under subsection (3) as it applies in relation to the exercise by the FCA of its power to make, alter or revoke rules under Part 9A.

(10) This section is subject to section 143E.

Powers to make rules applying to parent undertakings

143E

(1) Subsections (1) and (3) of section 143D do not require the FCA to make rules applying to parent undertakings of FCA investment firms which belong to a group which includes a relevant body, but the FCA may make rules described in those subsections applying to such parent undertakings.

(2) In subsection (1), “relevant body” means—

(a) an undertaking (as defined in section 1161(1) of the Companies Act 2006) that has its head office in the United Kingdom and that has permission under Part 4A to accept deposits, other than—

(i) an undertaking that also has permission under Part 4A to effect or carry out contracts of insurance, or

(ii) a credit union within the meaning of section 1 of the Credit Unions Act 1979;

(b) an investment firm that is for the time being designated by the PRA under article 3 of the Financial Services and Markets Act 2000 (PRA-regulated Activities) Order 2013 (S.I. 2013/556).

(3) The FCA may make rules applying to parent undertakings of FCA investment firms which impose requirements for the disclosure of information about such undertakings' branches and subsidiary undertakings outside the United Kingdom.

(4) The FCA's powers to make rules under subsections (1) and (3) are powers to do so—

(a) in relation to authorised parent undertakings, in exercise of its power to make general rules, and

(b) in relation to non-authorised parent undertakings, where such rules appear to it to be necessary or expedient for the purpose of advancing one or more of its operational objectives.

(5) Section 143D(4) applies in relation to rules made by the FCA in exercise of the powers conferred by, or described in, this section as it applies in relation to rules made in the performance of the FCA's duties under that section.

(6) Section 143D ... (7), (8) and (9) apply in relation to rules made under this section applying to non-authorised parent undertakings as they apply in relation to rules made under section 143D(3).

Part 9C rules

143F

(1) In this Act, “Part 9C rules” means rules made, or to be made, by the FCA—

(a) in the performance of its duties under section 143C or 143D, or

(b) in exercise of the powers conferred by, or described in, section 143E.

(2) The FCA must publish a list of all Part 9C rules in force in the way appearing to the FCA to be best calculated to bring it to the attention of people likely to be affected by the rules.

(3) The FCA's opinion as to whether a rule is a Part 9C rule is conclusive for all purposes.

Matters to consider when making Part 9C rules

143G

(1) When making Part 9C rules, the FCA must, among other things, have regard to—

(a) any relevant standards set by an international standard-setting body, and

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d) any other matter specified by the Treasury by regulations.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) When making Part 9C rules, the FCA must consider, and consult the Treasury about, the likely effect of the rules on relevant equivalence decisions.

(4) For the purpose of this section, an equivalence decision is “relevant” if the Treasury have, by notice in writing, informed the FCA that it is relevant for that purpose.

(5) In this section—

“equivalence decision” means a decision as to whether the law and practice of one country or territory is equivalent to the law and practice of another country or territory, either generally or as it relates to a particular matter;

“territory” includes the European Union and any other international organisation or authority comprising countries or territories.

(6) This section is subject to section 143I.

Explanation to accompany consultation on rules

143H

(1) A draft of proposed Part 9C rules published in accordance with section 138I(1)(b) must be accompanied by—

(a) an explanation of the provision that the FCA has considered it appropriate to include in the rules given the risks specified in or under section 143C(2) or 143D(2), and

(b) an explanation of the ways in which having regard to the matters specified in or under section 143G(1) has affected the proposed rules,

(as well as being accompanied by the information listed in section 138I(2)).

(2) If the FCA makes the proposed Part 9C rules, it must publish—

(a) a summary of the purpose of the proposed rules, and

(b) explanations complying with subsection (1),

(as well as the information required by section 138I(4) and (5)).

(3) This section is subject to section 143I.

Exceptions from sections 143G and 143H

143I

(1) Sections 143G and 143H do not apply where the FCA makes Part 9C rules—

(a) in order to comply with a direction given by the Financial Policy Committee of the Bank of England under section 9H of the Bank of England Act 1998 (directions requiring macro-prudential measures), or

(b) in order to act in accordance with a recommendation made by that Committee under section 9Q of that Act (recommendations about the exercise of the FCA's functions).

(2) Section 143H does not apply in relation to Part 9C rules if the FCA considers that the delay involved in complying with that section would be prejudicial to the interests of consumers (as defined in section 425A).

(3) If the FCA proposes Part 9C rules that change existing Part 9C rules and the changes consist of or include changes which, in the FCA's opinion, are not material—

(a) the explanations described in section 143H(1) are not required in relation to the rules to the extent that they make those changes, but

(b) the draft of the rules must be accompanied by a statement of the FCA's opinion.

(4) If the FCA makes Part 9C rules that change existing Part 9C rules and the changes consist of or include changes which, in the FCA's opinion, are not material—

(a) the summary and explanations described in section 143H(2) are not required in relation to the rules to the extent that they make those changes, but

(b) the FCA must publish a statement of its opinion.

(5) For the purposes of this section, whether a change to Part 9C rules is material is to be determined by the FCA by reference to, among other things, the risks specified in or under section 143C(2) or 143D(2) and the matters specified in or under section 143G(1).

Requirement to have UK parent undertaking

143J

(1) This section applies where—

(a) two or more FCA investment firms are subsidiary undertakings of the same parent undertaking,

(b) the parent undertaking's head office is in a country or territory outside the United Kingdom, and

(c) in the FCA's opinion, the law and practice in the other country or territory does not impose requirements on the parent undertaking which have equivalent effect to requirements imposed by Part 9C rules.

(2) Where this section applies, the FCA may exercise its power under section 55L(3) to impose a requirement on the FCA investment firms to secure that a parent undertaking with its head office in the United Kingdom is established.

Imposition of requirements on non-authorised parent undertakings

143K

(1) The FCA may, on the application of a non-authorised parent undertaking of an FCA investment firm—

(a) impose a requirement on the parent undertaking,

(b) vary a requirement imposed on the parent undertaking under this section, or

(2) The FCA may exercise its power under subsection (3) in relation to a non-authorised parent undertaking of an FCA investment firm if it appears to the FCA that—

(a) it is necessary or expedient to do so in order to manage risks specified in or under section 143D(2), and

(b) it is desirable to do so in order to advance one or more of its operational objectives.

(3) The FCA's power under this subsection is a power—

(a) to impose a requirement,

(b) to vary a requirement imposed under this section, or

(4) The FCA may refuse an application under subsection (1) if it appears to the FCA that it is desirable to do so in order to advance one or more of the FCA's operational objectives.

(5) A requirement may, in particular, be imposed under this section—

(a) so as to require the parent undertaking to take specified action, or

(b) so as to require the parent undertaking to refrain from taking specified action.

(6) A requirement may be imposed by reference to the parent undertaking's relationship with—

(a) its group, or

(b) other members of its group.

(7) A requirement may refer to the past conduct of the parent undertaking (for example, by requiring the parent undertaking to review or take remedial action in respect of past conduct).

(8) A requirement may be expressed to expire at the end of a specified period, but the imposition of a requirement that expires at the end of a specified period does not affect the FCA's power to impose a new requirement.

(9) A requirement ceases to be in force if the person on whom it is imposed ceases to be a non-authorised parent undertaking of an FCA investment firm.

(10) For the purposes of a provision of this section which refers to the FCA's operational objectives, in relation to the exercise of a power in relation to a particular parent undertaking, it does not matter whether there is a relationship between the parent undertaking and the persons whose interests will be protected by the exercise of the power.

Applications under section 143K

143L

(1) An application under section 143K(1) for the imposition or variation of a requirement must contain a statement of the desired requirement or variation.

(2) An application under section 143K(1)—

(a) must be made in such manner as the FCA may direct, and

(b) must contain, or be accompanied by, such other information as the FCA may reasonably require.

(3) At any time after the application is received and before it is determined, the FCA may require the applicant to provide it with such further information as the FCA reasonably considers necessary to enable it to determine the application.

(4) The FCA may require an applicant to provide information which the applicant is required to provide the FCA under this section in such form, or to verify it in such a way, as the FCA may direct.

(5) Different directions may be given, and different requirements imposed, in relation to different applications or categories of application.

Determination of applications under section 143K

143M

(1) The FCA must determine an application under section 143K(1)—

(a) if the application is complete, before the end of the period of six months beginning with the day on which the FCA received the application, or

(b) if the application is incomplete, before the end of the period of 12 months beginning with the day on which the FCA received the application.

(2) The applicant may withdraw the application, by giving the FCA a written notice, at any time before the FCA determines it.

(3) If the FCA grants an application under section 143K(1), it must give the applicant a written notice.

(4) The notice must state the date from which the requirement or variation has effect.

Refusal of applications under section 143K

143N

(1) If the FCA proposes to refuse an application under section 143K(1), it must give the applicant a warning notice.

(2) If the FCA decides to refuse an application under section 143K(1), it must give the applicant a decision notice.

Exercise of own-initiative power under section 143K

143O

(1) The imposition or variation of a requirement by the FCA under section 143K(2) takes effect—

(a) immediately, if the notice given under subsection (3) states that is the case,

(b) on such date as may be specified in the notice, or

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