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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

Ending of authorisation

261U

(1) An authorisation order may be revoked by an order made by the FCA if it appears to the FCA that—

(a) one or more of the requirements for the making of the order are no longer satisfied;

(b) the operator or depositary of the scheme concerned has contravened a requirement imposed on the operator or depositary by or under this Act;

(c) the operator or depositary of the scheme has, in purported compliance with any such requirement, knowingly or recklessly given the FCA information which is false or misleading in a material particular;

(d) no regulated activity is being carried on in relation to the scheme and the period of that inactivity began at least twelve months earlier; or

(e) none of paragraphs (a) to (d) applies, but it is desirable to revoke the authorisation order in order to protect the interests of participants or potential participants in the scheme.

(2) For the purposes of subsection (1)(e), the FCA may take into account any matter relating to—

(a) the scheme;

(b) the operator or depositary;

(d) any director of the operator or depositary;

(e) any person exercising influence over the operator or depositary;

(f) any body corporate in the same group as the operator or depositary;

(g) any director of any such body corporate;

(h) any person exercising influence over any such body corporate.

Procedure for revoking authorisation order

261V

(1) If the FCA proposes to make an order under section 261U revoking an authorisation order (“a revoking order”), it must give separate warning notices to the operator and the depositary of the scheme.

(2) If the FCA decides to make a revoking order, it must without delay give each of them a decision notice and either of them may refer the matter to the Tribunal.

Requests for revocation of authorisation order

261W

(1) An authorisation order may be revoked by an order made by the FCA at the request of the operator or depositary of the scheme concerned.

(2) If the FCA makes an order under subsection (1), it must give written notice of the order to the operator and depositary of the scheme concerned.

(3) The FCA may refuse a request to make an order under this section if it considers that—

(a) the public interest requires that any matter concerning the scheme should be investigated before a decision is taken as to whether the authorisation order should be revoked; or

(b) revocation would not be in the interests of the participants ....

(4) If the FCA proposes to refuse a request under this section, it must give separate warning notices to the operator and the depositary of the scheme.

(5) If the FCA decides to refuse the request, it must without delay give each of them a decision notice and either of them may refer the matter to the Tribunal.

Powers of intervention

Directions

261X

(1) The FCA may give a direction under this section if it appears to the FCA that—

(a) one or more of the requirements for the making of an authorisation order are no longer satisfied;

(b) the operator or depositary of an authorised contractual scheme has contravened, or is likely to contravene, a requirement imposed—

(i) by or under this Act; ...

(ii) by UCITS-related direct EU legislation; or

(iii) by the MMF Regulation or any directly applicable regulation or decision made under that Regulation which constitutes assimilated direct legislation;

(c) the operator or depositary of such a scheme has, in purported compliance with any such requirement, knowingly or recklessly given the FCA information which is false or misleading in a material particular; or

(d) none of paragraphs (a) to (c) applies, but it is desirable to give a direction in order to protect the interests of participants or potential participants in such a scheme.

(2) A direction under this section may—

(a) require the operator of the scheme to cease the issue or redemption, or both the issue and redemption, of units under the scheme;

(b) require the operator and depositary of the scheme to wind it up.

(3) If the authorisation order is revoked, the revocation does not affect any direction under this section which is then in force.

(4) A direction may be given under this section in relation to a scheme in the case of which the authorisation order has been revoked.

(5) If a person contravenes a direction under this section, section 138D applies to the contravention as it applies to a contravention mentioned in that section.

(6) The FCA may revoke or vary a direction given under this section, either on its own initiative or on the application of a person to whom the direction was given, if it appears to the FCA—

(a) in the case of revocation, that it is no longer necessary for the direction to take effect or continue in force;

(b) in the case of variation, that the direction should take effect or continue in force in a different form.

Applications to the court

261Y

(1) If the FCA could give a direction under section 261X, it may also apply to the court for an order—

(a) removing the operator or the depositary, or both the operator and the depositary, of the scheme; and

(b) replacing the person or persons removed with a suitable person or persons nominated by the FCA.

(2) The FCA may nominate a person for the purposes of subsection (1)(b) only if it is satisfied that, if the order was made, the requirements of section 261D(4) to (9) would be complied with.

(3) If it appears to the FCA that there is no person it can nominate for the purposes of subsection (1)(b), it may apply to the court for an order—

(a) removing the operator or the depositary, or both the operator and the depositary, of the scheme; and

(b) appointing an authorised person to wind up the scheme.

(4) On an application under this section the court may make such order as it thinks fit.

(5) The court may, on the application of the FCA, rescind any such order as is mentioned in subsection (3) and substitute such an order as is mentioned in subsection (1).

(6) The FCA must give written notice of the making of an application under this section to the operator and depositary of the scheme concerned.

(7) The jurisdiction conferred by this section may be exercised by—

(a) the High Court;

(b) in Scotland, the Court of Session.

Winding up or merger of master UCITS

261Z

(1) Subsection (2) applies if a master UCITS which has one or more feeder UCITS which are authorised contractual schemes is wound up, whether as a result of a direction given by the FCA under section 257 or 261X, an order of the court under section 258 or 261Y, rules made by the FCA or otherwise.

(2) The FCA must direct the operator and depositary of any authorised contractual scheme which is a feeder UCITS of the master UCITS to wind up the feeder UCITS unless—

(a) the FCA approves under section 283A the investment by the feeder UCITS of at least 85% of the total property which is subject to the collective investment scheme constituted by the feeder UCITS in units of another UCITS or master UCITS; or

(b) the FCA approves under section 261S an amendment of the contractual scheme deed of the feeder UCITS which would enable it to convert into a UK UCITS which is not a feeder UCITS.

(3) Subsection (4) applies if a master UCITS which has one or more feeder UCITS which are authorised contractual schemes—

(a) merges with another UCITS, or

(b) is divided into two or more UCITS.

(4) The FCA must direct the operator and depositary of any authorised contractual scheme which is a feeder UCITS of the master UCITS to wind up the scheme unless—

(a) the FCA approves under section 283A the investment by the scheme of at least 85% of the total property which is subject to the collective investment scheme constituted by the feeder UCITS in the units of—

(i) the master UCITS which results from the merger;

(ii) one of the UCITS resulting from the division; or

(iii) another UCITS or master UCITS;

(b) the FCA approves under section 261S an amendment of the contractual scheme deed of the scheme concerned which would enable it to convert into a UK UCITS which is not a feeder UCITS.

Procedure on giving directions under section 261X or 261Z and varying them on FCA’s own initiative

261Z1

(1) A direction under section 261X or 261Z takes effect—

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

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

(2) A direction under section 261X 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 its power under that section, considers that it is necessary for the direction to take effect immediately (or on that date).

(3) If the FCA proposes to give a direction under section 261X or 261Z, or gives a direction under either section with immediate effect, it must give separate written notice to the operator and the depositary of the scheme concerned.

(4) The notice must—

(a) give details of the direction;

(b) inform the person to whom it is given of when the direction takes effect;

(d) inform the person to whom it is given that representations may be made to the FCA within such period as may be specified in it (whether or not the matter has been referred to the Tribunal); and

(e) inform the person to whom it is given of the right to refer the matter to the Tribunal.

(5) If the direction imposes a requirement under section 261X(2)(a), the notice must state that the requirement has effect until—

(a) a specified date; or

(b) a further direction.

(6) If the direction is given under section 261X(2)(b) or section 261Z(2) or (4), the scheme must be wound up—

(a) by a date specified in the notice; or

(b) if no date is specified, as soon as practicable.

(7) The FCA may extend the period allowed under the notice for making representations.

(8) If, having considered any representations made by a person to whom the notice was given, the FCA decides—

(a) to give the direction in the way proposed, or

(b) if it has been given, not to revoke the direction,

it must give separate written notice to the operator and the depositary of the scheme concerned.

(9) If, having considered any representations made by a person to whom the notice was given, the FCA decides—

(a) not to give the direction in the way proposed,

(b) to give the direction in a way other than that proposed, or

it must give separate written notice to the operator and the depositary of the scheme concerned.

(10) A notice given under subsection (8) must inform the persons to whom it is given of the right to refer the matter to the Tribunal.

(11) A notice under subsection (9)(b) must comply with subsection (4).

(12) If a notice informs a person of the right to refer a matter to the Tribunal, it must give an indication of the procedure on such a reference.

(13) This section applies to the variation of a direction on the FCA’s own initiative as it applies to the giving of a direction.

(14) For the purposes of subsection (1)(c), whether a matter is open to review is to be determined in accordance with section 391(8).

Procedure: refusal to revoke or vary direction

261Z2

(1) If on an application under section 261X(6) for a direction to be revoked or varied the FCA proposes—

(a) to vary the direction otherwise than in accordance with the application, or

(b) to refuse to revoke or vary the direction,

it must give the applicant a warning notice.

(2) If the FCA decides to refuse to revoke or vary the direction—

(a) it must give the applicant a decision notice; and

(b) the applicant may refer the matter to the Tribunal.

Procedure: revocation of direction and grant of request for variation

261Z3

(1) If the FCA decides on its own initiative to revoke a direction under section 261X it must give separate written notice of its decision to the operator and the depositary of the scheme.

(2) If on an application under section 261X(6) for a direction to be revoked or varied the FCA decides to revoke the direction or vary it in accordance with the application, it must give the applicant written notice of its decision.

(3) A notice under this section must specify the date on which the decision takes effect.

(4) The FCA may publish such information about the revocation or variation, in such way, as it considers appropriate.

Information for home state regulator

261Z4

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Information for feeder UCITS

261Z5

(1) The FCA must immediately inform the operator of any authorised contractual scheme which is a feeder UCITS of an authorised unit trust scheme, an authorised contractual scheme or an authorised open-ended investment company (the master UCITS) of—

(a) any failure of which the FCA becomes aware by the master UCITS to comply with a provision made by or under any enactment in implementation of Chapter VIII of the UCITS directive;

(b) any warning notice or decision notice given to the master UCITS in relation to a contravention of any provision made in implementation of Chapter VIII of the UCITS directive by or under any enactment or in rules of the FCA;

(c) any information reported to the FCA pursuant to rules of the FCA made to implement Article 106(1) of the UCITS directive which relates to the master UCITS, or to one or more of its directors, or its management company, trustee, depositary or auditor.

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

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER 3B — Unauthorised co-ownership AIFs

Power to make provision about unauthorised co-ownership AIFs

261Z6

(1) The Treasury may by regulations make provision about unauthorised co-ownership AIFs that corresponds or is similar to, or applies with modifications, any of sections 261M to 261O and section 261P(1) and (2) (rights and liabilities of participants in authorised co-ownership schemes).

(2) Regulations under subsection (1) may make provision about unauthorised co-ownership AIFs generally, or about unauthorised co-ownership AIFs of a description specified in the regulations.

(3) In this section “unauthorised co-ownership AIF” means a co-ownership scheme that—

(a) is an AIF, and

(b) is not authorised for the purposes of this Act by an authorisation order in force under section 261D(1).

Chapter IV — Open-ended Investment Companies

Open-ended investment companies.

262

(1) The Treasury may by regulations make provision for—

(a) facilitating the carrying on of collective investment by means of open-ended investment companies;

(b) regulating such companies.

(2) The regulations may, in particular, make provision—

(a) for the incorporation and registration in the United Kingdom of bodies corporate;

(b) for a body incorporated by virtue of the regulations to take such form as may be determined in accordance with the regulations;

(c) as to the purposes for which such a body may exist, the investments which it may issue and otherwise as to its constitution;

(d) as to the management and operation of such a body and the management of its property;

(e) as to the powers, duties, rights and liabilities of such a body and of other persons, including—

(i) the directors or sole director of such a body;

(ii) its depositary (if any);

(iii) its shareholders, and persons who hold the beneficial title to shares in it without holding the legal title;

(iv) its auditor; and

(v) any persons who act or purport to act on its behalf;

(f) as to the merger of one or more such bodies and the division of such a body;

(g) for the appointment and removal of an auditor for such a body;

(h) as to the winding up and dissolution of such a body;

(i) for such a body, or any director or depositary of such a body, to be required to comply with directions given by the FCA;

(j) enabling the FCA to apply to a court for an order removing and replacing any director or depositary of such a body;

(k) for the carrying out of investigations by persons appointed by the FCA or the Secretary of State;

(l) corresponding to any provision made in relation to unit trust schemes by Chapter III of this Part.

(3) Regulations under this section may—

(a) impose criminal liability;

(b) confer functions on the FCA;

(d) confer jurisdiction on any court or on the Tribunal;

(e) provide for fees to be charged by the FCA in connection with the carrying out of any of its functions under the regulations (including fees payable on a periodical basis);

(f) modify, exclude or apply (with or without modifications) any primary or subordinate legislation (including any provision of, or made under, this Act);

(g) make consequential amendments, repeals and revocations of any such legislation;

(h) modify or exclude any rule of law.

(4) The provision that may be made by virtue of subsection (3)(f) includes provision extending or adapting any power to make subordinate legislation.

(5) Regulations under this section may, in particular—

(a) revoke the Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations 1996; and

(b) provide for things done under or in accordance with those regulations to be treated as if they had been done under or in accordance with regulations under this section.

Amendment of section 716 Companies Act 1985.

263

In section 716(1) of the Companies Act 1985 (prohibition on formation of companies with more than 20 members unless registered under the Act etc.), after “this Act,” insert “ is incorporated by virtue of regulations made under section 262 of the Financial Services and Markets Act 2000 ”.

Chapter V — Recognised Overseas Schemes

Schemes constituted in other EEA States

Schemes constituted in other EEA States.

264

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Representations and references to the Tribunal.

265

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Disapplication of rules.

266

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Power of FCA to suspend promotion of scheme.

267

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Procedure on giving directions under section 267 and varying them on FCA's own initiative.

268

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Procedure on application for variation or revocation of direction.

269

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...

Schemes authorised in designated countries or territories.

270

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Procedure.

271

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Schemes authorised in approved countries

271A

(1) A collective investment scheme which is authorised under the law of a country or territory outside the United Kingdom is a recognised scheme if—

(a) regulations made by the Treasury approving the country or territory for the purposes of this section are in force,

(b) the scheme is of a description specified in the regulations in relation to which the country or territory is approved,

(d) the FCA has made (and has not revoked) an order granting the application, and

(e) no direction under section 271L (suspension of recognition) has effect in relation to the scheme.

(2) In making regulations under this section, the Treasury may have regard to any matter that they consider relevant (and see the restrictions in sections 271B and 271C).

Approval of country: equivalent protection afforded to participants

271B

(1) The Treasury may not make regulations under section 271A approving a country or territory and specifying a description of collective investment scheme unless satisfied that the equivalent protection test is met.

(2) The equivalent protection test is met if the protection afforded to participants or potential participants in the schemes by the law and practice of the country or territory is at least equivalent to that afforded to participants or potential participants in comparable authorised schemes by the law and practice of the United Kingdom under which such schemes are authorised and supervised.

(3) In this section—

“comparable authorised schemes” means whichever of the following the Treasury consider to be the most appropriate—authorised unit trust schemes;authorised contractual schemes which are co-ownership schemes;authorised contractual schemes which are partnership schemes;authorised open-ended investment companies;any two or more of the kinds of collective investment scheme mentioned in paragraphs (a) to (d);

“participants” means participants in the United Kingdom.

Approval of country: regulatory co-operation

271C

(1) The Treasury may not make regulations under section 271A approving a country or territory and specifying a description of collective investment scheme unless satisfied that adequate arrangements exist, or will exist, for co-operation between the FCA and the overseas regulator.

(2) In this section, “the overseas regulator” means the authority responsible for the authorisation and supervision of schemes of that description in the country or territory.

Report by the FCA in relation to approval

271D

(1) When considering whether to make, vary or revoke regulations under section 271A approving a country or territory and specifying a description of collective investment scheme, the Treasury may ask the FCA to prepare a report on—

(a) the law and practice of the country or territory under which such schemes are authorised and supervised, or particular aspects of such law and practice, and

(b) any existing or proposed arrangements for co-operation between the FCA and the overseas regulator.

(2) A request for a report under subsection (1) must be made in writing.

(3) If the Treasury ask for a report under subsection (1), the FCA must provide the Treasury with the report.

(4) In this section, “the overseas regulator” has the same meaning as in section 271C.

Power to impose requirements on schemes

271E

(1) The Treasury may by regulations—

(a) provide that a section 271A scheme of a description specified in the regulations must comply with requirements specified in the regulations, and

(b) impose requirements on the operator of such a scheme.

(2) In making regulations under this section in relation to a description of section 271A scheme, the Treasury must have regard to any requirements imposed in relation to comparable authorised schemes by or under this Act.

(3) Regulations under this section may describe requirements by reference to—

(a) rules made or to be made by the FCA, or

(b) other enactments.

(4) The power under subsection (3) includes power to make provision by reference to rules or other enactments as amended from time to time.

(5) The FCA may make, amend or revoke a rule if it considers it necessary or appropriate to do so for the purposes of a requirement imposed (or varied or withdrawn) by regulations under this section which is described by reference to a rule made or to be made by the FCA.

(6) If, for the purposes of a requirement imposed (or varied or withdrawn) by regulations under this section which is described by reference to a rule made or to be made by the FCA, the Treasury consider that it is necessary or appropriate for the FCA to make, amend or revoke a rule, they may direct the FCA to do so.

(7) If the Treasury give a direction under subsection (6), the FCA must comply with the direction within such time as the Treasury may specify in the direction.

(8) The references in paragraphs (5) and (6) to the amendment or revocation of rules are to the amendment or revocation of rules made by the FCA.

(9) Section 141A (power to make consequential amendments of references to rules) applies in relation to the FCA's power to make, amend or revoke rules under this section as it applies in relation to its power to make, amend or revoke rules under Part 9A.

(10) In this section—

“comparable authorised schemes” has the same meaning as in section 271B;

“enactment” includes— assimilated direct legislation,an enactment comprised in subordinate 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).

Application for recognition to the FCA

271F

(1) An application for recognition of a collective investment scheme under section 271A—

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

(b) must contain the address of a place in the United Kingdom for service of notices, or other documents, required or authorised to be served on the operator under this Act, and

(c) must contain or be accompanied by such information as the FCA may reasonably require for the purpose of determining the application.

(2) Where requirements imposed by regulations under section 271E would apply to the scheme or its operator if the application were granted, the application must contain an explanation of how each requirement would be satisfied.

(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 it reasonably considers necessary to enable it to determine the application.

(4) The FCA may require the applicant to present information provided under this section in such form, or to verify the information in such a way, as the FCA may direct.

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

Determination of applications

271G

(1) The FCA—

(a) may only make an order under section 271A granting an application under that section if it is satisfied that the conditions in subsection (2) are met, and

(b) if it is so satisfied, must make such an order unless it is permitted to refuse the application under subsection (3) or required to do so under subsection (4).

(2) Those conditions are—

(a) that the scheme is authorised in a country or territory which is approved by the Treasury in regulations under section 271A,

(b) that the scheme is of a description of scheme specified in the regulations,

(d) that, where requirements imposed by regulations under section 271E would apply to the scheme or its operator if the application were granted, each such requirement would be satisfied.

(3) The FCA may refuse an application under section 271A if it appears to the FCA that the operator of the scheme—

(a) has contravened a requirement imposed on them by or under this Act, or would contravene such a requirement if the application were granted, or

(b) has, in purported compliance with such a requirement, knowingly or recklessly given the FCA information which is false or misleading in a material particular.

(4) The FCA must refuse an application under section 271A if it considers it desirable to do so in order to protect the interests of participants or potential participants in the scheme in the United Kingdom.

(5) Where the FCA receives an application under section 271A which is complete, it must give the applicant a notice under section 271H(1) or (2) before the end of the period of two months beginning with the day on which the FCA receives the application.

(6) An application under section 271A is complete if the FCA considers that the application satisfies section 271F(1) and (2).

(7) Where the FCA receives an application under section 271A which is not complete, it must—

(a) notify the operator of the scheme that it does not consider that the application satisfies section 271F(1) or (2) (as applicable), and

(b) identify the information needed to complete the application.

(8) In this section, “the overseas regulator” has the same meaning as in section 271C.

Procedure when determining an application

271H

(1) If the FCA decides to make an order under section 271A granting an application under that section, it must give written notice of its decision to the applicant.

(2) If the FCA proposes to refuse an application under section 271A, it must give the applicant a warning notice.

(3) If the FCA decides to refuse the application, it must give the applicant a decision notice.

(4) If the FCA gives the applicant a decision notice under subsection (3), the applicant may refer the matter to the Tribunal, except where the FCA refuses the application on the ground that it is not satisfied that a condition in section 271G(2)(a) or (c) is met.

Obligations on operator of a section 271A scheme

271I

(1) The operator of a section 271A scheme must notify the FCA if the operator becomes aware that it has contravened, or expects to contravene, a requirement imposed on it by or under this Act.

(2) The operator of a section 271A scheme must notify the FCA of any change to—

(a) the name or address of the operator of the scheme,

(b) the name or address of any trustee or depositary of the scheme,

(d) the address of the place in the United Kingdom for service of notices, or other documents, required or authorised to be served on the operator under this Act.

(3) A notification under subsection (1) or (2) must be made in writing as soon as reasonably practicable.

Provision of information to the FCA

271J

(1) The operator of a section 271A scheme must provide to the FCA such information as the FCA may direct, at such times as the FCA may direct, for the purpose of determining whether—

(a) the conditions set out in section 271G(2)(a) to (c) are met, and

(b) any requirements relating to the scheme or its operator imposed by or under this Act are satisfied.

(2) The FCA may require the operator to present information provided under this section in such form, or to verify the information in such a way, as the FCA may direct.

(3) Different directions may be given in relation to different schemes or different descriptions of scheme.

Rules as to scheme particulars

271K

(1) The FCA may make rules in relation to section 271A schemes for purposes corresponding to those for which rules may be made under section 248 in relation to authorised unit trust schemes.

(2) For the purposes of subsection (1), a reference in section 248 to the manager of an authorised unit trust scheme is to be read as a reference to the operator of a section 271A scheme.

(3) Rules made under this section do not affect any liability which a person may incur apart from the rules.

Suspension of recognition

271L

(1) The FCA may direct that a section 271A scheme is not to be a recognised scheme—

(a) for a specified period,

(b) until the occurrence of a specified event, or

(2) The FCA may give a direction under subsection (1) only if—

(a) the FCA is no longer satisfied that the conditions set out in section 271G(2)(a) to (c) are met,

(b) it appears to the FCA that a requirement relating to the scheme or its operator imposed by or under this Act has not been satisfied, or is likely not to be satisfied,

(c) it appears to the FCA that the operator of the scheme has, in purported compliance with any such requirement, knowingly or recklessly given the FCA information which is false or misleading in a material particular, or

(d) although none of paragraphs (a) to (c) applies, the FCA considers it desirable to do so in order to protect the interests of participants or potential participants in the United Kingdom.

Procedure when suspending recognition

271M

(1) A direction under section 271L takes effect—

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

(b) on a day specified in the notice, or

(2) A direction under section 271L may be expressed to take effect immediately or on a specified day only if the FCA, having regard to its reason for giving the direction, reasonably considers that it is necessary for the direction to take effect immediately or on that day (as appropriate).

(3) If the FCA proposes to give a direction under section 271L, or gives such a direction with immediate effect, it must give written notice to—

(a) the operator of the scheme, and

(b) the trustee or depositary of the scheme (if any).

(4) The notice must—

(a) set out details of the direction,

(b) set out when the direction takes effect,

(d) state that the recipient of the notice may make representations to the FCA within such period as may be specified in the notice (whether or not the matter has been referred to the Tribunal), and

(e) set out the recipient's right to refer the matter to the Tribunal.

(5) The FCA may extend the period allowed under the notice for making representations.

(6) The FCA must give written notice to the operator and (if any) the trustee or depositary of the scheme concerned if, having considered any representations made, the FCA decides—

(a) to give the direction in the way proposed, or

(b) if it has been given, not to revoke the direction.

(7) The FCA must give written notice to the operator and (if any) the trustee or depositary of the scheme concerned if, having considered any representations made, the FCA decides—

(a) not to give the direction in the way proposed,

(b) to give the direction in a way other than that proposed, or

(8) A notice under subsection (6) must set out the recipient's right to refer the matter to the Tribunal.

(9) A notice under subsection (7)(b) must comply with subsection (4).

(10) Where a notice sets out the right of the recipient to refer a matter to the Tribunal, it must give an indication of the procedure on such a reference.

(11) This section applies to the variation of a direction as it applies to the giving of a direction.

(12) For the purposes of subsection (1)(c), whether a matter is open to review is to be determined in accordance with section 391(8).

Revocation of recognition on the FCA's initiative

271N

(1) The FCA may revoke an order made under section 271A in relation to a collective investment scheme if—

(a) the FCA is no longer satisfied that the conditions set out in section 271G(2)(a) to (c) are met,

(b) it appears to the FCA that a requirement relating to the scheme or its operator imposed by or under this Act has not been satisfied,

(c) it appears to the FCA that the operator of the scheme has, in purported compliance with any such requirement, knowingly or recklessly given the FCA information which is false or misleading in a material particular, or

(d) although none of paragraphs (a) to (c) applies, the FCA considers it desirable to revoke the order to protect the interests of participants or potential participants in the United Kingdom.

(2) If the FCA proposes to revoke an order made under section 271A, it must give a warning notice to—

(a) the operator of the scheme, and

(b) the trustee or depositary of the scheme (if any).

(3) If the FCA decides to revoke the order—

(a) it must without delay give a decision notice to the operator and (if any) the trustee or depositary of the scheme, and

(b) the operator, trustee or depository may refer the matter to the Tribunal.

Requests for revocation of recognition

271O

(1) The FCA may revoke an order made under section 271A in relation to a collective investment scheme at the request of the scheme's operator.

(2) If the FCA decides to do so, it must give written notice to the operator and (if any) the trustee or depositary of the scheme.

(3) The FCA may refuse a request under this section if it considers that—

(a) the public interest requires that any matter concerning the scheme should be investigated before a decision is taken as to whether the order should be revoked, or

(b) revocation would not be in the interests of participants in the scheme.

(4) If the FCA proposes to refuse a request under this section, it must give a warning notice to the operator and (if any) the trustee or depositary of the scheme.

(5) If the FCA decides to refuse the request—

(a) it must without delay give a decision notice to the operator and (if any) the trustee or depositary of the scheme, and

(b) the operator, trustee or depositary may refer the matter to the Tribunal.

Obligations on operator where recognition is revoked or suspended

271P

(1) This section applies where—

(a) the FCA gives a decision notice under section 271N(3), or a written notice under section 271O(2), in relation to a section 271A scheme, or

(b) a direction given by the FCA under section 271L(1) in relation to a section 271A scheme takes effect.

(2) The operator of the scheme must notify such persons as the FCA may direct that the FCA has revoked an order under section 271A for recognition of the scheme or given a direction under section 271L in relation to the scheme (as applicable).

(3) A notification under subsection (2) that relates to a direction under section 271L must set out the terms of the direction.

(4) A notification under subsection (2) must—

(a) contain such information as the FCA may direct, and

(b) be made in such form and manner as the FCA may direct.

(5) Different directions may be given under subsection (2) or (4) in relation to—

(a) different schemes or different descriptions of scheme;

(b) different persons or descriptions of persons to whom a notification under subsection (2) must be given.

Effect of variation or revocation of Treasury regulations

271Q

(1) This section applies, in relation to a section 271A scheme, where the Treasury vary or revoke regulations under section 271A and, as a result, the scheme ceases to be a recognised scheme because—

(a) the country or territory in which the scheme is authorised is no longer approved for the purposes of that section, or

(b) the scheme is no longer of a description of scheme specified in regulations under that section.

(2) Where this section applies, the order given by the FCA under section 271A in relation to the scheme is revoked.

(3) The Treasury may by regulations make provision, in relation to a scheme which has ceased to be recognised under section 271A by virtue of this section—

(a) requiring an application under section 272 by such a scheme to be made during a period specified in the regulations or in a direction given by the FCA, and

(b) modifying or disapplying section 275(1) and (2) (time limits for determining applications under section 272) for the purposes of an application under section 272 relating to such a scheme.

Public censure

271R

(1) This section applies where the FCA considers that—

(a) a requirement imposed by regulations under section 271E has been contravened,

(b) rules made under section 271K have been contravened,

(d) the operator of a section 271A scheme has contravened a rule made, or a requirement imposed, under section 283.

(2) The FCA may publish a statement to that effect.

(3) Where the FCA proposes to publish a statement under subsection (2) relating to a scheme or the operator of a scheme, it must give the operator a warning notice setting out the terms of the statement.

(4) If the FCA decides to publish the statement—

(a) it must give the operator, without delay, a decision notice setting out the terms of the statement, and

(b) the operator may refer the matter to the Tribunal.

(5) After a statement under subsection (2) is published, the FCA must send a copy of it to the operator and to any person to whom a copy of the decision notice was given under section 393(4).

Recognition of parts of schemes under section 271A

271S

(1) Section 271A(1) applies in relation to a part of a collective investment scheme as it applies in relation to such a scheme.

(2) Accordingly, the following include a part of a scheme recognised under section 271A—

(a) the reference to a scheme recognised under section 271A in the definition of “section 271A scheme” in section 237(3), and

(b) other references to such a scheme (however expressed) in or in provision made under this Part of this Act (unless the contrary intention appears).

(3) Provisions of or made under this Part of this Act have effect in relation to parts of schemes recognised, or seeking recognition, under section 271A with appropriate modifications.

(4) The Treasury may by regulations—

(a) make provision about what are, or are not, appropriate modifications for the purposes of subsection (3);

(b) make provision so that a relevant enactment has effect in relation to parts of schemes recognised, or seeking recognition, under section 271A with such modifications as the Treasury consider appropriate;

(5) Regulations under subsection (4)(b) or (c) may amend, repeal or revoke an enactment.

(6) In this section—

“enactment” has the same meaning as in section 271E;

“relevant enactment” means an enactment passed or made before the day on which subsection (1) comes into force that makes provision in relation to collective investment schemes recognised, or seeking recognition, under section 271A.

Individually recognised overseas schemes

Individually recognised overseas schemes.

272

(1) The FCA may, on the application of the operator of a collective investment scheme which—

(a) is managed in a country or territory outside the United Kingdom, ...

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

(ca) does not have the benefit of section 271A, and

(d) appears to the FCA to satisfy the requirements set out in subsections (2) to (15),

make an order declaring the scheme to be a recognised scheme.

(1A) For the purposes of subsection (1)(ca), a collective investment scheme has the benefit of section 271A if—

(a) it is authorised under the law of a country or territory which is for the time being approved by regulations under section 271A, and

(b) it falls within a description of schemes specified in the regulations.

(2) Adequate protection must be afforded to participants in the scheme.

(3) The arrangements for the scheme’s constitution and management must be adequate.

(4) The powers and duties of the operator and, if the scheme has a trustee or depositary, of the trustee or depositary must be adequate.

(5) In deciding whether the matters mentioned in subsection (3) or (4) are adequate, the FCA must have regard to—

(a) any rule of law, and

(b) any matters which are... the subject of rules,

applicable in relation to comparable authorised schemes.

(6) “Comparable authorised schemes” means whichever of the following the FCA considers the most appropriate, having regard to the nature of scheme in respect of which the application is made—

(a) authorised unit trust schemes;

(aa) authorised contractual schemes which are co-ownership schemes;

(ab) authorised contractual schemes which are partnership schemes;

(b) authorised open-ended investment companies;

(7) The scheme must take the form of an open-ended investment company or (if it does not take that form) the operator must be a body corporate.

(8) The operator of the scheme must—

(a) if an authorised person, have permission to act as operator;

(b) if not an authorised person, be a fit and proper person to act as operator.

(9) The trustee or depositary (if any) of the scheme must—

(a) if an authorised person, have permission to act as trustee or depositary;

(b) if not an authorised person, be a fit and proper person to act as trustee or depositary.

(10) The operator and the trustee or depositary (if any) of the scheme must be able and willing to co-operate with the FCA by the sharing of information and in other ways.

(11) The name of the scheme must not be undesirable or misleading.

(12) The purposes of the scheme must be reasonably capable of being successfully carried into effect.

(13) The participants must be entitled to have their units redeemed in accordance with the scheme at a price related to the net value of the property to which the units relate and determined in accordance with the scheme.

(14) But a scheme is to be treated as complying with subsection (13) if it requires the operator to ensure that a participant is able to sell his units on an investment exchange at a price not significantly different from that mentioned in that subsection.

(15) Subsection (13) is not to be read as imposing a requirement that the participants must be entitled to have their units redeemed (or sold as mentioned in subsection (14)) immediately following a demand to that effect.

Matters that may be taken into account.

273

For the purposes of subsections (8)(b) and (9)(b) of section 272, the FCA may take into account any matter relating to—

(a) any person who is or will be employed by or associated with the operator, trustee or depositary in connection with the scheme;

(b) any director of the operator, trustee or depositary;

(d) any body corporate in the same group as the operator, trustee or depositary;

(e) any director of any such body corporate;

(f) any person exercising influence over any such body corporate.

Applications for recognition of individual schemes.

274

(1) An application under section 272 for an order declaring a scheme to be a recognised scheme must be made to the FCA by the operator of the scheme.

(2) The application—

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

(b) must contain the address of a place in the United Kingdom for the service on the operator of notices or other documents required or authorised to be served on him under this Act;

(c) must contain or be accompanied by such information as the FCA may reasonably require for the purpose of determining the application.

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

(4) Different directions may be given, and different requirements imposed, in relation to different applications.

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

Determination of applications.

275

(1) An application under section 272 must be determined by the FCA before the end of the period of six months beginning with the date on which it receives the completed application.

(2) The FCA may determine an incomplete application if it considers it appropriate to do so; and it must in any event determine such an application within twelve months beginning with the date on which it first receives the application.

(3) If the FCA makes an order under section 272(1), it must give written notice of the order to the applicant.

Procedure when refusing an application.

276

(1) If the FCA proposes to refuse an application made under section 272 it must give the applicant a warning notice.

(2) If the FCA decides to refuse the application—

(a) it must give the applicant a decision notice; and

(b) the applicant may refer the matter to the Tribunal.

Alteration of schemes and changes of operator, trustee or depositary.

277

(1) The operator of a scheme recognised by virtue of section 272 must give written notice to the FCA of any proposed alteration to the scheme which, if made, would be a material alteration.

(2) Effect is not to be given to any such proposal unless—

(a) the FCA, by written notice, has given its approval to the proposal; or

(b) one month, beginning with the date on which notice was given under subsection (1), has expired without the FCA having given written notice to the operator that it has decided to refuse approval.

(3) ... Before any replacement of the operator, trustee or depositary of such a scheme, notice of the proposed replacement must be given to the FCA—

(a) by the operator, trustee or depositary (as the case may be); or

(b) by the person who is to replace him.

(3A) A notice under subsection (3) must be given—

(a) at least one month before the proposed replacement, or

(b) if that is not reasonably practicable, as soon as is reasonably practicable in the period of one month before the proposed replacement.

(3B) The operator of such a scheme must give written notice to the FCA, as soon as reasonably practicable, of any change to—

(a) the name or address of the operator of the scheme,

(b) the name or address of any trustee or depositary of the scheme,

(d) the address of the place in the United Kingdom for service of notices, or other documents, required or authorised to be served on the operator under this Act.

(4) If a change is made, or is to be made, to the law which applies to such a scheme in the country or territory in which it is managed and the change affects or will affect any of the matters mentioned at section 272(2) to (4), the operator of the scheme must give written notice of the change to the FCA—

(a) at least one month before the change takes effect; or

(b) if that is not reasonably practicable, as soon as it is reasonably practicable to do so.

(5) A notice under this section—

(a) must be given in such manner as the FCA may direct; and

(b) where the notice is given under subsection (1) or (3), must include such information as the FCA may direct for the purpose of determining whether the requirements for the making of an order under section 272 in respect of the scheme would continue to be satisfied following the alteration or replacement that is the subject of the notice.

(6) The FCA may make rules specifying when a proposed alteration is a material alteration for the purposes of subsection (1).

Regular provision of information relating to compliance with requirements for recognition

277A

(1) The operator of a scheme recognised by virtue of section 272 must provide to the FCA such information as the FCA may direct, at such times as the FCA may direct, for the purpose of determining whether the requirements for the making of an order under section 272 in respect of the scheme continue to be satisfied.

(2) A direction under subsection (1) may not require information to be provided within the period of 12 months beginning with the date on which information was last required to be provided to the FCA in respect of the scheme pursuant to a requirement under section 274(2)(c) or a direction under subsection (1) or section 277(5)(b).

(3) The information must be provided in such manner as the FCA may direct.

...

Rules as to scheme particulars.

278

The FCA may make rules imposing duties or liabilities on the operator of a scheme recognised under section ... 272 for purposes corresponding to those for which rules may be made under section 248 in relation to authorised unit trust schemes.

Revocation of recognition.

279

The FCA may ... revoke an order under section 272 if it appears to the FCA—

(a) that the operator, trustee or depositary of the scheme has contravened a requirement imposed on him by or under this Act;

(b) that the operator, trustee or depositary of the scheme has, in purported compliance with any such requirement, knowingly or recklessly given the FCA information which is false or misleading in a material particular;

(d) that none of paragraphs (a) to (c) applies, but it is undesirable in the interests of the participants or potential participants that the scheme should continue to be recognised.

Procedure.

280

(1) If the FCA proposes to make an order under section 279 revoking a recognition order, it must give a warning notice to the operator and (if any) the trustee or depositary of the scheme.

(2) If the FCA decides to ... make an order under that section—

(a) it must without delay give a decision notice to the operator and (if any) the trustee or depositary of the scheme; and

(b) the operator or the trustee or depositary may refer the matter to the Tribunal.

Directions.

281

(1) In this section a “relevant recognised scheme” means a scheme recognised under section ... 272.

(2) If it appears to the FCA that—

(a) the operator, trustee or depositary of a relevant recognised scheme has contravened, or is likely to contravene, a requirement imposed on him by or under this Act,

(b) the operator, trustee or depositary of such a scheme has, in purported compliance with any such requirement, knowingly or recklessly given the FCA information which is false or misleading in a material particular,

(d) none of paragraphs (a) to (c) applies, but the exercise of the power conferred by this section is desirable in order to protect the interests of participants or potential participants in a relevant recognised scheme who are in the United Kingdom,

it may direct that the scheme is not to be a recognised scheme for a specified period or until the occurrence of a specified event or until specified conditions are complied with.

Procedure on giving directions under section 281 and varying them otherwise than as requested.

282

(1) A direction takes effect—

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

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

(2) A direction 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 its power under section 281, considers that it is necessary for the direction to take effect immediately (or on that date).

(3) If the FCA proposes to give a direction under section 281, or gives such a direction with immediate effect, it must give separate written notice to the operator and (if any) the trustee or depositary of the scheme concerned.

(4) The notice must—

(a) give details of the direction;

(b) inform the person to whom it is given of when the direction takes effect;

(d) inform the person to whom it is given that he may make representations to the FCA within such period as may be specified in it (whether or not he has referred the matter to the Tribunal); and

(e) inform him of his right to refer the matter to the Tribunal.

(5) The FCA may extend the period allowed under the notice for making representations.

(6) If, having considered any representations made by a person to whom the notice was given, the FCA decides—

(a) to give the direction in the way proposed, or

(b) if it has been given, not to revoke the direction,

it must give separate written notice to the operator and (if any) the trustee or depositary of the scheme concerned.

(7) If, having considered any representations made by a person to whom the notice was given, the FCA decides—

(a) not to give the direction in the way proposed,

(b) to give the direction in a way other than that proposed, or

it must give separate written notice to the operator and (if any) the trustee or depositary of the scheme concerned.

(8) A notice given under subsection (6) must inform the person to whom it is given of his right to refer the matter to the Tribunal.

(9) A notice under subsection (7)(b) must comply with subsection (4).

(10) If a notice informs a person of his right to refer a matter to the Tribunal, it must give an indication of the procedure on such a reference.

(11) This section applies to the variation of a direction on the FCA's own initiative as it applies to the giving of a direction.

(12) For the purposes of subsection (1)(c), whether a matter is open to review is to be determined in accordance with section 391(8).

Obligations on operator where recognition is revoked or suspended

282A

(1) This section applies where—

(a) the FCA gives a decision notice under section 280(2) in relation to a scheme recognised under section 272, or

(b) a direction given by the FCA under section 281(2) in relation to such a scheme takes effect.

(2) The operator of the scheme must notify such persons as the FCA may direct that the FCA has revoked an order under section 272 for recognition of the scheme or given a direction under section 281 in relation to the scheme (as applicable).

(3) A notification under subsection (2) that relates to a direction under section 281 must set out the terms of the direction.

(4) A notification under subsection (2) must—

(a) contain such information as the FCA may direct, and

(b) be made in such form and manner as the FCA may direct.

(5) Different directions may be given under subsection (2) or (4) in relation to—

(a) different schemes or different descriptions of schemes;

(b) different persons or descriptions of persons to whom a notification under subsection (2) must be given.

Public censure

282B

(1) This section applies where the FCA considers that—

(a) rules made under section 278 have been contravened,

(b) the operator of a scheme recognised under section 272 has contravened section 277, 277A or 282A, or

(c) the operator of a scheme recognised under section 272 has contravened a rule made, or a requirement imposed, under section 283.

(2) The FCA may publish a statement to that effect.

(3) Where the FCA proposes to publish a statement under subsection (2) in relation to a scheme or the operator of a scheme, it must give the operator a warning notice setting out the terms of the statement.

(4) If the FCA decides to publish the statement—

(a) it must give the operator, without delay, a decision notice setting out the terms of the statement, and

(b) the operator may refer the matter to the Tribunal.

(5) After a statement under subsection (2) is published, the FCA must send a copy of it to the operator and to any person to whom a copy of the decision notice was given under section 393(4).

Recognition of parts of schemes under section 272

282C

(1) Section 272(1) applies in relation to a part of a collective investment scheme as it applies in relation to such a scheme.

(2) Accordingly, the following include a part of a scheme recognised under section 272—

(a) the reference to a scheme recognised under section 272 in the definition of “recognised scheme” in section 237(3), and

(b) other references to such a scheme (however expressed) in or in provision made under this Part of this Act (unless the contrary intention appears).

(3) Provisions of or made under this Part of this Act have effect in relation to parts of schemes recognised, or seeking recognition, under section 272 with appropriate modifications.

(4) The Treasury may by regulations—

(a) make provision about what are, or are not, appropriate modifications for the purposes of subsection (3);

(b) make provision so that a relevant enactment has effect in relation to parts of schemes recognised, or seeking recognition, under section 272 with such modifications as the Treasury consider appropriate;

(5) Regulations under subsection (4)(b) or (c) may amend, repeal or revoke an enactment.

(6) In this section—

“enactment” has the same meaning as in section 271E;

“relevant enactment” means an enactment passed or made before the day on which subsection (1) comes into force that makes provision in relation to collective investment schemes recognised, or seeking recognition, under section 272.

Facilities and information in UK

Facilities and information in UK.

283

(1) The FCA may make rules requiring operators of recognised schemes to maintain in the United Kingdom, or in such part or parts of it as may be specified, such facilities as the FCA thinks desirable in the interests of participants and as are specified in rules.

(2) The FCA may by notice in writing require the operator of any recognised scheme to include such explanatory information as is specified in the notice in any communication of his which—

(a) is a communication of an invitation or inducement of a kind mentioned in section 21(1); and

(b) names the scheme.

(3) In the case of a communication originating outside the United Kingdom, subsection (2) only applies if the communication is capable of having an effect in the United Kingdom.

CHAPTER 5A — MASTER-FEEDER STRUCTURES

Master-feeder structures

283A

(1) The operator of a UKUCITS may not invest a higher proportion of the property which is subject to the collective investment scheme constituted by that UCITS in units of another UCITS than is permitted by rule 5.2.11(9) of the Collective Investment Schemes sourcebook unless the investment is approved by the FCA in accordance with this section.

(2) An application for approval under subsection (1) of an investment must be made by the operator of the UKUCITS in such manner, and accompanied by such information, as is required by rules made by the FCA.

(3) The FCA must grant an application made under subsection (2) if it is satisfied—

(a) that the UK UCITS, its operator, trustee or depositary and auditor and the UCITS in which it proposes to invest, and its operator, have complied with—

(i) the requirements laid down in the Chapter 8 provisions, and

(ii) any other requirements imposed by the FCA in relation to the application;

(b) in a case where the application is made by the operator of a feeder UCITS in respect of the investment of the proceeds of the winding-up of its master UCITS, that the proceeds of the winding up are to be paid to the feeder UCITS before the date on which the investment is to be made.

(3A) In subsection (3)(a)(i) “the Chapter 8 provisions” means—

(a) in relation to a UK UCITS or its operator, trustee or depositary, or auditor, any provision made by or under an enactment in implementation of Chapter 8 of the UCITS directive, and

(b) in relation to an EEA UCITS or its operator, Chapter 8 of the UCITS directive.

(4) In a case within subsection (3)(b), approval must be subject to the conditions in subsections (5) and (6).

(5) The first condition is that the feeder UCITS is to receive the proceeds of the winding-up—

(a) in cash; or

(b) wholly or partly in assets other than cash in a case where the feeder UCITS so elects and each of the following so permits—

(i) the decision of the master UCITS that it should be wound up;

(ii) the trust deed , contractual scheme deed or instrument of incorporation of the feeder UCITS; and

(iii) either the agreement between the feeder UCITS and its master UCITS, or the internal conduct of business rules operated by the feeder UCITS and the master UCITS in accordance with rules made by the FCA.

(6) The second condition is that cash received by the feeder UCITS in accordance with paragraph (5)(a) may not be reinvested before the date on which the feeder UCITS proposes to invest in the new UCITS, except for the purpose of efficient cash management.

(7) The FCA must, within 15 working days of the date on which the FCA had received all the information required in relation to the application, give written notice to the operator—

(a) that the FCA approves its application, or

(b) that the FCA objects to the application.

(8) Following receipt of notice that the FCA objects to the application, the operator may refer the FCA's decision to the Tribunal.

Reports on derivative instruments

283B

(1) An authorised person who is the management company in relation to a UK UCITS must report to the FCA at specified intervals of not more than 12 months about any investment in derivative instruments during the specified period to which the report relates.

(2) The report must be in the specified form and contain the specified information.

(3) The FCA must review the regularity and completeness of the information provided by each management company under subsection (1).

(4) In this section, “specified” means specified—

(a) in rules 6.12.3 and 6.12.3A, and annex 2R to chapter 6, of the Collective Investment Schemes sourcebook, or

(b) in UCITS-related direct EU legislation.

Chapter VI — Investigations

Power to investigate.

284

(1) An investigating authority may appoint one or more competent persons to investigate on its behalf—

(a) the affairs of, or of the manager or trustee of, any authorised unit trust scheme,

(b) the affairs of, or of the operator, trustee or depositary of, any recognised scheme so far as relating to activities carried on in the United Kingdom, or

(c) the affairs of, or of the operator, trustee or depositary of, any other collective investment scheme except a body incorporated by virtue of regulations under section 262,

if it appears to the investigating authority that it is in the interests of the participants or potential participants to do so or that the matter is of public concern.

(2) A person appointed under subsection (1) to investigate the affairs of, or of the manager, trustee, operator or depositary of, any scheme (scheme “A”), may also, if he thinks it necessary for the purposes of that investigation, investigate—

(a) the affairs of, or of the manager, trustee, operator or depositary of, any other such scheme as is mentioned in subsection (1) whose manager, trustee, operator or depositary is the same person as the manager, trustee, operator or depositary of scheme A;

(b) the affairs of such other schemes and persons (including bodies incorporated by virtue of regulations under section 262 and the directors and depositaries of such bodies) as may be prescribed.

(3) If the person appointed to conduct an investigation under this section (“B”) considers that a person (“C”) is or may be able to give information which is relevant to the investigation, B may require C—

(a) to produce to B any documents in C’s possession or under his control which appear to B to be relevant to the investigation,

(b) to attend before B, and

and it is C’s duty to comply with that requirement.

(4) Subsections (5) to (9) of section 170 apply if an investigating authority appoints a person under this section to conduct an investigation on its behalf as they apply in the case mentioned in subsection (1) of that section.

(5) Section 174 applies to a statement made by a person in compliance with a requirement imposed under this section as it applies to a statement mentioned in that section.

(6) Subsections (2) to (4) and (6) of section 175 and section 177 have effect as if this section were contained in Part XI.

(7) Subsections (1) to (9) of section 176 apply in relation to a person appointed under subsection (1) as if—

(a) references to an investigator were references to a person so appointed;

(b) references to an information requirement were references to a requirement imposed under section 175 or under subsection (3) by a person so appointed;

(c) the premises mentioned in subsection (3)(a) were the premises of a person whose affairs are the subject of an investigation under this section or of an appointed representative of such a person.

(8) No person may be required under this section to disclose information or produce a document in respect of which he owes an obligation of confidence by virtue of carrying on the business of banking unless subsection (9) or (10) applies.

(9) This subsection applies if—

(a) the person to whom the obligation of confidence is owed consents to the disclosure or production; or

(b) the imposing on the person concerned of a requirement with respect to information or a document of a kind mentioned in subsection (8) has been specifically authorised by the investigating authority.

(10) This subsection applies if the person owing the obligation of confidence or the person to whom it is owed is—

(a) the manager, trustee, operator or depositary of any collective investment scheme which is under investigation;

(b) the director of a body incorporated by virtue of regulations under section 262 which is under investigation;

(11) “Investigating authority” means the FCA or the Secretary of State.

PART 17A — Transformer Vehicles

Transformer vehicles

284A

(1) In this section “transformer vehicle” means an undertaking (“A”) which—

(a) is established for the purposes of carrying on the activities mentioned in subsection (2), or

(b) carries on those activities.

(2) The activities referred to in subsection (1) are—

(a) assuming risk from another undertaking (“B”), and

(b) fully funding A's exposure to that risk by issuing investments where the repayment rights of the investors are subordinated to A's obligations to B in respect of the risk.

(3) The Treasury may by regulations make provision for facilitating, and provision for regulating—

(a) the establishment and operation of transformer vehicles;

(b) the activities mentioned in subsection (2);

(4) Regulations under subsection (3) may (amongst other things) make provision—

(a) for the incorporation and registration in the United Kingdom of bodies corporate;

(b) for a body incorporated by virtue of the regulations to take such form and name as may be determined in accordance with the regulations;

(d) as to the constitution, ownership, management and operation of such a body;

(e) for such a body to comprise different parts;

(f) for such parts to have legal personality distinct from that of the body;

(g) as to the holding and management of the assets and liabilities of such a body, including provision for the segregation of assets and liabilities relating to different risks;

(h) as to the powers, duties, rights and liabilities of such a body and of other persons, including—

(i) its directors and other officers;

(ii) its shareholders, and persons who hold the beneficial title to shares in it without holding the legal title;

(iii) its auditor;

(iv) any persons holding assets for it;

(v) any persons who act or purport to act on its behalf;

(i) as to the merger of one or more such bodies and the division of such a body;

(j) for the appointment and removal of an auditor for such a body;

(k) as to the winding up and dissolution of such a body;

(l) enabling the FCA or the PRA to apply to a court for an order removing or replacing any director of, or person holding assets for, such a body;

(m) for the carrying out of investigations by persons appointed by the FCA or the PRA.

(5) If regulations under subsection (3) make the provision mentioned in subsection (4)(e) references in subsection (4) to a body include its constituent parts.

(6) Regulations under subsection (3) may—

(a) impose criminal liability;

(b) confer functions on the FCA or the PRA (including the functions of making rules and giving directions);

(c) authorise the FCA or the PRA to require the Council of Lloyd's to exercise functions on its behalf (including functions conferred otherwise than by the regulations);

(d) confer jurisdiction on any court or on the Tribunal;

(e) provide for fees to be charged by the FCA or the PRA in connection with the carrying out of any of their functions under the regulations (including fees payable on a periodical basis);

(f) modify, exclude or apply (with or without modifications) any primary or subordinate legislation (including any provision of, or made under, this Act);

(g) make consequential amendments, repeals and revocations of any such legislation;

(h) modify or exclude any rule of law.

(7) Regulations under subsection (3) may make the provision mentioned in subsection (6)(c) only with the consent of the Council of Lloyd's.

(8) The provision that may be made by virtue of subsection (6)(f) includes provision extending or adapting any power to make subordinate legislation.

(9) Regulations under subsection (3) may provide that a reference in the regulations to, or to any provision of, legislation (including ... legislation of a country or territory outside the United Kingdom) is to be construed as a reference to that legislation or that provision as amended from time to time.

(10) In this section—

“investment” includes any asset, right or interest;

“primary legislation” means an Act, an Act of the Scottish Parliament, a Measure or Act of the National Assembly for Wales, or Northern Ireland legislation;

“subordinate legislation” means an instrument made under primary legislation.

(11) If a statutory instrument containing regulations under this section would, apart from this subsection, be treated as a hybrid instrument for the purposes of the Standing Orders of either House of Parliament, it is to proceed in that House as if it were not a hybrid instrument.

Part XVIII — Recognised investment exchanges, clearing houses , CSDs and other parties

Chapter I — Exemption

General

Exemption for recognised bodies etc.

285

(1) In this Act—

(a) “recognised investment exchange” means an investment exchange in relation to which a recognition order is in force;

(b) “recognised clearing house” means—

(i) a central counterparty in relation to which a recognition order is in force (in this Part referred to as a “recognised central counterparty”), or

(ii) a clearing house which provides clearing services in the United Kingdom without doing so as a central counterparty, and in relation to which a recognition order is in force;

(d) “third country central counterparty” means a person established in a country other than the United Kingdom who has been recognised by the Bank of England as a central counterparty pursuant to Article 25 of the EMIR Regulation;

(e) “recognised CSD” means a central securities depository in relation to which a recognition order is in force;

(g) “third country CSD” means a central securities depository, established in a country other than the United Kingdom, which is recognised by the Bank of England pursuant to Article 25 of the CSD regulation.

(2) A recognised investment exchange is exempt from the general prohibition as respects any regulated activity—

(a) which is carried on as a part of the exchange’s business as an investment exchange; or

(b) which is carried on for the purposes of, or in connection with, the provision by the exchange of services designed to facilitate the provision of clearing services by another person.

(2A) Subsection (2) does not apply in respect of a regulated activity specified by Chapter 2B (cryptoassets) of Part 2 (specified activities) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.

(3) A recognised clearing house which is not a recognised central counterparty is exempt from the general prohibition as respects any regulated activity—

(a) which is carried on for the purposes of, or in connection with, the provision of clearing services by the clearing house, or

(b) which is carried on for the purposes of, or in connection with, the provision by the clearing house of services designed to facilitate the provision of clearing services by another person.

(3ZA) Subsections (2) and (3) do not apply in respect of the regulated activity specified in article 63S of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (administering a benchmark).

(3A) A recognised central counterparty is exempt from the general prohibition as respects any regulated activity which is carried on for the purposes of, or in connection with, the services or activities specified in its recognition order.

(3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3C) A third country central counterparty is exempt from the general prohibition as respects any regulated activity which is carried on for the purposes of, or in connection with, the services or activities specified in its recognition by the Bank of England pursuant to Article 25 of the EMIR regulation.

(3D) A recognised CSD is exempt from the general prohibition as respects any regulated activity which is carried on for the purposes of, or in connection with—

(a) the core services listed in Section A of the Annex to the CSD regulation which the central securities depository is authorised to provide pursuant to Article 16 or 19(1)(a) or (c) of that regulation, or

(b) any non-banking-type ancillary services listed in or permitted under Section B of that Annex which the central securities depository is authorised to provide, including services notified under Article 19 of the CSD regulation.

(3E) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3F) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3G) A third country CSD is exempt from the general prohibition as respects any regulated activity which is carried on for the purposes of, or in connection with, the services and activities covered by its recognition by the Bank of England pursuant to Article 25 of the CSD regulation.

(3H) But a recognised CSD ... or a third country CSD is not exempt from the general prohibition as respects any regulated activity which is carried on for the purposes of, or in connection with, any banking-type ancillary service listed in or permitted under Section C of the Annex to the CSD regulation.

(4) The Treasury may by order amend paragraph (b) of subsection (2) or (3).

Powers exercisable in relation to recognised bodies etc

285A

(1) For the purposes of this Part, the FCA is “the appropriate regulator” in relation to recognised investment exchanges.

(2) For the purposes of this Part, the Bank of England is “the appropriate regulator” in relation to recognised clearing houses and recognised CSDs.

(3) In Schedule 17A—

(a) Part 1 makes provision for a memorandum of understanding between the appropriate regulators , and between the FCA and the PRA, with respect to the exercise of their functions in relation to recognised bodies;

(b) Part 2 applies certain provisions of this Act in relation to the Bank of England in consequence of the conferring of functions on the Bank under this Part of this Act or as a consequence of conferring other FMI functions on the Bank;

(c) Part 3 makes provision relating to the winding up, administration or insolvency of recognised clearing houses and recognised CSDs; and

(d) Part 4 makes provision about fees.

Qualification for recognition.

286

(1) The Treasury may make regulations setting out the requirements—

(a) which must be satisfied by an investment exchange , clearing house or central securities depository if it is to qualify as a body in respect of which the appropriate regulator may make a recognition order under this Part; and

(b) which, if a recognition order is made, it must continue to satisfy if it is to remain a recognised body.

(2) But if regulations contain provision as to the default rules of an investment exchange , clearing house or central securities depository, or as to proceedings taken under such rules by such a body, they require the approval of the Secretary of State.

(3) “Default rules” means rules of an investment exchange , clearing house or central securities depository which provide for the taking of action in the event of a person’s appearing to be unable, or likely to become unable, to meet his obligations in respect of one or more market contracts connected with the exchange , clearing house or central securities depository.

(4) “Market contract” means—

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Financial Services and Markets Act 2000

Ending of authorisation

Revocation of authorisation order otherwise than by consent

261U

Procedure for revoking authorisation order

261V

Requests for revocation of authorisation order

261W

Powers of intervention

Directions

261X

Applications to the court

261Y

Winding up or merger of master UCITS

261Z

Procedure on giving directions under section 261X or 261Z and varying them on FCA’s own initiative

261Z1

Procedure: refusal to revoke or vary direction

261Z2

Procedure: revocation of direction and grant of request for variation

261Z3

Information for home state regulator

261Z4

Information for feeder UCITS

261Z5

CHAPTER 3B — Unauthorised co-ownership AIFs

Power to make provision about unauthorised co-ownership AIFs

261Z6

Chapter IV — Open-ended Investment Companies

Open-ended investment companies.

262

Amendment of section 716 Companies Act 1985.

263

Chapter V — Recognised Overseas Schemes

Schemes constituted in other EEA States

Schemes constituted in other EEA States.

264

Representations and references to the Tribunal.

265

Disapplication of rules.

266

Power of FCA to suspend promotion of scheme.

267

Procedure on giving directions under section 267 and varying them on FCA's own initiative.

268

Procedure on application for variation or revocation of direction.

269

...

Schemes authorised in designated countries or territories.

270

Procedure.

271

Schemes authorised in approved countries

Schemes authorised in approved countries

271A

Approval of country: equivalent protection afforded to participants

271B

Approval of country: regulatory co-operation

271C

Report by the FCA in relation to approval

271D

Power to impose requirements on schemes

271E

Application for recognition to the FCA

271F

Determination of applications

271G

Procedure when determining an application

271H

Obligations on operator of a section 271A scheme

271I

Provision of information to the FCA

271J

Rules as to scheme particulars

271K

Suspension of recognition

271L

Procedure when suspending recognition

271M

Revocation of recognition on the FCA's initiative