Legalize / United Kingdom / Public General Act

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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articles Not indexed

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

(5) A relevant regulator may either on its own initiative or on an application by the critical third party concerned withdraw or vary a notice given by it under subsection (2) by publishing a further notice.

(6) Publication under this section is to be made in such manner as the relevant regulator considers best designed to bring the publication to the attention of the public.

(7) Where a notice includes a prohibition, condition or limitation imposed under subsection (2), publication of a notice under this section must in particular be made in a manner appearing to the relevant regulator to be best designed to bring the notice to the attention of the persons to whom the prohibition, condition or limitation applies.

(8) A person who breaches a prohibition, condition or limitation imposed by a notice under this section is to be taken to have contravened a requirement imposed on the person under this Act.

(9) For the purposes of this section the objectives of a relevant regulator are as described in section 312M(2).

Procedure and right to refer to Tribunal

312S

(1) If a relevant regulator proposes to publish a statement or notice under section 312Q or 312R, it must give the critical third party, authorised persons, relevant service providers or FMI entities to whom the statement or notice would relate a warning notice.

(2) A warning notice must set out the terms of the proposed statement or notice.

(3) If a relevant regulator decides to publish a statement or notice under section 312Q or 312R it must give the critical third party, authorised persons, relevant service providers or FMI entities to whom the statement or notice relates a decision notice.

(4) A decision notice must set out the terms of the statement or notice.

(5) If a relevant regulator decides to act under section 312N or 312Q a critical third party who is aggrieved may refer the matter to the Tribunal.

(6) If a relevant regulator decides to act under section 312R a critical third party, authorised person, relevant service provider or FMI entity who is aggrieved may refer the matter to the Tribunal.

Statement of policy relating to disciplinary measures

312T

(1) The relevant regulators must prepare and publish a statement of policy with respect to the exercise of powers under section 312Q and section 312R.

(2) The relevant regulators may alter or replace a statement published under this section.

(3) The relevant regulators must publish a statement as altered or replaced under subsection (2).

(4) Publication under this section is to be made in such manner as the relevant regulators consider best designed to bring the publication to the attention of the public.

Duty to ensure co-ordinated exercise of functions etc

312U

(1) The relevant regulators must co-ordinate the exercise of their respective functions conferred by or under this Chapter.

(2) In complying with the duty in subsection (1) each relevant regulator must obtain information and advice from any of the other relevant regulators who may be expected to have relevant information or relevant expertise.

(3) The duty in subsection (1) applies only to the extent that compliance with the duty does not impose a burden on the relevant regulators that is disproportionate to the benefits of compliance.

(4) Before exercising any power conferred by or under this Chapter a relevant regulator must consult each of the other relevant regulators (where not otherwise required to do so).

Memorandum of understanding

312V

(1) The relevant regulators must prepare and maintain a memorandum which describes in general terms—

(a) the role of the relevant regulators in relation to the exercise of functions conferred by or under this Chapter, and

(b) how they intend to comply with section 312U in relation to the exercise of such functions.

(2) The relevant regulators must review the memorandum at least once in each calendar year.

(3) The relevant regulators may revise a memorandum under this section.

(4) The relevant regulators must give the Treasury a copy of the memorandum and any revised memorandum.

(5) The Treasury must lay before Parliament a copy of any document received by them under this section.

(6) The relevant regulators must ensure that the memorandum as in force for the time being is published in the way appearing to them to be best calculated to bring it to the attention of the public.

(7) The memorandum need not relate to any aspect of compliance with section 312U if the relevant regulators consider—

(a) that publication of information about that aspect would be against the public interest, or

(b) that aspect is a technical or operational matter not affecting the public.

Application of provisions of this Act to this Chapter

312W

The following provisions do not apply for the purposes of this Chapter—

(a) section 3D (duty to ensure co-ordinated exercise of functions);

(b) section 3E (memorandum of understanding);

Chapter IV

Interpretation

Interpretation of Part XVIII.

313

(1) In this Part—

“application” means an application for a recognition order made under section 287 , 288 or 288A;

“applicant” means a person who has applied for a recognition order;

“central counterparty” means a body corporate or unincorporated association which interposes itself between the counterparties to the contracts traded on one or more financial markets, becoming the buyer to every seller and the seller to every buyer;

“central counterparty recognition order” means a recognition order made under section 290(1)(b);

“clearing”, in relation to a central counterparty, means the process of establishing positions, including the calculation of net obligations and ensuring that financial instruments, cash, or both, are available to secure the exposures arising from those positions; and “clearing services”, in relation to a central counterparty, is to be read accordingly;

“critical third party” has the same meaning as in Chapter 3C (see section 312L(8);

“CSD recognition order” means a recognition order made under section 290(1)(d);

“the EMIR regulation” means Regulation (EU) 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories as it forms part of assimilated law, and any reference to requirements contained in or to functions under the EMIR regulation includes a reference (as the case may be) to requirements contained in or to functions under—any EU regulation, originally made under the EMIR regulation, which is assimilated direct legislation; orany subordinate legislation (within the meaning of the Interpretation Act 1978) made under the EMIR regulation on or after IP completion day;

“FMI functions”, in relation to the Bank of England, has the meaning given by section 30D(3) of the Bank of England Act 1998;

“multilateral trading facility” means a UK multilateral trading facility as defined by Article 2(1)(14A) of the markets in financial instruments regulation;

“organised trading facility” means a UK organised trading facility as defined by Article 2(1)(15A) of the markets in financial instruments regulation;

“overseas applicant” means a body corporate or association which has neither its head office nor its registered office in the United Kingdom and which has applied for a recognition order;

“overseas investment exchange” means a body corporate or association which has neither its head office nor its registered office in the United Kingdom and in relation to which a recognition order is in force;

“overseas clearing house” means a body corporate or association which is not a central counterparty and has neither its head office nor its registered office in the United Kingdom and in relation to which a recognition order is in force;

“recognised body” means a recognised investment exchange , a recognised clearing house or a recognised CSD , and in Chapter 3B also includes a third country central counterparty;

“recognised central counterparty” has the meaning given in section 285;

“recognised clearing house” has the meaning given in section 285;

“recognised CSD” has the meaning given in section 285;

“recognised investment exchange” has the meaning given in section 285;

“recognition order” means an order made under section 290 or 292;

“recognition requirements” has the meaning given by section 286;

“regulated market” means a UK regulated market as defined by Article 2(1)(13A) of the markets in financial instruments regulation;

“remedial direction” has the meaning given in section 308(8);

“revocation order” has the meaning given in section 297.

“Tier 2 third country central counterparty” means a third country central counterparty which has been determined by the Bank of England to be systemically important or likely to become systemically important in accordance with Article 25.2a of the EMIR regulation;

“trading venue” means a multilateral trading facility, a regulated market or an organised trading facility.

(1A) For the purposes of this Part, a clearing house does not include a central securities depository.

(2) References in this Part to rules of an investment exchange (or a clearing house or central securities depository) are to rules made, or conditions imposed, by the investment exchange (or the clearing house or central securities depository) with respect to—

(a) recognition requirements;

(b) admission of persons to, or their exclusion from the use of, its facilities; or

(3) References in this Part to guidance issued by an investment exchange are references to guidance issued, or any recommendation made, in writing or other legible form and intended to have continuing effect, by the investment exchange to—

(a) all or any class of its members or users, or

(b) persons seeking to become members of the investment exchange or to use its facilities,

with respect to any of the matters mentioned in subsection (2)(a) to (c).

(4) References in this Part to guidance issued by a clearing house are to guidance issued, or any recommendation made, in writing or other legible form and intended to have continuing effect, by the clearing house to—

(a) all or any class of its members, or

(b) persons using or seeking to use its services,

with respect to the provision by it or its members of clearing services or services falling within section 285(3)(b).

Part 18A — SUSPENSION AND REMOVAL OF FINANCIAL INSTRUMENTS FROM TRADING

FCA's power to require suspension or removal of financial instruments from trading

313A

(1) The FCA may, for the purpose of protecting—

(a) the interests of investors, or

(b) the orderly functioning of the financial markets,

require an institution or a class of institutions to suspend or remove a financial instrument from trading.

(2) If the FCA exercises the power conferred by subsection (1), the matter may be referred to the Tribunal by—

(a) the institution or, as the case may be, any institution in the class, or

(b) the issuer of the financial instrument (if any).

(3) In this section, “trading” includes trading otherwise than on a trading venue .

Suspension or removal of financial instruments from trading: procedure

313B

(1) A requirement imposed on an institution under section 313A (a “relevant requirement”) takes effect—

(a) immediately, if the notice given under subsection (2) states that this is the case;

(b) in any other case, on such date as may be specified in the notice.

(2) If the FCA proposes to impose a relevant requirement on an institution, or a class of institutions, or imposes such a requirement with immediate effect, it must give written notice to give notice—

(a) by written notice to—

(i) the institution or, as the case may be, each institution in the class, and

(ii) the issuer of the financial instrument in question (if any); or

(b) by publishing a notice by means of a regulatory information service.

(3) A notice given under subsection (2)(a) must—

(a) give details of the relevant requirement;

(b) state the FCA's reasons for imposing the requirement and choosing the date on which it took effect or takes effect;

(c) inform the recipient that he may make representations to the FCA within such period as may be specified by the notice (whether or not he has referred the matter to the Tribunal);

(d) inform him of the date on which the requirement took effect or takes effect; and

(e) inform him of his right to refer the matter to the Tribunal and give an indication of the procedure on such a reference.

(3A) A notice published under subsection (2)(b) must—

(a) give details of the relevant requirement;

(b) specify the institution, or the class of institutions, to which it applies;

(d) state that any institution to which the requirement applies or the issuer of the financial instrument in question may make representations to the FCA within such period as may be specified by the notice (whether or not the institution or the issuer has referred the matter to the Tribunal);

(e) state the date on which the requirement took effect or takes effect; and

(f) state that any institution to which the requirement applies or the issuer of the financial instrument in question has a right to refer the matter to the Tribunal, and give an indication of the procedure on such a reference.

(4) The FCA may extend the period within which representations may be made to it.

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

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

(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Procedure following consideration of representations

313BA

(1) This section applies where, within the period specified under section 313B(3), (3A) or (4), representations are made to the FCA in relation to a requirement that it has proposed to impose or has imposed under section 313A.

(2) The FCA must decide whether to impose the requirement or (in the case of a requirement that has been imposed) whether to revoke it.

(3) In the case of a requirement that the FCA has proposed to impose on a class of institutions, the FCA may decide to impose the requirement—

(a) on the class;

(b) on the class apart from one or more specified members of it; or

(4) In the case of a requirement that the FCA has imposed on a class of institutions, the FCA may decide to revoke it in relation to—

(a) the class;

(b) the class apart from one or more specified members of it; or

(5) The FCA must give written notice of its decision to—

(a) any institution which has made representations, and

(b) the issuer of the financial instrument in question (if any).

(6) In the case of a requirement that the FCA has proposed to impose or has imposed on a class, the FCA must also give notice of its decision by publishing it by means of a regulatory information service unless the decision is—

(a) to impose the requirement on the class, or

(b) not to revoke the requirement in relation to the class or any member of it.

(7) An institution to which notice is required to be given under subsection (5) may refer the matter to the Tribunal if the FCA's decision is that the requirement will be imposed on, or will continue to apply to, the institution.

(8) An issuer to whom notice is required to be given under subsection (5) may refer the matter to the Tribunal if the FCA's decision is that the requirement will be imposed on, or will continue to apply to, the institution or (in the case of a requirement relating to a class) any of the institutions in the class.

(9) A notice given under subsection (5) must inform the recipient if the recipient has a right to refer the matter to the Tribunal.

Revocation of requirements: applications by institutions

313BB

(1) This section applies where the FCA has imposed a requirement on an institution or a class of institutions under section 313A.

(2) The institution or any of the institutions in the class may apply to the FCA for the revocation of the requirement.

(3) The FCA must decide whether to revoke the requirement.

(4) In the case of a requirement imposed on a class of institutions, the FCA may decide to revoke it in relation to—

(a) the class;

(b) the class apart from one or more specified members of it; or

(5) The FCA must give a warning notice if—

(a) in the case of a requirement imposed on an institution, the FCA proposes not to revoke the requirement, or

(b) in the case of a requirement imposed on a class, the FCA proposes to make a decision which would have the effect that the requirement continues to apply to the applicant (whether or not it would have the effect that it continues to apply to other members of the class).

(6) The warning notice must be given to—

(a) the applicant, and

(b) the issuer of the financial instrument in question (if any).

Decisions on applications for revocation by institutions

313BC

(1) This section applies where, having considered any representations made in response to a warning notice, the FCA has decided whether to grant an application for revocation made under section 313BB.

(2) The FCA must give written notice in accordance with subsection (3) if—

(a) in the case of a requirement imposed on an institution, the FCA decides to revoke the requirement, or

(b) in the case of a requirement imposed on a class, the FCA makes a decision which has the effect that the requirement will no longer apply to the applicant (whether or not it will continue to apply to other members of the class).

(3) The written notice must be given to—

(a) the applicant, and

(b) the issuer of the financial instrument in question (if any).

(4) If the FCA is required to give written notice under subsection (2) in relation to a requirement imposed on a class, the FCA must also give notice of its decision by publishing it by means of a regulatory information service.

(5) The FCA must give a decision notice in accordance with subsection (6) if—

(a) in the case of a requirement imposed on an institution, the FCA decides not to revoke the requirement, or

(b) in the case of a requirement imposed on a class, the FCA makes a decision which has the effect that the requirement will continue to apply to the applicant (whether or not it will continue to apply to other members of the class).

(6) The decision notice must be given to—

(a) the applicant, and

(b) the issuer of the financial instrument in question (if any).

(7) If the FCA is required to give a decision notice in relation to a requirement imposed on a class, the FCA must also give notice of its decision by publishing it by means of a regulatory information service.

(8) If the FCA gives a decision notice, the recipient may refer the matter to the Tribunal.

Revocation of requirements: applications by issuers

313BD

(1) This section applies where the FCA has imposed a requirement on an institution or a class of institutions under section 313A.

(2) The issuer of the financial instrument may apply to the FCA for the revocation of the requirement.

(3) The FCA must decide whether to revoke the requirement.

(4) In the case of a requirement imposed on a class of institutions, the FCA may decide to revoke it in relation to—

(a) the class;

(b) the class apart from one or more specified members of it; or

(5) The FCA must give the issuer a warning notice if—

(a) in the case of a requirement imposed on an institution, the FCA proposes not to revoke the requirement, or

(b) in the case of a requirement imposed on a class, the FCA proposes not to revoke the requirement or to revoke it in relation to—

(i) the class apart from one or more specified members of it, or

(ii) one or more specified members of the class only.

Decisions on applications for revocation by issuers

313BE

(1) This section applies where, having considered any representations made in response to a warning notice, the FCA has decided whether to grant an application for revocation made under section 313BD.

(2) The FCA must give written notice to the issuer if the FCA decides to revoke the requirement.

(3) If the FCA is required to give written notice under subsection (2) in relation to a requirement imposed on a class, the FCA must also give notice of its decision by publishing it by means of a regulatory information service.

(4) The FCA must give the issuer a decision notice if—

(a) in the case of a requirement imposed on an institution, the FCA decides not to revoke the requirement, or

(b) in the case of a requirement imposed on a class, the FCA decides not to revoke the requirement or makes a decision to revoke the requirement in relation to—

(i) the class apart from one or more specified members of it, or

(ii) one or more specified members of the class only.

(5) If the FCA is required to give a decision notice under subsection (4)(b), it must also give notice of its decision by publishing it by means of a regulatory information service.

(6) If the FCA gives a decision notice under subsection (4), the issuer may refer the matter to the Tribunal.

Notification in relation to suspension or removal of a financial instrument from trading

313C

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Suspension or removal of financial instruments from trading: notification and trading on other venues

313CA

(1) The FCA must take the steps in subsection (2) to (4) if it imposes a requirement on an institution under section 313A to—

(a) suspend or remove a financial instrument from trading; or

(b) suspend or remove a derivative which relates, or is referenced, to the financial instrument from trading to support the objectives of a suspension or removal mentioned in paragraph (a).

(2) The FCA must require any trading venue or systematic internaliser which falls under its jurisdiction and trades the same instrument or derivative to suspend or remove the instrument or derivative from trading if a suspension or removal mentioned in subsection (1) was due to—

(a) suspected market abuse;

(b) a take-over bid; or

(3) But the FCA is not obliged to impose a requirement under subsection (2) if it could cause significant damage to the interests of investors or the orderly functioning of the market.

(4) The FCA must publish a decision of any of the following kinds in such a manner as the FCA considers appropriate—

(a) a decision to impose a requirement under section 313A;

(b) a decision to revoke a requirement imposed under section 313A;

(5) Subsection (4) does not require a decision to be published if it has already been published under section 313B(2)(b) or 313BE(5).

Suspension or removal of a financial instrument from a trading by a trading venue: FCA duties

313CB

(1) The FCA must take the steps in subsections (2), (4), and (5)if a person specified in subsection (6) operating a trading venue in the United Kingdom informs the FCA it has made a decision—

(a) to suspend or remove a financial instrument from trading on the trading venue because the instrument no longer complies with the venue’s rules, or

(b) to suspend or remove a derivative which relates, or is referenced, to the financial instrument from trading on the trading venue to support the objectives of a suspension or removal mentioned in paragraph (a).

(2) The FCA must require any other trading venue or any systematic internaliser which falls under its jurisdiction and trades the same instrument or derivative to suspend or remove the instrument or derivative from trading if a suspension or removal mentioned in subsection (1) was due to—

(a) suspected market abuse;

(b) a take-over bid; or

(3) But the FCA is not obliged to impose a requirement under subsection (2) if it could cause significant damage to the interests of investors or the orderly functioning of the market.

(4) The FCA must revoke a requirement imposed under subsection (2) if the person mentioned in subsection (1) informs the FCA it has lifted the suspension mentioned in that subsection.

(5) The FCA must publish any decision to impose, or to revoke or not to impose, a requirement under subsection (2) in such a manner as the FCA considers appropriate.

(6) The specified persons for the purposes of subsection (6) are—

(a) a recognised investment exchange,

(b) an investment firm with a Part 4A permission to carry on a regulated activity which is any of the investment services and activities,

(c) a qualifying credit institution that has Part 4A permission to carry on the regulated activity of accepting deposits.

Significant damage to investors’ interests or orderly functioning of market

313CBA

(1) This section applies for the purposes of sections 313CA(3) and 313CB(3).

(2) The following are circumstances in which a suspension or removal from trading of a financial instrument could cause significant damage to the interests of investors or the orderly functioning of the market—

(a) where it would create a systemic risk undermining financial stability, such as where the need exists to unwind a dominant market position, or where settlement obligations would not be met in a significant volume;

(b) where the continuation of trading on the market is necessary to perform critical post-trade risk management functions when—

(i) as a result of the default of a clearing member there is a need for the liquidation of financial instruments under the default procedures of a central counterparty, and

(ii) a central counterparty would be exposed to unacceptable risks as a result of an inability to calculate margin requirements;

(c) where the financial viability of the issuer would be threatened, such as where it is involved in a corporate transaction or capital raising.

(3) In determining in any other circumstance whether a suspension or removal could cause significant damage to the interests of investors or the orderly functioning of the market, the FCA must have regard (among other things) to the following—

(a) the liquidity of the market concerned, taking account of the fact that the consequences of a suspension or removal are likely to be greater where the market is more liquid;

(b) the nature of the suspension or removal, where actions with a sustained or lasting impact on the ability of investors to trade a financial instrument on trading venues, such as removals, are likely to have a greater impact on investors than other actions;

(c) the knock-on effects of a suspension or removal on sufficiently related derivatives, indices or benchmarks for which the removed or suspended instrument serves as an underlying or constituent;

(d) the effects of a suspension on the interests of market end-users who are not financial counterparties, such as entities trading in financial instruments to hedge commercial risks.

(4) In this section—

“central counterparty” has the same meaning as in Part 18 (see section 313(1));

“clearing member”, in relation to a central counterparty, means an undertaking which participates in the central counterparty and which is responsible for discharging the financial obligations arising from that participation;

“financial counterparty” has the meaning given in Article 2(8) of Regulation (EU) 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories.

Suspension or removal of a financial instrument from trading in another EEA state: FCA duties

313CC

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Interpretation of Part 18A

313D

(1) In this Part—

“derivative” means a derivative referred to in paragraphs 4 to 10 of Part 1 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544);

“financial instrument” means an instrument specified in Part 1 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;

“institution” means—a recognised investment exchange, other than an overseas investment exchange (within the meaning of Part 18);an investment firm; a qualifying credit institution that has Part 4A permission to carry on the regulated activity of accepting deposits, when carrying out investment services or activities; or a qualifying credit institution other than one that has Part 4A permission to carry on the regulated activity of accepting deposits; ...

“issuer”, in relation to a financial instrument, means the person who issued the instrument;

“market abuse” means a contravention of Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or 15 (prohibition of market manipulation) of the market abuse regulation;

“non-disclosure of inside information” means a failure to disclose inside information, as defined by Article 7 (inside information) of the market abuse regulation, in contravention of Article 17 (public disclosure of inside information) of that Regulation;

“regulated information” has the meaning given in Article 2(1)(k) of the transparency obligations directive (as defined in section 103 of this Act);

“regulatory information service” means—a service approved by the FCA to disseminate regulated information in accordance with rules made under section 89A of this Act, ......

“systematic internaliser” has the meaning given in Article 2(1)(12) of the markets in financial instruments regulation;

“trading venue” means a UK trading venue, as defined by Article 2(1)(16A) of the markets in financial instruments regulation.

(2) In this Part a trading venue or systematic internaliser falls under the FCA’s jurisdiction if—

(a) it is established in the United Kingdom; or

(b) in the case of a systematic internaliser which does not fall within the FCA’s jurisdiction by virtue of paragraph (a)—

(i) it has established a branch (as defined by Article 2(1)(20) of the markets in financial instruments regulation) in the United Kingdom; and

(ii) the FCA considers that it is necessary to impose a requirement on the systematic internaliser under section section 313CA(2) or 313CB(2).

Part XIX — Lloyd’s

General

Regulators' general duty.

314

(1) So far as it is appropriate to do so for the purpose of advancing one or more of its operational objectives, the FCA must keep itself informed about—

(a) the way in which the Council supervises and regulates the market at Lloyd's, and

(b) the way in which regulated activities are being carried on in that market.

(1A) So far as it is appropriate to do so for the purpose of advancing its general objective or (if section 2C applies) its insurance objective, the PRA must keep itself informed about—

(a) the way in which the Council supervises and regulates the market at Lloyd's, and

(b) the way in which any PRA-regulated activities are being carried on in that market.

(2) Each regulator must keep under review the desirability of exercising—

(a) any of its powers under this Part;

(b) any powers which it has in relation to the Society as a result of provision made by or under this Act.

The PRA's objectives in relation to Lloyd's etc

314A

(1) This section modifies—

(a) the effect of sections 2B and 2C (the PRA's general objective and insurance objective), and

(b) the effect of section 3I (power of PRA to require FCA to refrain from specified action),

in relation to anything done, or proposed to be done, by the PRA under or for the purposes of this Part.

(2) This section applies only if PRA-authorised persons include—

(a) the Society, or

(b) other persons who carry on regulated activities in relation to anything done at Lloyd's.

(3) Section 2B(2) and (3) have effect as if references to PRA-authorised persons (or a PRA-authorised person) were references to the Society, and the members of the Society, taken together (and sections 2G and 2J(3) are to be read accordingly).

(4) Section 2C(1) has effect as if the reference to the discharge of the PRA's general functions so far as relating to the activity mentioned there were a reference to the discharge of its general functions so far as relating to the carrying on by the Society or other persons of PRA-regulated activities in relation to anything done at Lloyd's.

(5) Section 3I(4)(b) has effect as if the reference to a PRA-authorised person were a reference to the Society, and the members of the Society, taken together.

The Society

The Society: regulated activities

315

(1) This section applies if an activity carried on by the Society is of a kind specified in an order made under section 22 (regulated activities).

(2) The order may provide that the Society is not to be subject to any requirement of this Act concerning the registered office of a body corporate.

Power to apply Act to Lloyd’s underwriting

Direction by a regulator

316

(1) The general prohibition or (if the general prohibition is not applied under this section) a core provision applies to the carrying on of an insurance market activity by—

(a) a member of the Society, or

(b) the members of the Society taken together,

only if a regulator so directs.

(1A) A direction under subsection (1)—

(a) may be given by the FCA only if it considers that giving the direction is necessary or expedient for the purpose of advancing one or more of its operational objectives, and

(b) may be given by the PRA only if it considers that giving the direction is necessary or expedient for the purpose of advancing its general objective or (if section 2C applies) the insurance objective.

(1B) A direction under subsection (1) which applies the general prohibition to a member of the Society, or to the members of the Society taken together, may be given by a regulator only with the consent of the other regulator.

(2) A direction given under subsection (1) which applies a core provision is referred to in this Part as “an insurance market direction”.

(3) In subsection (1)—

“core provision” means a provision of this Act mentioned in section 317; and

“insurance market activity” means a regulated activity relating to contracts of insurance written at Lloyd’s.

(4) In deciding whether to give a direction under subsection (1), the regulator concerned must have particular regard to—

(a) the interests of policyholders and potential policyholders;

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

(c) the need to ensure the effective exercise of the functions which the regulator concerned has in relation to the Society as a result of provision made by or under this Act.

(5) A direction under subsection (1) must be in writing.

(6) A direction under subsection (1) applying the general prohibition may apply it in relation to different classes of person.

(7) An insurance market direction—

(a) must specify each core provision, class of person and kind of activity to which it applies;

(b) may apply different provisions in relation to different classes of person and different kinds of activity.

(8) A direction under subsection (1) has effect from the date specified in it, which may not be earlier than the date on which it is made.

(9) A direction under subsection (1) given by a regulator must be published in the way appearing to the regulator to be best calculated to bring it to the attention of the public.

(10) A regulator who gives a direction under subsection (1) may charge a reasonable fee for providing a person with a copy of the direction.

(11) A regulator who gives a direction under subsection (1) must, without delay, give the Treasury a copy of the direction.

The core provisions.

317

(1) The core provisions are Parts V, 9A, XI, XII, XIV, XV, XVI, XXII and XXIV, sections 384 to 386 and Part XXVI.

(2) References in an applied core provision to an authorised person are (where necessary) to be read as references to a person in the class to which the insurance market direction applies.

(3) An insurance market direction may provide that a core provision is to have effect, in relation to persons to whom the provision is applied by the direction, with modifications.

Exercise of powers through Council.

318

(1) A regulator may give a direction under this subsection to the Council or to the Society (acting through the Council) or to both.

(2) A direction under subsection (1) is one given to the body concerned—

(a) in relation to the exercise of its powers generally with a view to achieving, or in support of, a specified objective; or

(b) in relation to the exercise of a specified power which it has, whether in a specified manner or with a view to achieving, or in support of, a specified objective.

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

(3A) A direction under subsection (1)—

(a) may be given by the FCA only if it considers that giving the direction is necessary or expedient for the purpose of advancing one or more of its operational objectives, and

(b) may be given by the PRA only if it considers that giving the direction is necessary or expedient for the purpose of advancing its general objective or (if section 2C applies) the insurance objective.

(4) A direction under subsection (1) may be given—

(a) instead of giving a direction under section 316(1); or

(b) if the regulator concerned considers it necessary or expedient to do so, at the same time as, or following, the giving of such a direction.

(5) A direction may also be given under subsection (1) in respect of underwriting agents as if they were among the persons mentioned in section 316(1).

(6) A direction under this section—

(a) does not, at any time, prevent the exercise by a regulator of any of its powers;

(b) must be in writing.

(7) A direction under subsection (1) given by a regulator must be published in the way appearing to the regulator to be best calculated to bring it to the attention of the public.

(8) A regulator who gives a direction under subsection (1) may charge a reasonable fee for providing a person with a copy of the direction.

(9) A regulator who gives a direction under subsection (1) must, without delay, give the Treasury a copy of the direction.

Consultation.

319

(1) Before a regulator gives a direction under section 316 or 318, it must—

(a) in a case where section 316(1B) requires the regulator to obtain the consent of the other regulator, obtain that consent,

(b) in any other case, consult the other regulator, and

(2) The draft must be accompanied by—

(a) a cost benefit analysis; and

(b) notice that representations about the proposed direction may be made to the regulator within a specified time.

(3) Before a regulator gives the proposed direction—

(a) it must have regard to any representations made to it in accordance with subsection (2)(b), and

(b) if it was required by subsection (1)(b) to consult the other regulator and proposes to give a direction which differs from the draft published under subsection (1) in a way which is, in the opinion of the regulator, significant, it must again consult the other regulator.

(4) If the regulator gives the proposed direction it must publish an account, in general terms, of—

(a) the representations made to it in accordance with subsection (2)(b); and

(b) its response to them.

(5) If the direction differs from the draft published under subsection (1) in a way which is, in the opinion of the regulator, significant—

(a) the regulator must (in addition to complying with subsection (4)) publish details of the difference; and

(b) those details must be accompanied by a cost benefit analysis.

(6) Subsections (1)(c) and (2) to (5) do not apply in relation to—

(a) a direction given by the FCA if it considers that the delay involved in complying with them would be prejudicial to the interests of consumers, as defined in section 425A, or

(b) a direction given by the PRA if it considers that the delay involved in complying with them would—

(i) be prejudicial to the safety and soundness of the Society, and the members of the Society, taken together, or

(ii) in a case where section 2C applies, be prejudicial to securing the appropriate degree of protection for policyholders.

(7) Neither subsection (2)(a) nor subsection (5)(b) applies if the regulator concerned considers—

(a) that, making the appropriate comparison, there will be no increase in costs; or

(b) that, making that comparison, there will be an increase in costs but the increase will be of minimal significance.

(8) A regulator who publishes a draft under subsection (1) may charge a reasonable fee for providing a person with a copy of the draft.

(9) When a regulator is required to publish a document under this section it must do so in the way appearing to it to be best calculated to bring it to the attention of the public.

(10) “Cost benefit analysis” means—

(a) an analysis of the costs together with an analysis of the benefits that will arise—

(i) if the proposed direction is given, or

(ii) if subsection (5)(b) applies, from the direction that has been given, and

(b) subject to subsection (10A), an estimate of those costs and of those benefits.

(10A) If, in the opinion of the regulator concerned—

(a) the costs or benefits referred to in subsection (10) cannot reasonably be estimated, or

(b) it is not reasonably practicable to produce an estimate,

the cost benefit analysis need not estimate them, but must include a statement of the opinion of the regulator concerned and an explanation of it.

(11) “The appropriate comparison” means—

(a) in relation to subsection (2)(a), a comparison between the overall position if the direction is given and the overall position if it is not given;

(b) in relation to subsection (5)(b), a comparison between the overall position after the giving of the direction and the overall position before it was given.

Former underwriting members

Former underwriting members.

320

(1) A former underwriting member may carry out each contract of insurance that he has underwritten at Lloyd’s whether or not he is an authorised person.

(2) If he is an authorised person, any Part 4A permission that he has does not extend to his activities in carrying out any of those contracts.

(3) The PRA may impose on a former underwriting member such requirements as appear to it to be appropriate for the purpose of protecting policyholders against the risk that he may not be able to meet his liabilities.

(4) A person on whom a requirement is imposed may refer the matter to the Tribunal.

(5) In the event that the activity of effecting or carrying out contracts of insurance as principal is not to any extent a PRA-regulated activity, the function conferred on the PRA by subsection (3) is exercisable instead by the FCA.

(6) Accordingly, in that case—

(a) references in section 321 to the PRA are to be read as references to the FCA, and

(b) the reference in section 321(13) to the FCA is to be read as a reference to the PRA.

Requirements imposed under section 320.

321

(1) A requirement imposed under section 320 takes effect—

(a) immediately, if the notice given under subsection (2) states that that is the case;

(b) in any other case, on such date as may be specified in that notice.

(2) If the PRA proposes to impose a requirement on a former underwriting member (“A”) under section 320, or imposes such a requirement on him which takes effect immediately, it must give him written notice.

(3) The notice must—

(a) give details of the requirement;

(b) state the PRA's reasons for imposing it;

(c) inform A that he may make representations to the PRA within such period as may be specified in the notice (whether or not he has referred the matter to the Tribunal);

(d) inform him of the date on which the requirement took effect or will take effect; and

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

(4) The PRA may extend the period allowed under the notice for making representations.

(5) If, having considered any representations made by A, the PRA decides—

(a) to impose the proposed requirement, or

(b) if it has been imposed, not to revoke it,

it must give him written notice.

(6) If the PRA decides—

(a) not to impose a proposed requirement, or

(b) to revoke a requirement that has been imposed,

it must give A written notice.

(7) If the PRA decides to grant an application by A for the variation or revocation of a requirement, it must give him written notice of its decision.

(8) If the PRA proposes to refuse an application by A for the variation or revocation of a requirement it must give him a warning notice.

(9) If the PRA, having considered any representations made in response to the warning notice, decides to refuse the application, it must give A a decision notice.

(10) A notice given under—

(a) subsection (5), or

(b) subsection (9) in the case of a decision to refuse the application,

must inform A of his right to refer the matter to the Tribunal.

(11) If the PRA decides to refuse an application for a variation or revocation of the requirement, the applicant may refer the matter to the Tribunal.

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

(13) Before giving a notice under any provision of this section, the PRA must consult the FCA.

Rules applicable to former underwriting members.

322

(1) The PRA may make rules imposing such requirements on persons to whom the rules apply as appear to it to be appropriate for protecting policyholders against the risk that those persons may not be able to meet their liabilities.

(2) The rules may apply to—

(a) former underwriting members generally; or

(b) to a class of former underwriting member specified in them.

(3) Section 319 applies to the making of proposed rules under this section as it applies to the giving of a proposed direction under section 316.

(4) Part 9A (except sections 137T, 138F, 138G and 138H) does not apply to rules made under this section.

(5) In the event that the activity of effecting or carrying out contracts of insurance as principal is not to any extent a PRA-regulated activity, the function conferred on the PRA by subsection (1) is exercisable instead by the FCA.

Transfers of business done at Lloyd’s

Transfer schemes.

323

The Treasury may by order provide for the application of any provision of Part VII (with or without modification) in relation to schemes for the transfer of the whole or any part of the business carried on by one or more members of the Society or former underwriting members.

Supplemental

Interpretation of this Part.

324

(1) In this Part—

“arranging deals”, in relation to the investments to which this Part applies, has the same meaning as in paragraph 3 of Schedule 2;

“former underwriting member” means a person ceasing to be an underwriting member of the Society on, or at any time after, 24 December 1996; and

“participation in Lloyd’s syndicates”, in relation to the secondary market activity, means the investment described in sub-paragraph (1) of paragraph 21 of Schedule 2.

(2) A term used in this Part which is defined in Lloyd’s Act 1982 has the same meaning as in that Act.

Part XX — Provision of Financial Services by Members of the Professions

FCA's general duty.

325

(1) The FCA must keep itself informed about—

(a) the way in which designated professional bodies supervise and regulate the carrying on of exempt regulated activities by members of the professions in relation to which they are established;

(b) the way in which such members are carrying on exempt regulated activities.

(2) In this Part—

“exempt regulated activities” means regulated activities which may, as a result of this Part, be carried on by members of a profession which is supervised and regulated by a designated professional body without breaching the general prohibition; and

“members”, in relation to a profession, means persons who are entitled to practise the profession in question and, in practising it, are subject to the rules of the body designated in relation to that profession, whether or not they are members of that body.

(3) The FCA must keep under review the desirability of exercising any of its powers under this Part.

(4) Each designated professional body must co-operate with the FCA, by the sharing of information and in other ways, in order to enable the FCA to perform its functions under this Part.

Designation of professional bodies.

326

(1) The Treasury may by order designate bodies for the purposes of this Part.

(2) A body designated under subsection (1) is referred to in this Part as a designated professional body.

(3) The Treasury may designate a body under subsection (1) only if they are satisfied that—

(a) the basic condition, and

(b) one or more of the additional conditions,

are met in relation to it.

(4) The basic condition is that the body has rules applicable to the carrying on by members of the profession in relation to which it is established of regulated activities which, if the body were to be designated, would be exempt regulated activities.

(5) The additional conditions are that—

(a) the body has power under any enactment to regulate the practice of the profession;

(b) being a member of the profession is a requirement under any enactment for the exercise of particular functions or the holding of a particular office;

(c) the body has been recognised for the purpose of any enactment other than this Act and the recognition has not been withdrawn;

(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) “Enactment” includes an Act of the Scottish Parliament, Northern Ireland legislation and subordinate legislation (whether made under an Act, an Act of the Scottish Parliament or Northern Ireland legislation).

(7) “Recognised” means recognised by—

(a) a Minister of the Crown;

(b) the Scottish Ministers;

(d) a Northern Ireland department or its head.

Exemption from the general prohibition.

327

(1) The general prohibition does not apply to the carrying on of a regulated activity by a person (“P”) if—

(a) the conditions set out in subsections (2) to (7) are satisfied; ...

(aa) where the activity is the provision of a service listed in Part 3 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 relating to a financial instrument, the condition set out in subsection (7A) is also satisfied; and

(b) there is not in force—

(i) a direction under section 328, or

(ii) an order under section 329,

which prevents this subsection from applying to the carrying on of that activity by him.

(2) P must be—

(a) a member of a profession; or

(b) controlled or managed by one or more such members.

(3) P must not receive from a person other than his client any pecuniary reward or other advantage, for which he does not account to his client, arising out of his carrying on of any of the activities.

(4) The manner of the provision by P of any service in the course of carrying on the activities must be incidental to the provision by him of professional services.

(5) P must not carry on, or hold himself out as carrying on, a regulated activity other than—

(a) one which rules made as a result of section 332(3) allow him to carry on; or

(b) one in relation to which he is an exempt person.

(6) The activities must not be of a description, or relate to an investment of a description, specified in an order made by the Treasury for the purposes of this subsection.

(7) The activities must be the only regulated activities carried on by P (other than regulated activities in relation to which he is an exempt person).

(7A) The condition mentioned in subsection (1)(aa) is that—

(a) the service is provided in an incidental manner in the course of a professional activity ...; and

(b) the professional activity concerned is the provision of professional services.

(7B) In subsection (7A) a service is provided in an incidental manner in the course of a professional activity ... if the applicable conditions are satisfied.

(7C) The applicable conditions for the purposes of subsection (7B) are those set out in paragraph 6(a) to (c) of Schedule 3 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.

(8) “Professional services” means services—

(a) which do not constitute carrying on a regulated activity, and

(b) the provision of which is supervised and regulated by a designated professional body.

(9) The exemption in this section does not apply to the carrying on of a regulated claims management activity in Great Britain.

Directions in relation to the general prohibition.

328

(1) The FCA may direct that section 327(1) is not to apply to the extent specified in the direction.

(2) A direction under subsection (1)—

(a) must be in writing;

(b) may be given in relation to different classes of person or different descriptions of regulated activity.

(3) A direction under subsection (1) must be published in the way appearing to the FCA to be best calculated to bring it to the attention of the public.

(4) The FCA may charge a reasonable fee for providing a person with a copy of the direction.

(5) The FCA must, without delay, give the Treasury a copy of any direction which it gives under this section.

(6) The FCA may exercise the power conferred by subsection (1) only if it is satisfied ...—

(a) that it is desirable to do so in order to protect the interests of clients; ...

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

(7) In considering whether it is satisfied of the matter specified in subsection (6)(a), the FCA must have regard amongst other things to the effectiveness of any arrangements made by any designated professional body—

(a) for securing compliance with rules made under section 332(1);

(b) for dealing with complaints against its members in relation to the carrying on by them of exempt regulated activities;

(c) in order to offer redress to clients who suffer, or claim to have suffered, loss as a result of misconduct by its members in their carrying on of exempt regulated activities;

(d) for co-operating with the FCA under section 325(4).

(8) In this Part “clients” means—

(a) persons who use, have used or are or may be contemplating using, any of the services provided by a member of a profession in the course of carrying on exempt regulated activities;

(b) persons who have rights or interests which are derived from, or otherwise attributable to, the use of any such services by other persons; or

(c) persons who have rights or interests which may be adversely affected by the use of any such services by persons acting on their behalf or in a fiduciary capacity in relation to them.

(9) If a member of a profession is carrying on an exempt regulated activity in his capacity as a trustee, the persons who are, have been or may be beneficiaries of the trust are to be treated as persons who use, have used or are or may be contemplating using services provided by that person in his carrying on of that activity.

Orders in relation to the general prohibition.

329

(1) Subsection (2) applies if it appears to the FCA that a person to whom, as a result of section 327(1), the general prohibition does not apply is not a fit and proper person to carry on regulated activities in accordance with that section.

(2) The FCA may make an order disapplying section 327(1) in relation to that person to the extent specified in the order.

(3) The FCA may, on the application of the person named in an order under subsection (1), vary or revoke it.

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

(5) If a partnership is named in an order under this section, the order is not affected by any change in its membership.

(6) If a partnership named in an order under this section is dissolved, the order continues to have effect in relation to any partnership which succeeds to the business of the dissolved partnership.

(7) For the purposes of subsection (6), a partnership is to be regarded as succeeding to the business of another partnership only if—

(a) the members of the resulting partnership are substantially the same as those of the former partnership; and

(b) succession is to the whole or substantially the whole of the business of the former partnership.

Consultation.

330

(1) Before giving a direction under section 328(1), the FCA must publish a draft of the proposed direction.

(2) The draft must be accompanied by—

(a) a cost benefit analysis; and

(b) notice that representations about the proposed direction may be made to the FCA within a specified time.

(3) Before giving the proposed direction, the FCA must have regard to any representations made to it in accordance with subsection (2)(b).

(4) If the FCA gives the proposed direction it must publish an account, in general terms, of—

(a) the representations made to it in accordance with subsection (2)(b); and

(b) its response to them.

(5) If the direction differs from the draft published under subsection (1) in a way which is, in the opinion of the FCA, significant—

(a) the FCA must (in addition to complying with subsection (4)) publish details of the difference; and

(b) those details must be accompanied by a cost benefit analysis.

(6) Subsections (1) to (5) do not apply if the FCA considers that the delay involved in complying with them would prejudice the interests of consumers.

(7) Neither subsection (2)(a) nor subsection (5)(b) applies if the FCA considers—

(a) that, making the appropriate comparison, there will be no increase in costs; or

(b) that, making that comparison, there will be an increase in costs but the increase will be of minimal significance.

(8) The FCA may charge a reasonable fee for providing a person with a copy of a draft published under subsection (1).

(9) When the FCA is required to publish a document under this section it must do so in the way appearing to it to be best calculated to bring it to the attention of the public.

(10) Cost benefit analysis” means—

(a) an analysis of the costs together with an analysis of the benefits that will arise—

(i) if the proposed direction is given, or

(ii) if subsection (5)(b) applies, from the direction that has been given, and

(b) subject to subsection (10A), an estimate of those costs and of those benefits.

(10A) If, in the opinion of the FCA—

(a) the costs or benefits referred to in subsection (10) cannot reasonably be estimated, or

(b) it is not reasonably practicable to produce an estimate,

the cost benefit analysis need not estimate them, but must include a statement of the FCA's opinion and an explanation of it.

(11) “The appropriate comparison” means—

(a) in relation to subsection (2)(a), a comparison between the overall position if the direction is given and the overall position if it is not given;

(b) in relation to subsection (5)(b), a comparison between the overall position after the giving of the direction and the overall position before it was given.

Procedure on making or varying orders under section 329.

331

(1) If the FCA proposes to make an order under section 329, it must give the person concerned a warning notice.

(2) The warning notice must set out the terms of the proposed order.

(3) If the FCA decides to make an order under section 329, it must give the person concerned a decision notice.

(4) The decision notice must—

(a) name the person to whom the order applies;

(b) set out the terms of the order; and

(5) Subsections (6) to (8) apply to an application for the variation or revocation of an order under section 329.

(6) If the FCA decides to grant the application, it must give the applicant written notice of its decision.

(7) If the FCA proposes to refuse the application, it must give the applicant a warning notice.

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

(9) A person—

(a) against whom the FCA have decided to make an order under section 329, or

(b) whose application for the variation or revocation of such an order the FCA had decided to refuse,

may refer the matter to the Tribunal.

(10) The FCA may not make an order under section 329 unless—

(a) the period within which the decision to make to the order may be referred to the Tribunal has expired and no such reference has been made; or

(b) if such a reference has been made, the reference has been determined.

Rules in relation to persons to whom the general prohibition does not apply.

332

(1) The FCA may make rules applicable to persons to whom, as a result of section 327(1), the general prohibition does not apply.

(2) The power conferred by subsection (1) is to be exercised for the purpose of ensuring that clients are aware that such persons are not authorised persons.

(3) A designated professional body must make rules—

(a) applicable to members of the profession in relation to which it is established who are not authorised persons; and

(b) governing the carrying on by those members of regulated activities (other than regulated activities in relation to which they are exempt persons).

(4) Rules made in compliance with subsection (3) must be designed to secure that, in providing a particular professional service to a particular client, the member carries on only regulated activities which arise out of, or are complementary to, the provision by him of that service to that client.

(5) Rules made by a designated professional body under subsection (3) require the approval of the FCA.

False claims to be a person to whom the general prohibition does not apply.

333

(1) A person who—

(a) describes himself (in whatever terms) as a person to whom the general prohibition does not apply, in relation to a particular regulated activity, as a result of this Part, or

(b) behaves, or otherwise holds himself out, in a manner which indicates (or which is reasonably likely to be understood as indicating) that he is such a person,

is guilty of an offence if he is not such a person.

(2) In proceedings for an offence under this section it is a defence for the accused to show that he took all reasonable precautions and exercised all due diligence to avoid committing the offence.

(3) A person guilty of an offence under this section is liable on summary conviction to imprisonment for a term not exceeding six months or a fine not exceeding level 5 on the standard scale, or both.

(4) But where the conduct constituting the offence involved or included the public display of any material, the maximum fine for the offence is level 5 on the standard scale multiplied by the number of days for which the display continued.

PART 20A — PENSIONS GUIDANCE

Introduction and definitions

333A

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Giving of pensions guidance

Secretary of State’s role in relation to pensions guidance

333B

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Giving of pensions guidance

333C

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financial assistance to bodies involved in giving pensions guidance

333D

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Designation of guidance providers

Designation of providers of pensions guidance

333E

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

333F

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

False claims when giving pensions guidance

Offence of falsely claiming to be giving pensions guidance under arrangements made with Secretary of State

333G

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Standards for giving of pensions guidance by designated guidance providers

333H

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Monitoring of compliance with standards by designated guidance providers

333I

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Failure by designated guidance providers to comply with standards: FCA recommendations

333J

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FCA policy on making recommendations under section 333J

333K

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FCA policy on making recommendations under section 333J: procedure

333L

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Failure by designated guidance providers to comply with standards: ... directions

333M

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Directions to designated guidance providers under section 333M: relationship with power to revoke a designation

333N

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FCA's duties and power to give guidance

FCA's duties

333O

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Power of the FCA to give guidance

333P

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Funding of pensions guidance

Funding of FCA's pensions guidance costs

333Q

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Funding of Secretary of State’s pensions guidance costs

333R

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART 20B — Illegal Money Lending

Financial assistance for action against illegal money lending

333S

(1) The Treasury may make grants or loans, or give any other form of financial assistance, to any person for the purpose of taking action against illegal money lending.

(2) Taking action against illegal money lending includes—

(a) investigating illegal money lending and offences connected with illegal money lending;

(b) prosecuting, or taking other enforcement action in respect of, illegal money lending and offences connected with illegal money lending;

(c) providing education, information and advice about illegal money lending, and providing support to victims of illegal money lending;

(d) undertaking or commissioning research into the effectiveness of activities of the kind described in paragraphs (a) to (c);

(e) providing advice, assistance and support (including financial support) to, and oversight of, persons engaged in activities of the kind described in paragraphs (a) to (c).

(3) A grant, loan or other form of financial assistance under subsection (1) may be made or given on such terms as the Treasury consider appropriate.

(4) “Illegal money lending” means carrying on a regulated activity within article 60B of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) (regulated credit agreements) in circumstances which constitute an authorisation offence.

Funding of action against illegal money lending

333T

(1) The Treasury must, from time to time, notify the FCA of the amount of the Treasury's illegal money lending costs.

(2) The FCA must make rules requiring authorised persons, or any specified class of authorised person, to pay to the FCA specified amounts, or amounts calculated in a specified way, with a view to recovering the amount notified under subsection (1).

(3) The amounts to be paid under the rules may include a component to recover the expenses of the FCA in collecting the payments (“collection costs”).

(4) Before the FCA publishes a draft of the rules it must consult the Treasury.

(5) The rules may be made only with the consent of the Treasury.

(6) The Treasury may notify the FCA of matters that they will take into account when deciding whether or not to give consent for the purposes of subsection (5).

(7) The FCA must have regard to any matters notified under subsection (6) before publishing a draft of rules to be made under this section.

(8) The FCA must pay to the Treasury the amounts that it receives under rules made under this section apart from amounts in respect of its collection costs (which it may keep).

(9) The Treasury must pay into the Consolidated Fund the amounts received by them under subsection (8).

(10) In this section the “Treasury's illegal money lending costs” means the expenses incurred, or expected to be incurred, by the Treasury—

(a) in connection with providing grants, loans, or other financial assistance to any person (under section 333S or otherwise) for the purpose of taking action against illegal money lending;

(b) in undertaking or commissioning research relating to taking action against illegal money lending.

(11) The Treasury may by regulations amend the definition of the “Treasury's illegal money lending costs”.

(12) In this section “illegal money lending” and “taking action against illegal money lending” have the same meaning as in section 333S.

Part XXI — Mutual Societies

Friendly societies

The Friendly Societies Commission.

334

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

(3) The enactments relating to friendly societies which are mentioned in Part I of Schedule 18 are amended as set out in that Part.

(4) Part II of Schedule 18—

(a) removes certain restrictions on the ability of incorporated friendly societies to form subsidiaries and control corporate bodies; and

(b) makes connected amendments.

The Registry of Friendly Societies.

335

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Building societies

The Building Societies Commission.

336

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Building Societies Investor Protection Board.

337

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Industrial and provident societies and credit unions

Industrial and provident societies and credit unions.

338

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplemental

Supplemental provisions.

339

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part XXII — Auditors and Actuaries

General duties of regulator

General duties of PRA in relation to auditors

339A

(1) The arrangements maintained by the PRA under section 2K (supervision of PRA-authorised persons) must include arrangements for—

(a) the sharing with auditors of PRA-authorised persons of information that the PRA is not prevented from disclosing, and

(b) the exchange of opinions with auditors of PRA-authorised persons.

(2) The PRA must issue and maintain a code of practice describing how it will comply with subsection (1).

(3) The PRA may at any time alter or replace a code issued under this section.

(4) If a code is altered or replaced, the PRA must issue the altered or replacement code.

(5) When the PRA issues a code under this section the PRA must—

(a) give a copy of the code to the Treasury, and

(b) publish the code in such manner as the PRA thinks fit.

(6) The Treasury must lay before Parliament a copy of the code.

(7) “Auditor” means an auditor appointed under or as a result of a statutory provision.

Duty to meet auditors of certain institutions

339B

(1) The FCA must make arrangements for meetings to take place at least once a year between—

(a) the FCA, and

(b) the auditor of any PRA-authorised person to which section 339C applies.

(2) The PRA must make arrangements for meetings to take place at least once a year between—

(a) the PRA, and

(b) the auditor of any PRA-authorised person to which section 339C applies.

(3) The annual report of each regulator must include the number of meetings that have taken place during the period to which the report relates between the regulator and auditors of PRA-authorised persons to which section 339C applies.

(4) In subsection (3) “the annual report” means—

(a) in relation to the FCA, every report which it is required by paragraph 11 of Schedule 1ZA to make to the Treasury, and

(b) in relation to the PRA, every report which it is required by paragraph 19 of Schedule 1ZB to make to the Treasury.

(5) In this section “auditor” means an auditor appointed under or as a result of a statutory provision.

PRA-authorised persons to which this section applies

339C

(1) This section applies to a PRA-authorised person which—

(a) is a UK institution,

(b) meets condition A or B,

(d) is, in the opinion of the PRA, important to the stability of the UK financial system.

(2) Condition A is that the person has permission under Part 4A to carry on the regulated activity of accepting deposits.

(3) Condition B is that—

(a) the person is an investment firm that has permission under Part 4A to carry on the regulated activity of dealing in investments as principal, and

(b) when carried on by the person, that activity is a PRA-regulated activity.

(4) In this section—

(a) “UK institution” means an institution which is incorporated in, or formed under the law of any part of, the United Kingdom;

(b) “insurer” means an institution which is authorised under this Act to carry on the regulated activity of effecting or carrying out contracts of insurance as principal;

(c) “credit union” means a credit union as defined by section 31 of the Credit Unions Act 1979 or a credit union as defined by Article 2(2) of the Credit Unions (Northern Ireland) Order 1985.

(5) Subsections (2), (3) and (4)(b) are to be read in accordance with Schedule 2, taken together with any order under section 22.

Appointment

Appointment.

340

(1) The appropriate regulator may make rules requiring an authorised person, or an authorised person falling within a specified class—

(a) to appoint an auditor, or

(b) to appoint an actuary,

if he is not already under an obligation to do so imposed by another enactment.

(2) The appropriate regulator may make rules requiring an authorised person, or an authorised person falling within a specified class—

(a) to produce periodic financial reports; and

(b) to have them reported on by an auditor or an actuary.

(3A) The PRA—

(a) must make rules imposing on auditors of PRA-authorised persons such duties as may be specified in relation to co-operation with the PRA in connection with the supervision by the PRA of PRA-authorised persons, and

(b) may make rules—

(i) imposing such other duties on auditors of PRA-authorised persons as may be specified, and

(ii) imposing such duties on actuaries acting for PRA-authorised persons as may be specified.

(3B) The FCA may make rules imposing on auditors of, or actuaries acting for, authorised persons such duties as may be specified.

(4) Rules under subsection (1) may make provision—

(a) specifying the manner in which and time within which an auditor or actuary is to be appointed;

(b) requiring the regulator making the rules to be notified of an appointment;

(d) as to remuneration;

(e) as to the term of office, removal and resignation of an auditor or actuary.

(5) An auditor or actuary appointed as a result of rules under subsection (1), or on whom duties are imposed by rules under subsection (3A) or (3B)—

(a) must act in accordance with such provision as may be made by rules; and

(b) is to have such powers in connection with the discharge of his functions as may be provided by rules.

(5A) In subsections (1) and (2) “the appropriate regulator” means—

(a) in the case of a PRA-authorised person, the PRA;

(b) in any other case, the FCA.

(6) In subsections (1) to (3B) “auditor” or “actuary” means an auditor, or actuary, who satisfies such requirements as to qualifications, experience and other matters (if any) as may be specified.

(7) “Specified” means specified in rules.

(8) The powers conferred by this section enable only the making of such rules as appear to the regulator making them to be necessary or expedient—

(a) in the case of the FCA, for the purpose of advancing one or more of its operational objectives, or

(b) in the case of the PRA, for the purpose of advancing any of its objectives.

Information

Access to books etc.

341

(1) An appointed auditor of, or an appointed actuary acting for, an authorised person—

(a) has a right of access at all times to the authorised person’s books, accounts and vouchers; and

(b) is entitled to require from the authorised person’s officers such information and explanations as he reasonably considers necessary for the performance of his duties as auditor or actuary.

(2) “Appointed” means appointed under or as a result of this Act.

Information given by auditor or actuary to a regulator.

342

(1) This section applies to a person who is, or has been, an auditor of an authorised person or recognised investment exchange, appointed under or as a result of a statutory provision.

(2) This section also applies to a person who is, or has been, an actuary acting for an authorised person and appointed under or as a result of a statutory provision.

(3) An auditor or actuary does not contravene any duty to which he is subject merely because he gives to a regulator—

(a) information on a matter of which he has, or had, become aware in his capacity as auditor of, or actuary acting for, the authorised person or recognised investment exchange, or

(b) his opinion on such a matter,

if he is acting in good faith and he reasonably believes that the information or opinion is relevant to any functions of that regulator.

(4) Subsection (3) applies whether or not the auditor or actuary is responding to a request from the regulator.

(5) The Treasury may make regulations prescribing circumstances in which an auditor or actuary must communicate matters to a regulator as mentioned in subsection (3).

(6) It is the duty of an auditor or actuary to whom any such regulations apply to communicate a matter to a regulator in the circumstances prescribed by the regulations.

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