Financial Services and Markets Act 2000

• (10) After giving a direction under this paragraph, a UK regulator must—

• (a) publish the direction in the way appearing to the UK regulator to be best calculated to bring it to the attention of persons likely to be affected by it, and

• (b) give a copy of the direction to the Treasury and the other UK regulator without delay.

PART 8 — UK regulators' directions about information

Directions about information to be included in notifications

57

• (1) A UK regulator may direct that a notification for the purposes of paragraph 12, 22, 32 or 44 in relation to which it is the appropriate UK regulator must include information specified in the direction.

• (2) In a direction, a UK regulator may only specify information which it reasonably considers necessary to enable it to discharge functions conferred on it by or under this Act in relation to persons with a Schedule 2A permission.

• (3) A UK regulator that gives a direction under this paragraph may, by a further direction, vary or revoke the direction.

• (4) A direction under this paragraph—

• (a) may make different provision for different purposes, but

• (b) may not make provision in relation to a specific person.

• (5) The FCA must consult the Treasury before giving a direction under this paragraph.

• (6) The PRA must consult the Treasury and the FCA before giving a direction under this paragraph.

• (7) After giving a direction under this paragraph, a UK regulator must—

• (a) publish the direction in the way appearing to the UK regulator to be best calculated to bring it to the attention of persons likely to be affected by it, and

• (b) give a copy of the direction to the Treasury and the other UK regulator without delay.

PART 9 — Transition on withdrawal of approval of regulated activity etc

Transition on withdrawal of approval of regulated activity

58

• (1) Sub-paragraph (2) applies where—

• (a) the Treasury withdraw their approval of a regulated activity for the purposes of this Schedule (by revoking or amending regulations under paragraph 5), and

• (b) immediately before approval is withdrawn, a person had a Schedule 2A permission to carry on the activity.

• (2) The regulated activity is to be treated as approved under this Schedule but—

• (a) only so far as carried on by the person,

• (b) subject to the time limit in sub-paragraph (3), and

• (c) subject to any restriction under paragraph 60.

• (3) The regulated activity ceases to be treated as approved under this Schedule by virtue of sub-paragraph (2)—

• (a) at the end of the period specified by the Treasury by regulations, or

• (b) if earlier, when an event listed in sub-paragraph (4) first occurs.

• (4) Those events are—

• (a) the person ceases to carry on the regulated activity in the United Kingdom;

• (b) the person ceases to have permission from the Gibraltar regulator to carry on the corresponding activity in Gibraltar;

• (c) the person ceases to have a Schedule 2A permission in respect of the activity;

• (d) the person is given permission under Part 4A of this Act in respect of the activity;

• (e) the Treasury approve the activity for the purposes of this Schedule (by making regulations under paragraph 5).

• (5) Where the approval of the regulated activity referred to in sub-paragraph (1)(a) is subject to limitations, references in this Part of this Schedule to that activity are to that activity subject to those limitations.

• (6) Where the withdrawal of the approval of the regulated activity referred to in sub-paragraph (1)(a) is subject to limitations, references in this Part of this Schedule to that activity are to that activity subject to those limitations.

• (7) For the purposes of sub-paragraph (4)(b) and (c), a person does not cease to have permission in respect of an activity while it has permission to carry on the activity by virtue of, and subject to the restrictions in, Part 10 of this Schedule.

Transition on Gibraltar activity ceasing to be corresponding activity

59

• (1) Sub-paragraph (2) applies where—

• (a) the Treasury provide that an activity which the Gibraltar regulator has authorised, or may authorise, a person to carry on in Gibraltar (a “Gibraltar activity”) does not correspond to an approved activity (by revoking or amending regulations under paragraph 6), and

• (b) immediately before they do so, a person had a Schedule 2A permission to carry on the approved activity by virtue of having permission from the Gibraltar regulator to carry the Gibraltar activity.

• (2) For the purposes of this Schedule, the Gibraltar activity is to be treated as corresponding to the approved activity but—

• (a) only so far as the approved activity is carried on by the person in the United Kingdom,

• (b) subject to the time limit in sub-paragraph (3), and

• (c) subject to any restriction under paragraph 60.

• (3) The Gibraltar activity ceases to be treated as corresponding to the approved activity by virtue of sub-paragraph (2)—

• (a) at the end of the period specified by the Treasury by regulations, or

• (b) if earlier, when an event listed in sub-paragraph (4) first occurs.

• (4) Those events are—

• (a) the person ceases to carry on the approved activity in the United Kingdom;

• (b) the person ceases to have permission from the Gibraltar regulator to carry on the Gibraltar activity;

• (c) the person ceases to have a Schedule 2A permission in respect of the approved activity;

• (d) the person is given permission under Part 4A of this Act in respect of the approved activity;

• (e) the Treasury provide that the Gibraltar activity corresponds to the approved activity (by making regulations under paragraph 6).

• (5) Where the provision made about the Gibraltar activity in regulations under paragraph 6 immediately before the Treasury make the provision described in sub-paragraph (1)(a) is subject to limitations, references in this Part of this Schedule to the Gibraltar activity are to that activity subject to those limitations.

• (6) Where the provision made about the Gibraltar activity in the regulations under paragraph 6 referred to in sub-paragraph (1)(a) is subject to limitations, references in this Part of this Schedule to the Gibraltar activity are to that activity subject to those limitations.

• (7) For the purposes of sub-paragraph (4)(b) and (c), a person does not cease to have permission in respect of an activity while it has permission to carry on the activity by virtue of, and subject to the restrictions in, Part 10 of this Schedule.

Restricting transitional permission

60

• (1) Sub-paragraph (2) applies where—

• (a) by virtue of paragraph 58(1), a regulated activity is treated as approved under this Schedule so far as carried on by a person, or

• (b) by virtue of paragraph 59(1), an activity which the Gibraltar regulator has authorised, or may authorise, a person to carry on in Gibraltar is treated as corresponding to an approved activity so far as the approved activity is carried on by a person.

• (2) The appropriate UK regulator may decide that the person may only carry on the regulated activity or approved activity (as appropriate) in the United Kingdom so far as is necessary for one or more of the following purposes—

• (a) for the performance of a protected contract;

• (b) in order to reduce the financial risk of a party to a protected contract or a third party affected by the performance of a protected contract;

• (c) in order to transfer the property, rights or liabilities under a protected contract to a person authorised to carry on a regulated activity by virtue of section 31(1)(a);

• (d) in order to comply with a requirement imposed by or under an enactment.

• (3) If it proposes to make a decision under sub-paragraph (2), the appropriate UK regulator must give the person a written notice.

• (4) The notice must—

• (a) give details of the proposed decision, and

• (b) inform the person that the person may make representations to the appropriate UK regulator within the period specified in the notice.

• (5) The appropriate UK regulator may extend the period allowed under the notice for making representations.

• (6) If, having considered any representations made by the person, the appropriate UK regulator decides to restrict the person's activities as described in sub-paragraph (2), it must—

• (a) give the person a written notice (“a restriction notice”), and

• (b) inform the Gibraltar regulator in writing without delay.

• (7) A restriction notice must—

• (a) specify the date on which it takes effect,

• (b) inform the person of the person's right to refer the matter to the Tribunal (see paragraph 62), and

• (c) indicate the procedure on a reference to the Tribunal.

• (8) The Treasury may by regulations provide that a restriction notice may not specify a date falling before the end of a period specified or described in the regulations.

• (9) In this paragraph—

• “the appropriate UK regulator” means—in the case of a PRA-authorised person, the PRA, andin any other case, the FCA;

• “enactment” includes— assimilated 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;

• “protected contract” means a contract specified or described in a direction by the appropriate UK regulator under paragraph 61;

• “subordinate legislation” has the same meaning as in the Interpretation Act 1978 (see section 21 of that Act).

• (10) In this paragraph, references to the performance of a protected contract include the performance of an obligation under the contract which is contingent or conditional.

Directions about protected contracts

61

• (1) A UK regulator may direct that a contract specified or described in the direction is a protected contract for the purposes of this Part of this Schedule.

• (2) A UK regulator that gives a direction under this paragraph may, by a further direction, vary or revoke the direction.

• (3) A direction under this paragraph may make different provision for different purposes, including different provision in connection with—

• (a) different activities,

• (b) different contracts or descriptions of contract, or

• (c) different Gibraltar-based persons or descriptions of Gibraltar-based person.

• (4) After giving a direction under this paragraph, a UK regulator must—

• (a) publish the direction in the way appearing to the UK regulator to be best calculated to bring it to the attention of persons likely to be affected by it, and

• (b) give a copy of the direction to the Treasury and the other UK regulator without delay.

Right to refer matters to the Tribunal

62

Where a person in respect of whom a decision under paragraph 60(2) is made is aggrieved by the decision, the person may refer the matter to the Tribunal.

Further powers

63

• (1) The Treasury may by regulations extend the period under section 55V(1) or (2) for determining an application which—

• (a) is for a Part 4A permission or a variation of a Part 4A permission, and

• (b) relates only to the carrying on of an activity which the applicant is carrying on in the United Kingdom by virtue of this Part of this Schedule.

• (2) The power under sub-paragraph (1) includes power to amend section 55V.

• (3) The Treasury may by regulations extend the period for consideration of an application which—

• (a) is for approval under section 59 or variation of approval under section 59, and

• (b) relates only to performance of a function in relation to the carrying on of an activity which the applicant is carrying on in the United Kingdom by virtue of this Part of this Schedule.

• (4) The power under sub-paragraph (3) includes power to amend sections 61 and 63ZA.

PART 10 — Transition on cancellation of UK or Gibraltar permission

Transition on cancellation of Schedule 2A permission

64

• (1) Sub-paragraphs (2), (4) and (5) apply where—

• (a) a person's Schedule 2A permission is cancelled under Part 5 of this Schedule, or

• (b) a person's Schedule 2A permission is varied under Part 4 of this Schedule so as to remove permission to carry on an activity (including by adding or varying a limitation).

• (2) The person is to be treated as continuing to have the Schedule 2A permission, or the permission to carry on the activity, but—

• (a) only so far as is necessary for one or more of the purposes described in sub-paragraph (3), and

• (b) subject to the time limit in paragraph 68.

• (3) The purposes are—

• (a) for the performance of a protected contract;

• (b) to reduce the financial risk of a party to a protected contract or a third party affected by the performance of a protected contract;

• (c) to transfer the property, rights or liabilities under a protected contract to a person authorised to carry on a regulated activity by virtue of section 31(1)(a);

• (d) to comply with a requirement imposed by or under an enactment.

• (4) A UK regulator may exercise the powers under paragraph 49(1) (UK regulator's initiative: imposing, varying and cancelling requirements) in relation to the person if it appears to the UK regulator that it is desirable to do so in order to advance—

• (a) in the case of the FCA, one or more of its operational objectives, or

• (b) in the case of the PRA, one of its objectives.

• (5) For the purposes of section 33 (withdrawal of authorisation) a person's Schedule 2A permission is to be treated as being cancelled when the person ceases to be treated as having a Schedule 2A permission by virtue of this paragraph.

• (6) In this paragraph—

• “enactment” has the same meaning as in paragraph 60;

• “protected contract” means—an existing contract, ora contract specified or described in a direction by the appropriate UK regulator under paragraph 67(1).

• (7) In sub-paragraph (6), “existing contract”, in relation to a person referred to in sub-paragraph (1), means a contract entered into before the person's permission is cancelled or varied as described in that sub-paragraph, but—

• (a) does not include a contract specified or described in a direction under paragraph 67(2), and

• (b) except as otherwise provided in such a direction, does not include—

• (i) a variation of a contract agreed on or after that day, or

• (ii) a contract renewed on or after that day.

• (8) In this paragraph, references to the performance of a protected contract include the performance of an obligation under the contract which is contingent or conditional.

Transition on cancellation of Gibraltar permission

65

• (1) Sub-paragraphs (2) and (4) apply where the Gibraltar regulator—

• (a) cancels a Gibraltar-based person's permission to carry on in Gibraltar an activity in relation to which the person has a Schedule 2A permission, or

• (b) varies such a permission so as to remove permission to carry on such an activity (including by adding or varying a restriction).

• (2) For the purposes of this Schedule, the person is to be treated as continuing to have the permission from the Gibraltar regulator but—

• (a) only so far as is necessary for one or more of the purposes described in sub-paragraph (3), and

• (b) subject to the time limit in paragraph 68.

• (3) The purposes are—

• (a) for the performance of a protected contract;

• (b) to reduce the financial risk of a party to a protected contract or a third party affected by the performance of a protected contract;

• (c) to transfer the property, rights or liabilities under a protected contract to a person authorised to carry on a regulated activity by virtue of section 31(1)(a);

• (d) to comply with a requirement imposed by or under an enactment.

• (4) A UK regulator may exercise the powers under paragraph 49(1) (UK regulator's initiative: imposing, varying and cancelling requirements) in relation to the person if it appears to the UK regulator that it is desirable to do so in order to advance—

• (a) in the case of the FCA, one or more of its operational objectives, or

• (b) in the case of the PRA, one of its objectives.

• (5) In this paragraph—

• “enactment” has the same meaning as in paragraph 60;

• “protected contract” means—an existing contract, ora contract specified or described in a direction by the appropriate UK regulator under paragraph 67(1).

• (6) In sub-paragraph (5), “existing contract”, in relation to a person referred to in sub-paragraph (1), means a contract entered into before the person's permission is cancelled or varied as described in that sub-paragraph, but—

• (a) does not include a contract specified or described in a direction under paragraph 67(2), and

• (b) except as otherwise provided in such a direction, does not include—

• (i) a variation of a contract agreed on or after that day, or

• (ii) a contract renewed on or after that day.

• (7) In this paragraph, references to the performance of a protected contract include the performance of an obligation under the contract which is contingent or conditional.

The appropriate UK regulator

66

• (1) In this Part of this Schedule, “the appropriate UK regulator” means—

• (a) the PRA, in a case in which the Gibraltar-based person is a PRA-authorised person but not a paragraph 37(1) person, or

• (b) the FCA, in any other case.

• (2) In this paragraph, “a paragraph 37(1) person” means a person who is treated as having a Schedule 2A permission by virtue of paragraph 64 following the cancellation of that permission by the FCA under paragraph 37(1).

Directions about protected contracts

67

• (1) A UK regulator may direct that a contract specified or described in the direction is a protected contract for the purposes of paragraph 64 or 65 (or both).

• (2) A UK regulator may, by giving a direction, modify the definition of “existing contract” for the purposes of paragraph 64 or 65 (or both) in the ways provided for in the definitions of that term in those paragraphs.

• (3) A UK regulator that gives a direction under this paragraph may, by a further direction, vary or revoke the direction.

• (4) A UK regulator may give different directions under this paragraph in connection with—

• (a) different activities,

• (b) different contracts or descriptions of contract, or

• (c) different Gibraltar-based persons or descriptions of Gibraltar-based person.

• (5) After giving a direction under this paragraph, a UK regulator must—

• (a) publish the direction in the way appearing to the UK regulator to be best calculated to bring it to the attention of persons likely to be affected by it, and

• (b) give a copy of the direction to the Treasury and the other UK regulator without delay.

End of transition

68

• (1) A Gibraltar-based person ceases to be treated as having a permission by virtue of paragraph 64 or 65—

• (a) when an event listed in sub-paragraph (2) first occurs, or

• (b) if the appropriate UK regulator specifies an earlier date, on that date.

• (2) Those events are—

• (a) the person ceases to carry on the regulated activity in the United Kingdom;

• (b) the person is given permission under Part 4A of this Act in respect of the regulated activity;

• (c) the regulated activity ceases to be an approved activity;

• (d) the person obtains (as appropriate)—

• (i) a new Schedule 2A permission to carry on the activity referred to in paragraph 64(1), or

• (ii) a new permission from the Gibraltar regulator to carry on the activity referred to in paragraph 65(1).

• (3) If the appropriate UK regulator specifies a date for the purposes of sub-paragraph (1)(b), it may vary the date but only by specifying a later date.

• (4) In sub-paragraph (2), references to “the regulated activity” are references (as appropriate) to—

• (a) the regulated activity in respect of which the Gibraltar-based person is treated as having a Schedule 2A permission by virtue of paragraph 64, or

• (b) the regulated activity corresponding to the activity in respect of which the Gibraltar-based person is treated as having permission from the Gibraltar regulator by virtue of paragraph 65.

• (5) For the purposes of sub-paragraph (2)(c), a regulated activity does not cease to be an approved activity while it is treated as approved in relation to the Gibraltar-based person under Part 9 of this Schedule (with or without the restrictions under that Part).

End of transition: procedure

69

• (1) If a UK regulator proposes to specify or vary a date in relation to a person under paragraph 68(1)(b) or (3), it must give the person a warning notice.

• (2) If a UK regulator decides to specify or vary a date in relation to a person under paragraph 68(1)(b) or (3), it must give the person a decision notice.

Right to refer matters to the Tribunal

70

If a UK regulator gives a Gibraltar-based person a decision notice under paragraph 69, the person may refer the matter to the Tribunal.

PART 11 — Policy statements

Policy statements

71

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

• (a) its powers to vary or cancel a Schedule 2A permission under Part 4 or 5 of this Schedule other than on a notification by the Gibraltar regulator,

• (b) its powers to impose, vary or cancel requirements under Part 6 of this Schedule, other than on a notification by the Gibraltar regulator, and

• (c) its power to give directions under Part 7 of this Schedule.

• (2) Where a UK regulator has issued a statement under sub-paragraph (1), it may prepare and issue a revised statement.

• (3) In exercising a power described in sub-paragraph (1), a UK regulator must have regard to any relevant statement of policy issued under this paragraph and in force at the time.

Policy statements: procedure

72

• (1) Before issuing a statement under paragraph 71(1) or (2), a UK regulator must—

• (a) publish a draft of the proposed statement in the way appearing to it to be best calculated to bring it to the attention of the public,

• (b) publish a notice stating that representations may be made to the UK regulator within the period specified in the notice, and

• (c) have regard to any representations made to it in accordance with the notice.

• (2) If the UK regulator issues the proposed statement, it must publish—

• (a) the statement, and

• (b) an account in general terms of—

• (i) the representations made to it in accordance with the notice, and

• (ii) its response to them.

• (3) If the statement issued differs from the draft published under sub-paragraph (1) in a way which, in the opinion of the UK regulator, is significant, the UK regulator must publish details of the differences (as well as complying with sub-paragraph (2)).

• (4) A UK regulator—

• (a) must give a copy of a statement issued under paragraph 71(1) or (2) to the Treasury before publishing it, and

• (b) may charge a reasonable fee for providing a person with a copy of such a statement or a draft statement published under this paragraph.

• (5) Anything published by a UK regulator under this paragraph must be published in the way appearing to the UK regulator to be best calculated to bring it to the attention of the public.

PART 12 — Consultation etc by UK regulators

FCA's duties to consult the PRA

73

• (1) The FCA must consult the PRA before—

• (a) rejecting a notification under paragraph 19 in a case in which the person with responsibility for managing an aspect of the Gibraltar-based person's affairs is prohibited by an order under section 56 from performing a function in relation to an activity carried on by a PRA-authorised person, or

• (b) rejecting a notification under paragraph 20 in a case in which a relevant access right that was lost related to a PRA-regulated activity.

• (2) The FCA must consult the PRA before doing any of the following in a case in which the Gibraltar-based person is a PRA-authorised person or a member of a group that includes a PRA-authorised person—

• (a) rejecting a notification under paragraph 26(5);

• (b) varying a Schedule 2A permission under paragraph 27;

• (c) rejecting a notification under paragraph 36(4);

• (d) cancelling a Schedule 2A permission under paragraph 37(1);

• (e) imposing a requirement under paragraph 41(3);

• (f) rejecting a notification under paragraph 48(4);

• (g) imposing, varying or cancelling a requirement under paragraph 49(2).

FCA's duties to obtain consent from the PRA

74

• (1) The FCA must obtain the PRA's consent before exercising its power under paragraph 27 in relation to a PRA-authorised person so as to—

• (a) add an activity to those to which the person's Schedule 2A permission relates, or

• (b) widen the description of an activity to which the person's Schedule 2A permission relates.

• (2) Sub-paragraph (1) does not apply in relation to the regulated activity specified in article 63S of the Financial Services and Markets 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) (administering a benchmark).

• (3) Consent given by the PRA for the purposes of this paragraph may be conditional on the way in which the FCA exercises its power.

FCA's duties to inform the PRA

75

• (1) The FCA must inform the PRA in writing without delay after rejecting a notification under—

• (a) paragraph 18(2) or (3), 19 or 20;

• (b) paragraph 26(4) or (5);

• (c) paragraph 36(4);

• (d) paragraph 48(4).

• (2) The FCA must inform the PRA in writing without delay after imposing, varying or cancelling a requirement under paragraph 41(3) or 49(2).

PRA's duties to consult the FCA

76

• (1) The PRA must consult the FCA before—

• (a) giving a confirmation notice under paragraph 16;

• (b) rejecting a notification under paragraph 19 or 20;

• (c) giving a confirmation notice under paragraph 25;

• (d) rejecting a notification under paragraph 26(5);

• (e) varying a Schedule 2A permission under paragraph 27;

• (f) giving a confirmation notice under paragraph 35;

• (g) rejecting a notification under paragraph 36(5);

• (h) cancelling a Schedule 2A permission under paragraph 37(2);

• (i) imposing a requirement under paragraph 41(4);

• (j) giving a confirmation notice under paragraph 47;

• (k) rejecting a notification under paragraph 48(5);

• (l) imposing, varying or cancelling a requirement under paragraph 49(3);

• (m) giving a notice under paragraph 60;

• (n) giving a direction under paragraph 61;

• (o) giving a direction under paragraph 67.

• (2) The PRA must—

• (a) consult the FCA before publishing a draft statement under paragraph 72, and

• (b) if the final version of the statement is to differ from the draft in a way which, in the opinion of the PRA, is significant, consult the FCA again before issuing it.

PRA's duty to obtain consent from the FCA

77

• (1) The PRA must obtain the FCA's consent before exercising its power under paragraph 27 so as to—

• (a) add an activity to those to which a Schedule 2A permission relates, or

• (b) widen the description of an activity to which a Schedule 2A permission relates.

• (2) Consent given by the FCA for the purposes of this paragraph may be conditional on the way in which the PRA exercises its power.

PRA's duties to inform the FCA

78

• (1) When the PRA receives a notification for the purposes of a provision listed in the first column of the following table, it must give a copy to the FCA without delay, except where it rejects the notification under the provision listed in the second column (notification incomplete)—

Notification for the purposes of	Rejection under
paragraph 12	paragraph 18(1)
paragraph 22	paragraph 26(3)
paragraph 32	paragraph 36(3)
paragraph 44	paragraph 48(3).

• (2) The PRA must inform the FCA in writing without delay after rejecting a notification under—

• (a) paragraph 18(2) or (3), 19 or 20;

• (b) paragraph 26(4) or (5);

• (c) paragraph 36(5);

• (d) paragraph 48(5).

• (3) The PRA must inform the FCA in writing without delay after imposing, varying or cancelling a requirement under paragraph 41(4) or 49(3).

UK regulators' duties to inform the Gibraltar regulator

79

• (1) A UK regulator must inform the Gibraltar regulator in writing before giving a confirmation notice under—

• (a) paragraph 16,

• (b) paragraph 25,

• (c) paragraph 35, or

• (d) paragraph 47.

• (2) A UK regulator must inform the Gibraltar regulator in writing without delay after—

• (a) varying a Schedule 2A permission under paragraph 27,

• (b) cancelling a Schedule 2A permission under paragraph 37,

• (c) imposing a requirement under paragraph 41, or

• (d) imposing, varying or cancelling a requirement under paragraph 49.

PART 13 — Co-operation and Assistance

Duties to co-operate

80

• (1) Each of the FCA, the PRA and the scheme manager must take such steps as they consider appropriate, for the purposes in sub-paragraph (2), to co-operate—

• (a) with each other and the Treasury (“the UK entities”), and

• (b) with the government of Gibraltar and the Gibraltar regulator (“the Gibraltar entities”).

• (2) Those purposes are—

• (a) to secure that they, and the Treasury, are able to perform their functions under this Schedule and section 32A, and

• (b) to secure that, so far as is reasonably possible, there is co-operation between the UK entities and the Gibraltar entities which the Treasury, having regard to the objectives in paragraph 7(1), consider adequate.

• (3) For the purposes of sub-paragraph (2), the FCA, the PRA and the scheme manager must, among other things, have regard to—

• (a) the memoranda and arrangements described in paragraph 9(4)(a) to (d),

• (b) reports laid before Parliament by the Treasury under section 32A, and

• (c) any guidance published by the Treasury.

• (4) Each of the FCA, the PRA and the scheme manager must ensure that one or more memoranda describing how it intends to comply with sub-paragraph (1) are prepared and maintained.

• (5) The steps taken for the purposes of sub-paragraph (1) may include arrangements for the sharing of information which the FCA, the PRA or the scheme manager is not prevented from disclosing.

• (6) When carrying out functions under this Schedule, the FCA and the PRA must, among other things, have regard to any relevant arrangements in force at the time for co-operation between the UK entities or for co-operation between those entities and the Gibraltar entities.

Publication and review of arrangements for co-operation

81

• (1) Each of the FCA, the PRA and the scheme manager must—

• (a) ensure that a copy of each memorandum describing how it intends to comply with paragraph 80(1), and of any other document recording arrangements that it enters into for the purpose of complying with paragraph 80(1), is given to the Treasury (unless the Treasury also entered into the arrangement),

• (b) ensure that each memorandum is published in the way appearing to it to be best calculated to bring it to the attention of the public, and

• (c) review the memoranda that it has in place for the purpose of complying with paragraph 80(1) at least once in each of the reporting periods described in section 32A.

• (2) Where the Treasury enter into arrangements with the FCA, the PRA, the scheme manager, the government of Gibraltar or the Gibraltar regulator for a purpose described in paragraph 80(2), they must—

• (a) ensure that any memorandum recording the arrangements is published in the way appearing to the Treasury to be best calculated to bring it to the attention of the public, and

• (b) review the memoranda that the Treasury have in place for a purpose described in paragraph 80(2) at least once in each of the reporting periods described in section 32A.

• (3) The Treasury must lay before Parliament a copy of any memorandum—

• (a) given to them under sub-paragraph (1), or

• (b) published in accordance with sub-paragraph (2)(a).

Provision of reports to assist the Treasury

82

• (1) A UK regulator or the scheme manager must, on a request from the Treasury, prepare and send to the Treasury a report on a matter specified in the request.

• (2) The Treasury may only make a request under this paragraph for a report that they reasonably require in connection with the exercise of their functions under—

• (a) this Schedule, or

• (b) section 32A.

• (3) A request for a report under this paragraph—

• (a) must be made in writing, and

• (b) may require the UK regulator or scheme manager to send the report to the Treasury before a date specified in the request.

PART 14 — Special cases

Gibraltar-based individuals carrying on insurance distribution activities

83

• (1) For the purposes of paragraph 1, an individual without a head office in Gibraltar is to be treated as having a head office there if the individual—

• (a) is normally resident in Gibraltar, and

• (b) has permission from the Gibraltar regulator to carry on an insurance distribution activity in Gibraltar.

• (2) A notification for the purposes of paragraph 12 in respect of an individual who is a Gibraltar-based person by virtue of this paragraph satisfies paragraph 15(1)(b) if it states the main address where the individual carries on an insurance distribution activity in Gibraltar.

• (3) The Treasury may by regulations replace the requirement in sub-paragraph (1)(a) with a different requirement relating to residence in Gibraltar.

• (4) In this paragraph, “insurance distribution activity” has the meaning given in paragraph 2B(5) and (6) of Schedule 6.

SCHEDULE 3 — EEA Passport Rights

Part I — Defined terms

The single market directives

1

“The single market directives” means—

• (a) the capital requirements directive;

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (ca) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (d) the markets in financial instruments directive; ...

• (e) the insurance distribution directive; ...

• (f) the UCITS directive; ...

• (g) the alternative investment fund managers directive; and

• (h) the mortgages directive.

The banking co-ordination directives

2

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

The Solvency 2 Directive

3

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

The reinsurance directive

3A

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

The investment services directive

4

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

The insurance distribution directive

4A

“The insurance distribution directive” means Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution (recast) as amended by Directive (EU) 2018/411 of the European Parliament and of the Council of 14 March 2018.

The UCITS directive

4B

“The UCITS directive ” means the Directive of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (No 2009/65/EC) , as amended by Directive 2014/91/EU of the European Parliament and of the Council of 23rd July 2014.

The markets in financial instruments directive

4C

“The markets in financial instruments directive” means Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments.

The emission allowance auctioning regulation

4D

“The emission allowance auctioning regulation” means Commission Regulation ( EU ) No 1031/2010 of 12 November 2010 on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to Directive 2003/87/ EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community.

The alternative investment fund managers directive

4E

“The alternative investment fund managers directive” means Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers.

The mortgages directive

4F

“The mortgages directive” means Directive 2014/17/EU of the European Parliament and of the Council of 4th February 2014 on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010.

EEA firm

5

“EEA firm” means any of the following if it does not have its relevant office in the United Kingdom—

• (a) an investment firm (as defined in Article 4.1.1 of the markets in financial instruments directive) which is authorised (within the meaning of Article 5) by its home state regulator;

• (b) a credit institution (as defined in Article 4(1)(1) of the capital requirements regulation) which is authorised (within the meaning of Article 8 of the capital requirements directive) by its home state regulator;

• (c) a financial institution (as defined in Article 4(1)(26) of the capital requirements regulation) which is a subsidiary of the kind mentioned in Article 34 of the capital requirements directive and which fulfils the conditions of that Article;

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

• (da) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (e) an insurance intermediary (as defined in Article 2.1(3) of the insurance distribution directive), an ancillary insurance intermediary (as defined in Article 2.1(4) of that directive) or a reinsurance intermediary (as defined in Article 2.1(5) of that directive), which is registered with its home state regulator under Article 3 of that directive;

• (f) a management company (as defined in paragraph 11B) which is authorised (within the meaning of Article 6 of the UCITS directive) by its home state regulator; ...

• (g) a person who has received authorisation under Article 18.2 of the emission allowance auctioning regulation; ...

• (h) an AIFM (as defined in Article 4.1(b) of the alternative investment fund managers directive) which is authorised (in accordance with Article 6.1 of that directive) by its home state regulator; or

• (i) a mortgage intermediary which is admitted (in accordance with Article 29(1) of the mortgages directive) by its home state regulator to carry out all or part of the credit intermediation activities set out in Article 4(5) of that directive or to provide advisory services (as defined in Article 4(21) of that directive).

5A

In paragraph 5, “relevant office” means—

• (a) in relation to a firm falling within sub-paragraph (e) or (i) of that paragraph which has a registered office, its registered office;

• (aa) in relation to a firm falling within sub-paragraph (h) of that paragraph, its registered office;

• (b) in relation to any other firm, its head office.

EEA authorisation

6

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

EEA right

7

“EEA right” means the entitlement of a person to establish a branch, or provide services, in an EEA State other than that in which he has his relevant office—

• (a) in accordance with the Treaty as applied in the EEA; and

• (b) subject to the conditions of the relevant single market directive or, as the case may be, the emission allowance auctioning regulation.

7A

In paragraph 7, “relevant office” means—

• (a) in relation to a person who has a registered office and whose entitlement is subject to the conditions of the insurance distribution directive or the mortgages directive, his registered office;

• (aa) in relation to a person whose entitlement is subject to the conditions of the alternative investment fund managers directive, its registered office;

• (b) in relation to any other person, his head office.

EEA State

8

“EEA State ” has the meaning given by Schedule 1 to the Interpretation Act 1978.

Home state regulator

9

“Home state regulator” means the competent authority (within the meaning of the relevant single market directive or, as the case may be, the emission allowance auctioning regulation) of an EEA State (other than the United Kingdom) in relation to the EEA firm concerned.

UK firm

10

“UK firm” means a person whose relevant office is in the UK and who has an EEA right to carry on activity in an EEA State other than the United Kingdom.

10A

In paragraph 10, “relevant office” means—

• (a) in relation to a firm whose EEA right derives from the insurance distribution directive and which has a registered office, its registered office;

• (aa) in relation to a firm whose EEA right derives from the alternative investment fund managers directive, its registered office;

• (b) in relation to any other firm, its head office.

UK investment firm

10B

”UK investment firm” means a UK firm—

• (a) which is an investment firm, and

• (b) whose EEA right derives from the markets in financial instruments directive.

Host state regulator

11

“Host state regulator” means the competent authority (within the meaning of the relevant single market directive or, as the case may be, the emission allowance auctioning regulation) of an EEA State (other than the United Kingdom) in relation to a UK firm’s exercise of EEA rights there.

Tied agent

11A

”Tied agent” has the meaning given in Article 4.1.29 of the markets in financial instruments directive.

Management company

11B

“Management company” has the meaning given in Article 2.1(b) of the UCITS directive.

UCITS

11C

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

EEAAIFM

11D

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

Part II — Exercise of Passport Rights by EEA Firms

Firms qualifying for authorisation

12

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

Establishment

13

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

Services

14

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

Grant of permission

15

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

Grant of permission: bidding for emission allowances

15ZA

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

Power to restrict permission of management companies

Application for approval to manage UCITS

15A

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

Representations and references to the Tribunal

15B

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

Information to home state regulator

15C

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

Effect of carrying on regulated activity when not qualified for authorisation

16

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

Continuing regulation of European Economic AreaEEA firms

17

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

Giving up right to authorisation

18

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

Part III — Exercise of Passport Rights by UK Firms

Meaning of “the appropriate UK regulator”

18A

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

Establishment

19

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

Services

20

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

Information for host state regulator

20ZA

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

Tied agents

20A

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

Notice of intention to market a UCITS

20B

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

Notice of intention to market an Alternative Investment FundAIF

20C

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

Offence relating to exercise of passport rights

21

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

Continuing regulation of United KingdomUK firms

22

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

23

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

24

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

Arrangements between FCA and PRA

24A

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

Information to be included in the public record

25

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

UK management companies: delegation of functions

26

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

UK management companies: withdrawal of authorisation

27

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

Management companies: request for information

28

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

Full-scope United KingdomUKAlternative Investment Fund ManagersAIFMs: notification of breach by host state regulator

29

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

SCHEDULE 4 — Treaty Rights

Definitions

1

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

Firms qualifying for authorisation

2

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

Exercise of Treaty rights

3

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

Notification between UK regulators

3A

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

Permission

4

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

Notice to United KingdomUK regulator

5

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

Offences

6

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

SCHEDULE 5 — Persons Concerned in Collective Investment Schemes

Authorisation

1

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

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

• (3) An authorised open-ended investment company is an authorised person.

• (4) A body—

• (a) incorporated by virtue of regulations made under section 1 of the Open-Ended Investment Companies Act (Northern Ireland) 2002 in respect of which an authorisation order is in force, and

• (b) which is a UCITS as defined in section 236A,

is an authorised person.

• (5) “Authorisation order” means an order made under (or having effect as made under) any provision of those regulations which is made by virtue of section 1(2)(1) of that Act (provision corresponding to Chapter 3 of Part 17 of the Act).

Permission

2

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

• (2) A person authorised as a result of paragraph 1(3) or (4) has permission to carry on, so far as it is a regulated activity other than the activity of managing an AIF—

• (a) the operation of the scheme;

• (b) any activity in connection with, or for the purposes of, the operation of the scheme.

SCHEDULE 6 — Threshold Conditions

PART 1 — Introduction

1A

• (1) In this Schedule—

• “assets” includes contingent assets;

• “consolidated supervision” has the same meaning as in section 3M;

• “consumers” has the meaning given in section 425A;

• “financial crime” is to be read with section 1H(3);

• “functions”, in relation to the FCA or the PRA, means functions conferred on that regulator by or under this Act;

• “implementing provisions” has the same meaning as in section 3M;

• “liabilities” includes contingent liabilities;

• “relevant directives” has the same meaning as in section 3M;

• “relevant implementing provisions” means—any implementing provision contained in subordinate legislation (within the meaning of the Interpretation Act 1978) made otherwise than by any of the following–statutory instrument, andstatutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979 (S.I. 1979/1573 (N.I. 12)); orany other implementing provision (as amended from time to time));

• “Society” means the society incorporated by Lloyd’s Act 1871 by the name of Lloyd’s;

• “subsidiary undertaking” includes all the instances mentioned in Article 1(1) and (2) of the Seventh Company Law Directive in which an entity may be a subsidiary of an undertaking.

• (2) For the purposes of this Schedule, the “non-financial resources” of a person include any systems, controls, plans or policies that the person maintains, any information that the person holds and the human resources that the person has available.

• (3) In this Schedule, References to “integrity” of the UK financial system are to be read in accordance section 1D(2).

• (4) References to the failure of a person are to be read in accordance with section 2J(3) and (4).

PART 1B — Part 4A permission: authorised persons who are not PRA-authorised persons

Introduction

2A

If the person concerned (“A”) carries on, or is seeking to carry on, regulated activities which do not consist of or include a PRA-regulated activity, the threshold conditions that are relevant to the discharge by the FCA of its functions in relation to A are the conditions set out in paragraphs 2B to 2F.

Location of offices

2B

• (1) Unless sub-paragraph (3) , (4)(a) or (7) applies, if A is a body corporate incorporated in the United Kingdom—

• (a) A’s head office, and

• (b) if A has a registered office, that office,

must be in the United Kingdom.

• (2) If A is not a body corporate but A’s head office is in the United Kingdom, A must carry on business in the United Kingdom.

• (3) If—

• (a) A is seeking to carry on, or is carrying on, a regulated activity which is any of the investment services and activities,

• (b) A is a body corporate with no registered office, and

• (c) A’s head office is in the United Kingdom,

A must carry on business in the United Kingdom.

• (4) If A is seeking to carry on, or is carrying on, an insurance distribution activity—

• (a) where A is a body corporate incorporated in the United Kingdom, A’s registered office, or if A has no registered office, A’s head office, must be in the United Kingdom;

• (b) where A is an individual, A is to be treated for the purposes of sub-paragraph (2) as having a head office in the United Kingdom if A is resident in the United Kingdom.

• (5) “Insurance distribution activity” means any of the following activities—

• (a) dealing in rights under a contract of insurance as agent;

• (b) arranging deals in rights under a contract of insurance;

• (c) assisting in the administration and performance of a contract of insurance;

• (d) advising on buying or selling rights under a contract of insurance;

• (e) agreeing to do any of the activities specified in paragraphs (a) to (d).

• (6) Sub-paragraph (5) must be read with—

• (a) section 22,

• (b) any relevant order under that section, and

• (c) Schedule 2.

• (7) If A is seeking to carry on, or is carrying on, the regulated activity of managing an AIF and is, or upon being granted Part 4A permission to carry on that regulated activity would be, a full-scope UKAIFM, A’s head office and registered office must be in the United Kingdom.

Effective supervision

2C

• (1) A must be capable of being effectively supervised by the FCA having regard to all the circumstances including—

• (a) the nature (including the complexity) of the regulated activities that A carries on or seeks to carry on;

• (b) the complexity of any products that A provides or will provide in carrying on those activities;

• (c) the way in which A’s business is organised;

• (d) if A is a member of a group, whether membership of the group is likely to prevent the FCA’s effective supervision of A;

• (e) whether A is subject to consolidated supervision required under any relevant implementing provisions;

• (f) if A has close links with another person (“CL”)—

• (i) the nature of the relationship between A and CL,

• (ii) whether those links are or that relationship is likely to prevent the FCA’s effective supervision of A, and

• (iii) if CL is subject to the laws, regulations or administrative provisions of a country or territory outside the United Kingdom (“the foreign provisions”), whether those foreign provisions, or any deficiency in their enforcement, would prevent the FCA’s effective supervision of A.

• (1A) Paragraphs (a), (b) and (e) of sub-paragraph (1) do not apply where the only regulated activities that the person carries on, or seeks to carry on, are—

• (a) relevant credit activities, and

• (b) if any, activities to which, by virtue of section 39(1D), sections 20(1) and (1A) and 23(1A) do not apply when carried on by the person.

• (2) A has close links with CL if—

• (a) CL is a parent undertaking of A,

• (b) CL is a subsidiary undertaking of A,

• (c) CL is a parent undertaking of a subsidiary undertaking of A,

• (d) CL is a subsidiary undertaking of a parent undertaking of A,

• (e) CL owns or controls 20% or more of the voting rights or capital of A, or

• (f) A owns or controls 20% or more of the voting rights or capital of CL.

Appropriate resources

2D

• (1) The resources of A must be appropriate in relation to the regulated activities that A carries on or seeks to carry on.

• (2) The matters which are relevant in determining whether A has appropriate resources include—

• (a) the nature and scale of the business carried on, or to be carried on, by A;

• (b) the risks to the continuity of the services provided by, or to be provided by, A;

• (c) A’s membership of a group and any effect which that membership may have.

• (3) Except in a case within sub-paragraph (3A), the matters which are relevant in determining whether A has appropriate financial resources include—

• (a) the provision A makes and, if A is a member of a group, which other members of the group make, in respect of liabilities;

• (b) the means by which A manages and, if A is a member of a group, by which other members of the group manage, the incidence of risk in connection with A’s business.

• (3A) Where the only regulated activities that A carries on or seeks to carry on are—

• (a) relevant credit activities, and

• (b) if any, activities to which, by virtue of section 39(1D), sections 20(1) and (1A) and 23(1A) do not apply when carried on by A,

A has adequate financial resources if A is capable of meeting A’s debts as they fall due.

• (4) The matters which are relevant in determining whether A has appropriate non-financial resources include—

• (a) the skills and experience of those who manage A’s affairs;

• (b) whether A’s non-financial resources are sufficient to enable A to comply with—

• (i) requirements imposed or likely to be imposed on A by the FCA in the exercise of its functions, or

• (ii) any other requirement in relation to whose contravention the FCA would be the appropriate regulator for the purpose of any provision of Part 14 of this Act.

Suitability

2E

A must be a fit and proper person having regard to all the circumstances, including—

• (a) A’s connection with any person;

• (b) the nature (including the complexity) of the regulated activities that A carries on or seeks to carry on;

• (c) the need to ensure that A’s affairs are conducted in an appropriate manner, having regard in particular to the interests of consumers and the integrity of the UK financial system;

• (d) whether A has complied and is complying with requirements imposed by the FCA in the exercise of its functions, or requests made by the FCA, relating to the provision of information to the FCA and, where A has so complied or is so complying, the manner of that compliance;

• (e) whether those who manage A’s affairs have adequate skills and experience and have acted and may be expected to act with probity;

• (f) whether A’s business is being, or is to be, managed in such a way as to ensure that its affairs will be conducted in a sound and prudent manner;

• (g) the need to minimise the extent to which it is possible for the business carried on by A, or to be carried on by A, to be used for a purpose connected with financial crime.

Business model

2F

• (1) A’s business model (that is, A’s strategy for doing business) must be suitable for a person carrying on the regulated activities that A carries on or seeks to carry on.

• (2) The matters which are relevant in determining whether A satisfies the condition in sub-paragraph (1) include—

• (a) whether the business model is compatible with A’s affairs being conducted, and continuing to be conducted, in a sound and prudent manner;

• (b) the interests of consumers;

• (c) the integrity of the UK financial system.

• (3) This paragraph does not apply where the only regulated activities that the person carries on, or seeks to carry on, are—

• (a) relevant credit activities, and

• (b) if any, activities to which, by virtue of section 39(1D), sections 20(1) and (1A) and 23(1A) do not apply when carried on by the person.

Interpretation

2G

• (1) In this Part of this Schedule, each of the following is a “relevant credit activity”—

• (a) an activity of the kind specified by article 36A of the Regulated Activities Order (credit broking) when carried on in the case specified in sub-paragraph (3), (4) or (5),

• (b) an activity of the kind specified by article 39D of that Order (debt adjusting) when carried on—

• (i) in the case specified in sub-paragraph (3), by a person who also carries on an activity of the kind specified by paragraph (a),

• (ii) by a person in connection with an activity of the kind specified by paragraph (d) or (e) which the person also carries on,

• (iii) by a not-for-profit body,

• (c) an activity of the kind specified by article 39E of that Order (debt-counselling) when carried on—

• (i) in the case specified in sub-paragraph (3), by a person who also carries on an activity of the kind specified by paragraph (a),

• (ii) by a person in connection with an activity of the kind specified by paragraph (d) or (e) which the person also carries on,

• (iii) by a not-for-profit body,

• (d) an activity of the kind specified by article 60B of that Order (regulated credit agreements) if—

• (i) it is carried on by a supplier,

• (ii) no charge (by way of interest or otherwise) is payable by the borrower in connection with the provision of credit under the regulated credit agreement, and

• (iii) the regulated credit agreement is not a hire-purchase agreement or a conditional sale agreement,

• (da) an activity of the kind specified by article 60B of that Order (regulated credit agreements) if carried on by a local authority,

• (e) an activity of the kind specified by article 60N of that Order (regulated consumer hire agreements),

• (f) an activity of the kind specified by article 89A of that Order (providing credit information services) where carried on by a person in connection with an activity of the kind specified by any of paragraphs (a) to (e) which the person also carries on, or

• (g) an activity of the kind specified by article 64 of that Order (agreeing to carry on specified kinds of activity) so far as relevant to any of the activities specified in paragraphs (a) to (f).

• (2) Except where the activity is carried on by a not-for-profit body, an activity is not a relevant credit activity for the purposes of—

• (a) paragraph (a) to (e) of sub-paragraph (1), and

• (b) paragraph (g) of that sub-paragraph so far at it relates to activities of the kind specified by any of those paragraphs,

if it relates to an agreement under which the obligation of the borrower to repay or the hirer to pay is secured, or is to be secured, by a legal mortgage on land.

• (3) The case specified in this sub-paragraph is where a supplier (other than a domestic premises supplier) carries on the activity for the purposes of, or in connection with, the sale of goods or supply of services by the supplier to a customer (who need not be the borrower under the credit agreement or the hirer under the consumer hire agreement).

• (3A) For the purposes of sub-paragraph (3), “domestic premises supplier” means a supplier who—

• (a) sells, offers to sell or agrees to sell goods, or

• (b) offers to supply services or contracts to supply services,

to customers who are individuals while the supplier, or the supplier’s representative, is physically present at the dwelling of the individual (but see sub-paragraph (3B)).

• (3B) A supplier who acts as described in sub-paragraph (3A) on an occasional basis only will not be a domestic premises supplier unless the supplier indicates to the public at large, or any section of the public, the supplier’s willingness to attend (in person or through a representative) the dwelling of potential customers in order to carry on any of the activities mentioned in sub-paragraph (3A)(a) or (b).

• (4) The case specified in this sub-paragraph is where the activity relates to a green deal plan.

• (5) The case specified in this sub-paragraph is where the activity relates to a consumer hire agreement or a hire-purchase agreement.

• (6) For the purposes of this paragraph—

• “borrower” includes—any person providing a guarantee or indemnity under an agreement, anda person to whom the rights and duties of the borrower under an agreement or a person falling within paragraph (a) have passed by assignment or operation of law;

• “conditional sale agreement” has the meaning given by article 60L of the Regulated Activities Order;

• “consumer hire agreement” has the meaning given by article 60N(3) of the Regulated Activities Order;

• “customer” means a person to whom a supplier sells goods or supplies services or agrees to do so;

• ...

• “green deal plan” has the meaning given by section 1 of the Energy Act 2011;

• “hire-purchase agreement” has the meaning given by the Regulated Activities Order;

• “local authority” means—in England and Wales, a local authority within the meaning of the Local Government Act 1972, the Greater London Authority, the Common Council of the City of London or the Council of the Isles of Scilly;in Scotland, a local authority within the meaning of the Local Government (Scotland) Act 1973; andin Northern Ireland, a district council within the meaning of the Local Government Act (Northern Ireland) 1972;

• “not-for-profit body” means a body which, by virtue of its constitution or any enactment—is required (after payment of outgoings) to apply the whole of its income and any capital it expends for charitable or public purposes, andis prohibited from directly or indirectly distributing amongst its members any part of its assets (otherwise than for charitable or public purposes);

• “Regulated Activities Order” means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;

• “regulated credit agreement” has the meaning given by the Regulated Activities Order;

• “supplier” means a person whose main business is to sell goods or supply services and not to carry on a regulated activity, other than an activity of the kind specified by article 60N of the Regulated Activities Order (regulated consumer hire agreements).

PART 1C — Part 4A permission: conditions for which FCA is responsible in relation to PRA-authorised persons

Introduction

3A

If the person concerned (“B”) carries on, or is seeking to carry on, regulated activities which consist of or include a PRA-regulated activity, the threshold conditions which are relevant to the discharge by the FCA of its functions in relation to B are the conditions set out in paragraphs 3B to 3E.

Effective supervision

3B

• (1) B must be capable of being effectively supervised by the FCA having regard to all the circumstances including—

• (a) the nature (including the complexity) of the regulated activities that B carries on or seeks to carry on;

• (b) the complexity of any products that B provides or will provide in carrying on those activities;

• (c) the way in which B’s business is organised;

• (d) if B is a member of a group, whether membership of the group is likely to prevent the FCA’s effective supervision of B;

• (e) whether B is subject to consolidated supervision required under any relevant implementing provisions;

• (f) if B has close links with another person (“CL”)—

• (i) the nature of the relationship between B and CL,

• (ii) whether those links are or that relationship is likely to prevent the FCA’s effective supervision of B, and

• (iii) if CL is subject to the laws, regulations or administrative provisions of a country or territory outside the United Kingdom (“the foreign provisions”), whether those foreign provisions, or any deficiency in their enforcement, would prevent the FCA’s effective supervision of B.

• (2) B has close links with CL if—

• (a) CL is a parent undertaking of B,

• (b) CL is a subsidiary undertaking of B,

• (c) CL is a parent undertaking of a subsidiary undertaking of B,

• (d) CL is a subsidiary undertaking of a parent undertaking of B,

• (e) CL owns or controls 20% or more of the voting rights or capital of B, or

• (f) B owns or controls 20% or more of the voting rights or capital of CL.

Appropriate non-financial resources

3C

• (1) The non-financial resources of B must be appropriate in relation to the regulated activities that B carries on or seeks to carry on, having regard to the operational objectives of the FCA.

• (2) The matters which are relevant in determining whether the condition in sub-paragraph (1) is met include—

• (a) the nature and scale of the business carried on, or to be carried on, by B;

• (b) the risks to the continuity of the services provided by, or to be provided by, B;

• (c) B’s membership of a group and any effect which that membership may have;

• (d) the skills and experience of those who manage B’s affairs;

• (e) whether B’s non-financial resources are sufficient to enable B to comply with—

• (i) requirements imposed or likely to be imposed on B by the FCA in the exercise of its functions, or

• (ii) any other requirement in relation to whose contravention the FCA would be the appropriate regulator for the purpose of any provision of Part 14 of this Act.

Suitability

3D

• (1) B must be a fit and proper person, having regard to the operational objectives of the FCA.

• (2) The matters which are relevant in determining whether B satisfies the condition in sub-paragraph (1) include—

• (a) B’s connection with any person;

• (b) the nature (including the complexity) of the regulated activities that B carries on or seeks to carry on;

• (c) the need to ensure that B’s affairs are conducted in an appropriate manner, having regard in particular to the interests of consumers and the integrity of the UK financial system;

• (d) whether B has complied and is complying with requirements imposed by the FCA in the exercise its functions, or requests made by the FCA, relating to the provision of information to the FCA and, where B has so complied or is so complying, the manner of that compliance;

• (e) whether those who manage B’s affairs have adequate skills and experience and have acted and may be expected to act with probity;

• (f) the need to minimise the extent to which it is possible for the business carried on by B, or to be carried on by B, to be used for a purpose connected with financial crime.

Business model

3E

B’s business model (that is, B’s strategy for doing business) must be suitable for a person carrying on the regulated activities that B carries on or seeks to carry on, having regard to the FCA’s operational objectives.

PART 1D — Part 4A permission: conditions for which the PRA is responsible in relation to insurers etc.

Introduction

4A

• (1) If the person concerned (“C”) carries on, or is seeking to carry on, regulated activities which consist of or include a PRA-regulated activity relating to the effecting or carrying out of contracts of insurance, the threshold conditions which are relevant to the discharge by the PRA of its functions in relation to C are the conditions set out in paragraphs 4B to 4F.

• (2) If the person concerned (“C”) carries on, or is seeking to carry on, regulated activities which consist of or include a PRA-regulated activity relating to managing the underwriting capacity of a Lloyd’s syndicate as a managing agent at Lloyd’s, the conditions which are relevant to the discharge by the PRA of its functions in relation to C are the conditions set out in paragraphs 4C to 4F except for sub-paragraphs (5)(d) and (5)(e) of paragraph 4D which are not relevant for that purpose.

• (3) If the person concerned (“C”) carries on, or is seeking to carry on, regulated activities which consist of or include a PRA-regulated activity relating to the arranging, by the Society, of deals in contracts of insurance written at Lloyd’s, the conditions which are relevant to the discharge by the PRA of its functions in relation to C are the conditions set out in paragraphs 4C to 4F, subject to sub-paragraph (4).

• (4) Paragraph 4D has effect in relation to persons of the kind specified by sub-paragraph (3) as if—

• (a) for paragraph (d) and (e) of sub-paragraph (5) there were substituted—

(d) the effect that the carrying on of business by C might be expected to have on the stability of the UK financial system or on those who are or may become policyholders of members of C; (e) the effect that the failure of C might be expected to have on the stability of the UK financial system or on those who are or may become policyholders of members of C;

, and

• (b) sub-paragraph (6) were omitted.

• (5) If the person concerned (“C”) carries on, or is seeking to carry on, regulated activities which consist of or include a PRA-regulated activity relating to an assumption of risk falling within article 13A of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, the threshold conditions which are relevant to the discharge by the PRA of its functions in relation to C are the conditions set out in paragraphs 4B to 4F, subject to sub-paragraph (6).

• (6) Paragraphs 4B to 4F have effect in relation to persons of the kind specified by sub-paragraph (5) as if—

• (a) the persons are undertakings, whether incorporated or not, other than an existing insurance or reinsurance undertaking, which assume risks from insurance or reinsurance undertakings and which fully fund their exposure to such risks through the proceeds of a debt issuance or any other financing mechanism where the repayment rights of the providers of such debt or financing mechanism are subordinated to the reinsurance obligations of such an undertaking;

• (b) the persons are not insurance undertakings;

• (c) references to contracts of insurance are references to contracts for the assumption of risk; and

• (d) references to C’s policyholders are references to undertakings from whom C assumes a risk.

• (7) In paragraph (6)(a), references to undertakings which assume risks from insurance or reinsurance undertakings include references to undertakings which assume risks from overseas insurance undertakings or overseas reinsurance undertakings and Gibraltar insurance undertakings or Gibraltar reinsurance undertakings ....

• (8) In this paragraph—

• “Gibraltar insurance undertaking” means an undertaking which—has its head office in Gibraltar; andis authorised by the Gibraltar Financial Services Commission to effect or carry out contracts of insurance (other than contracts of reinsurance) under paragraph 24 of Schedule 2 to the Financial Services Act 2019 of Gibraltar;

• “Gibraltar reinsurance undertaking” means an undertaking which—has its head office in Gibraltar; andis authorised by the Gibraltar Financial Services Commission to effect or carry out contracts of insurance that are limited to reinsurance contracts under paragraph 24 of Schedule 2 to the Financial Services Act 2019 of Gibraltar;

• “overseas insurance undertaking” means a person who—is established in a country or territory other than—the United Kingdom, orGibraltar;is not an authorised person;is not an authorised person for the purposes of the Financial Services Act 2019 of Gibraltar; andeffects or carries out contracts of insurance as principal;

• “overseas reinsurance undertaking” means a person who—is established in a country or territory other than—the United Kingdom, orGibraltar;is not an authorised person;is not an authorised person for the purposes of the Financial Services Act 2019 of Gibraltar; andeffects or carries out contracts of insurance that are limited to reinsurance contracts as principal.

Legal status

4B

C must be—

• (a) a body corporate (other than a limited liability partnership),

• (b) a registered friendly society, or

• (c) a member of Lloyd’s.

Location of offices

4C

• (1) If C is a body corporate incorporated in the United Kingdom—

• (a) C’s head office, and

• (b) if C has a registered office, that office,

must be in the United Kingdom.

• (2) If C is not a body corporate but C’s head office is in the United Kingdom, C must carry on business in the United Kingdom.

Business to be conducted in a prudent manner

4D

• (1) The business of C must be conducted in a prudent manner.

• (2) To satisfy the condition in sub-paragraph (1), C must in particular have appropriate financial and non-financial resources.

• (3) To have appropriate financial resources C must satisfy the following conditions—

• (a) C’s assets must be appropriate given C’s liabilities, and

• (b) the liquidity of C’s resources must be appropriate given C’s liabilities and when they fall due or may fall due.

• (4) To have appropriate non-financial resources C must satisfy the following conditions—

• (a) C must be willing and able to value C’s assets and liabilities appropriately,

• (b) C must have resources to identify, monitor, measure and take action to remove or reduce risks to the safety and soundness of C,

• (c) C must have resources to identify, monitor, measure and take action to remove or reduce risks to the accuracy of C’s valuation of C’s assets and liabilities,

• (d) the effectiveness with which C’s business is managed must meet a reasonable standard of effectiveness, and

• (e) C’s non-financial resources must be sufficient to enable C to comply with—

• (i) requirements imposed or likely to be imposed on C by the PRA in the exercise of its functions, and

• (ii) any other requirement in relation to whose contravention the PRA would be the appropriate regulator for the purpose of any provision of Part 14 of this Act.

• (5) The matters which are relevant in determining whether C satisfies the condition in sub-paragraph (1) or (2) include—

• (a) the nature (including the complexity) of the regulated activities that C carries on or seeks to carry on;

• (b) the nature and scale of the business carried on or to be carried on by C;

• (c) the risks to the continuity of the services provided by, or to be provided by, C;

• (d) the effect that the carrying on of the business of effecting or carrying out contracts of insurance by C might be expected to have on the stability of the UK financial system or on those who are or may become C’s policyholders;

• (e) the effect that C’s failure or C being closed to new business might be expected to have on the stability of the UK financial system or on those who are or may become C’s policyholders;

• (f) C’s membership of a group and any effect which that membership may have.

• (6) C is “closed to new business” for the purposes of this paragraph if C has ceased to effect contracts of insurance or has substantially reduced the number of such contracts which C effects.

Suitability

4E

• (1) C must be a fit and proper person, having regard to the PRA’s objectives.

• (2) The matters which are relevant in determining whether C satisfies the condition in sub-paragraph (1) include—

• (a) whether C has complied and is complying with requirements imposed by the PRA in the exercise of its functions, or requests made by the PRA relating to the provision of information to the PRA and, if C has so complied or is so complying, the manner of that compliance;

• (b) whether those who manage C’s affairs have adequate skills and experience and have acted and may be expected to act with probity.

Effective supervision

4F

• (1) C must be capable of being effectively supervised by the PRA.

• (2) The matters which are relevant in determining whether C satisfies the condition in sub-paragraph (1) include—

• (a) the nature (including the complexity) of the regulated activities that C carries on or seeks to carry on;

• (b) the complexity of any products that C provides or will provide in carrying on those activities;

• (c) the way in which C’s business is organised;

• (d) if C is a member of a group, whether membership of the group is likely to prevent the PRA’s effective supervision of C;

• (e) whether C is subject to consolidated supervision required under any relevant implementing provisions;

• (f) if C has close links with another person (“CL”)—

• (i) the nature of the relationship between C and CL,

• (ii) whether those links are or that relationship is likely to prevent the PRA’s effective supervision of C, and

• (iii) if CL is subject to the laws, regulations or administrative provisions of a country or territory outside the United Kingdom (“the foreign provisions”), whether those foreign provisions, or any deficiency in their enforcement, would prevent the PRA’s effective supervision of C.

• (3) C has close links with CL if—

• (a) CL is a parent undertaking of C,

• (b) CL is a subsidiary undertaking of C,

• (c) CL is a parent undertaking of a subsidiary undertaking of C,

• (d) CL is a subsidiary undertaking of a parent undertaking of C,

• (e) CL owns or controls 20% or more of the voting rights or capital of C, or

• (f) C owns or controls 20% or more of the voting rights or capital of CL.

PART 1E — Part 4A permission: conditions for which the PRA is responsible in relation to other PRA-authorised persons

Introduction

5A

If the person concerned (“D”) carries on, or is seeking to carry on, PRA-regulated activities which do not consist of or include a regulated activity relating to—

• (a) the effecting or carrying out of contracts of insurance,

• (b) managing the underwriting capacity of a Lloyd’s syndicate as a managing agent at Lloyds, ...

• (c) arranging, by the Society, of deals in contracts of insurance written at Lloyd’s, or

• (d) an assumption of risk falling within article 13A of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001,

the threshold conditions which are relevant to the discharge by the PRA of its functions in relation to D are the conditions set out in paragraphs 5B to 5F.

Legal status

5B

If D carries on or is seeking to carry on a regulated activity which consists of or includes accepting deposits or issuing electronic money, D must be—

• (a) a body corporate, or

• (b) a partnership.

Location of offices

5C

• (1) If D is a body corporate incorporated in the United Kingdom—

• (a) D’s head office, and

• (b) if D has a registered office, that office,

must be in the United Kingdom.

• (2) If D is not a body corporate but D’s head office is in the United Kingdom, D must carry on business in the United Kingdom.

Business to be conducted in a prudent manner

5D

• (1) The business of D must be conducted in a prudent manner.