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Financial Services and Markets Act 2000

Type Public General Act

Publication 2000-06-14

Last updated 2026-09-05

State In force

Department Statute Law Database

Source legislation.gov.uk

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

Reform history JSON API

Duty of FCA

2

(1) The FCA must take such steps as are necessary to ensure that the body corporate established by the Financial Services Authority under this Schedule as originally enacted is, at all times, capable of exercising the functions conferred on the scheme operator by or under this Act.

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

(3) The following functions of the FCA fall within this sub-paragraph—

(a) making rules for the purposes of section 226;

(b) approving rules made for the purposes of section 227;

(d) approving rules made under section 230;

(e) taking steps under sub-paragraph (1);

(f) appointing or removing members of the board under paragraph 3(2);

(g) taking steps under paragraph 3A(1);

(h) making rules under paragraph 7(3);

(i) making rules under paragraph 13;

(j) consenting to scheme rules under paragraph 14(7), other than rules relating to fees;

(k) approving the fixing, variation, addition or removal of standard terms under paragraph 18, other than terms relating to the making of payments to the scheme operator; and

(l) approving arrangements under paragraph 19(3).

Constitution

3

(1) The constitution of the scheme operator must provide for it to have—

(a) a chairman; and

(b) a board (which must include the chairman) whose members are the scheme operator’s directors.

(2) The chairman and other members of the board must be persons appointed, and liable to removal from office, by the FCA (acting, in the case of the chairman, with the approval of the Treasury).

(3) But the terms of their appointment (and in particular those governing removal from office) must be such as to secure their independence from the FCA in the operation of the scheme.

(4) The function of making voluntary jurisdiction rules under section 227 ... and the functions conferred by paragraphs 4, 5, 7, 9 , 9A or 14 may be exercised only by the board.

(5) The validity of any act of the scheme operator is unaffected by—

(a) a vacancy in the office of chairman; or

(b) a defect in the appointment of a person as chairman or as a member of the board.

Relationship with FCA

3A

(1) The scheme operator and the FCA must each take such steps as it considers appropriate to co-operate with the other in the exercise of their functions under this Part of this Act.

(2) The scheme operator and the FCA must prepare and maintain a memorandum describing how they intend to comply with sub-paragraph (1).

(3) The scheme operator must ensure that the memorandum as currently in force is published in the way appearing to the scheme operator to be best calculated to bring it to the attention of the public.

The panel of ombudsmen

4

(1) The scheme operator must appoint and maintain a panel of persons, appearing to it to have appropriate qualifications and experience, to act as ombudsmen for the purposes of the scheme.

(2) A person’s appointment to the panel is to be on such terms (including terms as to the duration and termination of his appointment and as to remuneration) as the scheme operator considers—

(a) consistent with the independence of the person appointed; and

(b) otherwise appropriate.

The Chief Ombudsman

5

(1) The scheme operator must appoint one member of the panel to act as Chief Ombudsman.

(2) The Chief Ombudsman is to be appointed on such terms (including terms as to the duration and termination of his appointment) as the scheme operator considers appropriate.

Status

6

(1) The scheme operator is not to be regarded as exercising functions on behalf of the Crown.

(2) The scheme operator’s ... officers and staff are not to be regarded as Crown servants.

(3) Appointment as Chief Ombudsman or to the panel or as a deputy ombudsman does not confer the status of Crown servant.

Annual reports

7

(1) At least once a year—

(a) the scheme operator must make a report to the FCA on the discharge of its functions; and

(b) the Chief Ombudsman must make a report to the FCA on the discharge of his functions.

(2) Each report must distinguish between functions in relation to the scheme’s compulsory jurisdiction ... and functions in relation to its voluntary jurisdiction.

(3) Each report must also comply with any requirements specified in rules made by the FCA.

(4) The scheme operator must publish each report in the way it considers appropriate.

(5) The Treasury may—

(a) require the scheme operator to comply with any provisions of the Companies Act 2006 about accounts and their audit which would not otherwise apply to it, or

(b) direct that any provision of that Act about accounts and their audit is to apply to the scheme operator with such modifications as are specified in the direction, whether or not the provision would otherwise apply to the scheme manager.

(6) Compliance with any requirement under sub-paragraph (5)(a) or (b) is enforceable by injunction or, in Scotland, an order for specific performance under section 45 of the Court of Session Act 1988.

(7) Proceedings under sub-paragraph (6) may be brought only by the Treasury.

Audit of accounts

7A

(1) The scheme operator must send a copy of its annual accounts to the Comptroller and Auditor General as soon as is reasonably practicable.

(2) The Comptroller and Auditor General must—

(a) examine, certify and report on accounts received under this paragraph, and

(b) send a copy of the certified accounts and the report to the Treasury.

(3) The Treasury must lay the copy of the certified accounts and the report before Parliament.

(4) The scheme operator must send a copy of the certified accounts and the report to the FCA.

(5) Except as provided by paragraph 7(5), the scheme operator is exempt from the requirements of Part 16 of the Companies Act 2006 (audit), and its balance sheet must contain a statement to that effect.

(6) In this paragraph “annual accounts” has the meaning given by section 471 of the Companies Act 2006.

Information, advice and guidance

8

The scheme operator may publish such information, guidance or advice as it considers appropriate and may charge for it or distribute it free of charge.

Budget

9

(1) The scheme operator must, before the start of each of its financial years, adopt an annual budget which has been approved by the FCA.

(2) The scheme operator may, with the approval of the FCA, vary the budget for a financial year at any time after its adoption.

(3) The annual budget must include an indication of—

(a) the distribution of resources deployed in the operation of the scheme, and

(b) the amounts of income of the scheme operator arising or expected to arise from the operation of the scheme,

distinguishing between the scheme’s compulsory ... and voluntary jurisdiction.

Annual plan

9A

(1) The scheme operator must in respect of each of its financial years prepare an annual plan.

(2) The plan must be prepared before the start of the financial year.

(3) An annual plan in respect of a financial year must make provision about the use of the resources of the scheme operator.

(4) The plan may include material relating to periods longer than the financial year in question.

(5) Before preparing an annual plan, the scheme operator must consult such persons (if any) as the scheme operator considers appropriate.

(6) The scheme operator must publish each annual plan in the way it considers appropriate.

Exemption from liability in damages

10

(1) No person is to be liable in damages for anything done or omitted in the discharge, or purported discharge, of any functions under this Act in relation to the compulsory jurisdiction ....

(2) Sub-paragraph (1) does not apply—

(a) if the act or omission is shown to have been in bad faith; or

(b) so as to prevent an award of damages made in respect of an act or omission on the ground that the act or omission was unlawful as a result of section 6(1) of the Human Rights Act 1998.

Privilege

11

For the purposes of the law relating to defamation, proceedings in relation to a complaint which is subject to the compulsory jurisdiction ... are to be treated as if they were proceedings before a court.

Part III — The Compulsory Jurisdiction

Introduction

12

This Part of this Schedule applies only in relation to the compulsory jurisdiction.

FCA's ... rules

13

(1) The FCA must make rules providing that a complaint is not to be entertained unless —

(a) the complainant has referred it under the ombudsman scheme before the applicable time limit (determined in accordance with the rules) has expired , or

(b) in the case of a complaint other than a relevant complaint within the meaning of section 404B, the respondent agrees that the complaint should be entertained despite the complainant having referred it under the ombudsman scheme after the applicable time limit has expired.

(2) The rules may provide that an ombudsman may extend that time limit in specified circumstances.

(3) The FCA may make rules providing that a complaint is not to be entertained (except in specified circumstances) if the complainant has not previously communicated its substance to the respondent and given him a reasonable opportunity to deal with it.

(4) The FCA may make rules requiring an authorised person , an electronic money issuer within the meaning of the Electronic Money Regulations 2011 or a payment service provider within the meaning of the Payment Services Regulations 2017, who may become subject to the compulsory jurisdiction as a respondent to establish such procedures as the FCA considers appropriate for the resolution of complaints which—

(a) may be referred to the scheme; and

(b) arise out of activity to which the FCA's powers under Part 9A do not apply.

The scheme operator’s rules

14

(1) The scheme operator must make rules, to be known as “scheme rules”, which are to set out the procedure for reference of complaints and for their investigation, consideration and determination by an ombudsman.

(2) Scheme rules may, among other things—

(a) specify matters which are to be taken into account in determining whether an act or omission was fair and reasonable;

(b) provide that a complaint may, in specified circumstances, be dismissed without consideration of its merits;

(c) provide for the reference of a complaint, in specified circumstances and with the consent of the complainant, to another body with a view to its being determined by that body instead of by an ombudsman;

(d) make provision as to the evidence which may be required or admitted, the extent to which it should be oral or written and the consequences of a person’s failure to produce any information or document which he has been required (under section 231 or otherwise) to produce;

(e) allow an ombudsman to fix time limits for any aspect of the proceedings and to extend a time limit;

(f) provide for certain things in relation to the reference, investigation or consideration (but not determination) of a complaint to be done by a member of the scheme operator’s staff instead of by an ombudsman;

(fa) allow the correction of any clerical mistake in the written statement of a determination made by an ombudsman;

(fb) provide that any irregularity arising from a failure to comply with any provisions of the scheme rules does not of itself render a determination void;

(g) make different provision in relation to different kinds of complaint.

(3) The circumstances specified under sub-paragraph (2)(b) may include the following—

(a) the ombudsman considers the complaint frivolous or vexatious;

(b) legal proceedings have been brought concerning the subject-matter of the complaint and the ombudsman considers that the complaint is best dealt with in those proceedings; or

(c) the ombudsman is satisfied that there are other compelling reasons why it is inappropriate for the complaint to be dealt with under the ombudsman scheme.

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

(4) If the scheme operator proposes to make any scheme rules it must publish a draft of the proposed rules in the way appearing to it to be best calculated to bring them to the attention of persons appearing to it to be likely to be affected.

(5) The draft must be accompanied by a statement that representations about the proposals may be made to the scheme operator within a time specified in the statement.

(6) Before making the proposed scheme rules, the scheme operator must have regard to any representations made to it under sub-paragraph (5).

(7) The consent of the FCA is required before any scheme rules may be made.

Fees

15

(1) Scheme rules may require a respondent or other persons of a specified description to pay to the scheme operator such fees as may be specified in the rules.

(2) The rules may, among other things—

(a) provide for the scheme operator to reduce or waive a fee in a particular case;

(b) set different fees for different stages of the proceedings on a complaint;

(d) make different provision for different kinds of complaint.

(3) The reference in sub-paragraph (1) to persons of a specified description is a reference to such descriptions of persons as may be specified in regulations made by the Treasury.

(4) The power conferred by sub-paragraph (3) to specify descriptions of persons may not be exercised so as to provide for eligible complainants to fall within a specified description of persons.

(5) The reference in sub-paragraph (4) to “eligible complainants” is a reference to complainants who are eligible in relation to the compulsory or voluntary jurisdiction of the ombudsman scheme (see section 226(6) and 227(7)).

(6) Before making regulations under sub-paragraph (3) the Treasury must consult the scheme operator.

Enforcement of money awards

16

A money award, including interest, which has been registered in accordance with scheme rules may—

(a) if the county court so orders in England and Wales, be recovered under section 85 of the County Courts Act 1984 (or otherwise) as if it were payable under an order of that court;

(b) be enforced in Northern Ireland as a money judgment under the Judgments Enforcement (Northern Ireland) Order 1981;

(c) be enforced in Scotland by the sheriff, as if it were a judgment or order of the sheriff and whether or not the sheriff could himself have granted such judgment or order.

Part 3A — The consumer credit jurisdiction

Introduction

16A

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Procedure for complaints etc.

16B

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Fees

16C

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Enforcement of money awards

16D

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Procedure for consumer credit rules

16E

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Verification of consumer credit rules

16F

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Consultation

16G

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Part IV — The Voluntary Jurisdiction

Introduction

17

This Part of this Schedule applies only in relation to the voluntary jurisdiction.

Terms of reference to the scheme

18

(1) Complaints are to be dealt with and determined under the voluntary jurisdiction on standard terms fixed by the scheme operator with the approval of the FCA.

(2) Different standard terms may be fixed with respect to different matters or in relation to different cases.

(3) The standard terms may, in particular—

(a) require the making of payments to the scheme operator by participants in the scheme of such amounts, and at such times, as may be determined by the scheme operator;

(b) make provision as to the award of costs on the determination of a complaint.

(4) The scheme operator may not vary any of the standard terms or add or remove terms without the approval of the FCA.

(5) The standard terms may include provision to the effect that (unless acting in bad faith) none of the following is to be liable in damages for anything done or omitted in the discharge or purported discharge of functions in connection with the voluntary jurisdiction—

(a) the scheme operator;

(b) any member of its governing body;

(d) any person acting as an ombudsman for the purposes of the scheme.

Delegation by and to other schemes

19

(1) The scheme operator may make arrangements with a relevant body—

(a) for the exercise by that body of any part of the voluntary jurisdiction of the ombudsman scheme on behalf of the scheme; or

(b) for the exercise by the scheme of any function of that body as if it were part of the voluntary jurisdiction of the scheme.

(2) A “relevant body” is one which the scheme operator is satisfied—

(a) is responsible for the operation of a broadly comparable scheme (whether or not established by statute) for the resolution of disputes; and

(b) in the case of arrangements under sub-paragraph (1)(a), will exercise the jurisdiction in question in a way compatible with the requirements imposed by or under this Act in relation to complaints of the kind concerned.

(3) Such arrangements require the approval of the FCA.

Voluntary jurisdiction rules: procedure

20

(1) If the scheme operator makes voluntary jurisdiction rules, it must give a copy to the FCA without delay.

(2) If the scheme operator revokes any such rules, it must give written notice to the FCA without delay.

(3) The power to make voluntary jurisdiction rules is exercisable in writing.

(4) Immediately after making voluntary jurisdiction rules, the scheme operator must arrange for them to be printed and made available to the public.

(5) The scheme operator may charge a reasonable fee for providing a person with a copy of any voluntary jurisdiction rules.

Verification of the rules

21

(1) The production of a printed copy of voluntary jurisdiction rules purporting to be made by the scheme operator—

(a) on which is endorsed a certificate signed by a member of the scheme operator’s staff authorised by the scheme operator for that purpose, and

(b) which contains the required statements,

is evidence (or in Scotland sufficient evidence) of the facts stated in the certificate.

(2) The required statements are—

(a) that the rules were made by the scheme operator;

(b) that the copy is a true copy of the rules; and

(3) A certificate purporting to be signed as mentioned in sub-paragraph (1) is to be taken to have been duly signed unless the contrary is shown.

Consultation

22

(1) If the scheme operator proposes to make voluntary jurisdiction rules, it must publish a draft of the proposed rules in the way appearing to it to be best calculated to bring them to the attention of the public.

(2) The draft must be accompanied by—

(a) an explanation of the proposed rules; and

(b) a statement that representations about the proposals may be made to the scheme operator within a specified time.

(3) Before making any voluntary jurisdiction rules, the scheme operator must have regard to any representations made to it in accordance with sub-paragraph (2)(b).

(4) If voluntary jurisdiction rules made by the scheme operator differ from the draft published under sub-paragraph (1) in a way which the scheme operator considers significant, the scheme operator must publish a statement of the difference.

SCHEDULE 17A — Further provision in relation to exercise of Part 18 functions , or other FMI functions, by Bank of England

Part 1 — Co-operation between appropriate regulators

Memorandum of understanding between appropriate regulators and PRA

1

(1) The appropriate regulators must prepare and maintain a memorandum describing how they intend to work together in exercising their functions in relation to persons who are recognised bodies.

(2) The memorandum must in particular make provision about—

(a) the need for each party when exercising a function in relation to any person (“A”) who is a recognised body, or any member of A's group, to have regard to the exercise (or possible exercise) of any function by the other party in relation to A or any member of A's group;

(b) the role of each party in cases where they are both exercising functions in relation to the same persons;

(d) the co-ordination by the parties of the exercise of their powers to appoint competent persons under Part 11 (information gathering and investigations) to conduct investigations on their behalf.

(3) In this paragraph any reference to a function is to any function whether conferred by or under any provision of this Part of this Act or any other provision of this Act or otherwise.

2

(1) The FCA and the PRA must prepare and maintain a memorandum describing how they intend to work together in exercising their functions in relation to persons who are recognised bodies and who—

(a) are PRA-authorised persons; or

(b) are members of a group of which a member is a PRA-authorised person.

(2) The memorandum must in particular make provision about—

(a) the need for each party when exercising a function in relation to any person (“A”) who is a recognised body, or any member of A's group, to have regard to the exercise (or possible exercise) of any function by the other party in relation to A or any member of A's group;

(b) the role of each party in cases where they are both exercising functions in relation to the same persons;

(d) the co-ordination by the parties of the exercise of their powers to appoint competent persons under Part 11 (information gathering and investigations) to conduct investigations on their behalf.

(3) In this paragraph any reference to a function is to any function whether conferred by or under any provision of this Part of this Act or any other provision of this Act or otherwise.

3

The parties to a memorandum under paragraph 1 or 2 must review the memorandum at least once in each calendar year.

4

The parties to a memorandum under paragraph 1 or 2 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 paragraph 4.

6

The parties to a memorandum under paragraph 1 or 2 must ensure that the memorandum as currently in force is published in the way appearing to them to be best calculated to bring it to the attention of the public.

6A

(1) If the Bank makes a Part 18 prohibition order relating to an individual, the Bank must—

(a) provide the FCA with information falling within section 347(2)(f) in relation to the order, and

(b) where the FCA has notified the Bank that it considers it appropriate to include in the record maintained under section 347 information of a certain description, disclose to the FCA such information of that description relating to the order or the individual as the Bank has in its possession.

(2) The duty to provide information under sub-paragraph (1)—

(a) does not apply to information which the Bank reasonably believes is in the possession of the FCA;

(b) does not require or authorise the disclosure of information whose disclosure is prohibited by or under section 348;

Notification by FCA of action in relation to recognised clearing houses

7

The FCA must notify the Bank of England of any direction given by it under section 128 to a recognised clearing house or a recognised CSD (market abuse: suspension of investigations).

8

The FCA must notify the Bank of England of any requirement imposed by it under section 313A on a recognised clearing house (power to require suspension or removal of financial instruments from trading).

Part 2 — Application of provisions of this Act in relation to Bank of England

Introduction

9

(1) The provisions of this Act mentioned in this Part of this Schedule are to apply in relation to the Bank of England in accordance with the provision made by this Part of this Schedule.

(2) In any case where sub-paragraph (1) applies—

(a) any reference in this Act to the FCA or the PRA which is contained in, or relates to, any of those provisions (however expressed) is to be read as a reference to the Bank; and

(b) this Act has effect with any other necessary modifications.

Public consultations

9A

(1) Section 1RB (requirements in connection with public consultations) applies in relation to the Bank but as if, in subsection (4), after “proposals” there were inserted “in connection with the carrying on by the Bank of its FMI functions.

(2) For this purpose, paragraph 9(2)(a) does not apply so far as relating to the following references in section 1RB—

(a) in subsection (2), the reference after “statutory panels of” to the FCA and the PRA;

(b) in subsection (5)(a), the reference to the FCA;

Requirements

9B

(1) The powers conferred by section 55L(3) (FCA own-initiative power to impose requirements on authorised persons) are exercisable by the Bank to impose requirements on a relevant FMI entity.

(2) In this paragraph “relevant FMI entity” means—

(a) a recognised central counterparty,

(b) a recognised CSD, or

(3) The power under sub-paragraph (1) is exercisable only if it appears to the Bank that either (or both) of the following conditions is met.

(4) The first condition is that it is desirable to exercise the power in order to advance the Financial Stability Objective.

(5) The second condition is that the relevant FMI entity—

(a) has failed, or is likely to fail, to satisfy the recognition requirements, or

(b) has failed to comply with any other obligation imposed on it by or under this Act.

(6) The power conferred by sub-paragraph (1) may not be exercised so as to restrict or prohibit discretionary payments to employees or shareholders of a recognised central counterparty (and for this purpose “discretionary payment” has the meaning given by paragraph 13(11) of Schedule 11 to the Financial Services and Markets Act 2023 and “employee” has the meaning given by paragraph 154 of that Schedule).

(7) The powers conferred by section 55L(5) (FCA power to impose requirements on application of authorised persons with Part 4A permission) are exercisable by the Bank to impose requirements on a relevant FMI entity on the application of that entity.

(8) A power conferred by this paragraph is exercisable whether or not there is a relationship between the entity in relation to which it is exercised and the persons whose interests will be protected by its exercise.

(9) The following provisions apply in relation to requirements imposed by the Bank under this paragraph as they apply in relation to requirements imposed by the FCA under section 55L, with the modifications in sub-paragraph (10)—

(a) section 55L(6) (power to refuse application to impose etc requirements);

(b) section 55N (further provision in relation to requirements);

(d) section 55Q (exercise of power in support of overseas regulator);

(e) section 55R(1) (persons connected with applicant);

(f) section 55U(3) to (8) (applications for requirement to be imposed etc);

(g) section 55V(1) to (6) (determination of applications);

(h) section 55X(2) and (4)(f) (warning and decision notices on refusal of applications);

(i) section 55Y (exercise of own-initiative power: procedure);

(j) section 55Z3(1) and (2) (right to refer matters to the Tribunal).

(10) The modifications are—

(a) any reference to the FCA is to be read as a reference to the Bank;

(b) any references to own-initiative powers are to be read as references to the power conferred by sub-paragraph (1);

(d) in section 55L(6), the reference to the FCA’s operational objectives is to be read as a reference to the Bank’s Financial Stability Objective;

(e) section 55N has effect as if the reference to regulated activities in subsection (2) were a reference to activities in respect of which a recognition order is in force.

Rules

10

(1) The following provisions of Part 9A of this Act are to apply in relation to rules made by the Bank under any provision made by or under this Act—

(a) section 137T (general supplementary powers);

(b) sections 138A and 138B (modification or waiver of rules), but with the omission of subsection (5) of section 138A, subsection (4) of section 138B, and, apart from in relation to rules made under section 300F, subsection (4)(b) of section 138A;

(ba) section 138BA (disapplication or modification of rules in individual cases);

(d) section 138D (actions for damages), but with the omission of subsections (2) and (3), and any references to those subsections;

(e) section 138E (limits on effect of contravening rules);

(ea) section 138EA (matters to consider when making rules);

(f) section 138F (notification of rules) but with the omission of subsections (1A) and (2);

(g) section 138G (rule-making instruments);

(h) section 138H (verification of rules);

(i) section 138J (consultation), but with the omission of subsections (1)(a), (2)(c) and (5)(b); ...

(ia) section 138JA(2), (3) (4), (10) and (11) (duties in relation to PRA Cost Benefit Analysis Panel);

(ib) section 138JB (statement of policy in relation to cost benefit analyses);

(j) section 138L (consultation: general exemptions), but with the omission of subsection (1);

(k) section 141A (power to make consequential amendments of references to rules);

(l) section 141B (power to consequentially amend enactments).

(2) Any reference in any of those provisions to an authorised person is to be read as a reference to a recognised clearing house ... or a recognised CSD or other persons in respect of whom FMI functions are exercised.

(2A) Section 137T has effect as if, in paragraph (b), for “the other regulator” there were substituted “the FCA or the PRA”.

(2B) Section 138A has effect as if the reference in subsection (4)(b) to any of the regulator’s objectives were a reference to the Bank’s Financial Stability Objective.

(2C) Section 138BA has effect as if subsection (3)(b) and (c) were omitted.

(2D) Section 138EA(5) has effect as if, for paragraphs (a) and (b), there were substituted “complying with a recommendation of the Financial Policy Committee of the Bank of England under section 9O of the Bank of England Act 1998 (making of recommendations within the Bank).

(3) Section 138J(2)(d) has effect in relation to rules proposed to be made by the Bank as if the reference to the compatibility of the proposed rules with the provisions mentioned in section 138J(2)(d) were a reference to their compatibility with the Bank's financial stability objective.

(3A) Section 138J(8A) has effect as if, in paragraph (a), for sub-paragraphs (i) and (ii) there were substituted “be prejudicial to advancing the Financial Stability Objective, or”.

(4) Section 138L(2) has effect as if for paragraphs (a) and (b) there were substituted “be prejudicial to financial stability”.

(4A) Sub-paragraphs (1) to (4) do not apply in relation to rules made by the Bank under section 312M (in relation to which see paragraph 10A).

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

10A

The following provisions of Part 9A of this Act are to apply in relation to rules made by the Bank under section 312M, subject to the modifications specified in this subsection—

(a) section 137T (general supplementary powers) as if—

(i) the reference in paragraph (a) to “authorised persons, activity or investment” were a reference to “critical third parties or services”, and

(ii) for paragraph (b) there were substituted—

(b) may make provision by reference to rules made by the FCA or PRA or standards issued by any other person, as those rules or standards have effect from time to time,

(b) sections 138A and 138B (modification or waiver of rules) as if—

(i) the reference in subsection (4)(b) of section 138A to any of regulator’s objectives were a reference to the Bank’s Financial Stability Objective,

(ii) subsection (5) of section 138A were omitted, and

(iii) subsection (4) of section 138B were omitted;

(c) section 138BA (disapplication or modification of rules in individual cases) as if subsection (3)(b) and (c) were omitted;

(d) section 138C (evidential provisions);

(e) section 138E (limits on effect of contravening rules);

(f) section 138EA (matters to consider when making rules) as if, for paragraphs (a) and (b) of subsection (5), there were substituted “complying with a recommendation of the Financial Policy Committee of the Bank of England under section 9O of the Bank of England Act 1998 (making of recommendations within the Bank).”;

(g) section 138F (notification of rules) as if subsections (1A) and (2) were omitted;

(h) section 138G (rule-making instruments);

(i) section 138H (verification of rules);

(j) section 138J (consultation) as if—

(i) the reference in subsection (1)(a) to the “FCA” were a reference to the “FCA and the PRA”;

(ii) the reference in subsection (2)(d) to the compatibility of the proposed rules with the provisions mentioned in that subsection were a reference to their compatibility with the Bank’s Financial Stability Objective; and

(iii) in subsection (8A), in paragraph (a), for sub-paragraphs (i) and (ii) there were substituted “be prejudicial to advancing the Financial Stability Objective, or”;

(k) section 138JA(2), (3) (4), (10) and (11) (duty to consult PRA Cost Benefit Analysis Panel);

(l) section 138JB (statement of policy in relation to cost benefit analyses);

(m) section 138L (consultation: general exemptions) as if—

(i) subsection (1) were omitted, and

(ii) in subsection (2) for paragraphs (a) and (b) there were substituted “be prejudicial to financial stability.”;

(n) section 141A (power to make consequential amendments of references to rules);

(o) section 141B (power to consequentially amend enactments).

Information gathering and investigations

11

(1) The powers conferred by section 165(1) and (3) (power to require information) are exercisable by the Bank or (as the case may be) its officers to impose requirements on—

(a) a recognised clearing house;

(aa) a recognised CSD;

(ab) a third country CSD, in relation to any services referred to in the Annex to the CSD regulation which the third country CSD provides in the United Kingdom;

(ac) a third country central counterparty and any person to whom that central counterparty has outsourced operational functions, services or activities.

(b) a person who for the purposes of section 165 is connected with a recognised clearing house , a third country central counterparty or a recognised CSD (as the case may be).

(2) The information or documents that the Bank may require to be provided or produced are limited to—

(a) information or documents reasonably required in connection with the exercise by the Bank of functions conferred on it by or under this Part of this Act;

(b) information or documents reasonably required in connection with the exercise by the Bank of any of its other functions in pursuance of its financial stability objective; ...

(c) information or documents which the Bank reasonably considers may enable or assist the FCA in discharging functions conferred on the FCA by or under this Act ; and

(d) information or documents reasonably required in connection with the exercise by the Bank of its functions—

(i) under—

(aa) the EMIR regulation,

(bb) the CSD regulation,

(cc) any EU regulation originally made under the CSD Regulation which is assimilated direct legislation, or

(dd) any subordinate legislation made under the CSD Regulation on or after IP completion day;

(ii) in connection with Article 4 or 15 of the SFT regulation; or

(iii) under any subordinate legislation made under the SFT regulation on or after IP completion day.

(3) In consequence of the provision made by sub-paragraph (2), section 165(4) is not to apply in relation to section 165(1) and (3) as applied by this paragraph.

12

The power conferred by section 166 (reports by skilled person) is exercisable by the Bank as if references in that section to an authorised person were to a recognised clearing house, third country central counterparty or a recognised CSD.

12A

(1) Section 166A applies in relation to rules made by the Bank under section 300F.

(2) For this purpose any reference in section 166A to an authorised person is to be read as a reference to a relevant FMI entity (as defined by paragraph 9B(2)).

13

(1) The powers conferred by section 167 (appointment of persons to carry out general investigations) are exercisable by the Bank as if references in that section to an authorised person were to any recognised clearing house other than an overseas clearing house or to any Tier 2 third country central counterparty or to any recognised CSD.

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

(2) In addition to the powers conferred by section 171, a person conducting an investigation under section 167 as a result of this paragraph is to have the powers conferred by sections 172 and 173 (and for this purpose the references in those sections to an investigator are to be read accordingly).

14

(1) The power conferred by section 168(5) (appointment of persons to carry out investigations in particular cases) is exercisable by the Bank.

(2) That power is exercisable if it appears to the Bank that there are circumstances suggesting that—

(a) a clearing house or a central securities depository may be guilty of ... an offence under prescribed regulations relating to money laundering;

(b) a clearing house or a central securities depository person may have contravened a rule made by the Bank under this Part of this Act;

(d) a clearing house or a central securities depository may have contravened any qualifying provision that is specified, or of a description specified, for the purposes of this sub-paragraph by the Treasury by order;

(e) a clearing house or a central securities depository may have breached the general prohibition.

(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(g) a person may be guilty of an offence under section 398(1), as applied by paragraph 30 of this Schedule;

(h) a Tier 2 third country central counterparty may have contravened the requirements of the EMIR regulation.

(i) an individual may not be a fit and proper person to perform functions in relation to an activity carried on by a relevant recognised body;

(j) an individual may have performed, or agreed to perform, a function in breach of a Part 18 prohibition order;

(k) a relevant recognised body may have failed to comply with section 309F (1);

(l) a relevant recognised body may have failed to comply with section 309G (1);

(m) a person in relation to whom the Bank has given approval under section 309G may not be a fit and proper person to perform the function to which that approval relates;

(n) a person may have performed a designated senior management function without approval under section 309G (see section 309U (3));

(o) a person may be guilty of misconduct for the purposes of section 309Z2.

(3) In addition to the powers conferred by section 171, a person conducting an investigation under section 168(5) as a result of this paragraph is to have the powers conferred by sections 172 and 173 (and for this purpose the references in those sections to an investigator are to be read accordingly).

15

An overseas regulator may, in accordance with section 169, request the Bank to exercise the power conferred by section 165 (as applied by paragraph 11 of this Schedule).

16

The power to give information under section 176(1) (entry of premises under warrant) is exercisable by the Bank, or an investigator appointed by the Bank, as if the reference to the second set of conditions were omitted.

Powers in relation to parent undertakings

17

(1) The following provisions of Part 12A of this Act are to apply in relation to the Bank—

(a) section 192C (power to direct qualifying parent undertaking);

(b) section 192D (requirements that may be imposed);

(d) section 192G (references to Tribunal);

(e) section 192H (statement of policy);

(f) section 192I (statement of policy: procedure);

(g) section 192J (rules requiring provision of information);

(h) sections 192K to 192N (enforcement).

(2) For the purposes of those provisions section 192B (meaning of “qualifying parent undertaking”) is to apply as if the reference in subsection (1) to a qualifying authorised person or recognised UK investment exchange were a reference to a recognised clearing house other than an overseas clearing house or to a recognised CSD.

(3) Section 192C has effect as if—

(a) the general condition in subsection (2) were that the Bank considers that it is desirable to give the direction for the purpose of the effective regulation of one or more recognised clearing houses or recognised CSDs in the group of the qualifying parent undertaking,

(b) subsections (3) and (4) were omitted, and

(c) the reference in subsection (5)(a) to authorised persons or recognised investment exchanges were a reference to recognised clearing houses or recognised CSDs.

(4) Section 192E has effect as if the reference in subsection (1) to an authorised person or recognised investment exchange were a reference to a recognised clearing house or a recognised CSD.

(5) Section 192I has effect as if subsection (1)(a) required consultation with the FCA.

(6) Before the Bank gives a notice under section 192E(1) or (8)(b)—

(a) if the notice relates to the parent undertaking of an authorised person or recognised investment exchange, the Bank must consult the FCA, and

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

Auditors

18

(1) Section 342 (information given by auditor to a regulator) applies in relation to a relevant auditor as if—

(a) the references in that section to a recognised investment exchange were to a recognised clearing house or a recognised CSD,

(b) in the case of an auditor of a recognised clearing house or a recognised CSD which is also an authorised person or recognised investment exchange, the references to a regulator included the Bank, and

(c) in the case of an auditor of a recognised clearing house or a recognised CSD not falling within paragraph (b), the references to a regulator were to the Bank.

(2) A “relevant auditor” is a person who is, or has been, an auditor of a recognised clearing house or a recognised CSD appointed under or as a result of a statutory provision , the EMIR regulation or the CSD regulation.

19

(1) Section 343 (information given by auditor: person with close links) applies in relation to a relevant auditor as if—

(a) the references in that section to a recognised investment exchange were to a recognised clearing house or a recognised CSD,

(b) in the case of an auditor of a recognised clearing house or a recognised CSD which is an authorised person or which is a recognised investment exchange, the references to a regulator included the Bank, and

(c) in the case of an auditor of a recognised clearing house or a recognised CSD not falling within paragraph (b), the references to a regulator were to the Bank.

(2) A “relevant auditor” is a person who—

(a) is, or has been, an auditor of a recognised clearing house or a recognised CSD appointed under or as a result of a statutory provision , the EMIR regulation or the CSD regulation, and

(b) is, or has been, an auditor of a person who has close links with the recognised clearing house or the recognised CSD.

20

Section 344 (duty of auditor resigning to give notice) applies to an auditor to whom section 342 applies (whether by virtue of paragraph 18 or otherwise) as if—

(a) the references in that section to a recognised investment exchange were to a recognised clearing house or a recognised CSD,

(b) in the case of an auditor of a recognised clearing house or a recognised CSD which is neither an authorised person nor a recognised investment exchange, the reference in the definition of “the appropriate regulator” to the FCA were a reference to the Bank,

(c) in the case of an auditor of a recognised clearing house or a recognised CSD which is a PRA-authorised person, the reference in the definition of “the appropriate regulator” to the PRA were a reference to the PRA and the Bank, and

(d) in the case, not falling within paragraph (c), of an auditor of a recognised clearing house or a recognised CSD which is an authorised person or which is a recognised investment exchange, the reference in the definition of “the appropriate regulator” to the FCA were a reference to the FCA and the Bank.

21

Sections 345A to 345E apply to auditors to whom section 342 applies only by virtue of paragraph 18 as if—

(a) the references in those sections to an auditor or actuary to whom section 342 applies were to an auditor to whom section 342 applies by virtue of paragraph 18,

(b) the references in those sections to a PRA-authorised person were to a recognised clearing house or a recognised CSD,

(c) in a case where the Bank disqualifies a person from being an auditor of a recognised clearing house or a recognised CSD that is also a recognised investment exchange, section 345A(5)(a) required the Bank to notify the FCA, and

(d) the references in sections 345D and 345E to a regulator included the Bank.

Public record and disclosure of information

22

Section 347 (record of authorised persons, recognised investment exchanges, etc),.

(a) so far as it relates to recognised investment exchanges, applies in relation to the Bank as if references in that section to a recognised investment exchange were to a recognised clearing house , third country central counterparty , a third country CSD or a recognised CSD

(b) so far as it relates to approved persons, applies in relation to the Bank as if references in that section to an approved person were to a person in relation to whom the Bank has given approval under section 309G.

23

(1) Sections 348 to 350 and 353 (disclosure of information) apply in relation to information received by the Bank for the purposes of, or in the discharge of, any of its functions under Chapter 3C of Part 18 of this Act, any of its functions relating to recognised clearing houses or recognised CSDs or any of its functions under the EMIR regulation , the CSD regulation , any EU regulation originally made under the CSD regulation which is assimilated direct legislation, or any subordinate legislation made under the CSD regulation on or after IP completion day.

(2) Paragraph 9(2)(a) does not apply to the reference to the PRA in section 348(8).

Co-operation

23A

Section 354B (co-operation) applies in relation to the Bank for the purposes of, or in the discharge of, any of its functions under—

(a) the EMIR regulation;

(b) the CSD regulation;

(d) any EU regulation, originally made under the CSD regulation or the SFT regulation, which is assimilated direct legislation; or

(e) any subordinate legislation (within the meaning of the Interpretation Act 1978) made under the CSD regulation, or the SFT regulation, on or after IP completion day.

Insolvency

24

(1) The following provisions of Part 24 of this Act are to apply in relation to the Bank—

(za) sections 355A and 355B (powers to participate in proceedings under Part 26A of the Companies Act 2006);

(a) section 356 (powers to participate in proceedings: company voluntary arrangements);

(b) section 358 (powers to participate in proceedings: trust deeds for creditors in Scotland);

(d) section 362 (powers to participate in administration proceedings);

(e) section 362A (consent to appointment of administrator);

(f) section 363 (powers to participate in proceedings: receivership);

(g) section 365 (powers to participate in proceedings: voluntary winding-up);

(h) section 367 (winding-up petitions);

(i) section 371 (powers to participate in proceedings: winding-up).

(2) Those provisions are to apply as if any reference to an authorised person or recognised investment exchange (other than the reference to “an authorised person” in section 355B(2)(a)) were a reference to a recognised clearing house or a recognised CSD.

25

(1) In the case of any regulated activity which is carried on for the purposes of, or in connection with, the provision of clearing services, the reference to the FCA in section 375(1) is to be read as including a reference to the Bank.

(2) In the case of any regulated activity which is carried on for the purposes of, or in connection with, the provision of any service mentioned in section 285(3D), the reference to the FCA in section 375(1) is to be read as including a reference to the Bank.

Injunctions and restitution

26

(1) The power to make an application under section 380(1), (2) or (3) (injunctions) is exercisable by the Bank.

(2) For the purposes of the application, any reference in that section to a relevant requirement is to—

(a) a requirement that is imposed by or under any provision of this Part of this Act that relates to a recognised clearing house or a recognised CSD (and for this purpose a prohibition imposed under section 312FA(2)(c) (prohibition on person holding office etc. with a central securities depository) is treated as a requirement);

(aa) a requirement that is imposed on a critical third party by the Bank by or under any provision of Chapter 3C of this Part of this Act;

(b) a requirement that is imposed under any other provision of this Act by the Bank;

(c) a requirement that is imposed by any qualifying provision that is specified, or of a description specified, for the purposes of this sub-paragraph by the Treasury by order; or

(d) a requirement that is imposed by this Act and whose contravention constitutes an offence that the Bank has power to prosecute under this Act (see section 401, as applied by paragraph 31).

27

(1) The power to make an application under section 382(1) (restitution order) is exercisable by the Bank.

(2) For the purposes of the application, any reference in that section to a relevant requirement is to be read in accordance with paragraph 26(2) of this Schedule (subject to sub-paragraph (3)).

(3) The power to make an application under section 382(1) is not exercisable by the Bank in respect of the contravention of a requirement imposed by or under Article 4 or 15 of the SFT regulation.

28

(1) The power conferred by section 384(5) (power of FCA to require restitution order) is exercisable by the Bank.

(2) That power is exercisable if the Bank is satisfied that a recognised clearing house , a recognised CSD or a critical third party has contravened a relevant requirement, or been knowingly concerned in the contravention of a relevant requirement, and—

(a) that profits have accrued to the recognised clearing house , the recognised CSD or the critical third party as a result of the contravention; or

(b) that one or more persons have suffered loss or been otherwise adversely affected as a result of the contravention.

(3) For the purposes of that power, “relevant requirement” is to be read in accordance with paragraph 26(2) of this Schedule (subject to sub-paragraph (3A)).

(3A) The power conferred by section 384(5) is not exercisable by the Bank in respect of the contravention of a requirement imposed by or under Article 4 or 15 of the SFT regulation.

(4) Where this paragraph applies, section 384(5) and (6) are to have effect as if—

(a) any reference to the person concerned were a reference to the recognised clearing house , the recognised CSD or the critical third party; and

(b) any reference to subsection (1) were a reference to sub-paragraph (2) of this paragraph.

Notices

29

The provisions of Part 26 of this Act (notices) apply,

(a) in relation to a warning or decision notice given by the Bank under section 55X(2) or (4), 192L, 309C, 309D, 309M, 309P, 309V, 309Z4, 312G , 312H or 312S as they apply in relation to such a notice given by the FCA under that section.

(b) in relation to a notice under section 309R (5), (8) or (10)(b) as they apply in relation to such a notice given by the FCA under those provisions.

Offences

30

Section 398 (misleading the FCA: residual cases) applies to information given to the Bank in purported compliance with—

(a) a requirement that is imposed by or under any provision of Part 18 of this Act that relates to a recognised clearing house , a third country central counterparty or a recognised CSD;

(aa) a requirement that is imposed by or under any provision of Chapter 3C of Part 18 of this Act that relates to critical third parties;

(b) a requirement that is imposed under any other provision of this Act by the Bank; or

(c) a requirement that is imposed by any qualifying provision specified, or of a description specified, for the purposes of this paragraph by the Treasury by order.

31

(1) Section 401 (proceedings for an offence) applies to the Bank as if for the purposes of subsections (2)(a) and (3)(a) of that section the Bank were an appropriate regulator in respect of each of the following offences—

(a) an offence under section 177(3) where the investigation is being, or is likely to be, conducted on behalf of the Bank;

(b) an offence under section 177(4) where the requirement is imposed by the Bank;

(c) an offence under section 177(6) where the warrant is issued as a result of information on oath given by the Bank or a person appointed by it to conduct an investigation on its behalf;

(ca) an offence under section 309E;

(d) an offence under section 398(1) where the information was given to the Bank.

(2) Section 401(3B) has effect subject to the provision made by this paragraph (so that the FCA is not the appropriate regulator for the purposes of subsections (2)(a) and (3)(a) in respect of the above offences).

International obligations

31A

(1) The following provisions of Part 28 of this Act apply in relation to the exercise by the Bank of its FMI functions with the modifications in sub-paragraphs (2) and (3)—

(a) section 409A (consultation in relation to deference decisions), and

(b) section 409B (notification in relation to international trade obligations).

(2) Section 409A applies as if—

(a) in subsection (4), in paragraph (b), for the words after “proposes to” to the end there were substituted “exercise any of its other FMI functions”;

(b) in subsection (6)(a), the reference to the duty imposed by section 138J were a reference to that duty as it applies in relation to the Bank under paragraph 10(1) of this Schedule;

(c) in subsection (9), for paragraphs (a) to (f) there were substituted “in order to comply with a recommendation of the Financial Policy Committee of the Bank of England under section 9O of the Bank of England Act 1998 (making of recommendations within the Bank).”;

(d) subsections (7) and (10) were omitted.

(3) Section 409B applies as if—

(a) in subsection (4), in paragraph (b), for the words after “proposes to” to the end there were substituted “exercise any of its other FMI functions”;

(b) in subsection (5)(a), the reference to the duty imposed by section 138J were a reference to that duty as it applies in relation to the Bank under paragraph 10(1) of this Schedule;

(c) in subsection (8), for paragraphs (a) to (c) there were substituted “in order to comply with a recommendation of the Financial Policy Committee of the Bank of England under section 9O of the Bank of England Act 1998 (making of recommendations within the Bank).”;

(d) subsections (6) and (9) were omitted.

Transitional provisions

31B

Section 427 (transitional provisions), so far as it relates to an order under section 426 which makes provision in connection with this Part of this Act, applies in relation to the Bank.

Records

32

Paragraph 17 of Schedule 1ZB (records) applies in relation to the recording of decisions made by the Bank in the exercise of its functions relating to recognised clearing houses , third country central counterparties, recognised CSDs , critical third parties and third country CSDs.

Annual report

33

Paragraph 19 of Schedule 1ZB (annual report by PRA) applies in relation to the Bank, but—

(a) as if for paragraphs (a) to (fb) of sub-paragraph (1) there were substituted—

(a) the discharge of its functions relating to recognised clearing houses , third country central counterparties, recognised CSDs , critical third parties and third country CSDs, (b) the extent to which, in its opinion, in discharging those functions its Financial Stability Objective and its objective under section 30D(2) of the Bank of England Act 1998 have been advanced, (c) the efforts it has made to engage with persons (other than those mentioned in paragraph (a)) appearing to the Bank to have an interest in the discharge of those functions, and (d) the results of that engagement,”, and

(b) as if sub-paragraphs (1A), (1B), (3) and (6) were omitted.

Other reports

33A

Paragraph 21A of Schedule 1ZB (other reports by PRA) applies in relation to the Bank, but as if—

(a) the reference in sub-paragraph (1)(a) to paragraphs (a) to (f) of paragraph 19(1) were a reference to those paragraphs as substituted in relation to the Bank under paragraph 33 of this Schedule;

(b) the reference in sub-paragraph (1)(b) to such other matters were a references to such other matters so far as relating to the exercise of the Bank’s FMI functions;

(c) the reference in sub-paragraph (5)(b) to section 348 were a reference to that section as it applies in relation to the Bank under paragraph 23 of this Schedule.

Engagement with Parliamentary Committees

33B

(1) Paragraph 36 of Schedule 1ZB (PRA engagement with Parliamentary Committees) applies in relation to the Bank, but as if—

(a) in sub-paragraph (2)(a), the reference to section 138J were a reference to that section as it applies in relation to the Bank under paragraph 10(1) of this Schedule;

(b) in sub-paragraph (2)(b), the reference to a proposal were to a proposal so far as relating to the exercise of the Bank’s FMI functions;

(d) in sub-paragraph (4)(a), the reference to the PRA’s objectives were a reference to the Financial Stability Objective and the Bank’s secondary innovation objective (see section 30D(2) of the Bank of England Act 1998);

(e) in sub-paragraph (4)(b), the reference to section 3B were a reference to section 30E of the Bank of England Act 1998;

(f) in sub-paragraph (4)(c), the reference to section 138EA were a reference to that section as it applies in relation to the Bank under paragraph 10(1) of this Schedule;

(g) in sub-paragraph (5A)(b)(ii) and (c)(ii), the references to the PRA being notified were references to the Bank being notified.

(2) Paragraph 37 of Schedule 1ZB applies in relation to the Bank, but as if, in sub-paragraph (2), after “the draft of any proposals” there were inserted “so far as relating to the exercise by the Bank of its FMI functions”.

Part 3 — Winding up, administration or insolvency of recognised clearing houses

Notice to Bank of England of preliminary steps

34

(1) An application for an administration order in respect of a recognised clearing house or a recognised CSD may not be determined unless the conditions below are satisfied.

(2) A petition for a winding up order in respect of a recognised clearing house or a recognised CSD may not be determined unless the conditions below are satisfied.

(3) A resolution for voluntary winding up of a recognised clearing house or a recognised CSD may not be made unless the conditions below are satisfied.

(4) An administrator of a recognised clearing house or a recognised CSD may not be appointed unless the conditions below are satisfied.

(5) Condition 1 is that the Bank of England has been notified—

(a) by the applicant for an administration order, that the application has been made,

(b) by the petitioner for a winding up order, that the petition has been presented,

(d) by the person proposing to appoint an administrator, of the proposed appointment.

(6) Condition 2 is that a copy of the notice complying with Condition 1 has been filed (in Scotland, lodged) with the court (and made available for public inspection by the court).

(7) Condition 3 is that—

(a) the period of 2 weeks, beginning with the day on which the notice is received, has ended, or

(b) the Bank of England has informed the person who gave the notice that—

(i) it has no objection to the order, resolution or appointment being made, and

(ii) it does not intend to exercise a stabilisation power under Schedule 11 to the Financial Services and Markets Act 2023.

(8) Arranging for the giving of notice in order to satisfy Condition 1 can be a step with a view to minimising the potential loss to a recognised clearing house's or a recognised CSD’s creditors for the purpose of section 214 of the Insolvency Act 1986 (wrongful trading).

(9) In this paragraph “the court” means—

(a) in England and Wales, the High Court,

(b) in Scotland, the Court of Session, and

Power to give directions to insolvency practitioner

35

(1) This paragraph applies where a person has been appointed to act as an insolvency practitioner (within the meaning of section 388 of the Insolvency Act 1986 or Article 3 of the Insolvency (Northern Ireland) Order 1989) in relation to a company which is, or has been, a recognised clearing house or a recognised CSD.

(2) The Bank of England may give directions to the person if satisfied that it is desirable to give the directions, having regard to the public interest in—

(a) protecting and enhancing the stability of the UK financial system,

(b) protecting and enhancing public confidence in the stability of the UK financial system, ...

(c) in the case of a company which is, or has been, a recognised clearing house, maintaining the continuity of ... clearing services and

(d) in the case of a company which is, or has been, a recognised CSD, maintaining the continuity of the services referred to in section 285(3D).

(3) Before giving directions the Bank of England must consult—

(a) the Treasury, and

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

(4) Directions are enforceable, on an application by the Bank of England, by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.

(5) A person is not liable for damages in respect of action or inaction in accordance with directions.

(6) The immunity does not extend to action or inaction—

(a) in bad faith, or

(b) in contravention of section 6(1) of the Human Rights Act 1998.

Part 4 — Fees

36

(1) The Bank of England may, in connection with the discharge of any of its qualifying functions, require recognised clearing houses, ... third country central counterparties, recognised CSDs ... or settlement internalisers (as defined in point (11) of Article 2(1) of the CSD regulation) to pay fees to the Bank.

(2) The “qualifying functions” of the Bank are—

(a) its functions under or as a result of this Part of this Act, ...

(b) its functions under or as a result of a qualifying provision that is specified, or of a description specified, for the purposes of this sub-paragraph by the Treasury by order; ...

(ba) its functions under or as a result of regulations made under section 8 of the European Union (Withdrawal) Act 2018; and

(3) The power of the Bank to set fees includes power to set fees for the purpose of meeting expenses incurred by it or the FCA—

(a) in preparation for the exercise of functions by the Bank under this Part of this Act, ...

(b) for the purpose of facilitating the exercise by the Bank of those functions or otherwise in connection with their exercise by it or

(4) It is irrelevant when the expenses were incurred (and, in particular, it is irrelevant if expenses were incurred by the FCA at a time when it was known as the Financial Services Authority).

(5) The power conferred by this paragraph may not be used to require a fee to be paid by any person whose application under section 309I for approval under section 309G has been granted.

37

Any fee which is owed to the Bank under paragraph 36 may be recovered as a debt due to the Bank.

SCHEDULE 18 — Mutuals

Part I — Friendly Societies

The Friendly Societies Act 1974 (c.46)

1

Omit sections 4 (provision for separate registration areas) and 10 (societies registered in one registration area carrying on business in another).

2

In section 7 (societies which may be registered), in subsection (2)(b), for “in the central registration area or in Scotland” substitute “ in the United Kingdom, the Channel Islands or the Isle of Man ”.

3

In section 11 (additional registration requirements for societies with branches), omit “and where any such society has branches in more than one registration area, section 10 above shall apply to that society”.

4

In section 99(4) (punishment of fraud etc and recovery of property misapplied), omit “in the central registration area”.

The Friendly Societies Act 1992 (c.40)

5

Omit sections 31 to 36A (authorisation of friendly societies business).

6

In section 37 (restrictions on combinations of business), omit subsections (1), (1A) and (7A) to (9).

7

Omit sections 38 to 43 (restrictions on business of certain authorised societies).

8

Omit sections 44 to 50 (regulation of friendly societies business).

Part II — Friendly Societies: Subsidiaries and Controlled Bodies

Interpretation

9

In this Part of this Schedule—

“the 1992 Act” means the Friendly Societies Act 1992; and

“section 13” means section 13 of that Act.

Qualifying bodies

10

(1) Subsections (2) to (5) of section 13 (incorporated friendly societies allowed to form or acquire control or joint control only of qualifying bodies) cease to have effect.

(2) As a result, omit—

(a) subsections (8) and (11) of that section, and

(b) Schedule 7 to the 1992 Act (activities which may be carried on by a subsidiary of, or body jointly controlled by, an incorporated friendly society).

Bodies controlled by societies

11

In section 13(9) (defined terms), after paragraph (a) insert—

(aa) an incorporated friendly society also has control of a body corporate if the body corporate is itself a body controlled in one of the ways mentioned in paragraph (a)(i), (ii) or (iii) by a body corporate of which the society has control;

Joint control by societies

12

In section 13(9), after paragraph (c) insert—

(cc) an incorporated friendly society also has joint control of a body corporate if— (i) a subsidiary of the society has joint control of the body corporate in a way mentioned in paragraph (c)(i), (ii) or (iii); (ii) a body corporate of which the society has joint control has joint control of the body corporate in such a way; or (iii) the body corporate is controlled in a way mentioned in paragraph (a)(i), (ii) or (iii) by a body corporate of which the society has joint control;

Acquisition of joint control

13

In section 13(9), in the words following paragraph (d), after “paragraph (c)” insert “ or (cc) ”.

Amendment of Schedule 8 to the 1992 Act

14

(1) Schedule 8 to the 1992 Act (provisions supplementing section 13) is amended as follows.

(2) Omit paragraph 3(2).

(3) After paragraph 3 insert—

(3A) (1) A body is to be treated for the purposes of section 13(9) as having the right to appoint to a directorship if— (a) a person’s appointment to the directorship follows necessarily from his appointment as an officer of that body; or (b) the directorship is held by the body itself. (2) A body (“B”) and some other person (“P”) together are to be treated, for the purposes of section 13(9), as having the right to appoint to a directorship if— (a) P is a body corporate which has directors and a person’s appointment to the directorship follows necessarily from his appointment both as an officer of B and a director of P; (b) P is a body corporate which does not have directors and a person’s appointment to the directorship follows necessarily from his appointment both as an officer of B and as a member of P’s managing body; or (c) the directorship is held jointly by B and P. (3) For the purposes of section 13(9), a right to appoint (or remove) which is exercisable only with the consent or agreement of another person must be left out of account unless no other person has a right to appoint (or remove) in relation to that directorship. (4) Nothing in this paragraph is to be read as restricting the effect of section 13(9).

(4) In paragraph 9 (exercise of certain rights under instruction by, or in the interests of, incorporated friendly society) insert at the end “ or in the interests of any body over which the society has joint control ”.

Consequential amendments

15

(1) Section 52 of the 1992 Act is amended as follows.

(2) In subsection (2), omit paragraph (d).

(3) In subsection (3), for “(4) below” substitute “ (2) ”.

(4) For subsection (4) substitute—

(4) A court may not make an order under subsection (5) unless it is satisfied that one or more of the conditions mentioned in subsection (2) are satisfied.

(5) In subsection (5), omit the words from “or, where” to the end.

References in other enactments

16

References in any provision of, or made under, any enactment to subsidiaries of, or bodies jointly controlled by, an incorporated friendly society are to be read as including references to bodies which are such subsidiaries or bodies as a result of any provision of this Part of this Schedule.

Part III — Building Societies

The Building Societies Act 1986 (c.53)

17

Omit section 9 (initial authorisation to raise funds and borrow money).

18

Omit Schedule 3 (supplementary provisions about authorisation).

Part IV — Industrial and Provident Societies

The Industrial and Provident Societies Act 1965 (c.12)

19

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

20

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

Part V — Credit Unions

The Credit Unions Act 1979 (c.34)

21

In section 6 (minimum and maximum number of members), omit subsections (2) to (6).

22

In section 11 (loans), omit subsections (2) and (6).

23

Omit sections 11B (loans approved by credit unions), 11C (grant of certificates of approval) and 11D (withdrawal of certificates of approval).

24

In section 12, omit subsections (4) and (5).

25

In section 14, omit subsections (2), (3), (5) and (6).

26

In section 28 (offences), omit subsection (2).

SCHEDULE 19

Part I — Persons and functions for the purposes of section 351

1

The Table set out after this paragraph has effect for the purposes of section 351(3)(b).

Part II — The enactments

1

The Fair Trading Act 1973

2

The Consumer Credit Act 1974

3

The Estate Agents Act 1979

4

The Competition Act 1980

5

The Telecommunications Act 1984

6

The Airports Act 1986

7

The Gas Act 1986

8

The Control of Misleading Advertisements Regulations 1988

9

The Electricity Act 1989

10

The Broadcasting Act 1990

11

The Water Industry Act 1991

12

The Electricity (Northern Ireland) Order 1992

13

The Railways Act 1993

14

Part IV of the Airports (Northern Ireland) Order 1994

15

The Gas (Northern Ireland) Order 1996

16

The EC Competition (Articles 88 and 89) Enforcement Regulations 1996

17

The Unfair Terms in Consumer Contracts Regulations 1999

18

This Act.

19

An enactment specified for the purposes of this paragraph in an order made by the Treasury.

SCHEDULE 19A — The manager of a write-down order

Application of Schedule

1

(1) This Schedule applies where—

(a) a write-down order has been made under section 377A in relation to an insurer, and

(b) one or more persons have been appointed under section 377G to act as the manager of the order.

(2) Where only one person acts as the manager, a reference in this Schedule to “the manager” is to that person.

(3) Where two or more persons act jointly as the manager—

(a) a reference in this Schedule to the manager is a reference to those persons acting jointly;

(b) where an offence of omission is committed by the manager, each of the persons appointed to act jointly—

(i) commits the offence, and

(ii) may be proceeded against and punished individually.

(4) Where persons act jointly in respect of only some of the functions of the manager, sub-paragraph (3) applies only in relation to those functions.

(5) Where two or more persons act concurrently as the manager, a reference in this Schedule to the manager is a reference to any of the persons appointed (or any combination of them).

(6) In this Schedule, “creditor” includes a contingent or prospective creditor.

Status of the manager

2

The manager is an officer of the court.

Monitoring the insurer’s affairs

3

(1) The manager must monitor the insurer’s affairs for the purpose of forming a view as to whether—

(a) it remains the case that the write-down order is reasonably likely to lead to a better outcome for the insurer’s policyholders and other creditors (taken as a whole) than if the write-down order were not in effect, or

(b) that will remain the case, or once again be the case, if the directors of the insurer were to take certain action or refrain from taking certain action.

(2) If the manager forms the view mentioned in sub-paragraph (1)(b), the manager may make such recommendations to the directors of the insurer as the manager thinks appropriate.

(3) In forming a view mentioned in sub-paragraph (1), the manager is entitled to rely on information provided by the insurer, unless the manager has reason to doubt its accuracy.

(4) If directed to do so by the FCA or the PRA, the manager must provide a report to that regulator on such matters relating to the insurer’s affairs, and at such intervals, as that regulator may specify.

Application by manager to revoke or vary a write-down order

4

(1) This paragraph applies if the manager forms the view that it is in the interests of the insurer’s policyholders and other creditors (taken as a whole) for the write-down order to be—

(a) revoked, or

(b) varied in one or more respects.

(2) The manager must apply to the court for such orders (whether under section 377I or otherwise) as the manager thinks likely to achieve the best outcome for the insurer’s policyholders and other creditors (taken as a whole).

(3) In forming the view mentioned in sub-paragraph (1), the manager may have regard, among other things—

(a) to whether recommendations under paragraph 3(2) have been made (and if so, whether they have been acted upon);

(b) to whether recommendations, or further recommendations, under paragraph 3(2) could be made (and if so, the likelihood that they will be acted upon).

Provision of information and assistance to the manager

5

(1) The manager may require a relevant person to provide such information or assistance as the manager may reasonably require for the purpose of carrying out the manager’s functions.

(2) Each of the following is a “relevant person” for these purposes—

(a) a director of the insurer, or of a body corporate in the same group as the insurer;

(b) an employee of the insurer, or of a body corporate in the same group as the insurer;

(d) a person who has at any relevant time been a person falling within paragraph (a), (b) or (c).

(3) A relevant person must comply with a requirement under this paragraph to provide information as soon as is practicable.

(4) The obligation imposed by sub-paragraph (3) is enforceable, on the application of the manager—

(a) by an injunction, or

(b) in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.

Application by manager for directions

6

The manager may apply to the court for directions about the carrying out of the manager’s functions.

Challenges to the manager’s actions

7

(1) Any of the following persons may apply to the court on the ground that an act, omission or decision of the manager has unfairly harmed the interests of the applicant—

(a) a director of the insurer;

(b) a shareholder of the insurer;

(d) any other person affected by the write-down order.

(2) Any of the following persons may apply to the court on the ground that an act, omission or decision of the manager is not in the interests of the insurer’s policyholders and other creditors (taken as a whole)—

(a) the FCA;

(b) the PRA;

(d) a provisional liquidator of the insurer.

(3) Before making an application under sub-paragraph (2)—

(a) the FCA must consult the PRA;

(b) the PRA must consult the FCA;

(4) On an application under this paragraph the court may—

(a) confirm, reverse or modify any act or decision of the manager,

(b) give the manager directions, or

(c) make such other order as the court thinks appropriate (but may not, under this paragraph, order the manager to pay any compensation).

(5) Where an application under this paragraph relates to a failure by the manager to apply to the court for the variation or termination of the write-down order, the court may treat the application as an application for an order under section 377I made by a person entitled to apply for an order under that section.

SCHEDULE 19B — Further provision about write-down orders

PART 1 — Restrictions on enforcement

Application of this Part of this Schedule

1

(1) This Part of this Schedule applies in relation to an insurer—

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