Financial Services and Markets Act 2023

• (b) the words from “made a loan” to “secured loan” become paragraph (a);

• (c) at the end of that paragraph insert

, or (b) entered into an agreement mentioned in section 11E(1) with a member, which is treated by virtue of section 11F(2) as a secured agreement.

;

• (d) the words from “the member” to the end become subsection (5A).

Ancillary services

6

• (1) Section 9A (power to charge for ancillary services) is amended as follows.

• (2) In subsection (2), in the words before paragraph (a), for “the activity of accepting a deposit or making a loan” substitute “an activity mentioned in subsection (3)”.

• (3) After subsection (2) insert—

(3) The activities mentioned in this subsection are— (a) accepting a deposit; (b) making a loan; (c) entering into a conditional sale agreement, as the seller; (d) entering into a hire purchase agreement, as the person from whom goods are bailed or (in Scotland) hired.

Loans

7

• (1) Section 11 (loans) is amended as follows.

• (2) In subsection (1)—

• (a) omit “to a member”;

• (b) at the end insert

, to— (a) a member, or (b) another credit union (whether or not a member).

• (3) After subsection (1) insert—

(1ZA) Where a loan is made under subsection (1)(b) to a credit union that is not a member of the lending credit union, the maximum period within which the loan must be repaid is six months.

• (4) After subsection (7) insert—

(8) An order under subsection (5) may make different provision in relation to— (a) loans made to a member; (b) loans made to a credit union that is not a member of the lending credit union.

Conditional sale and hire purchase agreements

8

Before section 12 (power to hold land for limited purposes) insert—

(11E) (1) If the objects of a credit union include the optional object specified in section 1(3ZZA) it may (subject to such terms, including as to security, as its rules may provide)— (a) enter into a conditional sale agreement, as the seller, with a member of the credit union, or (b) enter into a hire purchase agreement, as the person from whom goods are bailed or (in Scotland) hired, with a member of the credit union. (2) A credit union may only enter into an agreement mentioned in subsection (1) with a corporate member if— (a) the credit union’s rules provide that it may do so, and (b) entering into the agreement would not result in the aggregate of the outstanding balances under all such agreements made by the credit union with corporate members exceeding 10% of the aggregate of the outstanding balances under all such agreements made by the credit union with members, or such higher percentage as may be specified in regulations made by the Treasury. (3) Subsection (4) applies where— (a) an agreement mentioned in subsection (1) is entered into by a credit union with a member, and (b) the agreement is not a secured agreement within the meaning of section 11F. (4) The terms of the agreement must include provision as to whether, for the duration of the agreement, the member is permitted to withdraw shares where the member’s paid-up shareholding in the credit union is, or following the withdrawal would be, less than the member’s total liability (including contingent liability) to the credit union. (5) Any interest charged under an agreement mentioned in subsection (1)— (a) must not exceed the rate specified in subsection (7), and (b) must be inclusive of all administrative and other expenses incurred in connection with the making of the agreement. (6) The rate specified in this subsection is 3% per month on the sum outstanding under the agreement. (7) The Treasury may by regulations amend subsection (7) to substitute a different rate for the rate that is for the time being specified. (11F) (1) This section applies where— (a) a credit union enters into an agreement mentioned in section 11E(1) with a member of the credit union, and (b) at the time the agreement is entered into, the member’s paid-up shareholding in the credit union is equal to or greater than the member’s total liability (including contingent liability) to the credit union. (2) On the application of the member to the credit union, the agreement is to be treated for the purposes of this Act as a secured agreement.

Insurance distribution activities

9

After section 11F (inserted by paragraph 8) insert—

(11G) If the objects of a credit union include the optional object specified in section 1(3ZZA), it may (subject to such terms as the rules of the credit union may provide)— (a) carry on an insurance distribution activity which constitutes or involves the provision of a service to a member, and (b) charge such fee as it considers appropriate for providing the service.

Minor and consequential amendments

10

In section 12 (power to hold land for limited purposes), in subsection (3)—

• (a) the words from “making loans” to the end become paragraph (a);

• (b) at the end of that paragraph insert

, or (b) entering into agreements mentioned in section 11E(1) with members on the security of an interest in land and of enforcing any such security.

11

In section 23A (power to make provision corresponding to provision applying to building societies), omit subsection (5).

12

In section 29 (orders and regulations), in subsection (2) for “section” substitute “sections 1ZB(5) and”.

13

• (1) Section 31 (interpretation, etc.) is amended as follows.

• (2) In subsection (1), at the appropriate places insert—

• “conditional sale agreement” means an agreement for the sale of goods under which—the purchase price or part of it is payable by instalments, andthe property in the goods is to remain with the seller (notwithstanding that the buyer is to be in possession of the goods) until such conditions as to the payment of instalments or otherwise as may be specified in the agreement are fulfilled;

;

• “enactment” includes—an enactment contained in subordinate legislation within the meaning of the Interpretation Act 1978;an enactment contained in, or in an instrument made under, an Act of the Scottish Parliament;an enactment contained in, or in an instrument made under, Northern Ireland legislation within the meaning of the Interpretation Act 1978;an enactment contained in, or in an instrument made under, a Measure or Act of the National Assembly for Wales;

;

• “hire purchase agreement” means an agreement—which is not a conditional sale agreement,under which goods are bailed or (in Scotland) hired to a person (“P”) in return for periodical payments by P, andthe property in the goods will pass to P if the terms of the agreement are complied with and one or more of the following occurs—the exercise by P of an option to purchase the goods;the doing by any party to the agreement of any other act specified in the agreement;the happening of any event specified in the agreement;

.

• (3) After subsection (1A) insert—

(1B) In this Act, “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). (1C) Subsection (1B) must be read with— (a) section 22 of the 2000 Act; (b) any relevant order under that section; and (c) Schedule 2 to that Act.

• (4) In subsection (4)—

• (a) in the words before paragraph (a), omit “(which are replaced by, or are inconsistent with, provisions of the 2000 Act)”;

• (b) omit paragraph (b);

• (c) omit paragraph (d).

14

In Schedule 1 (matters to be provided for in rules of credit union), in paragraph 9, after “members”, in both places, insert “or other credit unions”.

Transitional provision

15

The amendments made by paragraphs 7(3) and 14 do not apply in relation to a loan made by a credit union to another credit union before the earliest date on which either of those amendments comes into force (whether or not any amount of the loan remains outstanding on or after that date).

16

The amendment made by paragraph 13(4)(b) does not apply in relation to a year of account of a credit union beginning before the date on which that amendment comes in force (and accordingly, sections 77 and 78 of the Co-operative and Community Benefit Societies Act 2014 do not apply in relation to any such year of account).

Revocation of retained EU law relating to financial services and markets

Transitional amendments

Power to make further transitional amendments

Power to restate and modify saved legislation

Power to replace references to EU directives

Restatement in rules: exemption from consultation requirements etc

Interpretation of Chapter

Designated activities

Rules relating to central counterparties and central securities depositories

Central counterparties and central securities depositories: other requirements

Rules relating to investment exchanges and data reporting service providers

Treasury directions to Bank of England: restrictions

Testing of FMI technologies or practices

Reports on FMI sandboxes

Regulations

Interpretation

Critical third parties: designation and powers

Digital settlement assets

Financial promotion

Sustainability disclosure requirements

Digital settlement assets

Digital settlement assets: power to make regulations

Implementation of mutual recognition agreements

Competitiveness and growth objective

Regulatory principles

Sections 25 and 27: consequential amendments

Review of rules

Treasury power in relation to rules

Matters to consider when making rules

Effect of rules etc on deference decisions

Effect of rules etc on international trade obligations

Power to disapply or modify rules

Responses to recommendations of the Treasury

Public consultation requirements

Engagement with statutory panels

Engagement with Parliamentary Committees

Reporting requirements

Duty to co-operate and consult in exercising functions

Listing Authority Advisory Panel

Insurance Practitioner Panel

Cost Benefit Analysis Panels

Statement of policy on cost benefit analyses

Statement of policy on panel appointments

Composition of panels

Panel reports

Exercise of FMI regulatory powers

Bank of England: rule-making powers

Application of FSMA 2000 to FMI functions

Payment Systems Regulator

Chair of the Payment Systems Regulator as member of FCA Board

Consultation on rules

Cash access services

Wholesale cash distribution

Recognised bodies: senior managers and certification

Central counterparties in financial difficulties

Insurers in financial difficulties

Application of provisions to regulatory functions under this Act

Formerly authorised persons

Control over authorised persons

Financial services compensation scheme

The Ombudsman scheme

Unauthorised co-ownership AIFs

Power to amend enactments in consequence of rules

Extent

Power to amend or repeal certain provisions of FSMA 2000

Power under FSMA 2000 to make transitional provisions

Cryptoassets

Bank of England levy

Bank of England levy: consequential amendments

Liability of payment service providers for fraudulent transactions

Credit unions

Reinsurance for acts of terrorism

Banking Act 2009: miscellaneous amendments

Arrangements for the investigation of complaints

Politically exposed persons: money laundering and terrorist financing

Politically exposed persons: review of guidance

Forest risk commodities: review

Interpretation

Pre-commencement consultation

Financial provision

Power to make consequential provision

Regulations

Extent

Commencement

Short title

Any provision made under any of the following EU directives—

Any provision made under an instrument listed in Part 1 (including any such instrument as it had effect in EU law before IP completion day).

Any provision made under an instrument listed in Part 2.

Any technical standards to which Chapter 2A of Part 9A of FSMA 2000 applies.

In FSMA 2000—

EU-derived legislation not falling within Parts 1 to 3 so far as relating to financial services or markets (other than instruments excluded from this Part by regulations under section 1(5)).

For this purpose—

Introductory

Transparency requirements for equities

Transparency requirements for fixed income instruments and derivatives etc

Systematic internalisers and other investment firms

Share trading obligation

Derivatives trading obligation

Consequential amendments relating to this Part

Introductory

STS equivalent non-UK securitisations

Minor and consequential amendments

Introductory

Participation

Technology

Practices

Financial instruments

Settlement of payments

Requirements

Cooperation

Transparency and reporting

Enforcement

Banking Act 2009

Financial Services Act 2012

Financial Services (Banking Reform) Act 2013

Amendments to FSMA 2000

Overview

Removal of impediments to the exercise of stabilisation powers etc

Restriction on remuneration

Resolution plans

Removal of directors and senior managers

Temporary manager

Paragraphs 5 and 6: conditions

Temporary manager: further provisions in relation to the appointment

Temporary manager: instrument of appointment

Right to refer matters to the Tribunal

Removal of directors and senior managers and appointment of temporary manager: procedure

Removal of directors and senior managers and appointment of temporary manager: notice requirements

Temporary restriction on remuneration

Restriction on remuneration: review and revocation

Special resolution objectives

Code of Practice

General conditions

Effect on other group members

Specific conditions: financial assistance cases

Resolution liaison panel

Restrictions on use of certain resolution powers

Pre-resolution valuation

Replacement of Bank’s provisional valuation

Independent valuer: valuation under paragraph 22 or 23

Independent valuer: supplemental

Consequences of a replacement valuation

Entry of premises under warrant

Private sector purchaser: marketing

Entry of premises under warrant

Transfer of ownership

Tear-up power

Cash call power

Power to reduce variation margin payments

Regulatory sanctions

Powers in relation to securities

Report on provisions in write-down instrument

Priority between creditors

Procedure: general

Shadow directors etc

Interpretation: “securities”

Share transfer instrument

Effect

Continuity

Conversion and delisting

Directors and senior managers

Restriction of security interests

Suspension of termination rights

Procedure: instruments

Supplemental instruments

Onward transfer

Reverse share transfer

Bridge central counterparties: share transfers

Bridge central counterparties: reverse share transfer

Property transfer instrument

Effect

Transferable property

Consolidated Fund

Banking Act 2009

Recognised central counterparty rules

Financial Services and Markets Act 2000

Licences

Foreign property

Companies Act 2006

Procedure

Property transfer instrument: delisting

Transfer of property subsequent to resolution instrument

Supplemental instruments

Private sector purchaser: reverse property transfer

Onward transfer

Bridge central counterparties: reverse property transfer

Transfer of ownership and private sector purchaser: property transfer

Transfer of ownership: reverse property transfer

Bridge central counterparty: supplemental property transfer powers

Bridge central counterparty: supplemental reverse property transfer powers

Restriction of partial transfers

Power to protect certain interests

Creation of liabilities

Regulations for safeguarding certain financial arrangements: write-down instruments

Resolution instruments: effect and supplementary matters

Write-down instruments: supplementary

Resolution instruments: procedure

Supplemental resolution instruments

Regulatory sanctions

Termination rights etc

Deferment

Recovery of expenses

Compensation scheme

Instruments: notification of members and creditors

General continuity obligation: property transfers

Special continuity obligations: property transfers

Continuity obligations: onward property transfers

General continuity obligation: share transfers

Special continuity obligations: share transfers

Continuity obligations: onward share transfers

Continuity obligations: consideration and terms

Continuity obligations: termination

Suspension of obligations

Restriction of security interests

Suspension of termination rights

Suspension: general provision

Stay on terminating membership

Restriction on remuneration

Pensions

Disputes

Tax

Stay or sist of legal proceedings

Insolvency proceedings

Recognition of transferee company

International obligation notice: general

International obligation notice: bridge central counterparty

Public funds: general

Public funds: bridge central counterparty

Private sector purchaser: report

Bridge central counterparty: report

Transfer of ownership: report

Sale to commercial purchaser, transfer to bridge central counterparty and transfer of ownership: conditions for group companies

Paragraph 117: supplemental

Information

Reports by skilled persons

Appointment of persons to carry out general investigations

Appointment of person to carry out investigations in particular cases

Investigations etc in support of foreign resolution authorities

Investigations: general

Powers of persons appointed under paragraph 121

Powers of persons appointed as a result of paragraph 122

Admissibility of statements made to investigators

Information and documents: supplemental provision

Protected items

Entry of premises under warrant

Retention of documents obtained under paragraph 130

Offences etc

Prosecution of offences under paragraph 132

Offences under paragraph 132 by bodies corporate etc

Regulatory sanctions

Determination of sanctions

Procedure: warning notice

Procedure: decision notice

Procedure: general

Appeals

Injunctions: failure to comply with certain paragraph 136 sanctions

Publication

Co-operation

Third-country resolution actions

Effects of recognition on third-country resolution action

Third-country instruments: supplementary provision

Information

Restrictions on disclosure of confidential information

Remedies on judicial review

Giving of notices, documents etc under this Schedule

“Financial assistance”

Modifications to the law

Interpretation

Recognised central counterparty

Interpretation: “CCP group company”, etc

Consolidated Fund

National Loans Fund

Bank of England Act 1998

Financial Services and Markets Act 2000

Companies Act 2006

Banking Act 2009

Financial Services Act 2012

Financial Services (Banking Reform) Act 2013

Modified application of corporate law to CCPs in resolution

FSMA 2000

Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations 2001

Introductory

Specified financial activities

Shares

Ancillary services

Loans

Conditional sale and hire purchase agreements

Insurance distribution activities

Minor and consequential amendments

Transitional provision

Editorial notes