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Financial Services and Markets Act 2023

Type Public General Act

Publication 2023-06-29

Last updated 2026-04-06

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(7) The Bank may act under or by virtue of sub-paragraph (2) only with the consent of the Treasury.

Continuity obligations: consideration and terms

95

(1) The Treasury may by regulations specify matters which are to be or not to be considered in determining—

(a) what amounts to reasonable consideration for the purpose of paragraphs 89 to 94;

(b) what provisions to include in accordance with paragraph 90(3)(b) or 93(3)(b).

(2) The Bank may give guarantees or indemnities in respect of consideration for services or facilities provided or to be provided in pursuance of a continuity obligation.

(3) Regulations under this paragraph are subject to the negative procedure.

Continuity obligations: termination

96

(1) The Bank may by notice terminate an obligation arising under paragraph 89 or 92.

(2) The power under sub-paragraph (1) is exercisable by giving a notice to each person—

(a) on whom the obligation is imposed, or

(b) who has benefited or might have expected to benefit from the obligation.

(3) A reference in sub-paragraph (1) to obligations under a paragraph includes a reference to obligations under that paragraph as applied under paragraph 91 or 94.

Suspension of obligations

97

(1) Where the Bank is exercising a stabilisation power in respect of a CCP (a “CCP under resolution”) the Bank may suspend obligations to make a payment, or delivery, under a contract where one of the parties to the contract is the CCP under resolution.

(2) A suspension imposed under sub-paragraph (1) does not apply to—

(a) payments of eligible claims, or

(b) payments or deliveries to excluded persons (see paragraph 100).

(3) A suspension imposed under sub-paragraph (1)—

(a) begins when the instrument providing for the suspension is first published,

(b) must end no later than midnight at the end of the first business day following the day on which the instrument providing for the suspension is published, and

(c) subject to sub-paragraph (2), suspends all obligations to make a payment or delivery under the contract in question, whether the obligation concerned is that of the CCP under resolution or of any other party to the contract.

(4) Where a payment or delivery under the contract concerned first fell due within the period of the suspension, that payment or delivery is treated as being due immediately on the expiry of the suspension.

(5) The power under sub-paragraph (1) must be exercised by way of provision in a share transfer instrument, property transfer instrument, resolution instrument or third-country instrument.

(6) The Bank must have regard to the impact a suspension might have on the orderly functioning of the financial markets before exercising the power in sub-paragraph (1).

(7) In this paragraph, “eligible claim” means a claim in respect of which compensation is payable under the Financial Services Compensation Scheme.

Restriction of security interests

98

(1) Where the Bank is exercising a stabilisation power in respect of a CCP (a “CCP under resolution”) the Bank may suspend the rights of a secured creditor of the CCP to enforce any security interest the creditor has in relation to any assets of the CCP.

(2) A suspension under sub-paragraph (1)—

(a) begins when the instrument providing for the suspension is first published, and

(b) must end no later than midnight at the end of the first business day following the day on which that instrument is published.

(3) But the Bank may not suspend the rights of an excluded person to enforce any security interest that person may have in relation to any asset of the CCP under resolution which has been pledged or provided to the excluded person in question as collateral or as cover for margin.

(4) The power under sub-paragraph (1) must be exercised by way of provision in a share transfer instrument, property transfer instrument, resolution instrument or third-country instrument.

(5) Where the power in sub-paragraph (1) is being exercised in a partial property transfer, the Bank must ensure that any restrictions on the enforcement of security interests which it imposes under that sub-paragraph are applied consistently for all CCP group companies in respect of which the Bank is exercising a stabilisation power.

(6) The Bank must have regard to the impact a suspension might have on the orderly functioning of the financial markets before exercising the power in sub-paragraph (1).

(7) For the purposes of this paragraph, a “security interest” means an interest or right held for the purpose of securing the payment of money or the performance of any other obligation.

Suspension of termination rights

99

(1) The Bank may suspend the termination right of any party to a qualifying contract (other than a party who is an excluded person).

(2) A contract is a “qualifying contract” for the purpose of this paragraph if—

(a) one of the parties to the contract is a CCP in respect of which the Bank is exercising a stabilisation power (a “CCP under resolution”) and all the obligations under the contract to make a payment, make delivery or provide collateral continue to be performed, or

(b) one of the parties to the contract is a subsidiary of a CCP under resolution and the condition in sub-paragraph (3) is met.

(3) The condition is that—

(a) the obligations of the subsidiary are guaranteed or otherwise supported by the CCP under resolution,

(b) the termination rights under the contract are triggered by the insolvency or the financial condition of the CCP under resolution, and

(i) all the assets and liabilities relating to the contract have been or are being transferred to, or assumed by, a single transferee, or

(ii) the Bank is providing adequate protection for the performance of the obligations of the subsidiary under the contract in any other way.

(4) The Bank must have regard to the impact a suspension might have on the orderly functioning of the financial markets before exercising the power in sub-paragraph (1).

(5) The power under sub-paragraph (1) must be exercised by way of provision in a share transfer instrument, property transfer instrument, resolution instrument or third-country instrument.

(6) A suspension imposed under sub-paragraph (1)—

(a) begins when the instrument providing for the suspension is first published, and

(b) must end no later than midnight at the end of the first business day following the day on which that instrument is published.

(7) A person may exercise a termination right under a contract before the expiry of the suspension if that person is given notice by the Bank that the rights and liabilities of the CCP under resolution covered by the contract are not—

(a) to be transferred to another undertaking through the exercise of a stabilisation power, or

(b) to be made subject to a share transfer instrument, property transfer instrument, resolution instrument or third-country instrument.

(8) If—

(a) no notice has been given by the Bank under sub-paragraph (7), and

(b) a termination right has been triggered otherwise than through the exercise of a stabilisation power or the imposition of a suspension under sub-paragraph (1) (or the occurrence of an event directly linked to the exercise of a stabilisation power),

a person may, on the expiry of the suspension, exercise the termination right in accordance with the terms of the contract.

(9) But, where the rights and liabilities of the CCP under resolution or the subsidiary under the contract have been transferred to another undertaking, sub-paragraph (8) applies only if the event giving rise to the termination right has been triggered by that undertaking.

(10) For the purposes of this paragraph, “termination right” means—

(a) a right to terminate a contract,

(b) a right to accelerate, close out, set-off or net obligations, or any similar provision that suspends, modifies or extinguishes an obligation of a party to the contract, or

Suspension: general provision

100

For the purposes of paragraphs 97 to 99—

“business day” means any day other than a Saturday, a Sunday, or a day which is a bank holiday under the Banking and Financial Dealings Act 1971 in any part of the United Kingdom;

“excluded person” means— a person who has been declared to be, or who is an operator of, a designated system under regulation 4 of the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 (S.I. 1999/2979), a CCP, a third-country central counterparty (within the meaning given by section 285 of FSMA 2000), or a central bank.

Stay on terminating membership

101

(1) This paragraph applies where the Bank has made a resolution instrument, share transfer instrument or a property transfer instrument in relation to a CCP.

(2) A clearing member of the CCP may not at any time during the relevant period terminate their membership of the CCP.

(3) The “relevant period” for the purposes of sub-paragraph (2) is the period of 48 hours beginning with the time the instrument in question comes into force.

(4) A resolution instrument, share transfer instrument or property transfer instrument in relation to a CCP may provide for sub-paragraph (2)—

(a) not to apply in relation to clearing members of the CCP, or

(b) to apply in relation to clearing members of the CCP only to the extent specified by the Bank in the instrument.

(5) Provision may be made under sub-paragraph (4) only if the Bank considers that such provision would advance one or more of the special resolution objectives.

Restriction on remuneration

102

(1) The Bank may restrict or prohibit for a specified period discretionary payments to specified employees or specified shareholders of a CCP.

(2) The power under sub-paragraph (1) must be exercised by way of provision in a share transfer instrument, property transfer instrument or resolution instrument.

(3) The specified period for the purposes of sub-paragraph (1) must not exceed 5 years (but this is subject to sub-paragraph (4)).

(4) A provision under sub-paragraph (1) restricting or prohibiting discretionary payments in relation to a CCP ceases to have effect if—

(a) any of the conditions under paragraph 17 cease to be met in relation to the CCP, and

(b) the Bank is satisfied that following the exercise of any of the stabilisation powers in relation to the CCP, the CCP has sufficient resources to pay compensation and repay any public funds in connection with the exercise of those powers.

(5) In this paragraph—

“discretionary payments” has the meaning given in paragraph 13;

“specified” means specified in the instrument under sub-paragraph (2).

Pensions

103

(1) This paragraph applies to—

(a) share transfer instruments, and

(b) property transfer instruments.

(2) An instrument may make provision—

(a) about the consequences of a transfer for a pension scheme;

(b) about property, rights and liabilities of any pension scheme of the CCP.

(3) In particular, an instrument may—

(a) modify any rights and liabilities,

(b) apportion rights and liabilities, or

(4) Provision by virtue of this paragraph may (but need not) amend the terms of a pension scheme.

(5) A share or property transfer instrument may make provision in reliance on this paragraph only with the consent of the Treasury.

(6) In this paragraph—

(a) “pension scheme” includes any arrangement for the payment of pension, allowances and gratuities, and

(b) a reference to a pension scheme of a CCP is a reference to a scheme in respect of which the CCP, or a CCP group company, is or was an employer.

Disputes

104

(1) This paragraph applies to—

(a) share transfer instruments,

(b) property transfer instruments,

(d) third-country instruments.

(2) An instrument may include provision for disputes to be determined in a specified manner.

(3) Provision by virtue of sub-paragraph (2) may, in particular—

(a) confer jurisdiction on a court or tribunal;

(b) confer discretion on a specified person.

Tax

105

(1) The Treasury may by regulations make provision about the fiscal consequences of the exercise of a stabilisation power.

(2) Regulations may relate to—

(a) capital gains tax,

(b) corporation tax,

(d) inheritance tax,

(e) stamp duty,

(f) stamp duty land tax, or

(g) stamp duty reserve tax.

(3) Regulations may apply to—

(a) anything done in connection with an instrument,

(b) things transferred or otherwise affected by virtue of an instrument,

(d) persons otherwise affected by an instrument.

(4) Regulations may—

(a) modify or disapply an enactment;

(b) provide for an action to have or not have specified consequences;

(c) provide for specified classes of property (including securities), rights or liabilities to be treated, or not treated, in a specified way;

(d) withdraw or restrict a relief;

(e) extend, restrict or otherwise modify a charge to tax;

(f) provide for matters to be determined by the Treasury in accordance with provision made by or in accordance with the regulations.

(5) Regulations may make provision for the fiscal consequences of the exercise of a stabilisation power in respect of things done—

(a) during the period of three months before the date on which the stabilisation power is exercised, or

(b) on or after that date.

(6) In relation to the exercise of a supplemental, onward, bridge or subsequent instrument under paragraph 49, 50, 52, 66, 67, 69, 71, 73 or 82, in sub-paragraph (5)(a) above “the stabilisation power” is a reference to the first stabilisation power in connection with which the supplemental, onward, bridge or subsequent instrument is made.

(7) The Treasury may by regulations amend sub-paragraph (2) so as to—

(a) add an entry, or

(b) remove an entry.

(8) Regulations under this paragraph are subject to the affirmative procedure.

Stay or sist of legal proceedings

106

(1) This paragraph applies where—

(a) the Bank has exercised a stabilisation power in relation to a CCP or a CCP group company, and

(b) the CCP or CCP group company is a party to legal proceedings before a court in the United Kingdom.

(2) The Bank may apply to that court for a stay or sist of proceedings where the Bank reasonably considers that a stay or sist of those proceedings is necessary for an effective application of the stabilisation options or the stabilisation powers.

Insolvency proceedings

107

(1) This paragraph applies to a CCP if—

(a) a stabilisation power has been exercised in respect of the CCP, or

(b) the conditions in paragraph 17 are met in relation to the CCP.

(2) Insolvency proceedings may not be commenced in relation to the CCP except by, or with the consent of, the Bank.

(3) For the purposes of sub-paragraph (2), the commencement of insolvency proceedings means—

(a) making an application for an administration order,

(b) presenting a petition for winding up,

(d) appointing an administrator.

Recognition of transferee company

108

(1) The Bank may provide for a company to which the business of a CCP is transferred in accordance with paragraph 29(3) to be treated as a CCP for the purposes of FSMA 2000—

(a) for a specified period, or

(b) until a specified event occurs.

(2) The provision may have effect—

(a) for a period specified in the instrument, or

(b) until the occurrence of an event specified or described in the instrument.

(3) The power under this paragraph—

(a) may be exercised only with the consent of the Treasury, and

(b) must be exercised by way of provision in a property transfer instrument.

International obligation notice: general

109

(1) The Bank may not exercise a stabilisation power in respect of a CCP if the Treasury notify the Bank that the exercise would be likely to contravene an international obligation of the United Kingdom.

(2) A notice under sub-paragraph (1)—

(a) must be in writing, and

(b) may be withdrawn (generally, partially or conditionally).

(3) If the Treasury give a notice under sub-paragraph (1) the Bank must consider other exercises of the stabilisation powers with a view to—

(a) pursuing the special resolution objectives, and

(b) avoiding the objections on which the Treasury’s notice was based.

(4) The Treasury may by notice to the Bank disapply sub-paragraph (3) in respect of a CCP and a notice may be revoked by further notice.

International obligation notice: bridge central counterparty

110

(1) This paragraph applies where the Bank has transferred all or part of a CCP’s business to a bridge central counterparty.

(2) The Bank must comply with any notice of the Treasury requiring the Bank, for the purpose of ensuring compliance by the United Kingdom with its international obligations—

(a) to take specified action under this Schedule in respect of the bridge central counterparty, or

(b) not to take specified action under this Schedule in respect of the bridge central counterparty.

(3) A notice under sub-paragraph (2)—

(a) must be in writing, and

(b) may be withdrawn (generally, partially or conditionally).

(4) A notice may include requirements about timing.

Public funds: general

111

(1) The Bank may not exercise a stabilisation power in respect of a CCP without the Treasury’s consent if the exercise of that power would be likely to have implications for public funds.

(2) In sub-paragraph (1)—

(a) “public funds” means the Consolidated Fund and any other account or source of money which cannot be drawn or spent other than by, or with the authority of, the Treasury, and

(b) action has implications for public funds if it would or might involve or lead to a need for the application of public funds.

(3) The Treasury may by regulations specify considerations which are to be, or not to be, taken into account in determining whether action has implications for public funds for the purpose of sub-paragraph (1).

(4) If the Treasury refuse consent under sub-paragraph (1), the Bank must consider other exercises of the stabilisation powers with a view to—

(a) pursuing the special resolution objectives, and

(b) avoiding the objections on which the Treasury’s refusal was based.

(5) The Treasury may by notice to the Bank disapply sub-paragraph (4) in respect of a CCP; and a notice may be revoked by further notice.

(6) Regulations under this paragraph are subject to the negative procedure.

Public funds: bridge central counterparty

112

(1) This paragraph applies where the Bank has transferred all or part of a CCP’s business to a bridge central counterparty.

(2) The Bank may not take action in respect of the bridge central counterparty without the Treasury’s consent if the action would be likely to have implications for public funds.

(3) Paragraph 111 (2) and (3) have effect for the purposes of this paragraph.

Private sector purchaser: report

113

(1) This paragraph applies where the Bank sells all or part of a CCP’s business to a commercial purchaser.

(2) The Bank must report to the Chancellor of the Exchequer about the exercise of the power to make share transfer instruments and property transfer instruments under paragraph 27(2).

(3) The report must comply with any requirements as to content specified by the Treasury.

(4) The report must be made as soon as is reasonably practicable after the end of one year beginning with the date of the first transfer instrument made under paragraph 27(2).

Bridge central counterparty: report

114

(1) Where the Bank transfers all or part of a CCP’s business to a bridge central counterparty, the Bank must report to the Chancellor of the Exchequer about the activities of the bridge central counterparty.

(2) The first report must be made as soon as is reasonably practicable after the end of one year beginning with the date of the first transfer to the bridge central counterparty.

(3) A report must be made as soon as is reasonably practicable after the end of each subsequent year.

(4) The Chancellor of the Exchequer must lay a copy of each report under sub-paragraph (2) or (3) before Parliament.

(5) The Bank must comply with any request of the Treasury for a report dealing with specified matters in relation to a bridge central counterparty.

(6) A request under sub-paragraph (5) may include provision about—

(a) the content of the report;

(b) timing.

Resolution instruments: report

115

(1) This paragraph applies where the Bank makes one or more resolution instruments in respect of a CCP.

(2) The Bank must, on request by the Treasury, report to the Chancellor of the Exchequer about—

(a) the exercise of the power to make the resolution instrument, and

(b) any other matters in relation to the CCP that the Treasury may specify.

(3) In relation to the matter specified in sub-paragraph (2)(a), the report must comply with any requirements that the Treasury may specify.

(4) The Chancellor of the Exchequer must lay a copy of each report under sub-paragraph (2) before Parliament.

Transfer of ownership: report

116

(1) This paragraph applies where the Bank makes one or more share transfer instruments in respect of a CCP under paragraph 30(2).

(2) The Bank must report to the Chancellor of the Exchequer about the exercise of the power to make share transfer instruments under that paragraph.

(3) The report must comply with any requirements as to content specified by the Treasury.

(4) The report must be made as soon as is reasonably practicable after the end of one year beginning with the date of the first transfer instrument made under paragraph 30(2).

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

117

(1) The Bank may exercise a stabilisation power in respect of a CCP group company in accordance with paragraph 27(2), 29(3) or 30(2) if each of the following conditions is met.

(2) Condition 1 is that the Bank is satisfied that the general conditions for the exercise of a stabilisation power set out in paragraph 17 are met in respect of a CCP in the same group.

(3) Condition 2 (which does not apply in a financial assistance case) is that the Bank is satisfied that the exercise of the power in respect of the CCP group company is necessary, having regard to the public interest in—

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

(b) the maintenance of public confidence in the stability of that system.

(4) Condition 3 (which applies only in a financial assistance case) is that—

(a) the Treasury have recommended the Bank to exercise a stabilisation power on the grounds that it is necessary to protect the public interest, and

(b) in the Bank’s opinion, exercise of the power in respect of the CCP group company is an appropriate way to provide that protection.

(5) Condition 4 is that the CCP group company is an undertaking incorporated in, or formed under the law of any part of, the United Kingdom.

(6) Before determining whether Condition 2 or 3 (as appropriate) is met, the Bank must consult—

(a) the Treasury,

(b) if the CCP is a PRA-authorised person, the PRA, and

(7) In exercising a stabilisation power in reliance on this paragraph the Bank must have regard to the need to minimise the effect of the exercise of the power on other undertakings in the same group.

(8) In this paragraph “financial assistance case” means a case in which the Treasury notify the Bank that they have provided financial assistance in respect of a CCP in the same group for the purpose of resolving or reducing a serious threat to the stability of the UK financial system.

Paragraph 117: supplemental

118

(1) In paragraph 117 references to CCPs includes references to CCP group companies.

(2) Where the Bank exercises a stabilisation power in respect of a CCP group company in reliance on paragraph 117, the provisions relating to the stabilisation powers contained in this Schedule (except paragraphs 17 and 19) and any other enactment apply (with any necessary modifications) as if the CCP group company were a CCP.

PART 6 — Information, investigation and enforcement

Information

119

(1) This paragraph applies only to information and documents reasonably required in connection with the exercise by the Bank of functions conferred by or under this Schedule.

(2) The Bank may, by notice in writing given to a CCP or CCP group company, require the CCP or CCP group company—

(a) to provide specified information or information of a specified description, or

(b) to produce specified documents or documents of a specified description.

(3) The information or documents must be provided or produced—

(a) before the end of such reasonable period as may be specified, and

(b) at such place as may be specified.

(4) An officer who has written authorisation from the Bank to do so may require a CCP or CCP group company without delay—

(a) to provide the officer with specified information or information of a specified description, or

(b) to produce to the officer specified documents or documents of a specified description.

(5) The Bank may require any information provided under this paragraph to be provided in such form as it may reasonably require.

(6) The Bank may require—

(a) any information provided, whether in a document or otherwise, to be verified in such manner, or

(b) any document produced to be authenticated in such manner,

as it may reasonably require.

(7) The powers conferred by sub-paragraphs (2) and (4) may also be exercised by the Bank to impose requirements on a person who is connected with a CCP.

(8) “Officer” means an officer of the Bank, and includes a member of the Bank’s staff or an agent of the Bank.

(9) “Specified” means—

(a) in sub-paragraphs (2) and (3), specified in the notice, and

(b) in sub-paragraph (4), specified in the authorisation.

(10) For the purposes of this paragraph, a person is connected with a CCP if that person is or has at any relevant time been—

(a) a member of that CCP’s group,

(b) a controller of that CCP (within the meaning of section 422 of FSMA 2000), or

(c) in relation to that CCP, a person mentioned in Part 1 of Schedule 15 to FSMA 2000 (reading references in that Part to the authorised person as references to the CCP).

Reports by skilled persons

120

(1) This paragraph applies where the Bank has required or could require a person to whom sub-paragraph (2) applies (“the person concerned”) to provide information or produce documents with respect to any matter (“the matter concerned”) under paragraph 119.

(2) This sub-paragraph applies to—

(a) a CCP,

(b) a member of a CCP’s group, or

who is, or was at the relevant time, carrying on a business.

(3) The Bank may either—

(a) by notice in writing given to the person concerned, require that person to provide the Bank with a report on the matter concerned, or

(b) itself appoint a person to provide the Bank with a report on the matter concerned.

(4) When acting under sub-paragraph (3)(a), the Bank may require the report to be in such form as may be specified in the notice.

(5) The Bank must give notice of an appointment under sub-paragraph (3)(b) to the person concerned.

(6) The person appointed to make a report—

(a) must be a person appearing to the Bank to have the skills necessary to make a report on the matter concerned, and

(b) where the appointment is to be made by the person concerned, must be a person nominated or approved by the Bank.

(7) It is the duty of—

(a) the person concerned, and

(b) any person who is providing (or who has at any time provided) services to the person concerned in relation to the matter concerned,

to give the person appointed to prepare a report all such assistance as the appointed person may reasonably require.

(8) The obligation imposed by sub-paragraph (7) is enforceable, on the application of the Bank, by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.

(9) The Bank may, in relation to an appointment under sub-paragraph (3)(b), require a CCP to pay to the Bank a fee to cover the expenses incurred by the Bank in relation to the appointment.

Appointment of persons to carry out general investigations

121

(1) This paragraph applies only for the purposes of the functions of the Bank conferred by or under this Schedule.

(2) If it appears to the Bank that there is a good reason for doing so, the Bank may appoint one or more competent persons to conduct an investigation on its behalf into—

(a) the nature, conduct or state of the business of a CCP,

(b) a particular aspect of that business, or

(3) If a person appointed under sub-paragraph (2) thinks it necessary for the purposes of the investigation, that person may also investigate the business of a person who is or has at any relevant time been a member of a group of which the CCP under investigation is part.

(4) A person appointed under sub-paragraph (2) who decides to investigate the business of any person under sub-paragraph (3) must give that person written notice of that decision.

(5) In this paragraph, “business” includes any part of a business.

Appointment of person to carry out investigations in particular cases

122

(1) This paragraph applies if it appears to the Bank that there are circumstances suggesting that a person may have failed to comply with any relevant requirement.

(2) The Bank may appoint one or more competent persons to conduct an investigation on its behalf.

(3) In this paragraph “relevant requirement” means a requirement imposed by or under this Schedule.

Investigations etc in support of foreign resolution authorities

123

(1) On receiving a request to which sub-paragraph (3) applies from a foreign resolution authority, the Bank may—

(a) exercise the power conferred by paragraph 119, or

(b) appoint one or more competent persons to investigate any matter.

(2) Accordingly, for the purposes of sub-paragraph (1)(a), paragraph 119 has effect as if it also referred to information and documents reasonably required by the Bank to meet such a request.

(3) This sub-paragraph applies to a request if the request is made by a foreign resolution authority in connection with the exercise by that authority of functions in relation to third-country resolution action (within the meaning of paragraph 145) corresponding to the stabilisation powers of the Bank under this Schedule.

(4) An investigator appointed under sub-paragraph (1)(b) has the same powers as an investigator appointed under paragraph 122.

(5) In deciding whether or not to exercise its investigative power, the Bank may take into account in particular—

(a) whether, in the territory of the foreign resolution authority concerned, corresponding assistance would be given to the Bank,

(b) whether the case concerns the breach of a law, or other requirement, which has no close parallel in the United Kingdom or involves the assertion of a jurisdiction not recognised by the United Kingdom,

(d) whether it is otherwise appropriate in the public interest to give the assistance sought.

(6) The Bank may decide that it will not exercise its investigative power unless the foreign resolution authority undertakes to make such contribution towards the cost of its exercise as the Bank considers appropriate.

(7) “Foreign resolution authority” means an authority, in a country or territory outside the United Kingdom, which exercises functions referred to in sub-paragraph (3).

(8) “Investigative power” means one of the powers mentioned in sub-paragraph (1).

Investigations: general

124

(1) This paragraph applies if the Bank appoints one or more competent persons (“investigators”) under paragraph 121 or 122 to conduct an investigation on its behalf.

(2) The Bank must give written notice of the appointment of an investigator to the person who is the subject of the investigation (“the person under investigation”).

(3) A notice under sub-paragraph (2) must—

(a) specify the provisions under which, and as a result of which, the investigator was appointed, and

(b) state the reason for the investigator’s appointment.

(4) Nothing prevents the Bank from appointing a person who is a member of its staff as an investigator.

(5) An investigator must make a report of the investigation to the Bank.

(6) The Bank may, by a direction to an investigator, control—

(a) the scope of the investigation,

(b) the period during which the investigation is to be conducted,

(d) the reporting of the investigation.

(7) A direction may, in particular—

(a) confine the investigation to particular matters;

(b) extend the investigation to additional matters;

(c) require the investigator to discontinue the investigation or to take only such steps as are specified in the direction;

(d) require the investigator to make such interim reports as are so specified.

(8) If there is a change in the scope or conduct of the investigation and, in the opinion of the Bank, the person under investigation is likely to be significantly prejudiced by not being made aware of it, that person must be given written notice of the change.

(9) If the appointment is under paragraph 122, sub-paragraphs (2) and (8) do not apply if the Bank believes that the notice required by the sub-paragraph in question would be likely to result in the investigation being frustrated.

Powers of persons appointed under paragraph 121

125

(1) This paragraph applies to an investigator appointed under paragraph 121 to conduct an investigation on behalf of the Bank.

(2) The investigator may require the person who is the subject of the investigation (“the person under investigation”) or any person connected with the person under investigation—

(a) to attend before the investigator at a specified time and place and answer questions, or

(b) otherwise to provide such information as the investigator may require for the purposes of the investigation.

(3) The investigator may also require any person to produce at a specified time and place any specified documents or documents of a specified description.

(4) A requirement under sub-paragraph (2) or (3) may be imposed only so far as the investigator reasonably considers the question, provision of information or production of the document to be relevant to the purposes of the investigation.

(5) For the purposes of this paragraph, a person (“B”) is connected with the person under investigation (“A”) if B is or has at any relevant time been—

(a) a member of A’s group;

(b) a controller of A;

(c) in relation to A, a person mentioned in Part 1 or 2 of Schedule 15 to FSMA 2000 (reading references in those Parts to the authorised person or the person under investigation as references to A).

(6) In this paragraph—

“controller” has the meaning given in section 422 of FSMA 2000;

“specified” means specified in a notice in writing.

Powers of persons appointed as a result of paragraph 122

126

(1) This paragraph applies to an investigator appointed under paragraph 122 to conduct an investigation on behalf of the Bank.

(2) The investigator has—

(a) the powers conferred by paragraph 125 on an investigator appointed under paragraph 121, and

(b) the powers conferred by sub-paragraphs (3) and (4).

(3) The investigator may require the person who is the subject of the investigation (“the person under investigation”) to give the investigator all assistance in connection with the investigation which that person is reasonably able to give.

(4) The investigator may require a person who is neither the person under investigation nor a person connected with the person under investigation—

(a) to attend before the investigator at a specified time and place and answer questions, or

(b) otherwise to provide such information as the investigator may require for the purposes of the investigation.

(5) A requirement may only be imposed under sub-paragraph (4) if the investigator is satisfied that the requirement is necessary or expedient for the purposes of the investigation.

(6) Paragraph 125 (5) and (6) applies for the purposes of this paragraph.

Admissibility of statements made to investigators

127

(1) A statement made to an investigator appointed under paragraph 121 or 122 by a person in compliance with an information requirement is admissible in evidence in any proceedings, so long as it also complies with any requirement governing the admissibility of evidence in the circumstances in question.

(2) But in criminal proceedings in which that person is charged with an offence to which this sub-paragraph applies—

(a) no evidence relating to the statement may be adduced, and

(b) no question relating to it may be asked—

by or on behalf of the prosecution, or the Bank (as the case may be), unless evidence relating to it is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person.

(3) Sub-paragraph (2) applies to any offence other than one under—

(a) paragraph 132,

(b) section 398 of FSMA 2000 (misleading FCA or PRA: residual cases),

(d) section 44(2) of the Criminal Law (Consolidation) (Scotland) Act 1995 (false statements made otherwise than on oath), or

(e) Article 10 of the Perjury (Northern Ireland) Order 1979 (false declarations etc).

(4) “Information requirement” means a requirement imposed by an investigator under paragraph 125, 126 or 128.

Information and documents: supplemental provision

128

(1) If the Bank has power under this Schedule to require a person to produce a document but if it appears that the document is in the possession of a third person, that power may be exercised in relation to the third person.

(2) If a document is produced in response to a requirement imposed under this Schedule, the person to whom it is produced may—

(a) take copies or extracts from the document, or

(b) require the person producing the document, or any relevant person to provide an explanation of the document.

(3) A document so produced may be retained for so long as the person to whom it is produced considers that it is necessary to retain it (rather than copies of it) for the purposes for which the document was requested.

(4) If the person to whom a document is so produced has reasonable grounds for believing—

(a) that the document may have to be produced for the purposes of any legal proceedings, and

(b) that it might otherwise be unavailable for those purposes,

it may be retained until the proceedings are concluded.

(5) If a person who is required under this Schedule to produce a document fails to do so, the Bank or an investigator may require that person to state, to the best of that person’s knowledge and belief, where the document is.

(6) A lawyer may be required under this Schedule to furnish the name and address of the lawyer’s client.

(7) No person may be required under this Schedule to disclose information or produce a document in respect of which the person (“A”) owes an obligation of confidence unless—

(a) A is the person under investigation or a member of that person’s group,

(b) the person to whom the obligation of confidence is owed is the person under investigation or a member of that person’s group,

(d) the imposing on A of a requirement with respect to such information or document has been specifically authorised by the Bank.

(8) If a person claims a lien on a document, its production under this Schedule does not affect the lien.

(9) In this paragraph—

“controller” has the meaning given by section 422 of FSMA 2000;

“investigator” means a person appointed under paragraph 121 or 122;

“relevant person”, in relation to a person who is required to produce a document, means a person who— has been or is or is proposed to be a director or controller of that person, has been or is an auditor of that person, has been or is an actuary, accountant or lawyer appointed or instructed by that person, or has been or is an employee of that person.

Protected items

129

(1) A person may not be required under this Schedule to produce, disclose or permit the inspection of protected items.

(2) “Protected items” means—

(a) communications between a professional legal adviser and that adviser’s client or any person representing such a client which fall within sub-paragraph (3),

(b) communications between a professional legal adviser, that adviser’s client or any person representing such a client and any other person which fall within sub-paragraph (3) (as a result of paragraph (b) of that sub-paragraph), and

(i) are enclosed with, or referred to in, such communications,

(ii) fall within sub-paragraph (3), and

(iii) are in the possession of a person entitled to be in possession of them.

(3) A communication or item falls within this sub-paragraph if it is made—

(a) in connection with the giving of legal advice to the client, or

(b) in connection with, or in contemplation of, legal proceedings and for the purposes of those proceedings.

(4) A communication or item is not a protected item if it is held with the intention of furthering a criminal purpose.

Entry of premises under warrant

130

(1) A justice of the peace may issue a warrant under this paragraph if satisfied on information on oath given by or on behalf of the Secretary of State, the Bank or an investigator that there are reasonable grounds for believing that the first, second or third set of conditions is satisfied.

(2) The first set of conditions is—

(a) that a person on whom an information requirement has been imposed has failed (wholly or in part) to comply with it, and

(b) that on the premises specified in the warrant—

(i) there are documents which have been required, or

(ii) there is information which has been required.

(3) The second set of conditions is—

(a) that the premises specified in the warrant are premises of a CCP or a member of the same group as a CCP,

(b) that there are on the premises documents or information in relation to which an information requirement could be imposed, and

(i) it would not be complied with, or

(ii) the documents or information to which it related would be removed, tampered with or destroyed.

(4) The third set of conditions is—

(a) that an offence mentioned in paragraph 132 has been (or is being) committed by any person,

(b) that there are on the premises specified in the warrant documents or information relevant to whether that offence has been (or is being) committed,

(d) that if such a requirement were to be imposed—

(i) it would not be complied with, or

(ii) the documents or information to which it related would be removed, tampered with or destroyed.

(5) A warrant under this paragraph authorises a constable—

(a) to enter the premises specified in the warrant,

(b) to search the premises and take possession of any documents or information appearing to be documents or information of a kind in respect of which a warrant under this paragraph was issued (“the relevant kind”) or to take, in relation to any such documents or information, any such steps which may appear to be necessary for preserving them or preventing interference with them,

(d) to require any person on the premises to provide an explanation of any document or information appearing to be of the relevant kind or to state where it may be found, and

(e) to use such force as may be reasonably necessary.

(6) A warrant under this paragraph may be executed by any constable.

(7) The warrant may authorise persons to accompany any constable who is executing it.

(8) The powers in sub-paragraph (5) may be exercised by a person authorised by the warrant to accompany a constable; but that person may exercise those powers only in the company of, and under the supervision of, a constable.

(9) In England and Wales, sections 15(5) to (8) and 16(3) to (12) of the Police and Criminal Evidence Act 1984 (execution of search warrants and safeguards) apply to warrants issued under this paragraph.

(10) In Northern Ireland, Articles 17(5) to (8) and 18(3) to (12) of the Police and Criminal Evidence (Northern Ireland) Order 1989 apply to warrants issued under this paragraph.

(11) In the application of this paragraph to Northern Ireland the reference to a justice of the peace is a reference to a lay magistrate.

(12) In the application of this paragraph to Scotland—

(a) for the reference to a justice of the peace substitute references to a justice of the peace or a sheriff, and

(b) for the references to information on oath substitute references to evidence on oath.

(13) “Investigator” means an investigator appointed under paragraph 121 or 122.

(14) “Information requirement” means a requirement imposed—

(a) by the Bank under paragraph 119 or 128, or

(b) by an investigator under paragraph 125, 126 or 128.

Retention of documents obtained under paragraph 130

131

(1) Any document of which possession is taken under paragraph 130 (“a seized document”) may be retained for so long as it is necessary to retain it (rather than copies of it) in the circumstances.

(2) A person claiming to be the owner of a seized document may apply to a magistrates’ court, or in Scotland the sheriff, for an order for the delivery of the document to the person appearing to the court or sheriff to be the owner.

(3) If on an application under sub-paragraph (2) the court, or in Scotland the sheriff, cannot ascertain who is the owner of the seized document the court or sheriff (as the case may be) may make such order as the court or sheriff thinks fit.

(4) An order under sub-paragraph (2) or (3) does not affect the right of any person to take legal proceedings against any person in possession of a seized document for the recovery of the document.

(5) Any right to bring proceedings (as described in sub-paragraph (4)) may only be exercised within 6 months of the date of the order made under sub-paragraph (2) or (3).

Offences etc

132

(1) If a person other than the investigator (“the defaulter”) fails to comply with a requirement imposed on the defaulter under paragraph 125, 126 or 128, the person imposing the requirement may certify that fact in writing to the court.

(2) If the court is satisfied that the defaulter has failed without reasonable excuse to comply with the requirement, it may deal with the defaulter (and, in the case of a body corporate, any director or other officer) as if that person were in contempt.

(3) “Officer”, in relation to a limited liability partnership, means a member of the limited liability partnership.

(4) A person who knows or suspects that an investigation is being or is likely to be conducted under paragraph 121, 122 or 123 is guilty of an offence if—

(a) that person falsifies, conceals, destroys or otherwise disposes of a document which that person knows or suspects is or would be relevant to such an investigation, or

(b) that person causes or permits the falsification, concealment, destruction or disposal of such a document,

unless that person shows that that person had no intention of concealing facts disclosed by the document from the investigator.

(5) A person who, in purported compliance with a requirement imposed on that person by any relevant requirement—

(a) provides information which that person knows to be false or misleading in a material particular, or

(b) recklessly provides information which is false or misleading in a material particular,

is guilty of an offence.

(6) Any person who intentionally obstructs the exercise of any rights conferred by a warrant under paragraph 130 is guilty of an offence.

(7) A person guilty of an offence under sub-paragraph (4), (5) or (6) is liable, on summary conviction—

(a) in England and Wales, to imprisonment for a term not exceeding 3 months or a fine, or both;

(b) In Scotland and Northern Ireland, to imprisonment for a term not exceeding 3 months or a fine not exceeding level 5 on the standard scale, or both.

(8) In this paragraph—

“court” means— the High Court, in Scotland, the Court of Session;

“relevant requirement” has the meaning given in paragraph 122.

Prosecution of offences under paragraph 132

133

(1) Proceedings for an offence under paragraph 132 may be instituted—

(a) in England and Wales, only by the Bank or by or with the consent of the Director of Public Prosecutions, and

(b) in Northern Ireland, only by the Bank or by or with the consent of the Director of Public Prosecutions for Northern Ireland.

(2) In exercising its power to institute proceedings for an offence under paragraph 132, the Bank must comply with any conditions or restrictions imposed in writing by the Treasury.

(3) Conditions or restrictions may be imposed under sub-paragraph (2) in relation to proceedings generally, or such proceedings or categories of proceedings as the Treasury may direct.

Offences under paragraph 132 by bodies corporate etc

134

(1) If an offence under paragraph 132 committed by a body corporate is shown—

(a) to have been committed with the consent or connivance of an officer, or

(b) to be attributable to any neglect on the part of an officer,

the officer as well as the body corporate is guilty of the offence and liable to be proceeded against and punished accordingly.

(2) If the affairs of a body corporate are managed by its members, sub-paragraph (1) applies in relation to the acts and defaults of a member in connection with that member’s functions of management as if that member were a director of the body.

(3) If an offence under paragraph 132 committed by a partnership is shown—

(a) to have been committed with the consent or connivance of a partner, or

(b) to be attributable to any neglect on the part of a partner,

the partner as well as the body corporate is guilty of the offence and liable to be proceeded against and punished accordingly.

(4) In sub-paragraph (3) “partner” includes a person purporting to act as partner.

(5) “Officer” in relation to a body corporate means—

(a) a director, member of the committee of management, chief executive, manager, secretary or other similar officer of the body, or a person purporting to act in any such capacity, and

(b) an individual who is a controller of the body (and for these purposes, “controller” has the meaning given in section 422 of FSMA 2000).

(6) If an offence under paragraph 132 committed by an unincorporated association (other than a partnership) is shown—

(a) to have been committed with the consent or connivance of an officer of the association or a member of its governing body, or

(b) to be attributable to any neglect on the part of such an officer or member,

the officer or member as well as the association is guilty of the offence and liable to be proceeded against and punished accordingly.

Injunctions to prevent failure to comply with relevant requirement

135

(1) If, on the application of the Bank, the court is satisfied that there is a reasonable likelihood that any person will contravene a relevant requirement, the court may make an order restraining, or in Scotland an interdict prohibiting, the contravention.

(2) The jurisdiction conferred by this paragraph is exercisable—

(a) in England and Wales, and Northern Ireland, by the High Court, and

(b) in Scotland, by the Court of Session.

(3) In this paragraph “relevant requirement” has the meaning given in paragraph 122.

Regulatory sanctions

136

(1) If the Bank considers that a person has failed to comply with a relevant requirement imposed on the person, it may do one or more of the following—

(a) publish a statement to that effect;

(b) impose on that person a penalty, in respect of the failure, of such amount as it considers appropriate;

(c) with a view to ensuring that the failure ceases or is not repeated or the consequences of the failure are mitigated, direct that person to refrain from any conduct;

(d) prohibit that person from holding an office or position involving responsibility for taking decisions about the management of—

(i) a named CCP,

(ii) a CCP of a specified description, or

(iii) any CCP.

(2) A prohibition under sub-paragraph (1)(d)may apply—

(a) for a specified period,

(b) until further notice, or

(3) If the Bank considers that a failure by a person to comply with a relevant requirement occurred with the consent or connivance of, or was attributable to any neglect on the part of, an officer of that person, it may do one or more of the following—

(a) publish a statement to that effect;

(b) impose on that officer a penalty, in respect of the failure, of such amount as it considers appropriate;

(c) with a view to ensuring that the failure ceases or is not repeated or the consequences of the failure are mitigated, direct that person to refrain from any conduct specified in the direction.

(4) A penalty under this paragraph—

(a) must be paid to the Bank, and

(b) may be enforced by the Bank as a debt.

(5) In this paragraph “relevant requirement” has the meaning given in paragraph 122.

Determination of sanctions

137

When determining the type of sanction, and level of any penalty, to be imposed on a person under paragraph 136, the Bank must take into account all relevant circumstances, including where appropriate—

(a) the gravity and the duration of the failure,

(b) the degree of responsibility of the person,

(d) the amount of profits gained or losses avoided by the person,

(e) the losses for third parties caused by the failure,

(f) the level of co-operation of the person with the Bank,

(g) previous failures by the person, and

(h) any potential systemic consequences of the failure.

Procedure: warning notice

138

(1) If the Bank proposes to impose a sanction on a person under paragraph 136(1) or (3) it must give that person a warning notice.

(2) Section 387 of FSMA 2000 applies in relation to a warning notice given under sub-paragraph (1) and to the Bank as it applies in relation to a warning notice given under that Act and to the regulator which gave that notice, subject to sub-paragraphs (3) and (4).

(3) In complying with section 387(1)(a) of that Act, a warning notice must in particular—

(a) if it is about a proposal to publish a statement, set out the terms of the statement,

(b) if it is about a proposal to impose a penalty, specify the amount of the penalty,

(d) if it is about a proposal to impose a prohibition on holding an office or other position, specify the extent of the prohibition.

(4) For the purposes of sub-paragraph (2), section 387 of that Act has effect as if subsections (1A) and (3A) were omitted.

Procedure: decision notice

139

(1) If the Bank decides to impose a sanction on a person under paragraph 136(1) or (3) it must without delay give that person a decision notice.

(2) If the decision is to publish a statement, the decision notice must set out the terms of the statement.

(3) If the decision is to impose a penalty, the decision notice must specify the amount of the penalty.

(4) If the decision is to refrain from certain conduct, the decision notice must specify the conduct.

(5) If the decision is to impose a prohibition on holding an office or other position, the decision notice must specify the extent of the prohibition.

(6) Section 388 of FSMA 2000 applies in relation to a decision notice given under sub-paragraph (1) and the Bank as it applies in relation to a decision notice given under that Act and the regulator which gave that notice, subject to sub-paragraph (7).

(7) Section 388 of that Act has effect for the purposes of sub-paragraph (6) as if—

(a) in subsection (1)(e)(i) for “this Act” there were substituted “paragraph 141 of Schedule 11 to the Financial Services and Markets Act 2023”, and

(b) subsections (1A) and (2) were omitted.

Procedure: general

140

(1) Sections 389, 390 and 392 to 394 of FSMA 2000 apply in relation to a warning notice given under paragraph 138, a decision notice given under paragraph 139 and the Bank as they apply in relation to a warning notice or decision notice given under that Act and the regulator which gave that notice, subject to sub-paragraphs (2) to (4).

(2) Section 389 of that Act has effect as if subsection (2) were omitted.

(3) Section 390 has effect as if—

(a) in subsection (2A), in paragraph (a), for “133(6)(b)” there were substituted “133(5)(b)”,

(b) in that paragraph, for “133(6)” there were substituted “133(5)”,

(4) A final notice about a direction under paragraph 136(1)(c) or (3)(c) of Schedule 11 to the Financial Services and Markets Act 2023 or a prohibition under paragraph 136(1)(d) of that Schedule must— (a) specify the conduct to which the direction relates or the extent of the prohibition, and (b) give details of the date on which the direction or prohibition has effect.

(4) Section 392 has effect as if for paragraphs (a) and (b) there were substituted—

(a) a warning notice given under paragraph 138 of Schedule 11 to the Financial Services and Markets Act 2023; (b) a decision notice given under paragraph 139 of Schedule 11 to the Financial Services and Markets Act 2023.

Appeals

141

(1) If the Bank decides to impose a sanction on a person under paragraph 136, the person may appeal to the Upper Tribunal.

(2) The Bank may not impose a sanction while an appeal under this paragraph could be brought or is pending.

Injunctions: failure to comply with certain paragraph 136 sanctions

142

(1) If, on the application of the Bank, the court is satisfied—

(a) that there is a reasonable likelihood that there will be a compliance failure, or

(b) that there has been a compliance failure and there is a reasonable likelihood that it will continue or be repeated,

the court may make an order restraining the conduct constituting the failure.

(2) If, on the application of the Bank, the court is satisfied—

(a) that there has been a compliance failure, and

(b) that there are steps which could be taken for remedying the failure,

the court may make an order requiring anyone who appears to have been knowingly concerned in the failure to take such steps as the court may direct to remedy it.

(3) If, on the application of the Bank, the court is satisfied—

(a) that there may have been a compliance failure by any person, or

(b) that a person may have been knowingly concerned in a compliance failure,

the court may make an order restraining that person from dealing with any assets which it is satisfied the person is reasonably likely to deal with.

(4) “Compliance failure” means—

(a) a failure to comply with a direction under paragraph 136(1)(c) or (3)(c), or

(b) a breach of a prohibition imposed under paragraph 136(1)(d).

(5) The jurisdiction conferred by this paragraph is exercisable—

(a) in England and Wales and Northern Ireland, by the High Court, and

(b) in Scotland, by the Court of Session.

(6) In this paragraph—

(a) references to an order restraining anything are, in Scotland, to be read as references to an interdict prohibiting that thing,

(b) references to an order requiring steps to be taken are, in Scotland, to be read as references to an order for specific performance under section 45 of the Court of Session Act 1988,

(d) references to dealing with assets include disposing of them.

Publication

143

(1) In the case of a warning notice under paragraph 138—

(a) neither the Bank nor a person to whom it is given or copied may publish the notice,

(b) a person to whom the notice is given or copied may not publish any details concerning the notice unless the Bank has published those details, and

(c) after consulting the persons to whom the notice is given or copied, the Bank may publish such information about the matter to which the notice relates as it considers appropriate.

(2) A person to whom a decision notice under paragraph 139 is given or copied may not publish the notice or any details concerning it unless the Bank has published the notice or those details.

(3) A notice of discontinuance must state that, if the person to whom the notice is given consents, the Bank may publish such information as it considers appropriate about the matter to which the discontinued proceedings related.

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