The Banking Coordination (Second Council Directive) Regulations 1992

(6) If it appears to the Bank to be desirable in the interests of the depositors or potential depositors of an authorised institution to do so, it may also exercise the powers conferred by subsections (1) and (3) above in relation to any undertaking which is or has at any relevant time been— (a) a parent undertaking, subsidiary undertaking or related company of that institution; (b) a subsidiary undertaking of a parent undertaking of that institution; (c) a parent undertaking of a subsidiary undertaking of that institution; or (d) an undertaking in the case of which a shareholder controller of that institution, either alone or with any associate or associates, holds 50 per cent. or more of the shares or is entitled to exercise, or control the exercise of, more than 50 per cent. of the voting power at a general meeting; or in relation to any partnership of which that institution is or has at any relevant time been a member. (7) If it appears to the Bank to be desirable to do so in the interests of the depositors or potential depositors of an authorised institution which is a partnership ('the authorised partnership'), it may also exercise the powers conferred by subsections (1) and (3) above in relation to— (a) any other partnership having a member in common with the authorised partnership; (b) any undertaking which is or has at any time been a member of the authorised partnership; (c) any undertaking in the case of which the partners in the authorised partnership, either alone or with any associate or associates, hold 20 per cent. or more of the shares or are entitled to exercise, or control the exercise of, more than 50 per cent. of the voting power at a general meeting; or (d) any subsidiary undertaking or parent undertaking of any such undertaking as is mentioned in paragraph (b) or (c) above or any parent undertaking of any such subsidiary undertaking. (7A) In subsections (6) and (7) above "share' has the same meaning as in Part VII of the Companies Act 1985 or Part VIII of the Companies (Northern Ireland) Order 1986.

Investigations on behalf of the Bank

37

For subsections (2) and (3) of section 41 of the Banking Act (investigations on behalf of the Bank) there shall be substituted the following subsections—

(2) If a person appointed under subsection (1) above thinks it necessary for the purposes of his investigation, he may also investigate the business of any undertaking which is or has at any relevant time been— (a) a parent undertaking, subsidiary undertaking or related company of the institution under investigation; (b) a subsidiary undertaking or related company of a parent undertaking of that institution; (c) a parent undertaking of a subsidiary undertaking of that institution; or (d) an undertaking in the case of which a shareholder controller of that institution, either alone or with any associate or associates, holds 20 per cent. or more of the shares or is entitled to exercise, or control the exercise of, more than 20 per cent. of the voting power at a general meeting; or the business of any partnership of which that institution is or has at any relevant time been a member. (3) If a person appointed under subsection (1) above thinks it necessary for the purposes of his investigation in the case of an authorised institution which is a partnership ('the authorised partnership'), he may also investigate the business of— (a) any other partnership having a member in common with the authorised partnership; (b) any undertaking which is or has at any time been a member of the authorised partnership; (c) any undertaking in the case of which the partners in the authorised partnership, either alone or with any associate or associates, hold 20 per cent. or more of the shares or are entitled to exercise, or control the exercise of, more than 20 per cent. of the voting power at a general meeting; or (d) any subsidiary undertaking, related company or parent undertaking of any such undertaking as is mentioned in paragraph (b) or (c) above or any parent undertaking of any such subsidiary undertaking. (3A) In subsections (2) and (3) above "share' has the same meaning as in Part VII of the Companies Act 1985 or Part VIII of the Companies (Northern Ireland) Order 1986.

Restrictions on disclosure of information

Disclosure for facilitating discharge of functions by the Bank

38

In subsection (1) of section 83 of the Banking Act (disclosure for facilitating discharge of functions by the Bank), for the words “its functions under this Act” there shall be substituted the following paragraphs—

(a) its function as a monetary authority; or (b) its functions as a monetary authority; or (c) its functions as a supervisor of money market and gilt market institutions

Disclosure for facilitating discharge of functions by other supervisory bodies

39

• (1) For the purpose of facilitating references to them, the entries in the Table in subsection (1) of section 84 of the Banking Act[^f00035] (disclosure for facilitating discharge of functions by other supervisory bodies) shall be numbered 1 to 19.

• (2) For subsection (5) of that section there shall be substituted the following subsections—

(5) Section 82 above does not preclude the disclosure by the Bank of information to the Treasury if disclosure appears to the Bank to be— (a) desirable or expedient in the interests of depositors; or (b) in the public interest, and (in either case) in accordance with article 12(7) of the First Council Directive[^f00036]. (5A) Section 82 above does not preclude the disclosure by the Bank of information to the Secretary of State for purposes other than those specified in relation to him in subsection (1) above if the disclosure is made with the consent of the Treasury and— (a) the information relates to an authorised institution or former authorised institution and does not enable the financial affairs of any other identifiable person to be ascertained and disclosure appears to the Bank to be necessary in the interests of depositors or in the public interest; or (b) in any other case, disclosure appears to the Bank to be necessary in the interests of depositors; and (in either case) disclosure appears to the Bank to be in accordance with article 12(7) of the First Council Directive.

• (3) In subsection (6)(a) of that section, at the end of sub-paragraph (i) there shall be inserted the words “or the Banking Coordination (Second Council Directive) Regula tions 1992”.

• (4) After that subsection there shall be inserted the following subsections—

(7) Subsection (6) above does not apply in relation to disclosures to an authority which is not a supervisory authority in another member State unless the Bank is satisfied that the authority is subject to restrictions on further disclosures at least equivalent to those imposed by this Part of this Act. (8) Information which is disclosed to a person in pursuance of subsection (1), (4) or (6) above shall not be used otherwise than for the purpose mentioned in that subsection. (9) Any person who uses information in contravention of subsection (8) above shall be liable on summary conviction to imprisonment for a term not exceeding three months or to a fine not exceeding the fifth level on the standard scale or to both. (10) Any reference in this section to enabling or assisting any person to discharge or exercise any functions is a reference to enabling or assisting that person to discharge or exercise those functions in relation to— (a) a financial market; or (b) persons carrying on the business of banking or insurance, Consumer Credit Act businesses or the business of providing other financial services; and in this subsection 'Consumer Credit Act business' has the same meaning as in the Banking Coordination (Second Council Directive) Regulations 1992.

Other permitted disclosures

40

• (1) In subsection (1) of section 85 of the Banking Act[^f00037] (other permitted disclosures), paragraph (g) shall be omitted.

• (2) After that subsection there shall be inserted the following subsection—

(1A) The disclosures permitted by subsection (1)(f) above do not include the disclosure of information relating to a person who (not being a director, controller or manager of the institution) is or has been, to the knowledge of the person making the disclosure, involved in an attempt to secure the survival of the institution as a going concern.

Information supplied to Bank by relevant overseas authority etc.

41

For section 86 of the Banking Act there shall be substituted the following section—

(86) (1) Section 82 above applies also to information which— (a) has been supplied to the Bank for the purposes of any relevant functions by the relevant supervisory authority in a country or territory outside the United Kingdom; or (b) has been obtained for those purposes by the Bank, or by a person acting on its behalf, in another member State. (2) Subject to subsections (3) and (4) below, information supplied or obtained as mentioned in subsection (1)(a) or (b) above shall not be disclosed except as provided by section 82 above or— (a) for the purpose of enabling or assisting the Bank to discharge any relevant functions; or (b) with a view to the institution of, or otherwise for the purposes of, criminal proceedings, whether under this Act or otherwise. (3) Information supplied to the Bank for the purposes of any relevant functions by the relevant supervisory authority in another member State may be disclosed— (a) to a relevant recipient, if the authority consents to its disclosure and the case is one in which information to which section 82 above applies could be so disclosed by virtue of section 84(1) or (2) above; or (b) to the Treasury or the Secretary of State, if the authority consents to its disclosure and the case is one in which information to which section 82 above applies could be so disclosed by virtue of section 84(5) or (5A) above. (4) Information obtained as mentioned in subsection (1)(b) above may be disclosed— (a) to a relevant recipient, if the relevant supervisory authority in the member State concerned consents to its disclosure and the case is one in which information to which section 82 above applies could be so disclosed by virtue of section 84(1) or (2) above; or (b) to the Treasury or the Secretary of State, if that authority consents to its disclosure and the case is one in which information to which section 82 above applies could be so disclosed by virtue of section 84(5) or (5A) above. (5) In this section— - 'relevant functions', in relation to the Bank, means its functions under this Act, its functions as a monetary authority and its functions as a supervisor of money market and gilt market institutions; - 'relevant recipient' means a person specified in any of entries 1 to 8, 13 to 15 and 17 in the Table in section 84(1) above.

Disclosure of information obtained under other Acts

42

After subsection (3) of section 87 of the Banking Act (disclosure of information obtained under other Acts) there shall be inserted the following subsection—

(3A) Information disclosed by the Building Societies Commission to the Bank for the purpose of enabling or assisting it to discharge any relevant functions may be disclosed— (a) to a relevant recipient, if the Commission consents to its disclosure and the case is one in which information to which section 82 above applies could be so disclosed by virtue of section 84(1) or (2) above; or (b) to the Treasury or the Secretary of State, if the Commission consents to its disclosure and the case is one in which information to which section 82 above applies could be so disclosed by virtue of section 84(5)(a) or (5A) above; and in this subsection 'relevant functions' has the same meaning as in section 86 above and "relevant recipient' means a person specified in any of entries 1 to 8, 13 to 15 and 17 in the Table in section 84(1) above.

Interpretation

Meaning of “controller” and “associate”

43

• (1) In paragraph (c) of subsection (3) of section 105 of the Banking Act (meaning of “director, controller” etc.), for the words from “either alone” to the end there shall be substituted the words “satisfies the requirements of this paragraph”; and at the end of that subsection there shall be inserted the words

and (e) a person who is, or would be if he were an undertaking, a parent undertaking of the institution.

• (2) For subsection (4) of that section there shall be substituted the following subsections—

(3A) A person satisfies the requirements of subsection (3)(c) above in relation to an institution if, either alone or with any associate or associates— (a) he holds 10 per cent. or more of the shares in the institution or another institution of which it is a subsidiary undertaking; (b) he is entitled to exercise, or control the exercise of, 10 per cent. or more of the voting power at any general meeting of the institution or another institution of which it is such an undertaking; or (c) he is able to exercise a significant influence over the management of the institution or another institution of which it is such an undertaking by virtue of— (i) a holding of shares in; or (ii) an entitlement to exercise, or control the exercise of, the voting power at any general meeting of, the institution or, as the case may be, the other institution concerned; and in this subsection 'share' has the same meaning as in Part VII of the Companies Act 1985 or Part VIII of the Companies (Northern Ireland) Order 1986. (4) A person who is a controller of an institution by virtue of subsection (3)(c) above is in this Act referred to as a "shareholder controller' of the institution; and in this Act— (a) a "minority shareholder controller' means a shareholder controller not falling within paragraph (a) or (b) of subsection (3A) above; (b) a "10 per cent. shareholder controller' means a shareholder controller in whose case the percentage referred to in the relevant paragraph is 10 or more but less than 20; (c) a "20 per cent. shareholder controller' means a shareholder controller in whose case that percentage is 20 or more but less than 33; (d) a "33 per cent. shareholder controller' means a shareholder controller in whose case that percentage is 33 or more but less than 50; (e) a "50 per cent. shareholder controller' means a shareholder controller in whose case that percentage is 50 or more; (f) a "majority shareholder controller' means a shareholder controller in whose case that percentage is 50 or more but less than 75; and (g) a "principal shareholder controller' means a shareholder in whose case that percentage is 75 or more; and in this subsection "the relevant paragraph', in relation to a shareholder controller, means whichever one of paragraphs (a) and (b) of subsection (3A) above gives the greater percentage in his case.

• (3) After subsection (5) of that section there shall be inserted the following subsection—

(5A) A person who is a controller of an institution by virtue of subsection (3)(e) above is in this Act referred to as a 'parent controller' of the institution.

• (4) For subsections (9) and (10) of that section there shall be substituted the following subsections—

(9) In this Act 'associate', in relation to a person entitled to exercise or control the exercise of voting power in relation to, or holding shares in, an undertaking, means— (a) the wife or husband or son or daughter of that person; (b) the trustees of any settlement under which that person has a life interest in possession or, in Scotland, a life interest; (c) any company of which that person is a director; (d) any person who is an employee or partner of that person; (e) if that person is a company— (i) any director of that company; (ii) any subsidiary undertaking of that company; and (iii) any director or employee of any such subsidiary undertaking; and (f) if that person has with any other person an agreement or arrangement with respect to the acquisition, holding or disposal of shares or other interests in that undertaking or body corporate or under which they undertake to act together in exercising their voting power in relation to it, that other person. (10) For the purposes of subsection (9) above— - 'son' includes stepson and "daughter' includes stepdaughter; - 'settlement' includes any disposition or arrangement under which property is held in trust.

Meaning of “related company”

44

• (1) For subsection (1) of section 105A of the Banking Act[^f00038] (meaning of “related company”) there shall be substituted the following subsection—

(1) In this Act a 'related company', in relation to an institution or the parent undertaking of an institution, means a body corporate (other than a subsidiary undertaking) in which the institution or parent undertaking holds a qualifying capital interest.

• (2) In subsection (2) of that section, for the words “holding company” there shall be substituted the words “parent undertaking”.

Other interpretation of Banking Act

45

• (1) In subsection (1) of section 106 of the Banking Act (interpretation)—

• (a) after the definition of “municipal bank” there shall be inserted the following definition—

'parent controller' has the meaning given in section 105(5A) above;

• (b) for the definition of “relevant supervisory authority” there shall be substituted the following definition—

• 'relevant supervisory authority'— in relation to another member State, has the meaning given in regulation 2 of the Banking Coordination (Second Council Directive) Regulations 1992; in relation to any other country or territory outside the United Kingdom, means the authority discharging in that country or territory functions corresponding to those of the Bank under this Act;

; and

• (c) for the definition of “shareholder controller” and related definitions there shall be substituted the following definitions—

• 'shareholder controller', 'minority shareholder controller', '10 per cent. shareholder controller', "20 per cent. shareholder controller', "33 per cent. shareholder controller', "50 per cent. shareholder controller', "majority shareholder controller' and "principal shareholder controller' have the meanings given in section 105(4) above

• (2) After subsection (2) of that section there shall be inserted the following subsection—

(2A) In this Act the following expressions, namely— - another member State; - connected UK authority; - credit institution; - European authorised institution; - the First Council Directive; - home State; - listed activity; - parent undertaking; - recognised self-regulating organisation; - relevant supervisory authority; - the Second Council Directive; - subsidiary undertaking; - supervisory authority; - undertaking, have the same meanings as in the Banking Coordination (Second Council Directive) Regulations 1992.

Miscellaneous

Savings for certain institutions

46

The Banking Act[^f00039] shall have effect—

• (a) in relation to institutions which are not credit institutions incorporated in or formed under the law of a part of the United Kingdom, without the amendments made by regulations 27, 31(1), 34, 36, 37 and 43 to 45 above; and

• (b) in relation to information relating to the business or other affairs of institutions which are authorised institutions within the meaning of that Act but are not credit institutions, without the amendments made by regulations 38, 39(2) to (4) and 40 to 42 above.

Other amendments of Banking Act

47

The provisions of the Banking Act which are mentioned in Schedule 8 to these Regulations shall have effect subject to the amendments there specified.

PART V — AMENDMENTS OF FINANCIAL SERVICES ACT

Authorisation by membership of recognised self-regulating organisations

48

• (1) Section 7 of the Financial Services Act (authorisation by membership of recognised self-regulating organisation) shall have effect as if it included provision that an institution which—

• (a) is a European institution or quasi-European authorised institution; and

• (b) is a member of a recognised self-regulating organisation,

is not, by virtue of its membership of that organisation, an authorised person as respects any home-regulated investment business.

• (2) Paragraph 2 of Schedule 2 to that Act[^f00040] (requirements for recognition of self-regulating organisations) shall have effect as if it included provision that the rules and practices of the organisation must be such as to secure that where—

• (a) a UK authorised institution applies for admission as a member of the organisation; and

• (b) the institution states in its application that it proposes to carry on investment business which consists of or includes a listed activity,

the institution shall not be admitted as a member unless the UK authority has notified the organisation that, were the institution so admitted, the UK authority would not by reason of that proposal exercise any of its relevant powers.

• (3) In this regulation “relevant powers” means—

• (a) in relation to the Bank, the powers conferred on it by section 11 or 12 of the Banking Act (power to revoke or restrict authorisations);

• (b) in relation to the Commission, the powers conferred on it by section 42 or 43 of the Building Societies Act (power to impose conditions on or revoke authorisations).

Applications for authorisation

49

Section 26 of the Financial Services Act (applications for authorisation) shall have effect as if it included provision that an application for authorisation in respect of any home-regulated investment business may not be made by—

• (a) a European authorised institution or quasi-European authorised institution; or

• (b) a European subsidiary which has not applied for a direction under paragraph 5 of Schedule 2 to these Regulations.

Grant and refusal of authorisation

50

• (1) Section 27 of the Financial Services Act (grant and refusal of authorisation) shall have effect as if it included provision that—

• (a) where a European institution or quasi-European authorised institution holds an authorisation granted under that section, the institution is not by virtue of that authorisation an authorised person as respects any home-regulated investment business;

• (b) where an application for authorisation in respect of any home-regulated investment business is made by a European subsidiary which has applied for a direction under paragraph 5 of Schedule 2 of these Regulations, the Secretary of State shall not grant the application unless he is satisfied that the institution will cease to be a European subsidiary on or before the date when the authorisation takes effect; and

• (c) for the purposes of determining whether to grant or refuse an application in respect of any other investment business made by a European subsidiary, the fact that the subsidiary is subject to supervision pursuant to article 18(2) of the Second Council Directive shall be taken into account.

• (2) That section shall also have effect as if it included provision that where—

• (a) a UK authorised institution applies for authorisation; and

• (b) the institution states in its application that it proposes to carry on investment business which consists of or includes a listed activity,

the Board shall not grant the authorisation unless the UK authority has notified the Board that, were the authorisation granted, the UK authority would not by reason of that proposal exercise any of its relevant powers.

• (3) In this regulation “relevant powers” has the same meaning as in regulation 48 above.

Authorisation in other member State

51

Section 31 of the Financial Services Act (authorisation in other member State) shall have effect as if it included provision that an institution to which that section applies and which is a European institution or quasi-European authorised institution is not, by virtue of that section, an authorised person as respects any home-regulated investment business.

Exempted persons

52

• (1) Section 43 of the Financial Services Act (listed money market institutions) shall have effect as if it included provision that an institution which—

• (a) is a European institution or quasi-European authorised institution; and

• (b) is for the time being included in a list maintained for the purposes of that section,

is not, by virtue of its inclusion in that list, an exempted person as respects any homeregulated investment business.

• (2) That section shall also have effect as if it included provision that the conditions and arrangements referred to in subsection (2) must be such as to secure that no European institution, other than one on which an absolute prohibition has been imposed under regulation 15 of these Regulations, is refused admission to the list, or removed from it, for reasons relating to—

• (a) the fitness of the institution to be included in the list;

• (b) the financial standing of the institution; or

• (c) any other matter for which, under the Second Council Directive, responsibility is reserved to a supervisory authority in the institution’s home State.

Reciprocal facilities for banking business

53

• (1) No notice shall be served under section 183 of the Financial Services Act (reciprocal facilities for financial business) on a credit institution incorporated in or formed under the law of any part of the United Kingdom which—

• (a) appears to the Secretary of State or the Treasury to be a subsidiary undertaking of a person connected with a country outside the United Kingdom; and

• (b) is carrying on, or appears to the Secretary of State or the Treasury to intend to carry on, any investment, insurance or banking business in, or in relation to, the United Kingdom,

if the sole ground for giving that notice is the ground specified in paragraph (2) below.

• (2) The ground referred to in paragraph (1) above is that it appears to the Secretary of State or the Treasury that by reason of—

• (a) the law of the country concerned; or

• (b) any action taken by, or the practices of, the government or any other authority or body in that country,

credit institutions connected with the United Kingdom are unable to carry on banking business in, or in relation to, that country on terms as favourable as those on which credit institutions connected with that country are able to carry on such business in, or in relation to, the United Kingdom.

The Board’s functions under the Regulations

54

The functions of the Board under these Regulations shall be treated for the purposes of the Financial Services Act and the Transfer of Functions (Financial Services) Order 1992[^f00041] as if they were functions under Chapter VI of Part I of that Act which—

• (a) had been functions of the Secretary of State; and

• (b) had been transferred to the Board by the Financial Services Act 1986 (Delegation) Order 1987[^f00042].

Other amendments of Financial Services Act

55

The provisions of the Financial Services Act which are mentioned in Schedule 9 to these Regulations shall have effect subject to the amendments there specified.

Construction of Part V

56

• (1) In this Part of these Regulations “authorised person” has the same meaning as in the Financial Services Act.

• (2) If and to the extent that a European institution is an authorised person, nothing in this Part of these Regulations, except regulations 48(1), 50(1) and 51 and paragraphs 5, 6, 11(2), 20 and 30 of Schedule 9, shall affect the operation of the Financial Services Act in relation to it.

PART VI — AMENDMENTS OF CONSUMER CREDIT ACT

Effect of standard licence

57

• (1) Section 22 of the Consumer Credit Act[^f00043] (standard and group licences) shall have effect as if it included provision that a standard licence held by a European institution or quasi-European authorised institution does not cover the carrying on by that institution of any home-regulated activities.

• (2) In this regulation and regulation 58 below “standard licence” has the meaning given by section 22(1)(a) of the Consumer Credit Act.

Grant of standard licence

58

• (1) Section 25 of the Consumer Credit Act (licensee to be a fit person) shall have effect as if—

• (a) it included provision that a standard licence shall not be issued to a European institution or quasi-European authorised institution in respect of any homeregulated activities; and

• (b) the reference in subsection (2)(b) to any provision made by or under that Act, or by or under any enactment regulating the provision of credit to individuals or other transactions with individuals, included a reference to any corresponding provision in force in another member State.

• (2) That section shall also have effect as if it included provision that where—

• (a) a UK authorised institution applies for a standard licence; and

• (b) the institution states in its application that it proposes to carry on a Consumer Credit Act business which consists of or includes one or more listed activities, the Director shall not grant the licence unless the UK authority has notified the Director that, were the licence granted, the UK authority would not by reason of that proposal exercise any of its relevant powers.

• (3) In paragraph (2) above “relevant powers” means—

• (a) in relation to the Bank, the powers conferred on it by section 11 or 12 of the Banking Act (power to revoke or restrict authorisations);

• (b) in relation to the Commission, the powers conferred on it by section 42 or 43 of the Building Societies Act (power to impose conditions on or revoke authorisations).

Conduct of business

59

• (1) Section 26 of the Consumer Credit Act (conduct of business), and any existing regulations made otherwise than by virtue of section 54 of that Act, shall have effect as if any reference to a licensee included a reference to a European institution carrying on a Consumer Credit Act business.

• (2) Section 54 of that Act (conduct of business regulations), and any existing regulations made by virtue of that section, shall have effect as if any reference to a licensee who carries on a consumer credit business, a consumer hire business or a business of credit brokerage, debt-adjusting or debt-counselling included a reference to a European institution who carries on such a business.

• (3) In this regulation “existing regulations” means regulations made under section 26 of that Act before the commencement date.

The register

60

Section 35 of the Consumer Credit Act (the register) shall have effect as if the particulars to be included in the register included—

• (a) particulars of information received by the Director under regulation 13 above;

• (b) particulars of prohibitions and restrictions imposed by him under regulation 18 or 19 above;

• (c) such particulars of documents received by him under paragraph 3(3), 4(3) or 5(4) of Schedule 2 to these Regulations as he thinks fit; and

• (d) particulars of such other matters (if any) arising under these Regulations as he thinks fit.

Enforcement of agreements

61

• (1) Section 40 of the Consumer Credit Act (enforcement of agreements by unlicensed trader) shall have effect as if the reference in subsection (1) to a regulated agreement, other than a non-commercial agreement, made when the creditor or owner was unlicensed did not include a reference to such an agreement made when the creditor or owner was a relevant institution.

• (2) Section 148 of that Act (enforcement of agreement for services of unlicensed trader) shall have effect as if the reference in subsection (1) to an agreement for the services of a person carrying on an ancillary credit business made when that person was unlicensed did not include a reference to such an agreement made when that person was a relevant institution.

• (3) Section 149 of that Act (enforcement of regulated agreements made on the introduction of an unlicensed credit-broker) shall have effect as if references in subsections (1) and (2) to introductions by an unlicensed credit-broker did not include references to introductions by a credit-broker who was a relevant institution.

• (4) In this regulation “relevant institution” means a European institution—

• (a) to which regulation 5(1)(c) above applies; and

• (b) which is not precluded from making the agreement or introductions in question by a restriction imposed under regulation 19 above.

Restrictions on disclosure of information

62

Section 174 of the Consumer Credit Act[^f00044] (restrictions on disclosure of information) shall have effect as if in subsection (3A)—

• (a) the reference to the Bank’s functions under the Banking Act included a reference to its functions under these Regulations; and

• (b) the reference to the Director’s functions under the Consumer Credit Act included a reference to his functions under these Regulations.

Power to modify subordinate legislation in relation to European institutions

63

• (1) If the Secretary of State is satisfied that it is necessary to do so for the purpose of implementing the Second Council Directive so far as relating to any particular European institution, he may, on the application or with the consent of the institution, by order direct that all or any of the provisions of—

• (a) any regulations made under section 26 of the Consumer Credit Act[^f00045]; or

• (b) any regulations or orders made under Parts IV to VIII of that Act[^f00046],

shall not apply to the institution or shall apply to it with such modifications as may be specified in the order.

• (2) An order under this regulation may be subject to conditions.

• (3) An order under this regulation may be revoked at any time by the Secretary of State; and the Secretary of State may at any time vary any such order on the application or with the consent of the European institution to which it applies.

PART VII — AMENDMENTS OF INSURANCE COMPANIES ACT

Withdrawal of authorisation

64

Section 13 of the Insurance Companies Act[^f00047] (final withdrawal of authorisation) shall have effect as if it included provision that, where a European subsidiary is authorised under section 3 of that Act to carry on insurance business of any class, the Secretary of State may, on the application of that institution, direct that it shall cease to be authorised to carry on business of that class.

Application of Part II of Act

65

Part II of the Insurance Companies Act (regulation of insurance companies) shall not apply to a European institution by reason only that it carries on in the United Kingdom a listed activity which it is authorised or permitted to carry on in its home State.

Meaning of “insurance business”

66

For the purposes of section 95 of the Insurance Companies Act (insurance business), a European institution carrying on a listed activity which it is authorised or permitted to carry on in its home State shall be treated as if it were carrying on a banking business.

PART VIII — AMENDMENTS OF BUILDING SOCIETIES ACT

Constitution

Establishment of building societies

67

At the end of subsection (1) of section 5 of the Building Societies Act[^f00048] (establishment, constitution and powers) there shall be inserted the words “and its principal office is in the United Kingdom”.

Initial authorisation to raise funds and borrow money

68

• (1) In subsection (4) of section 9 of the Building Societies Act (initial authorisation to raise funds and borrow money), the word “and” immediately following paragraph (c) shall be omitted and after that paragraph there shall be inserted the following paragraph—

(cc) each of the persons who, either alone or with any associate or associates, has a qualifying holding in the society is a fit and proper person to have such a holding; and

• (2) In subsection (13) of that section—

• (a) in the definition of “the prescribed minimum”, for the words “£100,000” there shall be substituted the words “ecu 1 million (or an amount of equal value denominated wholly or partly in another unit of account)”; and

• (b) the word “and” immediately preceding the definition of “qualifying deferred shares” shall be omitted and after that definition there shall be inserted the following definition—

• 'qualifying holding', in relation to a building society, means a holding of deferred shares in the society which— represents 10 per cent. or more of the qualifying deferred shares in the society; entitles the holder to exercise or control the exercise of 10 per cent. or more of the voting power at any general meeting of the society; or enables the holder to exercise a significant influence over the management of the society.

Powers of control of Commission

Power to direct application to renew authorisation

69

In subsection (6) of section 41 of the Building Societies Act[^f00049] (power to direct application to renew authorisation), the word “and” immediately following paragraph (d) shall be omitted and after that paragraph there shall be inserted the following paragraph—

(dd) each of the persons who, either alone or with any associate or associates, has a qualifying holding in the society is a fit and proper person to have such a holding; and

Imposition of conditions on current authorisation

70

In subsection (5) of section 42 of the Building Societies Act (imposition of conditions on current authorisation), the word “and” immediately before paragraph (c) shall be omitted and after that paragraph there shall be inserted the words

and (d) require any person who, either alone or with any associate or associates, has a qualifying holding in the society so to reduce that holding that it ceases to be such a holding.

Revocation of authorisation

71

• (1) After subsection (1) of section 43 of the Building Societies Act (revocation of authorisation) there shall be inserted the following subsection—

(1A) The Commission may, subject to subsection (4) below, revoke a building society’s authorisation if— (a) it appears to the Commission that the society’s principal place of business is or may be outside the United Kingdom; (b) it appears to the Commission that the society has carried on in the United Kingdom or elsewhere a listed activity (other than the acceptance of deposits or other repayable funds from the public) without having given prior notice to the Commission of its intention to do so; (c) the Commission is informed by The Securities and Investments Board, or a connected UK authority having regulatory functions in relation to the provision of financial services, that the society— (i) has contravened any provision of the Financial Services Act 1986 or any rules or regulations made under it; (ii) in purported compliance with any such provision, has furnished that Board or authority with false, misleading or inaccurate information; (iii) has contravened any prohibition or requirement imposed under that Act; or (iv) has failed to comply with any statement of principle issued under that Act; (d) the Commission is informed by the Director General of Fair Trading that the society, or any of the society’s employees, agents or associates (whether past or present), has done any of the things specified in paragraphs (a) to (d) of section 25(2) of the Consumer Credit Act 1974; (e) it appears to the Commission that the society has failed to comply with any obligation imposed on it by the Banking Coordination (Second Council Directive) Regulations 1992; or (f) the Commission is informed by a supervisory authority in another member State that the society has failed to comply with any obligation imposed on it by or under any rule of law in force in that State for purposes connected with the implementation of the Second Council Directive.

• (2) In subsection (4) of that section, for the words “subsection (1)” there shall be substituted the words “subsection (1) or (1A)”.

• (3) In subsection (5) of that section, for the words “subsection (1) or (3)” there shall be substituted the words “subsection (1), (1A) or (3)”.

• (4) After subsection (9) of that section there shall be inserted the following subsection—

(9A) The rules and prohibitions referred to in subsection (1A)(c) above include the rules of any recognised self-regulating organisation of which the society is a member and any prohibition imposed by virtue of those rules; and in subsection (1A)(d) above associate' has the same meaning as in section 25(2) of the Consumer Credit Act 1974.

Reauthorisation

72

• (1) In subsection (4) of section 44 of the Building Societies Act (reauthorisation), the word “and” immediately following paragraph (d) shall be omitted and after that paragraph there shall be inserted the following paragraph—

(dd) each of the persons who, either alone or with any associate or associates, has a qualifying holding in the society is a fit and proper person to have such a holding; and

• (2) After subsection (9) of that section there shall be inserted the following subsection—

(9A) Any expression used in this section to which a meaning is given by section 9(13) has that meaning in this section.

Criteria for prudent management

73

In subsection (3) of section 45 of the Building Societies Act (criteria for prudent management), for the first criterion there shall be substituted the following criterion—

(1) Maintenance of— (a) adequate reserves and other designated capital resources; and (b) own funds which amount to not less than the sum which, for the purposes of section 9, is the prescribed minimum in relation to qualifying capital.

Exercise of powers on information from supervisory authority

74

After section 45 of the Building Societies Act there shall be inserted the following section—

(45A) (1) This section applies where, in the case of a building society for which an authorisation is in force, the Commission is informed by a supervisory authority in another member State that the society is failing to comply with an obligation imposed by or under any rule of law in force in that State for purposes connected with the implementation of the Second Council Directive. (2) The Commission shall as soon as practicable send a copy of the information received by it to every other authority which it knows is a connected UK authority. (3) The Commission shall also— (a) consider whether to exercise its powers— (i) under section 42, to impose conditions on the society’s authorisation, or (ii) under section 43, to revoke the society’s authorisation; and (b) notify its decision, and any action which it has taken or intends to take, to the supervisory authority and to every other authority which it knows is a connected UK authority.

Information

Power of Commission to obtain information and documents etc.

75

In subsection (1) of section 52 of the Building Societies Act (powers to obtain information and documents etc.), for the words from “any of its functions” to the end there shall be substituted the following paragraphs—

(a) any of its functions under Part I, section 9, the foregoing sections of this Part, Part X and sections 107 and 108; and (b) any of its functions under the Banking Coordination (Second Council Directive) Regulations 1992.

Confidentiality of certain information obtained by Commission

76

• (1) In subsection (2) of section 53 of the Building Societies Act (confidentiality of certain information obtained by Commission), paragraph (g) shall be omitted.

• (2) After that subsection there shall be inserted the following subsection—

(2A) As regards the disclosure of information with a view to the institution of, or otherwise for the purposes of, any proceedings in respect of the society under the Bankruptcy (Scotland) Act 1985[^f00050] or the Insolvency Act 1986[^f00051], the disclosures permitted by subsection (2)(b) above do not include the disclosure of information relating to a person who (not being a director or other officer of the society) is or has been, to the knowledge of the Commission, involved in an attempt to secure the survival of the society as a going concern.

• (3) In subsection (4)(a) of that section, after sub-paragraph (ii) there shall be inserted the words “and (in either case) the disclosure would, in its opinion, be in accordance with article 12(7) of the First Council Directive”.

• (4) In subsection (5) of that section[^f00052], for paragraph (b) there shall be substituted the following paragraph—

(b) by the Bank, of any of its functions under the Banking Act 1987 or as a monetary authority or supervisor of money market and gilt market institutions;

• (5) In subsection (6) of that section, for the words from “it is desirable” to the end there shall be substituted the following paragraphs—

(a) it is desirable or expedient that the information should be disclosed in the interests of shareholders or depositors or, in the case of information for the Secretary of State, in the public interest; and (b) disclosure is in accordance with article 12(7) of the First Council Directive.

• (6) At the end of subsection (7) of that section there shall be inserted the words “if the disclosure is made with a view to facilitating the discharge of any of the functions mentioned in paragraph (b) or, as the case may be, paragraph (c) above”.

• (7) At the end of subsection (8) of that section there shall be inserted the words “if the disclosure is made with a view to facilitating the discharge of any prescribed functions of the authority”.

• (8) In subsection (9)(a) of that section, for the words “the functions” there shall be substituted the words “the supervisory functions”.

• (9) After subsection (11) of that section there shall be inserted the following subsection—

(11A) Subsection (11) above does not apply in relation to disclosures to an overseas regulatory authority which is not a supervisory authority in another member State unless the Commission is satisfied that the authority is subject to restrictions on further disclosures at least equivalent to those imposed by this section and section 54.

• (10) After subsection (13) of that section there shall be inserted the following subsections—

(13A) Information which is disclosed to a person with a view to facilitating or assisting the discharge of any functions shall not be used otherwise than with a view to facilitating or assisting the discharge of those functions. (13B) Any person who uses information in contravention of subsection (13A) above shall be liable on summary conviction to imprisonment for a term not exceeding three months or to a fine not exceeding level 5 on the standard scale or to both.

• (11) After subsection (14) of that section there shall be inserted the following subsections—

(15) Any reference in this section to facilitating or assisting the discharge of any functions is a reference to facilitating or assisting the discharge of those functions in relation to— (a) a financial market; or (b) persons carrying on the business of banking or insurance, Consumer Credit Act businesses or the business of providing other financial services; and in this subsection 'Consumer Credit Act business' has the same meaning as in the Banking Coordination (Second Council Directive) Regulations 1992. (16) Any reference in this section or section 54 to the Commission’s functions under this Act includes a reference to its functions under those Regulations.

Information disclosed to Commission from other sources

77

• (1) After subsection (3) section 54 of the Building Societies Act[^f00053] (information disclosed to Commission from other sources) there shall be inserted the following subsections—

(3A) If information is disclosed by the Bank of England to the Commission for the purpose of enabling it better to discharge its functions under this Act— (a) subsection (1) of section 53 applies to that information as it applies to information obtained or furnished under or for the purposes of this Act; but (b) the references in subsections (2) to (11) of that section to the disclosure of information do not extend to the disclosure of that information unless— (i) the Bank of England consents to the disclosure; and (ii) the disclosure is for the purpose of enabling the Commission better to discharge its functions under this Act. (3B) If information is disclosed to the Commission by the relevant supervisory authority in another member State, or is obtained by the Commission, or by a person acting on its behalf, in another member State— (a) subsection (1) of section 53 applies to that information as it applies to information obtained or furnished under or for the purposes of this Act; but (b) the references in subsections (2) to (11) of that section to the disclosure of information do not extend to the disclosure of that information unless— (i) in the case of information disclosed to the Commission by the relevant supervisory authority in another member State, that authority consents to its disclosure; or (ii) in the case of information obtained by the Commission, or by a person acting on its behalf, in another member State, the relevant supervisory authority in that State consents to its disclosure.

• (2) In subsection (6) of that section, after the words “overseas regulatory authority” there shall be inserted the words “which is not the relevant supervisory authority in another member State”.

Accounts and audit

Accounting records and systems of business control etc.

78

After subsection (10) of section 71 of the Building Societies Act[^f00054] (accounting records and systems of business control etc.) there shall be inserted the following subsection—

(10A) The Commission may, for the purpose of implementing the Council Directive on the supervision of credit institutions on a consolidated basis (No. 92/30/EEC)[^f00055], direct that subsection (10) above shall have effect in relation to any building society specified in the direction as if any associated body of the society so specified were linked to it by resolution.

Miscellaneous and supplemental

Service of notices

79

After subsection (1) of section 115 of the Building Societies Act (service of notices) there shall be inserted the following subsection—

(1A) This section also has effect in relation to any notice or other document required or authorised by or under any provision of the Banking Coordination (Second Council Directive) Regulations 1992 to be served on any person by the Commission.

Meaning of “associate”

80

After section 118 of the Building Societies Act there shall be inserted the following section—

(118A) (1) In this Act 'associate', in relation to a person holding deferred shares in, or entitled to exercise or control the exercise of voting power in relation to, a building society, means— (a) the wife or husband or son or daughter of that person; (b) the trustees of any settlement under which that person has a life interest in possession or, in Scotland, a life interest; (c) any company of which that person is a director; (d) any person who is an employee or partner of that person; (e) if that person is a company— (i) any director of that company; (ii) any subsidiary undertaking of that company; and (iii) any director or employee of any such subsidiary undertaking; and (f) if that person has with any other person an agreement or arrangement with respect to the acquisition, holding or disposal of deferred shares in that society or under which they undertake to act together in exercising their voting power in relation to it, that other person. (2) For the purposes of this section— - 'son' includes stepson and "daughter' includes stepdaughter; - 'settlement' includes any disposition or arrangement under which property is held in trust.

Other interpretation of Building Societies Act

81

After subsection (2) of section 119 of the Building Societies Act (interpretation) there shall be inserted the following subsection—

(2A) In this Act the following expressions, namely— - another member State; - connected UK authority; - ecu; - the First Council Directive; - listed activity; - own funds; - recognised self-regulating organisation; - relevant supervisory authority; - the Second Council Directive; - supervisory authority, have the same meanings as in the Banking Coordination (Second Council Directive) Regulations 1992.

PART IX — SUPPLEMENTAL

Minor and consequential amendments

82

• (1) The provisions mentioned in Schedule 10 to these Regulations shall have effect subject to the amendments there specified, being minor amendments or amendments consequential on the provisions of these Regulations.

• (2) Any deed, contract or other instrument made before the commencement date shall have effect, unless the context otherwise requires, as if any reference to an institution authorised by the Bank under the Banking Act (however expressed) included a reference to a European deposit-taker.

• (3) In this regulation and Schedule 10 to these Regulations “European deposit-taker” means a European authorised institution which has lawfully established a branch in the United Kingdom for the purpose of accepting deposits.

Transitional provisions and savings

83

Schedule 11 to these Regulations shall have effect with respect to the transitional and other matters there mentioned.

SCHEDULE 1 — ANNEX TO THE SECOND COUNCIL DIRECTIVE

SCHEDULE 2 — REQUIREMENTS AS RESPECTS EUROPEAN INSTITUTIONS

Requirements for carrying on activities etc.

1

• (1) In relation to the carrying on of a home-regulated activity by the provision of services, the requirements of this paragraph are that the institution has given to the relevant supervisory authority in its home State a notice in accordance with paragraph 2 below.

• (2) In relation to the establishment of a branch, the requirements of this paragraph are—

• (a) that the institution has given to the relevant supervisory authority in its home State a notice in accordance with paragraph 2 below;

• (b) that the Bank has received from that authority a notice in accordance with paragraph 3 below; and

• (c) that either—

• (i) the Bank has informed the institution that it may establish the branch; or

• (ii) the period of two months beginning with the day on which the Bank received the notice mentioned in paragraph (b) above has elapsed.

2

A notice given by an institution to the relevant supervisory authority in its home State is given in accordance with this paragraph if it states—

• (a) the United Kingdom to be a member State in which the institution proposes to carry on home-regulated activities;

• (b) whether the institution intends to establish a branch in the United Kingdom;

• (c) if the notice states that the institution does not intend to establish such a branch, the home-regulated activities in relation to which the notice is given; and

• (d) if the notice states that the institution intends to establish such a branch, the requisite details of the branch.

3

• (1) A notice given in respect of a European authorised institution or quasi-European authorised institution by the relevant supervisory authority in its home State is in accordance with this paragraph if it—

• (a) certifies that the institution is a credit institution which is for the time being authorised to act as such an institution by the authority;

• (b) contains the information stated in the institution’s notice; and

• (c) if the institution intends to establish a branch in the United Kingdom, contains—

• (i) a statement of the amount of the institution’s own funds and the solvency ratio of the institution (calculated in accordance with the Solvency Ratio Directive[^f00056]); and

• (ii) details of any deposit guarantee scheme which is intended to secure the protection of depositors in the branch.

• (2) A notice given in respect of a European subsidiary or quasi-European subsidiary by the relevant supervisory authority in its home State is in accordance with this paragraph if it—

• (a) certifies that the institution is a financial institution which is a 90 per cent. subsidiary undertaking of a European institution incorporated in or formed under the law of that State;

• (b) certifies that the conditions mentioned in regulation 3(6) of these Regulations are fulfilled in relation to the institution;

• (c) certifies that the institution’s business is being conducted in a prudent manner;

• (d) contains the information stated in the institution’s notice; and

• (e) if the institution intends to establish a branch in the United Kingdom, contains a statement of the amount of the institution’s own funds and the consolidated solvency ratio of the institution’s parent undertaking (calculated in accordance with the Solvency Ratio Directive).

• (3) The Bank shall as soon as practicable send a copy of any notice received by it in accordance with this paragraph, and a note of the date of its receipt, to every other authority which it knows is a connected UK authority.

Requirements for changing requisite details of branch

4

• (1) Subject to sub-paragraph (2) below, the requirements of this paragraph are—

• (a) that the institution has given a notice to the Bank, and to the relevant supervisory authority in its home State, stating the details of the proposed change;

• (b) that the Bank has received from that authority a notice stating those details; and

• (c) that either the Bank has informed the institution that it may make the change, or the period of one month beginning with the day on which it gave the Bank the notice mentioned in paragraph (a) above has elapsed.

• (2) In the case of a change occasioned by circumstances beyond the institution’s control, the requirements of this paragraph are that the institution has, as soon as practicable (whether before or after the change), given a notice to the Bank, and to the relevant supervisory authority in its home State, stating the details of the change.

• (3) The Bank shall as soon as practicable send a copy of any notice received by it in accordance with this paragraph, and a note of the date of its receipt, to every other authority which it knows is a connected UK authority.

Cancellation of compliance with certain requirements

5

• (1) The Bank may, on an application by a European subsidiary, direct that any compliance with the requirements of paragraph 1 above in relation to—

• (a) its carrying on of any activity; or

• (b) its establishment of a branch,

shall cease to have effect as from such date as may be specified in the direction.

• (2) The Bank shall not give a direction under this paragraph unless—

• (a) the applicant has given notice of the application to the relevant supervisory authority in its home State; and

• (b) the Bank has agreed with that authority that the direction should be given.

• (3) The date specified in a direction under this paragraph—

• (a) shall not be earlier than the date requested in the application; but

• (b) subject to that, shall be such date as may be agreed between the Bank and the relevant supervisory authority.

• (4) The Bank shall as soon as practicable send a copy of any direction given under this paragraph to the applicant, to the relevant supervisory authority and to every other authority which it knows is a connected UK authority.

SCHEDULE 3 — PROHIBITIONS AND RESTRICTIONS BY THE BANK

Preliminary

1

In this Schedule—

• “prohibition” means a prohibition under regulation 9 of these Regulations;

• “restriction” means a restriction under regulation 10 of these Regulations.

Notice of prohibition or restriction in non-urgent cases

2

• (1) Subject to paragraph 3 below, where the Bank proposes, in relation to a European institution—

• (a) to impose a prohibition;

• (b) to impose a restriction; or

• (c) to vary a restriction otherwise than with the agreement of the institution,

the Bank shall give notice of its proposal to the institution and to every other authority which it knows is a connected UK authority.

• (2) If the proposed action is within paragraph (b) or (c) of sub-paragraph (1) above, the notice under that sub-paragraph shall specify the proposed restriction or, as the case may be, the proposed variation.

• (3) A notice under sub-paragraph (1) above shall state the grounds on which the Bank proposes to act and give particulars of the institution’s rights under sub-paragraph (5) below.

• (4) Where a proposed restriction consists of or includes a condition requiring the removal of any person as director, controller or manager, the Bank shall give that person a copy of the notice mentioned in sub-paragraph (1) above, together with a statement of his rights under sub-paragraph (5) below.

• (5) An institution which is given a notice under sub-paragraph (1) above and a person who is given a copy under sub-paragraph (4) above may, within the period of 14 days beginning with the day on which the notice was given, make representations to the Bank.

• (6) After giving a notice under sub-paragraph (1) above and taking into account any representations made under sub-paragraph (5) above, the Bank shall decide whether—

• (a) to proceed with the action proposed in the notice;

• (b) to take no further action;

• (c) if the proposed action was the imposition of a prohibition, to impose a restriction instead of or in addition to the prohibition; or

• (d) if the proposed action was the imposition or variation of a restriction, to impose a different restriction or make a different variation.

• (7) The Bank shall give—

• (a) the institution;

• (b) any such person as is mentioned in sub-paragraph (4) above; and

• (c) the relevant supervisory authority in the institution’s home State,

written notice of its decision and, except where the decision is to take no further action, the notice shall state the reasons for the decision and give particulars of the rights conferred by sub-paragraph (11) below and section 27 of the Banking Act[^f00057].

• (8) A notice under sub-paragraph (7) above shall be given—

• (a) within the period of 28 days beginning with the day on which the notice under sub-paragraph (1) above was given; or

• (b) where a reply of the relevant supervisory authority to a notice under regulation 11(3) of these Regulations was received during the second half of that period, within the period of 14 days beginning with the day on which that reply was so received;

and where such a reply was so received, the Bank shall give notice of that fact to the institution and to any such person as is mentioned in sub-paragraph (4) above.

• (9) If no notice under sub-paragraph (7) above is given within the period mentioned in sub-paragraph (8) above, the Bank shall be treated as having at the end of that period given a notice under that sub-paragraph to the effect that no further action is to be taken.

• (10) A notice under sub-paragraph (7) above imposing a prohibition or a restriction on an institution or varying a restriction shall, subject to section 27(4) of the Banking Act, have the effect of prohibiting the institution from accepting deposits in the United Kingdom or restricting its activities or varying the restriction in the manner specified in the notice.

• (11) Where the decision notified under sub-paragraph (7) above is to impose or vary a restriction otherwise than as stated in the notice given under sub-paragraph (1) above—

• (a) the institution concerned; and

• (b) in the case of a European institution, the relevant supervisory authority,

may, within the period of seven days beginning with the day on which the notice was given under sub-paragraph (7) above, make written representations to the Bank with respect to the restriction or variation and the Bank may, after taking those representations into account, alter the restriction.

• (12) The Bank may omit from the copy given to a person under sub-paragraph (4) above and from a notice given to him under sub-paragraph (7) above any matter which does not relate to him.

Notice of prohibition or restriction in urgent cases

3

• (1) No notice need be given in accordance with paragraph 2 above in respect of—

• (a) the imposition of a prohibition;

• (b) the imposition of a restriction; or

• (c) the variation of a restriction otherwise than with the agreement of the institution concerned,

in any case in which the Bank considers that the prohibition or restriction should be imposed, or the variation should be made, as a matter of urgency.

• (2) In any such case the Bank may by written notice to the institution impose the prohibition or restriction or make the variation.

• (3) Any such notice shall state the reasons for which the Bank has acted and particulars of the rights conferred by sub-paragraph (5) below and by section 27 of the Banking Act.

• (4) Where a restriction consists of or includes a condition requiring the removal of any person as director, controller or manager, the Bank shall give that person a copy of the notice mentioned in sub-paragraph (2) above, together with a statement of his rights under sub-paragraph (5) below.

• (5) An institution to which a notice is given under this paragraph and a person who is given a copy of it by virtue of sub-paragraph (4) above may within the period of 14 days beginning with the day on which the notice was given make representations to the Bank.

• (6) After giving a notice under sub-paragraph (2) above and taking into account any representations made in accordance with sub-paragraph (5) above, the Bank shall decide whether—

• (a) to confirm or rescind its original decision; or

• (b) to impose a different restriction or to vary the restriction in a different manner.

• (7) The Bank shall, within the period of 28 days beginning with the day on which the notice was given under sub-paragraph (2) above, give—

• (a) the institution; and

• (b) the relevant supervisory authority in the institution’s home State,

written notice of its decision under sub-paragraph (6) above and, except where the decision is to rescind the original decision, the notice shall state the reasons for the decision.

• (8) Where the notice under sub-paragraph (7) above is of a decision to take the action specified in sub-paragraph (6)(b) above, the notice under sub-paragraph (7) shall have the effect of imposing the prohibition or restriction, or making the variation specified in the notice, with effect from the date on which it is given.

Appeals

4

• (1) Section 27 of the Banking Act (rights of appeal) shall have effect as if—

• (a) the decisions mentioned in subsection (1) included a decision of the Bank to impose a prohibition or impose or vary a restriction; and

• (b) the reference in subsection (4) to the revocation of an institution’s authorisation included a reference to the imposition of a prohibition on the institution.

• (2) Section 29 of that Act (determination of appeals) shall have effect as if in subsection (2)(a)—

• (a) the reference to revoking an authorisation included a reference to imposing a prohibition; and

• (b) the reference to restricting an authorisation instead included a reference to imposing instead a restriction.

• (3) That section shall also have effect as if it included provision that, in the case of any appeal by a European institution, notice of the tribunal’s determination, together with a statement of its reasons, shall be given to the relevant supervisory authority in the institution’s home State.

Statement of principles

5

• (1) The Bank shall, as soon as practicable after the coming into force of these Regulations, publish in such manner as it thinks appropriate a statement of the principles in accordance with which it is acting or proposing to act in exercising its power to impose a prohibition on or to restrict the listed activities of a European institution.

• (2) Subsection (2) of section 16 of the Banking Act (statement of principles) shall apply for the purposes of sub-paragraph (1) above as it applies for the purpose of subsection (1) of that section.

SCHEDULE 4 — PROHIBITIONS BY THE BOARD

Notice of prohibition

1

• (1) Where the Board proposes—

• (a) to impose a prohibition on a European institution under regulation 15 of these Regulations; or

• (b) to refuse an application made by a European institution under paragraph (3) of that regulation,

it shall give the institution on which it proposes to impose the prohibition, or whose application it proposes to refuse, written notice of its intention to do so, stating the reasons for which it proposes to act.

• (2) In the case of a proposed prohibition the notice shall state the date on which it is proposed that the prohibition should take effect and, in the case of a limited prohibition, its proposed duration.

• (3) Where the reasons stated in a notice under sub-paragraph (1) above relate specifically to matters which—

• (a) refer to a person identified in the notice other than the institution concerned; and

• (b) are in the opinion of the Board prejudicial to that person in any office or employment,

the Board shall, unless it considers it impracticable to do so, serve a copy of the notice on that person.