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The Financial Services and Markets Act 2000 (Transitional Provisions) (Partly Completed Procedures) Order 2001

Type Statutory-Instrument

Publication 2001-11-06

Last updated 2020-12-31

State In force

Department King's Printer of Acts of Parliament

Source legislation.gov.uk

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(b) is treated as having been extended by any period added before commencement by virtue of paragraph 1(3) of Schedule 2D to the Insurance Companies Act[^f00029].

(3) Where, before commencement a preliminary notice was served on a person under section 60(3A) of the Insurance Companies Act[^f00030] but no notice of objection has been served in respect of that preliminary notice, then the preliminary notice ceases to have effect on commencement and the Authority must, as soon as practicable after commencement, notify the recipients of the notice of that fact.

(4) Paragraph (3) does not affect the power of the Authority to serve a notice under section 62(2) in respect of the application (effective by virtue of paragraph (1)).

(5) Where a request for information has been made under paragraph 1(2) of Schedule 2D to the Insurance Companies Act and it has not been complied with before commencement, that request has effect after commencement as a request made under section 60(3).

Notices under section 61 of the Insurance Companies Act

51

(1) Where—

(a) a person has served a notice under section 61(1)(a) of the Insurance Companies Act;

(b) no notice has been served before commencement objecting to or approving the appointment referred to in the notice;

(d) the appointment has not taken effect before commencement; and

(e) the performance after commencement by the person of the functions of the post for which he is proposed would require the approval of the Authority under section 59,

the company mentioned in the notice is to be treated as if it had made an application in accordance with section 60 for the Authority’s approval under section 59 for the performance by the person of the functions involved in the appointment.

(2) In relation to an application having effect under paragraph (1), the period of consideration for the purposes of section 183—

(a) is three months beginning with the date on which the notice served under section 61 of the Insurance Companies Act was received; but

(b) is treated as having been extended by any period added before commencement by virtue of paragraph 1(3) of Schedule 2D to the Insurance Companies Act.

(3) Where, before commencement a preliminary notice was served on a person under section 61(2) of the Insurance Companies Act but no notice of objection has been served in respect of that preliminary notice, then the preliminary notice ceases to have effect on commencement and the Authority must, as soon as practicable after commencement, notify the recipients of the notice of that fact.

(4) Paragraph (3) does not affect the power of the Authority to serve a notice under section 62(2) in respect of the application (effective by virtue of paragraph (1)).

Insurance Companies Act: miscellaneous provisions

52

(1) A preliminary notice served under paragraph 2(3) or 3(4) of Schedule 2D to the Insurance Companies Act ceases to have effect on commencement and the Authority must, as soon as practicable after commencement, notify the person on whom the notice was served of that fact (but this is without prejudice to the power of the Authority to serve a notice under section 63 on the person).

(2) Where—

(a) before commencement, a preliminary notice has been served under paragraph 4(2) of Schedule 2D to the Insurance Companies Act;

(b) no notice of objection has been served under paragraph 4(1) of that Schedule in respect of the matter covered in the notice;

(c) the person to whom the notice relates is a person who is treated as a person who has been approved by the Authority for the purposes of section 59,

the notice has effect after commencement as a warning notice served under section 63(3) giving notice of the Authority’s intention to withdraw its approval.

(3) The Authority must, as soon as practicable after commencement, serve a copy of the notice on any interested party (within the meaning of section 63) who has not previously received a copy.

(4) Notwithstanding section 392(a), sections 393 and 394 do not apply to a warning notice having effect by virtue of paragraph (2).

(5) A notice having effect under paragraph (2) is to be treated as if—

(a) it gave notice that the Authority proposes to withdraw its approval for that person;

(b) it stated that section 394 does not apply;

(d) the reference to making oral representations were omitted (without prejudice to any representations already made).

Notices in respect of bank or investment firm partners

53

(1) Where—

(a) a person has served a proposed partner notice before commencement;

(b) the proposed appointment referred to in the notice has not been approved by the Regulator before commencement and is not treated as having been approved by the expiry of any period within which objection may be made;

(d) the appointment has not taken effect before commencement; and

(e) the performance after commencement by the person of the functions of the post for which he is proposed would require the approval of the Authority under section 59,

the authorised person mentioned in the proposed partner notice is to be treated as if it had made an application under section 60 for the Authority’s approval under section 59 for the performance by the proposed partner of the functions involved in the appointment.

(2) In relation to an application having effect under paragraph (1), the period of consideration for the purposes of section 61(3)—

(a) is three months beginning with the date on which the Authority received the proposed partner notice; but

(b) is treated as having been extended by any period added before commencement by virtue of section 21(4) of the Banking Act or regulation 41(4) of the ISD Regulations.

(3) Where, before commencement a preliminary notice was served on a person under section 22(2) of the Banking Act or regulation 42(3) of the ISD Regulations in response to a proposed partner notice but no notice of objection has been served in respect of that preliminary notice, then the preliminary notice ceases to have effect on commencement and the Authority must, as soon as practicable after commencement, notify the recipients of the notice of that fact.

(4) Paragraph (3) does not affect the power of the Authority to serve a notice under section 62(2) in respect of the application (effective by virtue of paragraph (1)).

(5) A “proposed partner notice” means a notice served—

(a) under section 21(1) of the Banking Act in respect of an appointment falling within section 21(2) of that Act;

(b) under regulation 41(1) of the ISD Regulations in respect of an appointment falling within regulation 41(2) of those Regulations.

(6) The “Regulator” means—

(a) in respect of the provisions of the Banking Act, the Authority;

(b) in respect of the provisions of the ISD Regulations, the relevant regulator within the meaning of regulation 46(5) of those Regulations.

CHAPTER II — MISCELLANEOUS

Public statements under section 60 of the Financial Services Act

54

(1) Where, before commencement—

(a) the Authority has given a written notice under section 60(2) of the Financial Services Act;

(b) the period within which the case could be required to be referred to the Financial Services Tribunal under that Act has not expired;

the notice ceases to have effect on commencement and the Authority must, as soon as practicable after commencement, notify the authorised person (and any person to whom a copy of the notice was given under section 60(3) of the Financial Services Act) of that fact.

(2) Where, before commencement—

(a) the Authority has given a written notice under section 60(2) of the Financial Services Act;

(b) the period within which the case could be required to be referred to the Financial Services Tribunal under that Act has expired;

(d) the Authority has not published the statement (whether or not notice pursuant to section 60(5) of the Financial Services Act has been given),

the Authority must proceed in the manner described in paragraph (3).

(3) Where paragraph (2) applies, the Authority must either—

(a) give a final notice (to which section 390(3) applies) and publish the statement in accordance with that notice; or

(b) give a notice of discontinuance (to which section 389 applies).

Disqualification directions

55

(1) Where, before commencement—

(a) a notice was given under section 59(4)(a) of the Financial Services Act of a proposal to give a disqualification direction;

(b) the period within which the case could be required to be referred to the Financial Services Tribunal under that Act has not expired; and

the notice has effect as if it were a warning notice given under section 57(1).

(2) Notwithstanding section 392(a), sections 393 and 394 do not apply to a warning notice having effect by virtue of paragraph (1).

(3) A notice having effect under paragraph (1) has effect—

(a) as if it stated that the action which the Authority proposes to take is to prohibit the recipient from performing any functions in relation to regulated activities which correspond to the kinds of investment business referred to in the notice;

(b) as if it stated that the prohibition order will relate to any authorised person who is mentioned or described in the notice;

(d) as if it stated that representations may be made to the Authority within 28 days of commencement.

(4) Where a notice has effect under paragraph (1)—

(a) the Authority must decide whether to give a decision notice under section 57(3);

(b) in taking that decision the Authority must consider the question set out in section 56(1).

(5) Where—

(a) a person is the subject of a disqualification direction which has effect pursuant to article 79 of the Authorised Persons Order as a prohibition order under section 56;

(b) before commencement that person applied for the Authority’s consent or for a variation of such consent under section 59(3) of the Financial Services Act and the application has not been decided before commencement,

the application is to be treated as an application for a variation made to the Authority under section 56(7).

(6) Where, before commencement—

(a) a notice was given under section 59(4)(b) of the Financial Services Act of intention to refuse an application;

(b) the period within which the case could be required to be referred to the Financial Services Tribunal under that Act had not expired; and

the notice ceases to have effect and the Authority must, as soon as practicable after commencement, notify the applicant of that fact.

(7) Paragraph (6) does not affect the power of the Authority to serve a notice under section 58(3) in respect of the application (as effective by virtue of paragraph (5)).

PART VI — PROCEEDINGS OF RECOGNISED SELF-REGULATING ORGANISATIONS

CHAPTER I — INCOMPLETE DISCIPLINARY PROCEEDINGS

Interpretation

56

(1) In this Part—

“IMRO” means the Investment Management Regulatory Organisation Limited and “IMRO rules” means the rules of IMRO;

“PIA” means the Personal Investment Authority Limited and “PIA rules” means the rules of the PIA;

“SFA” means The Securities and Futures Authority Limited and “SFA rules” means the rules of the SFA.

(2) For the purposes of this Part, “disciplinary proceedings” are proceedings brought—

(a) by IMRO under Rules 4.6 and 5.1 of Chapter VIII of the IMRO rules;

(b) by the PIA serving a notice of proposed order under rule 10.1.4(1) or (2) or issuing formal proceedings under rule 10.1.2(3) of the PIA rules;

(3) For the purposes of this Part, a person is treated as being subject to incomplete disciplinary proceedings where—

(a) disciplinary proceedings have been brought against him by a recognised self-regulating organisation in accordance with the rules of that organisation; and

(b) he has not been informed, before commencement, whether or not the organisation has determined to impose on him a disciplinary measure within the meaning of article 76 in respect of the matters which were the subject of the proceedings,

and a person who was, immediately before commencement, subject to incomplete disciplinary proceedings is described as being “in discipline”.

(4) Disciplinary proceedings are to be treated as proceedings begun against the person who was subject to them for the purposes of section 66(4).

(5) In this Part, references to “the Civil Remedies Order” are to the Financial Services and Markets Act 2000 (Transitional Provisions and Savings) (Civil Remedies, Discipline, Criminal Offences etc.) Order (No. 2) 2001[^f00031];

(6) In this Part—

(a) “the relevant SRO” in relation to a person in discipline is whichever of IMRO, the PIA or the SFA commenced incomplete disciplinary proceedings against him; and

(b) “the relevant SRO” in relation to incomplete disciplinary proceedings means whichever of IMRO, the PIA or the SFA is the organisation in accordance with the rules of which those proceedings were commenced.

Application of this Chapter

57

This Chapter applies only where the person in discipline is—

(a) an authorised person (within the meaning of the Act) who was a member of IMRO, the PIA or the SFA immediately before commencement; or

(b) a person who was, immediately before commencement—

(i) a registered individual for the purposes of Rule 1.2.(2) to (4) of Chapter IV and Chapter VIII of the IMRO rules or a person who had, before commencement, ceased to be a registered individual but who was treated as a registered individual for the purposes of Rule 1.2(2) to (4) of Chapter IV and Chapter VIII of the IMRO rules;

(ii) a registered individual or former registered individual for the purposes of the PIA rules;

(iii) a registered person or former registered person for the purposes of SFA rules.

Determination of incomplete disciplinary proceedings

58

(1) Subject to article 64(2), the Authority may, before the end of the period of six months beginning at commencement, refer the incomplete disciplinary proceedings of a person in discipline to the interim tribunal established in accordance with Chapter IV of this Part.

(2) Where the Authority refers the incomplete disciplinary proceedings to the interim tribunal under paragraph (1), it must notify the person in discipline that it has done so and of the effect of this Order.

(3) The interim tribunal has jurisdiction to determine the incomplete disciplinary proceedings referred to it under paragraph (1) and must—

(a) determine what (if any) is the appropriate action for the Authority to take against the person who was the subject of the incomplete disciplinary proceedings referred to it, in the exercise of the Authority’s powers under the Act; and

(b) on determining the reference, remit the matter to the Authority with such directions (if any) as the interim tribunal considers appropriate for giving effect to its determination.

(4) The Authority must act in accordance with the determination of, and any direction given by, the interim tribunal.

Test to be applied by interim tribunal

59

(1) Where the issues arising for determination in the incomplete disciplinary proceedings included the issue whether a person who was authorised under the Financial Services Act was a fit and proper person, the interim tribunal must consider instead whether that person is failing or is likely to fail to satisfy the threshold conditions (within the meaning of section 41(1)).

(2) Where the issues arising for determination in the incomplete disciplinary proceedings included the issue whether a person was a fit and proper person to be employed in connection with investment business (within the meaning of the Financial Services Act) or investment business of a particular kind, the interim tribunal must consider instead whether that person is a fit and proper person to perform the functions in relation to the regulated activity corresponding to that investment business which he was performing before commencement.

Appropriate decisions on determination by interim tribunal

60

(1) The interim tribunal must not direct the Authority to take action against the person in discipline if the rules of the relevant SRO in respect of that person did not confer a power to take similar action against him.

(2) The Authority must not, in giving effect to any direction of the interim tribunal, impose on a person in discipline a penalty under section 66(3)(a) or 206 that exceeds the penalty which the relevant SRO could have imposed in relation to that conduct at the conclusion of the incomplete disciplinary proceedings.

(3) The Authority must, in giving effect to any direction of the interim tribunal by imposing a penalty on a person in discipline under section 66(3)(a) or 206, have regard to any statement made by the relevant SRO which was in force when the conduct in question took place with respect to its policy on the imposition of and amount of penalties (whether issued as guidance, contained in the rules of that organisation or otherwise).

(4) The interim tribunal must not direct the Authority to exercise its powers under section 66 in respect of a person in discipline unless the Authority would have been able, by virtue of article 9(3) of the Civil Remedies Order, to exercise those powers against that person in respect of his failure, misconduct or other contravention in the absence of the incomplete disciplinary proceedings.

Decisions taken by the Authority giving effect to interim tribunal directions

61

(1) Where the Authority implements a direction from the interim tribunal by exercising its power under section 45, sections 53, 54 and 55 do not apply to the exercise of that power.

(2) Where the Authority implements a direction from the interim tribunal by exercising its power under section 63(1), subsections (3) to (6) of that section do not apply to the exercise of that power.

(3) Where the Authority implements a direction from the interim tribunal by exercising its power under section 66(3), section 67 does not apply to the exercise of that power.

(4) Where the Authority implements a direction from the interim tribunal by exercising its power under section 196 or 200(1), section 197 and section 200(2) to (5) do not apply to the exercise of that power.

(5) Where the Authority implements a direction from the interim tribunal by exercising its power under section 205 or 206, sections 207 and 208 do not apply to the exercise of that power.

(6) Where the Authority implements a direction from the interim tribunal by exercising its power under section 384(5), sections 385 and 386 do not apply to the exercise of that power.

(7) Where the Authority implements a direction from the interim tribunal by exercising any of the powers mentioned in paragraphs (1) to (6), it must exercise that power by giving written notice to the person concerned and sections 390(3), (4), (5) and (7) to (9) and 391(4) apply to that notice as they apply to a final notice.

Appeal from determination of interim tribunal

62

(1) Where a person in discipline or the Authority is aggrieved by the determination by the interim tribunal of the incomplete disciplinary proceedings to which that person was subject immediately before commencement, that person or the Authority may refer the matter to the Financial Services and Markets Tribunal.

(2) Section 133 applies to the Tribunal when it is considering a reference made under paragraph (1) with the following modifications—

(a) as if subsection (3) provided that on such a reference, the Tribunal may consider only the evidence that was considered by the interim tribunal unless fresh evidence comes to light which could not reasonably have been made available to the interim tribunal by the party now seeking to adduce it;

(b) as if subsection (4) provided that on determining a reference from an interim tribunal the Tribunal must decide whether the determination of the interim tribunal was unlawful or was not justified by the evidence and must remit the matter to the Authority with such directions (if any) as the Tribunal considers appropriate having regard to its decision;

(3) Article 60 applies to the power of the Tribunal under this article, and to the Authority in giving effect to a direction from the Tribunal as it applies to directions given by the interim tribunal under article 58 and to the action of the Authority in giving effect to such directions.

Modification of Tribunal Rules

63

The Schedule to this Order has effect for the purpose of modifying the Financial Services and Markets Tribunal Rules 2001[^f00032] as they apply to references made under article 62.

Substitution of proceedings under the Act for proceedings before interim tribunal

64

(1) This article applies to a notice given by the Authority to a person in discipline which is—

(a) a notice under section 53(4) that it proposes to vary, or varies with immediate effect, that person’s Part IV permission;

(b) a warning notice under section 54(1) stating that it proposes to cancel his Part IV permission;

(d) a warning notice under section 67(1) stating that it proposes to take action under section 66 (as applied by article 9 of the Civil Remedies Order);

(e) a warning notice under section 207(1) stating that it proposes to take action under section 205 or 206 (as applied by articles 7 and 8 of the Civil Remedies Order);

(f) a notice under section 197(3) that it proposes to impose, or imposes with immediate effect, a requirement under section 196;

(g) a warning notice under section 385(1) stating that it proposes to exercise the power under section 384(5) (as applied by article 3 of the Civil Remedies Order); or

(h) a decision notice pursuant to article 68, 69, 70, 71, 73, 74 or 75,

provided in each case that the reasons stated in the notice why the Authority proposes to take action relate to or arise from the same failure, misconduct or other contravention which was the subject of the incomplete disciplinary proceedings to which the person to whom the notice is given was subject immediately before commencement (“the corresponding incomplete disciplinary proceedings”).

(2) The Authority may not after giving a notice to which this article applies, refer the corresponding incomplete disciplinary proceedings to the interim tribunal under article 58(1).

(3) If the Authority gives a notice to which this article applies after having referred the corresponding incomplete disciplinary proceedings to the interim tribunal under article 58(1), the proceedings before the interim tribunal lapse, without prejudice to the power of the interim tribunal under article 89(4).

Service of warning or decision notice

65

The Authority must not give a notice by virtue of which proceedings before an interim tribunal will lapse in accordance with article 64(3) unless—

(a) the person in discipline consents to the Authority doing so (but that consent is not to be treated as an admission in relation to any matter set out in the notice); or

(b) the interim tribunal to which the incomplete disciplinary proceedings have been referred approves the giving of the notice

CHAPTER II — EXPEDITED DECISION NOTICES, ETC.

General

Conditions making it appropriate to give a decision notice without a warning notice

66

(1) Where a provision of this Chapter provides that the Authority may, if the expedited decision conditions are satisfied, give a person (“A”) a decision notice under a provision of the Act without having given A a warning notice, the expedited decision conditions referred to are that—

(a) the reasons stated in the decision notice given to A relate to or arise from the same failure, misconduct or other contravention which was the subject of the incomplete disciplinary proceedings to which A was subject immediately before commencement;

(b) A had, before commencement, been given a reasonable opportunity in the course of the incomplete disciplinary proceedings to make representations to the relevant SRO in respect of the failure, misconduct or other contravention which was the subject of the incomplete disciplinary proceedings; and

(c) the Authority has taken any representations so made by A into account in deciding whether to give A a decision notice and on the terms of that notice.

(2) The Financial Services and Markets Tribunal may take into account, in considering a decision notice referred to it, whether or not the expedited decision conditions were satisfied in relation to that decision notice; but a finding that they were not so satisfied does not affect the validity of the notice.

Decision notices issued pursuant to this Chapter

67

Where, pursuant to a provision in this Chapter, the Authority gives a decision notice without having given a warning notice, that notice is to be treated for the purposes of section 133(6) as if it had been preceded by a warning notice stating that the Authority proposed to take the action referred to in the decision notice.

Members of self-regulating organisations

Public censure

68

(1) This article applies where—

(a) the Authority proposes to publish a statement about a person (“P”) under section 205, pursuant to the power conferred on it by article 7 of the Civil Remedies Order;

(b) the reasons for which the Authority proposes to take action relate to or arise from the same failure, misconduct or other contravention which was the subject of incomplete disciplinary proceedings to which P was subject immediately before commencement;

(c) the relevant SRO in relation to those incomplete disciplinary proceedings would have had power to make a statement about P corresponding to the power of the Authority under section 205 at the conclusion of those proceedings;

(d) the expedited decision conditions are satisfied.

(2) In a case where this article applies, the Authority may give a decision notice under section 208(1)(a) without having given a warning notice.

Financial penalty

69

(1) This article applies where—

(a) the Authority proposes to impose a penalty on a person (“P”) under section 206, pursuant to the power conferred on it by article 8 of the Civil Remedies Order;

(b) the reasons for which the Authority proposes to take action relate to or arise from the same failure, misconduct or other contravention which was the subject of incomplete disciplinary proceedings to which P was subject immediately before commencement;

(c) the relevant SRO in relation to those incomplete disciplinary proceedings would have had power to impose a penalty on P corresponding to the power of the Authority under section 206 at the conclusion of those proceedings;

(d) the expedited decision conditions are satisfied.

(2) In a case where this article applies, the Authority may give a decision notice under section 208(1)(b) without having given a warning notice.

Power to order restitution

70

(1) This article applies where—

(a) the Authority proposes to require a person (“P”) to make payments under section 384(5), pursuant to the power conferred on it by article 3 of the Civil Remedies Order;

(b) the reasons for which the Authority proposes to take action relate to or arise from the same failure, misconduct or other contravention which was the subject of the incomplete disciplinary proceedings to which P was subject immediately before commencement;

(c) the relevant SRO in relation to those incomplete disciplinary proceedings would have had power to order P to make payments corresponding to the power of the Authority under section 384(5) at the conclusion of those proceedings;

(d) the expedited decision conditions are satisfied.

(2) In a case where this article applies, the Authority may give a decision notice under section 386(1) without having given a warning notice.

Cancellation of Part IV permission

71

(1) This article applies where—

(a) the Authority proposes to cancel a person’s Part IV permission under section 54;

(b) the reasons for which the Authority proposes to take action relate to or arise from the same failure, misconduct or other contravention which was the subject of the incomplete disciplinary proceedings to which P was subject immediately before commencement;

(c) the relevant SRO in relation to those incomplete disciplinary proceedings would have had power to expel P from membership at the conclusion of those proceedings;

(d) the expedited decision conditions are satisfied.

(2) In a case where this article applies, the Authority may give a decision notice under section 54(2) without having given a warning notice.

Exercise of own initiative powers

72

(1) This article applies where—

(a) the Authority proposes to exercise its powers to vary a person’s Part IV permission under section 53 or to impose a requirement under section 196;

(b) the reasons for which the Authority proposes to take action relate to or arise from the same failure, misconduct or other contravention which was the subject of incomplete disciplinary proceedings to which that person (“P”) was subject immediately before commencement;

(i) to suspend in whole or in part P’s entitlement to carry on investment business (within the meaning of the Financial Services Act);

(ii) to terminate part of P’s entitlement to carry on such business;

(iii) to impose conditions on P in respect of his carrying on such business.

(d) the conditions specified in paragraph (3) are satisfied.

(2) In a case where this article applies, the Authority may specify in a notice given under section 53(4) or section 197(3) that the variation has immediate effect.

(3) The conditions specified in this paragraph are that—

(a) P had, before commencement, been given a reasonable opportunity to make representations to the relevant SRO in respect of the failure, misconduct or other contravention which was the subject of the incomplete disciplinary proceedings; and

(b) the Authority has taken any representations so made by P into account in deciding whether to specify that the variation has immediate effect.

Discipline of registered individuals or persons

Public statement about registered person or individual

73

(1) This article applies where—

(a) the Authority proposes to publish a statement about a person (“RI”) under section 66(3)(b), pursuant to the power conferred on it by article 9 of the Civil Remedies Order;

(b) the reasons for which the Authority proposes to take action relate to or arise from the same failure, misconduct or other contravention which was the subject of the incomplete disciplinary proceedings to which RI was subject immediately before commencement;

(c) the relevant SRO in relation to those incomplete disciplinary proceedings would have had power to make a statement about RI corresponding to the power of the Authority under section 66(3)(b) at the conclusion of those proceedings;

(d) the expedited decision conditions are satisfied.

(2) In a case where this article applies, the Authority may give a decision notice under section 67(4) without having given a warning notice.

Penalty imposed on registered person or individual

74

(1) This article applies where—

(a) the Authority proposes to impose a penalty on a person (“RI”) under section 66(3)(a), pursuant to the power conferred on it by article 9 of the Civil Remedies Order;

(b) the reasons for which the Authority proposes to take action relate to or arise from the same failure, misconduct or other contravention which was the subject of the incomplete disciplinary proceedings to which RI was subject immediately before commencement;

(c) the relevant SRO in relation to those incomplete disciplinary proceedings would have had power to impose a penalty on RI corresponding to the power of the Authority under section 66(3)(a) at the conclusion of those proceedings;

(d) the expedited decision conditions are satisfied.

(2) In a case where this article applies, the Authority may give a decision notice under section 67(4) without having given a warning notice.

Withdrawal of approval of registered person or individual

75

(1) This article applies where—

(a) the Authority proposes to withdraw its approval from a person (“RI”) under section 63(1);

(b) the reasons for which the Authority proposes to take action relate to or arise from the same failure, misconduct or other contravention which was the subject of the incomplete disciplinary proceedings to which RI was subject immediately before commencement;

(c) the relevant SRO in relation to those incomplete disciplinary proceedings would have had power to remove the registered individual or person from its register corresponding to the power of the Authority under section 63(1) against RI at the conclusion of those proceedings;

(d) the expedited decision conditions are satisfied.

(2) In a case where this article applies, the Authority may give a decision notice under section 63(4) without having given a warning notice.

CHAPTER III — INCOMPLETE APPEALS

Definition of “disciplinary measure”

76

(1) In this Chapter, a “disciplinary measure” means—

(a) any measure imposed by a disciplinary tribunal in accordance with Rule 6.7(6) of Chapter VIII of the IMRO rules;

(b) any measure imposed by a tribunal in accordance with Rule 10.4.3 of Chapter 10 of the PIA rules;

(c) any measure imposed by a disciplinary tribunal in accordance with rule 7–30 (penalties), 7–30A (terms and conditions) or 7–31 (compensation orders) of Chapter 7 of the SFA rules.

(2) This Chapter applies only to a disciplinary measure imposed—

(a) on an authorised person (within the meaning of the Act) who was a member of the recognised self-regulating organisation immediately before commencement; or

(b) in respect of post commencement actionable misconduct by an individual who was immediately before commencement—

(i) a registered individual for the purposes of Rule 1.2.(2) to (4) of Chapter IV and Chapter VIII of the IMRO rules or a person who had, before commencement, ceased to be a registered individual but who was treated as a registered individual for the purposes of Rule 1.2(2) to (4) of Chapter IV and Chapter VIII of the IMRO rules;

(ii) a registered individual or former registered individual for the purposes of the PIA rules;

(iii) a registered person or former registered person for the purposes of SFA rules.

(3) “Post commencement actionable misconduct” for the purposes of paragraph (2)(b) is any failure, misconduct or contravention—

(a) in respect of which the Authority would have power, by virtue of article 9(3) of the Civil Remedies Order, to take action after commencement under section 66, or

(b) which the Authority would be entitled to take into account in the exercise of its powers under section 63.

Incomplete appeals against disciplinary measure

77

(1) This article applies where—

(a) a disciplinary measure was imposed on a person;

(b) that person has exercised a right to appeal against the imposition of that measure before commencement; but

(2) In a case where this article applies, the Authority must, as soon as practicable after commencement, refer the matter to the interim tribunal to determine the appeal and must notify the appellant that it has done so and of the effect of this Order.

(3) The interim tribunal has jurisdiction to determine the appeal referred to it under paragraph (2).

(4) For the purposes of paragraph (1)(b), a right to appeal means—

(a) in respect of a disciplinary measure imposed by IMRO, a right under Rule 6.7(10) in Chapter VIII of the IMRO rules to refer the matter to the Appeals Tribunal constituted in accordance with that Chapter;

(b) in respect of a disciplinary measure imposed by the PIA, a right under Rule 10.5.2(1) of Chapter 10 of the PIA rules to refer the matter to the Appeal Commissioner having jurisdiction in accordance with that Chapter;

(c) in respect of a disciplinary measure imposed by the SFA, a right under rule 7–34(3) and 7–34(4) of Chapter 7 of the SFA rules to refer the matter to the Disciplinary Appeal Tribunal constituted in accordance with that Chapter.

Task of interim tribunal when determining an appeal against disciplinary measure

78

(1) Where the interim tribunal hears an appeal referred to it under article 77(2), it must—

(a) determine whether the imposition of the disciplinary measure was unlawful or was not justified by the evidence on which it was based;

(b) remit the matter to the Authority with such directions (if any) as the interim tribunal considers appropriate for giving effect to its determination.

(2) The interim tribunal may consider only the evidence which was considered in the course of the proceedings which resulted in the imposition of the disciplinary measure, unless fresh evidence come to light which could not reasonably have been made available then by the party now seeking to adduce it.

(3) Articles 59, 60 and 61 apply to the determination of the interim tribunal and to the action taken by the Authority following a direction by the interim tribunal under paragraph (1).

Preservation of right of appeal against disciplinary measure

79

(1) Where before commencement—

(a) a disciplinary measure has been imposed on a person;

(b) the period set by the rules of the organisation which imposed the disciplinary measure during which a right to appeal may be exercised has not expired;

the person who had a right to appeal against the imposition of the measure may refer the matter to the Financial Services and Markets Tribunal.

(2) Section 133 applies to the Tribunal in respect of a reference made under paragraph (1) with the following modifications—

(a) section 133(1)(a) applies as if the period mentioned was so much of the period referred to in paragraph (1)(b) above as had not expired at commencement;

(b) as if subsection (3) provided that on such a reference, the Tribunal may consider only the evidence which was considered in the course of the proceedings which resulted in the imposition of the disciplinary measure, unless fresh evidence comes to light which could not reasonably have been made available then by the party now seeking to adduce it;

(c) as if subsection (4) provided that on determining the appeal, the Tribunal must determine whether the imposition of the disciplinary measure was unlawful or was not justified by the evidence and must remit the matter to the Authority with such directions (if any) as the Tribunal considers appropriate having regard to its determination;

(d) as if subsections (6), (7), (8), (9) and (12) did not apply.

(3) For the purposes of paragraph (1) a right to appeal has the same meaning as in article 77(4).

(4) Article 60 applies to the power of the Tribunal under this article, and to the Authority in giving effect to a direction from the Tribunal as it applies to directions given by the interim tribunal under article 58 and to the action of the Authority in giving effect to such directions.

Modification of Tribunal Rules

80

The Schedule to this Order has effect for the purposes of modifying the Financial Services and Markets Tribunal Rules 2001 as they apply to references made under article 79.

Definition of “intervention measure”

81

In this Chapter, an “intervention measure” means—

(a) an Intervention within the meaning of Rule 2.1 and 2.2 of Chapter VIII of the IMRO rules;

(b) an intervention notice given under Rule 9.3 of the PIA rules;

Intervention measure stayed before commencement

82

(1) This article applies where before commencement—

(a) an intervention measure had been imposed on an authorised person (within the meaning of the Act) who was a member of a recognised self-regulating organisation immediately before commencement; and

(b) a stay had been granted preventing the intervention measure from coming into effect at any time before commencement.

(2) In a case where this article applies—

(a) the person on whom the intervention measure was imposed is not to be treated as subject to that measure immediately before commencement for the purposes of article 35 of the Authorised Persons Order; and

(b) any proceedings in respect of an appeal brought by the person against the measure lapse at commencement.

Intervention measure not stayed before commencement

83

(1) This article applies where before commencement—

(a) an intervention measure had been imposed on an authorised person (within the meaning of the Act) who was a member of a recognised self-regulating organisation immediately before commencement; and

(b) no stay had been granted preventing the intervention measure from coming into effect at any time before commencement;

(c) the measure has effect after commencement as a requirement imposed under section 43 or 196 of the Act by virtue of article 35 of the Authorised Persons Order; and

(d) either—

(i) the person on whom the measure was imposed has exercised a right to appeal in respect of the imposition of that measure but that appeal has not been determined before commencement; or

(ii) the period (if any) set by the rules of the organisation for the exercise of the right to appeal in respect of that measure has not expired and no appeal has been lodged in accordance with the rules of that body.

(2) In a case where this article applies—

(a) any appeal proceedings in train at commencement in respect of the measure lapse;

(b) the person may refer the measure having effect by virtue of article 35 of the Authorised Persons Order to the Tribunal under section 55(2).

(3) Where the imposition of an intervention measure is referred to the Tribunal under paragraph (2), section 133 and the Financial Services and Markets Tribunal Rules 2001 apply to the reference as if the notice by which the intervention measure was imposed before commencement were a supervisory notice.

(4) For the purposes of paragraph (1) a right to appeal means—

(a) in respect of an intervention measure imposed by IMRO, a right under rule 2.3(5) of Chapter VIII of the IMRO rules to appeal to the Appeal Tribunal constituted in accordance with Section 7 of that Chapter;

(b) in respect of an intervention measure imposed by the PIA, a right—

(i) under Rule 9.4(2) or 9.7.1(1) of the PIA rules to refer the matter to the Membership and Disciplinary Tribunal; or

(ii) under Rules 9.7.2(2) and 11.2.1(2) to refer the matter from the Membership and Disciplinary Tribunal to the PIA Appeals Commissioner;

(c) in respect of an intervention measure imposed by the SFA, a right under rule 7–20 of the SFA Rules to refer the matter to the chairman or a deputy chairman of the Tribunal Panel in accordance with that rule.

Intervention measure against registered individual or person

84

(1) This article applies where before commencement—

(a) an intervention measure had been imposed on a registered person or individual;

(b) the measure would (but for this article) have effect after commencement as a limitation on the approval of that person under section 59 by virtue of article 72(2)(b) or 73(3) of the Authorised Persons Order; and

(i) the person on whom the measure was imposed has exercised a right to appeal in respect of the imposition of that measure but that appeal has not been determined before commencement; or

(ii) the period (if any) set by the rules of the body imposing the measure for the exercise of the right to appeal in respect of that measure has not expired and no appeal has been lodged in accordance with the rules of that body.

(2) In a case where this article applies (and whether or not a stay was granted before commencement)—

(a) the intervention measure is to be disregarded for the purposes of article 72(2)(b) or 73(3) of the Authorised Persons Order;

(b) any appeal proceedings in train in respect of the measure lapse at commencement.

(3) For the purposes of paragraph (1), a right to appeal has the same meaning it has for the purposes of article 83(1).

Summary fine imposed before commencement

85

(1) This article applies where—

(a) a summary fine was imposed on a person before commencement; and

(b) either—

(i) the person on whom the fine was imposed has exercised a right to appeal against the imposition of that fine but that appeal has not been determined before commencement; or

(ii) the period set by the rules of the organisation which imposed the fine for the exercise of the right to appeal against that fine has not expired and no appeal has been lodged in accordance with the rules of that body.

(2) In a case where this article applies, the Authority must, if the person on whom the fine was imposed requests, refer the matter to the interim tribunal.

(3) For the purposes of this article, a summary fine is a fine imposed—

(a) by IMRO under Rule 3.1 of Chapter VIII of the IMRO rules;

(b) by the SFA under Rule 7–45 of the SFA Rules.

(4) Where the imposition of a summary fine is referred to the interim tribunal under paragraph (2) the interim tribunal must—

(a) consider whether the decision to impose it was unlawful or was not justified by the evidence on which it was based;

(b) either cancel the fine or remit the matter to the Authority with a direction to impose a penalty under section 66(3)(a).

(5) Where the Authority imposes a penalty on a person under section 66(3)(a) following a direction from the interim tribunal, section 67 does not apply to the exercise of that power but—

(a) the Authority must exercise the power by giving written notice to the person concerned; and

(b) sections 390(3), (4), (5), (8) and (9) and 391(4) apply to that notice as they apply to a final notice.

CHAPTER IV — THE INTERIM TRIBUNAL

President of the interim tribunal

86

(1) The Treasury must as soon as practicable appoint a person to be the President of the interim tribunal.

(2) The President of the interim tribunal is to hold and vacate office in accordance with the terms of his appointment and may be removed by the Treasury on the ground of incapacity or misbehaviour.

(3) The President may at any time resign office by notice in writing to the Treasury but is eligible for re-appointment if he ceases to hold office.

Constitution of the interim tribunal

87

(1) On a reference to the interim tribunal, the President must appoint the required number of the most appropriate people to act as members of the interim tribunal for the purposes of hearing and determining the reference.

(2) For the purposes of paragraph (1), the following are the most appropriate people—

(a) a person who was a member of the panel appointed by the relevant SRO before which—

(i) the incomplete disciplinary proceedings (in the case of a reference under article 58(1)); or

(ii) the appeal (in the case of a reference under article 77(2) or 85(2));

which form or forms the subject of the reference were or was being heard immediately before commencement;

(b) where it is not reasonably practicable to appoint the required number of members from persons falling within sub-paragraph (a), then a person who was eligible to be appointed by the relevant SRO to a panel to determine incomplete disciplinary proceedings (in the case of a reference under article 58) or an appeal (in the case of a reference under article 77(2) or 85(2));

(c) where it is not reasonably practicable to appoint the required number of members from persons falling within sub-paragraph (a) or (b), then a person appearing to the President to be qualified by experience or otherwise to deal with the matter referred to the interim tribunal.

(3) For the purpose of this article the “required number” of members of the interim tribunal to hear and determine a particular case is the number of people who would, in accordance with the rules of the relevant SRO, have formed the panel or other body by whom the matter would have been determined but for the repeal of the Financial Services Act.

(4) If, in relation to a particular case, the President falls within the class of the most appropriate people, he may sit as one of the required number of members.

Power of the Authority to make arrangements for the interim tribunal

88

The Authority may make such arrangements as appear to it to be necessary or expedient for the purpose of establishing and maintaining the interim tribunal and in particular may—

(a) enter into contracts for the provision of accommodation and any other facilities required by the interim tribunal;

(b) pay the persons appointed to serve on the interim tribunal (including the President) such remuneration and allowances as it determines, having regard to the remuneration and allowances that were payable to persons falling within article 87(2)(a) before commencement.

Procedure of the interim tribunal

89

(1) Subject to paragraphs (2) and (3), the interim tribunal must when determining any matter referred to it, adopt, so far as reasonably practicable, the same procedure as would have been adopted by the panel or other body by whom the matter would have been determined but for the repeal of the Financial Services Act (treating the Authority for these purposes as the relevant SRO).

(2) In considering the procedure to be adopted in determining any matter referred to it the interim tribunal—

(a) must have regard to the desirability of avoiding undue prolongation of proceedings and unnecessary costs being incurred by the parties to the proceedings; and

(b) for that purpose, may take into account evidence or submissions given or made to the relevant SRO before commencement as if they were given or made to the interim tribunal.

(3) Before remitting any matter to the Authority with directions under article 58(3), 78(1) or 85(4), the interim tribunal must give the parties to the proceedings before it an opportunity to make representations as to what directions it should give the Authority.

(4) Where proceedings before the interim tribunal lapse by virtue of article 64(3), the tribunal may make an order providing for such incidental, consequential or supplementary matters as it considers just and expedient.

(5) Where a matter has been referred to the interim tribunal, that tribunal may, on the application of either of the parties to the proceedings, suspend the effect of a disciplinary or intervention measure (or prevent it from taking effect) until the determination of the reference.

PART VII — SUPPLEMENTAL

Adaptation of dates and duration of periods in notices continued in effect

90

(1) A notice given before commencement may specify a new date by or on which, or a new period within or for which—

(a) representations may be made to the Authority;

(b) action will be taken by the Authority;

(d) action must be taken by the recipient of the notice; or

(e) certain conduct on the part of the recipient must cease,

if commencement occurs before the corresponding original date occurs or the corresponding original period elapses.

(2) Where a notice provides a new date or period as mentioned in paragraph (1), then if—

(a) commencement occurs before the corresponding original date occurs or period elapses; and

(b) the notice has effect after commencement as a notice given under the Act,

that new date or period takes effect and replaces the original date or original period (if any).

(3) For the purposes of this article, an “original date” or “original period” is the relevant date or period which would have applied but for the repeal or revocation of the provision under which the notice was originally given.

(4) When specifying a new period for the purposes of this article, the person giving the notice must specify a period starting with commencement.

Explanation of notices continued in effect

91

A notice shall not have effect, pursuant to any provision of this Order, as a notice under the Act unless the person giving the notice also gave the recipient (either at the same time as the notice or after giving the notice but allowing a reasonable time before commencement) an explanation of the effect that this Order will have on the notice if commencement occurs before the matters referred to in the notice are decided.

Validity of notices continued in effect

92

Where, by virtue of any provision in this Order, a notice has effect as a notice given under the Act, its validity is not affected by—

(a) the omission from the notice of any matter which is required by the Act but which was not required by the provision under which the notice was originally given; or

(b) a failure to follow any procedure which is required by the Act but which was not required by the provision under which the notice was originally given,

and that omission or failure may not be taken into account by the Tribunal in considering any matter referred to it.

Effect of lapsed notices

93

Where a notice given before commencement does not take effect, by virtue of this Order, as a notice given under the Act, that fact does not of itself preclude the Authority from taking into account, when exercising its powers under the Act, the matters which were the subject of the notice.

Right of third party to receive notice of post commencement decision

94

(1) Where a notice served before commencement has effect by virtue of this Order as if it were a notice served under section 53(4) or section 197(3), a third party recipient of that notice must be given a copy of any notice issued by the Authority under section 53(7) or (8), or under section 197(6) or (7) (as the case may be) in relation to the matter covered by that notice.

(2) For the purposes of this article a “third party recipient” is a person who was given a copy of the notice pursuant to—

(a) section 29(3) or 34(3) of the Financial Services Act;

(b) section 13(4) of the Banking Act;

(d) paragraph 1(3) of Schedule 4 to the 2BCD Regulations;

(e) paragraph 1(3) of Schedule 4 to the ISD Regulations;

(f) paragraph 2(4) of Schedule 3 to the 2BCD Regulations;

(g) paragraph 7(2), 8(3) or 10(2) of Schedule 13 to the Friendly Societies Act;

(h) paragraph 4(2), 5(3) or 6(2) of Schedule 3 to the Building Societies Act;

(i) section 42A(5) of the Building Societies Act.

Right of third party to refer matter to the Tribunal

95

(1) This article applies where—

(a) a notice served before commencement has effect by virtue of article 10, 12 or 20 of this Order as if it were a notice served under section 53(4) or section 197(3);

(b) a person (“the third party”) was given a copy of that notice pursuant to—

(i) section 29(3) or 34(3) of the Financial Services Act;

(ii) paragraph 1(3) of Schedule 4 to the 2BCD Regulations; or

(iii) paragraph 1(3) of Schedule 4 to the ISD Regulations;

(c) the third party had immediately before commencement a right to refer that notice to the Financial Services Tribunal under section 97 of the Financial Services Act but had not exercised that right; and

(d) the Authority, after commencement, gives a notice under section 53(7) or (8)(b) or section 197(6) or (7)(b) in respect of the matter covered by the notice mentioned in sub-paragraph (a) above.

(2) In a case where this article applies, the third party may refer to the Financial Services and Markets Tribunal the question whether the reasons stated in the notice mentioned in paragraph (1)(b) above are substantiated.

(3) The Schedule to this Order has effect for the purposes of modifying the Financial Services and Markets Tribunal Rules 2001 as they apply to references made under paragraph (2).

PART VIII — PARTLY COMPLETED EXERCISE OF EEA RIGHTS

CHAPTER 1 — EEA FIRMS

EEA firms seeking to establish a branch

96

(1) This article applies in relation to an EEA firm which at commencement—

(a) is seeking to establish a branch as mentioned in paragraph 12(1) of Schedule 3; and

(b) has not satisfied the establishment conditions in paragraph 13 of Schedule 3.

(2) Subject to paragraph (4), if, before commencement a notice in accordance with—

(a) paragraph 3 of Schedule 2 to the 2BCD Regulations; or

(b) paragraph 3 of Schedule 3 to the ISD Regulations,

was received as respects the firm for the purposes of paragraph 1(2)(b) of Schedule 2 to the 2BCD Regulations or paragraph 1(2)(b) of Schedule 3 to the ISD Regulations, the notice is to be treated as the consent notice required by paragraph 13(1)(a) of Schedule 3 and as satisfying the requirements of paragraph 13(1)(b) of that Schedule.

(3) If, before commencement a notice and certificate as mentioned in paragraph 1(2)(a) of Schedule 2F to the Insurance Companies Act were received as respects the firm, the notice and certificate are to be treated as the consent notice required by paragraph 13(1)(a) of Schedule 3 and as satisfying the requirements of paragraph 13(1)(b) of that Schedule.

(4) This article does not apply in respect of an EEA firm which is taken to have complied with the requirements of Schedule 2 to the 2BCD Regulations only by virtue of having complied with the corresponding requirements under the law of Gibraltar (within the meaning of regulation 2C(2) of the 2BCD Regulations[^f00033]).

EEA firms seeking to provide services

97

(1) This article applies in relation to an EEA firm which at commencement—

(a) is seeking to provide services as mentioned in paragraph 12(2) of Schedule 3; and

(b) has not satisfied the service conditions in paragraph 14 of Schedule 3.

(2) If before commencement a notice in accordance with paragraph 2 of Schedule 3 to the ISD Regulations was given by the firm for the purposes of paragraph 1(1)(a) of that Schedule, the notice is to be treated as the notice of intention required by paragraph 14(1)(a) of Schedule 3.

(3) If before commencement a notice and certificate as mentioned in paragraph 8(2)(a) of Schedule 2F to the Insurance Companies Act were received as respects the firm, the notice and certificate are to be treated as the regulator’s notice required by paragraph 14(1)(b) of Schedule 3.

EC companies seeking to carry on reinsurance business

98

(1) This article applies in relation to an EC company (within the meaning of the Insurance Companies Act) which at commencement—

(a) is seeking to carry on reinsurance business through a branch in the United Kingdom; and

(b) neither has permission to carry on that activity by virtue of Schedule 4 nor has a Part IV permission to carry it on.

(2) If before commencement the company had, in accordance with paragraph 4(2)(a)(i) of Schedule 2F to the Insurance Companies Act, served a notice of its intention to carry on reinsurance business, the notice is to be treated as an application for permission made under section 40.

(3) Article 9 applies in relation to an application treated under this article as an application under section 40 or 44 as it applies to an application so treated pursuant to a provision in Part II.

Authority’s duties as respects incoming firms

99

Where—

(a) under article 96 or 97 a notice is treated as the consent notice required by paragraph 13(1) of Schedule 3 or the regulator’s notice required by paragraph 14(1)(b) of that Schedule; and

(b) the Authority has before commencement taken action in respect of that notice corresponding to any of the action required by paragraph 13(2) or 14(2) of that Schedule,

the Authority need only take such action (if any) under paragraph 13(2) or 14(2) of that Schedule as, having regard to the action taken before commencement, it considers necessary.

CHAPTER II — UK FIRMS

Establishment of a branch by UK firm

100

(1) This article applies to a UK firm within the meaning of Schedule 3.

(2) But this article does not apply where the conditions in paragraph 19(2) to (5) of that Schedule are by virtue of article 77 of the Authorised Persons Order treated as satisfied.

(3) If, before commencement—

(a) a notice in accordance with paragraph 2 of Schedule 6 to the 2BCD Regulations or ISD Regulations was given by the firm for the purposes of paragraph 1(2)(a) of that Schedule; or

(b) a notice was given by the firm in accordance with paragraph 1(2)(a) of Schedule 2G[^f00034] to the Insurance Companies Act or paragraph 1(2)(a) of Schedule 13B[^f00035] to the Friendly Societies Act,

and the case does not fall within paragraph (4), the notice is to be treated as the notice of intention required by paragraph 19(2) of Schedule 3 (and hence as satisfying the first condition for the purposes of paragraph 19(6) and (7)) and, if it was not given to the Authority as required by paragraph 1(2), as having been so given.

(4) The case falls within this paragraph if in response to the notice a notice of refusal was given to the firm under—

(a) paragraph 4(6) of Schedule 6 to the 2BCD or ISD Regulations; or

(b) paragraph 1(5) of Schedule 2G to the Insurance Companies Act or of Schedule 13B to the Friendly Societies Act,

and the refusal was not at commencement capable of being reversed on an appeal, a reference to a tribunal or a review as mentioned in paragraph 4(6) of Schedule 6 to the 2BCD or ISD Regulations.

(5) If, before commencement—

(a) a notice as mentioned in paragraph 3(1) or (2) of Schedule 6 to the 2BCD Regulations was given as respects the firm under paragraph 1(2)(b) of that Schedule;

(b) a notice as mentioned in paragraph 3 of Schedule 6 to the ISD Regulations was given as respects the firm under paragraph 1(2)(b) of that Schedule; or

(c) a notice and certificate were given as respects the firm under paragraph 1(2)(b) of Schedule 2G to the Insurance Companies Act or paragraph 1(2)(b) of Schedule 13B to the Friendly Societies Act,

the notice is (or the notice and certificate are) to be treated as the consent notice required by paragraph 19(4) of Schedule 3 and, if given otherwise than by the Authority, as having been given by the Authority.

Provision of services by UK firm

101

(1) This article applies to a UK firm within the meaning of Schedule 3.

(2) But this article does not apply where—

(a) the condition in paragraph 20(1) of Schedule 3 is by virtue of article 77(4) of the Authorised Persons Order treated as satisfied; or

(b) by virtue of article 77(6) of the Authorised Persons Order, the consent notice is deemed to have been given by the Authority under paragraph 20(3A)(a) of Schedule 3 and the notice required by paragraph 20(4B) of that Schedule is deemed to have been received by the firm.

(3) If, before commencement a notice was given by the firm under—

(a) paragraph 5(2)(a) of Schedule 2G to the Insurance Companies Act; or

(b) paragraph 5(2)(a) of Schedule 13B to the Friendly Societies Act,

and the case does not fall within paragraph (4), the notice is to be treated as the notice of intention required by paragraph 20(1) of Schedule 3 and, if it was not given to the Authority as required by paragraph 20(1), as having been so given.

(4) The case falls within this paragraph if in response to the notice a notice of refusal was given to the firm under paragraph 5(6) of Schedule 2G to the Insurance Companies Act or paragraph 5(6) of Schedule 13B to the Friendly Societies Act.

(5) If before commencement a notice and certificate were given as respects the firm under paragraph 5(2)(b) of Schedule 2G to the Insurance Companies Act or paragraph 5(2)(b) of Schedule 13B to the Friendly Societies Act, the notice and certificate are to be treated as the consent notice required by paragraph 20(3A)(a) of Schedule 3 and, if given otherwise than by the Authority, as having been given by the Authority.

PART IX — APPEALS

CHAPTER I — REFERENCES TO THE FINANCIAL SERVICES TRIBUNAL

Interpretation

102

In this Chapter—

(a) references to section 97 are references to section 97 of the Financial Services Act (as it has effect by virtue of the 2BCD Regulations and ISD Regulations);

(b) “the Financial Services Tribunal” means the Financial Services Tribunal established under Chapter IX of Part I of the Financial Services Act.

Request for reference: further consideration by the Authority

103

(1) This article applies where before commencement—

(a) a person has required the Authority under section 97(1)(a) to refer a matter to the Financial Services Tribunal;

(b) the period of 28 days referred in section 97(1) has not expired, and

(2) Where this article applies and the notice to which the request for a reference relates was served under section 29, 34, 59(4) or 60(2) of the Financial Services Act (or is treated for the purposes of section 97(1) as having been so served[^f00036]), the Authority may, before the expiry of the period mentioned in section 97(1), notify the person (and any person on whom a copy of the notice had been served) that it has decided—

(a) to grant the application (where the notice proposed the refusal of an application);

(b) not to take action in relation to the matter covered by the notice (where the notice proposed the withdrawal or suspension of authorisation or the giving of a direction or publishing of a statement); or

(3) Where this article applies, the notice to which the request for a reference relates was served under section 70 of the Financial Services Act and the matter was the refusal of an application for the rescission or variation of a prohibition or requirement, the Authority may, before the expiry of the period mentioned in section 97(1), notify the person (and any person on whom a copy of the notice had been served) that it has decided to grant the application.

(4) Where this article applies, the notice to which the request for a reference relates was served under section 70 of the Financial Services Act and the matter was the imposition or variation of a prohibition or requirement which has not yet taken effect, the Authority may, before the expiry of the period mentioned in section 97(1), notify the person (and any person on whom a copy of the notice had been served) that it has decided not to take action in relation to the matter covered by the notice.

(5) Where this article applies and the request for a reference relates to a decision to refuse to give a notice under paragraph 3 or 7(1) of Schedule 6 to the ISD Regulations, the Authority may, before the expiry of the period mentioned in section 97(1), notify the person that it has decided to give (as the case may be)—

(a) a consent notice under paragraph 19 of Schedule 3; or

(b) a notice under regulation 11(5)(a) of the Financial Services and Markets Act 2000 (EEA Passport Rights) Regulations 2001[^f00037].

(6) Where, before commencement, a substituted notice complying with section 97(5) was served by the Authority pursuant to section 97(4) this article has effect in relation to that notice as if the period mentioned in paragraph (1)(b) was the period of 28 days after the date of service of the original notice or 14 days after the date of service of the substituted notice, whichever ends later.

Effect of notification pursuant to article 103

104

(1) Where the Authority notifies the person as described in article 103(2), (3) or (4) the Authority must not refer the matter to the Financial Services Tribunal.

(2) Where the Authority notifies the person pursuant to article 103(2)(a) or (3) that it has decided to grant an application, it must grant the application as it has effect after commencement by virtue of article 3 or 4 of this Order.

(3) Where the Authority notifies the person pursuant to article 103(5) it must (as the case may be)—

(a) give the consent notice and otherwise comply with the relevant procedure set out in paragraph 19 of Schedule 3; or

(b) comply with regulation 11(5) of the Financial Services and Markets Act 2000 (EEA Passport Rights) Regulations 2001.

Transitional reference to Financial Services Tribunal

105

(1) Where the Authority does not notify the person as described in article 103(2), (3), (4) or (5), the Authority must refer the matter to the Financial Services Tribunal.

(2) Notwithstanding the repeal of the Financial Services Act, sections 96, 97(6), 99, 100 and 101 of Schedule 6 to that Act continue to have effect in relation to transitional references with the modifications set out in article 108.

(3) A “transitional reference” is—

(a) a reference—

(i) which was made by the Authority before commencement to the Financial Services Tribunal pursuant to section 97(1);

(ii) which was not withdrawn before commencement; and

(iii) on which the tribunal has not reported before commencement; or

(b) a reference made by the Authority to the Financial Services Tribunal under paragraph (1).

Task of the Financial Services Tribunal on transitional reference

106

(1) On a transitional reference made at the request of a person falling within section 97(1)(a), the Financial Services Tribunal must—

(a) investigate the case and report on it to the Authority,

(b) state in that report its recommendations as to what would be the appropriate action (if any) for the Authority to take in the exercise of the powers conferred on the Authority by or under the Act and give the reasons for those recommendations.

(2) The Authority must exercise its powers in the manner most appropriate to give effect to the Financial Services Tribunal’s recommendations.

(3) The Financial Services Tribunal must send a copy of its report to the person at whose request the case was referred to it.

Appropriate decisions on determination of transitional reference

107

(1) Where the transitional reference made at the request of a person falling within section 97(1)(a) concerned a notice served under section 29, 34, or 70 of the Financial Services Act, the Authority may not exercise its powers under section 205 or 206 of the Act in giving effect to the recommendations of the Financial Services Tribunal.

(2) Where the transitional reference made at the request of a person falling within section 97(1)(a) concerned a notice served under section 59(4) or 60 of the Financial Services Act, the Authority may not exercise its powers under Part IV or Part XIII of the Act in giving effect to the recommendations of the Financial Services Tribunal.

Modification of section 100 of Financial Services Act in relation to transitional reference

108

(1) Section 100 of the Financial Services Act has effect in relation to a transitional reference as if the following were substituted for subsection (2)—

(2) The Authority may at any such time withdraw any reference made at the request of a person on whom a notice was served under any of the provisions mentioned in subsection (1)(a) of section 97 above if it decides— (a) to grant the application (where the notice proposed the refusal of an application); (b) not to take action in relation to the matter covered by the notice (where the notice proposed the withdrawal or suspension of authorisation or the giving of a direction or publishing of a statement); (c) to withdraw its objection (where the notice was a notice of objection to an acquisition of control); (d) to give a consent notice (where the Authority had refused consent under paragraph 3 or 7 of Schedule 6 to the ISD Regulations); (e) to consent to a change of details (where the Authority had refused consent pursuant to regulation 11(6) of the Financial Services and Markets Act 2000 (EEA Passport Rights) Regulations 2001), and notifies the person who requested the reference of that decision. (2A) But a reference may not be withdrawn under subsection (2) unless the decision to withdraw it is made and the notice is given before any prohibition, requirement or variation has taken effect.

(2) Section 100 of the Financial Services Act has effect in relation to a transitional reference as if the following were substituted for subsection (5)—

(5) Where a person on whom a notice was served under section 29, 34 or 60 above withdraws a case from the Tribunal, the Financial Services and Markets Act 2000 (Transitional Provisions) (Partly Completed Procedures) Order 2001 applies to him as if the period for such a reference had expired before commencement (within the meaning of that Order) without such a reference being required and the Authority had given notice (as the case may be)— (a) under section 29(5)(a); (b) under section 34(5)(a); (c) under section 60(5) that the statement is to be published; (d) under paragraph 1(5)(a) of Schedule 4 to the Banking Coordination (Second Council Directive) Regulations 1992; or (e) under paragraph 1(5)(a) of Schedule 4 to the Investment Services Regulations 1995.

Test to be applied by the Financial Services Tribunal

109

(1) Where in any transitional reference the issues arising for consideration included the issue whether a person authorised under the Financial Services Act was a fit and proper person to carry on investment business (within the meaning of that Act), the Financial Services Tribunal must consider instead whether that person is failing or is likely to fail to satisfy the threshold conditions (within the meaning of section 41 of the Act).

(2) Where in any transitional reference the issues arising for consideration included the issue whether a person was a fit and proper person to be employed in connection with investment business (within the meaning of the Financial Services Act) or investment business of a particular kind, the Financial Services Tribunal must consider instead whether that person is a fit and proper person to perform the functions in relation to a regulated activity corresponding to that investment business which he was performing before commencement.

(3) Where in any transitional reference the issues arising for consideration included the issue whether a person was a fit and proper person to be a controller of any description to which regulation 41 of the ISD Regulations applies, the Financial Services Tribunal must consider instead—

(a) in a case where, after commencement, the person would require the approval of the Authority under section 59, the question whether that person is a fit and proper person to perform the functions in relation to a regulated activity corresponding to the investment business which he was performing before commencement;

(b) in a case where, after commencement, the person would have control over a UK authorised person (within the meaning of Part XII of the Act), the question whether the person meets the approval requirements within the meaning of section 186.

Decisions taken by the Authority giving effect to Financial Services Tribunal recommendations

110

(1) Where the Authority gives effect to a recommendation of the Financial Services Tribunal by exercising its power under section 45, sections 53, 54 and 55 do not apply to the exercise of that power.

(2) Where the Authority gives effect to a recommendation of the Financial Services Tribunal by exercising its power under section 52(6) or (7), section 52(9) does not apply to the exercise of that power.

(3) Where the Authority gives effect to a recommendation of the Financial Services Tribunal by exercising its power under section 56, sections 57 and 58 do not apply to the exercise of that power.

(4) Where the Authority gives effect to a recommendation of the Financial Services Tribunal by exercising its power under section 186(1), 185(1) or 187, section 183(3), 185(3) or 188 (as the case may be) does not apply to the exercise of that power.

(5) Where the Authority gives effect to a recommendation of the Financial Services Tribunal by exercising its power under section196 or 200(1), section 197 and section 200(2) to (5) do not apply to the exercise of that power.

(6) Where the Authority gives effect to a recommendation of the Financial Services Tribunal by exercising its power under section 205 or 206, sections 207, 208 and 210(7) do not apply to the exercise of that power.

(7) Where the Authority gives effect to a recommendation of the Financial Services Tribunal by exercising any of the powers mentioned in paragraphs (1) to (6), it shall exercise that power by giving to the parties to the transitional reference a written notice and sections 390(3), (4) and (7) and 391(4) apply to that notice as they apply to a final notice.

Modification of Financial Services Tribunal Rules

111

The Financial Services Tribunal (Conduct of Investigations) Rules 1988[^f00038] have effect after commencement (notwithstanding the repeal of the Financial Services Act) in relation to a transitional reference with the following modifications—

(a) references in the rules to a matter referred to the Tribunal under section 97 must be read as references to transitional references within the meaning of article 105(3);

(b) for rule 17 substitute the following—

“In a transitional reference made at the request of a person falling within section 97(1)(a) of the Act, the Tribunal shall inform the relevant authority and the applicant of the recommendation it is minded to give as to the appropriate action (if any) for the relevant authority to take and shall afford the applicant and the relevant authority fourteen days in which to make written or oral representations to it before making its report.”.

CHAPTER II — APPEALS TO THE BANKING APPEAL TRIBUNAL

Preservation of right of appeal under the Banking Act

112

Where, before commencement—

(a) a decision has been taken against which an appeal may be brought to a tribunal constituted in accordance with section 28 of the Banking Act (“a banking appeal tribunal”);

(b) the period in which an appeal against that decision could be made has not expired; and

section 27 of the Banking Act (as it has effect by virtue of the 2BCD Regulations) applies to that decision and the repeal of that Act does not affect the continuity of the period set by or under that Act as the period within which an appeal against that decision may be brought.

Application of the Banking Act to transitional appeals

113

(1) Notwithstanding the repeal of the Banking Act, sections 27(4) and (5), 28, 30 and 31 of that Act apply to a transitional Banking Act appeal, subject to the modifications set out in this article.

(2) A “transitional Banking Act appeal” is

(a) an appeal brought in accordance with section 28 of the Banking Act which has not been determined before commencement; or

(b) an appeal brought after commencement pursuant to article 112.

(3) In section 27 of the Banking Act, for subsection (5) substitute the following—

(5) The Tribunal may suspend the operation of a decision imposing or varying a restriction or giving or varying a direction pending the determination of an appeal in respect of that decision.

(4) In subsection (3) of section 30 of the Banking Act, for the words “appeals under this Part of this Act” are substituted

transitional Banking Act appeals within the meaning of article 113 of the Financial Services and Markets Act 2000 (Transitional Provisions) (Partly Completed Procedures) Order 2001

Task of the banking appeal tribunal in relation to a transitional Banking Act appeal

114

(1) On a transitional Banking Act appeal brought by an institution under section 27(1) of the Banking Act, the question for the determination of the banking appeal tribunal is whether, for the reasons adduced by the appellant, the decision was unlawful or was not justified by the evidence on which it was based.

(2) On making its determination, the banking appeal tribunal must remit the matter to the Authority with such directions (if any) as the tribunal considers appropriate for giving effect to its determination.

(3) The Authority must exercise its powers under—

(a) Part IV, V, XII or XIII of the Act;

(b) Schedule 3 to the Act;

in the manner most appropriate to give effect to the determination of, and any direction given by, the banking appeal tribunal.

(4) Notwithstanding the repeal of the Banking Act, section 29(5), (6) and (8) of that Act apply to a transitional Banking Act appeal brought by a person under section 27(2) of the Banking Act.

(5) The banking appeal tribunal must send a copy of its determination and directions (if any) to the appellant and the Authority.

Decisions taken by the Authority giving effect to banking appeal tribunal determination

115

(1) Where the Authority implements a direction given by the banking appeal tribunal by exercising its power under section 45, sections 53, 54 and 55 do not apply to the exercise of that power.

(2) Where the Authority implements a direction given by the banking appeal tribunal by exercising its power under section 52(6) or (7), section 52(9) does not apply to the exercise of that power.

(3) Where the Authority implements a direction given by the banking appeal tribunal by exercising its power under section 186(1), 185(1) or 187, section 183(3), 185(3) or 188 (as the case may be) does not apply to the exercise of that power.

(4) Where the Authority implements a direction given by the banking appeal tribunal by exercising its power under section 196 or 200(1), section 197 and section 200(2) to (5) do not apply to the exercise of that power.

(5) Where the Authority implements a direction giving by the banking appeal tribunal by exercising any of the powers mentioned in paragraphs (1) to (4), it must exercise that power by giving the parties written notice and sections 390(7) and 391(4) apply to that notice as they apply to a final notice.

Test to be applied by banking appeal tribunal

116

(1) Where in any transitional Banking Act appeal the issues arising for consideration included the issue whether a person was a fit and proper person to hold a particular position with an institution (within the meaning of Schedule 3 to the Banking Act), the banking appeal tribunal must consider instead whether—

(a) the authorised person with whom that person held the position is failing or is likely to fail to satisfy the threshold conditions (within the meaning of section 41); and

(b) whether that person is a fit and proper person to perform the functions in relation to a regulated activity which corresponds to the business in relation to which he was engaged before commencement.

(2) Where in any transitional Banking Act appeal the issues arising for consideration included the issue whether a person was a fit and proper person to be a controller of any description to which section 21 of the Banking Act applies, the banking appeal tribunal must consider instead—

(a) in a case where, after commencement, the person would require the approval of the Authority under section 59, the question whether that person is a fit and proper person to perform functions in relation to a regulated activity corresponding to the business in relation to which he was engaged before commencement;

(b) in a case where, after commencement, the person would have control over a UK authorised person (within the meaning of Part XII of the Act), the question whether the person meets the approval requirements within the meaning of section 186.

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