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Financial Services Bill


Financial Services Bill
Schedule 5 — Performance of regulated activities

200

 

Schedule 5

Section 13

 

Performance of regulated activities

1          

Part 5 of FSMA 2000 is amended as follows.

2     (1)  

Section 58 (applications relating to prohibition orders: procedure and right

to refer to Tribunal) is amended as follows.

5

      (2)  

In subsections (2) to (5), for “Authority” substitute “appropriate regulator”.

      (3)  

After subsection (5) insert—

“(6)   

“The appropriate regulator” means the regulator to which the

application is made.”

3          

In section 59 (approval for particular arrangements), omit subsection (9).

10

4     (1)  

Section 60 (applications for approval), for “Authority” or “Authority’s”, in

each place, substitute “appropriate regulator” or “appropriate regulator’s”.

      (2)  

For subsection (3) substitute—

“(3)   

At any time after the application is received and before it is

determined, the appropriate regulator may require the applicant to

15

provide it with such further information as it reasonably considers

necessary to enable it to determine the application or, as the case

requires, to decide whether to give consent.”

      (3)  

In subsection (6), for “Part IV” substitute “Part 4A”.

      (4)  

After subsection (6) insert—

20

“(7)   

The PRA must consult the FCA before—

(a)   

giving a direction under subsection (2)(a) in relation to a class

of applicants, or

(b)   

imposing a requirement under subsection (2)(b) on a class of

applicants.

25

(8)   

The PRA must as soon as practicable notify the FCA of the receipt or

withdrawal of an application to the PRA, unless the case is one in

which by virtue of arrangements under section 59B the consent of the

FCA is not required.

(9)   

“The appropriate regulator”—

30

(a)   

in relation to a controlled function which is of a description

specified in rules made by the FCA, means the FCA;

(b)   

in relation to a controlled function which is of a description

specified in rules made by the PRA, means the PRA, and for

the purposes of subsection (3) also includes the FCA in cases

35

where the consent of the FCA is required.”

5     (1)  

Section 61 (determination of applications) is amended as follows.

      (2)  

In subsection (1), for “The Authority may grant an application made under

section 60” substitute “The regulator to which an application is made under

section 60 may grant the application”.

40

      (3)  

In subsection (2)—

(a)   

for “the Authority” substitute “the regulator”, and

 
 

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Schedule 5 — Performance of regulated activities

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(b)   

after “general rules” insert “made by that regulator”.

      (4)  

After subsection (2) insert—

“(2A)   

Subsections (1) and (2) apply in relation to the giving by the FCA of

any required consent as they apply in relation to the grant of the

application.”

5

      (5)  

In subsection (3), for the words from the beginning to “determine” substitute

“The regulator to which an application is made under section 60 must,

before the end of the period for consideration, determine”.

      (6)  

After subsection (3) insert—

“(3A)   

“The period for consideration”—

10

(a)   

in any case where the application under section 60 is made by

a person applying for permission under Part 4A (see section

60(6)), means whichever ends last of—

(i)   

the period within which the application for that

permission must be determined under section 55V(1)

15

or (2), and

(ii)   

the period of 3 months beginning with the date on

which the regulator receives the application under

section 60, and

(b)   

in any other case, means the period of 3 months beginning

20

with the date on which the regulator receives the application

under section 60.”

      (7)  

In subsection (4), for “the Authority”, in each place, substitute “a regulator”.

      (8)  

In subsection (5)—

(a)   

for “Authority”, in the first place, substitute “regulator to which the

25

application was made”, and

(b)   

for “Authority”, in the second place, substitute “regulator”.

6     (1)  

Section 62 (applications for approval: procedure and right to refer to

Tribunal) is amended as follows.

      (2)  

In subsection (1), for the words from “If” to “, it” substitute “If the regulator

30

to which an application is made under section 60 (“an application”) decides

to grant the application, it”.

      (3)  

In subsections (2) to (4)—

(a)   

for “the Authority” substitute “the regulator to which an application

is made”, and

35

(b)   

for “an application” substitute “the application”.

7     (1)  

Section 63 (withdrawal of approval) is amended as follows.

      (2)  

In subsection (2)—

(a)   

for “its approval, the Authority may take into account any matter

which it could take into account if it were” substitute “an approval,

40

the FCA or the PRA may take into account any matter which could

be taken into account in”, and

(b)   

at the end insert “(on the assumption, if it is not the case, that the

application was one falling to be considered by it)”.

      (3)  

In subsections (3) to (5)—

45

 
 

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(a)   

for “the Authority” substitute “a regulator”, and

(b)   

for “its approval” substitute “an approval”.

8          

In section 63A (performance of controlled functions without approval:

power to impose penalties), for “Authority”, in each place, substitute

“appropriate regulator”.

5

9          

In section 63B (procedure and right to refer to Tribunal), for “the Authority”,

in each place, substitute “a regulator”.

10    (1)  

Section 63C (statement of policy) is amended as follows.

      (2)  

In subsection (1), for “The Authority” substitute “Each regulator”.

      (3)  

In subsections (2) and (3), for “The Authority’s” substitute “Each

10

regulator’s”.

      (4)  

In subsection (4), for “the Authority” substitute “the regulator that has

issued the statement”.

      (5)  

In subsection (5)—

(a)   

for “The Authority” substitute “A regulator”, and

15

(b)   

after “issued” insert “by it”.

      (6)  

In subsection (6), for “replaced, the Authority” substitute “replaced by a

regulator, the regulator”.

      (7)  

In subsection (7), for “The Authority” substitute “A regulator”.

      (8)  

In subsection (8)—

20

(a)   

after “section” insert “by a regulator”, and

(b)   

for “Authority”, in both places, substitute “regulator”.

      (9)  

In subsection (9), for “Authority” substitute “regulator”.

     (10)  

In subsection (10)—

(a)   

for “the Authority” substitute “a regulator”, and

25

(b)   

after “published” insert “by it”.

11    (1)  

Section 63D (statement of policy: procedure) is amended as follows.

      (2)  

In subsection (1)—

(a)   

for “issuing” substitute “a regulator issues”, and

(b)   

for “Authority”, in both places, substitute “regulator”.

30

      (3)  

In subsections (2), (3), (4) and (5) (in both places), for “Authority” substitute

“regulator”.

      (4)  

In subsection (6)—

(a)   

for “The Authority” substitute “A regulator”, and

(b)   

after “published” insert “by it”.

35

12    (1)  

Section 64 (conduct of approved persons: statement and codes) is amended

as follows.

      (2)  

In subsection (2)—

(a)   

for “the Authority” substitute “a regulator”, and

(b)   

after “subsection (1)” insert “or (1A)”.

40

 
 

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      (3)  

In subsection (3)(a) to (c), for “Authority” substitute “regulator issuing the

code”.

      (4)  

In subsection (4)—

(a)   

for “The Authority” substitute “A regulator”, and

(b)   

after “issued” insert “by it”.

5

      (5)  

In subsection (5)—

(a)   

after “replaced” insert “by a regulator”, and

(b)   

for “Authority” substitute “regulator”.

      (6)  

In subsection (6)—

(a)   

for “the Authority”, in the first place, substitute “the regulator that

10

issued it”, and

(b)   

for “the Authority”, in the second place, substitute “that regulator”.

      (7)  

In subsection (10), for “The Authority” substitute “A regulator”.

      (8)  

In subsection (11), for paragraph (b) substitute—

“(b)   

is to be treated for the purposes of section 1B(6)(a) as part of

15

the FCA’s rule-making functions (where the power is

exercisable by the FCA) and is to be treated for the purposes

of section 2I(1)(a) as part of the PRA’s rule-making functions

(where the power is exercisable by the PRA).”

      (9)  

In subsection (12)—

20

(a)   

for “The Authority” substitute “A regulator”, and

(b)   

after “published” insert “by it”.

     (10)  

For subsection (13) substitute—

“(13)   

Any expression which is used both in this section and section 59 has

the same meaning in this section as in that section.”

25

13    (1)  

Section 65 (statements and codes: procedure) is amended as follows.

      (2)  

For subsection (1) substitute—

“(1)   

Before a regulator issues a statement or code under section 64, it

must—

(a)   

consult the other regulator; and

30

(b)   

after doing so, publish a draft of the statement or code in the

way appearing to it to be best calculated to bring the

statement or code to the attention of the public.

(1A)   

The duty of the FCA to consult the PRA under subsection (1)(a)

applies only in so far as the statement or code applies to persons in

35

relation to whom approval is given under section 59 in respect of the

performance by them of significant-influence functions (within the

meaning of that section) in relation to the carrying on by PRA-

authorised persons of regulated activities.”

      (3)  

In subsection (2)(b), for “the Authority” substitute “the regulator publishing

40

the draft”.

      (4)  

In subsection (3)—

(a)   

for “issuing” substitute “a regulator issues”, and

(b)   

for “the Authority” substitute “it”.

 
 

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Schedule 5 — Performance of regulated activities

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      (5)  

In subsection (4), for “the Authority” substitute “a regulator”.

      (6)  

In subsection (5)—

(a)   

for “the Authority”, in the first place, substitute “the regulator

issuing the statement or code”, and

(b)   

for “the Authority”, in the second place, substitute “the regulator”.

5

      (7)  

In subsection (6), for “the Authority” substitute “the regulator concerned”.

      (8)  

For subsection (7) substitute—

“(7)   

Subsections (1)(b) and (2) to (6) do not apply in relation to—

(a)   

a statement or code issued by the FCA if it considers that the

delay involved in complying with them would be prejudicial

10

to the interests of consumers, as defined in section 425A; or

(b)   

a statement or code issued by the PRA if it considers that the

delay involved in complying with them would—

(i)   

be prejudicial to the safety and soundness of PRA-

authorised persons, or

15

(ii)   

in a case where section 2C applies, be prejudicial to

securing the appropriate degree of protection for

policyholders.”

      (9)  

In subsection (9)—

(a)   

for “The Authority” substitute “A regulator”, and

20

(b)   

after “published” insert “by it”.

     (10)  

For subsection (11) substitute—

“(11)   

“Cost benefit analysis” means—

(a)   

an analysis of the costs together with an analysis of the

benefits that will arise—

25

(i)   

if the proposed statement or code is issued, or

(ii)   

if subsection (5)(b) applies, from the statement or

code that has been issued, and

(b)   

subject to subsection (11A), an estimate of those costs and of

those benefits.

30

(11A)   

If, in the opinion of the regulator concerned—

(a)   

the costs or benefits referred to in subsection (11) cannot

reasonably be estimated, or

(b)   

it is not reasonably practicable to produce an estimate,

   

the cost benefit analysis need not estimate them, but must include a

35

statement of the opinion of the regulator concerned and an

explanation of it.”

14    (1)  

Section 66 (disciplinary powers) is amended as follows.

      (2)  

In subsection (1)—

(a)   

in the opening words—

40

(i)   

for “The Authority” substitute “A regulator”, and

(ii)   

after “this section” insert “(whether or not it has given its

approval in relation to the person)”, and

(b)   

in paragraphs (a) and (b), for “ Authority” substitute “ regulator”.

 
 

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Schedule 5 — Performance of regulated activities

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      (3)  

For subsection (2) substitute—

“(2)   

For the purposes of action by the FCA, a person is guilty of

misconduct if, while an approved person—

(a)   

the person has failed to comply with a statement of principle

issued by the FCA under section 64, or

5

(b)   

the person has been knowingly concerned in a contravention

by the relevant authorised person of a requirement imposed

on that authorised person—

(i)   

by or under this Act, or

(ii)   

by any qualifying EU provision specified, or of a

10

description specified, for the purposes of this

subsection by the Treasury by order.

(2A)   

For the purposes of action by the PRA, a person is guilty of

misconduct if, while an approved person in respect of the

performance of a significant-influence function in relation to the

15

carrying on by a PRA-authorised person of a regulated activity—

(a)   

the person has failed to comply with a statement of principle

issued by the PRA under section 64, or

(b)   

the person has been knowingly concerned in a contravention

by the relevant authorised person of a requirement imposed

20

on that authorised person—

(i)   

by or under this Act, or

(ii)   

by any qualifying EU provision specified, or of a

description specified, for the purposes of this

subsection by the Treasury by order.”

25

      (4)  

In subsection (3), for “ Authority” substitute “regulator”.

      (5)  

In subsection (3D), for “The Authority” substitute “The regulator taking

action under this section”.

      (6)  

In subsection (4)—

(a)   

for “The Authority”, in the first place, substitute “A regulator”, and

30

(b)   

for “the Authority”, in the second place, substitute “the regulator”.

      (7)  

In subsection (5)(a), for “the Authority” substitute “a regulator”.

      (8)  

For subsection (6) substitute—

“(6)   

“Approved person” means a person in relation to whom an approval

is given under that section.”

35

15    (1)  

Section 67 (disciplinary measures: procedure and right to refer to Tribunal)

is amended as follows.

      (2)  

In subsections (1) and (4), for “the Authority” substitute “a regulator”.

      (3)  

In subsection (7)—

(a)   

for “the Authority”, in the first place, substitute “a regulator”, and

40

(b)   

for “the Authority”, in the second place, substitute “the regulator”.

      (4)  

In subsection (9)—

(a)   

for “an approved person (“A”),” substitute “a person (“A”) in relation

to whom approval has been given,”, and

(b)   

omit the second sentence.

45

 
 

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16         

In section 68 (publication), for “the Authority” substitute “the regulator

publishing it”.

17    (1)  

Section 69 (statement of policy) is amended as follows.

      (2)  

In subsection (1), for “The Authority must” substitute “Each regulator must”.

      (3)  

In subsection (2), for “The Authority’s” substitute “A regulator’s”.

5

      (4)  

In subsection (3)—

(a)   

for “The Authority” substitute “A regulator”, and

(b)   

after “issued” insert “by it”.

      (5)  

In subsection (4), for “replaced, the Authority” substitute “replaced by a

regulator, the regulator”.

10

      (6)  

In subsection (5), for “The Authority” substitute “A regulator”.

      (7)  

In subsection (6)—

(a)   

after “section” insert “by a regulator”, and

(b)   

for “the Authority”, in both places, substitute “the regulator”.

      (8)  

In subsection (7), for “Authority” substitute “regulator”.

15

      (9)  

In subsection (8)—

(a)   

for “the Authority” substitute “a regulator”, and

(b)   

after “published” insert “by it”.

18    (1)  

Section 70 (statements of policy: procedure) is amended as follows.

      (2)  

In subsection (1)—

20

(a)   

for “issuing” substitute “a regulator issues”, and

(b)   

for “Authority”, in both places, substitute “regulator”.

      (3)  

In subsections (2), (3), (4) and (5) (in both places), for “Authority” substitute

“regulator”.

      (4)  

In subsection (6)—

25

(a)   

for “The Authority” substitute “A regulator”, and

(b)   

after “published” insert “by it”.

Schedule 6

Section 20

 

Control of business transfers

1          

Part 7 of FSMA 2000 is amended as follows.

30

2          

Before section 104 insert—

“103A   

Meaning of “the appropriate regulator”

(1)   

In this Part “the appropriate regulator” means—

(a)   

in relation to a scheme in respect of which the authorised

person concerned is a PRA-authorised person, the PRA;

35

(b)   

in any other case, the FCA.

(2)   

In this Part, “the authorised person concerned”—

 
 

 
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