Financial Services Bill

Session 2010 - 12
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Other Bills before Parliament

Financial Services Bill

Financial Services Bill
Part 2 — Amendments of Financial Services and Markets Act 2000
41

22B
Parliamentary control in relation to certain orders under section 22A
(1)
This section applies to the first order made under section 22A(1).
(2)
This section also applies to any subsequent order made under section
22A(1) which—
(a)
contains a statement by the Treasury that, in their opinion, the
5
effect (or one of the effects) of the proposed order would be—
(i)
that an activity would become a PRA-regulated activity,
or
(ii)
that a PRA-regulated activity would become a regulated
activity that is not a PRA-regulated activity, or
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(b)
amends primary legislation.
(3)
No order to which this section applies may be made unless—
(a)
a draft of the order has been laid before Parliament and
approved by a resolution of each House, or
(b)
subsection (5) applies.
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(4)
Subsection (5) applies if an order to which this section applies contains
a statement that the Treasury are of the opinion that, by reason of
urgency, it is necessary to make the order without a draft being so laid
and approved.
(5)
Where this subsection applies the order—
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(a)
must be laid before Parliament after being made, and
(b)
ceases to have effect at the end of the relevant period unless
before the end of that period the order is approved by a
resolution of each House of Parliament (but without that
affecting anything done under the order or the power to make
25
a new order).
(6)
The “relevant period” is a period of 28 days beginning with the day on
which the order is made.
(7)
In calculating the relevant period no account is to be taken of any time
during which Parliament is dissolved or prorogued or during which
30
both Houses are adjourned for more than 4 days.”
Permission to carry on regulated activities
9
Permission to carry on regulated activities
(1)
In section 31 (authorised persons), in subsection (1)(a), for “Part IV permission”
substitute “Part 4A permission”.
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Financial Services Bill
Part 2 — Amendments of Financial Services and Markets Act 2000
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(2)
For sections 40 to 55 of FSMA 2000 substitute—
“Part 4A
Permission to carry on regulated activities
Application for permission
55A
Application for permission
5
(1)
An application for permission to carry on one or more regulated
activities may be made to the appropriate regulator by—
(a)
an individual,
(b)
a body corporate,
(c)
a partnership, or
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(d)
an unincorporated association.
(2)
“The appropriate regulator”, in relation to an application under this
section, means—
(a)
the PRA, in a case where—
(i)
the regulated activities to which the application relates
15
consist of or include a PRA-regulated activity, or
(ii)
the applicant is a PRA-authorised person otherwise than
by virtue of a Part 4A permission;
(b)
the FCA, in any other case.
(3)
An authorised person who has a permission under this Part which is in
20
force may not apply for permission under this section.
(4)
An EEA firm may not apply for permission under this section to carry
on a regulated activity which it is, or would be, entitled to carry on in
exercise of an EEA right, whether through a United Kingdom branch or
by providing services in the United Kingdom.
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(5)
A permission given by the appropriate regulator under this Part or
having effect as if so given is referred to in this Act as “a Part 4A
permission”.
55B
The threshold conditions
(1)
“The threshold conditions”, in relation to a regulated activity, means
30
the conditions set out in Schedule 6, as read with any threshold
condition code made by either regulator under section 137M.
(2)
Any reference in this Part to the threshold conditions for which either
regulator is responsible is to be read as a reference to the conditions set
out in Schedule 6 that are expressed to be relevant to the discharge by
35
that regulator of its functions, as read with any threshold condition
code made by that regulator under section 137M.
(3)
In giving or varying permission, imposing or varying a requirement, or
giving consent, under any provision of this Part, each regulator must
ensure that the person concerned will satisfy, and continue to satisfy, in
40
relation to all of the regulated activities for which the person has or will
have permission, the threshold conditions for which that regulator is
responsible.

Financial Services Bill
Part 2 — Amendments of Financial Services and Markets Act 2000
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(4)
But the duty imposed by subsection (3) does not prevent a regulator,
having due regard to that duty, from taking such steps as it considers
are necessary, in relation to a particular person, in order to advance—
(a)
in the case of the FCA, any of its operational objectives;
(b)
in the case of the PRA, any of its objectives.
5
55C
Power to amend Schedule 6
(1)
The Treasury may by order amend Parts 1 and 2 of Schedule 6 by
altering, adding or repealing provisions, or by substituting for those
Parts as they have effect for the time being provisions specified in the
order.
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(2)
Different provision may be made under this section—
(a)
in relation to the discharge of the functions of each regulator;
(b)
in relation to different regulated activities;
(c)
in relation to persons who carry on, or seek to carry on, activities
that consist of or include a PRA-regulated activity and in
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relation to other persons.
55D
Firms based outside EEA
(1)
This section applies in relation to a person (“the non-EEA firm”)—
(a)
who is a body incorporated in, or formed under the law of, or is
an individual who is a national of, any country or territory
20
outside the EEA, and
(b)
who is carrying on a regulated activity in any country or
territory outside the United Kingdom in accordance with the
law of that country or territory (“the overseas state”).
(2)
In determining whether the non-EEA firm is satisfying or will satisfy,
25
and continue to satisfy, any one or more of the threshold conditions for
which a UK regulator is responsible, the UK regulator may have regard
to any opinion notified to it by a regulatory authority in the overseas
state (“the overseas regulator”) which relates to the non-EEA firm and
appears to the UK regulator to be relevant to compliance with those
30
conditions.
(3)
In considering how much weight (if any) to attach to the opinion, the
UK regulator must have regard to the nature and scope of the
supervision exercised in relation to the non-EEA firm by the overseas
regulator.
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(4)
In this section “UK regulator” means the FCA or the PRA.
55E
Giving permission: the FCA
(1)
This section applies where the FCA is the appropriate regulator in
relation to an application for permission under section 55A.
(2)
The FCA may give permission for the applicant to carry on the
40
regulated activity or activities to which the application relates or such
of them as may be specified in the permission.
(3)
If the applicant is a member of a group which includes a PRA-
authorised person, the FCA must consult the PRA before determining
the application.
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Part 2 — Amendments of Financial Services and Markets Act 2000
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(4)
If it gives permission, the FCA must specify the permitted regulated
activity or activities, described in such manner as the FCA considers
appropriate.
(5)
The FCA may—
(a)
incorporate in the description of a regulated activity such
5
limitations (for example as to circumstances in which the
activity may, or may not, be carried on) as it considers
appropriate;
(b)
specify a narrower or wider description of regulated activity
than that to which the application relates;
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(c)
give permission for the carrying on of a regulated activity which
is not included among those to which the application relates
and is not a PRA-regulated activity.
55F
Giving permission: the PRA
(1)
This section applies where the PRA is the appropriate regulator in
15
relation to an application for permission under section 55A.
(2)
The PRA may with the consent of the FCA give permission for the
applicant to carry on the regulated activity or activities to which the
application relates or such of them as may be specified in the
permission.
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(3)
If it gives permission, the PRA must specify the permitted regulated
activity or activities, described in such manner as the PRA considers
appropriate.
(4)
The PRA may—
(a)
incorporate in the description of a regulated activity such
25
limitations (for example as to circumstances in which the
activity may, or may not, be carried on) as it considers
appropriate;
(b)
specify a narrower or wider description of regulated activity
than that to which the application relates;
30
(c)
give permission for the carrying on of a regulated activity which
is not included among those to which the application relates.
(5)
Consent given by the FCA for the purposes of this section may be
conditional on the manner in which the PRA exercises its powers under
subsections (3) and (4).
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(6)
Subsections (3) and (4)(b) and (c) do not enable the PRA to give
permission that relates only to activities that are not PRA-regulated
activities, except where the applicant is a PRA-authorised person
otherwise than by virtue of a Part 4A permission.
55G
Giving permission: special cases
40
(1)
“The applicant” means an applicant for permission under section 55A.
(2)
If the applicant—
(a)
in relation to a particular regulated activity, is exempt from the
general prohibition as a result of section 39(1) or an order made
under section 38(1), but
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Financial Services Bill
Part 2 — Amendments of Financial Services and Markets Act 2000
45

(b)
has applied for permission in relation to another regulated
activity,

the application is to be treated as relating to all the regulated activities
which, if permission is given, the applicant will carry on.
(3)
If the applicant—
5
(a)
in relation to a particular regulated activity, is exempt from the
general prohibition as a result of section 285(2) or (3), but
(b)
has applied for permission in relation to another regulated
activity,

the application is to be treated as relating only to that other regulated
10
activity.
(4)
If the applicant—
(a)
is a person to whom, in relation to a particular regulated
activity, the general prohibition does not apply as a result of
Part 19, but
15
(b)
has applied for permission in relation to another regulated
activity,

the application is to be treated as relating only to that other regulated
activity.
(5)
Subsection (6) applies where either regulator (“the responsible
20
regulator”) receives an application for permission under section 55A
which is in the regulator’s opinion similar to an application which was
previously made to the other regulator and was either—
(a)
treated by the other regulator as not being a valid application to
that regulator because of the regulated activities to which it
25
related, or
(b)
refused by the other regulator after being considered.
(6)
The responsible regulator must have regard to the desirability of
minimising—
(a)
the additional work for the applicant in dealing with the new
30
application, and
(b)
the time taken to deal with the new application.
Variation and cancellation of Part 4A permission
55H
Variation by FCA at request of authorised person
(1)
This section applies in relation to an authorised person who has a Part
35
4A permission but is not a PRA-authorised person.
(2)
The FCA may, on the application of the authorised person, vary the
permission by—
(a)
adding a regulated activity, other than a PRA-regulated
activity, to those to which the permission relates;
40
(b)
removing a regulated activity from those to which the
permission relates;
(c)
varying the description of a regulated activity to which the
permission relates.
(3)
The FCA may, on the application of the authorised person, cancel the
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permission.

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Part 2 — Amendments of Financial Services and Markets Act 2000
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(4)
The FCA may refuse an application under this section if it considers
that it is desirable to do so in order to advance any of its operational
objectives.
(5)
If the applicant is a member of a group which includes a PRA-
authorised person, the FCA must consult the PRA before determining
5
the application.
(6)
If as a result of a variation of a Part 4A permission under this section
there are no longer any regulated activities for which the authorised
person concerned has permission, the FCA must, once it is satisfied that
it is no longer necessary to keep the permission in force, cancel it.
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(7)
The FCA’s power to vary a Part 4A permission under this section
extends to including in the permission as varied any provision that
could be included if a fresh permission were being given by it in
response to an application under section 55A.
55I
Variation by PRA at request of authorised person
15
(1)
On the application of a PRA-authorised person with a Part 4A
permission, the PRA may with the consent of the FCA vary the
permission by—
(a)
adding a regulated activity to those to which the permission
relates;
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(b)
removing a regulated activity from those to which the
permission relates;
(c)
varying the description of a regulated activity to which the
permission relates.
(2)
On the application of a PRA-authorised person with a Part 4A
25
permission, the PRA may, after consulting the FCA, cancel the
permission.
(3)
On the application of an authorised person other than a PRA-
authorised person, the PRA may with the consent of the FCA vary the
permission by adding to the regulated activities to which the
30
permission relates one or more regulated activities which include a
PRA-regulated activity.
(4)
The PRA may refuse an application under this section if it appears to it
that it is desirable to do so in order to advance any of its objectives.
(5)
The FCA may withhold its consent to a proposed variation under this
35
section if it appears to it that it is desirable to do so in order to advance
one or more of its operational objectives.
(6)
If as a result of a variation of a Part 4A permission under this section
there are no longer any regulated activities for which the authorised
person concerned has permission, the PRA must, once it is satisfied
40
after consulting the FCA that it is no longer necessary to keep the
permission in force, cancel it.
(7)
The PRA’s power to vary a Part 4A permission under this section
extends to including in the permission as varied any provision that
could be included if a fresh permission were being given by it in
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response to an application under section 55A.

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Part 2 — Amendments of Financial Services and Markets Act 2000
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(8)
Consent given by the FCA for the purposes of subsection (1) may be
conditional on the manner in which the PRA exercises its powers under
section 55F(3) and (4) (as a result of subsection (7)).
55J
Variation or cancellation on initiative of regulator
(1)
Either regulator may exercise its power under this section in relation to
5
an authorised person with a Part 4A permission (“A”) if it appears to
the regulator that—
(a)
A is failing, or is likely to fail, to satisfy the threshold conditions
for which the regulator is responsible,
(b)
A has failed, during a period of at least 12 months, to carry on a
10
regulated activity to which the Part 4A permission relates, or
(c)
it is desirable to exercise the power in order to advance—
(i)
in the case of the FCA, one or more of its operational
objectives,
(ii)
in the case of the PRA, any of its objectives.
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(2)
The FCA’s power under this section is the power—
(a)
to vary the Part 4A permission by—
(i)
adding a regulated activity other than a PRA-regulated
activity to those to which the permission relates,
(ii)
removing a regulated activity from those to which the
20
permission relates, or
(iii)
varying the description of a regulated activity to which
the permission relates in a way which, if it is a PRA-
regulated activity, does not, in the opinion of the FCA,
widen the description, or
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(b)
to cancel the Part 4A permission.
(3)
The PRA’s power under this section is the power—
(a)
in the case of a PRA-authorised person, to vary the Part 4A
permission in any of the ways mentioned in section 55I(1) or to
cancel it;
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(b)
in the case of an authorised person who is not a PRA-authorised
person, to vary the Part 4A permission by adding a PRA-
regulated activity to those to which the permission relates and,
if the PRA does so, to vary the Part 4A permission in any of the
other ways mentioned in section 55I(1).
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(4)
The FCA—
(a)
must consult the PRA before exercising its power under this
section in relation to—
(i)
a PRA-authorised person, or
(ii)
a member of a group which includes a PRA-authorised
40
person, and
(b)
in the case of a PRA-authorised person, may exercise the power
so as to add a new activity to those to which the permission
relates or to widen the description of a regulated activity to
which the permission relates, only with the consent of the PRA.
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(5)
The PRA—
(a)
must consult the FCA before exercising its power under this
section, and