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Financial Services BillPage 190

Exercise of passport rights by EEA firms

2 (1) Paragraph 13 (establishment) is amended as follows.

(2) In sub-paragraphs (1) and (1A), for “Authority”, in each place, substitute
“appropriate UK regulator”.

(3) 5After sub-paragraph (1A) insert—

(1B) Where the PRA receives a consent notice, it must give a copy to the
FCA without delay.

(1C) Where the FCA receives a consent notice it must in prescribed
cases give a copy to the PRA without delay.

(1D) 10In a case where the FCA is the appropriate UK regulator, the
consent of the PRA is required for any notice by the FCA for the
purposes of sub-paragraph (1)(ba) which relates to—

(a) a PRA-regulated activity,

(b) a PRA-authorised person, or

(c) 15a person whose immediate group includes a PRA-
authorised person.

(1E) If the FCA—

(a) receives a consent notice, or

(b) receives under sub-paragraph (1B) a copy of a consent
20notice,

it must prepare for the firm’s supervision.

(1F) If the PRA—

(a) receives a consent notice, or

(b) receives under sub-paragraph (1C) a copy of a consent
25notice which identifies PRA-regulated activities or relates
to a PRA-authorised person,

it must prepare for the firm’s supervision.

(4) In sub-paragraph (2)—

(a) for “Authority” substitute “appropriate UK regulator”, and

(b) 30omit paragraph (a).

(5) In sub-paragraph (3), for “Authority” substitute “appropriate UK regulator”.

(6) In sub-paragraph (4), after the definition of “applicable provisions” insert—

3 (1) Paragraph 14 (services) is amended as follows.

(2) In sub-paragraph (1), for “Authority”, in each place, substitute “appropriate
UK regulator”.

(3) After sub-paragraph (1) insert—

(1A) 40Relevant notice” means—

(a) a regulator’s notice, or

Financial Services BillPage 191

(b) where none is required by sub-paragraph (1), a notice
informing the appropriate UK regulator of the firm’s
intention to provide services in the United Kingdom.

(1B) Where the PRA receives a relevant notice, it must give a copy to
5the FCA without delay.

(1C) Where the FCA receives a relevant notice, it must in prescribed
cases give a copy to the PRA without delay.

(1D) If the FCA—

(a) receives a relevant notice, or

(b) 10receives under sub-paragraph (1B) a copy of a relevant
notice,

it must prepare for the firm’s supervision.

(1E) If the PRA—

(a) receives a relevant notice, or

(b) 15receives under sub-paragraph (1C) a copy of a relevant
notice which identifies PRA-regulated activities or relates
to a PRA-authorised person,

it must, unless the firm falls within paragraph 5(e), prepare for the
firm’s supervision.

(4) 20For sub-paragraph (2) substitute—

(2) If the appropriate UK regulator has received a relevant notice, it
must, unless the firm falls within paragraph 5(a) or (e), notify the
firm of the applicable provisions (if any).

(5) Omit sub-paragraph (2A).

(6) 25In sub-paragraph (3)—

(a) for “(2)(b)” substitute “(2)”, and

(b) for the words from “Authority” to the end substitute “appropriate
UK regulator received the relevant notice”.

(7) In sub-paragraph (4), after the definition of “applicable provisions” insert—

4 (1) Paragraph 15A (application for approval to manage UCITS) is amended as
follows.

(2) 35For “Authority” or “Authority’s”, in each place, substitute “appropriate UK
regulator” or “appropriate UK regulator’s”.

(3) After sub-paragraph (6) insert—

(6A) If—

(a) the FCA is the appropriate UK regulator, and

(b) 40the firm is, or the firm’s immediate group includes, a PRA-
authorised person,

the FCA must give the PRA a copy of the notice under sub-
paragraph (4).

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(4) In sub-paragraph (7), before the definition of “specified” insert—

5 (1) 5Paragraph 15B (representations and references to the Tribunal) is amended
as follows.

(2) For “Authority”, in both places, substitute “appropriate UK regulator”.

(3) After sub-paragraph (3) insert—

(4) In this paragraph “the appropriate UK regulator” has the same
10meaning as in paragraph 15A.

6 In paragraph 15C (information to home state regulator), in sub-paragraph
(1), for “Authority” substitute “appropriate UK regulator, as defined in
paragraph 15A(7),”.

7 In paragraph 17 (continuing regulation of EEA firms)—

(a) 15before paragraph (a) insert—

(za) require the FCA and the PRA to notify
each other about EEA firms qualifying
for authorisation;, and

(b) in paragraph (c), for “the Authority” substitute “the FCA or the
20PRA”.

8 In paragraph 18 (giving up right to authorisation), in paragraph (b), for “Part
IV permission” substitute “Part 4A permission”.

Exercise of passport rights by UK firms

9 In Part 3 (exercise of passport rights by UK firms), before the italic heading
25before paragraph 19 insert—

Meaning of “the appropriate UK regulator”

18A In this Part of this Schedule “the appropriate UK regulator”
means—

(a) where the UK firm is a PRA-authorised person, the PRA;

(b) 30in any other case, the FCA.

10 (1) Paragraph 19 (establishment) is amended as follows.

(2) For “Authority”, in each place, substitute “appropriate UK regulator”.

(3) After sub-paragraph (7B) insert—

(7C) Where the PRA is the appropriate UK regulator, it must consult the
35FCA before deciding whether to give a consent notice, except where
sub-paragraph (7A) applies.

(7D) Where the FCA is the appropriate UK regulator, it must consult the
PRA before deciding whether to give a consent notice in relation to a
UK firm whose immediate group includes a PRA-authorised
40person.

11 (1) Paragraph 20 (services) is amended as follows.

Financial Services BillPage 193

(2) For “Authority”, in each place, substitute “appropriate UK regulator”.

(3) After sub-paragraph (3A) insert—

(3AA) Where the PRA is the appropriate UK regulator, it must consult
the FCA before deciding whether to give a consent notice.

(3AB) 5Where the FCA is the appropriate UK regulator, it must consult
the PRA before deciding whether to give a consent notice in
relation to a UK firm whose immediate group includes a PRA-
authorised person.

12 In paragraph 20ZA (information for host state regulator), for “Authority”, in
10each place, substitute “appropriate UK regulator”.

13 In paragraph 20B (notice of intention to market), for “Authority”, in each
place, substitute “appropriate UK regulator”.

14 In paragraph 22 (continuing regulation of UK firms), in sub-paragraph (3)—

(a) for “the Authority’s consent” substitute “the consent of the FCA or
15the PRA”, and

(b) in paragraph (b), for “the Authority” substitute “the FCA or the
PRA”.

15 (1) Paragraph 23 (power to impose requirements) is amended as follows.

(2) For “the Authority”, in each place, substitute “the FCA”.

(3) 20In sub-paragraph (1)(a), for “Part IV permission” substitute “Part 4A
permission”.

(4) In sub-paragraphs (2) and (2A), for “section 45” substitute “section 55L or
55M”.

(5) After sub-paragraph (2A) insert—

(2B) 25This paragraph does not affect any duty of the FCA to consult the
PRA before exercising its power under section 55L or 55M.

16 (1) Paragraph 24 (which relates to UK firms exercising rights under the banking
consolidation directive) is amended as follows.

(2) In sub-paragraph (1)(a), for “Part IV permission” substitute “Part 4A
30permission”.

(3) In sub-paragraph (2)—

(a) for “the Authority”, in the first place, substitute “either regulator”,

(b) in paragraph (a), for “Part IV permission” substitute “Part 4A
permission”, and

(c) 35in paragraph (b), for “the Authority” substitute “that regulator”.

17 After paragraph 24 insert—

Arrangements between FCA and PRA

24A (1) The regulators may make arrangements about—

(a) how they will consult each other when required to do so by
40paragraph 19(7C) or (7D) or 20(3AA) or (3AB) or by
regulations under paragraph 22;

Financial Services BillPage 194

(b) how each of them will act in response to any advice or
representations received from the other.

(2) The arrangements may require one regulator to obtain the consent
of the other in specified circumstances before—

(a) 5giving a consent notice under paragraph 19 or 20, or

(b) exercising specified functions under regulations under
paragraph 22.

(3) The arrangements must be in writing, and must specify—

(a) the EEA rights to which they relate, and

(b) 10the date on which they come into force.

(4) Where arrangements are in force under this paragraph, the
regulators must exercise functions in accordance with the
arrangements.

(5) The regulators must publish any arrangements under this
15paragraph in such manner as they think fit.

18 In paragraph 25 (information to be included in the public record) for
“Authority” substitute “FCA”.

19 In paragraph 26 (UK management companies: delegation of functions), for
“Authority”, in each place, substitute “appropriate UK regulator”.

20 20In paragraph 27 (UK management companies: withdrawal of authorisation),
for “Authority”, in each place, substitute “appropriate UK regulator”.

21 In paragraph 28 (management companies: request for information), for
“Authority”, in each place, substitute “appropriate UK regulator”.

Part 2 25Amendments of Schedule 4 to FSMA 2000: Treaty rights

22 Schedule 4 to FSMA 2000 (Treaty rights) is amended as follows.

23 (1) Paragraph 3 (exercise of Treaty rights) is amended as follows.

(2) In sub-paragraph (2), for “Authority” substitute “appropriate UK regulator”.

(3) After that sub-paragraph insert—

(2A) 30In sub-paragraph (2) “the appropriate UK regulator” means—

(a) where any of the activities to which the notification under
that sub-paragraph relates is a PRA-regulated activity, the
PRA;

(b) in any other case, the FCA.

(2B) 35Where the PRA receives a notification under sub-paragraph (2), it
must give a copy to the FCA without delay.

(2C) Where the FCA receives a notification under sub-paragraph (2), it
must in prescribed cases give a copy to the PRA without delay.

Financial Services BillPage 195

24 After paragraph 3 insert—

Notification between UK regulators

3A Regulations may require the PRA and the FCA to notify each other
about Treaty firms qualifying for authorisation.

25 (1) 5Paragraph 4 (permission) is amended as follows.

(2) In sub-paragraph (3)—

(a) for “a Part IV permission” substitute “a Part 4A permission”, and

(b) for “Authority” substitute “appropriate UK regulator”.

(3) In sub-paragraph (4), for “Authority” substitute “appropriate UK regulator”.

(4) 10After that sub-paragraph insert—

(5) The appropriate UK regulator” means—

(a) where the Treaty firm is a PRA-authorised person, the
FCA or the PRA;

(b) in any other case, the FCA.

26 (1) 15Paragraph 5 (notice to Authority) is amended as follows.

(2) In sub-paragraph (2), for “the Authority” substitute “the appropriate UK
regulator”.

(3) After sub-paragraph (2) insert—

(2A) The appropriate UK regulator” means—

(a) 20where any of the activities to which the notice relates is a
PRA-regulated activity, the PRA;

(b) in any other case, the FCA.

(2B) Where the PRA receives a notice under sub-paragraph (2), it must
give a copy to the FCA without delay.

(2C) 25Where the FCA receives a notice under sub-paragraph (2) from—

(a) a PRA-authorised person, or

(b) a person whose immediate group includes a PRA-
authorised person,

it must give a copy to the PRA without delay.

(4) 30For sub-paragraph (4) substitute—

(4) Subsections (1), (4) and (8) of section 55U apply to a notice under
sub-paragraph (2) as they apply to an application for a Part 4A
permission.

(5) In the italic heading immediately before paragraph 5, for “Authority”
35substitute “UK regulator”.

Part 3 Amendments of sections 34 and 35 of FSMA 2000: EEA firms and Treaty firms

27 (1) Section 34 of FSMA 2000 (EEA firms) is amended as follows.

(2) In subsection (2), for “the Authority” substitute “the appropriate regulator”.

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(3) After that subsection insert—

(2A) In subsection (2) “the appropriate regulator” means—

(a) in the case of a PRA-authorised person, the PRA, and

(b) in any other case, the FCA.

(4) 5In subsection (3), for “Part IV permission” substitute “Part 4A permission”.

28 (1) Section 35 of FSMA 2000 (Treaty firms) is amended as follows.

(2) In subsection (2), for “the Authority” substitute “the appropriate regulator”.

(3) After that subsection insert—

(2A) In subsection (2) “the appropriate regulator” means—

(a) 10in the case of a PRA-authorised person, the PRA, and

(b) in any other case, the FCA.

(4) In subsection (3), for “Part IV permission” substitute “Part 4A permission”.

Part 4 Amendments of Part 13 of FSMA 2000: Powers of intervention

29 15Part 13 of FSMA 2000 (incoming firms: intervention by Authority) is
amended as follows.

30 In the heading to Part 13, for “Authority” substitute “FCA or PRA”.

31 In section 193 (interpretation of Part 13), in subsection (1), in the definition
of “power of intervention”, for “the Authority” substitute “the FCA or the
20PRA”.

32 (1) Section 194 (general grounds on which power of intervention is exercisable)
is amended as follows.

(2) In subsection (1)—

(a) for “Authority”, in each place, substitute “appropriate regulator”,

(b) 25in paragraph (c), for the words from “meet” to the end substitute
“advance—

(i) in the case of the FCA, one or more of its
operational objectives, and

(ii) in the case of the PRA, any of its objectives.

(3) 30After subsection (1A) insert—

(1B) The appropriate regulator” means—

(a) where the incoming firm is a PRA-authorised person, the
FCA or the PRA;

(b) in any other case, the FCA.

(4) 35In subsection (3), for “Authority”, in each place, substitute “FCA”.

33 (1) Section 194A (contravention by relevant EEA firm with UK branch of
requirement under markets in financial instruments directive) is amended
as follows.

(2) For “Authority” or “Authority’s”, in each place (and in the heading),
40substitute “appropriate regulator” or “appropriate regulator’s”.

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(3) After subsection (7) insert—

(8) Subsection (4) is not to be regarded as requiring the PRA to take
action in relation to the contravention of a requirement falling within
subsection (3) in a case where it is satisfied the the FCA is required to
5act, and is acting or has acted, under subsection (4)—

(a) in relation to that requirement, or

(b) where that requirement is imposed by rules made by the
PRA, in relation to an identical requirement imposed by rules
made by the FCA.”

(9) 10“The appropriate regulator” means—

(a) where the relevant EEA firm is a PRA-authorised person, the
FCA or, subject to subsection (8), the PRA;

(b) in any other case, the FCA.

34 (1) Section 195 (exercise of power in support of overseas regulator) is amended
15as follows.

(2) In subsection (1), for “Authority” substitute “appropriate regulator”.

(3) In subsection (2), for “Authority’s” substitute “appropriate regulator’s”.

(4) After subsection (2) insert—

(2A) The appropriate regulator” means—

(a) 20where the incoming firm is a PRA-authorised person, the
FCA or the PRA;

(b) in any other case, the FCA.

(5) In subsection (4)—

(a) in paragraph (a), for “the Authority” substitute “either regulator”,
25and

(b) omit paragraph (b).

(6) In subsections (5) to (8), for “Authority”, in each place, substitute
“appropriate regulator”.

35 (1) Section 195A (contravention by relevant EEA firm or EEA UCITS of
30directive requirement: home state regulator primarily responsible for
securing compliance) is amended as follows.

(2) For “Authority” or “Authority’s”, in each place, substitute “appropriate
regulator” or “appropriate regulator’s”.

(3) After subsection (11) insert—

(11A) 35Subsection (4) is not to be regarded as requiring the PRA to notify the
home state regulator in relation to the contravention of a
requirement falling within subsection (2) or (3) in a case where the
PRA is satisfied the the FCA is required to act, and is acting or has
acted, under subsection (4) in relation to that requirement.

(4) 40In subsection (12), before the definition of “home state” insert—

36 For section 196 substitute—

196 The power of intervention

(1) If a regulator is entitled to exercise its power of intervention in
5respect of an incoming firm under this Part, it may impose any
requirement in relation to the firm which that regulator could
impose if—

(a) the firm’s permission was a Part 4A permission; and

(b) the regulator was entitled to exercise its power under section
1055L(3) or 55M(3).

(2) The FCA must consult the PRA before exercising its powers by virtue
of this section in relation to—

(a) a PRA-authorised person, or

(b) a member of a group which includes a PRA-authorised
15person.

(3) The PRA must consult the FCA before exercising its powers by virtue
of this section.

37 (1) Section 197 (procedure on exercise of power of intervention) is amended as
follows.

(2) 20In subsection (2), for “Authority” substitute “regulator”.

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

(4) In subsection (4)—

(a) in paragraph (c), for “Authority’s” substitute “regulator’s”, and

(b) in paragraph (d), for “Authority” substitute “regulator”.

(5) 25In subsections (5) to (7), for “Authority”, in each place, substitute
“regulator”.

38 (1) Section 198 (power to apply to court for injunction in respect of certain
overseas insurance companies) is amended as follows.

(2) In subsections (1) to (3), for “Authority”, in each place, substitute
30“appropriate regulator”.

(3) After subsection (3) insert—

(3A) The appropriate regulator” means whichever regulator is, at the
time when the request is received, the competent authority for the
purposes of the provision referred to in subsection (1)(a), (b) or (c).

39 (1) 35Section 199 (additional procedure for EEA firms in certain cases) is amended
as follows.

(2) In subsection (1), for “the Authority” substitute “a regulator”.

(3) In subsection (2)(a)(i), for “the Authority” substitute “that regulator”.

(4) In subsections (3) to (10), for “Authority” substitute “regulator”.

Financial Services BillPage 199

(5) After subsection (10) insert—

(11) Subsection (3) is not to be regarded as requiring the PRA to take
action in relation to the contravention of a relevant requirement in a
case where it is satisfied that the FCA is required to act, and is acting
5or has acted, under subsection (3)—

(a) in relation to that requirement, or

(b) where that requirement is imposed by rules made by the
PRA, in relation to an identical requirement imposed by rules
made by the FCA.

40 (1) 10Section 199A (management companies: loss of authorisation) is amended as
follows.

(2) In subsection (2), for “Authority”, in both places, substitute “appropriate
regulator”.

(3) For subsection (4) substitute—

(4) 15In this section—

41 (1) Section 200 (rescission and variation of requirements) is amended as follows.

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

(3) In subsection (2)—

(a) for “the Authority”, in the first place, substitute “either regulator”,
25and

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

(4) In subsections (3) and (4), for “Authority” substitute “regulator”.

(5) In subsection (5)—

(a) for “the Authority”, in the first place, substitute “either regulator”,
30and

(b) in paragraph (a), for “the Authority” substitute “the regulator”.

42 For section 201 substitute—

201 Effect of certain requirements on other persons

If either regulator, in exercising its power of intervention, imposes on
35an incoming firm a requirement of the kind mentioned in subsection
(4) of section 55P, the requirement has the same effect in relation to
the firm as it would have in relation to an authorised person if it had
been imposed on the authorised person by the regulator acting
under section 55L or 55M.

43 40In section 202 (contravention of requirement imposed under Part 13), in
subsection (1), for “the Authority” substitute “a regulator”.

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