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(b) in paragraph (b), for “clearing services” substitute “services falling
within section 285(2)(b)”, and

(c) for “the Authority” substitute “the FCA and the Bank of England”.

(4) In subsection (7)—

(a) 5in paragraph (a), after “clearing services” insert “or services falling
within section 285(3)(b)”,

(b) in paragraph (b), after “clearing services” insert “or services falling
within section 285(3)(b)”, and

(c) for “the Authority” substitute “the Bank of England and the FCA”.

(5) 10In subsection (9), for “the Authority’s” substitute “the appropriate
regulator’s”.

11 For section 293A substitute—

293A   Information: compliance with EU requirements

The appropriate regulator may require a recognised body to give the
15appropriate regulator such information as the appropriate regulator
reasonably requires in order to satisfy itself that the body is
complying with any qualifying EU provision that is specified, or of a
description specified, for the purposes of this section by the Treasury
by order.

12 20In section 294 (modification or waiver of rules), in subsections (1), (2), (4) and
(6), for “Authority” substitute “appropriate regulator”.

13 (1) Section 295 (notification: overseas investment exchanges and overseas
clearing houses) is amended as follows.

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

(3) 25In subsection (2), for the words from “likely” to the end substitute “likely to
affect the appropriate regulator’s assessment of whether it is satisfied as to
the requirements set out in section 292(3)”.

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

(5) Omit subsection (4).

14 (1) 30Section 296 (power to give directions) is amended as follows.

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

(3) In subsection (1A)—

(a) for the words from “in the case of a recognised body which is a
recognised investment” to “the body” substitute “if it appears to the
35appropriate regulator that a recognised body”, and

(b) for the words from “directly applicable” to the end substitute
“directly applicable EU regulation specified (or of a description
specified) in an order made by the Treasury”.

(4) In subsection (2), for “The Authority” substitute “The regulator concerned”.

(5) 40In subsection (2A)—

(a) in the opening words, for “a recognised investment exchange other
than an overseas investment exchange” substitute “a recognised

Financial Services BillPage 221

body other than an overseas investment exchange or overseas
clearing house”,

(b) in paragraph (a)—

(i) for “the Authority”, in both places, substitute “the regulator
5concerned”, and

(ii) for “the exchange” substitute “the body”, and

(c) in paragraph (b), for “the exchange” substitute “the body”.

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

(7) In subsection (4), for “the Authority” substitute “an appropriate regulator”.

(8) 10In the heading, for “Authority’s” substitute “Appropriate regulator’s”.

15 (1) Section 297 (revoking recognition) is amended as follows.

(2) In subsections (1) and (2), for “the Authority” substitute “the appropriate
regulator”.

(3) In subsection (2A)—

(a) 15in the opening words—

(i) for “the Authority” substitute “the appropriate regulator”,
and

(ii) omit “which is a recognised investment exchange”,

(b) in paragraphs (a) and (b), after “exchange” insert “or (as the case may
20be) of a clearing house”, and

(c) in paragraph (c), for the words from “directly applicable” to the end
substitute “directly applicable EU regulation specified (or of a
description specified) in an order made by the Treasury”.

(4) In subsection (2C), at the end insert “or overseas clearing house”.

(5) 25In subsection (5), for “the Authority” substitute “the appropriate regulator”.

16 In section 298 (directions and revocation: procedure), in subsections (1),
(2)(a), (3), (5), (6), (7) (in both places) and (8), for “the Authority” substitute
“the appropriate regulator”.

17 In section 299 (complaints about recognised bodies), in subsections (1) and
30(2), for “Authority” substitute “appropriate regulator”.

18 In section 300A (power to disallow excessive regulatory provision)—

(a) in subsection (1), for the words from “with” to the end substitute
“with—

(a) its business as an investment exchange,

(b) 35the provision by it of clearing services, or

(c) the provision by it of services falling within section
285(2)(b) or (3)(b)., and

(b) in subsections (2) (in both places) and (4), and in the heading, for
“Authority” substitute “appropriate regulator”.

19 40In section 300B (duty to notify proposal to make regulatory provision), in
subsections (1) to (3), for “Authority” substitute “appropriate regulator”.

20 In section 300C (restriction on making provision before Authority decides
whether to act), in subsections (1), (2)(a), (3) (in both places), (4)(a) and (b),
and in the heading, for “Authority” substitute “appropriate regulator”.

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21 (1) Section 300D (consideration by Authority whether to disallow proposed
provision) is amended as follows.

(2) In subsections (1) to (4) and (5)(a) and (b), for “Authority” substitute
“appropriate regulator”.

(3) 5In subsection (6)—

(a) in the opening words, for “the Authority” substitute “the appropriate
regulator”,

(b) in paragraph (b)—

(i) for “the Authority’s” substitute “the appropriate
10regulator’s”, and

(ii) for “the Authority” substitute “the regulator concerned”, and

(c) in paragraph (c)(i) and (ii), for “the Authority” substitute “the
appropriate regulator”.

(4) In the heading, for “Authority” substitute “appropriate regulator”.

22 (1) 15Section 301 (supervision of certain contracts) is amended as follows.

(2) In subsection (2), for “the Authority” substitute “the Bank of England”.

(3) In subsection (3)—

(a) for “the Authority”, in the first place, substitute “the FCA or the Bank
of England”, and

(b) 20for “the Authority”, in the second place, substitute “the Bank”.

(4) In subsections (4)(a), (6)(a), (7) and (9), for “Authority” substitute “Bank of
England”.

23 In section 301A (obligation to notify the Authority: acquisitions of control),
in subsections (1) and (2), and in the heading, for “the Authority” substitute
25“the FCA”.

24 In section 301B (requirements for s.301A notices), in subsections (1) to (3), for
“Authority” substitute “FCA”.

25 In section 301C (acknowledgement of receipt), in subsections (1) and (2), for
“Authority” substitute “FCA”.

26 30In section 301F (assessment: general), in subsections (1) to (3), for
“Authority” substitute “FCA”.

27 (1) Section 301G (assessment: procedure) is amended as follows.

(2) In subsections (1) (in both places) and (2) to (5), for “Authority” substitute
“FCA”.

(3) 35In subsection (6), for “the Authority’s” substitute “the FCA’s”.

28 In section 301H (duration of approval), in subsections (1), (2) and (3) (in both
places), for “the Authority” substitute “the FCA”.

29 In section 301I (objections by the Authority), in subsections (1) to (5), and in
the heading, for “Authority” substitute “FCA”.

30 40In section 301J (restriction notices), in subsections (1), (2)(b), (3) and (7), for
“Authority” substitute “FCA”.

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31 In section 301K (order for sale of shares), in subsection (1), for “the
Authority” substitute “the FCA”.

32 (1) Section 301L (offences under Chapter) is amended as follows.

(2) In subsections (1) and (2) (in both places), for “the Authority” substitute “the
5FCA”.

(3) In subsection (4), for “the Authority’s” substitute “the FCA’s”.

(4) In subsections (5) and (9), for “the Authority” substitute “the FCA”.

33 In section 312A (exercise of passport rights by EEA market operator), in
subsection (1)(b), for “the Authority” substitute “the FCA”.

34 10In section 312B (removal of passport rights from EEA market operator), in
subsections (1) (in each place), (3), (4)(b), (5), (6), (7)(a) and (b), (8)(b), (9) to
(11) and (12) (in both places), for “Authority” substitute “FCA”.

35 In section 312C (exercise of passport rights by recognised investment
exchange), in subsections (2) to (6), for “Authority” substitute “FCA”.

36 15In section 313 (interpretation), in subsection (4), after “clearing services”
insert “or services falling within section 285(3)(b)”.

37 In section 392 (warning and decisions notices: application of provisions
relating to third party rights and access to evidence)—

(a) in paragraph (a), after “section 280(1),” insert “section 312G(1),”, and

(b) 20in paragraph (b), after “section 280(2),” insert “section 312H(1),”.

38 In section 412A (approval and monitoring of trade-matching and reporting
systems), in subsections (1), (2), (4), (5) (in both places), (6) (in both places)
and (7), for “Authority” substitute “FCA”.

39 In section 412B (procedure for approval and suspension or withdrawal of
25approval), in subsections (1) to (6), (7) (in both places), (8) and (9), for
“Authority” substitute “FCA”.

Section 34

SCHEDULE 9 Discipline and enforcement

Part 1 30Introductory

1 FSMA 2000 is amended as follows.

Part 2 Authorised persons acting without permission

2 (1) Section 20 (authorised persons acting without permission) is amended as
35follows.

(2) In subsection (1)—

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(a) in the opening words, after “an authorised person” insert “other than
a PRA-authorised person”,

(b) for paragraph (a) substitute—

(a) given to that person under Part 4A, or, and

(c) 5in the words after paragraph (b), for “Authority” substitute “ FCA”.

(3) After that subsection insert—

(1A) If a PRA-authorised person carries on a regulated activity in the
United Kingdom, or purports to do so, otherwise than in accordance
with permission given to the person under Part 4A or resulting from
10any other provision of this Act, the person is to be taken to have
contravened—

(a) a requirement imposed by the FCA, and

(b) a requirement imposed by the PRA.

(4) In subsection (2), for “The contravention” substitute “A contravention
15within subsection (1) or (1A)”.

(5) In subsection (3), for “the contravention”, in the first place, substitute “a
contravention within subsection (1) or (1A)”.

Part 3 Market abuse

3 (1) 20In the provisions of Part 8 (market abuse) mentioned in sub-paragraph (2),
for “Authority” or “Authority’s”, in each place, substitute “FCA” or “FCA’s”.

(2) The provisions are: sections 119, 120 (including the heading), 121 to 130A
and 131A.

(3) In section 121 (codes: procedure), for subsection (10) substitute—

(10) 25Cost benefit analysis” means—

(a) an analysis of the costs together with an analysis of the
benefits that will arise—

(i) if the proposed code is issued, or

(ii) if subsection (5)(b) applies, from the code that has
30been issued, and

(b) subject to subsection (10A), an estimate of those costs and of
those benefits.

(10A) If, in the opinion of the FCA—

(a) the costs or benefits referred to in subsection (10) cannot
35reasonably 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
statement of the FCA’s opinion and an explanation of it.

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Part 4 Disciplinary measures

4 In Part 14 (disciplinary measures), before section 205 insert—

204A Meaning of “relevant requirement” and “appropriate regulator”

(1) 5The following definitions apply for the purposes of this Part.

(2) “Relevant requirement” means a requirement imposed—

(a) by or under this Act, or

(b) by a qualifying EU provision specified, or of a description
specified, for the purposes of this subsection by the Treasury
10by order.

(3) The PRA is “the appropriate regulator” in the case of a contravention
of—

(a) a requirement that is imposed under any provision of this Act
by the PRA,

(b) 15a requirement under section 56(6) where the authorised
person concerned is a PRA-authorised person and the
prohibition order concerned is made by the PRA,

(c) a requirement under section 59(1) or (2) where the authorised
person concerned is a PRA-authorised person and the
20approval concerned falls to be given by the PRA.

(4) In the case of a contravention of a requirement that is imposed by a
qualifying EU provision, “the appropriate regulator” for the purpose
of any provision of this Part is whichever of the PRA or the FCA (or
both) is specified by the Treasury by order in relation to the
25qualifying EU provision for the purposes of that provision of this
Part.

(5) In the case of a contravention of a requirement where the
contravention constitutes an offence, the “appropriate regulator” is
whichever of the PRA or the FCA has power to prosecute the offence
30(see section 401).

(6) The FCA is “the appropriate regulator” in the case of a contravention
of any other requirement imposed by or under this Act.

(7) The Treasury may by order amend the provisions defining “the
appropriate regulator”.

5 35In section 205 (public censure)—

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

(b) for the words from “a requirement” to “may” substitute “a relevant
requirement imposed on the person, it may”.

6 (1) 40Section 206 (financial penalties) is amended as follows.

(2) In subsection (1)—

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

(b) for the words from “a requirement” to “UCITS directive,” substitute
“a relevant requirement imposed on the person,”.

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(3) In subsection (3), for “Authority” substitute “regulator that imposed the
penalty”.

7 (1) Section 206A (suspending permission to carry on regulated activities etc.) is
amended as follows.

(2) 5In subsection (1), for “Authority” substitute “appropriate regulator”.

(3) After that subsection insert—

(1A) The power conferred by subsection (1) is also exercisable by the FCA
if it considers that an authorised person has contravened a
requirement imposed on the person by—

(a) 10the Payment Services Regulations 2009, or

(b) the Electronic Money Regulations 2011.

(4) In subsection (2)—

(a) in the definition of “permission”, for “the Authority” substitute “the
FCA or the PRA”, and

(b) 15omit the definition of “relevant requirement”.

(5) In subsection (6), for “Authority” substitute “appropriate regulator”.

8 In section 207(1) (proposal to take disciplinary measures), for “the
Authority” substitute “a regulator”.

9 In section 208(1) and (4) (decision notice), for “the Authority”, in each place,
20substitute “a regulator”.

10 In section 209 (publication), for “the Authority” substitute “the regulator
concerned”.

11 (1) Section 210 (statements of policy) is amended as follows.

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

(3) 25In subsection (2), for “The Authority’s” substitute “A regulator’s”.

(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
30regulator, the regulator”.

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

(7) In subsection (6)—

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

(b) for “Authority”, in both places, substitute “regulator”.

(8) 35In subsection (7)—

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

(b) after “published” insert “by it”.

(9) In subsection (8), for “Authority” substitute “regulator”.

12 (1) Section 211 (statements of policy: procedure) is amended as follows.

(2) 40In subsection (1)—

Financial Services BillPage 227

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

(b) for “Authority”, in both places, substitute “regulator”.

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

(4) 5In subsection (6), for “The Authority” substitute “A regulator”.

Part 5 Injunctions and restitution

13 (1) Section 380 (injunctions) is amended as follows.

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

(3) 10In subsection (6)(a)—

(a) in the opening words, for “Authority” substitute “appropriate
regulator”,

(b) in sub-paragraph (i), for the words from “any directly applicable” to
UCITS directive” substitute “a qualifying EU provision specified, or
15of a description specified, for the purposes of this subsection by the
Treasury by order”, and

(c) in sub-paragraph (ii), for the words from “which the Authority” to
the end substitute “mentioned in section 402(1)”.

(4) In subsection (7), omit paragraph (a) (and the “and” at the end of it).

(5) 20After subsection (7) insert—

(8) The PRA is the “appropriate regulator” in the case of a contravention
of—

(a) a requirement that is imposed by the PRA under any
provision of this Act,

(b) 25a requirement under section 56(6) where the authorised
person concerned is a PRA-authorised person and the
prohibition order concerned is made by the PRA, or

(c) a requirement under section 59(1) or (2) where the authorised
person concerned is a PRA-authorised person and the
30approval concerned falls to be given by the PRA.

(9) In the case of a contravention of a requirement that is imposed by a
qualifying EU provision, “the appropriate regulator” is whichever of
the PRA or the FCA (or both) is specified by the Treasury by order in
relation to the qualifying EU provision for the purposes of this
35section.

(10) In the case of a contravention of a requirement where the
contravention constitutes an offence under this Act, the “appropriate
regulator” is whichever of the PRA or the FCA has power to
prosecute the offence (see section 401).

(11) 40The FCA is the “appropriate regulator” in the case of a contravention
of any other requirement.

(12) The Treasury may by order amend the definition of “appropriate
regulator”.

Financial Services BillPage 228

14 (1) Section 381 (injunctions in case of market abuse) is amended as follows.

(2) In subsections (1) to (3), for “Authority” substitute “FCA”.

(3) In subsection (4), after “The court” insert “may”.

15 (1) Section 382 (restitution orders) is amended as follows.

(2) 5In subsection (1), for “Authority” substitute “appropriate regulator”.

(3) In subsections (2) and (3), for “Authority” substitute “regulator concerned”.

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

(5) In subsection (9)(a)—

(a) in the opening words, for “Authority” substitute “appropriate
10regulator”,

(b) in sub-paragraph (i), for the words from “any directly applicable” to
UCITS directive” substitute “a qualifying EU provision specified, or
of a description specified, for the purposes of this subsection by the
Treasury by order”, and

(c) 15in sub-paragraph (ii), for the words from “which the Authority” to
the end substitute “mentioned in section 402(1)”.

(6) In subsection (10), omit paragraph (a) (and the “and” at the end of it).

(7) After subsection (10) insert—

(11) The PRA is the “appropriate regulator” in the case of a contravention
20of—

(a) a requirement that is imposed by the PRA under any
provision of this Act,

(b) a requirement under section 56(6) where the authorised
person concerned is a PRA-authorised person and the
25prohibition order concerned is made by the PRA, or

(c) a requirement under section 59(1) or (2) where the authorised
person concerned is a PRA-authorised person and the
approval concerned falls to be given by the PRA.

(12) In the case of a contravention of a requirement that is imposed by a
30qualifying EU provision, “the appropriate regulator” is whichever of
the PRA or the FCA (or both) is specified by the Treasury by order in
relation to the qualifying EU provision for the purposes of this
section.

(13) In the case of a contravention of a requirement where the
35contravention constitutes an offence under this Act, the “appropriate
regulator” is the regulator which has power to prosecute the offence
(see section 401).

(14) The FCA is the “appropriate regulator” in the case of a contravention
of any other requirement.

(15) 40The Treasury may by order amend the definition of “appropriate
regulator”.

16 In section 383(1), (4), (5) and (9) (restitution orders in case of market abuse),
for “ Authority” substitute “FCA”.

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17 (1) Section 384 (power of Authority to require restitution) is amended as
follows.

(2) In subsection (1)—

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

(b) 5after “authorised person” insert “or recognised investment
exchange”.

(3) In subsections (2) and (4), for “Authority” substitute “FCA”.

(4) In subsection (5)—

(a) for “Authority”, in the first place, substitute “regulator exercising the
10power (“the regulator concerned”)”, and

(b) for “Authority”, in each of the other places, substitute “regulator
concerned”.

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

(6) In subsection (7)—

(a) 15in paragraph (a), for the words from “any directly applicable” to
UCITS directive” substitute “a qualifying EU provision specified, or
of a description specified, for the purposes of this subsection by the
Treasury by order”, and

(b) in paragraph (b), for the words from “in relation to which” to the end
20substitute “mentioned in section 402(1)”.

(7) Omit subsection (8).

(8) After subsection (8) insert—

(9) The PRA is the “appropriate regulator” in the case of a contravention
of—

(a) 25a requirement that is imposed by the PRA under any
provision of this Act,

(b) a requirement under section 56(6) where the authorised
person concerned is a PRA-authorised person and the
prohibition order concerned is made by the PRA, or

(c) 30a requirement under section 59(1) or (2) where the authorised
person concerned is a PRA-authorised person and the
approval concerned falls to be given by the PRA.

(10) In the case of a contravention of a requirement that is imposed by a
qualifying EU provision, “the appropriate regulator” is whichever of
35the PRA or the FCA (or both) is specified by the Treasury by order in
relation to the qualifying EU provision for the purposes of this
section.

(11) In the case of a contravention of a requirement where the
contravention constitutes an offence under this Act, the “appropriate
40regulator” is the regulator which has power to prosecute the offence
(see section 401).

(12) The FCA is the “appropriate regulator” in the case of a contravention
of any other requirement.

(13) The Treasury may by order amend the definition of “appropriate
45regulator”.

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