Financial Services Bill

Session 2012 - 13
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Financial Services Bill

Financial Services Bill
Schedule 4 — EEA passport rights and treaty rights
Part 1 — Amendments of Schedule 3 to FSMA 2000: EEA passport rights
191

Part 4
Miscellaneous
Exemption from liability in damages
30    (1)
None of the following is to be liable in damages for anything done
or omitted in the discharge, or purported discharge, of the PRA’s
5
functions—
(a)
the PRA;
(b)
any person (“P”) who is, or is acting as, an officer of, or
member of the staff of, the PRA or a member of its
governing body;
10
(c)
any person who could be held vicariously liable for things
done or omitted by P, but only in so far as the liability
relates to P’s conduct.
      (2)
Sub-paragraph (1) does not apply—
(a)
if the act or omission is shown to have been in bad faith, or
15
(b)
so as to prevent an award of damages made in respect of
an act or omission on the ground that the act or omission
was unlawful as a result of section 6(1) of the Human
Rights Act 1998.
Accredited financial investigators
20
31
For the purposes of this Act anything done by an accredited
financial investigator within the meaning of the Proceeds of Crime
Act 2002 who—
(a)
is, or is acting as, an officer of, or member of the staff of, the
PRA or a member of its governing body, or
25
(b)
is appointed by the PRA under section 167 or 168 to
conduct an investigation,

is to be treated as done in the exercise or discharge of a function of
the PRA.
Amounts required by rules to be paid to the PRA
30
32
Any amount (other than a fee) which is required by rules to be
paid to the PRA may be recovered as a debt due to the PRA.”
Schedule 4
Section 10

EEA passport rights and treaty rights
Part 1
35
Amendments of Schedule 3 to FSMA 2000: EEA passport rights
Introductory
1
Schedule 3 to FSMA 2000 (EEA passport rights) is amended as follows.

Financial Services Bill
Schedule 4 — EEA passport rights and treaty rights
Part 1 — Amendments of Schedule 3 to FSMA 2000: EEA passport rights
192

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)
After sub-paragraph (1A) insert—
5
   “(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)
In a case where the FCA is the appropriate UK regulator, the
10
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)
a person whose immediate group includes a PRA-
15
authorised person.
     (1E)
If the FCA—
(a)
receives a consent notice, or
(b)
receives under sub-paragraph (1B) a copy of a consent
notice,
20

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
notice which identifies PRA-regulated activities or relates
25
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)
omit paragraph (a).
30
      (5)
In sub-paragraph (3), for “Authority” substitute “appropriate UK regulator”.
      (6)
In sub-paragraph (4), after the definition of “applicable provisions” insert—
““the appropriate UK regulator” means whichever of the FCA
and the PRA is the competent authority for the purposes of
the relevant single market directive;”.
35
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)
“Relevant notice” means—
40
(a)
a regulator’s notice, or

Financial Services Bill
Schedule 4 — EEA passport rights and treaty rights
Part 1 — Amendments of Schedule 3 to FSMA 2000: EEA passport rights
193

(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
the FCA without delay.
5
     (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)
receives under sub-paragraph (1B) a copy of a relevant
10
notice,

it must prepare for the firm’s supervision.
     (1E)
If the PRA—
(a)
receives a relevant notice, or
(b)
receives under sub-paragraph (1C) a copy of a relevant
15
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)
For sub-paragraph (2) substitute—
20
    “(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)
In sub-paragraph (3)—
25
(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—
““the appropriate UK regulator” means whichever of the FCA
30
and the PRA is the competent authority for the purposes of
the relevant single market directive;”.
4     (1)
Paragraph 15A (application for approval to manage UCITS) is amended as
follows.
      (2)
For “Authority” or “Authority’s”, in each place, substitute “appropriate UK
35
regulator” or “appropriate UK regulator’s”.
      (3)
After sub-paragraph (6) insert—
   “(6A)
If—
(a)
the FCA is the appropriate UK regulator, and
(b)
the firm is, or the firm’s immediate group includes, a PRA-
40
authorised person,

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

Financial Services Bill
Schedule 4 — EEA passport rights and treaty rights
Part 1 — Amendments of Schedule 3 to FSMA 2000: EEA passport rights
194

      (4)
In sub-paragraph (7), before the definition of “specified” insert—
““the appropriate UK regulator” means whichever of the FCA
and the PRA is the competent authority for the purposes of
the UCITS directive;”.
5     (1)
Paragraph 15B (representations and references to the Tribunal) is amended
5
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
meaning as in paragraph 15A.”
10
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)
before paragraph (a) insert—
15
“(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
PRA”.
20
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
before paragraph 19 insert—
25
“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)
in any other case, the FCA.”
30
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
FCA before deciding whether to give a consent notice, except where
35
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
person.”
40
11    (1)
Paragraph 20 (services) is amended as follows.

Financial Services Bill
Schedule 4 — EEA passport rights and treaty rights
Part 1 — Amendments of Schedule 3 to FSMA 2000: EEA passport rights
195

      (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)
Where the FCA is the appropriate UK regulator, it must consult
5
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
each place, substitute “appropriate UK regulator”.
10
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
the PRA”, and
15
(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)
In sub-paragraph (1)(a), for “Part IV permission” substitute “Part 4A
20
permission”.
      (4)
In sub-paragraphs (2) and (2A), for “section 45” substitute “section 55L or
55M”.
      (5)
After sub-paragraph (2A) insert—
   “(2B)
This paragraph does not affect any duty of the FCA to consult the
25
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
permission”.
30
      (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)
in paragraph (b), for “the Authority” substitute “that regulator”.
35
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
paragraph 19(7C) or (7D) or 20(3AA) or (3AB) or by
40
regulations under paragraph 22;

Financial Services Bill
Schedule 4 — EEA passport rights and treaty rights
Part 2 — Amendments of Schedule 4 to FSMA 2000: Treaty rights
196

(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)
giving a consent notice under paragraph 19 or 20, or
5
(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)
the date on which they come into force.
10
      (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
paragraph in such manner as they think fit.”
15
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
In paragraph 27 (UK management companies: withdrawal of authorisation),
20
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
Amendments of Schedule 4 to FSMA 2000: Treaty rights
25
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)
In sub-paragraph (2) “the appropriate UK regulator” means—
30
(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)
Where the PRA receives a notification under sub-paragraph (2), it
35
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 Bill
Schedule 4 — EEA passport rights and treaty rights
Part 3 — Amendments of sections 34 and 35 of FSMA 2000: EEA firms and Treaty firms
197

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)
Paragraph 4 (permission) is amended as follows.
5
      (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)
After that sub-paragraph insert—
10
    “(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)
Paragraph 5 (notice to Authority) is amended as follows.
15
      (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)
where any of the activities to which the notice relates is a
20
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)
Where the FCA receives a notice under sub-paragraph (2) from—
25
(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)
For sub-paragraph (4) substitute—
30
    “(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”
substitute “UK regulator”.
35
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”.