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Session 2012 - 13
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Financial Services Bill


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

55

 

(b)   

give the address of a place in the United Kingdom for service on

the applicant of any notice or other document which is required

or authorised to be served on the applicant under this Act.

(2)   

An application for the variation of a Part 4A permission must contain a

statement—

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(a)   

of the desired variation, and

(b)   

of the regulated activity or regulated activities which the

applicant proposes to carry on if the permission is varied.

(3)   

An application for the variation of a requirement imposed under

section 55L or 55M or for the imposition of a new requirement must

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contain a statement of the desired variation or requirement.

(4)   

An application under this Part must—

(a)   

be made in such manner as the regulator to which it is to be

made may direct, and

(b)   

contain, or be accompanied by, such other information as that

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regulator may reasonably require.

(5)   

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

the appropriate regulator may require the applicant to 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

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whether to give consent.

(6)   

In subsection (5), the “appropriate regulator” means—

(a)   

in a case where the application is made to the FCA, the FCA;

(b)   

in a case where the application is made to the PRA, the FCA or

the PRA.

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(7)   

Different directions may be given, and different requirements imposed,

in relation to different applications or categories of application.

(8)   

Each regulator may require an applicant to provide information which

the applicant is required to provide to it under this section in such form,

or to verify it in such a way, as the regulator may direct.

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(9)   

The PRA must consult the FCA before—

(a)   

giving a direction under this section in relation to a class of

applications, or

(b)   

imposing a requirement under this section in relation to a class

of applications.

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55V     

Determination of applications

(1)   

An application under this Part must be determined by the regulator to

which it is required to be made (“the appropriate regulator”) before the

end of the period of 6 months beginning with the date on which it

received the completed application.

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(2)   

The appropriate regulator may determine an incomplete application if

it considers it appropriate to do so; and it must in any event determine

such an application within 12 months beginning with the date on which

it received the application.

(3)   

Where the application cannot be determined by the appropriate

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regulator without the consent of the other regulator, the other

 
 

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

56

 

regulator’s decision must also be made within the period required by

subsection (1) or (2).

(4)   

The applicant may withdraw the application, by giving the appropriate

regulator written notice, at any time before the appropriate regulator

determines it.

5

(5)   

If the appropriate regulator grants an application—

(a)   

for Part 4A permission,

(b)   

for the variation or cancellation of a Part 4A permission,

(c)   

for the variation or cancellation of a requirement imposed

under section 55L or 55M, or

10

(d)   

for the imposition of a new requirement under either of those

sections,

   

it must give the applicant written notice.

(6)   

The notice must state the date from which the permission, variation,

cancellation or requirement has effect.

15

(7)   

A notice under this section which is given by the PRA and relates to the

grant of an application for Part 4A permission or for the variation of a

Part 4A permission must state that the FCA has given its consent to the

grant of the application.

55W     

Applications under this Part: communications between regulators

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

withdrawal of—

(a)   

an application for permission under section 55A,

(b)   

an application under section 55I, or

(c)   

an application under section 55M(5).

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55X     

Determination of applications: warning notices and decision notices

(1)   

If a regulator proposes—

(a)   

to give a Part 4A permission but to exercise its power under

section 55E(5)(a) or (b) or 55F(4)(a) or (b),

(b)   

to give a Part 4A permission but to exercise its power under

30

section 55L(1) or 55M(1) in connection with the application for

permission,

(c)   

to vary a Part 4A permission on the application of an authorised

person but to exercise its power under section 55E(5)(a) or (b) or

55F(4)(a) or (b),

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(d)   

to vary a Part 4A permission but to exercise its power under

section 55L(1) or 55M(1) in connection with the application for

variation,

(e)   

in the case of the FCA, to exercise its power under section 55L(1)

in connection with an application to the PRA for a Part 4A

40

permission or the variation of a Part 4A permission,

   

it must give the applicant a warning notice.

(2)   

If a regulator proposes to refuse an application made under this Part, it

must (unless subsection (3) applies) give the applicant a warning

notice.

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(3)   

This subsection applies if it appears to the regulator that—

 
 

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

57

 

(a)   

the applicant is an EEA firm, and

(b)   

the application is made with a view to carrying on a regulated

activity in a manner in which the applicant is, or would be,

entitled to carry on that activity in the exercise of an EEA right

whether through a United Kingdom branch or by providing

5

services in the United Kingdom.

(4)   

If a regulator decides—

(a)   

to give a Part 4A permission but to exercise its power under

section 55E(5)(a) or (b) or 55F(4)(a) or (b),

(b)   

to give a Part 4A permission but to exercise its power under

10

section 55L(1) or 55M(1) in connection with the giving of the

permission,

(c)   

to vary a Part 4A permission on the application of an authorised

person but to exercise its power under section 55E(5)(a) or (b) or

55F(4)(a) or (b),

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(d)   

to vary a Part 4A permission on the application of an authorised

person but to exercise its power under section 55L(1) or 55M(1)

in connection with the variation,

(e)   

in the case of the FCA, to exercise its power under section 55L(1)

in connection with an application to the PRA for a Part 4A

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permission or the variation of a Part 4A permission, or

(f)   

to refuse an application under this Part,

   

it must give the applicant a decision notice.

55Y     

Exercise of own-initiative power: procedure

(1)   

This section applies to an exercise of either regulator’s own-initiative

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variation power or own-initiative requirement power in relation to an

authorised person (“A”).

(2)   

A variation of a permission or the imposition or variation of a

requirement takes effect—

(a)   

immediately, if the notice given under subsection (4) states that

30

that is the case,

(b)   

on such date as may be specified in the notice, or

(c)   

if no date is specified in the notice, when the matter to which the

notice relates is no longer open to review.

(3)   

A variation of a permission, or the imposition or variation of a

35

requirement, may be expressed to take effect immediately (or on a

specified date) only if the regulator concerned, having regard to the

ground on which it is exercising its own-initiative variation power or

own-initiative requirement power, reasonably considers that it is

necessary for the variation, or the imposition or variation of the

40

requirement, to take effect immediately (or on that date).

(4)   

If either regulator proposes to vary a Part 4A permission or to impose

or vary a requirement, or varies a Part 4A permission or imposes or

varies a requirement, with immediate effect, it must give A written

notice.

45

(5)   

The notice must—

(a)   

give details of the variation of the permission or the

requirement or its variation,

 
 

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

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(b)   

state the regulator’s reasons for the variation of the permission

or the imposition or variation of the requirement,

(c)   

inform A that A may make representations to the regulator

within such period as may be specified in the notice (whether or

not A has referred the matter to the Tribunal),

5

(d)   

inform A of when the variation of the permission or the

imposition or variation of the requirement takes effect, and

(e)   

inform A of A’s right to refer the matter to the Tribunal.

(6)   

The regulator may extend the period allowed under the notice for

making representations.

10

(7)   

If, having considered any representations made by A, the regulator

decides—

(a)   

to vary the permission, or impose or vary the requirement, in

the way proposed, or

(b)   

if the permission has been varied or the requirement imposed or

15

varied, not to rescind the variation of the permission or the

imposition or variation of the requirement,

   

it must give A written notice.

(8)   

If, having considered any representations made by A, the regulator

decides—

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(a)   

not to vary the permission, or impose or vary the requirement,

in the way proposed,

(b)   

to vary the permission or requirement in a different way, or

impose a different requirement, or

(c)   

to rescind a variation or requirement which has effect,

25

   

it must give A written notice.

(9)   

A notice under subsection (7) must inform A of A’s right to refer the

matter to the Tribunal.

(10)   

A notice under subsection (8)(b) must comply with subsection (5).

(11)   

If a notice informs A of A’s right to refer a matter to the Tribunal, it

30

must give an indication of the procedure on such a reference.

(12)   

For the purposes of subsection (2)(c), whether a matter is open to

review is to be determined in accordance with section 391(8).

55Z     

Cancellation of Part 4A permission: procedure

(1)   

If a regulator proposes to cancel an authorised person’s Part 4A

35

permission otherwise than at the person’s request, it must give the

person a warning notice.

(2)   

If a regulator decides to cancel an authorised person’s Part 4A

permission otherwise than at the person’s request, it must give the

person a decision notice.

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References to the Tribunal

55Z1    

Right to refer matters to the Tribunal

(1)   

An applicant who is aggrieved by the determination of an application

made under this Part may refer the matter to the Tribunal.

 
 

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

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(2)   

An authorised person who is aggrieved by the exercise by either

regulator of its own-initiative variation power or its own-initiative

requirement power may refer the matter to the Tribunal.

Interpretation

55Z2    

Interpretation of Part 4A

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In this Part—

“own-initiative requirement power”, in relation to the FCA or the

PRA, is to be read in accordance with section 55L(4) or 55M(4);

“own-initiative variation power”, in relation to the FCA or the

PRA, is to be read in accordance with section 55J(11).”

10

(3)   

In Schedule 6 to FSMA 2000 (the threshold conditions), omit paragraph 9.

Passporting

10      

Passporting: exercise of EEA rights and Treaty rights

Schedule 4 contains amendments of the following provisions of FSMA 2000—

(a)   

Schedule 3 (EEA passport rights),

15

(b)   

Schedule 4 (Treaty rights),

(c)   

sections 34 and 35 (EEA firms and Treaty firms), and

(d)   

Part 13 (incoming firms: powers of intervention).

Performance of regulated activities

11      

Prohibition orders

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(1)   

Section 56 of FSMA 2000 (performance of regulated activities: prohibition

orders) is amended as follows.

(2)   

For subsection (1) substitute—

“(1)   

The FCA may make a prohibition order if it appears to it that an

individual is not a fit and proper person to perform functions in

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relation to a regulated activity carried on by—

(a)   

an authorised person,

(b)   

a person who is an exempt person in relation to that activity, or

(c)   

a person to whom, as a result of Part 20, the general prohibition

does not apply in relation to that activity.

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(1A)   

The PRA may make a prohibition order if it appears to it that an

individual is not a fit and proper person to perform functions in

relation to a regulated activity carried on by—

(a)   

a PRA-authorised person, or

(b)   

a person who is an exempt person in relation to a PRA-

35

regulated activity carried on by the person.”

(3)   

In subsection (2), for “The Authority may make an order (“a prohibition

order”)” substitute “A “prohibition order” is an order”.

 
 

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

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(4)   

In subsection (3), for paragraph (b) substitute—

“(b)   

all persons falling within subsection (3A) or a particular

paragraph of that subsection or all persons within a specified

class of person falling within a particular paragraph of that

subsection.”

5

(5)   

After subsection (3) insert—

“(3A)   

A person falls within this subsection if the person is—

(a)   

an authorised person,

(b)   

an exempt person, or

(c)   

a person to whom, as a result of Part 20, the general prohibition

10

does not apply in relation to a regulated activity.”

(6)   

In subsection (6), for “An authorised person” substitute “A person falling

within subsection (3A)”.

(7)   

In subsection (7)—

(a)   

for “The Authority” substitute “The regulator that has made a

15

prohibition order”, and

(b)   

for “a prohibition order” substitute “the order”.

(8)   

After subsection (7) insert—

“(7A)   

If—

(a)   

the FCA proposes to vary or revoke a prohibition order, and

20

(b)   

as a result of the proposed variation or revocation, an

individual—

(i)   

will no longer be prohibited from performing a function

of interest to the PRA, or

(ii)   

will be prohibited from performing such a function,

25

   

the FCA must consult the PRA before varying or revoking the order.

(7B)   

A function is of interest to the PRA if it is performed in relation to a

regulated activity carried on by—

(a)   

a PRA-authorised person, or

(b)   

a person who is an exempt person in relation to a PRA-

30

regulated activity carried on by the person.

(7C)   

The PRA must consult the FCA before varying or revoking a

prohibition order.”

(9)   

Omit subsection (8).

(10)   

Section 57 of FSMA 2000 (prohibition orders: procedure and right to refer to

35

Tribunal) is amended as follows.

(11)   

In subsections (1) and (3), for “the Authority” substitute “a regulator”.

(12)   

At the end insert—

“(6)   

If—

(a)   

the FCA proposes to make a prohibition order, and

40

(b)   

as a result of the proposed order, an individual will be

prohibited from performing a function of interest to the PRA,

   

the FCA must consult the PRA before giving a warning notice under

this section.

 
 

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

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(7)   

A function is of interest to the PRA if it is performed in relation to a

regulated activity carried on by—

(a)   

a PRA-authorised person, or

(b)   

a person who is an exempt person in relation to a PRA-

regulated activity carried on by the person.

5

(8)   

The PRA must consult the FCA before giving a warning notice under

this section.”

12      

Approval for particular arrangements

(1)   

In section 59 of FSMA 2000 (approval for particular arrangements)—

(a)   

in subsections (1) and (2), for “the Authority” substitute “the

10

appropriate regulator”, and

(b)   

for subsections (3) to (7) substitute—

“(3)   

“Controlled function”—

(a)   

in relation to the carrying on of a regulated activity by a

PRA-authorised person, means a function of a

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description specified in rules made by the FCA or the

PRA, and

(b)   

in relation to the carrying on of a regulated activity by

any other authorised person, means a function of a

description specified in rules made by the FCA.

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(4)   

“The appropriate regulator”—

(a)   

in relation to a controlled function which is of a

description specified in rules made by the FCA, means

the FCA, and

(b)   

in relation to a controlled function which is of a

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description specified in rules made by the PRA, means

the PRA with the consent of the FCA.

(5)   

The FCA may specify a description of function under

subsection (3)(a) or (b) only if, in relation to the carrying on of a

regulated activity by an authorised person, it is satisfied that the

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function is—

(a)   

a customer-dealing function, or

(b)   

a significant-influence function.

(6)   

The PRA may specify a description of function under

subsection (3)(a) only if, in relation to the carrying on of a

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regulated activity by a PRA-authorised person, it is satisfied

that the function is a significant-influence function.

(7)   

In determining whether a function is a significant-influence

function, the FCA or the PRA may take into account the likely

consequences of a failure to discharge the function properly.

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(7A)   

“Customer-dealing function”, in relation to the carrying on of a

regulated activity by an authorised person (“A”), means a

function that will involve the person performing it in dealing

with—

(a)   

customers of A, or

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(b)   

property of customers of A,

 
 

 
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