Financial Services Bill (HL Bill 60)

(3) An application must be made in such manner as the regulator may
direct.

(4) A regulator may not give a direction unless it is satisfied that—

(a) compliance by the person with the rules, or with the rules as
5unmodified, would be unduly burdensome or would not
achieve the purpose for which the rules were made, and

(b) the direction would not adversely affect the advancement of
any of the regulator’s objectives.

(5) In subsection (4)(b) “objectives”, in relation to the FCA, means
10operational objectives.

(6) A direction may be given subject to conditions.

(7) The regulator may—

(a) revoke a direction, or

(b) vary it on the application, or with the consent, of the person to
15whom it relates.

(8) “Direction” means a direction under this section.

138B Publication of directions under section 138A

(1) Subject to subsection (2), a direction must be published by the regulator
concerned in the way appearing to the regulator to be best calculated
20for bringing it to the attention of—

(a) persons likely to be affected by it, and

(b) persons who are, in the opinion of the regulator, likely to make
an application for a similar direction.

(2) Subsection (1) does not apply if the regulator is satisfied that it is
25inappropriate or unnecessary to publish the direction.

(3) In deciding whether it is satisfied as mentioned in subsection (2), the
regulator must—

(a) consider whether the publication of the direction would be
detrimental to the stability of the UK financial system,

(b) 30take into account whether the direction relates to a rule
contravention of which is actionable in accordance with section
138D,

(c) consider whether publication of the direction would prejudice,
to an unreasonable degree, the commercial interests of the
35person concerned or any other member of the person’s
immediate group, and

(d) consider whether its publication would be contrary to an
international obligation of the United Kingdom.

(4) The FCA must consult the PRA before publishing or deciding not to
40publish a direction which relates to—

(a) a PRA-authorised person, or

(b) an authorised person who has as a member of its immediate
group a PRA-authorised person.

(5) For the purposes of paragraphs (c) and (d) of subsection (3), the
45regulator must consider whether it would be possible to publish the
direction without either of the consequences mentioned in those

paragraphs by publishing it without disclosing the identity of the
person concerned.

(6) “Direction” means a direction under section 138A.

Contravention of rules

138C 5Evidential provisions

(1) If a particular rule made by either regulator so provides, contravention
of the rule does not give rise to any of the consequences provided for
by other provisions of this Act.

(2) A rule made by a regulator which so provides must also provide—

(a) 10that contravention may be relied on as tending to establish
contravention of such other rule made by that regulator as may
be specified, or

(b) that compliance may be relied on as tending to establish
compliance with such other rule made by that regulator as may
15be specified.

(3) A rule may include the provision mentioned in subsection (1) only if
the regulator making the rule considers that it is appropriate for it also
to include the provision required by subsection (2).

(4) In this section “rule” does not include a rule made under—

(a) 20section 137N (threshold condition code);

(b) section 192J (provision of information by parent undertakings).

138D Actions for damages

(1) A rule made by the PRA may provide that contravention of the rule is
actionable at the suit of a private person who suffers loss as a result of
25the contravention, subject to the defences and other incidents applying
to actions for breach of statutory duty.

(2) A contravention by an authorised person of a rule made by the FCA is
actionable at the suit of a private person who suffers loss as a result of
the contravention, subject to the defences and other incidents applying
30to actions for breach of statutory duty.

(3) If rules made by the FCA so provide, subsection (2) does not apply to a
contravention of a specified provision of the rules.

(4) In prescribed cases, a contravention of a rule which by virtue of
subsection (1) or (2) would be actionable at the suit of a private person
35is actionable at the suit of a person who is not a private person, subject
to the defences and other incidents applying to actions for breach of
statutory duty.

(5) In subsections (1), (2) and (3) “rule” does not include—

(a) Part 6 rules;

(b) 40rules under section 137N (threshold condition code);

(c) rules under section 192J (provision of information by parent
undertakings);

(d) a rule requiring an authorised person to have or maintain
financial resources.

(6) “Private person” has such meaning as may be prescribed.

138E Limits on effect of contravening rules

(1) A person is not guilty of an offence by reason of a contravention of a
rule made by either regulator.

(2) 5No such contravention makes any transaction void or unenforceable.

(3) Subsection (2) does not apply in relation to product intervention rules
made by the FCA under section 137C.

Procedural provisions

138F Notification of rules

10If either regulator makes, alters or revokes any rules, that regulator
must without delay give written notice—

(a) to the Treasury, and

(b) to the Bank of England.

138G Rule-making instruments

(1) 15Any power conferred on either regulator to make rules is exercisable in
writing.

(2) An instrument by which rules are made by either regulator (“a rule-
making instrument”) must specify the provision under which the rules
are made.

(3) 20To the extent that a rule-making instrument does not comply with
subsection (2), it is void.

(4) A rule-making instrument must be published by the regulator making
the rule in the way appearing to that regulator to be best calculated to
bring it to the attention of the public.

(5) 25The regulator making the rule may charge a reasonable fee for
providing a person with a copy of a rule-making instrument.

(6) A person is not to be taken to have contravened any rule made by a
regulator if the person shows that at the time of the alleged
contravention the rule-making instrument concerned had not been
30made available in accordance with this section.

138H Verification of rules

(1) The production of a printed copy of a rule-making instrument
purporting to be made by a regulator—

(a) on which is endorsed a certificate signed by a member of staff of
35that regulator who is authorised by the regulator for that
purpose, and

(b) which contains the required statements,

is evidence (or in Scotland sufficient evidence) of the facts stated in the
certificate.

(2) 40The required statements are—

(a) that the instrument was made by the FCA or the PRA (as the
case may be),

(b) that the copy is a true copy of the instrument, and

(c) that on a specified date the instrument was made available to
the public in accordance with section 138G(4).

(3) A certificate purporting to be signed as mentioned in subsection (1) is
5to be taken to have been properly signed unless the contrary is shown.

(4) A person who wishes in any legal proceedings to rely on a rule-making
instrument may require the regulator that made the rule to endorse a
copy of the instrument with a certificate of the kind mentioned in
subsection (1).

138I 10Consultation by the FCA

(1) Before making any rules, the FCA must—

(a) consult the PRA, and

(b) after doing so, publish a draft of the proposed rules in the way
appearing to the FCA to be best calculated to bring them to the
15attention of the public.

(2) The draft must be accompanied by—

(a) a cost benefit analysis,

(b) an explanation of the purpose of the proposed rules,

(c) any statement prepared under section 138K(2),

(d) 20an explanation of the FCA’s reasons for believing that making
the proposed rules is compatible with its duties under section
1B(1) and (5)(a), and

(e) notice that representations about the proposals may be made to
the FCA within a specified time.

(3) 25Before making the proposed rules, the FCA must have regard to any
representations made to it in accordance with subsection (2)(e).

(4) If the FCA makes the proposed rules, it must publish an account, in
general terms, of—

(a) the representations made to it in accordance with subsection
30(2)(e), and

(b) its response to them.

(5) If the rules differ from the draft published under subsection (1)(b) in a
way which is, in the opinion of the FCA, significant the FCA must
publish—

(a) 35details of the difference (in addition to complying with
subsection (4)) together with a cost benefit analysis, and

(b) any statement prepared under section 138K(4).

(6) The requirements to carry out a cost benefit analysis under this section
do not apply in relation to rules made under—

(a) 40section 136(2);

(b) subsection (1) of section 213 as a result of subsection (4) of that
section;

(c) section 234;

(d) paragraph 23 of Schedule 1ZA;

(e) 45paragraph 12 of Schedule 1A.

(7) “Cost benefit analysis” means—

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

(i) if the proposed rules are made, or

(ii) if subsection (5) applies, from the rules that have been
5made, and

(b) subject to subsection (8), an estimate of those costs and of those
benefits.

(8) If, in the opinion of the FCA—

(a) the costs or benefits referred to in subsection (7) cannot
10reasonably 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.

(9) The FCA may charge a reasonable fee for providing a person with a
15copy of a draft published under subsection (1)(b).

(10) Subsection (1)(a) does not apply to rules made by the FCA in relation to
recognised investment exchanges under Part 18.

(11) This section is subject to section 138L.

138J Consultation by the PRA

(1) 20Before making any rules, the PRA must—

(a) consult the FCA, and

(b) after doing so, publish a draft of the proposed rules in the way
appearing to the PRA to be best calculated to bring them to the
attention of the public.

(2) 25The draft must be accompanied by—

(a) a cost benefit analysis,

(b) an explanation of the purpose of the proposed rules,

(c) any statement prepared under section 138K(2),

(d) an explanation of the PRA’s reasons for believing that making
30the proposed rules is compatible with its duties under—

(i) section 2B(1) or, as the case requires, section 2C(1) or
2D(3), and

(ii) section 2H, and

(e) notice that representations about the proposals may be made to
35the PRA within a specified time.

(3) Before making the proposed rules, the PRA must have regard to any
representations made to it in accordance with subsection (2)(e).

(4) If the PRA makes the proposed rules, it must publish an account, in
general terms, of—

(a) 40the representations made to it in accordance with subsection
(2)(e), and

(b) its response to them.

(5) If the rules differ from the draft published under subsection (1)(b) in a
way which is, in the opinion of the PRA, significant the PRA must
45publish—

(a) details of the difference (in addition to complying with
subsection (4)) together with a cost benefit analysis, and

(b) any statement prepared under section 138K(4).

(6) The requirements to carry out a cost benefit analysis under this section
5do not apply in relation to rules made under—

(a) section 136(2);

(b) subsection (1) of section 213 as a result of subsection (4) of that
section;

(c) section 234;

(d) 10paragraph 31 of Schedule 1ZB;

(e) paragraph 12 of Schedule 1A.

(7) “Cost benefit analysis” means—

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

(i) 15if the proposed rules are made, or

(ii) if subsection (5) applies, from the rules that have been
made, and

(b) subject to subsection (8), an estimate of those costs and of those
benefits.

(8) 20If, in the opinion of the PRA—

(a) the costs or benefits referred to in subsection (7) cannot
reasonably 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
25statement of the PRA’s opinion and an explanation of it.

(9) The PRA may charge a reasonable fee for providing a person with a
copy of a draft published under subsection (1)(b).

(10) This section is subject to section 138L.

138K Consultation: mutual societies

(1) 30Subsection (2) applies where a regulator proposes to make a rule (“the
proposed rule”) which would apply both to—

(a) authorised persons which are mutual societies, and

(b) other authorised persons.

(2) The regulator must prepare a statement setting out—

(a) 35its opinion whether or not the impact of the proposed rule on
persons within subsection (1)(a) will be significantly different
from its impact on persons within subsection (1)(b), and

(b) if so, details of the difference.

(3) Subsection (4) applies where a regulator makes a rule which—

(a) 40applies both to—

(i) authorised persons which are mutual societies, and

(ii) other authorised persons, and

(b) differs from the draft of the proposed rule published under
section 138I(1)(b) or section 138J(1)(b) (as the case may be).

(4) 45The regulator must prepare a statement setting out—

(a) its opinion whether or not the impact of the rule is significantly
different from the impact of the proposed rule on—

(i) the persons within subsection (3)(a)(i), and

(ii) those persons as compared with persons within
5subsection (3)(a)(ii), and

(b) if so, details of the difference.

(5) A “mutual society” is—

(a) a building society within the meaning of the Building Societies
Act 1986;

(b) 10a friendly society within the meaning of the Friendly Societies
Act 1992;

(c) a registered society within the meaning of the Industrial and
Provident Societies Act 1965;

(d) an EEA mutual society.

(6) 15An “EEA mutual society” is—

(a) a body which is a European Cooperative Society for the
purposes of Council Regulation (EC) No 1435/2003 (statute for
a European Cooperative Society);

(b) a body which is established as a cooperative under the law of an
20EEA state as mentioned in that Regulation;

(c) a body which is a cooperative or mutual undertaking of such
description as the Treasury specify by order and which is
established or operates in accordance with the laws of an EEA
state.

138L 25Consultation: general exemptions

(1) Sections 138I(1)(b) and (2) to (5) and 138K do not apply in relation to
rules made by the FCA if the FCA considers that the delay involved in
complying with them would be prejudicial to the interests of
consumers, as defined in section 425A.

(2) 30Sections 138J(1)(b) and (2) to (5) and 138K do not apply in relation to
rules made by the PRA if the PRA considers that the delay involved in
complying with them would—

(a) be prejudicial to the safety and soundness of PRA-authorised
persons, or

(b) 35in a case where section 2C applies, be prejudicial to securing the
appropriate degree of protection for policyholders.

(3) The provisions listed in subsection (4) do not apply if the regulator
concerned considers that, making the appropriate comparison—

(a) there will be no increase in costs, or

(b) 40there will be an increase in costs but that increase will be of
minimal significance.

(4) Those provisions are—

(a) subsections (2)(a) and (5)(a) of section 138I;

(b) subsections (2)(a) and (5)(a) of section 138J.

(5) 45The “appropriate comparison” means—

(a) in relation to section 138I(2)(a) or 138J(2)(a), a comparison
between the overall position if the rules are made and the
overall position if the rules are not made;

(b) in relation to section 138I(5)(a) or 138J(5)(a), a comparison
5between the overall position after the making of the rules and
the overall position before they were made.

138M Consultation: exemptions for temporary product intervention rules

(1) Sections 138I(1)(b) and (2) to (5) and 138K do not apply in relation to
product intervention rules made by the FCA if it considers that it is
10necessary or expedient not to comply with them for the purpose of
advancing—

(a) the consumer protection objective or the competition objective,
or

(b) if an order under section 137C(1)(b) is in force, the integrity
15objective.

(2) Any rules made as a result of subsection (1) (“temporary product
intervention rules”) are to cease to have effect at the end of the period
specified in the rules.

(3) The longest period that may be specified is the period of 12 months
20beginning with the day on which the rules come into force.

(4) Nothing in subsection (2) prevents the FCA from revoking temporary
product intervention rules before the end of the period mentioned
there.

(5) If the FCA has made temporary product intervention rules (“the initial
25rules”), it may not make further temporary product intervention rules
containing the same, or substantially the same, provision as that
contained in the initial rules until the prohibited period has ended.

(6) “The prohibited period” means the period of 12 months beginning with
the day on which the period mentioned in subsection (2) ends (whether
30or not the initial rules have been revoked before the end of the period
mentioned there).

138N Temporary product intervention rules: statement of policy

(1) The FCA must prepare and issue a statement of its policy with respect
to the making of temporary product intervention rules.

(2) 35The FCA may at any time alter or replace a statement issued under this
section.

(3) If a statement issued under this section is altered or replaced, the FCA
must issue the altered or replaced statement.

(4) The FCA must, without delay, give the Treasury a copy of any
40statement which it publishes under this section.

(5) A statement issued under this section must be published by the FCA in
the way appearing to the FCA to be best calculated to bring it to the
attention of the public.

(6) The FCA may charge a reasonable fee for providing a person with a
45copy of the statement.

138O Statement of policy under section 138N: procedure

(1) Before issuing a statement under section 138N, the FCA must publish a
draft of the proposed statement in the way appearing to the FCA to be
best calculated to bring it to the attention of the public.

(2) 5The draft must be accompanied by notice that representations about the
proposal may be made to the FCA within a specified time.

(3) Before issuing the proposed statement, the FCA must have regard to
any representations made to it in accordance with subsection (2).

(4) If the FCA issues the proposed statement it must publish an account, in
10general terms, of—

(a) the representations made to it in accordance with subsection (2),
and

(b) its response to them.

(5) If the statement differs from the draft published under subsection (1) in
15a way which is, in the opinion of the FCA, significant, the FCA must (in
addition to complying with subsection (4)) publish details of the
difference.

(6) The FCA may charge a reasonable fee for providing a person with a
copy of a draft published under subsection (1).

(7) 20This section also applies to a proposal to alter or replace a statement.

CHAPTER 3 Guidance

139A Power of the FCA to give guidance

(1) The FCA may give guidance consisting of such information and advice
as it considers appropriate—

(a) 25with respect to the operation of specified parts of this Act and of
any rules made by the FCA;

(b) with respect to any other matter relating to functions of the
FCA;

(c) with respect to any other matters about which it appears to the
30FCA to be desirable to give information or advice.

(2) The FCA may give financial or other assistance to persons giving
information or advice of a kind which the FCA could give under this
section.

(3) Subsection (5) applies where the FCA proposes to give guidance to
35FCA-regulated persons generally, or to a class of FCA-regulated
persons, in relation to rules to which those persons are subject.

(4) Subsection (5) also applies in relation to guidance which the FCA
proposes to give to persons generally, or to a class of person, in relation
to its functions under the short selling regulation.

(5) 40Where this subsection applies, subsections (1), (2)(e) and (3) of section
138I (consultation) apply to the proposed guidance as they apply to
proposed rules, unless the FCA considers that the delay in complying

with those provisions would be prejudicial to the interests of
consumers.

(6) The FCA may—

(a) publish its guidance,

(b) 5offer copies of its published guidance for sale at a reasonable
price, and

(c) if it gives guidance in response to a request made by any person,
make a reasonable charge for that guidance.

(7) In this Chapter, references to guidance made by the FCA include
10references to any recommendations made by the FCA to FCA-
regulated persons generally, or to any class of FCA-regulated person.

(8) “Consumers” has the meaning given in section 1G.

(9) “FCA-regulated person” means—

(a) an authorised person, or

(b) 15any person who is otherwise subject to rules made by the FCA.

139B Notification of FCA guidance to the Treasury

(1) On giving any general guidance, the FCA must give written notice to
the Treasury without delay.

(2) If the FCA alters any of its guidance, it must give written notice to the
20Treasury without delay.

(3) The notice under subsection (2) must include details of the alteration.

(4) If the FCA revokes any of its general guidance, it must give written
notice to the Treasury without delay.

(5) “General guidance” means guidance given by the FCA under section
25139A which is—

(a) given to persons generally, to FCA-regulated persons generally
or to a class of FCA-regulated person,

(b) intended to have continuing effect, and

(c) given in writing or other legible form.

(6) 30“FCA-regulated person” has the same meaning as in section 139A.

CHAPTER 4 Competition scrutiny

140A Interpretation

(1) In this Chapter—

• “market in the United Kingdom” includes—

  (a)

  35so far as it operates in the United Kingdom or a part of
  the United Kingdom, any market which operates there
  and in another country or territory or in a part of another
  country or territory, and

  (b)

  any market which operates only in a part of the United
  40Kingdom;

• “the OFT” means the Office of Fair Trading;

Financial Services BillPage 110

• “practices”, in relation to each regulator, means practices adopted
  by that regulator in the exercise of functions under this Act;

• “regulating provisions” means—

  (a)

  in relation to the FCA, any—

  (i)

  5rules of the FCA;

  (ii)

  general guidance (as defined by section 139B(5));

  (iii)

  statement issued by the FCA under section 64;

  (iv)

  code issued by the FCA under section 64 or 119;

  (b)

  in relation to the PRA, any—

  (i)

  10rules of the PRA;

  (ii)

  statement issued by the PRA under section 64;

  (iii)

  code issued by the PRA under section 64.

(2) In this Chapter each of the Competition Commission and the OFT is “a
competition authority”.

(3) 15For the purposes of this Chapter, any reference to a feature of a market
in the United Kingdom for goods or services is to be read as a reference
to—

(a) the structure of the market concerned or any aspect of that
structure,

(b) 20any conduct (whether or not in the market concerned) of one or
more than one person who supplies or acquires goods or
services in the market concerned, or

(c) any conduct relating to the market concerned of customers of
any person who supplies or acquires goods or services.

(4) 25In subsection (3) “conduct” includes any failure to act (whether or not
intentional) and any other unintentional conduct.

140B Advice about effect of regulating provision or practice

(1) In this Chapter, any reference to the giving of “section 140B advice” to
a regulator is to be read in accordance with this section.

(2) 30The OFT gives “section 140B advice” to a regulator if—

(a) it gives advice to the regulator under section 7 of the Enterprise
Act 2002 (provision of competition advice to Ministers etc.), and

(b) the advice states that in the opinion of the OFT one or more of
the things mentioned in subsection (4) may cause, or contribute
35to, the effect mentioned in subsection (5), or might be expected
to do so in the future.

(3) The Competition Commission gives “section 140B advice” to a
regulator if a report published by it under section 136 of the Enterprise
Act 2002 (investigations and reports on market investigation reference)
40contains—

(a) a decision that one or more of the things mentioned in
subsection (4) may cause, or contribute to, the effect mentioned
in subsection (5), and

(b) a recommendation that any action should be taken by that
45regulator.

(4) Those things are—

(a) a regulating provision or practice of the regulator,

(b) two or more regulating provisions or practices (of that regulator
or of both regulators) taken together,

(c) a particular combination of regulating provision or practices (of
that regulator or of both regulators), or

(d) 5a feature, or combination of features, of a market in the United
Kingdom that could be dealt with by regulating provision or
practices (of that regulator or of both regulators).

(5) That effect is the prevention, restriction or distortion of competition in
connection with the supply or acquisition of any goods or services in
10the United Kingdom or a part of the United Kingdom.

140C Consultation with regulator

Before giving section 140B advice, a competition authority must consult
the regulator to which the advice is to be given.

140D Investigation powers of OFT

15Where the OFT is deciding whether to exercise its power under section
7 of the Enterprise Act 2002 to give advice which, if given, would be
section 140B advice, section 174 of that Act has effect as if—

(a) in subsection (1), for the words from “make a reference” to the
end there were substituted “give advice which would for the
20purposes of Chapter 4 of Part 9A of the Financial Services and
Markets Act 2000 be section 140B advice”, and

(b) in subsection (2), for “make such a reference” there were
substituted “give such advice”.

140E Publication by OFT of section 140B advice

25The OFT must publish in such manner as it thinks fit any section 140B
advice given by it to either regulator.

140F Duty of Competition Commission to send report to regulator

(1) Where the publication of a report of the Competition Commission
under section 142 of the Enterprise Act 2002 constitutes the giving of
30section 140B advice to either regulator, the Commission must give a
copy of the report to that regulator.

(2) The day on which the copy is given is the day on which the regulator is
to be taken to receive the section 140B advice.

140G Duty of regulator to publish response

(1) 35A regulator must, within 90 days after the day on which it receives
section 140B advice, publish a response stating how it proposes to deal
with the advice and in particular—

(a) whether it has decided to take any action, or to take no action,
in response to the advice,

(b) 40if it has decided to take action, what action it proposes to take,
and

(c) its reasons for its proposals.

(2) Publication is to be in such manner as the regulator thinks fit.

140H Role of the Treasury

(1) This section applies where—

(a) a competition authority has given section 140B advice and the
regulator has published a response under section 140G, and

(b) 5the competition authority remains of the opinion that one or
more of the things mentioned in section 140B(4) may cause or
contribute to, the effect mentioned in section 140B(5).

(2) The competition authority may refer the section 140B advice to the
Treasury by sending the Treasury—

(a) 10a copy of the section 140B advice and of the response, and

(b) a request to consider the advice and the response.

(3) In referring the section 140B advice, the competition authority may give
advice to the Treasury as to what action, if any, ought to be taken by the
regulator.

(4) 15If section 140B advice is referred to them, the Treasury may give a
direction to the regulator to which the advice was given requiring the
regulator to take such action as may be specified in the direction.

(5) In considering whether to give a direction and, if so, what action to
specify, the Treasury must have regard to—

(a) 20any advice the competition authority has given under
subsection (3),

(b) any action which the section 140B advice suggests that the
regulator should take, and

(c) the response of the regulator to the section 140B advice.

(6) 25The direction may not require the regulator to do anything that it has
no power to do, but the existence of the direction is relevant to the
exercise of any discretion conferred on the regulator.

(7) Before giving a direction under this section, the Treasury must consult
the regulator to which it is to be given.

(8) 30If the Treasury give a direction under this section they must—

(a) publish in such manner as they think fit a statement giving
details of the direction and of their reasons for giving it, and

(b) lay a copy of the statement before Parliament.

CHAPTER 5 Power to make consequential amendments

141A 35Power to make consequential amendments of references to rules etc.

(1) This section applies if—

(a) a provision of primary or subordinate legislation (whenever
passed or made) contains a reference (however expressed) to
rules of either regulator or to guidance of the FCA,

(b) 40it appears to the Treasury or the Secretary of State that the
reference requires amendment in consequence of the exercise
by that regulator of its power under this Part to make, alter or

revoke its rules or the exercise by the FCA of its power to make,
alter or revoke its guidance.

(2) The Treasury or the Secretary of State may by order make such
amendment of the legislation referred to in subsection (1)(a) as appears
5to them to be necessary or expedient in consequence of the exercise by
the regulator of the power mentioned in subsection (1)(b).

(3) The power conferred by subsection (2) includes power—

(a) to replace a reference to the rules of one regulator with a
reference to the rules of the other regulator or to the rules of
10both regulators;

(b) to replace a reference to the rules of both regulators with a
reference to the rules of one regulator.

(4) In subsection (1)(a) “subordinate legislation” does not include rules of
either regulator.”

(2) 15In section 391 of FSMA 2000 (publication), after subsection (5) insert—

“(5A) Subsection (5) does not apply in relation to a notice given in accordance
with section 137R(5) or (8)(a) (but see section 137R(11)).”

(3) In section 395 of FSMA 2000 (procedures in relation to giving of supervisory
notices etc), in subsection (13), after paragraph (bb) insert—

“(bba) 20section 137R(5) or (8)(a);”.

(4) Omit Schedule 14 to FSMA 2000 (role of the Competition Commission).

25 Short selling rules

(1) In every provision of Part 8A of FSMA 2000 (short selling) for “Authority” or
“Authority’s” in each place substitute “FCA” or “FCA’s”.

(2) 25Subsection (1) does not affect references to “the competent authority”.

Control over authorised persons

26 Control over authorised persons

(1) FSMA 2000 is amended as follows.

(2) In every provision of Part 12 (control over authorised persons), for “Authority”
30or “Authority’s”, in each place (where not expressly amended by the following
provisions), substitute “appropriate regulator” or “appropriate regulator’s”.

(3) In section 178 (obligation to notify an acquisition of control), after subsection
(2) insert—

“(2A) In this Part, “the appropriate regulator” means—

(a) 35where the UK authorised person is a PRA-authorised person,
the PRA;

(b) in any other case, the FCA.”

(4) In section 179 (requirements for section 178 notices) in subsection (2), for “The
Authority” substitute “Each regulator”.

(5) In section 187 (approval with conditions), for subsection (2) substitute—

“(2) The appropriate regulator may only impose conditions where—

(a) if it did not impose those conditions, it would propose to object
to the acquisition, or

(b) 5it is required to do so by a direction under section 187A(3)(b) or
section 187B(3).”