Financial Services and Markets Bill

Financial Services and Markets Bill - continued	House of Commons

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	PART XVII
	RECOGNISED INVESTMENT EXCHANGES AND CLEARING HOUSES
	CHAPTER I
	EXEMPTION
	General
Exemption for recognised investment exchanges and clearing houses.	256. - (1) In this Act-
	(a) "recognised investment exchange" means an investment exchange which is recognised for the purposes of this Act by a recognition order in force under section 261; and
	(b) "recognised clearing house" means a clearing house which is recognised for the purposes of this Act by a recognition order in force under that section.
	(2) A recognised investment exchange is exempt from the general prohibition as respects any regulated activity-
	(a) which it carries on in its capacity as an investment exchange; or
	(b) which it carries on for the purposes of, or in connection with, the provision by it of clearing services.
	(3) A recognised clearing house is exempt from the general prohibition as respects any regulated activity which it carries on for the purposes of, or in connection with, the provision by it of clearing services.
Qualification for recognition.	257. - (1) The Treasury may make regulations setting out the requirements-
	(a) which must be satisfied by an investment exchange or clearing house if it is to qualify as a body in respect of which the Authority may make a recognition order under this Part; and
	(b) which, if a recognition order is made, it must continue to satisfy if it is to remain a recognised body.
	(2) But if regulations set out requirements relating only to-
	(a) investment exchanges which enter, or propose to enter, into a market contract, or
	(b) clearing houses which enter, or propose to enter, into a market contract,
	they must be made by the Treasury and the Secretary of State, acting jointly.
	(3) "Market contract" means-
	(a) a contract to which Part VII of the
	Companies Act 1989 applies as a result of section 155 of that Act or a contract to which Part V of the Companies (No. 2)(Northern Ireland) Order 1990 applies as a result of Article 80 of that Order; and
	(b) such other kind of contract as may be prescribed.
	(4) Requirements resulting from this section are referred to in this Part as "recognition requirements".
	(5) Except for regulations to which subsection (2) applies, regulations under this section may not make different provision for different kinds of investment exchange or clearing house.
	Applications for recognition
Application by an investment exchange.	258. - (1) Any body corporate or unincorporated association may apply to the Authority for an order declaring it to be a recognised investment exchange for the purposes of this Act.
	(2) The application must be made in such manner as the Authority may direct and must be accompanied by-
	(a) a copy of the applicant's rules;
	(b) a copy of any guidance issued by the applicant;
	(c) the required particulars; and
	(d) such other information as the Authority may reasonably require for the purpose of determining the application.
	(3) The required particulars are-
	(a) particulars of any arrangements which the applicant has made, or proposes to make, for the provision of clearing services in respect of transactions effected on the exchange;
	(b) if the applicant proposes to provide clearing services in respect of transactions other than those effected on the exchange, particulars of the criteria which the applicant will apply when determining to whom it will provide those services.
Application by a clearing house.	259. - (1) Any body corporate or unincorporated association may apply to the Authority for an order declaring it to be a recognised clearing house for the purposes of this Act.
	(2) The application must be made in such manner as the Authority may direct and must be accompanied by-
	(a) a copy of the applicant's rules;
	(b) a copy of any guidance issued by the applicant;
	(c) the required particulars; and
	(d) such other information as the Authority may reasonably require for the purpose of determining the application.
	(3) The required particulars are-
	(a) if the applicant makes, or proposes to make, clearing arrangements with a recognised investment exchange, particulars of those arrangements;
	(b) if the applicant proposes to provide clearing services for persons other than recognised investment exchanges, particulars of the criteria which it will apply when determining to whom it will provide those services.

Prepared 17 June 1999