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PART XVII |
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RECOGNISED INVESTMENT EXCHANGES AND CLEARING HOUSES |
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CHAPTER I |
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EXEMPTION |
| General |
Exemption for recognised investment exchanges and clearing houses. |
256. - (1) In this Act- |
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(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 |
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(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. |
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(2) A recognised investment exchange is exempt from the general prohibition as respects any regulated activity- |
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(a) which it carries on in its capacity as an investment exchange; or |
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(b) which it carries on for the purposes of, or in connection with, the provision by it of clearing services. |
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(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- |
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(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 |
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(b) which, if a recognition order is made, it must continue to satisfy if it is to remain a recognised body. |
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(2) But if regulations set out requirements relating only to- |
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(a) investment exchanges which enter, or propose to enter, into a market contract, or |
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(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. |
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(3) "Market contract" means- |
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(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 |
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(b) such other kind of contract as may be prescribed. |
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(4) Requirements resulting from this section are referred to in this Part as "recognition requirements". |
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(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. |
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(2) The application must be made in such manner as the Authority may direct and must be accompanied by- |
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(a) a copy of the applicant's rules; |
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(b) a copy of any guidance issued by the applicant; |
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(c) the required particulars; and |
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(d) such other information as the Authority may reasonably require for the purpose of determining the application. |
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(3) The required particulars are- |
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(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; |
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(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. |
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(2) The application must be made in such manner as the Authority may direct and must be accompanied by- |
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(a) a copy of the applicant's rules; |
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(b) a copy of any guidance issued by the applicant; |
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(c) the required particulars; and |
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(d) such other information as the Authority may reasonably require for the purpose of determining the application. |
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(3) The required particulars are- |
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(a) if the applicant makes, or proposes to make, clearing arrangements with a recognised investment exchange, particulars of those arrangements; |
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(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. |
Applications: supplementary. |
260. - (1) At any time after receiving an application and before determining it, the Authority may require the applicant to provide additional information. |
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(2) Information which the Authority requires in connection with an application must be provided in such form, or verified in such manner, as the Authority may direct. |
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(3) Different directions may be given, or requirements imposed, by the Authority with respect to different applications. |
Recognition orders. |
261. - (1) If it appears to the Authority that the applicant satisfies the recognition requirements applicable in his case, the Authority may make a recognition order declaring the applicant to be- |
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(a) a recognised investment exchange, if the application is made under section 258; |
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(b) a recognised clearing house, if it is made under section 259. |
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(2) The Treasury's approval of the making of a recognition order is required under section 273. |
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(3) In considering an application, the Authority may have regard to any information which it considers is relevant to the application. |
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(4) A recognition order must specify a date on which it is to take effect. |
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(5) Section 269 has effect in relation to a decision to refuse to make a recognition order- |
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(a) as it has effect in relation to a decision to revoke such an order; and |
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(b) as if references to a recognised body were references to the applicant. |
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(6) Subsection (5) does not apply in a case in which the Treasury have failed to give their approval under section 273. |
Liability in relation to recognised body's regulatory functions. |
262. - (1) Neither a recognised body nor its officers and staff are to be liable in damages to its members for anything done or omitted in the discharge of its regulatory functions unless it is shown that the act or omission was in bad faith. |
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(2) But subsection (1) does not 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. |
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(3) "Regulatory functions" means the functions of the recognised body so far as relating to, or to matters arising out of, the obligations to which the body is subject under or by virtue of this Act. |