Aerial operations report: March 1993
The legislation referred to in Schedule 1 is revoked.
In that Schedule—
Part 1 refers to assimilated direct principal legislation;
Part 2 refers to subordinate legislation;
Part 3 refers to EU tertiary legislation and subordinate legislation made under an instrument referred to in Part 2;
Part 4 refers to primary legislation;
Part 5 refers to other EU-derived legislation not covered by Parts 1 to 3.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
continue to be recognised and available in domestic law by virtue of section 4 of the European Union (Withdrawal) Act 2018, and
are derived from any provision of legislation referred to in Schedule 1,
The revocation of any legislation in accordance with this section does not affect the continued effect of any amendments to other legislation made by that revoked legislation (as those amendments had effect immediately before the revocation).
The Treasury may by regulations provide for specified subordinate legislation, or for subordinate legislation of a specified description, otherwise falling within Part 5 of Schedule 1, not to fall within that Part.
Regulations under subsection (5) are subject to the negative procedure.
Schedule 2 amends particular legislation referred to in Schedule 1 in relation to the transitional period.
In this Chapter “the transitional period”, in relation to any legislation, means the period ending with the revocation of that legislation.
The amendments in Schedule 2 do not restrict the power in section 3 to modify legislation as amended by that Schedule.
The Treasury may by regulations modify legislation referred to in Schedule 1 in relation to the transitional period.
The power under subsection (1) is exercisable only by making such modifications as the Treasury consider necessary or desirable for or in connection with one or more of the following purposes—
protecting and enhancing the integrity or stability of the financial system operating in the United Kingdom;
promoting the safety and soundness of persons providing financial services;
promoting effectiveness in the functioning of financial markets;
promoting effective competition in the interests of consumers in financial services and markets or persons who use, or are likely to use, services provided by payment systems in the course of business carried on by those persons;
facilitating the international competitiveness of the economy of the United Kingdom and its growth in the medium to long term;
protecting consumers and those who are, or may become, insurance policyholders;
providing for efficient and effective arrangements in relation to the exercise of functions under the Banking Act 2009 or Part 4 of this Act;
protecting public funds;
implementing, or making changes to reflect, developments in international standards and practices relating to, or applied for the purposes of, the provision of financial services or the operation of financial markets;
providing for efficient and effective regulatory, enforcement, investigatory and supervisory arrangements in relation to the provision of financial services or the operation of financial markets;
removing provisions that are yet to be commenced or changing the timing of their commencement.
In subsection (2)—
the integrity of the financial system operating in the United Kingdom includes the matters listed in section 1D(2) of FSMA 2000;
references to financial markets include references to financial exchanges;
“consumer” has the meaning given by section 1G(1) of FSMA 2000;
“payment system” has the same meaning as in Part 5 of the Financial Services (Banking Reform) Act 2013 (see section 41 of that Act);
the reference to regulatory arrangements includes (among other things) a reference to arrangements for the making of rules.
In modifying legislation for or in connection with a purpose mentioned in subsection (2) regulations under this section may—
confer powers on the Treasury or on a regulator;
authorise the making of subordinate legislation by the Treasury;
authorise the making of rules or other instruments by a regulator;
provide for fees to be charged by a regulator in connection with the carrying out of its functions;
apply (with or without modifications), or make equivalent or similar provision to, provisions made by or under FSMA 2000 (including criminal offences created by that Act).
The power under section 84(2)(c) to make supplementary, incidental, consequential, transitional, transitory or saving provision includes, in relation to regulations under this section, power to restate legislation in a clearer or more accessible way.
Before making regulations under this section the Treasury must consult the regulators.
The duty under subsection (6), so far as relating to the Bank of England or the Payment Systems Regulator, applies only if, and to the extent that, the Treasury think it appropriate to consult that regulator in view of the modifications being made by the regulations.
The power under subsection (1) to modify legislation does not include power to modify—
primary legislation referred to in Part 4 of Schedule 1;
technical standards of the kind mentioned in section 138P(2)(a) of FSMA 2000;
EU tertiary legislation of the kind mentioned in section 138P(2)(b) of FSMA 2000.
Regulations under this section that modify only the following kinds of legislation referred to in Schedule 1 are subject to the negative procedure—
EU tertiary legislation;
subordinate legislation that was not subject to affirmative resolution on being made.
Regulations under this section to which subsection (9) does not apply are subject to the affirmative procedure.
The power under section 86(5) to make saving provision in connection with the revocation of any legislation referred to in Schedule 1 includes power to restate that legislation (as it has effect immediately before its revocation)—
by amending primary legislation or subordinate legislation, or
by making new subordinate legislation.
Regulations made by virtue of subsection (1) may make such modifications of the legislation being restated as the Treasury consider necessary or desirable for or in connection with—
the purpose of making the law clearer or more accessible, or
any of the purposes mentioned in section 3(2).
Legislation restated by virtue of subsection (1) is not assimilated law.
Where legislation is restated by virtue of subsection (1), the Treasury may by regulations make such further modifications of that legislation as they consider necessary or desirable for or in connection with a purpose referred to in subsection (2)(a) or (b).
Subsection (4) of section 3 applies to regulations made under, or by virtue of, this section as it applies to regulations made under that section.
The power conferred by virtue of subsection (1) to restate legislation may be exercised in relation to the entirety of that legislation or in relation to such parts of it as the Treasury consider appropriate.
The power conferred by virtue of subsection (1) to restate legislation does not include power to restate—
technical standards of the kind mentioned in section 138P(2)(a) of FSMA 2000, or
EU tertiary legislation of the kind mentioned in section 138P(2)(b) of FSMA 2000.
Regulations made by virtue of this section that do not amend primary legislation and contain provision restating only the following kinds of legislation referred to in Schedule 1 are subject to the negative procedure—
EU tertiary legislation;
subordinate legislation that was not subject to affirmative resolution on being made;
any other legislation, so far as restated without any modifications made for a purpose mentioned in section 3(2).
Regulations made by virtue of this section to which subsection (8) does not apply are subject to the affirmative procedure.
The Treasury may by regulations modify legislation for or in connection with the purpose of replacing any reference (however expressed) to an EU directive referred to in Part 3 of Schedule 1 with such other provision (if any) as the Treasury consider appropriate.
The power under subsection (1) is exercisable only if the Treasury consider it necessary or desirable to replace the reference for or in connection with—
the purpose of making the law clearer or more accessible, or
any of the purposes mentioned in section 3(2).
Regulations under this section are subject to the affirmative procedure if they amend primary legislation.
Regulations under this section to which subsection (3) does not apply are subject to the negative procedure.
A relevant requirement does not apply to the making of rules by a regulator if and to the extent that—
the proposed rules make excluded provision in relation to provisions of legislation referred to in Schedule 1, and
those provisions of legislation are specified, or fall within a description of provisions specified, in relation to the making of rules by the regulator in regulations made by the Treasury for the purposes of this section.
A relevant requirement does not apply to the making of rules by a regulator if and to the extent that—
the proposed rules make excluded changes to provision of existing rules made by the regulator containing an assimilated obligation, and
the assimilated obligation is specified, or falls within a description of obligations specified, in relation to the making of rules by the regulator in regulations made by the Treasury for the purposes of this section.
A relevant requirement does not apply to the revocation of rules by a regulator if and to the extent that—
the rules being revoked make provision containing an assimilated obligation, and
the rules are revoked without being replaced by other rules made by the regulator.
For the purposes of subsection (1), rules make excluded provision in relation to provisions of legislation if, in the opinion of the regulator making the rules, the rules reproduce those provisions—
without any changes that are material, or
with changes that are material but their effect is to reduce a regulatory burden without having any other effects that are material.
For the purposes of subsection (2), rules make excluded changes to provision of existing rules if, in the opinion of the regulator making the rules—
the effect of the changes is to reduce a regulatory burden, and
the changes have no other effects that are material.
In this section references to a “regulatory burden” include (among other things) references to—
a financial cost;
an administrative inconvenience;
an obstacle to trade or innovation;
an obstacle to efficiency, productivity or profitability.
Where a relevant requirement does not apply to the making or revocation of rules by virtue of subsection (1), (2) or (3), the requirement also does not apply to any rules that contain incidental, supplemental, consequential or transitional provision so far as made in connection with provision made by virtue of that subsection.
“Relevant requirement” means—
in relation to rules made by the FCA, the requirements imposed by—
section 138I of FSMA 2000, except for subsection (1)(a), and
section 138K of FSMA 2000;
in relation to rules made by the PRA, the requirements imposed by—
section 138J of FSMA 2000, except for subsection (1)(a), and
section 138K of FSMA 2000;
in relation to rules made by the Bank of England, the requirements imposed by paragraph 10(1)(i) of Schedule 17A to FSMA 2000;
in relation to rules made by the Payment Systems Regulator, the requirements imposed by section 104 of the Financial Services (Banking Reform) Act 2013, except for subsection (2)(a).
Where a regulator makes or revokes rules without complying with a relevant requirement by virtue of subsection (1), (2) or (3), the regulator must publish a statement which must—
in a case falling within subsection (1), list the provisions of legislation that have been restated by the rules;
in a case falling within subsection (2), specify or describe the assimilated obligations in relation to which changes have been made by the rules;
in a case falling within subsection (3), specify or describe the assimilated obligations that have been removed by the revocation of the rules.
Where the statement relates to the making of rules that include provision of a kind mentioned in subsection (4)(b) or (5)(a) and (b), the statement must—
if made by the FCA, include an explanation of the FCA’s reasons for believing that making the proposed rules is compatible with its duties under section 1B(1), (4A) and (5)(a) of FSMA 2000;
if made by the PRA, include an explanation of the PRA’s reasons for believing that making the proposed rules is compatible with its duties under—
section 2B(1) or, as the case requires, section 2C(1) or 2D(3) of FSMA 2000, and
section 2H of FSMA 2000;
if made by the Bank of England, include an explanation of the Bank’s reasons for believing that making the proposed rules is compatible with—
the Bank’s financial stability objective under section 2A of the Bank of England Act 1998, and
the Bank’s duties under section 30D(1)(a) of that Act;
if made by the Payment Systems Regulator, include an explanation of the Regulator’s reasons for believing that making the proposed rules is compatible with its duties under section 49 of the Financial Services (Banking Reform) Act 2013.
The statement must be published in the way appearing to the regulator to be best calculated to bring the statement to the attention of the public.
Regulations under this section are subject to the affirmative procedure.
In this section “rules”—
in relation to the Payment Systems Regulator, means—
generally applicable requirements within the meaning of Part 5 of the Financial Services (Banking Reform) Act 2013 (as amended by Schedule 7 to this Act), or
directions of general application imposed under any other enactment;
in relation to any other regulator, means rules made by that regulator under FSMA 2000 or any other enactment.
In this Chapter—
the FCA,
A person appointed under section 377G of the Act to act as the manager of a write-down order That person’s functions in relation to the write-down order
Section 1 (registration) is amended as follows. After subsection (2) insert— In subsection (3), in the words before paragraph (a), before “objects” insert “mandatory”. After subsection (3) insert— In subsection (3ZA), for “subsection (3)” substitute “subsections (3) and (3ZZA)”.
Section 11 (loans) is amended as follows. In subsection (1)— After subsection (1) insert— After subsection (7) insert—
In section 12 (power to hold land for limited purposes), in subsection (3)—
the words from “making loans” to the end become paragraph (a);
at the end of that paragraph insert , or
After section 1 insert—
In section 23A (power to make provision corresponding to provision applying to building societies), omit subsection (5).
In section 2 (supplementary and transitional provisions as to registration), in subsection (3)—
for “those” substitute “the mandatory objects”;
after “section 1(3) above” insert “(whether or not the society also has the optional object specified in section 1(3ZZA) above)”.
In section 29 (orders and regulations), in subsection (2) for “section” substitute “sections 1ZB(5) and”.
Section 31 (interpretation, etc.) is amended as follows. In subsection (1), at the appropriate places insert—; ; . After subsection (1A) insert— In subsection (4)—
In Schedule 1 (matters to be provided for in rules of credit union), in paragraph 9, after “members”, in both places, insert “or other credit unions”.
exercises executive functions within that CCP, and
The Bank may give directions to a CCP to take measures which the Bank considers are required to address impediments to the effective exercise of the stabilisation powers. The power conferred by sub-paragraph (1) includes (but is not limited to) a power to direct the CCP— Where a CCP is a subsidiary of a company incorporated in the United Kingdom, the Bank may give directions to its parent company requiring the parent company to establish a separate holding company as a parent of the subsidiary for the purpose of— Before giving directions under this paragraph the Bank must have regard to the potential impact of the direction on— Where the CCP in question is a PRA-authorised person, the Bank must consult the PRA before giving directions under this paragraph. Directions under this paragraph— Nothing in this paragraph limits the powers of the Bank under section 296 or 296A of, or paragraph 9B of Schedule 17A to, FSMA 2000. In this paragraph, “recovery plan” in relation to a CCP, means a plan required under paragraph 29B of the Schedule to the Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges, Clearing Houses and Central Securities Depositories) Regulations 2001 (S.I. 2001/995).
The condition in this sub-paragraph is met if— The condition in this sub-paragraph is met if it is not reasonably likely that the deterioration would be reversed or the infringement would be brought to an end by any measure which could be taken by the Bank under the provisions listed in sub-paragraph (3). The provisions mentioned in sub-paragraph (2) are— The condition in this sub-paragraph is met if the imposition of one or more requirements under paragraph 5 (removal and replacement of directors and senior managers) would not be sufficient to reverse the deterioration or bring the infringement to an end. The condition in this sub-paragraph is met in relation to a director of a CCP, if the director— For the purposes of this paragraph— Regulations under this paragraph are subject to the negative procedure.
A CCP which is aggrieved by one of the following may refer the matter to the Tribunal— A director or senior manager (or a former director or senior manager) of a CCP who is aggrieved by the imposition of a requirement on that CCP under paragraph 5 may refer the matter to the Tribunal. A director (or a former director) of a CCP who is aggrieved by the imposition of a requirement on that director under paragraph 6(7) may refer the matter to the Tribunal.
The Bank may by direction restrict or prohibit for a specified period discretionary payments to specified employees of a CCP or specified shareholders of a CCP. The power under sub-paragraph (1) may be exercised only if— The conditions in this sub-paragraph are— The condition in this sub-paragraph is that the exercise of the power is necessary or desirable having regard to the public interest in— The Bank must prepare and publish a statement of its policy with respect to the giving of directions under this paragraph. The Bank may alter or replace a statement of policy published under this paragraph. The Bank must publish a statement as altered or replaced under sub-paragraph (6). No directions may be given under this paragraph before the statement of policy under sub-paragraph (5) has been published. The specified period for the purposes of sub-paragraph (1) must not exceed 5 years. Directions under this paragraph— In this paragraph “discretionary payments” means payments, made otherwise than under a contractual obligation, of any of the following—
The Treasury must issue a code of practice about the use of the stabilisation powers. The code may, in particular, provide guidance on— See also paragraph 29 which requires the inclusion in the code of certain matters about bridge central counterparties. The Treasury may revise and re-issue the code of practice. Before issuing or re-issuing the code of practice the Treasury must consult the Bank, the FCA and the PRA. The Bank must have regard to the code of practice. As soon as is reasonably practicable after issuing or re-issuing the code of practice the Treasury must lay a copy before Parliament.
In a financial assistance case, the Bank may exercise a stabilisation power in respect of the CCP concerned in accordance with paragraph 27, 29 or 30 only if satisfied that the condition in sub-paragraph (3) is met. “Financial assistance case” means a case where the Treasury notify the Bank that they have provided financial assistance in respect of a CCP for the purpose of resolving or reducing a serious threat to the stability of the UK financial system. The condition is that— The condition in this paragraph is in addition to the conditions in paragraph 17.
Before the Bank exercises a stabilisation power in respect of a CCP, it must ensure that the assets and liabilities of the CCP are valued. The purpose of a valuation carried out under sub-paragraph (1) is to— Unless sub-paragraph (4) applies, the Bank must arrange for the appointment of an independent valuer in accordance with paragraph 24 to carry out a valuation for the purposes of sub-paragraph (1). Where the Bank considers that the urgency of the case makes it appropriate to exercise the stabilisation power before a valuation can be carried out by a person appointed in accordance with sub-paragraph (3), the Bank may carry out a provisional valuation of the assets and liabilities of the CCP for the purposes of sub-paragraph (1). In carrying out a valuation required under sub-paragraph (1), the person carrying out the valuation must— A provisional valuation carried out under sub-paragraph (4) must in particular make provision in respect of additional losses by the CCP in accordance with any regulations made under this paragraph. A valuation under sub-paragraph (1) must be accompanied by— Where appropriate, the information in sub-paragraph (7)(c) may be supplemented by an analysis and estimate of the value of the assets and liabilities of the CCP on a market value basis. Where a provisional valuation is carried out under sub-paragraph (4), the Bank need only comply with sub-paragraph (7) as far as it is reasonable to do so in the circumstances. The Treasury may by regulations make provision for the purposes of a valuation under this paragraph specifying— Before making regulations under sub-paragraph (10) the Treasury must consult the Bank. Regulations under this paragraph are subject to the negative procedure.
An independent valuer may do anything necessary or desirable for the purposes of or in connection with the performance of the functions of the office. The Treasury may by regulations confer specific functions on independent valuers; in particular, the regulations may— Provision under sub-paragraph (2) may— An independent valuer may appoint staff. The Treasury may by regulations make provision about the procedure to be followed by independent valuers. Independent valuers (and their staff) are neither servants nor agents of the Crown (and, in particular, are not civil servants). Records of an independent valuer are public records for the purposes of the Public Records Act 1958. Regulations under this paragraph are subject to the negative procedure.
Subject to sub-paragraph (4) and (5), the Bank must make arrangements for marketing— The arrangements under sub-paragraph (1) must— The arrangements under sub-paragraph (1) must not— Sub-paragraph (1) does not apply if the Bank considers that complying with that sub-paragraph would undermine one or more of the special resolution objectives. In particular sub-paragraph (1) does not apply if the Bank considers that—
The fourth stabilisation option is to make one or more tear-up instruments for the purpose of ensuring that the CCP has a matched book. A tear-up instrument is an instrument that makes provision terminating one or more contracts held by the CCP with clearing members. Where the Bank exercises the power under sub-paragraph (1), it must as soon as reasonably practicable determine the value of the terminated contract. On the basis of the determination under sub-paragraph (3) the Bank must as soon as reasonably practicable either— The Bank must within 12 months of this paragraph coming into force publish a statement of policy as to how it determines what a commercially reasonable payment is for the purpose of complying with sub-paragraph (4). The Bank may alter or replace a statement of policy published under this paragraph. The Bank must publish a statement as altered or replaced under sub-paragraph (6). For the purposes of this paragraph, a CCP has a matched book when the sum of the financial obligations owed by the CCP to its clearing members is equal to the sum of the financial obligations owed to the CCP by its clearing members.
The seventh stabilisation option is for the Bank to make one or more write-down instruments. A write-down instrument is an instrument that makes any of the following provision (or any combination of the following)— The power under this paragraph may be exercised only for the purpose of recovering losses arising otherwise than as a result of a clearing member defaulting on the member’s obligations to the CCP. The power under sub-paragraph (2) may not be exercised so as to affect the following liabilities— The reference to modifying a liability owed by the CCP includes a reference to modifying the terms (or the effect of the terms) of a contract under which the CCP has a liability. The reference to changing the form of a liability owed by the CCP includes, for example— The Treasury may by regulations amend sub-paragraph (4) by— Regulations under this paragraph are subject to the affirmative procedure. In this paragraph—
The Treasury may, for the purpose of ensuring that the treatment of any claims in respect of a CCP’s shares or any liabilities in any write-down instrument is aligned to an appropriate degree with the treatment of claims and liabilities on an insolvency, by regulations specify matters or principles to which the Bank is to be required to have regard in making any such instrument. Regulations under this paragraph may for example— Regulations under this paragraph may amend paragraph 36(4). Regulations under this paragraph are subject to the affirmative procedure.
In this Schedule “securities” includes anything falling within any of the following classes. Class 1: shares and stock. Class 2: debentures, including— Class 3: warrants or other instruments that entitle the holder to acquire anything in Class 1 or 2.
A share transfer instrument may provide for a transferee to be treated for any purpose connected with the transfer as the same person as the transferor. A share transfer instrument may provide for agreements made or other things done by or in relation to a transferor to be treated as made or done by or in relation to the transferee. A share transfer instrument may provide for anything (including legal proceedings) that relates to anything transferred and is in the process of being done by or in relation to the transferor immediately before the transfer date, to be continued by or in relation to the transferee. A share transfer instrument may modify references (express or implied) in an instrument or document to a transferor. A share transfer instrument may require or permit—
A share transfer instrument may permit or require the execution, issue or delivery of an instrument. A share transfer instrument may provide for a transfer to have effect irrespective of — A share transfer instrument may provide for the effect of an instrument executed, issued or delivered, in accordance with the instrument. A share transfer instrument may modify or annul the effect of an instrument. A share transfer instrument may—
This paragraph applies where the Bank has made a share transfer instrument, in respect of securities issued by a CCP, in accordance with paragraph 27(2), 29(3) or 30(2) (“the original instrument”). The Bank may make one or more supplemental share transfer instruments. A supplemental share transfer instrument is a share transfer instrument which— Paragraphs 17 and 19 do not apply to a supplemental share transfer instrument (but it is to be treated in the same way as any other share transfer instrument for all other purposes, including for the purposes of the application of a power under this Schedule). Before making a supplemental share transfer instrument the Bank must consult— The possibility of making a supplemental share transfer instrument in reliance on sub-paragraph (2) is without prejudice to the possibility of making a new instrument in accordance with paragraphs 27(2), 29(3) and 30(2) (and not in reliance on sub-paragraph (2) above). Paragraph 48 applies where the Bank has made a supplemental share transfer instrument.
This paragraph applies where the Bank has made a property transfer instrument or share transfer instrument in respect of a bridge central counterparty in accordance with paragraph 29(3) (“the original instrument”). The Bank may make one or more bridge central counterparty share transfer instruments. A bridge central counterparty share transfer instrument is a share transfer instrument which— Paragraphs 17 and 19 do not apply to a bridge central counterparty share transfer instrument (but it is to be treated in the same way as any other share transfer instrument for all other purposes, including for the purposes of the application of a power under this Schedule). Before making a bridge central counterparty share transfer instrument the Bank must consult— Paragraph 48 applies where the Bank has made a bridge central counterparty share transfer instrument.
In this paragraph “transfer” means a transfer provided for by a property transfer instrument. A transfer takes effect by virtue of the instrument (and in accordance with its provisions as to timing or other ancillary matters). A transfer takes effect despite any restriction arising by virtue of contract or legislation or in any other way. In sub-paragraph (3) “restriction” includes— A property transfer instrument may provide for a transfer to be conditional upon a specified event or situation— A property transfer instrument may include provision dealing with the consequences of breach of a condition imposed under sub-paragraph (5); and the consequences may include— Where a property transfer instrument makes provision in respect of property held on trust (however arising) it may also make provision about— Provision under sub-paragraph (7)(a) may remove or alter the terms of the trust on which the property is held only to the extent that the Bank thinks it necessary or expedient for the purpose of transferring— In sub-paragraph (8) references to the transferor are references to the transferor under the property transfer instrument.
A property transfer instrument may enable the Bank— Sub-paragraph (1) also applies to a director or senior manager of a relevant CCP group company of the specified CCP. A “relevant CCP group company” means a CCP group company incorporated in, or formed under the law of any part of, the United Kingdom. Appointments under sub-paragraph (1)(d) are to be on terms and conditions agreed with the Bank.
A licence in respect of anything transferred by a property transfer instrument continues to have effect despite the transfer. A property transfer instrument may disapply sub-paragraph (1) to a specified extent. Where a licence imposes rights or obligations, a property transfer instrument may apportion responsibility for exercise or compliance between transferor and transferee. In this paragraph “licence” includes permission and approval and any other permissive document in respect of anything transferred.
As soon as is reasonably practicable after making a property transfer instrument in respect of a CCP, the Bank must send a copy to— As soon as is reasonably practicable after making a property transfer instrument the Bank must publish a copy— and arrange for the publication of a copy on the website of the CCP in respect of which the instrument was made. Where the Treasury receive a copy of a property transfer instrument under sub-paragraph (1) they must lay a copy before Parliament.
This paragraph applies where the Bank has made a property transfer instrument in accordance with paragraph 27(2) or 29(3) (“the original instrument”). The Bank may make one or more supplemental property transfer instruments. A supplemental property transfer instrument is a property transfer instrument which— Paragraphs 17 and 19 do not apply to a supplemental property transfer instrument (but it is to be treated in the same way as any other property transfer instrument for all other purposes, including for the purposes of the application of a power under this Schedule). Before making a supplemental property transfer instrument the Bank must consult— The possibility of making a supplemental property transfer instrument in reliance on sub-paragraph (2) is without prejudice to the possibility of making a new instrument in accordance with paragraph 27(2) or 29(3) (and not in reliance on sub-paragraph (2) above). Paragraph 64 applies where the Bank has made a supplemental property transfer instrument.
This paragraph applies where the Bank has made a property transfer instrument in accordance with paragraph 29(3) (“the original instrument”) providing for the transfer of property, rights or liabilities to a bridge central counterparty. The Bank may make one or more bridge central counterparty reverse property transfer instruments in respect of property, rights or liabilities of the bridge central counterparty. If the Bank makes an onward property transfer instrument under paragraph 69 the Bank may make one or more reverse property transfer instruments in respect of property, rights or liabilities of a transferee under the onward property transfer instrument (“the onward transferee”). A bridge central counterparty reverse property transfer instrument is a property transfer instrument which— The Bank must not make a bridge central counterparty reverse property transfer instrument unless— Paragraphs 17 and 19 do not apply to a bridge central counterparty reverse property transfer instrument (but it is to be treated in the same way as any other property transfer instrument for all other purposes including for the purposes of the application of a power under this Schedule). Before making a bridge central counterparty reverse property transfer instrument the Bank must consult— Paragraph 64 applies where the Bank has made a bridge central counterparty reverse property transfer instrument.
This paragraph applies where the Bank has made a share transfer instrument in accordance with paragraph 29(3) (“the original instrument”) providing for the transfer of securities issued by a CCP (“the CCP”) to a bridge central counterparty. The Bank may make one or more property transfer instruments in relation to the CCP (“bridge central counterparty supplemental property transfer instruments”). A bridge central counterparty supplemental property transfer instrument is an instrument which— Paragraphs 17 and 19 do not apply to a bridge central counterparty supplemental property transfer instrument (but it is to be treated in the same way as any other property transfer instrument for all other purposes including for the purposes of the application of a power under this Schedule). Before making a bridge central counterparty supplemental property transfer instrument the Bank must consult— The possibility of making a bridge central counterparty supplemental property transfer instrument in reliance on sub-paragraph (2) is without prejudice to the possibility of making a property transfer instrument in accordance with paragraph 29(3) (and not in reliance on sub-paragraph (2) above). Paragraph 64 applies where the Bank has made a bridge central counterparty supplemental property transfer instrument.
In this paragraph— The Treasury may by regulations — Regulations under this paragraph may apply to protected arrangements generally or only to arrangements— Regulations under this paragraph may include provision for determining which arrangements are to be, or not to be, treated as protected arrangements; in particular, regulations may provide for arrangements to be classified not according to their description by the parties but according to one or more indications of how they are treated, or are intended to be treated, in commercial practice. In this paragraph “arrangements” includes arrangements which— Regulations under this paragraph are subject to the affirmative procedure.
In this Schedule “resolution instrument” means— A resolution instrument must be made in writing. A resolution instrument in respect of a CCP ceases to have effect on whichever of the following occurs first— The Bank may at any time amend a resolution instrument to specify or amend a date for the purposes of sub-paragraph (3)(a). Before amending a resolution instrument in accordance with sub-paragraph (4) the Bank must consult the Treasury. Provision made in a resolution instrument takes effect despite any restriction arising by virtue of contract or legislation or in any other way. A resolution instrument may provide for anything (including legal proceedings) that relates to anything affected by the instrument and is in the process of being done immediately before the instrument takes effect to be continued from the time the instrument takes effect. A resolution instrument may modify references (express or implied) in an instrument or document. A resolution instrument may require or permit any person to provide information and assistance to the Bank or another person, for the purposes of or in connection with provision made or to be made in that or another resolution instrument. A resolution instrument— A resolution instrument ceasing to have effect does not affect the validity of anything previously done in accordance with it.
This paragraph applies where the Bank has made a resolution instrument (“the original instrument”) with respect to a CCP. The Bank may make, with respect to the CCP, one or more resolution instruments designated by the Bank as supplemental resolution instruments. Paragraphs 17, 22 and 79(3)(c) do not apply to a supplemental resolution instrument (but it is to be treated in the same way as a resolution instrument for all other purposes, including for the purposes of the application of a power under this Schedule). Before making a supplemental resolution instrument, the Bank must consult— The possibility of making a supplemental resolution instrument in reliance on sub-paragraph (2) is without prejudice to the possibility of making a new resolution instrument in accordance with paragraphs 31(1), 32(1), 33(1), 34(1) and 38(1) (and not in reliance on sub-paragraph (2) above).
The Treasury may by regulations make provision for and in connection with the suspension or waiver of provisions made under a resolution instrument. The following are examples of provision that may be made by regulations under this paragraph— Regulations under this paragraph are subject to the negative procedure.
This paragraph applies where the Bank has applied one or more of the stabilisation options in respect of a CCP. Except where securities issued by the CCP have been admitted to trading on a regulated market (within the meaning given in section 103(1) of FSMA 2000), the Bank must send a copy of any property transfer instrument, share transfer instrument or resolution instrument made in respect of the CCP to each of the following persons who are known to the Bank—
In this paragraph— The Bank may— Sub-paragraph (2) may be relied on to impose obligations on— Sub-paragraph (2) may be used to impose obligations— A power under sub-paragraph (2) is exercisable by giving a notice to each person— Paragraphs 89(3) to (10) and 90(3) and (4) apply to an obligation as applied under sub-paragraph (2)— The Bank may act under or by virtue of sub-paragraph (2) only with the consent of the Treasury.
In this paragraph “onward transfer” means a transfer (whether or not under a power in this Schedule) of securities issued by a CCP where— The Bank may— Sub-paragraph (2) may be relied on to impose obligations on— Sub-paragraph (2) may be used to impose obligations— A power under sub-paragraph (2) is exercisable by giving a notice to each person— Paragraphs 92(4) to (10) and 94(3) and (4) apply to an obligation as applied under sub-paragraph (2) with any necessary modification. The Bank may act under or by virtue of sub-paragraph (2) only with the consent of the Treasury.
Where the Bank is exercising a stabilisation power in respect of a CCP (a “CCP under resolution”) the Bank may suspend obligations to make a payment, or delivery, under a contract where one of the parties to the contract is the CCP under resolution. A suspension imposed under sub-paragraph (1) does not apply to— A suspension imposed under sub-paragraph (1)— Where a payment or delivery under the contract concerned first fell due within the period of the suspension, that payment or delivery is treated as being due immediately on the expiry of the suspension. The power under sub-paragraph (1) must be exercised by way of provision in a share transfer instrument, property transfer instrument, resolution instrument or third-country instrument. The Bank must have regard to the impact a suspension might have on the orderly functioning of the financial markets before exercising the power in sub-paragraph (1). In this paragraph, “eligible claim” means a claim in respect of which compensation is payable under the Financial Services Compensation Scheme.
For the purposes of paragraphs 97 to 99—
“excluded person” means—
This paragraph applies to— An instrument may make provision— In particular, an instrument may— Provision by virtue of this paragraph may (but need not) amend the terms of a pension scheme. A share or property transfer instrument may make provision in reliance on this paragraph only with the consent of the Treasury. In this paragraph—
This paragraph applies where— The Bank may apply to that court for a stay or sist of proceedings where the Bank reasonably considers that a stay or sist of those proceedings is necessary for an effective application of the stabilisation options or the stabilisation powers.
The Bank may not exercise a stabilisation power in respect of a CCP if the Treasury notify the Bank that the exercise would be likely to contravene an international obligation of the United Kingdom. A notice under sub-paragraph (1)— If the Treasury give a notice under sub-paragraph (1) the Bank must consider other exercises of the stabilisation powers with a view to— The Treasury may by notice to the Bank disapply sub-paragraph (3) in respect of a CCP and a notice may be revoked by further notice.
This paragraph applies where the Bank has transferred all or part of a CCP’s business to a bridge central counterparty. The Bank may not take action in respect of the bridge central counterparty without the Treasury’s consent if the action would be likely to have implications for public funds. Paragraph 111(2) and (3) have effect for the purposes of this paragraph.
This paragraph applies where the Bank makes one or more resolution instruments in respect of a CCP. The Bank must, on request by the Treasury, report to the Chancellor of the Exchequer about— In relation to the matter specified in sub-paragraph (2)(a), the report must comply with any requirements that the Treasury may specify. The Chancellor of the Exchequer must lay a copy of each report under sub-paragraph (2) before Parliament.
In paragraph 117 references to CCPs includes references to CCP group companies. Where the Bank exercises a stabilisation power in respect of a CCP group company in reliance on paragraph 117, the provisions relating to the stabilisation powers contained in this Schedule (except paragraphs 17 and 19) and any other enactment apply (with any necessary modifications) as if the CCP group company were a CCP.
In section 7D of the Bank of England Act 1998 (examination by Comptroller and Auditor General), in subsection (10)—
Schedule 11 to the Financial Services and Markets Act 2023,
for the definition of “stabilisation powers” substitute—
The Banking Act 2009 is amended as follows. In section 1 (overview), in the table in subsection (6), omit the entry relating to sections 89B to 89G. In section 2 (interpretation: bank), omit subsection (9). In section 39A (banks which are recognised central counterparties)— In section 75 (power to change law), in subsection (5) omit paragraph (cb). Omit sections 89B to 89G and the cross-heading preceding section 89B. In section 259 (statutory instruments), in Part 1 of the Table, omit the entry relating to section 89F. In section 261 (index), in the Table, omit the following entries—
The Treasury may by regulations provide for a relevant enactment to apply for the purposes of this Schedule with or without modifications. In this paragraph “relevant enactment” means any provision made by or under— Regulations under this paragraph are subject to the affirmative procedure.
“legislation” means primary legislation, retained direct EU legislation or subordinate legislation;
“EU directive” means a directive within the meaning of Article 288 of the Treaty on the Functioning of the European Union;
an Act or Measure of Senedd Cymru, or
The purpose of the special resolution regime for CCPs (see Part 5 of this Schedule) is to address the situation where all or part of the business of a CCP has encountered, or is likely to encounter, financial difficulties. The special resolution regime consists of the eight stabilisation options. The eight stabilisation options are— The stabilisation options are achieved through the exercise of one or more of the “stabilisation powers” which are— Each of the following has a role in the operation of the special resolution regime— Other Parts of this Schedule deal with the following matters—
This paragraph applies only to information and documents reasonably required in connection with the exercise by the Bank of functions conferred by or under this Schedule. The Bank may, by notice in writing given to a CCP or CCP group company, require the CCP or CCP group company— The information or documents must be provided or produced— An officer who has written authorisation from the Bank to do so may require a CCP or CCP group company without delay— The Bank may require any information provided under this paragraph to be provided in such form as it may reasonably require. The Bank may require— as it may reasonably require. The powers conferred by sub-paragraphs (2) and (4) may also be exercised by the Bank to impose requirements on a person who is connected with a CCP. “Officer” means an officer of the Bank, and includes a member of the Bank’s staff or an agent of the Bank. “Specified” means— For the purposes of this paragraph, a person is connected with a CCP if that person is or has at any relevant time been—
This paragraph applies if it appears to the Bank that there are circumstances suggesting that a person may have failed to comply with any relevant requirement. The Bank may appoint one or more competent persons to conduct an investigation on its behalf. In this paragraph “relevant requirement” means a requirement imposed by or under this Schedule.
This paragraph applies to an investigator appointed under paragraph 121 to conduct an investigation on behalf of the Bank. The investigator may require the person who is the subject of the investigation (“the person under investigation”) or any person connected with the person under investigation— The investigator may also require any person to produce at a specified time and place any specified documents or documents of a specified description. A requirement under sub-paragraph (2) or (3) may be imposed only so far as the investigator reasonably considers the question, provision of information or production of the document to be relevant to the purposes of the investigation. For the purposes of this paragraph, a person (“B”) is connected with the person under investigation (“A”) if B is or has at any relevant time been— In this paragraph—
If the Bank has power under this Schedule to require a person to produce a document but if it appears that the document is in the possession of a third person, that power may be exercised in relation to the third person. If a document is produced in response to a requirement imposed under this Schedule, the person to whom it is produced may— A document so produced may be retained for so long as the person to whom it is produced considers that it is necessary to retain it (rather than copies of it) for the purposes for which the document was requested. If the person to whom a document is so produced has reasonable grounds for believing— it may be retained until the proceedings are concluded. If a person who is required under this Schedule to produce a document fails to do so, the Bank or an investigator may require that person to state, to the best of that person’s knowledge and belief, where the document is. A lawyer may be required under this Schedule to furnish the name and address of the lawyer’s client. No person may be required under this Schedule to disclose information or produce a document in respect of which the person (“A”) owes an obligation of confidence unless— If a person claims a lien on a document, its production under this Schedule does not affect the lien. In this paragraph—
Any document of which possession is taken under paragraph 130 (“a seized document”) may be retained for so long as it is necessary to retain it (rather than copies of it) in the circumstances. A person claiming to be the owner of a seized document may apply to a magistrates’ court, or in Scotland the sheriff, for an order for the delivery of the document to the person appearing to the court or sheriff to be the owner. If on an application under sub-paragraph (2) the court, or in Scotland the sheriff, cannot ascertain who is the owner of the seized document the court or sheriff (as the case may be) may make such order as the court or sheriff thinks fit. An order under sub-paragraph (2) or (3) does not affect the right of any person to take legal proceedings against any person in possession of a seized document for the recovery of the document. Any right to bring proceedings (as described in sub-paragraph (4)) may only be exercised within 6 months of the date of the order made under sub-paragraph (2) or (3).
If an offence under paragraph 132 committed by a body corporate is shown— the officer as well as the body corporate is guilty of the offence and liable to be proceeded against and punished accordingly. If the affairs of a body corporate are managed by its members, sub-paragraph (1) applies in relation to the acts and defaults of a member in connection with that member’s functions of management as if that member were a director of the body. If an offence under paragraph 132 committed by a partnership is shown— the partner as well as the body corporate is guilty of the offence and liable to be proceeded against and punished accordingly. In sub-paragraph (3) “partner” includes a person purporting to act as partner. “Officer” in relation to a body corporate means— If an offence under paragraph 132 committed by an unincorporated association (other than a partnership) is shown— the officer or member as well as the association is guilty of the offence and liable to be proceeded against and punished accordingly.
When determining the type of sanction, and level of any penalty, to be imposed on a person under paragraph 136, the Bank must take into account all relevant circumstances, including where appropriate—
the gravity and the duration of the failure,
the degree of responsibility of the person,
the financial strength of the person,
the amount of profits gained or losses avoided by the person,
the losses for third parties caused by the failure,
the level of co-operation of the person with the Bank,
previous failures by the person, and
any potential systemic consequences of the failure.
Sections 389, 390 and 392 to 394 of FSMA 2000 apply in relation to a warning notice given under paragraph 138, a decision notice given under paragraph 139 and the Bank as they apply in relation to a warning notice or decision notice given under that Act and the regulator which gave that notice, subject to sub-paragraphs (2) to (4). Section 389 of that Act has effect as if subsection (2) were omitted. Section 390 has effect as if— Section 392 has effect as if for paragraphs (a) and (b) there were substituted—
In the case of a warning notice under paragraph 138— A person to whom a decision notice under paragraph 139 is given or copied may not publish the notice or any details concerning it unless the Bank has published the notice or those details. A notice of discontinuance must state that, if the person to whom the notice is given consents, the Bank may publish such information as it considers appropriate about the matter to which the discontinued proceedings related. A copy of a notice of discontinuance must be accompanied by a statement that, if the person to whom the notice is copied consents, the Bank may publish such information as it considers appropriate about the matter to which the discontinued proceedings related, so far as relevant to that person. Subject to sub-paragraph (8), where the Bank gives a decision notice it may publish such information about the matter to which the notice relates as it considers appropriate. Where the Bank publishes information under sub-paragraph (5) and the person to whom the decision notice is given refers the matter to the Upper Tribunal, the Bank must, without undue delay, publish on its website information about the status of the appeal and its outcome. Subject to sub-paragraph (8), where the Bank gives a final notice— Information about a matter to which a decision notice or a final notice relates must be published anonymously where— Where sub-paragraph (8) applies, the person publishing the information may make such arrangements as to the publication of information (including as to the timing of publication) as are necessary to preserve the anonymity of the person on whom the sanction is imposed. Where the Bank publishes information in accordance with sub-paragraphs (6) to (9), it must ensure the information remains on its website for at least five years, unless the information is personal data and the data protection legislation requires the information to be retained for a different period. In this paragraph—
This paragraph applies where an instrument under paragraph 145 recognises any third-country resolution action (or a part of it). The third-country resolution action (or part) produces the same legal effects in any part of the United Kingdom as it would have produced had it been made (with due authority) under the law of that part of the United Kingdom. For the purposes of supporting, or giving full effect to, the third-county resolution action (or the part), the Bank may exercise, in relation to a third-country central counterparty, one or more of the stabilisation options, or one or more of the stabilisation powers, available to the Bank in relation to a similar entity in the United Kingdom. But, for the purposes of exercising a power by virtue of sub-paragraph (3), provision which could otherwise be made under this Schedule in a share transfer instrument, property transfer instrument or resolution instrument may instead be made in— An instrument under paragraph (b) is a “third-country instrument” (as is an instrument under paragraph 145(2)(a), (b) or (c)). This Schedule (other than this paragraph) applies in relation to the exercise of any power by virtue of sub-paragraph (3), subject to sub-paragraphs (6) and (7) and any other necessary modifications. Objective 6 is to support third-country resolution action with a view to promoting objectives which, in relation to the country or territory concerned, correspond to Objectives 1 to 5 in relation to the United Kingdom. Paragraphs 17 to 19 do not apply. Paragraph 145(6) applies for the purposes of this paragraph.
Sections 348, 349, 352 and 353 of FSMA 2000 (disclosure of information) apply for the purposes of this Schedule with the following modifications. Section 348 of that Act has effect as if — Section 349 of that Act has effect as if, in subsection (2)(c), for “or the PRA” there were substituted “the PRA or the Bank of England”. Section 353 of that Act has effect as if in subsection (1)—
In this Schedule “financial assistance” includes giving guarantees or indemnities and any other kind of financial assistance (actual or contingent). The Treasury may by regulations provide that a specified activity or transaction, or class of activity or transaction, is to be or not to be treated as financial assistance for a specified purpose of this Schedule; and sub-paragraph (1) is subject to this sub-paragraph. Regulations under this paragraph are subject to the negative procedure.
In this Schedule “recognised central counterparty” has the meaning given by section 285 of FSMA 2000. But “recognised central counterparty” does not include a recognised clearing house (within the meaning of section 285 of FSMA 2000) which is also— Where a stabilisation power is exercised in respect of a recognised central counterparty, the body does not cease to be a recognised central counterparty for the purposes of this Schedule if the recognition order under Part 18 of FSMA 2000 is later revoked.
Where the Treasury propose to make a loan to or in respect of a CCP, they may arrange for money to be paid out of the National Loans Fund. The Treasury may make arrangements under sub-paragraph (1) only where they think it necessary to make the loan urgently in order to protect the stability of the UK financial system The Treasury may determine— Sums received by the Treasury in respect of loans by virtue of this paragraph must be paid into the National Loans Fund. Neither section 16 of the Banking (Special Provisions) Act 2008 (finance) nor any other enactment restricts the breadth of application of this paragraph. Where money is paid in reliance on sub-paragraph (1) the Treasury must as soon as is reasonably practicable lay a report before Parliament specifying the amount paid (but not the identity of the CCP or other institution to or in respect of which it is paid). If the Treasury think it necessary on public interest grounds, they may delay or dispense with a report under sub-paragraph (6).
“UK financial system” has the meaning given by section 1I of FSMA 2000;
“known close associate”.
the FCA,
For Articles 8 to 11 substitute—
Article 23 (trading obligation for investment firms) is amended as follows. Omit paragraphs 1, 1A, 3, 4, 5 and 6. In the title, for “Trading obligation for investment firms” substitute “Investment firms operating internal matching systems”.
The EU Securitisation Regulation 2017 is amended in accordance with paragraphs 35 to 37.
the Bank of England, or
In Article 1(2E), omit “Article 23,”.
In Article 4 (requirements for securitisation special purpose entities)—
in the words before point (a), for “third country” substitute “country or territory outside the United Kingdom”;
in point (a), for “third country” substitute “country or territory”;
in point (b), for “third country”, in both places, substitute “country or territory”.
“CCP” means a recognised central counterparty (see paragraph 155);
Regulation (EU) 2017/2402 of the European Parliament and of the Council of 12 December 2017 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation, and amending Directives 2009/65/EC, 2009/138/EC and 2011/61/EU and Regulations (EC) No 1060/2009 and (EU) No 648/2012 (“the EU Securitisation Regulation 2017”) is amended in accordance with this Part of this Schedule.
If the Bank is satisfied that the conditions in paragraph 7(1) and (2) are met in relation to a CCP, the Bank may require the CCP to remove— If the Bank imposes a requirement under sub-paragraph (1), the Bank may also require the CCP— If the Bank is satisfied that the condition in paragraph 7(5) is met in relation to a person who is a director of a CCP, the Bank may require that CCP to remove that person from the board of directors. Nothing in this Schedule affects the powers under Article 31 of EMIR or paragraphs 45 and 58.
Before appointing a person to act as a temporary manager, the Bank must be satisfied that the person— A person may not be appointed to act as a temporary manager for a period longer than one year, but is eligible for re-appointment (or further re-appointment) if paragraph 6(1) continues to apply in relation to the CCP. The Bank may vary the terms of the appointment of a temporary manager, or remove the temporary manager, at any time. A temporary manager is not liable for damages in respect of anything done in good faith for the purposes of or in connection with the functions of the appointment (subject to section 8 of the Human Rights Act 1998).
A requirement under paragraph 5 or 6(7) or the appointment of a temporary manager under paragraph 6(1) may be expressed to take effect immediately or on a specified date only if the Bank, having regard to the grounds for imposing the requirement or making the appointment, reasonably considers that it is necessary for the requirement or the appointment to take effect immediately or on that date. If the Bank proposes to impose a requirement on a CCP under paragraph 5 or imposes such a requirement with immediate effect, it must give written notice— If the Bank— the Bank must give written notice to the CCP. If the Bank proposes to impose a requirement on the directors under paragraph 6(7), or imposes such a requirement with immediate effect, the Bank must give written notice to each director. If, having considered any representations made by a person to whom notice (the “original notice”) has been given (see paragraph 12), the Bank decides— the Bank must give written notice to each person to whom the original notice was given. A written notice under sub-paragraph (5) must inform the person to whom it is given of the right of that person to refer the matter to the Tribunal and give an indication of the procedure on such a reference. If, having considered any representations made by a person to whom the original notice has been given (see paragraph 12), the Bank decides— the Bank must give written notice to each person to whom the original notice was given.
This paragraph applies where a direction has been given under paragraph 13(1) in relation to a CCP. The Bank must, at least once every 3 months after giving the direction, carry out a review of whether the requirements for the exercise of the power continue to be met. If at any time the Bank becomes aware that the requirements for the exercise of the power cease to be met, the Bank must revoke the direction with immediate effect. The direction ceases to have effect if a stabilisation power is exercised in respect of the CCP.
There is to be paid out of money provided by Parliament expenditure incurred— For the purpose of sub-paragraph (1)(a) expenditure is incurred in respect of financial assistance in respect of CCPs if it is incurred in respect of an activity, transaction or arrangement, or class of activity, transaction or arrangement, which is expected to facilitate any part of the business of one or more CCPs; and for that purpose it does not matter— In this paragraph “financial assistance” has the meaning given by paragraph 152 (and regulations under that paragraph may restrict or expand the effect of sub-paragraph (2)) Expenditure which could be paid out of money provided by Parliament under sub-paragraph (1) may be charged on and paid out of the Consolidated Fund if the Treasury are satisfied that the need for the expenditure is too urgent to permit arrangements to be made for the provision of money by Parliament. Where money is paid in reliance on sub-paragraph (4) the Treasury must as soon as is reasonably practicable lay a report before Parliament specifying the amount paid (but not the identity of the CCP or other institution to or in respect of which it is paid). If the Treasury think it necessary on public interest grounds, they may delay or dispense with a report under sub-paragraph (5).
FSMA 2000 is amended as follows. In section 77 (discontinuance and suspension of listing), in subsection (3A), after “2009” insert “or paragraph 44 or 65 of Schedule 11 to the Financial Services and Markets Act 2023”. In section 78 (discontinuance or suspension: procedure)— In section 133 (proceedings before Tribunal: general provision), in subsection (1)(c) for “or the Banking Act 2009” substitute “, the Banking Act 2009 or the Financial Services and Markets Act 2023”. In section 133B (offences), in subsection (1)(c) for “or the Banking Act 2009” substitute “, the Banking Act 2009 or the Financial Services and Markets Act 2023”.
The Financial Services Act 2012 is amended as follows. In section 57A (duty of Bank to provide information required by Treasury)— In section 58 (duty of Bank to notify Treasury of possible need for public funds)— In section 61 (Treasury power of direction), in subsection (2)(b)— Omit section 102.
FSMA 2000 is amended as follows.
The amendments made by paragraphs 7(3) and 14 do not apply in relation to a loan made by a credit union to another credit union before the earliest date on which either of those amendments comes into force (whether or not any amount of the loan remains outstanding on or after that date).
Section 348 (restrictions on disclosure of confidential information by FCA, PRA etc) is amended as follows. After subsection (2) insert— In subsection (5), after paragraph (d) insert—.
The amendment made by paragraph 13(4)(b) does not apply in relation to a year of account of a credit union beginning before the date on which that amendment comes in force (and accordingly, sections 77 and 78 of the Co-operative and Community Benefit Societies Act 2014 do not apply in relation to any such year of account).
In section 429 (Parliamentary control of statutory instruments), in subsection (2B), after paragraph (c) insert—.
In Schedule 1ZB (the PRA), in paragraph 33(2) (exemption from liability in damages), for “and 284” insert “, 284 and 377G”.
Article 5 (due-diligence requirements for institutional investors) is amended as follows. In paragraph 1, for “third country”, in each place, substitute “country or territory outside the United Kingdom”. In paragraph 3, after point (d) insert—
Article 46 (Treasury review) is amended as follows. In paragraph 1, omit the second subparagraph. In paragraph 2—
In Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012, in Article 242 (definitions), in point (10) (meaning of “simple, transparent and standardised securitisation” or “STS securitisation”)—
the words from “a securitisation” to the end become paragraph (a);
at the end of that paragraph, insert ; or.
In Commission Delegated Regulation (EU) 2015/35 of 10 October 2014 supplementing Directive 2009/138/EC of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II), in Article 1 (definitions), in point 18b (meaning of “STS securitisation”)—
the words from “a securitisation” to the end become paragraph (a);
at the end of that paragraph, insert ; or.
In Article 11(1) of Regulation (EU) 2017/1131 of the European Parliament and of the Council of 14 June 2017 on money market funds (eligible securitisations and ABCPs), after paragraph (c) insert—
The Securitisation Regulations 2018 (S.I. 2018/1288) are amended in accordance with paragraphs 42 and 43.
In regulation 2 (interpretation), in the definition of “SRUP”, in paragraph (c), for “third country” substitute “country or territory outside the United Kingdom”.
In regulation 4 (designation of competent authorities), in paragraph (1)(b), for “third country” substitute “country or territory outside the United Kingdom”.
the PRA, or
a central bank.
In Part 3 (position limits and position management controls in commodity derivatives), before regulation 16 insert—
Regulation 16 (FCA duty to establish position limits) is amended as follows. In the title, for “duty” substitute “power”. In paragraph (1)— After that paragraph insert— Omit paragraphs (2), (3) and (5).
Regulation 27 (FCA power to require information) is amended as follows. In paragraph (1), in both of sub-paragraphs (a) and (b) omit “or over the counter contract”. In paragraph (2) omit “or over the counter contract”. For paragraph (3) substitute—
Regulation 28 (FCA power to intervene) is amended as follows. In paragraph (1), in the words before sub-paragraph (a), for the words from “the exercise” to “regulation” substitute “advancing one or more of its operational objectives referred to in section 1B(3) of the Act”. In paragraph (2) after “established” insert “in accordance with rules made under regulation 15A or”. In paragraph (3) omit “or an economically equivalent over the counter contract”.
In regulation 29 (interpretation of Part 3), in paragraph (2)—
before the definition of “position” insert—;
after the definition of “position limit” insert—.
For the purposes of this Chapter, references to legislation do not include references to rules made by a regulator.
For the purposes of this Chapter, subordinate legislation was subject to affirmative resolution on being made if it was made with approval given by a resolution of each House of Parliament (whether before or after it was made).
References in this Chapter to the revocation of legislation are, in relation to the legislation referred to in Part 4 of Schedule 1, to be read as references to its repeal.
FSMA 2000 is amended as follows.
After Part 5 insert—
The following amendments are related to the new Part 5A of FSMA 2000 inserted by subsection (2).
In section 3E (memorandum of understanding), in subsection (2) after paragraph (g) insert—.
In section 3I (power of PRA to require the FCA to refrain from specified action), in subsection (3) in paragraph (a)—
the words from “its powers in relation to the” to the end become sub-paragraph (i), and
after that sub-paragraph insert , or.
In section 138D (actions for damages), in subsection (5) after paragraph (za) insert—.
In section 417 (definitions), at the appropriate place insert—.
In section 429 (Parliamentary control of statutory instruments)—
in subsection (2B), after paragraph (a) insert—;
in subsection (8), in the list of sections beginning with “22B,”, insert at the appropriate place “, 71S”;
in subsection (9) (as inserted by the Financial Services Act 2021), for the words from “which” to the end substitute “which is subject to a procedure before Parliament for the approval of the instrument in draft before it is made or its approval after it is made.”
After Schedule 6A insert the Schedule 6B set out in Schedule 3 to this Act.
FSMA 2000 is amended as follows.
After section 300E (power to disallow excessive regulatory provision: supplementary) insert—
In section 165 (regulators’ power to require information: authorised persons etc) omit subsection (8A).
In section 165A (PRA’s power to require information: financial stability) omit subsection (7A).
In section 293 (notification requirements)—
in subsection (7A) at the end insert “and a third country central counterparty”;
in subsection (8) for “or an overseas clearing house” substitute “, an overseas clearing house or a third country central counterparty”.
In section 417(1) (definitions), at the appropriate place insert—.
In Schedule 17A to FSMA 2000 (further provision in relation to exercise of Part 18 functions by Bank of England), before paragraph 10 (and the heading before it) insert—
FSMA 2000 is amended as follows.
After section 300G (section 300F: rules in relation to overseas FMI entities) (inserted by section 9) insert—
In section 166A (appointment of skilled person to collect and update information), after subsection (9) insert—
In section 168 (appointment of persons to carry out investigations in particular cases), in subsection (4)(ca), at the end insert “or a rule made by the FCA under section 300H”.
In section 312E (public censure)—
in subsection (1)—
after “recognised body” insert “or data reporting service provider”;
after “the body” insert “or provider”;
in subsection (2)(a) after “exchange” insert “or data reporting service provider”;
after subsection (3) insert—
In section 312F (financial penalties), in subsection (1)—
after “recognised body” insert “or data reporting service provider”;
after “the body”, in both places, insert “or provider”.
In section 312G (proposal to take disciplinary measures), in subsection (1)—
in paragraph (a), after “recognised body” insert “or data reporting service provider”;
in the words after paragraph (b), after “body” insert “, provider”.
In section 312H (decision notice)—
in subsection (1)—
in paragraph (a), after “recognised body” insert “or data reporting service provider”;
in the words after paragraph (b), after “body” insert “, provider”;
in subsection (4)—
in paragraph (a), after “recognised body” insert “or data reporting service provider”;
in the words after paragraph (b), after “body” insert “, provider”.
In section 312I(a) (publication), after “recognised body” insert “, data reporting service provider”.
Section 4 of the Bank of England Act 1946 (Treasury directions to the Bank) is amended as follows.
In subsection (1), after paragraph (b) insert—
After subsection (1) insert—
The Treasury may by regulations make provision for the purposes of—
testing, for a limited period, the efficiency or effectiveness of the carrying on of FMI activities in a particular way, and
assessing whether or how relevant enactments should apply in relation to FMI activities carried on in that way.
The reference in subsection (1)(a) to FMI activities being carried on in a particular way includes a reference to—
the use of developing technology in the carrying on of FMI activities;
the adoption of new or different practices in the carrying on of FMI activities.
Provision made in regulations under subsection (1) is referred to in this group of sections as an FMI sandbox.
An FMI sandbox must specify or otherwise provide for—
the FMI activities to which the FMI sandbox arrangements relate;
the description—
of FMI entities eligible to participate in the FMI sandbox arrangements, and
of any other persons (including in particular the users of services provided by FMI entities) eligible to so participate;
the limited period for which the FMI sandbox arrangements apply.
An FMI sandbox may confer functions on the appropriate regulator in connection with the implementation and operation of the FMI sandbox arrangements.
An FMI sandbox may— but provision under this subsection may not amend, repeal or revoke a relevant enactment.
provide for a relevant enactment not to apply for the purposes of the FMI sandbox arrangements;
provide for modifications in the application of a relevant enactment for those purposes;
provide for the application of a relevant enactment (with or without modifications) for those purposes;
In the case of a relevant enactment that is a rule or another instrument made by an appropriate regulator, provision under subsection (6) may provide for the powers under that subsection to be exercisable by that regulator.
Schedule 4 contains further examples of types of provision that an FMI sandbox may make.
An FMI sandbox—
may be replaced by another FMI sandbox of the same or similar effect;
may have effect at the same time as one or more other FMI sandboxes.
Regulations under this section are subject to the negative procedure.
For the purposes of this group of sections—
“FMI entity” means—
a recognised investment exchange that is not an overseas investment exchange;
a recognised CSD;
the operator of a multilateral trading facility;
the operator of an organised trading facility;
such other persons as may be specified in regulations under this section as eligible to participate in the FMI sandbox arrangements concerned;
“FMI activities” are any activities carried on as part of the business of an FMI entity;
“FMI sandbox arrangements” means any arrangements implemented as part of an FMI sandbox.
This section applies where the Treasury make regulations under section 13 implementing FMI sandbox arrangements.
The Treasury must prepare and publish a report on the FMI sandbox arrangements.
The report must be prepared by a date no later than the date specified in the regulations.
The report must contain—
a description of the FMI sandbox arrangements;
an assessment of the efficiency or effectiveness of those arrangements;
whether, and if so how, the Treasury propose exercising the power under section 15 in relation to those arrangements.
The Treasury must consult the appropriate regulator in preparing the report.
The appropriate regulator must provide to the Treasury such information or other assistance as the Treasury may require for the purposes of preparing the report.
The Treasury must lay a copy of the report before Parliament.
This section applies where, after testing the efficiency or effectiveness of FMI sandbox arrangements implemented under an FMI sandbox, the Treasury determine that arrangements of the same or similar effect should have effect after the expiry of the FMI sandbox.
The Treasury may by regulations make provision implementing the FMI sandbox arrangements—
as tested under the FMI sandbox, or
with such variations as the Treasury consider appropriate.
Regulations under this section that implement FMI sandbox arrangements may be made before (as well as after) the expiry of the FMI sandbox concerned.
Regulations under this section may include provision that amends, repeals or revokes a relevant enactment.
Regulations under this section that amend, repeal or revoke any provision of primary legislation are subject to the affirmative procedure.
Regulations under this section to which subsection (5) does not apply are subject to the negative procedure.
A power to make regulations under this group of sections includes power conferring a discretion on an appropriate regulator, or another specified person, to do anything under, or for the purposes of, the regulations.
Before making regulations under this group of sections the Treasury must consult—
the appropriate regulators;
such other persons as the Treasury consider appropriate.
This section applies for the purposes of this section and sections 13 to 16.
The “appropriate regulator”, in relation to an FMI sandbox, means the regulator specified in that sandbox as the appropriate regulator (and both of the regulators may be specified); and for this purpose “regulator” means—
the FCA, or
the Bank of England.
“Relevant enactment” means any provision made by or under—
FSMA 2000;
the Companies Act 2006;
the Financial Markets Insolvency (Settlement Finality) Regulations 1999 (S.I. 1999/2979);
the Stock Transfer (Gilt-edged Securities) (CGO Service) Regulations 1985 (S.I. 1985/1144);
the Uncertificated Securities Regulations 2001 (S.I. 2001/3755);
the Financial Collateral Arrangements (No. 2) Regulations 2003 (S.I. 2003/3226);
Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation);
Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments;
the Government Stock Regulations 2004 (S.I. 2004/1611);
Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories;
the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692);
Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive;
Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC.
The following terms are defined as follows—
“clearing member” has the meaning given in Article 2 of EMIR and, unless otherwise provided, includes an interoperable CCP;
Section 110 of the Financial Services Act 2012 (payment to Treasury of penalties received by Bank of England) is amended as follows. In subsection (2)(a), after “192K” insert “, 309U, 309Z2”. In subsection (5), after paragraph (a) insert—.
The Treasury may by regulations make provision requiring the Bank to create and maintain a resolution plan for each CCP. The following are examples of provision that regulations under sub-paragraph (1) may make— Regulations under this paragraph may provide for exemptions. Regulations under this paragraph are subject to the negative procedure. In this paragraph “resolution plan”, in relation to a CCP, means a document setting out the actions that the Bank proposes to take in the event that the CCP meets the conditions under paragraph 17 for the exercise of the stabilisation powers.
The Bank may disclose information that it thinks relevant to the financial stability of— Information about the business or other affairs of a specified or identifiable person may be disclosed under sub-paragraph (1) only to— Except as provided by sub-paragraph (4), the disclosure of information under this paragraph does not breach— This paragraph does not authorise a disclosure of information if the disclosure would contravene the data protection legislation (but in determining whether a disclosure would do so, take into account the duties imposed by this paragraph). In this paragraph “the data protection legislation” has the same meaning as in the Data Protection Act 2018 (see section 3 of that Act).
Regulations under section 414 of FSMA 2000 (service of notices), and subsection (4) of that section, apply in relation to any notice, direction or document of any kind required to be given under any provision of this Schedule (however that requirement is expressed) as if those provisions were provisions of that Act.
In this Schedule—
The Companies Act 2006 is amended as follows. In Part 2 of Schedule 2 (specified descriptions of disclosures for the purposes of section 948), in paragraph 49(c) for “or the Banking Act 2009” substitute “, the Banking Act 2009 or the Financial Services and Markets Act 2023”. In Part 2 of Schedule 11A (specified descriptions of disclosures for the purposes of section 1224A), in paragraph 71(c) for “or the Banking Act 2009” substitute “, the Banking Act 2009 or the Financial Services and Markets Act 2023”.
The Financial Services (Banking Reform) Act 2013 is amended as follows. In Schedule 2 omit paragraph 9. In Schedule 10 omit paragraph 7.
“relevant regulator” means—
The particular kinds of technology that may be used under the FMI sandbox arrangements for the purposes of assessing their efficiency or effectiveness.
How payments are to be settled in respect of transactions taking place under the FMI sandbox arrangements. Provision under sub-paragraph (1) includes provision as to cash settlement or whatever other forms of settlement the provision may specify.
Publication of specified details of the FMI sandbox arrangements by the Treasury or the appropriate regulator (or both). Duties of appropriate regulators to provide the Treasury with information about the operation of the FMI sandbox arrangements. Requirements imposed by virtue of this paragraph are in addition to the requirement imposed by section 14.
The Financial Services Act 2012 is amended as follows.
FSMA 2000 is amended as follows.
If the Bank is satisfied that the conditions in paragraph 7(1), (2) and (4) are met in relation to a CCP, the Bank may appoint a person to act (or more than one persons to act jointly) as a temporary manager of that CCP. A temporary manager may be appointed under sub-paragraph (1)— A temporary manager has the functions specified in the instrument of appointment (see paragraph 9). The functions which may be specified include (amongst other things)— The temporary manager may, with the consent of the Bank— The temporary manager may propose business for consideration at the general meeting. If the temporary manager is being appointed to work with the directors, the Bank—
The power in paragraph 6(1) is to be exercised by an instrument of appointment. The instrument of appointment must— The instrument of appointment may— The instrument of appointment may require the temporary manager to make reports to the Bank, at specified times or intervals, on— The instrument of appointment may provide for the payment of remuneration and allowances to a temporary manager. Provision under sub-paragraph (5) may provide that the amounts are— If a temporary manager— the Bank must publish the instrument of appointment on its website.
A notice under paragraph 11(2) must— A notice given under paragraph 11(3) must— A notice given under paragraph 11(4) must— The Bank may extend the period allowed by the notice given under paragraph 11(2), (3) or (4) for making representations. A notice under paragraph 11(7)(a) about the imposition of a requirement under paragraph 5 must comply with sub-paragraph (1). A notice under paragraph 11(7)(a) about the appointment of a person as a temporary manager or the variation of the terms of the appointment of a person as a temporary manager must comply with sub-paragraph (2). A notice under paragraph 11(7)(a) about the imposition of a requirement under paragraph 6(7) must comply with sub-paragraph (3). In this paragraph, any reference to “appointment” includes re-appointment.
A stabilisation power may be exercised in respect of a CCP only if the Bank is satisfied that each of the following conditions is met. Condition 1 is that the CCP is failing or likely to fail. Condition 2 is that— Condition 3 is that the exercise of the power is necessary having regard to the public interest in the advancement of one or more of the special resolution objectives. Condition 4 is that one or more of the special resolution objectives would not be met to the same extent by the winding up of the CCP. For the purposes of Condition 1, a CCP is failing or likely to fail if one or more of the following apply— The Bank may treat Condition 1 as met if satisfied that it would be met but for the withdrawal or possible withdrawal of critical clearing services by the CCP. The Bank must treat Conditions 1 and 2(a) as met if satisfied that those conditions would be met but for financial assistance provided by— This sub-paragraph applies where, in order to remedy a serious disturbance in the economy of the United Kingdom and preserve financial stability, the extraordinary public financial support takes either of the following forms— Before determining that Conditions 2, 3 and 4 are met the Bank must consult—
The Treasury must make arrangements for a panel to advise the Treasury about the effect of the special resolution regime on— In particular, the panel may advise the Treasury about— The Treasury must ensure that the panel includes—
Where the Bank has carried out a provisional valuation under paragraph 22 before exercising a stabilisation power, the Bank must arrange for the appointment of an independent valuer in accordance with paragraph 24 to carry out a full valuation in accordance with this paragraph as soon as reasonably practicable. The purpose of the valuation carried out under sub-paragraph (1) is to— A valuation carried out under sub-paragraph (1) must comply with sub-paragraph (5) of paragraph 22 and be accompanied by the information required in sub-paragraph (7) of that paragraph.
Where the independent valuation carried out under paragraph 23(1) produces a higher valuation of the net asset value of the CCP than a provisional valuation carried out under paragraph 22(4), the Bank may— The power in sub-paragraph (1)(a)—
The second stabilisation option is to transfer all or part of the business of the CCP to a company which meets the requirements of sub-paragraph (2) (a “bridge central counterparty”). Those requirements are that the company— For that purpose the Bank may make— The code of practice under paragraph 16 must include provision about the management and control of bridge central counterparties including, in particular, provision about— The Bank must, without delay, take all necessary steps to wind up the bridge central counterparty if— Sub-paragraph (5) does not apply if the bridge central counterparty— “The relevant post-transfer period” means the period of two years beginning with the day of the transfer mentioned in sub-paragraph (5)(a), subject to any extension under sub-paragraph (8). The Bank may extend (or further extend) the relevant post-transfer period by one year if it is satisfied that the extension— Where property, rights or liabilities are first transferred by property transfer instrument to a bridge central counterparty and later transferred (whether or not by the exercise of a power under this Schedule) to another company which is wholly owned by the Bank, that other company is an “onward bridge central counterparty”. An onward bridge central counterparty—
The fifth stabilisation option is to make one or more cash call instruments. A cash call instrument is an instrument that makes provision requiring one or more clearing members of the CCP to pay an amount in cash specified in the instrument to the CCP. The Treasury may by regulations— The power under sub-paragraph (1) does not apply to a clearing member— Regulations under this paragraph are subject to the negative procedure.
A write-down instrument may— Sub-paragraph (1) applies to securities issued by the CCP that fall within class 1 in paragraph 40. A write-down instrument may— The reference in sub-paragraph (1) to converting securities from one form or class into another includes creating a new security in connection with the modification of an existing security. In sub-paragraph (3) any reference to a class of securities is to be construed in accordance with paragraph 40. The provision that may be made under sub-paragraph (3)(a) includes, for example— In sub-paragraph (3)— Where the listing of securities is suspended in accordance with a write-down instrument, those securities are to be treated for the purposes of section 96 of, and paragraph 23(6) of Schedule 1ZA to, FSMA 2000 as still being listed. The provision that may be made under this paragraph in relation to any securities is in addition to any provision that the Bank may have power to make in relation to them under paragraph 34.
cancel, transfer, dilute or modify any securities to which this sub-paragraph applies;
convert any such securities from one form or class into another.
The eighth stabilisation option is for the Bank to make one or more instruments of control. An instrument of control is an instrument that makes any of the following provision — Provision made under sub-paragraph (2) may for example include—
A share transfer instrument is for purposes of this Schedule an instrument which— A share transfer instrument may relate to—
A share transfer instrument may provide for securities to be converted from one form or class to another. A share transfer instrument may provide for the listing of securities, under section 74 of FSMA 2000, to be discontinued or suspended. Where the listing of securities is suspended in accordance with a share transfer instrument, those securities are to be treated for the purposes of section 96 of, and paragraph 23(6) of Schedule 1ZA to, FSMA 2000 as still being listed.
A share transfer instrument may include incidental, consequential or transitional provision. In relying on sub-paragraph (1) a share transfer instrument—
This paragraph applies where the Bank has made a share transfer instrument, in respect of securities issued by a CCP, in accordance with paragraph 27(2), 29(3) or 30(2) (“the original instrument”). The Bank may make one or more onward share transfer instruments. An onward share transfer instrument is a share transfer instrument which— An onward share transfer instrument may not transfer securities to the transferor under the original instrument. The Bank may not make an onward share transfer instrument unless the transferee under the original instrument is— Paragraphs 17 and 19 do not apply to an onward share transfer instrument (but it is to be treated in the same way as any other share transfer instrument for all other purposes, including for the purposes of the application of a power under this Schedule). Before making an onward share transfer instrument the Bank must consult— Paragraph 48 applies where the Bank has made an onward share transfer instrument.
This paragraph applies where the Bank has made a bridge central counterparty share transfer instrument in accordance with paragraph 52(2) (“the original instrument”). The Bank may make one or more bridge central counterparty reverse share transfer instruments in respect of securities issued by the bridge central counterparty and held by a transferee under the original instrument. A bridge central counterparty reverse share transfer instrument is a share transfer instrument which— The Bank must not make a bridge central counterparty reverse share transfer instrument unless— Paragraphs 17 and 19 do not apply to a bridge central counterparty reverse share transfer instrument (but it is to be treated in the same way as any other share transfer instrument for all other purposes including for the purposes of the application of a power under this Schedule). Before making a bridge central counterparty reverse share transfer instrument the Bank must consult— Paragraph 48 applies where the Bank has made a bridge central counterparty reverse share transfer instrument.
A property transfer instrument may transfer any property, rights or liabilities including, in particular—
property, rights and liabilities acquired or arising between the making of the instrument and the transfer date,
rights and liabilities arising on or after the transfer date in respect of matters occurring before that date,
property outside the United Kingdom,
rights and liabilities under the law of a country or territory outside the United Kingdom, and
rights and liabilities under an enactment.
A property transfer instrument made in respect of a CCP may make provision about the consequences of a transfer for the rules of the CCP. In particular, an instrument may— Provision by virtue of this paragraph may (but need not) be limited so as to have effect—
This paragraph applies where a property transfer instrument transfers foreign property. In sub-paragraph (1) “foreign property” means— The transferor and the transferee must each take any necessary steps to ensure that the transfer is effective as a matter of foreign law (if it is not wholly effective by virtue of the property transfer instrument). Until the transfer is effective as a matter of foreign law, the transferor must— If the Bank determines that, in spite of any action taken by the transferee or the transferor, it is not possible for the transfer of certain property to be effective under the law of the jurisdiction where the property is located or (where the property consists of rights or liabilities) the law under which it arises— The Bank must give notice of any determination under sub-paragraph (5) to the transferor and the transferee. The transferor must meet any expenses of the transferee in complying with this paragraph. An obligation imposed by this paragraph is enforceable as if created by contract between the transferor and transferee. The transferor must comply with any directions of the Bank in respect of the obligations under sub-paragraphs (3) and (4); and— In this paragraph “foreign law” means the law of a country or territory outside the United Kingdom.
A property transfer instrument may provide for the listing of securities, under section 74 of FSMA 2000, to be discontinued or suspended. Where the listing of securities is suspended in accordance with a property transfer instrument, those securities are to be treated for the purposes of section 96 of, and paragraph 23(6) of Schedule 1ZA to, FSMA 2000 as still being listed.
This paragraph applies where the Bank has made a property transfer instrument in accordance with paragraph 27(2) (“the original instrument”) providing for the transfer of property, rights or liabilities of a CCP to a person (“the original transferee”). The Bank may make one or more private sector reverse property transfer instruments in respect of property, rights or liabilities of the original transferee. A private sector reverse property transfer instrument is a property transfer instrument which— The Bank must not make a private sector reverse property transfer instrument without the written consent of the original transferee. Paragraphs 17 and 19 do not apply to a private sector reverse property transfer instrument (but it is to be treated in the same way as any other property transfer instrument for all other purposes including for the purposes of the application of a power under this Schedule). Before making a private sector reverse property transfer instrument the Bank must consult— Paragraph 64 applies where the Bank has made a private sector reverse property transfer instrument.
This paragraph applies where the Bank has made a share transfer instrument, in respect of securities issued by a CCP, in accordance with paragraph 27(2) or 30(2) (“the original instrument”). The Bank may make one or more property transfer instruments. A property transfer instrument is an instrument which— The Bank may not make a property transfer instrument in accordance with this paragraph unless the original instrument transferred securities to— Paragraphs 17 and 19 do not apply to a property transfer instrument made in accordance with this paragraph. Before making a property transfer instrument in accordance with this paragraph, the Bank must consult— Paragraph 64 applies where the Bank has made a property transfer instrument in accordance with this paragraph.
This paragraph applies where the Bank has made a bridge central counterparty supplemental property transfer instrument in accordance with paragraph 73 (“the original instrument”). The Bank may make one or more reverse property transfer instruments (“bridge central counterparty supplemental reverse property transfer instruments”) in respect of property, rights or liabilities of the transferee under the original instrument. A bridge central counterparty supplemental reverse property transfer instrument is an instrument which— Paragraphs 17 and 19 do not apply to a bridge central counterparty supplemental reverse property transfer instrument (but it is to be treated in the same way as any other property transfer instrument for all other purposes including for the purposes of the application of a power under this Schedule). The Bank must not make a bridge central counterparty supplemental reverse property transfer instrument unless— Before making a bridge central counterparty supplemental reverse property transfer instrument the Bank must consult— Paragraph 64 applies where the Bank has made a bridge central counterparty supplemental property transfer instrument.
The provision that may be made by a property transfer instrument in reliance on paragraph 54(1)(b), 67(3)(b), 68(3)(b), 69(3)(b), 70(4)(c), 71(3)(b), 72(3)(b), 73(3)(b), or 74(3)(b) includes provision for the creation of liabilities. The provision may be framed by reference to an agreement which has been or is to be entered into, or anything else which has been or is to be done, by any person (including a person other than the person making the instrument).
A write-down instrument may permit or require the execution, issue or delivery of an instrument. A write-down instrument may provide for any provision in the instrument to have effect irrespective of— A write-down instrument may provide for the effect of an instrument executed, issued or delivered in accordance with the instrument. A write-down instrument may—
A resolution instrument may enable the Bank— Sub-paragraph (1) also applies to a director or senior manager of a relevant CCP group company of the specified CCP. A “relevant CCP group company” is a CCP group company incorporated in, or formed under the law of any part of, the United Kingdom. Appointments under sub-paragraph (1)(d) are to be on terms and conditions agreed with the Bank.
The Bank may, in making a resolution instrument, share transfer instrument or property transfer instrument in relation to a CCP, direct that CCP to pay the Bank a specified fee to cover expenses reasonably incurred by the Bank in connection with exercising that option. The Treasury may direct a CCP in relation to which the Bank has made a resolution instrument, share transfer instrument or property transfer instrument to pay the Treasury a specified fee to cover expenses reasonably incurred by the Treasury in connection with the exercise by the Bank of that power in relation to the CCP.
In this paragraph— In this paragraph a reference to insolvency includes a reference to liquidation, administration, receivership, composition with creditors and a scheme of arrangement. The residual CCP and each group company must provide such services and facilities as are required to enable a transferee to operate the transferred business, or part of it, effectively. The duty under sub-paragraph (3) (the “continuity obligation”) may be enforced as if created by contract between the residual CCP or group company and the transferee. The continuity obligation continues to apply despite the residual CCP or group company entering insolvency, and may not be disclaimed by a liquidator under section 178(2) of the Insolvency Act 1986 or Article 152(1) of the Insolvency (Northern Ireland) Order 1989. The duty to provide services and facilities in pursuance of the continuity obligation is subject to a right to receive reasonable consideration. But if the services and facilities provided in pursuance of the continuity obligation were provided to the CCP whose business has been transferred, under an agreement with that CCP, before the property transfer instrument providing for the transfer was made, they are to continue for the duration of that agreement to be provided on the terms set out in that agreement (and sub-paragraph (6) does not apply). The continuity obligation is not limited to the provision of services or facilities directly to a transferee. The Bank may, with the consent of the Treasury, by notice to the residual CCP or a group company state that in the Bank’s opinion— A notice under sub-paragraph (9) is to be determinative of the nature and extent of the continuity obligation as from the time when the notice is given.
In this paragraph and paragraph 93— In this paragraph a reference to insolvency includes a reference to liquidation, administration, receivership, composition with creditors and a scheme of arrangement. Each former group company must provide such services and facilities as are required to enable the transferred CCP to operate effectively. The duty under sub-paragraph (3) (the “continuity obligation”) may be enforced as if created by contract between the transferred CCP and the former group company. The continuity obligation continues to apply despite the former group company entering insolvency, and may not be disclaimed by a liquidator under section 178(2) of the Insolvency Act 1986 or Article 152(1) of the Insolvency (Northern Ireland) Order 1989. The duty to provide services and facilities in pursuance of the continuity obligation is subject to a right to receive reasonable consideration. But if the services and facilities provided in pursuance of the continuity obligation were provided to the transferred CCP, under an agreement with that CCP, before the share transfer instrument providing for the transfer was made, they are to continue for the duration of that agreement to be provided on the terms set out in that agreement (and sub-paragraph (6) does not apply). The continuity obligation is not limited to the provision of services or facilities directly to the transferred CCP. The Bank may by notice to a former group company state that in the Bank’s opinion— A notice under sub-paragraph (9) is to be determinative of the nature and extent of the continuity obligation as from the time when the notice is given. The Bank may act under or by virtue of sub-paragraph (9) only with the consent of the Treasury.
The Treasury may by regulations specify matters which are to be or not to be considered in determining— The Bank may give guarantees or indemnities in respect of consideration for services or facilities provided or to be provided in pursuance of a continuity obligation. Regulations under this paragraph are subject to the negative procedure.
Where the Bank is exercising a stabilisation power in respect of a CCP (a “CCP under resolution”) the Bank may suspend the rights of a secured creditor of the CCP to enforce any security interest the creditor has in relation to any assets of the CCP. A suspension under sub-paragraph (1)— But the Bank may not suspend the rights of an excluded person to enforce any security interest that person may have in relation to any asset of the CCP under resolution which has been pledged or provided to the excluded person in question as collateral or as cover for margin. The power under sub-paragraph (1) must be exercised by way of provision in a share transfer instrument, property transfer instrument, resolution instrument or third-country instrument. Where the power in sub-paragraph (1) is being exercised in a partial property transfer, the Bank must ensure that any restrictions on the enforcement of security interests which it imposes under that sub-paragraph are applied consistently for all CCP group companies in respect of which the Bank is exercising a stabilisation power. The Bank must have regard to the impact a suspension might have on the orderly functioning of the financial markets before exercising the power in sub-paragraph (1). For the purposes of this paragraph, a “security interest” means an interest or right held for the purpose of securing the payment of money or the performance of any other obligation.
This paragraph applies where the Bank has made a resolution instrument, share transfer instrument or a property transfer instrument in relation to a CCP. A clearing member of the CCP may not at any time during the relevant period terminate their membership of the CCP. The “relevant period” for the purposes of sub-paragraph (2) is the period of 48 hours beginning with the time the instrument in question comes into force. A resolution instrument, share transfer instrument or property transfer instrument in relation to a CCP may provide for sub-paragraph (2)— Provision may be made under sub-paragraph (4) only if the Bank considers that such provision would advance one or more of the special resolution objectives.
This paragraph applies to— An instrument may include provision for disputes to be determined in a specified manner. Provision by virtue of sub-paragraph (2) may, in particular—
This paragraph applies to a CCP if— Insolvency proceedings may not be commenced in relation to the CCP except by, or with the consent of, the Bank. For the purposes of sub-paragraph (2), the commencement of insolvency proceedings means—
This paragraph applies where the Bank has transferred all or part of a CCP’s business to a bridge central counterparty. The Bank must comply with any notice of the Treasury requiring the Bank, for the purpose of ensuring compliance by the United Kingdom with its international obligations— A notice under sub-paragraph (2)— A notice may include requirements about timing.
This paragraph applies where the Bank sells all or part of a CCP’s business to a commercial purchaser. The Bank must report to the Chancellor of the Exchequer about the exercise of the power to make share transfer instruments and property transfer instruments under paragraph 27(2). The report must comply with any requirements as to content specified by the Treasury. The report must be made as soon as is reasonably practicable after the end of one year beginning with the date of the first transfer instrument made under paragraph 27(2).
This paragraph applies where the Bank makes one or more share transfer instruments in respect of a CCP under paragraph 30(2). The Bank must report to the Chancellor of the Exchequer about the exercise of the power to make share transfer instruments under that paragraph. The report must comply with any requirements as to content specified by the Treasury. The report must be made as soon as is reasonably practicable after the end of one year beginning with the date of the first transfer instrument made under paragraph 30(2).
This paragraph applies only for the purposes of the functions of the Bank conferred by or under this Schedule. If it appears to the Bank that there is a good reason for doing so, the Bank may appoint one or more competent persons to conduct an investigation on its behalf into— If a person appointed under sub-paragraph (2) thinks it necessary for the purposes of the investigation, that person may also investigate the business of a person who is or has at any relevant time been a member of a group of which the CCP under investigation is part. A person appointed under sub-paragraph (2) who decides to investigate the business of any person under sub-paragraph (3) must give that person written notice of that decision. In this paragraph, “business” includes any part of a business.
This paragraph applies if the Bank appoints one or more competent persons (“investigators”) under paragraph 121 or 122 to conduct an investigation on its behalf. The Bank must give written notice of the appointment of an investigator to the person who is the subject of the investigation (“the person under investigation”). A notice under sub-paragraph (2) must— Nothing prevents the Bank from appointing a person who is a member of its staff as an investigator. An investigator must make a report of the investigation to the Bank. The Bank may, by a direction to an investigator, control— A direction may, in particular— If there is a change in the scope or conduct of the investigation and, in the opinion of the Bank, the person under investigation is likely to be significantly prejudiced by not being made aware of it, that person must be given written notice of the change. If the appointment is under paragraph 122, sub-paragraphs (2) and (8) do not apply if the Bank believes that the notice required by the sub-paragraph in question would be likely to result in the investigation being frustrated.
A statement made to an investigator appointed under paragraph 121 or 122 by a person in compliance with an information requirement is admissible in evidence in any proceedings, so long as it also complies with any requirement governing the admissibility of evidence in the circumstances in question. But in criminal proceedings in which that person is charged with an offence to which this sub-paragraph applies— by or on behalf of the prosecution, or the Bank (as the case may be), unless evidence relating to it is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person. Sub-paragraph (2) applies to any offence other than one under— “Information requirement” means a requirement imposed by an investigator under paragraph 125, 126 or 128.
A justice of the peace may issue a warrant under this paragraph if satisfied on information on oath given by or on behalf of the Secretary of State, the Bank or an investigator that there are reasonable grounds for believing that the first, second or third set of conditions is satisfied. The first set of conditions is— The second set of conditions is— The third set of conditions is— A warrant under this paragraph authorises a constable— A warrant under this paragraph may be executed by any constable. The warrant may authorise persons to accompany any constable who is executing it. The powers in sub-paragraph (5) may be exercised by a person authorised by the warrant to accompany a constable; but that person may exercise those powers only in the company of, and under the supervision of, a constable. In England and Wales, sections 15(5) to (8) and 16(3) to (12) of the Police and Criminal Evidence Act 1984 (execution of search warrants and safeguards) apply to warrants issued under this paragraph. In Northern Ireland, Articles 17(5) to (8) and 18(3) to (12) of the Police and Criminal Evidence (Northern Ireland) Order 1989 apply to warrants issued under this paragraph. In the application of this paragraph to Northern Ireland the reference to a justice of the peace is a reference to a lay magistrate. In the application of this paragraph to Scotland— “Investigator” means an investigator appointed under paragraph 121 or 122. “Information requirement” means a requirement imposed—
Proceedings for an offence under paragraph 132 may be instituted— In exercising its power to institute proceedings for an offence under paragraph 132, the Bank must comply with any conditions or restrictions imposed in writing by the Treasury. Conditions or restrictions may be imposed under sub-paragraph (2) in relation to proceedings generally, or such proceedings or categories of proceedings as the Treasury may direct.
If the Bank considers that a person has failed to comply with a relevant requirement imposed on the person, it may do one or more of the following— A prohibition under sub-paragraph (1)(d)may apply— If the Bank considers that a failure by a person to comply with a relevant requirement occurred with the consent or connivance of, or was attributable to any neglect on the part of, an officer of that person, it may do one or more of the following— A penalty under this paragraph— In this paragraph “relevant requirement” has the meaning given in paragraph 122.
If the Bank decides to impose a sanction on a person under paragraph 136(1) or (3) it must without delay give that person a decision notice. If the decision is to publish a statement, the decision notice must set out the terms of the statement. If the decision is to impose a penalty, the decision notice must specify the amount of the penalty. If the decision is to refrain from certain conduct, the decision notice must specify the conduct. If the decision is to impose a prohibition on holding an office or other position, the decision notice must specify the extent of the prohibition. Section 388 of FSMA 2000 applies in relation to a decision notice given under sub-paragraph (1) and the Bank as it applies in relation to a decision notice given under that Act and the regulator which gave that notice, subject to sub-paragraph (7). Section 388 of that Act has effect for the purposes of sub-paragraph (6) as if—
If, on the application of the Bank, the court is satisfied— the court may make an order restraining the conduct constituting the failure. If, on the application of the Bank, the court is satisfied— the court may make an order requiring anyone who appears to have been knowingly concerned in the failure to take such steps as the court may direct to remedy it. If, on the application of the Bank, the court is satisfied— the court may make an order restraining that person from dealing with any assets which it is satisfied the person is reasonably likely to deal with. “Compliance failure” means— The jurisdiction conferred by this paragraph is exercisable— In this paragraph—
Paragraph 47 (incidental provision) applies to a third-country instrument as it applies to a share transfer instrument. Paragraph 48 (procedure: instruments) applies to a third-country instrument as it applies to a share transfer instrument, except that references in that paragraph to the CCP are to be read as references to the third-country central counterparty to which the third-country instrument relates. Paragraph 109 (international obligation notice: general) applies in relation to the making of a third-country instrument under paragraph 145 or 146 as it applies in relation to the exercise of a stabilisation power, except that— Paragraph 110 (international obligation notice: bridge central counterparty) applies where the Bank has, by virtue of paragraph 146, transferred all or part of the business of a third-country central counterparty to a bridge central counterparty as it applies where the Bank has transferred all or part of the business of a CCP to a bridge central counterparty. Paragraph 145(6) applies for the purposes of this paragraph.
Section 85 (relevant functions in relation to complaints scheme) is amended as follows. In subsection (3)(a), after “(payment systems)” insert “or Part 5A of that Act (wholesale cash distribution)”. In subsection (7)—
Section 56 (prohibition orders) is amended as follows— After subsection (7C) insert— For subsection (9) substitute—
Section 110 (payment to Treasury of penalties received by Bank of England) is amended as follows. In subsection (2), in paragraph (b), for “section 198” substitute “sections 198 and 206T”. In subsection (5)—
Section 57 (prohibition orders: procedure and right to refer to Tribunal) is amended as follows. After subsection (8) insert—.
In section 59AB(1) (specifying functions as controlled functions: transitional provision), after “this Part”, in both places, insert “or Chapter 2A of Part 18”.
In section 133(7A) (proceedings before Tribunal: general provision), after paragraph (l) insert—.
In section 138A (modification or waiver of rules), in subsection (2), after paragraph (b) insert—
Section 168 (appointment of persons to carry out investigations in particular cases) is amended as follows. After subsection (4) insert— In subsection (6), after paragraph (b) insert— After subsection (6), insert—
In the heading of Chapter 3B of Part 18, at the end insert “in respect of recognised bodies”.
Section 312FA is omitted.
In section 313 (interpretation of Part 18), in subsection (1)—
omit the definition of “application”;
omit the definition of “applicant”.
Section 347 (the record of authorised persons etc) is amended as follows. In subsection (1)— In subsection (2)— In subsection (8), after ““Approved person”” insert “(except in the expression “Part 18 approved person”)”. After subsection (8) insert— In subsection (8A)— In subsection (9), after “approval” insert “under section 59”. After subsection (9) insert—
In section 391 (publication of notices), in subsection (1ZB), after paragraph (k) insert—.
Section 392 (application of sections 393 and 394) is amended as follows. In paragraph (a) (warning notices), after “282B(3),” insert “309C(1)(b), 309P(1)(b), 309V(1), 309Z4(1),”. In paragraph (b) (decision notices), after “282B(4),” insert “309C(3), 309P(2), 309V(3), 309Z4(6),”.
In section 395 (the FCA’s and PRA’s procedures), in subsection (13), after paragraph (fa) insert—.
Section 417(1) (interpretation) is amended as follows. In the appropriate place insert—. In the definition of “prohibition order”, after ““Part 9C prohibition order”” insert “or ““Part 18C prohibition order””.
In section 429 (Parliamentary control of statutory instruments)
in subsection (2), in the list of sections beginning with “90B” insert at the appropriate place “309Z8,”;
in subsection (2B), after paragraph (ba) insert—.
Schedule 1ZA (the Financial Conduct Authority) is amended as follows. In paragraph 20(4), after paragraph (ba) insert—. In paragraph 24, after paragraph (b) insert—
In Schedule 2A (Gibraltar-based persons carrying on activities in the UK), in paragraph 19 (power to reject: prohibition order in respect of senior manager), in sub-paragraph (2)(b)—
omit the “or” at the end of paragraph (ii) and insert—;
in paragraph (iii) for “or 143S” substitute “, 143S or 309B”.
Schedule 17A (further provision in relation to exercise of Part 18 functions by Bank of England) is amended as follows. After paragraph 6 insert— In paragraph 14(2) (investigations)— In paragraph 22 (application of section 347 to the Bank)— In paragraph 29 (notices)— In paragraph 31(1) (proceedings for an offence), after paragraph (c) insert—. The power conferred by this paragraph may not be used to require a fee to be paid by any person whose application under section 309I for approval under section 309G has been granted.
The following terms have the same meanings as in Part 18 of FSMA 2000—
“resolution instrument” has the meaning given by paragraph 79;
In Article 3 (pre-trade transparency requirements), after paragraph 3 insert—
In Article 2(1) (definitions), in point (17) (“liquid market”)—
omit paragraph (a);
in paragraph (b), for “Articles 4, 5 and 14” substitute “Article 14”.
For Article 4 substitute—
In Article 12(1) after “accordance with” insert “, or with rules made under,”.
After Article 4 insert—
In Article 13(1) after “accordance with” insert “, or with rules made under,”.
Omit Article 5 (volume cap mechanism).
Omit Article 19.
Article 14 (obligation for systematic internalisers to make public firm quotes in respect of shares etc) is amended as follows. In paragraph 6A, omit “referred to in Article 5(3A)”. After paragraph 6C insert—
In Article 26(3), omit “and Article 21(5)(a)”.
In Article 47(1A)(a), after “Regulation” insert “or in rules made by the FCA under this Regulation”.
In Article 50B (FCA directions), omit “Article 5, Article 9 or”.
Article 50C (other FCA directions) is amended as follows. In paragraph 2 after “Article” insert “4a or”. In paragraph 3 after “Article” insert “4a or”. In paragraph 4 after “Article” insert “4a or”.
Article 50D (FCA rules) is amended as follows. In paragraph 1— In paragraph 2(b) after “damages)” insert “and section 138EA (matters to consider when making rules)”. After paragraph 2 insert— In paragraph 3, for the words after “authorised persons” substitute “included a reference to persons who are not authorised persons but to whom any of the rules made by the FCA under this Regulation apply”.
The Treasury may by regulations amend subsection (3) so as to add to the list of relevant enactments.
Regulations under subsection (6) are subject to the affirmative procedure.
FSMA 2000 is amended as follows.
In the heading to Part 18, for “and CSDs” substitute “, CSDs and other parties”.
After section 312K (statement of policy: procedure) insert—
FSMA 2000 is amended as follows.
In section 313 (interpretation of Part 18), in subsection (1), at the appropriate place insert—.
In section 380 (injunctions), in subsection (11) after “requirement” insert “, other than a case falling within paragraph 26 of Schedule 17A”.
In section 391 (publication), in subsection (1ZB) after paragraph (l) insert—.
In section 392 (third party rights and access to evidence)—
in paragraph (a), after “312(G)(1),” insert “312S(1),”, and
in paragraph (b) after “312H(1),” insert “312S(3),”.
In section 429 (Parliamentary control of statutory instruments), in subsection (8), in the list of sections beginning with “3G(1),”, insert at the appropriate place “, 312L”.
The following amendments are to Schedule 17A (application of provisions to Bank).
Sub-paragraphs (1) to (4) do not apply in relation to rules made by the Bank under section 312M (in relation to which see paragraph 10A).
After paragraph 10 insert—
In paragraph 23(1) (public record and disclosure of information), after “discharge of,” insert “any of its functions under Chapter 3C of Part 18 of this Act,”.
In paragraph 26(2) (injunctions), after paragraph (a) insert—.
In paragraph 28 (restitution)—
in sub-paragraph (2), in the words before paragraph (a), for “or a recognised CSD” substitute “, a recognised CSD or a critical third party”;
in sub-paragraph (2)(a) for “or the recognised CSD” substitute “, the recognised CSD or the critical third party”;
in sub-paragraph (4)(a) for “or the recognised CSD” substitute “, the recognised CSD or the critical third party”.
In paragraph 29 (notices) for “or 312H” substitute “, 312H or 312S”.
In paragraph 30 (offences), after sub-paragraph (a) insert—.
In paragraph 32 (records) after “recognised CSDs” insert “, critical third parties”.
In paragraph 33(a) (annual report), in the substituted paragraph (a), after “recognised CSDs” insert “, critical third parties”.
See also Part 6 of Schedule 2.
FSMA 2000 is amended as follows.
In section 21 (restrictions on financial promotion), after subsection (2) insert—
After section 55N insert—
Schedule 5 contains amendments related to this section.
The amendments made by this section and Schedule 5—
apply to an authorised person whether the person became authorised before or after the coming into force of this section;
do not affect the approval of a communication given before the coming into force of this section.
FSMA 2000 is amended as follows.
After section 416 insert—
In Schedule 1ZA (the Financial Conduct Authority), in paragraph 11 (annual report), in sub-paragraph (1)—
after paragraph (ha) insert—;
after paragraph (ia) insert—.
In Schedule 1ZB (the Prudential Regulation Authority), in paragraph 19 (annual report), in sub-paragraph (1)—
after paragraph (e) insert—;
after paragraph (fa) insert—.
In Schedule 6, which provides for the regulation of digital settlement assets—
Part 1 extends Part 5 of the Banking Act 2009 (Bank of England oversight of payment systems) to payment systems using digital settlement assets and DSA service providers, and makes consequential provision;
Part 2 extends Part 5 of the Financial Services (Banking Reform) Act 2013 (regulation of payment systems) to payment systems using digital settlement assets.
The Treasury may by regulations make such provision as they consider appropriate for the purpose of, or in connection with—
the regulation of payments that include digital settlement assets,
the regulation of— as those terms are for the time being defined in Part 5 of the Banking Act 2009, and
recognised payment systems that include arrangements using digital settlement assets,
recognised DSA service providers, and
service providers connected with, or in relation to, the systems and providers mentioned in sub-paragraphs (i) and (ii),
making insolvency arrangements (including administration, restructuring and any similar procedure) in respect of the systems and providers mentioned in paragraph (b).
In this section, “digital settlement asset” means a digital representation of value or rights, whether or not cryptographically secured, that—
can be used for the settlement of payment obligations,
can be transferred, stored or traded electronically, and
uses technology supporting the recording or storage of data (which may include distributed ledger technology).
The provision that may be made by regulations under this section includes provision—
applying legislation relating to the regulation of electronic money and payments to digital settlement assets (subject to whatever modifications the Treasury consider appropriate);
applying legislation relating to insolvency arrangements and interactions between different arrangements to the systems and providers mentioned in subsection (1) (subject to whatever modifications the Treasury consider appropriate);
conferring powers on the Treasury (including a power to legislate);
conferring powers, or imposing duties, on a relevant regulator (including a power to make rules or other instruments);
about fees or other charges payable to a relevant regulator;
about recognition orders and recognition criteria in Part 5 of the Banking Act 2009;
about the enforcement of obligations arising under or by virtue of the regulations;
about appeals in respect of decisions made under or by virtue of the regulations;
about the sharing of information.
Provision under subsection (3)(g) may include provision creating offences punishable on summary conviction—
in England and Wales, with imprisonment for a term not exceeding 3 months or a fine, or both;
in Scotland and Northern Ireland, with imprisonment for a term not exceeding 3 months or a fine not exceeding level 5 on the standard scale, or both.
The power to make regulations under this section includes power to modify legislation.
The power under subsection (5) includes power to modify the definition of “digital settlement asset” in subsection (2).
Regulations under this section are—
subject to the affirmative procedure, or
if the Treasury consider it necessary for the regulations to come into force without delay, subject to the made affirmative procedure.
Before making regulations under this section, the Treasury must consult—
the FCA,
the Bank of England, and
in relation to regulations that refer to the PRA or to the Payment Systems Regulator, those bodies.
Where regulations under this section are subject to the made affirmative procedure the statutory instrument containing them must be laid before Parliament after being made.
Regulations contained in a statutory instrument laid before Parliament under subsection (9) cease to have effect at the end of the period of 28 days beginning with the day on which the instrument is made unless, during that period, the instrument is approved by a resolution of each House of Parliament.
In calculating the period of 28 days, no account is to be taken of any whole days that fall within a period during which—
Parliament is dissolved or prorogued, or
either House of Parliament is adjourned for more than four days.
If regulations cease to have effect as a result of subsection (10), that does not—
affect the validity of anything previously done under the regulations, or
prevent the making of new regulations.
In this section—
“EU tertiary legislation” has the same meaning as in the European Union (Withdrawal) Act 2018 (see section 20(1));
In Article 1(3) (subject matter and scope), for “financial counterparties” to the end substitute “counterparties that are relevant financial counterparties, or relevant non-financial counterparties, for the purposes of Article 28 (see paragraph 1A of that Article)”.
In section 7 (shares), in subsection (5)—
at the beginning insert “Subsection (5A) applies”;
the words from “made a loan” to “secured loan” become paragraph (a);
at the end of that paragraph insert , or;
the words from “the member” to the end become subsection (5A).
Before section 12 (power to hold land for limited purposes) insert—
Article 28 (obligation to trade on regulated markets, MTFs or OTFs) is amended as follows. In paragraph 1, for the words from the beginning to “Article 10(1)(b) of Regulation (EU) No 648/2012” substitute “Relevant financial counterparties and relevant non-financial counterparties shall conclude transactions which are neither intragroup transactions as defined in Article 3 of Regulation (EU) No 648/2012 nor transactions covered by the transitional provisions in Article 89 of that Regulation with other relevant financial counterparties or other relevant non-financial counterparties”. After paragraph 1 insert—
After Article 28 insert—
For Article 31 substitute—
The Treasury may by regulations make such provision as they consider appropriate for the purpose of, or in connection with, implementing any mutual recognition agreement to which the United Kingdom is, or is expected to become, a party.
The reference in subsection (1) to a “mutual recognition agreement” is a reference to any international agreement so far as it provides for, or relates to—
the recognition that the law and practice of a foreign country is, in respect of relevant matters, equivalent to the law and practice of the United Kingdom, and
the recognition that the law and practice of the United Kingdom is, in respect of relevant matters, equivalent to the law and practice of that foreign country.
Matters are “relevant matters” for the purposes of subsection (2) if they relate to financial services or markets (whether generally or in particular respects).
The provision that may be made by regulations under this section includes provision—
conferring powers on the Treasury (including a power to legislate);
conferring powers, or imposing duties, on a relevant regulator (including a power to make rules or other instruments);
about fees or other charges payable to a relevant regulator;
about the enforcement of obligations arising under or by virtue of the regulations;
about appeals in respect of decisions made under or by virtue of the regulations;
about the sharing of information.
The reference in this section to a mutual recognition agreement to which the United Kingdom is, or is expected to become, a party includes a reference to such an agreement as modified or supplemented from time to time.
The power to make regulations under this section includes power to modify legislation.
Before making provision under subsection (4)(b) that imposes a duty on a relevant regulator the Treasury must consult the regulator.
Provision under subsection (4)(b) that imposes a duty on a relevant regulator to make rules may (among other things)—
specify matters that the rules must cover;
specify a period within which the rules must be made.
But except so far as permitted by subsection (8), such provision may not require rules to be made in a specified form or with specified content.
Regulations under this section are subject to the affirmative procedure.
In this section—
“recognised CSD”.
The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701) is amended in accordance with this Part of this Schedule.
Eligibility for participation in the FMI sandbox arrangements for FMI entities and persons other than FMI entities. The requirements mentioned in sub-paragraph (1) may be framed by reference to— Application or other procedures for participating in the FMI sandbox arrangements. Information to be supplied by persons wishing to participate in the FMI sandbox arrangements for the purposes of assessing eligibility. Information to be supplied by persons participating in the FMI sandbox arrangements for the purposes of notifying other persons of their participation.
Descriptions of financial instrument (“the FMI sandbox instruments”) that may be traded under the FMI sandbox arrangements. The forms that the FMI sandbox instruments may take for the purposes of trading as part of the FMI sandbox arrangements. Limitations or prohibitions on the trading of the FMI sandbox instruments, or of other instruments that are converted from, or are otherwise linked to, the FMI sandbox instruments. Limitations (whether by reference to number, value or another metric) on the amount of FMI sandbox instruments permitted for trading under the FMI sandbox arrangements. References in this paragraph to the trading of FMI sandbox instruments include references to their settlement.
Duties of the appropriate regulators to cooperate with each other for the purposes of implementing and operating the FMI sandbox arrangements.
FSMA 2000 is amended as follows.
In section 1B (FCA’s general duties), after subsection (4) insert—
After section 1E insert—
In section 2H—
in the title, for “competition objective” substitute “objectives”;
for subsection (1) substitute—
Each regulator must make two reports to the Treasury on how it has complied with its duty to advance the competitiveness and growth objective.
The reports prepared by each regulator under subsection (1) must in particular explain—
the action taken by the regulator to ensure that the competitiveness and growth objective is embedded in its operations, processes and decision-making, and
how any rules and guidance that the regulator has made advance that objective.
The first report under this section must be made before the end of 12 months beginning with the first day on which section 25 of this Act comes into force, and must relate to that period.
The second report under this section must be made before the end of 24 months beginning with the first day on which section 25 of this Act comes into force, and must relate to the period beginning with the day on which the first report is published.
The Treasury must lay a copy of each report prepared under this section before Parliament.
Each regulator must publish its reports prepared under this section in such manner as it thinks fit.
In this section—
“regulator” means the FCA and the PRA;
references to the competitiveness and growth objective, and the duty to advance that objective, are—
in relation to the FCA, references to its objective in section 1EB of FSMA 2000 and to its duty to advance that objective under section 1B(4A) of that Act, and
in relation to the PRA, references to its objective in section 2H(1B) of FSMA 2000 and to its duty to advance that objective under section 2H(1)(b) of that Act.
In section 3B of FSMA 2000 (regulatory principles to be applied by both regulators), in subsection (1) for paragraph (c) substitute—.
FSMA 2000 is amended as follows.
In section 1JA (Treasury recommendations in connection with general duties), after subsection (1)(c) insert—.
In section 1K (guidance about objectives), after subsection (1) insert—
In section 2I (guidance about objectives), after subsection (1) insert—
In section 3B (regulatory principles to be applied by both regulators), for subsection (3) substitute—
In section 3D (duty of FCA and PRA to ensure co-ordinated exercise of functions), for subsection (4) substitute—
In section 138I (consultation by the FCA), in subsection (2)(d) after “1B(1)” insert “, (4A)”.
In section 143G (matters to consider when making Part 9C rules)—
in subsection (1)—
insert “and” after paragraph (a), and
omit paragraphs (b) and (c);
omit subsection (2).
In section 232A (scheme operator’s duty to provide information to FCA)—
the existing words become subsection (1), and
after that subsection insert—
In paragraph 11 of Schedule 1ZA (FCA annual report), in sub-paragraph (1) after paragraph (d) insert—.
In paragraph 20 of Schedule 1ZB (consultation about PRA annual report), in sub-paragraph (1)(c) for “and the PRA has facilitated effective competition in accordance with” substitute “including its secondary objectives under”.
FSMA 2000 is amended as follows.
After section 3R (arrangements for provision of services) insert—
FSMA 2000 is amended as follows.
After section 3RD (inserted by section 29) insert—
In section 429 (Parliamentary control of statutory instruments) in subsection (2) after “section” insert “3RE,”.
FSMA 2000 is amended as follows.
Before section 138F (under the italic heading “Procedural provisions”) insert—
In section 138I (consultation by the FCA)—
in subsection (2) after paragraph (b) insert—;
after subsection (8) insert—
In section 138J (consultation by the PRA)—
in subsection (2) after paragraph (b) insert—;
after subsection (8) insert—
In section 429 (Parliamentary procedure for statutory instruments), in subsection (2), in the list of sections beginning with “90B” insert at the appropriate place “138EA(3),”.
FSMA 2000 is amended as follows.
In the italic heading before section 410, after “international” insert “powers and”.
Before section 410 insert—
In FSMA 2000 after section 409A (inserted by section 32) insert—
FSMA 2000 is amended as follows.
After section 138B insert—
In section 429 (Parliamentary control of statutory instruments), in subsection (2), in the list of sections beginning with “90B” insert at the appropriate place “138BA,”.
Section 1JA of FSMA 2000 (recommendations by Treasury in connection with general duties) is amended in accordance with subsections (2) and (3).
After subsection (2) insert—
In subsection (3), for “subsection (1)” substitute “subsection (1), (2A) or (2C)”.
Section 30B of the Bank of England Act 1998 (recommendations by Treasury) is amended in accordance with subsections (5) and (6).
After subsection (2) insert—
In subsection (3), for “subsection (1)” substitute “subsection (1), (2A) or (2C)”.
After section 1RA of FSMA 2000 (inserted by section 45) insert—
After section 2NA of FSMA 2000 (inserted by section 45) insert—
Paragraph 11 of Schedule 1ZA to FSMA 2000 (annual report of the Financial Conduct Authority) is amended in accordance with subsections (2) and (3).
In sub-paragraph (1)—
omit the “and” at the end of paragraph (ia), and
after paragraph (ia) insert—.
In this paragraph “statutory panel” has the meaning given in section 1RB(5).
Paragraph 19 of Schedule 1ZB to FSMA 2000 (annual report of the PRA) is amended in accordance with subsections (5) and (6).
In sub-paragraph (1)—
after paragraph (ba) insert—,
omit the “and” at the end of paragraph (f), and
after paragraph (f) insert—.
In this paragraph “statutory panel” has the meaning given in section 1RB(5).
FSMA 2000 is amended as follows.
In Part 4 of Schedule 1ZA (miscellaneous provisions relating to Financial Conduct Authority), after paragraph 27 insert—
In Part 4 of Schedule 1ZB (miscellaneous provisions relating to the PRA), after paragraph 35 insert—
FSMA 2000 is amended as follows.
After paragraph 11 of Schedule 1ZA insert—
After paragraph 21 of Schedule 1ZB insert—
FSMA 2000 is amended as follows.
In the italic heading before section 415B, at the end insert “and co-operation”.
After section 415B (consultation) insert—
In FSMA 2000, after section 1Q insert—
In FSMA 2000, after section 2M insert—
FSMA 2000 is amended as follows.
After section 138I insert—
After section 138J insert—
FSMA 2000 is amended as follows.
After section 138IA (inserted by section 43) insert—
After section 138JA (inserted by section 43) insert—
FSMA 2000 is amended as follows.
After section 1R insert—
After section 2N insert—
FSMA 2000 is amended in accordance with subsections (2) to (8).
After section 1M (FCA’s general duty to consult) insert—
In section 1N (FCA Practitioner Panel), after subsection (5) insert—
In section 1O (Smaller Business Practitioner Panel), after subsection (6) insert—
In section 1P (Markets Practitioner Panel), after subsection (6) insert—
In section 1Q (Consumer Panel), after subsection (4) insert—
After section 2L (PRA’s general duty to consult) insert—
In section 2M (the PRA Practitioner Panel), after subsection (5) insert—
In section 103 of the Financial Services (Banking Reform) Act 2013 (regulator’s general duty to consult) after subsection (5) insert—
The Treasury may by regulations require specified statutory panels of the regulator to produce an annual report on their work and provide that report to the Treasury.
Regulations under subsection (1) may make provision about the content of the annual report.
The Treasury must lay a copy of each report prepared by virtue of this section before Parliament.
Each specified statutory panel of the regulator must publish its reports prepared by virtue of this section in such manner as it thinks fit.
In this section—
“statutory panels of the regulator” means—
in relation to the FCA, the panels mentioned in section 1RA(8) of FSMA 2000,
in relation to the PRA, the panels mentioned in section 2NA(8) of FSMA 2000, and
in relation to the Payment Systems Regulator, a panel established under section 103(3) of the Financial Services (Banking Reform) Act 2013;
“specified” means specified in regulations under this section.
Regulations under this section are subject to the negative procedure.
After section 30C of the Bank of England Act 1998 insert—
FSMA 2000 is amended as follows.
After section 300H (inserted by section 11) insert—
In section 429 (Parliamentary control of statutory instruments), in subsection (2), in the list of sections beginning with “90B” insert at the appropriate place “300M,”.
FSMA 2000 is amended as follows.
In section 285A (powers exercisable in relation to recognised bodies)—
in the title at the end insert “etc”;
in subsection (3), at the end of paragraph (b) insert “or as a consequence of conferring other FMI functions on the Bank”.
In section 313(1) (interpretation of Part 18), insert at the appropriate place—.
Schedule 17A to FSMA 2000 (further provision in relation to exercise of Bank of England functions under Part 18 of that Act) is amended as follows.
In the title to the Schedule, after “functions” insert “, or other FMI functions,”.
After paragraph 9 insert—
In paragraph 10—
in sub-paragraph (1)(b), for the words from “subsection (4)(b)” to the end substitute “subsection (5) of section 138A, subsection (4) of section 138B, and, apart from in relation to rules made under section 300F, subsection (4)(b) of section 138A;”;
after sub-paragraph (1)(b) insert—;
in sub-paragraph (1)(d) for “subsection (2)” substitute “subsections (2) and (3), and any references to those subsections”;
after sub-paragraph (1)(e) insert—;
at the end of sub-paragraph (1)(f) insert “but with the omission of subsections (1A) and (2)”;
at the end of sub-paragraph (1)(i) omit “and”;
after sub-paragraph (1)(i) insert—;
after sub-paragraph (1)(j) insert—;
in sub-paragraph (2) at the end insert “or other persons in respect of whom FMI functions are exercised”;
Section 137T has effect as if, in paragraph (b), for “the other regulator” there were substituted “the FCA or the PRA”. Section 138A has effect as if the reference in subsection (4)(b) to any of the regulator’s objectives were a reference to the Bank’s Financial Stability Objective. Section 138BA has effect as if subsection (3)(b) and (c) were omitted. Section 138EA(5) has effect as if, for paragraphs (a) and (b), there were substituted “complying with a recommendation of the Financial Policy Committee of the Bank of England under section 9O of the Bank of England Act 1998 (making of recommendations within the Bank).
Section 138J(8A) has effect as if, in paragraph (a), for sub-paragraphs (i) and (ii) there were substituted “be prejudicial to advancing the Financial Stability Objective, or
After paragraph 12 insert—
In paragraph 14(2)—
in paragraph (a) omit “an offence under section 398(1) or”;
for paragraph (g) substitute—.
In paragraph 29 before “192L,” insert “55X(2) or (4),”.
After paragraph 31 insert—
In paragraph 33(a), for “(f)” substitute “(fb)” and in the substituted paragraph (b)—
for “financial stability objective has been met” substitute “Financial Stability Objective and its objective under section 30D(2) of the Bank of England Act 1998 have been advanced”;
after “been met,” insert—.
In paragraph 33(b), for “sub-paragraph (3)” substitute “sub-paragraphs (1A), (1B), (3) and (6)”.
After paragraph 33 insert—
Schedule 7 makes provision corresponding or similar to provision made by preceding provisions of this Chapter relating to the accountability of the Payment Systems Regulator.
FSMA 2000 is amended as follows.
In section 417(1) (definitions), at the appropriate place insert—.
Schedule 1ZA (FCA: constitution etc) is amended as follows.
In paragraph 2—
in sub-paragraph (2), after paragraph (c) insert—;
in sub-paragraph (3), after “(c)” insert “, (ca)”.
In paragraph 3—
in sub-paragraph (6) after “PRA” insert “or of the Payment Systems Regulator”;
in sub-paragraph (7) for “the Bank’s Deputy Governor for prudential regulation” substitute “a person holding an office mentioned in paragraph 2(2)(c) or (ca)”.
In paragraph 5(a) for “or (c)” substitute “, (c) or (ca)”.
After paragraph 6 insert—
In section 138I of FSMA 2000 (consultation by the FCA), after subsection (4) insert—
In section 138J of FSMA 2000 (consultation by the PRA), after subsection (4) insert—
In section 104 of the Financial Services (Banking Reform) Act 2013 (consultation requirements), after subsection (5) insert—
Schedule 8 makes provision about the provision of cash deposit and withdrawal services in the United Kingdom or a part of the United Kingdom.
Schedule 9 makes provision about persons involved in wholesale cash distribution (as that term is defined in the Schedule).
Schedule 10 amends FSMA 2000 to make provision about the performance, by senior managers and others, of functions in relation to activities carried on by recognised bodies (within the meaning of Part 18 of that Act) of types specified by the Treasury.
Schedule 11 makes provision for a special resolution regime for central counterparties where all or part of its business has encountered, or is likely to encounter, financial difficulties.
Schedule 12 makes provision about the powers of the court in relation to liabilities of an insurer that is, or is likely to become, unable to pay its debts (an order made in exercise of these powers is a “write-down order”).
Schedule 13 makes provision about the enforcement of contracts to which an insurer is a party, where the insurer is subject to a write-down order or to certain insolvency proceedings.
FSMA 2000 is amended as follows.
In section 1A (the FCA), in subsection (6) after paragraph (czb) insert—.
In section 2AB (functions of the PRA), in subsection (3) after paragraph (c) insert—.
FSMA 2000 is amended as follows.
In section 404C after “(which” insert “, subject to section 415AA(1),”.
After section 415A insert—
The amendments made by this section have effect only in relation to persons who cease to be authorised persons on or after 20 July 2022.
In Part 12 of FSMA 2000 (control over authorised persons), in section 187 (approval with conditions), in subsection (2)—
at the end of paragraph (a) omit “or”, and
after that paragraph insert—.
FSMA 2000 is amended as set out in subsections (2) and (3).
In section 212 (the scheme manager), in subsection (3)(aa) omit the words “(who is to be the accounting officer)”.
Omit section 218B (Treasury’s power to receive information).
Omit section 15 of the Financial Services (Banking Reform) Act 2013 (which inserted section 218B of FSMA 2000).
FSMA 2000 is amended as follows.
In section 429 (Parliamentary control of statutory instruments), in subsection (2B) after paragraph (c) insert—
Paragraph 15 of Schedule 17 (the Ombudsman scheme: power of scheme operator to charge fees) is amended as set out in subsections (4) and (5).
In sub-paragraph (1) after “respondent” insert “or other persons of a specified description”.
The reference in sub-paragraph (1) to persons of a specified description is a reference to such descriptions of persons as may be specified in regulations made by the Treasury. The power conferred by sub-paragraph (3) to specify descriptions of persons may not be exercised so as to provide for eligible complainants to fall within a specified description of persons. The reference in sub-paragraph (4) to “eligible complainants” is a reference to complainants who are eligible in relation to the compulsory or voluntary jurisdiction of the ombudsman scheme (see section 226(6) and 227(7)). Before making regulations under sub-paragraph (3) the Treasury must consult the scheme operator.
FSMA 2000 is amended as follows.
In section 261E (authorised contractual schemes: holding of units)—
before subsection (1) insert—;
in subsection (1) for “a contractual” substitute “the”.
After section 261Z5 insert—
FSMA 2000 is amended as follows.
After section 141A insert—
Omit section 144F (power to consequentially amend enactments).
In section 429 (Parliamentary control of statutory instruments), in subsection (2), in the list of sections beginning with “90B”—
insert at the appropriate place “141B,”;
omit “144F,”.
FSMA 2000 is amended as follows.
In section 137T (regulator rules: general supplementary powers), after paragraph (a) insert—.
In section 428 (regulations and orders)—
in subsection (3) before paragraph (a) insert—;
after subsection (3) insert—
The Treasury may by regulations amend or repeal the following provisions in Part 9C of FSMA 2000—
section 143C (duty to make rules applying to FCA investment firms);
section 143D (duty to make rules applying to parent undertakings);
section 143G (matters to consider when making Part 9C rules).
In consequence of provision made in regulations under subsection (1), the Treasury may by regulations amend or repeal other provisions of FSMA 2000.
Regulations under this section are subject to the affirmative procedure.
FSMA 2000 is amended as follows.
In section 427 (transitional provisions)—
in subsection (2)(a) to (c), for “the Authority”, in each place, substitute “a regulator”;
in subsection (2)(f), for “the Authority’s” substitute “the FCA’s”;
in subsection (3)(a), for “the Authority” substitute “a regulator”.
In Schedule 17A, after paragraph 31A (inserted by section 50), insert—
FSMA 2000 is amended as follows.
In section 21 (restrictions on financial promotion), in subsection (14) at end insert “(including where an asset, right or interest is, or comprises or represents, a cryptoasset)”.
In section 22 (regulated activities), in subsection (4) at end insert “(including where an asset, right or interest is, or comprises or represents, a cryptoasset)”.
In section 417 (definitions)—
in subsection (1), insert at the appropriate place—;
at end insert—
In section 429 (Parliamentary control of statutory instruments), in subsection (2) leave out “or 333T” and insert “, 333T or 417(5)”.
The Bank of England Act 1998 is amended as follows.
Omit section 6 and Schedule 2 (cash ratio deposits).
Before section 7 insert—
Before Schedule 2A (financial policy committee) insert—
The Bank of England Act 1998 is amended as follows in consequence of provision made by section 70.
In section 37 (restriction on disclosure of information), for “cash ratio deposit” substitute “Bank of England levy”.
In section 38 (offences in relation to supplying information to the Bank), in each of subsections (1) and (3), for “paragraph 9 of Schedule 2” substitute “paragraph 9 of Schedule 2ZA”.
In section 40 (orders)—
in subsection (2)—
after “section 17(4) or (5),” insert “or”;
omit “paragraph 1(2) or 5 of Schedule 2, or”;
in subsection (3) omit “paragraph 2(2) or 8 of Schedule 2,”.
Schedule 7 (restriction on disclosure of information) is amended in accordance with subsections (6) to (8).
In paragraph 1(1)(a), for “paragraph 9 of Schedule 2” substitute “paragraph 9 of Schedule 2ZA”.
In paragraph 2(1)(c), for “Schedule 2” substitute “Schedule 2ZA”.
In paragraph 5(a), for “Schedule 2 (payment in lieu of cash ratio deposit)” substitute “Schedule 2ZA (Bank of England levy)”.
The Payment Systems Regulator must prepare and publish a draft of a relevant requirement for reimbursement in such qualifying cases of payment orders as the Regulator considers should be eligible for reimbursement.
A case is a “qualifying case” for the purposes of this section if—
the case relates to a payment order executed over the Faster Payments Scheme, and
the payment order was executed subsequent to fraud or dishonesty.
The draft of the relevant requirement must—
be published in the way appearing to the Payment Systems Regulator to be best calculated to bring it to the attention of the public;
be accompanied by notice that representations about the proposed relevant requirement may be made to the Payment Systems Regulator within a specified time.
The duty imposed by subsection (1) must be carried out before the end of two months beginning with the day on which this section comes into force.
The Payment Systems Regulator must impose a relevant requirement, in whatever way and to whatever extent it considers appropriate, for reimbursement to be made in qualifying cases of payment orders.
In complying with the duty imposed by subsection (5) the Payment Systems Regulator must have regard to any representations made in accordance with subsection (3)(b).
The duty imposed by subsection (5) must be carried out before the end of 6 months beginning with the day on which this section comes into force.
The duty under subsections (1) to (3), and under section 104(2) of the Financial Services (Banking Reform) Act 2013 in the application of that section to a relevant requirement imposed under subsection (5) of this section, may be satisfied by things done before (as well as after) this section comes into force.
Nothing in subsections (1) to (8) is to be taken as limiting the power of the Payment Systems Regulator—
to vary or revoke a relevant requirement imposed under the duty imposed by subsection (5), or
to impose further relevant requirements (after that duty is complied with) in connection with reimbursement of payment orders executed subsequent to fraud or dishonesty.
In subsections (1) to (9)—
“director” includes, in relation to a CCP which has no board of directors, a member of the equivalent management body responsible for the management of the CCP concerned;
In regulation 90 of the Payment Services Regulations 2017 (S.I. 2017/752) (liability of payment service providers for incorrect unique identifiers), after paragraph (5) insert—
Schedule 14 amends the Credit Unions Act 1979 to make provision about additional financial activities credit unions may choose to carry on.
The Reinsurance (Acts of Terrorism) Act 1993 is amended as follows.
After section 2, insert—
The Banking Act 2009 is amended as follows.
In section 7A (effect on other group members, financial stability in UK etc)—
in subsection (1), for “(4)(b)(ii)” substitute “(4), (4B)(b),”;
after subsection (1) insert—
In section 83ZD (appointment of person to carry out investigations in particular cases), in subsection (3)(a), for “83ZN” substitute “83ZR”.
In section 89H (recognition of third-country resolution actions), in subsection (7), in the definition of “third-country resolution action”—
in the words before paragraph (a), for “, third country parent undertaking or a bank, building society, credit union or investment firm” substitute “or third-country parent undertaking”;
in paragraph (a), omit “or a bank, building society, credit union or investment firm”.
In section 182 (interpretation: “payment system”)—
in subsection (1), after “arrangements” insert “, or proposed arrangements,”;
in subsection (5), after “operates” insert “, or is intended to operate,”.
In section 244 (immunity), in subsection (2)(c) after “2000,” insert “of its functions under, or as a result of regulations made under, the Financial Services and Markets Act 2023,”.
The Financial Services Act 2012 is amended in accordance with subsections (2) and (3).
In section 84 (arrangements for the investigation of complaints)—
omit the “and” at the end of subsection (1)(a);
omit subsection (1)(b);
after subsection (1) insert—;
omit subsection (4);
in subsection (5), in the opening words, for “regulators” substitute “Treasury”.
In section 87 (investigation of complaints)—
in subsection (9A), after paragraph (b) insert—;
in subsection (9B), after paragraph (e) insert—;
after subsection (9B) insert—
The Treasury must exercise the power conferred by section 49 of the Sanctions and Anti-Money Laundering Act 2018 (power of appropriate Minister to make regulations about money laundering etc) for the purpose mentioned in subsection (2).
The purpose is to make provision amending Part 3 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692) (“the 2017 Regulations”) (customer due diligence) so as to secure the result required by subsection (3).
The result required by this subsection is that, where a customer is a domestic PEP, or a family member or a known close associate of a domestic PEP—
the starting point for the relevant person’s assessment under regulation 35(3) of the 2017 Regulations is that the customer presents a lower level of risk than a non-domestic PEP, and
if no enhanced risk factors are present, the extent of enhanced customer due diligence measures to be applied in relation to that customer is less than the extent to be applied in the case of a non-domestic PEP.
In this section—
“customer” includes a potential customer;
“domestic PEP” means a politically exposed person entrusted with prominent public functions by the United Kingdom;
“enhanced risk factors”, in relation to a customer who is a domestic PEP or a family member or a known close associate of that domestic PEP, mean risk factors other than the customer’s position as a domestic PEP or as a family member or known close associate of that domestic PEP;
“non-domestic PEP” means a politically exposed person who is not a domestic PEP;
the following terms have the same meaning as in regulation 35(12) of the 2017 Regulations—
Section 55 of the Sanctions and Anti-Money Laundering Act 2018 (Parliamentary procedure for regulations) does not apply to regulations made in compliance with the duty imposed by subsection (1).
Regulations made in compliance with the duty imposed by subsection (1)—
are subject to the negative procedure, and
must be laid before Parliament in accordance with paragraph (a) before the end of 12 months starting with the day on which this section comes into force.
The Treasury must, before the end of 6 months starting with the day on which this section comes into force, lay before Parliament a statement setting out what progress has been made towards making the regulations in compliance with the duty imposed by subsection (1).
The duty in subsection (7) does not apply where the regulations have been laid before Parliament in accordance with subsection (6)(a) before the end of 6 months starting with the day on which this section comes into force.
The FCA must review its guidance on politically exposed persons (“PEPs”) given under section 139A of FSMA 2000 and in compliance with the requirements under regulation 48 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692) (“the 2017 Regulations”).
The review required under subsection (1) must include—
an assessment of the extent to which the guidance is followed by those persons to whom it is given under regulation 48 of the 2017 Regulations, and
in the light of that assessment, consideration as to whether the guidance remains appropriate or whether it should be revised.
The FCA must—
before the end of 3 months beginning with the day on which this section comes into force, publish an update on the FCA’s plan for the review required under subsection (1), and
before the end of 12 months beginning with the day on which this section comes into force—
publish the conclusions of the review, and
where the FCA concludes that the guidance should be revised, publish draft revised guidance for consultation.
Publication as required by subsection (3) must be in the way appearing to the FCA to be best calculated to bring the publication to the attention of persons likely to be affected by it.
The FCA is not required under this section to publish any information whose publication would be against the public interest.
In this section—
“domestic PEP” means a politically exposed person entrusted with prominent public functions by the United Kingdom;
the following terms have the same meaning as in regulation 35(12) of the 2017 Regulations—
an Act of Parliament,
The following provisions are revoked—
paragraph 7BA of the Schedule to the Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges, Clearing Houses and Central Securities Depositories) Regulations 2001 (S.I. 2001/995);
in the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017—
regulation 17;
regulation 18;
regulation 19;
regulation 25;
regulation 29(1);
in Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments—
in Article 26(3), the last sentence;
in Schedule 3, paragraphs 31 and 32;
Commission Delegated Regulation (EU) 2017/591 of 1 December 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to regulatory technical standards for the application of position limits to commodity derivatives.
The Credit Unions Act 1979 is amended as follows.
Section 9A (power to charge for ancillary services) is amended as follows. In subsection (2), in the words before paragraph (a), for “the activity of accepting a deposit or making a loan” substitute “an activity mentioned in subsection (3)”. After subsection (2) insert—
After section 11F (inserted by paragraph 8) insert—
The Treasury must carry out a review to assess the extent to which regulation of the UK financial system is adequate for the purpose of eliminating the financing of the use of prohibited forest risk commodities.
In subsection (1) the reference to “prohibited” forest risk commodities is a reference to forest risk commodities, or products derived from forest risk commodities, the use of which is prohibited by paragraph 2 of Schedule 17 to the Environment Act 2021.
Having carried out a review the Treasury must lay before Parliament, and publish, a report stating—
the conclusions of the review, and
the steps the Treasury consider it appropriate to take to improve the effectiveness of the regulation of the UK financial system for the purpose stated in subsection (1).
Subsection (3) must be complied with before the end of 9 months beginning with the day on which the first regulations under paragraph 1 of Schedule 17 to the Environment Act 2021 are made.
In this section—
“this group of sections” means the sections referred to in subsection (1).
The particular kinds of practices that may be adopted under the FMI sandbox arrangements for the purposes of assessing their efficiency or effectiveness. The practices referred to in sub-paragraph (1) include practices adopted in the issuance, trading or settlement of financial instruments in a way not otherwise possible or practicable as a result of requirements imposed by relevant enactments.
Requirements applicable— Provision under this paragraph includes provision conferring powers on the appropriate regulator to make rules or technical standards applicable for the purposes of the FMI sandbox arrangements.
How requirements imposed by or under the FMI sandbox arrangements are to be enforced. Provision under sub-paragraph (1) may be made by— The powers mentioned in sub-paragraph (2)(a) include powers to—
“recognition requirements” means the requirements resulting from section 286 of FSMA 2000;
In this Act—
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subsection (2) applies to a duty to consult, so far as applying to or in connection with, or otherwise arising in consequence of, a provision of an enactment as modified or made—
by or under this Act, or
by or under another Act as amended by this Act.
The duty to consult may be satisfied by things done before the commencement date (as well as by things done on or after that date).
The “commencement date”, in relation to a provision of an enactment as modified or made— means the date on which the modification or making of that provision comes into force.
by or under this Act, or
by or under another Act as amended by this Act,
There is to be paid out of money provided by Parliament any expenditure incurred by the Treasury for any purpose in connection with this Act.
The Treasury may by regulations make provision that is consequential on this Act or on any provision made under it.
The power to make regulations under this section may (among other things) be exercised by modifying any provision made by or under an enactment (including this Act).
Regulations under this section are subject to the affirmative procedure if they amend, repeal or revoke any provision of primary legislation.
Regulations under this section to which subsection (3) does not apply are subject to the negative procedure.
Any power to make regulations under this Act is exercisable by statutory instrument.
Any power to make regulations under this Act includes power—
to make provision by reference to any rules or other instruments as they have effect from time to time;
to make different provision for different purposes;
to make supplementary, incidental, consequential, transitional, transitory or saving provision.
Where regulations under this Act are subject to “the affirmative procedure”, the regulations may not be made unless a draft of the statutory instrument containing them has been laid before, and approved by a resolution of, each House of Parliament.
Where regulations under this Act are subject to “the negative procedure”, the statutory instrument containing them is subject to annulment in pursuance of a resolution of either House of Parliament.
Any provision that may be made by regulations under this Act, or under any other enactment, subject to the negative procedure may be made in regulations, made under or by virtue of this Act, subject to the affirmative procedure.
If an instrument, or a draft of an instrument, containing regulations under this Act would, apart from this subsection, be treated as a hybrid instrument for the purposes of the standing orders of either House of Parliament, it is to proceed in that House as if it were not a hybrid instrument.
This section does not apply to regulations under section 86, except so far as making provision by virtue of section 4(1).
This Act extends to England and Wales, Scotland and Northern Ireland except as provided by subsection (2).
The following extend to England and Wales and Scotland only—
section 73;
section 74.
The power under section 430(3) of FSMA 2000 may be exercised so as to extend to any of the Channel Islands or the Isle of Man any amendment or repeal made by or under this Act of any part of that Act (with or without modifications).
The following come into force on the day on which this Act is passed—
this Part;
Part 5 of Schedule 2, and section 2 so far as relating to that Part;
section 20(3), so far as conferring a power to make regulations;
section 24;
section 56 and Schedule 10, so far as conferring power to make regulations;
section 77;
section 78.
The following provisions come into force two months after Royal Assent—
section 22;
section 52;
section 54;
section 55;
section 58;
section 60;
section 61;
section 62;
section 72;
section 74.
The rest of this Act comes into force on such day as the Treasury may by regulations appoint.
Different days may be appointed for different purposes.
The Treasury may by regulations make transitional or saving provision in connection with the coming into force of any provision of this Act.
The power to make regulations under subsection (5) includes power to make different provision for different purposes.
Regulations under this section are to be made by statutory instrument.
This Act may be cited as the Financial Services and Markets Act 2023.
Section 1
Regulation (EC) No 924/2009 of the European Parliament and of the Council of 16 September 2009 on cross-border payments in the Community and repealing Regulation (EC) No 2560/2001 Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies Regulation (EU) No 513/2011 of the European Parliament and of the Council of 11 May 2011 amending Regulation (EC) No 1060/2009 on credit rating agencies Regulation (EU) No 236/2012 of the European Parliament and of the Council of 14 March 2012 on short selling and certain aspects of credit default swaps Regulation (EU) No 260/2012 of the European Parliament and of the Council of 14 March 2012 establishing technical and business requirements for credit transfers and direct debits in euro and amending Regulation (EC) No 924/2009 Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories Regulation (EU) No 345/2013 of the European Parliament and of the Council of 17 April 2013 on European venture capital funds Regulation (EU) No 346/2013 of the European Parliament and of the Council of 17 April 2013 on European social entrepreneurship funds Regulation (EU) No 462/2013 of the European Parliament and of the Council of 21 May 2013 amending Regulation (EC) No 1060/2009 on credit rating agencies Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 Regulation (EU) No 248/2014 of the European Parliament and of the Council of 26 February 2014 amending Regulation (EU) No 260/2012 as regards the migration to Union-wide credit transfers and direct debits Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012 Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No 236/2012 Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products Regulation (EU) 2015/751 of the European Parliament and of the Council of 29 April 2015 on interchange fees for card-based payment transactions Regulation (EU) 2015/760 of the European Parliament and of the Council of 29 April 2015 on European long-term investment funds Regulation (EU) 2015/2365 of the European Parliament and of the Council of 25 November 2015 on transparency of securities financing transactions and of reuse and amending Regulation (EU) No 648/2012 Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014 Regulation (EU) 2016/1033 of the European Parliament and of the Council of 23 June 2016 amending Regulation (EU) No 600/2014 on markets in financial instruments, Regulation (EU) No 596/2014 on market abuse and Regulation (EU) No 909/2014 on improving securities settlement in the European Union and on central securities depositories Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC Regulation (EU) 2017/1131 of the European Parliament and of the Council of 14 June 2017 on money market funds Regulation (EU) 2017/2401 of the European Parliament and of the Council of 12 December 2017 amending Regulation (EU) No 575/2013 on prudential requirements for credit institutions and investment firms Regulation (EU) 2017/2402 of the European Parliament and of the Council of 12 December 2017 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation, and amending Directives 2009/65/EC, 2009/138/EC and 2011/61/EU and Regulations (EC) No 1060/2009 and (EU) No 648/2012 Regulation (EU) 2019/113 of the European Central Bank of 7 December 2018 amending Regulation (EU) No 1333/2014 concerning statistics on the money markets (ECB/2018/33) Regulation (EU) 2019/630 of the European Parliament and of the Council of 17 April 2019 amending Regulation (EU) No 575/2013 as regards minimum loss coverage for non-performing exposures Regulation (EU) 2019/876 of the European Parliament and of the Council of 20 May 2019 amending Regulation (EU) No 575/2013 as regards the leverage ratio, the net stable funding ratio, requirements for own funds and eligible liabilities, counterparty credit risk, market risk, exposures to central counterparties, exposures to collective investment undertakings, large exposures, reporting and disclosure requirements, and Regulation (EU) No 648/2012 Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector Regulation (EU) 2019/2155 of the European Central Bank of 5 December 2019 amending Regulation (EU) No 1163/2014 on supervisory fees (ECB/2019/37) Regulation (EU) 2019/2175 of the European Parliament and of the Council of 18 December 2019 amending Regulation (EU) No 1093/2010 establishing a European Supervisory Authority (European Banking Authority), Regulation (EU) No 1094/2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), Regulation (EU) No 1095/2010 establishing a European Supervisory Authority (European Securities and Markets Authority), Regulation (EU) No 600/2014 on markets in financial instruments, Regulation (EU) 2016/1011 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds, and Regulation (EU) 2015/847 on information accompanying transfers of funds Regulation (EU) 2020/605 of the European Central Bank of 9 April 2020 amending Regulation (EU) 2015/534 on reporting of supervisory financial information (ECB/2020/22) Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment
Official Listing of Securities (Change of Competent Authority) Regulations 1991 (S.I. 1991/2000) Credit Institutions (Protection of Depositors) Regulations 1995 (S.I. 1995/1442) Financial Markets and Insolvency (Settlement Finality) Regulations 1999 (S.I. 1999/2979) Official Listing of Securities (Change of Competent Authority) Regulations 2000 (S.I. 2000/968) Financial Markets and Insolvency (Settlement Finality) (Revocation) Regulations 2001 (S.I. 2001/1349) Financial Services (EEA Passport Rights) Regulations 2001 (S.I. 2001/1376) Financial Services and Markets Act 2000 (Communications by Auditors) Regulations 2001 (S.I. 2001/2587) Public Offers of Securities (Exemptions) Regulations 2001 (S.I. 2001/2955) Financial Services and Markets Act 2000 (Official Listing of Securities) Regulations 2001 (S.I. 2001/2956) Financial Services and Markets Act 2000 (Official Listing of Securities) (Transitional Provisions) Order 2001 (S.I. 2001/2957) Electronic Commerce Directive (Financial Services and Markets) Regulations 2002 (S.I. 2002/1775) Electronic Commerce Directive (Financial Services and Markets) (Amendment) Regulations (S.I. 2002/2015) Financial Services and Markets Act 2000 (Fourth Motor Insurance Directive) Regulations 2002 (S.I. 2002/2706) Insurance Mediation Directive (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/1473) Collective Investment Schemes (Miscellaneous Amendments) Regulations 2003 (S.I. 2003/2066) Financial Collateral Arrangements (No.2) Regulations 2003 (S.I. 2003/3226) Insurers (Reorganisation and Winding Up) Regulations 2004 (S.I. 2004/353) Credit Institutions (Reorganisation and Winding up) Regulations 2004 (S.I. 2004/1045) Financial Conglomerates and Other Financial Groups Regulations 2004 (S.I. 2004/1862) Financial Services (Distance Marketing) Regulations 2004 (S.I. 2004/2095) Life Assurance Consolidation Directive (Consequential Amendments) Regulations 2004 (S.I. 2004/3379) Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380) Financial Services and Markets Act 2000 (Market Abuse) Regulations 2005 (S.I. 2005/381) Prospectus Regulations 2005 (S.I. 2005/1433) Insurers (Reorganisation and Winding Up) (Lloyd‘s) Regulations 2005 (S.I. 2005/1998) Financial Services and Markets Act 2000 (Markets in Financial Instruments) (Modification of Powers) Regulations 2006 (S.I. 2006/2975) Financial Services (EEA State) Regulations 2007 (S.I. 2007/108) Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126) Financial Services and Markets Act 2000 (Markets in Financial Instruments) (Amendment No. 2) Regulations 2007 (S.I. 2007/2160) Financial Services and Markets Act 2000 (Motor Insurance) Regulations 2007 (S.I. 2007/2403) Reinsurance Directive Regulations 2007 (S.I. 2007/3253) Financial Services and Markets Act 2000 (Reinsurance Directive) Order 2007 (S.I. 2007/3254) Financial Services and Markets Act 2000 (Reinsurance Directive) Regulations 2007 (S.I. 2007/3255) Regulated Covered Bonds Regulations 2008 (S.I 2008/346) Friendly Societies Act 1992 (Accounts, Audit and EEA State Amendments) Order 2008 (S.I. 2008/1140) Building Societies (Accounts and Related Provisions) (Amendment) Regulations 2008 (S.I. 2008/1143) Friendly Societies (Accounts and Related Provisions) (Amendment) Regulations 2008 (S.I. 2008/1144) Financial Services and Markets Act 2000 (Market Abuse) Regulations 2008 (S.I. 2008/1439) The Financial Services and Markets Act 2000 (Amendment of section 323) Regulations 2008 (S.I. 2008/1469) Building Societies Act 1986 (Accounts, Audit and EEA State Amendments) Order 2008 (S.I. 2008/1519) Regulated Covered Bonds (Amendment) Regulations 2008 (S.I. 2008/1714) Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 (S.I. 2008/1950) Definition of Financial Instrument Order 2008 (S.I. 2008/3053) Takeover Code (Concert Parties) Regulations 2008 (S.I. 2008/3073) Payment Services Regulations 2009 (S.I. 2009/209) Financial Services and Markets Act 2000 (Controllers) Regulations 2009 (S.I. 2009/534) Financial Services and Markets Act 2000 (Amendment) Regulations 2009 (S.I. 2009/2461) Payment Services (Amendment) Regulations 2009 (S.I. 2009/2475) Financial Services and Markets Act 2000 (Law Applicable to Contracts of Insurance) Regulations 2009 (S.I. 2009/3075) Financial Services and Markets Act 2000 (Market Abuse) Regulations 2009 (S.I. 2009/3128) Credit Rating Agencies Regulations 2010 (S.I. 2010/906) Consumer Credit (EU Directive) Regulations 2010 (S.I. 2010/1010) Consumer Credit (Disclosure of Information) Regulations 2010 (S.I. 2010/1013) Consumer Credit (Agreements) Regulations 2010 (S.I. 2010/1014) Financial Services and Markets Act 2000 (Amendments to Part 18A etc) Regulations 2010 (S.I. 2010/1193) Consumer Credit (Amendment) Regulations 2010 (S.I. 2010/1969) Consumer Credit (Amendment) Regulations 2011 (S.I. 2011/11) Electronic Money Regulations 2011 (S.I. 2011/99) Undertakings for Collective Investment in Transferable Securities Regulations 2011 (S.I. 2011/1613) Prospectus Regulations 2011 (S.I. 2011/1668) Recognised Auction Platforms Regulations 2011 (S.I. 2011/2699) Financial Services and Markets Act 2000 (Market Abuse) Regulations 2011 (S.I. 2011/2928) Financial Services (Omnibus 1 Directive) Regulations 2012 (S.I. 2012/916) Prospectus Regulations 2012 (S.I. 2012/1538) Payment Services Regulations 2012 (S.I. 2012/1791) Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2012 (S.I. 2012/1906) Undertakings for Collective Investment in Transferable Securities (Amendment) Regulations 2012 (S.I 2012/2015) Financial Services and Markets Act 2000 (Short Selling) Regulations 2012 (S.I. 2012/2554) Payments in Euro (Credit Transfers and Direct Debits) Regulations 2012 (S.I 2012/3122) Financial Services and Markets Act 2000 (Qualifying Provisions) Order 2013 (S.I. 2013/419) Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) Regulations 2013 (S.I. 2013/504) Prospectus Regulations 2013 (S.I. 2013/1125) Financial Conglomerates and Other Financial Groups (Amendment) Regulations 2013 (S.I. 2013/1162) Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388) Credit Rating Agencies (Civil Liability) Regulations 2013 (S.I. 2013/1637) Alternative Investment Fund Managers Regulations 2013 (S.I. 2013/1773) Alternative Investment Fund Managers (Amendment) Regulations 2013 (S.I. 2013/1797) Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013 (S.I. 2013/1881) Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) (No. 2) Regulations 2013 (S.I. 2013/1908) Companies and Partnerships (Accounts and Audit) Regulations 2013 (S.I. 2013/2005) Capital Requirements Regulations 2013 (S.I. 2013/3115) Financial Services and Markets Act 2000 (Qualifying Provisions) (No.2) Order 2013 (S.I. 2013/3116) Capital Requirements (Country-by-Country Reporting) Regulations 2013 (S.I. 2013/3118) Financial Services and Markets Act 2000 (Consumer Credit) (Miscellaneous Provisions) Order 2014 (S.I. 2014/208) Financial Services and Markets Act 2000 (Consumer Credit) (Miscellaneous Provisions) (No. 2) Order 2014 (S.I. 2014/506) Capital Requirements (Capital Buffers and Macro-prudential Measures) Regulations 2014 (S.I. 2014/894) Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) (Amendment) Regulations 2014 (S.I. 2014/905) Alternative Investment Fund Managers Order 2014 (S.I. 2014/1292) Central Securities Depositories Regulations 2014 (S.I. 2014/2879) Financial Services and Markets Act 2000 (Market Abuse) Regulations 2014 (S.I. 2014/3081) Payments to Governments and Miscellaneous Provisions Regulations 2014 (S.I. 2014/3293) Bank Recovery and Resolution Order 2014 (S.I. 2014/3329) Banking Act 2009 (Mandatory Compensation Arrangements Following Bail-in) Regulations 2014 (S.I. 2014/3330) Building Societies (Bail-in) Order 2014 (S.I. 2014/3344) Bank Recovery and Resolution (No. 2) Order 2014 (S.I. 2014/3348) Banking Act 2009 (Restriction of Special Bail-in Provision, etc.) Order 2014 (S.I. 2014/3350) Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486) Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) (Amendment) Regulations 2015 (S.I. 2015/348) Payment Services (Amendment) Regulations 2015 (S.I. 2015/422) Deposit Guarantee Scheme Regulations 2015 (S.I. 2015/486) Solvency 2 Regulations 2015 (S.I. 2015/575) Mortgage Credit Directive Order 2015 (S.I. 2015/910) Transparency Regulations 2015 (S.I. 2015/1755) Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 3) Order 2015 (S.I. 2015/1863) European Long-term Investment Funds Regulations 2015 (S.I. 2015/1882) Payment Card Interchange Fee Regulations 2015 (S.I. 2015/1911) Payment Accounts Regulations 2015 (S.I 2015/2038) Undertakings for Collective Investment in Transferable Securities Regulations 2016 (S.I. 2016/225) Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2016 (S.I. 2016/392) Financial Services and Markets Act 2000 (Market Abuse) Regulations 2016 (S.I. 2016/680) Financial Services and Markets Act 2000 (Transparency of Securities Financing Transactions and of Reuse) Regulations 2016 (S.I 2016/715) Financial Services and Markets Act 2000 (Qualifying EU Provisions) (Amendment) Order 2016 (S.I. 2016/936) Financial Services and Markets (Disclosure of Information to the European Securities and Markets Authority etc. and Other Provisions) Regulations 2016 (S.I. 2016/1095) Companies Act 2006 (Distributions of Insurance Companies) Regulations 2016 (S.I. 2016/1194) Bank Recovery and Resolution Order 2016 (S.I. 2016/1239) Financial Services & Markets Act 2000 (Regulated Activities) (Amendment) Order 2017 (2017/488) Data Reporting Services Regulations 2017 (S.I. 2017/699) Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701) Payment Services Regulations 2017 (S.I. 2017/752) Central Securities Depositories Regulations 2017 (S.I. 2017/1064) Packaged Retail and Insurance-based Investment Products Regulations 2017 (S.I 2017/1127) Payment Systems and Services and Electronic Money (Miscellaneous Amendments) Regulations 2017 (S.I. 2017/1173) Risk Transformation Regulations 2017 (S.I. 2017/1212) Financial Services and Markets Act 2000 (Markets in Financial Instruments) (No.2) Regulations 2017 (S.I. 2017/1255) Alternative Investment Fund Managers (Amendment) Regulations 2018 (S.I. 2018/134) Financial Services and Markets Act 2000 (Benchmarks) Regulations 2018 (S.I. 2018/135) Insurance Distribution (Regulated Activities and Miscellaneous Amendments) Order 2018 (S.I. 2018/546) Money Market Funds Regulations 2018 (S.I. 2018/698) Financial Services and Markets Act 2000 (Prospectus and Markets in Financial Instruments) Regulations 2018 (S.I. 2018/786) Consumer Credit (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1038) Friendly Societies (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1039) Financial Regulators’ Powers (Technical Standards etc.) (Amendment etc.) (EU Exit) Regulations 2018 (S.I. 2018/1115) EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018 (S.I. 2018/1149) Central Counterparties (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2018 (S.I. 2018/1184) Building Societies Legislation (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1187) Credit Transfers and Direct Debits in Euro (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1199) Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018 (S.I. 2018/1201) Banks and Building Societies (Priorities on Insolvency) Order 2018 (S.I. 2018/1244) Deposit Guarantee Scheme and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1285) Securitisation Regulations 2018 (S.I. 2018/1288) Bank of England (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1297) Trade Repositories (Amendment and Transitional Provision) (EU Exit) Regulations 2018 (S.I. 2018/1318) Central Securities Depositories (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1320) Short Selling (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1321) Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394) Capital Requirements (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1401) Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403) Credit Institutions and Insurance Undertakings Reorganisation and Winding Up (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/38) Financial Conglomerates and Other Financial Groups (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/264) Credit Rating Agencies (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/266) Interchange Fee (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/284) Market Abuse (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/310) Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/325) Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/328) Venture Capital Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/333) Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2019 (S.I. 2019/335) Long-term Investment Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/336) Financial Markets and Insolvency (Amendment and Transitional Provision) (EU Exit) Regulations 2019 (S.I 2019/341) Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343) Money Market Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/394) Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019 (S.I 2019/403) Financial Services Contracts (Transitional and Saving Provision) (EU Exit) Regulations 2019 (S.I. 2019/405) Solvency 2 and Insurance (Amendment, etc.) (EU Exit) Regulations 2019 (S.I. 2019/407) Equivalence Determinations for Financial Services and Miscellaneous Provisions (Amendment etc) (EU Exit) Regulations 2019 (S.I. 2019/541) Transparency of Securities Financing Transactions and of Reuse (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/542) Financial Services (Distance Marketing) (Amendment and Savings Provisions) (EU Exit) Regulations 2019 (S.I. 2019/574) Financial Regulators’ Powers (Technical Standards etc.) and Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/576) Financial Services (Gibraltar) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/589) Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/632) Mortgage Credit (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/656) Benchmarks (Amendment and Transitional Provision) (EU Exit) Regulations 2019 (S.I. 2019/657) Securitisation (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/660) Payment Accounts (Amendment) (EU Exit) Regulations 2019 (S.I 2019/661) Investment Exchanges, Clearing Houses and Central Securities Depositories (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/662) Insurance Distribution (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/663) Uncertificated Securities (Amendment and EU Exit) Regulations 2019 (S.I. 2019/679) Gibraltar (Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/680) Public Record, Disclosure of Information and Co-operation (Financial Services) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/681) Official Listing of Securities, Prospectus and Transparency (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/707) Financial Services (Miscellaneous) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/710) Financial Services and Markets (Insolvency) (Amendment of Miscellaneous Enactments) Regulations 2019 (S.I. 2019/755) Proxy Advisors (Shareholders’ Rights) Regulations 2019 (S.I 2019/926) Financial Services (Miscellaneous) (Amendment) (EU Exit) (No. 2) Regulations 2019 (S.I. 2019/1010) Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) (Amendment) Regulations 2019 (S.I. 2019/1031) Financial Services and Markets Act 2000 (Prospectus) Regulations 2019 (S.I. 2019/1043) Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212) Capital Requirements (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/1232) Risk Transformation and Solvency 2 (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/1233) Prospectus (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/1234) Electronic Commerce and Solvency 2 (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/1361) Cross-Border Distribution of Funds, Proxy Advisors, Prospectus and Gibraltar (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/1370) Financial Services (Miscellaneous) (Amendment) (EU Exit) (No. 3) Regulations 2019 (S.I. 2019/1390) Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) (No. 2) Regulations 2019 (S.I. 2019/1416) Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56) Financial Services and Markets Act 2000 (Central Counterparties, Investment Exchanges, Prospectus and Benchmarks) (Amendment) Regulations 2020 (S.I. 2020/117) Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2020 (S.I. 2020/628) Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2020 (S.I. 2020/646) Equivalence Determinations for Financial Services (Amendment etc.) (EU Exit) Regulations 2020 (S.I. 2020/1055) Payment Services and Electronic Money (Amendment) Regulations 2020 (S.I. 2020/1275) Financial Services and Economic and Monetary Policy (Consequential Amendments) (EU Exit) Regulations 2020 (S.I. 2020/1301) Bearer Certificates (Collective Investment Schemes) Regulations 2020 (S.I. 2020/1346) Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020 (S.I 2020/1350) Securities Financing Transactions, Securitisation and Miscellaneous Amendments (EU Exit) Regulations 2020 (S.I. 2020/1385) Financial Holding Companies (Approval etc.) and Capital Requirements (Capital Buffers and Macro-prudential Measures) (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1406) Solvency 2 (Credit Risk Adjustment) Regulations 2021 (S.I. 2021/463) Capital Requirements Regulation (Amendment) (EU Exit) Regulations 2021 (S.I. 2021/558) Financial Markets and Insolvency (Transitional Provision) (EU Exit) (Amendment) Regulations 2021 (S.I. 2021/782) Markets in Financial Instruments, Benchmarks and Financial Promotions (Amendment) (EU Exit) Regulations 2021 (S.I. 2021/1074) Capital Requirements Regulation (Amendment) Regulations 2021 (S.I. 2021/1078) Financial Services (Gibraltar) (Amendment) (EU Exit) Regulations 2021 (S.I. 2021/1252) Financial Services Act 2021 (Prudential Regulation of Credit Institutions and Investment Firms) (Consequential Amendments and Miscellaneous Provisions) Regulations 2021 (S.I. 2021/1376) Solvency 2 (Group Supervision) (Amendment) Regulations 2021 (S.I. 2021/1408) Financial Services and Markets Act 2000 (Qualifying Provisions) (Amendment) Order 2022 (S.I. 2022/1252)
Any provision made under any of the following EU directives— Any provision made under an instrument listed in Part 1 (including any such instrument as it had effect in EU law before IP completion day). Any provision made under an instrument listed in Part 2. Any technical standards to which Chapter 2A of Part 9A of FSMA 2000 applies.
Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems;
Directive 2001/24/EC of the European Parliament and of the Council of 4 April 2001 on the reorganisation and winding up of credit institutions;
Directive 2001/34/EC of the European Parliament and of the Council of 28 May 2001 on the admission of securities to official stock exchange listing and on information to be published on those securities;
Directive 2002/47/EC of the European Parliament and of the Council of 6 June 2002 on financial collateral arrangements;
Directive 2002/65/EC of the European Parliament and of the Council of 23 September 2002 concerning the distance marketing of consumer financial services;
Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate;
Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market;
Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers;
Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities;
Directive 2009/103/EC of the European Parliament and of the Council of 16 September 2009 relating to insurance against civil liability in respect of the use of motor vehicles, and the enforcement of the obligation to insure against such liability;
Directive 2009/110/EC of the European Parliament and of the Council of 16 September 2009 on the taking up, pursuit and prudential supervision of the business of electronic money institutions;
Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance;
Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers;
Directive 2011/89/EU of the European Parliament and of the Council of 16 November 2011 amending Directives 98/78/EC, 2002/87/EC, 2006/48/EC and 2009/138/EC as regards the supplementary supervision of financial entities in a financial conglomerate;
Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms;
Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014 on credit agreements for consumers relating to residential immovable property;
Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes;
Directive 2014/57/EU of the European Parliament and of the Council of 16 April 2014 on criminal sanctions for market abuse;
Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms;
Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments;
Directive 2014/92/EU of the European Parliament and of the Council of 23 July 2014 on the comparability of fees related to payment accounts, payment account switching and access to payment accounts with basic features;
Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market;
Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution;
Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on the activities and supervision of institutions for occupational retirement provision;
Directive (EU) 2019/2034 of the European Parliament and of the Council of 27 November 2019 on the prudential supervision of investment firms.
In FSMA 2000—
section 55J(7A) to (7C);
section 55KA;
section 137A(6) and (7);
section 137G(6) and (7);
Chapter 2A of Part 9A;
Part 9D;
section 192XA(3) and (4);
section 300H(4) (as inserted by section 11(2) of this Act);
section 367(3)(za);
paragraph 10(5) of Schedule 17A.
EU-derived legislation not falling within Parts 1 to 3 so far as relating to financial services or markets (other than instruments excluded from this Part by regulations under section 1(5)). For this purpose—
“EU-derived legislation” means—
assimilated direct legislation,
subordinate legislation so far as it contains provision for the purpose of implementing, or otherwise in relation to, an EU directive or any other obligation that was created or arose by or under the EU Treaties before IP completion day,
subordinate legislation made under section 3, or
subordinate legislation made under the European Union (Withdrawal) Act 2018;
EU-derived legislation is to be taken as “relating” to financial services or markets if its purpose, or one of its main purposes, is for or in connection with the imposition of requirements on the provision of financial services or the operation of financial markets or exchanges.
Section 2
a person who has been declared to be, or who is an operator of, a designated system under regulation 4 of the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 (S.I. 1999/2979),
Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments is amended in accordance with this Part of this Schedule.
In Article 2(1) (definitions), for points (12) and (12A) substitute—.
In Article 17a (tick sizes), in the second paragraph, omit “large in scale”.
For Article 18 substitute—
For Article 21 substitute—
In Article 22 (providing information for the purposes of transparency and other calculations), in paragraph 1 omit “and for determining whether an investment firm is a systematic internaliser”.
Regulation (EU) No 648/2012 on OTC derivatives, central counterparties and trade repositories is amended in accordance with this Part of this Schedule.
After Article 6a insert—
After Article 84b insert—
Northern Ireland legislation;
Article 2 (definitions) is amended as follows. Omit point (A8) (definition of “third country”). Before point (1) insert—. In point (5) (definition of “sponsor”), for “third country” substitute “country or territory outside the United Kingdom”.
This paragraph sets out the special resolution objectives. The Bank must have regard to the special resolution objectives in using, or considering the use of, the stabilisation powers. Objective 1 is to protect and enhance the stability of the UK financial system, including in particular by— Objective 2 is to protect and enhance public confidence in the stability of the UK financial system. Objective 3 is to maintain the continuity of central counterparty clearing services. Objective 4 is to protect public funds. Objective 5 is to avoid interfering with property rights in contravention of a Convention right (within the meaning of the Human Rights Act 1998). The order in which the objectives are listed in this paragraph is not significant; they are to be balanced as appropriate in each case. In this paragraph, “market infrastructures” include recognised investment exchanges, recognised clearing houses and recognised CSDs, within the meaning of section 285 of FSMA 2000.
Where the Bank is considering the exercise of a stabilisation power in respect of a CCP which is a member of a group, the Bank must have regard to—
the need to minimise the effect of the exercise of the power on other undertakings in the same group, and
the potential effect of the exercise of the power on the financial stability of countries other than the United Kingdom (particularly those countries in which any member of that group is operating).
Where the Bank has exercised the first stabilisation option (private sector purchaser) in respect of a CCP it may only exercise the relevant resolution powers in relation to the residual CCP. Where the Bank has exercised the third stabilisation option (transfer of ownership) in respect of a CCP it may only exercise the relevant resolution powers in respect of the CCP where the transferee under paragraph 30 is— In this paragraph—
The Bank must make arrangements for the appointment of a person to act as an independent valuer for the purposes of a valuation to be conducted under paragraph 22 or 23. The Bank may require the CCP to which the valuation relates to reimburse the Bank for costs it incurs in relation to the independent valuer (including remuneration and allowances paid to the valuer and the valuer’s staff). A person may not be appointed as an independent valuer under sub-paragraph (1) unless the Bank is satisfied that the person is independent from the Bank and the CCP to which the valuation relates. An independent valuer is to hold and vacate office in accordance with the terms of the appointment. An independent valuer may be removed from office only on the grounds of incapacity or serious misconduct. In the event of the death of an independent valuer, or an independent valuer being removed from office or resigning, a new independent valuer must be appointed by the Bank in accordance with this paragraph.
The first stabilisation option is to sell all or part of the business of the CCP to a commercial purchaser. For that purpose the Bank may make—
The third stabilisation option is to transfer ownership of the CCP to any person other than a bridge central counterparty or a commercial purchaser. For that purpose the Bank may make one or more share transfer instruments.
The sixth stabilisation option is to make one or more variation instruments. A variation instrument is an instrument that makes provision to reduce or cancel a variation margin payment that a CCP would have otherwise paid to a clearing member of the CCP. The power under this paragraph may be exercised only for the purpose of recovering losses arising as a result of a clearing member defaulting on the member’s obligations to the CCP. The power under sub-paragraph (1) does not apply to a clearing member— In this paragraph, a “variation margin payment” means a payment reflecting an increase in the market value of a clearing member’s position in the market.
This paragraph applies to a relevant provision in a write-down instrument. The Bank must report to the Chancellor of the Exchequer stating the reasons why that provision has been made in the case of the securities or liabilities concerned. If the provision departs from the insolvency treatment principles, the report must state the reasons why it does so. The insolvency treatment principles are that where an instrument includes a relevant provision— A report must comply with any other requirements as to content that may be specified by the Treasury. A report must be made as soon as reasonably practicable after the making of the instrument to which it relates. The Chancellor of the Exchequer must lay a copy of each report under sub-paragraph (2) before Parliament. In this paragraph a “relevant provision” means a provision falling within paragraph 34(2).
This paragraph applies where the Bank uses one or more of the stabilisation options mentioned in paragraph 1(3) in respect of a CCP unless the CCP has ceased to be subject to the exercise of any stabilisation power mentioned in paragraph 1(4). A relevant person is not to be treated in relation to the CCP— In this paragraph—
In this paragraph “transfer” means a transfer provided for by a share transfer instrument. A transfer takes effect by virtue of the instrument (and in accordance with its provisions as to timing or other ancillary matters). A transfer takes effect despite any restriction arising by virtue of contract or legislation or in any other way. In sub-paragraph (3) “restriction” includes— A share transfer instrument may provide for a transfer to take effect free from any trust, liability or other encumbrance (and may include provision about their extinguishment). A share transfer instrument may extinguish rights to acquire securities falling within Class 1 or 2 in paragraph 40.
A share transfer instrument may enable the Bank— Sub-paragraph (1) also applies to a director or senior manager of a relevant CCP group company of the specified CCP. A “relevant CCP group company” means a CCP group company that is incorporated in, or formed under the law of any part of, the United Kingdom. Appointments under sub-paragraph (1)(d) are to be on terms and conditions agreed with the Bank.
As soon as is reasonably practicable after making a share transfer instrument in respect of a CCP, the Bank must send a copy to— As soon as is reasonably practicable after making share transfer instrument the Bank must publish a copy— and arrange for the publication of a copy on the website of the CCP in respect of which the instrument was made. Where the Treasury receive a copy of a share transfer instrument under sub-paragraph (1) they must lay a copy before Parliament.
This paragraph applies where the Bank has made a share transfer instrument in accordance with paragraph 27(2), 29(3) or 30(2) (“the original instrument”) providing for the transfer of securities issued by a CCP to a person (“the original transferee”). The Bank may make one or more reverse share transfer instruments in respect of securities issued by the CCP and held by the original transferee (whether or not they were transferred by the original instrument). If the Bank makes an onward share transfer instrument in respect of securities transferred by the original instrument, the Bank may make one or more reverse share transfer instruments in respect of securities issued by the CCP and held by a transferee under the onward share transfer instrument (“the onward transferee”). A reverse share transfer instrument is a share transfer instrument which— The Bank may not make a reverse share transfer instrument under sub-paragraph (2) unless— The Bank may not make a reverse share transfer instrument under sub-paragraph (3) unless— Paragraphs 17 and 19 do not apply to a reverse share transfer instrument (but it is to be treated in the same way as any other share transfer instrument for all other purposes including for the purposes of the application of a power under this Schedule). Before making a reverse share transfer instrument the Bank must consult— Paragraph 48 applies where the Bank has made a reverse share transfer instrument.
A property transfer instrument is an instrument which— A property transfer instrument may relate to—
A property transfer instrument may provide— A property transfer instrument may provide for agreements made or other things done by or in relation to a transferor to be treated as made or done by or in relation to the transferee. A property transfer instrument may provide for anything (including legal proceedings) that relates to anything transferred and is in the process of being done by or in relation to the transferor immediately before the transfer date, to be continued by or in relation to the transferee. A property transfer instrument which transfers or enables the transfer of a contract of employment may include provision about continuity of employment. A property transfer instrument may modify references (express or implied) in an instrument or document to a transferor. In so far as rights and liabilities in respect of anything transferred are enforceable after transfer, a property transfer instrument may provide for apportionment between transferor and transferee to a specified extent and in specified ways. A property transfer instrument may enable the transferor and transferee by agreement to modify a provision of the instrument; but a modification— A property transfer instrument may require or permit—
A property transfer instrument made in respect of a CCP may make provision about the consequences of a transfer for membership of the CCP. In particular, an instrument may—
A property transfer instrument may include incidental, consequential or transitional provision. In relying on sub-paragraph (1) an instrument—
This paragraph applies where the Bank has made a resolution instrument. The Bank may make one or more property transfer instruments in respect of property, rights or liabilities of the CCP. Paragraph 17 does not apply to a property transfer instrument under sub-paragraph (2). Before making a property transfer instrument under sub-paragraph (2) the Bank must consult—
This paragraph applies where the Bank has made a property transfer instrument in respect of a bridge central counterparty in accordance with paragraph 29(3) (“the original instrument”). The Bank may make one or more onward property transfer instruments. An onward property transfer instrument is a property transfer instrument which— An onward property transfer instrument may relate to property, rights or liabilities of the bridge central counterparty whether or not they were transferred under the original instrument. An onward property transfer instrument may not transfer property, rights or liabilities to the transferor under the original instrument. Paragraphs 17 and 19 do not apply to an onward property transfer instrument (but for other purposes it is to be treated in the same way as any other property transfer instrument, including for the purposes of the application of a power under this Schedule). Before making an onward property transfer instrument the Bank must consult— Paragraph 64 applies where the Bank of England has made an onward property transfer instrument.
This paragraph applies where the Bank has made a property transfer instrument in accordance with paragraph 71(2) (“the original instrument”). The Bank may make one or more reverse property transfer instruments in respect of property, rights and liabilities of the transferee under the original instrument. A reverse property transfer instrument is a property transfer instrument which— The Bank must not make a reverse property transfer instrument unless— Paragraphs 17 and 19 do not apply to a reverse property transfer instrument made in accordance with this paragraph. Before making a reverse property transfer instrument in accordance with this paragraph, the Bank must consult— Paragraph 64 applies where the Bank has made a reverse property transfer instrument in accordance with this paragraph.
In this Schedule, “partial property transfer” means a property transfer instrument which provides for the transfer of some, but not all of the property, rights and liabilities of a CCP. The Treasury may by regulations— Regulations under this paragraph may apply to partial property transfers generally or only to partial property transfers— Provision under sub-paragraph (2) may, in particular, refer to particular classes of liabilities. Regulations under this paragraph are subject to the affirmative procedure.
In this paragraph “protected arrangements” means security interests, title transfer collateral arrangements, set-off arrangements and netting arrangements. In sub-paragraph (1)— The Treasury may by regulations — Regulations under this paragraph may apply to protected arrangements generally or only to arrangements— Regulations under this paragraph may include provision for determining which arrangements are to be, or not to be, treated as protected arrangements; in particular, regulations may provide for arrangements to be classified not according to their description by the parties but according to one or more indications of how they are treated, or are intended to be treated, in commercial practice. In this paragraph “arrangements” includes arrangements which— Regulations under this paragraph are subject to the affirmative procedure.
As soon as is reasonably practicable after making a resolution instrument in respect of a CCP, the Bank must send a copy of the instrument to— As soon as is reasonably practicable after making a resolution instrument the Bank must publish a copy— and arrange for the publication of a copy on the website of the CCP in respect of which the instrument was made. Where the Treasury receive a copy of a resolution instrument under sub-paragraph (1) they must lay a copy before Parliament.
In this paragraph— A Type 1 default event provision is a provision of a contract or other agreement that has the effect that if a specified event occurs or situation arises— A Type 2 default event provision is a provision of a contract or other agreement that has the effect that a provision of the contract or agreement— For the purposes of sub-paragraphs (2) and (3) it is the effect of a provision that matters, not how it is described (nor, for example, whether it is presented in a positive or a negative form). Subject to sub-paragraph (7), sub-paragraph (6) applies where— The following are to be disregarded in determining whether a default event provision applies— A stabilisation instrument may provide for sub-paragraph (6)— Provision may be made under sub-paragraph (7) only if the Bank considers that such provision would advance one or more of the special resolution objectives. A stabilisation instrument may provide for sub-paragraph (10) or (11) to apply (but need not apply either) in circumstances where sub-paragraph (6) would not apply. If this sub-paragraph applies, the stabilisation instrument is to be disregarded in determining whether a default event provision applies. If this sub-paragraph applies, the stabilisation instrument is to be disregarded in determining whether a default event provision applies except so far as the instrument provides otherwise. In sub-paragraphs (9), (10) and (11) a reference to a stabilisation instrument is a reference to— Provision under sub-paragraph (9) may apply sub-paragraph (10) or (11)— A thing is not done by virtue of a stabilisation instrument for the purposes of sub-paragraph (12)(b) merely by virtue of being done under a contract or other agreement rights or obligations under which have been affected by the instrument.
The Treasury may by regulations make provision for protecting the financial interests of relevant persons in connection with the making of a stabilisation instrument in respect of a CCP. For the purposes of sub-paragraph (1) regulations may make provision establishing a scheme, which may for example include provision— In making regulations under this paragraph the Treasury must have regard (among other matters) to the desirability of ensuring that any person who is a relevant person before the making of a stabilisation instrument does not receive less favourable treatment than they would have received had— The regulations may provide for the amount of compensation payable to relevant persons to be determined by a person appointed in accordance with the regulations (an “independent valuer”). The regulations may make such further provision about independent valuers as the Treasury consider to be appropriate, including (among other things)— The regulations may provide for compensation or other payments to be made by— In this paragraph— Regulations under this paragraph are subject to the affirmative procedure.
Expressions in this paragraph have the same meaning as in paragraph 89. The Bank may— In modifying or setting terms under sub-paragraph (2) the Bank must aim, so far as is reasonably practicable, to preserve or include— The power under sub-paragraph (2)— An obligation imposed on the residual CCP or a group company under sub-paragraph (2)(d) or (e) continues to apply despite the residual CCP or group company entering insolvency, and may not be disclaimed by a liquidator under section 178(2) of the Insolvency Act 1986 or Article 152(1) of the Insolvency (Northern Ireland) Order 1989.
Expressions in this paragraph have the same meaning as in paragraph 92. The Bank may— In modifying or setting terms under sub-paragraph (2) the Bank must aim, so far as is reasonably practicable, to preserve or include— The power under sub-paragraph (2)— An obligation imposed on the transferred CCP or a former group company under sub-paragraph (2)(b) or (c) continues to apply despite the transferred CCP or former group company entering insolvency, and may not be disclaimed by a liquidator under section 178(2) of the Insolvency Act 1986 or Article 152(1) of the Insolvency (Northern Ireland) Order 1989.
The Bank may by notice terminate an obligation arising under paragraph 89 or 92. The power under sub-paragraph (1) is exercisable by giving a notice to each person— A reference in sub-paragraph (1) to obligations under a paragraph includes a reference to obligations under that paragraph as applied under paragraph 91 or 94.
The Bank may suspend the termination right of any party to a qualifying contract (other than a party who is an excluded person). A contract is a “qualifying contract” for the purpose of this paragraph if— The condition is that— The Bank must have regard to the impact a suspension might have on the orderly functioning of the financial markets before exercising the power in sub-paragraph (1). The power under sub-paragraph (1) must be exercised by way of provision in a share transfer instrument, property transfer instrument, resolution instrument or third-country instrument. A suspension imposed under sub-paragraph (1)— A person may exercise a termination right under a contract before the expiry of the suspension if that person is given notice by the Bank that the rights and liabilities of the CCP under resolution covered by the contract are not— If— a person may, on the expiry of the suspension, exercise the termination right in accordance with the terms of the contract. But, where the rights and liabilities of the CCP under resolution or the subsidiary under the contract have been transferred to another undertaking, sub-paragraph (8) applies only if the event giving rise to the termination right has been triggered by that undertaking. For the purposes of this paragraph, “termination right” means—
The Bank may restrict or prohibit for a specified period discretionary payments to specified employees or specified shareholders of a CCP. The power under sub-paragraph (1) must be exercised by way of provision in a share transfer instrument, property transfer instrument or resolution instrument. The specified period for the purposes of sub-paragraph (1) must not exceed 5 years (but this is subject to sub-paragraph (4)). A provision under sub-paragraph (1) restricting or prohibiting discretionary payments in relation to a CCP ceases to have effect if— In this paragraph—
The Treasury may by regulations make provision about the fiscal consequences of the exercise of a stabilisation power. Regulations may relate to— Regulations may apply to— Regulations may— Regulations may make provision for the fiscal consequences of the exercise of a stabilisation power in respect of things done— In relation to the exercise of a supplemental, onward, bridge or subsequent instrument under paragraph 49, 50, 52, 66, 67, 69, 71, 73 or 82, in sub-paragraph (5)(a) above “the stabilisation power” is a reference to the first stabilisation power in connection with which the supplemental, onward, bridge or subsequent instrument is made. The Treasury may by regulations amend sub-paragraph (2) so as to— Regulations under this paragraph are subject to the affirmative procedure.
The Bank may provide for a company to which the business of a CCP is transferred in accordance with paragraph 29(3) to be treated as a CCP for the purposes of FSMA 2000— The provision may have effect— The power under this paragraph—
The Bank may not exercise a stabilisation power in respect of a CCP without the Treasury’s consent if the exercise of that power would be likely to have implications for public funds. In sub-paragraph (1)— The Treasury may by regulations specify considerations which are to be, or not to be, taken into account in determining whether action has implications for public funds for the purpose of sub-paragraph (1). If the Treasury refuse consent under sub-paragraph (1), the Bank must consider other exercises of the stabilisation powers with a view to— The Treasury may by notice to the Bank disapply sub-paragraph (4) in respect of a CCP; and a notice may be revoked by further notice. Regulations under this paragraph are subject to the negative procedure.
Where the Bank transfers all or part of a CCP’s business to a bridge central counterparty, the Bank must report to the Chancellor of the Exchequer about the activities of the bridge central counterparty. The first report must be made as soon as is reasonably practicable after the end of one year beginning with the date of the first transfer to the bridge central counterparty. A report must be made as soon as is reasonably practicable after the end of each subsequent year. The Chancellor of the Exchequer must lay a copy of each report under sub-paragraph (2) or (3) before Parliament. The Bank must comply with any request of the Treasury for a report dealing with specified matters in relation to a bridge central counterparty. A request under sub-paragraph (5) may include provision about—
The Bank may exercise a stabilisation power in respect of a CCP group company in accordance with paragraph 27(2), 29(3) or 30(2) if each of the following conditions is met. Condition 1 is that the Bank is satisfied that the general conditions for the exercise of a stabilisation power set out in paragraph 17 are met in respect of a CCP in the same group. Condition 2 (which does not apply in a financial assistance case) is that the Bank is satisfied that the exercise of the power in respect of the CCP group company is necessary, having regard to the public interest in— Condition 3 (which applies only in a financial assistance case) is that— Condition 4 is that the CCP group company is an undertaking incorporated in, or formed under the law of any part of, the United Kingdom. Before determining whether Condition 2 or 3 (as appropriate) is met, the Bank must consult— In exercising a stabilisation power in reliance on this paragraph the Bank must have regard to the need to minimise the effect of the exercise of the power on other undertakings in the same group. In this paragraph “financial assistance case” means a case in which the Treasury notify the Bank that they have provided financial assistance in respect of a CCP in the same group for the purpose of resolving or reducing a serious threat to the stability of the UK financial system.
This paragraph applies where the Bank has required or could require a person to whom sub-paragraph (2) applies (“the person concerned”) to provide information or produce documents with respect to any matter (“the matter concerned”) under paragraph 119. This sub-paragraph applies to— who is, or was at the relevant time, carrying on a business. The Bank may either— When acting under sub-paragraph (3)(a), the Bank may require the report to be in such form as may be specified in the notice. The Bank must give notice of an appointment under sub-paragraph (3)(b) to the person concerned. The person appointed to make a report— It is the duty of— to give the person appointed to prepare a report all such assistance as the appointed person may reasonably require. The obligation imposed by sub-paragraph (7) is enforceable, on the application of the Bank, by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988. The Bank may, in relation to an appointment under sub-paragraph (3)(b), require a CCP to pay to the Bank a fee to cover the expenses incurred by the Bank in relation to the appointment.
On receiving a request to which sub-paragraph (3) applies from a foreign resolution authority, the Bank may— Accordingly, for the purposes of sub-paragraph (1)(a), paragraph 119 has effect as if it also referred to information and documents reasonably required by the Bank to meet such a request. This sub-paragraph applies to a request if the request is made by a foreign resolution authority in connection with the exercise by that authority of functions in relation to third-country resolution action (within the meaning of paragraph 145) corresponding to the stabilisation powers of the Bank under this Schedule. An investigator appointed under sub-paragraph (1)(b) has the same powers as an investigator appointed under paragraph 122. In deciding whether or not to exercise its investigative power, the Bank may take into account in particular— The Bank may decide that it will not exercise its investigative power unless the foreign resolution authority undertakes to make such contribution towards the cost of its exercise as the Bank considers appropriate. “Foreign resolution authority” means an authority, in a country or territory outside the United Kingdom, which exercises functions referred to in sub-paragraph (3). “Investigative power” means one of the powers mentioned in sub-paragraph (1).
This paragraph applies to an investigator appointed under paragraph 122 to conduct an investigation on behalf of the Bank. The investigator has— The investigator may require the person who is the subject of the investigation (“the person under investigation”) to give the investigator all assistance in connection with the investigation which that person is reasonably able to give. The investigator may require a person who is neither the person under investigation nor a person connected with the person under investigation— A requirement may only be imposed under sub-paragraph (4) if the investigator is satisfied that the requirement is necessary or expedient for the purposes of the investigation. Paragraph 125(5) and (6) applies for the purposes of this paragraph.
A person may not be required under this Schedule to produce, disclose or permit the inspection of protected items. “Protected items” means— A communication or item falls within this sub-paragraph if it is made— A communication or item is not a protected item if it is held with the intention of furthering a criminal purpose.
If a person other than the investigator (“the defaulter”) fails to comply with a requirement imposed on the defaulter under paragraph 125, 126 or 128, the person imposing the requirement may certify that fact in writing to the court. If the court is satisfied that the defaulter has failed without reasonable excuse to comply with the requirement, it may deal with the defaulter (and, in the case of a body corporate, any director or other officer) as if that person were in contempt. “Officer”, in relation to a limited liability partnership, means a member of the limited liability partnership. A person who knows or suspects that an investigation is being or is likely to be conducted under paragraph 121, 122 or 123 is guilty of an offence if— unless that person shows that that person had no intention of concealing facts disclosed by the document from the investigator. A person who, in purported compliance with a requirement imposed on that person by any relevant requirement— is guilty of an offence. Any person who intentionally obstructs the exercise of any rights conferred by a warrant under paragraph 130 is guilty of an offence. A person guilty of an offence under sub-paragraph (4), (5) or (6) is liable, on summary conviction— In this paragraph—
If, on the application of the Bank, the court is satisfied that there is a reasonable likelihood that any person will contravene a relevant requirement, the court may make an order restraining, or in Scotland an interdict prohibiting, the contravention. The jurisdiction conferred by this paragraph is exercisable— In this paragraph “relevant requirement” has the meaning given in paragraph 122.
If the Bank proposes to impose a sanction on a person under paragraph 136(1) or (3) it must give that person a warning notice. Section 387 of FSMA 2000 applies in relation to a warning notice given under sub-paragraph (1) and to the Bank as it applies in relation to a warning notice given under that Act and to the regulator which gave that notice, subject to sub-paragraphs (3) and (4). In complying with section 387(1)(a) of that Act, a warning notice must in particular— For the purposes of sub-paragraph (2), section 387 of that Act has effect as if subsections (1A) and (3A) were omitted.
If the Bank decides to impose a sanction on a person under paragraph 136, the person may appeal to the Upper Tribunal. The Bank may not impose a sanction while an appeal under this paragraph could be brought or is pending.
In connection with the exercise of its powers to impose sanctions under paragraph 136, the Bank must take such steps as it considers appropriate to co-operate with—
the FCA, and
any person who exercises functions outside the United Kingdom equivalent to those exercisable by the Bank under this Schedule.
After Article 28 (third party verifying STS compliance) insert—
Regulation 19B of the Central Counterparties (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2018 (S.I. 2018/1184) is amended as follows. In paragraph (2) for “one year” substitute “3 years and 6 months”. After paragraph (3) insert—
The Electronic Money Regulations 2011 (S.I. 2011/99) are amended in accordance with paragraphs 53 to 62.
In regulation 48 (monitoring and enforcement), after paragraph (1)(a) insert—.
In regulation 49 (reporting requirements), after paragraph (1) insert—
In regulation 50 (public censure), after “Regulations” insert “or, in the case of an electronic money institution, section 312R of the 2000 Act”.
In regulation 51 (financial penalties)—
omit “or” at the end of paragraph (1)(a), and
after that paragraph insert—.
In regulation 52 (suspending authorisation etc), in paragraph (1) after “Regulations” insert “or by or under section 312R of the 2000 Act”.
In regulation 54 (injunctions)—
omit “or” at the end of paragraph (1)(a);
after paragraph (1)(b) insert—;
in paragraph (2)(a) after “Regulations” insert “or an electronic money institution has contravened a requirement imposed on it by or under section 312R of the 2000 Act”;
in the words after paragraph (2)(b), after “that person” insert “or institution”;
omit “or” at the end of paragraph (3)(a);
after that paragraph insert—;
in paragraph (3)(b) for “such a requirement” substitute “a requirement described in sub-paragraph (a) or (aa)”.
In regulation 55 (power to require restitution), in paragraph (1) after “requirement,” insert “or, where the electronic money issuer is an electronic money institution, has contravened a requirement imposed on it by or under section 312R of the 2000 Act, or been knowingly concerned in the contravention of such a requirement,”.
In regulation 57 (restitution orders), in paragraph (1) after “requirement,” insert “or, where the electronic money issuer is an electronic money institution, has contravened a requirement imposed on it by or under section 312R of the 2000 Act, or been knowingly concerned in the contravention of such a requirement,”.
In regulation 58 (complaints), in paragraph (1)—
the words from “a requirement” to the end become sub-paragraph (a), and
after that sub-paragraph insert , or
In Schedule 3 (application and modification of legislation)—
in paragraph 1(b), in the inserted text substituting section 66A of the 2000 Act—
in subsection (1), the words from “a contravention” to the end become sub-paragraph (a),
after that paragraph insert , or, and
“Relevant person” means—
in paragraph 3(d)(i), in the inserted subsection (1)(ab), after “2011” insert “or section 312R”.
The Payment Services Regulations 2017 (S.I. 2017/752) are amended in accordance with paragraphs 64 to 72.
In regulation 108 (monitoring and enforcement), after paragraph (1)(a) insert—.
In regulation 109 (reporting requirements), after paragraph (1) insert—
In regulation 110 (public censure), after “Regulations” insert “or, in the case of an authorised payment institution, small payment institution, or registered account information services provider, section 312R of the 2000 Act”.
In regulation 111 (financial penalties)—
omit “or” at the end of paragraph (1)(a), and
after that paragraph insert—.
In regulation 113 (injunctions)—
omit “or” at the end of paragraph (1)(a);
after paragraph (1)(b) insert—;
in paragraph (2)(a) after “Regulations” insert “or an authorised payment institution, small payment institution, or registered account information services provider has contravened a requirement imposed on it by or under section 312R of the 2000 Act”;
in the words after paragraph (2)(b), after “that person” insert “or institution or provider”;
omit “or” at the end of paragraph (3)(a);
after that paragraph insert—;
in paragraph (3)(b) for “such a requirement” substitute “a requirement described in sub-paragraph (a) or (aa)”.
In regulation 114 (power to require restitution), in paragraph (1) after “requirement,” insert “or, where the payment service provider is an authorised payment institution, small payment institution, or registered account information services provider, has contravened a requirement imposed on it by or under section 312R of the 2000 Act, or been knowingly concerned in the contravention of such a requirement,”.
In regulation 116 (restitution orders), in paragraph (1) after “requirement,” insert “or, where the payment service provider is an authorised payment institution, small payment institution, or registered account information services provider, has contravened a requirement imposed on it by or under section 312R of the 2000 Act, or been knowingly concerned in the contravention of such a requirement,”.
In regulation 117 (complaints), in paragraph (1)—
the words from “a requirement” to the end become sub-paragraph (a), and
after that sub-paragraph insert or
In Schedule 6 (application and modification of legislation)—
in paragraph 1, in the inserted text substituting section 66A of the 2000 Act—
in subsection (1), the words from “a contravention” to the end become sub-paragraph (a), and
after that paragraph insert or;
“Relevant person” means—
in paragraph 4(e), in the inserted subsection (1)(c), after “2017” insert “or section 312R”.
Section 8
Section 13
Section 20
FSMA 2000 is amended as follows.
In section 1H (further interpretative provisions for sections 1B to 1G), in subsection (2)(c) after “invitations” insert “or inducements”.
In section 25 (contravention of section 21), in subsection (2)(a) after “section 21” insert “in accordance with subsection (2A) of that section”.
In section 55A (application for permission), after subsection (5) insert—
Section 55O (imposition of requirements on acquisition of control) is amended as follows. In subsection (1)(b), after “power” insert “or (as the case may be) the power under section 55NA(5)(b)”. In subsection (2)(a) for “or 55M” substitute “, 55M or 55NA”. In subsection (3), after “PRA-authorised person” insert “and the case does not relate to a requirement that is imposed (or that could be imposed) under section 55NA”.
In section 55R (persons connected with an applicant), in subsection (1) after paragraph (b) insert—.
In section 55U (applications under Part 4A), after subsection (3) insert—
In section 55V (determination of applications), in subsection (5)—
omit “or” at the end of paragraph (c);
after paragraph (d) insert , or.
Section 55X (determination of applications: warning notices and decision notices) is amended as follows. In subsection (1)— In subsection (4)—
Section 55Y (exercise of own-initiative power: procedure) is amended as follows. After subsection (1) insert— For subsection (4) substitute—
Section 55Z (cancellation of Part 4A permission: procedure) is amended as follows. In the heading, after “permission” insert “or permission under section 55NA”. In subsection (1) after “permission” insert “or permission under section 55NA”. In subsection (2) after “permission” insert “or permission under section 55NA”.
In section 55Z3 (right to refer matters to the Tribunal), after subsection (2) insert—
Section 22
The Banking Act 2009 is amended as follows.
In the heading to Part 5 (payment systems), after “systems” insert “and service providers”.
In section 181 (overview), after “services” insert “, including”.
Section 182 (interpretation of payment system) is amended as follows. In the heading, for ““payment system”” substitute “key terms”. In subsection (1), after “money” insert “or digital settlement assets”. After subsection (4) insert— After subsection (5) insert—
Section 183 (interpretation of other expressions) is amended as follows. In the opening words of paragraph (k) after “system” insert “or to a DSA service provider”. In sub-paragraph (i) of paragraph (k), after “constituting” insert “, or connected with,”.
In the cross-heading before section 184 (recognition order), after “systems” insert “and service providers”.
In the heading to section 184 , after “order” insert “: payment system”.
In section 184, in subsection (4), after “constituting” insert “or connected with”.
After section 184 insert—
In the heading to section 185 (recognition criteria) after “criteria” insert “: payment system”.
After section 185 insert—
Section 186 (procedure) is amended as follows. In the opening words of subsection (1) after “system” insert “or a DSA service provider”. After subsection (1)(a) insert—. In subsection (1)(b), after “system” insert “or the DSA service provider (as appropriate)”. In subsection (2)(a), for “the operator of which” substitute “or a DSA service provider, where the operator of the system or the provider”. In subsection (2)(b), after “operator” insert “or provider”. In subsection (3), after “system” insert “or a DSA service provider”.
Section 186A (amendment of recognition order) is amended as follows. After subsection (2)(a) insert—. In subsection (2)(b), after “system” insert “or the recognised DSA service provider (as appropriate)”. In subsection (3)(a), for “the operator of which” substitute “or a DSA service provider, where the operator of the system or the provider”. In subsection (3)(b), after “operator” insert “or provider”. In subsection (4)—
Section 187 (de-recognition) is amended as follows. In subsection (2)— After subsection (3)(a) insert—. In subsection (3)(b), after “system” insert “or the recognised DSA service provider (as appropriate)”. In subsection (4)(a), for “the operator of which” substitute “or a DSA service provider, where the operator of the system or the provider”. In subsection (4)(b), after “operator” insert “or provider”. In subsection (5), after “system” insert “, or by a recognised DSA service provider”.
Section 188 (principles) is amended as follows. In subsection (1)—
In section 189 (codes of practice)—
the words after “about” to the first “systems” become paragraph (a);
after that paragraph, insert ,;
omit “and”;
the words after “and” become paragraph (c);
at end insert “or to such DSA service providers”.
In section 190 (system rules), in subsection (1)(a)—
after “constituting” insert “, or connected with,”;
at end insert “, or a DSA service provider”.
After section 190 insert—
Section 191 (directions) is amended as follows. In subsection (1)— In subsection (2)— In subsection (3)— In subsection (4)(b), after “operator” insert “, DSA service provider”.
After section 192 (role of FCA and PRA), insert—
Section 193 (inspection) is amended as follows. In subsection (1)— In the opening words of subsection (2)—
Section 194 (inspection: warrant) is amended as follows. In subsection (1)(a)— In subsection (2)(a), after “system” insert “, the DSA service provider”. In subsection (3), after “system” insert “, the DSA service provider”.
Section 195 (independent report) is amended as follows. In subsection (1)(a), omit “or”. After subsection (1)(b), insert— In subsection (2)(a), after “operator” insert “, recognised DSA service provider”. In subsection (2)(b), after “operator” insert “, recognised DSA service provider”.
In section 196 (compliance failure)—
after first “system” insert “, a recognised DSA service provider”;
after second “system” insert “or such a DSA service provider”.
In section 197 (publication), in subsection (1)—
after first “system” insert “, a recognised DSA service provider”;
after second “system” insert “or such a DSA service provider”.
In section 198 (penalty), in subsection (1)—
after first “system” insert “, a recognised DSA service provider”;
after second “system” insert “or such a DSA service provider”.
Section 199 (closure) is amended as follows. In subsection (2)— In subsection (3)(a)— In subsection (3A)— In subsection (4), after “operator” insert “, DSA service provider,”.
Section 200 (management disqualification) is amended as follows. In subsection (1), after “system” insert “or from being a DSA service provider”. In subsection (2)— In subsection (2A)—
Section 201 (warning) is amended as follows. In subsection (1)— In subsection (1A)—
In section 202 (appeal), in subsection (2)—
after first “system” insert “or recognised DSA service provider”;
after second “system” insert “or DSA service provider (as the case may be)”.
Section 202A (injunctions) is amended as follows. In subsection (2)— In subsection (3)—
In section 203 (fees), in subsection (1)—
after first “systems” insert “, recognised DSA service providers,”;
after second “systems” insert “or such DSA service providers”.
After section 203B (annual report) insert—
Section 204 (information) is amended as follows. In subsection (1)(a), after “206A(2)(b)” insert “or 206A(2A)(b)”. In subsection (1A)— In subsection (2)—
Section 205 (pretending to be recognised) is amended as follows. In the opening words of subsection (1) after “system” insert “or DSA service provider”. In subsection (1)(a), after “system” insert “or provider”. In subsection (1)(b), after “system” insert “or provider”. In subsection (1A), after “system” insert “or recognised DSA service provider”.
Section 206 (saving for informal oversight) is amended as follows. In subsection (1)— In subsection (2)—
Section 206A (services forming part of recognised payment systems) is amended as follows. For the heading substitute “Service providers”. In subsection (1)— After subsection (2) insert— After subsection (3) insert— In the opening words of subsection (4), after “(2)(b)” insert “or (2A)(b) or systems under subsection (2B)(b)”. In subsection (4)(b) after “system” insert “or DSA service provider”. In subsection (5) after “(2)(b)” insert “, (2A)(b) or (2B)(b)”.
After section 206A insert—
182(5C) Meaning of “digital settlement asset” and “DSA service provider” Draft affirmative resolution
The Financial Services (Banking Reform) Act 2013 is amended as follows.
Section 41 (meaning of payment system) is amended as follows. After subsection (2) insert—
Section 42 (participants in payment systems) is amended as follows. In subsection (2)(c), for “subsection (5)” substitute “subsections (5) and (5A)”. After subsection (5) insert—
In section 98 (duty of regulators to ensure co-ordinated exercise of functions), for paragraph (c) of subsection (5) substitute—
In section 110 (interpretation of Part), at the appropriate place insert—; .
In section 112 (interpretation: infrastructure companies), after subsection (2)(a) insert—
In section 113 (interpretation: other expressions), in subsection (1) at the appropriate place insert—.
Section 115 (objective of FMI administration) is amended as follows. In the opening words of subsection (1) after system insert “, or a recognised DSA service provider,”. In subsection (1)(a) after “system” in each place, insert “or provider”.
In section 143 (Parliamentary control of orders and regulations), after subsection (2)(a) insert—.
Section 51
The Financial Services (Banking Reform) Act 2013 is amended as follows.
In section 39 (overview)—
after subsection (11) insert—;
in subsection (12) for “107” substitute “107A”.
In section 53 (regulatory principles), in paragraph (c) at the end insert “, including in a way consistent with contributing towards achieving compliance by the Secretary of State with section 1 of the Climate Change Act 2008 (UK net zero emissions target) and section 5 of the Environment Act 2021 (environmental targets) where the Payment Systems Regulator considers the exercise of its functions to be relevant to the making of such a contribution;”.
After section 102 (power of PRA to require Regulator to refrain from specified action), insert—
Before section 103 (regulator’s general duty to consult) insert (under the italic heading “Consultation, accountability and oversight”)—
In section 104 (consultation in relation to generally applicable requirements)—
in subsection (1), in the words before paragraph (a) for “section” substitute “Part”;
in subsection (3) after paragraph (b) insert—;
after subsection (12) insert—
After section 104 insert—
After section 107 insert—
In section 110(1) (interpretation), at the appropriate place insert—.
In section 143 (orders and regulations: Parliamentary control), in subsection (2), after paragraph (b) insert—.
In Schedule 4 (the Payment Systems Regulator), after paragraph 7(2)(b) insert—.
In Schedule 4, after paragraph 7 insert—
In Schedule 4, after paragraph 14 insert—
Section 54
After Part 8A of FSMA 2000 (short selling) insert—
FSMA 2000 is amended as follows.
In section 3D (duty of FCA and PRA to ensure co-ordinated exercise of functions), in subsection (4), after “operational objectives”, insert “, or the purpose for which the FCA must exercise its functions under Part 8B (see section 131U(1))”.
In section 55H (variation by FCA at request of authorised person), in subsection (4), after “objectives” insert “, or the purpose for which the FCA must exercise its functions under Part 8B (see section 131U(1))”.
In section 55L (imposition of requirements by FCA), in subsection (6), after “objectives” insert “, or the purpose for which the FCA must exercise its functions under Part 8B (see section 131U(1))”.
In section 55T (persons whose interests are protected), after “operational objectives,” insert “the purpose for which the FCA must exercise its functions under Part 8B,”.
In section 232A (ombudsman scheme operator’s duty to provide information to FCA), after “objectives,” insert “, or the purpose for which the FCA must exercise its functions under Part 8B (see section 131U(1)),”.
In section 395 (the FCA’s and PRA’s procedures), in subsection (13), after paragraph (bbzb) insert—
In section 429 (Parliamentary control of statutory instruments), in subsection (2), in the list of sections beginning with “90B” insert at the appropriate place “131O(7),”.
Section 55
After Part 5 of the Banking Act 2009 (payment systems) insert—
Part 6 of the Financial Services (Banking Reform) Act 2013 (special administration for operators of certain infrastructure systems) is amended as follows.
In section 111 (financial market infrastructure administration), in the heading, after “market” insert “and cash”.
Section 112 (interpretation: infrastructure companies) is amended as follows. In subsection (2), omit the “or” at the end of paragraph (b) and insert—. In subsection (4)— In subsection (6), in paragraph (b), for “(2)(a) or (b)” substitute “(2)(a), (b) or (ba)”. After subsection (6) insert—
In section 113 (interpretation: other expressions), in subsection (1)—
in relation to an infrastructure company falling within subsection (2)(ba) of that section, any system used by the company to facilitate or control wholesale cash distribution,
at the end insert—
In section 115 (objective of FMI administration), after subsection (1A) insert—
In section 119 (continuity of supply), in subsection (6), in the definition of “supply”, after paragraph (a) insert—.
In section 120 (power to direct FMI administrator), in subsection (8), at the end insert “or section 206M of that Act (directions) in relation to a person recognised for the purposes of Part 5A of that Act”.
In section 127 (interpretation of Part), in subsection (1), at the end insert—
“Payment Systems Regulator” means the body established under section 40(1) of the Financial Services (Banking Reform) Act 2013;
The Banking Act 2009 is amended as follows.
ordinary market assistance offered by the Bank on its usual terms, or
PART 5A - Wholesale cash distribution 206M Bank of England directions: immunity Negative resolution 206Z Fees regulations Negative resolution 206Z4 Information Negative resolution 206Z6 Power to disapply regulation and enforcement provisions Draft affirmative resolution
“family member”;
In section 261 (index of defined terms)—
in the entry for “FCA”, in the second column, for “& 183” substitute “, 183 & 206F”;
in the entry for “Payment Systems Regulator”, in the second column, after “183” insert “& 206F”;
in the entry for “PRA”, in the second column, for “& 183” substitute “, 183 & 206F”.
the FCA,
In section 98 of the Financial Services (Banking Reform) Act 2013 (duty of regulators to ensure co-ordinated exercise of functions), in subsection (5)(b), at the end insert “or Part 5A of that Act (wholesale cash distribution)”.
A direction given to a relevant person under paragraph 2 must be accompanied by a notice which— The direction may, if the Bank considers it necessary, take effect— In any other case the direction takes effect when— Where representations are made by the relevant person within the period specified under sub-paragraph (1)(c), the Bank must, within a reasonable period, consider those representations and decide— The Bank must— If the relevant person is aggrieved by the confirmation of the direction, the person may refer the matter to the Upper Tribunal. A notice under sub-paragraph (5)(a) or (b) confirming the direction must— A notice given under sub-paragraph (5)(b) of a decision by the Bank to give a different direction must comply with sub-paragraph (1). The Bank must prepare and publish a statement of its policy with respect to the giving of directions under paragraph 2. The Bank may alter or replace a statement of policy published under this paragraph. The Bank must publish a statement as altered or replaced under sub-paragraph (10). No directions may be given under paragraph 2 before the statement of policy under sub-paragraph (9) has been published. In this paragraph “relevant person” means—
This paragraph applies where the Bank is notified of third-country resolution action in respect of a third-country central counterparty. The Bank must make an instrument which— An instrument within paragraph (a), (b) or (c) is a “third-country instrument” (as is an instrument under paragraph 146). The Bank may only make a decision under sub-paragraph (2) with the approval of the Treasury. Recognition of the action (or a part of it) may be refused only if the Bank and the Treasury are satisfied that one or more of the following conditions are satisfied— The recognition of a third-country resolution action (or any part of it) is without prejudice to any normal insolvency proceedings. In this paragraph—
Where an application is made for judicial review of a decision of the Bank to exercise the stabilisation powers in relation to a CCP or CCP group company (“relevant proceedings”)— For the purposes of sub-paragraph (1)— Sub-paragraph (1) does not affect the power of the court, subject to section 244 of the Banking Act 2009 (immunity), to award damages as a remedy in relevant proceedings.
The Treasury may by regulations modify the law for the purpose of enabling the powers under this Schedule to be used effectively, having regard to the special resolution objectives. Regulations may be made— Regulations under sub-paragraph (2)(c) may make provision which has retrospective effect in so far as the Treasury consider it necessary or desirable for giving effect to the particular exercise of a power under this Schedule in connection with which the regulations are made (but in relying on this sub-paragraph the Treasury must have regard to the fact that it is in the public interest to avoid retrospective legislation). In sub-paragraph (1) “modify the law” means— Specific powers under this Schedule are without prejudice to the generality of this paragraph. Regulations under this paragraph are— Where regulations under this paragraph are subject to the made affirmative procedure the statutory instrument containing the regulations must be laid before Parliament after being made. Regulations contained in a statutory instrument laid before Parliament under sub-paragraph (7) cease to have effect at the end of the period of 28 days beginning with the day on which the instrument is made unless, during that period, the instrument is approved by a resolution of each House of Parliament. In calculating the period of 28 days, no account is to be taken of any whole days that fall within a period during which— If regulations cease to have effect as a result of sub-paragraph (8), that does not—
In this Schedule “CCP group company” means an undertaking— Regulations under this paragraph may require the Bank to consult specified persons before determining whether the conditions are met. Regulations under this paragraph are subject to the affirmative procedure. Undertakings are in the same group for the purposes of paragraph 117 and this paragraph if they are group undertakings in respect of each other. Expressions defined in the Companies Act 2006 have the same meaning in paragraph 117 and this paragraph as in that Act.
“FSMA 2000” means the Financial Services and Markets Act 2000;
Section 56
In Part 18 of FSMA 2000 (recognised investment exchanges, clearing houses and CSDs), before Chapter 3B insert—
Section 57
Section 58
Part 24 of FSMA 2000 (insolvency) is amended as follows. In section 360 (application of Part 2 of 1986 Act or Part 3 of 1989 Order (administration) to insurers), at the end insert— Omit section 377 (reducing the value of contracts instead of winding up). Before section 378 (treatment of assets on winding up) insert—
After Schedule 19 to FSMA 2000 (competition information), insert—
After Schedule 19A to FSMA 2000 (the manager of a write-down order), inserted by Part 2 of this Schedule, insert—
Part 15 of FSMA 2000 (the Financial Services Compensation Scheme) is amended as follows.
After section 217 (insurers in financial difficulties) insert—
In section 219 (scheme manager’s power to require information), in subsection (1A), after paragraph (b) insert—.
After section 220 (scheme manager’s power to inspect information held by liquidator etc), insert—
Section 58
Part 24 of FSMA 2000 (insolvency) is amended as follows. After section 377J (further provision about write-down orders), inserted by Part 1 of Schedule 12 to this Act, insert— After Schedule 19B (further provision about write-down orders), inserted by Part 3 of Schedule 12 to this Act, insert—
In section 429 of FSMA 2000 (Parliamentary control of statutory instruments), in subsection (2B), at the end insert—
Section 73