Financial Services and Markets Act 2000 (c. 8)

(The document as of February, 2008)

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(d) market abuse may have taken place.

(3) The investigating authority may appoint one or more competent persons to conduct an investigation on its behalf.

(4) Subsection (5) applies if it appears to the Authority that there are circumstances suggesting that--

(a) a person may have contravened section 20;

(b) a person may be guilty of an offence under prescribed regulations relating to money laundering;

(d) an individual may not be a fit and proper person to perform functions in relation to a regulated activity carried on by an authorised or exempt person;

(e) an individual may have performed or agreed to perform a function in breach of a prohibition order;

(f) an authorised or exempt person may have failed to comply with section 56(6);

(g) an authorised person may have failed to comply with section 59(1) or (2);

(h) a person in relation to whom the Authority has given its approval under section 59 may not be a fit and proper person to perform the function to which that approval relates; or

(i) a person may be guilty of misconduct for the purposes of section 66.

(5) The Authority may appoint one or more competent persons to conduct an investigation on its behalf.

(6) "Investigating authority" means the Authority or the Secretary of State.

Assistance to overseas regulators

169 Investigations etc. in support of overseas regulator

(1) At the request of an overseas regulator, the Authority may--

(a) exercise the power conferred by section 165; or

(b) appoint one or more competent persons to investigate any matter.

(2) An investigator has the same powers as an investigator appointed under section 168(3) (as a result of subsection (1) of that section).

(3) If the request has been made by a competent authority in pursuance of any Community obligation the Authority must, in deciding whether or not to exercise its investigative power, consider whether its exercise is necessary to comply with any such obligation.

(4) In deciding whether or not to exercise its investigative power, the Authority may take into account in particular--

(a) whether in the country or territory of the overseas regulator concerned, corresponding assistance would be given to a United Kingdom regulatory authority;

(b) whether the case concerns the breach of a law, or other requirement, which has no close parallel in the United Kingdom or involves the assertion of a jurisdiction not recognised by the United Kingdom;

(d) whether it is otherwise appropriate in the public interest to give the assistance sought.

(5) The Authority may decide that it will not exercise its investigative power unless the overseas regulator undertakes to make such contribution towards the cost of its exercise as the Authority considers appropriate.

(6) Subsections (4) and (5) do not apply if the Authority considers that the exercise of its investigative power is necessary to comply with a Community obligation.

(7) If the Authority has appointed an investigator in response to a request from an overseas regulator, it may direct the investigator to permit a representative of that regulator to attend, and take part in, any interview conducted for the purposes of the investigation.

(8) A direction under subsection (7) is not to be given unless the Authority is satisfied that any information obtained by an overseas regulator as a result of the interview will be subject to safeguards equivalent to those contained in Part XXIII.

(9) The Authority must prepare a statement of its policy with respect to the conduct of interviews in relation to which a direction under subsection (7) has been given.

(10) The statement requires the approval of the Treasury.

(11) If the Treasury approve the statement, the Authority must publish it.

(12) No direction may be given under subsection (7) before the statement has been published.

(13) "Overseas regulator" has the same meaning as in section 195.

(14) "Investigative power" means one of the powers mentioned in subsection (1).

(15) "Investigator" means a person appointed under subsection (1)(b).

Conduct of investigations

170 Investigations: general

(1) This section applies if an investigating authority appoints one or more competent persons ("investigators") under section 167 or 168(3) or (5) to conduct an investigation on its behalf.

(2) The investigating authority must give written notice of the appointment of an investigator to the person who is the subject of the investigation ("the person under investigation").

(3) Subsections (2) and (9) do not apply if --

(a) the investigator is appointed as a result of section 168(1) or (4) and the investigating authority believes that the notice required by subsection (2) or (9) would be likely to result in the investigation being frustrated; or

(b) the investigator is appointed as a result of subsection (2) of section 168.

(4) A notice under subsection (2) must--

(a) specify the provisions under which, and as a result of which, the investigator was appointed; and

(b) state the reason for his appointment.

(5) Nothing prevents the investigating authority from appointing a person who is a member of its staff as an investigator.

(6) An investigator must make a report of his investigation to the investigating authority.

(7) The investigating authority may, by a direction to an investigator, control--

(a) the scope of the investigation;

(b) the period during which the investigation is to be conducted;

(d) the reporting of the investigation.

(8) A direction may, in particular--

(a) confine the investigation to particular matters;

(b) extend the investigation to additional matters;

(c) require the investigator to discontinue the investigation or to take only such steps as are specified in the direction;

(d) require the investigator to make such interim reports as are so specified.

(9) If there is a change in the scope or conduct of the investigation and, in the opinion of the investigating authority, the person subject to investigation is likely to be significantly prejudiced by not being made aware of it, that person must be given written notice of the change.

(10) "Investigating authority", in relation to an investigator, means--

(a) the Authority, if the Authority appointed him;

(b) the Secretary of State, if the Secretary of State appointed him.

171 Powers of persons appointed under section 167

(1) An 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--

(a) to attend before the investigator at a specified time and place and answer questions; or

(b) otherwise to provide such information as the investigator may require.

(2) An investigator may also require any person to produce at a specified time and place any specified documents or documents of a specified description.

(3) A requirement under subsection (1) or (2) may be imposed only so far as the investigator concerned reasonably considers the question, provision of information or production of the document to be relevant to the purposes of the investigation.

(4) For the purposes of this section and section 172, a person is connected with the person under investigation ("A") if he is or has at any relevant time been--

(a) a member of A's group;

(b) a controller of A;

(d) in relation to A, a person mentioned in Part I or II of Schedule 15.

(5) "Investigator" means a person conducting an investigation under section 167.

(6) "Specified" means specified in a notice in writing.

172 Additional power of persons appointed as a result of section 168(1) or (4)

(1) An investigator has the powers conferred by section 171.

(2) An investigator may also require a person who is neither the subject of the investigation ("the person under investigation") nor a person connected with the person under investigation--

(a) to attend before the investigator at a specified time and place and answer questions; or

(b) otherwise to provide such information as the investigator may require for the purposes of the investigation.

(3) A requirement may only be imposed under subsection (2) if the investigator is satisfied that the requirement is necessary or expedient for the purposes of the investigation.

(4) "Investigator" means a person appointed as a result of subsection (1) or (4) of section 168.

(5) "Specified" means specified in a notice in writing.

173 Powers of persons appointed as a result of section 168(2)

(1) Subsections (2) to (4) apply if an investigator considers that any person ("A") is or may be able to give information which is or may be relevant to the investigation.

(2) The investigator may require A--

(a) to attend before him at a specified time and place and answer questions; or

(b) otherwise to provide such information as he may require for the purposes of the investigation.

(3) The investigator may also require A to produce at a specified time and place any specified documents or documents of a specified description which appear to the investigator to relate to any matter relevant to the investigation.

(4) The investigator may also otherwise require A to give him all assistance in connection with the investigation which A is reasonably able to give.

(5) "Investigator" means a person appointed under subsection (3) of section 168 (as a result of subsection (2) of that section).

174 Admissibility of statements made to investigators

(1) A statement made to an investigator by a person in compliance with an information requirement is admissible in evidence in any proceedings, so long as it also complies with any requirements governing the admissibility of evidence in the circumstances in question.

(2) But in criminal proceedings in which that person is charged with an offence to which this subsection applies or in proceedings in relation to action to be taken against that person under section 123--

(a) no evidence relating to the statement may be adduced, and

(b) no question relating to it may be asked,

by or on behalf of the prosecution or (as the case may be) the Authority, 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.

(3) Subsection (2) applies to any offence other than one--

(a) under section 177(4) or 398;

(b) under section 5 of the [1911 c. 6.] Perjury Act 1911 (false statements made otherwise than on oath);

(c) under section 44(2) of the [1995 c. 39.] Criminal Law (Consolidation)(Scotland) Act 1995 (false statements made otherwise than on oath); or

(d) under Article 10 of the [S.I. 1979/1714 (N.I. 19).] Perjury (Northern Ireland) Order 1979.

(4) "Investigator" means a person appointed under section 167 or 168(3) or (5).

(5) "Information requirement" means a requirement imposed by an investigator under section 171, 172, 173 or 175.

175 Information and documents: supplemental provisions

(1) If the Authority or an investigator has power under this Part to require a person to produce a document but it appears that the document is in the possession of a third person, that power may be exercised in relation to the third person.

(2) If a document is produced in response to a requirement imposed under this Part, the person to whom it is produced may--

(a) take copies or extracts from the document; or

(b) require the person producing the document, or any relevant person, to provide an explanation of the document.

(3) If a person who is required under this Part to produce a document fails to do so, the Authority or an investigator may require him to state, to the best of his knowledge and belief, where the document is.

(4) A lawyer may be required under this Part to furnish the name and address of his client.

(5) No person may be required under this Part to disclose information or produce a document in respect of which he owes an obligation of confidence by virtue of carrying on the business of banking unless--

(a) he is the person under investigation or a member of that person's group;

(b) the person to whom the obligation of confidence is owed is the person under investigation or a member of that person's group;

(d) the imposing on him of a requirement with respect to such information or document has been specifically authorised by the investigating authority.

(6) If a person claims a lien on a document, its production under this Part does not affect the lien.

(7) "Relevant person", in relation to a person who is required to produce a document, means a person who--

(a) has been or is or is proposed to be a director or controller of that person;

(b) has been or is an auditor of that person;

(d) has been or is an employee of that person.

(8) "Investigator" means a person appointed under section 167 or 168(3) or (5).

176 Entry of premises under warrant

(1) A justice of the peace may issue a warrant under this section if satisfied on information on oath given by or on behalf of the Secretary of State, the Authority or an investigator that there are reasonable grounds for believing that the first, second or third set of conditions is satisfied.

(2) The first set of conditions is--

(a) that a person on whom an information requirement has been imposed has failed (wholly or in part) to comply with it; and

(b) that on the premises specified in the warrant--

(i) there are documents which have been required; or

(ii) there is information which has been required.

(3) The second set of conditions is--

(a) that the premises specified in the warrant are premises of an authorised person or an appointed representative;

(b) that there are on the premises documents or information in relation to which an information requirement could be imposed; and

(i) it would not be complied with; or

(ii) the documents or information to which it related would be removed, tampered with or destroyed.

(4) The third set of conditions is--

(a) that an offence mentioned in section 168 for which the maximum sentence on conviction on indictment is two years or more has been (or is being) committed by any person;

(b) that there are on the premises specified in the warrant documents or information relevant to whether that offence has been (or is being) committed;

(d) that if such a requirement were to be imposed--

(i) it would not be complied with; or

(ii) the documents or information to which it related would be removed, tampered with or destroyed.

(5) A warrant under this section shall authorise a constable--

(a) to enter the premises specified in the warrant;

(b) to search the premises and take possession of any documents or information appearing to be documents or information of a kind in respect of which a warrant under this section was issued ("the relevant kind") or to take, in relation to any such documents or information, any other steps which may appear to be necessary for preserving them or preventing interference with them;

(d) to require any person on the premises to provide an explanation of any document or information appearing to be of the relevant kind or to state where it may be found; and

(e) to use such force as may be reasonably necessary.

(6) In England and Wales, sections 15(5) to (8) and section 16 of the [1984 c. 60.] Police and Criminal Evidence Act 1984 (execution of search warrants and safeguards) apply to warrants issued under this section.

(7) In Northern Ireland, Articles 17(5) to (8) and 18 of the [S.I. 1989/1341 (N.I. 12).] Police and Criminal Evidence (Northern Ireland) Order 1989 apply to warrants issued under this section.

(8) Any document of which possession is taken under this section may be retained--

(a) for a period of three months; or

(b) if within that period proceedings to which the document is relevant are commenced against any person for any criminal offence, until the conclusion of those proceedings.

(9) In the application of this section to Scotland--

(a) for the references to a justice of the peace substitute references to a justice of the peace or a sheriff; and

(b) for the references to information on oath substitute references to evidence on oath.

(10) "Investigator" means a person appointed under section 167 or 168(3) or (5).

(11) "Information requirement" means a requirement imposed--

(a) by the Authority under section 165 or 175; or

(b) by an investigator under section 171, 172, 173 or 175.

Offences

177 Offences

(1) If a person other than the investigator ("the defaulter") fails to comply with a requirement imposed on him under this Part the person imposing the requirement may certify that fact in writing to the court.

(2) If the court is satisfied that the defaulter 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 officer) as if he were in contempt.

(3) A person who knows or suspects that an investigation is being or is likely to be conducted under this Part is guilty of an offence if--

(a) he falsifies, conceals, destroys or otherwise disposes of a document which he knows or suspects is or would be relevant to such an investigation, or

(b) he causes or permits the falsification, concealment, destruction or disposal of such a document,

unless he shows that he had no intention of concealing facts disclosed by the documents from the investigator.

(4) A person who, in purported compliance with a requirement imposed on him under this Part--

(a) provides information which he knows to be false or misleading in a material particular, or

(b) recklessly provides information which is false or misleading in a material particular,

is guilty of an offence.

(5) A person guilty of an offence under subsection (3) or (4) is liable--

(a) on summary conviction, to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum, or both;

(b) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine, or both.

(6) Any person who intentionally obstructs the exercise of any rights conferred by a warrant under section 176 is guilty of an offence and liable on summary conviction to imprisonment for a term not exceeding three months or a fine not exceeding level 5 on the standard scale, or both.

(7) "Court" means--

(a) the High Court;

(b) in Scotland, the Court of Session.

Part XII Control Over Authorised Persons

Notice of control

178 Obligation to notify the Authority

(1) If a step which a person proposes to take would result in his acquiring--

(a) control over a UK authorised person,

(b) an additional kind of control over a UK authorised person, or

he must notify the Authority of his proposal.

(2) A person who, without himself taking any such step, acquires any such control or additional or increased control must notify the Authority before the end of the period of 14 days beginning with the day on which he first becomes aware that he has acquired it.

(3) A person who is under the duty to notify the Authority imposed by subsection (1) must also give notice to the Authority on acquiring, or increasing, the control in question.

(4) In this Part "UK authorised person" means an authorised person who--

(a) is a body incorporated in, or an unincorporated association formed under the law of, any part of the United Kingdom; and

(b) is not a person authorised as a result of paragraph 1 of Schedule 5.

(5) A notice under subsection (1) or (2) is referred to in this Part as "a notice of control".

Acquiring, increasing and reducing control

179 Acquiring control

(1) For the purposes of this Part, a person ("the acquirer") acquires control over a UK authorised person ("A") on first falling within any of the cases in subsection (2).

(2) The cases are where the acquirer--

(a) holds 10% or more of the shares in A;

(b) is able to exercise significant influence over the management of A by virtue of his shareholding in A;

(d) is able to exercise significant influence over the management of P by virtue of his shareholding in P;

(e) is entitled to exercise, or control the exercise of, 10% or more of the voting power in A;

(f) is able to exercise significant influence over the management of A by virtue of his voting power in A;

(g) is entitled to exercise, or control the exercise of, 10% or more of the voting power in P; or

(h) is able to exercise significant influence over the management of P by virtue of his voting power in P.

(3) In subsection (2) "the acquirer" means--

(a) the acquirer;

(b) any of the acquirer's associates; or

(4) For the purposes of this Part, each of the following is to be regarded as a kind of control--

(a) control arising as a result of the holding of shares in A;

(b) control arising as a result of the holding of shares in P;

(d) control arising as a result of the entitlement to exercise, or control the exercise of, voting power in P.

(5) For the purposes of this section and sections 180 and 181, "associate", "shares" and "voting power" have the same meaning as in section 422.

180 Increasing control

(1) For the purposes of this Part, a controller of a person ("A") who is a UK authorised person increases his control over A if--

(a) the percentage of shares held by the controller in A increases by any of the steps mentioned in subsection (2);

(b) the percentage of shares held by the controller in a parent undertaking ("P") of A increases by any of the steps mentioned in subsection (2);

(c) the percentage of voting power which the controller is entitled to exercise, or control the exercise of, in A increases by any of the steps mentioned in subsection (2);

(d) the percentage of voting power which the controller is entitled to exercise, or control the exercise of, in P increases by any of the steps mentioned in subsection (2); or

(e) the controller becomes a parent undertaking of A.

(2) The steps are--

(a) from below 10% to 10% or more but less than 20%;

(b) from below 20% to 20% or more but less than 33%;

(d) from below 50% to 50% or more.

(3) In paragraphs (a) to (d) of subsection (1) "the controller" means--

(a) the controller;

(b) any of the controller's associates; or

(4) In the rest of this Part "acquiring control" or "having control" includes--

(a) acquiring or having an additional kind of control; or

(b) acquiring an increase in a relevant kind of control, or having increased control of a relevant kind.

181 Reducing control

(1) For the purposes of this Part, a controller of a person ("A") who is a UK authorised person reduces his control over A if--

(a) the percentage of shares held by the controller in A decreases by any of the steps mentioned in subsection (2),

(b) the percentage of shares held by the controller in a parent undertaking ("P") of A decreases by any of the steps mentioned in subsection (2),

(c) the percentage of voting power which the controller is entitled to exercise, or control the exercise of, in A decreases by any of the steps mentioned in subsection (2),

(d) the percentage of voting power which the controller is entitled to exercise, or control the exercise of, in P decreases by any of the steps mentioned in subsection (2), or

(e) the controller ceases to be a parent undertaking of A,

unless the controller ceases to have the kind of control concerned over A as a result.

(2) The steps are--

(a) from 50% or more to 33% or more but less than 50%;

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