Financial Services and Markets Act 2000 (c. 8)

(The document as of February, 2008)

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(a) the firm had a Part IV permission in relation to the business which it is carrying on; and

(b) the Authority was entitled to exercise its power under that Part to vary that permission.

Section 31(1)(c).

SCHEDULE 4 Treaty Rights

Definitions

1 In this Schedule--

• "consumers" means persons who are consumers for the purposes of section 138;

• "Treaty firm" means a person--

  (a)

  whose head office is situated in an EEA State (its "home state") other than the United Kingdom; and

  (b)

  which is recognised under the law of that State as its national; and

• "home state regulator", in relation to a Treaty firm, means the competent authority of the firm's home state for the purpose of its home state authorisation (as to which see paragraph 3(1)(a)).

Firms qualifying for authorisation

2 Once a Treaty firm which is seeking to carry on a regulated activity satisfies the conditions set out in paragraph 3(1), it qualifies for authorisation.

Exercise of Treaty rights

3 (1) The conditions are that--

(a) the firm has received authorisation ("home state authorisation") under the law of its home state to carry on the regulated activity in question ("the permitted activity");

(b) the relevant provisions of the law of the firm's home state--

(i) afford equivalent protection; or

(ii) satisfy the conditions laid down by a Community instrument for the co-ordination or approximation of laws, regulations or administrative provisions of member States relating to the carrying on of that activity; and

(c) the firm has no EEA right to carry on that activity in the manner in which it is seeking to carry it on.

(2) A firm is not to be regarded as having home state authorisation unless its home state regulator has so informed the Authority in writing.

(3) Provisions afford equivalent protection if, in relation to the firm's carrying on of the permitted activity, they afford consumers protection which is at least equivalent to that afforded by or under this Act in relation to that activity.

(4) A certificate issued by the Treasury that the provisions of the law of a particular EEA State afford equivalent protection in relation to the activities specified in the certificate is conclusive evidence of that fact.

Permission

4 (1) On qualifying for authorisation under this Schedule, a Treaty firm has permission to carry on each permitted activity through its United Kingdom branch or by providing services in the United Kingdom.

(2) The permission is to be treated as being on terms equivalent to those to which the firm's home state authorisation is subject.

(3) If, on qualifying for authorisation under this Schedule, a firm has a Part IV permission which includes permission to carry on a permitted activity, the Authority must give a direction cancelling the permission so far as it relates to that activity.

(4) The Authority need not give a direction under sub-paragraph (3) if it considers that there are good reasons for not doing so.

Notice to Authority

5 (1) Sub-paragraph (2) applies to a Treaty firm which--

(a) qualifies for authorisation under this Schedule, but

(b) is not carrying on in the United Kingdom the regulated activity, or any of the regulated activities, which it has permission to carry on there.

(2) At least seven days before it begins to carry on such a regulated activity, the firm must give the Authority written notice of its intention to do so.

(3) If a Treaty firm to which sub-paragraph (2) applies has given notice under that sub-paragraph, it need not give such a notice if it again becomes a firm to which that sub-paragraph applies.

(4) Subsections (1), (3) and (6) of section 51 apply to a notice under sub-paragraph (2) as they apply to an application for a Part IV permission.

Offences

6 (1) A person who contravenes paragraph 5(2) is guilty of an offence.

(2) In proceedings against a person for an offence under sub-paragraph (1) it is a defence for him to show that he took all reasonable precautions and exercised all due diligence to avoid committing the offence.

(3) A person is guilty of an offence if in, or in connection with, a notice given by him under paragraph 5(2) he--

(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.

(4) A person guilty of an offence under this paragraph is liable--

(a) on summary conviction, to a fine not exceeding the statutory maximum;

(b) on conviction on indictment, to a fine.

Section 36.

SCHEDULE 5 Persons Concerned in Collective Investment Schemes

Authorisation

1 (1) A person who for the time being is an operator, trustee or depositary of a recognised collective investment scheme is an authorised person.

(2) "Recognised" means recognised by virtue of section 264.

(3) An authorised open-ended investment company is an authorised person.

Permission

2 (1) A person authorised as a result of paragraph 1(1) has permission to carry on, so far as it is a regulated activity--

(a) any activity, appropriate to the capacity in which he acts in relation to the scheme, of the kind described in paragraph 8 of Schedule 2;

(b) any activity in connection with, or for the purposes of, the scheme.

(2) A person authorised as a result of paragraph 1(3) has permission to carry on, so far as it is a regulated activity--

(a) the operation of the scheme;

(b) any activity in connection with, or for the purposes of, the operation of the scheme.

Section 41.

SCHEDULE 6 Threshold Conditions

Part I Part IV Permission

Legal status

1 (1) If the regulated activity concerned is the effecting or carrying out of contracts of insurance the authorised person must be a body corporate, a registered friendly society or a member of Lloyd's.

(2) If the person concerned appears to the Authority to be seeking to carry on, or to be carrying on, a regulated activity constituting accepting deposits, it must be--

(a) a body corporate; or

(b) a partnership.

Location of offices

2 (1) If the person concerned is a body corporate constituted under the law of any part of the United Kingdom--

(a) its head office, and

(b) if it has a registered office, that office,

must be in the United Kingdom.

(2) If the person concerned has its head office in the United Kingdom but is not a body corporate, it must carry on business in the United Kingdom.

Close links

3 (1) If the person concerned ("A") has close links with another person ("CL") the Authority must be satisfied--

(a) that those links are not likely to prevent the Authority's effective supervision of A; and

(b) if it appears to the Authority that CL is subject to the laws, regulations or administrative provisions of a territory which is not an EEA State ("the foreign provisions"), that neither the foreign provisions, nor any deficiency in their enforcement, would prevent the Authority's effective supervision of A.

(2) A has close links with CL if--

(a) CL is a parent undertaking of A;

(b) CL is a subsidiary undertaking of A;

(c) CL is a parent undertaking of a subsidiary undertaking of A;

(d) CL is a subsidiary undertaking of a parent undertaking of A;

(e) CL owns or controls 20% or more of the voting rights or capital of A; or

(f) A owns or controls 20% or more of the voting rights or capital of CL.

(3) "Subsidiary undertaking" includes all the instances mentioned in Article 1(1) and (2) of the Seventh Company Law Directive in which an entity may be a subsidiary of an undertaking.

Adequate resources

4 (1) The resources of the person concerned must, in the opinion of the Authority, be adequate in relation to the regulated activities that he seeks to carry on, or carries on.

(2) In reaching that opinion, the Authority may--

(a) take into account the person's membership of a group and any effect which that membership may have; and

(b) have regard to--

(i) the provision he makes and, if he is a member of a group, which other members of the group make in respect of liabilities (including contingent and future liabilities); and

(ii) the means by which he manages and, if he is a member of a group, which other members of the group manage the incidence of risk in connection with his business.

Suitability

5 The person concerned must satisfy the Authority that he is a fit and proper person having regard to all the circumstances, including--

(a) his connection with any person;

(b) the nature of any regulated activity that he carries on or seeks to carry on; and

(c) the need to ensure that his affairs are conducted soundly and prudently.

Part II Authorisation

Authorisation under Schedule 3

6 In relation to an EEA firm qualifying for authorisation under Schedule 3, the conditions set out in paragraphs 1 and 3 to 5 apply, so far as relevant, to--

(a) an application for permission under Part IV;

(b) exercise of the Authority's own-initiative power under section 45 in relation to a Part IV permission.

Authorisation under Schedule 4

7 In relation to a person who qualifies for authorisation under Schedule 4, the conditions set out in paragraphs 1 and 3 to 5 apply, so far as relevant, to--

(a) an application for an additional permission;

(b) the exercise of the Authority's own-initiative power under section 45 in relation to additional permission.

Part III Additional Conditions

8 (1) If this paragraph applies to the person concerned, he must, for the purposes of such provisions of this Act as may be specified, satisfy specified additional conditions.

(2) This paragraph applies to a person who--

(a) has his head office outside the EEA; and

(b) appears to the Authority to be seeking to carry on a regulated activity relating to insurance business.

(3) "Specified" means specified in, or in accordance with, an order made by the Treasury.

9 The Treasury may by order--

(a) vary or remove any of the conditions set out in Parts I and II;

(b) add to those conditions.

Section 72(2).

SCHEDULE 7

The Authority as Competent Authority for Part VI

General

1 This Act applies in relation to the Authority when it is exercising functions under Part VI as the competent authority subject to the following modifications.

The Authority's general functions

2 In section 2--

(a) subsection (4)(a) does not apply to listing rules;

(b) subsection (4)(c) does not apply to general guidance given in relation to Part VI; and

(c) subsection (4)(d) does not apply to functions under Part VI.

Duty to consult

3 Section 8 does not apply.

Rules

4 (1) Sections 149, 153, 154 and 156 do not apply.

(2) Section 155 has effect as if--

(a) the reference in subsection (2)(c) to the general duties of the Authority under section 2 were a reference to its duty under section 73; and

(b) section 99 were included in the provisions referred to in subsection (9).

Statements of policy

5 (1) Paragraph 5 of Schedule 1 has effect as if the requirement to act through the Authority's governing body applied also to the exercise of its functions of publishing statements under section 93.

(2) Paragraph 1 of Schedule 1 has effect as if section 93 were included in the provisions referred to in sub-paragraph (2)(d).

Penalties

6 Paragraph 16 of Schedule 1 does not apply in relation to penalties under Part VI (for which separate provision is made by section 100).

Fees

7 Paragraph 17 of Schedule 1 does not apply in relation to fees payable under Part VI (for which separate provision is made by section 99).

Exemption from liability in damages

8 Schedule 1 has effect as if--

(a) sub-paragraph (1) of paragraph 19 were omitted (similar provision being made in relation to the competent authority by section 102); and

(b) for the words from the beginning to "(a)" in sub-paragraph (3) of that paragraph, there were substituted "Sub-paragraph (2) does not apply".

Section 72(3).

SCHEDULE 8

Transfer of functions under Part VI

The power to transfer

1 (1) The Treasury may by order provide for any function conferred on the competent authority which is exercisable for the time being by a particular person to be transferred so as to be exercisable by another person.

(2) An order may be made under this paragraph only if--

(a) the person from whom the relevant functions are to be transferred has agreed in writing that the order should be made;

(b) the Treasury are satisfied that the manner in which, or efficiency with which, the functions are discharged would be significantly improved if they were transferred to the transferee; or

(c) the Treasury are satisfied that it is otherwise in the public interest that the order should be made.

Supplemental

2 (1) An order under this Schedule does not affect anything previously done by any person ("the previous authority") in the exercise of functions which are transferred by the order to another person ("the new authority").

(2) Such an order may, in particular, include provision--

(a) modifying or excluding any provision of Part VI, IX or XXVI in its application to any such functions;

(b) for reviews similar to that made, in relation to the Authority, by section 12;

(c) imposing on the new authority requirements similar to those imposed, in relation to the Authority, by sections 152, 155 and 354;

(d) as to the giving of guidance by the new authority;

(e) for the delegation by the new authority of the exercise of functions under Part VI and as to the consequences of delegation;

(f) for the transfer of any property, rights or liabilities relating to any such functions from the previous authority to the new authority;

(g) for the carrying on and completion by the new authority of anything in the process of being done by the previous authority when the order takes effect;

(h) for the substitution of the new authority for the previous authority in any instrument, contract or legal proceedings;

(i) for the transfer of persons employed by the previous authority to the new authority and as to the terms on which they are to transfer;

(j) making such amendments to any primary or subordinate legislation (including any provision of, or made under, this Act) as the Treasury consider appropriate in consequence of the transfer of functions effected by the order.

(3) Nothing in this paragraph is to be taken as restricting the powers conferred by section 428.

3 If the Treasury have made an order under paragraph 1 ("the transfer order") they may, by a separate order made under this paragraph, make any provision of a kind that could have been included in the transfer order.

Section 87(5).

SCHEDULE 9 Non-listing Prospectuses

General application of Part VI

1 The provisions of Part VI apply in relation to a non-listing prospectus as they apply in relation to listing particulars but with the modifications made by this Schedule.

References to listing particulars

2 (1) Any reference to listing particulars is to be read as a reference to a prospectus.

(2) Any reference to supplementary listing particulars is to be read as a reference to a supplementary prospectus.

General duty of disclosure

3 (1) In section 80(1), for "section 79" substitute "section 87".

(2) In section 80(2), omit "as a condition of the admission of the securities to the official list".

Supplementary prospectuses

4 In section 81(1), for "section 79 and before the commencement of dealings in the securities concerned following their admission to the official list" substitute "section 87 and before the end of the period during which the offer to which the prospectus relates remains open".

Exemption from liability for compensation

5 (1) In paragraphs 1(3) and 2(3) of Schedule 10, for paragraph (d) substitute--

" (d) the securities were acquired after such a lapse of time that he ought in the circumstances to be reasonably excused and, if the securities are dealt in on an approved exchange, he continued in that belief until after the commencement of dealings in the securities on that exchange. "

(2) After paragraph 8 of that Schedule, insert--

" Meaning of "approved exchange"

9 "Approved exchange" has such meaning as may be prescribed. "

Advertisements

6 In section 98(1), for "If listing particulars are, or are to be, published in connection with an application for listing," substitute "If a prospectus is, or is to be, published in connection with an application for approval, then, until the end of the period during which the offer to which the prospectus relates remains open,".

Fees

7 Listing rules made under section 99 may require the payment of fees to the competent authority in respect of a prospectus submitted for approval under section 87.

Section 90(2) and (5).

SCHEDULE 10 Compensation: Exemptions

Statements believed to be true

1 (1) In this paragraph "statement" means--

(a) any untrue or misleading statement in listing particulars; or

(b) the omission from listing particulars of any matter required to be included by section 80 or 81.

(2) A person does not incur any liability under section 90(1) for loss caused by a statement if he satisfies the court that, at the time when the listing particulars were submitted to the competent authority, he reasonably believed (having made such enquiries, if any, as were reasonable) that--

(a) the statement was true and not misleading, or

(b) the matter whose omission caused the loss was properly omitted,

and that one or more of the conditions set out in sub-paragraph (3) are satisfied.

(3) The conditions are that--

(a) he continued in his belief until the time when the securities in question were acquired;

(b) they were acquired before it was reasonably practicable to bring a correction to the attention of persons likely to acquire them;

(c) before the securities were acquired, he had taken all such steps as it was reasonable for him to have taken to secure that a correction was brought to the attention of those persons;

(d) he continued in his belief until after the commencement of dealings in the securities following their admission to the official list and they were acquired after such a lapse of time that he ought in the circumstances to be reasonably excused.

Statements by experts

2 (1) In this paragraph "statement" means a statement included in listing particulars which--

(a) purports to be made by, or on the authority of, another person as an expert; and

(b) is stated to be included in the listing particulars with that other person's consent.

(2) A person does not incur any liability under section 90(1) for loss in respect of any securities caused by a statement if he satisfies the court that, at the time when the listing particulars were submitted to the competent authority, he reasonably believed that the other person--

(a) was competent to make or authorise the statement, and

(b) had consented to its inclusion in the form and context in which it was included,

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