The Act
32.The Act is in 30 Parts.
Part I, The Regulator. This Part sets out the Authority’s general duties and statutory objectives. It also, with Schedule 1, imposes requirements about the Authority’s constitution and accountability and about the exercise of certain of its functions.
Part II, Regulated and Prohibited Activities. This Part provides a power for the Treasury to set the scope of regulation by order, within the overall object and purpose of the Act. It prohibits persons who are not authorised (or exempt) from carrying on a regulated activity in the United Kingdom and from holding themselves out as being authorised or exempt. It also sets out arrangements for the regulation of financial promotion.
Part III, Authorisation and Exemption. This Part sets out which persons are to be authorised for the purposes of the Act and gives the Treasury power to exempt certain persons from the requirement to be authorised. Authorised persons will include those persons given permission under Part IV and certain persons from other member States who are authorised in accordance with arrangements under the Treaty of Rome (the “Treaty”) and the single market directives.
Part IV, Permission to Carry on Regulated Activities. This Part entitles persons to apply for the Authority’s permission to carry on particular regulated activities and makes provision about the giving, variation and revocation of such permissions by the Authority.
Part V, Performance of Regulated Activities. This Part requires persons, such as employees and office holders, who perform specified types of function for authorised persons, to be approved by the Authority. It requires such approved persons to behave in a way that complies with any statements of principle issued by the Authority and gives the Authority certain disciplinary powers. It also gives the Authority powers to prohibit persons from carrying out functions in relation to regulated activities.
Part VI, Official Listing. This Part sets out the powers of the competent authority and the obligations of issuers listed securities. It makes provision for the maintenance of, and admission to, the official list, and for the making of listing rules (including listing rules in relation to sponsors).
Part VII, Control of Business Transfers. This Part creates a mechanism for the transfer of banking and insurance business, subject to a court procedure and regulatory scrutiny.
Part VIII, Penalties for Market Abuse. This Part confers on the Authority power to impose penalties for market abuse. The Act sets out the kinds of behaviour which constitute market abuse and requires the Authority to produce a code which help to determine whether particular behaviour amounts to market abuse.
Part IX, Hearings and Appeals. This Part establishes the Tribunal and sets out the procedure for referring cases to it where the Authority has decided to take regulatory action under the various powers conferred by the Act. It gives a right to appeal against a decision of the Tribunal on a point of law.
Part X, Rules and Guidance. This Part confers powers upon the Authority to set regulatory requirements for persons authorised under the Act. It gives the Authority power to issue guidance on requirements imposed by and under the Act. It also sets out the procedures that the Authority must follow in exercising those powers.
Part XI, Information Gathering and Investigations. This Part sets out the powers of the Authority and of the Secretary of State to require the production of information and documents, to require reports to be prepared, to conduct investigations and to gain access to premises with a warrant.
Part XII, Control over Authorised Persons. This Part requires persons who propose to acquire control over certain authorised persons to notify, and secure the approval of, the Authority.
Part XIII, Incoming Firms: Intervention by the Authority. This Part confers power on the Authority to intervene in the activities of authorised persons from other member States who are authorised in accordance with rights under the Treaty and EC directives. It sets out the grounds on which the power is exercisable and the procedure for exercising it.
Part XIV, Disciplinary Measures. This Part gives the Authority powers to issue public statements about, or impose penalties on, authorised persons who fail to comply with requirements imposed by or under the Act.
Part XV, The Financial Services Compensation Scheme. This Part requires the Authority to create a scheme for the payment of compensation to consumers who suffer financial loss as a consequence of the inability of an authorised person to meet its liabilities. It also confers a certain number of powers on the manager of the scheme.
Part XVI, The Ombudsman Scheme. This Part requires the Authority to establish a single, compulsory ombudsman scheme for the speedy and informal resolution of disputes between members of the public and authorised persons and confers certain powers on the operator of the ombudsman scheme for that purpose. It also provides for the ombudsman to adjudicate on certain other types of dispute, on a voluntary basis.
Part XVII, Collective Investment Schemes. This Part provides for the regulation of collective investment schemes.
Part XVIII, Recognised Investment Exchanges and Clearing Houses. This Part sets out the regulatory regime for investment exchanges and clearing houses and provides for competition scrutiny of the regulatory provisions and practices of those bodies.
Part XIX, Lloyd’s. This Part makes the Society of Lloyd’s an authorised person and gives the Authority certain powers to direct the affairs of the Society, its members and Lloyd’s managing and members’ agents. It also provides for the regulation of former underwriting members of the Society.
Part XX, Provision of Financial Services by Members of the Professions. This Part creates an exemption for members of the professions providing financial services to clients in particular circumstances and gives the Authority an oversight role and certain powers in relation to firms that benefit from the exemption.
Part XXI, Mutual Societies. This Part confers powers on the Treasury to transfer to the Authority and to the Treasury certain functions relating to the registration and regulation of building societies, friendly societies and industrial and provident societies and certain other mutual societies. It also confers powers to dissolve certain statutory bodies.
Part XXII, Auditors and Actuaries. This Part concerns the appointment of auditors and actuaries by authorised persons and their responsibilities.
Part XXIII, Public Record and Disclosure of Information. This Part requires the Authority to maintain a public record of authorised (and certain other) persons, and makes provision about the purposes for which confidential information may be disclosed by and to the Authority and other persons having functions under the Act.
Part XXIV, Insolvency. This Part gives the Authority powers to ask the courts to wind up, or initiate other insolvency procedures against, authorised (and certain other) persons. It also enables the Authority to be heard by the court when such proceedings are commenced by third parties.
Part XXV, Injunctions and Restitution. This Part gives the Authority and the Secretary of State powers to seek injunctions in relation to regulatory contraventions and offences for which the Authority has powers to prosecute. It also provides for restitution to be paid to those who have incurred a loss as a result of such a contravention.
Part XXVI, Notices. This Part contains provisions relating to the procedures which the Authority must follow when giving notice of proposed actions under various provisions of the Act. It relates, for example, to decisions not to give permissions or to refuse applications for approvals and to decisions to take regulatory action, such as imposing penalties or making public statements.
Part XXVII, Offences. This Part creates certain offences, including making misleading statements and supplying false information to the Authority. It also makes general provision about offences under the Act and contains provision about the institution of proceedings, for example under Part V of the Criminal Justice Act 1993 (insider dealing) and in relation to money laundering.
Part XXVIII, Miscellaneous. This Part contains provisions giving the Treasury power to direct the Authority and certain other bodies to comply with the UK’s international obligations, including European Union decisions to take reciprocal trade action. It also contains provisions concerning gaming contracts, reviews of past business and a number of other matters.
Part XXIX, Interpretation.
Part XXX, Supplemental. This Part contains provisions dealing with the commencement of the legislation and its territorial scope. It confers certain powers on the Treasury in relation to consequential and transitional provisions and with Schedules 18 and 20 to 22 makes certain amendments to other legislation.
