Financial Services and Markets Act 2000

[F1PART 6U.K.Requirements

RequirementsU.K.

40(1)A requirement may be imposed on a Gibraltar-based person in accordance with this Part of this Schedule—U.K.

(a)by a UK regulator as part of the process of considering a notification under Part 3 or 4 of this Schedule (see paragraphs 41 to 43),

(b)on the initiative of the Gibraltar regulator (see paragraphs 44 to 48), or

(c)on the UK regulator's initiative (see paragraphs 49 to 52).

(2)Requirements imposed on a Gibraltar-based person in accordance with this Part of this Schedule may be varied or cancelled in accordance with this Part of this Schedule—

(a)on the initiative of the Gibraltar regulator (see paragraphs 44 to 48), or

(b)on the UK regulator's initiative (see paragraphs 49 to 52).

Imposing requirements in connection with Part 3 or 4 notificationU.K.

41(1)This paragraph applies where a UK regulator has received—U.K.

(a)a notification for the purposes of paragraph 12 in respect of the carrying on of an activity by a Gibraltar-based person, or

(b)a notification for the purposes of paragraph 22 in respect of the variation of a Gibraltar-based person's Schedule 2A permission.

(2)A UK regulator may exercise the powers under this paragraph where it considers that it is desirable to do so in order to advance one or more of its objectives.

(3)The FCA may impose requirements on the Gibraltar-based person.

(4)The PRA may impose requirements on the Gibraltar-based person if—

(a)the notification mentioned in sub-paragraph (1) relates to activities which consist of or include PRA-regulated activities, or

(b)the Gibraltar-based person is a PRA-authorised person.

(5)A requirement may not be imposed under this paragraph—

(a)after the end of the period for considering the notification mentioned in sub-paragraph (1), or

(b)so as to take effect before the end of that period.

(6)In the case of the FCA, the reference in this paragraph to its objectives is a reference only to its operational objectives.

Imposing requirements in connection with Part 3 or 4 notification: procedureU.K.

42(1)If a UK regulator proposes to impose a requirement on a Gibraltar-based person under paragraph 41, it must—U.K.

(a)give the person a warning notice,

(b)give the Gibraltar regulator a written notice of the proposed requirement, stating the UK regulator's reasons for imposing the requirement, and

(c)consider any representations made by the Gibraltar regulator within the period specified in the notice.

(2)If a UK regulator decides to impose a requirement on a Gibraltar-based person under paragraph 41, it must give the person a decision notice.

Right to refer matters to the TribunalU.K.

43U.K.If a UK regulator gives a Gibraltar-based person a decision notice under paragraph 42, the person may refer the matter to the Tribunal.

Gibraltar regulator's initiative: notificationU.K.

44(1)If the appropriate UK regulator receives a notification from the Gibraltar regulator (see paragraph 46)—U.K.

(a)asking for a requirement to be imposed on a Gibraltar-based person with a Schedule 2A permission, or

(b)asking for a requirement imposed on a Gibraltar-based person with a Schedule 2A permission to be varied or cancelled,

the requirement is imposed, varied or cancelled as specified in the notification at the end of the period for considering the notification, as it relates to the requirement (see paragraph 47).

(2)The requirement is not imposed, varied or cancelled under sub-paragraph (1) if, during the period for considering the notification—

(a)the appropriate UK regulator rejects the notification, as it relates to the requirement (see paragraph 48), or

(b)the Gibraltar regulator withdraws the notification, as it relates to the requirement.

(3)References in this Part of this Schedule to a notification are references to a notification for the purposes of this paragraph, except where otherwise stated.

Gibraltar regulator's initiative: the appropriate UK regulatorU.K.

45U.K.In relation to a notification, “the appropriate UK regulator” means—

(a)the PRA, in a case where the approved activities to which the notification relates consist of or include PRA-regulated activities, and

(b)the FCA, in any other case.

Gibraltar regulator's initiative: notifying the UK regulatorU.K.

46U.K.A notification must—

(a)state the requirement to be imposed or the desired variation or cancellation (as appropriate),

(b)state the reason for asking for the requirement to be imposed, varied or cancelled,

(c)state that the Gibraltar regulator consents to the requirement being imposed, varied or cancelled, and

(d)contain, or be accompanied by, any further information specified in a direction given by the appropriate UK regulator under paragraph 57 and in force when the notification is given.

Gibraltar regulator's initiative: considering a notificationU.K.

47(1)Where the appropriate UK regulator receives a notification, it must acknowledge receipt in writing without delay.U.K.

(2)The period for considering a notification is—

(a)so far as it relates to a requirement to be imposed on a Gibraltar-based person with a branch in the United Kingdom, the period of two months beginning with the day on which the appropriate UK regulator receives the notification, and

(b)so far as it relates to any other requirement, the period of one month beginning with that day.

(3)If, before the end of the period described in sub-paragraph (2), the appropriate UK regulator gives the Gibraltar-based person a confirmation notice in respect of a requirement specified in the notification, then the period for considering the notification as it relates to the requirement ends when the notice is given.

(4)A “confirmation notice” is a written notice confirming that the requirement is imposed, varied or cancelled as requested in the notification.

Gibraltar regulator's initiative: rejecting a notificationU.K.

48(1)The appropriate UK regulator may not reject a notification so far as it relates to a requirement unless—U.K.

(a)it is required to do so under sub-paragraph (3), or

(b)it has power to do under sub-paragraph (4) or (5).

(2)A notification is rejected when the appropriate UK regulator gives a written notice of the rejection to the Gibraltar regulator.

(3)The appropriate UK regulator must reject a notification if satisfied that the notification does not satisfy one or more of the requirements in paragraph 46.

(4)The FCA may reject a notification, so far as it relates to a requirement, if it appears to the FCA that it is desirable to do so in order to advance one or more of its operational objectives.

(5)The PRA may reject a notification, so far as it relates to a requirement, if it appears to the PRA that it is desirable to do so in order to advance one or more of its objectives.

(6)The rejection of a notification does not prevent the Gibraltar regulator from giving a further notification in respect of the same requirement.

UK regulator's initiative: imposing, varying and cancelling requirementsU.K.

49(1)A UK regulator may exercise the powers under this paragraph in relation to a Gibraltar-based person only where one of the own-initiative conditions is satisfied (see paragraph 28).U.K.

(2)The FCA may—

(a)impose a requirement on a Gibraltar-based person with a Schedule 2A permission,

(b)vary a requirement imposed by the FCA under this Part of this Schedule, or

(c)cancel such a requirement.

(3)The PRA may—

(a)impose a requirement on a Gibraltar-based person with a Schedule 2A permission where the person is a PRA-authorised person,

(b)vary a requirement imposed by the PRA under this Part of this Schedule, or

(c)cancel such a requirement.

UK regulator's initiative: procedure for imposing or varying requirementsU.K.

50(1)The imposition or variation of a requirement under paragraph 49 takes effect—U.K.

(a)immediately, if the notice given under sub-paragraph (3) states that is the case,

(b)on such date as may be specified in the notice, or

(c)if no date is specified in the notice, when the matter to which the notice relates is no longer open to review.

(2)The imposition or variation of a requirement under paragraph 49 may be expressed to take effect immediately, or on a specified date, only if the UK regulator reasonably considers that it is necessary for the imposition or variation of the requirement to take effect immediately or on that date, having regard to the own-initiative condition on which it is relying for the purposes of paragraph 49(1).

(3)If a UK regulator—

(a)proposes to exercise the power under paragraph 49 to impose a requirement on a Gibraltar-based person, or vary a requirement imposed on a Gibraltar-based person, or

(b)exercises that power so as to impose a requirement on a Gibraltar-based person, or vary a requirement imposed on a Gibraltar-based person, with immediate effect,

it must give the person a written notice.

(4)The notice must—

(a)give details of the requirement or its variation,

(b)state the UK regulator's reasons for imposing or varying the requirement,

(c)inform the Gibraltar-based person that the person may make representations to the UK regulator within the period specified in the notice (whether or not the Gibraltar-based person has referred the matter to the Tribunal),

(d)inform the Gibraltar-based person of when the imposition or variation of the requirement takes effect, and

(e)inform the Gibraltar-based person of the person's right to refer the matter to the Tribunal.

(5)The UK regulator may extend the period allowed under the notice for making representations.

(6)If, having considered any representations made by the Gibraltar-based person, the UK regulator decides—

(a)to impose the requirement or vary the requirement in the way proposed, or

(b)if the requirement has been imposed or varied, not to rescind its imposition or variation,

it must give the Gibraltar-based person a written notice.

(7)A notice under sub-paragraph (6) must inform the Gibraltar-based person of the person's right to refer the matter to the Tribunal.

(8)If, having considered any representations made by the Gibraltar-based person, the UK regulator decides—

(a)not to impose the requirement or vary the requirement in the way proposed,

(b)to impose a different requirement or vary the requirement in a different way, or

(c)to rescind a requirement or variation which has effect,

it must give the Gibraltar-based person a written notice.

(9)A notice under sub-paragraph (8)(b) must comply with sub-paragraph (4).

(10)If a notice under this paragraph informs a person of the person's right to refer a matter to the Tribunal, it must give an indication of the procedure for such a reference.

(11)For the purposes of sub-paragraph (1)(c), whether a matter is open to review is to be determined in accordance with section 391(8).

UK regulator's initiative: procedure for cancellationU.K.

51(1)If a UK regulator proposes to exercise a power under paragraph 49 to cancel a requirement imposed on a Gibraltar-based person, it must give the person a written notice.U.K.

(2)The notice must specify the date on which the cancellation takes effect.

Right to refer matters to the TribunalU.K.

52U.K.A Gibraltar-based person who is aggrieved by the exercise by a UK regulator of a power under paragraph 49 to impose a requirement on the person, or vary a requirement imposed on the person, may refer the matter to the Tribunal.

Assets requirementsU.K.

53(1)This paragraph makes provision about a requirement imposed on a Gibraltar-based person (“G”) by a UK regulator under this Part of this Schedule—U.K.

(a)prohibiting the disposal of, or other dealing with, any of G's assets (whether in the United Kingdom, Gibraltar or elsewhere) or restricting such disposals or dealings, or

(b)requiring that some or all of G's assets, or some or all assets belonging to consumers (as defined in section 1G) but held by G or to G's order, must be transferred to and held by a trustee approved by the UK regulator.

(2)If a UK regulator—

(a)imposes a requirement described in sub-paragraph (1)(a), and

(b)gives notice of the requirement to an institution with whom G keeps an account,

the notice has the effects set out in sub-paragraph (3).

(3)Those effects are that—

(a)the institution does not act in breach of a contract with G if, having been instructed by G (or on G's behalf) to transfer a sum or otherwise make a payment out of G's account, it refuses to do so in the reasonably held belief that complying with the instruction would be incompatible with the requirement, and

(b)if the institution complies with such an instruction, it is liable to pay to the UK regulator an amount equal to the amount transferred from, or otherwise paid out of, G's account in contravention of the requirement.

(4)If a UK regulator imposes a requirement described in sub-paragraph (1)(b), no assets held by a person as trustee in accordance with the requirement may, while the requirement is in force, be released or dealt with except with the consent of the UK regulator.

(5)If, while a requirement described in sub-paragraph (1)(b) is in force, G creates a charge over any assets of G held in accordance with the requirement, the charge is (to the extent that it confers security over the assets) void against the liquidator and G's creditors.

(6)Assets held by a person as trustee are to be taken to be held by the trustee in accordance with a requirement mentioned in sub-paragraph (1)(b) only if—

(a)G has given the trustee a written notice that those assets are to be held by the trustee in accordance with the requirement, or

(b)they are assets into which assets to which paragraph (a) applies have been transposed by the trustee on the instruction of G.

(7)A person who contravenes sub-paragraph (4) commits an offence and is liable—

(a)on summary conviction in England and Wales, to a fine;

(b)on summary conviction in Scotland or Northern Ireland, to a fine not exceeding level 5 on the standard scale.

(8)In this paragraph, references to imposing a requirement (however expressed) include imposing a requirement by varying an existing requirement.

(9)In this paragraph, “charge” includes a mortgage (or, in Scotland, a security over property).

(10)Sub-paragraphs (4) and (6) do not affect any equitable interest or remedy in favour of a person who is a beneficiary of a trust as a result of a requirement described in sub-paragraph (1)(b).

Further provision about requirementsU.K.

54(1)A requirement imposed on a Gibraltar-based person under this Part of this Schedule may, among other things, be imposed so as to require the person—U.K.

(a)to take specified action, or

(b)to refrain from taking specified action.

(2)A requirement imposed under this Part of this Schedule may extend to activities which are not approved activities.

(3)A requirement imposed on a Gibraltar-based person under this Part of this Schedule may be imposed by reference to the person's relationship with—

(a)the person's group, or

(b)other members of the person's group.

(4)A requirement imposed under this Part of this Schedule may be expressed to expire at the end of a specified period (but the imposition of such a requirement does not affect the UK regulator's powers to impose a new requirement).

(5)A requirement imposed on a Gibraltar-based person under this Part of this Schedule may refer to the past conduct of the person (for example, by requiring the person concerned to review or take remedial action in respect of past conduct).

Contravention of requirement imposed under this PartU.K.

55(1)Contravention of a requirement imposed under this Part of this Schedule does not—U.K.

(a)make a person guilty of an offence,

(b)make a transaction void or unenforceable, or

(c)give rise to a right of action for breach of statutory duty, subject to sub-paragraph (2).

(2)A contravention of a requirement imposed under this Part of this Schedule is actionable at the suit of a person who suffers loss as a result of the contravention where—

(a)the action would be brought at the suit of a private person, or

(b)the conditions in sub-paragraph (3) are met,

subject to the defences and other incidents applying to actions for breach of statutory duty.

(3)The conditions mentioned in sub-paragraph (2)(b) are that—

(a)the action would be brought by a person acting in a fiduciary or representative capacity on behalf of a private person, and

(b)any remedy would be exclusively for the benefit of that private person and could not be obtained through an action brought otherwise than at the suit of the person acting in a fiduciary or representative capacity.

(4)Sub-paragraph (2) does not apply where the requirement contravened is a requirement to have or maintain financial resources.

(5)In this paragraph, “private person” has such meaning as may be prescribed.]