SCHEDULE 2PREVENTION OF RESTRICTIVE PRACTICES

Examination of rules and practices

1.—(1) The Treasury shall not approve a person as Operator of a relevant system unless they are satisfied that the rules and any guidance of which copies are furnished with the application for approval—

(a)do not have, and are not intended or likely to have, to any significant extent the effect of restricting, distorting or preventing competition; or

(b)if they have or are intended to have that effect to any significant extent, that the effect is not greater than is necessary for the protection of investors, or for compliance with Directive 2000/12/EC of the European Parliament and of the Council(1).

(2) Subject to subparagraph (5), the powers conferred by subparagraph (3) shall be exercisable by the Treasury if at any time it appears to them that—

(a)any rules made or guidance issued by an Operator;

(b)any practices of an Operator in his capacity as such; or

(c)any practices of a system-user,

have, or are intended or likely to have, to a significant extent the effect of restricting, distorting or preventing competition and that the effect is greater than is necessary for the protection of investors or for compliance with Directive 2000/12/EC of the European Parliament and of the Council.

(3) The powers exercisable under this paragraph are—

(a)to withdraw approval from the Operator;

(b)to direct the Operator to take specified steps for the purpose of securing that the rules, guidance or practices in question do not have the effect mentioned in subparagraph (2); or

(c)to make alterations in the rules of the Operator for that purpose.

(4) The practices referred to in subparagraph (2)(c) are practices in relation to business in respect of which system-users are subject to the rules of the Operator and which are required or contemplated by his rules or guidance or otherwise attributable to his conduct in his capacity as Operator.

(5) The provisions of Schedule 3 shall apply as regards the procedure to be followed before—

(a)refusing to approve a person as Operator of a relevant system pursuant to subparagraph (1); or

(b)exercising any of the powers conferred by subparagraph (3).