Legalize / United Kingdom / Public General Act

Financial Services and Markets Act 2000

Type Public General Act

Publication 2000-06-14

Last updated 2026-09-05

State In force

Department Statute Law Database

Source legislation.gov.uk

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articles Not indexed

An Act to make provision about the regulation of financial services and markets; to provide for the transfer of certain statutory functions relating to building societies, friendly societies, industrial and provident societies and certain other mutual societies; and for connected purposes.

Reform history JSON API

(a) is incorporated in the United Kingdom, or

(b) has a place of business in the United Kingdom.

(3) Condition B is that the parent undertaking is not itself an authorised person, a recognised investment exchange , a recognised clearing house or a recognised CSD.

(4) Condition C is that the parent undertaking is a financial institution of a kind prescribed by the Treasury by order.

(5) “Recognised UK investment exchange” means a recognised investment exchange that is not an overseas investment exchange as defined in section 313(1).

(6) The Treasury may by order—

(a) amend subsection (4) by omitting the words “a financial institution”, and

(b) make any amendment of subsection (2) that they consider desirable in connection with an amendment made under paragraph (a).

Power of direction

Power to direct qualifying parent undertaking

192C

(1) The appropriate regulator may give a direction under this section to a qualifying parent undertaking if either the general condition or the consolidated supervision condition is satisfied.

(2) The general condition is that the appropriate regulator considers that it is desirable to give the direction in order to advance—

(a) in the case of the FCA, one or more of its operational objectives;

(b) in the case of the PRA, any of its objectives.

(3) The consolidated supervision condition is that—

(a) the appropriate regulator is the competent authority for the purpose of consolidated supervision that is required, in relation to some or all of the members of the group of a qualifying authorised person, in pursuance of—

(i) any implementing provision contained in subordinate legislation (within the meaning of the Interpretation Act 1978) made otherwise than by any of the following—

(aa) statutory instrument, and

(bb) statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979 (S.I. 1979/1573 (N.I. 12)); ...

(ii) any other implementing provision (as amended from time to time), ...

(iii) Part 9C rules;

(iv) CRR rules; or

(v) rules made under section 192XA, and

(b) the appropriate regulator considers that the giving of the direction is desirable for the purpose of the effective consolidated supervision of the group.

(4) In subsection (3)(a)—

“consolidated supervision” includes supplemental supervision;

“implementing provision” has the same meaning as in section 3M.

(5) In deciding whether to give a direction under this section, a regulator must have regard—

(a) to the desirability where practicable of exercising its powers in relation to authorised persons or recognised investment exchanges rather than its powers under this section, and

(b) to the principle that a burden or restriction which is imposed on a person should be proportionate to the benefits, considered in general terms, which are expected to result from its imposition.

(6) “The appropriate regulator” means—

(a) where a direction relates to a qualifying authorised person or recognised investment exchange who is a PRA-authorised person, the FCA or the PRA;

(b) in any other case, the FCA.

Requirements that may be imposed

192D

(1) A direction under section 192C may require the parent undertaking—

(a) to take specified action, or

(b) to refrain from taking specified action.

(2) A requirement may be imposed by reference to the parent undertaking's relationship with—

(a) its group, or

(b) other members of its group.

(3) A requirement may refer to the past conduct of the parent undertaking (for example, by requiring the parent undertaking to review or take remedial action in respect of past conduct).

(4) A requirement imposed by the direction may be expressed to expire at the end of a specified period, but the imposition of a requirement that expires at the end of a specified period does not affect the power to give a further direction imposing a new requirement.

(5) The direction—

(a) may be revoked by the regulator which gave it by written notice to the body to which it is given, and

(b) ceases to be in force if the body to which it is given ceases to be a qualifying parent undertaking.

Direction: procedure

192E

(1) If a regulator proposes to give a direction under section 192C, or gives such a direction with immediate effect, it must give written notice to—

(a) the parent undertaking to which the direction is given (or to be given) (“P”), and

(b) any authorised person or recognised investment exchange who will, in the opinion of the regulator, be significantly affected by the direction.

(2) In the following provisions of this section “notified person” means a person to whom notice under subsection (1) is given.

(3) A direction under section 192C takes effect—

(a) immediately, if the notice under subsection (1) states that that is the case,

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

(4) A direction may be expressed to take effect immediately (or on a specified date) only if the regulator reasonably considers that it is necessary for the direction to take effect immediately (or on that date).

(5) The notice under subsection (1) must—

(a) give details of the direction,

(b) state the regulator's reasons for the direction and for its determination as to when the direction takes effect,

(c) inform the notified person that the person may make representations to the regulator within such period as may be specified in the notice (whether or not the notified person has referred the matter to the Tribunal), and

(d) inform the notified person of the person's right to refer the matter to the Tribunal.

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

(7) If, having considered any representations made by any notified person, the regulator decides—

(a) to give the direction proposed, or

(b) if the direction has been given, not to revoke the direction,

it must give each of the notified persons written notice.

(8) If, having considered any representations made by any notified person, the regulator decides—

(a) not to give the direction proposed,

(b) to give a different direction, or

it must give each of the notified persons written notice.

(9) A notice given under subsection (7) must inform the notified person of the person's right to refer the matter to the Tribunal.

(10) A notice under subsection (8)(b) must comply with subsection (5).

(11) If a notice informs the notified person of the person's right to refer a matter to the Tribunal, it must give an indication of the procedure on such a reference.

(12) For the purposes of subsection (3)(c), whether a matter is open to review is to be determined in accordance with section 391(8).

Consultation between regulators

192F

(1) Before the PRA gives a notice under section 192E(1) or (8)(b), it must consult the FCA.

(2) Before the FCA gives a notice under section 192E(1) or (8)(b) in relation to the parent undertaking of a PRA-authorised person, the FCA must consult the PRA.

(3) Before the FCA gives a notice under section 192E(1) or (8)(b) in relation to the parent undertaking of a recognised clearing house or a recognised CSD, it must consult the Bank of England.

References to Tribunal

192G

(1) A notified person who is aggrieved by the exercise by either regulator of its powers in relation to directions under section 192C may refer the matter to the Tribunal.

(2) “Notified person” is to be read in accordance with subsection (2) of section 192E, except that it includes a person to whom a notice under subsection (1) of that section ought to have been given.

Statement of policy: directions under section 192C

192H

(1) Each regulator must prepare and issue a statement of policy with respect to the giving of directions under section 192C.

(2) A regulator may at any time alter or replace a statement issued under this section.

(3) If a statement issued under this section is altered or replaced, the regulator must issue the altered or replacement statement.

(4) In exercising or deciding whether to exercise its power under section 192C in any particular case, a regulator must have regard to any statement published under this section and for the time being in force.

(5) A statement under this section must be published by the regulator concerned in the way appearing to the regulator to be best calculated to bring it to the attention of the public.

(6) A regulator may charge a reasonable fee for providing a person with a copy of a statement published under this section.

(7) A regulator must, without delay, give the Treasury a copy of any statement which the regulator publishes under this section.

Statement of policy relating to directions: procedure

192I

(1) Before issuing a statement of policy under section 192H, a regulator (“the issuing regulator”) must—

(a) consult the other regulator and , where the issuing regulator is the FCA, the Bank of England, and

(b) publish a draft of the proposed statement in the way appearing to the issuing regulator to be best calculated to bring it to the attention of the public.

(2) The draft must be accompanied by notice that representations about the proposal may be made to the issuing regulator within a specified time.

(3) Before issuing the proposed statement, the issuing regulator must have regard to any representations made to it in accordance with subsection (2).

(4) If the issuing regulator issues the proposed statement it must publish an account, in general terms, of—

(a) the representations made to it in accordance with subsection (2), and

(b) its response to them.

(5) If the statement differs from the draft published under subsection (2) in a way which is, in the opinion of the issuing regulator, significant, the issuing regulator—

(a) must before issuing it consult the other regulator again, and

(b) must (in addition to complying with subsection (4)), publish details of the difference.

(6) The issuing regulator may charge a reasonable fee for providing a person with a draft published under subsection (1)(b).

(7) This section also applies to a proposal to alter or replace a statement.

Rules requiring provision of information by parent undertakings

192J

(1) The appropriate regulator may make rules requiring qualifying parent undertakings—

(a) to provide to the regulator information of a specified description;

(b) to produce to the regulator documents of a specified description.

(2) The rules may only specify a description of information or documents that is relevant to the exercise by the regulator of its functions.

(3) The rules may make provision—

(a) as to the time within which information must be provided or documents produced;

(b) about the form in which any information is to provided;

(d) requiring information provided to be verified in a specified manner;

(e) requiring documents produced to be authenticated in a specified manner.

(4) “The appropriate regulator” means—

(a) in relation to the parent undertaking of a qualifying authorised person who is a PRA-authorised person, the FCA or the PRA;

(b) in any other case, the FCA.

Rules applying to parent undertakings of ring-fenced bodies

192JA

(1) The appropriate regulator may make such rules applying to bodies corporate falling within subsection (2) as appear to the regulator to be necessary or expedient for the group ring-fencing purposes.

(2) A body corporate falls within this subsection if—

(a) it is incorporated in the United Kingdom or has a place of business in the United Kingdom,

(b) it is a parent undertaking of a ring-fenced body, and

(3) The “group ring-fencing purposes” are the purposes set out in section 142H(4).

(4) “The appropriate regulator” means—

(a) in relation to the parent undertaking of a ring-fenced body that is a PRA-authorised person, the PRA;

(b) in any other case, the FCA.

Rules requiring parent undertakings to facilitate resolution

192JB

(1) The appropriate regulator may make rules requiring a qualifying parent undertaking to make arrangements that in the opinion of the regulator—

(a) would facilitate the preparation, maintenance, implementation and review of a recovery plan in relation to the group of the qualifying parent undertaking,

(b) are required in relation to the provision of financial support to other members of the group of the qualifying parent undertaking which encounter or are likely to encounter financial difficulties, or

(c) would allow or facilitate the exercise of the resolution powers in relation to the qualifying parent undertaking or any of its subsidiary undertakings in the event of a situation arising where all or part of the business of the parent undertaking or the subsidiary undertaking encounters or is likely to encounter financial difficulties.

(1A) A “recovery plan” in relation to a group, is a document which provides for measures to be taken to achieve the stabilisation of the group as a whole, or any institution within the group, where the group or institution is in a situation of financial stress, in order to address or remove the causes of the financial stress and restore the financial position of the group or the institution.

(2) The “resolution powers” are—

(a) the powers conferred on the Treasury and the Bank of England by or under Parts 1 to 3 of the Banking Act 2009, and

(b) any similar powers exercisable by an authority outside the United Kingdom.

(3) The arrangements that may be required include arrangements relating to—

(a) the issue of debt instruments by the parent undertaking;

(b) the provision to a subsidiary undertaking (“S”) or a transferee by the parent undertaking, or by any other subsidiary undertaking of the parent undertaking, of such services and facilities as would be required to enable S or the transferee to operate the business, or part of the business, effectively.

(d) the entry by the parent undertaking into a group financial support agreement and provision of financial support by the parent undertaking in accordance with that agreement.

(4) In subsection (3)—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) “group financial support agreement” means an agreement for the provision of financial support, by a member of the group of the parent undertaking, to an institution in the group which, at any time after the agreement is concluded, comes to need financial support;

(c) “transferee” means a person to whom all or part of the business of the parent undertaking or the subsidiary undertaking could be transferred as a result of the exercise of the resolution powers.

(5) “Debt instrument” has the same meaning as in section 142Y.

(6) “The appropriate regulator” means—

(a) where the subsidiary undertakings of the qualifying parent undertaking include a ring-fenced body that is a PRA-authorised person, the PRA;

(b) where the subsidiary undertakings of the qualifying parent undertaking include one or more PRA-authorised persons but do not include any authorised person that is not a PRA-authorised person, the PRA;

(c) where the subsidiary undertakings of the qualifying parent undertaking do not include any PRA-authorised person, the FCA;

(d) in any other case, the PRA or the FCA.

Failure to comply with direction or breach of rules

Power to impose penalty or issue censure

192K

(1) This section applies if a regulator is satisfied that a person who is or has been a qualifying parent undertaking (“P”) has contravened—

(a) a requirement of a direction given to P by that regulator under section 192C, ...

(b) a provision of rules made by that regulator under section 192J or 192JB, or

(c) a requirement imposed by a qualifying provision specified, or of a description specified, for the purposes of this subsection by the Treasury by order.

(1A) This section also applies if a regulator is satisfied that a person (“P”) who is or has been a parent undertaking of a ring-fenced body has contravened a provision of rules made by that regulator under section 192JA.

(2) The regulator may impose a penalty of such amount as it considers appropriate on—

(a) P, or

(b) any person who was knowingly concerned in the contravention.

(3) The regulator may, instead of imposing a penalty on a person, publish a statement censuring the person.

(3A) The regulator may impose, for such period as it considers appropriate, restrictions (including a temporary ban) on the exercise by any member of the management body or senior management of, or other person who works for, a qualifying parent undertaking of any functions in a PRA-authorised person, an investment firm or a qualifying parent undertaking.

(3B) The regulator may only impose restrictions under subsection (3A) on a person who was, at any time, knowingly concerned in the contravention.

(4) The regulator may not take action against a person under this section after the end of the limitation period unless, before the end of that period, it has given a warning notice to the person under section 192L.

(5) “The limitation period” means the period of 3 years beginning with the first day on which the regulator knew of the contravention.

(6) For this purpose a regulator is to be treated as knowing of a contravention if it has information from which the contravention can reasonably be inferred.

(7) In this section—

“management body” means the board of directors, or if there is no such board, the equivalent body responsible for the management of the undertaking concerned;

“member of the senior management” means a person who—exercises executive functions within a qualifying parent undertaking, andis responsible, and directly accountable to the management body, for the day to day management of that qualifying parent undertaking.

(8) A regulator which imposes a restriction on any person under subsection (3A) may—

(a) vary the restriction so as to reduce the period for which it has effect or otherwise to limit its effect, or

(b) cancel the restriction.

Procedure and right to refer to Tribunal

192L

(1) If a regulator proposes to take action against a person under section 192K, it must give the person a warning notice.

(2) A warning notice about a proposal to impose a penalty must state the amount of the penalty.

(3) A warning notice about a proposal to publish a statement must set out the terms of the statement.

(3A) A warning notice about a proposal to impose a restriction under section 192K(3A) must state—

(a) the terms of the restriction, and

(b) the period for which the restriction is to have effect.

(4) If the regulator decides to take action against a person under section 192K, it must give the person a decision notice.

(5) A decision notice about the imposition of a penalty must state the amount of the penalty.

(6) A decision notice about the publication of a statement must set out the terms of the statement.

(6B) A decision notice about the imposition of a restriction under section 192K(3A) must state—

(a) the terms of the restriction, and

(b) the period for which the restriction is to have effect.

(7) If the regulator decides to take action against a person under section 192K, the person may refer the matter to the Tribunal.

Duty on publication of statement

192M

After a statement under section 192K(3) is published, the regulator must send a copy of the statement to—

(a) the person in respect of whom it is made, and

(b) any person to whom a copy of the decision notice was given under section 393(4).

Imposition of penalties under section 192K: statement of policy

192N

(1) Each regulator must prepare and issue a statement of policy with respect to—

(a) the imposition of penalties under section 192K, and

(b) the amount of penalties under that section.

(2) A regulator's policy in determining what the amount of a penalty should be must include having regard to—

(a) the seriousness of the contravention,

(b) the extent to which the contravention was deliberate or reckless, and

(3) A regulator may at any time alter or replace a statement issued under this section.

(4) If a statement issued under this section is altered or replaced, the regulator must issue the altered or replacement statement.

(5) In exercising, or deciding whether to exercise, a power under section 192K(2) in the case of any particular contravention, a regulator must have regard to any statement of policy published under this section and in force at a time when the contravention occurred.

(6) A statement under this section must be published by the regulator concerned in the way appearing to the regulator to be best calculated to bring it to the attention of the public.

(7) A regulator may charge a reasonable fee for providing a person with a copy of the statement published under this section.

(8) A regulator must, without delay, give the Treasury a copy of any statement which it publishes under this section.

(9) Section 192I applies in relation to a statement under this section as it applies in relation to a statement under section 192H.

PART12B — Approval of certain holding companies

Interpretation

192O

(1) In this Part—

“on a consolidated basis” means on the basis of the consolidated situation;

“consolidated situation” means the situation that results from an entity being treated, for the purposes of the capital requirements regulation or CRR rules (as appropriate), as if that entity and one or more other entities formed a single entity;

“designated investment firm” means an investment firm which is for the time being designated by the PRA under article 3 of the Financial Services and Markets Act 2000 (PRA-regulated Activities) Order 2013;

“Directive 2013/36/EU UK law” means—before IP completion day, the law of the United Kingdom which is relied on by the United Kingdom to implement the capital requirements directive and its implementing measures (“the relevant EU provisions”); andafter IP completion day, the law of the United Kingdom which was relied on immediately before that date to implement the relevant EU provisions as it has effect—on 1 January 2022, in the case of rules made by the FCA or by the PRA under this Act, andas amended from time to time, in all other cases,...

“EU tertiary legislation” has the meaning given in section 20 of the European Union (Withdrawal) Act 2018;

“financial holding company” has the meaning given in Article 4(1)(20) of the capital requirements regulation;

“financial institution” has the meaning given in Article 4(1)(26) of the capital requirements regulation;

“institution” means a credit institution or an investment firm;

“investment firm” has the meaning given in Article 4(1)(2) of the capital requirements regulation;

“mixed financial holding company” has the meaning given in Article 4(1)(21) of the capital requirements regulation;

“parent institution” means an institution which is a parent undertaking;

“parent undertaking” has the meaning given in section 420;

“section 192XA rules” means rules made under section 192XA;

“on a sub-consolidated basis” means—on the basis of the consolidated situation of a parent institution, financial holding company or mixed financial holding company, excluding a sub-group of entities, oron the basis of the consolidated situation of a parent institution, financial holding company or mixed financial holding company that is not the ultimate parent institution, financial holding company or mixed financial holding company;

“subsidiary institution” means an institution which is a subsidiary undertaking.

(2) A “parent financial holding company” or “parent mixed financial holding company” means a financial holding company or a mixed financial holding company which—

(a) is a UK parent financial holding company or a UK parent mixed financial holding company, within the meaning given in Article 4(1)(30) and 4(1)(32) respectively of the capital requirements regulation; or

(b) is required, whether by the PRA by direction under section 192C or otherwise, to comply with the capital requirements regulation , CRR rules and Directive 2013/36/EU UK law on a sub-consolidated basis.

(3) In this Part, references to instruments made under the capital requirements regulation include EU tertiary legislation made under that regulation which forms part of assimilated law.

Approval

Requirement for approval

192P

(1) No company may be established in the United Kingdom as a parent financial holding company or a parent mixed financial holding company unless—

(a) the company is approved by the PRA;

(b) the PRA has confirmed that the company is exempt from the requirement for approval under subsection (2); or

(i) a credit institution, or

(ii) a designated investment firm.

(2) A company is exempt from the requirement for approval if—

(a) it is a parent financial holding company and its principal activity is to acquire holdings in subsidiary undertakings; or

(b) it is a parent mixed financial holding company and its principal activity with respect to institutions and financial institutions is to acquire holdings in subsidiary undertakings,

and all of the conditions in subsection (3) are satisfied.

(3) The conditions in this subsection are satisfied if—

(a) the Bank of England has not identified the company as a resolution entity (within the meaning of section 3 of the Banking Act 2009) in a group resolution plan under Part 5 of the Bank Recovery and Resolution (No. 2) Order 2014;

(b) a credit institution or a designated investment firm which is a subsidiary undertaking in the same group as the company—

(i) has been designated by the PRA as responsible to ensure the group’s compliance with prudential requirements on a consolidated or sub-consolidated basis, and

(ii) has the power required to discharge those obligations effectively, whether under contractual arrangements with other companies in the group or otherwise;

(i) the group as a whole, or

(ii) any of its subsidiary undertakings which are institutions or financial institutions;

(d) the PRA is satisfied that there is no impediment to the effective supervision of the group on a consolidated or sub-consolidated basis.

(4) For the purposes of this section, a company is established in the United Kingdom if the company is incorporated in, or formed under the law of, any part of the United Kingdom.

Application for approval or exemption

192Q

(1) An application for—

(a) the PRA’s approval for the purposes of section 192P(1)(a); or

(b) confirmation of exemption from the requirement for approval,

must be made by the company concerned.

(2) The application must—

(a) be made in such manner as the PRA may direct; and

(b) contain or be accompanied by the information referred to in subsection (3).

(3) The information referred to in subsection (2) is—

(a) a description of the structural organisation of the group of which the company is part, indicating—

(i) its subsidiary undertakings and parent undertakings, and

(ii) the location and type of activity undertaken by each of the entities within the group;

(b) the identity of at least two individuals who are directors of the company;

(c) a description as to how each director of the company complies with the requirements that they are of sufficiently good repute, and possess sufficient knowledge, skills and experience, to perform their duties as directors;

(d) where one of the subsidiary undertakings of the company is a credit institution or a designated investment firm—

(i) the identity of any persons who hold, whether directly or indirectly, qualifying holdings (within the meaning of Article 4(1)(36) of the capital requirements regulation), in the credit institution or designated investment firm, and the amounts of those holdings, or

(ii) if no person holds a qualifying holding in the credit institution or designated investment firm, the identity of the 20 largest shareholders in the credit institution or designated investment firm and the amount of their shareholdings;

(e) a description of the internal organisation and the distribution of tasks with the group.

(4) The PRA may, by notice in writing, require the company to provide any further information necessary to enable the PRA to assess whether the conditions referred to in section 192P(2) and (3) or section 192R are fulfilled.

Grant of approval

192R

(1) When the PRA receives an application from a company under section 192Q, it must decide whether—

(a) to approve the company,

(b) to confirm that the company qualifies for an exemption under section 192P(2) and (3), or

(2) The PRA may only approve the company under this section where conditions A, B and C are satisfied.

(3) Condition A is that the internal arrangements and distribution of tasks within the group of which the company is part are—

(a) adequate for the purpose of complying with the requirements imposed by Directive 2013/36/EU UK law , CRR rules ... and the capital requirements regulation on a consolidated or sub-consolidated basis, ...

(aa) adequate for the purpose of complying with section 192XA rules, and

(b) effective to—

(i) co-ordinate all the subsidiary undertakings of the company, including, where necessary, through an adequate distribution of tasks among subsidiary institutions;

(ii) prevent or manage intra-group conflicts; and

(iii) enforce the group-wide policies set by the company throughout the group.

(4) Condition B is that the structural organisation of the group of which the company is part does not obstruct or otherwise prevent the effective supervision of the subsidiary institutions and parent institutions as concerns the individual, consolidated and, where appropriate, sub-consolidated obligations to which they are subject.

(5) In assessing whether Condition B is satisfied, the PRA must take into account—

(a) the position of the company within the group;

(b) the shareholding structure of the company, and the group of which it is part; and

(6) Condition C is that—

(a) the PRA has received the information as to the identity of the shareholders of any credit institution in the group, and the amount of their shareholdings, which is required under Directive 2013/36/EU UK law; and

(b) the directors of the company are of sufficiently good repute, and possess sufficient knowledge, skills and experience to perform their duties as directors.

(7) Where the PRA proposes to refuse approval, or to reject an application for confirmation of exemption, it must give the company a warning notice within four months beginning with—

(a) the date on which it received the application under section 192Q; or

(b) if later (subject to subsection (8) and section 387), the date on which it received any further information requested under section 192Q(4).

(8) When the PRA decides to refuse approval, or to reject an application for an exemption, it must give the company a decision notice within six months of the date on which it received which the application under section 192Q.

Regulator’s duty to monitor

192S

(1) The PRA must monitor whether—

(a) a company approved under section 192R continues to satisfy the conditions in section 192R(3) to (6); and

(b) a company which it has confirmed is exempt from the requirement for approval under section 192P continues to satisfy the conditions for exemption set out in section 192P(2) and (3).

(2) A company which is subject to the requirement for approval under section 192P(1), or exempt from that requirement under section 192P(2), must give the PRA notice in writing of—

(a) any change in the structural organisation of the group; and

(b) any other information required by rules made under section 192J.

Measures

192T

(1) Where the PRA determines that the conditions in section 192R are not met, or have ceased to be met, by a company which is subject to the requirement for approval under section 192P(1), the PRA must take appropriate measures in relation to the company—

(a) to ensure the continuity and integrity of the consolidated or sub-consolidated supervision of the group of which the company is part (the “relevant group”); ...

(b) to ensure that the relevant group complies with the requirements in Directive 2013/36/EU UK law , CRR rules ... and the capital requirements regulation on a consolidated or sub-consolidated basis , and

(2) Measures taken under subsection (1) may include a direction—

(a) suspending the exercise by the company of voting rights attached to the shares of specified subsidiary institutions held by the company;

(b) requiring the company to transfer its holdings in its subsidiary institutions to its shareholders;

(c) designating another financial holding company, mixed financial holding company or institution within the group as being responsible for a period specified in the direction for ensuring that the group complies with the requirements laid down in Directive 2013/36/EU UK law , CRR rules ... and in the capital requirements regulation on a consolidated or sub-consolidated basis and with section 192XA rules;

(d) restricting or prohibiting distributions or interest payments to shareholders;

(e) requiring the company to divest from, or reduce its holdings in, institutions or financial institutions;

(f) requiring the company to submit a plan setting out how it proposes to correct any deficiencies in its compliance with the conditions in section 192R.

(3) Where the PRA determines that a company which it has confirmed is exempt from the requirement for approval under section 192P no longer satisfies the conditions for exemption under section 192P(3), it must direct that company to apply for approval for the purposes of section 192P(1)(a).

Directions: procedure

192U

(1) If the PRA proposes to give a direction under section 192T, or gives such a direction with immediate effect, it must give written notice to—

(a) the financial holding company or mixed financial holding company to which the direction is given (or to be given); and

(b) any authorised person or recognised investment exchange who will, in the opinion of the PRA, be significantly affected by the direction.

(2) In the following provisions of this section “notified person” means a person to whom notice under subsection (1) is given.

(3) A direction under section 192T takes effect—

(a) immediately, if the notice under subsection (1) states that that is the case;

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

(4) A direction may be expressed to take effect immediately (or on a specified date) only if the PRA reasonably considers that it is necessary for the direction to take effect immediately (or on that date).

(5) The notice under subsection (1) must—

(a) give details of the direction;

(b) state the PRA’s reasons for the direction and for its determination as to when the direction takes effect;

(c) inform the notified person that the person may make representations to the PRA within such period as may be specified in the notice (whether or not the notified person has referred the matter to the Tribunal); and

(d) inform the notified person of the person’s right to refer the matter to the Tribunal.

(6) The PRA may extend the period allowed under the notice for making representations.

(7) If, having considered any representations made by any notified person, the PRA decides—

(a) to give the direction proposed; or

(b) if the direction has been given, not to revoke the direction,

it must give each of the notified persons written notice.

(8) If, having considered any representations made by any notified person, the PRA decides—

(a) not to give the direction proposed,

(b) to give a different direction, or

it must give each of the notified persons written notice.

(9) A notice given under subsection (7) must inform the notified person of the person’s right to refer the matter to the Tribunal.

(10) A notice under subsection (8)(b) must comply with subsection (5).

(11) If a notice informs the notified person of the person’s right to refer a matter to the Tribunal, it must give an indication of the procedure on such a reference.

(12) For the purposes of subsection (3)(c), whether a matter is open to review is to be determined in accordance with section 391(8).

Rules imposing consolidated or sub-consolidated requirements

192V

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consultation between regulators

192W

The PRA must consult the FCA before—

(a) approving an application under section 192Q; or

(b) giving a notice under section 192U(1) or (8)(b) to the financial holding company or mixed financial company of a group which includes an institution which is not a PRA-authorised person.

References to Tribunal

192X

(1) A reference may be made to the Tribunal by—

(a) a company which is aggrieved by the decision of the PRA under section 192R to refuse approval, or to reject an application for an exemption; or

(b) a notified person who is aggrieved by the exercise by the PRA of its powers in relation to directions under section 192T.

(2) “Notified person” means a person to whom notice under section 192U(1) has been given, or ought to have been given.

Rules

Rules applying to holding companies

192XA

(1) The PRA may make rules described in subsection (2) applying to financial holding companies and mixed financial holding companies that are—

(a) approved under section 192R, or

(b) designated under section 192T(2)(c),

where it appears to the PRA to be necessary or expedient to make the rules for the purpose of advancing any of its objectives.

(2) Those rules are—

(a) rules imposing requirements to be complied with by holding companies on a consolidated or sub-consolidated basis;

(b) rules imposing requirements which, in the PRA's opinion, are likely to mitigate group risk;

(d) rules imposing public disclosure requirements related to requirements described in paragraph (a) or (b);

(e) rules imposing requirements in respect of governance arrangements;

(f) rules imposing requirements in respect of remuneration policies and practices.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) Rules made under this section may make provision by reference to the capital requirements regulation, to instruments made under that regulation or to Directive 2013/36/EU UK law, as amended from time to time.

(6) Section 137H (rules about remuneration) applies where the PRA makes rules under this section prohibiting persons, or persons of a specified description, from being remunerated in a specified way as it applies where the PRA makes general rules imposing such a prohibition.

(7) Section 137I (Treasury direction to consider compliance with remuneration policies) applies where the PRA makes rules under this section requiring financial holding companies or mixed financial holding companies, or a specified description of such companies, to act in accordance with a remuneration policy as it applies where the PRA makes general rules imposing such requirements on authorised persons, but as if—

(a) the references in that section to authorised persons were references to financial holding companies or mixed financial holding companies, and

(b) subsection (7) of that section were omitted.

(8) Section 141A (power to make consequential amendments of references to rules etc) applies to the exercise by the PRA of its power to make, alter or revoke rules under this section as it applies in relation to the exercise by the PRA of its power to make, alter or revoke rules under Part 9A.

(9) In this section—

“governance arrangements” includes organisational structure, lines of responsibility and internal control mechanisms;

“group risk” means the risk that the financial position of a financial holding company or mixed financial holding company or of a member of its group may be adversely affected—by its relationships, whether financial or non-financial, with other members of the group, orby matters which affect the financial position of the group, or of a group which forms part of that group, taken as a whole (including, for example, reputational contagion).

Procedural provision

192XB

(1) For provision about the making of section 192XA rules that are CRR rules, see Part 9D.

(2) The following provisions of Part 9D apply in relation to section 192XA rules that are not CRR rules as if they were CRR rules—

(a) section 144C (matters to consider when making rules);

(b) section 144D (explanation to accompany consultation on rules);

Disapplication or modification of rules in individual cases

192XC

(1) This section applies to a section 192XA rule if, or to the extent that, section 192XA rules provide for it to apply to the rule.

(2) The PRA may, on the application of or with the consent of a person who is subject to section 192XA rules, give the person a permission that enables the person—

(a) not to apply the section 192XA rule, or

(b) to apply the section 192XA rule with the modifications specified in the permission.

(3) The PRA may—

(a) give permission under this section subject to conditions, and

(b) revoke or vary permission under this section.

Power to impose penalty or issue censure

192Y

(1) This section applies if the PRA is satisfied that a company which is or has been a financial holding company or a mixed financial holding company (“the company”) has contravened a requirement imposed by—

(a) this Part;

(b) a direction given to the company by the PRA under section 192T;

(ca) section 192XA rules; or

(d) the capital requirements regulation or an instrument made under that regulation.

(2) The PRA may impose a penalty of such amount as it considers appropriate on—

(a) the company; or

(b) any person who was knowingly concerned in the contravention.

(3) The PRA may, instead of imposing a penalty on a person, publish a statement censuring the person.

(4) The PRA may not take action against a person under this section after the end of the limitation period unless, before the end of that period, it has given a warning notice to the person under section 192Z.

(5) “The limitation period” means the period of 3 years beginning with the first day on which the PRA knew of the contravention.

(6) For this purpose the PRA is to be treated as knowing of a contravention if it has information from which the contravention can reasonably be inferred.

Procedure and right to refer to Tribunal

192Z

(1) If a regulator proposes to take action against a person under section 192Y, it must give the person a warning notice.

(2) A warning notice about a proposal to impose a penalty must state the amount of the penalty.

(3) A warning notice about a proposal to publish a statement must set out the terms of the statement.

(4) If the regulator decides to take action against a person under section 192Y, it must give the person a decision notice.

(5) A decision notice about the imposition of a penalty must state the amount of the penalty.

(6) A decision notice about the publication of a statement must set out the terms of the statement.

(7) If the regulator decides to take action against a person under section 192Y, the person may refer the matter to the Tribunal.

Duty on publication of statement

192Z1

After a statement under section 192Y(3) is published, the regulator must send a copy of the statement to—

(a) the person in respect of whom it is made; and

(b) any person to whom a copy of the decision notice was given under section 393(4).

Directions and penalties: statement of policy

192Z2

(1) The PRA must prepare and issue a statement of policy with respect to—

(a) the taking of measures, including directions, under section 192T;

(b) the imposition of penalties under section 192Y;

(2) The PRA’s policy in determining what the amount of a penalty should be must include having regard to—

(a) the seriousness of the contravention;

(b) the extent to which the contravention was deliberate or reckless; and

(3) The PRA may at any time alter or replace a statement issued under this section.

(4) If a statement issued under this section is altered or replaced, the PRA must issue the altered or replacement statement.

(5) In imposing, or deciding whether to impose a penalty under section 192Y(2) in the case of any particular contravention, the PRA must have regard to any statement of policy published under this section and in force at a time when the contravention occurred.

(6) A statement under this section must be published by the PRA in the way appearing to the PRA to be best calculated to bring it to the attention of the public.

(7) The PRA may charge a reasonable fee for providing a person with a copy of the statement published under this section.

(8) The PRA must, without delay, give the Treasury a copy of any statement which it publishes under this section.

Statement of policy relating to directions: procedure

192Z3

(1) Before issuing a statement of policy under section 192Z2, the PRA must—

(a) consult the FCA; and

(b) publish a draft of the proposed statement in the way appearing to the PRA to be best calculated to bring it to the attention of the public.

(2) The draft must be accompanied by notice that representations about the proposal may be made to the PRA within a specified time.

(3) Before issuing the proposed statement, the PRA must have regard to any representations made to it in accordance with subsection (2).

(4) If the PRA issues the proposed statement it must publish an account, in general terms, of—

(a) the representations made to it in accordance with subsection (2); and

(b) its response to them.

(5) If the statement differs from the draft published under subsection (2) in a way which is, in the opinion of the PRA, significant, the PRA must—

(a) consult the FCA again before issuing it; and

(b) in addition to complying with subsection (4), publish details of the difference.

(6) The PRA may charge a reasonable fee for providing a person with a draft published under subsection (1)(b).

(7) This section also applies to a proposal to alter or replace a statement.

Part XIII — Incoming Firms: Intervention by FCA or PRA

Interpretation

Interpretation of this Part.

193

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General grounds on which power of intervention is exercisable.

194

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Contravention by relevant EEA firm with UK branch of requirement under markets in financial instruments directive: appropriate regulator primarily responsible for securing compliance

194A

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Contravention by relevant EEA firm of requirement in capital requirements directive or capital requirements regulation

194B

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Contravention by relevant EEA firm with UK branch of requirement in mortgages directive: appropriate regulator primarily responsible for securing compliance

194C

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Contravention by relevant EEA firm of requirement in insurance distribution directive: appropriate regulator primarily responsible for securing compliance

194D

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Exercise of power in support of overseas regulator.

195

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) “An overseas regulator” means an authority in a country or territory outside the United Kingdom—

(a) which is a home state regulator; or

(b) which exercises any function of a kind mentioned in subsection (4).

(4) The functions are—

(a) a function corresponding to any function of either regulator under this Act;

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) a function corresponding to any function exercised by the Secretary of State under the Companies Acts (as defined in section 2 of the Companies Act 2006);

(d) a function in connection with —

(i) the investigation of conduct of the kind prohibited by Part V of the Criminal Justice Act 1993 (insider dealing); or

(ii) the enforcement of rules (whether or not having the force of law) relating to such conduct;

(e) a function prescribed by regulations made for the purposes of this subsection which, in the opinion of the Treasury, relates to companies or financial services.

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Contravention by relevant EEA firm , EEAUCITS or EEAAIFM of directive requirements: home state regulator primarily responsible for securing compliance

195A

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Contravention by relevant EEA firm of requirement in mortgages directive: home state regulator primarily responsible for securing compliance

195B

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Contravention by relevant EEA firm of requirement in insurance distribution directive: home state regulator primarily responsible for securing compliance

195C

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The power of intervention.

196

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Exercise of power of intervention

Procedure on exercise of power of intervention.

197

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Power to apply to court for injunction in respect of certain overseas insurance companies.

198

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Additional procedure for EEA firms in certain cases.

199

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Management companies: loss of authorisation

199A

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplemental

Rescission and variation of requirements.

200

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Effect of certain requirements on other persons

201

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Contravention of requirement imposed under this Part.

202

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Powers of Office of Fair Trading

Power to prohibit the carrying on of Consumer Credit Act business.

203

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Power to restrict the carrying on of Consumer Credit Act business.

204

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART 13A — Enhanced supervision of firms exercising rights under the Insurance Distribution Directive

Insurance distribution directive: enhanced supervision of EEA firms by UK regulators

203A

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Insurance distribution directive: enhanced supervision of UK firms by an EEA regulator

203B

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Modification or waiver of rules where firm subject to enhanced supervision

203C

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Publication of directions under section 203C

203D

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part XIV — Disciplinary Measures

Meaning of “relevant requirement” and “appropriate regulator”

204A

(1) The following definitions apply for the purposes of this Part.

(2) “Relevant requirement” means a requirement imposed—

(a) by or under this Act, ...

(aa) by regulations under section 11 of the Civil Liability Act 2018,

(aza) by or under Part 1 of the Pensions Act 2008 in relation to the scale requirement in section 28B or the asset allocation requirement in section 28C,

(ab) by or under the Securitisation Regulations 2024,

(ac) by small pots regulations within the meaning of Chapter 2 of Part 2 of the Pension Schemes Act 2026,

(b) by a qualifying provision specified, or of a description specified, for the purposes of this subsection by the Treasury by order , ...

(d) by the Undertakings for Collective Investment in Transferable Securities Regulations 2011.

(3) The PRA is “the appropriate regulator” in the case of a contravention of—

(a) a requirement that is imposed under any provision of this Act by the PRA;

(b) a requirement under section 56(6) where the authorised person concerned is a PRA-authorised person and the prohibition order concerned is made by the PRA;

(d) a requirement under section 62A(2) where the revised statement of responsibilities is to be provided to the PRA only;

(e) a requirement under section 64B(2) or (5) where the conduct rules concerned are made by the PRA;

(f) a requirement under section 64C(1) to notify the PRA that disciplinary action has been taken.

(fa) a requirement imposed by regulation 8A(2) of the Securitisation Regulations 2024 where the institutional investor concerned is a PRA-authorised person;

(g) a requirement imposed by regulation 38 of the Securitisation Regulations 2024 on a PRA-authorised person in a case where the temporary prohibition imposed under regulation 37(1) or (2) of those Regulations was imposed by the PRA.

(3A) Either the PRA or the FCA is “the appropriate regulator” in the case of a contravention of—

(a) a requirement under section 59(1) or (2) where the authorised person concerned is a PRA-authorised person and the approval concerned falls to be given by the PRA;

(b) a requirement under section 60A(1) or (2) where the authorised person concerned is a PRA-authorised person and the approval concerned falls to be given by the PRA;

(ba) a requirement under section 62A(2) where the revised statement of responsibilities is to be provided to the FCA and the PRA;

(d) a requirement under section 63E(1) where the authorised person concerned is a PRA-authorised person and the function concerned is of a description specified in rules made by the PRA;

(e) a requirement under section 63F(1), (2), (4), (6) or (7) where the authorised person concerned is a PRA-authorised person and the certificate concerned relates to a function of a description specified in rules made by the PRA.

(4) In the case of a contravention of a requirement that is imposed by a qualifying EU provision, “the appropriate regulator” for the purpose of any provision of this Part is whichever of the PRA or the FCA (or both) is specified by the Treasury by order in relation to the qualifying EU provision for the purposes of that provision of this Part.

(5) In the case of a contravention of a requirement where the contravention constitutes an offence, the “appropriate regulator” is whichever of the PRA or the FCA has power to prosecute the offence (see section 401).

(6) The FCA is “the appropriate regulator” in the case of a contravention of any other requirement imposed—

(a) by or under this Act;

(aza) by or under Part 1 of the Pensions Act 2008 in relation to the scale requirement in section 28B or the asset allocation requirement in section 28C,

(aa) by regulations under section 11 of the Civil Liability Act 2018;

(ab) by or under the Securitisation Regulations 2024;

(ac) by small pots regulations within the meaning of Chapter 2 of Part 2 of the Pension Schemes Act 2026;

(b) by the Alternative Investment Fund Managers Regulations 2013; or

(7) The Treasury may by order amend the provisions defining “the appropriate regulator”.

Public censure.

205

(1) If the appropriate regulator considers that an authorised person has contravened a relevant requirement imposed on the person, it may publish a statement to that effect.

(2) If the FCA considers that a person other than an authorised person has contravened a relevant Part 5A requirement imposed on the person, it may publish a statement to that effect.

Financial penalties.

206

(1) If the appropriate regulator considers that an authorised person has contravened a relevant requirement imposed on the person, it may impose on him a penalty, in respect of the contravention, of such amount as it considers appropriate.

(1A) If the FCA considers that a person other than an authorised person has contravened a relevant Part 5A requirement imposed on the person, it may impose on the person a penalty, in respect of the contravention, of such amount as it considers appropriate.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) A penalty under this section is payable to the regulator that imposed the penalty.

Suspending permission to carry on regulated activities etc

206A

(1) If the appropriate regulator considers that an authorised person has contravened a relevant requirement imposed on the person, it may—

(a) suspend, for such period as it considers appropriate, any permission which the person has to carry on a regulated activity; or

(b) impose, for such period as it considers appropriate, such limitations or other restrictions in relation to the carrying on of a regulated activity by the person as it considers appropriate.

(1A) The power conferred by subsection (1) is also exercisable by the FCA if it considers that an authorised person has contravened a requirement imposed on the person by—

(a) the Payment Services Regulations 2017, or

(b) the Electronic Money Regulations 2011.

(1B) The power conferred by subsection (1) may not be exercised in relation to a contravention of a requirement imposed under section 122A, 122B, 122C, 122G, 122H, 122I, 122IA, 123A or 123B.

(2) In subsection (1)—

“ permission ” means any permission that the authorised person has, whether given (or treated as given) by the FCA or the PRA or conferred by any provision of this Act;

(3) The period for which a suspension or restriction is to have effect may not exceed 12 months.

(4) A suspension may relate only to the carrying on of an activity in specified circumstances.

(5) A restriction may, in particular, be imposed so as to require the person concerned to take, or refrain from taking, specified action.

(6) The appropriate regulator may—

(a) withdraw a suspension or restriction; or

(b) vary a suspension or restriction so as to reduce the period for which it has effect or otherwise to limit its effect.

(7) The power under this section may (but need not) be exercised so as to have effect in relation to all the regulated activities that the person concerned carries on.

(8) Any one or more of the powers under—

(a) subsection (1)(a) and (b) of this section, and

(b) sections 205 and 206,

may be exercised in relation to the same contravention.

Prohibition or restriction on carrying on of relevant designated activities

206B

(1) If the FCA considers that a person carrying on a relevant designated activity has contravened a relevant Part 5A requirement imposed on the person in relation to that activity, it may—

(a) prohibit the person, for such period as it considers appropriate, from carrying on that activity, or

(b) impose, for such period as it considers appropriate, such limitations or other restrictions in relation to the carrying on of that activity by the person as it considers appropriate.

(2) A prohibition may relate only to the carrying on of an activity in specified circumstances.

(3) A restriction may, in particular, be imposed so as to require the person concerned to take, or refrain from taking, specified action.

(4) The FCA may, on the application of the person to whom it relates—

(a) withdraw a prohibition or restriction, or

(b) vary a prohibition or restriction so as to reduce the period for which it has effect or otherwise to limit its effect.

(5) The power under this section may, but need not, be exercised so as to have effect in relation to all the relevant designated activities that the person concerned carries on.

(6) Any one or more of the powers under—

(a) subsection (1)(a) and (b) of this section, and

(b) sections 205 and 206,

may be exercised in relation to the same contravention.

Proposal to take disciplinary measures.

207

(1) If a regulator proposes—

(a) to publish a statement in respect of an authorised person (under section 205(1)), ...

(b) to impose a penalty on an authorised person (under section 206(1)), or

(c) to suspend a permission of an authorised person or impose a restriction in relation to the carrying on of a regulated activity by an authorised person (under section 206A),

it must give the authorised person a warning notice.

(1A) If the FCA proposes—

(a) to publish a statement in respect of a person under section 205(2),

(b) to impose a penalty on a person under section 206(1A), or

it must give the person a warning notice.

(2) A warning notice about a proposal to publish a statement must set out the terms of the statement.

(3) A warning notice about a proposal to impose a penalty, must state the amount of the penalty.

(4) A warning notice about a proposal to suspend a permission or impose a prohibition or restriction must state the period for which the suspension , prohibition or restriction is to have effect.

Decision notice.

208

(1) If a regulator decides—

(a) to publish a statement under section 205(1) (whether or not in the terms proposed), . . .

(b) to impose a penalty under section 206(1) (whether or not of the amount proposed), or

it must without delay give the authorised person concerned a decision notice.

(1A) If the FCA decides—

(a) to publish a statement in respect of a person under section 205(2),

(b) to impose a penalty on a person under section 206(1A), or

it must without delay give the person a decision notice.

(2) In the case of a statement, the decision notice must set out the terms of the statement.

(3) In the case of a penalty, the decision notice must state the amount of the penalty.

(3A) In the case of a suspension , prohibition or restriction, the decision notice must state the period for which the suspension , prohibition or restriction is to have effect.

(4) If a regulator decides to—

(a) publish a statement in respect of an authorised person under section 205(1), . . .

(b) impose a penalty on an authorised person under section 206(1), or

(c) suspend a permission of an authorised person, or impose a restriction in relation to the carrying on of a regulated activity by an authorised person, under section 206A,

the authorised person may refer the matter to the Tribunal.

(5) If the FCA decides to—

(a) publish a statement in respect of a person under section 205(2),

(b) impose a penalty on a person under section 206(1A), or

the person may refer the matter to the Tribunal.

Applications under section 206B(4): procedure and right to refer to Tribunal

208A

(1) This section applies to an application under subsection (4) of section 206B for the variation or withdrawal of a prohibition or restriction imposed under that section.

(2) If the FCA decides to grant the application, it must give the applicant written notice of its decision.

(3) If the FCA proposes to refuse the application, it must give the applicant a warning notice.

(4) If the FCA decides to refuse the application, it must give the applicant a decision notice.

(5) If the FCA gives the applicant a decision notice, the applicant may refer the matter to the Tribunal.

Publication.

209

(1) After a statement under section 205(1) is published, the regulator concerned must send a copy of it to the authorised person and to any person on whom a copy of the decision notice was given under section 393(4).

(2) After a statement under section 205(2) is published, the FCA must send a copy of it to the person to whom the statement relates and to any person to whom a copy of the decision notice was given under section 393(4).

Statements of policy.

210

(1) Each regulator must prepare and issue a statement of its policy with respect to—

(a) the imposition of penalties, suspensions , prohibitions or restrictions under this Part;

(b) the amount of penalties under this Part; and

(1A) Each regulator's policy with respect to the imposition of penalties, suspensions or restrictions under this Part must include policy with respect to their imposition in relation to conduct which constitutes or may constitute an offence by virtue of section 23(1A) (authorised persons carrying on credit-related regulated activities otherwise than in accordance with permission).

(2) A regulator's policy in determining what the amount of a penalty should be , or what the period for which a suspension , prohibition or restriction is to have effect should be, must include having regard to—

(a) the seriousness of the contravention in question in relation to the nature of the requirement contravened;

(b) the extent to which that contravention was deliberate or reckless; and

(3) A regulator may at any time alter or replace a statement issued by it under this section.

(4) If a statement issued under this section is altered or replaced by a regulator, the regulator must issue the altered or replacement statement.

(5) A regulator must, without delay, give the Treasury a copy of any statement which it publishes under this section.

(6) A statement issued under this section by a regulator must be published by the regulator in the way appearing to the regulator to be best calculated to bring it to the attention of the public.

(7) In exercising, or deciding whether to exercise, its power under section 206 , 206A or 206B in the case of any particular contravention, a regulator must have regard to any statement published by it under this section and in force at the time when the contravention in question occurred.

(8) The regulator may charge a reasonable fee for providing a person with a copy of the statement.

Statements of policy: procedure.

211

(1) Before a regulator issues a statement under section 210, the regulator must publish a draft of the proposed statement in the way appearing to the regulator to be best calculated to bring it to the attention of the public.

(2) The draft must be accompanied by notice that representations about the proposal may be made to the regulator within a specified time.

(3) Before issuing the proposed statement, the regulator must have regard to any representations made to it in accordance with subsection (2).

(4) If the regulator issues the proposed statement it must publish an account, in general terms, of—

(a) the representations made to it in accordance with subsection (2); and

(b) its response to them.

(5) If the statement differs from the draft published under subsection (1) in a way which is, in the opinion of the regulator, significant, the regulator must (in addition to complying with subsection (4)) publish details of the difference.

(6) A regulator may charge a reasonable fee for providing a person with a copy of a draft published under subsection (1).

(7) This section also applies to a proposal to alter or replace a statement.

Part XV — The Financial Services Compensation Scheme

The scheme manager

The scheme manager.

212

(1) The scheme manager” means the body corporate established by the Financial Services Authority under this section as originally enacted.

(2) The regulators must take such steps as are necessary to ensure that the scheme manager is, at all times, capable of exercising the functions conferred on it by or under this Part or Part 15A.

(3) The constitution of the scheme manager must provide for it to have—

(a) a chairman; ...

(aa) a chief executive ...; and

(b) a board (which must include the chairman and chief executive ) whose members are the scheme manager’s directors.

(4) The chairman, chief executive and other members of the board must be persons appointed, and liable to removal from office, by the regulators (acting, in the case of the chairman and the chief executive, with the approval of the Treasury).

(5) But the terms of their appointment (and in particular those governing removal from office) must be such as to secure their independence from the regulators in the operation of the compensation scheme.

(6) The scheme manager is not to be regarded as exercising functions on behalf of the Crown.

(7) The scheme manager’s ... officers and staff are not to be regarded as Crown servants.

The scheme

The compensation scheme.

213

(1) The regulators must by rules made in accordance with an order under subsection (1A) establish a scheme for compensating persons in cases where—

(a) relevant persons are unable, or likely to be unable, to satisfy claims against them, ...

(aa) relevant exchanges are unable, or likely to be unable, to satisfy claims made against them in connection with a regulated activity relating to a trading facility carried on by the exchange, or

(b) persons who have assumed responsibility for liabilities arising from acts or omissions of relevant persons or relevant exchanges (“successors”) are unable, or likely to be unable, to satisfy claims against the successors that are based on those acts or omissions.

(1A) The Treasury must by order specify—

(a) the cases in which the FCA may, or may not, make rules under subsection (1), and

(b) the cases in which the PRA may, or may not, make rules under that subsection.

(2) The rules (taken together) are to be known as the Financial Services Compensation Scheme (but are referred to in this Act as “the compensation scheme”).

(3) The compensation scheme must, in particular, provide for the scheme manager—

(a) to assess and pay compensation, in accordance with the scheme, to claimants in respect of claims made in connection with—

(i) a regulated activity carried on (whether or not with permission) by relevant persons; and

(ii) a regulated activity relating to a trading facility carried on (whether or not in accordance with any requirements relating to that activity resulting from section 286) by relevant exchanges; and

(b) to have power to impose levies for the purpose of meeting its expenses (including in particular expenses incurred, or expected to be incurred, in paying compensation, borrowing or insuring risks)—

(i) on authorised persons, or any class of authorised person;

(ii) on recognised investment exchanges carrying on a regulated activity relating to a trading facility, or any class of such exchanges; or

(iii) on authorised persons and on recognised investment exchanges carrying on a regulated activity relating to a trading facility, or on any class of such persons and exchanges.

(4) The compensation scheme may provide for the scheme manager to have power to impose levies—

(a) on authorised persons, or any class of authorised person;

(b) on recognised investment exchanges carrying on a regulated activity relating to a trading facility, or any class of such exchanges; or

(c) on authorised persons and on recognised investment exchanges carrying on a regulated activity relating to a trading facility, or on any class of such persons and exchanges,

for the purpose of recovering the cost (whenever incurred) of establishing the scheme.

(5) In making any provision of the scheme by virtue of subsection (3)(b), the regulators must take account of the desirability of ensuring that the amount of the levies imposed on a particular —

(a) class of authorised person;

(b) class of recognised investment exchange carrying on a regulated activity relating to a trading facility; or

(c) class of authorised person and of recognised investment exchanges carrying on a regulated activity relating to a trading facility;

reflects, so far as is practicable, the amount of claims or recapitalisation payments within the meaning of section 214E, as the case may be, made, or likely to be made in respect of that class of person, exchange, or persons and exchanges.

(5A) The compensation scheme may not allow the scheme manager to impose levies on credit unions in relation to recapitalisation payments under section 214E.

(5B) In subsection (5A), the reference to “credit unions” is to credit unions within the meaning of—

(a) the Credit Unions Act 1979 (see section 31);

(b) the Credit Unions (Northern Ireland) Order 1985 (S.I. 1985/1205 (N.I. 12)) (see Article 2).

(6) An amount payable to the scheme manager as a result of any provision of the scheme made by virtue of subsection (3)(b) or (4) may be recovered as a debt due to the scheme manager.

(7) Sections 214 to 217 make further provision about the scheme but are not to be taken as limiting the power conferred on the regulators by subsection (1).

(8) In those sections “specified” means specified in the scheme.

(9) In this Part (except in sections 219, 220 or 224) “relevant person” means a person who was—

(a) an authorised person at the time the act or omission giving rise to the claim against him , or against a successor falling within subsection (1)(b), took place; or

(b) an appointed representative at that time.

(10A) But a person is not to be regarded as a relevant person in relation to a regulated activity if, at that time, the person—

(a) was a Gibraltar-based person with a Schedule 2A permission to carry on the activity, and

(b) fell within a prescribed category, either generally or in relation to the activity.

(10B) Regulations prescribing a category of person for the purposes of subsection (10A) may, among other things, make provision by reference to—

(a) whether the activity is carried on through a branch in the United Kingdom;

(b) the level of protection provided by the compensation scheme and by any comparable scheme operating in Gibraltar.

(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(12) In this Part (except in sections 220 and 224) “relevant exchange” means a body corporate or unincorporated association which was a recognised investment exchange carrying on a regulated activity relating to a trading facility at the time the act or omission giving rise to the claim against it, or against a successor falling within subsection (1)(b), took place.

(13) In this Part “regulated activity relating to a trading facility” means—

(a) the regulated activity of operating a multilateral trading facility; or

(b) the regulated activity of operating an organised trading facility.

(14) In this Part, “funeral plan contract” has the same meaning as in article 59(2) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.

Provisions of the scheme

General.

214

(1) The compensation scheme may, in particular, make provision—

(a) as to the circumstances in which a relevant person or relevant exchange is to be taken (for the purposes of the scheme) to be unable, or likely to be unable, to satisfy claims made against him or it;

(aa) as to the circumstances in which a successor falling within section 213(1)(b) is to be taken (for the purposes of the scheme) to be unable, or likely to be unable, to satisfy claims against the successor that are based on the acts or omissions of a relevant person or relevant exchange;

(b) for the establishment of different funds for meeting different kinds of claim;

(d) limiting the levy payable by a person in respect of a specified period;

(e) for repayment of the whole or part of a levy in specified circumstances;

(f) for a claim to be entertained only if it is made by a specified kind of claimant;

(g) for a claim to be entertained only if it falls within a specified kind of claim;

(h) as to the procedure to be followed in making a claim;

(i) for the making of interim payments before a claim is finally determined;

(j) limiting the amount payable on a claim to a specified maximum amount or a maximum amount calculated in a specified manner;

(k) for payment to be made, in specified circumstances, to a person other than the claimant.

(1A) Rules by virtue of subsection (1)(h) may, in particular, allow the scheme manager to treat persons who are or may be entitled to claim under the scheme as if they had done so.

(1B) A reference in any enactment or instrument to a claim or claimant under this Part includes a reference to a deemed claim or claimant in accordance with subsection (1A).

(1C) Rules by virtue of subsection (1)(j) may, in particular, allow, or be subject to rules which allow, the scheme manager to settle a class of claim by payment of sums fixed without reference to, or by modification of, the normal rules for calculation of maximum entitlement for individual claims.

(2) Different provision may be made with respect to different kinds of claim.

(3) The scheme may provide for the determination and regulation of matters relating to the scheme by the scheme manager.

(4) The scheme, or particular provisions of the scheme, may be made so as to apply only in relation to—

(a) activities carried on,

(b) claimants,

(d) events occurring,

in specified territories, areas or localities.

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) The scheme may provide for the scheme manager to have power—

(a) in specified circumstances,

(b) but only if the scheme manager is satisfied that the claimant is entitled to receive a payment in respect of his claim—

(i) under a scheme which is comparable to the compensation scheme, or

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