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) specify the period within which a review must be carried out;

(b) determine the scope and conduct of a review;

(6) Provision made in a direction under subsection (5)(b) may include a requirement—

(a) for a review to be carried out by a person appointed by the regulator who is independent of the regulator;

(b) for any such appointment to be made only with the approval of the Treasury.

(7) As soon as practicable after giving a direction under subsection (1) the Treasury must—

(a) lay before Parliament a copy of the direction, and

(b) publish the direction in such manner as the Treasury think fit.

(8) Subsection (7) does not apply where the Treasury consider that publication of the direction would be against the public interest.

(9) A direction under subsection (1) may be varied or revoked by the giving of a further direction.

Report on certain reviews

3RD

(1) This section applies where the Treasury have given a direction to a regulator under section 3RC(1) to carry out a review.

(2) The regulator must make a written report to the Treasury as to the opinion of the regulator in relation to the following matters—

(a) if the regulator is the FCA, whether the rules under review—

(i) are compatible with the FCA’s strategic objective,

(ii) advance one or more of the FCA’s operational objectives, and

(iii) advance the competitiveness and growth objective;

(b) if the regulator is the PRA, whether the rules under review—

(i) advance one or more of the PRA’s objectives, and

(ii) advance the PRA’s competition objective and the PRA’s competitiveness and growth objective;

(d) whether any amendments should be made to the rules and, if so, what those amendments should be;

(e) whether any rules should be revoked (with or without replacement);

(f) whether any other action should be taken and, if so, what that action should be.

(3) As soon as practicable after receiving the report the Treasury must—

(a) lay before Parliament a copy of the report, and

(b) publish the report in such manner as the Treasury think fit.

(4) When complying with subsection (3) the Treasury may withhold material from the report if the Treasury consider that publication of the material would be against the public interest.

Power of Treasury to require making of rules by regulations

3RE

(1) The Treasury may by regulations require a regulator to exercise a power under this Act to make rules in relation to a specified activity or a specified description of person.

(2) Regulations under this section may—

(a) specify matters that the rules must cover;

(b) specify a period within which the rules must be made.

(3) But except so far as permitted by subsection (2), regulations under this section may not require rules to be made—

(a) in a specified form or with specified content, or

(b) to achieve or advance a specified outcome.

(4) If no period is specified under subsection (2)(b) the rules must be made as soon as reasonably practicable after the coming into force of the regulations.

Enhancing public understanding of financial matters etc.

The consumer financial education body

3S

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

Interpretation

3T

In this Part “enactment” includes—

(a) an enactment contained in subordinate legislation within the meaning of the Interpretation Act 1978;

(b) an enactment contained in, or in an instrument made under, an Act of the Scottish Parliament;

(d) an enactment contained in, or in an instrument made under, Northern Ireland legislation.

Part II — Regulated And Prohibited Activities

The general prohibition

The general prohibition.

19

(1) No person may carry on a regulated activity in the United Kingdom, or purport to do so, unless he is—

(a) an authorised person; or

(b) an exempt person.

(2) The prohibition is referred to in this Act as the general prohibition.

Requirement for permission

Authorised persons acting without permission.

20

(1) If an authorised person other than a PRA-authorised person carries on a regulated activity in the United Kingdom, or purports to do so, otherwise than in accordance with permission—

(a) given to that person under Part 4A, or

(b) resulting from any other provision of this Act,

he is to be taken to have contravened a requirement imposed on him by the FCA under this Act.

(1A) If a PRA-authorised person carries on a regulated activity in the United Kingdom, or purports to do so, otherwise than in accordance with permission given to the person under Part 4A or resulting from any other provision of this Act, the person is to be taken to have contravened—

(a) a requirement imposed by the FCA, and

(b) a requirement imposed by the PRA.

(2) A contravention within subsection (1) or (1A)—

(a) does not, except as provided by section 23(1A), make a person guilty of an offence,

(b) does not, except as provided by section 26A, make any transaction void or unenforceable, and

(3) In prescribed cases a contravention within subsection (1) or (1A) is actionable at the suit of a person who suffers loss as a result of the contravention, subject to the defences and other incidents applying to actions for breach of statutory duty.

(4) Subsections (1) and (1A) are subject to section 39(1D).

(5) References in this Act to an authorised person acting in contravention of this section are references to the person acting in a way that results in a contravention within subsection (1) or (1A).

Financial promotion

Restrictions on financial promotion.

21

(1) A person (“A”) must not, in the course of business, communicate an invitation or inducement to

(a) engage in investment activity , or

(b) to engage in claims management activity.

(2) But subsection (1) does not apply if—

(a) A is an authorised person; or

(b) the content of the communication is approved for the purposes of this section by an authorised person.

(2A) The content of a communication may be approved for the purposes of this section by an authorised person only if the giving of the approval—

(a) is permitted under section 55NA (which enables approval to be given with FCA permission), or

(b) falls within an exemption conferred by regulations under section 55NB.

(3) In the case of a communication originating outside the United Kingdom, subsection (1) applies only if the communication is capable of having an effect in the United Kingdom.

(4) The Treasury may by order specify circumstances in which a person is to be regarded for the purposes of subsection (1) as—

(a) acting in the course of business;

(b) not acting in the course of business.

(5) The Treasury may by order specify circumstances (which may include compliance with financial promotion rules) in which subsection (1) does not apply.

(6) An order under subsection (5) may, in particular, provide that subsection (1) does not apply in relation to communications—

(a) of a specified description;

(b) originating in a specified country or territory outside the United Kingdom;

(c) originating in a country or territory which falls within a specified description of country or territory outside the United Kingdom; or

(d) originating outside the United Kingdom.

(7) The Treasury may by order repeal subsection (3).

(8) “Engaging in investment activity” means—

(a) entering or offering to enter into an agreement the making or performance of which by either party constitutes a controlled activity; or

(b) exercising any rights conferred by a controlled investment to acquire, dispose of, underwrite or convert a controlled investment.

(9) An activity is a controlled activity if—

(a) it is an activity of a specified kind or one which falls within a specified class of activity; and

(b) it relates to an investment of a specified kind, or to one which falls within a specified class of investment.

(10) An investment is a controlled investment if it is an investment of a specified kind or one which falls within a specified class of investment.

(10A) “Engaging in claims management activity” means entering into or offering to enter into an agreement the making or performance of which by either party constitutes a controlled claims management activity.

(10B) An activity is a “controlled claims management activity” if—

(a) it is an activity of a specified kind,

(b) it is, or relates to, claims management services, and

(11) Schedule 2 (except paragraph 26) applies for the purposes of subsections (9) and (10) with references to section 22 being read as references to each of those subsections.

(12) Nothing in Schedule 2, as applied by subsection (11), limits the powers conferred by subsection (9) or (10).

(12A) Paragraph 25 of Schedule 2 applies for the purposes of subsection (10B) with the references to section 22 in sub-paragraph (3) of that paragraph being read as references to subsection (10B).

(13) “Communicate” includes causing a communication to be made.

(14) “Investment” includes any asset, right or interest (including where an asset, right or interest is, or comprises or represents, a cryptoasset).

(15) “Specified” means specified in an order made by the Treasury.

Regulated activities

22

(1) An activity is a regulated activity for the purposes of this Act if it is an activity of a specified kind which is carried on by way of business and—

(a) relates to an investment of a specified kind; or

(b) in the case of an activity of a kind which is also specified for the purposes of this paragraph, is carried on in relation to property of any kind.

(1A) An activity is also a regulated activity for the purposes of this Act if it is an activity of a specified kind which is carried on by way of business and relates to—

(a) information about a person's financial standing, ... or

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

(1B) An activity is also a regulated activity for the purposes of this Act if it is an activity of a specified kind which—

(a) is carried on by way of business in Great Britain, and

(b) is, or relates to, claims management services.

(2) Schedule 2 makes provision supplementing this section.

(3) Nothing in Schedule 2 limits the powers conferred by subsection (1) or (1A) subsections (1) to (1B) .

(4) “Investment” includes any asset, right or interest (including where an asset, right or interest is, or comprises or represents, a cryptoasset).

(5) “Specified” means specified in an order made by the Treasury.

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

(6A) For the purposes of subsection (1A)(c), “benchmark” has the meaning given by Article 3 of the EU Benchmarks Regulation 2016, and “administering” a benchmark means acting as an administrator of that benchmark within the meaning of that Article.

Designation of activities requiring prudential regulation by PRA

22A

(1) The Treasury may by order specify the regulated activities that are “PRA-regulated activities” for the purposes of this Act.

(2) An order under subsection (1) may—

(a) provide for exceptions;

(b) confer powers on the Treasury or either regulator;

(c) authorise the making of rules or other instruments by either regulator for purposes of, or connected with, any relevant provision;

(d) make provision in respect of any information or document which in the opinion of the Treasury or either regulator is relevant for purposes of, or connected with, any relevant provision;

(e) make such consequential, transitional, or supplemental provision as the Treasury consider appropriate for purposes of, or connected with, any relevant provision.

(3) Provision made as a result of subsection (2)(e) may amend any primary or subordinate legislation, including any provision of, or made under, this Act.

(4) “Relevant provision” means this section or any provision made under this section.

Parliamentary control in relation to certain orders under section 22A

22B

(1) This section applies to the first order made under section 22A(1).

(2) This section also applies to any subsequent order made under section 22A(1) which—

(a) contains a statement by the Treasury that, in their opinion, the effect (or one of the effects) of the proposed order would be—

(i) that an activity would become a PRA-regulated activity, or

(ii) that a PRA-regulated activity would become a regulated activity that is not a PRA-regulated activity, or

(b) amends primary legislation.

(3) No order to which this section applies may be made unless—

(a) a draft of the order has been laid before Parliament and approved by a resolution of each House, or

(b) subsection (5) applies.

(4) Subsection (5) applies if an order to which this section applies contains a statement that the Treasury are of the opinion that, by reason of urgency, it is necessary to make the order without a draft being so laid and approved.

(5) Where this subsection applies the order—

(a) must be laid before Parliament after being made, and

(b) ceases to have effect at the end of the relevant period unless before the end of that period the order is approved by a resolution of each House of Parliament (but without that affecting anything done under the order or the power to make a new order).

(6) The “relevant period” is a period of 28 days beginning with the day on which the order is made.

(7) In calculating the relevant period no account is to be taken of any time during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than 4 days.

Offences

Contravention of the general prohibition or section 20(1) or (1A).

23

(1) A person who contravenes the general prohibition is guilty of an offence and liable—

(a) on summary conviction, to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum, or both;

(b) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine, or both.

(1A) An authorised person (“A”) is guilty of an offence if A carries on a credit-related regulated activity in the United Kingdom, or purports to do so, otherwise than in accordance with permission—

(a) given to that person under Part 4A, or

(b) resulting from any other provision of this Act.

(1B) In this Act “credit-related regulated activity” means a regulated activity of a kind designated by the Treasury by order.

(1C) The Treasury may designate a regulated activity under subsection (1B) only if the activity involves a person—

(a) entering into or administering an agreement under which the person provides another person with credit,

(b) exercising or being able to exercise the rights of the lender under an agreement under which another person provides a third party with credit, or

(1D) But a regulated activity may not be designated under subsection (1B) if the agreement in question is one under which the obligation of the borrower is secured on land.

(1E) “Credit” includes any cash loan or other financial accommodation.

(1F) A person guilty of an offence under subsection (1A) is liable—

(a) on summary conviction, to imprisonment for a term not exceeding the applicable maximum term or a fine not exceeding the statutory maximum, or both;

(b) on conviction on indictment, to imprisonment for a term not exceeding two years, or a fine, or both.

(1G) The “applicable maximum term” is—

(a) in England and Wales, the general limit in a magistrates’ court (or 6 months, if the offence was committed before the commencement of 2 May 2022);

(b) in Scotland, 12 months;

(2) In this Act “an authorisation offence” means an offence under this section.

(3) In proceedings for an authorisation offence it is a defence for the accused to show that he took all reasonable precautions and exercised all due diligence to avoid committing the offence.

(4) Subsection (1A) is subject to section 39(1D).

(5) No proceedings may be brought against a person in respect of an offence under subsection (1A) in a case where either regulator has taken action under section 205, 206 or 206A in relation to the alleged contravention within section 20(1) or (1A).

Parliamentary control in relation to certain orders under section 23

23A

(1) This section applies to the first order made under section 23(1B).

(2) This section also applies to any subsequent order made under section 23(1B) which contains a statement by the Treasury that, in their opinion, the effect (or one of the effects) of the proposed order would be that an activity would become a credit-related regulated activity.

(3) An order to which this section applies may not be made unless a draft of the order has been laid before Parliament and approved by a resolution of each House.

False claims to be authorised or exempt.

24

(1) A person who is neither an authorised person nor, in relation to the regulated activity in question, an exempt person is guilty of an offence if he—

(a) describes himself (in whatever terms) as an authorised person;

(b) describes himself (in whatever terms) as an exempt person in relation to the regulated activity; or

(c) behaves, or otherwise holds himself out, in a manner which indicates (or which is reasonably likely to be understood as indicating) that he is—

(i) an authorised person; or

(ii) an exempt person in relation to the regulated activity.

(2) In proceedings for an offence under this section it is a defence for the accused to show that he took all reasonable precautions and exercised all due diligence to avoid committing the offence.

(3) A person guilty of an offence under this section is liable on summary conviction to imprisonment for a term not exceeding six months or a fine not exceeding level 5 on the standard scale, or both.

(4) But where the conduct constituting the offence involved or included the public display of any material, the maximum fine for the offence is level 5 on the standard scale multiplied by the number of days for which the display continued.

Contravention of section 21.

25

(1) A person who contravenes section 21(1) is guilty of an offence and liable—

(a) on summary conviction, to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum, or both;

(b) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine, or both.

(2) In proceedings for an offence under this section it is a defence for the accused to show—

(a) that he believed on reasonable grounds that the content of the communication was prepared, or approved for the purposes of section 21 in accordance with subsection (2A) of that section, by an authorised person; or

(b) that he took all reasonable precautions and exercised all due diligence to avoid committing the offence.

Enforceability of agreements

Agreements made by unauthorised persons.

26

(1) An agreement made by a person in the course of carrying on a regulated activity in contravention of the general prohibition is unenforceable against the other party.

(2) The other party is entitled to recover—

(a) any money or other property paid or transferred by him under the agreement; and

(b) compensation for any loss sustained by him as a result of having parted with it.

(3) “Agreement” means an agreement—

(a) made after this section comes into force; and

(b) the making or performance of which constitutes, or is part of, the regulated activity in question.

(4) This section does not apply if the regulated activity is accepting deposits.

Agreements relating to credit

26A

(1) An agreement that is made by an authorised person in contravention of section 20 is unenforceable against the other party if the agreement is entered into in the course of carrying on a credit-related regulated activity involving matters falling within section 23(1C)(a).

(2) The other party is entitled to recover—

(a) any money or other property paid or transferred by that party under the agreement, and

(b) compensation for any loss sustained by that party as a result of having parted with it.

(3) In subsections (1) and (2) “agreement” means an agreement—

(a) which is made after this section comes into force, and

(b) the making or performance of which constitutes, or is part of, the credit-related regulated activity.

(4) If the administration of an agreement involves the carrying on of a credit-related regulated activity, the agreement may not be enforced by a person for the time being exercising the rights of the lender under the agreement unless that person

(a) has permission, given under Part 4A or resulting from any other provision of this Act, in relation to that activity

(b) is an appointed representative in relation to that activity,

(d) is a person to whom, as a result of Part 20, the general prohibition does not apply in relation to that activity.

(5) If the taking of steps to procure payment of debts due under an agreement involves the carrying on of a credit-related regulated activity, the agreement may not be enforced by a person for the time being exercising the rights of the lender under the agreement unless

(a) the agreement is enforced in accordance with permission—

(i) given under Part 4A to the person enforcing the agreement, or

(ii) resulting from any other provision of this Act.

(b) that person is an appointed representative in relation to that activity,

(d) that person is a person to whom, as a result of Part 20, the general prohibition does not apply in relation to that activity.

Agreements made through unauthorised persons.

27

(1) This section applies to an agreement that—

(a) is made by an authorised person (“the provider”) in the course of carrying on a regulated activity,

(b) is not made in contravention of the general prohibition,

(d) is made in consequence of something said or done by another person (“the third party”) in the course of—

(i) a regulated activity carried on by the third party in contravention of the general prohibition, or

(ii) a credit-related regulated activity carried on by the third party in contravention of section 20.

(1ZA) But this section does not apply to a regulated credit agreement or a regulated consumer hire agreement unless the provider knows before the agreement is made that the third party had some involvement in the making of the agreement or matters preparatory to its making.

(1A) An agreement to which this section applies is unenforceable against the other party.

(2) The other party is entitled to recover—

(a) any money or other property paid or transferred by him under the agreement; and

(b) compensation for any loss sustained by him as a result of having parted with it.

(3) “Agreement” means an agreement—

(a) made after this section comes into force; and

(b) the making or performance of which constitutes, or is part of, the regulated activity in question carried on by the provider.

(4) This section does not apply if the regulated activity is accepting deposits.

(5) For the purposes of subsection (1ZA)—

“regulated consumer hire agreement” has the meaning given by article 60N of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544);

“regulated credit agreement” has the meaning given by article 60B of that Order.

Agreements made unenforceable by section 26 or 27: general cases.

28

(1) This section applies to an agreement which is unenforceable because of section 26 or 27, other than an agreement entered into in the course of carrying on a credit-related regulated activity.

(2) The amount of compensation recoverable as a result of that section is—

(a) the amount agreed by the parties; or

(b) on the application of either party, the amount determined by the court.

(3) If the court is satisfied that it is just and equitable in the circumstances of the case, it may allow—

(a) the agreement to be enforced; or

(b) money and property paid or transferred under the agreement to be retained.

(4) In considering whether to allow the agreement to be enforced or (as the case may be) the money or property paid or transferred under the agreement to be retained the court must—

(a) if the case arises as a result of section 26, have regard to the issue mentioned in subsection (5); or

(b) if the case arises as a result of section 27, have regard to the issue mentioned in subsection (6).

(5) The issue is whether the person carrying on the regulated activity concerned reasonably believed that he was not contravening the general prohibition by making the agreement.

(6) The issue is whether the provider knew that the third party was (in carrying on the regulated activity) contravening the general prohibition.

(7) If the person against whom the agreement is unenforceable—

(a) elects not to perform the agreement, or

(b) as a result of this section, recovers money paid or other property transferred by him under the agreement,

he must repay any money and return any other property received by him under the agreement.

(8) If property transferred under the agreement has passed to a third party, a reference in section 26 or 27 or this section to that property is to be read as a reference to its value at the time of its transfer under the agreement.

(9) The commission of an authorisation offence does not make the agreement concerned illegal or invalid to any greater extent than is provided by section 26 or 27.

28A

(1) This section applies to an agreement that—

(a) is entered into in the course of carrying on a credit-related regulated activity, and

(b) is unenforceable because of section 26, 26A or 27.

(2) The amount of compensation recoverable as a result of that section is—

(a) the amount agreed by the parties, or

(b) on the application of either party, the amount specified in a written notice given by the FCA to the applicant.

(3) If on application by the relevant firm the FCA is satisfied that it is just and equitable in the circumstances of the case, it may by written notice to the applicant allow—

(a) the agreement to be enforced, or

(b) money paid or property transferred under the agreement to be retained.

(4) In considering whether to allow the agreement to be enforced or (as the case may be) the money or property paid or transferred under the agreement to be retained the FCA must—

(a) if the case arises as a result of section 26 or 26A, have regard to the issue mentioned in subsection (5), or

(b) if the case arises as a result of section 27, have regard to the issue mentioned in subsection (6).

(5) The issue is whether the relevant firm reasonably believed that by making the agreement the relevant firm was neither contravening the general prohibition nor contravening section 20.

(6) The issue is whether the provider knew that the third party was (in carrying on the credit-related regulated activity) either contravening the general prohibition or contravening section 20.

(7) An application to the FCA under this section by the relevant firm may relate to specified agreements or to agreements of a specified description or made at a specified time.

(8) “The relevant firm” means—

(a) in a case falling within section 26, the person in breach of the general prohibition;

(b) in a case falling within section 26A or 27, the authorised person concerned.

(9) If the FCA thinks fit, it may when acting under subsection (2)(b) or (3)—

(a) limit the determination in its notice to specified agreements, or agreements of a specified description or made at a specified time;

(b) make the determination in its notice conditional on the doing of specified acts by the applicant.

Decisions under section 28A: procedure

28B

(1) A notice under section 28A(2)(b) or (3) must—

(a) give the FCA's reasons for its determination, and

(b) give an indication of—

(i) the right to have the matter referred to the Tribunal that is conferred by subsection (3), and

(ii) the procedure on such a reference.

(2) The FCA must, so far as it is reasonably practicable to do so, give a copy of the notice to any other person who appears to it to be affected by the determination to which the notice relates.

(3) A person who is aggrieved by the determination of an application under section 28A(2)(b) or (3) may refer the matter to the Tribunal.

Accepting deposits in breach of general prohibition.

29

(1) This section applies to an agreement between a person (“the depositor”) and another person (“the deposit-taker”) made in the course of the carrying on by the deposit-taker of accepting deposits in contravention of the general prohibition.

(2) If the depositor is not entitled under the agreement to recover without delay any money deposited by him, he may apply to the court for an order directing the deposit-taker to return the money to him.

(3) The court need not make such an order if it is satisfied that it would not be just and equitable for the money deposited to be returned, having regard to the issue mentioned in subsection (4).

(4) The issue is whether the deposit-taker reasonably believed that he was not contravening the general prohibition by making the agreement.

(5) “Agreement” means an agreement—

(a) made after this section comes into force; and

(b) the making or performance of which constitutes, or is part of, accepting deposits.

Enforceability of agreements resulting from unlawful communications.

30

(1) In this section—

“unlawful communication” means a communication in relation to which there has been a contravention of section 21(1);

“controlled agreement” means an agreement the making or performance of which by either party constitutes a controlled activity for the purposes of that section; and

“controlled investment” has the same meaning as in section 21.

(2) If in consequence of an unlawful communication a person enters as a customer into a controlled agreement, it is unenforceable against him and he is entitled to recover—

(a) any money or other property paid or transferred by him under the agreement; and

(b) compensation for any loss sustained by him as a result of having parted with it.

(3) If in consequence of an unlawful communication a person exercises any rights conferred by a controlled investment, no obligation to which he is subject as a result of exercising them is enforceable against him and he is entitled to recover—

(a) any money or other property paid or transferred by him under the obligation; and

(b) compensation for any loss sustained by him as a result of having parted with it.

(4) But the court may allow—

(a) the agreement or obligation to be enforced, or

(b) money or property paid or transferred under the agreement or obligation to be retained,

if it is satisfied that it is just and equitable in the circumstances of the case.

(5) In considering whether to allow the agreement or obligation to be enforced or (as the case may be) the money or property paid or transferred under the agreement to be retained the court must have regard to the issues mentioned in subsections (6) and (7).

(6) If the applicant made the unlawful communication, the issue is whether he reasonably believed that he was not making such a communication.

(7) If the applicant did not make the unlawful communication, the issue is whether he knew that the agreement was entered into in consequence of such a communication.

(8) “Applicant” means the person seeking to enforce the agreement or obligation or retain the money or property paid or transferred.

(9) Any reference to making a communication includes causing a communication to be made.

(10) The amount of compensation recoverable as a result of subsection (2) or (3) is—

(a) the amount agreed between the parties; or

(b) on the application of either party, the amount determined by the court.

(11) If a person elects not to perform an agreement or an obligation which (by virtue of subsection (2) or (3)) is unenforceable against him, he must repay any money and return any other property received by him under the agreement.

(12) If (by virtue of subsection (2) or (3)) a person recovers money paid or property transferred by him under an agreement or obligation, he must repay any money and return any other property received by him as a result of exercising the rights in question.

(13) If any property required to be returned under this section has passed to a third party, references to that property are to be read as references to its value at the time of its receipt by the person required to return it.

Part III — Authorisation and Exemption

Authorisation

Authorised persons.

31

(1) The following persons are authorised for the purposes of this Act—

(a) a person who has a Part 4A permission to carry on one or more regulated activities;

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

(d) a person who is otherwise authorised by a provision of, or made under, this Act.

(2) In this Act “authorised person” means a person who is authorised for the purposes of this Act.

Partnerships and unincorporated associations.

32

(1) If a firm is authorised—

(a) it is authorised to carry on the regulated activities concerned in the name of the firm; and

(b) its authorisation is not affected by any change in its membership.

(2) If an authorised firm is dissolved, its authorisation continues to have effect in relation to any individual or firm which succeeds to the business of the dissolved firm.

(3) For the purposes of this section, an individual or firm is to be regarded as succeeding to the business of a dissolved firm only if succession is to the whole or substantially the whole of the business of the former firm.

(4) “Firm” means—

(a) a partnership; or

(b) an unincorporated association of persons.

(5) “Partnership” does not include a partnership which is constituted under the law of any place outside the United Kingdom and is a body corporate.

Ending of authorisation

Withdrawal of authorisation ....

33

(1) This section applies if—

(a) an authorised person’s Part 4A permission is cancelled; and

(b) as a result, there is no regulated activity for which he has permission.

(2) The appropriate regulator must give a direction withdrawing that person’s status as an authorised person.

(2A) In subsection (2) “the appropriate regulator” means—

(a) in the case of a PRA-authorised person, the PRA, and

(b) in any other case, the FCA.

EEA firms.

34

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

Treaty firms.

35

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

Authorised open-ended investment companies

36

Schedule 5 makes provision about authorised open-ended investment companies.

Exercise of EEA rights by UK firms

Exercise of EEA rights by UK firms.

37

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

Exemption

Exemption orders.

38

(1) The Treasury may by order (“an exemption order”) provide for—

(a) specified persons, or

(b) persons falling within a specified class,

to be exempt from the general prohibition.

(2) But a person cannot be an exempt person as a result of an exemption order if he has a Part 4A permission.

(3) An exemption order may provide for an exemption to have effect—

(a) in respect of all regulated activities;

(b) in respect of one or more specified regulated activities;

(d) only in relation to specified functions;

(e) subject to conditions.

(4) “Specified” means specified by the exemption order.

Exemption of appointed representatives.

39

(1) If a person (other than an authorised person)—

(a) is a party to a contract with an authorised person (“his principal”) which—

(i) permits or requires him to carry on business of a prescribed description, and

(ii) complies with such requirements as may be prescribed, and

(b) is someone for whose activities in carrying on the whole or part of that business his principal has accepted responsibility in writing,

he is exempt from the general prohibition in relation to any regulated activity comprised in the carrying on of that business for which his principal has accepted responsibility.

(1ZA) But a person is not exempt as a result of subsection (1) if subsection (1A) , (1AA) or (1BA) applies to the person.

(1A) This subsection applies to a person —

(a) if his principal is an investment firm , a qualifying credit institution, or a firm which has a Part 4A permission to carry on regulated activities as an exempt investment firm within the meaning of regulation 8 of the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), and

(b) so far as the business for which his principal has accepted responsibility is investment services business,

unless he is entered on the applicable register.

(1AA) This subsection applies to a person—

(a) if the person’s principal is an investment firm , a qualifying credit institution, or a person mentioned in Article 3.1 (optional exemptions) of the markets in financial instruments directive, and

(b) so far as the business for which the person’s principal has accepted responsibility is selling, or advising clients on, structured deposits ...,

unless the person is entered on the applicable register.

(1B) In subsections (1A) and (1AA) The “applicable register” is the record maintained by the FCA by virtue of section 347(1)(ha).

(1BA) This subsection applies to a person (“A”)—

(a) if A’s principal is a mortgage intermediary, and

(b) so far as the business for which A’s principal has accepted responsibility is of a kind that—

(i) is specified in article 25A (arranging regulated mortgage contracts), article 36A (credit broking), article 53A (advising on regulated mortgage contracts) or article 53DA (advising on regulated credit agreements the purpose of which is to acquire land) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001; and

(ii) relates to mortgage agreements entered into on or after 21st March 2016,

unless A meets the requirements of subsection (1BB).

(1BB) The requirements of this subsection are—

(a) that A is entered on the record maintained by the FCA by virtue of section 347(1)(hb);

(b) that A’s principal is a person who has a Part 4A permission to carry on one or more of the regulated activities mentioned in subsection (1BA)(b)(i); and

(1C) Subsection (1D) applies where an authorised person (“A”)—

(a) has permission under Part 4A, or permission resulting from any other provision of this Act, only in relation to one or more qualifying activities,

(b) is a party to a contract with another authorised person (A's “principal”) which—

(i) permits or requires A to carry on business of a prescribed description (“the relevant business”), and

(ii) complies with such requirements as may be prescribed, and

(c) is someone for whose activities in carrying on the whole or part of the relevant business A's principal has accepted responsibility in writing.

(1D) Sections 20(1) and (1A) and 23(1A) do not apply in relation to the carrying on by A of a relevant additional activity.

(1E) In subsections (1C) and (1D)—

(a) “qualifying activity” means a regulated activity which is of a prescribed kind and relates—

(i) to rights under a contract of the kind mentioned in paragraph 23 of Schedule 2, other than one under which the obligation of the borrower to repay is secured on land, or

(ii) to rights under a contract of the kind mentioned in paragraph 23B of that Schedule;

(b) “relevant additional activity” means a regulated activity which—

(i) is not one to which A's permission relates, and

(ii) is comprised in the carrying on of the business for which A's principal has accepted responsibility.

(2) In this Act “appointed representative” means—

(a) a person who is exempt as a result of subsection (1), or

(b) a person carrying on a regulated activity in circumstances where, as a result of subsection (1D), sections 20(1) and (1A) and 23(1A) do not apply.

(3) The principal of an appointed representative is responsible, to the same extent as if he had expressly permitted it, for anything done or omitted by the representative in carrying on the business for which he has accepted responsibility.

(4) In determining whether an authorised person has complied with—

(a) a provision contained in or made under this Act, ...

(aa) a provision contained in or made under the Securitisation Regulations 2024, or

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

anything which a relevant person has done or omitted as respects business for which the authorised person has accepted responsibility is to be treated as having been done or omitted by the authorised person.

(5) “Relevant person” means a person who at the material time is or was an appointed representative by virtue of being a party to a contract with the authorised person.

(6) Nothing in subsection (4) is to cause the knowledge or intentions of an appointed representative to be attributed to his principal for the purpose of determining whether the principal has committed an offence, unless in all the circumstances it is reasonable for them to be attributed to him.

(7) A person carries on “investment services business” if, under the full and unconditional responsibility of only one investment firm on whose behalf the person acts, the person—

(a) promotes investment services or ancillary services to the firm's clients or prospective clients,

(b) receives and transmits instructions or orders from clients in respect of investment services or financial instruments,

(d) provides advice to clients or prospective clients in respect of investment services or financial instruments.

(8) In this section—

“ancillary services” means any of the services and activities listed in Part 3A of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544);

“financial instruments” means those instruments specified in Part 1 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;

“investment services” means any of the services and activities listed in Part 3 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, relating to any of the instruments listed in Part 1 of that Schedule;

“structured deposit” has the meaning given by Article 2.1.23 of the markets in financial instruments regulation.

Certain tied agents operating outside United Kingdom

39A

(1) This section applies to an authorised person whose relevant office is in the United Kingdom if—

(a) he is a party to a contract with a person (other than an authorised person) who is established in the United Kingdom; and

(b) the contract is a relevant contract.

(2) A contract is a “relevant contract” if it satisfies conditions A to C.

(3) Condition A is that the contract permits or requires the person mentioned in subsection (1)(a) (the “agent”) to carry on investment services business.

(4) Condition B is that the FCA is satisfied that no such business is, or is likely to be, carried on by the agent in the United Kingdom.

(5) Condition C is that the business is of a description that, if carried on in the United Kingdom, would be prescribed for the purposes of section 39(1)(a)(i).

(6) An authorised person to whom this section applies who—

(a) enters into or continues to perform a relevant contract with an agent which does not comply with the applicable requirements,

(b) enters into or continues to perform a relevant contract without accepting or having accepted responsibility in writing for the agent's activities in carrying on investment services business,

(i) the record maintained by the FCA by virtue of section 347(1)(ha), or

(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d) continues to perform a relevant contract with an agent when he knows or ought to know that the agent is not entered on that record ... ,

is to be taken for the purposes of this Act to have contravened a requirement imposed on him by or under this Act.

(7) The “applicable requirements” are the requirements prescribed for the purposes of subsection (1)(a)(ii) of section 39 which have effect in the case of a person to whom subsection (1A) of that section applies.

(8) Section 39(7) applies for the purposes of this section.

(9) In this section—

“relevant office” means—in relation to a body corporate, its registered office or, if it has no registered office, its head office, andin relation to a person other than a body corporate, the person's head office.

Part IV — Permission to Carry on Regulated Activities

Application for permission

Application for permission.

40

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

The threshold conditions.

41

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

Permission

Giving permission.

42

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

Imposition of requirements.

43

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

Variation and cancellation of Part IV permission

Variation etc. at request of authorised person.

44

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

Variation etc. on the Authority’s own initiative.

45

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

Variation of permission on acquisition of control.

46

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

Exercise of power in support of overseas regulator.

47

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

Prohibitions and restrictions.

48

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

Connected persons

Persons connected with an applicant.

49

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

Additional permissions

Authority’s duty to consider other permissions etc.

50

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

Procedure

Applications under this Part.

51

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

Determination of applications.

52

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

Exercise of own-initiative power: procedure.

53

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

Cancellation of Part IV permission: procedure.

54

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

Notification

Notification of ESMA

54A

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

Notification of EBA

54B

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

References to the Tribunal

Right to refer matters to the Tribunal.

55

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

PART 4A — Permission to carry on regulated activities

Application for permission

55A

(1) An application for permission to carry on one or more regulated activities may be made to the appropriate regulator by—

(a) an individual,

(b) a body corporate,

(d) an unincorporated association.

(2) “The appropriate regulator”, in relation to an application under this section, means (subject to subsection (2B))—

(a) the PRA, in a case where—

(i) the regulated activities to which the application relates consist of or include a PRA-regulated activity, or

(ii) the applicant is a PRA-authorised person otherwise than by virtue of a Part 4A permission;

(b) the FCA, in any other case.

(2A) An application under this section for permission to carry on the regulated activity specified in article 63S of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 may not include an application for permission to carry on any other regulated activity.

(2B) The appropriate regulator, in relation to an application under this section for permission to carry on the regulated activity specified in article 63S of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, is the FCA.

(3) An authorised person who has a permission under this Part which is in force may not apply for permission under this section.

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

(5) A permission given by the appropriate regulator under this Part or having effect as if so given is referred to in this Act as “a Part 4A permission”.

(6) References in this section to permission under this Part do not include references to permission under section 55NA.

The threshold conditions

55B

(1) “The threshold conditions”, in relation to a regulated activity, means the conditions set out in or specified under Schedule 6, as read with any threshold condition code made by either regulator under section 137O.

(2) Any reference in this Part to the threshold conditions for which either regulator is responsible is to be read as a reference to the conditions set out in or specified under Schedule 6 that are expressed to be relevant to the discharge by that regulator of its functions, as read with any threshold condition code made by that regulator under section 137O.

(3) In giving or varying permission, imposing or varying a requirement, or giving consent, under any provision of this Part, each regulator must ensure that the person concerned will satisfy, and continue to satisfy, in relation to all of the regulated activities for which the person has or will have permission, the threshold conditions for which that regulator is responsible.

(4) But the duty imposed by subsection (3) does not prevent a regulator, having due regard to that duty, from taking such steps as it considers are necessary, in relation to a particular person, in order to advance—

(a) in the case of the FCA, any of its operational objectives;

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

(5) The duty imposed by subsection (3) does not apply in relation to the regulated activity specified in article 63S of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (administering a benchmark).

Power to amend Schedule 6

55C

(1) The Treasury may by order amend Parts 1 and 2 of Schedule 6 by altering, adding or repealing provisions, or by substituting for those Parts as they have effect for the time being provisions specified in the order.

(2) Different provision may be made under this section—

(a) in relation to the discharge of the functions of each regulator;

(b) in relation to different regulated activities;

(c) in relation to persons who carry on, or seek to carry on, activities that consist of or include a PRA-regulated activity and in relation to other persons.

Firms based outside the United Kingdom

55D

(1) This section applies in relation to a person (“the non-UK firm”)—

(a) who is a body incorporated in, or formed under the law of, or is an individual who is a national of, any country or territory outside the United Kingdom, and

(b) who is carrying on a regulated activity in any country or territory outside the United Kingdom in accordance with the law of that country or territory (“the overseas state”).

(2) In determining whether the non-UK firm is satisfying or will satisfy, and continue to satisfy, any one or more of the threshold conditions for which a UK regulator is responsible, the UK regulator may have regard to any opinion notified to it by a regulatory authority in the overseas state (“the overseas regulator”) which relates to the non-UK firm and appears to the UK regulator to be relevant to compliance with those conditions.

(3) In considering how much weight (if any) to attach to the opinion, the UK regulator must have regard to the nature and scope of the supervision exercised in relation to the non-UK firm by the overseas regulator.

(4) In this section “UK regulator” means the FCA or the PRA.

Giving permission: the FCA

55E

(1) This section applies where the FCA is the appropriate regulator in relation to an application for permission under section 55A.

(2) The FCA may give permission for the applicant to carry on the regulated activity or activities to which the application relates or such of them as may be specified in the permission.

(3) If the applicant is a member of a group which includes a PRA-authorised person, the FCA must consult the PRA before determining the application.

(3A) The FCA must consult the PRA before determining an application for permission to carry on the regulated activity specified in article 63S of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (administering a benchmark) made by a person who is a PRA-authorised person otherwise than by virtue of a Part 4A permission.

(4) If it gives permission, the FCA must specify the permitted regulated activity or activities, described in such manner as the FCA considers appropriate.

(5) The FCA may—

(a) incorporate in the description of a regulated activity such limitations (for example as to circumstances in which the activity may, or may not, be carried on) as it considers appropriate;

(b) specify a narrower or wider description of regulated activity than that to which the application relates;

(c) give permission for the carrying on of a regulated activity which is not included among those to which the application relates and is not a PRA-regulated activity.

Giving permission: the PRA

55F

(1) This section applies where the PRA is the appropriate regulator in relation to an application for permission under section 55A.

(2) The PRA may with the consent of the FCA give permission for the applicant to carry on the regulated activity or activities to which the application relates or such of them as may be specified in the permission.

(3) If it gives permission, the PRA must specify the permitted regulated activity or activities, described in such manner as the PRA considers appropriate.

(4) The PRA may—

(a) incorporate in the description of a regulated activity such limitations (for example as to circumstances in which the activity may, or may not, be carried on) as it considers appropriate;

(b) specify a narrower or wider description of regulated activity than that to which the application relates;

(c) give permission for the carrying on of a regulated activity which is not included among those to which the application relates.

(5) Consent given by the FCA for the purposes of this section may be conditional on the manner in which the PRA exercises its powers under subsections (3) and (4).

(6) Subsections (3) and (4)(b) and (c) do not enable the PRA to give permission that relates only to activities that are not PRA-regulated activities, except where the applicant is a PRA-authorised person otherwise than by virtue of a Part 4A permission.

Giving permission: special cases

55G

(1) “The applicant” means an applicant for permission under section 55A.

(2) If the applicant—

(a) in relation to a particular regulated activity, is exempt from the general prohibition as a result of section 39(1) or an order made under section 38(1), but

(b) has applied for permission in relation to another regulated activity,

the application is to be treated as relating to all the regulated activities which, if permission is given, the applicant will carry on.

(3) If the applicant—

(a) in relation to a particular regulated activity, is exempt from the general prohibition as a result of ... section 285, but

(b) has applied for permission in relation to another regulated activity,

the application is to be treated as relating only to that other regulated activity.

(4) If the applicant—

(a) is a person to whom, in relation to a particular regulated activity, the general prohibition does not apply as a result of Part 19, but

(b) has applied for permission in relation to another regulated activity,

the application is to be treated as relating only to that other regulated activity.

(5) Subsection (6) applies where either regulator (“the responsible regulator”) receives an application for permission under section 55A which is in the regulator's opinion similar to an application which was previously made to the other regulator and was either—

(a) treated by the other regulator as not being a valid application to that regulator because of the regulated activities to which it related, or

(b) refused by the other regulator after being considered.

(6) The responsible regulator must have regard to the desirability of minimising—

(a) the additional work for the applicant in dealing with the new application, and

(b) the time taken to deal with the new application.

Variation and cancellation of Part 4A permission

Variation by FCA at request of authorised person

55H

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

(2) The FCA may, on the application of an authorised person who has a Part 4A permission but is not a PRA-authorised person, vary the permission by—

(a) adding a regulated activity, other than a PRA-regulated activity, to those to which the permission relates;

(b) removing a regulated activity from those to which the permission relates;

(3) The FCA may, on the application of an authorised person who has a Part 4A permission but is not a PRA-authorised person, cancel the permission.

(3A) The FCA may, on the application of a PRA-authorised person with a Part 4A permission, vary the permission by—

(a) adding to the regulated activities to which the permission relates the regulated activity specified in article 63S of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (administering a benchmark),

(b) removing that regulated activity from those to which the permission relates, or

(3B) The FCA must consult the PRA before exercising its power under subsection (3A).

(4) The FCA may refuse an application under this section if it appears to it that it is desirable to do so in order to advance any of its operational objectives , or the purpose for which the FCA must exercise its functions under Part 8B (see section 131U (1)).

(4A) The FCA may also refuse an application under this section if it appears to the FCA that the authorised person would not comply with requirements in Part 5 of the Alternative Investment Fund Managers Regulations 2013 (AIFs which acquire control of non-listed companies and issuers) that would apply to the authorised person.

(5) If on an application under subsection (2) or (3) the applicant is a member of a group which includes a PRA-authorised person, the FCA must consult the PRA before determining the application.

(6) If as a result of a variation of a Part 4A permission under this section there are no longer any regulated activities for which the authorised person concerned has permission, the FCA must, once it is satisfied that it is no longer necessary to keep the permission in force, cancel it.

(7) The FCA's power to vary a Part 4A permission under this section extends to including in the permission as varied any provision that could be included if a fresh permission were being given by it in response to an application under section 55A.

Variation by PRA at request of authorised person

55I

(1) On the application of a PRA-authorised person with a Part 4A permission, the PRA may with the consent of the FCA vary the permission by—

(a) adding a regulated activity to those to which the permission relates;

(b) removing a regulated activity from those to which the permission relates;

but the PRA may not under this subsection add, remove or vary the description of the regulated activity specified in article 63S of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (administering a benchmark).

(2) On the application of a PRA-authorised person with a Part 4A permission, the PRA may, after consulting the FCA, cancel the permission , but the PRA may not under this subsection cancel a permission where the only regulated activity to which the permission relates is the regulated activity in article 63S of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (administering a benchmark).

(3) On the application of an authorised person other than a PRA-authorised person, the PRA may with the consent of the FCA vary the permission by adding to the regulated activities to which the permission relates one or more regulated activities which include a PRA-regulated activity , but the PRA may not under this subsection add the regulated activity specified in article 63S of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (administering a benchmark).

(4) The PRA may refuse an application under this section if it appears to it that it is desirable to do so in order to advance any of its objectives.

(5) The FCA may withhold its consent to a proposed variation under this section if it appears to it that it is desirable to do so in order to advance one or more of its operational objectives.

(6) If as a result of a variation of a Part 4A permission under this section there are no longer any regulated activities for which the authorised person concerned has permission, the PRA must, once it is satisfied after consulting the FCA that it is no longer necessary to keep the permission in force, cancel it.

(7) The PRA's power to vary a Part 4A permission under this section extends to including in the permission as varied any provision that could be included if a fresh permission were being given by it in response to an application under section 55A.

(8) Consent given by the FCA for the purposes of subsection (1) may be conditional on the manner in which the PRA exercises its powers under section 55F(3) and (4) (as a result of subsection (7)).

Variation or cancellation on initiative of regulator

55J

(1) Either regulator may exercise its power under this section in relation to an authorised person with a Part 4A permission (“A”) if it appears to the regulator that—

(a) A is failing, or is likely to fail, to satisfy the threshold conditions for which the regulator is responsible,

(b) A has failed, during a period of at least 12 months, to carry on a regulated activity to which the Part 4A permission relates, ...

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

(ii) in the case of the PRA, any of its objectives , or

(d) in the case of the FCA, A has failed to comply with a requirement in Part 5 of the Alternative Investment Fund Managers Regulations 2013 (AIFs which acquire control of non-listed companies and issuers), or it is for some other reason desirable to exercise the power for the purposes of ensuring compliance with such a requirement.

(2) The FCA's power under this section is the power—

(a) to vary the Part 4A permission by—

(i) adding a regulated activity other than a PRA-regulated activity to those to which the permission relates,

(ii) removing a regulated activity from those to which the permission relates, or

(iii) varying the description of a regulated activity to which the permission relates in a way which, if it is a PRA-regulated activity, does not, in the opinion of the FCA, widen the description, or

(b) to cancel the Part 4A permission.

(3) The PRA's power under this section is the power—

(a) in the case of a PRA-authorised person, to vary the Part 4A permission in any of the ways mentioned in section 55I(1) or to cancel it;

(b) in the case of an authorised person who is not a PRA-authorised person, to vary the Part 4A permission by adding a PRA-regulated activity to those to which the permission relates and, if the PRA does so, to vary the Part 4A permission in any of the other ways mentioned in section 55I(1).

(4) The FCA—

(a) must consult the PRA before exercising its power under this section in relation to—

(i) a PRA-authorised person, or

(ii) a member of a group which includes a PRA-authorised person, and

(b) in the case of a PRA-authorised person, may exercise the power so as to add a new activity to those to which the permission relates or to widen the description of a regulated activity to which the permission relates, only with the consent of the PRA

, but paragraph (b) does not apply in relation to the regulated activity specified in article 63S of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (administering a benchmark).

(5) The PRA—

(a) must consult the FCA before exercising its power under this section, and

(b) may exercise the power so as to add a new activity to those to which the permission relates or to widen the description of a regulated activity to which the permission relates, only with the consent of the FCA.

(6) Without prejudice to the generality of subsections (1) to (3), a regulator may, in relation to an authorised person who is an investment firm, exercise its power under this section to cancel the Part 4A permission if it appears to it that any of the conditions in section 55K is met.

(6A) Without prejudice to the generality of subsections (1) to (3), the FCA may, in relation to an authorised person who is a full-scope UKAIFM, exercise its power under this section to cancel the Part 4A permission if it appears to it that any of the following conditions is met—

(a) the person has failed, during a period of at least six months, to carry on the regulated activity of managing an AIF;

(b) the person obtained the Part 4A permission to carry on the regulated activity of managing an AIF by making a false statement or by any other irregular means;

(c) in a case where the Part 4A permission includes permission to carry on the management of portfolios of investments in accordance with mandates given by investors on a discretionary, and client-by-client, basis, the person no longer complies with Part 9C rules;

(d) the person no longer meets the conditions that a person must meet in order to obtain a Part 4A permission to carry on the regulated activity of managing an AIF;

(e) the person has seriously or systematically infringed—

(i) an AIFMD requirement;

(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(iv) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . or

(v) an MMF requirement.

(6AA) For the purposes of subsection (6A)(e)—

(a) an AIFMD requirement is a provision of—

(i) the Alternative Investment Fund Managers Regulations 2013,

(ii) any EU regulation, originally made under the alternative investment fund managers directive, which is assimilated direct legislation,

(iii) any provision made by or under this Act that immediately before IP completion day implemented provisions of the alternative investment fund managers directive (as that implementing provision is amended from time to time), or

(iv) any subordinate legislation (within the meaning of the Interpretation Act 1978) which is made under a power substituted for a power of an EU entity to make a directly applicable regulation under the alternative investment fund managers directive by regulations made under section 8 of the European Union (Withdrawal) Act 2018;

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

(i) the MMF Regulation,

(ii) any EU regulation, originally made under the MMF Regulation, which is assimilated direct legislation, or

(iii) any subordinate legislation (within the meaning of the Interpretation Act 1978) made under the MMF Regulation on or after IP completion day.

(6B) Without prejudice to the generality of subsections (1) to (3), the FCA may, in relation to an authorised person who is a mortgage intermediary and who has a Part 4A permission to carry on a relevant mortgage activity, exercise its power under this section to cancel the Part 4A permission or to vary the Part 4A permission by removing a relevant mortgage activity from the activities to which the permission relates, if it appears to the FCA that any of the following conditions is met—

(a) during a period of at least six months, the person has not carried on a relevant mortgage activity;

(b) the person obtained the Part 4A permission to carry on a relevant mortgage activity by making a false statement or by any other irregular means;

(c) the person no longer meets the conditions which the person was ... required to meet in order to be granted a Part 4A permission to carry on a relevant mortgage activity; or

(d) the person has seriously or systematically infringed any provision made by or under this Act which sets the operating conditions for mortgage intermediaries ....

(6C) In subsection (6B) “relevant mortgage activity” means—

(a) an activity of a kind specified in article 25A (arranging regulated mortgage contracts), article 53A (advising on regulated mortgage contracts) or article 53DA (advising on regulated credit agreements the purpose of which is to acquire land) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, or

(b) an activity of a kind specified in article 36A of that Order (credit broking) which is referred to in Article 33(1)(a) of the mortgages directive.

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

(7ZA) Without prejudice to the generality of subsections (1) and (2), if it appears to the FCA that there has been a serious failure, by a person with permission to carry on the regulated activity specified in article 51ZA of the Financial Services and Markets Act (Regulated Activities) Order 2001 (managing a UK UCITS), to comply with the requirements imposed—

(a) by or under this Act in pursuance of the UCITS Directive, ...

(b) by the Undertakings for Collective Investment in Transferable Securities Regulations 2011, or

the FCA may exercise its powers under this section to vary the Part 4A permission of the person concerned by removing that activity from those to which the permission relates, or to cancel the person’s Part 4A permission.

(7ZB) Without prejudice to the generality of subsections (1) and (2), the FCA may, in relation to an authorised person who is an investment firm, exercise its power under this section if it appears to it that the authorised person has failed to comply with a requirement imposed by—

(a) the market abuse regulation,

(b) any EU regulation, originally made under the market abuse regulation, which is assimilated direct legislation, or

(c) any subordinate legislation (within the meaning of the Interpretation Act 1978) made under the market abuse regulation on or after IP completion day.

(7ZC) Without prejudice to the generality of subsections (1) and (2), if it appears to the FCA, in relation to a person who has a permission to carry on the regulated activity specified in article 63S of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (administering a benchmark), that the conditions in Article 35(1) of the EU Benchmarks Regulation 2016 are met, the FCA may exercise its powers under this section—

(a) to vary the Part 4A permission by removing that activity from those to which the permission relates, or

(b) to cancel the Part 4A permission.

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

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

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

(8) If, as a result of a variation of a Part 4A permission under this section, there are no longer any regulated activities for which the authorised person concerned has permission, the regulator responsible for the variation must, once it is satisfied that it is no longer necessary to keep the permission in force, cancel it.

(9) Before cancelling under subsection (8) a Part 4A permission which relates to a person who (before the variation) was a PRA-authorised person, the regulator must consult the other regulator.

(10) The power of either regulator to vary a Part 4A permission under this section extends to including in the permission as varied any provision that could be included if a fresh permission were being given in response to an application to that regulator under section 55A.

(11) Consent given by one regulator for the purpose of subsection (4)(b) or (5)(b) may be conditional on the manner in which the other regulator exercises its powers under section 55E(4) and (5) or 55F(3) and (4) (as a result of subsection (10)).

(12) The power of the FCA or the PRA under this section is referred to in this Part as its own-initiative variation power.

(13) In this section “enactment” has the meaning given by section 3T.

Variation or cancellation on initiative of FCA: additional power

55JA

(1) Schedule 6A confers an additional power on the FCA to vary or cancel an FCA-authorised person's Part 4A permission.

(2) In this section and that Schedule “FCA-authorised person” means an authorised person who is not a PRA-authorised person.

Investment firms: particular conditions that enable cancellation

55K

(1) The conditions referred to in section 55J(6) are as follows—

(a) that the firm has failed, during a period of at least 6 months, to carry on a regulated activity which is an investment service or activity for which it has a Part 4A permission;

(b) that the firm obtained the Part 4A permission by making a false statement or by other irregular means;

(c) that the firm no longer satisfies the requirements for authorisation ... in relation to a regulated activity which is an investment service or activity for which it has a Part 4A permission;

(d) that the firm has seriously and systematically infringed any assimilated direct legislation, or any provision made by or under this Act, which sets the operating conditions in relation to a regulated activity which is an investment service or activity for which it has a Part 4A permission;

(e) that the firm has seriously or systematically infringed the markets in financial instruments regulation.

(2) For the purposes of this section a regulated activity is an investment service or activity if it falls within the definition of “investment services and activities” in section 417(1).

Insurance undertakings, reinsurance undertakings and third-country insurance undertakings: particular conditions that enable cancellation

55KA

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

Imposition and variation of requirements

Imposition of requirements by FCA

55L

(1) Where a person has applied (whether to the FCA or the PRA) for a Part 4A permission or the variation of a Part 4A permission, the FCA may impose on that person such requirements, taking effect on or after the giving or variation of the permission, as the FCA considers appropriate.

(2) The FCA may exercise its power under subsection (3) in relation to an authorised person with a Part 4A permission (whether given by it or by the PRA) (“A”) if it appears to the FCA that—

(a) A is failing, or is likely to fail, to satisfy the threshold conditions for which the FCA is responsible,

(b) A has failed, during a period of at least 12 months, to carry on a regulated activity to which the Part 4A permission relates, or

(3) The FCA's power under this subsection is a power—

(a) to impose a new requirement,

(b) to vary a requirement imposed by the FCA under this section, or

(4) The FCA's power under subsection (3) is referred to in this Part as its own-initiative requirement power.

(5) The FCA may, on the application of an authorised person with a Part 4A permission—

(a) impose a new requirement,

(b) vary a requirement imposed by the FCA under this section, or

(6) The FCA may refuse an application under subsection (5) if it appears to it that it is desirable to do so in order to advance any of its operational objectives , or the purpose for which the FCA must exercise its functions under Part 8B (see section 131U (1)).

(7) The FCA must consult the PRA before imposing or varying a requirement which relates to—

(a) a person who is, or will on the granting of an application for Part 4A permission be, a PRA-authorised person, or

(b) a person who is a member of a group which includes a PRA-authorised person.

Imposition of requirements by PRA

55M

(1) Where—

(a) a person has applied for a Part 4A permission in relation to activities which consist of or include a PRA-regulated activity,

(b) a PRA-authorised person has applied for a Part 4A permission or the variation of a Part 4A permission, or

(c) an authorised person other than a PRA-authorised person has applied for a Part 4A permission to be varied by adding to the regulated activities to which it relates one or more regulated activities which include a PRA-regulated activity,

the PRA may impose on that person such requirements, taking effect on or after the giving or variation of the permission, as the PRA considers appropriate.

(2) The PRA may exercise its power under subsection (3) in relation to a PRA-authorised person with a Part 4A permission (“P”) if it appears to the PRA that—

(a) P is failing, or is likely to fail, to satisfy the threshold conditions for which the PRA is responsible,

(b) P has failed, during a period of at least 12 months, to carry on a regulated activity to which the Part 4A permission relates, or

(3) The PRA's power under this subsection is a power—

(a) to impose a new requirement,

(b) to vary a requirement imposed by the PRA under this section, or

(4) The PRA's power under subsection (3) is referred to in this Part as its own-initiative requirement power.

(5) The PRA may, on the application of a PRA-authorised person with a Part 4A permission—

(a) impose a new requirement,

(b) vary a requirement imposed by the PRA under this section, or

(6) The PRA may refuse an application under subsection (5) if it appears to it that it is desirable to do so in order to advance any of its objectives.

(6A) The PRA may not exercise its powers under this section to impose a requirement relating to the regulated activity specified in article 63S of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (administering a benchmark).

(7) The PRA must consult the FCA before imposing or varying a requirement.

Requirements under section 55L or 55M: further provisions

55N

(1) A requirement may, in particular, be imposed—

(a) so as to require the person concerned to take specified action, or

(b) so as to require the person concerned to refrain from taking specified action.

(2) A requirement may extend to activities which are not regulated activities.

(3) A requirement 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 may be expressed to expire at the end of such period as the regulator imposing it may specify, but the imposition of a requirement that expires at the end of a specified period does not affect the regulator's power to impose a new requirement.

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

(6) In this section “requirement” means a requirement imposed under section 55L or 55M.

General requirement relating to financial promotion approval

55NA

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Financial Services and Markets Act 2000

Report on certain reviews

3RD

Power of Treasury to require making of rules by regulations

3RE

Enhancing public understanding of financial matters etc.

The consumer financial education body

3S

Interpretation

Interpretation

3T

Part II — Regulated And Prohibited Activities

The general prohibition

The general prohibition.

19

Requirement for permission

Authorised persons acting without permission.

20

Financial promotion

Restrictions on financial promotion.

21

Regulated activities

Regulated activities

22

Designation of activities requiring prudential regulation by PRA

22A

Parliamentary control in relation to certain orders under section 22A

22B

Offences

Contravention of the general prohibition or section 20(1) or (1A).

23

Parliamentary control in relation to certain orders under section 23

23A

False claims to be authorised or exempt.

24

Contravention of section 21.

25

Enforceability of agreements

Agreements made by unauthorised persons.

26

Agreements relating to credit

26A

Agreements made through unauthorised persons.

27

Agreements made unenforceable by section 26 or 27: general cases.

28

Credit-related agreements made unenforceable by section 26, 26A or 27

28A

Decisions under section 28A: procedure

28B

Accepting deposits in breach of general prohibition.

29

Enforceability of agreements resulting from unlawful communications.

30

Part III — Authorisation and Exemption

Authorisation

Authorised persons.

31

Partnerships and unincorporated associations.

32

Ending of authorisation

Withdrawal of authorisation ....

33

EEA firms.

34

Treaty firms.

35

Authorised open-ended investment companies

36

Exercise of EEA rights by UK firms

Exercise of EEA rights by UK firms.

37

Exemption

Exemption orders.

38

Exemption of appointed representatives.

39

Certain tied agents operating outside United Kingdom

39A

Part IV — Permission to Carry on Regulated Activities