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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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

(b) “subsidiary undertaking” also includes, in relation to a body incorporated in or formed under the law of an EEA State ..., an undertaking which is a subsidiary undertaking within the meaning of any rule of law in force in that State for purposes connected with implementation of the Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC (and “parent undertaking” is to be read accordingly).

(3) In this Act “subsidiary undertaking”, in relation to an incorporated friendly society, means a body corporate of which the society has control within the meaning of section 13(9)(a) or (aa) of the Friendly Societies Act 1992 (and “parent undertaking” is to be read accordingly).

Group.

421

(1) In this Act “group”, in relation to a person (“A”), means A and any person who is—

(a) a parent undertaking of A;

(b) a subsidiary undertaking of A;

(d) a parent undertaking of a subsidiary undertaking of A;

(e) an undertaking in which A or an undertaking mentioned in paragraph (a), (b), (c) or (d) has a participating interest;

(f) if A or an undertaking mentioned in paragraph (a) or (d) is a building society, an associated undertaking of the society; or

(g) if A or an undertaking mentioned in paragraph (a) or (d) is an incorporated friendly society, a body corporate of which the society has joint control (within the meaning of section 13(9)(c) or (cc) of the Friendly Societies Act 1992).

(2) “Participating interest” has the meaning given in section 421A; but also includes an interest held by an individual which would be a participating interest for the purposes of those provisions if he were taken to be an undertaking.

(3) “Associated undertaking” has the meaning given in section 119(1) of the Building Societies Act 1986.

Immediate group

421ZA

In this Act “immediate group”, in relation to a person (“A”), means—

(a) A;

(b) a parent undertaking of A;

(d) a subsidiary undertaking of a parent undertaking of A;

(e) a parent undertaking of a subsidiary undertaking of A.

Meaning of “participating interest”

421A

(1) In section 421 a “participating interest” means an interest held by an undertaking in the shares of another undertaking which it holds on a long-term basis for the purpose of securing a contribution to its activities by the exercise of control or influence arising from or related to that interest.

(2) A holding of 20% or more of the shares of an undertaking is presumed to be a participating interest unless the contrary is shown.

(3) The reference in subsection (1) to an interest in shares includes—

(a) an interest which is convertible into an interest in shares, and

(b) an option to acquire shares or any such interest;

and an interest or option falls within paragraph (a) or (b) notwithstanding that the shares to which it relates are, until the conversion or the exercise of the option, unissued.

(4) For the purposes of this section an interest held on behalf of an undertaking shall be treated as held by it.

(5) In this section “undertaking” has the same meaning as in the Companies Acts (see section 1161(1) of the Companies Act 2006).

Controller.

422

(1) In this Act “controller”, in relation to an undertaking (“B”), means a person (“A”) who falls within any of the cases in subsection (2).

(2) The cases are where A holds—

(a) 10% or more of the shares in B or in a parent undertaking of B (“P”);

(b) 10% or more of the voting power in B or P; or

(c) shares or voting power in B or P as a result of which A is able to exercise significant influence over the management of B.

(3) For the purposes of calculations relating to this section, the holding of shares or voting power by a person (“A1”) includes any shares or voting power held by another (“A2”) if A1 and A2 are acting in concert.

(4) In this section “shares”—

(a) in relation to an undertaking with a share capital, means allotted shares;

(b) in relation to an undertaking with capital but no share capital, means rights to share in the capital of the undertaking;

(i) conferring any right to share in the profits, or liability to contribute to the losses, of the undertaking; or

(ii) giving rise to an obligation to contribute to the debts or expenses of the undertaking in the event of a winding up.

(5) In this section “voting power”—

(a) includes, in relation to a person (“H”)—

(i) voting power held by a third party with whom H has concluded an agreement, which obliges H and the third party to adopt, by concerted exercise of the voting power they hold, a lasting common policy towards the management of the undertaking in question;

(ii) voting power held by a third party under an agreement concluded with H providing for the temporary transfer for consideration of the voting power in question;

(iii) voting power attaching to shares which are lodged as collateral with H, provided that H controls the voting power and declares an intention to exercise it;

(iv) voting power attaching to shares in which H has a life interest;

(v) voting power which is held, or may be exercised within the meaning of subparagraphs (i) to (iv), by a controlled undertaking of H;

(vi) voting power attaching to shares deposited with H which H has discretion to exercise in the absence of specific instructions from the shareholders;

(vii) voting power held in the name of a third party on behalf of H;

(viii) voting power which H may exercise as a proxy where H has discretion about the exercise of the voting power in the absence of specific instructions from the shareholders; and

(b) in relation to an undertaking which does not have general meetings at which matters are decided by the exercise of voting rights, means the right under the constitution of the undertaking to direct the overall policy of the undertaking or alter the terms of its constitution.

(6) For the purposes of this section, an undertaking “B” is a controlled undertaking of H if any of the conditions in section 89J(4)(a) to (d) (read with section 89J(5)) is met (reading references in those provisions to A as references to H).

Disregarded holdings

422A

(1) For the purposes of section 422, shares and voting power that a person holds in an undertaking (“B”) or in a parent undertaking of B (“P”) are disregarded in the following circumstances.

(2) Shares held only for the purposes of clearing and settling within a short settlement cycle are disregarded.

(3) Shares held by a custodian or its nominee in a custodian capacity are disregarded, provided that the custodian or nominee is only able to exercise voting power attached to the shares in accordance with instructions given in writing.

(4) Shares representing no more than 5% of the total voting power in B or P held by an investment firm are disregarded, provided that it—

(a) holds the shares in the capacity of a market maker (as defined in article 2.1.6 of the markets in financial instruments regulation);

(b) has a Part 4A permission to carry on one or more investment services and activities;

(c) neither intervenes in the management of B or P nor exerts any influence on B or P to buy the shares or back the share price.

(5) Shares held by a qualifying credit institution or investment firm in its trading book are disregarded, provided that—

(a) the shares represent no more than 5% of the total voting power in B or P; and

(b) ... the voting power is not used to intervene in the management of B or P.

(6) Shares held by a qualifying credit institution or an investment firm are disregarded, provided that—

(a) the shares are held as a result of performing the investment services and activities of—

(i) underwriting shares; or

(ii) placing shares on a firm commitment basis ...; and

(b) the qualifying credit institution or investment firm—

(i) does not exercise voting power represented by the shares or otherwise intervene in the management of the issuer; and

(ii) retains the holding for a period of less than one year.

(7) Where a management company (as defined in section 237(2)) and its parent undertaking both hold shares or voting power, each may disregard holdings of the other, provided that each exercises its voting power independently of the other.

(8) But subsection (7) does not apply if the management company—

(a) manages holdings for its parent undertaking or a controlled undertaking of its parent undertaking;

(b) has no discretion to exercise the voting power attached to such holdings; and

(i) its parent undertaking; or

(ii) a controlled undertaking of the parent undertaking.

(9) Where an investment firm and its parent undertaking both hold shares or voting power, the parent undertaking may disregard holdings managed by the investment firm on a client by client basis and the investment firm may disregard holdings of the parent undertaking, provided that the investment firm—

(a) has permission to provide portfolio management;

(b) exercises its voting power independently from the parent undertaking; and

(c) may only exercise the voting power under instructions given in writing, or has appropriate mechanisms in place for ensuring that individual portfolio management services are conducted independently of any other services.

(9A) Shares acquired for stabilisation purposes in accordance with the market abuse regulation and Commission Delegated Regulation (EU) No. 1052/2016 of 8 March 2016 supplementing Regulation (EU) No. 596/2014 of the European Parliament and the Council with regard to the regulatory technical standards for conditions applicable to buy-back programmes and stabilisation measures are disregarded, provided that the voting power attached to those shares is not exercised or otherwise used to intervene in the management of B or P.

(10) For the purposes of this section “qualifying credit institution” includes a credit institution which is authorised under the law of Gibraltar relied on immediately before IP completion day to implement the capital requirements directive.

(11) For the purposes of this section, an undertaking is a controlled undertaking of the parent undertaking if it is controlled by the parent undertaking; and for this purpose the question of whether one undertaking controls another is to be determined in accordance with section 89J(4) and (5).

Manager.

423

(1) In this Act, except in relation to a unit trust scheme or a registered friendly society, “manager” means an employee who—

(a) under the immediate authority of his employer is responsible, either alone or jointly with one or more other persons, for the conduct of his employer’s business; or

(b) under the immediate authority of his employer or of a person who is a manager by virtue of paragraph (a) exercises managerial functions or is responsible for maintaining accounts or other records of his employer.

(2) If the employer is not an individual, references in subsection (1) to the authority of the employer are references to the authority—

(a) in the case of a body corporate, of the directors;

(b) in the case of a partnership, of the partners; and

(3) “Manager”, in relation to a body corporate, means a person (other than an employee of the body) who is appointed by the body to manage any part of its business and includes an employee of the body corporate (other than the chief executive) who, under the immediate authority of a director or chief executive of the body corporate, exercises managerial functions or is responsible for maintaining accounts or other records of the body corporate.

Mortgage agreements etc

423A

(1) In this Act—

“mortgage agreement” means an agreement to which subsection (2) applies, but to which subsection (3) does not apply, under which a mortgage creditor grants or promises to grant, to a consumer, a credit in the form of a deferred payment, loan or other similar financial accommodation;

“mortgage creditor” means a person who grants or promises to grant—in the course of the person's trade, business or profession, andunder an agreement to which subsection (2) applies but to which subsection (3) does not apply,credit in the form of a deferred payment, loan or other similar financial accommodation;

“mortgage intermediary” means a person who, in the course of the person's trade, business or profession, and acting neither as a mortgage creditor or notary nor in an introductory capacity, does any of the following for any agreed form of financial consideration—presenting or offering mortgage agreements to consumers;assisting consumers by undertaking preparatory work or other pre-contractual administration in respect of mortgage agreements (otherwise than as referred to in paragraph (a));concluding mortgage agreements with consumers on behalf of mortgage creditors;

“tied mortgage intermediary” means a mortgage intermediary who acts on behalf of and under the full and unconditional responsibility of—only one mortgage creditor,only one group of mortgage creditors, ora number of mortgage creditors or groups of mortgage creditors which does not represent the majority of the market.

(2) This subsection applies to the following agreements—

(a) an agreement secured by a mortgage on, or (in Scotland) a heritable security over, residential immovable property, or by any other charge or right over or related to such property;

(b) an agreement the purpose of which is to acquire or retain property rights in land or in an existing or projected building.

(3) This subsection applies to the following agreements—

(a) an agreement under which the creditor—

(i) contributes a lump sum, periodic payments or other forms of credit disbursement in return for a sum deriving from the future sale of a residential immovable property or a right relating to residential immovable property, and

(ii) will not seek repayment of the credit until the occurrence of one or more specified life events of the consumer, unless the consumer breaches contractual obligations so as to allow the creditor to terminate the agreement;

(b) an agreement under which credit is granted by an employer to its employees as a secondary activity where the agreement is offered free of interest or at an annual rate lower than that prevailing on the market and not offered to the public generally;

(c) an agreement under which credit is granted free of interest and without any other charges except those that recover costs directly related to the securing of the credit;

(d) an agreement in the form of an overdraft facility under which the credit has to be repaid within one month;

(e) an agreement which is the outcome of a settlement reached in or before a court or other statutory authority;

(f) an agreement which—

(i) relates to the deferred payment, free of charge, of an existing debt, and

(ii) is not secured by a mortgage, by another comparable security commonly used in the United Kingdom on residential immovable property or by a right related to residential immovable property.

(4) In this section—

“acting in an introductory capacity” means merely introducing (directly or indirectly) a consumer to a mortgage creditor or mortgage intermediary;

“annual rate” means the total cost to the borrower expressed as an annual percentage of the total amount of credit;

“consumer” means an individual who is acting for purposes outside those of any trade, business or profession carried on by the individual;

“group of mortgage creditors” means a group of mortgage creditors that are to be consolidated for the purposes of drawing up consolidated accounts in accordance with—the requirements of Part 15 of the Companies Act 2006, if the parent undertaking (within the meaning of that Act) is a company, orif it is not, the legal requirements that apply to the drawing up of consolidated accounts for the parent undertaking;

“specified” means specified in rules made by the FCA.

(5) A reference in this section to any immovable property, land or building—

(a) in relation to an agreement entered into before IP completion day, is a reference to any immovable property, land or building in the United Kingdom or within the territory of an EEA State;

(b) in relation to an agreement entered into on or after IP completion day, is a reference to any immovable property, land or building in the United Kingdom.

Insurance.

424

(1) In this Act, references to—

(a) contracts of insurance,

(b) reinsurance,

(d) contracts of general insurance,

are to be read with section 22 and Schedule 2.

(2) In this Act “policy” and “policyholder”, in relation to a contract of insurance, have such meaning as the Treasury may by order specify.

(3) The law applicable to a contract of insurance, the effecting of which constitutes the carrying on of a regulated activity, is to be determined, if it is of a prescribed description, in accordance with regulations made by the Treasury.

Investment firm

424A

(1) In this Act (except as otherwise provided), “investment firm” has the meaning given in paragraph 2.1A of the markets in financial instruments regulation.

(2) Subsection (1) is subject to subsection (5).

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

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

(5) References in this Act to an “investment firm” do not include references to—

(a) a person excluded from the definition of “investment firm” in Article 3(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) by paragraph (a) or (b) of that definition; or

(b) 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).

Expressions relating to authorisation ... in the single market.

425

(1) In this Act—

(a) “alternative investment fund managers directive”, “capital requirements directive”, ... ... ... “EEA firm”, “EEA right”, “EEA State”, “emission allowance auctioning regulation”, ..., ... ... ... “insurance distribution directive”, ... “markets in financial instruments directive”, “mortgages directive”, “single market directives” ... , “tied agent” and “UCITS directive” have the meaning given in Schedule 3; ...

(aa) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . and

(b) “home state regulator”, in relation to an EEA firm, has the meaning given in Schedule 3.

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

Consumers: regulated activities etc carried on by authorised persons

425A

(1) This section has effect for the purposes of the provisions of this Act which apply this section.

(2) “Consumers” means persons who—

(a) who use, have used or may use any of the services within subsection (3); ...

(b) who have relevant rights or interests in relation to any of those services ; or

(d) in respect of whom a person carries on an activity which is specified in article 89G of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (seeking out etc claims) whether that activity, as carried on by that person, is a regulated activity or is, by reason of an exclusion provided for under the 2001 Order or the 2000 Act, not a regulated activity.

(3) The services within this subsection are services provided by—

(a) authorised persons in carrying on regulated activities;

(b) authorised persons who are investment firms, or qualifying credit institutions, in providing relevant ancillary services; or

(4) A person (“P”) has a “relevant right or interest” in relation to any services within subsection (3) if P has a right or interest—

(a) which is derived from, or is otherwise attributable to, the use of the services by others; or

(b) which may be adversely affected by the use of the services by persons acting on P's behalf or in a fiduciary capacity in relation to P.

(5) If a person is providing a service within subsection (3) as a trustee, the persons who are, have been or may be beneficiaries of the trust are to be treated as persons who use, have used or may use the service.

(6) A person who deals with another person (“A”) in the course of A providing a service within subsection (3) is to be treated as using the service.

(7) In this section—

“regulated benchmark” means a benchmark, as defined in section 22 ... (6A), in relation to which any provision made under section 22(1A) ... (c) has effect.

“relevant ancillary service” means any service of a kind mentioned in Part 3A of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) the provision of which does not involve the carrying on of a regulated activity.

Consumers: regulated activities carried on by others

425B

(1) This section has effect for the purposes of the provisions of this Act which apply this section.

(2) “ Consumers ” means persons who, in relation to regulated activities carried on otherwise than by authorised persons, would be consumers as defined by section 425A if the activities were carried on by authorised persons.

“Qualifying provision”

425C

(1) In this Act “qualifying provision” means a provision of any of the following—

(a) assimilated direct legislation;

(b) technical standards made in accordance with Chapter 2A of Part 9A;

(ba) other subordinate legislation made under assimilated direct legislation;

(c) subordinate legislation ... made by virtue of regulations made under section 8 of the European Union (Withdrawal) Act 2018.

(2) In this section, “subordinate legislation” has the same meaning as in the Interpretation Act 1978 (see section 21 of that Act).

Part XXX — Supplemental

Consequential and supplementary provision.

426

(1) A Minister of the Crown may by order make such incidental, consequential, transitional or supplemental provision as he considers necessary or expedient for the general purposes, or any particular purpose, of this Act or in consequence of any provision made by or under this Act or for giving full effect to this Act or any such provision.

(2) An order under subsection (1) may, in particular, make provision—

(a) for enabling any person by whom any powers will become exercisable, on a date set by or under this Act, by virtue of any provision made by or under this Act to take before that date any steps which are necessary as a preliminary to the exercise of those powers;

(b) for applying (with or without modifications) or amending, repealing or revoking any provision of or made under an Act passed before this Act or in the same Session;

(d) for making savings, or additional savings, from the effect of any repeal or revocation made by or under this Act.

(3) Amendments made under this section are additional, and without prejudice, to those made by or under any other provision of this Act.

(4) No other provision of this Act restricts the powers conferred by this section.

Transitional provisions.

427

(1) Subsections (2) and (3) apply to an order under section 426 which makes transitional provisions or savings.

(2) The order may, in particular—

(a) if it makes provision about the authorisation and permission of persons who before commencement were entitled to carry on any activities, also include provision for such persons not to be treated as having any authorisation or permission (whether on an application to a regulator or otherwise);

(b) make provision enabling a regulator to require persons of such descriptions as it may direct to re-apply for permissions having effect by virtue of the order;

(c) make provision for the continuation as rules of such provisions (including primary and subordinate legislation) as may be designated in accordance with the order by a regulator, including provision for the modification by a regulator of provisions designated;

(d) make provision about the effect of requirements imposed, liabilities incurred and any other things done before commencement, including provision for and about investigations, penalties and the taking or continuing of any other action in respect of contraventions;

(e) make provision for the continuation of disciplinary and other proceedings begun before commencement, including provision about the decisions available to bodies before which such proceedings take place and the effect of their decisions;

(f) make provision as regards the FCA’s obligation to maintain a record under section 347 as respects persons in relation to whom provision is made by the order.

(3) The order may—

(a) confer functions on the Treasury, the Secretary of State, a regulator, the scheme manager, the scheme operator, members of the panel established under paragraph 4 of Schedule 17 or the Competition and Markets Authority;

(b) confer jurisdiction on the Tribunal;

(d) modify, exclude or apply (with or without modifications) any primary or subordinate legislation (including any provision of, or made under, this Act).

(4) In subsection (2) “commencement” means the commencement of such provisions of this Act as may be specified by the order.

Regulations and orders.

428

(1) Any power to make an order which is conferred on a Minister of the Crown by this Act and any power to make regulations which is conferred by this Act is exercisable by statutory instrument.

(2) The Lord Chancellor’s power to make rules under section 132 is exercisable by statutory instrument.

(3) Any statutory instrument made under this Act may—

(za) make provision by reference to any rules or other instruments as they have effect from time to time;

(a) contain such incidental, supplemental, consequential and transitional provision as the person making it considers appropriate; and

(b) make different provision for different cases.

(4) In subsection (3)(za) “rules” includes rules made by the Bank of England under this Act.

Parliamentary control of statutory instruments.

429

(1) No order is to be made under—

(a) section 1J, 3B(4), 3F(6), 55C, ... 138K(6)(c), 144(4), 192(b) or (e) , 192B(6), 204A(7), 213(1A), 236(5), 285(4), 380(12), 382(15), 384(13), 404G . . . or 419 , 419 or 419B, or

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

unless a draft of the order has been laid before Parliament and approved by a resolution of each House.

(2) No regulations are to be made under section 3RE, 90B 131O(7), , 137AA(3), 137GA(2) 138BA, 138EA(3), 141B, 142W, 143C(2), 143D(2), 143G(1), 144C(1), ... , 214A, 214B , 214D , 262, 271S, 282C, 284A, 300M, ... 309Z8 , 333T or 417(5) or paragraph 5, 6, 58(3)(a), 59(3)(a) or 60(8) of Schedule 2A unless a draft of the regulations has been laid before Parliament and approved by a resolution of each House.

(2A) Regulations to which subsection (2B) applies are not to be made unless a draft of the regulations has been laid before Parliament and approved by a resolution of each House.

(2B) This subsection applies to regulations which contain—

(a) provision made under section 59AB(2) which modifies, excludes or applies with modifications any provision of primary legislation;

(aa) provision made under section 71Q which amends or repeals a provision of this Act;

(ab) provision made under section 71R which amends, repeals or revokes a provision of this Act or another Act of Parliament, an Act of the Scottish Parliament, an Act or Measure of Senedd Cymru, or Northern Ireland legislation;

(ac) provision made under section 117H which amends or repeals any provision of primary legislation;

(b) provision made under section 137FBA(3);

(ba) provision made under section 143B(2) which amends this Act;

(bb) provision made under section 309H(2) which modifies, excludes or applies with modifications any provision of primary legislation;

(d) provision made under paragraph 15(3) of Schedule 17;

(d) provision made under paragraph 3(4) or 9(3) of Schedule 19B;

(e) provision made under paragraph 12 of Schedule 19C.

(3) An order to which, if it is made, subsection (4) or (5) will apply is not to be made unless a draft of the order has been laid before Parliament and approved by a resolution of each House.

(4) This subsection applies to an order under section 21 if—

(a) it is the first order to be made, or to contain provisions made, under section 21(4);

(b) it varies an order made under section 21(4) so as to make section 21(1) apply in circumstances in which it did not previously apply;

(d) it varies a previous order made under section 21(5) so as to make section 21(1) apply in circumstances in which it did not, as a result of that previous order, apply;

(e) it is the first order to be made, or to contain provisions made, under section 21(9) or (10) , (10) or (10B);

(f) it adds one or more activities to those that are controlled activities for the purposes of section 21; or

(g) it adds one or more investments to those which are controlled investments for the purposes of section 21 ; or

(h) it adds one or more activities to those that are controlled claims management activities for the purposes of section 21.

(5) This subsection applies to an order under section 38 if—

(a) it is the first order to be made, or to contain provisions made, under that section; or

(b) it contains provisions restricting or removing an exemption provided by an earlier order made under that section.

(6) An order containing a provision to which, if the order is made, subsection (7) will apply is not to be made unless a draft of the order has been laid before Parliament and approved by a resolution of each House.

(7) This subsection applies to a provision contained in an order if—

(a) it is the first to be made in the exercise of the power conferred by subsection (1) of section 326 or it removes a body from those for the time being designated under that subsection; or

(b) it is the first to be made in the exercise of the power conferred by subsection (6) of section 327 or it adds a description of regulated activity or investment to those for the time being specified for the purposes of that subsection.

(7A) An order to which, if it is made, subsection (7B) will apply is not to be made unless a draft of the order has been laid before Parliament and approved by a resolution of each House.

(7B) This subsection applies to an order under section 419A(4) if—

(a) it is the first order to be made, or to contain provisions made, under that subsection; or

(b) it adds one or more benefits to those that are specified benefits for the purposes of section 419A.

(8) Any other statutory instrument made under this Act, apart from one made under section 3G(1), , 312L 137D(1)(b), 165A(2)(d) , 192A(4) or 431(2) or to which section 22B , 23A , 71S or 142Z or paragraph 26 of Schedule 2 applies, shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(9) Any provision that may be made in a statutory instrument under this Act subject to annulment in pursuance of a resolution of either House of Parliament may be made in a statutory instrument which is subject to a procedure before Parliament for the approval of the instrument in draft before it is made or its approval after it is made.

Extent.

430

(1) This Act, except Chapter IV of Part XVII, extends to Northern Ireland.

(2) Except where Her Majesty by Order in Council provides otherwise, the extent of any amendment or repeal made by or under this Act is the same as the extent of the provision amended or repealed.

(3) Her Majesty may by Order in Council provide for any provision of or made under this Act relating to a matter which is the subject of other legislation which extends to any of the Channel Islands or the Isle of Man to extend there with such modifications (if any) as may be specified in the Order.

Commencement.

431

(1) The following provisions come into force on the passing of this Act—

(a) this section;

(b) sections 428, 430 and 433;

(2) The other provisions of this Act come into force on such day as the Treasury may by order appoint; and different days may be appointed for different purposes.

Minor and consequential amendments, transitional provisions and repeals.

432

(1) Schedule 20 makes minor and consequential amendments.

(2) Schedule 21 makes transitional provisions.

(3) The enactments set out in Schedule 22 are repealed.

Short title.

433

This Act may be cited as the Financial Services and Markets Act 2000.

SCHEDULE 1 — The Financial Services Authority

Part I — General

Interpretation

1

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Constitution

2

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Non-executive members of the governing body

3

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Functions of the non-executive committee

4

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Arrangements for discharging functions

5

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Monitoring and enforcement

6

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

Arrangements for the investigation of complaints

7

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

Investigation of complaints

8

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

Records

9

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

Annual report

10

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

Annual public meeting

11

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

Report of annual meeting

12

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

Part II — Status

13

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

Exemption from requirement of “limited” in Authority’s name

14

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

15

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

Part III — Penalties and Fees

Penalties

16

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

Fees

17

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

Services for which fees may not be charged

18

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

Part IV — Miscellaneous

Exemption from liability in damages

19

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

19A

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

Amounts required by rules to be paid to the Authority

19B

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

Disqualification for membership of House of Commons

20

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

Disqualification for membership of Northern Ireland Assembly

21

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

SCHEDULE 1ZA — The Financial Conduct Authority

PART 1 — General

Interpretation

1

In this Schedule—

“the Bank” means the Bank of England;

“functions”, in relation to the FCA, means functions conferred on the FCA by or under any provision of this Act (see section 1A(6) which affects the meaning of references to such functions).

Constitution

2

(1) The constitution of the FCA must provide for the FCA to have a governing body.

(2) The governing body must consist of—

(a) a chair appointed by the Treasury,

(b) a chief executive appointed by the Treasury,

(ca) the Chair of the Payment Systems Regulator,

(d) 2 members appointed jointly by the Secretary of State and the Treasury, and

(e) at least one other member appointed by the Treasury.

(3) The members referred to in sub-paragraph (2)(a), (c) , (ca) and (d) are to be non-executive members.

(4) In exercising its powers under sub-paragraph (2)(e) to appoint executive or non-executive members, the Treasury must secure that the majority of members of the governing body are non-executive members.

(5) An employee of the FCA may not be appointed as a non-executive member.

(6) In the following provisions of this Schedule an “appointed member” means a member of the governing body appointed under sub-paragraph (2)(a), (b), (d) or (e).

2A

(1) The term of office of a person appointed as chief executive under paragraph 2(2)(b) must not begin before—

(a) the person has, in connection with the appointment, appeared before the Treasury Committee of the House of Commons, or

(b) (if earlier) the end of the period of 3 months beginning with the day on which the appointment is made.

(1A) Appointment as chief executive under paragraph 2(2)(b) is to be for a period of 5 years.

(2) Sub-paragraphs (1) and (1A) do not apply if the person is appointed as chief executive on an acting basis, pending a further appointment being made.

(3) The reference to the Treasury Committee of the House of Commons—

(a) if the name of that Committee is changed, is a reference to that Committee by its new name, and

(b) if the functions of that Committee (or substantially corresponding functions) become functions of a different Committee of the House of Commons, is to be treated as a reference to the Committee by which the functions are exercisable.

(4) Any question arising under sub-paragraph (3) is to be determined by the Speaker of the House of Commons.

2B

(1) A person may not be appointed as chief executive under paragraph 2(2)(b) more than twice.

(2) For this purpose an appointment as chief executive on an acting basis, pending a further appointment being made, is to be ignored.

3

(1) The terms of service of the appointed members are to be determined by the Treasury.

(2) In the case of a member appointed under paragraph 2(2)(d), the Treasury must consult the Secretary of State about the terms of service.

(3) Before appointing a person as an appointed member, the Treasury (or as the case requires the Treasury and the Secretary of State) must consider whether the person has any financial or other interests that could have a material effect on the extent of the functions as member that it would be proper for the person to discharge.

(4) The terms of service of an appointed member (“M”) must be such as—

(a) to secure that M is not subject to direction by the Treasury or the Secretary of State,

(b) to require M not to act in accordance with the directions of any other person, and

(c) to prohibit M from acquiring any financial or other interests that have a material effect on the extent of the functions as member that it would be proper for M to discharge.

(5) If an appointed member is an employee of the FCA, the member's interest as employee is to be disregarded for the purposes of sub-paragraphs (3) and (4)(c) and paragraph 4(1)(b).

(6) A person who is an employee of the PRA or of the Payment Systems Regulator is disqualified for appointment as an appointed member.

(7) The FCA may pay expenses to a person holding an office mentioned in paragraph 2(2)(c) or (ca) in respect of that person's service as a member.

4

(1) The Treasury may remove an appointed member from office—

(a) on the grounds of incapacity or serious misconduct, or

(b) on the grounds that in all the circumstances the member's financial or other interests are such as to have a material effect on the extent of the functions as member that it would be proper for the person to discharge.

(2) Before removing from office a member appointed under paragraph 2(2)(d), the Treasury must consult the Secretary of State.

5

The validity of any act of the FCA is not affected—

(a) by any vacancy in any of the offices mentioned in paragraph 2(2)(a), (b) , (c) or (ca), or

(b) by a defect in the appointment of a person—

(i) to any of those offices, or

(ii) as an appointed member.

6

The Bank's Deputy Governor for prudential regulation must not take part in any discussion by or decision of the FCA which relates to—

(a) the exercise of the FCA's functions in relation to a particular person, or

(b) a decision not to exercise those functions.

6A

(1) The Chair of the Payment Systems Regulator must not take part in any discussion by or decision of the FCA which relates to—

(a) the exercise of the FCA’s functions in relation to a particular person, or

(b) a decision not to exercise those functions.

(2) Sub-paragraph (1) does not apply at any time when the person who is the Chair of the Payment Systems Regulator also holds the office mentioned in paragraph 2(2)(a).

Remuneration

7

The FCA must pay to the appointed members such remuneration as may be determined—

(a) in the case of the non-executive members, by the Treasury;

(b) in the case of the executive members, by the FCA.

Arrangements for discharging functions

8

(1) The FCA may make arrangements for any of its functions to be discharged by a committee, sub-committee, officer or member of staff of the FCA, but subject to the following provisions.

(2) In exercising its legislative functions, the FCA must act through its governing body.

(3) For that purpose, the following are the FCA's legislative functions—

(a) making rules under this Act or under assimilated direct legislation;

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

(i) section 63ZD, 63C, ... 69, 88C, 89S, 93, 124, ... 138N, 142V, 192H, 192N, 210 or 312J,

(ii) section 345D (whether as a result of section 345(2) , section 249(1) or 261K(1)), or

(iii) section 80 of the Financial Services Act 2012;

(d) giving directions under section 316, 318 or 328.

(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(f) making technical standards in accordance with Chapter 2A of Part 9A;

(g) making EU Exit instruments under the Financial Regulators’ Powers (Technical Standards) (Amendment etc.) (EU Exit) Regulations 2018.

(3A) In exercising its functions under sections 9(2) and 10 of the Financial Guidance and Claims Act 2018 (approving and reviewing standards set by Money and Pensions Service), the FCA must act through its governing body.

(4) The function of issuing general guidance (as defined in section 139B(5) ...) may not be discharged by an officer or member of staff of the FCA.

(5) In respect of the exercise of a function under Part 1 of the Competition Act 1998, the power in sub-paragraph (1) is subject to provision in rules made under section 51 of that Act by virtue of paragraph 1A of Schedule 9 to that Act.

Records

9

The FCA must maintain satisfactory arrangements for—

(a) recording decisions made in the exercise of its functions, and

(b) the safe-keeping of those records which it considers ought to be preserved.

Publication of record of meetings of governing body

10

(1) The FCA must publish a record of each meeting of its governing body—

(a) before the end of the period of 6 weeks beginning with the day of the meeting, or

(b) if no meeting of the governing body is subsequently held during that period, before the end of the period of 2 weeks beginning with the day of the next meeting.

(2) The record must specify any decision taken at the meeting (including decisions to take no action) and must set out, in relation to each decision, a summary of the deliberations of the governing body.

(3) Sub-paragraphs (1) and (2) do not require the publication of information whose publication within the time required by sub-paragraph (1) would in the opinion of the governing body be against the public interest.

(4) Publication under this section is to be in such manner as the FCA thinks fit.

Annual report

11

(1) At least once a year the FCA must make a report to the Treasury on—

(a) the discharge of its functions,

(b) the extent to which, in its opinion, its operational objectives have been advanced,

(d) how, in its opinion, it has complied with the duty in section 1B(4),

(da) how, in its opinion, it has complied with the duty in section 1B(4A),

(e) its consideration of the matter mentioned in section 1B(5)(b),

(f) its consideration of the principles in section 3B,

(g) how it has complied with section 3D,

(h) any direction received under section 3I or 3J during the period to which the report relates,

(ha) any rules that it has made as a result of section 137C during the period to which the report relates and the kinds of regulated credit agreement (within the meaning of that section) to which the rules apply,

(hb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(hc) how it has satisfied the requirement in section 138EA(2) so far as regarding disclosure requirements in connection with matters relating to sustainability,

(i) how it has complied with section 354A(1) so far as relating to co-operation with persons outside the United Kingdom, ...

(ia) how, in its opinion, it has complied with its duties under sections 9(2) and 10 of the Financial Guidance and Claims Act 2018, ...

(ib) how it has satisfied the requirement in section 416B to have regard to any SDR policy statement of the Treasury published and not withdrawn under section 416A (sustainability disclosure requirements: policy statement),

(ib) any engagement with the statutory panels of the FCA, the PRA or the Payment Systems Regulator,

(ic) how it has complied with the statement of policy on panel appointments prepared under section 1RA in relation to the process for making appointments and the matters considered in determining who is appointed, and

(j) such other matters as the Treasury may from time to time direct.

(2) Sub-paragraph (1) does not require the inclusion in the report of any information whose publication would in the opinion of the FCA be against the public interest.

(3) The report must be accompanied by—

(a) a statement of the remuneration of the appointed members of the governing body of the FCA during the period to which the report relates, and

(b) such other reports or information, prepared by such persons, as the Treasury may from time to time direct.

(4) The Treasury must lay before Parliament a copy of each report received by them under this paragraph.

(5) In this paragraph “statutory panel” has the meaning given in section 1RB(5).

Other reports

11A

(1) The Treasury may (subject to this paragraph) at any time by direction require the FCA to publish a report containing information about—

(a) any of the matters mentioned in paragraphs (a) to (ia) of paragraph 11(1);

(b) such other matters that the direction may specify.

(2) The Treasury may give a direction under this paragraph requiring information to be published only if the Treasury consider that—

(a) the information is reasonably necessary for the purpose of reviewing and scrutinising the discharge of the FCA’s functions, and

(b) other available information is not sufficient to meet that purpose.

(3) Subject to sub-paragraph (4), the FCA must publish a report prepared under a direction given under this paragraph in such manner, and within such period, as the direction may require.

(4) Nothing in this paragraph requires the inclusion in the report of any information whose publication would be against the public interest.

(5) A direction under this paragraph may not—

(a) require a report to be published more than once in each quarter;

(b) require the publication of information that is confidential information for the purposes of Part 23 (see section 348(2)).

(6) The Treasury must consult the FCA before giving a direction under this paragraph.

(7) In exercising the power under this paragraph, the Treasury must have regard to the desirability of minimising any adverse effect that the preparation of the report required in accordance with the direction may have on the exercise by the FCA of any of its other functions.

(8) The Treasury must—

(a) lay before Parliament a copy of a direction given under this paragraph, and

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

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

Annual public meeting

12

(1) Not later than 3 months after making a report under paragraph 11, the FCA must hold a public meeting (“the annual meeting”) for the purposes of enabling that report to be considered.

(2) The FCA must organise the annual meeting so as to allow—

(a) a general discussion of the contents of the report which is being considered, and

(b) a reasonable opportunity for those attending the meeting to put questions to the FCA about the way in which it discharged, or failed to discharge, its functions during the period to which the report relates.

(3) But otherwise the annual meeting is to be organised and conducted in such a way as the FCA considers appropriate.

(4) The FCA must give reasonable notice of its annual meeting.

(5) That notice must—

(a) give details of the time and place at which the meeting is to be held,

(b) set out the proposed agenda for the meeting,

(d) give details of the FCA's arrangements for enabling persons to attend, and

(e) be published by the FCA in the way appearing to it to be best calculated to bring the notice to the attention of the public.

(6) If the FCA proposes to alter any of the arrangements which have been included in the notice given under sub-paragraph (5), it must—

(a) give reasonable notice of the alteration, and

(b) publish that notice in the way appearing to the FCA to be best calculated to bring it to the attention of the public.

Report of annual meeting

13

Not later than one month after its annual meeting, the FCA must publish a report of the proceedings of the meeting.

Accounts and audit

14

(1) The Treasury may—

(a) require the FCA to comply with any provisions of the Companies Act 2006 about accounts and their audit which would not otherwise apply to it, or

(b) direct that any provision of that Act about accounts and their audit is to apply to the FCA with such modifications as are specified in the direction, whether or not the provision would otherwise apply to the FCA.

(2) Compliance with any requirement under sub-paragraph (1)(a) or (b) is enforceable by injunction or, in Scotland, an order for specific performance under section 45 of the Court of Session Act 1988.

(3) Proceedings under sub-paragraph (2) may be brought only by the Treasury.

15

(1) The FCA must send a copy of its annual accounts to the Comptroller and Auditor General as soon as is reasonably practicable.

(2) The Comptroller and Auditor General must—

(a) examine, certify and report on accounts received under this paragraph, and

(b) send a copy of the certified accounts and the report to the Treasury.

(3) The Treasury must lay the copy of the certified accounts and the report before Parliament.

(4) Except as provided by paragraph 14(1), the FCA is exempt from the requirements of Part 16 of the Companies Act 2006 (audit), and its balance sheet must contain a statement to that effect.

(5) In this paragraph “annual accounts” has the meaning given in section 471 of the Companies Act 2006.

PART 2 — Status

Status

16

In relation to any of its functions—

(a) the FCA is not to be regarded as acting on behalf of the Crown, and

(b) its members, officers and staff are not to be regarded as Crown servants.

Exemption from requirement for use of “limited” in name of FCA

17

The FCA is to continue to be exempt from the requirements of the Companies Act 2006 relating to the use of “limited” as part of its name.

18

If the Secretary of State is satisfied that any action taken by the FCA makes it inappropriate for the exemption given by paragraph 17 to continue, the Secretary of State may, after consulting the Treasury, give a direction removing it.

PART 3 — Penalties and fees

Penalties

19

In determining its policy with respect to the amounts of penalties to be imposed by it under this Act, the FCA must take no account of the expenses which it incurs, or expects to incur, in discharging its functions.

20

(1) The FCA must in respect of each of its financial years pay to the Treasury its penalty receipts after deducting its enforcement costs.

(2) The FCA's “penalty receipts” in respect of a financial year are any amounts received by it during the year by way of penalties imposed under this Act.

(3) The FCA's “enforcement costs” in respect of a financial year are the expenses incurred by it during the year in connection with—

(a) the exercise, or consideration of the possible exercise, of any of its enforcement powers in particular cases, or

(b) the recovery of penalties imposed under this Act or under a provision mentioned in sub-paragraph (4A).

(4) For this purpose the FCA's enforcement powers are—

(a) its powers under any of the provisions mentioned in section 133(7A),

(b) its powers under section 56 (prohibition orders),

(ba) its powers under section 143S (Part 9C prohibition orders),

(bb) its powers under section 309B (Part 18 prohibition orders),

(ca) its powers under the relevant competition provisions (as applied by Part 16A of this Act),

(d) its powers under any other enactment specified by the Treasury by order,

(e) its powers in relation to the investigation of relevant offences, and

(f) its powers in England and Wales or Northern Ireland in relation to the prosecution of relevant offences.

(4A) The relevant competition provisions” are—

(a) section 31E of the Competition Act 1998 (enforcement of commitments);

(b) section 34 of that Act (enforcement of directions);

(d) section 40A of that Act (penalties: failure to comply with requirements);

(e) section 174A of the Enterprise Act 2002 (penalties).

(5) “Relevant offences” are—

(a) offences under this Act,

(b) offences under subordinate legislation made under this Act,

(ca) offences under Part 1 of the Competition Act 1998,

(cb) offences under Part 4 of the Enterprise Act 2002,

(d) offences under Part 7 of the Financial Services Act 2012, and

(e) any other offences specified by the Treasury by order.

(6) The Treasury may give directions to the FCA as to how the FCA is to comply with its duty under sub-paragraph (1).

(7) The directions may in particular—

(a) specify descriptions of expenditure that are, or are not, to be regarded as incurred in connection with either of the matters mentioned in sub-paragraph (3),

(b) relate to the calculation and timing of the deduction in respect of the FCA's enforcement costs, and

(8) The directions may also require the FCA to provide the Treasury at specified times with specified information relating to—

(a) penalties that the FCA has imposed under this Act, or

(b) the FCA's enforcement costs.

(9) The Treasury must pay into the Consolidated Fund any sums received by them under this paragraph.

21

(1) The FCA must prepare and operate a scheme (“the financial penalty scheme”) for ensuring that the amounts that, as a result of the deduction for which paragraph 20(1) provides, are retained by the FCA in respect of amounts paid to it by way of penalties imposed under this Act are applied for the benefit of regulated persons.

(2) “Regulated persons” means—

(a) authorised persons,

(b) recognised investment exchanges,

(d) issuers who have requested or approved the admission of financial instruments to trading on a regulated market, ...

(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) The financial penalty scheme may, in particular, make different provision with respect to different classes of regulated person.

(4) The financial penalty scheme must ensure that those who have become liable to pay a penalty to the FCA in any financial year of the FCA do not receive any benefit under the scheme in the following financial year.

(5) Up-to-date details of the financial penalty scheme must be set out in a document (“the scheme details”).

22

(1) The scheme details must be published by the FCA in the way appearing to it to be best calculated to bring them to the attention of the public.

(2) Before making the financial penalty scheme, the FCA must publish a draft of the proposed scheme in the way appearing to the FCA to be best calculated to bring it to the attention of the public.

(3) The draft must be accompanied by notice that representations about the proposals may be made to the FCA within a specified time.

(4) Before making the scheme, the FCA must have regard to any representations made to it in accordance with sub-paragraph (3).

(5) If the FCA makes the proposed scheme, it must publish an account, in general terms, of—

(a) the representations made to it in accordance with sub-paragraph (3), and

(b) its response to them.

(6) If the scheme differs from the draft published under sub-paragraph (2) in a way which is, in the opinion of the FCA, significant, the FCA must (in addition to complying with sub-paragraph (5)) publish details of the difference.

(7) The FCA must, without delay, give the Treasury a copy of any scheme details published by it.

(8) The FCA may charge a reasonable fee for providing a person with a copy of—

(a) a draft published under sub-paragraph (2);

(b) scheme details.

(9) Sub-paragraphs (2) to (6) and (8)(a) also apply to a proposal to alter or replace the financial penalty scheme.

Fees

23

(1) The FCA may make rules providing for the payment to it of such fees, in connection with the discharge of any of its qualifying functions, as it considers will (taking account of its expected income from fees and charges provided for by any other provision of this Act other than sections 137SA, , 137SB ... and 333T) enable it—

(a) to meet expenses incurred in carrying out its functions , other than its excepted functions, or for any incidental purpose,

(b) to repay the principal of, and pay any interest on, any relevant borrowing and to meet relevant commencement expenses, and

(2) The “qualifying functions” of the FCA are—

(a) its functions under or as a result of this Act or any of the other enactments mentioned in section 1A(6)(a) to (ca) and (e) but not its excepted functions, and

(b) its functions under or as a result of a qualifying provision that is specified, or of a description specified, for the purposes of this sub-paragraph by the Treasury by order.

(2ZA) The “excepted functions” of the FCA are—

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

(b) its functions under section 333T so far as relating to the collection of payments. , and

(2A) The functions referred to in sub-paragraph (1)(a) include functions of the FCA under the Competition Act 1998 or the Enterprise Act 2002 as a result of Part 16A of this Act; but this sub-paragraph is not to be regarded as limiting the effect of the definition of “functions” in paragraph 1.

(3) In sub-paragraph (1)(b)—

“relevant borrowing” means any money borrowed by the FCA which has been used for the purpose of meeting expenses incurred in relation to its assumption of functions under this Act, and

“relevant commencement expenses” means expenses incurred by the FCA—in preparation for the exercise of functions by the FCA under this Act, orfor the purpose of facilitating the exercise by the FCA of those functions or otherwise in connection with their exercise by it.

(4) Neither section 1A(6)(d) nor the definition of “functions” in paragraph 1 applies for the purposes of sub-paragraph (2).

(5) For the purposes of sub-paragraph (3) it is irrelevant when the borrowing of the money, the incurring of the expenses or the assumption of functions took place (and, in particular, it is irrelevant if any of those things were done at a time when the FCA was known as the Financial Services Authority).

(6) In the case of rules made under Part 6 of this Act, the rules may, in particular, require the payment of fees in respect of—

(a) the continued inclusion of securities or persons in any list or register required to be kept by the FCA as a result of any provision made by or under that Part,

(b) access to any list or register within paragraph (a), and

(7) In fixing the amount of any fee which is to be payable to the FCA, no account is to be taken of any sums which the FCA receives, or expects to receive, by way of penalties imposed by it under this Act.

(8) Any fee which is owed to the FCA under any provision made by or under this Act may be recovered as a debt due to the FCA.

Services for which fees may not be charged

24

The power conferred by paragraph 23 may not be used to require—

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

(b) a fee to be paid by any person whose application for approval under section 59 has been granted.

(c) a fee to be paid by any person whose application under section 309I for approval under section 309G has been granted.

PART 4 — Miscellaneous

Exemption from liability in damages

25

(1) None of the following is to be liable in damages for anything done or omitted in the discharge, or purported discharge, of the FCA's functions—

(a) the FCA;

(b) any person (“P”) who is, or is acting as, a member, officer or member of staff of the FCA;

(c) any person who could be held vicariously liable for things done or omitted by P, but only in so far as the liability relates to P's conduct.

(1A) In sub-paragraph (1) the reference to the FCA's functions includes its functions under

(a) Part 5 of the Financial Services (Banking Reform) Act 2013 (regulation of payment systems),

(b) Part 3 of the Finance Act 2022 (economic crime (anti-money laundering) levy).

(2) Anything done or omitted by a person mentioned in sub-paragraph (1)(a) or (b) while acting, or purporting to act, as a result of an appointment under any of sections 166 to 169 is to be taken for the purposes of sub-paragraph (1) to have been done or omitted in the discharge, or as the case may be purported discharge, of the FCA's functions.

(3) Sub-paragraph (1) does not apply—

(a) if the act or omission is shown to have been in bad faith, or

(b) so as to prevent an award of damages made in respect of an act or omission on the ground that the act or omission was unlawful as a result of section 6(1) of the Human Rights Act 1998.

Accredited financial investigators

26

For the purposes of this Act anything done by an accredited financial investigator within the meaning of the Proceeds of Crime Act 2002 who—

(a) is, or is acting as, an officer of, or member of the staff of, the FCA, or

(b) is appointed by the FCA under section 97, 167 or 168 to conduct an investigation,

is to be treated as done in the exercise or discharge of a function of the FCA.

Amounts required by rules to be paid to the FCA

27

Any amount (other than a fee) which is required by rules to be paid to the FCA may be recovered as a debt due to the FCA.

Engagement with Parliamentary Committees

28

(1) This paragraph applies where the FCA issues a relevant consultation.

(2) For the purposes of this paragraph the FCA issues a relevant consultation if it—

(a) publishes a draft of proposed rules under section 138I,

(b) publishes a proposal under a duty imposed by another provision of this Act or by any other enactment, or

(3) The FCA must, as soon as reasonably practicable after issuing the consultation, notify in writing the chair of each relevant Parliamentary Committee that the consultation has been issued.

(4) The notification must specify the parts of the consultation (if any) that address the ways in which the proposals subject to consultation—

(a) advance the FCA’s operational objectives,

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

(d) engage with matters to which the FCA must have regard under regulations made under section 138EA.

(5) The reference in sub-paragraph (4)(a) to the FCA’s operational objectives includes, in its application as a secondary objective, the competitiveness and growth objective (see section 1EB).

(6) The notification must also specify any other part of the consultation which the FCA considers should be drawn to the attention of the relevant Parliamentary Committees.

(7) References in this paragraph to the relevant Parliamentary Committees are references to—

(a) the Treasury Committee of the House of Commons,

(b) the Committee of the House of Lords which—

(i) is charged with responsibility by that House for the purposes of this paragraph, and

(ii) has notified the FCA that it is a relevant Parliamentary Committee for those purposes, and

(i) is charged with responsibility by those Houses for the purposes of this paragraph, and

(ii) has notified the FCA that it is a relevant Parliamentary Committee for those purposes.

(8) References in this paragraph to the Treasury Committee of the House of Commons—

(a) if the name of that Committee is changed, are references to that Committee by its new name, and

(b) if the functions of that Committee (or substantially corresponding functions) become functions of a different Committee of the House of Commons, are to be treated as references to the Committee by which the functions are exercisable.

(9) Any question arising under sub-paragraph (8) is to be determined by the Speaker of the House of Commons.

29

(1) This paragraph applies where—

(a) the FCA issues a public consultation, and

(b) a Committee of the House of Commons or the House of Lords, or a joint Committee of both Houses, has provided to the FCA representations in response to the consultation.

(2) For the purposes of this paragraph, the FCA issues a public consultation if it publishes the draft of any proposals for the purpose of bringing them to the attention of the public (whether or not under a duty to do so imposed by an enactment).

(3) The FCA must give to the chair of the Committee concerned a written response to the representations.

(4) The duty to respond imposed by sub-paragraph (3) applies only so far as the FCA would not be under a corresponding duty to do so imposed by another enactment.

(5) The FCA is not required under sub-paragraph (3) to provide any information whose publication would in the opinion of the FCA be against the public interest.

SCHEDULE 1ZB — The Prudential Regulation Authority

PART 1 — General

Interpretation

1

In this Schedule—

“functions”, in relation to the PRA, means functions conferred on the PRA by or under any provision of this Act (see section 2AB(3) which affects the meaning of references to such functions).

Constitution

2

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

3

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

4

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

5

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

Appointed members of governing body

6

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

7

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

8

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

9

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

10

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

11

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

12

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13

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

14

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

Terms of service

15

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

Arrangements for discharging functions

16

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

Records

17

The PRA must maintain satisfactory arrangements for—

(a) recording decisions made in the exercise of its functions, and

(b) the safe-keeping of those records which it considers ought to be preserved.

Budget

18

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

Annual report

19

(1) At least once a year the PRA must make a report to the Chancellor of the Exchequer on—

(a) the discharge of its functions,

(b) the extent to which, in its opinion, its objectives have been advanced,

(ba) how it has complied with section 2H(1),

(bb) how it has complied with the statement of policy on panel appointments prepared under section 2NA in relation to the process for making appointments and the matters considered in determining who is appointed,

(d) how it has complied with section 3D,

(e) any direction given under section 3I or 3J during the period to which the report relates,

(ea) how it has satisfied the requirement in section 138EA(2) so far as regarding disclosure requirements in connection with matters relating to sustainability,

(f) how it has complied with section 354B(1) so far as relating to co-operation with persons outside the United Kingdom, ...

(fa) any engagement with the statutory panels of the FCA, the PRA or the Payment Systems Regulator,

(fb) how it has satisfied the requirement in section 416B to have regard to any SDR policy statement of the Treasury under section 416A (sustainability disclosure requirements: policy statement), and

(g) such other matters as the Treasury may from time to time direct.

(1A) In the report the PRA must also report in general terms on—

(a) the extent to which, in its opinion, ring-fenced bodies have complied with the ring-fencing provisions,

(b) steps taken by ring-fenced bodies in order to comply with the ring-fencing provisions,

(d) the extent to which ring-fenced bodies are carrying on the regulated activity of dealing in investments as principal (whether in the United Kingdom or elsewhere) in circumstances where as a result of an order under section 142D(2) that activity is not an excluded activity,

(e) the extent to which ring-fenced bodies are carrying on activities that would be excluded activities by virtue of an order under section 142D(4) but for an exemption or exclusion made by such an order,

(f) the extent to which ring-fenced bodies are doing things that they would be prohibited from doing by an order under section 142E but for an exemption made by such an order, and

(g) the extent to which ring-fenced bodies appear to it to have acted in accordance with any guidance which it has given to ring-fenced bodies and which relates to the operation of the ring-fencing provisions.

(1B) In sub-paragraph (1A)—

(a) references to “ring-fenced bodies” relate only to ring-fenced bodies that are PRA-authorised persons, and

(b) “the ring-fencing provisions” means ring-fencing rules and the duty imposed as a result of section 142G.

(2) Sub-paragraphs (1) and (1A) do not require the inclusion in the report of any information whose publication would in the opinion of the PRA be against the public interest.

(3) The report must be accompanied by—

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

(b) such other reports or information, prepared by such persons, as the Treasury may from time to time direct.

(4) The Chancellor of the Exchequer must lay before Parliament a copy of each report received by the Chancellor under this paragraph.

(5) The Chancellor may comply with sub-paragraph (4) by laying a document containing a report under this paragraph together with a report under section 4 of the Bank of England Act 1998.

(6) In this paragraph “statutory panel” has the meaning given in section 1RB(5).

Consultation about annual report

20

(1) In relation to each report made under paragraph 19, the PRA must publish at the same time as the report an invitation to members of the public to make representations to the PRA, within the 3 months beginning with the date of publication—

(a) about the report,

(b) about the way in which the PRA has discharged, or failed to discharge, its functions during the period to which the report relates, and

(c) about the extent to which, in their opinion, the PRA's objectives have been advanced including its secondary objectives under section 2H and has considered the regulatory principles in section 3B .

(2) The invitation must be published in the way appearing to it to be best calculated to bring the invitation to the attention of the public.

Report on consultation

21

(1) The PRA must publish a report about its consultation in accordance with paragraph 20.

(2) The report must contain an account, in general terms, of any representations received in pursuance of the invitation published under that paragraph.

(3) The report must be published not later than 4 months after the date on which the report under paragraph 19 was published.

Other reports

21A

(1) The Treasury may (subject to this paragraph) at any time by direction require the PRA to publish a report containing information about—

(a) any of the matters mentioned in paragraphs (a) to (f) of paragraph 19(1);

(b) such other matters that the direction may specify.

(2) The Treasury may give a direction under this paragraph requiring information to be published only if the Treasury consider that—

(a) the information is reasonably necessary for the purpose of reviewing and scrutinising the discharge of the PRA’s functions, and

(b) other available information is not sufficient to meet that purpose.

(3) Subject to sub-paragraph (4), the PRA must publish a report prepared under a direction given under this paragraph in such manner, and within such period, as the direction may require.

(4) Nothing in this paragraph requires the inclusion in the report of any information whose publication would be against the public interest.

(5) A direction under this paragraph may not—

(a) require a report to be published more than once in each quarter;

(b) require the publication of information that is confidential information for the purposes of Part 23 (see section 348(2)).

(6) The Treasury must consult the PRA before giving a direction under this paragraph.

(7) In exercising the power under this paragraph, the Treasury must have regard to the desirability of minimising any adverse effect that the preparation of the report required in accordance with the direction may have on the exercise by the PRA of any of its other functions.

(8) The Treasury must—

(a) lay before Parliament a copy of a direction given under this paragraph, and

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

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

Accounts and audit

22

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

23

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

PART 2 — Status

Status

24

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

Exemption from requirement for use of “limited” in name of PRA

25

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

26

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

PART 3 — Penalties and fees

Penalties

27

In determining its policy with respect to the amounts of penalties to be imposed by it under this Act, the PRA must take no account of the expenses which it incurs, or expects to incur, in discharging its functions.

28

(1) The PRA must in respect of each of its financial years pay to the Treasury its penalty receipts after deducting its enforcement costs.

(2) The PRA's “penalty receipts” in respect of a financial year are any amounts received by it during the year by way of penalties imposed under this Act.

(3) The PRA's “enforcement costs” in respect of a financial year are the expenses incurred by it during the year in connection with—

(a) the exercise, or consideration of the possible exercise, of any of its enforcement powers in particular cases, or

(b) the recovery of penalties imposed under this Act.

(4) For this purpose the PRA's enforcement powers are—

(a) its powers under any of the provisions mentioned in section 133(7A),

(b) its powers under section 56 (prohibition orders),

(d) its powers under any other enactment specified by the Treasury by order,

(e) its powers in relation to the investigation of relevant offences, and

(f) its powers in England and Wales or Northern Ireland in relation to the prosecution of relevant offences.

(5) “Relevant offences” are—

(a) offences under FSMA 2000,

(b) offences under subordinate legislation made under that Act, and

(6) The Treasury may give directions to the PRA as to how the PRA is to comply with its duty under sub-paragraph (1).

(7) The directions may in particular—

(a) specify descriptions of expenditure that are, or are not, to be regarded as incurred in connection with either of the matters mentioned in sub-paragraph (3),

(b) relate to the calculation and timing of the deduction in respect of the PRA's enforcement costs, and

(8) The directions may also require the PRA to provide the Treasury at specified times with information relating to—

(a) penalties that the PRA has imposed under FSMA 2000, or

(b) the PRA's enforcement costs.

(9) The Treasury must pay into the Consolidated Fund any sums received by them under this paragraph.

29

(1) The PRA must prepare and operate a scheme (“the financial penalty scheme”) for ensuring that the amounts that, as a result of the deduction for which paragraph 28(1) provides, are retained by the PRA in respect of amounts paid to it by way of penalties imposed under this Act are applied for the benefit of PRA-authorised persons.

(2) The financial penalty scheme may, in particular, make different provision with respect to different classes of PRA-authorised person.

(3) The financial penalty scheme must ensure that those who have become liable to pay a penalty to the PRA in any financial year of the PRA do not receive any benefit under the scheme in the following financial year.

(4) Up-to-date details of the financial penalty scheme must be set out in a document (“the scheme details”).

30

(1) The scheme details must be published by the PRA in the way appearing to it to be best calculated to bring them to the attention of the public.

(2) Before making the financial penalty scheme, the PRA must publish a draft of the proposed scheme in the way appearing to the PRA to be best calculated to bring it to the attention of the public.

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

(4) Before making the scheme, the PRA must have regard to any representations made to it in accordance with sub-paragraph (3).

(5) If the PRA makes the proposed scheme, it must publish an account, in general terms, of—

(a) the representations made to it in accordance with sub-paragraph (3), and

(b) its response to them.

(6) If the scheme differs from the draft published under sub-paragraph (2) in a way which is, in the opinion of the PRA, significant, the PRA must (in addition to complying with sub-paragraph (5)) publish details of the difference.

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