Legalize / United Kingdom / Statutory-Instrument

The Financial Services and Markets Act 2000 (Exemption) Order 2001

Type Statutory-Instrument

Publication 2001-03-26

State In force

Department King's Printer of Acts of Parliament

Source legislation.gov.uk

Reform history JSON API PDF

Made: 26th March 2001

Coming into force: In accordance with article 1

Whereas this Order is the first Order to be made, or to contain provisions made, under section 38 of the Financial Services and Markets Act 2000;

And whereas a draft of this Order has been approved by a resolution of each House of Parliament pursuant to section 429(3) and (5) of that Act;

Now, therefore, the Treasury, in exercise of the powers conferred on them by sections 38 and 428(3) of that Act, hereby make the following Order:

Citation and commencement

1

This Order may be cited as the Financial Services and Markets Act 2000 (Exemption) Order 2001 and comes into force on the day on which section 19 of the Act comes into force.

Interpretation

2

In this Order—

“the Act" means the Financial Services and Markets Act 2000;

“charity"—in relation to Scotland, means a body entered in the Scottish Charity Register; andotherwise, has the meaning given by section 96(1) of the Charities Act 1993 or by section 35 of the Charities Act (Northern Ireland) 1964 ;

“deposit" has the meaning given by the Regulated Activities Order;

“industrial and provident society" has the meaning given by section 417(1) of the Act but does not include a credit union within the meaning of the Credit Unions Act 1979 or the Credit Unions (Northern Ireland) Order 1985 ;

“investment firm” has the meaning given by the Regulated Activities Order;

“local authority" means—in England and Wales, a local authority within the meaning of the Local Government Act 1972 , the Greater London Authority, the Common Council of the City of London or the Council of the Isles of Scilly;in Scotland, a local authority within the meaning of the Local Government (Scotland) Act 1973 ; andin Northern Ireland, a district council within the meaning of the Local Government Act (Northern Ireland) 1972 ;

“non-qualifying contract of insurance” means a contract of insurance (within the meaning of the Regulated Activities Order) which is not a qualifying contract of insurance (within the meaning of that Order);

“qualifying credit institution” has the meaning given by article 3 of the Regulated Activities Order;

“the Regulated Activities Order" means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 .

Persons exempt in respect of any regulated activity other than insurance business

3

Each of the persons listed in Part I of the Schedule is exempt from the general prohibition in respect of any regulated activity other than an activity of the kind specified by article 10 of the Regulated Activities Order (effecting and carrying out contracts of insurance).

Persons exempt in respect of accepting deposits

4

Subject to the limitations, if any, expressed in relation to him, each of the persons listed in Part II of the Schedule is exempt from the general prohibition in respect of any regulated activity of the kind specified by article 5 of the Regulated Activities Order (accepting deposits).

Persons exempt in respect of particular regulated activities

5

(1) Subject to the limitation, if any, expressed in relation to him, each of the persons listed in Part III of the Schedule is exempt from the general prohibition in respect of any regulated activity of the kind specified by any of the following provisions of the Regulated Activities Order, or article 64 of that Order (agreeing to carry on specified kinds of activity) so far as relevant to any such activity—

(a) article 14 (dealing in investments as principal);

(b) article 21 (dealing in investments as agent);

(ca) article 25D (operating a multilateral trading facility);

(cb) article 25DA (operating an organised trading facility);

(d) article 37 (managing investments);

(da) article 39A (assisting in the administration and performance of a contract of insurance);

(e) article 40 (safeguarding and administering investments);

(f) article 45 (sending dematerialised instructions);

(ga) article 51ZA (managing a UCITS);

(gb) article 51ZB (acting as a trustee or depositary of a UCITS);

(gc) article 51ZC (managing an AIF);

(gd) article 51ZD (acting as a trustee or depositary of an AIF);

(ge) article 51ZE (establishing etc. a collective investment scheme);

(h) article 52 (establishing etc. a ... pension scheme);

(i) article 53 (advising on investments).

(j) article 55A (providing targeted support).

(2) Subject to the limitation, if any, expressed in relation to him, each of the persons listed in Part IV of the Schedule is exempt from the general prohibition in respect of any regulated activity of the kind referred to in relation to him, or an activity of the kind specified by article 64 of the Regulated Activities Order so far as relevant to any such activity.

Transitional exemption for credit unions

6

A credit union, within the meaning ..., is exempt from the general prohibition in respect of any regulated activity of the kind specified by article 5 of the Regulated Activities Order, but only until 1st July 2002.

SCHEDULE

PART I — PERSONS EXEMPT IN RESPECT OF ANY REGULATED ACTIVITY OTHER THAN INSURANCE BUSINESS

1

The Bank of England.

2

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

3

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4

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5

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6

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7

The European Investment Bank.

8

The International Bank for Reconstruction and Development.

9

The International Finance Corporation.

10

The International Monetary Fund.

11

The African Development Bank.

12

The Asian Development Bank.

13

The Caribbean Development Bank.

14

The Inter-American Development Bank.

15

The European Bank for Reconstruction and Development.

PART II — PERSONS EXEMPT IN RESPECT OF ACCEPTING DEPOSITS

16

A municipal bank, that is to say a company which was, immediately before the coming into force of this Order, exempted from the prohibition in section 3 of the Banking Act 1987 by virtue of section 4(1) of, and paragraph 4 of Schedule 2 to, that Act.

17

(1) Keesler Federal Credit Union, in so far as it accepts deposits from members, or dependants of members, of a visiting force of the United States of America, or from members, or dependants of members, of a civilian component of such a force.

(2) In sub-paragraph (1), “member", “dependent" and “visiting force" have the meanings given by section 12 of the Visiting Forces Act 1952 and “member of a civilian component" has the meaning given by section 10 of that Act.

18

A body of persons certified as a school bank by the National Savings Bank or by an authorised person who has permission to accept deposits.

19

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

20

(1) Any body which by virtue of any enactment has power to issue a precept to a local authority in England or Wales or a requisition to a local authority in Scotland, or to the expenses of which, by virtue of any enactment, a local authority in the United Kingdom is or can be required to contribute.

(2) In sub-paragraph (1), “enactment" includes an enactment comprised in, or in an instrument made under, an Act of the Scottish Parliament.

21

The Council of Europe Development Bank.

22

A charity, in so far as it accepts deposits—

(a) from another charity; or

(b) in respect of which no interest or premium is payable.

23

The National Children’s Charities Fund in so far as—

(a) it accepts deposits in respect of which no interest or premium is payable; and

(b) the total value of the deposits made by any one person does not exceed £10,000.

24

An industrial and provident society, in so far as it accepts deposits in the form of withdrawable share capital.

25

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

PART III — PERSONS EXEMPT IN RESPECT OF ANY REGULATED ACTIVITY MENTIONED IN ARTICLE 5(1)

26

The National Debt Commissioners.

27

Partnerships UK.

28

The International Development Association.

29

The English Tourist Board.

30

....

31

VisitScotland.

32

The Northern Ireland Tourist Board.

33

Scottish Enterprise.

34

The Multilateral Investment Guarantee Agency.

35

A person acting as an official receiver within the meaning of section 399 of the Insolvency Act 1986 or article 2 of the Insolvency (Northern Ireland) Order 1989 .

36

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

37

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

38

A person acting as a judicial factor.

39

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

PART IV — PERSONS EXEMPT IN RESPECT OF PARTICULAR REGULATED ACTIVITIES

Enterprise schemes

40

(1) Any body corporate which has as its principal object (or one of its principal objects)—

(a) the promotion or encouragement of industrial or commercial activity or enterprise in the United Kingdom or in any particular area of it; or

(b) the dissemination of information concerning persons engaged in such activity or enterprise or requiring capital to become so engaged;

is exempt from the general prohibition in respect of any regulated activity of the kind specified by articles 25, 36A, 39D, 39E and 89A of the Regulated Activities Order (arranging deals in investments, credit broking, debt adjusting, debt-counselling and providing credit information services) so long as it does not carry on that activity for, or with the prospect of, direct or indirect pecuniary gain.

(2) For the purposes of this paragraph, such sums as may reasonably be regarded as necessary to meet the costs of carrying on the activity mentioned in sub-paragraph (1) do not constitute a pecuniary gain.

(3) This paragraph does not apply where an investment firm or qualifying credit institution—

(a) provides or performs investment services and activities on a professional basis, and

(b) in doing so, but for the operation of sub-paragraph (1), it would be treated as carrying on an activity of a kind specified by Part 2 of the Regulated Activities Order in breach of the general prohibition.

Employee share schemes in electricity industry shares

41

(1) Each of the persons to whom this paragraph applies is exempt from the general prohibition in respect of any regulated activity of the kind specified by article 14, 21 or 25 of the Regulated Activities Order (dealing in investments as principal or agent or arranging deals in investments) which he carries on for the purpose of—

(a) enabling or facilitating transactions in electricity industry shares or debentures between or for the benefit of any qualifying person; or

(b) the holding of electricity industry shares or debentures by or for the benefit of any qualifying person.

(2) This paragraph applies to—

(a) The National Grid Holding plc;

(b) Electricity Association Limited;

(d) any company listed in Schedule 1 to the Electricity Act 1989 (Nominated Companies) (England and Wales) Order 1990 ; and

(e) a person holding shares in or debentures of a body corporate as trustee in pursuance of arrangements made for either of the purposes mentioned in sub-paragraph (1) by the Secretary of State, by any of the bodies mentioned in sub-paragraphs (a) to (c) or by an electricity successor company or by some or all of them.

(3) In this paragraph—

(a) “electricity industry shares or debentures" means—

(i) any investment of the kind specified by article 76 , 77 or 77A of the Regulated Activities Order (shares or instruments creating or acknowledging indebtedness or alternative finance investment bonds) in or of an electricity successor company;

(ii) any investment of the kind specified by article 79 or 80 of that Order (instruments giving entitlement to investments and certificates representing certain securities), so far as relevant to the investments mentioned in sub-paragraph (i); and

(iii) any investment of the kind specified by article 89 of that Order (rights to or interests in investments) so far as relevant to the investments mentioned in sub-paragraphs (i) and (ii);

(b) “qualifying person" means—

(i) the bona fide employees or former employees of The National Grid Holding plc, Electricity Association Limited or any other body corporate in the same group as either of them; and

(ii) the wives, husbands, widows, widowers , civil partners, surviving civil partners, or children (including, in Northern Ireland, adopted children) or step-children under the age of eighteen of such employees or former employees;

(c) references to an electricity successor company include any body corporate that is in the same group and “electricity successor company" means a body corporate which is a successor company for the purposes of Part II of the Electricity Act 1989 ;

(d) “former employees" of a person (“the employer") include any person who has never been employed by the employer so long as he occupied a position in relation to some other person of such a kind that it may reasonably be assumed that he would have been a former employee of the employer had the reorganisation of the electricity industry under Part II of the Electricity Act 1989 been affected before he ceased to occupy the relevant position.

Gas industry

42

(1) Transco plc is exempt from the general prohibition in respect of any regulated activity of the kind specified by article 14, 21 , 25 , 25D or 25DA of the Regulated Activities Order (dealing in investments as principal or agent , arranging deals in investments , operating a multilateral trading facility or operating an organised trading facility) which it carries on—

(a) in its capacity as a gas transporter under the Transco Licence; and

(b) for the purposes of enabling or facilitating gas shippers to buy or sell an investment of the kind specified by article 84 or 85 of the Regulated Activities Order (futures or contracts for differences etc.).

(2) ENMO Ltd. is exempt from the general prohibition in respect of any regulated activity of the kind specified by article 14, 21 , 25 , 25D or 25DA of the Regulated Activities Order (dealing in investments as principal or agent , arranging deals in investments , operating a multilateral trading facility or operating an organised trading facility) which it carries on—

(a) in its capacity as the operator of the balancing market; and

(b) for the purpose of enabling or facilitating Transco plc and relevant gas shippers, for the purpose of participating in the balancing market, to buy or sell investments of the kind specified by article 84 or 85 of that Order (futures or contracts for differences etc.).

(3) Transco plc and relevant gas shippers are exempt from the general prohibition in respect of any regulated activity of the kind specified by article 14 or 21 of the Regulated Activities Order (dealing in investments as principal or agent) in so far as that activity relates to an investment of the kind specified by article 84 or 85 of that Order (futures or contracts for differences etc.) and is carried on for the purpose of participating in the balancing market.

(4) In this paragraph—

(a) “the balancing market" means the market to regulate the delivery and off-take of gas in Transco plc’s pipeline system for the purpose of balancing the volume of gas in that system;

(b) “gas shipper" has the same meaning as in Part I of the Gas Act 1986 ;

(c) “relevant gas shippers" means gas shippers who have entered into a subscription agreement with ENMO Ltd. for the purpose of participating in the balancing market;

(d) “Transco Licence" means the licence treated as granted to Transco plc as a gas transporter under section 7 of the Gas Act 1986 ;

(e) the reference to enabling or facilitating includes acting pursuant to rules governing the operation of the balancing market which apply in the event of one of the participants appearing to be unable, or likely to become unable, to meet his obligations in respect of one or more contracts entered into through the balancing market.

Trade unions and employers’ associations

43

(1) A trade union or employers’ association is exempt from the general prohibition in respect of any regulated activity of the kind specified by article 10 of the Regulated Activities Order (effecting and carrying out contracts of insurance) which it carries on in order to provide provident benefits or strike benefits for its members.

(2) In sub-paragraph (1), “trade union" and “employers’ association" have the meanings given by section 1 and section 122(1) of the Trade Union and Labour Relations (Consolidation) Act 1992 or, in Northern Ireland, the meanings given by article 3(1) and article 4(1) of the Industrial Relations (Northern Ireland) Order 1992 .

Charities

44

(A1) A charity is exempt from the general prohibition in respect of any regulated activity of the kind specified by article 36H of the Regulated Activities Order (operating an electronic system in relation to lending) which it carries on in relation to an article 36H agreement (within the meaning given in article 36H(4) of the Regulated Activities Order) under or in connection with which the only amount payable to the lender is the amount of credit provided.

(1) A charity is exempt from the general prohibition in respect of any regulated activity of the kind specified by articles 51ZA to 51ZE of the Regulated Activities Order (managing or acting as trustee or depositary of a UCITS or an AIF, or establishing etc. a collective investment scheme) which it carries on in relation to a fund established under—

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