The Financial Services and Markets Act 2000 (Market Abuse) Regulations 2016

SCHEDULE 1 (1) (1) Where the Authority exercises functions under the emission allowance market abuse regime the following provisions of the Act apply with the modifications set out in paragraphs 2 to 22— (a) Part 8 (provisions relating to market abuse), except for section 122A (power to require information from issuers) and section 122G (publication of information and corrective statements by issuers); (b) Part 9 (hearings and appeals); (c) Part 11 (information gathering and investigations), except for sections 165 (regulator's power to require information: authorised persons etc) to 167 (appointment of persons to carry out general investigations); (d) Part 14 (disciplinary measures); (e) section 300 (extension of functions of Tribunal); (f) Part 25 (injunctions and restitution); (g) Part 26 (notices); and (h) section 417 (definitions) . (2) In this paragraph “functions under the emission allowance market abuse regime” means functions which— (a) are conferred on the Authority by Article 43.1 of the emission allowance auctioning regulation; and (b) relate to Articles 37 to 43 of the emission allowance auctioning regulation as they apply under Article 36.2 of that regulation to auctioned products which are not financial instruments as defined by Article 4.1(17) of the markets in financial instruments directive. (2) Section 122B (general power to require information) has effect as if the references in that section to the market abuse regulation or a supplementary EU regulation were to the emission allowance auctioning regulation. (3) Section 122C (power to require information: supplementary) has effect as if— (a) in subsection (6)(a) the reference to Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation were to Article 38 (prohibition of insider dealing), Article 39 (other prohibited uses of inside information) or Article 41 (prohibition of market manipulation) of the emission allowance auctioning regulation; (b) in subsection (6)(b) the reference to a provision of the market abuse regulation or a supplementary EU regulation were to Article 42 of the emission allowance auctioning regulation; (c) in subsection (7)(a) the reference to Article 14 or 15 of the market abuse regulation were to Article 38, 39 or 41 of the emission allowance auctioning regulation; (d) in subsection (7)(b) in subsection (7)(b) the reference to a provision of the market abuse regulation or a supplementary EU regulation were to Article 42 of the emission allowance auctioning regulation. (4) Section 122D (entry of premises under warrant) has effect as if the references in that section to the market abuse regulation or a supplementary EU regulation were to the emission allowance auctioning regulation. (5) Section 122H(3) (publication of corrective statements generally) has effect as if the reference to the market abuse regulation or a supplementary EU regulation were to the emission allowance auctioning regulation. (6) Part 8 (provisions relating to market abuse) has effect as if for section 122I there were substituted— (122I) (1) The FCA may suspend trading in, or the auctioning of, an auctioned product where it considers it necessary for the purposes of the exercise by it of functions under the emission allowances market abuse regime. (2) A suspension by the FCA takes effect— (a) immediately, if the FCA specify that that is the case; (b) in any other case, on such date as the FCA specify. (3) The FCA may— (a) cancel a suspension under subsection (1); and (b) impose such conditions for the cancellation to take effect as it considers appropriate. (7) Section 123(1) (power to impose penalties or issue censure) has effect as if— (a) in paragraph (a) the reference to Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation were to Article 38 (prohibition of insider dealing), Article 39 (other prohibited uses of inside information) or Article 41 (prohibition of market manipulation) of the emission allowance auctioning regulation; (b) in paragraph (b) the reference to a provision of the market abuse regulation or a supplementary EU regulation were to Article 42 of the emission allowance auctioning regulation; and (c) in paragraph (c)(ii) the reference to the market abuse regulation or a supplementary EU regulation were to the emission allowance market abuse regime. (8) Section 123A (power to prohibit individuals from managing or dealing) has effect as if— (a) in subsection (1)— (i) in paragraph (a) the reference to Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation were to Article 38 (prohibition of insider dealing), Article 39 (other prohibited uses of inside information) or Article 41 (prohibition of market manipulation) of the emission allowance auctioning regulation; and (ii) in paragraph (b) the reference to a provision of the market abuse regulation or a supplementary EU regulation were to Article 42 of the emission allowance auctioning regulation; and (b) in subsection (2)— (i) in paragraph (b) the reference to financial instruments were to auctioned products; and (ii) after paragraph (b) there were inserted— (c) a temporary prohibition on the individual making a bid, on his or her own account or the account of a third party, directly or indirectly, at an auction conducted by a recognised auction platform. (c) in subsection (3) the reference to Article 14 or 15 of the market abuse regulation were to Article 38, 39 or 41 of the emission allowance auctioning regulation. (9) Section 123B(1) (suspending permission to carry on regulated activities etc) has effect as if — (a) in paragraph (a) the reference to Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation were to Article 38 (prohibition of insider dealing), Article 39 (other prohibited uses of inside information) or Article 41 (prohibition of market manipulation) of the emission allowance auctioning regulation; and (b) in paragraph (b) the reference to a provision of the market abuse regulation or a supplementary EU regulation were to Article 42 of the emission allowance auctioning regulation. (10) In section 124(10) (statement of policy) the definition of “relevant person” has effect as if — (a) in paragraph (a) the reference to Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation were to Article 38 (prohibition of insider dealing), Article 39 (other prohibited uses of inside information) or Article 41 (prohibition of market manipulation) of the emission allowance auctioning regulation; (b) in paragraph (b) the reference to a provision of the market abuse regulation or a supplementary EU regulation were to Article 42 of the emission allowance auctioning regulation; and (c) in paragraph (c)(ii) the references to the market abuse regulation were to the emission allowance market abuse regime. (11) Section 129 (power of court to impose a penalty, prohibition, suspension, or restriction in cases of market abuse) has effect as if— (a) in subsection (1) the reference to a market abuse requirement were to an emission allowance market abuse regime requirement; (b) in subsection (3) the reference to Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation were to Article 38 (prohibition of insider dealing), Article 39 (other prohibited uses of inside information) or Article 41 (prohibition of market manipulation) of the emission allowance auctioning regulation; (c) in subsection (7)— (i) the definition of “market abuse requirement” were omitted; and (ii) at the appropriate place there were inserted— “emission allowance market abuse regime requirement” means a requirement imposed by the emission allowance market abuse regime which is a relevant requirement for the purposes of section 380 or 382 (as the case may be); (iii) in paragraph (ii) of the definition of “temporary prohibition” the reference to financial instruments were to auctioned products; (iv) after paragraph (ii) of the definition of “temporary prohibition” there were inserted— (iii) making a bid, on his or her own account or the account of a third party, directly or indirectly, at an auction conducted by a recognised auction platform. (12) Section 130(1)(a) (guidance) has effect as if the reference to Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation were to Article 38 (prohibition of insider dealing), Article 39 (other prohibited uses of inside information) or Article 41 (prohibition of market manipulation) of the emission allowance auctioning regulation. (13) Section 131A(2) (protected disclosures) has effect as if the reference in the closing words to Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation were to Article 38 (prohibition of insider dealing), Article 39 (other prohibited uses of inside information) or Article 41 (prohibition of market manipulation) of the emission allowance auctioning regulation. (14) Section 131AB (interpretation) has effect as if at the appropriate places there were inserted— (a) “ “auctioned product” has the meaning given in Article 4 of the emission allowance auctioning regulation;”; and (b) “ “emission allowance market abuse regime” means Articles 37 to 43 of the emission allowance auctioning regulation as they apply to auctioned products which are not financial instruments;”. (15) Section 131AE (liability for contraventions of Article 14 or 15 of the market abuse regulation) has effect as if the reference to Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation were to Article 38 (prohibition of insider dealing), Article 39 (other prohibited uses of inside information) or Article 41 (prohibition of market manipulation) of the emission allowance auctioning regulation. (16) Section 139A(4) (power of the FCA to give guidance) has effect as if the reference to the market abuse regulation or a directly applicable EU regulation made under the market abuse regulation were to the emission allowance market abuse regime. (17) Section 168 (appointment of persons to carry out investigations in particular cases) has effect as if— (a) in subsection (2)(d) the reference to Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation were to Article 38 (prohibition of insider dealing), Article 39 (other prohibited uses of inside information) or Article 41 (prohibition of market manipulation) of the emission allowance auctioning regulation; and (b) in subsection (4)(jb) the reference to the market abuse regulation were to the emission allowance market abuse regime. (18) Section 169(2A)(b) (investigations etc in support of overseas regulator) has effect as if the reference to Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation were to Article 38 (prohibition of insider dealing), Article 39 (other prohibited uses of inside information) or Article 41 (prohibition of market manipulation) of the emission allowance auctioning regulation. (19) Section 174(3A) (admissibility of statements made to investigators) has effect as if the reference to Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation were to Article 38 (prohibition of insider dealing), Article 39 (other prohibited uses of inside information) or Article 41 (prohibition of market manipulation) of the emission allowance auctioning regulation. (20) Section 300(4) (extension of functions of Tribunal) has effect as if the reference to Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation were to Article 38 (prohibition of insider dealing), Article 39 (other prohibited uses of inside information) or Article 41 (prohibition of market manipulation) of the emission allowance auctioning regulation. (21) Section 381 (injunctions in cases of market abuse) has effect as if— (a) in subsection (1)(a) the reference to Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation were to Article 38 (prohibition of insider dealing), Article 39 (other prohibited uses of inside information) or Article 41 (prohibition of market manipulation) of the emission allowance auctioning regulation; and (b) in subsection (1)(b), (2)(a), 3(a) and (b) the reference to Article 14 or 15 of the market abuse regulation were to Article 38, 39 or 41 of the emission allowance auctioning regulation. (22) Section 383(1)(a) (restitution orders in cases of market abuse) has effect as if the reference to Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation were to Article 38 (prohibition of insider dealing), Article 39 (other prohibited uses of inside information) or Article 41 (prohibition of market manipulation) of the emission allowance auctioning regulation. (23) Section 384 (power of FCA to require restitution) has effect as if— (a) in subsection (2)— (i) in paragraph (a) the reference to Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation were to Article 38 (prohibition of insider dealing), Article 39 (other prohibited uses of inside information) or Article 41 (prohibition of market manipulation) of the emission allowance auctioning regulation; and (ii) in paragraph (b) the reference to Article 14 or 15 of the market abuse regulation were to Article 38, 39 or 41 of the emission allowance auctioning regulation; and (b) in subsection (3) the references to Article 14 or 15 of the market abuse regulation were to Article 38, 39 or 41 of the emission allowance auctioning regulation. (24) Section 417(1) (definitions) has effect as if at the appropriate place there were inserted— “emission allowance market abuse regime” has the meaning given in section 131AB.

Financial Services and Markets Act 2000 (Qualifying EU Provisions) Order 2013

22

• (1) The Financial Services and Markets Act 2000 (Qualifying EU Provisions) Order 2013 is amended as follows.

• (2) In article 2 (qualifying EU provisions: general)—

• (a) after paragraph (2)(i) insert—

(j) the market abuse regulation and any directly applicable regulation made under that Regulation.

• (b) after paragraph (8)(e) insert—

(f) the market abuse regulation and any directly applicable regulation made under that Regulation.

; and

• (c) after paragraph (9) insert—

(10) The market abuse regulation and any directly applicable regulation made under that Regulation are specified qualifying EU provisions for the purposes of section 66A(4) of the Act.

• (3) In article 4 (qualifying EU provisions etc.: recognised investment exchanges and clearing houses) after paragraph (9) insert—

(10) The market abuse regulation and any directly applicable regulation made under that Regulation are specified qualifying EU provisions for the purposes of sections 296(1A) and 297(2A)(c) of the Act.

• (4) In article 5 (qualifying EU provisions: injunctions and restitution)—

• (a) in paragraph (2)(c) after “regulation” insert “ , except for Article 38 (prohibition of insider dealing), Article 39 (other prohibited uses of inside information) and Article 41 (prohibition of market manipulation) of that regulation ”;

• (b) after paragraph (2)(j) insert—

(k) the market abuse regulation and any directly applicable regulation made under that Regulation, except for Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) and Article 15 (prohibition of market manipulation) of the market abuse regulation.

; and

• (c) after paragraph (5)(i) insert—

(j) in relation to a contravention of the market abuse regulation or any directly applicable regulation made under that Regulation, the FCA.

• (5) In article 6 (qualifying EU provisions: fees), after paragraph (2)(l) insert—

(m) the market abuse regulation and any directly applicable regulation made under that Regulation.

PART 4 — Miscellaneous

Review

23

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

SCHEDULE — Reporting of actual or potential contraventions of the market abuse regulation to the FCA

Interpretation

1

In this Schedule—

• “dedicated communication channels” has the meaning given by paragraph 5;

• “FCA dedicated staff members” has the meaning given by paragraph 2;

• “reported person” means a person who is accused of having committed, or of intending to commit, a contravention of the market abuse regulation by a reporting person;

• “reporting person” means a person reporting an actual or potential contravention of the market abuse regulation to the FCA; and

• “report of a contravention” means a report submitted by the reporting person to the FCA regarding an actual or potential contravention of the market abuse regulation .

FCA dedicated staff members

2

• (1) The FCA must have staff members dedicated to handling reports of contraventions (“FCA dedicated staff members”).

• (2) FCA dedicated staff members must be trained for the purposes of handling reports of contraventions.

• (3) FCA dedicated staff members must exercise the following functions—

• (a) providing any interested person with information on the procedures for making reports of contraventions;

• (b) receiving and following up reports of contraventions; and

• (c) where the reporting person has provided contact details, maintaining contact with that person except where the reporting person has explicitly requested otherwise or the FCA reasonably believes that maintaining contact would jeopardise the protection of the reporting person's identity.

Information regarding the receipt of reports of contraventions and their follow up

3

• (1) The FCA must publish on its website in a separate, easily identifiable and accessible section the information regarding the receipt of reports of contraventions set out in sub-paragraph (2).

• (2) The information is—

• (a) the dedicated communication channels established by the FCA for the purposes of paragraph 5, including—

• (i) the telephone numbers, indicating whether conversations are recorded or unrecorded when using those telephone lines; and

• (ii) dedicated electronic and postal addresses, which are secure and ensure confidentiality, to contact FCA dedicated staff members;

• (b) the procedures applicable to reports of contraventions referred to in paragraph 4;

• (c) the confidentiality regime applicable to reports of contraventions in accordance with the procedures applicable to reports of contraventions referred to in paragraph 4;

• (d) the procedures for the protection of persons working under a contract of employment; and

• (e) a statement clearly explaining that persons making information available to the FCA in accordance with the market abuse regulation are not considered to be infringing any restriction on disclosure of information imposed by contract or by any legislative, regulatory or administrative provision, and do not incur liability of any kind related to such disclosure.

Procedures applicable to reports of contraventions

4

• (1) The procedures applicable to reports of contraventions referred to in paragraph 3(2)(b) (information regarding the receipt of reports of contraventions and their follow up) must clearly indicate all of the following information—

• (a) that reports of contraventions can be submitted anonymously;

• (b) the manner in which the FCA may require the reporting person to clarify the information reported or to provide additional information that is available to the reporting person;

• (c) the type, content and timeframe of the response about the outcome of the report of the contravention that the reporting person can expect after the reporting;

• (d) the confidentiality regime applicable to reports of contraventions, including a detailed description of the circumstances under which the confidential data of a reporting person may be disclosed in accordance with Articles 27 (professional secrecy), 28 (data protection) and 29 (disclosure of personal data to third countries) of the market abuse regulation.

• (2) The detailed description referred to in sub-paragraph (1)(d) must set out the exceptional cases in which confidentiality of data may not be ensured, including where the disclosure of data is a necessary and proportionate obligation required by ... the law of the United Kingdom—

• (a) in the context of investigations or subsequent judicial proceedings; or

• (b) to safeguard the freedoms of others, including the right of defence of the reported person; in each case subject to appropriate safeguards under such laws.

Dedicated communication channels

5

• (1) The FCA must establish independent and autonomous communication channels, which are both secure and ensure confidentiality, for receiving and following up reports of contraventions of the market abuse regulation (“dedicated communication channels”).

• (2) Dedicated communication channels are considered independent and autonomous provided that they meet all the following criteria—

• (a) they are separated from general communication channels of the FCA, including those through which the FCA communicates internally and with third parties in its ordinary course of business;

• (b) they are designed, set up and operated in a manner that ensures the completeness, integrity and confidentiality of the information and prevents access by non-authorised staff members of the FCA; and

• (c) they enable the storage of durable information in accordance with paragraph 6 to allow for further investigations.

• (3) The dedicated communication channels must allow a report of a contravention to be made in one or more of the following ways—

• (a) a written report of a contravention in electronic or paper format;

• (b) an oral report of a contravention through telephone lines, whether recorded or unrecorded; or

• (c) physical meeting with FCA dedicated staff members.

• (4) The FCA must provide the information referred to in paragraph 3(2) to the reporting person before or immediately on receipt of the report of a contravention, unless the FCA reasonably believes that providing that information would jeopardise the protection of the reporting person's identity.

• (5) The FCA must ensure that a report of a contravention received by means other than dedicated communication channels is promptly forwarded without modification to FCA dedicated staff members using the dedicated communication channels.

Record-keeping of reports received

6

• (1) The FCA must keep records of every report of a contravention received.

• (2) The FCA must promptly acknowledge the receipt of a written report of a contravention to the postal or electronic address indicated by the reporting person, unless the reporting person has explicitly requested otherwise, or the FCA reasonably believes that acknowledging receipt of a written report would jeopardise the protection of the reporting person's identity.

• (3) Where a recorded telephone line is used to make a report of a contravention, the FCA may document the oral reporting in the form of—

• (a) an audio recording of the conversation in a durable and retrievable form; or

• (b) a complete and accurate transcript of the conversation prepared by FCA dedicated staff members.

• (4) If the FCA prepares a transcript of a report of a contravention for the purposes of sub-paragraph (3)(b) and the reporting person has disclosed his or her identity to the FCA, the FCA must give the reporting person the opportunity to check, rectify and agree the transcript by signing it.

• (5) Where an unrecorded telephone line is used to make a report of a contravention, the FCA may document the oral reporting in the form of accurate minutes of the conversation prepared by FCA dedicated staff members.

• (6) If the FCA prepares minutes of a report of a contravention for the purposes of sub-paragraph (5) and the reporting person has disclosed his or her identity to the FCA, the FCA must give the reporting person the opportunity to check, rectify and agree the minutes of the call by signing them.

• (7) Where a person requests a physical meeting with FCA dedicated staff members to make a report of a contravention under paragraph 5(3)(c) the FCA must ensure that complete and accurate records of the meeting are kept in a durable and retrievable form.

• (8) The FCA may document the records of the physical meeting referred to in sub-paragraph (7) in the form of—

• (a) an audio recording of the conversation in a durable and retrievable form; or

• (b) accurate minutes of the meeting prepared by the FCA dedicated staff members.

• (9) If the FCA prepares minutes of a report of a contravention for the purposes of paragraph (8)(b) and the reporting person has disclosed his or her identity to the FCA, the FCA must give the reporting person the opportunity to check, rectify and agree the minutes of the meeting by signing them.

Protection of persons working under a contract of employment

7

• (1) The FCA must provide reporting persons with access to comprehensive information and advice on the remedies and procedures available under the law of the United Kingdom to protect them against unfair treatment.

• (2) The information and advice referred to in sub-paragraph (1) must include information and advice on any relevant procedures under the law of the United Kingdom to claim damages or compensation for unfair treatment.

Review of the procedures by FCA

8

• (1) The FCA must review its procedures for receiving and following up reports of contraventions regularly, and in any event at least once every two years.

• (2) In reviewing its procedures the FCA must take account of its experience ... and adapt its procedures accordingly and in line with market and technological developments.

Signed

David Evennett — Mel Stride — Two of the Lords Commissioners of Her Majesty's Treasury — 2016-06-28

Explanatory note

(This note is not part of the Regulations)

Footnotes

Editorial notes