Financial Services and Markets Bill - continued        House of Lords
PART X, RULES AND GUIDANCE - continued

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Endorsement of codes etc. issued by other bodies.     135. - (1) The Authority may make rules ("endorsing rules")-
 
 
    (a) endorsing the City Code on Takeovers and Mergers issued by the Panel on Takeovers and Mergers;
 
    (b) endorsing the Rules Governing Substantial Acquisitions of Shares issued by the Panel.
      (2) Endorsement may be-
 
 
    (a) as respects all authorised persons; or
 
    (b) only as respects a specified kind of authorised person.
      (3) At any time when endorsing rules are in force and if asked to do so by the Panel, the Authority may exercise its powers under Part IV, XIII, XIV or XXV as if the endorsed provisions were rules applying to the persons in respect of whom they are endorsed.
 
      (4) If endorsed provisions are altered, subsection (3) applies to them as altered, but only if before the alteration the Authority has notified the Panel (and has not withdrawn its notification) that it is satisfied with the Panel's consultation procedures.
 
      (5) "Consultation procedures" means procedures designed to provide an opportunity for persons likely to be affected by alterations to those provisions to make representations about proposed alterations to any of those provisions.
 
      (6) Subsections (1), (2)(d), (4), (5), (6)(a) and (12) of section 146 apply (with the necessary modifications) to a proposal to give notification of the kind mentioned in subsection (4) as they apply to a proposal to make endorsing rules.
 
      (7) This section applies in relation to particular provisions of the code or rules mentioned in subsection (1) as it applies to the code or the rules.
 
 
Price stabilising and certain other rules
Price stabilising rules.     136. - (1) The Authority may make rules ("price stabilising rules") as to-
 
 
    (a) the circumstances and manner in which,
 
    (b) the conditions subject to which, and
 
    (c) the time when or the period during which,
  action may be taken for the purpose of stabilising the price of investments of specified kinds.
 
      (2) Price stabilising rules-
 
 
    (a) are to be made so as to apply only to authorised persons;
 
    (b) may make different provision in relation to different kinds of investment.
      (3) The Authority may make rules which, for the purposes of section 379(4)(b), treat a person who acts or engages in conduct-
 
 
    (a) for the purpose of stabilising the price of investments, and
 
    (b) in conformity with such provisions corresponding to price stabilising rules and made by a body or authority outside the United Kingdom as may be specified in the rules under this subsection,
  as acting, or engaging in that conduct, for that purpose and in conformity with price stabilising rules.
 
      (4) The Treasury may by order impose limitations on the power to make rules under this section.
 
      (5) Such an order may, in particular-
 
 
    (a) specify the kinds of investment in relation to which price stabilising rules may make provision;
 
    (b) specify the kinds of investment in relation to which rules made under subsection (3) may make provision;
 
    (c) provide for price stabilising rules to make provision for action to be taken for the purpose of stabilising the price of investments only in such circumstances as the order may specify;
 
    (d) provide for price stabilising rules to make provision for action to be taken for that purpose only at such times or during such periods as the order may specify.
      (6) If provisions specified in rules made under subsection (3) are altered, the rules continue to apply to those provisions as altered, but only if before the alteration the Authority has notified the body or authority concerned (and has not withdrawn its notification) that it is satisfied with its consultation procedures.
 
      (7) "Consultation procedures" has the same meaning as in section 135.
 
Financial promotion rules.     137. - (1) The Authority may make rules applying to authorised persons about the communication of invitations or inducements of a kind mentioned in section 19(1) or 231(1).
 
      (2) Rules under this section may, in particular-
 
 
    (a) make provision about the form and content of communications; and
 
    (b) make provision about the approval by authorised persons of communications by others.
      (3) The Treasury may by order impose limitations on the power to make rules under this section.
 
Money laundering rules.     138. The Authority may make rules in relation to the prevention and detection of money laundering in connection with the carrying on of regulated activities by authorised persons.
 
 
Modification or waiver
Modification or waiver of rules.     139. - (1) This section applies in relation to the following-
 
 
    (a) auditors and actuaries rules;
 
    (b) financial promotion rules;
 
    (c) general rules;
 
    (d) non-regulated activity rules;
 
    (e) insurance business rules;
 
    (f) money laundering rules; and
 
    (g) price stabilising rules.
      (2) The Authority may, on the application or with the consent of an authorised person, direct that all or any of the rules to which this section applies-
 
 
    (a) are not to apply to the authorised person; or
 
    (b) are to apply to him with such modifications as may be specified in the direction.
      (3) An application must be made in such manner as the Authority may direct.
 
      (4) The Authority may not give a direction unless it is satisfied that-
 
 
    (a) compliance by the authorised person with the rules, or with the rules as unmodified, would be unduly burdensome or would not achieve the purpose for which the rules were made; and
 
    (b) the direction would not result in undue risk to persons whose interests the rules are intended to protect.
      (5) A direction may be given subject to conditions.
 
      (6) Unless it is satisfied that it is inappropriate or unnecessary to do so, a direction must be published by the Authority in such a way as it thinks most suitable for bringing the direction to the attention of-
 
 
    (a) those likely to be affected by it; and
 
    (b) others who may be likely to make an application for a similar direction.
      (7) In deciding whether it is satisfied as mentioned in subsection (6), the Authority must-
 
 
    (a) take into account whether the direction relates to a rule contravention of which is actionable in accordance with section 141;
 
    (b) consider whether its publication would prejudice, to an unreasonable degree, the commercial interests of the authorised person concerned or any other member of his immediate group; and
 
    (c) consider whether its publication would be contrary to an international obligation of the United Kingdom.
      (8) For the purposes of paragraphs (b) and (c) of subsection (7), the Authority must consider whether it would be possible to publish the direction without either of the consequences mentioned in those paragraphs by publishing it without disclosing the identity of the authorised person concerned.
 
      (9) The Authority may-
 
 
    (a) revoke a direction; or
 
    (b) vary it on the application, or with the consent, of the authorised person to whom it relates.
      (10) "Direction" means a direction under subsection (2).
 
      (11) "Immediate group", in relation to an authorised person ("A"), means-
 
 
    (a) A;
 
    (b) a parent undertaking of A;
 
    (c) a subsidiary undertaking of A;
 
    (d) a subsidiary undertaking of a parent undertaking of A;
 
    (e) a parent undertaking of a subsidiary undertaking of A.
 
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Prepared 11 February 2000