Financial Services and Markets Bill - continued        House of Lords

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  PART XIII
  INCOMING FIRMS: INTERVENTION BY AUTHORITY
 
Interpretation
Interpretation of this Part.     184. - (1) In this Part-
 
 
    "additional procedure" means the procedure described in section 191;
 
    "incoming firm" means-
 
      (a) an EEA firm which is exercising, or has exercised, its right to carry on a regulated activity in the United Kingdom in accordance with Schedule 3; or
 
      (b) a Treaty firm which is exercising, or has exercised, its right to carry on a regulated activity in the United Kingdom in accordance with Schedule 4; and
 
    "power of intervention" means the power conferred on the Authority by section 187.
      (2) In relation to an incoming firm which is an EEA firm, expressions used in this Part and in Schedule 3 have the same meaning in this Part as they have in that Schedule.
 
General grounds on which powers of intervention are exercisable.     185. - (1) The Authority may exercise its power of intervention in respect of an incoming firm if it appears to it that-
 
 
    (a) the firm has contravened, or is likely to contravene, a requirement which is imposed on it by or under this Act (in a case where the Authority is responsible for enforcing compliance in the United Kingdom);
 
    (b) the firm has, in purported compliance with any requirement imposed by or under this Act, knowingly or recklessly given the Authority information which is false or misleading in a material particular; or
 
    (c) it is desirable to exercise the power in order to protect the interests of actual or potential customers in relation to a regulated activity carried on by the firm.
      (2) Subsection (3) applies to an incoming EEA firm falling within sub-paragraph (a) or (b) of paragraph 5 of Schedule 3 which is exercising an EEA right to carry on any Consumer Credit Act business in the United Kingdom.
 
      (3) The Authority may exercise its power of intervention in respect of the firm if the Director General of Fair Trading has informed the Authority that-
 
 
    (a) the firm,
 
    (b) any of the firm's employees, agents or associates (whether past or present), or
 
    (c) if the firm is a body corporate, a controller of the firm or an associate of such a controller,
  has done any of the things specified in paragraphs (a) to (d) of section 25(2) of the Consumer Credit Act 1974.
 
      (4) "Associate", "Consumer Credit Act business" and "controller" have the same meaning as in section 196.
 
Exercise of powers in support of overseas regulator.     186. - (1) The Authority may exercise its power of intervention in respect of an incoming firm at the request of, or for the purpose of assisting, an overseas regulator.
 
      (2) Subsection (1) applies whether or not the Authority's power of intervention is also exercisable as a result of section 185.
 
      (3) "An overseas regulator" means an authority in a country or territory outside the United Kingdom-
 
 
    (a) which is a home state regulator; or
 
    (b) which exercises any function of a kind mentioned in subsection (4).
      (4) The functions are-
 
 
    (a) a function corresponding to any function of the Authority under this Act;
 
    (b) a function corresponding to any function exercised by the competent authority under Part VI in relation to the listing of shares;
 
    (c) a function corresponding to any function exercised by the Secretary of State under the Companies Act 1985;
 
    (d) a function in connection with -
 
      (i) the investigation of conduct of the kind prohibited by Part V of the Criminal Justice Act 1993 (insider dealing); or
 
      (ii) the enforcement of rules (whether or not having the force of law) relating to such conduct;
 
    (e) a function prescribed by regulations made for the purposes of this subsection which, in the opinion of the Treasury, relates to companies or financial services.
      (5) If-
 
 
    (a) a request to the Authority for the exercise of its power of intervention has been made by a home state regulator in pursuance of a Community obligation, or
 
    (b) a home state regulator has notified the Authority that an EEA firm's EEA authorisation has been withdrawn,
  the Authority must, in deciding whether or not to exercise its power of intervention, consider whether exercising it is necessary in order to comply with a Community obligation.
 
      (6) In deciding in any case in which the Authority does not consider that the exercise of its power of intervention is necessary in order to comply with a Community obligation, it may take into account in particular-
 
 
    (a) whether in the country or territory of the overseas regulator concerned, corresponding assistance would be given to a United Kingdom regulatory authority;
 
    (b) whether the case concerns the breach of a law, or other requirement, which has no close parallel in the United Kingdom or involves the assertion of a jurisdiction not recognised by the United Kingdom;
 
    (c) the seriousness of the case and its importance to persons in the United Kingdom;
 
    (d) whether it is otherwise appropriate in the public interest to give the assistance sought.
      (7) The Authority may decide not to exercise its power of intervention, in response to a request, unless the regulator concerned undertakes to make such contribution to the cost of its exercise as the Authority considers appropriate.
 
      (8) Subsection (7) does not apply if the Authority decides that it is necessary for it to exercise its power of intervention in order to comply with a Community obligation.
 
The power of intervention.     187. If the Authority is entitled to exercise its power of intervention in respect of an incoming firm under this Part, it may impose any requirement in relation to the firm which it could impose if-
 
 
    (a) the firm's permission was a Part IV permission; and
 
    (b) the Authority was entitled to exercise its power under that Part to vary that permission.
 
Exercise of powers of intervention
Procedure.     188. - (1) If the Authority proposes to exercise its power of intervention it must (except where section 189 applies) give the authorised person a warning notice.
 
      (2) The warning notice must specify the requirements which the Authority proposes to impose.
 
      (3) If the Authority decides to exercise its power of intervention-
 
 
    (a) it must give the authorised person a decision notice; and
 
    (b) the authorised person may refer the matter to the Tribunal.
      (4) The decision notice must specify the requirements which the Authority has decided to impose (which need not be those specified under subsection (2)).
 
      (5) A decision notice has the effect of imposing on the authorised person the requirements specified in the notice.
 
 
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