Financial Services and Markets Bill - continued        House of Lords

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SCHEDULE 4
 
  TREATY RIGHTS
 
Definitions
     1. In this Schedule-
 
 
    "consumers" has the same meaning as in section 5(3);
 
    "Treaty firm" means a person-
 
      (a) whose head office is situated in an EEA State (its "home state") other than the United Kingdom; and
 
      (b) which is recognised under the law of that State as its national; and
 
    "home state regulator", in relation to a Treaty firm, means the competent authority of the firm's home state for the purpose of its home state authorisation (as to which see paragraph 3(1)(a)).
 
Firms qualifying for authorisation
     2. A Treaty firm qualifies for authorisation if-
 
 
    (a) it seeks to carry on a regulated activity; and
 
    (b) the conditions set out in paragraph 3(1) are satisfied.
 
Exercise of Treaty rights
     3. - (1) The conditions are that-
 
 
    (a) the firm has received authorisation ("home state authorisation") under the law of its home state to carry on the regulated activity in question ("the permitted activity"); and
 
    (b) the relevant provisions of the law of the firm's home state-
 
      (i) afford equivalent protection; or
 
      (ii) satisfy the conditions laid down by a Community instrument for the co-ordination or approximation of laws, regulations or administrative provisions of member States relating to the carrying on of that activity; and
 
    (c) the firm has no EEA right to carry on that activity.
      (2) A firm is not to be regarded as having home state authorisation unless its home state regulator has so informed the Authority in writing.
 
      (3) Provisions afford equivalent protection if, in relation to the firm's carrying on of the permitted activity, they afford consumers protection which is at least equivalent to that afforded by or under this Act in relation to that activity.
 
      (4) A certificate issued by the Treasury that the provisions of the law of a particular EEA State afford equivalent protection in relation to the activities specified in the certificate is conclusive evidence of that fact.
 
 
Permission
     4. - (1) On qualifying for authorisation under this Schedule, a Treaty firm has permission to carry on each permitted activity through its United Kingdom branch or by providing services in the United Kingdom.
 
      (2) The permission is to be treated as being on terms equivalent to those to which the firm's home state authorisation is subject.
 
 
Notice to Authority
     5. - (1) A Treaty firm qualifying for authorisation under this Schedule must not carry on a regulated activity in the United Kingdom until after the expiry of seven days beginning with the day on which it gives the Authority written notice of its intention to do so.
 
      (2) Subsections (1), (3), (4) and (6) of section 49 apply to a notice under sub-paragraph (1) as they apply to an application for a Part IV permission.
 
      (3) The Authority must, after receiving-
 
 
    (a) the notice required by sub-paragraph (1), and
 
    (b) any information required by the Authority as a result of sub-paragraph (2),
  issue the firm concerned with a certificate of authorisation.
 
 
Offences
     6. - (1) A person who contravenes the prohibition imposed by paragraph 5(1) is guilty of an offence.
 
      (2) In proceedings against a person for an offence under sub-paragraph (1) it is a defence for him to show that he took all reasonable precautions and exercised all due diligence to avoid committing the offence.
 
      (3) A person is guilty of an offence if in, or in connection with, a notice given by him under paragraph 5(1) he-
 
 
    (a) provides information which he knows to be false or misleading in a material particular; or
 
    (b) recklessly provides information which is false or misleading in a material particular.
      (4) A person guilty of an offence under this paragraph is liable-
 
 
    (a) on summary conviction, to a fine not exceeding the statutory maximum;
 
    (b) on conviction on indictment, to a fine.
 
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Prepared 11 February 2000