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.     189. - (1) In this Part-
 
 
    "additional procedure" means the procedure described in section 195;
 
    "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 192.
      (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.     190. - (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.
      (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 199.
 
Exercise of powers in support of overseas regulator.     191. - (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 190.
 
      (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.     192. 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 on exercise of power of intervention.     193. - (1) A requirement takes effect-
 
 
    (a) immediately, if the notice given under subsection (3) states that that is the case;
 
    (b) on such date as may be specified in the notice; or
 
    (c) if no date is specified in the notice, when the matter to which it relates is no longer open to review.
      (2) A requirement may be expressed to take effect immediately (or on a specified date) only if the Authority, having regard to the ground on which it is exercising its power of intervention, considers that it is necessary for the requirement to take effect immediately (or on that date).
 
      (3) If the Authority proposes to impose a requirement under section 192 on an incoming firm, or imposes such a requirement with immediate effect, it must give the firm written notice.
 
      (4) The notice must-
 
 
    (a) give details of the requirement;
 
    (b) inform the firm of when the requirement takes effect;
 
    (c) state the Authority's reasons for imposing the requirement and for its determination as to when the requirement takes effect;
 
    (d) inform the firm that it may make representations to the Authority within such period as may be specified in the notice (whether or not it has referred the matter to the Tribunal); and
 
    (e) inform it of its right to refer the matter to the Tribunal.
      (5) The Authority may extend the period allowed under the notice for making representations.
 
      (6) If, having considered any representations made by the firm, the Authority decides-
 
 
    (a) to impose the requirement proposed, or
 
    (b) if it has been imposed, not to rescind the requirement,

it must give it written notice.

      (7) If, having considered any representations made by the firm, the Authority decides-
 
 
    (a) not to impose the requirement proposed,
 
    (b) to impose a different requirement from that proposed, or
 
    (c) to rescind a requirement which has effect,

it must give it written notice.

      (8) A notice given under subsection (6) must inform the firm of its right to refer the matter to the Tribunal.
 
      (9) A notice under subsection (7)(b) must comply with subsection (4).
 
      (10) If a notice informs a person of his right to refer a matter to the Tribunal, it must give an indication of the procedure on such a reference.
 
Power to apply to court for injunction in respect of certain overseas insurance companies.     194. - (1) This section applies if the Authority has received a request made in respect of an incoming EEA firm in accordance with-
 
 
    (a) Article 20.5 of the first non-life insurance directive; or
 
    (b) Article 24.5 of the first life insurance directive.
      (2) The court may, on an application made to it by the Authority with respect to the firm, grant an injunction restraining (or in Scotland an interdict prohibiting) the firm disposing of or otherwise dealing with any of its assets.
 
      (3) If the court grants an injunction, it may by subsequent orders make provision for such incidental, consequential and supplementary matters as it considers necessary to enable the Authority to perform any of its functions under this Act.
 
      (4) "The court" means-
 
 
    (a) the High Court; or
 
    (b) in Scotland, the Court of Session.
 
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