Statutory Instruments

2007 No. 1973

REGULATORY REFORM

financial services and markets

The Regulatory Reform (Financial Services and Markets Act 2000) Order 2007

Made

11th July 2007

Coming into force

12th July 2007

The Treasury have—

(a) consulted, in accordance with section 5(1) of the Regulatory Reform Act 2001( 1 )—

(i) such organisations as appeared to them to be representative of interests substantially affected by their proposals for this Order;

(ii) the statutory bodies to whose functions their proposals relate;

(iii) the National Assembly for Wales; and

(iv) such other persons as they considered appropriate;

(b) following that consultation, considered it appropriate to vary part of their proposals, and undertaken such further consultation with respect to the variations as appeared to them to be appropriate;

(d) laid a document containing their proposals before Parliament, in accordance with section 6 of the Regulatory Reform Act 2001( 2 ), and the period for Parliamentary consideration under section 8 of that Act has expired;

(e) had regard to the representations made during that period and in particular to the Fifth Report, Session 2006-2007, of the Delegated Powers and Regulatory Reform Committee of the House of Lords( 3 ) and the Third Report, Session 2006-7, of the Regulatory Reform Committee of the House of Commons( 4 );

(f) laid a draft of this Order before Parliament with a statement giving details of representations received during the period for Parliamentary scrutiny and of the changes the Treasury has made to their proposals in the light of them;

(g) reached the opinion that this Order does not remove any necessary protection or prevent any person from continuing to exercise any right or freedom which he might reasonably expect to continue to exercise;

(h) as this Order creates burdens affecting persons, reached the opinion that—

(i) the provisions of this Order, taken as a whole, strike a fair balance between the public interest and the interests of the persons affected by the burdens created, and

(ii) the extent to which this Order removes or reduces one or more burdens, or has other beneficial effects for persons affected by the burdens imposed by the existing law, makes it desirable for this Order to be made.

The draft of this Order has been approved by a resolution of each House of Parliament pursuant to section 4(2) of the Regulatory Reform Act 2001.

The Treasury, in exercise of the powers conferred upon them by section 1 of the Regulatory Reform Act 2001, make the following Order:

Citation and commencement

1. This Order may be cited as the Regulatory Reform (Financial Services and Markets Act 2000) Order 2007 and shall come into force on the day after the day on which it is made.

Amendments to the Financial Services and Markets Act 2000

2.The Financial Services and Markets Act 2000( 5 ) is amended as follows.

Partnerships and unincorporated associations

3. In section 32 (partnerships and unincorporated associations)—

(a) in subsection (2), after “in relation to any” insert “individual or”;

(b) for subsection (3), substitute—

“ (3) For the purposes of this section, an individual or firm is to be regarded as succeeding to the business of a dissolved firm only if succession is to the whole or substantially the whole of the business of the former firm. ” .

Persons connected with an applicant

4. In section 49 (persons connected with an applicant), for subsection (2)(b) substitute—

“ (b) varying any permission given by the Authority to such a person, where the effect of the variation is to grant permission for the purposes of a single market directive other than the one for the purposes of which the existing permission was granted, ” .

Discontinuance and suspension of listing on the application of an issuer

5. In section 77 (discontinuance and suspension of listing)—

(a) after subsection (2) insert—

“ (2A) The competent authority may discontinue under subsection (1) or suspend under subsection (2) the listing of any securities on its own initiative or on the application of the issuer of those securities. ” ;

(b) in subsection (5) after “any securities,” insert “on its own initiative,”.

6. In section 78 (discontinuance or suspension: procedure)—

(a) in subsection (1), after “suspension” insert “by the competent authority on its own initiative”;

(b) in subsection (2), after “If” insert “on its own initiative”;

7. After section 78 insert—

“ Discontinuance or suspension at the request of the issuer: procedure

78A. —(1) A discontinuance or suspension by the competent authority on the application of the issuer of the securities takes effect—

(a) immediately, if the notice under subsection (2) states that this is the case;

(b) in any other case, on such date as may be specified in that notice.

(2) If the competent authority discontinues or suspends the listing of securities on the application of the issuer of the securities it must give him written notice.

(3) The notice must—

(a) give details of the discontinuance or suspension;

(b) inform the issuer of the securities of the date on which the discontinuance or suspension took effect or will take effect; and

(4) If the competent authority proposes to refuse an application by the issuer of the securities for the discontinuance or suspension of the listing of the securities, it must give him a warning notice.

(5) The competent authority must, having considered any representations made in response to the warning notice, if it decides to refuse the application, give the issuer of the securities a decision notice.

(6) If the competent authority decides to refuse an application by the issuer of the securities for the discontinuance or suspension of the listing of the securities, the issuer may refer the matter to the Tribunal.

(7) If the competent authority has suspended the listing of securities on the application of the issuer of the securities and proposes to refuse an application by the issuer for the cancellation of the suspension, it must give him a warning notice.

(8) The competent authority must, having considered any representations made in response to the warning notice—

(a) if it decides to refuse the application for the cancellation of the suspension, give the issuer of the securities a decision notice;

(b) if it grants the application, give him written notice of its decision.

(9) If the competent authority decides to refuse an application for the cancellation of the suspension of listed securities, the applicant may refer the matter to the Tribunal.

(10) “Discontinuance” means a discontinuance of listing under section 77(1).

(11) “Suspension” means a suspension of listing under section 77(2). ” .

8. In section 395 (the Authority’s procedures)( 6 ), in subsection (13) after paragraph (b) insert “(bza) 78A(2) or (8)(b);”.

Modification or waiver of rules

10. In section 148 (modification or waiver of rules)—

(a) omit subsection (1);

(b) for subsection (2), substitute—

“ (2) The Authority may, on the application or with the consent of a person who is subject to rules made by the Authority, direct that all or any of those rules (other than rules made under section 247 (trust scheme rules) or section 248 (scheme particulars rules))—

(a) are not to apply to that person; or

(b) are to apply to him with such modifications as may be specified in the direction. ” ;

(d) in subsection (11), for “an authorised person” substitute “a person”.

11. In section 250 (modification or waiver of rules)—

(a) omit subsection (4)(a);

(b) in subsection (4)(b), for “authorised person (except in subsection (4)(a))” substitute “person”;

12. In regulation 7 (modification or waiver of FSA rules) of the Open-Ended Investment Companies Regulations 2001( 7 )—

(a) omit paragraph (3)(a);

(b) in paragraph (3)(b), for “authorised person (except in subsection (4)(a))” substitute “person”;

Guidance

13. In section 157 (guidance), in subsection (3) for “subsections (1), (2) and (4) to (10) of section 155 apply to the proposed guidance as they apply to proposed rules” substitute “subsections (1), (2)(d) and (4) of section 155 apply to the proposed guidance as they apply to proposed rules, unless the Authority considers that the delay in complying with them would be prejudicial to the interests of consumers”.

Arrangements for discharging functions

14. In Schedule 1, in paragraph 5 (arrangements for discharging functions), for sub-paragraph (2) substitute—

“ (2) But—

(a) in exercising the legislative functions mentioned in paragraph 1(2)(a) to (d), the Authority must act through its governing body; and

(b) the legislative function mentioned in paragraph 1(2)(e) may not be discharged by an officer or member of staff of the Authority. ” .

Frank Roy

Alan Campbell

Two of the Lords Commissioners of Her Majesty’s Treasury

11th July 2007

( 1 )

2001 c.6 .

( 2 )

The Regulatory Reform Act 2001 was repealed by section 30(1) of the Legislative and Regulatory Reform Act 2006 (c. 51) , but the application of the Regulatory Reform Act 2001 was saved in relation to the making of an Order under section 1 of that Act giving effect to proposals in a document laid before Parliament under section 6(1) of that Act before the day on which the Legislative and Regulatory Reform Act 2006 came into force. A proposal under section 6(1) of the Regulatory Reform Act 2001 was laid before Parliament on 18 December 2006, before the date on which the Legislative and Regulatory Reform Act 2006 came into force.

( 3 )

Fifth Report on 23 January 2007, HL Paper 30, HC 82-v.

( 4 )

Third Report on 23 March 2007, HC 397.

( 5 )

2000 c.8 .

( 6 )

section 395 has been amended by S.I. 2005/381 and S.I. 2005/1435 .

( 7 )

SI. 2001/1228 .

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