Financial Services and Markets Act 2000, section 55L

Imposition of requirements by FCA

PART 4A Permission to carry on regulated activities

(1)Where a person has applied (whether to the FCA or the PRA) for a Part 4A permission or the variation of a Part 4A permission, the FCA may impose on that person such requirements, taking effect on or after the giving or variation of the permission, as the FCA considers appropriate.

(2) The FCA may exercise its power under subsection (3) in relation to an authorised person with a Part 4A permission (whether given by it or by the PRA) (“A”) if it appears to the FCA that—

(a)A is failing, or is likely to fail, to satisfy the threshold conditions for which the FCA is responsible,

(b)A has failed, during a period of at least 12 months, to carry on a regulated activity to which the Part 4A permission relates, or

(c)it is desirable to exercise the power in order to advance one or more of the FCA's operational objectives.

(3)The FCA's power under this subsection is a power—

(a)to impose a new requirement,

(b)to vary a requirement imposed by the FCA under this section, or

(c)to cancel such a requirement.

(4)The FCA's power under subsection (3) is referred to in this Part as its own-initiative requirement power.

(5)The FCA may, on the application of an authorised person with a Part 4A permission—

(a)impose a new requirement,

(b)vary a requirement imposed by the FCA under this section, or

(c)cancel such a requirement.

(6)The FCA may refuse an application under subsection (5) if it appears to it that it is desirable to do so in order to advance any of its operational objectives [F279 , or the purpose for which the FCA must exercise its functions under Part 8B (see section 131U(1))F279] .

(7)The FCA must consult the PRA before imposing or varying a requirement which relates to—

(a)a person who is, or will on the granting of an application for Part 4A permission be, a PRA-authorised person, or

(b)a person who is a member of a group which includes a PRA-authorised person.

Read section 55L in the full Act → Definitions (12) Cases (5)

Definitions used in section 55L

the FCA

(2) The Financial Conduct Authority is in this Act referred to as “the FCA”.

Defined in s.1A(2) · see it in the full Act

“the FCA” means the Financial Conduct Authority;

Defined in s.417(1) · see it in the full Act
the PRA

“the PRA” means the Prudential Regulation Authority;

Defined in s.417(1) · see it in the full Act
a Part 4A permission

(5) A permission given by the appropriate regulator under this Part or having effect as if so given is referred to in this Act as “a Part 4A permission”.

Defined in s.55A(5) · see it in the full Act
Part 4A permission

“Part 4A permission” has the meaning given in section 55A(5);

Defined in s.417(1) · see it in the full Act
authorised person

“authorised person” has the meaning given in section 31(2);

Defined in s.417(1) · see it in the full Act

(2) In this Act “authorised person” means a person who is authorised for the purposes of this Act.

Defined in s.31(2) · see it in the full Act
The threshold conditions

(1) “The threshold conditions”, in relation to a regulated activity, means the conditions set out in or specified under Schedule 6, as read with any threshold condition code made by either regulator under section 137O.

Defined in s.55B(1) · see it in the full Act
threshold conditions

“threshold conditions”, in relation to a regulated activity, has the meaning given in section 55B(1);

Defined in s.417(1) · see it in the full Act
regulated activity

“regulated activity” has the meaning given in section 22;

Defined in s.417(1) · see it in the full Act
own-initiative requirement power

“own-initiative requirement power”, in relation to the FCA or the PRA, is to be read in accordance with section 55L(4) or 55M(4);

Defined in s.55Z4 · see it in the full Act
functions

(4) Neither section 2AB(3)(d) nor the definition of “functions” in paragraph 1 applies for the purposes of sub-paragraph (2).

Defined in Sch.1ZB para.31(4) · see it in the full Act

(2A) The functions referred to in sub-paragraph (1)(a) include functions of the FCA under the Competition Act 1998 or the Enterprise Act 2002 as a result of Part 16A of this Act ; but this sub-paragraph is not to be regarded as limiting the effect of the definition of “functions” in paragraph 1.

Defined in Sch.1ZA para.23(2A) · see it in the full Act

(4) Neither section 1A(6)(d) nor the definition of “functions” in paragraph 1 applies for the purposes of sub-paragraph (2).

Defined in Sch.1ZA para.23(4) · see it in the full Act
PRA-authorised person

(5) In this Act “PRA-authorised person” means an authorised person who has permission—

(a)given under Part 4A, or

(b)resulting from any other provision of this Act,

Defined in s.2B(5) · see it in the full Act

“PRA-authorised person” has the meaning given in section 2B(5);

Defined in s.417(1) · see it in the full Act
group

(1) In this Act “group”, in relation to a person (“A”), means A and any person who is—

(a)a parent undertaking of A;

(b)a subsidiary undertaking of A;

(c)a subsidiary undertaking of a parent undertaking of A;

(d)a parent undertaking of a subsidiary undertaking of A;

(e)an undertaking in which A or an undertaking mentioned in paragraph (a), (b), (c) or (d) has a participating interest;

(f)if A or an undertaking mentioned in paragraph (a) or (d) is a building society, an associated undertaking of the society; or

(g)if A or an undertaking mentioned in paragraph (a) or (d) is an incorporated friendly society, a body corporate of which the society has joint control (within the meaning of section 13(9)(c) or (cc) of the Friendly Societies Act 1992).

Defined in s.421(1) · see it in the full Act

Cases considering section 55L (5)

The Financial Conduct Authority v BlueCrest Capital Management

[2024] EWCA Civ 1125 · 2 October 2024Interprets

Confers the FCA’s own-initiative power to impose a single-firm redress requirement as a condition of continued permission. The power is not subject to the four conditions applicable to market-wide redress schemes, but remains constrained by statutory objectives and public law (see paras [57]-[60]; [73]-[86]).

The All-Party Parliamentary Group on Fair Banking Group, R (on the application of) v The Financial Conduct Authority

[2025] EWHC 525 (Admin) · 7 March 2025

The FCA’s power to impose remedial requirements was considered as a possible route to further redress, but the court upheld the rationality of declining to use it because of delay, evidential difficulty, resources and uncertain outcomes. (see paras [15], [70], [156]-[158])

Promethean Finance Limited v The Financial Conduct Authority

[2024] UKUT 229 (TCC) · 5 August 2024

The Tribunal held that the FCA’s power to impose requirements was engaged because the conduct created consumer-protection risks and a risk of failure to meet the suitability threshold condition. (see paras [110]; [123]) The Second Supervisory Notice imposed requirements under this provision. The Tribunal held that the requirements were reasonable and proportionate responses to the established risks. (see para [123])

What each judgment says about section 55L is in the case-law panel in the full Act.

Amendments and notes

6 notes from legislation.gov.uk

Amendments

  1. F279Words in s. 55L(6) inserted (29.8.2023) by Financial Services and Markets Act 2023 (c. 29), s. 86(2)(c), Sch. 8 para. 5

Modifications

  1. C158S. 55L applied (with modifications) (8.6.2023 for specified purposes, 7.10.2023 in so far as not already in force) by The Financial Services and Markets Act 2000 (Financial Promotion) (Amendment) Order 2023 (S.I. 2023/612), art. 1(2), Sch. para. 2 (with art. 11)
  2. C159S. 55L(1) modified (1.4.2015) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2015 (S.I. 2015/369), arts. 1, 7(4)
  3. C160S. 55L(2) modified by S.I. 1995/1442, reg. 49(2) (as substituted (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 12(c)(i))
  4. C161S. 55L(2) modified (2.4.2013) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2013 (S.I. 2013/655), arts. 1, 10(4)
  5. C162S. 55L(2) modified (1.4.2015) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2015 (S.I. 2015/369), arts. 1, 7(5)