The Financial Services and Markets Act 2000 (EEA Passport Rights) (Amendment) Regulations 2006

• Citation: S.I. 2006/3385
• Sections: 15

Section 1 Citation, commencement and interpretation

(1) These Regulations may be cited as the Financial Services and Markets Act 2000 ( EEA Passport Rights) (Amendment) Regulations 2006.

(2) These Regulations come into force on 1st April 2007 for the purposes of—

(a) regulations 4 and 5;

(b) enabling the Authority to treat a notice referred to in regulation 4A(3)(a) or 5A(3)(a) of the principal Regulations (inserted by these Regulations) given on or after that date as effective for the purpose of regulation 4A(3) or 5A(3) (as the case may be);

(c) enabling the Authority, on receipt on or after that date of notice under regulation 11A(2)(a) or 12A(2)(a) of the principal Regulations (inserted by these Regulations), to inform the host state regulator of the proposed change in accordance with regulation 11A(3) or 12A(3) (as the case may be); and

(d) enabling the Authority to give notice under regulation 11A(3) or 12A(3) of the principal Regulations (inserted by these Regulations),

and for all other purposes on 1st November 2007.

(3) Nothing in paragraph (2) gives an investment firm or a UK investment firm an EEA right to carry on, before 1st November 2007, an activity—

(a) which is an ancillary service listed in Section B of Annex I to the markets in financial instruments directive but which is not a non-core service listed in Section C of the Annex to the investment services directive ;

(b) in relation to an investment which is a financial instrument listed in Section C of Annex I to the markets in financial instruments directive but which is not an instrument listed in Section B of the Annex to the investment services directive; or

(c) referred to in paragraph 5 of Section A of Annex I to the markets in financial instruments directive unless the firm has an EEA right to carry on one or more core services listed in Section A of the Annex to the investment services directive.

(4) In these Regulations, “the principal Regulations” means the Financial Services and Markets Act 2000 (EEA Passport Rights) Regulations 2001 and “the investment services directive” means Council Directive 93/22/ EEC of 10 May 1993 on investment services in the securities field .

Section 2 Amendment of the principal Regulations

The principal Regulations are amended as follows.

Section 3 Amendment of the principal Regulations

In regulation 1(2), at the end, insert—

;

“tied agent” has the meaning given in Article 4.1.25 of the markets in financial instruments directive;

“UK investment firm” means a UK firm—

which is an investment firm,

whose EEA right derives from the markets in financial instruments directive

Section 4 Amendment of the principal Regulations

In regulation 2(2)—

(a) at the end of sub-paragraph (b) omit “and”;

(b) for sub-paragraph (c) substitute—

(c) details of the accredited compensation scheme of which the firm is a member in accordance with Directive 97/9/ EC of the European Parliament and of the Council of 3rd March 1997 on investor-compensation schemes ; and

(d) a statement of whether the firm intends to use a tied agent established in the United Kingdom.

Section 5 Amendment of the principal Regulations

In regulation 3—

(a) in paragraph (2)—

(i) for “In” substitute “Subject to paragraph (2ZA), in”;

(ii) at the end of sub-paragraph (a) omit “and”;

(iii) after sub-paragraph (b) insert—

; and

(c) a statement of whether the firm intends to use a tied agent to provide services in the United Kingdom

(b) after paragraph (2) insert—

(2ZA) In the case of an investment firm exercising the right under Article 31.5 of the markets in financial instruments directive, the prescribed information is—

(a) a statement that the firm is an investment firm; and

(b) a statement that the firm intends to exercise that right in the United Kingdom.

Section 6 Amendment of the principal Regulations

In regulation 4 —

(a) in the heading for “Investment firms, management” substitute “Management”;

(b) in paragraph (1) for “An investment firm,” substitute “A”;

(c) in paragraph (6) for “an investment firm,” substitute “a”.

Section 7 Amendment of the principal Regulations

After regulation 4 insert—

Investment firms: changes to branch details

(4A)

(1) An investment firm which has established a branch in the United Kingdom in exercise of an EEA right must not—

(a) make a change in the requisite details of the branch,

(b) use, for the first time, any tied agent established in the United Kingdom, or

(c) cease to use tied agents established in the United Kingdom,

unless the requirements of paragraph (3) have been complied with.

(2) Where those requirements have been complied with, the firm’s permission is to be treated as varied accordingly.

(3) The requirements are that—

(a) the firm has given a notice to its home state regulator stating the details of the proposed change, and

(b) the period of one month beginning with the day on which the firm gave the notice has elapsed.

(4) Paragraph (1) does not apply to a change occasioned by circumstances beyond the firm’s control.

Section 8 Amendment of the principal Regulations

In regulation 5 —

(a) in the heading for “Investment firms and management” substitute “Management”;

(b) omit paragraph (1).

Section 9 Amendment of the principal Regulations

After regulation 5 insert—

Investment firms: changes to services

(5A)

(1) An investment firm which is providing services in the United Kingdom in exercise of an EEA right must not—

(a) make a change in any of the matters referred to in regulation 3(2)(b),

(b) use, for the first time, any tied agent to provide services in the United Kingdom, or

(c) cease to use tied agents to provide services in the United Kingdom,

unless the requirements of paragraph (3) have been complied with.

(2) Where those requirements have been complied with, the firm’s permission is to be treated as varied accordingly.

(3) The requirements are that—

(a) the firm has given a notice to its home state regulator stating the details of the proposed change, and

(b) the period of one month beginning with the day on which the firm gave the notice has elapsed.

(4) Paragraph (1) does not apply to a change occasioned by circumstances beyond the firm’s control.

Section 10 Amendment of the principal Regulations

In regulation 11 —

(a) in the heading omit “investment firms,”;

(b) in paragraph (1) omit “the investment services directive,”.

Section 11 Amendment of the principal Regulations

After regulation 11 insert—

UK investment firms: changes to branch details

(11A)

(1) A UK investment firm which has exercised an EEA right deriving from the markets in financial instruments directive to establish a branch must not—

(a) make a change in the requisite details of the branch,

(b) use, for the first time, any tied agent established in the EEA State in which the branch is established, or

(c) cease to use tied agents established in the EEA State in which the branch is established,

unless the requirements of paragraph (2) have been complied with.

(2) The requirements are that—

(a) the firm has given a notice to the Authority stating the details of the proposed change, and

(b) the period of one month beginning with the day on which the firm gave the notice has elapsed.

(3) The Authority must, as soon as reasonably practicable after receiving a notice under paragraph (2), inform the host state regulator of the proposed change.

(4) Paragraph (1) does not apply to a change occasioned by circumstances beyond the firm’s control.

Section 12 Amendment of the principal Regulations

In regulation 12 —

(a) in the heading omit “investment firms and”;

(b) in paragraph (1) omit “the investment services directive or”.

Section 13 Amendment of the principal Regulations

After regulation 12 insert—

UK investment firms: changes to services

(12A)

(1) A UK investment firm which is providing services in a particular EEA State in exercise of an EEA right deriving from the markets in financial instruments directive must not—

(a) make a change in the programme of operations, or the EEA activities, to be carried on in exercise of that right,

(b) use, for the first time, any tied agent to provide services in the territory of that State, or

(c) cease to use tied agents to provide services in the territory of that State,

unless the requirements of paragraph (2) have been complied with.

(2) The requirements are that—

(a) the firm has given a notice to the Authority stating the details of the proposed change, and

(b) the period of one month beginning with the day on which the firm gave the notice has elapsed.

(3) The Authority must, as soon as reasonably practicable after receiving a notice under paragraph (2), inform the host state regulator of the proposed change.

(4) Paragraph (1) does not apply to a change occasioned by circumstances beyond the firm’s control.

Section 14 Amendment of the principal Regulations

In regulation 18(1) after “11(1),” insert “11A(1),” and after “12(1),” insert “12A(1),”.

Section 15 Transitional and saving provisions

(1) Where an investment firm has given notice to the Authority and to its home state regulator pursuant to regulation 4(4)(a) of the principal Regulations (of a change in the requisite details of its branch) on or before 31st October 2007, regulation 4 continues to apply in relation to that change as if it had not been amended by these Regulations, and regulation 4A of the principal Regulations (inserted by these Regulations) does not apply in relation to that change.

(2) Where an investment firm has given notice to the Authority and to its home state regulator pursuant to regulation 5(3)(a) of the principal Regulations or before 31st October 2007 (in relation to a change in the matters referred to in regulation 3(2)(b) of those Regulations), regulation 5 continues to apply in relation to that change as if it had not been amended by these Regulations, and regulation 5A of the principal Regulations (inserted by these Regulations) does not apply in relation to that change.

(3) Where on or before 31st October 2007—

(a) a UK investment firm has given notice to the Authority and to its host state regulator pursuant to regulation 11(2)(a) of the principal Regulations (of a change in the requisite details of the branch) on or before 31st October 2007, but

(b) the Authority has not performed its function under regulation 11(4) of those Regulations,

the Authority must inform the host state regulator of the change pursuant to regulation 11A(3) of the principal Regulations (inserted by these Regulations) instead of performing its function under regulation 11(4).

(4) Where the Authority has performed its function under regulation 11(4) of the principal Regulations (in relation to a change in the requisite details of a branch by a UK investment firm) on or before 31st October 2007, regulation 11 of the principal Regulations continues to apply in relation to that change as if it had not been amended by these Regulations, and regulation 11A of the principal Regulations (inserted by these Regulations) does not apply in relation to that change.

(5) Where a UK investment firm has given notice to the Authority and to its host state regulator pursuant to regulation 12(2)(a) of the principal Regulations (in relation to a change in its programme of operations or EEA activities) on or before 31st October 2007—

(a) regulation 12A of the principal Regulations (inserted by these Regulations) does not apply in relation to that change;

(b) the firm must not make the change to which the notice relates until the period of one month beginning with the day on which it gave the notice pursuant to regulation 12(2)(a) of the principal Regulations has elapsed; and

(c) the Authority must, as soon as reasonably practicable after receiving the notice, inform the host state regulator of the proposed change.

(6) In this regulation, “UK investment firm” means a UK firm (within the meaning of Schedule 3)—

(a) which is an investment firm (within the meaning of the investment services directive); and

(b) whose EEA right derives from that directive.