Financial Services and Markets Act 2000 (Transitional Provisions and Savings) (Civil Remedies, Discipline, Criminal Offences etc.) Order 2001
| Jurisdiction | UK Non-devolved |
| Citation | SI 2001/2657 |
2001 No. 2657
FINANCIAL SERVICES AND MARKETS
The Financial Services and Markets Act 2000 (Transitional Provisions and Savings) (Civil Remedies, Discipline, Criminal Offences etc.) Order 2001
Made 20th July 2001
Laid before Parliament 20th July 2001
Coming into force
The Treasury, in exercise of the powers conferred on them by sections 426, 427 and 428(3) of the Financial Services and Markets Act 20001, hereby make the following Order:
PART 1
GENERAL
Citation, commencement and interpretation
1.—(1) This Order may be cited as the Financial Services and Markets Act 2000 (Transitional Provisions and Savings) (Civil Remedies, Discipline, Criminal Offences etc.) Order 2001 and comes into force on the day on which section 19 comes into force.
(2) In this Order—
“the Act” means the Financial Services and Markets Act 2000;
“the 2BCD Regulations” means the Banking Coordination (Second Council Directive) Regulations 19922;
“the Banking Act” means the Banking Act 19873;
“the Building Societies Act” means the Building Societies Act 19864;
“commencement” means the beginning of the day on which section 19 comes into force;
“the Financial Services Act” means the Financial Services Act 19865;
“the Insurance Companies Act” means the Insurance Companies Act 19826;
“investment business” has the same meaning as in the Financial Services Act;
“the ISD Regulations” means the Investment Services Regulations 19957;
“recognised clearing house”, “recognised investment exchange”, “recognised professional body”, “recognised self-regulating organisation” and “recognised self-regulating organisation for friendly societies”8have the same meanings as in the Financial Services Act;
“the Regulated Activities Order” means the Financial Services and Markets Act 2000 (Regulated Activities) Order 20019.
(3) Any reference in this Order to a section, Part or Schedule is, unless the context otherwise requires, a reference to that section or Part of, or Schedule to, the Act.
PART 2
CIVIL REMEDIES
Remedial injunctions and restitution orders
2.—(1) Any requirement imposed before commencement by or under any of the provisions specified by paragraph (3) is to be treated as a relevant requirement for the purposes of section 380(2) and section 382.
(2) An application under section 380(2) or 382 in relation to a contravention of a requirement mentioned in paragraph (1) may be made only by the Authority and, in relation to such an application—
(a)
(a) section 380(2) has effect subject to paragraphs (4) to (6); and
(b)
(b) section 382 has effect subject to paragraphs (7) to (11).
(3) The provisions specified by this paragraph are—
(a)
(a) section 3 of the Financial Services Act (prohibition of carrying on investment business without being authorised or exempt);
(b)
(b) any rule or regulation made under Chapter V of Part I of that Act (conduct of investment business)10;
(c)
(c) section 47 (misleading statements and practices), 56 (unsolicited calls)11, 57 (restrictions on advertising)12or 59 (employment of prohibited persons)13of that Act;
(d)
(d) section 50 of that Act (modifications of conduct of business and financial resources rules), including that section as it applied by virtue of paragraph 14(3) of Schedule 11 to that Act (friendly societies)14;
(e)
(e) section 58(3) of that Act (exceptions from restrictions on advertising);
(f)
(f) Chapter VI of Part I of that Act (powers of intervention), including that Chapter as it applied by virtue of paragraph 23 of Schedule 11 to that Act15;
(g)
(g) section 91(2) of that Act (directions to authorised unit trust schemes);
(h)
(h) section 130 of that Act (restriction on promotion of contracts of insurance);
(i)
(i) any rule or regulation made under Schedule 11 to that Act;
(j)
(j) paragraph 24 of Schedule 11 to that Act (requirement to furnish information);
(k)
(k) any rule of a recognised self-regulating organisation to which the person concerned was subject and which regulated the carrying on by him of investment business;
(l)
(l) any rule of a recognised self-regulating organisation for friendly societies to which the person concerned was subject and which regulated the carrying on by him of investment business;
(m)
(m) any rule of a recognised professional body, recognised investment exchange or recognised clearing house to which the person was subject and which regulated the carrying on by him of investment business;
(n)
(n) regulation 18 of the Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations 199616; and
(o)
(o) section 3 of the Banking Act (restriction on acceptance of deposits)17.
(4) No order may be made under section 380(2) in relation to a contravention of a requirement imposed by section 3 of the Financial Services Act unless the court is satisfied that the person concerned contravened that requirement by entering into a transaction.
(5) No order may be made under section 380(2) in relation to a contravention of a requirement imposed by or under a provision of any rule that is specified by paragraph (3)(m) unless the court is satisfied that the body, exchange or clearing house is unable or unwilling to take appropriate steps to require the person concerned to take steps to remedy the contravention.
(6) The only order that the court may make under section 380(2) in relation to a contravention of a requirement imposed by section 3 of the Banking Act is an order requiring a person to repay the deposit forthwith or at such time as the court may direct and, in determining whether and, if so, on what terms, to make such an order, the court must have regard to the effect that repayment in acordance with the order would have on the solvency of the person concerned or otherwise on his ability to carry on his business in a manner satisfactory to his creditors.
(7) No order may be made under section 382(1) in relation to the contravention of a requirement mentioned in paragraph (1) solely on the ground that a person has been knowingly concerned in such a contravention by another.
(8) No order may be made under section 382(1) in relation to a contravention of a requirement imposed by section 3 of the Banking Act unless the court is satisfied that section 382(1)(a) is satisfied.
(9) In deciding whether, and if so, on what terms, to make an order under section 382(1)(a) in relation to such a contravention, the court must have regard to the effect that payment in accordance with the order would have on the solvency of the person concerned or otherwise on his ability to carry on business in a manner satisfactory to his creditors.
(10) Paragraph (11) applies if an application is made under section 382(1) in relation to a contravention of a requirement imposed by section 3 of the Financial Services Act.
(11) For the purposes of section 382(1)(b), a person is not to be regarded as having suffered loss or been otherwise adversely affected as a result of the contravention unless the court is satisfied that—
(a)
(a) he is an investor; and
(b)
(b) he suffered the loss or has been adversely affected as a result of—
(i) the contravention by the person concerned of section 47 or 56 of the Financial Services Act; or
(ii) the failure of that person to act substantially in accordance with any of the rules or regulations made under Chapter V of Part I of that Act.
Restitution by the Authority
3.—(1) Paragraph (2) applies if—
(a)
(a) an authorised person (within the meaning of the Act) was, immediately before commencement, a member of a recognised self-regulating organisation or a recognised self-regulating organisation for friendly societies;
(b)
(b) the Authority is satisfied that before commencement he contravened a requirement imposed by a rule of that organisation which regulated the carrying on by him of investment business;
(c)
(c) that organisation had, immediately before commencement, a power that corresponded to the power of the Authority under section 384(5) (power to order restitution) in relation to that contravention (or would have had such a power had an application been made to it by or on behalf of a person who had suffered loss or been otherwise adversely affected as a result of the contravention) but had not exercised that power in relation to that contravention; and
(d)
(d) the Authority is satisfied that section 384(1)(b) is met in relation to that contravention.
(2) The Authority may, subject to paragraph (3), exercise the power in section 384(5).
(3) The Authority may exercise the power in section 384(5) in relation to a contravention of a requirement imposed by a rule of The Securities and Futures Authority Limited only on the application by or on behalf of a person who has suffered loss or been otherwise adversely affected as a result of the contravention.
Injunctions to prevent disposal of assets
4.—(1) Any requirement imposed by or under any of the provisions specified by paragraph (3) is to be treated as a relevant requirement for the purposes of section 380(3)(a).
(2) An application under section 380(3) in relation to a contravention of a requirement mentioned in paragraph (1) may be made only by the Authority and, in relation to such an application, section 380(3) has effect subject to paragraph (4).
(3) The provisions specified by this paragraph are—
(a)
(a) section 3 (restriction on acceptance of deposits)18, 18 (false statements as to authorised status)19, 35 (fraudulent inducement to make a deposit), 67 (restriction on use of banking names)20, 69 (restrictions on use of banking descriptions)21, 71 (notices relating to names of institutions)22or 77 (notices relating to names of overseas institutions)23of the Banking Act;
(b)
(b) regulations under section 32 (advertisement regulations)24, 34 (unsolicited calls)25or 80 (regulations imposing requirements...
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