Financial Services and Markets Act 2000 (Transitional Provisions and Savings) (Civil Remedies, Discipline, Criminal Offences etc.) (No. 2) Order 2001

JurisdictionUK Non-devolved
CitationSI 2001/3083
Year2001

2001 No. 3083

FINANCIAL SERVICES AND MARKETS

The Financial Services and Markets Act 2000 (Transitional Provisions and Savings) (Civil Remedies, Discipline, Criminal Offences etc.) (No. 2) Order 2001

Made 11th September 2001

Laid before Parliament 11th September 2001

Coming into force in accordance with article 1

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:

1 GENERAL

PART 1

GENERAL

S-1 Citation, commencement and interpretation

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.) (No. 2) Order 2001.

(2) This Order comes into force for the purpose of article 23 on 8th October 2001 and for all other purposes, on the day on which section 19 comes into force.

(3) 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;

“IMRO” means the Investment Management Regulatory Organisation Limited;

“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;

“PIA rules” means the rules of the Personal Investment Authority Limited;

“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;

“relevant IMRO contravention”, in relation to any person (“A”)—

(a) in any case, means any breach by A of—

(i) the rules of IMRO;

(ii) the rules of any other recognised self-regulating organisation, or

(iii) the rules of any recognised professional body,

to which A was subject at the time of the breach (whether or not A was at that time regulated by IMRO);

(b) where A was a member of IMRO (rather than a registered individual), also means—

(i) any breach by A of the rules of the Authority made under Chapter V of Part I of the Financial Services Act,

(ii) the provision by A to IMRO of false, inaccurate or misleading information in submitting his application for membership; or

(iii) any breach by A of a statement of principle issued by the Authority under section 47A of the Financial Services Act9;

“SFA” means The Securities and Futures Authority Limited, and “SFA rules” means the rules of the SFA.

(4) 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.

(5) For the purposes of this Order, a recognised self-regulating organisation or a recognised self-regulating organisation for friendly societies is to be taken to have had a power immediately before commencement if it would have had that power had the appropriate procedural steps required by the rules of that organisation been complied with before commencement.

2 CIVIL REMEDIES

PART 2

CIVIL REMEDIES

S-2 Remedial injunctions and restitution orders in respect of pre-commencement conduct

Remedial injunctions and restitution orders in respect of pre-commencement conduct

2.—(1) Any requirement, condition or prohibition 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 only if the contravention occurred before commencement 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 (12).

(3) The provisions specified by this paragraph are—

(a)

(a) section 3 of the Financial Services Act (prohibition on 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 47A of that Act (statements of principle);

(e)

(e) section 50 of that Act (modification 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;

(f)

(f) section 58(3) of that Act (exceptions from restrictions on advertising);

(g)

(g) 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;

(h)

(h) section 91(2) of that Act (directions to authorised unit trust schemes);

(i)

(i) section 104(1) of that Act16(power to call for information);

(j)

(j) section 130 of that Act (restriction on promotion of contracts of insurance);

(k)

(k) section 183 of that Act17(reciprocal facilities for financial business) in reliance upon section 184(4) of that Act (partial restriction notices);

(l)

(l) any rule or regulation made under Schedule 11 to that Act;

(m)

(m) paragraph 24 of Schedule 11 to that Act (requirement to furnish information);

(n)

(n) any rule (within the meaning of section 8(3) of that Act) of a recognised self-regulating organisation to which the person concerned was subject and which regulated the carrying on by him of investment business;

(o)

(o) any rule of a recognised self-regulating organisation for friendly societies in relation to which the person concerned was a member society (within the meaning of Schedule 11 to that Act);

(p)

(p) any rule (within the meaning of section 16(3) of that Act) of a recognised professional body to which the person concerned was subject and which regulated the carrying on by him of investment business;

(q)

(q) a relevant rule of a recognised investment exchange or recognised clearing house;

(r)

(r) regulation 18 of the Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations 199618; and

(s)

(s) section 3 of the Banking Act (restriction on acceptance of deposits)19.

(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)(p) or (q) 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 accordance 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 imposed under section 47A of the Financial Services Act.

(8) 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.

(9) 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.

(10) In deciding whether, and if so, on what terms, to make an order under section 382(1) in relation to a contravention of that enactment, 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.

(11) Paragraph (12) 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.

(12) 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.

(13) In paragraph (3)(q), “relevant rule” means—

(a)

(a) any rule of a recognised investment exchange (within the meaning of section 36(2) of the Financial Services Act) or rule of a recognised clearing house (within the meaning of section 38(2) of that Act) to which the person concerned was subject and which regulated the carrying on...

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