Financial Services and Markets Act 2000 (Consequential Amendments and Repeals) Order 2001

JurisdictionUK Non-devolved
CitationSI 2001/3649

2001 No. 3649

FINANCIAL SERVICES AND MARKETS

The Financial Services and Markets Act 2000 (Consequential Amendments and Repeals) Order 2001

Made 9th November 2001

Laid before Parliament 9th November 2001

Coming into force in accordance with article 1

The Treasury in exercise of their powers under sections 426 and 427 of the Financial Services and Markets Act 20001hereby make the following Order:—

1 INTRODUCTORY

PART 1

INTRODUCTORY

Citation, commencement and transitional provisions
S-1 Citation, commencement and transitional provisions

Citation, commencement and transitional provisions

1. This Order may be cited as the Financial Services and Markets Act 2000 (Consequential Amendments and Repeals) Order 2001 and comes into force on 1st December 2001.

Interpretation
S-2 Interpretation

Interpretation

2. In this Order “the Act” means the Financial Services and Markets Act 2000.

The principal repeals and revocations
S-3 The principal repeals and revocations

The principal repeals and revocations

3.—(1) The following enactments are repealed—

(a)

(a) the Policyholders Protection Act 19752;

(b)

(b) the Insurance Companies Act 19823;

(c)

(c) the Financial Services Act 19864;

(d)

(d) the Banking Act 19875;

(e)

(e) the Insurance Companies (Reserves) Act 19956; and

(f)

(f) the Policyholders Protection Act 19977.

(2) The following instruments are revoked—

(a)

(a) the Banking Co-ordination (Second Council Directive) Regulations 19928;

(b)

(b) the Insurance Companies (Third Insurance Directives) Regulations 19949; and

(c)

(c) the Investment Services Regulations 199510.

2 AMENDMENTS TO THE COMPANIES LEGISLATION

PART 2

AMENDMENTS TO THE COMPANIES LEGISLATION

Companies Act 1985 (c. 6)

Companies Act 1985 (c. 6)

S-4 Membership of holding company

Membership of holding company

4.—(1) Section 23 (membership of holding company) of the Companies Act 198511is amended as follows.

(2) In paragraph (b) of subsection (3B), for “section 75 of the Financial Services Act 1986” substitute “section 236 of the Financial Services and Markets Act 2000”.

(3) For paragraphs (d) and (e) of that subsection substitute—

“(d)

“(d) “insurance business” means business which consists of the effecting or carrying out of contracts of insurance;

(e)

(e) “securities” includes—

(i) options,

(ii) futures, and

(iii) contracts for differences,

and rights or interests in those investments;”.

(4) In paragraph (f) of that subsection, for “section 75(8) of the Financial Services Act 1986” substitute “section 237(2) of the Financial Services and Markets Act 2000”.

(5) After that subsection, insert—

S-3BA

“3BA Subsection (3B) must be read with—

(a) section 22 of the Financial Services and Markets Act 2000;

(b) any relevant order under that section; and

(c) Schedule 2 to that Act.”.

S-5 Meaning of “offer to the public”

Meaning of “offer to the public”

5. Sections 59 and 60 of the 1985 Act12(so far as those sections continue to have effect) are repealed.

S-6 Purchase by company of its own shares: definition of “off-market” and “market” purchase

Purchase by company of its own shares: definition of “off-market” and “market” purchase

6.—(1) Section 163 of the 1985 Act (meaning of “off-market” and “market” purchase)13is amended as follows.

(2) In subsection (2)(a) for “Part IV of the Financial Services Act 1986” substitute “Part 6 of the Financial Services and Markets Act 2000”.

(3) For subsection (4) substitute—

S-4

“4 “Recognised investment exchange” means a recognised investment exchange other than an overseas investment exchange.

S-5

5 Expressions used in the definition contained in subsection (4) have the same meaning as in Part 18 of the Financial Services and Markets Act 2000.”.

S-7 Duty of company as to issue of certificates

Duty of company as to issue of certificates

7. For subsection (4) of section 185 of the 1985 Act (duty of company to issue certificates in relation to shares allotted or transferred)14substitute—

S-4

“4 Subsection (4A) applies in relation to a company—

(a) of which shares or debentures are allotted to a financial institution,

(b) of which debenture stock is allotted to a financial institution, or

(c) with which a transfer for transferring shares, debentures or debenture stock to a financial institution is lodged.

S-4A

4A The company is not required, in consequence of that allotment or transfer, to comply with subsection (1).

S-4B

4B “Financial institution” means—

(a) a recognised clearing house acting in relation to a recognised investment exchange; or

(b) a nominee of—

(i) a recognised clearing house acting in that way; or

(ii) a recognised investment exchange.

S-4C

4C No person may be a nominee for the purposes of this section unless he is a person designated for those purposes in the rules of the recognised investment exchange in question.

S-4D

4D Expressions used in subsections (4B) and (4C) have the same meaning as in Part 18 of the Financial Services and Markets Act 2000.”.

S-8 Disclosure of interests in shares: interests to be disclosed

Disclosure of interests in shares: interests to be disclosed

8.—(1) Section 199 of the 1985 Act (interests in shares required to be disclosed)15is amended as follows.

(2) In subsection (2A), in paragraph (a) for “authorised to” substitute “who may lawfully”.

(3) For subsections (6) and (7) substitute—

S-6

“6 For the purposes of subsection (2A), a person (“A”) may lawfully manage investments belonging to another if—

(a) A can manage those investments in accordance with a permission which A has under Part 4 of the Financial Services and Markets Act 2000;

(b) A is an EEA firm of the kind mentioned in sub-paragraph (a) or (b) of paragraph 5 of Schedule 3 to that Act, and can manage those investments in accordance with its EEA authorisation;

(c) A can, in accordance with section 327 of that Act, manage those investments without contravening the prohibition contained in section 19 of that Act; or

(d) A can lawfully manage those investments in another Member State and would, if he were to manage those investments in the United Kingdom, require permission under Part 4 of that Act.

S-7

7 References in this section to the management of investments must be read with—

(a) section 22 of the Financial Services and Markets Act 2000;

(b) any relevant order under that section; and

(c) Schedule 2 to that Act.”.

(4) In subsection (8)—

(a)

(a) in paragraph (b) for the words from the beginning to “conferred” substitute “is certified by the competent authority in that member State as complying with the conditions imposed”; and

(b)

(b) for “subsection (8) of section 86 of the Financial Services Act 1986” substitute “subsection (5) of section 264 of the Financial Services and Markets Act 2000”.

S-9 Disclosure of interests in shares: interests to be disregarded

Disclosure of interests in shares: interests to be disregarded

9. For section 209(2) of the 1985 Act (interests in shares to be disregarded for purposes of disclosure requirements)16substitute—

S-2

“2 An interest in shares is an exempt security interest for the purposes of subsection (1)(c) if the condition mentioned in subsection (2A) is satisfied and it is held by—

(a) a person who has permission under Part 4 of the Financial Services and Markets Act 2000 to accept deposits;

(b) an EEA firm of the kind mentioned in paragraph 5(b) of Schedule 3 to that Act;

(c) a person authorised under the law of a member State other than the United Kingdom to accept deposits who—

(i) would not qualify for authorisation under paragraph 12 of Schedule 3 to that Act; and

(ii) would require permission under another provision of that Act to accept such deposits in the United Kingdom;

(d) an authorised insurance undertaking;

(e) a person authorised under the law of a member State to deal in securities or derivatives, who deals in securities or derivatives on a relevant stock exchange or a relevant investment exchange, whether as a member or otherwise;

(f) a relevant stock exchange;

(g) a relevant investment exchange;

(h) a recognised clearing house;

(i) the Bank of England; or

(j) the central bank of a member State other than the United Kingdom.

S-2A

2A The condition is that the interest in the shares must be held by way of security only for the purposes of a transaction entered into in the ordinary course of his or its business as a person or other body falling within any of paragraphs (a) to (j) of subsection (2).

S-2B

2B Paragraphs (a) to (c) of subsection (2) must be read with—

(a) section 22 of the Financial Services and Markets Act 2000;

(b) any relevant order under that section; and

(c) Schedule 2 to that Act.

S-2C

2C But paragraph (a) of subsection (2) does not include—

(a) a building society incorporated, or deemed to be incorporated, under the Building Societies Act 1986; or

(b) a credit union, within the meaning of the Credit Unions Act 1979 of the Credit Unions (Northern Ireland) Order 1985.”.

S-10 Disclosure of interests in shares: interpretation

Disclosure of interests in shares: interpretation

10.—(1) Subsection (1) of section 220 of the 1985 Act (interpretation of Part 6)17is amended in accordance with paragraphs (2) to (8).

(2) The definitions of “authorised credit institution” and “designated agency” are repealed.

(3) In the definition of “authorised unit trust scheme” for “Chapter VIII of Part I of the Financial Services Act 1986” substitute “Part 17 of the Financial Services and Markets Act 2000”.

(4) For the definition of “derivatives” substitute—

““derivatives” means options and futures in relation to shares;”.

(5) After the definition of “derivatives” insert—

““EEA authorisation” has the same meaning as in paragraph 6 of Schedule 3 to the Financial Services and Markets Act 2000;”.

(6) In the definition of “operator” for “section 75(8) of the Financial Services Act 1986” substitute “section 237(2) of the Financial Services and Markets Act 2000”.

(7) For the definition which begins ““recognised clearing house”,” substitute—

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