Source: http://www.legislation.gov.uk/uksi/2017/1064/regulation/5/made
Timestamp: 2019-01-20 12:09:23
Document Index: 468814474

Matched Legal Cases: ['ART 4', 'art 9', 'ART 5', 'art 5', 'art 9', 'art 9', 'ART 6', 'art 9', 'ART 7', 'ART 8']

Amendments to the Central Securities Depositories Regulations 2014
5.—(1) The Central Securities Depositories Regulations 2014(1) are amended as follows.
(2) Before regulation 1 (commencement, citation and interpretation) insert—
Citation, commencement and interpretation”.
(3) In regulation 1 (interpretation)—
(a)in paragraph (2) at the appropriate places insert—
““credit institution” means credit institution (defined in point (1) of Article 4(1) of Regulation (EU) 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms(2)) authorised pursuant to Article 8 of Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms(3);”;
““EEA CSD” has the meaning given in section 285 of the Act(4);”;
““third country CSD” has the meaning given in section 285 of the Act.”;
(b)in paragraph (3) for “Any expression” substitute “Unless defined in these Regulations, any expression”.
Designation of competent authorities”.
(5) In regulation 2 (designation of competent authorities)—
“(c)the supervision of investment firms authorised pursuant to Article 5 of the markets in financial instruments directive(5) for the purposes of the CSD regulation;
(d)the supervision of participants(6) in a securities settlement system(7) for the purposes of the CSD regulation, other than recognised clearing houses(8) or recognised CSDs(9).”;
“(za)the functions referred to in Article 9(1) of the CSD regulation;”;
(ii)in sub-paragraph (a) after “CSD regulation,” insert “and all other competent authority functions under that regulation in relation to CSDs(10)”;
“(aa)host Member State competent authority functions under the CSD regulation in relation to EEA CSDs and third country CSDs;”;
(iv)omit “and” at the end of sub-paragraph (b);
(v)after sub-paragraph (c) insert—
(d)the supervision of CCPs(11) for the purposes of the CSD regulation.”.
(6) After regulation 2 insert—
Powers of the FCA”.
(7) In regulation 3 (power of FCA to require information from a person who is not authorised)—
“(1) In this regulation and in regulation 4—
“non-authorised counterparty” means a person, other than an authorised person or a recognised body, who is a party to a financial collateral arrangement referred to in the second sub-paragraph of Article 3(2) of the CSD regulation;
“participant” means a participant in a securities settlement system as defined in Article 2(1)(19) of the CSD regulation, other than—
an authorised person(12), or
a recognised body.”.
“(3A) Paragraph (3B) applies where a participant is subject to an obligation under Article 38(5) and (6) of the CSD regulation.
(3B) The FCA may, by notice in writing, require the participant—
(b)to provide specified documents or documents of a specified description,
so that it can verify whether the participant has complied with Article 38(5) and (6) of the CSD regulation.”.
(8) In regulation 4 (penalties and statements)—
(i)in sub-paragraph (a), after “non-authorised counterparty” insert “, participant”;
(ii)in sub-paragraph (b), after “non-authorised counterparty” insert “or participant”;
(b)in paragraph (2), after “non-authorised counterparty” insert “, participant”.
(9) After regulation 5 (procedure in relation to regulation 4) insert—
“PART 4Powers of the Bank
Power of the Bank to require information
5A.—(1) This regulation applies where it is necessary for the Bank to determine whether—
(a)a settlement internaliser(13) has complied with the first sub-paragraph of Article 9(1) of the CSD regulation or regulation 5N; or
(b)a person is a settlement internaliser.
(2) The Bank may, by giving notice in writing, require a person—
so that it can verify whether the settlement internaliser has complied with the first sub-paragraph of Article 9(1) of the CSD regulation or regulation 5N, or whether the person is a settlement internaliser.
(3) The information or documents must be provided or produced—
(4) This regulation applies only to information and documents reasonably required in connection with the exercise by the Bank of its functions under the CSD regulation.
(5) The Bank may require any information provided under this regulation to be provided in such a form as it may reasonably require.
(6) The Bank may require—
(a)any information provided, whether in a document or otherwise, to be verified in such a manner, or
(b)any document produced to be authenticated in such a manner,
(7) A requirement imposed under this regulation is a relevant requirement for the purposes of sections 380 (injunctions) and 382 (restitution orders) of the Act(14) as applied to the Bank by paragraphs 26 and 27 of Schedule 17A to the Act.
(8) In this regulation, “specified” means specified in the notice.
5B.—(1) If the Bank considers that—
(a)a person has contravened a relevant requirement imposed on it;
(b)a settlement internaliser has contravened a requirement imposed by or under the CSD regulation; or
(c)a settlement internaliser has contravened regulation 5N,
the Bank may publish a statement to that effect or impose on it a penalty, in respect of the contravention, of such amount as the Bank considers appropriate.
(2) If the Bank considers that a person has in purported compliance with a relevant requirement knowingly or recklessly given the Bank information which is false or misleading in a material particular, the Bank may publish a statement to that effect or impose upon the person a penalty of such amount as it considers appropriate.
(3) Where the Bank has published a statement or imposed a penalty under paragraph (1) or (2), it must comply with the requirements of Article 62 of the CSD regulation.
(4) A penalty under paragraph (1) or (2) is payable to the Bank.
(5) The Bank must in respect of each of its financial years pay to the Treasury any amounts received by it during the year by way of penalties imposed under this regulation.
(6) The Treasury may give directions to the Bank as to how the Bank is to comply with its duty under paragraph (5).
(a)specify the time when any payment is required to be made to the Treasury, or
(b)require the Bank to provide the Treasury at specified times with information relating to penalties that the Bank has imposed under this regulation.
(8) The Treasury must pay into the Consolidated Fund any sums received by them under this regulation.
(9) In this regulation, a “relevant requirement” means a requirement imposed under regulation 5A.
Procedure in relation to regulation 5B
5C.—(1) If the Bank proposes to take action against a person under regulation 5B, it must give the person concerned a warning notice.
(4) If, having considered any representations made in response to the warning notice, the Bank decides to take action against a person under regulation 5B, it must without delay give the person concerned a decision notice.
(7) If the Bank decides to take action against a person under regulation 5B, the person may refer the matter to the Tribunal(15).
(8) Sections 312J (statement of policy) and 312K (statement of policy: procedure) of the Act apply in respect of the imposition of penalties under regulation 5B and the amount of such penalties as they apply in respect of the imposition of penalties under section 312F of the Act.
(9) After a statement under regulation 5B is published, the Bank must send a copy of it to the person concerned and to any person to whom a copy of the decision notice was given under section 393(4) of the Act (applied by paragraph (10)).
(10) Sections 387(1), (2) and (3) (warning notices), 388 (decision notices), 389 (notices of discontinuance), 390 (final notices), 393 (third party rights) and 394 (access to FCA or PRA material) of the Act(16) apply in relation to a warning notice or decision notice given by the Bank under this regulation as if—
(a)references to the regulator or the regulator concerned were references to the Bank;
(b)the reference in section 388(1)(e)(i) to “this Act” were a reference to these Regulations.
(11) Section 391 of the Act (publication) applies in relation to a warning notice or decision notice under this regulation and in relation to a notice of discontinuance and a final notice under section 389 or 390 of the Act as applied by paragraph (10), but as if—
(a)references to the regulator and the FCA were references to the Bank;
(b)a warning notice under this regulation were treated as falling within subsection (1ZB);
(c)in subsection (8A)—
(i)the reference to the Act were to these Regulations;
(ii)the reference to a requirement included a requirement under regulation 5A.
(12) Part 9 of the Act (hearings and appeals) applies to references to the Tribunal under this regulation as it applies to references to the Tribunal under the Act, as if—
(a)a reference were a “disciplinary reference” for the purposes of section 133 of the Act(17) if it is in respect of a decision to publish a statement or impose a penalty under regulation 5B;
(b)section 133(1)(a) and (c) of the Act did not apply.
Power of the Bank to require a report by a skilled person
5D.—(1) This regulation applies where the Bank has required or could require a person on whom it could impose a requirement under regulation 5A(2) (“the person concerned”) to provide information or to produce documents under regulation 5A so that the Bank can verify whether—
(a)a settlement internaliser has complied with Article 9(1) of the CSD regulation, or
(b)a person is a settlement internaliser,
(“the matter concerned”).
(2) The Bank may appoint a person to provide the Bank with a report on the matter concerned.
(3) The Bank must give notice of an appointment under paragraph (2) to the person concerned.
(4) The person appointed to make a report must be a person appearing to the Bank to have the skills necessary to make a report on the matter concerned.
(5) It is the duty of—
(6) The obligation imposed by paragraph (5) is enforceable, on the application of the Bank, by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.
Power of the Bank to appoint a skilled person to collect and update information
5E.—(1) This regulation applies if the Bank considers that a settlement internaliser has failed to comply with the first sub-paragraph of Article 9(1) of the CSD regulation.
(2) The Bank may appoint a skilled person to collect or update the information required to be submitted under that sub-paragraph.
(3) References in this regulation to a skilled person are to a person appearing to the Bank to have the skills necessary to collect or update the information in question.
(4) The Bank must give notice of an appointment under paragraph (2) to the settlement internaliser.
(5) The skilled person may require any person to provide all such assistance as the skilled person may reasonably require to collect or update the information in question.
(6) A requirement imposed under paragraph (5) is enforceable, on the application of the Bank, by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.
(7) A contractual or other requirement imposed on a person (“P”) to keep any information in confidence does not apply if—
(a)the information is or may be relevant to anything required to be done as a result of this regulation,
(b)a settlement internaliser or a skilled person requests or requires P to provide the information for the purposes of securing that those things are done, and
(c)the Bank has approved the making of the request or the imposition of the requirement before it is made or imposed.
(8) A settlement internaliser may provide information (whether received under paragraph (7) or otherwise) that would otherwise be subject to a contractual or other requirement to keep it in confidence if it is provided for the purposes of anything required to be done as a result of this regulation.
PART 5Control over a recognised CSD
5F. In Part 5—
“acquisition” means a transfer of ownership rights which gives rise to a change in the identity of the persons exercising control over the operation of a recognised CSD(18);
“Article 27 notice” means a notification by a person under Article 27(7) of the CSD regulation of a proposed acquisition;
“assessment period” means the period of 60 working days referred to in Article 27(8) of the CSD regulation;
“control” means the relationship between two undertakings as described in section 1162 of, and Schedule 7 to, the Companies Act 2006(19)
“proposed acquisition” means a decision to transfer ownership rights which gives rise to a change in the identity of the persons exercising control over the operation of a recognised CSD;
“restriction notice” has the meaning given by regulation 5I;
“shares” has the meaning given by section 422 of the Act (controller), but section 422A of the Act(20) (disregarded holdings) does not apply;
“voting power” has the meaning given by section 422 of the Act;
a day which is a bank holiday under the Banking and Financial Dealings Act 1971(21) in any part of the United Kingdom.
Powers of Bank in relation to proposed acquisition
5G.—(1) The Bank may before the end of a period of 14 working days starting with the day on which it receives an Article 27 notice, by notice in writing, require the person who gave the Article 27 notice—
(b)to provide specified documents or documents of a specified description.
(2) Subsection (1) only applies to information or documents which the Bank reasonably requires in order to decide whether there are objective and demonstrable grounds for believing that a proposed acquisition would pose a threat to the sound and prudent management of the recognised CSD or to the ability of the recognised CSD to comply with the CSD regulation.
(a)before the end of such period as may be specified; and
(4) The Bank may require any information provided under this regulation to be provided in such a form as it may reasonably require.
(5) The Bank may require—
(6) In this regulation, “specified” means specified in the notice.
(7) For the purposes of Article 27(8) of the CSD regulation, the information referred to in Article 27(7) of that regulation is not received until the Bank receives all the information and documents required under this regulation, and where the Bank has imposed a requirement under paragraph (4) or (5), that requirement has been complied with.
Procedure in relation to proposed acquisition
5H.—(1) If the Bank gives a person (“P”) notice of its decision under Article 27(8) of the CSD regulation that it opposes a proposed acquisition, P may refer the Bank’s decision to the Tribunal.
(2) The notice under Article 27(8) of the CSD regulation must—
(a)give reasons for the decision;
(b)inform P that P may make representations to the Bank within such period as may be specified in the notice (whether or not P has referred the matter to the Tribunal); and
(c)inform P of P’s right to refer the matter to the Tribunal, and give an indication of the procedure on such a reference.
(3) The Bank may extend the period allowed under the notice under Article 27(8) of the CSD regulation for making representations.
(4) If, having considered any representations made by P, the Bank decides to rescind the notice under Article 27(8) of the CSD regulation, it must give P written notice.
(5) If, having considered any representations made by P, the Bank decides not to rescind the notice under Article 27(8) of the CSD regulation, it must give P written notice which must comply with paragraph (2)(c).
(6) Part 9 of the Act (hearings and appeals) applies to references to the Tribunal under this regulation as it applies to references to the Tribunal under the Act.
5I.—(1) The Bank may give notice in writing (a “restriction notice”) to a person (“P”) in the following circumstances.
(a)P has taken a decision in relation to which P is required to give the Bank an Article 27 notice; and
(b)P has made the acquisition—
(i)without giving the Article 27 notice,
(ii)before the expiry date of the assessment period (unless the Bank has approved the acquisition), or
(iii)in contravention of the Bank’s decision under Article 27(8) of the CSD regulation.
(3) In a restriction notice, the Bank may direct that shares or voting power to which the notice relates are, until further notice, subject to one or more of the following restrictions—
(6) A copy of the restriction notice must be given to—
(a)the recognised CSD in question; and
(b)in the case of shares or voting power held in a parent undertaking(22) of a recognised CSD, the parent undertaking.
(7) A person to whom the Bank gives a restriction notice may refer the matter to the Tribunal.
(8) Part 9 of the Act (hearings and appeals) applies to references to the Tribunal under this regulation as it applies to references to the Tribunal under the Act.
5J.—(1) The court may, on the application of the Bank, order the sale of shares or the disposition of voting power in the following circumstances.
(a)a person (“P”) has taken a decision in relation to which P is required to give the Bank an Article 27 notice; and
(4) Where the court makes an order under this regulation, it must take into account the level of holding that P would have been entitled to acquire, or to continue to hold, without contravening the Bank’s decision under Article 27(8) of the CSD regulation.
(5) If shares are sold or voting power disposed of in pursuance of an order under this regulation, any proceeds, less the costs of the sale or disposition, must be paid into court for the benefit of the persons beneficially interested in them; and any such person may apply to the court for payment of the whole or a part of the proceeds.
(6) The jurisdiction conferred by this regulation may be exercised by the High Court or in Scotland, the Court of Session.
5K.—(1) A person who fails to comply with an obligation to notify the Bank under the Article 27(7) of the CSD regulation is guilty of an offence.
(2) A person who gives an Article 27 notice to the Bank and makes the acquisition to which the notice relates before the expiry date of the assessment period is guilty of an offence unless the Bank has approved the acquisition.
(3) A person who makes an acquisition in contravention of the Bank’s decision under Article 27(8) of the CSD regulation is guilty of an offence.
(4) A person who provides information to the Bank which is false in a material particular is guilty of an offence.
(5) A person guilty of an offence under paragraph (1), (2) or (4) is liable—
(a)in England and Wales, on summary conviction or on conviction on indictment to a fine; and
(b)in Scotland and Northern Ireland, on summary conviction to a fine not exceeding the statutory maximum or on conviction on indictment to a fine.
(6) A person guilty of an offence under paragraph (3) is liable—
(i)on summary conviction to a fine, or
(ii)on conviction on indictment, to imprisonment for a term not exceeding two years or a fine, or both; and
(ii)on conviction on indictment, to imprisonment for a term not exceeding two years or a fine, or both.
(7) It is a defence for a person charged with an offence under paragraph (1) to show the person had, at the time of the alleged offence, no knowledge of the act or circumstances by virtue of which the duty to notify the Bank arose.
PART 6References to the Tribunal
5L.—(1) Paragraph (2) applies where the Bank or FCA takes a decision—
(a)to refuse an application under Article 19(1) of the CSD regulation;
(b)to require a recognised CSD to discontinue a CSD link(23) in accordance with Article 19(7) of that regulation;
(c)to withdraw authorisation for a service, activity or financial instrument in accordance with Article 20(4) of that regulation;
(d)to refuse to communicate information in accordance with Article 23(3) and (4) of that regulation (freedom of CSD to provide services in another Member State);
(e)to refuse an application for authorisation under Article 30(4) of that regulation (outsourcing);
(f)in relation to a complaint under Article 33(3) of that regulation (requirements for participation);
(g)to refuse an application for authorisation under Article 48(2) of that regulation (CSD links);
(h)in relation to a complaint under Article 49(4) of that regulation (freedom to issue in a CSD authorised in the European Union);
(i)in relation to a complaint under Article 52(2) of that regulation (procedure for CSD links);
(j)in relation to a complaint under Article 53(3) of that regulation (access between a CSD and another market infrastructure);
(k)to refuse an application by a CSD for authorisation to designate a credit institution or to provide banking-type ancillary services listed in or permitted under Section C of the Annex to that regulation under Article 55(5) of that regulation (procedure for granting and refusing authorisation to provide banking-type ancillary services);
(l)to refuse an application by a recognised CSD for an extension of banking-type ancillary services listed in or permitted under Section C of the Annex to that regulation (including services to be provided by a designated credit institution) under Article 55(5) of that regulation as applied by Article 56(2) of that regulation (extension of banking-type ancillary services);
(m)to withdraw, wholly or partly, a recognised CSD’s authorisation to designate a credit institution or to provide banking-type ancillary services listed in or permitted under Section C of the Annex to the CSD regulation under Article 57 of that regulation (withdrawal of authorisation).
(2) The following persons may refer the matter to the Tribunal—
(a)in the case of any decision mentioned in paragraph (1), the CSD to which the decision relates,
(b)in the case of a decision mentioned in paragraph (1)(f), (h) or (i), the complainant, and
(c)in the case of a decision mentioned in paragraph (1)(j), the CCP and the trading venue(24).
(3) Part 9 of the Act (hearings and appeals) applies to references to the Tribunal under this regulation as it applies to references to the Tribunal under the Act.
PART 7Access to trading venues
5M.—(1) Paragraph (2) applies where the FCA has decided in respect of a complaint made to it under Article 53(3) of the CSD regulation that a trading venue which is not a recognised body has failed, unjustifiably, to grant the access sought by the complainant.
(2) The FCA may direct the trading venue to take specified steps for the purpose of securing the trading venue’s compliance with the FCA’s determination of the complaint.
(3) A direction under this regulation is enforceable, on the application of the FCA, by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988(25).
(4) Section 298 of the Act applies in relation to a direction under this regulation as it applies in relation to a direction under section 296 of the Act given to a recognised CSD.
PART 8Reporting of infringements
5N.—(1) Settlement internalisers must have in place appropriate procedures for their employees to report actual or potential infringements of the CSD regulation and any directly applicable EU regulation made under that regulation internally through a specific, independent and autonomous channel.
(2) The protections set out in points (b), (c) and (d) of Article 65(2) of that regulation (reporting of infringements) must be applied in relation to those procedures.
Consequential amendments”.
(10) After regulation 9 (amendments to the Financial Services and Markets Act 2000 (Qualifying EU Provisions) Order 2013) insert—
(11) In regulation 10 (review) after “regulations 2 to 9” in each place insert “and the Central Securities Depositories Regulations 2017”.
OJ No L176, 27.6.2013, p.1.
OJ No L176, 27.6.2013, p.338.
Section 285 was amended by section 28 of the Financial Services Act 2012 and S.I. 2013/504.
Defined in section 425(1) of the Financial Services and Markets Act 2000; OJ No L145, 30.4.2004, p.1.
Defined Article 2(1)(19) of the CSD regulation. Definitions in the CSD regulation apply by virtue of S.I. 2014/2879.
Defined in Article 2(1)(10) of the CSD regulation.
Defined in section 417(1) of the Financial Services and Markets Act 2000.
A definition is inserted into section 417(1) of the Financial Services and Markets Act 2000 by these Regulations.
Defined in Article 2(1)(1) of the CSD regulation.
Defined in Article 2(1)(16) of the CSD regulation.
Defined in section 417(1) of the Financial Services and Markets Act 2000. Definitions in the Financial Services and Markets Act 2000 apply by virtue of S.I. 2014/2879.
Defined in Article 2(1)(11) of the CSD regulation.
Section 380 was amended by paragraph 19 of Schedule 9 to the Financial Services Act 2012, paragraph 3 of Schedule 10 to the Financial Services (Banking Reform) Act 2013 and S.I. 2013/1773, 2015/1755 and 2016/225. Section 382 was amended by paragraph 21 of Schedule 9 to the Financial Services Act 2012, paragraph 3 of Schedule 10 to the Financial Services (Banking Reform) Act 2013 and S.I. 2013/1773.
Sections 387, 388, 389, 390, 391, 393 and 394 were amended by Schedule 9 to the Financial Services Act 2012. Sections 387 and 388 were also amended by Schedule 3 to the Financial Services (Banking Reform) Act 2013. Section 390 was also amended by S.I. 2010/22. Section 391 was also amended by section 13 of the Financial Services Act 2010 (c.28), section 24 of the Financial Services Act 2012 and S.I. 2012/916, 2013/1388, 2013/3115, 2014/2879, 2016/225, 2016/680, 2016/715 and 2017/701. Section 394 was also amended by Schedules 4 and 10 to the Regulation of Investigatory Powers Act 2000 (c.23).
Section 133 was substituted by S.I. 2010/22 and amended by section 23 of the Financial Services Act 2012, section 4 of the Financial Services (Banking Reform) Act 2013, paragraph 83 of Schedule 9 to the Crime and Courts Act 2013 (c.22) and S.I. 2013/1388, 2014/3329 and 2016/680.
Defined in section 285 of the Financial Services and Markets Act 2000 as amended by these Regulations.
Sections 422 and 422A were substituted by S.I. 2009/534. Section 422 was amended by S.I. 2013/3115. Section 422A was amended by S.I. 2011/1613, 2013/3115 and 2015/1755.
Defined in section 420 of the Financial Services and Markets Act 2000.
Defined in Article 2(1)(29) of the CSD regulation.
Defined in Article 2(1)(42) of the CSD regulation.