Source: http://lawsdocbox.com/Legal_Issues/78271086-Part-2-regulated-activities-chapter-i-regulated-activities-3-regulated-activities-chapter-ii-the-general-prohibition-4-the-general-prohibition.html
Timestamp: 2019-10-17 12:45:49
Document Index: 236650002

Matched Legal Cases: ['ART 2', 'ART 2', 'ART 1', 'ART 2', 'ART 3', 'ART 4', 'ART 5', 'ART 6', 'ART 7', 'ART 8', 'ART 1', 'ART 2', 'ART 3', 'ART 4', 'ART 5', 'ART 6', 'ART 7']

PART 2 REGULATED ACTIVITIES Chapter I Regulated Activities 3. Regulated activities. Chapter II The General Prohibition 4. The general prohibition. - PDF
Download "PART 2 REGULATED ACTIVITIES Chapter I Regulated Activities 3. Regulated activities. Chapter II The General Prohibition 4. The general prohibition."
1 FINANCIAL SERVICES ACT 2008 (Chapter 8) Arrangement of Sections PART 1 THE REGULATOR AND THE REGULATORY OBJECTIVES 1. The Financial Supervision Commission. 2. Exercise of functions to be compatible with the regulatory objectives. PART 2 REGULATED ACTIVITIES Chapter I Regulated Activities 3. Regulated activities. Chapter II The General Prohibition 4. The general prohibition. Chapter III Licensing of Regulated Activities 5. Application for a licence. 6. Circumstances in which a licence will not be issued. 7. The licence. 8. Alteration of conditions of existing licences. 9. Revocation or suspension of a licence. PART 3 DIRECTORS AND CONTROLLERS, etc. 10. Directors, controllers, etc. 11. Warning notices. PART 4 REGULATION AND SUPERVISION 12. Guidance. 13. Public statements. 14. Directions. 15. Inspection and investigation. 16. Civil penalties. 17. Auditors to report to Commission. 18. The Rule Book. 19. The Rule Book: supplementary provisions. PART 5 SPECIAL REMEDIES 20. Injunctions, etc. 21. Appointment of receiver. 22. Appointment of business manager. 23. Appointment of reporting accountants, etc. PART 6 MEDIATION, COMPENSATION AND CONTRACTS 24. Mediation and adjudication in financial services disputes. 25. Compensation schemes. 26. Actions for damages. 27. Agreements made by unlicensed, etc persons. 28. Agreements made through unlicensed, etc persons. 29. Agreements made unenforceable by section 27 or 28. PART 7 SUPPLEMENTARY Chapter I
2 General 30. Publication of information. 31. Restrictions on disclosure of information. 32. Appeals to the Financial Services Tribunal. 33. Statutory indemnity. 34. Mutual assistance. 35. Registers. Chapter II Offences, etc. 36. Fraudulent inducement to make a deposit. 37. Misleading statements, etc. 38. Misleading practices. 39. Falsification of documents, etc. relevant to an investigation. 40. False statements. 41. Offences and penalties. 42. Offences by bodies corporate. PART 8 GENERAL 43. Contravention of statutory provisions. 44. Subordinate legislation. 45. Tynwald procedure. 46. Fees. 47. Gaming contracts. 48. Interpretation. 49. Amendment of enactments. 50. Repeal of enactments. 51. Transitional. 52. Financial provisions. 53. Short title and commencement. Schedules Schedule 1 - The Financial Supervision Commission. Schedule 2 - Inspection and investigation. Schedule 3 - The Rule Book. Schedule 4 - Mediation and adjudication. Schedule 5 - Disclosure of information. Schedule 6 - Amendment of enactments. Schedule 7 - Repeal of enactments. Schedule 8 - Transitional and saving provisions. Received Royal Assent:17th June 2008 Announced to Tynwald: 17th June 2008 AN ACT to repeal and replace with modifications certain enactments relating to the financial services industry and the Financial Supervision Commission; and for connected purposes. PART 1 THE REGULATOR AND THE REGULATORY OBJECTIVES 1 The Financial Supervision Commission (1) There shall continue to be a statutory board known as the Financial Supervision Commission (in this Act referred to as 'the Commission'). (2) Schedule 1, which makes provision about the constitution, functions, proceedings and status of the Commission, has effect. 2 Exercise of functions to be compatible with the regulatory objectives (1) The functions of the Commission shall, so far as is reasonably practicable, be exercised-
3 (a) in a way that is compatible with the regulatory objectives set out in subsection (2); and (b) in a way that the Commission considers most appropriate for the purpose of meeting those objectives. (2) The regulatory objectives are- (a) securing an appropriate degree of protection for the customers of persons carrying on a regulated activity; (b) the reduction of financial crime; and (c) supporting the Island s economy and its development as an international financial centre. (3) Subsection (1) shall apply in respect of the Treasury when discharging its functions under this Act. PART 2 REGULATED ACTIVITIES Chapter I Regulated Activities 3 Regulated activities (1) An activity is a regulated activity if- (a) it is a financial services activity of a specified kind; and (b) it is undertaken by way of business. (2) In subsection (1), 'financial services activity' includes- (a) deposit taking; (b) investment business; (c) any service to a collective investment scheme; (d) corporate services; (e) trust services; (f) any service or activity involving money transmission; (g) any other financial service or financial activity of a specified kind that is carried on by a person of a specified description. (3) In subsection (2), the generality of paragraph (g) is not limited by paragraphs (a) to (f). (4) The expressions used in subsection (2)(a) to (f) shall have such meaning as may be specified. (5) In this section, 'specified' means specified in an order made by the Treasury. Chapter II The General Prohibition 4 The general prohibition (1) A person must not carry on, nor hold themself out as carrying on, in or from the Island, a regulated activity- (a) in respect of which no licence is in force; or (b) if such a licence is in force, other than in accordance with the conditions, if any, of the licence. (2) Without prejudice to the generality of subsection (1), for the purposes of this Act, a person is treated as carrying on a regulated activity- (a) in the Island if that person- (i) carries on a regulated activity from a permanent place of business maintained by that person in the Island; or
4 (ii) engages in the Island in one or more of the activities which constitute a regulated activity and doing so constitutes the carrying on by that person of a business in the Island; (b) from the Island if that person is- (i) a limited partnership registered in the Island under Part II of the Partnership Act 1909; (ii) a company incorporated outside the Island that is registered under Part XI of the Companies Act 1931; (iii) a limited liability company formed under the Limited Liability Companies Act 1996; or (iv) a company incorporated in the Island under the Companies Acts 1931 to 2004; (v) a company incorporated under the Companies Act 2006, and carries on a regulated activity outside the Island. (3) Without prejudice to the generality of subsection (1), for the purposes of this Act a person is treated as holding themselves out as carrying on, in or from the Island, a regulated activity if that person (whether inside or outside the Island)- (a) by means of any words in the name, title or address of a web site or page or an internet site or page; or (b) by means of any words in an name or address or in the name, title or subject matter of an ; or (c) by means of any words in a domain name, expressly or by implication indicates that that person, or another, is a permitted person or carries on a regulated activity in, from or in connection with the Island, either on their own or another s behalf or as an intermediary for another. Chapter III Licensing of Regulated Activities 5 Application for a licence (1) Every application for a licence to carry on a regulated activity shall be made to the Commission. (2) An application under subsection (1) shall be in such form as is required by the Commission, together with such documents and information as it may require. 6 Circumstances in which a licence will not be issued (1) A licence will not be issued under section 7 unless the Commission is satisfied that- (a) the applicant is a fit and proper person to carry on the regulated activity and provide the services described in that application; (b) any controller or director of the applicant is a fit and proper person to act as such; (c) such other persons as appear to the Commission to be key persons are fit and proper persons; and (d) the applicant is managed and controlled in the Island. (2) In assessing whether an applicant is a fit and proper person under subsection (1), the Commission will have regard to the information before it as to- (a) the integrity, competence, financial standing, structure and organisation of the applicant; (b) the integrity, competence and financial standing of- (i) any controller or director of the applicant; (ii) key persons in relation to the applicant; and
5 (c) the description of the business the applicant proposes to carry on. (3) The Commission may publish guidance setting out the criteria that it will normally apply in assessing whether it is satisfied as required by subsection (1). (4) The guidance shall be published in such form and in such manner as the Commission may decide. (5) Subsections (2) and (3) do not affect the generality of subsection (1). 7 The licence (1) The Commission shall, in relation to every application for a licence to carry on a regulated activity- (a) issue the licence; (b) issue the licence, subject to conditions; or (c) refuse the application. (2) Subject to the provisions of this Act, a licence to carry on a regulated activity shall remain in force until revoked or surrendered. (3) The conditions which the Commission may impose may include a condition that- (a) the person to whom the licence is issued shall comply with the Rule Book or such provisions of the Rule Book as are specified; (b) the Rule Book shall apply to that person with such exceptions and modifications as may be specified. (4) The Commission shall give to the person concerned written notice of a decision under subsection (1) and, where the decision is under paragraph (b) or (c) of that subsection, a written statement of the reasons for the decision. (5) A licence may be issued in respect of one or more regulated activities and where a licence is issued in respect of more than one regulated activity, different conditions may be imposed in respect of different regulated activities. (6) If the holder of a licence is in contravention of any condition imposed under this section, the Commission may undertake action for a breach. (7) In this Act, a person who has been issued with a licence under this section is referred to as a 'licenceholder'. 8 Alteration of conditions of existing licences (1) The Commission may at any time- (a) make a licence subject to conditions or, as the case requires, further conditions; or (b) vary or revoke any condition. (2) Where a licence is issued in respect of more than one regulated activity, the powers under subsection (1) may be exercised in respect of the conditions imposed in respect of any or all of those activities. (3) The Commission shall give written notice to the person concerned of any decision to vary or revoke any condition under subsection (1) together with a statement of the reasons for the decision. (4) If the holder of a licence is in contravention of any condition imposed under this section, the Commission may undertake action for a breach. 9 Revocation or suspension of a licence (1) The Commission may at any time revoke or suspend a licence to carry on a regulated activity. (2) The Commission shall give written notice to the person concerned of any decision to revoke or suspend a licence under this section together with a statement of the reasons for the decision.
6 (3) Where a licence is issued in respect of more than one regulated activity, the powers under this section may be exercised in respect of any or all of those activities. (4) Where the Commission suspends a licence under subsection (1), it shall review the suspension on a regular basis. PART 3 DIRECTORS AND CONTROLLERS, etc. 10 Directors, controllers, etc (1) If, on reasonable grounds, it appears to the Commission that a person is not a fit and proper person- (a) to be appointed as a director or key person; or (b) to become a controller, of a licenceholder, the Commission may direct that such person shall not, without the written consent of the Commission, be appointed as such a director or key person or become such a controller. (2) If, on reasonable grounds, it appears to the Commission that any- (a) director or key person; or (b) controller, of a permitted person, is not a fit and proper person to continue as such, the Commission may direct that such person shall not, without the written consent of the Commission, continue as such a director, key person or controller. (3) The Commission shall give written notice to the person concerned of any decision to make a direction under this section together with a statement of the reasons for the decision. (4) Subject to subsection (5), where a notice has been given under subsection (3), the direction shall take effect- (a) if no appeal under section 32 is made within the period prescribed for the purposes of such an appeal, on the expiry of that period; or (b) if there is an appeal under section 32- (i) where the applicant abandons the appeal, on the date of abandonment; or (ii) where the decision of the Commission is confirmed, on the date of confirmation; or (iii) where the decision of the Commission is varied, on such date as the Tribunal constituted under section 32 directs. (5) If the Commission is of the opinion that a direction should have immediate effect, the notice under subsection (3) shall contain a statement to that effect together with the reasons for that opinion, and the direction shall have effect on the giving of the notice. (6) Any direction or consent by the Commission under subsection (1) or (2) may be- (a) given subject to conditions; (b) varied from time to time; and (c) revoked at any time, and the Commission shall give written notice to the person concerned of any decision to exercise the powers conferred by paragraph (a), (b) or (c). (7) No person shall- (a) accept or continue in any appointment referred to in subsection (1)(a) or (2)(a); or (b) become or continue as a controller, in contravention of a direction under this section. (8) It shall be the duty of a licenceholder to take reasonable care not to appoint a person in contravention of a direction under subsection (1).
7 (9) It shall be the duty of a permitted person to take reasonable care not to continue the appointment of a person in contravention of a direction under subsection (2). 11 Warning notices (1) The Commission may- (a) before making a direction under section 10(2); or (b) in any other circumstances that the Commission considers it appropriate to do so, give a written warning notice under this section to a director, key person or controller ('the relevant person') of a permitted person. (2) A warning notice under this section is a notice that the Commission has grounds to believe that such activities or circumstances as are specified in the notice are prejudicial to the relevant person s fitness and propriety and shall be accompanied by a statement of the reasons for the giving of the notice. (3) A warning notice may (but need not)- (a) propose that the relevant person take such remedial action as is specified in the notice; or (b) request the relevant person to propose remedial action. (4) Where a warning notice has been given under this section, the Commission shall, before making a direction under section 10(2), take into account any remedial action taken by the relevant person in response to the warning notice. (5) The giving of a warning notice under this section- (a) does not limit the powers of the Commission under section 10; and (b) is not required before the Commission may exercise those powers. (6) A warning notice issued under this section shall have effect- (a) for a period of up to 3 years from the date on which it is issued under subsection (1) and such period shall be specified in the notice; or (b) until such time as the Commission is content that any remedial action under subsection (3) has been completed to its satisfaction. (7) The Commission may disclose the circumstances surrounding a warning notice issued under subsection (1), to- (a) an employer who currently employs a person to whom such a notice has been issued; or (b) a person who has received an employment application from a person to whom such a notice has been issued and who, if successful in the application, would be required to be a director, key person or controller of a permitted person, provided that the warning notice is effective in accordance with subsection (6). PART 4 REGULATION AND SUPERVISION 12 Guidance (1) The Commission may give guidance consisting of such information and advice as it considers appropriate- (a) with respect to the operation of this Act and of any public document made under it; (b) with respect to any matters relating to functions of the Commission; (c) for the purpose of meeting the regulatory objectives; (d) with respect to any other matters about which it appears to the Commission to be desirable to give information or advice. (2) The Commission may- (a) publish its guidance; and
8 (b) offer copies of its published guidance for sale at a reasonable price. 13 Public statements (1) The Commission may issue a public statement concerning a person if the Commission has reasonable grounds to believe that- (a) the person is or has been in contravention of any provision of this Act or a provision made under this Act; or (b) the person is or has been in contravention of any condition imposed on, direction given to or requirement made of such person under this Act or any regulations; or (c) the person is or has been in contravention of any condition imposed upon any exemption granted under section 44(2) and (3). (2) The Commission may issue a public statement concerning any person who it believes is or has been carrying on a regulated activity (whether in the Island or elsewhere) if it appears to the Commission to be desirable to make the statement for the protection of any person or class of persons. (3) If a direction has been given under section 10(1) or (2) the Commission shall issue a public statement containing- (a) such information as is required by regulations under this Act to be included in the statement; and (b) such other information about the reasons for the giving of the direction as the Commission believes to be desirable in the public interest. (4) The Commission may issue a public statement concerning any matter relating to a regulated activity or persons carrying on a regulated activity in general or any class of a regulated activity or person carrying on a regulated activity where the Commission believes it to be desirable in the public interest to issue such a public statement. (5) Before issuing a public statement under this section, the Commission- (a) where the statement is in respect of a licenceholder, shall send a copy of the proposed statement to the person concerned at the address stated in the register kept under section 35; or (b) where the statement is in respect of any other person, shall send a copy of the proposed statement to the person concerned, at the last known address of that person, together with a written notice of the reasons for the issue of the statement. (6) Except where the Commission is of the opinion that immediate action is necessary, the copy and notice under subsection (5) shall be sent not less than 7 days before issuing the public statement under this section. (7) The Commission shall not issue a public statement under this section in respect of a direction under section 10(1) or (2) before the date on which the direction takes effect in accordance with section 10(4). 14 Directions (1) The Commission may issue written directions under this section to- (a) a permitted person; or (b) a former permitted person. (2) A direction may- (a) require the person to whom it is directed to take such action in respect of any regulated activity as is specified in the direction; (b) impose such requirements as are necessary to secure that any regulated activity carried on by that person is in whole or in part suspended or discontinued; or (c) where a person has surrendered, or intends to surrender, a licence, require the person to take such action as is necessary to secure that any regulated activity carried on by that person is in whole or in part discontinued and wound up,
9 and the directions shall include a statement of reasons for their issue. (3) If a person is in contravention of any direction under subsection (2), the Commission may undertake such action for a breach as is appropriate. 15 Inspection and investigation Schedule 2 (inspection and investigation) shall have effect. 16 Civil penalties (1) If the Commission is satisfied that a permitted person- (a) has contravened any provision of this Act; (b) has contravened any prohibition or requirement imposed under this Act; or (c) in purported compliance with any such requirement, has furnished the Commission with false, inaccurate or misleading information, it may require the permitted person to pay a penalty in respect of the contravention. (2) The Commission shall give written notice to the permitted person concerned of any decision under subsection (1), together with a statement of the reasons for the decision. (3) The Commission may not in respect of any such contravention- (a) both require a person to pay a penalty under this section and revoke a licence issued under section 7 to carry on a regulated activity; or (b) require a person to pay a penalty under this section if criminal proceedings have been commenced in respect of the contravention. (4) When setting the amount of a financial penalty, the Commission shall have regard to any regulations under subsection (5). (5) The Commission shall make such regulations as are necessary to give effect to this section with respect to- (a) the imposition of financial penalties under this section; and (b) the amount of those penalties. (6) Any amount received as a penalty shall be paid into and form part of the General Revenue of the Island. 17 Auditors to report to Commission (1) If the auditor of a permitted person becomes aware of any matter which is such as to give the auditor reasonable cause to believe that- (a) the permitted person may be in contravention of- (i) this Act; (ii) the Rule Book; (iii) any condition imposed by or under section 7, 8 or 44(3); or (iv) any direction or requirement imposed under this Act; and (b) the matter is likely to be of material significance in relation to the Commission s functions under this Act, the auditor shall report such matter in writing to the Commission. (2) No statutory or other duty to which an auditor of a permitted person may be subject shall be regarded as contravened by reason of the auditor communicating in good faith to the Commission, whether or not in response to a request made by the Commission, any information or opinion under subsection (1). (3) This section applies to any matter of which the auditor becomes aware in the capacity of auditor and which relates to the business or affairs of the permitted person. (4) For the purposes of this section, 'auditor' shall be a person of such description as is specified in the Rule Book. 18 The Rule Book
10 (1) The Commission may make rules (in this Act referred to as 'the Rule Book') concerning- (a) licenceholders; (b) regulated activities; (c) the conduct of business by a licenceholder; (d) the services and products provided by or on behalf of licenceholders; (e) the relationship between licenceholders and their customers; (f) the corporate governance and risk management of licenceholders; (g) the accounts, accounting records and solvency of licenceholders; and (h) the giving of full effect to the regulatory objectives and the functions of the Commission under this Act. (2) The Commission may, on the application or with the consent of the licenceholder, direct that the whole of the Rule Book or any of its provisions- (a) are not to apply to the licenceholder; or (b) are to apply to that person with such modifications as may be specified in the direction. (3) In cases where a declaration under paragraph 3 of Schedule 3 applies in respect of a licenceholder, the Commission may, on the application or with the consent of that licenceholder, direct that the relevant rules, regulations, codes, guidance or standards that are the subject of the declaration shall apply to that person with such exceptions and modifications as may be specified in the direction. (4) Schedule 3 shall have effect to supplement subsection (1). (5) Schedule 3 does not affect the generality of subsection (1). 19 The Rule Book - supplementary provisions (1) If a licenceholder is in contravention of the Rule Book the Commission may undertake action for a breach. (2) Contravention of the Rule Book does not give rise to any right of action by any persons affected nor does it affect the validity of any transaction. (3) Where a person discloses information to another in compliance with the Rule Book the disclosure shall not be treated as a breach of any restriction upon the disclosure of information imposed by statute or otherwise. (4) A licenceholder shall not be treated as a director of a company for the purposes of the Companies Acts 1931 to 2004 or the Companies Act 2006 by reason only that the licenceholder is required by the Rule Book to institute and operate systems and controls which are intended to ensure that employees, associates and agents who act as directors in the course of the business of the licenceholder carry out their duties in a diligent and proper manner. PART 5 SPECIAL REMEDIES 20 Injunctions, etc. (1) If on the application of the Commission the High Court is satisfied- (a) that there is a reasonable likelihood that any person will contravene any provision of- (i) this Act; (ii) any condition imposed under section 7, 8 or 44(2) and (3); (iii) the Rule Book or any other public document under this Act; (iv) any direction under section 10 or paragraph 2 of Schedule 2; or (b) that any person has contravened any such provision and that there is a reasonable likelihood that the contravention will continue or be repeated; or
11 (c) that any person has contravened any such provision and that there are steps that could be taken for remedying the contravention, the court may grant an injunction restraining the contravention or, as the case may be, make an order requiring that person and any other person who appears to the court to have been knowingly concerned in the contravention to take such steps as the court may direct to remedy it. (2) The court may, on the application of the Commission, make an order under subsection (1) if satisfied- (a) that profits have accrued to any person as a result of that person s contravention of any provision mentioned in subsection (1)(a); or (b) that one or more investors have suffered loss or been otherwise adversely affected as a result of that contravention. (3) The court may, under this subsection, order the person concerned to pay into court, or appoint a receiver to recover from that person, such sum as appears to the court to be just having regard- (a) in a case within subsection (2)(a), to the profits appearing to the court to have accrued; (b) in a case within subsection (2)(b), to the extent of the loss or other adverse effect; or (c) in a case within both paragraphs (a) and (b) of subsection (2), to the profits and to the extent of the loss or other adverse effect. (4) Any amount paid into court by or recovered from a person in pursuance of an order under subsection (3) shall be paid out to such person or distributed among such persons as the court may direct, being a person or persons appearing to the court to have entered into transactions with that person as a result of which the profits mentioned in subsection (2)(a) have accrued to that person or the loss or adverse effect mentioned in subsection (2)(b) has been suffered. (5) On an application under subsection (2) the court may require the person concerned to furnish it with such accounts or other information as it may require for establishing whether any and, if so, what profits have accrued to that person as mentioned in subsection (2)(a) and for determining how any amounts are to be paid or distributed under subsection (4); and the court may require any such amounts or other information to be verified in such manner as it may direct. (6) Nothing in this section affects the right of any person other than the Commission to bring proceedings in respect of the matters to which this section applies. 21 Appointment of receiver (1) The Commission may present a petition to the High Court for the appointment of a receiver under section 42 of the High Court Act 1991 in respect of the affairs, business and property of a permitted person. (2) If the High Court is satisfied that- (a) the appointment is in the public interest; (b) the appointment is necessary to protect the interests of customers, creditors or others who have or have had dealings with the permitted person; or (c) the appointment is necessary for the orderly winding up of the regulated activity undertaken by the permitted person; or (d) the appointment is necessary so that the affairs, business and property relating to the former regulated activity undertaken by a person may be settled or disposed of in an orderly manner, it may appoint a suitable person as receiver.
12 (3) On the presentation or hearing of a petition the Court may dismiss it, or adjourn the hearing conditionally or unconditionally, or make an interim order or any other order that it thinks fit. (4) Without prejudice to the generality of subsection (3), an interim order under that subsection may be made ex parte and may restrict (whether by reference to the consent of the Court or otherwise) the exercise of any powers of- (a) the permitted person; or (b) if the permitted person is a body corporate, its directors, in respect of the affairs, business and property of the regulated activity of the permitted person. (5) This section is without prejudice to the generality of the jurisdiction of the High Court under section 42 of the High Court Act 1991, or under any other enactment or at common law. 22 Appointment of business manager (1) The Commission may, by order, prescribe circumstances in which the Commission may apply to the High Court for the appointment by the Court of a person as a manager to manage the affairs of persons in so far as those affairs relate to the carrying on of a regulated activity. (2) An order made under subsection (1) may contain such incidental or supplementary provisions as the Commission considers necessary or expedient, and may contain different provisions for different types of regulated activity. (3) The Court may, on an application made to it by the Commission in circumstances prescribed in an order made under subsection (1), appoint, on such terms as it considers to be appropriate, a person to manage the affairs of a person in so far as those affairs relate to the carrying on of a regulated activity. (4) The Court may make such orders as are necessary to give effect to the appointment of a manager under this section and for dealing with any property connected with the regulated activity. 23 Appointment of reporting accountants, etc (1) The Commission may by notice in writing served on a permitted person require the person to provide the Commission with a report by an accountant or other person with relevant professional skill on, or on any aspect of, any matter relating to the affairs of the permitted person. (2) A notice under subsection (1) shall be accompanied by or include a written statement of the reasons for the decision. (3) The accountant or other person appointed by a permitted person to make any report required under subsection (1) shall be a person nominated or approved by the Commission; and the Commission may require the report to be in such form as is specified in the notice. (4) If it appears to the Commission to be desirable in the interests of the customers or potential customers of a permitted person to do so, it may also exercise the powers conferred by subsection (1)- (a) in relation to any body corporate which is or has at any relevant time been- (i) a holding company, subsidiary or related company of that person; (ii) a subsidiary of a holding company of that person; (iii) a holding company of a subsidiary of that person; or (iv) a body corporate in the case of which a shareholder controller of that permitted person, either alone or with any associate or associates, holds 50% or more of the
13 shares or is entitled to exercise, or control the exercise of, more than 50%, of the voting power at a general meeting; or (b) in relation to any partnership of which that permitted person is or has at any relevant time been a member. (5) If it appears to the Commission to be desirable to do so in the interests of the customers or potential customers of a permitted person which is a partnership (in this section referred to as 'the licensed partnership') it may also exercise the powers conferred by subsection (1) in relation to- (a) any other partnership having a member in common with the licensed partnership; (b) any body corporate which is or has at any relevant time been a member of the licensed partnership; (c) any body corporate in the case of which the partners in the licensed partnership, either alone or with any associate or associates, holds 50% or more of the shares or are entitled to exercise, or control the exercise of, more than 50% of the voting power at a general meeting or meeting of the board of directors; or (d) any subsidiary or holding company of any such body corporate as is mentioned in paragraph (b) or (c) or any holding company of any such subsidiary. (6) The provisions of this section shall apply to a former permitted person as they apply to a permitted person. (7) The costs and expenses of and relating to a report under this section shall be paid by the permitted person concerned. (8) No statutory or other duty to which a reporting accountant or person may be subject shall be regarded as contravened by reason of the reporting accountant or person communicating in good faith to the Commission any information or opinion under subsection (1). (9) This section applies to any matter of which the reporting accountant or person becomes aware in the capacity of reporting accountant or person making a report under subsection (1) and which relates to the business or affairs of the relevant permitted person. PART 6 MEDIATION, COMPENSATION AND CONTRACTS 24 Mediation and adjudication in financial services disputes Schedule 4 shall have effect with respect to mediation and adjudication in financial services disputes. 25 Compensation schemes (1) The Treasury may make regulations establishing a scheme for compensating investors and depositors in cases where persons who are or have been- (a) licenceholders; (b) the holders of licences under any Act repealed by this Act; (c) the holders of licences under section 3 of the Banking Act 1975, are unable or likely to be unable to satisfy claims in respect of any description of civil liability incurred by them in connection with their business. (2) Without prejudice to the generality of subsection (1), regulations under this section may- (a) provide for the administration of the scheme and the determination and regulation of any matter relating to its operation by such body as appears to the Treasury to be appropriate; (b) establish a fund out of which compensation is to be paid;
14 (c) provide for the levying of contributions from, or from any class of, the persons referred to in paragraphs (a) to (c) of subsection (1) and otherwise for financing the scheme and for the payment of contributions and other money into the fund; (d) specify the terms and conditions on which, and the extent to which, compensation is to be payable and any circumstances in which the right to compensation is to be excluded or modified; (e) provide for treating compensation payable under the scheme in respect of a claim against any person as extinguishing or reducing the liability of that person in respect of the claim and for conferring on the body administering the scheme a right of recovery against that person, being, in the event of that person s insolvency, a right not exceeding such right, if any, as the claimant would have had in that event; (f) contain incidental and supplementary provisions; and (g) contain transitional provisions, and in particular may provide that rights and liabilities under any existing nonstatutory compensation scheme shall be treated as rights and liabilities of the scheme established under the regulations. (3) Regulations may be made for the purpose of integrating any procedure for which provision is made by virtue of subsection (2)(e) into the general procedure on a winding-up or bankruptcy and may modify the enactments relating to such procedure for that purpose. 26 Actions for damages (1) Without prejudice to section 16, a contravention of any conditions imposed under section 7, 8 or 44(2) and (3) shall be actionable at the suit of a person who suffers loss as a result of the contravention subject to the defences and other incidents applying to actions for breach of statutory duty. (2) Subsection (1) does not apply to- (a) a contravention of conditions imposed in connection with the financial resources of a licenceholder; or (b) a contravention of the Rule Book except where compliance is imposed as a condition under section 7, 8 or 44(2) and (3). (3) No contravention to which subsection (1) applies shall invalidate any transaction. (4) No action in respect of a contravention to which this section applies shall lie at the suit of such persons or classes of persons as are prescribed for this purpose. 27 Agreements made by unlicensed, etc persons [P2000/8/26] (1) An agreement made by a person in the course of carrying on a regulated activity in contravention of the general prohibition in section 4(1)(a) is unenforceable against the other party. (2) The other party is entitled to recover- (a) any money or other property paid or transferred by that party under the agreement; and (b) compensation for any loss sustained by that party as a result of having parted with it. (3) 'Agreement' means an agreement- (a) made after this section comes into operation; and (b) the making or performance of which constitutes, or is part of, the regulated activity in question. (4) This section does not apply if the regulated activity is a financial services activity within the meaning of section 3(2)(d) or (e). 28 Agreements made through unlicensed, etc persons [P2000/8/27] (1) An agreement made by a permitted person ('the provider')-
15 (a) in the course of carrying on a regulated activity (not in contravention of the general prohibition in section 4(1)(a), but (b) in consequence of something said or done by another person ( 'the third party') in the course of a regulated activity carried on by the third party in contravention of that general prohibition, is unenforceable against the other party. (2) The other party is entitled to recover- (a) any money or other property paid or transferred by the other party under the agreement; and (b) compensation for any loss sustained by the other party as a result of having parted with it. (3) 'Agreement' means an agreement- (a) made after this section comes into operation; and (b) the making or performance of which constitutes, or is part of, the regulated activity in question carried on by the provider. (4) This section does not apply if the regulated activity is a financial services activity within the meaning of section 3(2)(d) or (e). 29 Agreements made unenforceable by section 27 or 28 [P2000/8/28] (1) This section applies to an agreement which is unenforceable because of section 27 or 28. (2) The amount of compensation recoverable as a result of that section is- (a) the amount agreed by the parties; or (b) on the application of either party, the amount determined by the High Court. (3) If the High Court is satisfied that it is just and equitable in the circumstances of the case, it may allow- (a) the agreement to be enforced; or (b) money and property paid or transferred under the agreement to be retained. (4) In considering whether to allow the agreement to be enforced or (as the case may be) the money or property paid or transferred under the agreement to be retained the High Court must- (a) if the case arises as a result of section 27, have regard to the issue mentioned in subsection (5); or (b) if the case arises as a result of section 28, have regard to the issue mentioned in subsection (6). (5) The issue is whether the person carrying on the regulated activity concerned reasonably believed that that person was not contravening the general prohibition in section 4(1)(a) by making the agreement. (6) The issue is whether the provider knew that the third party was (in carrying on the regulated activity) contravening that general prohibition. (7) If the person against whom the agreement is unenforceable- (a) elects not to perform the agreement, or (b) as a result of this section, recovers money paid or other property transferred by that person under the agreement, that person must repay any money and return any other property received under the agreement. (8) If property transferred under the agreement has passed to a third party, a reference in section 27 or 28 or this section to that property is to be read as a reference to its value at the time of its transfer under the agreement.
16 (9) The commission of an offence other than a contravention of the general prohibition under section 4(1)(a) does not make the agreement concerned illegal or invalid to any greater extent than is provided by section 27 or 28. PART 7 SUPPLEMENTARY Chapter I General 30 Publication of information (1) The Commission may publish, or arrange for the publication of, information in such form and manner as it considers appropriate with respect to- (a) the operation of this Act or the Collective Investment Schemes Act 2008 and any public document made under them, including in particular the rights of customers, the duties of licenceholders and the steps to be taken for enforcing those rights or complying with those duties; [Para (a) amended by Collective Investment Schemes Act 2008 Sch 6.] (b) any matter relating to the functions of the Commission under any enactment; (c) any other matters about which it appears to it to be desirable in the public interest to publish information. (2) The Commission may offer for sale copies of information published under this section and may, if it thinks fit, make a reasonable charge for advice given under this section at any person s request. (3) This section shall not be construed as authorising the disclosure of restricted information within the meaning of paragraph 1 of Schedule 5 in any case in which it could not be disclosed apart from the provisions of this section. 31 Restrictions on disclosure of information Schedule 5 (restrictions on the disclosure of information) shall have effect. 32 Appeals to the Financial Services Tribunal (1) For the purposes of this Act there shall be a tribunal known as the Financial Services Tribunal (in this Act referred to as 'the Tribunal'). (2) The Tribunal shall consist of- (a) a chairman appointed in accordance with the Tribunals Act 2006; and (b) 2 members selected in accordance with regulations made under section 9(b) of the Tribunals Act 2006, from a panel appointed in accordance with that Act. (3) Any person who is aggrieved by a decision of the Commission to- (a) issue a licence subject to conditions under section 7(1)(b); (b) refuse to issue a licence under section 7(1)(c); (c) make a licence subject to conditions or further conditions under section 8(1)(a); (d) vary or revoke any condition attached to a licence under section 8(1)(b); (e) suspend a licence under section 9(1); (f) revoke a licence under section 9(1); (g) issue a direction under section 10 ; (h) refuse to revoke a direction under section 10; (i) give a warning notice under section 11 or the terms of such a notice; (j) issue a direction under section 14(1); (k) impose a penalty under section 16, (l) withdraw an exemption in accordance with regulations under section 44(3)(b); or (m) issue a direction under paragraph 2 of Schedule 2,
17 may appeal, in accordance with rules made under section 8 of the Tribunals Act 2006, to the Tribunal. (4) On the determination of an appeal under this section the Tribunal shall confirm, vary or revoke the decision in question. (5) Any variation or revocation of a decision shall not affect the previous operation of that decision or anything duly done or suffered under it. (6) Without prejudice to subsection (7), any decision of the Tribunal on an appeal under this section shall be binding on the Commission and the applicant. (7) An appeal shall lie to the High Court, in accordance with rules of court, on a question of law from any decision of the Tribunal. 33 Statutory indemnity (1) This section applies in respect of any act or matter done or omitted to be done- (a) in the exercise, or purported exercise, of the functions conferred by or under a specified enactment; or (b) in the implementation, or purported implementation, of a mutual assistance agreement under section 34. (2) A designated body shall not, nor shall- (a) any officer, member or employee of a designated body; or (b) any other person acting on behalf of a designated body; or (c) any person acting pursuant to any authority conferred by a designated body, be liable in damages for, or in respect of, any act or matter done or omitted to be done unless the act or matter done or omitted to be done is shown to have been in bad faith. (3) Subsection (2) does not apply so as to prevent the award of damages made in respect of an act or omission on the ground that the act or omission was unlawful as a result of section 6(1) of the Human Rights Act 2001 (acts of public authorities). (4) In this section- 'designated body' means- (a) the Treasury; (b) the Commission; (c) a body administering a scheme under section 25; (d) a regulatory authority which is designated by regulations made by the Commission; (e) the Isle of Man Office of Fair Trading or an adjudicator to whom a dispute has been referred to under Schedule 4; 'specified enactment' means- (a) this Act; (b) the Companies Acts 1931 to 2004; (c) the Industrial and Building Societies Acts 1892 to 1993; (d) the Collective Investment Schemes Act 2008; [Para (d) amended by Collective Investment Schemes Act 2008 Sch 6.] (e) the Companies Act 2006.; (f) the Company Officers (Disqualification) Act 2009; [Para (f) added by Company Officers (Disqualification) Act 2009 Sch 4.] (g) the Insider Dealing Act 1998; [Para (g) added by Terrorism (Finance) Act 2009 s 29(2).] (h) the Terrorism (Finance) Act 2009; [Para (h) added by Terrorism (Finance) Act 2009 s 29(2).] (i) the Incorporated Cell Companies Act [Para (i) added by Incorporated Cell Companies Act 2010 s 36.]
18 (5) This section shall not have effect in relation to any action, suit or proceedings, whether commenced before or after the date on which this section comes into operation, in respect of any act or matter done or omitted to be done before that date. (6) This section does not prejudice the generality of paragraph 6 of Schedule 1 to the Government Departments Act 1987 nor paragraph 11 of Schedule 2 to the Statutory Boards Act Mutual assistance (1) Subject to subsection (2), the Commission may, in relation to a regulated activity, enter into mutual assistance agreements with a regulatory authority. (2) The powers conferred on the Commission by Schedule 2 may, without prejudice to their generality, be exercised for the purpose of assisting any such authority in the exercise of its functions. (3) At the request of a regulatory authority, the Commission may investigate any circumstances referred to in the request and for that purpose, the powers conferred on the Commission by Schedule 2 may, without prejudice to their generality, be exercised for the purpose of assisting the requesting authority in the exercise of its functions. (4) Subsections (1) to (3) shall not permit the disclosure of any information relating to the affairs of a customer otherwise than in accordance with Schedule Registers (1) The Commission shall keep a register of- (a) former and current licenceholders; and (b) classes of persons who are exempt from any provision of this Act under section 44(2), and in this Act such persons are referred to collectively as 'permitted persons'. (2) The Commission shall also keep a register of directions given under section 10. (3) The registers to be kept under this section- (a) shall contain such information; and (b) shall be available for public inspection at such times, in such manner and by such means, as may be prescribed in regulations made under section 44. Chapter II Offences, etc. 36 Fraudulent inducement to make a deposit (1) Any person ('A') who- (a) makes a statement, promise or forecast which A knows to be misleading, false or deceptive; or (b) dishonestly conceals any material facts; or (c) recklessly makes (dishonestly or otherwise) a statement, promise or forecast which is misleading, false or deceptive, is guilty of an offence if A makes the statement, promise or forecast or conceals the facts for the purpose of inducing, or is reckless as to whether it may induce, another person (whether or not the person to whom the statement, promise or forecast is made or from whom the facts are concealed)- (i) to make, or refrain from making, a deposit with A or any other person; or (ii) to enter, or refrain from entering, into an agreement for the purpose of making such a deposit. (2) Subsection (1) does not apply unless-
19 (a) the statement, promise or forecast is made in or from, or the facts are concealed in or from, the Island or arrangements are made in or from the Island for the statement, promise or forecast to be made or the facts to be concealed; or (b) the deposit is or would be made, or the agreement is or would be entered into, in or from the Island. 37 Misleading statements, etc. (1) A person ('A') who- (a) makes a statement, promise or forecast which A knows to be misleading, false or deceptive; or (b) dishonestly conceals any material facts; or (c) recklessly makes (dishonestly or otherwise) a statement, promise or forecast which is misleading, false or deceptive, is guilty of an offence if A makes the statement, promise or forecast or conceals the facts for the purpose of inducing, or is reckless as to whether it may induce, another person (whether or not the person to whom the statement, promise or forecast is made or from whom the facts are concealed)- (i) to enter or offer to enter into, or to refrain from entering or offering to enter into, an investment agreement; or (ii) to exercise, or refrain from exercising, any rights conferred by an investment. (2) Subsection (1) does not apply unless- (a) the statement, promise or forecast is made in or from, or the facts are concealed in or from, the Island; or (b) the agreement is or would be entered into or the rights are or would be exercised in the Island. (3) 'Investment agreement' means any agreement the making or performance of which by either party constitutes an activity of a description as is defined for the purposes of this definition in an order under section Misleading practices (1) A person ('A') who does any act or engages in any course of conduct which creates a false or misleading impression as to the market in or the price or value of any investments is guilty of an offence if A does so for the purpose of creating that impression and of thereby inducing another person to acquire, dispose of, subscribe for or underwrite those investments or to refrain from doing so or to exercise, or refrain from exercising, any rights conferred by those investments. (2) In proceedings brought against A for an offence under subsection (1) it shall be a defence for A to prove that A reasonably believed that A s act or conduct would not create an impression that was false or misleading as to the matters mentioned in that subsection. (3) Subsection (1) does not apply unless- (a) the course of conduct is engaged in, or the act is done, in the Island; or (b) the false or misleading impression is created there. 39 Falsification of documents, etc. relevant to an investigation If a person- (a) knows or suspects that an investigation by the Commission is being or is likely to be carried out; and (b) falsifies, conceals, destroys or otherwise disposes of, or causes or permits the falsification, concealment, destruction or disposal of documents which that person knows or suspects are or would be relevant to such an investigation,
The Protection of Investors (Administration and Intervention) (Bailiwick of Guernsey) Ordinance, 2008
Ordinance No. LII of 2008 The Protection of Investors (Administration and Intervention) (Bailiwick of Guernsey) Ordinance, 2008 ARRANGEMENT OF SECTIONS PART I ADMINISTRATION 1. Administration orders. 2.
Consolidated text PROJET DE LOI ENTITLED. The Regulation of Utilities (Bailiwick of Guernsey) Law, 2001 * [CONSOLIDATED TEXT] NOTE
PROJET DE LOI ENTITLED The Regulation of Utilities (Bailiwick of Guernsey) Law, 2001 * [CONSOLIDATED TEXT] NOTE This consolidated version of the enactment incorporates all amendments listed in the footnote