FINANCIAL SERVICES AND MARKETS Citation and commencement 1 These Regulations may be cited as the Financial Services and Markets Act 2000 (Rights of Action) Regulations 2001 and come into force on the day on which section 19 of the Act comes into force. Interpretation 2 In these Regulations— “the Act” means the Financial Services and Markets Act 2000; “government” means— the government of the United Kingdom; the Scottish Administration; the Executive Committee of the Northern Ireland Assembly; the National Assembly for Wales; or the government of any country or territory outside the United Kingdom; “international organisation” means any international organisation the members of which include the United Kingdom or any other state; “local authority”, in relation to the United Kingdom, means— in England and Wales, a local authority within the meaning of the Local Government Act 1972 , the Greater London Authority, the Common Council of the City of London or the Council of the Isles of Scilly; in Scotland, a local authority within the meaning of the Local Government (Scotland) Act 1973 ; and in Northern Ireland, a district council within the meaning of the Local Government Act (Northern Ireland) 1972 ; “Part IV financial resources requirement” means a requirement imposed on an authorised person by the Authority under Part IV of the Act to have or maintain financial resources; “Part XIII financial resources requirement” means a requirement imposed on an incoming firm (within the meaning of section 193(1) of the Act) by the Authority under Part XIII of the Act to have or maintain financial resources; “the Regulated Activities Order ” means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 . Private person 3 1 In these Regulations, “private person” means— a any individual, unless he suffers the loss in question in the course of carrying on— i any regulated activity; or ii any activity which would be a regulated activity apart from any exclusion made by article 72 (overseas persons) ... of the Regulated Activities Order ; ... b any person who is not an individual, unless he suffers the loss in question in the course of carrying on business of any kind; c a relevant recipient of credit (within the meaning of the Regulated Activities Order) who is not an individual and who has suffered the loss in question in connection with an activity of the kind specified by article 36A, 39D, 39E, 39F, 39G, 60B, 60N, 89A or 89B of that Order or article 64 of that Order so far as relevant to any of those activities, and d a person who is, by virtue of article 36J of that Order, to be regarded as a person who uses, may use, has or may have used or has or may have contemplated using, services provided by authorised persons in carrying on a regulated activity of the kind specified by article 36H of that Order or article 64 of that Order so far as relevant to that activity, but does not include a government, a local authority (in the United Kingdom or elsewhere) or an international organisation. 2 For the purposes of paragraph (1)(a), an individual who suffers loss in the course of effecting or carrying out contracts of insurance (within the meaning of article 10 of the Regulated Activities Order) written at Lloyd’s is not to be taken to suffer loss in the course of carrying on a regulated activity. Authorised person acting otherwise than in accordance with permission 4 1 A case where the conditions specified by paragraph (2) are satisfied is prescribed for the purposes of section 20(3) of the Act (and so in such a case the contravention of a requirement imposed by the FCA or the PRA under the Act is actionable at the suit of a person who suffers loss as a result of that contravention). 2 The conditions specified by this paragraph are that— a the action would be brought at the suit of— i a private person; or ii a person acting in a fiduciary or representative capacity on behalf of a private person and any remedy would be exclusively for the benefit of that private person and could not be effected through an action brought otherwise than at the suit of the fiduciary or representative; and b the contravention is not of a Part IV financial resources requirement. Prohibition orders and performance of a controlled function 5 1 The definition of “private person” in regulation 3 is prescribed for the purposes of section 71(3) of the Act (and so the contravention of section 56(6) or 59(1) or (2) of the Act is actionable at the suit of a person who falls within that definition and who suffers loss as a result of that contravention). 2 A case where the condition specified by paragraph (3) is satisfied is prescribed for the purposes of section 71(2) of the Act (and so in such a case the contravention of section 56(6) or 59(1) or (2) of the Act is actionable at the suit of a person who is not a private person). 3 The condition specified by this paragraph is that the action would be brought at the suit of a person (who is not a private person) acting in a fiduciary or representative capacity on behalf of a private person and any remedy would be exclusively for the benefit of that private person and could not be effected through an action brought otherwise than at the suit of the fiduciary or representative. ... rules 6 1 The definition of “private person” in regulation 3 is prescribed for the purposes of section 138D(6) of the Act (and so the contravention by an authorised person of a rule is actionable at the suit of a person who falls within that definition and who suffers loss as a result of that contravention). 2 A case where any of the conditions specified by paragraph (3) is satisfied is prescribed for the purposes of section 138D(4) of the Act (and so in such a case the contravention of a rule is actionable at the suit of a person who is not a private person). 3 The conditions specified by this paragraph are that— a the rule that has been contravened prohibits an authorised person from seeking to make provision excluding or restricting any duty or liability; b the rule that has been contravened is directed at ensuring that transactions in any security or contractually based investment (within the meaning of the Regulated Activities Order) are not effected with the benefit of unpublished information that, if made public, would be likely to affect the price of that security or investment; c the action would be brought at the suit of a person (who is not a private person) acting in a fiduciary or representative capacity on behalf of a private person and any remedy would be exclusively for the benefit of that private person and could not be effected through an action brought otherwise than at the suit of the fiduciary or representative. d the rule that has been contravened requires a relevant authorised person to respond to a claim for compensation within a specified time limit, or to pay interest in specified circumstances in respect of any such claim. 4 In this regulation— a “relevant authorised person” means an authorised person with a Part IV permission— i to effect or to carry out relevant contracts of insurance; or ii to manage the underwriting capacity of a Lloyd’s syndicate as a managing agent, the members of which effect or carry out relevant contracts of insurance underwritten at Lloyd’s; where a “relevant contract of insurance” means a contract of insurance against damage arising out of or in connection with the use of motor vehicles on land (other than carrier’s liability); b “rule” has the meaning given by section 138D(5) of the Act; and c “specified” means specified in rules. Incoming firms 7 1 A case where the conditions specified by paragraph (2) are satisfied is prescribed for the purposes of section 202(2) of the Act (and so in such a case the contravention of a requirement imposed by the FCA or the PRA under Part XIII of the Act is actionable at the suit of a person who suffers loss as a result of that contravention). 2 The conditions specified by this paragraph are that— a the action would be brought at the suit of— i a private person; or ii a person acting in a fiduciary or representative capacity on behalf of a private person and any remedy would be exclusively for the benefit of that private person and could not be effected through an action brought otherwise than at the suit of the fiduciary or representative; and b the contravention is not of a Part XIII financial resources requirement. Anne McGuire Tony McNulty Two of the Lords Commissioners of Her Majesty’s Treasury