66AMisconduct: action by the FCA

1

For the purposes of action by the FCA under section 66, a person is guilty of misconduct if any of conditions A to C is met in relation to the person.

2

Condition A is that—

a

the person has at any time failed to comply with rules made by the FCA under section 64A, and

b

at that time the person was—

i

an approved person, or

ii

an employee of a relevant authorised person.

3

Condition B is that—

a

the person has at any time been knowingly concerned in a contravention of a relevant requirement by an authorised person, and

b

at that time the person was—

i

an approved person in relation to the authorised person, or

ii

in the case of a relevant authorised person, an employee of the authorised person.

4

In this section “relevant requirement” means a requirement—

a

imposed by or under this Act, or

b

imposed by any qualifying EU provision specified, or of a description specified, for the purposes of this subsection by the Treasury by order.

5

Condition C is that—

a

the person has at any time been a senior manager in relation to a relevant authorised person,

b

there has at that time been (or continued to be) a contravention of a relevant requirement by the authorised person, and

c

the senior manager was at that time responsible for the management of any of the authorised person's activities in relation to which the contravention occurred.

6

But a person (“P”) is not guilty of misconduct by virtue of subsection (5) if P satisfies the FCA that P had taken such steps as a person in P's position could reasonably be expected to take to avoid the contravention occurring (or continuing).

7

For the purposes of subsection (5)—

• “senior manager”, in relation to a relevant authorised person, means a person who has approval under section 59 to perform a designated senior management function in relation to the carrying on by the authorised person of a regulated activity;

• “designated senior management function” means a function designated as a senior management function under section 59(6A) or (6B).

8

In this section—

• “approved person”—

  1. a

     means a person in relation to whom an approval is given under section 59, and

  2. b

     in relation to an authorised person, means a person in relation to whom such approval is given on the application of the authorised person;

• “employee”, in relation to a person, has the same meaning as in section 64A.

9

For the meaning of “relevant authorised person”, see section 71A.

66BMisconduct: action by the PRA

1

For the purposes of action by the PRA under section 66, a person is guilty of misconduct if any of conditions A to C is met in relation to the person.

2

Condition A is that—

a

the person has at any time failed to comply with rules made by the PRA under section 64A, and

b

at that time the person was—

i

an approved person, or

ii

an employee of a relevant PRA-authorised person.

3

Condition B is that—

a

the person has at any time been knowingly concerned in a contravention of a relevant requirement by a PRA-authorised person, and

b

at that time the person was—

i

an approved person in respect of the performance of a relevant senior management function in relation to the carrying on by the PRA-authorised person of a regulated activity, or

ii

in the case of a relevant PRA-authorised person, an employee of the authorised person.

4

In this section “relevant requirement” means a requirement—

a

imposed by or under this Act, or

b

imposed by any qualifying EU provision specified, or of a description specified, for the purposes of this subsection by the Treasury by order.

5

Condition C is that—

a

the person has at any time been a senior manager in relation to a relevant PRA-authorised person,

b

there has at that time been (or continued to be) a contravention of a relevant requirement by the authorised person, and

c

the senior manager was at that time responsible for the management of any of the authorised person's activities in relation to which the contravention occurred.

6

But a person (“P”) is not guilty of misconduct by virtue of subsection (5) if P satisfies the PRA that P had taken such steps as a person in P's position could reasonably be expected to take to avoid the contravention occurring (or continuing).

7

For the purposes of subsection (5)—

• “senior manager”, in relation to a relevant PRA-authorised person, means a person who has approval under section 59 to perform a designated senior management function in relation to the carrying on by the authorised person of a regulated activity;

• “designated senior management function” means a function designated as a senior management function under section 59(6A) or (6B).

8

In this section—

• “approved person”—

  1. a

     means a person in relation to whom—

     1. i

        the PRA has given its approval under section 59, or

     2. ii

        the FCA has given its approval under section 59 in respect of the performance by the person of a relevant senior management function in relation to the carrying on by a PRA-authorised person of a regulated activity, and

  2. b

     in relation to an authorised person, means a person in relation to whom approval under section 59 is given on the application of the authorised person;

• “employee”, in relation to a person, has the same meaning as in section 64A;

• “relevant PRA-authorised person” means a PRA-authorised person that is a relevant authorised person;

• “relevant senior management function” means a function which the PRA is satisfied is a senior management function as defined in section 59ZA (whether or not the function has been designated as such by the FCA).

9

For the meaning of “relevant authorised person”, see section 71A.