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EG 14.2 1Choice of powers

EG 14.2.1

1The FCA may use its powers under sections 254, 257 and 258 (in the case of AUTs) and sections 261U, 261X and 261Y (in the case of ACSs) individually, together, and as well as direct enforcement action against a depositary or authorised fund manager in their capacity as firms.

EG 14.2.2

1Where the FCA has a concern about an AUT or ACS that must be dealt with urgently, it will generally use its power to give directions under section 257 (in the case of an AUT) or section 261X (in the case of an ACS) in the first instance.

EG 14.2.3

1The following are examples of situations where the FCA may consider it appropriate to seek a court order under section 258 (in the case of an AUT) or section 261Y (in the case of an ACS) to remove the authorised fund manager or depositary:

  1. (1)

    Where there are grounds for concern over the behaviour of the authorised fund manager or depositary in respect of the management of the scheme or of its assets.

  2. (2)

    Where an authorised fund manager or depositary has breached a requirement imposed on him under the Act or has knowingly or recklessly given the FCA false information.

EG 14.2.4

1The FCA recognises that participants in an AUT or ACS have a direct financial interest in the scheme property. It follows that in cases where it considers it appropriate to use its section 254 power (in the case of an AUT) or its section 261U power (in the case of an ACS) to revoke an authorisation order, the FCA will generally first require the authorised fund manager or depositary to wind up the AUT or ACS (or seek a court order for the appointment of a firm to wind up the AUT or ACS).

EG 14.2.5

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