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REC 6.1 Introduction and legal background

REC 6.1.1G

The Act prohibits any person from carrying on, or purporting to carry on, regulated activities in the United Kingdom unless that person is an authorised person or an exempt person. If an overseas investment exchange wishes to undertake regulated activities in the United Kingdom, it will need to:

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  1. (1)

    obtain a Part 4A permission2 from the FCA2;

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  2. (2)

    (in the case of an EEA firm or a Treaty firm) qualify for authorisation under Schedule 3 (EEA Passport Rights) or Schedule 4 (Treaty rights) to the Act, respectively; or

  3. (3)

    (in the case of an EEA market operator)1 obtain exempt person status by exercising its passport rights under Articles 31(5) and 31(6) of MiFID (in the case of arrangements relating to a multilateral trading facility) or Article 42(6) of MiFID (in the case of arrangements relating to a regulated market);1 or

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  4. (4)

    obtain exempt person status by being declared by the FCA2 to be an ROIE.

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REC 6.1.2G

Having the status of an ROIE2 facilitates the participation of overseas investment exchanges in UK markets. In comparison with authorisation, it reduces the involvement which UK authorities need to have in the day-to-day affairs of an overseas recognised body because they are able to rely substantially on the supervisory and regulatory arrangements in the country where the applicant's head office is situated.

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