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Status: You are viewing the version of the handbook as on 2009-03-31.

REC 6.1 Introduction and legal background

REC 6.1.1GRP

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 or overseas clearing house wishes to undertake regulated activities in the United Kingdom, it will need to:

  1. (1)

    obtain a Part IV permission from the FSA;

  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

    1
  4. (4)

    obtain exempt person status by being declared by the FSA to be (in the case of an overseas investment exchange) an ROIE or (in the case of an overseas clearing house) an ROCH.

REC 6.1.2GRP

Having the status of an overseas recognised body facilitates the participation of overseas investment exchanges and overseas clearing houses 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.