UK Offence Report

Offences in relation to acquisition of control

paragraph 301F(10) of SCHEDULE 2 of The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (revoked)

This offence was read from the text as made, and no revised version was available, so a later revocation could not be ruled out. Check the current text at legislation.gov.uk.

What the provision says

10 A person who fails to comply with the duty to notify the Authority imposed by subsection (9) is guilty of an offence and liable, on summary conviction, to

a fine not exceeding level

5 on the standard scale.

Text as made, from legislation.gov.uk. © Crown copyright, reused under the Open Government Licence v3.0. This is the text as originally made; later amendments are not shown here.

Who it binds, and what has to be proved

Binds
a person
Conduct
failing to do something the instrument requires
Fault element
Strict liability
Burden of proof
No statutory defence — prosecution proves everything

The prosecution must prove that the conduct happened. This is a strict liability offence as drafted: the provision uses no word of intention, knowledge, recklessness or negligence, so there is no need to show that a person meant to do it, knew about it, or was careless.

Intention, knowledge and carelessness are irrelevant to guilt. They may still matter a great deal to sentence.

The provision states no defence, so the prosecution bears the burden on every element of the offence.

Classifier’s reasoning: no word of intention, knowledge, recklessness or negligence in the offence or its provision.

What would breach paragraph 301F(10) of SCHEDULE 2?

These are illustrations, not law. They are generated from the provision’s own words to show the shape of the offence. Whether any particular conduct is caught depends on the full text, on any amendment since, and on the facts.

  1. On these words an offence is committed where a person fails to comply with the duty to notify the Authority imposed by subsection (9).
  2. Not doing what the provision requires under the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007, by the time it requires it to be done.
  3. Doing it, but not in the manner or to the standard the instrument specifies.

Penalty

Mode of trial
Either way — magistrates’ court or Crown Court
Maximum fine
Unlimited
Standard scale
Level 5
Maximum prison (summary)
Not determined
Maximum prison (on indictment)
2 years

level 5 is unlimited in England and Wales for offences committed on or after 12 March 2015 (LASPO 2012 s.85, S.I. 2015/664).

Sentencing

Offences of this kind are usually sentenced under the guidelines below. This is a mapping by subject, not a finding about this provision, and the links go to a search of the Sentencing Council’s own site.

Prosecution figures

No published per-offence figure was found for this provision, and it could not be matched to a Ministry of Justice offence code. Offences created by statutory instrument very largely do not have one. Absence of a figure is not evidence that the offence is unused.

Status and lifecycle

Current status
Status not determined
Made
24 January 2007
In force from
Not determined
Extent
Not stated

How this was established: read from the text as made; no revised version available, so later revocation could not be ruled out.

What the instrument is for

(This note is not part of the Regulations) — the explanatory note published with the instrument, © Crown copyright.

These Regulations implement in part Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments (OJ No L 145, 30.4.2004, p.1) (“the Directive”). The Directive is also implemented by other statutory instruments including the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order (S.I. 2006/3384), the Financial Services and Markets Act 2000 (Exemption) (Amendment) Order 2007 (S.I. 2007/125), the Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges and Clearing Houses) (Amendment) Regulations 2006 (S.I. 2006/3386) and the Financial Services and Markets Act 2000 (EEA Passport Rights) (Amendment) Regulations 2006 (S.I. 2006/3385), and by the Financial Services Authority (“FSA”) using powers under the Financial Services and Markets Act 2000 (c. 8) (“the Act”). Part 2 of the Regulations requires the FSA to be satisfied that the authorisation requirements of the Directive (as to which see Chapter I of Title II and Commission Regulation 1287/2006 of 10 August 2006, OJ No L 241, 2.9.2006, p.1) are met before giving permission under Part 4 of the Act to an investment firm (as defined in section 424A of the Act, inserted by S.I. 2006/2975) or varying the permission of such a firm (transposing Article 7(1) of the Directive). Schedule 1 to the Regulations amends Part 13 of the Act. Sections 194A and 195A are inserted into Part 13 to set out new grounds on which the power of intervention under section 196 is exercisable and to set out the additional procedure that the FSA must follow in these cases (transposing Article 62 of the Directive). The new section 194A will apply where the FSA is primarily responsible for ensuring compliance with the Directive. The new section 195A will apply where the home state regulator is primarily responsible for securing compliance with the Directive. Section 199 is amended as a consequence of the amendments to Part 13. Schedule 2 to the Regulations amends Part 18 of the Act. Section 287 is amended to supplement the particulars which an applicant for recognition as an investment exchange is required to provide to the FSA (transposing parts of Articles 36, 37 and 38 of the Directive). New section 290(1A) requires the FSA to be satisfied that exchanges are complying with directly applicable Community legislation made under the Directive before making a recognition order. New section 290(1B) and (1C) sets time limits within which the FSA must determine applications for recognition as an investment exchange (but not as an overseas investment exchange), and to secure compliance with section 290(1B) sections 303, 306 and 307 are amended to provide for the reports and approvals required under Part 18 to be made within specific time periods (transposing Article 52.1 of the Directive). New section 292A requires exchanges to publish information in compliance with requirements in Articles 38 and 41 of the Directive. New section 293A enables the FSA to obtain information about exchanges’ compliance with directly applicable Community legislation made under the markets in financial instruments directive. Section 296 is amended to provide for the enforcement of directly applicable Community legislation made under the Directive, to give the FSA power to require an exchange to grant it access to the exchange’s premises for the purposes of inspecting the premises and documents on the premises, and to give the FSA power to require an exchange temporarily to cease carrying on a regulated activity (transposing Article 52.2(c) and (g) of the Directive). Further grounds on which the FSA can remove an exchange’s recognition are inserted into section 297 (transposing Article 36 of the Directive). New Chapter 1A of Part 18 requires persons acquiring or increasing control (as defined in section 301B) to notify the FSA in advance, gives the FSA power in certain cases to refuse to approve an acquisition or increase in control or to object to existing control, makes provision in relation to improperly acquired shares and creates offences in relation to breaches of the control requirements (transposing Article 38.3 of the Directive). New Chapter 3A of Part 18 makes provision about the “passport” rights of market operators (defined in the Directive) to provide services in another EEA State. New section 312A transposes the rights for EEA market operators under Articles 31.5 and 42.6 of the Directive to make arrangements in the United Kingdom for access to their facilities. New section 312B transposes Article 62.3 of the Directive by giving the FSA power to remove EEA market operators’ passport rights in certain circumstances. New section 312C makes provision for the exercise by recognised investment exchanges of the passport rights under Articles 31.5 and 42.6. Schedule 3 to the Regulations inserts Part 18A of the Act which gives the FSA power to require the suspension and removal of financial instruments from trading (transposing Articles 14.7, 41 and 50.2(j) and (k) of the Directive). It also requires the FSA to give notice and publish information about decisions to require the suspension or removal of instruments from trading. Schedule 4 to the Regulations amends Schedule 3 to the Act to make minor alterations to the procedures for the exercise of passport rights under the Directive to establish a branch or provide services in another EEA State (transposing Articles 31 and 32 of the Directive). The amendments relate to the exercise of passport rights by investment firms (defined in the Directive) which are EEA firms or UK firms (in both cases within the meaning of Schedule 3). Schedule 5 to the Regulations makes amendments to other parts of the Act. Section 39 is amended to make the exemption from financial services regulation for appointed representatives conditional, for those appointed representatives who are tied agents to whom Article 23 of the Directive applies, on the person being registered on the record maintained by the FSA or by the competent authority of another EEA State. New section 39A requires certain other tied agents, to whom section 39 does not apply, to comply with requirements mentioned in Article 23 of the Directive, including the requirement to be registered. There are consequential amendments in section 347. Section 45 is amended to specify additional grounds on which the FSA may cancel the Part IV permission of an investment firm (transposing Article 8 of the Directive). New sections 412A and 412B give effect to the FSA’s duty under Article 12(2) of Commission Regulation 1287/2006 of 10 August 2006 (OJ No L 241, 2.9.2006, p.1) to approve trade-matching and reporting systems which make reports of transactions in financial instruments, and the FSA’s duty to monitor such systems. Various provisions are also amended to provide for the enforcement of directly applicable Community legislation made under the Directive as if it were a provision made by or under the Act. Schedule 5 also makes a number of minor and consequential amendments to the Act. Schedule 6 to the Regulations makes consequential amendments to primary and secondary legislation. Part 3 of the Regulations and Schedule 7 make transitional provision in relation to the exercise of passport rights by investment exchanges and investment firms and the registration of tied agents. A transposition note has been prepared which sets out how the main elements of the Directive will be transposed into UK law. A Regulatory Impact Assessment of the effect of this instrument and the other instruments transposing the Directive on the costs of business has been prepared. Both may be obtained from the Financial Services Strategy Team, HM Treasury, 1 Horse Guards Road, London SW1A 2HQ. They are also available on HM Treasury’s website (www.hm-treasury.gov.uk). Copies of both documents have been placed in the libraries of both Houses of Parliament.

Read the full note and every offence in this instrument

Other offences in the same instrument

How this was identified as an offence

Everything above rests on the judgement that this provision creates a criminal offence, rather than mentioning one. That judgement is made by rule, from the words of the provision, and this is the rule that made it — with a confidence of 0.92.

Basis
the provision says a person is “guilty of an offence”
Confidence
0.92 of 1.00

A provision that states a penalty for an offence created elsewhere can read very like one that creates an offence, and the rules can mistake the one for the other. If the text quoted above sets a penalty for something made an offence by another provision, treat the classification on this page with that in mind, and read the instrument.

Check the source