UK Offence Report

Paragraph 26(2) Treat this subparagraph as modified so that for the purposes of the application under…

SCHEDULE of The Financial Services and Markets Act 2023 (Digital Securities Sandbox) Regulations 2023

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

Paragraph 26(2) Treat this subparagraph as modified so that for the purposes of the application under regulation 4, any reference in section 380 of FSMA 2000 as modified by this Part to

a relevant requirement includes

a requirement that is imposed under these Regulations— in connection with

a digital securities depository; or

a contravention of which constitutes an offence that the appropriate regulator has the power to prosecute by or under these Regulations.

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 This is the text as originally made; later amendments are not shown here.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
contravening a requirement of the instrument
Fault element
Mixed — some elements strict, some not
Burden of proof
No statutory defence — prosecution proves everything

The prosecution must prove the conduct, and - for those elements the provision qualifies (knowingly) - the state of mind it names. The remaining elements carry no fault requirement, so they are strict.

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

Classifier’s reasoning: no fault word in the offence-creating words, but the surrounding provision uses knowingly - which element it governs was not determined.

What would breach SCHEDULE?

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. Doing the thing the provision prohibits under the Financial Services and Markets Act 2023 (Digital Securities Sandbox) Regulations 2023, whatever the reason for doing it.
  2. Where the requirement is a positive duty, letting the time for performing it pass without performing it.

Penalty

Mode of trial
Not determined
Maximum fine
Not determined
Maximum prison (summary)
Not determined

no penalty is stated in this instrument; it may be in the enabling Act, or in a general penalties provision this pass did not connect to the offence.

No penalty was determined from this instrument. It may be in the enabling Act, or in a general penalties provision this pass did not connect to the offence. Absence of a figure here is not evidence that the offence carries no penalty.

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
14 December 2023
In force from
8 January 2024
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, which are made under the Financial Services and Markets Act 2023 (c. 29) (“the Act”), provide for the testing of the use of developing technology in the carrying on of financial market infrastructure (“FMI”) activities. These provisions are referred to as a “digital securities sandbox” or “DSS”. Regulation 3(1) explains the purpose of the Regulations and introduces the expression “DSS”. Regulation 3(2) lists the types of financial market infrastructure entity that are eligible to apply to participate as a sandbox entrant. Under regulation 3(3) the appropriate regulator may determine that other persons established in the UK may apply to participate as a sandbox entrant. Regulation 3(4) specifies three categories of person connected with the activities of a sandbox entrant who may participate in the DSS. Regulation 3(5) lists the types of FMI activity that may be carried on in the FMI sandbox arrangements. Regulation 3(6) provides for certain ancillary activities to be subject to the FMI sandbox arrangements. Regulation 3(7) describes the types of instrument that may be used in connection with the FMI activities. Regulation 3(8) identifies the appropriate regulators. Regulation 4(1) provides for an application for approval to participate to be submitted to the appropriate regulator. Regulation 4(2) concerns information that may be required to be submitted by an applicant. Regulations 5(1) to (3) require the appropriate regulator to determine an application by written notice. Under regulation 5(4) if an application is varied or rejected, the appropriate regulator must include reasons for doing so in its written notice to the applicant. Under regulation 5(5), an applicant that is approved to participate in the DSS will be issued with a sandbox approval notice (a “SAN”). The information that the appropriate regulator must include in the SAN is described in regulation 5(5) and what may be included is described in regulation 5(6). Regulation 5(7) permits a sandbox entrant to apply to the appropriate regulator to modify, suspend or cancel its SAN, and the procedure described in regulation 5(1) to (6) will apply Regulation 6(1) provides that the relevant enactments specified in the Schedule have effect with the modifications specified in the Schedule in relation to the Bank and the FCA, a sandbox entrant and other persons participating under regulation 3(4). Regulation 6(2) provides that the appropriate regulator may continue to exercise its powers in connection with the DSS activities of a sandbox entrant or a person described in regulation 3(4) after either of them have ceased to be in the FMI sandbox arrangements, where necessary. Regulation 6(3) imposes a requirement on sandbox entrants to make the public aware of its participation in the FMI sandbox arrangements. Under regulation 6(4), the Treasury may impose restrictions on the overall FMI activities or ancillary FMI activities within the DSS. Regulation 7(1) to (3) and (7) confers on the appropriate regulator the power to make rules that apply to a sandbox entrant and persons described in regulation 3(4) for the purpose of implementing and operating the FMI sandbox arrangements. Under regulation 7(4) to (6) the appropriate regulator may also waive or modify its rules. Regulation 8 provides that the appropriate regulator may modify technical standards for the purpose of implementing and operating the FMI sandbox arrangements. Regulation 9(1) requires the appropriate regulator to supervise the operation of the FMI sandbox. Under regulation 9(2) the appropriate regulator must supervise the performance of individual sandbox entrants, which may include modifying the SAN of a sandbox entrant. Regulation 10 concerns co-operation between the appropriate regulators. Regulation 11 requires the appropriate regulators to provide information on the performance of the FMI sandbox arrangements by a specified date to allow the Treasury to satisfy its reporting obligations under section 14(4) of the Act. Regulation 12(1) provides that the appropriate regulators may exercise certain powers, in addition to existing powers under the relevant enactments, in connection with the implementation and operation of the FMI sandbox. This power extends to modifying, suspending or cancelling a sandbox approval notice. Regulation 12(3) requires that a sandbox entrant be notified if it is to be affected by a power exercised by the appropriate regulator under regulation 12(1). Regulation 13 specifies the date on which these regulations are to cease to have effect. Part 1 of the Schedule specifies the relevant enactments for the purposes described in regulation 6. Parts 2 to 5 of the Schedule contain modifications to the following relevant enactments: Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories (“UK CSDR”), the Financial Services and Markets Act 2000 (c. 8), the Companies Act 2006 (c. 46) and the Uncertificated Securities Regulations 2001 (S.I. 2001/3755). A de minimis impact assessment of the effect of this instrument is available from HM Treasury, 1 Horseguards Road, London, SW1A 2 HQ and is published alongside this instrument on www.legislation.gov.uk.

Read the full note and every offence in this instrument

How this became law

This instrument became law without a debate or a vote. Under the negative procedure it took effect unless a motion to stop it succeeded, and none was tabled.

Neither House could have amended it. A statutory instrument is put to each House as a whole thing, to be approved or not; the Houses can reject an instrument or record their regret, but they cannot change a word of it. That is the constitutional position for every offence on this site.

The full procedural history →

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 0.88.

Basis
the provision says the conduct “is an offence”; the provision says the conduct “constitutes an offence”
Confidence
0.88 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