FINMAR Financial Stability and Market Confidence Sourcebook

Part

FINMAR Financial Stability and Market Confidence Sourcebook

Printed on: 02/11/2024

Rulebook at: 06/01/2011

Chapters

FINMAR 1 Gathering financial stability information
FINMAR 2 Short selling
FINMAR 3 Banking Act 2009
Transitional Provisions and Schedules

FINMAR 1

Gathering financial stability information

FINMAR 1.1

Application, purpose and scope

06/08/2010

Application

FINMAR 1.1.1

FINMAR 1 is relevant to authorised persons and unauthorised persons, in particular persons whose activities are or may be relevant to the stability of one or more aspects of a relevant financial system.

06/08/2010

Purpose

FINMAR 1.1.2

(1) Section 165B(6) (Statement of policy) of the Act requires the FSA to prepare and publish a statement of policy on the financial stability information power. The purpose of FINMAR 1.1 is to set out the FSA's statement of policy on the exercise of the financial stability information power and the overseas financial stability information power contained in sections 165A and 169A of the Act.
(2) The Treasury has approved this statement of policy in accordance with section 165B(7) of the Act.

06/08/2010

FINMAR 1.1.3

Determining whether to impose a financial stability information requirement involves different considerations from the exercise of other FSA powers. The guidance in this chapter relates only to the imposition of financial stability information requirements.

06/08/2010

Scope of the powers

FINMAR 1.1.4

The financial stability information power and the overseas financial stability information power are exercisable in relation to the categories of person set out in section 165A(2) of the Act (interpreted in accordance with the rest of that section).

06/08/2010

FINMAR 1.1.5

Table: section 165A(2) of the Act

Section 165A of the Act applies to:

(a)

a person who has a legal or beneficial interest in any of the assets of a relevant investment fund;

(b)

a person who is responsible for the management of a relevant investment fund;

(c)

a person (a "service provider") who provides any service to an authorised person;

(d)

a person prescribed by an order made by the Treasury or any person of a description prescribed by such an order (and see also section 165C);

(e)

a person who is connected with a person to whom this section applies as a result of any of the above paragraphs.

06/08/2010

FINMAR 1.1.6

The FSA may impose a financial stability information requirement on a person within the categories set out in FINMAR 1.1.5 UK only to the extent that it considers that the information or document is or might be relevant to the stability of one or more aspects of the UK financial system. The persons within these categories may include:

(1) a vehicle for collective investment, whether or not it is regulated, (including vehicles often referred to as "hedge funds" and "structured investment vehicles" or off-balance sheet vehicles used for investment) and its managers;
(2) a provider of a service to an authorised person, such as a software supplier or the provider of a liquidity facility, where the risk to the stability of one or more aspects of the UK financial system relates to the provision of the service;
(3) a large scale proprietary trader or investor who trades large volumes of financial instruments that are traded on UK regulated markets or UK MTFs, for example overseas corporate entities; and
(4) a person who manages investments for a single family (whether or not the investments are held within a trust), for example a family office.

06/08/2010

FINMAR 1.2

Financial stability information powers

06/08/2010

Introduction

FINMAR 1.2.1

The FSA has a regulatory objective of contributing to the protection and enhancement of UK financial stability. Section 250 of the Banking Act 2009 imposes a duty on the FSA to collect information that it thinks is, or may be, relevant to the stability of individual financial institutions or to one or more aspects of the UK financial system.

06/08/2010

FINMAR 1.2.2

Some information relevant to UK financial stability will be accessible to the FSA:

(1) through authorised persons' regular reports to the FSA; or

(2) from other UK or international authorities;

(3) through information gathered by the FSA under other information gathering powers, such as section 165 of the Act or section 250(2) of the Banking Act 2009.

06/08/2010

FINMAR 1.2.3

The FSA may use the financial stability information power to gather additional information relevant to UK financial stability. The information may relate to the exercise of the FSA's functions, or the FSA may collect the information in order to disclose it to another person or authority, for example the Bank of England or the Treasury. Information relevant to financial stability may be held by an authorised person or by an unauthorised person.

06/08/2010

FINMAR 1.2.4

When the FSA seeks additional information from an authorised person or an unauthorised person it may not in all cases be necessary to exercise statutory information-gathering powers. However, the FSA will use its statutory powers if it believes it is appropriate to do so and, in urgent cases, it may be appropriate for the FSA to exercise these powers without delay.

06/08/2010

Financial stability information power

FINMAR 1.2.5

The FSA may use the financial stability information power to require a person to provide:

(1) specified information or documents; or
(2) information or documents of a specified description;

that the FSA considers are or may be relevant to the stability of the UK financial system.

[Note: Section 165A of the Act]

06/08/2010

Overseas financial stability information power

FINMAR 1.2.6

The FSA may exercise the overseas financial stability information power at the request of an overseas regulator to require a person to provide:

(1) specified information or documents; or
(2) information or documents of a specified description;

that the FSA considers are or may be relevant to the stability of a relevant financial system operating in the country or territory of the overseas regulator.

[Note: Section 169A of the Act]

06/08/2010

FINMAR 1.2.7

If the overseas regulator is a competent authority and the request relates to an obligation of the FSA under EU law, the FSA will take into account whether it is necessary to exercise the overseas financial stability information power to comply with that obligation.

06/08/2010

FINMAR 1.2.8

In deciding whether to exercise the overseas financial stability information power, the FSA may take into account in particular:

(1) whether corresponding assistance would be given to a UK regulatory authority in the country or territory of the overseas regulator; and
(2) whether it is otherwise appropriate in the public interest to give the assistance sought.

06/08/2010

FINMAR 1.2.9

The FSA may decide not to exercise the overseas financial stability information power unless the overseas regulator undertakes to make such contribution towards the cost to the FSA of its exercise as the FSA considers appropriate.

06/08/2010

FINMAR 1.2.10

FINMAR 1.2.8 G and FINMAR 1.2.9 G do not apply if the FSA considers that it must use the overseas financial stability information power to comply with an obligation upon the FSA under EU law.

06/08/2010

FINMAR 1.3

Providing notice before imposing a financial stability information requirement

06/08/2010

Giving notice

FINMAR 1.3.1

The FSA will give a person a notice in writing if it proposes to impose a financial stability information requirement unless the FSA is satisfied that information or documents are required without delay. The notice will include:

(1) the reasons why the FSA proposes to impose the financial stability information requirement; and
(2) the time period in which the person may make representations to the FSA in respect of the proposal.

06/08/2010

Right to make representations

FINMAR 1.3.2

The notice referred to in FINMAR 1.3.1 G will specify a reasonable period in which to make representations. In determining the period for representations the FSA will take into account:

(1) the nature, type and number of documents likely to be required;
(2) the reasons for imposing the requirement;
(3) whether the person is likely to wish to seek legal advice;
(4) whether the person is an authorised person;
(5) any cost implications for the person.

06/08/2010

FINMAR 1.3.3

The FSA will generally invite the recipient of a notice to make representations in writing to the address provided in the notice. The FSA will consider a request by a person to make oral representations and will take into account:

(1) whether oral representations would be likely to:

(a) improve the FSA's understanding of the representations;
(b) be more convenient or less costly than written representations; and
(c) assist the FSA in making a decision more quickly; and

(2) as in other cases, and in accordance with the Disability Discrimination Act 1995, any reason relating to the disability of the person which would mean that they could not otherwise have a fair hearing.

06/08/2010

FINMAR 1.3.4

Once the period for making representations has expired the FSA will determine within a reasonable period whether to impose the financial stability information requirement.

06/08/2010

FINMAR 1.3.5

If the FSA does not receive any representations during the period specified in the notice it will determine whether to impose the financial stability information requirement based on the information available to it.

06/08/2010

FINMAR 1.4

Imposing a financial stability information requirement without prior notice

06/08/2010

FINMAR 1.4.1

If the FSA proposes to impose a financial stability information requirement and is satisfied that it is necessary for the information or documents covered by a financial stability information requirement to be provided or produced without delay, the FSA may impose the financial stability information requirement on a person without taking the steps described in FINMAR 1.3 (see section 165B (4) of the Act).

06/08/2010

FINMAR 1.4.2

The FSA will determine whether to impose a financial stability information requirement without prior notice based on the facts of each case and after taking into account the information before it concerning:

(1) the nature of the risk to financial stability and whether the risk appears to be increasing rapidly;
(2) the extent of the risk to financial stability;
(3) whether it is fair to impose the requirement without notice; and
(4) whether the information sought may lead to prompt action by the FSA.

06/08/2010

FINMAR 1.4.3

A person who receives a financial stability information requirement without prior notice should consider whether to contact the FSA concerning the requirement. The person should raise any proposal to make representations with the FSA at the earliest opportunity.

06/08/2010

FINMAR 1.5

Imposing a requirement

06/08/2010

Deciding to impose a requirement

FINMAR 1.5.1

In deciding whether to impose a financial stability information requirement the FSA will:

(1) review the material before it;
(2) consider any representations received from the proposed recipient of the requirement; and
(3) take into account:

(a) the nature and extent of the risks to financial stability;
(b) whether the information is more readily available from another source, taking into account the likely time and cost implications of seeking information from that source;
(c) whether the information may assist the FSA in fulfilling its functions, for example if the information relates to the exercise of the FSA's statutory powers.

06/08/2010

FINMAR 1.5.2

A decision to impose the financial stability information requirement will be taken by a member of FSA staff at the appropriate level of seniority.

06/08/2010

Scope of the requirement

FINMAR 1.5.3

The information and documents specified will be appropriate for each case. They may be defined broadly, for example information relating to a trading strategy and its execution, or in a more limited way, for example a contract documenting a particular trade.

06/08/2010

Notice of a financial stability information requirement

FINMAR 1.5.4

The FSA will give a person notice in writing if it decides to impose a financial stability information requirement. The notice will describe the information and documents to which the requirement relates and include the FSA's reasons for imposing the requirement.

06/08/2010

Requiring documents to be verified or authenticated

FINMAR 1.5.5

The FSA may, where it is reasonable to do so, require a person subject to a financial stability information requirement to provide:

(1) verification of any information; or
(2) authentication of any document;

that the person provides to the FSA in accordance with that requirement.

06/08/2010

FINMAR 1.5.6

When deciding whether to require verification or authentication the FSA will take into account the circumstances of each case, including:

(1) the type of information or documents required and whether there is a particular need for the information to be exactly accurate;
(2) the likely additional cost to the person providing the information or documents;
(3) the extent to which verification or authentication may improve the quality or reliability of the information or documents; and
(4) the nature of any previous communications between the person and the FSA.

06/08/2010

FINMAR 1.5.7

The FSA may, where it is reasonable to do so, require the information or documents to be verified or authenticated in any manner. Examples of verification or authentification include:

(1) a signed declaration by an officer or employee of a body corporate;
(2) a declaration by a commissioner for oaths that a copy of a document is a true copy of the original; and
(3) a declaration by the person's accountant or auditor that the information provided appears to be accurate.

06/08/2010

FINMAR 2

Short selling

FINMAR 2.1

Application and purpose

06/08/2010

Application

FINMAR 2.1.1

This chapter applies to all persons who:

(1) engage, or are intending to engage, in short selling in relation to relevant financial instruments; or
(2) have engaged in short selling in relation to relevant financial instruments where the resulting short position is still open.

06/08/2010

Purpose

FINMAR 2.1.2

The purpose of this chapter is to set out rules and provide guidance in relation to short selling in order to promote the FSA's statutory objectives of:

(1) maintaining confidence in the UK financial system; and
(2) contributing to the protection and enhancement of the stability of the UK financial system.

06/08/2010

FINMAR 2.2

Disclosure of disclosable short positions

06/08/2010

Disclosure during a rights issue period

FINMAR 2.2.1

A person who has a disclosable short position must provide disclosure of his position where:

(1) the position relates, directly or indirectly, to securities which are:

(a) the subject of a rights issue;
(b) admitted to trading on a prescribed market in the United Kingdom; and
(c) issued by:

(i) a UK company; or
(ii) a non-UK company for whom the UK prescribed market is the sole or main venue for trading the securities; and

(2) the disclosable short position:

(a) is reached or exceeded, or the position falls below a disclosable short position, during a rights issue period; or
(b) has been reached or exceeded immediately before the beginning of the rights issue period and has not fallen below a disclosable short position at the time the rights issue period commences.

06/08/2010

FINMAR 2.2.2

For the purposes of FINMAR 2.2.1R (1)(c)(ii), a UK prescribed market is the main venue for trading securities of a company where the volume of the securities traded on that market in the 12-month period immediately preceding the beginning of the company's rights issue period is greater than the volume of the securities traded on any other market, whether in the United Kingdom or elsewhere.

06/08/2010

Disclosure of a short position in a UK financial sector company

FINMAR 2.2.3

A person who has a disclosable short position in a UK financial sector company must provide ongoing disclosure of his position.

06/08/2010

FINMAR 2.2.4

Where a UK financial sector company is in a rights issue period, a disclosure under FINMAR 2.2.3 R is sufficient to satisfy the disclosure requirement in FINMAR 2.1.1 R.

06/08/2010

FINMAR 2.3

Calculation of net short position

06/08/2010

Preliminary

FINMAR 2.3.1

This section contains provisions relating to the calculation of a net short position for the purposes of determining whether a person has a disclosable short position.

06/08/2010

FINMAR 2.3.2

A net short position is the position remaining after deducting a long position (if any) that a person holds in relation to the issued capital of a company from a short position in relation to the issued capital of that company, where the value of the long and short positions is calculated in accordance with the provisions below.

06/08/2010

FINMAR 2.3.3

The calculation of a net short position must take account of any form of economic interest, whether by virtue of a long or short position, in the issued capital of the company.

06/08/2010

FINMAR 2.3.4

A net short position must be calculated on the basis of the position held at midnight at the end of each day that a person has the net short position.

06/08/2010

Long and short positions

FINMAR 2.3.5

A 'long position' is the total of:

(1) the number of shares a person holds in a company; and
(2) any exposure, calculated on a delta-adjusted basis, to the issued capital of the company the person has through his holding of financial instruments which will result in the person making a profit, whether directly or indirectly, if there is an increase in the price or value of the shares of the company.

06/08/2010

FINMAR 2.3.6

A 'short position' is the total of:

(1) the number of shares in a company that a person has sold where the person has borrowed or needs to borrow or purchase shares to settle the transaction and the shares have not yet been returned to the lender, or borrowed and returned to the lender, or purchased, as the case may be; and
(2) any exposure, calculated on a delta-adjusted basis, to the issued capital of the company the person has through his holding of financial instruments which will result in the person making a profit, whether directly or indirectly, if there is a decrease in the price or value of the shares.

06/08/2010

Calculating short positions: particular cases

FINMAR 2.3.7

For the purposes of calculating a net short position when a company is in a rights issue period:

(1) a long position in the nil paid rights cannot be deducted from a short position in relation to the company; and
(2) any short position in the nil paid rights must be taken into account.

06/08/2010

FINMAR 2.3.8

Where a person has an economic exposure to the issued capital of a company by virtue of his interest in a basket, index or exchange traded fund, the value of the exposure to the company should be included in the calculation of his net short position.

06/08/2010

FINMAR 2.4

Responsibility for disclosure

06/08/2010

Discretionary and non-discretionary managers

FINMAR 2.4.1

Where a person has appointed one or more discretionary investment managers to manage some or all of his investments, the person must make any disclosures required under FINMAR 2.2.1 R or FINMAR 2.2.3 R in respect of any disclosable short position, unless FINMAR 2.4.2 G applies.

06/08/2010

FINMAR 2.4.2

Where a person ("P") has appointed:

(1) a discretionary investment manager to manage some or all of his investments, P may authorise that discretionary investment manager to make any disclosures required by FINMAR 2.2.1 R or FINMAR 2.2.3 R on P's behalf in relation to the investments managed by that discretionary investment manager;
(2) more than one discretionary investment manager to manage some or all of his investments, P may authorise another person (such as the operator of an AUT, ICVC or any other fund) to make any disclosures required by FINMAR 2.2.1 R or FINMAR 2.2.3 R on P's behalf.

06/08/2010

FINMAR 2.4.3

Where a discretionary investment manager or another person has been authorised by a person ("P") to make any disclosures required by FINMAR 2.2.1 R or FINMAR 2.2.3 R on P's behalf, he must:

(1) provide disclosure or ongoing disclosure as required under FINMAR 2.2.1 R or FINMAR 2.2.3 R of P's position; and
(2) clearly identify the person on whose behalf he is making the disclosure.

06/08/2010

FINMAR 2.4.4

Where a discretionary investment manager manages investments for more than one person, he must provide disclosure or ongoing disclosure under FINMAR 2.2.1 R or FINMAR 2.2.3 R in respect of the aggregate net short position of all the portfolios managed by him.

06/08/2010

FINMAR 2.4.5

Where a person whose investments are managed by a non-discretionary investment manager has a disclosable short position, the person must make any disclosures required under FINMAR 2.2.1 R or FINMAR 2.2.3 R in respect of his position.

06/08/2010

FINMAR 2.4.6

A person whose investments are managed by a non-discretionary investment manager and who has a disclosable short position may authorise his non-discretionary investment manager to make any disclosures required by FINMAR 2.2.1 R or FINMAR 2.2.3 R on his behalf in respect of his position.

06/08/2010

FINMAR 2.4.7

Where a non-discretionary investment manager has been authorised by a person to make any disclosures required by FINMAR 2.2.1 R or FINMAR 2.2.3 R on that person's behalf, he must:

(1) provide disclosure or ongoing disclosure as required under FINMAR 2.2.1 R or FINMAR 2.2.3 R of the person's position; and
(2) clearly identify the person on whose behalf he is making the disclosure.

06/08/2010

Groups

FINMAR 2.4.8

Where one or more companies in a group is required to disclose a disclosable short position, each company must make a separate disclosure of its own position unless FINMAR 2.4.9 G applies.

06/08/2010

FINMAR 2.4.9

One company in a group may make a disclosure of a disclosable short position held by one or more companies in the group, provided that the disclosure clearly states the name of the company or of each of the companies, as the case may be, which holds a disclosable short position.

06/08/2010

FINMAR 3

Banking Act 2009

FINMAR 3.1

Application and purpose

06/08/2010

Application

FINMAR 3.1.1

FINMAR 3 is relevant to firms subject to the powers in Parts 1 to 3 of the Banking Act 2009 (the Banking Act), that is, UK incorporated firms with a Part IV permission to carry on the regulated activity of accepting deposits, other than credit unions, firms with a Part IV permission to effect or carry out contracts of insurance and any other class of institution specified in secondary legislation.

06/08/2010

Purpose

FINMAR 3.1.2

The purpose of FINMAR 3 is to provide guidance on assessing Condition 2 under section 7(3) of the Banking Act.

06/08/2010

FINMAR 3.2

Assessing Condition 2 under section 7(3) of the Banking Act 2009

06/08/2010

Introduction

FINMAR 3.2.1

The Banking Act introduces new powers for HM Treasury, the Bank of England and the FSA to deal with failing banks. The powers, which are set out in Parts 1 to 3 of that Act, can be used to deal with UK incorporated firms with a Part IV permission to carry on the regulated activity of accepting deposits, other than credit unions, firms with a Part IV permission to effect or carry out contracts of insurance and any other class of institution specified in secondary legislation. In relation to building societies, the main tools in the Act are applied with modifications. In this section the term "bank" is used to refer to those firms that are potentially subject to the powers in Parts 1 to 3 of the Banking Act. The powers are defined in the Banking Act, and referred to in this section as the "stabilisation powers". The Banking Act contains powers to enable HM Treasury to extend the application of the stabilisation powers to credit unions by secondary legislation.

06/08/2010

FINMAR 3.2.2

Section 7 of the Banking Act sets out the two conditions that must be met before a stabilisation power can be exercised in respect of a bank:

(1) Condition 1 is that the bank is failing, or is likely to fail, to satisfy the threshold conditions.
(2) Condition 2 is that, having regard to timing and other relevant circumstances, it is not reasonably likely that (ignoring the stabilisation powers) action will be taken by or in respect of the bank that will enable it to satisfy the threshold conditions.

06/08/2010

FINMAR 3.2.3

The Banking Act provides that the FSA is to treat Conditions 1 and 2 as met if satisfied that they would be met but for financial assistance provided by either HM Treasury or the Bank of England (disregarding ordinary market assistance offered by the Bank on its usual terms).

06/08/2010

Assessing Condition 1

FINMAR 3.2.4

The matters the FSA will take into account in assessing whether a bank is failing or is likely to fail to satisfy the threshold conditions are described in COND 2.1 to COND 2.5. The options available to the FSA in the case of a breach of the threshold conditions are outlined in Chapter 8 of the Enforcement Guide and SUP 7.2. These tools are available to the FSA at any time, and so may be used before or in conjunction with the stabilisation tools provided by the Banking Act.

06/08/2010

Assessing Condition 2

FINMAR 3.2.5

The Banking Act provides that in considering the test in Condition 2, the FSA should ignore the stabilisation powers. The purpose of this limitation is to make clear that in making its assessment, the FSA is not considering whether the stabilisation powers could successfully resolve the situation, but is considering whether alternative measures might provide for this instead.

06/08/2010

Timing

FINMAR 3.2.6

In assessing Condition 2, the FSA will consider the timeframe during which any actions taken by or in relation to the bank are likely to be available and to have effect. In the view of the FSA, the purpose of the reference to timing in Condition 2 is to require the FSA to consider whether a return to full compliance is likely to occur within a reasonable period of time. The following is a non-exhaustive list of factors the FSA may consider:

(1) the extent of any loss, or risk of loss, or other adverse effect on consumers. The more serious the loss or potential loss or other adverse effect, the more likely it is that the FSA will consider that remedial action will be needed urgently;
(2) the seriousness of any suspected breach of the requirements of the Act or the rules and the steps that need to be taken to correct that breach;
(3) the risk that the bank's conduct or business presents to the stability of the UK financial system and to confidence in that system;
(4) the likelihood that remedial action that could be taken by or in relation to the bank will take effect before consumers, market confidence or financial stability suffers significant detriment.

06/08/2010

FINMAR 3.2.7

If the FSA is satisfied that the breach of threshold conditions is likely to be temporary and to be rectified within a reasonable time, the FSA is unlikely to conclude that Condition 2 has been met.

06/08/2010

Other relevant circumstances

FINMAR 3.2.8

In general the FSA will be concerned to determine whether any remedial action that could be taken by or in relation to the bank will be effective. This will include an assessment of both how likely it is that the action will be taken, and if it is, the impact it will have on the bank's compliance with the threshold conditions. Circumstances that the FSA may take into account include but are not limited to:

(1) where the FSA's concerns relate to adequacy of liquidity:

(a) the availability of market funding to banks generally and any specific circumstances of the bank that may impact on its ability to access the market on terms which are generally available;
(b) whether the bank's current funding structure is adequate and viable; whether the primary sources of funding continue to be available, given current market sentiment, and whether they would still be viable if market sentiment was to change;
(c) the maturity profile of the bank's existing funding and the availability of funding from the market to replace maturing funding as the need arises;
(d) whether liquidity problems call into question adequacy of capital;
(e) the bank's credit rating and the likelihood and impact of any potential downgrade;
(f) the availability and terms of liquidity support from group companies, existing funders and central banks;

(2) where the FSA's concerns relate to capital:

(a) the availability of capital from the market for banks in general and any specific circumstances of the bank that may impact on its ability to access the market on terms which are generally available;
(b) potential sources of capital and the nature of and terms on which capital may be obtained;
(c) the success of any recent attempts by the bank to raise capital on the open market;
(d) the willingness of existing significant institutional investors to provide or assist in a strategic solution to the bank;

(3) where the FSA's concerns relate to the adequacy of non-financial resources or suitability, the FSA will take into account the factors identified in COND 2.4 and COND 2.5, and other Handbook provisions referred to in those chapters. In assessing Condition 2, the circumstances of each case are likely to be different, but the FSA will be concerned to establish the likelihood of achieving a return to full compliance with the threshold conditions, and the timescale in which a return to compliance will be effected;
(4) the prospects of the bank securing a material and relevant transaction with a third party, for example a sale of the bank itself or of all or part of its business. In relation to any transaction, the FSA will have regard to factors including but not limited to:

(a) the status of any ongoing negotiations;
(b) the level of interest expressed and the credibility of potential counterparties;
(c) practical constraints related to the bank itself, for example, management engagement, availability of relevant information and severability of infrastructure;
(d) the sources, availability and firmness of financing for any transaction;
(e) the need for shareholder approval, merger clearances or other consents;
(f) the suitability of the counterparty and the stability of the relevant parties following completion of any transaction.

06/08/2010

FINMAR 3.2.9

When assessing whether the bank will return to compliance with threshold condition 4 (adequate resources) the FSA will also assess the reasons behind the likely or actual failure of compliance. Serious failures of management, systems or internal controls may in themselves call into question the adequacy of the bank's non-financial resources (threshold condition 4) or suitability (threshold condition 5). Therefore, in assessing whether a bank is reasonably likely to satisfy the threshold conditions in the future, the FSA will be concerned to ensure that any such failures have been adequately addressed.

06/08/2010

Transitional Provisions and Schedules

FINMAR Sch 1

Record keeping requirements

06/08/2010

FINMAR Sch 1.1

There are no record-keeping requirements in FINMAR.

06/08/2010

FINMAR Sch 2

Notification requirements

06/08/2010

FINMAR Sch 2.1

There are no notification requirements in FINMAR.

06/08/2010

FINMAR Sch 3

Fees and other required payments

06/08/2010

FINMAR Sch 3.1

There are no requirements for fees in FINMAR.

06/08/2010

FINMAR Sch 4

Powers Exercised

06/08/2010

FINMAR Sch 4.1

The following powers and related provisions in or under the Act have been exercised by the FSA to make the rules, statements of policy and guidance in FINMAR:

Section 131B (Short selling rules)

Section 157(1) (Guidance)

Section 165B(6) (Safeguards etc in relation to exercise of power under section 165A)

06/08/2010

FINMAR Sch 5

Rights of action for damages

06/08/2010

FINMAR Sch 5.1

There are no rules in FINMAR.

06/08/2010

FINMAR Sch 6

Rules that can be waived

06/08/2010

FINMAR Sch 6.1

As a result of regulation 10 of the Regulatory Reform (Financial Services and Markets Act 2000) Order 2007 (SI 2007/1973) the FSA has power to waive all its rules, other than rules made under section 247 (Trust scheme rules) or section 248 (Scheme particulars rules) of the Act. However, if the rules incorporate requirements laid down in European directives, it will not be possible for the FSA to grant a waiver that would be incompatible with the United Kingdom's responsibilities under those directives.

06/01/2011