Content Options

View Options

Status: You are viewing the version of the handbook as on 2012-12-13.

REC 4.7 The section 297 power to revoke recognition

REC 4.7.1GRP

Under section 297 of the Act (Revoking recognition) 2and (for RAPs) under regulation 4 of the RAP regulations, the FSA has the power to revoke a recognition order relating to a recognised body.

REC 4.7.2GRP

The FSA will revoke a recognition order if:

  1. (1)

    it is directed to do so by the Treasury under section 308 of the Act (Directions by the Treasury); or

  2. (2)

    the recognised body has asked the FSA to revoke the order.

REC 4.7.2AGRP

2Where the FSA makes a revocation order under section 297 of the Act in relation to a UK RIE which is also an RAP, the FSA will also revoke the recognition order relating to its status as an RAP.

REC 4.7.3GRP

The FSA will usually consider revoking a recognition order if:

  1. (1)

    the recognised body is failing or has failed to satisfy 2one or more of the recognised body requirements 1and that failure has or will have serious consequences; or

    2
  2. (2)

    it would not be possible for the recognised body to comply with a direction under section 296 of the Act (FSA's power to give directions) or (for RAPs) regulation 3 of the RAP regulations;2 or

  3. (3)

    for some other reason, it would not be appropriate for the FSA to give a direction under section 296 or (for RAPs) regulation 3 of the RAP regulations; or21

    1
  4. (4)

    in the case of a UK RIE, it has not carried on the business of an investment exchange during the 12 months beginning with the day on which the recognition order took effect in relation to it, or it has not carried on the business of an investment exchange at any time during the period of six months ending with the day the recognition order is revoked; or21

  5. (5)

    2in the case of an RAP in relation to its RAP recognition order, it has not carried on the business of an auction platform during the 12 months beginning with the day on which the RAP recognition order took effect in relation to it, or it has not carried on the business of an auction platform at any time during the period of six months ending with the day the RAP recognition order is revoked.

REC 4.7.4GRP

The FSA would be likely to consider the conditions in REC 4.7.3 G (2) or REC 4.7.3 G (3) to be triggered1in the following circumstances:

1
  1. (1)

    the recognised body appears not to have the resources or management to be able to organise its affairs so as to satisfy one or more of the recognised body requirements; or21

    2
  2. (2)

    the recognised body does not appear to be willing to satisfy one or more of the recognised body requirements; or21

    2
  3. (3)

    the recognised body is failing or has failed to comply with a direction made under section 296 of the Act or (for RAPs) regulation 3 of the RAP regulations; or2

  4. (4)

    the recognised body has ceased to carry out regulated activities in the United Kingdom, or has so changed the nature of its business that it no longer satisfies one or more of the recognised body requirements21 in respect of the regulated activities for which recognised body status is relevant.

    2
REC 4.7.5GRP

In addition to the relevant 1factors set out in REC 4.7.4 G, the FSA will usually consider that it would not be able to secure an overseas recognised body's compliance with the recognition requirements or other obligations in or under the Act by means of a direction under section 296 of the Act, if it appears to the FSA that the overseas recognised body is prevented by any change in the legal framework or supervisory arrangements to which it is subject in its home territory from complying with the recognition requirements or other obligations in or under the Act.