Schedule 10, paragraph 6(2)

For paragraph 1 substitute— The Treasury may by regulations determine that the legal and supervisory arrangements of a third country ensure all of the following— that firms authorised in that third country to provide investment services or perform investment activities comply with legally binding prudential, organisational and business conduct requirements which have equivalent effect to the relevant UK requirements, that such firms are subject to effective supervision and enforcement ensuring compliance with the applicable legally binding prudential, organisational and business conduct requirements, and that the legal framework of that third country provides for an effective equivalent system for the recognition of investment firms authorised under third country legal regimes. For the purposes of paragraph 1(a), the relevant UK requirements are the following, as they apply on the day on which the Treasury makes the regulations— the requirements set out in this Regulation; the requirements set out in Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms; the requirements set out in CRR rules (as defined in section 144A of FSMA); the requirements set out in Part 9C rules (as defined in section 143F of FSMA); the requirements set out in Directive 2013/36/EU UK law and Directive 2014/65/EU UK law. The prudential, organisational and business conduct framework of a third country may be considered to have equivalent effect where that framework fulfils all of the following conditions— firms providing investment services or performing investment activities in that third country are subject to authorisation and to effective supervision and enforcement on an on-going basis; such firms are subject to sufficient capital requirements and, in particular, where they provide services or carry out the activities referred to in paragraph 3 or 6 of Part 3 of Schedule 2 to the Regulated Activities Order they are subject to comparable capital requirements to those that would apply if they were established in the United Kingdom; such firms are subject to appropriate requirements applicable to shareholders and members of their management body; such firms are subject to adequate business conduct and organisational requirements; market transparency and integrity is ensured by preventing market abuse in the form of insider dealing and market manipulation. When making regulations under paragraph 1, the Treasury must take into account whether the third country is a high-risk third country within the meaning of regulation 33 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692).

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Source: legislation.gov.uk · retrieved 2026-09-04