Part 1: Regulatory Framework Financial market infrastructure: general rules and requirements Section 10: Central counterparties and central securities depositories: other requirements
This section inserts a new paragraph 9B into Schedule 17A to FSMA 2000. This new paragraph provides for a power for the Bank to be able to impose requirements on a recognised central counterparty, recognised CSD and systemic third-country CCP; these are described as "relevant bodies" in this section. There are two key means by which a requirement can be imposed. First, paragraph 9B(1) to (5) provide that the Bank can impose a requirement of its own initiative, either if it is desirable to do so for its objective ‘to protect and enhance the stability of the financial system of the United Kingdom’ (the Financial Stability Objective), or if the relevant body has failed, or is likely to fail, to satisfy recognition requirements or an obligation under FSMA 2000. This power is based on the FCA’s "own-initiative power" in section 55L(3) of FSMA 2000, and the PRA’s equivalent power in section 55M. Second, paragraph 9B(7) provides that the Bank can impose a requirement on the application of the relevant body itself. This is based on the FCA’s power to impose a voluntary requirement on authorised persons in section 55L(5) of FSMA 2000 and the PRA’s equivalent power in section 55M.
	Paragraph 9B(6) provides that the Bank’s "own-initiative" power cannot be used to restrict or prohibit discretionary payments to employees or shareholders of a recognised central counterparty. Paragraph 13 of Schedule 11 to this Act gives the power to impose such a restriction or prohibition in certain circumstances.
	Paragraph 9B(9) provides that relevant provisions of Part 4A apply to requirements imposed by the Bank under this new provision, as they apply to requirements imposed by the FCA under section 55L, with appropriate modifications provided for in sub-paragraph (10).