Schedule 6: Gibraltar-based persons carrying on regulated activities in the UK Part 6: Requirements
Paragraph 40 confers a power on the UK regulators to impose, vary or cancel requirements on a Gibraltar-based person at different stages. For example, a UK regulator may impose requirements when a notification under Part 3 or 4 of Schedule 2A is being considered (sub-paragraph (1)(a)), or on the initiative of the Gibraltar regulator or the UK regulator (sub-paragraphs (1)(b) and (c)).
	Paragraph 41 clarifies that the UK regulators can impose a requirement in connection with a notification to seek permission to carry on an activity (Part 3 of Schedule 2A) or a notification in respect of a variation of permission (Part 4 of Schedule 2A). Sub-paragraph (2) provides that the FCA and the PRA may impose requirements under this paragraph if satisfied that it is desirable to do so in order to advance one or more of their objectives. Sub-paragraphs (3) and (4) specify which UK regulator has power to impose requirements in different cases. Sub-paragraph (5) prohibits the UK regulators from imposing a requirement under this paragraph after the period for consideration of a notification has expired. The same sub-paragraph also prevents the UK regulator from imposing a requirement which takes effect before the end of the period for considering the notification. Sub-paragraph (6) is self-explanatory.
	Paragraph 42, sub-paragraph (1) provides that, if a UK regulator proposes to impose a requirement under paragraph 41, it must give the person concerned a warning notice and give the Gibraltar regulator notice of the proposed requirement. The UK regulator must also consider any representations made by the Gibraltar regulator. Sub-paragraph (2) requires the UK regulator to give the person a decision notice if it decides to impose the proposed requirement.
	Paragraph 43 enables a Gibraltar-based person to refer to the Upper Tribunal a decision by the UK regulators in respect of a requirement imposed in connection with Part 3 and 4.
	Paragraphs 44-48 set out the arrangements that the UK regulators must follow when they receive a notification from the Gibraltar regulator asking for the imposition, variation or cancellation of a requirement on a Gibraltar-based person with a Schedule 2A permission. Under paragraph 44, if a UK regulator receives from the Gibraltar regulator a notification in relation to a requirement, this requirement will take effect once the consideration period by the UK regulator comes to an end, unless the UK regulator rejects the notification during that period, or the Gibraltar regulator withdraws the notification relating to the requirement. Sub-paragraph (3) is self-explanatory.
	Paragraph 45 clarifies which UK regulator is the appropriate regulator to consider a notification in each case.
	Paragraph 46 defines the contents that a notification from the Gibraltar regulator asking the UK regulators to impose, cancel or vary a requirement should have.
	Paragraph 47 sets out the process that the UK regulator should follow when considering a notification with a requirement requested by the Gibraltar regulator. Sub-paragraphs (1) and (4) are self-explanatory. Sub-paragraph (2) sets a consideration period from the day on which the notification was received. Sub-paragraph (3) provides for the consideration period to end earlier if the UK regulator issues a notice of confirmation to the Gibraltar-based person.
	Paragraph 48 prohibits the UK regulator from rejecting a notification from the Gibraltar regulator unless they must do so because the notification does not meet the requirements in paragraph 46 (sub-paragraph (3)) or it is desirable to reject the notification to advance the regulator’s objectives (sub-paragraphs (4) and (5)). Sub-paragraph (2) clarifies that a notification is rejected when the appropriate UK regulator gives written notice of the rejection to the Gibraltar regulator. Sub-paragraph (6) clarifies that a rejection at this stage does not prevent the Gibraltar regulator from sending a further notification in connection to requirements in the future.
	Paragraph 49, sub-paragraph (1) provides that the UK regulators may only exercise their power to impose, vary or cancel requirements of their own initiative if one of the own-initiative conditions set out in paragraph 28 is met. Conditions A to D in paragraph 28 are self-explanatory. Sub-paragraph (2) and (3) clarify the persons in relation to which the FCA and the PRA may impose, vary or cancel requirements.
	Paragraph 50 sets out the arrangements for the UK regulators to impose or vary requirements on a person of their own initiative. It explains when a requirement takes effect (sub-paragraphs (1) and (2)); and provides for certain procedural requirements to ensure that a person affected by a decision can express their views and challenge the decision (sub-paragraphs (3) to (11)).
	Paragraph 51 directs the UK regulators to provide written notice to the Gibraltar-based person if they propose to cancel a requirement, including the date the requirement comes into effect.
	Paragraph 52 confers a right on a Gibraltar-based person to refer to the Upper Tribunal the imposition, variation or cancellation of a requirement by the UK regulators under paragraph 49.
	Paragraph 53 enables the UK regulator to impose a requirement on a Gibraltar-based person prohibiting or restricting the disposal of any of the person’s assets or a requirement that those assets are transferred to a trustee approved by the UK regulators. Asset requirement restrictions are an important tool to tackle financial crime. If an asset requirement is imposed on a Gibraltar-based person and the UK regulators give notice of this fact to an institution with whom the person keeps an account, sub-paragraphs (2) and (3) protect the institution from contractual liability if it refuses to transfer a payment out of the person’s account in line with the asset restrictions imposed.
	If, by contrast, the institution makes the payment, the same provisions will make the institution liable to pay the UK regulator an amount equal to the sum transferred. Sub-paragraph (4) prohibits the release of any assets held by a trustee while the requirement is in force, except with the consent of the UK regulator. Sub-paragraph (5) voids any charges which the Gibraltar-based person creates in respect of its assets. Sub-paragraph (6) defines the circumstances when assets held by a trustee are to be considered as held in accordance with the asset requirement. Sub-paragraph (7) makes releasing assets in contravention of an asset requirement under sub-paragraph (1)(b) an offence under the law of England and Wales, Scotland and Northern Ireland. Sub-paragraph (8) provides that, in this paragraph, references to imposing a requirement also include varying an existing requirement. Sub-paragraph (9) defines the meaning of ‘charge’ for the purposes of this Schedule. Sub-paragraph (10) provides that sub-paragraphs (4) and (6) do not affect the equitable interest of the beneficiary of a trust resulting from an asset requirement under sub-paragraph (1)(b).
	Paragraph 54, sub-paragraph (1) gives two examples of the requirements that may be imposed on a Gibraltar-based person under Schedule 2A, namely, requiring the person to take specific action or to refrain from specific actions. Sub-paragraph (2) notes that the requirements may extend to activities which are not approved activities. Sub-paragraph (3) clarifies that a requirement may be imposed on a person due to its relationship with a wider group of financial services firms. Sub-paragraph (4) enables the regulators to set an expiry period for a requirement, and sub-paragraph (5) clarifies that a requirement may take into consideration past conduct.
	Paragraph 55, sub-paragraph (1) provides that contravening a requirement imposed by the UK regulators does not a make person guilty of an offence, make a transaction void or allow a right of action for breach of a statutory duty. Sub-paragraphs (2), (3) and (4) set out the circumstances where a private person may take legal action when a requirement is contravened, and they suffer loss as a result. Sub-paragraph (5) provides that the concept of private person may be defined in regulations made by HM Treasury.