Commentary Recognised investment exchanges and clearing houses Section 32: Recognised bodies: procedure for giving directions under s.296 etc
391.Section 32 sets out the procedural arrangements to be followed before the Bank or the FCA (as the case may be) may (a) give directions to a recognised body or (b) revoke a recognition order. These changes are designed to simplify the powers.
392.Subsection (2) omits paragraphs (b) and (c) of subsection (1) of section 296 of FSMA; as a result, the Bank and the FCA will no longer need to take steps to bring to the attention of the members of the recognised body, and any other persons which it considers are likely to be affected, its proposal to issue a direction or revoke a recognition order. Subsections (3) and (5) make provision consequential on the change to subsection (1).
393.Subsection (4) replaces subsection (4) such that the minimum period for making representations in response to a notice issued by the Bank or the FCA (as the case may be) setting out its intention to issue a direction is such period as is specified in the notice, rather than a minimum period being set out on the face of the legislation. This will enable the appropriate regulator to prescribe a shorter period than is currently the case under FSMA (which prescribes a minimum period of two months), for example, where the Bank needs to act urgently in the interests of addressing a potential threat to financial stability.
394.Subsection (6) amends subsection (7) so as to enable the appropriate regulator to give a direction without following the procedure set out in section 298 where it reasonably considers it necessary. This aligns the circumstances in which the power can be used with those in which the PRA and the FCA may vary, with immediate effect, a person’s permission to carry on authorised activities (see new sections 55J and 55Y(3) inserted by section 11).