Explanatory note

The Order makes provision for an exemption from the scope of the authorisation requirement imposed by Part I of the Financial Services Act 1986. The exemption is needed because Article 15.4 of Council Directive No. 93/22/EEC on investment services in the securities field (OJ No, L141, 10.5.93, p. 27) (“the Investment Services Directive”) has the effect that an EEA State must allow a market of the kind described in the Order to place within the territory of the State the facilities necessary to enable investment firms from that State to become members of the market or to have access to it.

The exemption has the effect that a person may, without having to obtain authorisation under the Financial Services Act, provide within the United Kingdom trading facilities constituting a market which operates without any requirement for a person dealing on the market to have a physical presence either in the EEA State from which the trading facilities are provided or on any physical floor that the market may have provided that the market appears on a list drawn up by another EEA State pursuant to the provisions of Article 16 of the Investment Services Directive. An EEA State may enter a market on the list only if the market concerned is a regulated market within the meaning of Article 1.13 of the Investment Services Directive and only if the EEA State is the home member State of the market within the meaning of article 1.6(c) of that Directive.