Explanatory note

Schedule 6 to the Financial Services and Markets Act 2000 (c. 8) (“the Act”) sets out threshold conditions which authorised persons, and applicants for authorisation, under that Act must satisfy.

This Order, which amends the Financial Services and Markets Act 2000 (Variation of Threshold Conditions) Order 2001 (S.I. 2001/2507) (“the 2001 Order”), varies those conditions in so far as they apply to Swiss general insurance companies as defined in article 1(2) of the 2001 Order.

This Order re-applies to Swiss general insurance companies the condition set out in paragraph 3 of Schedule 6 (which had previously been removed by the 2001 Order) so that, where such a company has close links with a parent or subsidiary undertaking, the Financial Services Authority (“the Authority”) must be satisfied that those close links are not likely to prevent the Authority’s effective supervision of that company (article 2(2)).

The Order also sets out additional threshold conditions which a Swiss general insurance company must satisfy. These include conditions requiring such a company to ensure that the value of the assets of the business carried on by it in the United Kingdom does not fall below the amount of the liabilities of that business and that such assets are maintained in such places, and are of such a nature, as may be specified in rules made by the Authority under the Act (article 2(3)).

A regulatory impact assessment has been prepared in relation to this Order and a copy can be obtained from the Financial Stability and Regulatory Policy Team, HM Treasury, 1 Horse Guards Road, London SW1A 2HQ.