{
  "url": "https://openlegislation.uk/financial-services-and-markets-act-2023-digital-securities-sandbox-regulations-2023/schedule/part-3",
  "json_url": "https://openlegislation.uk/financial-services-and-markets-act-2023-digital-securities-sandbox-regulations-2023/schedule/part-3.json",
  "legislation": "uksi/2023/1398",
  "legislation_title": "The Financial Services and Markets Act 2023 (Digital Securities Sandbox) Regulations 2023",
  "legislation_url": "https://openlegislation.uk/financial-services-and-markets-act-2023-digital-securities-sandbox-regulations-2023",
  "path": "schedule/part/3",
  "kind": "part",
  "number": "3",
  "heading": null,
  "text": "This Part sets out modifications made to the Financial Services and Markets Act 2000 (FSMA 2000) and the version so modified is referred to in this Part as “DSS FSMA”. The provisions specified in the first column are modified as provided for in the corresponding entry in the second column.\nProvision\nModification\nSection 20\nTreat a reference to a “regulated activity”, in relation to a digital securities depository, as excluding such regulated activity that the digital securities depository carries on in connection with any of the FMI activities under regulation 3(5)(b) or ancillary FMI activities for which it has approval under its SAN;\nSection 55L\nTreat the power conferred by subsection (3) as exercisable by the Bank of England to impose requirements on a sandbox entrant where the Bank of England is the appropriate regulator.\nTreat that power as exercisable only if it appears to the Bank of England that any of the following conditions is met—\n(a)it is desirable to exercise the power in order to advance the Bank of England’s financial stability objective or implement the FMI sandbox arrangements under s13(1) of the Act;\n(b)the sandbox entrant has failed, or is likely to fail, to satisfy a requirement or condition in its SAN, or has failed to comply with any other obligation imposed on it by or under these Regulations.\nTreat the powers conferred by subsection (5) as exercisable by the Bank of England to impose requirements on a sandbox entrant on the application of that entity.\nTreat the powers in subsections (3) and (5) of DSS FSMA as exercisable whether or not there is a relationship between the entity in relation to which it is exercised and the persons whose interests will be protected by its exercise.\nTreat the following provisions as applying in relation to requirements imposed by the Bank of England under this section of DSS FSMA as they apply in relation to requirements imposed by the FCA, with the following modifications—\n(a)sub-section (6) (power to refuse an application);\n(b)section 55N (further provision);\n(c)section 55P (prohibitions and restrictions);\n(d)section 55R(1) (persons connected with an applicant);\n(e)section 55U(3) to (8) (applications under this part);\n(f)section 55V(1) to (6) (determination of applications);\n(g)section 55X(2) and (4)(f) (determination of applications: warning notices and decision notices on refusal of applications);\n(h)section 55Y (exercise of own-initiative power: procedure).\nThe modifications are—\n(a)a reference to the FCA is to be read as a reference to the Bank of England;\n(b)references to own-initiative powers are to be read as a reference to the power conferred by section 55L(3) of DSS FSMA;\n(c)references to an authorised person are to be read as a reference to a sandbox entrant;\n(d)in section 55L(6), the reference to the FCA’s operational objectives is to be read as a reference to the Bank of England’s Financial Stability Objective or implementing and operating the FMI sandbox arrangements;\n(e)section 55N has effect as if the reference to regulated activities in subsection (2) is a reference to FMI activities carried out in the DSS by a sandbox entrant.\nSection 128\nTreat references to a recognised CSD in subsections (1) and (2) as including a reference to a digital securities depository.\nSection 137T\nTreat the reference in paragraph (a) to “authorised persons” as including a reference to a sandbox entrant and a person participating under regulation 3(4).\nTreat sub-paragraph (b) as also including a reference to “guidance” where reference is made to “rules”.\nTreat the reference to “regulator” in sub-paragraph (b) as a reference to the appropriate regulator under regulation 3(8)(a) and (b).\nSection 138B\nTreat the references to “regulator” under subsections (1), (3), (4) and (5) as including a reference to the FCA as having a power to give directions under regulation 7.\nSection 138G\nTreat the powers conferred on “either regulator” referred to in subsections (1) and (2) as including an appropriate regulator.\nSection 138I\nTreat this section as disapplied.\nSection 138IA\nTreat this section as disapplied.\nSection 138IB\nTreat this section as disapplied.\nSection 138L\nTreat this section as disapplied.\nSection 138Q\nTreat subsection (5) as disapplied.\nSection 138R\nTreat this section as disapplied.\nSection 138S\nTreat subsection (2)(f)-(i) as disapplied.\nSection 139A\nTreat subsections (3), (4) and (5) as disapplied.\nSection 165\nTreat the references to “authorised person” in subsections (1), (3), (7), (8) and (11) as including a reference to a sandbox entrant and reference to “either regulator” as including a reference to an appropriate regulator.\nTreat subsection (4) as including—\n(c)“in relation to the exercise by an appropriate regulator of the powers conferred by subsections (1), (2) and (3) in exercising functions conferred by these Regulations”.”\nTreat subsection (7) as including a person participating under regulation 3(4).\nSection 166\nTreat the reference to “authorised person” in subsection (2)(a) as including a sandbox entrant and a person participating under regulation 3(4).\nTreat the reference to “either regulator” in subsection (1) as including a reference to the appropriate regulator.\nSection 166A\nTreat the references to “either regulator” in subsection (1) as including a reference to the appropriate regulator.\nTreat the reference to “authorised person” in subsections (1) to (4) and (7) to (9) as including a reference to a sandbox entrant and a person participating under regulation 3(4).\nSection 167\nTreat the references to an “authorised person” in subsections (1A) and (4A) as including a reference to a sandbox entrant and a person participating under regulation 3(4).\nTreat the reference to an “investigating authority” in subsection (5A) as including a reference to an appropriate regulator.\nSection 168\nTreat subsection (4) as including when a sandbox entrant, or a person participating under regulation 3(4) has failed to comply with a provision of these Regulations.\nTreat subsection (6) (investigating authority) as including the appropriate regulator if that regulator appointed the investigator.\nSection 170\nTreat subsection (10) (investigating authority) as including the appropriate regulator if that regulator appointed the investigator.\nSection 171\nTreat subsection (1A) as including a sandbox entrant, and a person participating under regulation 3(4).\nSection 175\nTreat “either regulator” under subsection (1) as including reference to an appropriate regulator.\nSection 176\nTreat subsection (3A) as including a reference to a sandbox entrant and a person participating under regulation 3(4).\nSection 204A\nTreat subsection (2) and (6) as each including—\n“(ab) by or under the Financial Services and Markets Act 2023”.\nSection 205\nTreat the reference to an “authorised person” as including a sandbox entrant and a person participating under regulation 3(4).\nSection 206\nTreat the reference to an “authorised person” as including a reference to a sandbox entrant and a person participating under regulation 3(4).\nSection 207(1)\nTreat the references to an “authorised person” as including a sandbox entrant and a person participating under regulation 3(4).\nSection 208\nTreat the references to an “authorised person” in subsections (1) and (4) as including a sandbox entrant and a person participating under regulation 3(4).\nSection 209\nTreat the reference to an “authorised person” as including a sandbox entrant and a person participating under regulation 3(4).\nSection 211\nTreat this section as disapplied.\nSection 285(3D)\nTreat a digital securities depository as exempt from the general prohibition in respect of any regulated activities carried on in connection with any of the FMI activities under regulation 3(5)(b) or ancillary FMI activities (as defined in these Regulations) for which it has approval under its SAN.\nSection 285A\nTreat the definition of “appropriate regulator” in subsection (2) as including a reference to the Bank of England.\nSection 296(1)\nTreat subsection (1) as modified so that—\nthe reference to “appropriate regulator” includes a reference to the appropriate regulator under regulation 3(8)(a) and (b),\nthe reference to “recognised body” includes a reference to a digital securities depository, and\nparagraph (b) includes a reference to obligations imposed by or under these Regulations.\nSection 298\nIn this section treat a reference to—\nthe “appropriate regulator” as including a reference to the Bank of England;\na “recognised body” as including a reference to a digital securities depository;\na “direction under section 296” as including a direction given under that section in relation to a digital securities depository.\nIn subsection (7A) treat a reference to “recognised CSD” as a reference to a digital securities depository.\nSection 299\nTreat a reference to “recognised body” as including a reference to a digital securities depository.\nSection 312E\nIn subsection (1) treat the reference to “recognised body” as including a reference to a digital securities depository.\nIn subsection (3)—\n(i)treat the reference to “appropriate regulator” as including a reference to the Bank of England;\n(ii)treat the reference to “relevant requirement” as including a requirement (which may include a requirement imposed by a SAN) that is imposed by or under these Regulations.\nSection 312F\nTreat the reference to “appropriate regulator” as including a reference to the Bank of England.\nTreat the reference to “recognised body” as including a digital securities depository.\nSection 312FA\nTreat the reference to “recognised CSD” as including a reference to a digital securities depository.\nTreat subsections (2)(c) and (3)-(4) as disapplied.\nSection 312G\nTreat the reference to “appropriate regulator” as including a reference to the Bank of England.\nTreat the reference to “recognised body” as including a reference to a digital securities depository.\nSection 312H\nTreat the reference to “appropriate regulator” as including a reference to the Bank of England.\nTreat the reference to “recognised body” as including a reference to a digital securities depository.\nSection 312I\nTreat the reference to “appropriate regulator” as including a reference to the Bank of England.\nSection 312J\nTreat the reference to “appropriate regulator” as including a reference to the Bank of England.\nSection 312K\nTreat this section as disapplied.\nSection 380\nTreat subsection (6)(a) as including a reference to “(vii) imposed by or under the Financial Services and Markets Act 2023.”\nTreat subsection (6)(b) as including a reference to “by or under the Financial Services and Markets Act 2023” after the word “Act”.\nTreat the references in subparagraphs (1) to (3), (6), and (9) to (11) to “appropriate regulator” as including a reference to an appropriate regulator.\nSection 382\nTreat subsection (9)(a) as including a reference to “(v) by or under the Financial Services and Markets Act 2023.”.\nTreat subsection (9)(b) a including a reference to “by or under the Financial Services and Markets Act 2023”.\nTreat the references to “appropriate regulator” in sub-paragraphs (1), (7), (9) and (12) to (14) as including a reference to an appropriate regulator.\nSection 384\nTreat the reference to an “authorised person” in subparagraph (1) as including a reference to a sandbox entrant and a person participating under regulation 3(4).\nTreat the references to “appropriate regulator” in subparagraph (1), (7) to (8) and (12) to (14) as including a reference to the FCA.\nTreat subsection (7) as including a reference to a requirement imposed by or under the Financial Services and Markets Act 2023.\nSection 396\nTreat this section as disapplied.\nSection 398\nTreat subsection (1A) as including a reference to the Financial Services and Markets Act 2023.\nSection 401\nTreat subsection (1) as including an offence under the Financial Services and Markets Act 2023.\nTreat the reference to “appropriate regulator” in subsection (3A)(i) as including a reference to the Bank of England.\nTreat the reference to “appropriate regulator” in subsection (3AB) as including a reference to the Bank of England.\nSection 403\nTreat subsection (7) as including a reference to the Financial Services and Markets Act 2023.\nSection 413(1)\nTreat the reference to “this Act” as including a reference to these Regulations.\nSection 417\nTreat the reference to rules in subsection (1) as including rules made by or under the Financial Services and Markets Act 2023.\nSchedule 17A—\nPart 1\nParagraphs 1 to 6\nTreat these paragraphs as disapplied.\nParagraphs 7\nTreat reference to a “recognised CSD” as including a reference to a digital securities depository.\nParagraph 8\nTreat this paragraph as disapplied.\nParagraph 9(2)\nTreat this sub-paragraph as modified so that a reference to the Bank of England includes the definition under regulation 3(8)(b);\nParagraph 10(1)\nTreat sub-paragraph (1) as modified so that\nthe reference to rules made by the Bank of England under any provision made by or under the Financial Services and Markets Act 2000 includes in relation to a reference to rules made by the Bank of England under regulation 7.\nTreat paragraphs (b), (c), (i) and (j) as disapplied.\nParagraph 10(2)\nTreat a reference to “recognised CSD” as including a reference to a digital securities depository.\nParagraph 10(3)\nTreat this sub-paragraph as disapplied.\nParagraph 10(4)\nTreat this sub-paragraph as disapplied.\nParagraph 10A\nTreat this paragraph as disapplied.\nParagraph 11(1)\nTreat a reference to “recognised CSD” as including a reference to a digital securities depository.\nParagraph 11(2)\nTreat paragraph (a) as including a reference to information or documents reasonably required in connection with the exercise by the Bank of England of functions conferred on it in connection with these Regulations.\nTreat paragraph (d)(i) as including a reference to these Regulations.\nParagraph 11(3)\nIn consequence of the modifications made to paragraph 11(2) by this Schedule, section 165(4) is disapplied in relation to sections 165(1) and (3), as modified under this paragraph 11.\nParagraph 12\nTreat the reference to a “recognised CSD” in this paragraph as including a reference to a digital securities depository.\nParagraph 13(1)\nTreat the reference to a “recognised CSD” in this subparagraph as including a reference to a digital securities depository.\nParagraph 14(2)\nTreat this subparagraph as modified to include a power that allows the Bank of England to exercise powers conferred by section 168(5) if it appears to the Bank of England that there are circumstances suggesting a digital securities depository may—\n(a)be guilty of an offence under section 398(1) or an offence under prescribed regulations relating to money laundering;\n(b)have contravened a provision made by or under these Regulations;\n(c)may have contravened its SAN; or\n(d)may have breached the general prohibition; and\n(e)treat sub-paragraphs (2)(e) to (o) as disapplied.\nParagraph 15\nTreat this paragraph as disapplied.\nParagraph 17(1)\nTreat paragraphs (e) and (f) as disapplied, and paragraph (h) as modified to refer to “sections 192K to 192M”.\nParagraph 17(2)\nTreat this subparagraph as including a reference to a digital securities depository.\nParagraph 17(3)\nTreat this subparagraph as modified to include—\n(a)the general condition in subsection (2) were that the Bank of England considers it is desirable to give the direction for the effective regulation of the FMI sandbox arrangements; and\n(b)treat a reference to a “recognised CSD” as including a digital securities depository.\nParagraph 17(4)\nTreat a reference to a “recognised CSD” as including a reference to a digital securities depository.\nParagraphs 18\nTreat a reference to a “recognised CSD” as including a reference to a digital securities depository.\nTreat subparagraph (1)(c) as disapplied.\nParagraph 19\nTreat a reference to a “recognised CSD” as including a reference to a digital securities depository.\nParagraph 20\nTreat a reference to a “recognised CSD” as including a reference to a digital securities depository.\nParagraph 21\nTreat a reference to a “recognised CSD” as including a reference to a digital securities depository.\nTreat a reference to section 345E in this paragraph as disapplied.\nParagraph 22\nTreat this paragraph as disapplied.\nParagraph 23\nTreat this paragraph as modified so that—\n(a)section 348 (restrictions on disclosure of confidential information by FCA, PRA etc) is modified so that subsections (2)(b) and (5) include a reference to the disclosure of confidential information to the Bank of England in connection with the DSS;\n(b)section 349 (exemptions from section 348) is modified so that subsection (2)(c) includes a reference to the Bank of England in connection with the FMI sandbox arrangements;\n(c)section 350 (disclosure of information by the Inland Revenue) is modified so that subsection (1)(a) includes reference to the Bank of England in connection with the FMI sandbox arrangements.\nTreat a reference to a “recognised CSD” in this paragraph as including a reference to a digital securities depository.\nParagraph 24(2)\nTreat a reference to a “recognised CSD” in this sub-paragraph as including a reference to a digital securities depository.\nParagraph 25(2)\nTreat this sub-paragraph as including a reference to the Bank of England.\nParagraph 26(2)\nTreat this subparagraph as modified so that for the purposes of the application under regulation 4, any reference in section 380 of FSMA 2000 as modified by this Part to a relevant requirement includes a requirement that is imposed under these Regulations—\n(a)in connection with a digital securities depository; or\n(b)a contravention of which constitutes an offence that the appropriate regulator has the power to prosecute by or under these Regulations.\nParagraph 28\nTreat this paragraph as modified as follows.\nThe power conferred by section 384(5) of FSMA 2000 is exercisable by the Bank of England where conditions A and B are met.\nCondition A is that the Bank is satisfied that a digital securities depository has contravened a relevant requirement, or been knowingly concerned in the contravention of a relevant requirement.\nCondition B is that—\n(a)profits have accrued to the digital securities depository as a result of the contravention; or\n(b)one or more persons have suffered loss or been otherwise adversely affected as a result of the contravention.\nFor these purposes a reference to “relevant requirement” has the meaning given in paragraph 26(2) as modified by this Part.\nWhere this paragraph applies, section 384(5) and (6) of FSMA 2000 are to have effect as if—\n(a)any reference to the person concerned were to a digital securities depository; and\n(b)any reference to subsection (1) were a reference to the second sentence of this modified version of paragraph 28.\nParagraph 29\nTreat this paragraph as modified so that—\n(a)a reference to a “recognised body” in the sections of FSMA 2000 referred to in this paragraph shall include a reference to a digital securities depository or a sandbox entrant;\n(b)the provisions of Part 26 (notices) apply in relation to a warning or decision notice given by the Bank of England under section 55X(2) or (4), section 312G or 312H, as they apply to those sections under this table.\nParagraph 30\nTreat this paragraph as modified so that section 398 (misleading FCA: residual cases) applies to information given to the Bank of England in purported compliance with a requirement that is imposed by or under any provision of these Regulations that apply to a digital securities depository.\nParagraph 32\nTreat this paragraph as modified so that paragraph 17 of Schedule 1ZB (records) applies in relation to the recording of decisions made by the Bank of England in the exercise of its functions relating to a digital securities depository.\nParagraph 33\nTreat this paragraph as disapplied.\nParagraph 34\nTreat a reference to a “recognised CSD” in this paragraph as including a reference to a digital securities depository.\nParagraph 35\nTreat a reference to a “recognised CSD” in this paragraph as including a reference to a digital securities depository.\nParagraph 36\nTreat paragraph (1) as modified to provide that the Bank of England may, in connection with the discharge of any of its functions by or under these Regulations, require a sandbox entrant or any person applying to participate in the DSS as a sandbox entrant, to pay fees to the Bank. of England.\nTreat paragraph (2) as disapplied.\nTreat paragraph (3) as providing the appropriate regulator under regulation 3(8)(b) with a power to set fees for the purpose of meeting expenses incurred by it or the FCA—\n(a)in preparation for the exercise of functions by the Bank of England in connection with the discharge of any of its functions relating to the DSS; or\n(b)for the purpose of facilitating the exercise by the Bank of England of those functions or otherwise in connection with their exercise by it.\nParagraph 37\nTreat this paragraph as providing the appropriate regulator under regulation 3(8)(b) with a power in connection with the FMI sandbox arrangements.",
  "extent": null,
  "status": null,
  "version": "current",
  "annotations": [
    {
      "type": "F",
      "label": "F1",
      "text": "Words in Sch. Pt. 3 Table inserted (3.3.2025) by The Financial Services and Markets Act 2023 (Digital Securities Sandbox) (Amendment) Regulations 2025 (S.I. 2025/93), regs. 1(2), 6(1)(a)"
    },
    {
      "type": "F",
      "label": "F2",
      "text": "Words in Sch. Pt. 3 Table inserted (3.3.2025) by The Financial Services and Markets Act 2023 (Digital Securities Sandbox) (Amendment) Regulations 2025 (S.I. 2025/93), regs. 1(2), 6(1)(b)"
    },
    {
      "type": "I",
      "label": "I1",
      "text": "Sch. Pt. 3 in force at 8.1.2024, see reg. 1(2)"
    }
  ],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/uksi/2023/1398/schedule/part/3",
    "retrieved_at": "2026-10-28T21:36:44.479087+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}