Regulation 22 Finance: exceptions from prohibitionsI1

United Kingdom

(1)

The prohibition in regulation 14 (asset-freeze in relation to designated persons) is not contravened by an independent person (“P”) transferring to another person a legal or equitable interest in funds or economic resources where, immediately before the transfer, the interest—

(a)

is held by P, and

(b)

is not held jointly with the designated person.

(2)

In paragraph (1), “independent person” means a person who—

(a)

is not the designated person, and

(b)

is not owned or controlled directly or indirectly (within the meaning of regulation 9 (meaning of “owned or controlled directly or indirectly”)) by the designated person.

(3)

The prohibitions in regulations 14 to 16 (asset-freeze in relation to, and making funds available to, or for the benefit of, designated persons) are not contravened by a relevant institution crediting a frozen account with interest or other earnings due on the account.

(4)

The prohibitions in regulations 15 and 16 (making funds available to, or for the benefit of, designated persons) are not contravened by a relevant institution crediting a frozen account where it receives funds transferred to that institution for crediting to that account.

(5)

The prohibitions in regulations 15 and 16 are not contravened by the transfer of funds to a relevant institution for crediting to an account held or controlled (directly or indirectly) by a designated person, where those funds are transferred in discharge (or partial discharge) of an obligation which arose before the date on which the person became a designated person.

(6)

The prohibitions in regulations 14 to 16 are not contravened in relation to a designated person (“P”) by a transfer of funds from account A to account B, where—

(a)

account A is with a relevant institution which carries on an excluded activity within the meaning of section 142D (excluded activities) of the Financial Services and Markets Act 2000^f1,

(b)

account B is with a ring-fenced body within the meaning of section 142A (“ring-fenced body”) of the Financial Services and Markets Act 2000^f2, and

(c)

accounts A and B are held or controlled (directly or indirectly) by P.

(7)

In this regulation—

“designated person” has the same meaning as it has in Part 3 (Finance);
“frozen account” means an account with a relevant institution which is held or controlled (directly or indirectly) by a designated person;
“relevant institution” means a person that has permission under Part 4A (Permission to carry on regulated activities) of the Financial Services and Markets Act 2000^f3.

(8)

The definition of “relevant institution” in paragraph (7) is to be read with section 22 (regulated activities) of the Financial Services and Markets Act 2000^f4, any relevant order under that section^f5 and Schedule 2 (regulated activities) to that Act^f6.

(9)

For the purposes of paragraphs (1)(b), (5), and (6) and the definition of “frozen account” in paragraph (7)—

(a)

references to a designated person are to be read as including a person (“C”) who is owned or controlled directly or indirectly by the designated person (“D”) in accordance with regulation 9 (meaning of “owned or controlled directly or indirectly”), and

(b)

in respect of C, the reference in paragraph (5) to the “date on which the person became a designated person” is to be read as the date on which D became a designated person.

Annotations

Commencement

I1: Reg. 22 in force at 15.10.2026, see reg. 1(2)

Footnotes

f1: 2000 c. 8. Section 142D was inserted by the Financial Services (Banking Reform) Act 2013 (c. 33), section 4(1).
f2: Section 142A was inserted by the Financial Services (Banking Reform) Act 2013 (c. 33), section 4(1).
f3: Part 4A was inserted by the Financial Services Act 2012 (c. 21), section 11 (2) and most recently amended by the Financial Services Act 2021 (c. 22), section 28 and Schedule 11, paragraphs 2 and 3; the Financial Services and Markets Act 2023 (c. 29), sections 20 (3) and 86, Schedule 5, paragraphs 4 to 12 and Schedule 8, paragraph 4; S.I. 2021/1376; S.I. 2023/612; S.I. 2023/1410; and S.I. 2023/1424.
f4: Section 22 was amended by the Financial Services Act 2012, section 7(1); the Financial Guidance and Claims Act 2018 (c. 10), section 27(4); the Financial Services and Markets Act 2023 (c. 29), section 69(3); S.I. 2013/113; S.I. 2018/135 and S.I. 2023/779.
f5: S.I. 2001/544 as most recently amended by S.I. 2021/494; S.I. 2021/90; S.I. 2022/466; S.I. 2022/582; S.I. 2022/726; S.I. 2023/1411; S.I. 2024/105; and S.I. 2024/169.
f6: Schedule 2 was amended by the Regulation of Financial Services (Land Transactions) Act 2005 (c. 24), section 1; the Dormant Bank and Building Society Accounts Act 2008 (c. 31), section 15 and Schedule 2, paragraph 1; the Financial Services Act 2012, sections 7(2) to (5) and 8; the Financial Guidance and Claims Act 2018 (c. 10), section 27(13); S.I. 2013/1881; S.I. 2018/135; and S.I. 2019/632.