(1) Subject to paragraph (2), where at commencement a person ("E") is performing a function for a person ("A") under an arrangement entered into by A or by a contractor of A, then if E's continued performance of that function after commencement would, but for this article, require the approval of the Authority under section 59(1) or (2), then that continued performance by E of that function after commencement is to be taken to have been approved by the Authority for the purposes of section 59.

(2) Paragraph (1) does not apply if -

(a) a notice of objection had been served on the person under -

(i) regulation 42 of the ISD Regulations;

(ii) section 22(1) or 24(1) of the Banking Act;

(iii) paragraph 2(2) or 4(1) of Schedule 2D to the Insurance Companies Act;

(iv) paragraph 4(2) or 6(1) of Schedule 13A to the Friendly Societies Act;

(b) immediately before commencement, the performance by E of that function would have constituted a contravention of a rule of a recognised self-regulating organisation to which either E or A was subject.