A
BILL
TO
Require certain financial institutions to prepare parallel accounts on the basis
of the lower of historic cost and mark to market for their exposure to
derivatives; and for connected purposes.
Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—
1 Parallel accounts: prudent accounts of true capital and true profits
(1) After section 397(1) of the Companies Act 2006 insert—
“(2)
Where the company making a statement under subsection (1) is any
financial services company regulated under the Financial Services and
5Markets Act 2000 the directors shall also prepare additional individual
accounts according to section 396 and these additional individual
accounts shall be known as “the prudent accounts of true capital and
true profits” and these accounts shall be the relevant accounts for the
purposes of Part 18 and Part 23 of this Act.”
(2) 10In the Companies Act 2006—
(a) after section 712(2)(b)(ii) insert—
“(iii)
or where the relevant accounts are prudent
accounts of true capital and profits under section
397(2), provisions of a kind according to the
15regulations from the Secretary of State
prescribed under section 396;”; and
(b) after section 836(1)(b)(ii) insert—
“(iii)
or where the relevant accounts are prudent
accounts of true capital and profits under section
20397(2), provisions of a kind according to the
regulations from the Secretary of State
prescribed under section 396;”.
Financial Services (Regulation of Derivatives) BillPage 2
2 Right to return to preparing Companies Act individual accounts
After section 395(4)(c) of the Companies Act 2006 insert—
“(d)
and where the company is in any group containing any
financial services company regulated under the Financial
5Services and Markets Act 2000 and its accounts prepared in
accordance with Article 4 of the IAS Regulation would not
comply with sections 831, 832, 853(4) or Part 18 and Part 23 of
this Act.”.
3 Cessation of effect
10This Act shall cease to have effect in the event that the European Union-IAS
Regulation 2002 produces accounts that in the opinion of the Secretary of State
comply with and are consistent with: the Regulations from the Secretary of
State, sections 831, 832, 853(4) and Part 18 and Part 23 of the Companies Act
2006, in particular the requirement for amounts stated in accounts to be
15prudent, to include no unrealised profits, to make provisions for likely
contingent liabilities and for loans and other financial instruments to be stated
at the lower of cost and net realisable value.
4 Definition of certain financial institutions
For the purpose of section 1 of this Act a financial services company is any
20company regulated under the Financial Services and Markets Act 2000.
5 Short title, commencement and extent
(1)
This Act may be cited as the Financial Services (Regulation of Derivatives) Act
2011.
(2) This Act comes into force on the day on which it is passed.
(3) 25This Act extends to England and Wales, Scotland and Northern Ireland.