Session 2010 - 12
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Financial Services Bill


Financial Services Bill
Schedule 9 — Discipline and enforcement
Part 5 — Injunctions and restitution

228

 

(13)   

In the case of a contravention of a requirement where the

contravention constitutes an offence under this Act, the “appropriate

regulator” is the regulator which has power to prosecute the offence

(see section 401).

(14)   

The FCA is the “appropriate regulator” in the case of a contravention

5

of any other requirement.

(15)   

The Treasury may by order amend the definition of “appropriate

regulator”.”

16         

In section 383(1), (4), (5) and (9) (restitution orders in case of market abuse),

for “ Authority” substitute “FCA”.

10

17    (1)  

Section 384 (power of Authority to require restitution) is amended as

follows.

      (2)  

In subsection (1)—

(a)   

for “The Authority” substitute “The appropriate regulator”, and

(b)   

after “authorised person” insert “or recognised investment

15

exchange”.

      (3)  

In subsections (2) and (4), for “Authority” substitute “FCA”.

      (4)  

In subsection (5)—

(a)   

for “Authority”, in the first place, substitute “regulator exercising the

power (“the regulator concerned”)”, and

20

(b)   

for “Authority”, in each of the other places, substitute “regulator

concerned”.

      (5)  

In subsection (6), for “Authority” substitute “regulator concerned”.

      (6)  

In subsection (7)—

(a)   

in paragraph (a), for the words from “any directly applicable” to

25

“UCITS directive” substitute “a qualifying EU provision specified, or

of a description specified, for the purposes of this subsection by the

Treasury by order”, and

(b)   

in paragraph (b), for the words from “in relation to which” to the end

substitute “mentioned in section 402(1)”.

30

      (7)  

Omit subsection (8).

      (8)  

After subsection (8) insert—

“(9)   

The PRA is the “appropriate regulator” in the case of a contravention

of—

(a)   

a requirement that is imposed by the PRA under any

35

provision of this Act,

(b)   

a requirement under section 56(6) where the authorised

person concerned is a PRA-authorised person and the

prohibition order concerned is made by the PRA, or

(c)   

a requirement under section 59(1) or (2) where the authorised

40

person concerned is a PRA-authorised person and the

approval concerned falls to be given by the PRA.

(10)   

In the case of a contravention of a requirement that is imposed by a

qualifying EU provision, “the appropriate regulator” is whichever of

the PRA or the FCA (or both) is specified by the Treasury by order in

45

 
 

Financial Services Bill
Schedule 9 — Discipline and enforcement
Part 6 — Notice procedures

229

 

relation to the qualifying EU provision for the purposes of this

section.

(11)   

In the case of a contravention of a requirement where the

contravention constitutes an offence under this Act, the “appropriate

regulator” is the regulator which has power to prosecute the offence

5

(see section 401).

(12)   

The FCA is the “appropriate regulator” in the case of a contravention

of any other requirement.

(13)   

The Treasury may by order amend the definition of “appropriate

regulator”.”

10

      (9)  

In the heading, for “Authority” substitute “FCA or PRA”.

     (10)  

In the italic heading before section 384, for “Authority” substitute “FCA or

PRA”.

18    (1)  

Section 385 (warning notices) is amended as follows.

      (2)  

In subsection (1), for “the Authority” substitute “a regulator”.

15

      (3)  

In subsection (2), for “the Authority” substitute “the regulator”.

19         

In section 386(1) and (3) (decision notices), for “Authority” substitute

“regulator”.

Part 6

Notice procedures

20

20    (1)  

Section 387 (warning notices) is amended as follows.

      (2)  

In subsection (1)(a), for “Authority” substitute “regulator giving the notice

(“the regulator concerned”)”.

      (3)  

After subsection (1) insert—

“(1A)   

Where the PRA is the regulator concerned and the FCA proposes to

25

refuse consent for the purposes of section 55F, 55I or 59 or to give

conditional consent as mentioned in section 55F(5) or 55I(8), the

warning notice given by the PRA must—

(a)   

state that fact, and

(b)   

give the reasons for the FCA’s proposal.”

30

      (4)  

In subsection (2)—

(a)   

for “The warning” substitute “A warning”,

(b)   

for “28 days” substitute “14 days”, and

(c)   

for “Authority” substitute “regulator concerned”.

      (5)  

In subsection (3), for “The Authority” substitute “The regulator concerned”.

35

      (6)  

After subsection (3) insert—

“(3A)   

Where the PRA receives any representations in response to a

warning notice given by it under section 55X(1) or (2) or 62(2) in a

case falling within subsection (1A) it must—

 
 

Financial Services Bill
Schedule 9 — Discipline and enforcement
Part 6 — Notice procedures

230

 

(a)   

if the representations are in writing, give a copy to the FCA,

or

(b)   

if they are not in writing and have not been given directly to

the FCA by the person making them, provide the FCA with a

record of them.”

5

      (7)  

In subsection (4), for “The Authority” substitute “The regulator concerned”.

21    (1)  

Section 388 (decision notices) is amended as follows.

      (2)  

In subsection (1)(b), for “the Authority’s reasons” substitute “the reasons of

the regulator giving the notice (“the regulator concerned”)”.

      (3)  

After subsection (1) insert—

10

“(1A)   

Where the PRA is the regulator concerned and the FCA has decided

to refuse consent for the purposes of section 55F, 55I or 59 or to give

conditional consent as mentioned in section 55F(5) or 55I(8), the

decision notice given by the PRA must—

(a)   

state that fact, and

15

(b)   

give the reasons for the FCA’s decision.”

      (4)  

In subsections (3) and (4), for “The Authority” substitute “The regulator

concerned”.

22         

In section 389(1) (notices of discontinuance)—

(a)   

for “the Authority” substitute “a regulator”, and

20

(b)   

in paragraphs (a) and (b), after “notice” insert “given by it”.

23    (1)  

Section 390 (final notices) is amended as follows.

      (2)  

In subsection (1)—

(a)   

for “the Authority”, in the first place, substitute “a regulator”, and

(b)   

for “the Authority”, in the second place, substitute “the regulator”.

25

      (3)  

In subsection (2)—

(a)   

for “the Authority”, in the first place, substitute “a regulator”, and

(b)   

for “the Authority”, in the second place, substitute “the regulator”.

      (4)  

In subsections (9) and (10), for “the Authority” substitute “the regulator

giving the notice”.

30

24    (1)  

Section 391 (publication) is amended as follows.

      (2)  

For subsection (1) substitute—

“(1)   

In the case of a warning notice falling within subsection (1ZB)—

(a)   

neither the regulator giving the notice nor a person to whom

it is given or copied may publish the notice;

35

(b)   

a person to whom the notice is given or copied may not

publish any details concerning the notice unless the regulator

giving the notice has published those details; and

(c)   

after consulting the persons to whom the notice is given or

copied, the regulator giving the notice may publish such

40

information about the matter to which the notice relates as it

considers appropriate.

 
 

Financial Services Bill
Schedule 9 — Discipline and enforcement
Part 6 — Notice procedures

231

 

(1ZA)   

In the case of a warning notice not falling within subsection (1ZB),

neither the regulator giving the notice nor a person to whom it is

given or copied may publish the notice or any details concerning it.

(1ZB)   

A warning notice falls within this subsection if it is given under—

(a)   

section 63B;

5

(b)   

section 67;

(c)   

section 87M;

(d)   

section 88B;

(e)   

section 89K;

(f)   

section 89R;

10

(g)   

section 92;

(h)   

section 126;

(i)   

section 131H;

(j)   

section 192L;

(k)   

section 207;

15

(l)   

section 312G;

(m)   

section 345B.”

      (3)  

In subsections (1A), (2) and (3), for “Authority” substitute “regulator giving

the notice”.

      (4)  

In subsection (4)—

20

(a)   

for “The Authority” substitute “The regulator giving a decision or

final notice”, and

(b)   

for “a decision notice or final notice” substitute “the notice”.

      (5)  

In subsection (5), for “Authority” substitute “regulator giving the notice”.

      (6)  

For subsection (6) substitute—

25

“(6)   

The FCA may not publish information under this section if, in its

opinion, publication of the information would be—

(a)   

unfair to the person with respect to whom the action was

taken (or was proposed to be taken),

(b)   

prejudicial to the interests of consumers, or

30

(c)   

detrimental to the stability of the UK financial system.

(6A)   

The PRA may not publish information under this section if, in its

opinion, publication of the information would be—

(a)   

unfair to the person with respect to whom the action was

taken (or was proposed to be taken),

35

(b)   

prejudicial to the safety and soundness of PRA-authorised

persons, or

(c)   

in a case where section 2C applies, prejudicial to securing the

appropriate degree of protection for policyholders.”

      (7)  

In subsection (7), for “Authority” substitute “regulator”.

40

25    (1)  

Section 392 (application of sections 393 and 394) is amended as follows.

      (2)  

In paragraph (a)—

(a)   

for “54(1)” substitute “55Z(1)”, and

(b)   

after “131H(1),” insert “192L(1),”.

 
 

Financial Services Bill
Schedule 9 — Discipline and enforcement
Part 6 — Notice procedures

232

 

      (3)  

In paragraph (b)—

(a)   

for “54(2)” substitute “55Z(2)”, and

(b)   

after “131H(4),” insert “192L(4),”.

26    (1)  

Section 393 (third party rights) is amended as follows.

      (2)  

In subsections (1)(b) and (2), for “Authority” substitute “regulator giving the

5

notice”.

      (3)  

In subsection (3)—

(a)   

for “28 days” substitute “14 days”, and

(b)   

for “the Authority” substitute “the regulator giving the notice”.

      (4)  

In subsections (4)(b), (6), (7), (9)(b) and (11)(b), for “the Authority” substitute

10

“the regulator giving the notice”.

      (5)  

In subsection (12), for “which the Authority must disclose” substitute “to

which access must be given”.

27    (1)  

Section 394 (access to Authority material) is amended as follows.

      (2)  

In subsection (1)—

15

(a)   

in the opening words, for “the Authority” substitute “a regulator”,

and

(b)   

in paragraph (b), for “, in the opinion of the Authority,” substitute

“, in the regulator’s opinion,”.

      (3)  

In subsection (2), for “the Authority”, in both places, substitute “the

20

regulator giving the notice”.

      (4)  

In subsection (3), for “The Authority” substitute “The regulator giving the

notice”.

      (5)  

In subsection (4)—

(a)   

for “the Authority” substitute “the regulator giving the notice”, and

25

(b)   

for “the Authority’s” substitute “the regulator’s”.

      (6)  

In subsection (5), for “the Authority” substitute “the regulator giving the

notice”.

      (7)  

In subsection (6)—

(a)   

in paragraph (a), for “the Authority” substitute “the regulator giving

30

the notice”, and

(b)   

in paragraph (b), for “the Authority in connection with the matter to

which the notice to which this section applies” substitute “the

regulator giving the notice in connection with the matter to which

that notice”.

35

      (8)  

In the heading, for “Authority” substitute “FCA or PRA”.

28    (1)  

Section 395 (the Authority’s procedures) is amended as follows.

      (2)  

For subsection (1) substitute—

“(1)   

Each regulator must determine the procedure that it proposes to

follow in relation to the following—

40

(a)   

a decision which gives rise to an obligation to give a

supervisory notice,

 
 

Financial Services Bill
Schedule 9 — Discipline and enforcement
Part 6 — Notice procedures

233

 

(b)   

in the case of the FCA, a decision which—

(i)   

gives rise to an obligation for it to give a warning

notice or decision notice, or

(ii)   

gives rise to an obligation for the PRA to include a

statement under section 387(1A) in a warning notice

5

or a statement under section 388(1A) in a decision

notice,

(c)   

in the case of the PRA, a decision which gives rise to an

obligation for it to give a warning notice or decision notice,

other than a decision which depends entirely on a decision of

10

the FCA of the kind mentioned in paragraph (b)(ii).”

      (3)  

In subsection (2)—

(a)   

omit the words from “which gives” to “such notice”, and

(b)   

at the end insert “, or by 2 or more persons who include a person not

directly involved in establishing that evidence”.

15

      (4)  

In subsection (3), for the words from “taken” to the end substitute “taken

otherwise as mentioned in subsection (2) if the person taking the decision is

of a level of seniority laid down by the procedure and—

(a)   

in the case of procedure proposed by the FCA, the FCA

considers that, in the particular case, it is necessary in order

20

to advance one or more of its operational objectives, or

(b)   

in the case of procedure proposed by the PRA, the PRA

considers that, in the particular case, it is necessary in order

to advance any of its objectives.”

      (5)  

In subsection (5)—

25

(a)   

for “The Authority” substitute “Each regulator”, and

(b)   

for “the procedure” substitute “its procedure”.

      (6)  

In subsection (6)—

(a)   

for “the Authority” substitute “the regulator issuing it”, and

(b)   

for “it” substitute “the statement”.

30

      (7)  

In subsection (7), for “The Authority” substitute “The regulator issuing the

statement”.

      (8)  

In subsection (8)—

(a)   

for “The Authority” substitute “The regulator issuing a statement

under this section”, and

35

(b)   

for “any statement which it issues under this section” substitute “the

statement”.

      (9)  

In subsection (9)—

(a)   

for “giving” substitute “a regulator gives”,

(b)   

after “decision notice,” insert “other than a warning notice or

40

decision notice relating to a decision of the PRA that is required by a

a decision of the FCA of the kind mentioned in subsection (1)(b)(ii)”,

and

(c)   

for “the Authority” substitute “the regulator”.

 
 

Financial Services Bill
Schedule 9 — Discipline and enforcement
Part 7 — Offences

234

 

     (10)  

After subsection (9) insert—

“(9A)   

When the FCA takes a decision falling within subsection (1)(b)(ii), it

must follow its stated procedure.”

     (11)  

In subsection (10)—

(a)   

for “the Authority” substitute “a regulator”, and

5

(b)   

for “the procedure” substitute “its procedure”.

     (12)  

In subsection (11), for “The Authority’s” substitute “A regulator’s”.

     (13)  

In subsection (13), for paragraph (a) substitute—

“(a)   

55Y(4), (7) or (8)(b);”.

     (14)  

In the heading, for “Authority’s” substitute “FCA’s and PRA’s”.

10

     (15)  

In the italic heading before that section, for “Authority’s” substitute “FCA’s

and PRA’s”.

29    (1)  

Section 396 (statements under s.395: consultation) is amended as follows.

      (2)  

In subsection (1)—

(a)   

after “a statement of” insert “its”,

15

(b)   

for “the Authority”, in the first place, substitute “the regulator”,

(c)   

for “the Authority”, in the second place, substitute “it”, and

(d)   

for “it” substitute “the draft”.

      (3)  

In subsection (2), for “Authority” substitute “regulator publishing the draft”.

      (4)  

In subsection (3), for “Before issuing the proposed statement of procedure,

20

the Authority” substitute “Before a regulator issues the proposed statement

of its procedure, it”.

      (5)  

In subsection (4), for “Authority issues the proposed statement of

procedure” substitute “regulator issues the proposed statement of its

procedure,”.

25

      (6)  

In subsection (5)—

(a)   

for “statement of procedure differs from the draft published”

substitute “statement of the regulator’s procedure differs from the

draft published by it”,

(b)   

for “, in the opinion of the Authority,” substitute “, in its opinion,”,

30

and

(c)   

for “the Authority must” substitute “it must”.

      (7)  

In subsection (6)—

(a)   

for “The Authority” substitute “The regulator publishing a draft

under subsection (1)”, and

35

(b)   

for “a draft published under subsection (1)” substitute “the draft”.

Part 7

Offences

30    (1)  

Section 398 (misleading the Authority: residual cases) is amended as

follows.

40

      (2)  

In subsection (1), for “the Authority” substitute “a regulator”.

 
 

 
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Revised 27 January 2012