Session 2010 - 12
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Other Bills before Parliament

Financial Services Bill


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

235

 

      (3)  

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

31    (1)  

Section 401 (proceedings for offences) is amended as follows.

      (2)  

In subsections (2)(a) and (3)(a), for “Authority” substitute “appropriate

regulator”.

      (3)  

After subsection (3) insert—

5

“(3A)   

For the purposes of subsections (2)(a) and (3)(a), the PRA is the

“appropriate regulator” in respect of each of the following offences—

(a)   

an offence under section 55P(10) where the contravention is

of a requirement imposed by the PRA;

(b)   

an offence under section 56(4) where the prohibition order is

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made by the PRA;

(c)   

an offence under section 177(3) where the investigation is

being, or is likely to be, conducted on behalf of the PRA;

(d)   

an offence under section 177(4) where the requirement is

imposed by the PRA;

15

(e)   

an offence under section 177(6) where the warrant is issued as

a result of information on oath given by the PRA or a person

appointed by the PRA to conduct an investigation on its

behalf;

(f)   

an offence under section 191F(1) where the notice should

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have been given to the PRA;

(g)   

an offence under any of section 191F(2) to (7) where the

notice, approval or information was given to or by the PRA;

(h)   

an offence under section 366(3), unless the activity of

effecting or carrying out long-term contracts of insurance is

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not to any extent a PRA-regulated activity;

(i)   

an offence under section 398(1) where the information was

given to the PRA.

(3B)   

For the purposes of subsections (2)(a) and (3)(a), the FCA is the

“appropriate regulator” in respect of all other offences under this Act

30

or subordinate legislation made under this Act.”

      (4)  

In subsection (5), for “Authority” substitute “appropriate regulator”.

32    (1)  

Section 402 (power of the Authority to institute proceedings for certain other

offences) is amended as follows.

      (2)  

In subsections (1) and (2), for “Authority” substitute “FCA”.

35

      (3)  

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

 
 

Financial Services Bill
Schedule 9 — Discipline and enforcement
Part 8 — Co-operation

236

 

Part 8

Co-operation

33         

After section 415A insert—

“Consultation

415B    

Consultation in relation to taking certain enforcement action

5

(1)   

The FCA must consult the PRA before taking a qualifying step in

relation to a person who—

(a)   

is a PRA-authorised person, or

(b)   

has a qualifying relationship with a PRA-authorised person.

(2)   

The PRA must consult the FCA before taking a qualifying step.

10

(3)   

In this section any reference to the taking of a qualifying step is a

reference to—

(a)   

the giving of a warning notice or decision notice under

section 63B (performance of controlled functions without

approval),

15

(b)   

the giving of a warning notice or decision notice under

section 67 (disciplinary powers in relation to approved

person),

(c)   

the giving of a warning notice under section 126 or a decision

notice under section 127 (market abuse),

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(d)   

the giving of a warning notice or decision notice under

section 131H (short selling),

(e)   

the giving of a warning notice under section 207 or a decision

notice under section 208 (breaches of requirements imposed

by or under Act etc.),

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(f)   

the giving of a warning notice under section 312G or a

decision notice under section 312H (recognised bodies),

(g)   

the making of an application to the court under section

380, 381, 382 or 383 (injunctions or restitution), or

(h)   

the giving of a warning notice under section 385 or a decision

30

notice under section 386 (power of FCA or PRA to require

restitution).

(4)   

A person has a qualifying relationship with a PRA-authorised

person (“A”) for the purposes of this section if—

(a)   

the person is a member of A’s immediate group, or

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(b)   

in the case of a qualifying step within subsection (3)(a) or (b),

the person performs a significant-influence function under

an arrangement entered into by A, or by a contractor of A, in

relation to the carrying on by A of a regulated activity.

   

“Significant-influence function” and “arrangement” have the same

40

meanings as in section 59.”

 
 

Financial Services Bill
Schedule 10 — The Financial Services Compensation Scheme

237

 

Schedule 10

Section 35

 

The Financial Services Compensation Scheme

1          

Part 15 of FSMA 2000 (the Financial Services Compensation Scheme) is

amended as follows.

2     (1)  

Section 212 (the scheme manager) is amended as follows.

5

      (2)  

For subsections (1) and (2) substitute—

“(1)   

“The scheme manager” means the body corporate established by the

Financial Services Authority under this section as originally enacted.

(2)   

The regulators must take such steps as are necessary to ensure that

the scheme manager is, at all times, capable of exercising the

10

functions conferred on it by or under this Part or Part 15A.”

      (3)  

In subsections (4) and (5) for “Authority” substitute “regulators”.

3     (1)  

Section 213 (the compensation scheme) is amended as follows.

      (2)  

In each place, for “Authority” substitute “regulators”.

      (3)  

In subsection (1)—

15

(a)   

after “rules” insert “made in accordance with an order under

subsection (1A)”, and

(b)   

for the words from “cases where” to the end substitute “cases

where—

(a)   

relevant persons are unable, or likely to be unable, to

20

satisfy claims against them, or

(b)   

persons who have assumed responsibility for

liabilities arising from acts or omissions of relevant

persons (“successors”) are unable, or likely to be

unable, to satisfy claims against the successors that

25

are based on those acts or omissions.”

      (4)  

After subsection (1) insert—

“(1A)   

The Treasury must by order specify—

(a)   

the cases in which the FCA are, or are not, to make rules

under subsection (1), and

30

(b)   

the cases in which the PRA are, or are not, to make rules

under that subsection.”

      (5)  

In subsection (2), after “rules” insert “(taken together)”.

      (6)  

In subsection (9)(a), after “against him” insert “, or against a successor falling

within subsection (1)(b),”.

35

4          

In section 214 (general provisions of the scheme), in subsection (1), after

paragraph (a) insert—

“(aa)   

as to the circumstances in which a successor falling within

section 213(1)(b) is to be taken (for the purposes of the

scheme) to be unable, or likely to be unable, to satisfy claims

40

against the successor that are based on the acts or omissions

of a relevant person;”.

 
 

Financial Services Bill
Schedule 10 — The Financial Services Compensation Scheme

238

 

5          

In section 215 (rights of the scheme in insolvency), for “Authority”, in each

place, substitute “regulators”.

6          

In section 217 (insurers in financial difficulties), in subsection (5), for

“Authority” substitute “either regulator or both regulators”.

7          

After section 217 insert—

5

“Relationship with the regulators

217A    

Co-operation

(1)   

Each regulator and the scheme manager must take such steps as they

consider appropriate to co-operate with each other in the exercise of

their functions under this Part and Part 15A.

10

(2)   

Each regulator and the scheme manager must prepare and maintain

a memorandum describing how that regulator and the scheme

manager intend to comply with subsection (1).

(3)   

The scheme manager must ensure that the memoranda as currently

in force are published in the way appearing to it to be best calculated

15

to bring them to the attention of the public.”

8          

For the italic heading before section 218 substitute “Annual plan and report”.

9          

Before section 218 insert—

“217B   

Annual plan

(1)   

The scheme manager must in respect of each of its financial years

20

prepare an annual plan.

(2)   

The plan must be prepared before the start of the financial year.

(3)   

An annual plan in respect of a financial year must make provision

about the use of the resources of the scheme manager.

(4)   

The plan may include material relating to periods longer than the

25

financial year in question.

(5)   

Before preparing an annual plan, the scheme manager must consult

such persons (if any) as the scheme manager considers appropriate.

(6)   

The scheme manager must publish each annual plan in the way it

considers appropriate.”

30

10    (1)  

Section 218 (annual report) is amended as follows.

      (2)  

In subsections (1) and (2)(b), for “Authority” substitute “regulators”.

      (3)  

At the end insert—

“(4)   

The Treasury may—

(a)   

require the scheme manager to comply with any provisions

35

of the Companies Act 2006 about accounts and their audit

which would not otherwise apply to it, or

(b)   

direct that any such provision of that Act is to apply to the

scheme manager with such modifications as are specified in

the direction.

40

 
 

Financial Services Bill
Schedule 10 — The Financial Services Compensation Scheme

239

 

(5)   

Compliance with any requirement under subsection (4)(a) or (b) is

enforceable by injunction or, in Scotland, an order for specific

performance under section 45 of the Court of Session Act 1988.

(6)   

Proceedings under subsection (5) may be brought only by the

Treasury.”

5

11         

After section 218 insert—

“218ZA  

Audit of accounts

(1)   

The scheme manager must send a copy of its annual accounts to the

Comptroller and Auditor General and the Treasury as soon as is

reasonably practicable.

10

(2)   

The Comptroller and Auditor General must—

(a)   

examine, certify and report on accounts received under this

section, and

(b)   

send a copy of the certified accounts and the report to the

Treasury.

15

(3)   

The Treasury must lay the copy of the certified accounts and the

report before Parliament.

(4)   

The scheme manager must send a copy of the certified accounts and

the report to the regulators.

(5)   

Except as provided by section 218(4), the scheme manager is exempt

20

from the requirements of Part 16 of the Companies Act 2006 (audit),

and its balance sheet must contain a statement to that effect.

(6)   

In this section “annual accounts” has the meaning given by section

471 of the Companies Act 2006.”

12    (1)  

Section 218A (power to require information) is amended as follows.

25

      (2)  

In subsection (1)—

(a)   

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

and

(b)   

for “the Authority”, in the second and third place, substitute “that

regulator”.

30

      (3)  

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

      (4)  

In subsection (5), for “Authority’s” substitute “regulator’s”.

      (5)  

In the heading, for “Authority’s” substitute “Regulators’”.

13         

In section 224 (scheme manager’s power to inspect documents), in

subsection (1), after “relevant person,” insert “or a successor falling within

35

section 213(1)(b),”.

 
 

 
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Revised 27 January 2012