Financial Services Bill

Session 2010 - 12
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Other Bills before Parliament

Financial Services Bill

Financial Services Bill
Schedule 12 — Amendments of Parts 11 and 23 of FSMA 2000
Part 1 — Part 11 of FSMA 2000: information gathering and investigations
247

(5)
The skilled person may require any person to provide all such
assistance as the skilled person may reasonably require to collect or
update the information in question.
(6)
A requirement imposed under subsection (5) is enforceable, on the
application of the regulator in question, by an injunction or, in
5
Scotland, by an order for specific performance under section 45 of the
Court of Session Act 1988.
(7)
A contractual or other requirement imposed on a person (“P”) to
keep any information in confidence does not apply if—
(a)
the information is or may be relevant to anything required to
10
be done as a result of this section,
(b)
an authorised person or a skilled person requests or requires
P to provide the information for the purpose of securing that
those things are done, and
(c)
the regulator in question has approved the making of the
15
request or the imposition of the requirement before it is made
or imposed.
(8)
An authorised person may provide information (whether received
under subsection (7) or otherwise) that would otherwise be subject to
a contractual or other requirement to keep it in confidence if it is
20
provided for the purposes of anything required to be done as a result
of this section.
(9)
A regulator may make rules providing for expenses incurred by it in
relation to an appointment under subsection (2)(b) to be payable as a
fee by the authorised person.
25
(10)
In this section “authorised person”, in relation to the PRA, means
PRA-authorised person.”
7     (1)
Section 167 (appointment of investigator in general cases) is amended as
follows.
      (2)
In subsection (1), for “the Authority or the Secretary of State (“the
30
investigating authority”)” substitute “an investigating authority”.
      (3)
After subsection (5) insert—
“(5A)
“Investigating authority” means—
(a)
in relation to a recognised investment exchange, the
Secretary of State or the FCA;
35
(b)
in relation to an authorised person or former authorised
person, the FCA or the PRA;
(c)
in relation to an appointed representative or former
appointed representative, the FCA or the PRA.”
8     (1)
Section 168 (appointment of investigator in specific cases) is amended as
40
follows.
      (2)
In subsection (1)—
(a)
omit paragraph (a), and
(b)
in paragraph (b), for “191” substitute “191F”.
      (3)
In subsection (4)—
45

Financial Services Bill
Schedule 12 — Amendments of Parts 11 and 23 of FSMA 2000
Part 1 — Part 11 of FSMA 2000: information gathering and investigations
248

(a)
in the opening words, for “the Authority” substitute “an
investigating authority”,
(b)
in paragraph (c), for “Authority” substitute “investigating
authority”,
(c)
after that paragraph insert—
5
“(ca)
a recognised investment exchange may have
contravened the recognition requirements (within the
meaning of Part 18);”,
(d)
in paragraph (f), for “an authorised or exempt person” substitute “a
person”,
10
(e)
in paragraph (h), for “Authority” substitute “investigating
authority”,
(f)
in paragraph (j), omit the words from “or by any” to the end, and
(g)
after that paragraph insert—
“(k)
a person may have contravened a qualifying EU
15
provision that is specified, or of a description
specified, for the purposes of this subsection by the
Treasury by order.”
      (4)
In subsection (5), for “Authority” substitute “investigating authority”.
      (5)
For subsection (6) substitute—
20
“(6)
“Investigating authority” means—
(a)
in subsections (1) to (3), the FCA, the PRA or the Secretary of
State;
(b)
in subsections (4) and (5), the FCA or the PRA.”
9     (1)
Section 169 (investigations at the request of an overseas regulator) is
25
amended as follows.
      (2)
In subsection (1), for “the Authority” substitute “a regulator”.
      (3)
In subsections (3) and (4), in each place, for “Authority” substitute
“regulator”.
      (4)
In subsection (5), in each place, for “Authority” substitute “regulator”.
30
      (5)
In subsection (6), for “Authority” substitute “regulator”.
      (6)
In subsection (7), for “the Authority” substitute “a regulator”.
      (7)
In subsection (8), for “Authority” substitute “regulator”,
      (8)
In subsection (9), for “The Authority” substitute “Each regulator”.
      (9)
In subsection (11), for “Authority” substitute “regulator”.
35
10
In section 169A (supporting an overseas regulator regarding financial
stability), in subsection (1), for “Authority” substitute “PRA”.
11
In section 170 (investigations: general), in subsection (10), for paragraphs (a)
and (b) substitute—
“(a)
the FCA, if the FCA appointed the investigator;
40
(aa)
the PRA, if the PRA appointed the investigator;
(b)
the Secretary of State, if the Secretary of State appointed the
investigator.”

Financial Services Bill
Schedule 12 — Amendments of Parts 11 and 23 of FSMA 2000
Part 1 — Part 11 of FSMA 2000: information gathering and investigations
249

12
In section 174 (admissibility of statements to investigators), in subsection (2),
for “the Authority” substitute “a regulator”.
13    (1)
Section 175 (information and documents: supplemental) is amended as
follows.
      (2)
In subsection (1), for “the Authority” substitute “either regulator”.
5
      (3)
After subsection (2) insert—
“(2A)
A document so produced may be retained for so long as the person
to whom it is produced considers that it is necessary to retain it
(rather than copies of it) for the purposes for which the document
was requested.
10
(2B)
If the person to whom a document is so produced has reasonable
grounds for believing—
(a)
that the document may have to be produced for the purposes
of any legal proceedings, and
(b)
that it might otherwise be unavailable for those purposes,
15

it may be retained until the proceedings are concluded.”
      (4)
In subsection (3), for “Authority” substitute “regulator”.
14    (1)
Section 176 (entry of premises under warrant) is amended as follows.
      (2)
In subsection (1), for “the Authority” substitute “either regulator”.
      (3)
After subsection (5) insert—
20
“(5A)
A warrant under this section may be executed by any constable.
(5B)
The warrant may authorise persons to accompany any constable
who is executing it.
(5C)
The powers in subsection (5) may be exercised by a person
authorised by the warrant to accompany a constable; but that person
25
may exercise those powers only in the company of, and under the
supervision of, a constable.”
      (4)
In subsection (6), for “16” substitute “16(3) to (12)”.
      (5)
In subsection (7), for “18” substitute “18(3) to (12)”.
      (6)
Omit subsection (8).
30
      (7)
In subsection (11), in paragraph (a), for “the Authority” substitute “a
regulator”.
15
After section 176 insert—
“176A
Retention of documents taken under section 176
(1)
Any document of which possession is taken under section 176 (“a
35
seized document”) may be retained so long as it is necessary to retain
it (rather than copies of it) in the circumstances.
(2)
A person claiming to be the owner of a seized document may apply
to a magistrates’ court or (in Scotland) the sheriff for an order for the
delivery of the document to the person appearing to the court or
40
sheriff to be the owner.

Financial Services Bill
Schedule 12 — Amendments of Parts 11 and 23 of FSMA 2000
Part 2 — Part 23 of FSMA 2000: public record, disclosure of information and co-operation
250

(3)
If on an application under subsection (2) the court or (in Scotland) the
sheriff cannot ascertain who is the owner of the seized document the
court or sheriff (as the case may be) may make such order as the court
or sheriff thinks fit.
(4)
An order under subsection (2) or (3) does not affect the right of any
5
person to take legal proceedings against any person in possession of
a seized document for the recovery of the document.
(5)
Any right to bring proceedings (as described in subsection (4)) may
only be exercised within 6 months of the date of the order made
under subsection (2) or (3).”
10
Part 2
Part 23 of FSMA 2000: public record, disclosure of information and co-
operation
16    (1)
Section 347 (record of authorised persons) is amended as follows.
      (2)
In subsections (1) to (6), for “Authority”, in each place, substitute “FCA”.
15
      (3)
Omit subsection (1)(f).
      (4)
In subsection (2), in paragraph (e)—
(a)
omit “or recognised clearing house,”, and
(b)
omit “or clearing house”.
      (5)
In subsection (8), for “Authority” substitute “FCA or the PRA”.
20
17
After section 347 insert—
“347A
Duty of PRA to disclose information relevant to the record
(1)
The PRA must, for the purpose of assisting the FCA to comply with
its duty under section 347—
(a)
notify the FCA if the information included in the record as
25
required under section 347(2)(a) appears to the PRA to be
incomplete or inaccurate,
(b)
if it makes a prohibition order relating to an individual,
provide the FCA with information falling within section
347(2)(f) in relation to that order,
30
(c)
where it is the appropriate regulator in relation to an
approved person, provide the FCA with information falling
within section 347(2)(g) in relation to that approved person,
and
(d)
where the FCA has notified the PRA that it considers it
35
appropriate to include in the record information of a certain
description, disclose to the FCA such information of that
description as the PRA has in its possession.
(2)
The duty to provide information under this section does not apply to
information which the PRA reasonably believes is in the possession
40
of the FCA.
(3)
Subsection (1) does not require or authorise the disclosure of
information whose disclosure is prohibited by or under section 348.

Financial Services Bill
Schedule 12 — Amendments of Parts 11 and 23 of FSMA 2000
Part 2 — Part 23 of FSMA 2000: public record, disclosure of information and co-operation
251

(4)
This section is without prejudice to any other power to disclose
information.
(5)
In this section references to the “record” are to the record maintained
under section 347.”
18    (1)
Section 348 (restrictions on disclosure of information) is amended as follows.
5
      (2)
In subsection (2)(b)—
(a)
for “Authority” substitute “FCA, the PRA”, and
(b)
omit “, the competent authority for the purposes of Part VI”.
      (3)
In subsection (5)—
(a)
for paragraph (a) substitute—
10
“(a)
the FCA;
(aa)
the PRA;”,
(b)
omit paragraph (b),
(c)
in paragraph (d), for “139E” substitute “166A”, and
(d)
after paragraph (e) insert—
15
“(ea)
a person who is or has been engaged to provide
services to a person mentioned in those paragraphs;”.
      (4)
In subsection (6)—
(a)
in paragraph (a), for “the competent authority” substitute “the FCA”,
(b)
in paragraph (b), for “Authority” substitute “FCA, the PRA”, and
20
(c)
omit paragraph (c).
      (5)
In the heading for “Authority” substitute “FCA, PRA”.
19    (1)
Section 349 (exceptions from section 348) is amended as follows.
      (2)
In subsection (2)(c), for “Authority” substitute “FCA or the PRA”.
      (3)
In subsection (3A)(a), for “Authority” substitute “FCA or the PRA”.
25
      (4)
In subsection (3B)(c), for “Authority’s functions” substitute “functions of the
FCA or the PRA”.
20    (1)
Section 350 (disclosure of information to HMRC) is amended as follows.
      (2)
For subsection (1) substitute—
“(1)
No obligation as to secrecy imposed by statute or otherwise prevents
30
the disclosure of Revenue information to—
(a)
the FCA or the PRA, if the disclosure is made for the purpose
of assisting or enabling that regulator to discharge its
functions under this or any other Act, or
(b)
the Secretary of State, if the disclosure is made for the
35
purpose of assisting in the investigation of a matter under
section 168 or with a view to the appointment of an
investigator under that section.”
      (3)
In subsection (4), for “subsection (1)” substitute “subsection (1)(b)”.
      (4)
In subsection (5)(b), at the beginning insert “where the information is
40
obtained as a result of subsection (1)(b),”.
21
Omit section 351 (competition information).

Financial Services Bill
Schedule 12 — Amendments of Parts 11 and 23 of FSMA 2000
Part 2 — Part 23 of FSMA 2000: public record, disclosure of information and co-operation
252

22
In section 351A (disclosure under the UCITS directive), in subsection (1), for
“the Authority” substitute “the FCA or the PRA”.
23    (1)
In section 353 (removal of other restrictions on disclosure), in subsection
(1)(b)—
(a)
for “Authority”, in the first place, substitute “FCA or the PRA”, and
5
(b)
for “Authority”, in the second place, substitute “either of them”.
24
After section 353 insert—
“Information received from Bank of England
353A
Information received from Bank of England
(1)
A regulator must not disclose to any person specially protected
10
information.
(2)
“Specially protected information” is information in relation to which
the first and second conditions are met.
(3)
The first condition is that the regulator received the information
from—
15
(a)
the Bank of England (“the Bank”), or
(b)
the other regulator where that regulator had received the
information from the Bank.
(4)
The second condition is that the Bank notified the regulator to which
it disclosed the information that the Bank held the information for
20
the purpose of its functions with respect to any of the following—
(a)
monetary policy;
(b)
financial operations intended to support financial
institutions for the purposes of maintaining stability;
(c)
the provision of private banking services and related
25
services.
(5)
The notification referred to in subsection (4) must be—
(a)
in writing, and
(b)
given before, or at the same time as, the Bank discloses the
information.
30
(6)
The prohibition in subsection (1) does not apply—
(a)
to disclosure by one regulator to the other regulator where
the regulator making the disclosure informs the other
regulator that the information is specially protected
information by virtue of this section;
35
(b)
where the Bank has consented to disclosure of the
information;
(c)
to information which has been made available to the public
by virtue of being disclosed in any circumstances in which, or
for any purposes for which, disclosure is not precluded by
40
this section;
(d)
to information which the regulator is required to disclose in
pursuance of any EU obligation.
(7)
In this section references to disclosure by or to a regulator or by the
Bank include references to disclosure by or to—
45

Financial Services Bill
Schedule 12 — Amendments of Parts 11 and 23 of FSMA 2000
Part 2 — Part 23 of FSMA 2000: public record, disclosure of information and co-operation
253

(a)
persons who are, or are acting as,—
(i)
officers of, members of the staff of, or members of the
governing body of, the regulator, or
(ii)
directors, officers, employees or agents of the Bank, or
(b)
auditors, experts, contractors or investigators appointed by
5
the regulator or the Bank under powers conferred by this Act
or otherwise.
(8)
References to disclosure by a regulator do not include references to
disclosure between persons who fall within any paragraph of
subsection (7)(a) or (b) in relation to that regulator.
10
(9)
Each regulator must take such steps as are reasonable in the
circumstances to prevent the disclosure of specially protected
information, in cases not excluded by subsection (6), by those who
are or have been—
(a)
its officers or members of staff (including persons acting as its
15
officers or members of staff) or members of its governing
body;
(b)
auditors, experts, contractors or investigators appointed by
the regulator under powers conferred by this Act or
otherwise;
20
(c)
persons to whom the regulator has delegated any of its
functions.”
25
For section 354 substitute—
“354A
  FCA’s duty to co-operate with others
(1)
The FCA must take such steps as it considers appropriate to co-
25
operate with other persons (whether in the United Kingdom or
elsewhere) who have functions—
(a)
similar to those of the FCA, or
(b)
in relation to the prevention or detection of financial crime.
(2)
The persons referred to in subsection (1) do not include the Bank of
30
England or the PRA (but see sections 3D and 3P).
(3)
The FCA must take such steps as it considers appropriate to co-
operate with—
(a)
the Panel on Takeovers and Mergers;
(b)
an authority designated as a supervisory authority for the
35
purposes of Article 4.1 of the Takeovers Directive;
(c)
any other person or body that exercises functions of a public
nature, under legislation in any country or territory outside
the United Kingdom, that appears to the FCA to be similar to
those of the Panel on Takeovers and Mergers.
40
(4)
Co-operation may include the sharing of information which the FCA
is not prevented from disclosing.
(5)
“Financial crime” has the meaning given in section 1H(3).
354B
PRA’s duty to co-operate with others
(1)
The PRA must take such steps as it considers appropriate to co-
45
operate with—