Financial Services Bill (HC Bill 278)

(9) A regulator may charge a reasonable fee for providing a person with a copy
of—

(a) a draft published under subsection (1), or

(b) details published under subsection (6).

(10) 5Subsections (1) to (5) and (9)(a) also apply to a proposal to alter or replace the
complaints scheme.

82 Investigation of complaints

(1) A regulator is not obliged to investigate in accordance with the complaints
scheme a complaint which it reasonably considers would be more
10appropriately dealt with in another way (for example by referring the matter
to the Upper Tribunal or by the institution of other legal proceedings).

(2) The complaints scheme must provide—

(a) for reference to the investigator of any complaint which a regulator is
investigating,

(b) 15for the investigator—

(i) to have the means to conduct a full investigation of the
complaint,

(ii) to report to the regulator to which the complaint relates and the
complainant on the result of the investigator’s investigation,
20and

(iii) to be able to publish the investigator’s report (or part of it) if the
investigator considers that it (or the part) ought to be brought to
the attention of the public, and

(c) for the meeting by the regulators of the expenses of the scheme.

(3) 25If a regulator has decided not to investigate a complaint, it must notify the
investigator.

(4) If the investigator considers that a complaint of which the investigator has been
notified under subsection (3) ought to be investigated, the investigator may
proceed as if the complaint had been referred to the investigator under the
30complaints scheme.

(5) The complaints scheme must confer on the investigator the power to
recommend, if the investigator thinks it appropriate, that the regulator to
which a complaint relates takes either or both of the following steps—

(a) makes a compensatory payment to the complainant, or

(b) 35remedies the matter complained of.

(6) The complaints scheme must require the regulator to which a complaint
relates, in a case where the investigator—

(a) has reported that the complaint is well-founded, or

(b) has criticised the regulator in a report,

40to inform the investigator and the complainant of the steps which it proposes
to take in response to the report.

(7) The investigator may require the regulator to which a complaint relates to
publish the whole or a specified part of the response.

(8) The investigator may appoint a person to conduct the investigation on the
45investigator’s behalf but subject to the investigator’s direction.

(9) An officer or employee of any of the regulators may not be appointed under
subsection (8).

(10) Subsection (2) is not to be taken as preventing a regulator from making
arrangements for the initial investigation of a complaint to be conducted by the
5regulator.

83 Exemption from liability in damages

(1) Neither the investigator appointed under section 79 nor a person appointed to
conduct an investigation on the investigator’s behalf under section 82(8) is to
be liable in damages for anything done or omitted in the discharge, or
10purported discharge, of functions in relation to the investigation of a
complaint.

(2) Subsection (1) does not apply—

(a) if the act or omission is shown to have been in bad faith, or

(b) so as to prevent an award of damages made in respect of an act or
15omission on the ground that the act or omission was unlawful as a
result of section 6(1) of the Human Rights Act 1998.

Part 7 Amendments of Banking Act 2009

Special resolution regime and bank administration

84 20Private sector purchasers

(1) The Banking Act 2009 is amended as follows.

(2) After section 26 insert—

“26A Private sector purchaser: reverse share transfer

(1) This section applies where the Bank of England has made a share
25transfer instrument in accordance with section 11(2) (“the original
instrument”) providing for the transfer of securities issued by a bank to
a person (“the original transferee”).

(2) The Bank of England may make one or more private sector reverse
share transfer instruments in respect of securities issued by the bank
30and held by the original transferee.

(3) A private sector reverse share transfer instrument is a share transfer
instrument which—

(a) provides for transfer to the transferor under the original
instrument;

(b) 35makes other provision for the purposes of, or in connection
with, the transfer of securities which are, could be or could have
been transferred under paragraph (a).

(4) The Bank of England must not make a private sector reverse share
transfer instrument without the written consent of the original
40transferee.

(5) Sections 7, 8 and 50 do not apply to a private sector reverse share
transfer instrument (but it is to be treated in the same way as any other
share transfer instrument for all other purposes including for the
purposes of the application of a power under this Part).

(6) 5Before making a private sector reverse share transfer instrument the
Bank of England must consult—

(a) the PRA,

(b) the FCA, and

(c) the Treasury.

(7) 10Section 26 applies where the Bank of England has made a private sector
reverse share transfer instrument.”

(3) In section 29 (reverse share transfer)—

(a) in subsection (3) for the words from “securities”, in the second place, to
the end substitute “securities issued by the bank and held by a
15transferee under the onward share transfer order (“the onward
transferee”).”, and

(b) after subsection (4) insert—

“(4A) The Treasury must not make a reverse share transfer order
under subsection (3) unless—

(a) 20the onward transferee is—

(i) a company wholly owned by the Bank of
England,

(ii) a company wholly owned by the Treasury, or

(iii) a nominee of the Treasury, or

(b) 25the reverse share transfer order is made with the written
consent of the onward transferee.”

(4) In section 31 (bridge bank: reverse share transfer)—

(a) in subsection (1) omit the words from “providing for” to the end,

(b) in subsection (2) for “person within subsection (1)(a) to (c)” substitute
30“transferee under the original instrument”,

(c) after subsection (3) insert—

“(3A) The Bank of England must not make a bridge bank reverse
share transfer instrument unless—

(a) the transferee under the original instrument is—

(i) 35a company wholly owned by the Bank of
England,

(ii) a company wholly owned by the Treasury, or

(iii) a nominee of the Treasury, or

(b) the bridge bank reverse share transfer instrument is
40made with the written consent of the transferee under
the original instrument.”

(5) After section 42 insert—

“42A Private sector purchaser: reverse property transfer

(1) This section applies where the Bank of England has made a property
45transfer instrument in accordance with section 11(2) (“the original

instrument”) providing for the transfer of property, rights or liabilities
of a bank to a person (“the original transferee”).

(2) The Bank of England may make one or more private sector reverse
property transfer instruments in respect of property, rights or liabilities
5of the original transferee.

(3) A private sector reverse property transfer instrument is a property
transfer instrument which—

(a) provides for transfer to the transferor under the original
instrument;

(b) 10makes other provision for the purposes of, or in connection
with, the transfer of property, rights or liabilities that are, could
be or could have been transferred under paragraph (a) (whether
the transfer has been or is to be effected by that instrument or
otherwise).

(4) 15The Bank of England must not make a private sector reverse property
transfer instrument without the written consent of the original
transferee.

(5) Sections 7, 8 and 50 do not apply to a private sector reverse property
transfer instrument (but it is to be treated in the same way as any other
20property transfer instrument for all other purposes including for the
purposes of the application of a power under this Part).

(6) Before making a private sector reverse property transfer instrument the
Bank of England must consult—

(a) the PRA,

(b) 25the FCA, and

(c) the Treasury.

(7) Section 42 applies where the Bank of England has made a private sector
reverse property transfer instrument.”

(6) In section 44 (reverse property transfer)—

(a) 30in subsection (3) for “of a transferee” to the end substitute “of a
transferee under the onward property transfer instrument (“the
onward transferee”).”,

(b) after subsection (4) insert—

“(4A) The Bank of England must not make a reverse property transfer
35instrument unless—

(a) the onward transferee is—

(i) a company wholly owned by the Bank of
England,

(ii) a company wholly owned by the Treasury, or

(iii) 40a company wholly owned by a nominee of the
Treasury, or

(b) the reverse property transfer instrument is made with
the written consent of the onward transferee.”

(7) In section 46 (temporary public ownership: reverse property transfer)—

(a) 45in subsection (1) omit from “providing for” to the end, and

(b) after subsection (3) insert—

“(3A) The Treasury must not make a reverse property transfer order
unless—

(a) the transferee under the original order is—

(i) 5a company wholly owned by the Bank of
England,

(ii) a company wholly owned by the Treasury, or

(iii) a nominee of the Treasury, or

(b) the reverse property transfer order is made with the
10written consent of the transferee under the original
order.”

(8) In section 48A (creation of liabilities), in subsection (1) after “42(3)(b),” insert
“42A(3)(b),”.

(9) In section 53 (onward and reverse transfers: compensation), in subsection (1)—

(a) 15before paragraph (a) insert—

“(za) the Bank of England makes a private sector reverse
share transfer instrument under section 26A,”,

(b) after paragraph (d) insert—

“(da) the Bank of England makes a private sector reverse
20property transfer instrument under section 42A,”.

(10) In the Table in section 261 (index of defined terms), after the entry relating to
“partial property transfer”, insert—

85 Property transfer instruments: property held on trust

(1) The Banking Act 2009 is amended as follows.

(2) In section 34(7) (effect of property transfer instruments: provision in respect of
30property held on trust), in paragraph (a) omit “(which provision may remove
or alter the terms of the trust)”.

(3) At the end of section 34 insert—

“(8) Provision under subsection (7)(a) may remove or alter the terms of the
trust on which the property is held only to the extent that the Bank of
35England thinks it necessary or expedient for the purpose of
transferring—

(a) the legal or beneficial interest of the transferor in the property;

(b) any powers, rights or obligations of the transferor in respect of
the property.

(9) 40In subsection (8) references to the transferor are references to the
transferor under the property transfer instrument.”

(4) In section 45 (temporary public ownership: property transfer orders) after

subsection (5) insert—

“(5A) In the application of section 34(8) by virtue of subsection (5)(b) above,
the reference to the Bank of England is to be treated as a reference to the
Treasury.”

(5) 5In section 46 (temporary public ownership: reverse property transfer orders)
after subsection (5) insert—

“(5A) In the application of section 34(8) by virtue of subsection (5)(b) above,
the reference to the Bank of England is to be treated as a reference to the
Treasury.”

86 10Reports following exercise of a stabilisation power

(1) After section 79 of the Banking Act 2009 insert—

“79A Private sector purchaser: report

(1) This section applies where the Bank of England sells all or part of a
bank’s business to a commercial purchaser.

(2) 15The Bank must report to the Chancellor of the Exchequer about the
exercise of the power to make share transfer instruments and property
transfer instruments under section 11(2).

(3) The report must comply with any requirements as to content specified
by the Treasury.

(4) 20The report must be made as soon as is reasonably practicable after the
end of one year beginning with the date of the first transfer instrument
made under section 11(2).”

(2) After section 81 of that Act insert—

“81A Accounting information to be included in reports under sections 80
25and 81

(1) A report under section 80(1) or 81 must include accounting information
in respect of the bank or bridge bank that is the subject of the report.

(2) In this section “accounting information” means—

(a) a balance sheet that, in the opinion of the person making the
30report, gives a true and fair view of the state of affairs of the
bank or bridge bank as at the reporting date, and

(b) a profit and loss account that, in the opinion of the person
making the report, gives a true and fair view of the profit or loss
of the bank or bridge bank for the reporting period.

(3) 35In this section—

(a) “reporting period” means the period to which the report relates,
and

(b) “reporting date” means the last day of the reporting period.”

87 State aid

After section 145 of the Banking Act 2009 insert—

145A   Power to direct bank administrator

(1) This section applies where—

(a) 5a bank administration order has been made, and

(b) the Treasury are of the opinion that anything done, or proposed
to be done, in connection with the exercise of one or more of the
stabilisation powers may constitute the granting of aid to which
any of the provisions of Article 107 or 108 of TFEU applies
10(“State aid”).

(2) The Treasury may, in writing, direct the bank administrator to take
specified action to enable the United Kingdom to fulfil any of the
purposes specified in subsection (3).

(3) The purposes are—

(a) 15to inform the European Commission that State aid has been,
may have been, or may be, given;

(b) to obtain a decision from the Commission whether State aid—

(i) has been given, or

(ii) would be given, if the action proposed was taken;

(c) 20to apply for approval that such aid is, or would be, compatible
with the internal market, within the meaning of Article 107 of
TFEU;

(d) to comply with any requirements to enable an investigation
under Article 108 of TFEU to be carried out;

(e) 25to comply with any undertaking given to the European
Commission in connection with the application for approval
referred to in paragraph (c);

(f) to comply with any requests from the Commission relating to
the application for approval, including the provision of
30information;

(g) to comply with any undertakings given to the Commission, or
conditions imposed by the Commission, where approval has
been given.

(4) Before giving a direction under this section the Treasury must consult
35the bank administrator.

(5) The bank administrator must comply with the direction within the
period of time specified in the direction, or if no period of time is
specified, as soon as reasonably practicable.

(6) A direction under this section is enforceable on an application made by
40the Treasury, by injunction or, in Scotland, by an order for specific
performance under section 45 of the Court of Session Act 1988.

(7) A direction may specify circumstances in which the bank administrator
is immune from liability in damages.

(8) Immunity by virtue of subsection (7) does not extend to action—

(a) 45in bad faith, or

(b) in contravention of section 6(1) of the Human Rights Act 1998.

(9) If the United Kingdom has made, or proposes to make, an application
to the Council of the European Union under Article 108 of the TFEU,
references in subsection (3) to the Commission are to be read as
including references to the Council.

(10) 5In this section “TFEU” means the Treaty on the Functioning of the
European Union.”

Inter-bank payment systems

88 Inter-bank payment systems

(1) Part 5 of the Banking Act 2009 (inter-bank payment systems) is amended as
10follows.

(2) After section 186 insert—

“186A Amendment of recognition order

(1) The Treasury may amend a recognition order.

(2) Before amending a recognition order the Treasury must—

(a) 15consult the Bank of England,

(b) notify the operator of the recognised inter-bank payment
system, and

(c) consider any representations made.

(3) In addition, the Treasury—

(a) 20must consult the FCA before amending a recognition order in
respect of a payment system the operator of which—

(i) is, or has applied to become, a recognised investment
exchange, or

(ii) has, or has applied for, a Part 4A permission, and

(b) 25if the operator has, or has applied for, a Part 4A permission for
the carrying on of a PRA-regulated activity, must also consult
the PRA.

(4) The Treasury must consider any request by the operator of a recognised
inter-bank payment system for the amendment of its recognition
30order.”

(3) For section 191 substitute—

“191 Directions

(1) The Bank of England may give directions in writing to the operator of
a recognised inter-bank system.

(2) 35A direction may—

(a) require or prohibit the taking of specified action in the operation
of the system;

(b) set standards to be met in the operation of the system.

(3) If a direction is given for the purpose of resolving or reducing a threat
40to the stability of the UK financial system, the operator (including its
officers and staff) has immunity from liability in damages in respect of
action or inaction in accordance with the direction.

(4) A direction given for the purpose mentioned in subsection (3) must—

(a) include a statement that it is given for that purpose, and

(b) inform the operator of the effect of that subsection.

(5) The Treasury may by order confer immunity on any person from
5liability in damages in respect of action or inaction in accordance with
a direction (including a direction given for the purpose mentioned in
subsection (3)).

(6) An order—

(a) is to be made by statutory instrument, and

(b) 10is subject to annulment in pursuance of a resolution of either
House of Parliament.

(7) An immunity conferred by or under this section does not extend to
action or inaction—

(a) in bad faith, or

(b) 15in contravention of section 6(1) of the Human Rights Act 1998.”

(4) In section 186 (procedure)—

(a) for subsection (2) substitute—

“(2) In addition, the Treasury—

(a) must consult the FCA before making a recognition order
20in respect of a payment system the operator of which—

(i) is, or has applied to become, a recognised
investment exchange, or

(ii) has, or has applied for, a Part 4A permission, and

(b) if the operator has, or has applied for, a Part 4A
25permission for the carrying on of a PRA-regulated
activity, must also consult the PRA.”, and

(b) in subsection (3), for “or the FSA” substitute “, the FCA or the PRA”.

(5) In section 187 (de-recognition), for subsection (4) substitute—

“(4) In addition, the Treasury—

(a) 30must consult the FCA before revoking a recognition order in
respect of a payment system the operator of which—

(i) is, or has applied to become, a recognised investment
exchange, or

(ii) has, or has applied for, a Part 4A permission, and

(b) 35if the operator has, or has applied for, a Part 4A permission for
the carrying on of a PRA-regulated activity, must also consult
the PRA.”

(6) In section 192 (role of FSA)—

(a) in subsection (1), for “the FSA” substitute “the FCA or the PRA”,

(b) 40for subsection (2) substitute—

“(2) The Bank of England—

(a) must consult the FCA before taking action under this
Part in respect of a recognised inter-bank payment
system the operator of which satisfies section 186(2)(a),
45and

(b) must consult the PRA before taking action under this
Part in respect of a recognised inter-bank payment
system the operator of which satisfies section
186(2)(b).”,

(c) 5in subsection (3)—

(i) for “the FSA”, in the first place, substitute “the FCA or the PRA”,

(ii) for “the FSA”, in the second place, substitute “it”,

(iii) for “section 186(2)” substitute “section 186(2)(a) or (b)”, and

(iv) in paragraph (a), for “the FSA” substitute “the FCA or (as the
10case may be) the PRA”, and

(d) in the heading, for “FSA” substitute “FCA and PRA”.

(7) After section 202 insert—

“202A Injunctions

(1) If, on the application of the Bank of England, the court is satisfied—

(a) 15that there is a reasonable likelihood that there will be a
compliance failure, or

(b) that there has been a compliance failure and there is a
reasonable likelihood that it will continue or be repeated,

the court may make an order restraining the conduct constituting the
20failure.

(2) If, on the application of the Bank of England, the court is satisfied—

(a) that there has been a compliance failure by the operator of a
recognised inter-bank payment system, and

(b) that there are steps which could be taken for remedying the
25failure,

the court may make an order requiring the operator, and anyone else
who appears to have been knowingly concerned in the failure, to take
such steps as the court may direct to remedy it.

(3) If, on the application of the Bank of England, the court is satisfied—

(a) 30that there may have been a compliance failure by the operator
of a recognised inter-bank payment system, or

(b) that a person may have been knowingly concerned in a
compliance failure,

the court may make an order restraining the operator or person from
35dealing with any assets which it is satisfied the operator or person is
reasonably likely to deal with.

(4) The jurisdiction conferred by this section is exercisable—

(a) in England and Wales and Northern Ireland, by the High Court,
and

(b) 40in Scotland, by the Court of Session.

(5) In this section—

(a) references to an order restraining anything are, in Scotland, to
be read as references to an interdict prohibiting that thing,

(b) references to remedying a failure include mitigating its effect,
45and

(c) references to dealing with assets include disposing of them.”