Section 36

SCHEDULE 11 The financial ombudsman service

1 In section 226 (compulsory jurisdiction), in subsection (3)(a), for “Authority”
substitute “FCA”.

2 5In section 226A (consumer credit jurisdiction), in subsection (7), for
“Authority” substitute “FCA”.

3 In section 227 (voluntary jurisdiction), in subsection (6), for “Authority’s”
substitute “FCA’s”.

4 (1) Section 228 (determination under the compulsory and consumer credit
10jurisdiction) is amended as follows.

(2) In subsection (4), in paragraph (c), omit “in writing”.

(3) After subsection (6) insert—

“(6A) But the complainant is not to be treated as having rejected the
determination by virtue of subsection (6) if—

(a) 15the complainant notifies the ombudsman after the specified
date of the complainant’s acceptance of the determination,

(b) the complainant has not previously notified the ombudsman
of the complainant’s rejection of the determination, and

(c) the ombudsman is satisfied that such conditions as may be
20prescribed by rules made by the scheme operator for the
purposes of this section are satisfied.”

(4) After subsection (7) insert—

“(7A) Where a determination is rejected by virtue of subsection (6), the
notification under subsection (7) must contain a general description
25of the effect of subsection (6A).”

5 In section 229 (awards), in subsection (4), for “Authority” substitute “FCA”.

6 In section 230 (costs), in subsection (2), for “Authority” substitute “FCA”.

7 After section 230 insert—

“230A Reports of determinations

(1) 30The scheme operator must publish a report of any determination
made under this Part.

(2) But if the ombudsman who makes the determination informs the
scheme operator that, in the ombudsman’s opinion, it is
inappropriate to publish a report of that determination (or any part
35of it) the scheme operator must not publish a report of that
determination (or that part).

(3) Unless the complainant agrees, a report of a determination published
by the scheme operator may not include the name of the
complainant, or particulars which, in the opinion of the scheme
40operator, are likely to identify the complainant.

(4) The scheme operator may charge a reasonable fee for providing a
person with a copy of a report.”

8 After section 232 insert—

“232A Scheme operator’s duty to provide information to FCA

If the scheme operator considers that it has information that, in its
opinion, would or might be of assistance to the FCA in advancing
5one or more of the FCA’s operational objectives, it must disclose that
information to the FCA.”

9 In section 234 (industry funding), in subsection (1), for “Authority”
substitute “FCA”.

10 In section 234A (funding by consumer credit licensees), in subsection (1), for
10“Authority” substitute “FCA”.

11 After section 234A insert—

“Successors to businesses

234B Transfers of liability

(1) This section applies where a person (the “successor”) has assumed a
15liability (including a contingent one) of a person (the “predecessor”)
who was, or (apart from this section) would have been, the
respondent in respect of a complaint falling to be dealt with under
the ombudsman scheme.

(2) The complaint may (but need not) be dealt with under this Part as if
20the successor were the respondent.”

12 Schedule 17 (the ombudsman scheme) is amended as follows.

13 For paragraph 2 (and the italic heading before it) substitute—

“Duty of FCA

2 25The FCA must take such steps as are necessary to ensure that the
body corporate established by the Financial Services Authority
under this Schedule as originally enacted is, at all times, capable of
exercising the functions conferred on the scheme operator by or
under this Act.”

14 30In paragraph 3 (constitution)—

(a) for “Authority”, in each place, substitute “FCA”, and

(b) in sub-paragraph (4), after “9” insert “, 9A”.

15 After paragraph 3 insert—

35“Relationship with FCA

3A (1) The scheme operator and the FCA must each take such steps as it
considers appropriate to co-operate with the other in the exercise
of their functions under this Part.

(2) The scheme operator and the FCA must prepare and maintain a
40memorandum describing how they intend to comply with sub-
paragraph (1).

(3) The scheme operator must ensure that the memorandum as
currently in force is published in the way appearing to the scheme
operator to be best calculated to bring it to the attention of the
public.”

16 5In paragraph 7 (annual reports)—

(a) for “Authority” , in each place, substitute “FCA”, and

(b) at the end insert—

“(5) The Treasury may—

(a) require the scheme operator to comply with any
10provisions of the Companies Act 2006 about accounts and
their audit which would not otherwise apply to it, or

(b) direct that any provision of that Act about accounts and
their audit is to apply to the scheme operator with such
modifications as are specified in the direction, whether or
15not the provision would otherwise apply to the scheme
manager.

(6) Compliance with any requirement under sub-paragraph (5)(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.

(7) 20Proceedings under sub-paragraph (6) may be brought only by the
Treasury.”

17 After paragraph 7 insert—

“Audit of accounts

7A (1) The scheme operator must send a copy of its annual accounts to
25the Comptroller and Auditor General as soon as is reasonably
practicable.

(2) The Comptroller and Auditor General must—

(a) examine, certify and report on accounts received under
this paragraph, and

(b) 30send a copy of the certified accounts and the report to the
Treasury.

(3) The Treasury must lay the copy of the certified accounts and the
report before Parliament.

(4) The scheme operator must send a copy of the certified accounts
35and the report to the FCA.

(5) Except as provided by paragraph 7(5), the scheme operator is
exempt from the requirements of Part 16 of the Companies Act
2006 (audit), and its balance sheet must contain a statement to that
effect.

(6) 40In this paragraph “annual accounts” has the meaning given by
section 471 of the Companies Act 2006.”

18 For the italic heading before paragraph 8 substitute “Information, advice and
guidance”.

19 In paragraph 8 (guidance), for “guidance consisting of such information and
advice” substitute “such information, guidance or advice”.

20 In paragraph 9 (budget), for “Authority”, in each place, substitute “FCA”.

21 After paragraph 9 insert—

5“Annual plan

9A (1) The scheme operator must in respect of each of its financial years
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
10about the use of the resources of the scheme operator.

(4) The plan may include material relating to periods longer than the
financial year in question.

(5) Before preparing an annual plan, the scheme operator must
consult such persons (if any) as the scheme operator considers
15appropriate.

(6) The scheme operator must publish each annual plan in the way it
considers appropriate.”

22 In paragraph 13 (procedural rules)—

(a) for “Authority”, in each place, substitute “FCA”,

(b) 20for “Authority’s”, in each place, (including the italic heading),
substitute “FCA’s”, and

(c) in sub-paragraph (4)(b), for “Part X” substitute “Part 9A”.

23 In paragraph 14 (scheme operator’s rules)—

(a) in sub-paragraph (2), after paragraph (f) insert—

“(fa) 25allow the correction of any clerical mistake in the
written statement of a determination made by an
ombudsman;

(fb) provide that any irregularity arising from a failure
to comply with any provisions of the scheme rules
30does not of itself render a determination void;”,
and”

(b) in sub-paragraph (7), for “Authority” substitute “FCA”.

24 In paragraph 16B (procedure for complaints etc), in sub-paragraph (1), after
paragraph (d) insert—

“(e) 35may provide that an ombudsman may correct any clerical
mistake in a determination made by that ombudsman;

(f) provide that any irregularity arising from a failure to
comply with any provisions of the consumer credit rules
does not of itself render a determination void.”

25 40In paragraph 16E (consumer credit rules), for “Authority”, in each place,
substitute “FCA”.

26 In paragraph 18 (terms of reference), for “Authority”, in each place,
substitute “FCA”.

27 In paragraph 19 (delegation), in sub-paragraph (3), for “Authority”
substitute “FCA”.

28 In paragraph 20 (voluntary jurisdiction rules: procedure), for “Authority”, in
each place, substitute “FCA”.

Section 38

5SCHEDULE 12 Amendments of Parts 11 and 23 of FSMA 2000

Part 1 Part 11 of FSMA 2000: information gathering and investigations

1 (1) Section 165 (power to require information) is amended as follows.

(2) 10In subsection (1), for “The Authority” substitute “Either regulator”.

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

(4) In subsection (4), for “the Authority” substitute “either regulator”.

(5) In subsections (5) and (6) for “The Authority”, in each place, substitute “The
regulator in question”.

(6) 15In subsection (7), for the words from “exercised” to the end substitute
“exercised—

(a) by either regulator, to impose requirements on a person who is
connected with an authorised person;

(b) by the FCA, to impose requirements on an operator, trustee or
20depositary of a scheme recognised under section 270 or 272 who is
not an authorised person;

(c) by the FCA, to impose requirements on a recognised investment
exchange;

(d) by the FCA, to impose requirements on a person who is connected
25with a recognised investment exchange.”

(7) In subsection (9)—

(a) for “the Authority”, in the first place, substitute “the regulator
exercising the power”,

(b) for “the Authority’s” substitute “that regulator’s”, and

(c) 30for “the Authority”, in the second place, substitute “that regulator”.

(8) In subsection (11)—

(a) in the opening words, for “an authorised person” substitute “another
person”, and

(b) in paragraph (d), at the end insert “(reading references in that Part to
35the authorised person as references to A)”.

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

2 In section 165A (power to require information relevant to financial
stability)—

(a) for “Authority”, in each place, substitute “PRA”, and

(b) 40in the heading, for “Authority’s” substitute “PRA’s”.

3 In section 165B (safeguards relating to section 165A)—

(a) for “Authority”, in each place, substitute “PRA”, and

(b) for “Authority’s”, in each place, substitute “PRA’s”.

4 In section 165C (orders under section 165A(2)(d)) for subsection (1)
5substitute—

“(1) The Treasury may make an order under section 165A(2)(d) only if
either or both of the following conditions is met in relation to the
provision made by the order.

(1A) Condition A is that the Treasury consider that—

(a) 10the activities carried on by the prescribed person or persons
of the prescribed description, or the way in which those
activities (or any part of them) are carried on, or

(b) any failure to carry on those activities (or any part of them),

pose, or would be likely to pose, a serious threat to the stability of the
15UK financial system.

(1B) Condition B is that the provision implements all or part of a
recommendation made by the Financial Policy Committee of the
Bank of England under section 9O of the Bank of England Act 1998.”

5 For section 166 (reports by skilled persons) substitute—

“166 20Reports by skilled persons

(1) This section applies where either regulator has required or could
require a person to whom subsection (2) applies (“the person
concerned”) to provide information or produce documents with
respect to any matter (“the matter concerned”).

(2) 25This subsection applies to—

(a) an authorised person (“A”),

(b) any other member of A’s group,

(c) a partnership of which A is a member, or

(d) a person who has at any relevant time been a person falling
30within paragraph (a), (b) or (c),

who is, or was at the relevant time, carrying on a business.

(3) The regulator mentioned in subsection (1) may either—

(a) by notice in writing given to the person concerned, require
the person concerned to provide the regulator with a report
35on the matter concerned, or

(b) itself appoint a person to provide the regulator with a report
on the matter concerned.

(4) When acting under subsection (3)(a), the regulator may require the
report to be in such form as may be specified in the notice.

(5) 40The regulator must give notice of an appointment under subsection
(3)(b) to the person concerned.

(6) The person appointed to make a report—

(a) must be a person appearing to the regulator to have the skills
necessary to make a report on the matter concerned, and

(b) where the appointment is to be made by the person
concerned, must be person nominated or approved by the
regulator.

(7) It is the duty of—

(a) 5the person concerned, and

(b) any person who is providing (or who has at any time
provided) services to the person concerned in relation to the
matter concerned,

to give the person appointed to prepare a report all such assistance
10as the appointed person may reasonably require.

(8) The obligation imposed by subsection (7) is enforceable, on the
application of the regulator in question, by an injunction or, in
Scotland, by an order for specific performance under section 45 of the
Court of Session Act 1988.

(9) 15A regulator may make rules providing for expenses incurred by it in
relation to an appointment under subsection (3)(b) to be payable as a
fee by the person concerned.

(10) The powers conferred by this section may also be exercised by the
FCA in relation to a person to whom subsection (11) applies, (and
20references to the person concerned are to be read accordingly).

(11) This subsection applies to—

(a) a recognised investment exchange (“A”),

(b) any other member of A’s group,

(c) a partnership of which A is a member, or

(d) 25a person who has at any time been a person falling within
paragraph (a), (b) or (c),

who is, or was at the relevant time, carrying on a business.”

6 After section 166 insert—

166A   Appointment of skilled person to collect and update information

(1) 30This section applies if either regulator considers that an authorised
person has contravened a requirement in rules made by that
regulator to collect, and keep up to date, information of a description
specified in the rules.

(2) The regulator may either—

(a) 35require the authorised person to appoint a skilled person to
collect or update the information, or

(b) itself appoint a skilled person to do so.

(3) References in this section to a skilled person are to a person—

(a) appearing to the regulator to have the skills necessary to
40collect or update the information in question, and

(b) where the appointment is to be made by the authorised
person, nominated or approved by the regulator.

(4) The regulator must give notice of an appointment under subsection
(2)(b) to the authorised person.

(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
5application of the regulator in question, by an injunction or, in
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) 10the information is or may be relevant to anything required to
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) 15the regulator in question has approved the making of the
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
20a contractual or other requirement to keep it in confidence if it is
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
25fee by the authorised person.

(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) 30In subsection (1), for “the Authority or the Secretary of State (“the
investigating authority”)” substitute “an investigating authority”.

(3) After subsection (5) insert—

“(5A) Investigating authority” means—

(a) in relation to a recognised investment exchange, the
35Secretary of State or the FCA;

(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) 40Section 168 (appointment of investigator in specific cases) is amended as
follows.

(2) In subsection (1)—

(a) omit paragraph (a), and

(b) in paragraph (b), for “191” substitute “191F”.

(3) 45In subsection (4)—

(a) in the opening words, for “the Authority” substitute “an
investigating authority”,

(b) in paragraph (c), for “Authority” substitute “investigating
authority”,

(c) 5after that paragraph insert—

“(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
10person”,

(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) 15a person may have contravened a qualifying EU
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) 20For subsection (6) substitute—

“(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) 25Section 169 (investigations at the request of an overseas regulator) is
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) 30In subsection (5), in each place, for “Authority” substitute “regulator”.

(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) 35In subsection (11), for “Authority” substitute “regulator”.

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) 40the FCA, if the FCA appointed the investigator;

(aa) the PRA, if the PRA appointed the investigator;

(b) the Secretary of State, if the Secretary of State appointed the
investigator.”

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) 5In subsection (1), for “the Authority” substitute “either regulator”.

(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
10was requested.

(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) 15that it might otherwise be unavailable for those purposes,

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) 20After subsection (5) insert—

“(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
25authorised by the warrant to accompany a constable; but that person
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) 30Omit subsection (8).

(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) 35Any document of which possession is taken under section 176 (“a
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
40delivery of the document to the person appearing to the court or
sheriff to be the owner.