Financial Services Bill

Session 2010 - 12
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Other Bills before Parliament

Financial Services Bill

Financial Services Bill
Schedule 3 — Financial Conduct Authority and Prudential Regulation Authority: Schedules to be substituted as Schedules 1ZA and 1ZB to FSMA 2000
178

14    (1)
The FCA must send a copy of its annual accounts to the
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
5
this paragraph, and
(b)
send 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.
10
      (4)
Except as provided by paragraph 13(1), the FCA 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.
      (5)
In this paragraph “annual accounts” has the meaning given in
section 471 of the Companies Act 2006.
15
Part 2
Status
Status
15
In relation to any of its functions—
(a)
the FCA is not to be regarded as acting on behalf of the
20
Crown, and
(b)
its members, officers and staff are not to be regarded as
Crown servants.
Exemption from requirement for use of “limited” in name of FCA
16
The FCA is to continue to be exempt from the requirements of the
25
Companies Act 2006 relating to the use of “limited” as part of its
name.
17
If the Secretary of State is satisfied that any action taken by the
FCA makes it inappropriate for the exemption given by paragraph
16 to continue, the Secretary of State may, after consulting the
30
Treasury, give a direction removing it.
Part 3
Penalties and fees
Penalties
18    (1)
In determining its policy with respect to the amounts of penalties
35
to be imposed by it under this Act, the FCA must take no account
of the expenses which it incurs, or expects to incur, in discharging
its functions.
      (2)
The FCA must prepare and operate a scheme (“the financial
penalty scheme”) for ensuring that—
40

Financial Services Bill
Schedule 3 — Financial Conduct Authority and Prudential Regulation Authority: Schedules to be substituted as Schedules 1ZA and 1ZB to FSMA 2000
179

(a)
the amounts paid to it by way of penalties imposed under
this Act (other than Part 6 or 18) are applied for the benefit
of authorised persons, and
(b)
the amounts paid to it by way of penalties imposed under
Part 6 of this Act are applied for the benefit of—
5
(i)
issuers of securities admitted to the official list, and
(ii)
issuers who have requested or approved the
admission of financial instruments to trading on a
regulated market.
      (3)
The financial penalty scheme may, in particular, make different
10
provision with respect to different classes of authorised person or
issuer.
      (4)
Up-to-date details of the financial penalty scheme must be set out
in a document (“the scheme details”).
19    (1)
The scheme details must be published by the FCA in the way
15
appearing to it to be best calculated to bring them to the attention
of the public.
      (2)
Before making the financial penalty scheme, the FCA must
publish a draft of the proposed scheme in the way appearing to the
FCA to be best calculated to bring it to the attention of the public.
20
      (3)
The draft must be accompanied by notice that representations
about the proposals may be made to the FCA within a specified
time.
      (4)
Before making the scheme, the FCA must have regard to any
representations made to it in accordance with sub-paragraph (3).
25
      (5)
If the FCA makes the proposed scheme, it must publish an
account, in general terms, of—
(a)
the representations made to it in accordance with sub-
paragraph (3), and
(b)
its response to them.
30
      (6)
If the scheme differs from the draft published under sub-
paragraph (2) in a way which is, in the opinion of the FCA,
significant, the FCA must (in addition to complying with sub-
paragraph (5)) publish details of the difference.
      (7)
The FCA must, without delay, give the Treasury a copy of any
35
scheme details published by it.
      (8)
The FCA may charge a reasonable fee for providing a person with
a copy of—
(a)
a draft published under sub-paragraph (2);
(b)
scheme details.
40
      (9)
Sub-paragraphs (2) to (6) and (8)(a) also apply to a proposal to
alter or replace the financial penalty scheme.
Fees
20    (1)
The FCA may make rules providing for the payment to it of such
fees, in connection with the discharge of any of its qualifying
45

Financial Services Bill
Schedule 3 — Financial Conduct Authority and Prudential Regulation Authority: Schedules to be substituted as Schedules 1ZA and 1ZB to FSMA 2000
180

functions, as it considers will (taking account of its expected
income from fees and charges provided for by any other provision
of this Act) enable it—
(a)
to meet expenses incurred in carrying out its functions or
for any incidental purpose,
5
(b)
to repay the principal of, and pay any interest on, any
relevant borrowing and to meet relevant commencement
expenses, and
(c)
to maintain adequate reserves.
      (2)
The “qualifying functions” of the FCA are—
10
(a)
its functions under or as a result of this Act, and
(b)
its functions under or as a result of a qualifying EU
provision that is specified, or of a description specified, for
the purposes of this sub-paragraph by the Treasury by
order.
15
      (3)
In sub-paragraph (1)(b)—
“relevant borrowing” means any money borrowed by the
FCA which has been used for the purpose of meeting
expenses incurred in relation to its assumption of
functions under this Act, and
20
“relevant commencement expenses” means expenses
incurred by the FCA—
(a)
in preparation for the exercise of functions by the
FCA under this Act, or
(b)
for the purpose of facilitating the exercise by the FCA
25
of those functions or otherwise in connection with
their exercise by it.
      (4)
For the purposes of sub-paragraph (3) it is irrelevant when the
borrowing of the money, the incurring of the expenses or the
assumption of functions took place (and, in particular, it is
30
irrelevant if any of those things were done at a time when the FCA
was known as the Financial Services Authority).
      (5)
In the case of rules made under Part 6 of this Act, the rules may, in
particular, require the payment of fees in respect of—
(a)
the continued inclusion of securities or persons in any list
35
or register required to be kept by the FCA as a result of any
provision made by or under that Part,
(b)
access to any list or register within paragraph (a), and
(c)
the continued admission of financial instruments to
trading on a regulated market.
40
      (6)
In fixing the amount of any fee which is to be payable to the FCA,
no account is to be taken of any sums which the FCA receives, or
expects to receive, by way of penalties imposed by it under this
Act.
      (7)
Any fee which is owed to the FCA under any provision made by
45
or under this Act may be recovered as a debt due to the FCA.

Financial Services Bill
Schedule 3 — Financial Conduct Authority and Prudential Regulation Authority: Schedules to be substituted as Schedules 1ZA and 1ZB to FSMA 2000
181

Services for which fees may not be charged
21
The power conferred by paragraph 20 may not be used to
require—
(a)
a fee to be paid in respect of the discharge of any of the
FCA’s functions under paragraph 13, 14, 19 or 20 of
5
Schedule 3, or
(b)
a fee to be paid by any person whose application for
approval under section 59 has been granted.
Part 4
Miscellaneous
10
Exemption from liability in damages
22    (1)
None of the following is to be liable in damages for anything done
or omitted in the discharge, or purported discharge, of the FCA’s
functions—
(a)
the FCA;
15
(b)
any person (“P”) who is, or is acting as, an officer of, or
member of the staff of, the FCA or a member of its
governing body;
(c)
any person who could be held vicariously liable for things
done or omitted by P, but only in so far as the liability
20
relates to P’s conduct.
      (2)
Sub-paragraph (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 omission on the ground that the act or omission
25
was unlawful as a result of section 6(1) of the Human
Rights Act 1998.
Accredited financial investigators
23
For the purposes of this Act anything done by an accredited
financial investigator within the meaning of the Proceeds of Crime
30
Act 2002 who—
(a)
is, or is acting as, an officer of, or member of the staff of, the
FCA or a member of its governing body, or
(b)
is appointed by the FCA under section 97, 167 or 168 to
conduct an investigation,
35

is to be treated as done in the exercise or discharge of a function of
the FCA.
Amounts required by rules to be paid to the FCA
24
Any amount (other than a fee) which is required by rules to be
paid to the FCA may be recovered as a debt due to the FCA.
40