Financial Services Bill

Session 2010 - 12
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Other Bills before Parliament

Financial Services Bill

Financial Services Bill
Part 2 — Amendments of Financial Services and Markets Act 2000
73

89R
Action under s.89Q: procedure and right to refer to Tribunal
(1)
If the FCA proposes to take action against a provider under section
89Q, it must give the provider a warning notice.
(2)
A warning notice about a proposal to impose a penalty must state the
amount of the penalty.
5
(3)
A warning notice about a proposal—
(a)
to suspend an approval, or
(b)
to impose a restriction in relation to the giving of information,

must state the period for which the suspension or restriction is to have
effect.
10
(4)
A warning notice about a proposal to publish a statement must set out
the terms of the statement.
(5)
If the FCA decides to take action against a provider under section 89Q,
it must give the provider a decision notice.
(6)
A decision notice about the imposition of a penalty must state the
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amount of the penalty.
(7)
A decision notice about—
(a)
the suspension of an approval, or
(b)
the imposition of a restriction in relation to the giving of
information,
20

must state the period for which the suspension or restriction is to have
effect.
(8)
A decision notice about the publication of a statement must set out the
terms of the statement.
(9)
If the FCA decides to take action against a provider under section 89Q,
25
the provider may refer the matter to the Tribunal.
89S
Action under s.89Q: statement of policy
(1)
The FCA must prepare and issue a statement of its policy with respect
to—
(a)
the imposition of penalties, suspensions or restrictions under
30
section 89Q,
(b)
the amount of penalties under that section,
(c)
the period for which suspensions or restrictions under that
section are to have effect, and
(d)
the matters in relation to which suspensions or restrictions
35
under that section are to have effect.
(2)
The FCA’s policy in determining what the amount of a penalty should
be, or what the period for which a suspension or restriction is to have
effect should be, must include having regard to—
(a)
the seriousness of the contravention in question in relation to
40
the nature of the requirement concerned,
(b)
the extent to which that contravention was deliberate or
reckless, and
(c)
whether the provider concerned is an individual.

Financial Services Bill
Part 2 — Amendments of Financial Services and Markets Act 2000
74

(3)
The FCA may at any time alter or replace a statement issued under this
section.
(4)
If a statement issued under this section is altered or replaced, the FCA
must issue the altered or replaced statement.
(5)
In exercising, or deciding whether to exercise, its power under section
5
89Q in the case of any particular contravention, the FCA must have
regard to any statement of policy published under this section and in
force at a time when the contravention in question occurred.
(6)
A statement issued under this section must be published by the FCA in
the way appearing to the FCA to be best calculated to bring it to the
10
attention of the public.
(7)
The FCA may charge a reasonable fee for providing a person with a
copy of the statement.
(8)
The FCA must, without delay, give the Treasury a copy of any
statement which it publishes under this section.
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89T
Statement of policy under s.89S: procedure
(1)
Before issuing a statement under section 89S, the FCA must publish a
draft of the proposed statement in the way appearing to the FCA to be
best calculated to bring it to the attention of the public.
(2)
The draft must be accompanied by notice that representations about the
20
proposal may be made to the FCA within a specified time.
(3)
Before issuing the proposed statement, the FCA must have regard to
any representations made to it in accordance with subsection (2).
(4)
If the FCA issues the proposed statement it must publish an account, in
general terms, of—
25
(a)
the representations made to it in accordance with subsection (2);
and
(b)
its response to them.
(5)
If the statement differs from the draft published under subsection (1) in
a way which is, in the opinion of the FCA, significant, the FCA must (in
30
addition to complying with subsection (4)) publish details of the
difference.
(6)
The FCA may charge a reasonable fee for providing a person with a
copy of a draft published under subsection (1).
(7)
This section also applies to a proposal to alter or replace a statement.
35
89U
Powers exercisable to advance operational objectives
(1)
The FCA may take action against a provider under this section if it
considers that it is desirable to do so in order to advance one or more of
its operational objectives.
(2)
If the FCA is entitled to take action under this section against a
40
provider, it may—
(a)
suspend, for such period as it considers appropriate, the
provider’s approval, or

Financial Services Bill
Part 2 — Amendments of Financial Services and Markets Act 2000
75

(b)
impose, for such period as it considers appropriate, such
limitations or other restrictions in relation to the giving by the
provider of information as it considers appropriate.
(3)
A suspension may relate only to the giving of information in specified
circumstances.
5
(4)
A restriction may, in particular, be imposed so as to require the
provider to take, or refrain from taking, specified action.
(5)
The FCA may—
(a)
withdraw a suspension or restriction, or
(b)
vary a suspension or restriction so as to reduce the period for
10
which it has effect or otherwise to limit its effect.
(6)
A person against whom the FCA takes action under this section may
refer the matter to the Tribunal.
89V
Action under s.89U: procedure
(1)
Action against a provider under section 89U takes effect—
15
(a)
immediately, if the notice given under subsection (2) so
provides, or
(b)
on such later date as may be specified in the notice.
(2)
If the FCA—
(a)
proposes to take action against a provider under that section, or
20
(b)
takes action against a provider under that section with
immediate effect,

it must give the provider written notice.
(3)
The notice must—
(a)
give details of the action,
25
(b)
state the FCA’s reasons for taking the action and for its
determination as to when the action takes effect,
(c)
inform the provider that the provider may make
representations to the FCA within such period as may be
specified in the notice (whether or not the matter has been
30
referred to the Tribunal),
(d)
inform the provider of when the action takes effect,
(e)
inform the provider of the right to refer the matter to the
Tribunal, and
(f)
give an indication of the procedure on such a reference.
35
(4)
The FCA may extend the period allowed under the notice for making
representations.
(5)
If the FCA decides—
(a)
to take the action in the way proposed, or
(b)
if the action has taken effect, not to rescind it,
40

the FCA must give the provider written notice.
(6)
If the FCA decides—
(a)
not to take the action in the way proposed,
(b)
to take action under section 89U that differs from the action
originally proposed, or
45

Financial Services Bill
Part 2 — Amendments of Financial Services and Markets Act 2000
76

(c)
to rescind action which has taken effect,

the FCA must give the provider written notice.
(7)
A notice under subsection (5) must—
(a)
inform the provider of the right to refer the matter to the
Tribunal; and
5
(b)
give an indication of the procedure on such a reference.
(8)
A notice under subsection (6)(b) must comply with subsection (3).”
(2)
In section 395(13) (meaning of “supervisory notice”), after paragraph (bzb) (as
inserted by section 16(6)) insert—
“(bzc)
section 89V(2), (5) or (6)(b);”.
10
18
Penalties for breach of Part 6 rules
In section 91(6) of FSMA 2000 (penalties for breach of Part 6 rules: limitation
period), for “two years” substitute “3 years”.
19
Repeal of competition scrutiny power
Section 95 of FSMA 2000 (competition scrutiny) is repealed.
15
Control of business transfers
20
Control of business transfers
(1)
In section 104 of FSMA 2000 (control of business transfers) omit “or banking
business transfer scheme”.
(2)
Schedule 6 contains further amendments of Part 7 of FSMA 2000 (control of
20
business transfers).
Hearings and appeals
21
Proceedings before Tribunal
(1)
Part 9 of FSMA 2000 (hearings and appeals) is amended as follows.
(2)
In section 133 (proceedings before Tribunal: general provision)—
25
(a)
in subsection (1)(a), for “the Authority” substitute “the FCA or the
PRA”,
(b)
for subsections (5) and (6) substitute—
“(5)
In the case of a disciplinary reference or a reference under
section 393(11), the Tribunal—
30
(a)
must determine what (if any) is the appropriate action
for the decision-maker to take in relation to the matter;
and
(b)
on determining the reference, must remit the matter to
the decision-maker with such directions (if any) as the
35
Tribunal considers appropriate for giving effect to its
determination.

Financial Services Bill
Part 2 — Amendments of Financial Services and Markets Act 2000
77

(6)
In any other case, the Tribunal must determine the reference or
appeal by either—
(a)
dismissing it; or
(b)
remitting the matter to the decision-maker with a
direction to reconsider and reach a decision in
5
accordance with the findings of the Tribunal.
(6A)
The findings mentioned in subsection (6)(b) are limited to
findings as to—
(a)
issues of fact or law;
(b)
the matters to be, or not to be, taken into account in
10
making the decision; and
(c)
the procedural or other steps to be taken in connection
with the making of the decision.”, and
(c)
after subsection (7) insert—
“(7A)
A reference is a “disciplinary reference” for the purposes of this
15
section if it is in respect of any of the following decisions—
(a)
a decision to impose a penalty under section 63A;
(b)
a decision to take action under section 66;
(c)
a decision to take action under section 87M;
(d)
a decision to take action under section 88A;
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(e)
a decision to take action under section 89K;
(f)
a decision to take action under section 89Q;
(g)
a decision to take action under section 91;
(h)
a decision to take action under section 123;
(i)
a decision to take action under section 131G;
25
(j)
a decision to take action under section 192K;
(k)
a decision to publish a statement under section 205,
impose a penalty under section 206 or suspend a
permission or impose a restriction under section 206A;
(l)
a decision to take action under section 249;
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(m)
a decision to publish a statement under section 312E or
impose a penalty under section 312F;
(n)
a decision to take action under section 345 or 345A.”
(3)
In section 133A (proceedings before Tribunal: decision and supervisory
notices, etc)—
35
(a)
in subsection (1)—
(i)
after “determining” insert “in accordance with section 133(5)”,
and
(ii)
for the words from “given by the Authority” to “the Authority
would” substitute “given by a body, the Tribunal may not direct
40
the body to take action which it would”,
(b)
omit subsections (2) and (3),
(c)
in subsection (4), for the words from the beginning to “a decision
notice—” substitute “The action specified in a decision notice must not
be taken—”, and
45
(d)
in subsection (5)—
(i)
for “the Authority” substitute “the FCA or the PRA”, and
(ii)
for “the Authority’s” substitute “its”.

Financial Services Bill
Part 2 — Amendments of Financial Services and Markets Act 2000
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(4)
In section 133B (offences), in subsection (1)(a), for “the Authority” substitute
“the FCA or the PRA”.
(5)
In section 136 (funding of the legal assistance scheme), in subsections (1), (2),
(6)(a), (7) (in both places) and (8), for “Authority” substitute “FCA”.
Rules and guidance
5
22
Rules and guidance
(1)
For sections 138 to 164 of FSMA 2000 substitute—
“Part 9A
Rules and Guidance
Chapter 1
10
Rule-making powers
General rule-making powers of the FCA and the PRA
137A
The FCA’s general rules
(1)
The FCA may make such rules applying to authorised persons—
(a)
with respect to the carrying on by them of regulated activities,
15
or
(b)
with respect to the carrying on by them of activities which are
not regulated activities,

as appear to the FCA to be necessary or expedient for the purpose of
advancing one or more of its operational objectives.
20
(2)
Rules made under this section are referred to in this Act as the FCA’s
general rules.
(3)
The FCA’s general rules may make provision applying to authorised
persons even though there is no relationship between the authorised
persons to whom the rules will apply and the persons whose interests
25
will be protected by the rules.
(4)
The FCA’s general rules may contain requirements which take into
account, in the case of an authorised person who is a member of a
group, any activity of another member of the group.
(5)
The FCA’s general rules may not—
30
(a)
make provision prohibiting an EEA firm from carrying on, or
holding itself out as carrying on, any activity which it has
permission conferred by Part 2 of Schedule 3 to carry on in the
United Kingdom;
(b)
make provision, as respects an EEA firm, about any matter for
35
which responsibility is, under any of the single market
directives, reserved to the firm’s home state regulator.