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

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

(8) After section 203 insert—

“203A 5Records

(1) The Bank of England must maintain satisfactory arrangements for—

(a) recording decisions made in the exercise of its functions under
this Part, and

(b) the safe-keeping of those records which it considers ought to be
10preserved.

(2) The duty in subsection (1) does not apply to a decision to issue a notice
under section 204(1).

203B Annual report

(1) At least once a year the Bank of England must make a report to the
15Treasury on—

(a) the discharge of its functions under this Part,

(b) the extent to which, in its opinion, in discharging those
functions its financial stability objective has been met, and

(c) such other matters as the Treasury may from time to time direct.

(2) 20Subsection (1) does not require the inclusion in the report of any
information whose publication would in the opinion of the Bank of
England be against the public interest.

(3) The Treasury must lay before Parliament a copy of each report received
by them under this section.”

(9) 25In section 204 (information)—

(a) after subsection (1), insert—

“(1A) The Bank of England may by notice in writing require the
operator of a recognised inter-bank payment system to provide
information which the Bank requires in connection with the
30exercise of its functions (whether under this Part or otherwise)
in pursuance of its financial stability objective.”,

(b) in subsections (2) and (3), after “notice” insert “under subsection (1) or
(1A)”,

(c) in subsection (4), for paragraph (b) substitute—

“(b) 35the FCA;

(ba) the PRA;”, and

(d) in paragraph (c) of that subsection, for “or the FSA” substitute “, the
FCA or the PRA”.

(10) In section 206A (services forming part of recognised inter-bank payment
40systems)—

(a) in subsection (4)(a), for “and the FSA” substitute “, the FCA and the
PRA”, and

(b) in subsection (6), for paragraph (b) (and the “and” at the end of it)
substitute—

“(b) 45the FCA,

(ba) the PRA, and”.

89 International obligations

In Part 5 of the Banking Act 2009, after section 206A insert—

206B   International obligations

(1) 5If it appears to the Treasury that any action proposed to be taken by the
Bank of England in exercising its powers under this Part would be
incompatible with EU obligations or any other international obligations
of the United Kingdom, the Treasury may direct the Bank not to take
that action.

(2) 10If it appears to the Treasury that any action which the Bank of England
has power under this Part to take is required for the purpose of
implementing any such obligation, the Treasury may direct the Bank to
take that action.

(3) A direction under this section—

(a) 15may include such supplemental or incidental requirements as
the Treasury consider necessary or expedient, and

(b) is enforceable on an application by the Treasury, by injunction
or, in Scotland, by an order for specific performance under
section 45 of the Court of Session Act 1988.”

20Further amendments

90 Amendments relating to new regulators

Schedule 17 contains amendments of the Banking Act 2009 related to the
provisions of Part 2 of this Act.

Part 8 25Miscellaneous

Amendments of Companies Act 1989

91 Amendments of Companies Act 1989

(1) Section 166 of the Companies Act 1989 (power of Secretary of State to give
directions to recognised investment exchange or recognised clearing house) is
30amended as follows.

(2) In subsection (2)(a)—

(a) for “Authority”, in the first place, substitute “appropriate regulator”,
and

(b) for “Authority”, in the second place, substitute “regulator”.

(3) 35In subsection (2)(b)—

(a) for “Authority”, in the first place, substitute “appropriate regulator”,
and

(b) for “Authority”, in the second place, substitute “regulator”.

(4) In subsection (3)—

(a) for “Authority” substitute “appropriate regulator”,

(b) omit the “or” following paragraph (a), and

(c) at the end insert—

“(c) 5in either case, that the direction is necessary having
regard to the public interest in the stability of the
financial system of the United Kingdom, or

(d) in either case, that the direction is necessary—

(i) to facilitate a proposed or possible use of a
10power under Part 1 of the Banking Act 2009
(special resolution regime), or

(ii) in connection with a particular exercise of a
power under that Part.”

(5) In subsection (7)—

(a) 15for “Authority”, in the first place, substitute “appropriate regulator”,
and,

(b) omit the words from “The Authority shall not” to the end.

(6) After that subsection insert—

“(7A) Where the exchange or clearing house is acting in accordance with a
20direction under subsection (2)(a) that was given only by virtue of
paragraph (a) of subsection (3), the appropriate regulator shall not give
a direction under subsection (7) unless it is satisfied that the direction
under that subsection will not impede or frustrate the proper and
efficient conduct of the default proceedings.

(7B) 25Where the exchange or clearing house has taken action under its default
rules without being directed to do so, the appropriate regulator shall
not give a direction under subsection (7) unless—

(a) it is satisfied that the direction under that subsection will not
impede or frustrate the proper and efficient conduct of the
30default proceedings, or

(b) it is satisfied that the direction is necessary—

(i) having regard to the public interest in the stability of the
financial system of the United Kingdom,

(ii) to facilitate a proposed or possible use of a power under
35Part 1 of the Banking Act 2009 (special resolution
regime), or

(iii) in connection with a particular exercise of a power
under that Part.”

(7) In subsection (8), for “Authority” substitute “the regulator which gave the
40direction”.

(8) At the end insert—

“(9) The appropriate regulator”—

(a) in relation to a recognised UK investment exchange, means the
FCA, and

(b) 45in relation to a recognised UK clearing house, means the Bank
of England.”

(9) In the heading, omit “of Secretary of State”.

Settlement systems

92 Evidencing and transfer of title to securities without written instrument

In section 785 of the Companies Act 2006 (provision enabling procedures for
evidencing and transferring title), at the end insert—

“(7) 5The regulations may confer functions on any person, including—

(a) the function of giving guidance or issuing a code of practice in
relation to any provision made by the regulations, and

(b) the function of making rules for the purposes of any provision
made by the regulations.

(8) 10The regulations may, in prescribed cases, confer immunity from
liability in damages.”

Director of Savings

93 Provision of services by Director of Savings

(1) The Director of Savings (“the Director”) may enter into arrangements with a
15public body for the provision by the Director, or persons authorised by the
Director, of services to the body.

(2) Arrangements are to be on such terms, including terms as to payment, as may
be agreed.

(3) “Public body” means a person or body whose functions are of a public nature.

20Part 9 General

Further amendments and repeals

94 Further minor and consequential amendments and repeals

(1) Schedule 18 contains further amendments of FSMA 2000 and other
25enactments.

(2) Schedule 19 contains further consequential repeals.

Orders

95 Orders: general

(1) Any power of the Treasury or the Secretary of State to make an order under this
30Act is exercisable by statutory instrument.

(2) Any order made by the Treasury or the Secretary of State under this Act may—

(a) contain such incidental or transitional provision as the Treasury
consider appropriate, and

(b) make different provision for different cases.

96 Orders: Parliamentary control

(1) A statutory instrument containing (alone or with other provision) an order to
which subsection (2) applies may not be made unless a draft of the instrument
has been laid before Parliament and approved by a resolution of each House.

(2) 5This subsection applies to—

(a) an order under Part 3 (mutual societies);

(b) an order under section 98 (power to make further consequential
amendments) that amends or repeals primary legislation.

(3) A statutory instrument containing an order under this Act, other than an
10instrument to which subsection (1) applies or an instrument containing only
provision made under section 102 (commencement), is subject to annulment in
pursuance of a resolution of either House of Parliament.

(4) In this section “primary legislation” means—

(a) an Act of Parliament,

(b) 15an Act of the Scottish Parliament,

(c) a Measure or Act of the National Assembly for Wales, or

(d) Northern Ireland legislation.

Interpretation

97 Interpretation

(1) 20In this Act “FSMA 2000” means the Financial Services and Markets Act 2000.

(2) In this Act—

• “the FCA” means the Financial Conduct Authority;

• “the PRA” means the Prudential Regulation Authority;

• “the UK financial system” means the financial system of the United
  25Kingdom.

(3) In this Act “enactment” includes—

(a) an enactment contained in subordinate legislation within the meaning
of the Interpretation Act 1978;

(b) an enactment contained in, or in an instrument made under, an Act of
30the Scottish Parliament;

(c) an enactment contained in, or in an instrument made under, a Measure
or Act of the National Assembly for Wales;

(d) an enactment contained in, or in an instrument made under, Northern
Ireland legislation.

35Consequential and transitional provisions

98 Power to make further consequential amendments etc

(1) The Treasury or the Secretary of State may by order make such provision
amending, repealing, revoking or applying with modifications any enactment
to which this section applies as they consider necessary or expedient in
40consequence of any provision made by or under this Act.

(2) This section applies to—

(a) any enactment passed or made before the passing of this Act, and

(b) any enactment passed or made on or before the last day of the Session
in which this Act is passed.

(3) Amendments and repeals made under this section are additional to those
5made by or under any other provision of this Act.

99 Transitional provisions and savings

(1) Schedule 20 contains transitional provisions.

(2) Schedule 21 contains provision about the transfer of property, rights and
liabilities.

(3) 10The Treasury may by order make such provision as they consider necessary or
expedient for transitory, transitional or saving purposes in connection with the
commencement of any provision made by or under this Act.

(4) An order under subsection (3) may, in particular—

(a) make provision enabling any person by whom any powers will become
15exercisable, on a date set by or under this Act, by virtue of any
provision made by or under this Act to take before that date any steps
which are necessary as a preliminary to the exercise of those powers;

(b) make provision treating any rules made, permission given or other
thing done by the Financial Services Authority before commencement
20under an enactment amended by this Act—

(i) as having been made, given or done under a corresponding
provision of the enactment as so amended;

(ii) as having been made, given or done (or also made, given or
done) by the PRA or the Bank of England;

(c) 25make provision for the continuation of proceedings begun before
commencement, including provision about the decisions available to
bodies before which such proceedings take place and the effect of their
decisions;

(d) make provision for making savings, or additional savings, from the
30effect of any repeal or revocation made by or under this Act.

(5) An order under subsection (3) may—

(a) confer functions on the Treasury, the FCA or the PRA, or on the Bank
of England or its Financial Policy Committee;

(b) modify, exclude or apply (with or without modifications) any
35enactment (including any provision of, or made under, this Act).

(6) In subsection (4) “commencement” means the commencement of such
provisions of this Act as may be specified by the order.

Final provisions

100 Financial provision

(1) 40There is to be paid out of money provided by Parliament—

(a) any expenditure incurred under or by virtue of this Act by a Minister
of the Crown or government department (apart from any expenditure
to be met from the National Loans Fund), and

(b) any increase attributable to this Act in the sums payable under any
other Act out of money so provided.

(2) There is to be paid out of the National Loans Fund any increase attributable to
this Act in the sums payable under any other Act out of that Fund.

101 5Extent

This Act extends to England and Wales, Scotland and Northern Ireland.

102 Commencement

(1) The following provisions come into force on the day on which this Act is
passed—

• 10sections 95 to 98;

• section 99(3) to (8);

• sections 100 and 101;

• this section;

• section 103.

(2) 15Section 93 comes into force at the end of the period of 2 months beginning with
day on which this Act is passed.

(3) The remaining provisions of this Act come into force on such day as the
Treasury may by order appoint.

(4) Different days may be appointed for different purposes.

103 20Short title

This Act may be cited as the Financial Services Act 2012.

SCHEDULES

Section 3

SCHEDULE 1 Bank of England Financial Policy Committee

Part 1 5Schedule to be inserted as Schedule 2A to Bank of England Act 1998

This is the Schedule to be inserted in the Bank of England Act 1998 after
Schedule 2—

Section 9B

“Schedule 2A Financial Policy Committee

Terms of office of appointed members

1 (1) 10Appointment under section 9B(1)(d) or (e) as a member of the
Financial Policy Committee is to be for a period of 3 years, but this
is subject to sub-paragraph (2) and to paragraph 3.

(2) Initially some appointments may be for shorter and different
periods so as to secure that appointments expire at different times.

2 (1) 15A person may not be appointed as a member of the Committee
under section 9B(1)(e) more than twice.

(2) For this purpose an appointment which by virtue of paragraph
1(2) is for a period of less than 3 years is to be disregarded.

3 (1) If it appears to the Chancellor of the Exchequer that in the
20circumstances it is desirable to do so, the Chancellor may, before
the end of term for which a person is appointed as a member of the
Committee under section 9B(1)(e), extend the persons’s term of
office on one occasion for a specified period of not more than 6
months.

(2) 25The term being extended may be the person’s first or second term
or, in a case where paragraph 2(2) allows a third term, the person’s
third term.

(3) If a person whose first term of office is extended is subsequently
re-appointed under section 9B(1)(e)—

(a) 30the length of the second term is to be reduced by a period
equal to the extension of the first term, but

(b) the second term may itself subsequently be extended
under sub-paragraph (1).

(4) In a case where a person’s second term of office is extended and
paragraph 2(2) allows a third term, sub-paragraph (3) is to be read
as if the references to first and second terms were references to
second and third terms respectively.

4 (1) 5A person appointed under section 9B(1)(d) or (e) may resign the
office by written notice to the Bank.

(2) Where the notice relates to a person appointed under section
9B(1)(e), the Bank must give a copy of the notice to the Treasury.

5 (1) The terms and conditions on which a person holds office as a
10member of the Committee appointed under section 9B(1)(e) are to
be such as the Bank may determine.

(2) The function of determining terms and conditions of office under
sub-paragraph (1) is to stand delegated to the sub-committee
constituted by section 3.

15Qualification for appointment

6 (1) The following persons are disqualified for appointment under
section 9B(1)(d) or (e)—

(a) a Minister of the Crown;

(b) a person serving in a government department in
20employment in respect of which remuneration is paid out
of money provided by Parliament.

(2) A member of the Monetary Policy Committee of the Bank
appointed under section 13(2)(c) is disqualified for appointment
under section 9B(1)(e).

25Removal of appointed members

7 A person appointed under section 9B(1)(d) or (e) vacates office on
becoming a person to whom paragraph 6(1)(a) or (b) applies.

8 A person appointed under section 9B(1)(d) vacates office on
ceasing to have executive responsibility within the Bank for the
30analysis of threats to financial stability or, as the case may be, the
analysis of markets.

9 (1) The Bank may, with the consent of the Chancellor of the
Exchequer, remove a member appointed under section 9B(1)(d) or
(e) (“M”) if it is satisfied—

(a) 35that M has been absent from 3 or more meetings of the
Committee without the Committee’s consent,

(b) that M has become bankrupt, that M’s estate has been
sequestrated or that M has made an arrangement with or
granted a trust deed for M’s creditors, or

(c) 40that M is unable or unfit to discharge M’s functions as a
member.

(2) The Bank may, with the consent of the Chancellor of the
Exchequer, also remove a member appointed under section
9B(1)(e) (“M”) if it is satisfied that in all the circumstances M’s

financial or other interests are such as substantially to affect the
functions as member which it would be proper for M to discharge.

(3) The function of removing a member under sub-paragraph (1) or
(2) is to stand delegated to the sub-committee constituted by
5section 3.

Meetings

10 (1) The Committee shall meet at least 4 times in each calendar year.

(2) The Governor of the Bank (or in the Governor’s absence the Bank’s
Deputy Governor for financial stability) may summon a meeting
10at any time on giving such notice as the person giving the notice
thinks the circumstances require.

Proceedings

11 (1) At a meeting of the Committee, the proceedings are to be
regulated as follows.

(2) 15The quorum is to be 7 (excluding the Treasury’s representative)
and of the 7—

(a) one must be the Governor of the Bank or the Bank’s
Deputy Governor for financial stability,

(b) unless both those mentioned in paragraph (a) are present,
20one must be either of the other Deputy Governors of the
Bank, and

(c) one must be a member appointed under section 9B(1)(e).

(3) The chair is to be taken by the Governor of the Bank or, if the
Governor is not present, by the Bank’s Deputy Governor for
25financial stability.

(4) The person chairing the meeting must seek to secure that decisions
of the Committee are reached by consensus wherever possible.

(5) Where that person forms the opinion that consensus cannot be
reached, a decision is to be taken by a vote of all those members
30present at the meeting.

(6) In the event of a tie, the person chairing the meeting is to have a
second casting vote.

(7) At a meeting of the Committee—

(a) the Treasury’s representative may not vote, and

(b) 35anything done by the Treasury’s representative is to be
disregarded in determining under sub-paragraph (4) or (5)
whether there is a consensus.

(8) Subject to sub-paragraphs (2) to (7) and paragraph 14, the
Committee is to determine its own procedure.

12 40The Committee may, in relation to sub-paragraph (2), (3), (4) or (5)
of paragraph 11, determine circumstances in which a member
who is not present at, but is in communication with, a meeting is
to be treated for the purposes of that sub-paragraph as present at
it.