Financial Services Bill (HC Bill 323)

(9) In deciding whether to exercise a power under section 345A(4)(c) in
the case of any particular contravention, the PRA must have regard
to any statement of policy published by it under this section and in
force at a time when the contravention occurred.

(10) 5A regulator may charge a reasonable fee for providing a person with
a copy of the statement.

345E Statements of policy: procedure

(1) Before a regulator issues a statement under section 345D, the
regulator must publish a draft of the proposed statement in the way
10appearing to the regulator 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 proposal may be made to the regulator within a specified time.

(3) Before issuing the proposed statement, the regulator must have
15regard to any representations made to it in accordance with
subsection (2).

(4) If the regulator issues the proposed statement it must publish an
account, in general terms, of—

(a) the representations made to it in accordance with subsection
20(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 regulator, significant, the
regulator must (in addition to complying with subsection (4))
25publish details of the difference.

(6) A regulator may charge a reasonable fee for providing a person with
a copy of a draft under subsection (1).

(7) This section also applies to a proposal to alter or replace a statement.”

7 (1) Section 392 (application of sections 393 and 394) is amended as follows.

(2) 30In paragraph (a), for “345(2) (whether as a result of subsection (1) of that
section” substitute “345B(1) (whether as a result of section 345(2), 345A(3)”.

(3) In paragraph (b), for “345(3) (whether as a result of subsection (1) of that
section” substitute “345B(4) (whether as a result of section 345(2), 345A(3)”.

Section 41

SCHEDULE 14 35Amendments of Part 24 of FSMA 2000: insolvency

1 Part 24 of FSMA 2000 is amended as follows.

2 In section 355 (interpretation of Part 24) at the end of subsection (1) insert—

• “ “PRA-regulated person” means a person who—

  (a)

  is or has been a PRA-authorised person,

  Financial Services BillPage 261

  (b)

  is or has been an appointed representative whose
  principal (or one of whose principals) is, or was, a
  PRA-authorised person, or

  (c)

  is carrying on or has carried on a PRA-regulated
  5activity in contravention of the general prohibition.”

3 (1) Section 356 (powers to participate in proceedings: company voluntary
arrangements) is amended as follows.

(2) In subsections (1) and (2), for “the Authority” substitute “the appropriate
regulator”.

(3) 10In subsection (3)—

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

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

(4) After subsection (3) insert—

“(4) 15The appropriate regulator” means—

(a) in the case of a PRA-authorised person—

(i) for the purposes of subsections (1) and (2), the FCA or
the PRA, and

(ii) for the purposes of subsection (3), each of the FCA
20and the PRA;

(b) in any other case, the FCA.

(5) If either regulator makes an application to the court under any of
those provisions in relation to a PRA-authorised person, the other
regulator is entitled to be heard at any hearing relating to the
25application.”

(5) In the heading, for “Authority’s powers” substitute “Powers of FCA and
PRA”.

4 (1) Section 357 (powers to participate in proceedings: individual voluntary
arrangements) is amended as follows.

(2) 30In subsections (1) to (5), for “Authority” substitute “appropriate regulator”.

(3) In subsection (6)—

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

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

(4) 35After subsection (6) insert—

“(7) The appropriate regulator” means—

(a) in the case of a PRA-authorised person—

(i) for the purposes of subsections (1) and (4) to (6), each
of the FCA and the PRA, and

(ii) 40for the purposes of subsection (3), the FCA or the
PRA;

(b) in any other case, the FCA.

(8) If either regulator makes an application to the court under any of the
provisions mentioned in subsection (5) in relation to a PRA-

authorised person, the other regulator is entitled to be heard at any
hearing relating to the application.”

(5) In the heading, for “Authority’s powers” substitute “Powers of FCA and
PRA”.

5 (1) 5Section 358 (powers to participate in proceedings: trust deeds for creditors
in Scotland) is amended as follows.

(2) In subsections (2) to (4), for “Authority” substitute “appropriate regulator”.

(3) In subsection (5)—

(a) for “the Authority”, in the first place, substitute “the appropriate
10regulator”, and

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

(4) In subsection (6), for “the Authority” substitute “a regulator”.

(5) After subsection (6) insert—

“(6A) The appropriate regulator” means—

(a) 15in the case of a PRA-authorised person—

(i) for the purposes of subsections (2), (3) and (4), each of
the FCA and the PRA, and

(ii) for the purposes of subsection (5), the FCA or the
PRA;

(b) 20in any other case, the FCA.”

(6) In the heading, for “Authority’s powers” substitute “Powers of FCA and
PRA”.

6 (1) Section 359 (administration order) is amended as follows.

(2) In subsection (1), for “Authority” substitute “FCA”.

(3) 25After subsection (1) insert—

“(1A) The PRA may make an administration application under Schedule
B1 to the 1986 Act or Schedule B1 to the 1989 Order in relation to a
company or insolvent partnership which is a PRA-regulated
person.”

(4) 30In subsection (2), for “the Authority” substitute “a regulator”, and

(5) In subsection (4), in the definition of “authorised deposit taker”, for “Part
IV”, in both places, substitute “Part 4A”.

7 (1) Section 361 (administrator’s duty to report) is amended as follows.

(2) In subsection (2), for “Authority” substitute “appropriate regulator”.

(3) 35After subsection (2) insert—

“(2A) The appropriate regulator” means—

(a) where the regulated activity is a PRA-regulated activity, the
FCA and the PRA;

(b) in any other case, the FCA.”

(4) For subsection (3) substitute—

“(3) Subsection (2) does not apply where—

(a) the administration arises out of an administration order
made on an application made or petition presented by a
5regulator, and

(b) the regulator’s application or petition depended on a
contravention by the company or partnership of the general
prohibition.”

(5) In the heading, for “Authority” substitute “FCA and PRA”.

8 (1) 10Section 362 (powers to participate in proceedings: administration orders) is
amended as follows.

(2) In subsection (1), omit “other than the Authority”.

(3) After subsection (1A) insert—

“(1B) This section also applies in relation to—

(a) 15the appointment under paragraph 22 of Schedule B1 to the
1986 Act (as applied by order under section 420 of the 1986
Act), or under paragraph 23 of Schedule B1 to the 1989 Order
(as applied by order under Article 364 of the 1989 Order), of
an administrator of a partnership of a kind described in
20subsection (1)(a) to (c), or

(b) the filing with the court of a copy of notice of intention to
appoint an administrator under either of those paragraphs
(as so applied).”

(4) In subsections (2) to (6), for “Authority” substitute “appropriate regulator”,

(5) 25After subsection (6) insert—

“(7) The appropriate regulator” means—

(a) for the purposes of subsections (2) to (4) and (6)—

(i) where the company or partnership is a PRA-
regulated person, each of the FCA and the PRA, and

(ii) 30in any other case, the FCA;

(b) for the purposes of subsection (5)—

(i) where the company or partnership is a PRA-
regulated person, the FCA or the PRA, and

(ii) in any other case, the FCA.

(8) 35But where the administration application was made by a regulator
“the appropriate regulator” does not include that regulator.”

(6) In the heading, for “Authority’s powers” substitute “Powers of FCA and
PRA”.

9 (1) Section 362A (administrator appointed by company or directors) is
40amended as follows.

(2) In subsection (1), after “company” insert “or partnership”.

(3) For subsection (2) substitute—

“(2) An administrator of the company or partnership may not be
appointed under a provision specified in subsection (2A) without the
consent of the appropriate regulator.

(2A) 5Those provisions are—

(a) paragraph 22 of Schedule B1 to the 1986 Act (including that
paragraph as applied in relation to partnerships by order
under section 420 of that Act);

(b) paragraph 23 of Schedule B1 to the 1989 Order (including that
10paragraph as applied in relation to partnerships by order
under article 364 of that Order).

(2B) “The appropriate regulator” means—

(a) where the company or partnership is a PRA-regulated
person, the PRA, and

(b) 15in any other case, the FCA.”

10 (1) Section 363 (powers to participate in proceedings: receivership) is amended
as follows.

(2) In subsections (2) to (5), for “Authority” substitute “appropriate regulator”.

(3) After subsection (5) insert—

“(6) 20The appropriate regulator” means—

(a) for the purposes of subsections (2) to (4)—

(i) where the company is a PRA-regulated person, each
of the FCA and the PRA, and

(ii) in any other case, the FCA;

(b) 25for the purposes of subsection (5)—

(i) where the company is a PRA-regulated person, the
FCA or the PRA, and

(ii) in any other case, the FCA.”

(4) In the heading, for “Authority’s powers” substitute “Powers of FCA and
30PRA”.

11 In section 364 (receiver’s duty to report to Authority)—

(a) for “to the Authority without delay” substitute “without delay to the
FCA and, if the regulated activity concerned is a PRA-regulated
activity, to the PRA”, and

(b) 35in the heading, for “Authority” substitute “FCA and PRA”.

12 (1) Section 365 (powers to participate in proceedings: voluntary winding up) is
amended as follows.

(2) In subsections (2) to (7), for “Authority” substitute “appropriate regulator”.

(3) After subsection (7) insert—

“(8) 40The appropriate regulator” means—

(a) for the purposes of subsections (2) to (4), (6) and (7)—

(i) where the company is a PRA-authorised person, each
of the FCA and the PRA, and

(ii) in any other case, the FCA;

(b) for the purposes of subsection (5)—

(i) where the company is a PRA-authorised person, the
FCA or the PRA, and

(ii) in any other case, the FCA.”

(4) 5In the heading, for “Authority’s powers” substitute “Powers of FCA and
PRA”.

13 (1) Section 366 (insurers effecting or carrying out long-term contracts of
insurance) is amended as follows.

(2) In subsections (1), (2) and (5), for “Authority” substitute “PRA”.

(3) 10At the end insert—

“(9) Before giving or refusing consent under subsection (1), the PRA must
consult the FCA.

(10) In the event that the activity of effecting or carrying out long-term
contracts of insurance as principal is not to any extent a PRA-
15regulated activity—

(a) references to the PRA in subsections (1), (2) and (5) are to be
read as references to the FCA, and

(b) subsection (9) does not apply.”

14 (1) Section 367 (winding-up petitions) is amended as follows.

(2) 20In subsection (1), for “Authority” substitute “FCA”.

(3) After that subsection insert—

“(1A) The PRA may present a petition to the court for the winding up of a
body which is a PRA-regulated person.”

(4) In subsection (2), for “subsection (1)” substitute “subsections (1) and (1A)”.

(5) 25In subsection (6), after “(1)” insert “or (1A)”.

15 (1) Section 368 (winding-up petitions: EEA and Treaty firms) is amended as
follows.

(2) The existing provision becomes subsection (1).

(3) In that subsection—

(a) 30for “The Authority” substitute “A regulator”, and

(b) after “it” insert “or the other regulator”.

(4) After that subsection insert—

“(2) If a regulator receives from the home state regulator of a body falling
within subsection (1)(a) or (b) a request to present a petition to the
35court under section 367 for the winding up of the body, it must—

(a) notify the other regulator of the request, and

(b) provide the other regulator with such information relating to
the request as it thinks fit.”

16 (1) Section 369 (insurers: service of petition etc. on Authority) is amended as
40follows.

(2) In subsection (1)—

(a) for “the Authority” substitute “a regulator”, and

(b) for “on the Authority” substitute “on the appropriate regulator”.

(3) In subsection (2)—

(a) for “the Authority” substitute “a regulator”, and

(b) 5for “on the Authority” substitute “on the appropriate regulator”.

(4) After that subsection insert—

“(3) The appropriate regulator” means—

(a) in relation to a PRA-authorised person, the FCA and the PRA,
and

(b) 10in any other case, the FCA.

(4) If either regulator—

(a) presents a petition for the winding up of a PRA-authorised
person with permission to effect or carry out contracts of
insurance, or

(b) 15applies to have a provisional liquidator appointed under
section 135 of the 1986 Act (or Article 115 of the 1989 Order)
in respect of a PRA-authorised person with permission to
effect or carry out contracts of insurance,

that regulator must serve a copy of the petition or application (as the
20case requires) on the other regulator.”

(5) In the heading, for “Authority” substitute “FCA and PRA”.

17 (1) Section 369A (reclaim funds: service of petition etc. on Authority) is
amended as follows.

(2) In subsection (1)—

(a) 25for “other than the Authority” substitute “other than a regulator”,
and

(b) for “on the Authority” substitute “on the appropriate regulator”.

(3) In subsection (2)—

(a) for “other than the Authority” substitute “other than a regulator”,
30and

(b) for “on the Authority” substitute “on the appropriate regulator”.

(4) After subsection (3) insert—

“(4) The appropriate regulator” means—

(a) in relation to an authorised reclaim fund that is a PRA-
35authorised person, the FCA and the PRA, and

(b) in relation to any other authorised reclaim fund, the FCA.

(5) If either regulator—

(a) presents a petition for the winding up of an authorised
reclaim fund that is a PRA-authorised person, or

(b) 40applies to have a provisional liquidator appointed under
section 135 of the 1986 Act (or Article 115 of the 1989 Order)
in respect of an authorised reclaim fund that is a PRA-
authorised person,

that regulator must serve a copy of the petition or application (as the
45case requires) on the other regulator.”

(5) In the heading, for “Authority” substitute “FCA and PRA”.

18 (1) Section 370 (liquidator’s duty to report to Authority) is amended as follows.

(2) The existing provision becomes subsection (1).

(3) In subsection (1)—

(a) 5in paragraph (a), for “a person other than the Authority” substitute
“any person”, and

(b) in paragraph (b), for “to the Authority without delay” substitute
“without delay to the FCA and, if the regulated activity concerned is
a PRA-regulated activity, to the PRA”.

(4) 10After that subsection insert—

“(2) Subsection (1) does not apply where—

(a) a body is being wound up on a petition presented by a
regulator, and

(b) the regulator’s petition depended on a contravention by the
15body of the general prohibition.”

(5) In the heading, for “Authority” substitute “FCA and PRA”.

19 (1) Section 371 (power to participate in proceedings: winding up by the court)
is amended as follows.

(2) In subsection (1), omit “other than the Authority”.

(3) 20In subsections (2) to (5), for “Authority” substitute “appropriate regulator”.

(4) After subsection (5) insert—

“(6) The appropriate regulator” means—

(a) for the purposes of subsections (2), (3) and (5)—

(i) where the body is a PRA-regulated person, each of
25the FCA and the PRA, and

(ii) in any other case, the FCA;

(b) for the purposes of subsection (4)—

(i) where the body is a PRA-regulated person, the FCA
or the PRA, and

(ii) 30in any other case, the FCA.

(7) But where the petition was presented by a regulator “the appropriate
regulator” does not include the regulator which presented the
petition.”

(5) In the heading, for “Authority’s powers” substitute “Powers of FCA and
35PRA”.

20 (1) Section 372 (bankruptcy petitions) is amended as follows.

(2) In subsection (1), for “Authority” substitute “FCA”.

(3) After that subsection insert—

“(1A) The PRA may present a petition to the court—

(a) 40under section 264 of the 1986 Act (or Article 238 of the 1989
Order) for a bankruptcy order to be made against an
individual who is a PRA-regulated person;

(b) under section 5 of the 1985 Act for the sequestration of the
estate of an individual who is a PRA-regulated person.”

(4) In subsection (2), for “such a petition may be presented” substitute “a
petition may be presented by virtue of subsection (1) or (1A)”.

(5) 5In subsection (4)(a)—

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

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

(6) In subsection (6)—

(a) after “(1)(b)” insert “or (1A)(b)”, and

(b) 10in paragraph (a), for “the Authority” substitute “the regulator by
which the petition is presented”.

21 (1) Section 373 (insolvency practitioner’s duty to report to Authority) is
amended as follows.

(2) In subsection (1)—

(a) 15in paragraph (a), omit the words from “by virtue of” to “Authority”,
and

(b) for “to the Authority without delay” substitute “without delay to the
FCA and, if the regulated activity concerned is a PRA-regulated
activity, to the PRA”.

(3) 20After that subsection insert—

“(1A) Subsection (1) does not apply where—

(a) the bankruptcy order or sequestration award is in force by
virtue of a petition presented by a regulator, and

(b) the regulator’s petition depended on a contravention by the
25individual of the general prohibition.”

(4) In the heading, for “to Authority” substitute “to FCA and PRA”.

22 (1) Section 374 (Authority’s powers to participate in proceedings: bankruptcy)
is amended as follows.

(2) In subsection (1), omit “other than the Authority”.

(3) 30In subsections (2) to (4), for “Authority” substitute “appropriate regulator”.

(4) After subsection (6) insert—

“(7) The appropriate regulator” means—

(a) for the purposes of subsections (2) and (3)—

(i) where the individual or entity is a PRA-regulated
35person, each of the FCA and the PRA, and

(ii) in any other case, the FCA;

(b) for the purposes of subsection (4)—

(i) where the individual or entity is a PRA-regulated
person, the FCA or the PRA, and

(ii) 40in any other case, the FCA.

(8) But where the petition was presented by a regulator “the appropriate
regulator” does not include the regulator which presented the
petition.”

(5) In the heading, for “Authority’s powers” substitute “Powers of FCA or
PRA”.

23 (1) Section 375 (Authority’s right to apply for an order relating to debt
avoidance) is amended as follows.

(2) 5In subsection (1), for “Authority” substitute “FCA”.

(3) After subsection (1) insert—

“(1A) The PRA may apply for an order under section 423 of the 1986 Act
(or Article 367 of the 1989 Order) in relation to a debtor if—

(a) at the time the transaction at an undervalue was entered into,
10the debtor was carrying on a PRA-regulated activity
(whether or not in contravention of the general prohibition);
and

(b) a victim of the transaction is or was party to an agreement
entered into with the debtor, the making or performance of
15which constituted or was part of a PRA-regulated activity
carried on by the debtor.”

(4) In subsection (2), after “subsection (1)(b)” insert “or subsection (1A)(b) (as
the case may be)”.

(5) In the heading, for “Authority’s right” substitute “Right of FCA and PRA”.

24 (1) 20Section 376 (continuation of contracts of long-term insurance where insurer
in liquidation) is amended as follows.

(2) In subsection (11)(c), for “Authority” substitute “PRA”.

(3) After subsection (11) insert—

“(11A) The PRA must—

(a) 25consult the FCA before making an application under
subsection (10), and

(b) provide the FCA with a copy of any actuary’s report made to
the PRA under that subsection.

(11B) In the event that the activity of effecting or carrying out long-term
30contracts of insurance as principal is not to any extent a PRA-
authorised activity—

(a) the reference in subsection (11)(c) to the PRA is to be read as
a reference to the FCA, and

(b) subsection (11A) does not apply.”

Section 42

35SCHEDULE 15 The consumer financial education body

1 Schedule 1A (further provision about the consumer financial education
body) is amended as follows.

2 In paragraph 1 (ensuring exercise of functions) for “Authority”, in each
40place, substitute “FCA”.