Financial Services Bill

Session 2012 - 13
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Financial Services Bill

Financial Services Bill
Part 6 — Investigation of complaints against regulators
149

(5)
For the purposes of subsection (2), the following are the PRA’s legislative
functions—
(a)
making rules under FSMA 2000;
(b)
issuing codes under section 64 of FSMA 2000;
(c)
issuing statements under—
5
(i)
section 63C, 64, 69, 192H, 192N, 210 or 345D of FSMA 2000, or
(ii)
section 76 of the Financial Services Act 2012;
(d)
giving directions under section 316, 318 or 328 of FSMA 2000;
(e)
issuing guidance under section 2H of FSMA 2000.
(6)
For the purposes of subsection (3), the following functions of the Bank of
10
England under Part 18 of FSMA 2000 are legislative functions—
(a)
making rules;
(b)
issuing statements—
(i)
under section 312J, or
(ii)
by virtue of the application by Schedule 17A of a provision
15
mentioned in subsection (5)(c)(i) of this section.
(7)
For the purposes of subsection (3), the following functions of the Bank of
England under Part 5 of the Banking Act 2009 are legislative functions—
(a)
publishing principles or codes of practice under sections 188 and 189;
(b)
preparing statements under section 198(3).
20
81
Consultation in relation to, and publication of, complaints scheme
(1)
Before making the complaints scheme, the regulators must publish a draft of
the proposed scheme in the way appearing to them to be best calculated to
bring it to the attention of the public.
(2)
The draft must be accompanied by notice that representations about it may be
25
made to any of the regulators within a specified time.
(3)
Before making the proposed complaints scheme, the regulators must have
regard to any representations made to any of them in accordance with
subsection (2).
(4)
If the regulators make the proposed complaints scheme, they must publish an
30
account, in general terms, of—
(a)
the representations made to any of them in accordance with subsection
(2), and
(b)
their response to the representations.
(5)
If the complaints scheme differs from the draft published under subsection (1)
35
in a way which is, in the opinion of the regulators, significant the regulators
must (in addition to complying with subsection (4)) publish details of the
difference.
(6)
The regulators must publish up-to-date details of the complaints scheme
including, in particular, details of—
40
(a)
the provision made under section 82(5), and
(b)
the powers which the investigator has to investigate a complaint.
(7)
Those details must be published in the way appearing to the regulators to be
best calculated to bring them to the attention of the public.

Financial Services Bill
Part 6 — Investigation of complaints against regulators
150

(8)
The regulators must notify the Treasury of the publication of details under
subsection (6).
(9)
A regulator may charge a reasonable fee for providing a person with a copy
of—
(a)
a draft published under subsection (1), or
5
(b)
details published under subsection (6).
(10)
Subsections (1) to (5) and (9)(a) also apply to a proposal to alter or replace the
complaints scheme.
82
Investigation of complaints
(1)
A regulator is not obliged to investigate in accordance with the complaints
10
scheme a complaint which it reasonably considers would be more
appropriately dealt with in another way (for example by referring the matter
to the Upper Tribunal or by the institution of other legal proceedings).
(2)
The complaints scheme must provide—
(a)
for reference to the investigator of any complaint which a regulator is
15
investigating,
(b)
for the investigator—
(i)
to have the means to conduct a full investigation of the
complaint,
(ii)
to report to the regulator to which the complaint relates and the
20
complainant on the result of the investigator’s investigation,
and
(iii)
to be able to publish the investigator’s report (or part of it) if the
investigator considers that it (or the part) ought to be brought to
the attention of the public, and
25
(c)
for the meeting by the regulators of the expenses of the scheme.
(3)
If a regulator has decided not to investigate a complaint, it must notify the
investigator.
(4)
If the investigator considers that a complaint of which the investigator has been
notified under subsection (3) ought to be investigated, the investigator may
30
proceed as if the complaint had been referred to the investigator under the
complaints scheme.
(5)
The complaints scheme must confer on the investigator the power to
recommend, if the investigator thinks it appropriate, that the regulator to
which a complaint relates takes either or both of the following steps—
35
(a)
makes a compensatory payment to the complainant, or
(b)
remedies the matter complained of.
(6)
The complaints scheme must require the regulator to which a complaint
relates, in a case where the investigator—
(a)
has reported that the complaint is well-founded, or
40
(b)
has criticised the regulator in a report,

to inform the investigator and the complainant of the steps which it proposes
to take in response to the report.
(7)
The investigator may require the regulator to which a complaint relates to
publish the whole or a specified part of the response.
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Financial Services Bill
Part 7 — Amendments of Banking Act 2009
151

(8)
The investigator may appoint a person to conduct the investigation on the
investigator’s behalf but subject to the investigator’s direction.
(9)
An officer or employee of any of the regulators may not be appointed under
subsection (8).
(10)
Subsection (2) is not to be taken as preventing a regulator from making
5
arrangements for the initial investigation of a complaint to be conducted by the
regulator.
83
Exemption from liability in damages
(1)
Neither the investigator appointed under section 79 nor a person appointed to
conduct an investigation on the investigator’s behalf under section 82(8) is to
10
be liable in damages for anything done or omitted in the discharge, or
purported discharge, of functions in relation to the investigation of a
complaint.
(2)
Subsection (1) does not apply—
(a)
if the act or omission is shown to have been in bad faith, or
15
(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 was unlawful as a
result of section 6(1) of the Human Rights Act 1998.
Part 7
Amendments of Banking Act 2009
20
Special resolution regime and bank administration
84
Private sector purchasers
(1)
The Banking Act 2009 is amended as follows.
(2)
After section 26 insert—
“26A
Private sector purchaser: reverse share transfer
25
(1)
This section applies where the Bank of England has made a share
transfer instrument in accordance with section 11(2) (“the original
instrument”) providing for the transfer of securities issued by a bank to
a person (“the original transferee”).
(2)
The Bank of England may make one or more private sector reverse
30
share transfer instruments in respect of securities issued by the bank
and held by the original transferee.
(3)
A private sector reverse share transfer instrument is a share transfer
instrument which—
(a)
provides for transfer to the transferor under the original
35
instrument;
(b)
makes other provision for the purposes of, or in connection
with, the transfer of securities which are, could be or could have
been transferred under paragraph (a).

Financial Services Bill
Part 7 — Amendments of Banking Act 2009
152

(4)
The Bank of England must not make a private sector reverse share
transfer instrument without the written consent of the original
transferee.
(5)
Sections 7, 8 and 50 do not apply to a private sector reverse share
transfer instrument (but it is to be treated in the same way as any other
5
share transfer instrument for all other purposes including for the
purposes of the application of a power under this Part).
(6)
Before making a private sector reverse share transfer instrument the
Bank of England must consult—
(a)
the PRA,
10
(b)
the FCA, and
(c)
the Treasury.
(7)
Section 26 applies where the Bank of England has made a private sector
reverse share transfer instrument.”
(3)
In section 29 (reverse share transfer)—
15
(a)
in subsection (3) for the words from “securities”, in the second place, to
the end substitute “securities issued by the bank and held by a
transferee under the onward share transfer order (“the onward
transferee”).”, and
(b)
after subsection (4) insert—
20
“(4A)
The Treasury must not make a reverse share transfer order
under subsection (3) unless—
(a)
the onward transferee is—
(i)
a company wholly owned by the Bank of
England,
25
(ii)
a company wholly owned by the Treasury, or
(iii)
a nominee of the Treasury, or
(b)
the reverse share transfer order is made with the written
consent of the onward transferee.”
(4)
In section 31 (bridge bank: reverse share transfer)—
30
(a)
in subsection (1) omit the words from “providing for” to the end,
(b)
in subsection (2) for “person within subsection (1)(a) to (c)” substitute
“transferee under the original instrument”,
(c)
after subsection (3) insert—
“(3A)
The Bank of England must not make a bridge bank reverse
35
share transfer instrument unless—
(a)
the transferee under the original instrument is—
(i)
a company wholly owned by the Bank of
England,
(ii)
a company wholly owned by the Treasury, or
40
(iii)
a nominee of the Treasury, or
(b)
the bridge bank reverse share transfer instrument is
made with the written consent of the transferee under
the original instrument.”

Financial Services Bill
Part 7 — Amendments of Banking Act 2009
153

(5)
After section 42 insert—
“42A
Private sector purchaser: reverse property transfer
(1)
This section applies where the Bank of England has made a property
transfer instrument in accordance with section 11(2) (“the original
instrument”) providing for the transfer of property, rights or liabilities
5
of a bank to a person (“the original transferee”).
(2)
The Bank of England may make one or more private sector reverse
property transfer instruments in respect of property, rights or liabilities
of the original transferee.
(3)
A private sector reverse property transfer instrument is a property
10
transfer instrument which—
(a)
provides for transfer to the transferor under the original
instrument;
(b)
makes other provision for the purposes of, or in connection
with, the transfer of property, rights or liabilities that are, could
15
be or could have been transferred under paragraph (a) (whether
the transfer has been or is to be effected by that instrument or
otherwise).
(4)
The Bank of England must not make a private sector reverse property
transfer instrument without the written consent of the original
20
transferee.
(5)
Sections 7, 8 and 50 do not apply to a private sector reverse property
transfer instrument (but it is to be treated in the same way as any other
property transfer instrument for all other purposes including for the
purposes of the application of a power under this Part).
25
(6)
Before making a private sector reverse property transfer instrument the
Bank of England must consult—
(a)
the PRA,
(b)
the FCA, and
(c)
the Treasury.
30
(7)
Section 42 applies where the Bank of England has made a private sector
reverse property transfer instrument.”
(6)
In section 44 (reverse property transfer)—
(a)
in subsection (3) for “of a transferee” to the end substitute “of a
transferee under the onward property transfer instrument (“the
35
onward transferee”).”,
(b)
after subsection (4) insert—
“(4A)
The Bank of England must not make a reverse property transfer
instrument unless—
(a)
the onward transferee is—
40
(i)
a company wholly owned by the Bank of
England,
(ii)
a company wholly owned by the Treasury, or
(iii)
a company wholly owned by a nominee of the
Treasury, or
45

Financial Services Bill
Part 7 — Amendments of Banking Act 2009
154

(b)
the reverse property transfer instrument is made with
the written consent of the onward transferee.”
(7)
In section 46 (temporary public ownership: reverse property transfer)—
(a)
in subsection (1) omit from “providing for” to the end, and
(b)
after subsection (3) insert—
5
“(3A)
The Treasury must not make a reverse property transfer order
unless—
(a)
the transferee under the original order is—
(i)
a company wholly owned by the Bank of
England,
10
(ii)
a company wholly owned by the Treasury, or
(iii)
a nominee of the Treasury, or
(b)
the reverse property transfer order is made with the
written consent of the transferee under the original
order.”
15
(8)
In section 48A (creation of liabilities), in subsection (1) after “42(3)(b),” insert
“42A(3)(b),”.
(9)
In section 53 (onward and reverse transfers: compensation), in subsection (1)—
(a)
before paragraph (a) insert—
“(za)
the Bank of England makes a private sector reverse
20
share transfer instrument under section 26A,”,
(b)
after paragraph (d) insert—
(da)
the Bank of England makes a private sector reverse
property transfer instrument under section 42A,”.
(10)
In the Table in section 261 (index of defined terms), after the entry relating to
25
“partial property transfer”, insert—

“Private sector reverse property transfer
42A

instrument

Private sector reverse share transfer
26A”.

instrument

30
85
Property transfer instruments: property held on trust
(1)
The Banking Act 2009 is amended as follows.
(2)
In section 34(7) (effect of property transfer instruments: provision in respect of
property held on trust), in paragraph (a) omit “(which provision may remove
or alter the terms of the trust)”.
35
(3)
At the end of section 34 insert—
“(8)
Provision under subsection (7)(a) may remove or alter the terms of the
trust on which the property is held only to the extent that the Bank of
England thinks it necessary or expedient for the purpose of
transferring—
40
(a)
the legal or beneficial interest of the transferor in the property;

Financial Services Bill
Part 7 — Amendments of Banking Act 2009
155

(b)
any powers, rights or obligations of the transferor in respect of
the property.
(9)
In subsection (8) references to the transferor are references to the
transferor under the property transfer instrument.”
(4)
In section 45 (temporary public ownership: property transfer orders) after
5
subsection (5) insert—
“(5A)
In the application of section 34(8) by virtue of subsection (5)(b) above,
the reference to the Bank of England is to be treated as a reference to the
Treasury.”
(5)
In section 46 (temporary public ownership: reverse property transfer orders)
10
after subsection (5) insert—
“(5A)
In the application of section 34(8) by virtue of subsection (5)(b) above,
the reference to the Bank of England is to be treated as a reference to the
Treasury.”
86
Reports following exercise of a stabilisation power
15
(1)
After section 79 of the Banking Act 2009 insert—
“79A
Private sector purchaser: report
(1)
This section applies where the Bank of England sells all or part of a
bank’s business to a commercial purchaser.
(2)
The Bank must report to the Chancellor of the Exchequer about the
20
exercise of the power to make share transfer instruments and property
transfer instruments under section 11(2).
(3)
The report must comply with any requirements as to content specified
by the Treasury.
(4)
The report must be made as soon as is reasonably practicable after the
25
end of one year beginning with the date of the first transfer instrument
made under section 11(2).”
(2)
After section 81 of that Act insert—
“81A
Accounting information to be included in reports under sections 80
and 81
30
(1)
A report under section 80(1) or 81 must include accounting information
in respect of the bank or bridge bank that is the subject of the report.
(2)
In this section “accounting information” means—
(a)
a balance sheet that, in the opinion of the person making the
report, gives a true and fair view of the state of affairs of the
35
bank or bridge bank as at the reporting date, and
(b)
a profit and loss account that, in the opinion of the person
making the report, gives a true and fair view of the profit or loss
of the bank or bridge bank for the reporting period.
(3)
In this section—
40
(a)
“reporting period” means the period to which the report relates,
and