Financial Services Bill

Session 2012 - 13
Internet Publications
Other Bills before Parliament

Financial Services Bill

Financial Services Bill
Schedule 8 — Sections 26 to 31: minor and consequential amendments
223

body other than an overseas investment exchange or overseas
clearing house”,
(b)
in paragraph (a)—
(i)
for “the Authority”, in both places, substitute “the regulator
concerned”, and
5
(ii)
for “the exchange” substitute “the body”, and
(c)
in paragraph (b), for “the exchange” substitute “the body”.
      (6)
In subsection (3), for “the Authority” substitute “the regulator concerned”.
      (7)
In subsection (4), for “the Authority” substitute “an appropriate regulator”.
      (8)
In the heading, for “Authority’s” substitute “Appropriate regulator’s”.
10
15    (1)
Section 297 (revoking recognition) is amended as follows.
      (2)
In subsections (1) and (2), for “the Authority” substitute “the appropriate
regulator”.
      (3)
In subsection (2A)—
(a)
in the opening words—
15
(i)
for “the Authority” substitute “the appropriate regulator”,
and
(ii)
omit “which is a recognised investment exchange”,
(b)
in paragraphs (a) and (b), after “exchange” insert “or (as the case may
be) of a clearing house”, and
20
(c)
in paragraph (c), for the words from “directly applicable” to the end
substitute “directly applicable EU regulation specified (or of a
description specified) in an order made by the Treasury”.
      (4)
In subsection (2C), at the end insert “or overseas clearing house”.
      (5)
In subsection (5), for “the Authority” substitute “the appropriate regulator”.
25
16
In section 298 (directions and revocation: procedure), in subsections (1),
(2)(a), (3), (5), (6), (7) (in both places) and (8), for “the Authority” substitute
“the appropriate regulator”.
17
In section 299 (complaints about recognised bodies), in subsections (1) and
(2), for “Authority” substitute “appropriate regulator”.
30
18
In section 300A (power to disallow excessive regulatory provision)—
(a)
in subsection (1), for the words from “with” to the end substitute
“with—
(a)
its business as an investment exchange,
(b)
the provision by it of clearing services, or
35
(c)
the provision by it of services falling within section
285(2)(b) or (3)(b).”, and
(b)
in subsections (2) (in both places) and (4), and in the heading, for
“Authority” substitute “appropriate regulator”.
19
In section 300B (duty to notify proposal to make regulatory provision), in
40
subsections (1) to (3), for “Authority” substitute “appropriate regulator”.
20
In section 300C (restriction on making provision before Authority decides
whether to act), in subsections (1), (2)(a), (3) (in both places), (4)(a) and (b),
and in the heading, for “Authority” substitute “appropriate regulator”.

Financial Services Bill
Schedule 8 — Sections 26 to 31: minor and consequential amendments
224

21    (1)
Section 300D (consideration by Authority whether to disallow proposed
provision) is amended as follows.
      (2)
In subsections (1) to (4) and (5)(a) and (b), for “Authority” substitute
“appropriate regulator”.
      (3)
In subsection (6)—
5
(a)
in the opening words, for “the Authority” substitute “the appropriate
regulator”,
(b)
in paragraph (b)—
(i)
for “the Authority’s” substitute “the appropriate
regulator’s”, and
10
(ii)
for “the Authority” substitute “the regulator concerned”, and
(c)
in paragraph (c)(i) and (ii), for “the Authority” substitute “the
appropriate regulator”.
      (4)
In the heading, for “Authority” substitute “appropriate regulator”.
22    (1)
Section 301 (supervision of certain contracts) is amended as follows.
15
      (2)
In subsection (2), for “the Authority” substitute “the Bank of England”.
      (3)
In subsection (3)—
(a)
for “the Authority”, in the first place, substitute “the FCA or the Bank
of England”, and
(b)
for “the Authority”, in the second place, substitute “the Bank”.
20
      (4)
In subsections (4)(a), (6)(a), (7) and (9), for “Authority” substitute “Bank of
England”.
23
In section 301A (obligation to notify the Authority: acquisitions of control),
in subsections (1) and (2), and in the heading, for “the Authority” substitute
“the FCA”.
25
24
In section 301B (requirements for s.301A notices), in subsections (1) to (3), for
“Authority” substitute “FCA”.
25
In section 301C (acknowledgement of receipt), in subsections (1) and (2), for
“Authority” substitute “FCA”.
26
In section 301F (assessment: general), in subsections (1) to (3), for
30
“Authority” substitute “FCA”.
27    (1)
Section 301G (assessment: procedure) is amended as follows.
      (2)
In subsections (1) (in both places) and (2) to (5), for “Authority” substitute
“FCA”.
      (3)
In subsection (6), for “the Authority’s” substitute “the FCA’s”.
35
28
In section 301H (duration of approval), in subsections (1), (2) and (3) (in both
places), for “the Authority” substitute “the FCA”.
29
In section 301I (objections by the Authority), in subsections (1) to (5), and in
the heading, for “Authority” substitute “FCA”.
30
In section 301J (restriction notices), in subsections (1), (2)(b), (3) and (7), for
40
“Authority” substitute “FCA”.

Financial Services Bill
Schedule 9 — Discipline and enforcement
Part 2 — Authorised persons acting without permission
225

31
In section 301K (order for sale of shares), in subsection (1), for “the
Authority” substitute “the FCA”.
32    (1)
Section 301L (offences under Chapter) is amended as follows.
      (2)
In subsections (1) and (2) (in both places), for “the Authority” substitute “the
FCA”.
5
      (3)
In subsection (4), for “the Authority’s” substitute “the FCA’s”.
      (4)
In subsections (5) and (9), for “the Authority” substitute “the FCA”.
33
In section 312A (exercise of passport rights by EEA market operator), in
subsection (1)(b), for “the Authority” substitute “the FCA”.
34
In section 312B (removal of passport rights from EEA market operator), in
10
subsections (1) (in each place), (3), (4)(b), (5), (6), (7)(a) and (b), (8)(b), (9) to
(11) and (12) (in both places), for “Authority” substitute “FCA”.
35
In section 312C (exercise of passport rights by recognised investment
exchange), in subsections (2) to (6), for “Authority” substitute “FCA”.
36
In section 313 (interpretation), in subsection (4), after “clearing services”
15
insert “or services falling within section 285(3)(b)”.
37
In section 392 (warning and decisions notices: application of provisions
relating to third party rights and access to evidence)—
(a)
in paragraph (a), after “section 280(1),” insert “section 312G(1),”, and
(b)
in paragraph (b), after “section 280(2),” insert “section 312H(1),”.
20
38
In section 412A (approval and monitoring of trade-matching and reporting
systems), in subsections (1), (2), (4), (5) (in both places), (6) (in both places)
and (7), for “Authority” substitute “FCA”.
39
In section 412B (procedure for approval and suspension or withdrawal of
approval), in subsections (1) to (6), (7) (in both places), (8) and (9), for
25
“Authority” substitute “FCA”.
Schedule 9
Section 34

Discipline and enforcement
Part 1
Introductory
30
1
FSMA 2000 is amended as follows.
Part 2
Authorised persons acting without permission
2     (1)
Section 20 (authorised persons acting without permission) is amended as
follows.
35
      (2)
In subsection (1)—

Financial Services Bill
Schedule 9 — Discipline and enforcement
Part 3 — Market abuse
226

(a)
in the opening words, after “an authorised person” insert “other than
a PRA-authorised person”,
(b)
for paragraph (a) substitute—
“(a)
given to that person under Part 4A, or”, and
(c)
in the words after paragraph (b), for “Authority” substitute “ FCA”.
5
      (3)
After that subsection insert—
“(1A)
If a PRA-authorised person carries on a regulated activity in the
United Kingdom, or purports to do so, otherwise than in accordance
with permission given to the person under Part 4A or resulting from
any other provision of this Act, the person is to be taken to have
10
contravened—
(a)
a requirement imposed by the FCA, and
(b)
a requirement imposed by the PRA.”
      (4)
In subsection (2), for “The contravention” substitute “A contravention
within subsection (1) or (1A)”.
15
      (5)
In subsection (3), for “the contravention”, in the first place, substitute “a
contravention within subsection (1) or (1A)”.
Part 3
Market abuse
3     (1)
In the provisions of Part 8 (market abuse) mentioned in sub-paragraph (2),
20
for “Authority” or “Authority’s”, in each place, substitute “FCA” or “FCA’s”.
      (2)
The provisions are: sections 119, 120 (including the heading), 121 to 130A
and 131A.
      (3)
In section 121 (codes: procedure), for subsection (10) substitute—
“(10)
“Cost benefit analysis” means—
25
(a)
an analysis of the costs together with an analysis of the
benefits that will arise—
(i)
if the proposed code is issued, or
(ii)
if subsection (5)(b) applies, from the code that has
been issued, and
30
(b)
subject to subsection (10A), an estimate of those costs and of
those benefits.
(10A)
If, in the opinion of the FCA—
(a)
the costs or benefits referred to in subsection (10) cannot
reasonably be estimated, or
35
(b)
it is not reasonably practicable to produce an estimate,

the cost benefit analysis need not estimate them, but must include a
statement of the FCA’s opinion and an explanation of it.”

Financial Services Bill
Schedule 9 — Discipline and enforcement
Part 4 — Disciplinary measures
227

Part 4
Disciplinary measures
4
In Part 14 (disciplinary measures), before section 205 insert—
“204A
  Meaning of “relevant requirement” and “appropriate regulator”
(1)
The following definitions apply for the purposes of this Part.
5
(2)
“Relevant requirement” means a requirement imposed—
(a)
by or under this Act, or
(b)
by a qualifying EU provision specified, or of a description
specified, for the purposes of this subsection by the Treasury
by order.
10
(3)
The PRA is “the appropriate regulator” in the case of a contravention
of—
(a)
a requirement that is imposed under any provision of this Act
by the PRA,
(b)
a requirement under section 56(6) where the authorised
15
person concerned is a PRA-authorised person and the
prohibition order concerned is made by the PRA,
(c)
a requirement under section 59(1) or (2) where the authorised
person concerned is a PRA-authorised person and the
approval concerned falls to be given by the PRA.
20
(4)
In the case of a contravention of a requirement that is imposed by a
qualifying EU provision, “the appropriate regulator” for the purpose
of any provision of this Part is whichever of the PRA or the FCA (or
both) is specified by the Treasury by order in relation to the
qualifying EU provision for the purposes of that provision of this
25
Part.
(5)
In the case of a contravention of a requirement where the
contravention constitutes an offence, the “appropriate regulator” is
whichever of the PRA or the FCA has power to prosecute the offence
(see section 401).
30
(6)
The FCA is “the appropriate regulator” in the case of a contravention
of any other requirement imposed by or under this Act.
(7)
The Treasury may by order amend the provisions defining “the
appropriate regulator”.”
5
In section 205 (public censure)—
35
(a)
for “Authority”, in the first place, substitute “appropriate regulator”,
and
(b)
for the words from “a requirement” to “may” substitute “a relevant
requirement imposed on the person, it may”.
6     (1)
Section 206 (financial penalties) is amended as follows.
40
      (2)
In subsection (1)—
(a)
for “Authority” substitute “appropriate regulator”, and
(b)
for the words from “a requirement” to “UCITS directive,” substitute
“a relevant requirement imposed on the person,”.

Financial Services Bill
Schedule 9 — Discipline and enforcement
Part 4 — Disciplinary measures
228

      (3)
In subsection (3), for “Authority” substitute “regulator that imposed the
penalty”.
7     (1)
Section 206A (suspending permission to carry on regulated activities etc.) is
amended as follows.
      (2)
In subsection (1), for “Authority” substitute “appropriate regulator”.
5
      (3)
After that subsection insert—
“(1A)
The power conferred by subsection (1) is also exercisable by the FCA
if it considers that an authorised person has contravened a
requirement imposed on the person by—
(a)
the Payment Services Regulations 2009, or
10
(b)
the Electronic Money Regulations 2011.”
      (4)
In subsection (2)—
(a)
in the definition of “permission”, for “the Authority” substitute “the
FCA or the PRA”, and
(b)
omit the definition of “relevant requirement”.
15
      (5)
In subsection (6), for “Authority” substitute “appropriate regulator”.
8
In section 207(1) (proposal to take disciplinary measures), for “the
Authority” substitute “a regulator”.
9
In section 208(1) and (4) (decision notice), for “the Authority”, in each place,
substitute “a regulator”.
20
10
In section 209 (publication), for “the Authority” substitute “the regulator
concerned”.
11    (1)
Section 210 (statements of policy) is amended as follows.
      (2)
In subsection (1), for “The Authority” substitute “Each regulator”.
      (3)
In subsection (2), for “The Authority’s” substitute “A regulator’s”.
25
      (4)
In subsection (3)—
(a)
for “The Authority” substitute “A regulator”, and
(b)
after “issued” insert “by it”.
      (5)
In subsection (4), for “replaced, the Authority” substitute “replaced by a
regulator, the regulator”.
30
      (6)
In subsection (5), for “The Authority” substitute “A regulator”.
      (7)
In subsection (6)—
(a)
after “section” insert “by a regulator”, and
(b)
for “Authority”, in both places, substitute “regulator”.
      (8)
In subsection (7)—
35
(a)
for “the Authority” substitute “a regulator”, and
(b)
after “published” insert “by it”.
      (9)
In subsection (8), for “Authority” substitute “regulator”.
12    (1)
Section 211 (statements of policy: procedure) is amended as follows.
      (2)
In subsection (1)—
40

Financial Services Bill
Schedule 9 — Discipline and enforcement
Part 5 — Injunctions and restitution
229

(a)
for “issuing” substitute “a regulator issues”, and
(b)
for “Authority”, in both places, substitute “regulator”.
      (3)
In subsections (2) to (4) and (5) (in both places), for “Authority” substitute
“regulator”.
      (4)
In subsection (6), for “The Authority” substitute “A regulator”.
5
Part 5
Injunctions and restitution
13    (1)
Section 380 (injunctions) is amended as follows.
      (2)
In subsections (1) to (3), for “Authority” substitute “appropriate regulator”.
      (3)
In subsection (6)(a)—
10
(a)
in the opening words, for “Authority” substitute “appropriate
regulator”,
(b)
in sub-paragraph (i), for the words from “any directly applicable” to
“UCITS directive” substitute “a qualifying EU provision specified, or
of a description specified, for the purposes of this subsection by the
15
Treasury by order”, and
(c)
in sub-paragraph (ii), for the words from “which the Authority” to
the end substitute “mentioned in section 402(1)”.
      (4)
In subsection (7), omit paragraph (a) (and the “and” at the end of it).
      (5)
After subsection (7) insert—
20
“(8)
The PRA is the “appropriate regulator” in the case of a contravention
of—
(a)
a requirement that is imposed by the PRA under any
provision of this Act,
(b)
a requirement under section 56(6) where the authorised
25
person concerned is a PRA-authorised person and the
prohibition order concerned is made by the PRA, or
(c)
a requirement under section 59(1) or (2) where the authorised
person concerned is a PRA-authorised person and the
approval concerned falls to be given by the PRA.
30
(9)
In the case of a contravention of a requirement that is imposed by a
qualifying EU provision, “the appropriate regulator” is whichever of
the PRA or the FCA (or both) is specified by the Treasury by order in
relation to the qualifying EU provision for the purposes of this
section.
35
(10)
In the case of a contravention of a requirement where the
contravention constitutes an offence under this Act, the “appropriate
regulator” is whichever of the PRA or the FCA has power to
prosecute the offence (see section 401).
(11)
The FCA is the “appropriate regulator” in the case of a contravention
40
of any other requirement.
(12)
The Treasury may by order amend the definition of “appropriate
regulator”.”