Session 2012 - 13
Internet Publications
Other Bills before Parliament

Financial Services Bill


Financial Services Bill
Schedule 13 — Auditors and actuaries

258

 

      (3)  

In subsection (3)—

(a)   

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

(b)   

after “authorised person” insert “or recognised investment

exchange”, and

(c)   

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

5

      (4)  

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

      (5)  

In subsection (7), after “authorised person” insert “or recognised investment

exchange”.

      (6)  

For “the Authority”, in each other place (including the heading), substitute

“a regulator”.

10

4     (1)  

Section 343 (information given by auditor or actuary: persons with close

links) is amended as follows.

      (2)  

In subsection (1)—

(a)   

in paragraph (a), after “authorised person” insert “or recognised

investment exchange,”, and

15

(b)   

in paragraph (b), after “authorised person” insert “or recognised

investment exchange”.

      (3)  

In subsection (3)—

(a)   

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

(b)   

after “authorised person” insert “or recognised investment

20

exchange”, and

(c)   

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

      (4)  

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

      (5)  

in subsection (7), after “authorised person” insert “or recognised investment

exchange”.

25

      (6)  

In subsection (8), after “authorised person” insert “or recognised investment

exchange”.

      (7)  

For “the Authority”, in each other place (including the heading), substitute

“a regulator”.

5     (1)  

Section 344 (duty of auditor or actuary resigning to give notice) is amended

30

as follows.

      (2)  

In each place for “Authority” substitute “appropriate regulator”.

      (3)  

In subsection (2)(a), after “authorised person” insert “or recognised

investment exchange”.

      (4)  

In subsection (3)(a), for “Authority’s” substitute “regulator’s”.

35

      (5)  

After subsection (3) insert—

“(4)   

In this section “the appropriate regulator” means—

(a)   

in the case of an auditor of, or an actuary acting for, a PRA-

authorised person, the PRA;

(b)   

in any other case, the FCA.”

40

6     (1)  

For section 345 (disqualification of auditor or actuary) and the italic heading

 
 

Financial Services Bill
Schedule 13 — Auditors and actuaries

259

 

before it substitute—

“Disciplinary measures

345     

Disciplinary measures: FCA

(1)   

Subsection (2) applies if it appears to the FCA that an auditor or

actuary to whom section 342 applies—

5

(a)   

has failed to comply with a duty imposed on the auditor or

actuary by rules made by the FCA, or

(b)   

has failed to comply with a duty imposed under this Act to

communicate information to the FCA.

(2)   

The FCA may do one or more of the following—

10

(a)   

disqualify the auditor or actuary from being the auditor of, or

(as the case may be) from acting as an actuary for, any

authorised person or any particular class of authorised

person;

(b)   

disqualify the auditor from being the auditor of any

15

recognised investment exchange or any particular class of

recognised investment exchange;

(c)   

publish a statement to the effect that it appears to the FCA

that the auditor or (as the case may be) actuary has failed to

comply with the duty;

20

(d)   

impose on the auditor or actuary a penalty, payable to the

FCA, of such amount as the FCA considers appropriate.

(3)   

If an auditor or actuary has been disqualified by the PRA under

section 345A(4)(a), the FCA may disqualify the auditor or actuary, so

long as the disqualification under that provision remains in force,

25

from being the auditor of, or (as the case may be) from acting as an

actuary for—

(a)   

any FCA-authorised person,

(b)   

any particular class of FCA-authorised person,

(c)   

any recognised investment exchange, or

30

(d)   

any particular class of recognised investment exchange.

(4)   

In subsection (3) “FCA-authorised person” means an authorised

person who is not a PRA-authorised person.

(5)   

Where under subsection (2) or (3) the FCA disqualifies a person from

being the auditor of an authorised person or recognised investment

35

exchange or class of authorised person or recognised investment

exchange and that authorised person or recognised investment

exchange is also, or any person within that class is also, a recognised

clearing house, the FCA must —

(a)   

notify the Bank of England, and

40

(b)   

notify the disqualified person that it has made a notification

under paragraph (a).

(6)   

The FCA may remove any disqualification imposed under

paragraph (a) or (b) of subsection (2) if satisfied that the disqualified

person will in future comply with the duty in question.

45

(7)   

The FCA may at any time remove any disqualification imposed

under subsection (3).

 
 

Financial Services Bill
Schedule 13 — Auditors and actuaries

260

 

345A    

Disciplinary measures: PRA

(1)   

The following provisions of this section have effect only if the

Treasury, by order made after consultation with the PRA, so provide.

(2)   

Subsection (3) applies if it appears to the PRA that an auditor or

actuary to whom section 342 applies—

5

(a)   

has failed to comply with a duty imposed on the auditor or

actuary by rules made by the PRA, or

(b)   

has failed to comply with a duty imposed under this Act to

communicate information to the PRA.

(3)   

The PRA may exercise one or more of the specified powers.

10

(4)   

The specified powers are such one or more of the following as may

be specified in the order under subsection (1)—

(a)   

to disqualify the auditor or actuary from being the auditor of,

or (as the case may be) from acting as an actuary for, any

PRA-authorised person or any particular class of PRA-

15

authorised person;

(b)   

to publish a statement to the effect that it appears to the PRA

that the auditor or (as the case may be) actuary has failed to

comply with the duty;

(c)   

to impose on the auditor or actuary a penalty, payable to the

20

PRA, of such amount as the PRA considers appropriate.

(5)   

Where the PRA disqualifies a person under subsection (4)(a) it

must—

(a)   

notify the FCA, and

(b)   

notify the person concerned that it has made a notification

25

under paragraph (a).

(6)   

Where the PRA disqualifies a person from being the auditor of a

PRA-authorised person or class of PRA-authorised person, and that

PRA-authorised person is also, or any person within that class is also,

a recognised clearing house, the PRA must, in addition to complying

30

with subsection (5)—

(a)   

notify the Bank of England, and

(b)   

notify the disqualified person that it has made a notification

under paragraph (a).

(7)   

The PRA may remove any disqualification imposed under

35

subsection (4)(a) if satisfied that the disqualified person will in future

comply with the duty in question.

345B    

Procedure and right to refer to Tribunal

(1)   

If the FCA proposes to act under section 345(2) or the PRA proposes

to act under section 345A(3), it must give the auditor or actuary to

40

whom the action would relate a warning notice.

(2)   

A warning notice about a proposal to impose a penalty must state the

amount of the penalty.

(3)   

A warning notice about a proposal to publish a statement must set

out the terms of the statement.

45

 
 

Financial Services Bill
Schedule 13 — Auditors and actuaries

261

 

(4)   

If the FCA decides to act under section 345(2) or the PRA decides to

act under section 345A(3), it must give the auditor or actuary to

whom the action would relate a decision notice.

(5)   

A decision notice about the imposition of a penalty must state the

amount of the penalty.

5

(6)   

A decision notice about the publication of a statement must set out

the terms of the statement.

(7)   

If the FCA decides to act under section 345(2) or the PRA decides to

act under section 345A(3), the auditor or actuary concerned may

refer the matter to the Tribunal.

10

345C    

Duty on publication of statement

After a statement under section 345(2)(c) or 345A(4)(b) is published,

the regulator that published it must send a copy of the statement to—

(a)   

the auditor or actuary, and

(b)   

any person to whom a copy of the decision notice was given

15

under section 393(4).

345D    

Imposition of penalties on auditors or actuaries: statement of policy

(1)   

The FCA must prepare and issue a statement of its policy with

respect to—

(a)   

the imposition of penalties under section 345(2)(d), and

20

(b)   

the amount of penalties under that provision.

(2)   

If by virtue of an order under section 345A(1), the PRA has power to

impose penalties under section 345A(4)(c), the PRA must prepare

and issue a statement of its policy with respect to—

(a)   

the imposition of penalties under section 345A(4)(c), and

25

(b)   

the amount of penalties under that provision.

(3)   

A regulator’s policy in determining what the amount of a penalty

should be must include having regard to—

(a)   

the seriousness of the contravention, and

(b)   

the extent to which the contravention was deliberate or

30

reckless.

(4)   

A regulator may at any time alter or replace a statement issued under

this section.

(5)   

If a statement issued under this section is altered or replaced, the

regulator must issue the altered or replacement statement.

35

(6)   

A regulator must, without delay, give the Treasury a copy of any

statement which it publishes under this section.

(7)   

A statement issued under this section must be published by the

regulator in the way appearing to the regulator to be best calculated

to bring it to the attention of the public.

40

(8)   

In deciding whether to exercise a power under section 345(2)(d) in

the case of any particular contravention, the FCA must have regard

to any statement of policy published by it under this section and in

force at a time when the contravention occurred.

 
 

Financial Services Bill
Schedule 14 — Amendments of Part 24 of FSMA 2000: insolvency

262

 

(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)   

A regulator may charge a reasonable fee for providing a person with

5

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

appearing to the regulator to be best calculated to bring it to the

10

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

regard to any representations made to it in accordance with

15

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

(2), and

20

(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))

publish details of the difference.

25

(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)  

In paragraph (a), for “345(2) (whether as a result of subsection (1) of that

30

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)”.

Schedule 14

Section 41

 

Amendments of Part 24 of FSMA 2000: insolvency

35

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 Bill
Schedule 14 — Amendments of Part 24 of FSMA 2000: insolvency

263

 

(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

activity in contravention of the general prohibition.”

5

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)  

In subsection (3)—

10

(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)   

“The appropriate regulator” means—

15

(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

and the PRA;

20

(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

application.”

25

      (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)  

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

30

      (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)  

After subsection (6) insert—

35

“(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)   

for the purposes of subsection (3), the FCA or the

40

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-

 
 

Financial Services Bill
Schedule 14 — Amendments of Part 24 of FSMA 2000: insolvency

264

 

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)  

Section 358 (powers to participate in proceedings: trust deeds for creditors

5

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

regulator”, and

10

(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)   

in the case of a PRA-authorised person—

15

(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)   

in any other case, the FCA.”

20

      (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)  

After subsection (1) insert—

25

“(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)  

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

30

      (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)  

After subsection (2) insert—

35

“(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.”

 
 

 
previous section contents continue
 

© Parliamentary copyright
Revised 10 May 2012