Financial Services Bill

Session 2012 - 13
Internet Publications
Other Bills before Parliament

Financial Services Bill

Financial Services Bill
Schedule 17 — Amendments of Banking Act 2009 related to Part 2 of this Act
Part 2 — Amendments of Part 2 of the Act
279

Provision
Modification

Section 28
Subsection (6)(a) does not apply unless the bank has

as a member of its immediate group a PRA-

authorised person.

Section 29
Subsection (6)(a) does not apply unless the bank has

5

as a member of its immediate group a PRA-

authorised person.

Section 30
Subsection (5)(a) does not apply unless the bank has

as a member of its immediate group a PRA-

authorised person.

10

Section 31
Subsection (5)(a) does not apply unless the bank has

as a member of its immediate group a PRA-

authorised person.

Section 41
Ignore subsection (1)(c).

Section 42
Subsection (5)(a) does not apply unless the bank has

15

as a member of its immediate group a PRA-

authorised person.

Section
Subsection (6)(a) does not apply unless the bank has

42A
as a member of its immediate group a PRA-

authorised person.

20

Section 43
Subsection (7)(a) does not apply unless the bank has

as a member of its immediate group a PRA-

authorised person.

Section 44
Subsection (6)(a) does not apply unless the bank has

as a member of its immediate group a PRA-

25

authorised person.

Section 45
Subsection (8)(a) does not apply unless the bank has

as a member of its immediate group a PRA-

authorised person.

Section 46
Subsection (7)(a) does not apply unless the bank has

30

as a member of its immediate group a PRA-

authorised person.

Section 82
(a)
Treat the reference to the PRA in subsection

(2) as a reference to the FCA.

(b)
Ignore subsection (5)(a).”

35

Part 2
Amendments of Part 2 of the Act
29
Part 2 of the Banking Act 2009 is amended as follows.
30
In section 91 (interpretation: “bank”), for “Part 4” substitute “Part 4A”.
31
In section 93 (interpretation: other expressions), for subsection (1)
40

Financial Services Bill
Schedule 17 — Amendments of Banking Act 2009 related to Part 2 of this Act
Part 2 — Amendments of Part 2 of the Act
280

substitute—
“(1)
In this Part—
(a)
“the PRA” means the Prudential Regulation Authority, and
(b)
“the FCA” means the Financial Conduct Authority.”
32
In section 95 (application), in subsection (1)(b), for “FSA” substitute “PRA”.
5
33
In section 96 (grounds for applying), for “FSA”, in each place, substitute
“PRA”.
34
In section 97 (grounds for making), in subsection (1), for “FSA” substitute
“PRA”.
35
In section 98 (commencement), in subsection (2), for “FSA”, in both places,
10
substitute “PRA”.
36    (1)
Section 100 (liquidation committee) is amended as follows.
      (2)
For subsection (2) substitute—
“(2)
The liquidation committee is to consist initially of—
(a)
two individuals nominated by the Bank of England,
15
(b)
one individual nominated by the PRA,
(c)
one individual nominated by the FCA, and
(d)
one individual nominated by the FSCS.”
      (3)
In subsection (6)(c), for “and the FSA” substitute “, the PRA and the FCA”.
37
In section 101 (liquidation committee: supplemental), in subsection (7), for
20
“FSA” substitute “PRA, the FCA”.
38
In section 103 (general powers, duties and effect), in the Table—
(a)
in the entry relating to section 147 of the Insolvency Act 1986, for
“FSA” substitute “PRA”, and
(b)
in the entry relating to section 241 of that Act, for “FSA” substitute
25
“PRA”.
39    (1)
Section 108 (removal by court) is amended as follows.
      (2)
In subsection (1)(b), for “FSA” substitute “PRA”.
      (3)
In subsection (2)—
(a)
for “FSA” substitute “PRA”, and
30
(b)
after “England” insert “and the FCA”.
      (4)
In subsection (3), for “FSA” substitute “PRA and the FCA”.
40
In section 109 (removal by creditors), in subsection (4) for “and the FSA”
substitute “, the PRA and the FCA”.
41
In section 113 (company voluntary arrangement), in subsection (2)(b), for
35
sub-paragraph (i) substitute—
“(i)
the PRA,
(ia)
the FCA,”.
42
In section 115 (dissolution), in subsection (2)(b), for sub-paragraph (i)
substitute—
40
“(i)
the PRA,

Financial Services Bill
Schedule 17 — Amendments of Banking Act 2009 related to Part 2 of this Act
Part 2 — Amendments of Part 2 of the Act
281

(ia)
the FCA,”.
43
In section 117 (bank insolvency as alternative order), in subsection (2)(a)—
(a)
for “FSA” substitute “PRA”, and
(b)
after “England” insert “and the FCA”.
44    (1)
Section 120 (notice of preliminary steps) is amended as follows.
5
      (2)
For “FSA”, in each place (including the heading), substitute “PRA”.
      (3)
In subsection (10), in paragraph (a), after “England” insert “and the FCA”.
45
After section 129 insert—
“129A
Banks not regulated by PRA
(1)
In the application of this Part to an FCA-regulated bank the
10
modifications specified in the Table apply.
(2)
In this section—
“FCA-regulated bank” means a bank which does not carry on
any activity which is a PRA-regulated activity for the
purposes of the Financial Services and Markets Act 2000;
15
“immediate group” has the meaning given by section 421ZA of
the Financial Services and Markets Act 2000;
“PRA-authorised person” has the meaning given by section
2B(5) of that Act.
20
TABLE OF MODIFICATIONS

Provision
Modification

Section 95
Treat the reference to the PRA in

subsection (1) as a reference to the FCA.

Section 96
(a)
Treat the references to the PRA in

25

subsections (2) and (3) as references

to the FCA.

(b)
If the bank has as a member of its

immediate group a PRA-authorised

person the Bank of England must

30

consult the PRA before applying

for a bank insolvency order.

(c)
The FCA must consult the PRA

before applying for a bank

insolvency order.

35

Section 97
Treat the reference to the PRA in

subsection (1) as a reference to the FCA.

Section 98
Treat the references to the PRA in

subsection (2) as references to the FCA.

Financial Services Bill
Schedule 17 — Amendments of Banking Act 2009 related to Part 2 of this Act
Part 3 — Amendments of Part 3 to the Act
282

Provision
Modification

Section 100
(a)
Treat the reference to two

individuals in subsection (2)(a) as a

reference to one individual.

(b)
Ignore subsection (2)(b).

5

(c)
Ignore the reference to the PRA in

subsection (6)(c).

Section 101
Ignore the reference to the PRA in

subsection (7).

Section 103
In the Table, in the entries relating to

10

sections 147 and 241 of the Insolvency Act

1986, treat the reference to the PRA as a

reference to the FCA.

Section 108
(a)
Treat the reference to the PRA in

subsections (1) and (2) as a

15

reference to the FCA.

(b)
Ignore the duty to consult the FCA

in subsection (2).

(c)
Ignore the reference to the PRA in

subsection (3).

20

Section 109
Ignore the reference to the PRA in

subsection (4).

Section 113
Ignore subsection (2)(b)(i).

Section 115
Ignore subsection (2)(b)(i).

Section 117
(a)
Treat the reference to the PRA in

25

subsection (2) as a reference to the

FCA.

(b)
Ignore the duty to obtain the

consent of the FCA in subsection

(2)(a).

30

Section 120
(a)
Treat the references to the PRA in

subsections (5), (7) and (10) as

references to the FCA.

(b)
Ignore the duty to inform the FCA

in subsection (10)(a).”

35

Part 3
Amendments of Part 3 to the Act
46
Part 3 of the Banking Act 2009 is amended as follows.
47
In section 147 (administrator’s proposals), in subsection (6), for “FSA”
substitute “PRA and a copy of it to the FCA”.
40
48
In section 153 (successful rescue), in subsection (3), for “FSA” substitute
“PRA and the FCA”.

Financial Services Bill
Schedule 17 — Amendments of Banking Act 2009 related to Part 2 of this Act
Part 4 — Amendments of Parts 4 to 6 of the Act
283

49
In section 157 (other processes), in subsection (1), for “Before exercising an
insolvency power in respect of a residual bank the FSA” substitute “Before
the PRA or the FCA exercises an insolvency power in respect of a residual
bank, whichever of them is exercising the power”.
50
After section 157 insert—
5
“157A
Banks not regulated by PRA
(1)
In the application of this Part to an FCA-regulated bank the
modifications specified in the Table apply.
(2)
In this section “FCA-regulated bank” means a bank which does not
carry on any activity which is a PRA-regulated activity for the
10
purposes of the Financial Services and Markets Act 2000.
TABLE OF MODIFICATIONS

Provision
Modification

Section 147
The bank administrator must send the

15

statement to the FCA (and need not send a

copy of it to the PRA).

Section 153
Ignore the reference to the PRA in

subsection (3).

Section 157
Ignore the reference to the PRA in

20

subsection (1).”

51
In section 166 (interpretation: general), for subsection (2) substitute—
“(2)
In this Part—
“the FCA” means the Financial Conduct Authority, and
“the PRA” means the Prudential Regulation Authority.”
25
Part 4
Amendments of Parts 4 to 6 of the Act
52
Parts 4 to 6 of the Banking Act 2009 are amended as follows.
53    (1)
Section 183 (interpretation of Part 5) is amended as follows.
      (2)
In paragraph (c)—
30
(a)
for “section 3(2)” substitute “section 1I”, and
(b)
omit “(market confidence)”.
      (3)
For paragraph (e), and the “and” before it, substitute—
“(e)
“the FCA” means the Financial Conduct Authority,
(f)
“Part 4A permission” has the meaning given by section 55A
35
of the Financial Services and Markets Act 2000,
(g)
“the PRA” means the Prudential Regulation Authority,
(h)
“PRA-regulated activity” has the meaning given by section
22A of the Financial Services and Markets Act 2000, and

Financial Services Bill
Schedule 17 — Amendments of Banking Act 2009 related to Part 2 of this Act
Part 4 — Amendments of Parts 4 to 6 of the Act
284

(i)
“recognised investment exchange” has the meaning given by
section 285 of that Act.”
54
In section 223 (termination of right to issue), in subsections (5) and (6), for
“Part 4” substitute “Part 4A”.
55    (1)
Section 232 (definition) is amended as follows.
5
      (2)
In subsections (2) and (6)(a), for “Part 4” substitute “Part 4A”.
      (3)
In subsection (5B), in the definition of “rules”, for “section 139(1)” substitute
“section 137B(1)”.
      (4)
After subsection (6) insert—
“(7)
The Treasury may by order amend the definition of “investment
10
activity” in subsection (5B), including by defining that term by
reference to rules or guidance made by the PRA or the FCA under the
Financial Services and Markets Act 2000.”
56
In section 234 (regulations: details), for subsection (8)(b) substitute—
“(b)
the Prudential Regulation Authority,
15
(ba)
the Financial Conduct Authority,”.
57
In section 235 (regulations: procedure), at the end insert—
“(6)
An order under section 232(7)—
(a)
is to be made by statutory instrument, and
(b)
is subject to annulment in pursuance of a resolution of either
20
House of Parliament.”
58
In section 246 (information), in subsection (2)—
(a)
for paragraph (b) substitute—
“(b)
the Prudential Regulation Authority;
(ba)
the Financial Conduct Authority;”, and
25
(b)
in paragraph (d), for “or the Financial Services Authority” substitute,
“the Prudential Regulation Authority or the Financial Conduct
Authority”.
59    (1)
Section 249 (functions) is amended as follows.
      (2)
In subsection (1)—
30
(a)
for “Financial Services Authority” substitute “Prudential Regulation
Authority or the Financial Conduct Authority”, and
(b)
for “the Authority” substitute “that authority”.
      (3)
In subsection (2), for “Financial Services Authority” substitute “Prudential
Regulation Authority or the Financial Conduct Authority”.
35
      (4)
Omit subsection (3).
60
In section 250 (information), for “Financial Services Authority” substitute
“Prudential Regulation Authority.”
61    (1)
Section 259 (statutory instruments) is amended as follows.
      (2)
In the entry in the Table relating to section 232, for “232” substitute “232(6)”.
40

Financial Services Bill
Schedule 18 — Further minor and consequential amendments
Part 1 — Amendments of FSMA 2000
285

      (3)
After that entry insert—

“232(7)
Investment banks: definition
Negative

of investment activity
resolution”.

      (4)
In the entry in the Table relating to section 249, for “FSA—” substitute “PRA
or FCA—”.
5
62
In the Table in section 261 (index of defined terms)—
(a)
after the entry relating to “enactment” insert—

“FCA
3, 93, 166 & 183”

(b)
omit the entry relating to the FSA, and
(c)
after the entry relating to “partial property transfer” insert—
10

“PRA
3, 93, 166 & 183”.

Schedule 18
Section 95(1)

Further minor and consequential amendments
Part 1
Amendments of FSMA 2000
15
1
FSMA 2000 is amended as follows.
2     (1)
Section 33 (withdrawal of authorisation) is amended as follows.
      (2)
In subsection (1)(a), for “Part IV permission” substitute “Part 4A
permission”.
      (3)
In subsection (2), for “Authority” substitute “appropriate regulator”.
20
      (4)
After that subsection insert—
“(2A)
In subsection (2) “the appropriate regulator” means—
(a)
in the case of a PRA-authorised person, the PRA, and
(b)
in any other case, the FCA.”
      (5)
In the heading, omit “by the Authority”.
25
3     (1)
Section 36 (persons authorised as a result of being concerned in collective
investment schemes) is amended as follows.
      (2)
In subsection (1), for “Authority” substitute “FCA”.
      (3)
In subsection (2), for “Part IV permission” substitute “Part 4A permission”.
4
In section 38 (exemption orders), in subsection (2), for “Part IV permission”
30
substitute “Part 4A permission”.