(b) references to remedying a failure include mitigating its effect,
and

(c) references to dealing with assets include disposing of them.”

(8) After section 203 insert—

“203A 5Records

(1) The Bank of England must maintain satisfactory arrangements for—

(a) recording decisions made in the exercise of its functions under
this Part, and

(b) the safe-keeping of those records which it considers ought to be
10preserved.

(2) The duty in subsection (1) does not apply to a decision to issue a notice
under section 204(1).

203B Annual report

(1) At least once a year the Bank of England must make a report to the
15Treasury on—

(a) the discharge of its functions under this Part,

(b) the extent to which, in its opinion, in discharging those
functions its financial stability objective has been met, and

(c) such other matters as the Treasury may from time to time direct.

(2) 20Subsection (1) does not require the inclusion in the report of any
information whose publication would in the opinion of the Bank of
England be against the public interest.

(3) The Treasury must lay before Parliament a copy of each report received
by them under this section.”

(9) 25In section 204 (information)—

(a) after subsection (1), insert—

“(1A) The Bank of England may by notice in writing require the
operator of a recognised inter-bank payment system to provide
information which the Bank requires in connection with the
30exercise of its functions (whether under this Part or otherwise)
in pursuance of its financial stability objective.”,

(b) in subsections (2) and (3), after “notice” insert “under subsection (1) or
(1A)”,

(c) in subsection (4), for paragraph (b) substitute—

“(b) 35the FCA;

(ba) the PRA;”, and

(d) in paragraph (c) of that subsection, for “or the FSA” substitute “, the
FCA or the PRA”.

(10) In section 206A (services forming part of recognised inter-bank payment
40systems)—

(a) in subsection (4)(a), for “and the FSA” substitute “, the FCA and the
PRA”, and

(b) in subsection (6), for paragraph (b) (and the “and” at the end of it)
substitute—

“(b) 45the FCA,

(ba) the PRA, and”.

89 International obligations

In Part 5 of the Banking Act 2009, after section 206A insert—

206B   International obligations

(1) 5If it appears to the Treasury that any action proposed to be taken by the
Bank of England in exercising its powers under this Part would be
incompatible with EU obligations or any other international obligations
of the United Kingdom, the Treasury may direct the Bank not to take
that action.

(2) 10If it appears to the Treasury that any action which the Bank of England
has power under this Part to take is required for the purpose of
implementing any such obligation, the Treasury may direct the Bank to
take that action.

(3) A direction under this section—

(a) 15may include such supplemental or incidental requirements as
the Treasury consider necessary or expedient, and

(b) is enforceable on an application by the Treasury, by injunction
or, in Scotland, by an order for specific performance under
section 45 of the Court of Session Act 1988.”

20Further amendments

90 Amendments relating to new regulators

Schedule 17 contains amendments of the Banking Act 2009 related to the
provisions of Part 2 of this Act.

Part 8 25Miscellaneous

Consumer credit

91 Power to make further provision about regulation of consumer credit

(1) Subsection (2) applies on or at any time after the making after the passing of
this Act of an order under section 22 of FSMA 2000 which has the effect that an
30activity (a “transferred activity”)—

(a) ceases to be an activity in respect of which a licence under section 21 of
CCA 1974 is required or would be required but for the exemption
conferred by subsection (2), (3) or (4) of that section or paragraph 15(3)
of Schedule 3 to FSMA 2000, and

(b) 35becomes a regulated activity for the purposes of FSMA 2000.

(2) The Treasury may by order do any one or more of the following—

(a) transfer to the FCA functions of the OFT under any provision of CCA
1974 that remains in force;

(b) provide that any specified provision of FSMA 2000 which relates to the
powers or duties of the FCA in connection with the failure of any
person to comply with a requirement imposed by or under FSMA 2000
is to apply, subject to any specified modifications, in connection with
5the failure of any person to comply with a requirement imposed by or
under a specified provision of CCA 1974;

(c) require the FCA to issue a statement of policy in relation to the exercise
of powers conferred on it by virtue of paragraph (b);

(d) in connection with provision made by virtue of paragraph (b), provide
10that failure to comply with a specified provision of CCA 1974 no longer
constitutes an offence or that a person may not be convicted of an
offence under a specified provision of CCA 1974 in respect of an act or
omission in a case where the FCA has exercised specified powers in
relation to that person in respect of that act or omission;

(e) 15provide for the transfer to the Treasury of any functions under CCA
1974 previously exercisable by the Secretary of State;

(f) provide that functions of the Secretary of State under CCA 1974 are
exercisable concurrently with the Treasury;

(g) enable local weights and measures authorities to institute proceedings
20in England and Wales for a relevant offence;

(h) provide that references in a specified enactment to the FCA’s functions
under FSMA 2000 include references to its functions resulting from any
order under this section.

(3) In subsection (2)(g) “relevant offence” means an offence under FSMA 2000
25committed in relation to an activity that is a regulated activity for the purposes
of that Act by virtue of —

(a) an order made under section 22(1) of that Act in relation to an
investment of a kind falling within paragraph 23 or 23B of Schedule 2
to that Act, or

(b) 30an order made under section 22(1A) of that Act.

(4) On or at any time after the making of an order under section 22 of FSMA 2000
of the kind mentioned in subsection (1), the Treasury may, if in their opinion it
is desirable to do so having regard to the FCA’s operational objectives (as
defined in section 1B(3) of FSMA 2000) by order—

(a) 35exclude the application of any provision of CCA 1974 in relation to a
transferred activity, or

(b) repeal any provision of CCA 1974 which relates to a transferred
activity.

(5) The additional powers conferred by section 96(2) on a person making an order
40under this Act include power for the Treasury, when making an order under
this section—

(a) to make such consequential provision as the Treasury consider
appropriate,

(b) to amend any enactment, including any provision of, or made under,
45this Act.

(6) The provisions of this section do not limit—

(a) the powers conferred by section 99 or by section 22 of FSMA 2000, or

(b) the powers exercisable under Schedule 21 in connection with the
transfer of functions from the OFT.

(7) In this section—

• “CCA 1974” means the Consumer Credit Act 1974;

• “the OFT” means the Office of Fair Trading.

Amendments of Companies Act 1989

92 5Amendments of Companies Act 1989

(1) Section 166 of the Companies Act 1989 (power of Secretary of State to give
directions to recognised investment exchange or recognised clearing house) is
amended as follows.

(2) In subsection (2)(a)—

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

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

(3) In subsection (2)(b)—

(a) for “Authority”, in the first place, substitute “appropriate regulator”,
15and

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

(4) In subsection (3)—

(a) for “Authority” substitute “appropriate regulator”,

(b) omit the “or” following paragraph (a), and

(c) 20at the end insert—

“(c) in either case, that the direction is necessary having
regard to the public interest in the stability of the
financial system of the United Kingdom, or

(d) in either case, that the direction is necessary—

(i) 25to facilitate a proposed or possible use of a
power under Part 1 of the Banking Act 2009
(special resolution regime), or

(ii) in connection with a particular exercise of a
power under that Part.”

(5) 30In subsection (7)—

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

(b) omit the words from “The Authority shall not” to the end.

(6) After that subsection insert—

“(7A) 35Where the exchange or clearing house is acting in accordance with a
direction under subsection (2)(a) that was given only by virtue of
paragraph (a) of subsection (3), the appropriate regulator shall not give
a direction under subsection (7) unless it is satisfied that the direction
under that subsection will not impede or frustrate the proper and
40efficient conduct of the default proceedings.

(7B) Where the exchange or clearing house has taken action under its default
rules without being directed to do so, the appropriate regulator shall
not give a direction under subsection (7) unless—

(a) it is satisfied that the direction under that subsection will not
impede or frustrate the proper and efficient conduct of the
default proceedings, or

(b) it is satisfied that the direction is necessary—

(i) 5having regard to the public interest in the stability of the
financial system of the United Kingdom,

(ii) to facilitate a proposed or possible use of a power under
Part 1 of the Banking Act 2009 (special resolution
regime), or

(iii) 10in connection with a particular exercise of a power
under that Part.”

(7) In subsection (8), for “Authority” substitute “the regulator which gave the
direction”.

(8) At the end insert—

“(9) 15The appropriate regulator”—

(a) in relation to a recognised UK investment exchange, means the
FCA, and

(b) in relation to a recognised UK clearing house, means the Bank
of England.”

(9) 20In the heading, omit “of Secretary of State”.

Settlement systems

93 Evidencing and transfer of title to securities without written instrument

In section 785 of the Companies Act 2006 (provision enabling procedures for
evidencing and transferring title), at the end insert—

“(7) 25The regulations may confer functions on any person, including—

(a) the function of giving guidance or issuing a code of practice in
relation to any provision made by the regulations, and

(b) the function of making rules for the purposes of any provision
made by the regulations.

(8) 30The regulations may, in prescribed cases, confer immunity from
liability in damages.”

Director of Savings

94 Provision of services by Director of Savings

(1) The Director of Savings (“the Director”) may enter into arrangements with a
35public body for the provision by the Director, or persons authorised by the
Director, of services to the body.

(2) Arrangements are to be on such terms, including terms as to payment, as may
be agreed.

(3) “Public body” means a person or body whose functions are of a public nature.

Part 9 General

Further amendments and repeals

95 Further minor and consequential amendments and repeals

(1) 5Schedule 18 contains further amendments of FSMA 2000 and other
enactments.

(2) Schedule 19 contains further consequential repeals.

Orders

96 Orders: general

(1) 10Any power of the Treasury or the Secretary of State to make an order under this
Act is exercisable by statutory instrument.

(2) Any order made by the Treasury or the Secretary of State under this Act may—

(a) contain such incidental or transitional provision as the Treasury
consider appropriate, and

(b) 15make different provision for different cases.

97 Orders: Parliamentary control

(1) A statutory instrument containing (alone or with other provision) an order to
which subsection (2) applies may not be made unless a draft of the instrument
has been laid before Parliament and approved by a resolution of each House.

(2) 20This subsection applies to—

(a) an order under Part 3 (mutual societies);

(b) an order under section 99 (power to make further consequential
amendments) that amends or repeals primary legislation.

(3) A statutory instrument containing an order under this Act, other than an
25instrument to which subsection (1) applies or an instrument containing only
provision made under section 103 (commencement), is subject to annulment in
pursuance of a resolution of either House of Parliament.

(4) In this section “primary legislation” means—

(a) an Act of Parliament,

(b) 30an Act of the Scottish Parliament,

(c) a Measure or Act of the National Assembly for Wales, or

(d) Northern Ireland legislation.

Interpretation

98 Interpretation

(1) 35In this Act “FSMA 2000” means the Financial Services and Markets Act 2000.

(2) In this Act—

Financial Services BillPage 166

• “the FCA” means the Financial Conduct Authority;

• “the PRA” means the Prudential Regulation Authority;

• “the UK financial system” means the financial system of the United
  Kingdom.

(3) 5In this Act “enactment” includes—

(a) an enactment contained in subordinate legislation within the meaning
of the Interpretation Act 1978;

(b) an enactment contained in, or in an instrument made under, an Act of
the Scottish Parliament;

(c) 10an enactment contained in, or in an instrument made under, a Measure
or Act of the National Assembly for Wales;

(d) an enactment contained in, or in an instrument made under, Northern
Ireland legislation.

Consequential and transitional provisions

99 15Power to make further consequential amendments etc

(1) The Treasury or the Secretary of State may by order make such provision
amending, repealing, revoking or applying with modifications any enactment
to which this section applies as they consider necessary or expedient in
consequence of any provision made by or under this Act.

(2) 20This section applies to—

(a) any enactment passed or made before the passing of this Act, and

(b) any enactment passed or made on or before the last day of the Session
in which this Act is passed.

(3) Amendments and repeals made under this section are additional to those
25made by or under any other provision of this Act.

100 Transitional provisions and savings

(1) Schedule 20 contains transitional provisions.

(2) Schedule 21 contains provision about the transfer of property, rights and
liabilities.

(3) 30The Treasury may by order make such provision as they consider necessary or
expedient for transitory, transitional or saving purposes in connection with the
commencement of any provision made by or under this Act.

(4) An order under subsection (3) may, in particular—

(a) make provision enabling any person by whom any powers will become
35exercisable, on a date set by or under this Act, by virtue of any
provision made by or under this Act to take before that date any steps
which are necessary as a preliminary to the exercise of those powers;

(b) make provision treating any rules made, permission given or other
thing done by the Financial Services Authority before commencement
40under an enactment amended by this Act—

(i) as having been made, given or done under a corresponding
provision of the enactment as so amended;

(ii) as having been made, given or done (or also made, given or
done) by the PRA or the Bank of England;

(c) make provision for the continuation of proceedings begun before
commencement, including provision about the decisions available to
5bodies before which such proceedings take place and the effect of their
decisions;

(d) make provision for making savings, or additional savings, from the
effect of any repeal or revocation made by or under this Act.

(5) An order under subsection (3) may—

(a) 10confer functions on the Treasury, the FCA or the PRA, or on the Bank
of England or its Financial Policy Committee;

(b) modify, exclude or apply (with or without modifications) any
enactment (including any provision of, or made under, this Act).

(6) In subsection (4) “commencement” means the commencement of such
15provisions of this Act as may be specified by the order.

Final provisions

101 Financial provision

(1) There is to be paid out of money provided by Parliament—

(a) any expenditure incurred under or by virtue of this Act by a Minister
20of the Crown or government department (apart from any expenditure
to be met from the National Loans Fund), and

(b) any increase attributable to this Act in the sums payable under any
other Act out of money so provided.

(2) There is to be paid out of the National Loans Fund any increase attributable to
25this Act in the sums payable under any other Act out of that Fund.

102 Extent

This Act extends to England and Wales, Scotland and Northern Ireland.

103 Commencement

(1) The following provisions come into force on the day on which this Act is
30passed—

• sections 96 to 99;

• section 100(3) to (8);

• sections 101 and 102;

• this section;

• 35section 104.

(2) Section 94 comes into force at the end of the period of 2 months beginning with
day on which this Act is passed.

(3) The remaining provisions of this Act come into force on such day as the
Treasury may by order appoint.

(4) 40Different days may be appointed for different purposes.

104 Short title

This Act may be cited as the Financial Services Act 2012.

SCHEDULES

Section 3

SCHEDULE 1 Bank of England Financial Policy Committee

Part 1 5Schedule to be inserted as Schedule 2A to Bank of England Act 1998

This is the Schedule to be inserted in the Bank of England Act 1998 after
Schedule 2—

Section 9B

“Schedule 2A Financial Policy Committee

Terms of office of appointed members

1 (1) 10Appointment under section 9B(1)(d) or (e) as a member of the
Financial Policy Committee is to be for a period of 3 years, but this
is subject to sub-paragraph (2) and to paragraph 3.

(2) Initially some appointments may be for shorter and different
periods so as to secure that appointments expire at different times.

2 (1) 15A person may not be appointed as a member of the Committee
under section 9B(1)(e) more than twice.

(2) For this purpose an appointment which by virtue of paragraph
1(2) is for a period of less than 3 years is to be disregarded.

3 (1) If it appears to the Chancellor of the Exchequer that in the
20circumstances it is desirable to do so, the Chancellor may, before
the end of term for which a person is appointed as a member of the
Committee under section 9B(1)(e), extend the persons’s term of
office on one occasion for a specified period of not more than 6
months.

(2) 25The term being extended may be the person’s first or second term
or, in a case where paragraph 2(2) allows a third term, the person’s
third term.

(3) If a person whose first term of office is extended is subsequently
re-appointed under section 9B(1)(e)—

(a) 30the length of the second term is to be reduced by a period
equal to the extension of the first term, but

(b) the second term may itself subsequently be extended
under sub-paragraph (1).