101.1-4

Session 2012 - 13
Internet Publications
Other Bills before Parliament

Lords Amendments to the Financial Services Bill

LORDS amendments to the
Financial Services Bill
[The page and line references are to HL Bill 25, the bill as first printed for the Lords.]
Clause 1
1
Page 1, line 6, leave out “members” and insert “directors”
2
Page 1, line 12, leave out “directors” and insert “non-executive directors”
After Clause 2
3
Insert the following new Clause—


“Oversight Committee

(1)
The Bank of England Act 1998 is amended as follows.

(2)
For section 3 substitute—

“3A
Oversight Committee

(1)
There is to be a sub-committee of the court of directors of the Bank

(“the Oversight Committee”) consisting of the non-executive

directors of the Bank.

(2)
The functions of the Oversight Committee are—

(a)
keeping under review the Bank’s performance in relation

to—

(i)
the Bank’s objectives (that is, the objectives specified

in relation to it in this Act and the other objectives for

the time being determined by the court of directors

of the Bank),

(ii)
the duty of the Financial Policy Committee under

section 9C, and

(iii)
the Bank’s strategy as for the time being determined

by the court of directors of the Bank (including its

financial stability strategy);

Bill 101 55/2

2

(b)
monitoring the extent to which the objectives set by the

court of directors of the Bank in relation to the Bank’s

financial management have been met;

(c)
keeping under review the internal financial controls of the

Bank with a view to securing the proper conduct of its

financial affairs;

(d)
the functions conferred on the Oversight Committee by the

provisions listed in subsection (4).

(3)
The court of directors of the Bank may arrange for specified

functions of the Bank to be discharged by the Oversight Committee.

(4)
The provisions referred to in subsection (2)(d) are—

(a)
section 9B (review of procedures followed by Financial

Policy Committee);

(b)
section 16 (review of procedures followed by Monetary

Policy Committee);

(c)
paragraph 14 of Schedule 1 (remuneration of Governor and

Deputy Governors);

(d)
paragraph 5 of Schedule 2A (terms and conditions of office

of members of Financial Policy Committee appointed under

section 9B(1)(e));

(e)
paragraph 9 of that Schedule (removal of members of

Financial Policy Committee appointed under section

9B(1)(d) or (e));

(f)
paragraph 4(2) of Schedule 3 (terms and conditions of office

of members of Monetary Policy Committee appointed

under section 13(2)(c));

(g)
paragraph 9 of that Schedule (removal of members of

Monetary Policy Committee appointed under section

13(2)(b) or (c));

(h)
paragraph 15 of Schedule 1ZB to the Financial Services and

Markets Act 2000 (terms of service and remuneration of

members of the governing body of the Prudential

Regulation Authority).

3B
Oversight Committee: procedure

(1)
The chair of the court (designated under paragraph 13 of Schedule

1) is to chair meetings of the Oversight Committee (when present).

(2)
The Committee is to determine its own procedure, but this is subject

to subsection (1) and subsection (5).

(3)
The Committee may invite other persons to attend, or to attend and

speak at, any meeting of the Committee.

(4)
The Committee may delegate any of its functions to two or more of

its members.

(5)
If a member of the Committee (“M”) has any direct or indirect

interest (including any reasonably likely future interest) in any

dealing or business which falls to be considered by the

Committee—

(a)
M must disclose that interest to the Committee when it

considers that dealing or business, and

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(b)
the Committee must decide whether M is to be permitted to

participate in any proceedings of the Committee relating to

any question arising from its consideration of the dealing or

business, and if so to what extent and subject to what

conditions (if any).

3C
Reviews

(1)
In the discharge of any of its functions, the Oversight Committee

may arrange—

(a)
for a review to be conducted under this section in relation to

any matter by a person appointed by the Committee, and

(b)
for the person conducting the review to make one or more

reports to the Committee.

(2)
The persons who may be appointed to conduct a review include an

officer or employee of the Bank.

(3)
A review under this section is a “performance review” if it—

(a)
is arranged by the Committee in the discharge of any of its

functions under section 3A(2)(a) and (b), and

(b)
relates to past events.

(4)
If the person to be appointed to conduct a performance review is an

officer or employee of the Bank, the appointment requires the

consent of the Governor of the Bank.

(5)
In the case of a performance review, the Committee must have

regard to the desirability of ensuring that sufficient time has

elapsed—

(a)
for the review to be effective, and

(b)
to avoid the review having a material adverse effect on the

exercise by the Bank of its functions.

3D
Publication of reports of performance reviews

(1)
The Bank must give the Treasury a copy of any report made to the

Oversight Committee by a person appointed under section 3C to

conduct a performance review (as defined by subsection (3) of that

section).

(2)
Subject to subsection (3), the Bank must also publish the report.

(3)
Subsection (2) does not require the publication of information

whose publication at the time when the report is made would in the

opinion of the court of directors of the Bank be against the public

interest.

(4)
Where the court of directors decides under subsection (3) that

publication of information at the time when the report is made

would be against the public interest, it must keep under

consideration the question of whether publication of the

information would still be against the public interest.

(5)
Where the court of directors decides that publication of any

information is no longer against the public interest, the Bank must

publish the information.

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(6)
The Treasury must lay before Parliament a copy of any report or

other information published by the Bank under this section.

3E
Recommendations resulting from review

(1)
This section applies where a report made by a person appointed

under section 3C to conduct a review makes recommendations to

the Bank as to steps to be taken by it.

(2)
The Oversight Committee must—

(a)
monitor the Bank’s response to the report, and

(b)
if or to the extent that the Bank accepts the

recommendations, monitor the implementation of the

recommendations.

3F
Oversight Committee: further provisions

(1)
The documents to which the Oversight Committee is to have access

in the discharge of its functions include documents considered, or

to be considered, by the Financial Policy Committee or the

Monetary Policy Committee.

(2)
One or two members of the Oversight Committee may attend any

meeting of the Financial Policy Committee or the Monetary Policy

Committee, but a person attending by virtue of this subsection may

not speak unless invited to do so by the person chairing the

meeting.

(3)
Subsection (2) does not affect—

(a)
anything done in relation to the Financial Policy Committee

by a member of that Committee who is also a member of the

Oversight Committee,

(b)
the powers of the Financial Policy Committee under

paragraph 13 of Schedule 2A, or

(c)
the powers of the Monetary Policy Committee under

paragraph 13A of Schedule 3.”

(3)
In section 4 (annual report by the Bank), in subsection (2), for paragraph (a)

substitute—

“(a)
a report by the Oversight Committee on the matters for

which it is responsible, and”.

(4)
In section 16 (functions of court of directors)—

(a)
in subsection (1), for “court of directors of the Bank” substitute

“Oversight Committee”,

(b)
in subsection (2)—

(i)
for “the court’s function” substitute “the function of the

Oversight Committee”,

(ii)
for “the Committee” substitute “the Monetary Policy

Committee”,

(c)
omit subsection (3), and

(d)
accordingly, in the heading, for “court of directors” substitute

“Oversight Committee”.”
Clause 3
4
Page 3, line 12, leave out “2 members” and insert “one member”