Session 2012 - 13
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Other Bills before Parliament

Lords Amendments to the Financial Services Bill


 
 

10

 
 

“3IA  

  Power of PRA in relation to with-profits policies

 

(1)    

Where the first, second and third conditions are met, the PRA may give a

 

direction under this section to the FCA.

 

(2)    

The first condition is that the FCA is proposing to exercise any of its

 

regulatory powers in relation to with-profits insurers, a class of with-

 

profits insurers or a particular with-profits insurer.

 

(3)    

In subsection (2) “regulatory powers”, in relation to the FCA, means its

 

powers in relation to the regulation of authorised persons, including its

 

powers under Part 24 (insolvency) but not its powers in relation to consent

 

for the purposes of section 55F or 55I.

 

(4)    

The second condition is that the proposed exercise of the power relates to

 

the provision of financial benefits under with-profits policies at the

 

discretion of the insurer, or affects or may affect the amount, timing or

 

distribution of financial benefits that are so provided or the entitlement to

 

future benefits that are so provided.

 

(5)    

The third condition is that the PRA is of the opinion that the giving of the

 

direction is desirable in order to advance the PRA’s general objective or its

 

insurance objective.

 

(6)    

A direction under this section is a direction requiring the FCA not to

 

exercise the power or not to exercise it in a specified manner.

 

(7)    

The direction may be expressed to have effect during a specified period or

 

until revoked.

 

(8)    

The FCA is not required to comply with a direction under this section if or

 

to the extent that in the opinion of the FCA compliance would be

 

incompatible with any EU obligation or any other international obligation

 

of the United Kingdom.

 

(9)    

Subsections (1) to (8) apply only if the effecting or carrying out of with-

 

profits policies is a PRA-regulated activity.

 

(10)    

In this section “with-profits insurer” and “with-profits policy” have the

 

same meaning as they have for the purposes of section 3F.”

46

Page 33, line 40, at end insert “or 3IA

47

Page 33, line 42, at end insert “or 3IA”

48

Page 33, line 43, after “3I” insert “or 3IA”

49

Page 34, line 1, at end insert “or 3IA

50

Page 34, line 2, after “3I” insert “or 3IA”

51

Page 34, line 4, after “3I” insert “or 3IA”

52

Page 34, line 6, after “3I” insert “or 3IA”

53

Page 34, line 7, at end insert—

 

“(3A)    

The PRA must—

 

(a)    

publish the direction and statement, or the notice, in such manner

 

as it thinks fit, and


 
 

11

 
 

(b)    

where the direction or notice relates to a particular authorised

 

person or a particular with-profits insurer, give a copy of the

 

direction and statement, or the notice, to that person.”

54

Page 34, leave out lines 14 to 19

55

Page 34, leave out lines 20 to 28 and insert—

 

“(7)    

Subsection (3A) does not apply where the PRA, after consulting the

 

Treasury, decides that compliance with that subsection would be against

 

the public interest, and at any time when this subsection excludes the

 

application of subsection (3A) in relation to a direction under section 3I,

 

subsection (5) also does not apply.

 

(8)    

Where the PRA decides that compliance with subsection (3A) would be

 

against the public interest, it must from time to time review that decision

 

and if it subsequently decides that compliance is no longer against the

 

public interest it must—

 

(a)    

comply with that subsection, and

 

(b)    

in the case of a direction under section 3I, notify the Treasury for the

 

purposes of subsection (5).”

56

Page 35, line 37, at end insert “or 3IA”

57

Page 37, line 16, leave out from “with” to “that” in line 18 and insert—

 

“(a)    

a local weights and measures authority in England, Wales

 

or Scotland, or

 

(b)    

the Department of Enterprise, Trade and Investment in

 

Northern Ireland,

 

    

for the provision by the authority or department to the FCA of

 

services which relate to activities to which this subsection applies.

 

(5A)    

Subsection (5) applies to activities”

58

Page 37, line 22, leave out “22(1A)” and insert “22(1A)(a)”

Clause 6

59

Page 38, line 29, at end insert “, or

 

(b)    

the setting of a specified benchmark.”,”

60

Page 38, line 30, after “(1A),” insert—

 

“( )    

after subsection (5) insert—

 

“(6)    

“Benchmark” means an index, rate or price that—

 

(a)    

is determined from time to time by reference to the

 

state of the market,

 

(b)    

is made available to the public (whether free of

 

charge or on payment), and

 

(c)    

is used for reference for purposes that include one or

 

more of the following—

 

(i)    

determining the interest payable, or other

 

sums due, under loan agreements or under

 

other contracts relating to investments;

 

(ii)    

determining the price at which investments

 

may be bought or sold or the value of

 

investments;


 
 

12

 
 

(iii)    

measuring the performance of

 

investments.””

61

Page 39, line 16, leave out “22(1A)” and insert “22(1A)(a)”

62

Page 39, line 33, at end insert—

 

“Part 2B

 

Regulated activities relating to the setting of benchmarks

 

General

 

24E      

The matters with respect to which provisions may be made

 

under section 22(1A)(b) include, in particular, those described in

 

general terms in this Part of this Schedule.

 

Providing information

 

24F      

Providing any information or expression of opinion that—

 

(a)    

is required by another person in connection with the

 

determination of a benchmark, and

 

(b)    

is provided to that person for that purpose.

 

Administration

 

24G(1)  

Administering the arrangements for determining a benchmark.

 

      (2)  

Collecting, analysing or processing information or expressions of

 

opinion for the purpose of the determination of a benchmark.

 

Determining or publishing benchmark or publishing connected information

 

24H(1)  

Determining a benchmark.

 

      (2)  

Publishing a benchmark or information connected with a

 

benchmark.””

After Clause 8

63

Insert the following new Clause—

 

         

“Appointed representatives

 

(1)    

Section 39 of FSMA 2000 (appointed representatives) is amended as

 

follows.

 

(2)    

After subsection (1B) insert—

 

“(1C)    

Subsection (1D) applies where an authorised person (“A”)—

 

(a)    

has permission under Part 4A, or permission resulting from

 

any other provision of this Act, only in relation to one or

 

more qualifying activities,

 

(b)    

is a party to a contract with another authorised person (A’s

 

“principal”) which—

 

(i)    

permits or requires A to carry on business of a

 

prescribed description (“the relevant business”), and


 
 

13

 
 

(ii)    

complies with such requirements as may be

 

prescribed, and

 

(c)    

is someone for whose activities in carrying on the whole or

 

part of the relevant business A’s principal has accepted

 

responsibility in writing.

 

(1D)    

Sections 20(1) and (1A) and 23(1A) do not apply in relation to the

 

carrying on by A of a relevant additional activity.

 

(1E)    

In subsections (1C) and (1D)—

 

(a)    

“qualifying activity” means a regulated activity which is of

 

a prescribed kind and relates—

 

(i)    

to rights under a contract of the kind mentioned in

 

paragraph 23 of Schedule 2, other than one under

 

which the obligation of the borrower to repay is

 

secured on land, or

 

(ii)    

to rights under a contract of the kind mentioned in

 

paragraph 23B of that Schedule;

 

(b)    

“relevant additional activity” means a regulated activity

 

which—

 

(i)    

is not one to which A’s permission relates, and

 

(ii)    

is comprised in the carrying on of the business for

 

which A’s principal has accepted responsibility.”

 

(3)    

For subsection (2) substitute—

 

“(2)    

In this Act “appointed representative” means—

 

(a)    

a person who is exempt as a result of subsection (1), or

 

(b)    

a person carrying on a regulated activity in circumstances

 

where, as a result of subsection (1D), sections 20(1) and (1A)

 

and 23(1A) do not apply.””

Clause 9

64

Page 42, line 31, after “in” insert “or specified under”

65

Page 42, line 35, after “in” insert “or specified under”

66

Page 46, line 1, leave out “considers” and insert “appears to it”

67

Page 48, line 8, at end insert—

 

“(6A)    

Without prejudice to the generality of subsections (1) and (2), the FCA may,

 

in relation to an authorised person who has permission to carry on the

 

regulated activity specified in article 24A of the Financial Services and

 

Markets Act 2000 (Regulated Activities) Order 2001 (which relates to bids

 

in emission allowance auctions), exercise its power under this section to

 

vary the Part 4A permission of the person concerned by removing that

 

activity from those to which the permission relates if it appears to the FCA

 

that the person has seriously and systematically infringed the provisions of

 

paragraph 2 or 3 of Article 59 of the emission allowance auctioning

 

regulation.”

68

Page 49, line 27, at end insert—

 

“(5A)    

The FCA may refuse an application under subsection (5) if it appears to it

 

that it is desirable to do so in order to advance any of its operational

 

objectives.”


 
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Revised 6 December 2012