101.41-46

Session 2012 - 13
Internet Publications
Other Bills before Parliament

Lords Amendments to the Financial Services Bill

41

89C
Clearing house rules

(1)
A property transfer instrument made in respect of a UK clearing

house may make provision about the consequences of a transfer for

the rules of the clearing house.

(2)
In particular, an instrument may—

(a)
modify or amend the rules of a UK clearing house;

(b)
in a case where some, but not all, of the business of a UK

clearing house is transferred, make provision as to the

application of the rules in relation to the parts of the

business that are, and are not, transferred.

(3)
Provision by virtue of this section may (but need not) be limited so

as to have effect—

(a)
for a specified period, or

(b)
until a specified event occurs or does not occur.

89D
Clearing house membership

(1)
A property transfer instrument made in respect of a UK clearing

house may make provision about the consequences of a transfer for

membership of the clearing house.

(2)
In particular, an instrument may—

(a)
make provision modifying the terms on which a person is a

member of a UK clearing house;

(b)
in a case where some, but not all, of the business of a UK

clearing house is transferred, provide for a person who was

a member of the transferor to remain a member of the

transferor while also becoming a member of the transferee.

89E
Recognition of transferor company

(1)
The Bank of England may provide for a company to which the

business of a UK clearing house is transferred in accordance with

section 12(2) to be treated as a recognised clearing house for the

purposes of the Financial Services and Markets Act 2000—

(a)
for a specified period, or

42

(b)
until a specified event occurs.

(2)
The provision may have effect—

(a)
for a period specified in the instrument, or

(b)
until the occurrence of an event specified or described in the

instrument.

(3)
The power under this section—

(a)
may be exercised only with the consent of the Treasury, and

(b)
must be exercised by way of provision in a property transfer

instrument (or supplemental instrument).

89F
Clearing house compensation orders

(1)
The Treasury may by order make provision for protecting the

financial interests of transferors and others in connection with any

transfer under this Part as it applies by virtue of section 89B.

(2)
The order may make provision establishing a scheme—

(a)
for determining whether transferors should be paid

compensation, or providing for transferors to be paid

compensation, and establishing a scheme for paying any

compensation,

(b)
under which transferors become entitled to the proceeds of

the disposal of things transferred in specified

circumstances, and to a specified extent, and

(c)
for compensation to be paid to persons other than

transferors.

(3)
An order—

(a)
is to be made by statutory instrument, and

(b)
may not be made unless a draft has been laid before and

approved by resolution of each House of Parliament.

89G
Interpretation: “UK clearing house” &c.

(1)
In this Part “UK clearing house” means a clearing house—

(a)
which is incorporated in, or formed under the law of any

part of, the United Kingdom,

(b)
which provides central counterparty clearing services, and

(c)
in relation to which a recognition order is in force under Part

18 of the Financial Services and Markets Act 2000.

(2)
But “UK clearing house” does not include a clearing house which is

also—

(a)
a bank,

(b)
a building society (within the meaning of section 119 of the

Building Societies Act 1986),

(c)
a credit union (within the meaning of section 31 of the

Credit Unions Act 1979 or Article 2(2) of the Credit Unions

(Northern Ireland) Order 1985), or

(d)
an investment firm.

(3)
Where a stabilisation power is exercised in respect of a UK clearing

house, it does not cease to be a UK clearing house for the purposes

of this Part if the recognition order referred to in subsection (1)(c) is

later revoked.

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(4)
In this Part—

“central counterparty clearing services” has the same meaning

as in section 155 of the Companies Act 1989 (see subsection

(3A) of that section), and

“PRA-authorised person” has the meaning given by section

2B(5) of the Financial Services and Markets Act 2000.”

(7)
In the Table in section 259 (statutory instruments), in Part 1 after the entry

relating to section 89 insert—

“89F
Clearing house compensation
Draft affirmative resolution”.

orders

(8)
In the Table in section 261 (index of defined terms)—

(a)
after the entry relating to “bridge bank share transfer instrument”

insert—

“central counterparty clearing services
89G”,

(b)
after the entry relating to “partial property transfer” insert—

“PRA-authorised person
89G”, and

(c)
at the end insert—

“UK clearing house
89G”.”

Clause 91
128
Page 162, line 18, at end insert—

“(fa)
provide for any provision of sections 162 to 165 and 174A of CCA

1974 which relates to—

(i)
the powers of a local weights and measures authority in

Great Britain or the Department of Enterprise, Trade and

Investment in Northern Ireland in relation to compliance

with any provision made by or under CCA 1974,

(ii)
the powers of such an authority or that Department in

relation to the commission or suspected commission of

offences under any provision made by or under CCA 1974,

(iii)
the powers that may be conferred by warrant on an officer

of such an authority or that Department, or

(iv)
things done in the exercise of any of those powers,


to apply in relation to compliance with FSMA 2000 so far as relating

to relevant regulated activities, in relation to the commission or

suspected commission of a relevant offence or in relation to things

done in the exercise of any of those powers as applied by the order;”
129
Page 162, line 20, at end insert—

44

“(ga)
enable the Department of Enterprise, Trade and Investment in

Northern Ireland to institute proceedings in Northern Ireland for a

relevant offence;”
130
Page 162, line 23, at end insert—

“(2A)
If an order under this section makes provision by virtue of subsection (2)(b)

enabling the FCA to exercise any of its powers under sections 205 to 206A

of FSMA 2000 (disciplinary measures) by reference to an act or omission

that constitutes an offence under CCA 1974, the order must also make

provision by virtue of subsection (2)(d) ensuring that a person in respect of

whom the power has been exercised cannot subsequently be convicted of

the offence by reference to the same act or omission.”
131
Page 162, line 24, leave out from “subsection” to “by” in line 26 and insert “(2)(fa)

to (h)—

(a)
“relevant regulated activity” means an activity that is a regulated

activity for the purposes of FSMA 2000”
132
Page 162, line 30, leave out “22(1A)” and insert “22(1A)(a)”
133
Page 162, line 30, at end insert—

“(b)
“relevant offence” means an offence under FSMA 2000 committed

in relation to such an activity.”
134
Page 162, line 30, at end insert—

“(3A)
The Treasury may make provision by virtue of subsection (2)(ga) only with

the consent of the Department of Enterprise, Trade and Investment in

Northern Ireland.”
135
Page 162, line 32, leave out from “may” to “by” in line 34
136
Page 162, line 38, at end insert—

“( )
In exercising their powers under this section, the Treasury must have

regard to—

(a)
the importance of securing an appropriate degree of protection for

consumers, and

(b)
the principle that a burden or restriction which is imposed on a

person, or on the carrying on of an activity, should be proportionate

to the benefits, considered in general terms, which are expected to

result from the imposition of that burden or restriction.”
137
Page 163, line 2, at end insert—

““consumers” has the meaning given in section 1G of FSMA 2000;”
After Clause 91
138
Insert the following new Clause—


“Suspension of licences under Part 3 of Consumer Credit Act 1974

(1)
The Consumer Credit Act 1974 is amended as follows.

(2)
In section 32 (suspension or revocation)—

(a)
in subsection (1), omit “or suspended”,

(b)
in subsection (2)—

45

(i)
in paragraph (a), omit “, as the case may be,” and “, or

suspend it until a specified date or indefinitely,”, and

(ii)
in paragraph (b), omit “or suspension” and “or suspend”,

(c)
in subsection (3)—

(i)
in paragraph (a), omit “, as the case may be,” and “, or

suspend it until a specified date or indefinitely,”, and

(ii)
in paragraph (b), omit “or suspension”,

(d)
in subsection (4)—

(i)
in paragraph (a), omit “, as the case may be,” and “, or

suspend it until a specified date or indefinitely,”, and

(ii)
in paragraph (b), omit “or suspension”,

(e)
in subsections (6) and (7), omit “or suspension”,

(f)
omit subsection (8),

(g)
in subsection (9), omit “or to suspend”, and

(h)
for the title, omit “Suspension and”.

(3)
After section 32 insert—

“32A
Power to suspend licence

(1)
If during the currency of a licence it appears to the OFT to be

urgently necessary for the protection of consumers that the licence

should cease to have effect immediately or on a specified date, the

OFT is to proceed as follows.

(2)
In the case of a standard licence the OFT must, by notice—

(a)
inform the licensee that the OFT is suspending the licence

from the date of the notice or from a later date specified in

the notice,

(b)
state the OFT’s reasons for the suspension,

(c)
state either—

(i)
that the suspension is to end on a specified date,

which must be no later than the last day of the 12

months beginning with the day on which the

suspension takes effect, or

(ii)
that the duration of the suspension is to be as

provided by section 32B,

(d)
specify any provision to be made under section 34A, and

(e)
invite the licensee to submit to the OFT in accordance with

section 34ZA representations—

(i)
as to the suspension, and

(ii)
about the provision (if any) that is or should be made

under section 34A.

(3)
In the case of a group licence the OFT must—

(a)
give general notice that the OFT is suspending the licence

from the date of the notice or from a later date specified in

the notice,

(b)
state in the notice the OFT’s reasons for the suspension,

(c)
state in the notice either—

(i)
that the suspension is to end on a specified date,

which must be no later than the last day of the 12

months beginning with the day on which the

suspension takes effect, or

46

(ii)
that the duration of the suspension is to be as

provided by section 32B,

(d)
specify in the notice any provision to be made under section

34A, and

(e)
in the notice invite any licensee to submit to the OFT in

accordance with section 34ZA representations as to the

suspension.

(4)
In the case of a group licence issued on application the OFT must

also—

(a)
inform the original applicant of the matters specified under

subsection (3)(a) to (d) in the general notice, and

(b)
invite the original applicant to submit to the OFT in

accordance with section 34ZA representations as to the

suspension.

(5)
Except for the purposes of sections 29 to 32 and section 33A, a

licensee under a suspended licence is to be treated, in respect of the

period of suspension, as if the licence had not been issued.

(6)
The suspension may, if the OFT thinks fit, be ended by notice given

by it to the licensee or, in the case of a group licence, by general

notice.

(7)
In this section “consumers”, in relation to a licence, means

individuals who have been or may be affected by the carrying on of

the business to which the licence relates, other than individuals

who are themselves licensees.

32B
Duration of suspension

(1)
This section applies where a notice under section 32A provides for

the duration of a suspension under that section to be as provided by

this section.

(2)
The suspension ends at the end of the period of 12 months

beginning with the day on which it takes effect, but this is subject

to—

(a)
subsections (3) and (4) (where those subsections give a later

time), and

(b)
the powers of the OFT under section 32A(6) and section 33.

(3)
Subsection (4) applies where—

(a)
the OFT gives notice under section 32 that it is minded to

revoke the licence, and

(b)
it gives that notice—

(i)
on or before giving the notice under section 32A, or

(ii)
after giving that notice but before the end of the

period of 12 months mentioned in subsection (2).

(4)
The period of suspension is to continue until—

(a)
the time of any determination by the OFT not to revoke the

licence in pursuance of the notice under section 32, or

(b)
where the OFT determines to revoke the licence in

pursuance of the notice, the end of the appeal period.”

(4)
In section 33 (application to end suspension), for subsection (1) substitute—