101.5-9

Session 2012 - 13
Internet Publications
Other Bills before Parliament

Lords Amendments to the Financial Services Bill

5
5
Page 3, leave out lines 16 to 20 and insert—

“(2)
The member appointed under subsection (1)(d) is to be a person who has

executive responsibility within the Bank for the analysis of threats to

financial stability.”
6
Page 3, line 28, leave out “court of directors” and insert “Oversight Committee”
7
Page 3, line 28, at end insert “Financial Policy”
8
Page 3, leave out lines 30 and 31
9
Page 3, line 32, after “the” insert “Financial Policy”
10
Page 3, line 35, leave out from first “to” to end of line 36 and insert—

“(a)
contributing to the achievement by the Bank of the Financial

Stability Objective, and

(b)
subject to that, supporting the economic policy of Her

Majesty’s Government, including its objectives for growth

and employment.”
11
Page 3, line 37, leave out “of that objective” and insert “by the Bank of the Financial

Stability Objective”
12
Page 4, line 4, leave out “(1)” and insert “(1)(a)”
13
Page 4, line 21, at end insert—

“9CA
Specification of matters relevant to economic policy

(1)
The Treasury may by notice in writing to the Financial Policy

Committee specify for the purposes of section 9C(1)(b) what the

economic policy of Her Majesty’s Government is to be taken to be.

(2)
The Treasury must specify under subsection (1) the matter

mentioned there—

(a)
before the end of the period of 30 days beginning with the

day on which section 9C comes into force, and

(b)
at least once in every calendar year following that in which

the first notice under that subsection is given.

(3)
Where the Treasury give notice under this section they must—

(a)
publish the notice in such manner as they think fit, and

(b)
lay a copy of it before Parliament.”
14
Page 4, line 29, at end insert—

“( )
the responsibility of the Committee in relation to support

for the economic policy of Her Majesty’s Government,

including its objectives for growth and employment;”
15
Page 5, line 13, leave out from “while” to “seek” in line 14 and insert “complying

with section 9C(1),”
16
Page 10, line 18, at end insert—

6

“Explanation

9QA
Duty to prepare explanation

(1)
In connection with the exercise of any of the specified powers, the

Financial Policy Committee must prepare an explanation of—

(a)
the reasons for the Committee’s decision to exercise the

power, in the way in which it is being exercised, and

(b)
the Committee’s reasons for believing that the exercise of

the power, in the way in which it is being exercised, is

compatible with the duties of the Committee under the

following provisions—

(i)
section 9C(1) (as read with section 9C(4)), and

(ii)
section 9E.

(2)
The specified powers are—

(a)
the power to give a direction under section 9G;

(b)
the power to make recommendations under section 9N, so

far as relating to the exercise of the Bank’s functions in

relation to payment systems, settlement systems and

clearing houses;

(c)
the power to make recommendations under section 9O, so

far as relating to the exercise by the Treasury of their power

to make orders under any of the provisions mentioned in

subsection (2) of that section;

(d)
the power to make recommendations under section 9P.

(3)
The explanation required by subsection (1) in relation to the duty in

section 9E(3)(a) must include an estimate of the costs and an

estimate of the benefits that would arise from compliance with the

direction or recommendation in question, unless in the opinion of

the Committee it is not reasonably practicable to include such an

estimate.”
17
Page 10, line 18, at end insert—

“Review

9QB
Duty to review directions and recommendations

(1)
The Financial Policy Committee must—

(a)
before the end of each review period, review each direction

given by it under section 9G, other than a direction revoked

before the end of the review period, and

(b)
prepare a summary of its conclusions.

(2)
A review period is—

(a)
in relation to the first review, the period of 12 months

beginning with the day on which the direction was given,

and

(b)
in relation to subsequent reviews, the period of 12 months

beginning with the day on which the previous review was

completed.

(3)
The Financial Policy Committee must maintain arrangements for

the review at regular intervals of any recommendations that it has

7

made under any of sections 9N to 9Q and are of continuing

relevance.

(4)
The purpose of a review is—

(a)
in the case of a direction, to consider whether the direction

ought to be revoked, and

(b)
in the case of a recommendation, to consider whether the

recommendation ought to be withdrawn.”
18
Page 12, line 9, leave out “Committee’s objectives” and insert “objectives set out in

section 9C(1)(a) and (b)”
19
Page 12, line 9, at end insert—

“(4A)
If during the reporting period the Committee has made any

decision in relation to which section 9QA requires the preparation

of an explanation, the financial stability report must include the

required explanation.”
20
Page 12, line 9, at end insert—

“(4B)
If during the reporting period the Committee has completed the

review of a direction or recommendation, the financial stability

report must include a summary of the review.”
21
Page 12, line 14, leave out “subsection (3) or (4)” and insert “subsections (3) to (4B)”
Clause 5
22
Page 15, line 25, leave out “or”
23
Page 15, line 26, at end insert “or

(d)
a qualifying EU provision that is specified, or of a

description specified, for the purposes of this subsection by

the Treasury by order.”
24
Page 17, line 2, at end insert—

“(ea)
the differing expectations that consumers may have in relation to

different kinds of investment or other transaction;”
25
Page 17, line 31, at end insert—

“( )
the ease with which consumers who may wish to use those services,

including consumers in areas affected by social or economic

deprivation, can access them,”
26
Page 19, line 7, leave out “or”
27
Page 19, line 8, at end insert “, or

(d)
the financing of terrorism.”
28
Page 21, line 7, after “The” insert “FCA”
29
Page 21, line 9, after “the” insert “FCA”
30
Page 21, line 11, after third “the” insert “FCA”
31
Page 21, line 15, after second “the” insert “FCA”
32
Page 21, line 19, after second “the” insert “FCA”
33
Page 24, line 20, leave out “or”

8
34
Page 24, line 21, at end insert “or

(d)
a qualifying EU provision that is specified, or of a

description specified, for the purposes of this subsection by

the Treasury by order.”
35
Page 25, line 35, at end insert—

“2DA
Strategy

(1)
The PRA must—

(a)
determine its strategy in relation to its objectives, and

(b)
from time to time review, and if necessary revise, the

strategy.

(2)
Before determining or revising its strategy, the PRA must consult

the court of directors of the Bank of England about a draft of the

strategy or of the revisions.

(3)
The PRA must determine its strategy within 12 months of the

coming into force of this section.

(4)
The PRA must carry out and complete a review of its strategy

before the end of each relevant period.

(5)
The relevant period is 12 months beginning with the date on which

the previous review was completed, except that in the case of the

first review the relevant period is the period of 12 months

beginning with the date on which the strategy was determined

under subsection (3).

(6)
The PRA must publish its strategy.

(7)
If the strategy is revised the PRA must publish the revised strategy.

(8)
Publication under subsection (6) or (7) is to be in such manner as the

PRA thinks fit.”
36
Page 26, line 8, at end insert “, and

(b)
the need to minimise any adverse effect on competition in the

relevant markets that may result from the manner in which the PRA

discharges those functions.

(2)
In subsection (1)(b) “the relevant markets” means the markets for services

provided by PRA-authorised persons in carrying on regulated activities.”
37
Page 27, leave out lines 13 to 16
38
Page 27, line 16, at end insert—

“2KA
The PRA Practitioner Panel

(1)
Arrangements under section 2K must include the establishment and

maintenance of a panel of persons (to be known as “the PRA Practitioner

Panel”) to represent the interests of practitioners.

(2)
The PRA must appoint one of the members of the PRA Practitioner Panel

to be its chair.

(3)
The Treasury’s approval is required for the appointment or dismissal of the

chair.

9

(4)
The PRA must appoint to the PRA Practitioner Panel such persons

representing PRA-authorised persons as it considers appropriate.

(5)
The PRA may appoint to the PRA Practitioner Panel such other persons as

it considers appropriate.”
39
Page 28, line 36, leave out “2G” and insert “2G(1)(a)”
40
Page 29, line 2, at end insert—

“( )
the desirability of sustainable growth in the economy of the United

Kingdom in the medium or long term;”
41
Page 29, line 8, at end insert—

“(da)
the desirability where appropriate of each regulator exercising its

functions in a way that recognises differences in the nature of, and

objectives of, businesses carried on by different persons subject to

requirements imposed by or under this Act;”
42
Page 29, line 40, leave out “2G” and insert “2G(1)(a)”
43
Page 31, line 28, leave out from beginning to end of line 11 on page 32 and insert—

“(1)
The regulators must prepare and maintain a memorandum which

describes in general terms—

(a)
the role of each regulator in relation to the exercise of functions

conferred by or under this Act so far as they relate to with-profits

insurers, and

(b)
how the regulators intend to comply with section 3D in relation to

the exercise of those functions so far as they relate to the effecting or

carrying out of with-profits policies by with-profits insurers.

(2)
The memorandum required by this section may be combined with the

memorandum required by section 3E.

(3)
If the memorandum required by this section is contained in a separate

document, the PRA and the FCA must publish the memorandum as

currently in force in such manner as they think fit.

(4)
Subsections (1) to (3) apply only if the effecting or carrying out of with-

profits policies is a PRA-regulated activity.

(5)
For the purposes of this section—

(a)
a “with-profits policy” is a contract of insurance under which the

policyholder is eligible to receive a financial benefit at the discretion

of the insurer;

(b)
a “with-profits insurer” is a PRA-authorised person who has a Part

4A permission, or permission resulting from any other provision of

this Act, relating to the effecting or carrying out of with-profits

policies (whether or not the permission also relates to contracts of

insurance of other kinds).

(6)
The Treasury may by order amend the definition of “with-profits policy”

applying for the purposes of this section.”
44
Page 32, leave out line 21
45
Page 33, line 39, at end insert—