House of Commons Amendments

Session 2012 - 13
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Other Bills before Parliament

Notices of Amendments: 14 March 2013
19

Financial Services (Banking Reform) Bill, continued

(b)
after the end of that period the appropriate regulator must refuse to give

any member of the group a Part 4A permission to carry on a core activity.

(3)
At the end of the period specified in subsection (1)—

(a)
section 142H(1)(b) and (4) to (7), and

(b)
section 142JC,


cease to have effect.

(4)
In subsection (1) “the relevant commencement date” means the day appointed for

the coming into force of section 4 of the Financial Services (Banking Reform) Act

2013 so far as it inserts this section.’.

Chris Leslie

Cathy Jamieson

23

Clause  20,  page  21,  line  23,  at end insert—

‘( )
No order may be made appointing a day for the coming into force of section 4 so

far as it inserts section 142JD of FSMA 2000 unless—

(a)
the day is later than that on which there is published the report of a review

under section 142J of that Act containing a recommendation that section

4 should be brought into force to that extent, and

(b)
a draft of the order has been laid before, and approved by a resolution of,

each House of Parliament.’.

Chris Leslie

Cathy Jamieson

24

Clause  4,  page  9,  leave out lines 8 to 21 and insert—

‘Reviews

142J
Reviews of ring-fencing

(1)
The Treasury must make arrangements for the carrying out of reviews of the

effects of the operation of the provision made by or under this Part in relation to

ring-fenced bodies, including ring-fencing rules made by the PRA and the FCA.

Such arrangements shall be set out in a statutory instrument subject to approval

by resolution of both Houses of Parliament.

(2)
The first review must be completed before the end of the period of two years

beginning with the date on which section 4 of the Financial Services (Banking

Reform) Act 2013, so far as it inserts this section, comes into force.

(3)
Subsequent reviews must be completed before the end of the period of two years

beginning with the date on which the previous review was completed.

(4)
Not less than nine months, nor more than 12 months, before the date on which a

review is due to be completed, the PRA and the FCA must publish a joint

assessment of the impact of the operation of their ring-fence rules.

(5)
For the purposes of this section a review is completed when the report of it is

published.

142JA
Persons by whom reviews are to be conducted

(1)
The Treasury shall appoint not fewer than five persons to conduct a review of

whom one is to chair it.

(2)
A person may not be appointed to chair a review unless the chairman of the

Treasury Committee of the House of Commons has notified the Treasury that, in

Notices of Amendments: 14 March 2013
20

Financial Services (Banking Reform) Bill, continued

the chairman‘s opinion, the person is likely to act independently of the Treasury,

the PRA and the FCA in carrying out the review.

(3)
The persons appointed to conduct a review must include at least one person with

substantial experience in central banking or financial regulation at a senior level.

(4)
The reference in subsection (2) to the Treasury Committee of the House of

Commons—

(a)
if the name of that Committee is changed, is to be treated as a reference

to that Committee by its new name, and

(b)
if the functions of that Committee (or substantially corresponding

functions) become functions of a different Committee of the House of

Commons, is to be treated as a reference to the Committee by which the

functions are exercisable;


and any question arising under paragraph (a) or (b) is to be determined by the

Speaker of the House of Commons.

142JB
Reports of review

(1)
The persons appointed to conduct a review must give the Treasury a report of the

review.

(2)
The report must include an assessment of the extent to which the provision made

by or under this Part in relation to ring-fenced bodies, including ring-fencing rules

made by the PRA and by the FCA, are facilitating the advancement by the PRA

of the objective in section 2B(3)(c) and by the FCA of the continuity objective.

(3)
If the report is made before section 4 of the Financial Services (Banking Reform)

Act 2013, so far as it inserts section 142JD, has come into force it must also

include a recommendation as to whether or not section 4 of that Act should be

brought into force to that extent.

(4)
The report must include—

(a)
recommendations to the Treasury as to the provision that should be

included in orders and regulations under this Part, and

(b)
recommendations to the PRA and the FCA about the provision that

should be included in ring-fencing rules.

(5)
The Treasury must lay a copy of the report before Parliament and publish it in

such manner as it thinks fit.’.

Chris Leslie

Cathy Jamieson

25

Clause  6,  page  14,  line  7,  at end insert—

‘( )
the nature and extent of the dealings by ring-fenced bodies in derivative

products (including options, futures, contracts for differences and similar

products);’.

Chris Leslie

Cathy Jamieson

26

Clause  4,  page  3,  line  35,  at end insert—

‘(3A)
In making an order under subsection (2)(b) which—

(a)
provides an exemption for UK institutions holding deposits below a

specified amount, or

(b)
varies the amount previously specified for the purposes of such an

exemption,


the Treasury must aim to enhance competition among UK institutions which have

a Part 4A permission relating to one or more core activities (in particular by

Notices of Amendments: 14 March 2013
21

Financial Services (Banking Reform) Bill, continued

having regard to the likely effect on the number of UK institutions applying for

or obtaining such a permission for the first time).’.

Chris Leslie

Cathy Jamieson

27

Clause  6,  page  14,  line  7,  at end insert ‘and

( )
developments affecting the appropriateness of the amount for the time

being specified for the purposes of any exemption under section

142A(2)(b) for UK institutions holding deposits below that specified

amount.’.

Chris Leslie

Cathy Jamieson

28

Clause  4,  page  7,  line  45,  at end insert—

‘( )
provision requiring that shares or voting power in a ring-fenced body are

held only by another member of the ring-fenced body’s group which is

not carrying on an excluded activity or by other members of that group

none of which is carrying on such an activity;’.

Chris Leslie

Cathy Jamieson

29

Schedule,  page  24,  line  9,  at end insert—

‘( )
After subsection (3) insert—

“(4)
Without prejudice to the generality of subsection (3), in the case of a ring-

fencing transfer scheme the court must not make an order sanctioning the

scheme if it considers that it might lead to the dissolution of a company

or to the transfer of liabilities owed to any persons in a manner that may

prejudice the interests of those persons.”.’.

Bank bail-in regime

Chris Leslie

Cathy Jamieson

NC19

To move the following Clause:—

‘(1)
The Bank of England must, at least once in every year, prepare an assessment of

any progress which has been made towards the introduction of a bank bail-in

regime in the United Kingdom or, once a bank bail-in regime has been

introduced, of its operation.

(2)
If a bank bail-in regime is not in force in the United Kingdom by the end of 2015,

the Treasury must by regulations make provision for such a regime.

(3)
an assessment under subsection (1) must include—

(a)
an assessment of how much of the issued debt of banks would be covered

by any proposed bank bail-in regime or is covered by the provisions of

the bank bail-in regime in force;

(b)
(if a bank bail-in regime is in force) an account of the sorts of companies

within groups which have creditors who are covered by the bank bail-in

regime and of the sorts of persons who are creditors who are so covered;

Notices of Amendments: 14 March 2013
22

Financial Services (Banking Reform) Bill, continued

(c)
a review of the descriptions of creditors who would be covered by any

proposed bail-in regime or are covered by the provisions of the bank bail-

in regime in force, and

(d)
an account of progress towards international co-operation in relation to

bail-in regimes.

(4)
The Bank of England must send the assessment to the Treasury.

(5)
The Treasury must lay the assessment before Parliament.

(6)
The Bank of England must publish the assessment in such manner as they think

fit.

(7)
In this section “bank bail-in regime” means provisions under which losses

incurred by a bank are to be met by certain descriptions of creditors of the bank

should the bank encounter financial difficulties which might otherwise lead to the

taking of action which would be likely to have implications for public funds.

(8)
For the purposes of subsection (7) “action having implications for public funds”

has the same meaning as in section 78(1) of the Banking Act 2009.

(9)
In this section “bank” means a UK institution which has permission under Part

4A of FSMA 2000 to carry on the regulated activity of accepting deposits, other

than a building society (within the meaning of the Building Societies Act 1986)

or any description of institution excluded by virtue of subsection (2)(b) of section

142A of that Act from being a ring-fenced body as defined in subsection (1) of

that section.’.

Chris Leslie

Cathy Jamieson

30

Clause  16,  page  20,  line  28,  after ‘ring-fencing)’ insert ‘or section (Bank bail-in

regime)(2) (bank bail-in regime)’.

Chris Leslie

Cathy Jamieson

31

Title,  line  4,  after ‘insolvency;’ insert ‘to make provision in relation to a bank bail-in

regime;’.

Chris Leslie

Cathy Jamieson

32

Clause  4,  page  12,  line  22,  at end insert—

‘( )
If an order under this section includes provision for the grant by a regulator of any

exemption from the requirements imposed by such an order, the order must—

(a)
require a relevant body claiming the exemption to satisfy the regulator

that the exemption should be granted;

(b)
require the regulator, in deciding whether to grant the exemption, to have

regard to all reasonably foreseeable circumstances;

(c)
include provision for reviews of, or appeals from, any decision not to

grant the exemption;

(d)
require the regulator to make to the Treasury a report setting out any

decision to grant the exemption and the terms of the exemption granted,

and

(e)
require the Treasury to lay a copy of such a report before Parliament and

to publish it in such manner as they think fit.’.

Notices of Amendments: 14 March 2013
23

Financial Services (Banking Reform) Bill, continued

Annual assessment of developments in respect of risk-weighting

Chris Leslie

Cathy Jamieson

NC20

To move the following Clause:—

‘(1)
The Bank of England must, at least once in every year, prepare an assessment of

developments in respect of risk-weighting in relation to banks and building

societies.

(2)
The Bank must send the assessment to the Treasury.

(3)
The Treasury must lay the assessment before Parliament.

(4)
The Bank of England must publish the assessment in such manner as they think

fit.

(5)
In this section “risk weighting” means the process by which the assets of a bank

or building society are accorded a risk weight.

(6)
In this section—

“bank” means a UK institution which has permission under Part 4A of

FSMA 2000 to carry on the regulated activity of accepting deposits, other

than any description of institution excluded by virtue of subsection (2)(b)

of section 142A of that Act from being a ring-fenced body as defined in

subsection (1) of that section (or a building society);

“building society” has the same meaning as in the Building Societies Act

1986;

“risk weight” means a percentage that is derived from the risk to the value

of an asset.’.

Chris Leslie

Cathy Jamieson

33

Title,  line  4,  after ‘insolvency;’ insert ‘to make provision for reports relating to

developments in respect of risk-weighting;’.



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