House of Commons Amendments

Session 2012 - 13
Internet Publications
Other Bills before Parliament

5

House of Commons

Notices of Amendments

given on

Thursday 14 March 2013

For other Amendment(s) see the following page(s):

Financial Services (Banking Reform) Bill Committee 1 and 3

Public Bill Committee

Financial Services (Banking Reform) Bill

Chris Leslie

Cathy Jamieson

1

Clause  4,  page  12,  line  33,  at end insert ‘and

(ba)
section 142C.’.

Chris Leslie

Cathy Jamieson

2

Clause  4,  page  13,  line  7,  at end add—

‘(7)
A Treasury statement referred to in subsection (3) may only be made if the

Treasury considers that the statement is necessary—

(a)
to protect the continuity of provision in the UK of core services; or

(b)
to secure an appropriate degree of protection for depositors, or

(c)
to ensure the continuing stability of the UK financial service market.’.

Chris Leslie

Cathy Jamieson

3

Clause  4,  page  6,  line  24,  at end insert—

‘(1B)
If the order confers powers on a regulator or authorises or requires the making of

rules or other instruments by a regulator, then those power’s rules or instruments

are to be subject to annulment in pursuance of a resolution of either House of

Parliament.’.

Chris Leslie

Cathy Jamieson

4

Clause  4,  page  6,  line  38,  at end insert—

Notices of Amendments: 14 March 2013
6

Financial Services (Banking Reform) Bill, continued

‘(c)
has attempted to carry out an excluded activity or to contravene any

provision of an order under section 142E.’.

Chris Leslie

Cathy Jamieson

5

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

‘(4A)
If the appropriate regulator is satisfied that—

(a)
a relevant body has contravened a requirement under subsection (1)(a) or

(1)(b) and knew or could reasonably be expected to have known it was

contravening such a requirement; or

(b)
has at any time attempted to contravene such a requirement and knew or

could reasonably be expected to have known it was contravening such a

requirement,


it may impose a penalty on the institution of such amount as it considers

appropriate.’.

Leverage ratio

Chris Leslie

Cathy Jamieson

NC1

To move the following Clause:—

‘(1)
The Treasury may by order make provision about the tier 1 leverage ratio

applicable to a relevant body so as to require the relevant body to maintain a

minimum tier 1 leverage ratio.

(2)
The Treasury may by order make provision about the tier 1 leverage ratio

applicable to a ring-fenced body so as to require the Financial Policy Committee

to create differing minimum leverage ratios for different classes of ring-fenced

bodies, based upon the risk profile of their balance sheet.’.

Chris Leslie

Cathy Jamieson

6

Clause  4,  page  5,  line  35,  at end add—

‘(8)
Within six months of this Act receiving Royal Assent the Treasury shall carry out

a review of the regulated activities of dealing in investments as principal, the

purposes of which review shall include consideration of—

(a)
safeguards that may be required to prevent the mis-selling of investments

as principal as part of the core services of each ring-fenced body;

(b)
a definition of “simple derivatives”, will reference to their size, maturity

and basis, the dealing of which will be permitted under section 142C;

(c)
the establishment of a maximum ratio, relevant to the size of the balance

sheet of a ring-fenced body which provides core services, for the value of

investments as principal held as financial assets or liabilities on its

balance sheet;

(d)
the establishment of a maximum gross volume on the balance sheet of a

ring-fenced body which provides core services, for the value of

investments as principal held as financial assets or liabilities on its

balance sheet; and

Notices of Amendments: 14 March 2013
7

Financial Services (Banking Reform) Bill, continued

(e)
the information that may be required for an independent valuation of a

financial institutions’s assets or liabilities in respect of relevant

investments as principal.

(9)
The Chancellor of the Exchequer will—

(a)
lay before Parliament a report of the review in subsection (8); and

(b)
provide, by Order subject to an affirmative resolution of both Houses of

Parliament, such safeguards as may be set out in the review in subsection

(8).’.

Chris Leslie

Cathy Jamieson

7

Clause  9,  page  15,  line  25,  at end insert—

‘Category 8: Deposits of charitable bodies

15D
Any amount owed at the relevant date by the debtor in respect of deposits made

by charitable bodies up to the amount of nine tenths of the amount owed to the

persons to whom the amount is owed.

Interpretation for category 8

15E(1)
In paragraph 15D “charitable body” means any organisation with charitable

status under section 1 of the Charities Act 2006.

      (2)
For this purpose a “deposit” means rights of the kind described in—

(a)
paragraph 22 of Schedule 2 to the Financial Services and Markets Act

2000 (deposits), or

(b)
section 1(2)(b) of the Dormant Bank and Building Society Accounts

Act 2008.’.

Chris Leslie

Cathy Jamieson

8

Clause  9,  page  15,  line  35,  after ‘Financial Services Compensation Scheme’, insert

‘and deposits of charitable bodies’.

Chris Leslie

Cathy Jamieson

9

Clause  9,  page  15,  line  36,  at end insert—

‘Deposits of charitable bodies

(6C)
Any amount owed at the relevant date by the debtor in respect of deposits made

by charitable bodies up to the amount of nine tenths of the amount owed to the

persons to whom the amount is owed.’.

FSCS review of company savings schemes

Chris Leslie

Cathy Jamieson

NC2

To move the following Clause:—

Notices of Amendments: 14 March 2013
8

Financial Services (Banking Reform) Bill, continued

‘(1)
The Chief Executive of the Financial Services Compensation Scheme shall,

within six months of Royal Assent of this Act, publish a review of the protections

necessary for customers who make payments to any bodies corporate on the

understanding that such payments are deposits in a saving scheme.

(2)
The review in subsection (1) shall include consideration of any consequential

reform to creditor preference arrangements so that any payments made in advance

as part of a contract for the receipt of goods or services (such as gift vouchers,

certificates or other forms of pre-payment) in expectation that those sums would

be redeemable in a future exchange for such goods or services might be

considered as preferential debts in the event of insolvency.’.

Professional standards

Chris Leslie

Cathy Jamieson

NC3

To move the following Clause:—

‘After section 65 of FSMA 2000 insert—

“Section 65A

Professional Standards

(1)
The regulator will raise standards of professionalism in financial services

by mandating a licensing regime based on training and competence. This

must—

(a)
apply to all approved persons exercising controlled functions,

regardless of financial sector;

(b)
specify minimum thresholds of competence including integrity,

professional qualifications, continuous professional

development and adherence to a recognised code of conduct;

(c)
make provisions in connection with—

(i)
the granting of a licence;

(ii)
the refusal of a licence;

(iii)
the withdrawal of a licence; and

(iv)
the revalidation of a licensed person of a prescribed

description whenever the appropriate regulator sees fit,

either as a condition of the person’s continuing to hold a

licence or of the person’s licence being restored.

(d)
be evidenced by individuals holding an annual validation of

competence.

(2)
In the Financial Services and Markets Act 2000, section 59, remove

“authorised” and insert “licensed” throughout the section.’.

Code of conduct

Chris Leslie

Cathy Jamieson

NC4

To move the following Clause:—

Notices of Amendments: 14 March 2013
9

Financial Services (Banking Reform) Bill, continued

‘After section 64(6) of FSMA 2000 insert—

“(6A)
A code issued under subsection (2) shall—

(a)
apply to all approved persons exercising controlled functions in

the financial sector;

(b)
specify a framework of certain permitted and prohibited actions

with which approved persons must agree in writing to comply;

(c)
mandate individual financial penalties, and the terms of

temporary and permanent suspension of persons’ licence to

operate, which can be issued by the appropriate regulator if it

determines that an approved person has broken the code;

(d)
specify the training, including both practical and ethical, which

approved persons must undergo before practising controlled

functions; and

(e)
specify the additional training to be provided by institutions for

their staff and set out the system by which institutions will

monitor and enforce such a code.”.’.

Duty of care

Chris Leslie

Cathy Jamieson

NC5

To move the following Clause:—

‘At all times when carrying out core activities a ring-fenced body shall—

(a)
be subject to a fiduciary duty towards its customers in the operation of

core services; and

(b)
be subject to a duty of care towards its customers across the financial

services sector.’.

Chris Leslie

Cathy Jamieson

10

Clause  5,  page  13,  line  36,  at end insert—

‘(7D)
In relation to the directors of a ring-fenced body, the following arrangements shall

apply—

(a)
Half of the board of directors of the ring-fenced body, both executive and

non-executive, will be made up of independent persons.

(b)
In this section an “independent person” means a person who—

(i)
has not been an employee of the group within the previous five

years;

(ii)
does not have a material business relationship with the group and

has not had one within the previous three years, including an

indirect relationship as a partner, director, senior employee or

shareholder or an adviser or major customer or supplier;

(iii)
does not receive remuneration from the group other than

remuneration in their capacity as an independent person does not

participate in the group’s share option or performance-related

pay schemes and is not a member of the pension scheme;

(iv)
does not have close family ties with any of the company’s

advisers, directors or senior employees;

Notices of Amendments: 14 March 2013
10

Financial Services (Banking Reform) Bill, continued

(v)
does not hold cross-directorships or have significant links with

other directors through involvement in other companies or

bodies;

(vi)
does not represent a significant shareholder; and

(vii)
has not served on the board of any body in the group for more

than nine years.

(c)
The board of directors of the ring-fenced body, both executive and non-

executive, will have no formal, business or family relationship with the

directors of the rest of the group, other than by virtue of their appointment

to the same group.

(d)
The primary objective of the board of directors of the ring-fenced body,

both executive and non-executive, shall be on the performance and

functions of the ring-fenced body and they will have no responsibility for

the performance and functions of the remainder of group.

(e)
All directors of the ring-fenced body shall have a duty to preserve the

integrity of the ring-fence between the group and its subsidiary.’.

Remuneration consultants

Chris Leslie

Cathy Jamieson

NC6

To move the following Clause:—

‘The Secretary of State will by regulations provide for a requirement that the

remuneration consultants advising on remuneration policy shall be appointed by

the shareholders of a relevant financial institution.’.

Remuneration committee

Chris Leslie

Cathy Jamieson

NC7

To move the following Clause:—

‘The Secretary of State will provide for a requirement that an employee

representative should be a member of the remuneration committee of a relevant

financial institution.’.

Financial Crime Unit

Chris Leslie

Cathy Jamieson

NC8

To move the following Clause:—

‘(1)
The Secretary of State shall by order create a new Financial Crime Unit as part of

the Serious Fraud Office for the purpose of tackling financial crime, using

resources from the proceeds of penalties paid to the FCA.

(2)
The Treasury shall conduct a review into the creation of the Financial Crime Unit

and consult on its proposals for the Financial Crime Unit’s powers and

responsibilities.

Notices of Amendments: 14 March 2013
11

Financial Services (Banking Reform) Bill, continued

(3)
The Treasury shall lay its proposals before both Houses of Parliament no later

than six months after this Act comes into force.

(4)
The orders under subsection (1) may make such amendments to legislation as

appear to the Treasury to be necessary or expedient for the purpose of creating the

Financial Crime Unit.

(5)
The orders under subsection (1) may only be made if they have been laid before

and approved by a resolution of each House of Parliament.’.

Protection for whistleblowers

Chris Leslie

Cathy Jamieson

NC9

To move the following Clause:—

‘After Part IVA (43B(f) of the Employment Rights Act 1996 there is inserted—

“(g)
that a breach of regulated activities under FSMA 2000 or the

Financial Services Act 2012 has been committed, is being

committed, or is likely to be committed.”.’.

Remuneration reform

Chris Leslie

Cathy Jamieson

NC10

To move the following Clause:—

‘Within six months of Royal Assent of this Act the Chancellor of the Exchequer

shall lay before Parliament proposals on reform of remuneration at UK financial

institutions which shall include incentives to take account of the performance and

stability of a UK financial institution over a five- to 10-year period.’.

Review into competitiveness

Chris Leslie

Cathy Jamieson

NC11

To move the following Clause:—

‘(1)
The Treasury shall arrange for a review of the obstacles to increasing competition

for UK institutions involved in the provision of core services.

(2)
The review must be completed during the period of six months beginning with

the date on which this Act comes into force.

(3)
The review must consider, in particular—

(a)
the major obstacle to new UK institutions emerging as competitors in the

provision of core services, and

(b)
possible actions that could be taken to facilitate new UK institutions

being competitive in the provision of core services.

(4)
The review must result in a report to the Treasury.

(5)
The Treasury shall lay a copy of the report before Parliament.’.



© Parliamentary copyright	Revised 15 March 2013