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| Clause 4, page 12, line 22, at end insert— |
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| | ‘(4A) | If the appropriate regulator is satisfied that— |
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| | (a) | a relevant body has contravened a requirement under subsection (1)(a) or |
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| | (1)(b) and knew or could reasonably be expected to have known it was |
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| | contravening such a requirement; or |
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| | (b) | has at any time attempted to contravene such a requirement and knew or |
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| | could reasonably be expected to have known it was contravening such a |
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| | | it may impose a penalty on the institution of such amount as it considers |
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| Clause 4, page 12, line 22, at end insert— |
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| | ‘( ) | If an order under this section includes provision for the grant by a regulator of any |
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| | exemption from the requirements imposed by such an order, the order must— |
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| | (a) | require a relevant body claiming the exemption to satisfy the regulator |
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| | that the exemption should be granted; |
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| | (b) | require the regulator, in deciding whether to grant the exemption, to have |
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| | regard to all reasonably foreseeable circumstances; |
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| | (c) | include provision for reviews of, or appeals from, any decision not to |
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| | (d) | require the regulator to make to the Treasury a report setting out any |
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| | decision to grant the exemption and the terms of the exemption granted, |
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| | (e) | require the Treasury to lay a copy of such a report before Parliament and |
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| | to publish it in such manner as they think fit.’. |
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| Clause 4, page 12, line 31, at end insert— |
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| Clause 4, page 12, line 33, at end insert ‘and |
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| Clause 4, page 13, line 7, at end add— |
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| | ‘(7) | A Treasury statement referred to in subsection (3) may only be made if the |
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| | Treasury considers that the statement is necessary— |
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| | (a) | to protect the continuity of provision in the UK of core services; or |
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| | (b) | to secure an appropriate degree of protection for depositors, or |
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| | (c) | to ensure the continuing stability of the UK financial service market.’. |
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| Clause 4, page 13, line 7, at end insert— |
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| | ‘142NA | Enhanced scrutiny procedure for certain affirmative procedure orders |
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| | (1) | This section applies if— |
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| | (a) | an order under section 142A(2)(b) exempts a class of UK institutions |
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| | from being ring-fenced bodies, |
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| | (b) | an order under sections 142B(2) or 142B(5) makes provision for a |
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| | regulated activity to be or cease to be a core activity or varies the |
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| | circumstances in which a regulated activity is a core activity, |
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| | (c) | an order under section 142D(2) varies the circumstances in which the |
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| | regulated activity of dealing in investments as principal is an excluded |
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| | |
| | (d) | an order under section 142D(4) provides for an activity to be or cease to |
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| | be an excluded activity or varies the circumstances in which an activity |
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| | is an excluded activity, or |
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| | (e) | an order under section 142E varies the scope of what ring-fenced bodies |
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| | are prohibited from doing by virtue of that section (including by varying |
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| | exemptions or conditions), |
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| | (f) | an order is made under section 142M, |
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| | | and the order is not made in reliance on section 142N(4). |
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| | (2) | The Treasury must, before laying a draft of the order before either House of |
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| | Parliament for approval, consult such persons as the Treasury considers |
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| | appropriate in relation to the proposed draft. |
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| | (3) | If, after the consultation required by subsection (2), the Treasury considers that it |
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| | is appropriate to proceed with the making of an order, the Treasury must lay |
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| | before each House of Parliament a draft of the order together with an explanatory |
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| | (a) | explaining the provisions in the draft order, and |
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| | (b) | giving details of the consultation under subsection (2), any |
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| | representations received as a result of the consultation and any changes |
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| | made to the proposed draft as a result of the representations. |
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| | (4) | If a joint committee of both Houses of Parliament is charged with reporting on the |
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| | (a) | the chairman of the Treasury Committee of the House of Commons is to |
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| | be the chairman of the joint committee, and |
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| | (b) | the Treasury must have regard to any recommendations of the joint |
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| | committee made during the 60-day period. |
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| | (5) | If, after the expiry of the 60-day period, the Treasury wish to make an order |
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| | including material changes from the draft order, they must lay before |
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| | (a) | a revised draft order, and |
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| | (b) | a statement giving details of the revisions |
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| | (6) | After the expiry of the 60-day period (and, if subsection (5) applies, after |
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| | complying with that subsection) the Treasury may make the order in the terms of |
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| | the draft, or revised draft, if it is approved by a resolution of each House of |
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| | Parliament (as required by section 142N(2)(a)). |
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| | (7) | In this section “the 60-day period” means the period of 60 days beginning with |
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| | the day on which the draft order is laid before Parliament under subsection (3). |
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| | (8) | In calculating the 60-day period no account is to be taken of any time during |
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| | which Parliament is dissolved or prorogued or during which either House is |
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| | adjourned for more than 4 days. |
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| | (9) | The references in this section to the Treasury Committee of the House of |
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| | (a) | if the name of that Committee is changed, is to be treated as a reference |
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| | to that Committee by its new name, and |
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| | (b) | if the functions of that Committee (or substantially corresponding |
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| | functions) become functions of a different Committee of the House of |
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| | Commons, is to be treated as a reference to the Committee by which the |
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| | functions are exercisable; |
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| | | and any question arising under paragraph (a) or (b) is to be determined by the |
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| | Speaker of the House of Commons.”.’. |
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| Clause 5, page 13, line 36, at end insert— |
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| | ‘(7D) | In relation to the directors of a ring-fenced body, the following arrangements shall |
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| | (a) | Half of the board of directors of the ring-fenced body, both executive and |
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| | non-executive, will be made up of independent persons. |
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| | (b) | In this section an “independent person” means a person who— |
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| | (i) | has not been an employee of the group within the previous five |
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| | (ii) | does not have a material business relationship with the group and |
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| | has not had one within the previous three years, including an |
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| | indirect relationship as a partner, director, senior employee or |
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| | shareholder or an adviser or major customer or supplier; |
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| | (iii) | does not receive remuneration from the group other than |
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| | remuneration in their capacity as an independent person does not |
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| | participate in the group’s share option or performance-related |
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| | pay schemes and is not a member of the pension scheme; |
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| | (iv) | does not have close family ties with any of the company’s |
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| | advisers, directors or senior employees; |
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| | (v) | does not hold cross-directorships or have significant links with |
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| | other directors through involvement in other companies or |
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| | (vi) | does not represent a significant shareholder; and |
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| | (vii) | has not served on the board of any body in the group for more |
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| | (c) | The board of directors of the ring-fenced body, both executive and non- |
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| | executive, will have no formal, business or family relationship with the |
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| | directors of the rest of the group, other than by virtue of their appointment |
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| | (d) | The primary objective of the board of directors of the ring-fenced body, |
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| | both executive and non-executive, shall be on the performance and |
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| | functions of the ring-fenced body and they will have no responsibility for |
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| | the performance and functions of the remainder of group. |
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| | (e) | All directors of the ring-fenced body shall have a duty to preserve the |
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| | integrity of the ring-fence between the group and its subsidiary.’. |
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| Clause 6, page 14, line 7, at end insert— |
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| | ‘( ) | the nature and extent of the dealings by ring-fenced bodies in derivative |
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| | products (including options, futures, contracts for differences and similar |
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| Clause 6, page 14, line 7, at end insert ‘and |
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| | ( ) | developments affecting the appropriateness of the amount for the time |
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| | being specified for the purposes of any exemption under section |
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| | 142A(2)(b) for UK institutions holding deposits below that specified |
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| Schedule, page 24, line 9, at end insert— |
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| | ‘( ) | After subsection (3) insert— |
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| | “(4) | Without prejudice to the generality of subsection (3), in the case of a ring- |
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| | fencing transfer scheme the court must not make an order sanctioning the |
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| | scheme if it considers that it might lead to the dissolution of a company |
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| | or to the transfer of liabilities owed to any persons in a manner that may |
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| | prejudice the interests of those persons.”.’. |
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| Clause 9, page 15, line 25, at end insert— |
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| | ‘Category 8: Deposits of charitable bodies |
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| | 15D | Any amount owed at the relevant date by the debtor in respect of deposits made |
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| | by charitable bodies up to the amount of nine tenths of the amount owed to the |
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| | persons to whom the amount is owed. |
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| | Interpretation for category 8 |
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| | 15E(1) | In paragraph 15D “charitable body” means any organisation with charitable |
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| | status under section 1 of the Charities Act 2006. |
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| | (2) | For this purpose a “deposit” means rights of the kind described in— |
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| | (a) | paragraph 22 of Schedule 2 to the Financial Services and Markets Act |
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| | (b) | section 1(2)(b) of the Dormant Bank and Building Society Accounts |
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| Clause 9, page 15, line 35, after ‘Financial Services Compensation Scheme’, insert |
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| ‘and deposits of charitable bodies’. |
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| Clause 9, page 15, line 36, at end insert— |
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| | ‘Deposits of charitable bodies |
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| | (6C) | Any amount owed at the relevant date by the debtor in respect of deposits made |
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| | by charitable bodies up to the amount of nine tenths of the amount owed to the |
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| | persons to whom the amount is owed.’. |
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| Clause 16, page 20, line 28, after ‘ring-fencing)’ insert ‘or section (Bank bail-in |
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| regime)(2) (bank bail-in regime)’. |
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| Clause 20, page 21, line 23, at end insert— |
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| | ‘( ) | No order may be made appointing a day for the coming into force of section 4 so |
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| | far as it inserts section 142JC of FSMA 2000 unless the day is later than that on |
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| | which the report of the first review under section 142J of that Act is published.’. |
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| Clause 20, page 21, line 23, at end insert— |
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| | ‘( ) | No order may be made appointing a day for the coming into force of section 4 so |
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| | far as it inserts section 142JD of FSMA 2000 unless— |
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| | (a) | the day is later than that on which there is published the report of a review |
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| | under section 142J of that Act containing a recommendation that section |
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| | 4 should be brought into force to that extent, and |
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| | (b) | a draft of the order has been laid before, and approved by a resolution of, |
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| | each House of Parliament.’. |
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| To move the following Clause:— |
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| | ‘(1) | The Treasury may by order make provision about the tier 1 leverage ratio |
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| | applicable to a relevant body so as to require the relevant body to maintain a |
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| | minimum tier 1 leverage ratio. |
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| | (2) | The Treasury may by order make provision about the tier 1 leverage ratio |
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| | applicable to a ring-fenced body so as to require the Financial Policy Committee |
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| | to create differing minimum leverage ratios for different classes of ring-fenced |
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| | bodies, based upon the risk profile of their balance sheet.’. |
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| | FSCS review of company savings schemes |
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| To move the following Clause:— |
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| | ‘(1) | The Chief Executive of the Financial Services Compensation Scheme shall, |
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| | within six months of Royal Assent of this Act, publish a review of the protections |
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| | necessary for customers who make payments to any bodies corporate on the |
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| | understanding that such payments are deposits in a saving scheme. |
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| | (2) | The review in subsection (1) shall include consideration of any consequential |
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| | reform to creditor preference arrangements so that any payments made in advance |
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| | as part of a contract for the receipt of goods or services (such as gift vouchers, |
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| | certificates or other forms of pre-payment) in expectation that those sums would |
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| | be redeemable in a future exchange for such goods or services might be |
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| | considered as preferential debts in the event of insolvency.’. |
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| To move the following Clause:— |
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| | ‘After section 65 of FSMA 2000 insert— |
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| | (5) | The regulator will raise standards of professionalism in financial services |
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| | by mandating a licensing regime based on training and competence. This |
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| | (a) | apply to all approved persons exercising controlled functions, |
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| | regardless of financial sector; |
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| | (b) | specify minimum thresholds of competence including integrity, |
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| | professional qualifications, continuous professional |
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| | development and adherence to a recognised code of conduct; |
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| | (c) | make provisions in connection with— |
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| | (i) | the granting of a licence; |
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| | (ii) | the refusal of a licence; |
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| | (iii) | the withdrawal of a licence; and |
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| | (iv) | the revalidation of a licensed person of a prescribed |
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| | description whenever the appropriate regulator sees fit, |
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| | either as a condition of the person’s continuing to hold a |
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| | licence or of the person’s licence being restored. |
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| | (d) | be evidenced by individuals holding an annual validation of |
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| | (6) | In the Financial Services and Markets Act 2000, section 59, remove |
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| | “authorised” and insert “licensed” throughout the section.’. |
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| To move the following Clause:— |
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| | ‘After section 64(6) of FSMA 2000 insert— |
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| | “(6A) | A code issued under subsection (2) shall— |
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| | (a) | apply to all approved persons exercising controlled functions in |
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| | (b) | specify a framework of certain permitted and prohibited actions |
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| | with which approved persons must agree in writing to comply; |
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| | (c) | mandate individual financial penalties, and the terms of |
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| | temporary and permanent suspension of persons’ licence to |
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