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| New Amendments handed in are marked thus  |
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| Amendments which will comply with the required notice period at their next appearance
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| Financial Services (Banking Reform) Bill
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| | The Amendments have been arranged in accordance with the Resolution of the |
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| | Programming Sub-Committee. |
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| | Resolution of the Programming Sub-Committee |
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| | The Programming Sub-Committee appointed by the Speaker in respect of the Bill |
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| | agreed the following Resolution at its meeting on Monday 18 March (Standing Order No. |
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| | (1) | the Committee shall (in addition to its first meeting at 8.55 am on Tuesday 19 |
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| | (a) | at 2.00 pm on Tuesday 19 March; |
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| | (b) | at 11.30 am and 2.00 pm on Thursday 21 March; |
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| | (c) | at 9.10 am and 2.00 pm on Tuesday 26 March; |
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| | (d) | at 9.10 am and 2.00 pm on Tuesday 16 April; and |
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| | (e) | at 11.30 am and 2.00 pm on Thursday 18 April; |
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| | (2) | the proceedings shall be taken in the following order: Clauses 1 to 7; the |
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| | Schedule; Clauses 8 to 20; new Clauses; new Schedules; remaining |
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| | (3) | the proceedings shall (so far as not previously concluded) be brought to a |
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| | conclusion at 5.00 pm on Thursday 18 April. |
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| | Greg Clark has given notice of his intention to move a motion in the terms of the |
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| | Resolution of the Programming Sub-Committee (Standing Order No. 83C). |
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| | That, subject to the discretion of the Chair, any written evidence received by the |
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| | Committee shall be reported to the House for publication. |
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| Clause 1, page 1, line 11, after ‘that’, insert ‘reduces the risk of ring-fenced bodies |
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| assuming disproportionate exposure, enhances their capacity to cope with other exposure |
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| Clause 1, page 1, line 18, after ‘services,’, insert ‘in particular by securing the |
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| orderly handling of circumstances in which ring-fenced bodies have encountered or may |
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| encounter financial difficulties,’. |
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| Clause 2, page 2, line 42, after ‘that’, insert ‘reduces the risk of ring-fenced bodies |
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| assuming disproportionate exposure, enhances their capacity to cope with other exposure |
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| Clause 2, page 3, line 6, after ‘services,’, insert ‘in particular by securing the |
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| orderly handling of circumstances in which ring-fenced bodies have encountered or may |
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| encounter financial difficulties,’. |
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| Clause 4, page 3, line 33, leave out from ‘order’ to end of line 35 and insert— |
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| | ‘(a) | would significantly enhance the stability of the UK financial system or |
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| | provide other significant benefit to the economy of the United Kingdom, |
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| | (b) | would not pose a risk to the continuity of the provision in the United |
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| | Kingdom of core services.’. |
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| Clause 4, page 3, line 35, at end insert— |
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| | ‘(3A) | In making an order under subsection (2)(b) which— |
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| | (a) | provides an exemption for UK institutions holding deposits below a |
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| | (b) | varies the amount previously specified for the purposes of such an |
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| | | the Treasury must aim to enhance competition among UK institutions which have |
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| | a Part 4A permission relating to one or more core activities (in particular by |
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| | having regard to the likely effect on the number of UK institutions applying for |
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| | or obtaining such a permission for the first time).’. |
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| Clause 4, page 5, line 13, leave out from ‘circumstances’ to end of line 15 and |
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| | ‘(a) | would significantly enhance the stability of the UK financial system or |
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| | provide other significant benefit to the economy of the United Kingdom, |
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| | (b) | would not pose a risk to the continuity of the provision in the United |
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| | Kingdom of core services.’. |
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| Clause 4, page 5, line 35, at end add— |
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| | ‘(8) | Within six months of this Act receiving Royal Assent the Treasury shall carry out |
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| | a review of the regulated activities of dealing in investments as principal, the |
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| | purposes of which review shall include consideration of— |
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| | (a) | safeguards that may be required to prevent the mis-selling of investments |
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| | as principal as part of the core services of each ring-fenced body; |
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| | (b) | a definition of “simple derivatives”, will reference to their size, maturity |
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| | and basis, the dealing of which will be permitted under section 142C; |
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| | (c) | the establishment of a maximum ratio, relevant to the size of the balance |
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| | sheet of a ring-fenced body which provides core services, for the value of |
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| | investments as principal held as financial assets or liabilities on its |
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| | (d) | the establishment of a maximum gross volume on the balance sheet of a |
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| | ring-fenced body which provides core services, for the value of |
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| | investments as principal held as financial assets or liabilities on its |
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| | (e) | the information that may be required for an independent valuation of a |
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| | financial institutions’s assets or liabilities in respect of relevant |
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| | investments as principal. |
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| | (9) | The Chancellor of the Exchequer will— |
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| | (a) | lay before Parliament a report of the review in subsection (8); and |
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| | (b) | provide, by Order subject to an affirmative resolution of both Houses of |
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| | Parliament, such safeguards as may be set out in the review in subsection |
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| Clause 4, page 6, line 24, at end insert— |
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| | ‘(1B) | If the order confers powers on a regulator or authorises or requires the making of |
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| | rules or other instruments by a regulator, then those powers, rules or instruments |
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| | are to be subject to annulment in pursuance of a resolution of either House of |
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| Clause 4, page 6, line 38, at end insert— |
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| | ‘(c) | has attempted to carry out an excluded activity or to contravene any |
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| | provision of an order under section 142E.’. |
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| Clause 4, page 7, line 45, at end insert— |
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| | ‘( ) | provision requiring that shares or voting power in a ring-fenced body are |
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| | held only by another member of the ring-fenced body’s group which is |
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| | not carrying on an excluded activity or by other members of that group |
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| | none of which is carrying on such an activity;’. |
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| Clause 4, page 8, line 34, at end insert— |
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| | ‘(7A) | The Treasury must make regulations prescribing requirements with which ring- |
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| | fencing rules made for the group ring-fencing purposes must comply.’ |
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| Clause 4, page 9, leave out lines 8 to 21 and insert— |
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| | 142J | Reviews of ring-fencing |
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| | (1) | The Treasury must make arrangements for the carrying out of reviews of the |
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| | effects of the operation of the provision made by or under this Part in relation to |
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| | ring-fenced bodies, including ring-fencing rules made by the PRA and the FCA. |
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| | Such arrangements shall be set out in a statutory instrument subject to approval |
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| | by resolution of both Houses of Parliament. |
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| | (2) | The first review must be completed before the end of the period of two years |
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| | beginning with the date on which section 4 of the Financial Services (Banking |
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| | Reform) Act 2013, so far as it inserts this section, comes into force. |
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| | (3) | Subsequent reviews must be completed before the end of the period of two years |
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| | beginning with the date on which the previous review was completed. |
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| | (4) | Not less than nine months, nor more than 12 months, before the date on which a |
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| | review is due to be completed, the PRA and the FCA must publish a joint |
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| | assessment of the impact of the operation of their ring-fence rules. |
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| | (5) | For the purposes of this section a review is completed when the report of it is |
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| | 142JA | Persons by whom reviews are to be conducted |
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| | (1) | The Treasury shall appoint not fewer than five persons to conduct a review of |
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| | (2) | A person may not be appointed to chair a review unless the chairman of the |
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| | Treasury Committee of the House of Commons has notified the Treasury that, in |
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| | the chairman‘s opinion, the person is likely to act independently of the Treasury, |
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| | the PRA and the FCA in carrying out the review. |
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| | (3) | The persons appointed to conduct a review must include at least one person with |
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| | substantial experience in central banking or financial regulation at a senior level. |
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| | (4) | The reference in subsection (2) 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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| | (1) | The persons appointed to conduct a review must give the Treasury a report of the |
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| | (2) | The report must include an assessment of the extent to which the provision made |
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| | by or under this Part in relation to ring-fenced bodies, including ring-fencing rules |
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| | made by the PRA and by the FCA, are facilitating the advancement by the PRA |
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| | of the objective in section 2B(3)(c) and by the FCA of the continuity objective. |
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| | (3) | If the report is made before section 4 of the Financial Services (Banking Reform) |
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| | Act 2013, so far as it inserts section 142JD, has come into force it must also |
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| | include a recommendation as to whether or not section 4 of that Act should be |
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| | brought into force to that extent. |
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| | (4) | The report must include— |
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| | (a) | recommendations to the Treasury as to the provision that should be |
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| | included in orders and regulations under this Part, and |
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| | (b) | recommendations to the PRA and the FCA about the provision that |
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| | should be included in ring-fencing rules. |
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| | (5) | The Treasury must lay a copy of the report before Parliament and publish it in |
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| | such manner as it thinks fit.’. |
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| Clause 4, page 9, line 21, at end insert— |
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| | ‘Power to order full separation |
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| | 142JC | Power to order separation in case of particular groups |
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| | (a) | the members of a group include one or more ring-fenced bodies and one |
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| | or more other bodies, and |
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| | (b) | it appears to the appropriate regulator that the conduct of any one or more |
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| | of the members of the group is such that there is a significant risk that the |
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| | appropriate regulator will not be able to advance the objective in section |
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| | 2B(3)(c) (in the case of the PRA) or the continuity objective (in the case |
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| | of the FCA) otherwise than by acting under this section, |
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| | | the appropriate regulator may give a notice to each of the members of the group. |
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| | (2) | The notice must state that the appropriate regulator proposes to require the taking |
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| | of relevant steps in relation to the group before the date specified in the notice. |
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| | (3) | In this section “relevant steps” means steps to secure one of the following |
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| | (a) | that there is no member of the group with a Part 4A permission to carry |
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| | on a regulated activity of a description specified in the notice; |
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| | (b) | that no member of the group is a ring-fenced body; |
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| | (c) | that there is no member of the group with a Part 4A permission to carry |
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| | on a regulated activity which is not a ring-fenced body. |
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| | (a) | specify a period, of not less than 3 months, during which any member of |
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| | the group may make representations to the appropriate regulator in |
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| | relation to its proposal, and |
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| | (b) | name an independent reviewer who is to report on the conduct of the |
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| | members of the group and the appropriateness of the proposal made by |
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| | the appropriate regulator. |
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| | (5) | A person may not be named as the independent reviewer without the consent of |
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| | the chairman of the Treasury Committee of the House of Commons; and the |
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| | reference in this subsection 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 this paragraph (a) or (b) is to be determined by the |
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| | Speaker of the House of Commons. |
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| | (6) | After receiving any representations made in relation to the proposal by members |
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| | of the group and the report of the independent reviewer, the appropriate regulator |
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| | must decide whether it intends to implement the proposal. |
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| | (7) | If the appropriate regulator decides that it does intend to implement the proposal, |
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| | it must publish notice of the proposal, and of its decision to implement it, at least |
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| | 60 days before it is implemented. |
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| | (8) | A person who is aggrieved by the decision of the appropriate regulator that it |
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| | intends to implement the proposal may refer the matter to the Tribunal. |
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| | (9) | The proposal may not be implemented without the consent of the Treasury; and |
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| | the Treasury must publish their decision on any application made by the |
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| | appropriate regulator for consent, together with their reasons for the decision, at |
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| | least 60 days before it is implemented. |
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| | (10) | Once the Treasury has consented to the implementation of the proposal and |
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| | (a) | any reference to the Tribunal under subsection (8) has been dismissed, or |
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| | (b) | the period for making such a reference to the Tribunal has expired |
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| | without a reference having been made, |
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| | | the appropriate regulator may implement the proposal by giving notice to the |
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| | members of the group requiring the taking of the relevant steps specified in the |
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| | proposal before the date so specified. |
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| | (11) | If the relevant steps have not been taken by the specified date, the appropriate |
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| | (a) | in a case where the relevant steps are aimed at securing the result in |
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| | paragraph (a) of subsection (3), take the action specified in subsection |
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| | (b) | in a case where the relevant steps are aimed at securing the result in |
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| | paragraph (b) of subsection (3), take the action specified in subsection |
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| | (c) | in a case where the relevant steps are aimed at securing the result in |
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| | paragraph (c) of subsection (3), take the action specified in subsection |
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| | (12) | The action referred to in paragraph (a) of subsection (11) is— |
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| | (a) | to cancel the Part 4A permission of any member of the group to carry on |
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| | the regulated activity specified in the notice, and |
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| | (b) | to refuse to give a Part 4A permission to any member of the group to |
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| | (13) | The action referred to in paragraph (b) of subsection (11) is— |
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| | (a) | to cancel the Part 4A permission of any member of the group that is a |
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| | ring-fenced body to the extent that it relates to a core activity, and |
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| | (b) | to refuse to give any member of the group a Part 4A permission to carry |
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| | (14) | The action referred to in paragraph (c) of subsection (11) is— |
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| | (a) | to cancel the Part 4A permission of any member of the group that is not |
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| | (b) | to refuse to give a Part 4A permission to any member of the group that is |
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| | not a ring-fenced body.’. |
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| Clause 4, page 9, line 21, at end insert— |
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| | 142JD | General requirement of separation |
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| | (1) | Where the members of any group include one or more ring-fenced bodies and one |
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| | or more other bodies, the members of the group must, before the end of the period |
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| | of five years beginning with the relevant commencement date, take steps to |
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| | secure that there are no members of the group that are ring-fenced bodies. |
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