House of Commons Amendments

Session 2012 - 13
Internet Publications
Other Bills before Parliament

93

House of Commons

Tuesday 26 March 2013

Public Bill Committee

New Amendments handed in are marked thus

Amendments which will comply with the required notice period at their next appearance

Financial Services (Banking Reform) Bill

Note

The Amendments have been arranged in accordance with the Order of the

Committee [19 March].

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.”.’.

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.

Public Bill Committee: 26 March 2013
94

Financial Services (Banking Reform) Bill, continued

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.’.

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

21

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 142JC of FSMA 2000 unless the day is later than that on

which the report of the first review under section 142J of that Act is published.’.

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—

Public Bill Committee: 26 March 2013
95

Financial Services (Banking Reform) Bill, continued

(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.’.

New Clauses

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.’.

FSCS review of company savings schemes

Chris Leslie

Cathy Jamieson

NC2

To move the following Clause:—

‘(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.’.

Public Bill Committee: 26 March 2013
96

Financial Services (Banking Reform) Bill, continued

Professional standards

Chris Leslie

Cathy Jamieson

NC3

To move the following Clause:—

‘After section 65 of FSMA 2000 insert—

“Section 65A

Professional Standards

(5)
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.

(6)
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:—

‘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

Public Bill Committee: 26 March 2013
97

Financial Services (Banking Reform) Bill, continued

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.’.

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.’.

Public Bill Committee: 26 March 2013
98

Financial Services (Banking Reform) Bill, continued

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.

(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.”.’.

Public Bill Committee: 26 March 2013
99

Financial Services (Banking Reform) Bill, continued

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.
5
(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.
10
(4)
The review must result in a report to the Treasury.

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

As an Amendment to Chris Leslie’s proposed New Clause (Review into

competitiveness) (NC11):—

Mark Durkan

(a)

Line  9,  at end insert—

‘(c)
any evidence of impaired access to competitive core services in

identifiable regions of the UK or for particular classes of consumers.’.



© Parliamentary copyright	Revised 26 March 2013