House of Commons Amendments

Session 2013 - 14
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Other Bills before Parliament

Notices of Amendments: 2 July 2013
494

Financial Services (Banking Reform) Bill, continued

has contravened a requirement of a direction given to P by that regulator

as a result of section 142JB(2)(d) or (3)(d).

(2)
The regulator may impose a penalty of such amount as it considers

appropriate on—

(a)
P, or

(b)
any person who was knowingly concerned in the contravention.

(3)
The regulator may, instead of imposing a penalty on a person, publish a

statement censuring the person.

(4)
The regulator may not take action against a person under this section after

the end of the limitation period unless, before the end of that period, it has

given a warning notice to the person under section 142JJ.

(5)
“The limitation period” means the period of 3 years beginning with the

first day on which the regulator knew of the contravention.

(6)
For this purpose a regulator is to be treated as knowing of a contravention

if it has information from which the contravention can reasonably be

inferred.

(7)
The requirements that a regulator may be required to impose as a result

of a direction under section 142JB(2)(c) or (3)(c) include requirements

that the regulator would not but for the direction have power to impose.

142JJ
Procedure and right to refer to Tribunal

(1)
If a regulator proposes to take action against a person under section

142JI, it must give the person a warning notice.

(2)
A warning notice about a proposal to impose a penalty must state the

amount of the penalty.

(3)
A warning notice about a proposal to publish a statement must set out the

terms of the statement.

(4)
If the regulator decides to take action against a person under section

142JI, it must give the person a decision notice.

(5)
A decision notice about the imposition of a penalty must state the amount

of the penalty.

(6)
A decision notice about the publication of a statement must set out the

terms of the statement.

(7)
If the regulator decides to take action against a person under section

142JI, the person may refer the matter to the Tribunal.

142JK
Duty on publication of statement

After a statement under section 142JI(3) is published, the regulator must

send a copy of the statement to—

(a)
the person in respect of whom it is made, and

(b)
any person to whom a copy of the decision notice was given

under section 393(4).

142JL
Imposition of penalties under section 142JI: statement of policy

(1)
Each regulator must prepare and issue a statement of policy with respect

to—

Notices of Amendments: 2 July 2013
495

Financial Services (Banking Reform) Bill, continued

(a)
the imposition of penalties under section 142JI, and

(b)
the amount of penalties under that section.

(2)
A regulator’s policy in determining what the amount of a penalty should

be must include having regard to—

(a)
the seriousness of the contravention,

(b)
the extent to which the contravention was deliberate or reckless,

and

(c)
whether the person on whom the penalty is to be imposed is an

individual.

(3)
A regulator may at any time alter or replace a statement issued under this

section.

(4)
If a statement issued under this section is altered or replaced, the

regulator must issue the altered or replacement statement.

(5)
In exercising, or deciding whether to exercise, a power under section

142JI(2) in the case of any particular contravention, a regulator must

have regard to any statement of policy published under this section and

in force at a time when the contravention occurred.

(6)
A statement under this section must be published by the regulator

concerned in the way appearing to the regulator to be best calculated to

bring it to the attention of the public.

(7)
A regulator may charge a reasonable fee for providing a person with a

copy of the statement published under this section.

(8)
A regulator must, without delay, give the Treasury a copy of any

statement which it publishes under this section.

(9)
Section 192I applies in relation to a statement under this section as it

applies in relation to a statement under section 192H.’

Mr Chancellor of the Exchequer

7

Clause  4,  page  13,  line  10,  leave out from beginning to ‘any’ and insert—

‘(1)
This section has effect for the interpretation of this Part.’

Mr Chancellor of the Exchequer

8

Clause  4,  page  13,  line  14,  at end insert—

‘(3)
Any reference to the group restructuring powers is to be read in accordance with

section 142JB(1).’

Mr Chancellor of the Exchequer

9

Clause  4,  page  13,  line  14,  at end insert—

‘( )
In section 133 of FSMA 2000 (proceedings before Tribunal), in subsection (7A)

after paragraph (i) insert—

“(ia)
a decision to take action under section 142JI;”.

( )
In section 392 of FSMA 2000 (application of sections 393 and 394)—

(a)
in paragraph (a), after “131H(1),” insert “142JJ(1),”, and

(b)
in paragraph (b), after “131H(4),” insert “142JJ(4),”.’

Notices of Amendments: 2 July 2013
496

Financial Services (Banking Reform) Bill, continued

Mr Chancellor of the Exchequer

10

Clause  4,  page  13,  line  26,  at end insert—

‘( )
In Schedule 1ZA to FSMA 2000 (the Financial Conduct Authority), in paragraph

8(3)(c)(i), after “138N,” insert “142JL,”.

( )
In Schedule 1ZB to FSMA 2000 (the Prudential Regulation Authority), in

paragraph 16(3)(c)(i), after “69,” insert “142JL,”.’

Mr Chancellor of the Exchequer

NS1

To move the following Schedule:—

‘Minor Amendments

Companies Act 1985 (c. 6)

1
In Schedule 15D to the Companies Act 1985 (disclosures), omit paragraph 29.

Financial Services and Markets Act 2000 (c. 8)

2
In section 376 of FSMA 2000 (continuation of contracts of long-term

insurance where insurer in liquidation), in subsection (11B), for “PRA-

authorised” substitute “PRA-regulated”.

3
In Schedule 17A to FSMA 2000 (further provision in relation to exercise of

Part 18 functions by Bank of England), in paragraph 10(1)(j), for “subsections

(1) and (3)” substitute “subsection (1)”.

Income Tax Act 2007 (c. 3)

4
In section 991 of the Income Tax Act 2007 (meaning of “bank”), in subsections

(2)(b) and (3), for “Part 4” substitute “Part 4A”.

Banking Act 2009 (c. 1)

5
In section 89B of the Banking Act 2009 (application to recognised central

counterparties), in the Table in subsection (6), in the entry relating to section

81B, in the second column, after the modification of subsection (1) of that

section insert—

“In subsection (2), for “PRA” substitute “Bank of

England”.”

6
In section 191 of the Banking Act 2009 (directions), in subsection (1), after

“inter-bank” insert “payment”.

Financial Services Act 2012 (c. 21)

7
In section 73 of the Financial Services Act 2012 (duty of FCA to investigate

and report on possible regulatory failure), in subsection (1)(b)(i)—

(a)
for “their activities,” substitute “of the carrying on of regulated

activities,”, and

(b)
for “or for the regulation of collective investment schemes” substitute

“, for the regulation of collective investment schemes or for the

regulation of recognised investment exchanges,”’.

Notices of Amendments: 2 July 2013
497

Financial Services (Banking Reform) Bill, continued

8    (1)
Section 85 of the Financial Services Act 2012 (relevant functions in relation to

complaints scheme) is amended as follows.

      (2)
For subsection (2) substitute—

“(2)
The relevant functions of the FCA or the PRA are—

(a)
its functions conferred by or under FSMA 2000, other than its

legislative functions, and

(b)
such other functions as the Treasury may by order provide.”

      (3)
For subsection (3) substitute—

“(3)
The relevant functions of the Bank of England are—

(a)
its functions under Part 18 of FSMA 2000 (recognised

clearing houses) or under Part 5 of the Banking Act 2009

(inter-bank payment systems), other than its legislative

functions, and

(b)
such other functions as the Treasury may by order provide.”

      (4)
In subsections (4) and (5), for “subsection (2)” substitute “subsection (2)(a)”.

      (5)
In subsections (6) and (7), for “subsection (3)” substitute “subsection (3)(a)”.

      (6)
After subsection (7) insert—

“(8)
For the purposes of subsection (2), sections 1A(6) and 2A(6) of FSMA

2000 do not apply.”’.

Mr Chancellor of the Exchequer

11

Schedule,  page  22,  line  22,  leave out ‘subsidiary’ and insert ‘body’.

Mr Chancellor of the Exchequer

12

Schedule,  page  22,  line  28,  leave out ‘subsidiary’ and insert ‘body’.

Mr Chancellor of the Exchequer

13

Schedule,  page  22,  line  30,  leave out ‘subsidiary undertaking’ and insert ‘member of

the group’.

Mr Chancellor of the Exchequer

14

Schedule,  page  23,  line  3,  at end insert—

‘(d)
making provision in connection with the implementation of proposals

that would involve a body corporate whose group includes the transferee

becoming a ring-fenced body while one or more other members of the

transferee’s group are not ring-fenced bodies.’.

Mr Chancellor of the Exchequer

15

Schedule,  page  23,  line  24,  at end insert—

‘(2B)
In deciding whether to give consent, the PRA must have regard to the

scheme report prepared under section 109A in relation to the ring-

fencing transfer scheme.’.

Notices of Amendments: 2 July 2013
498

Financial Services (Banking Reform) Bill, continued

Mr Chancellor of the Exchequer

16

Schedule,  page  23,  line  24,  at end insert—

‘6A
For the heading to section 109 substitute “Scheme reports: insurance business

transfer schemes”.

6B
After section 109 insert—

“109A
Scheme reports: ring-fencing transfer schemes

(1)
An application under section 106B in respect of a ring-fencing transfer

scheme must be accompanied by a report on the terms of the scheme

(a “scheme report”).

(2)
A scheme report may be made only by a person—

(a)
appearing to the PRA to have the skills necessary to enable the

person to make a proper report, and

(b)
nominated or approved for the purpose by the PRA.

(3)
A scheme report must be made in a form approved by the PRA.

(4)
A scheme report must state—

(a)
whether persons other than the transferor concerned are likely

to be adversely affected by the scheme, and

(b)
if so, whether the adverse effect is likely to be greater than is

reasonably necessary in order to achieve whichever of the

purposes mentioned in section 106B(3) is relevant.

(5)
The PRA must consult the FCA before—

(a)
nominating or approving a person under subsection (2)(b), or

(b)
approving a form under subsection (3).”’.

Burden of proof: persons performimg significant influence functions

Stephen Barclay

NC2

To move the following Clause:—

‘(1)
The Financial Services and Markets Act 2000 is amended as follows.

(2)
In section 66 (disciplinary powers), at end insert—

“(10)
In determining whether a person performing a significant influence

function is guilty of misconduct under this section, where some evidence

of misconduct exists, it shall be for him to prove his standard of

behaviour was reasonable in all the circumstances.”.’.



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