House of Commons Amendments

Session 2013 - 14
Internet Publications
Other Bills before Parliament

Consideration of Bill: 8 July 2013
555

Financial Services (Banking Reform) Bill, continued

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

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

New Clauses relating to Bank of England Financial policy committee

Leverage ratio

Ed Balls

Chris Leslie

Cathy Jamieson

Catherine McKinnell

NC9

To move the following Clause:—

‘(1)
The Bank of England Act 1998 is amended as follows.

(2)
In Part 1A section 9D(1), for “may”, substitute “shall”.

(3)
In Part 1A after section 9D(1) insert—

“(1A)
The notice in subsection (1) shall include a target for the overall leverage

of the UK’s financial system, to encompass also the activities of foreign

financial institutions and non-bank originators of credit.”

(4)
After section 9D(3) insert—

“(4)
After each three month period, the Financial Policy Committee must

respond to the notice of the economic policy of Her Majesty’s

Government in subsection (1) by notifying the Treasury of—

(a)
any action that the Committee has taken to regulate leverage in

the financial system to the identified target in a manner

consistent with maintaining adequate credit availability and

growth in the economy, or

(b)
the Committee’s reasons for not intending to act to regulate

leverage in the financial system to the identified target.

(5)
Notificatiopn under subsection (4) must be given in writing.

(6)
The Treasury shall—

(a)
publish in such a manner as they think fit any notification

received under subsection (4), and

(b)
lay a copy of such a notification before Parliament.”.’.

Consideration of Bill: 8 July 2013
556

Financial Services (Banking Reform) Bill, continued

Remaining new clauses other than any standing in the name of a minister

of the crown or relating to competition or to portability of bank

accounts

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.”.’.

Professional standards

Ed Balls

Chris Leslie

Cathy Jamieson

Catherine McKinnell

NC3

To move the following Clause:—

‘After section 65 of FSMA 2000 insert—

“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 and

revised Banking Standards Rules;

(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 continuing to hold a

licence or of the person’s licence being restored;

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

competence;

Consideration of Bill: 8 July 2013
557

Financial Services (Banking Reform) Bill, continued

(e)
include specific provision for a Senior Persons Regime in

relation to activities involving the exercise of a significant

influence over a controlled function under section 59 of the Act.

(2)
In section 59, remove “authorised” and insert “licensed” throughout the

section.”.’.

Duty of Care

Ed Balls

Chris Leslie

Cathy Jamieson

Catherine McKinnell

NC4

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 it customers across the financial

services sector.’.

Remuneration reform

Ed Balls

Chris Leslie

Cathy Jamieson

Catherine McKinnell

NC5

To move the following Clause:—

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

shall, in consultation with the appropriate regulation, 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.’.

Consideration of Bill: 8 July 2013
558

Financial Services (Banking Reform) Bill, continued

Protection for whistleblowers

Ed Balls

Chris Leslie

Cathy Jamieson

Catherine McKinnell

NC7

To move the following Clause:—

‘(1)
After section 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.”.

(2)
After section 43B(5) of the Employment Rights Act 1996 there is inserted—


“The chairman of the board of directors of any relevant UK financial

institution will be informed of any protected disclosure made by a worker

which qualifies under the terms of Part IVA of this Act.”.’.

Reckless misconduct in the management of a bank

Ed Balls

Chris Leslie

Cathy Jamieson

Catherine McKinnell

NC11

To move the following Clause:—

‘(1)
Within the three months of Royal Assent of this Act the Government shall publish

proposals for the creation of a new criminal offence of reckless misconduct in the

management of a bank.

(2)
The new offence in subsection (2) should cover those approved persons who are

licensed under a Senior Persons Regime.

(3)
The Government shall bring forward further proposals within three months of

Royal Assent of this Act for the civil recovery of monies obtained by individuals

who have been found guilty of reckless misconduct in the management of a

bank.’.

Financial Services Crime Unit

Ed Balls

Chris Leslie

Cathy Jamieson

Catherine McKinnell

NC13

To move the following Clause:—

Consideration of Bill: 8 July 2013
559

Financial Services (Banking Reform) Bill, continued

‘(1)
The Treasury shall conduct a review into the creation of a Financial Services

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

powers and responsibilities.

(2)
The Treasury shall lay its proposals before both Houses of Parliament no later

than six months after this Act comes into force.’.

New Clauses relating to competition

Competition and Markets Authority review into competitiveness

Ed Balls

Chris Leslie

Cathy Jamieson

Catherine McKinnell

NC8

To move the following Clause:—

‘(1)
The Chancellor of the Exchequer shall instruct the Competition and Markets

Authority to begin a full market study, according to its powers under the

Enterprise Act 2002, into UK financial services institutions involved in the

provision of core services.

(2)
The full market study will consider:

(a)
the level of competition among UK institutions involved in the provision

of core services.

(b)
the obstacles to increasing competition for UK institutions involved in

the provision of core services.

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

being competitive in the provision of core services.

(3)
The full market study will be published within a year of Royal Assent of this Act.

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

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

Sale of state-owned banking assets

Ed Balls

Chris Leslie

Cathy Jamieson

Catherine McKinnell

NC10

To move the following Clause:—

‘(1)
Before the sale of banking assets in the ownership of HM Treasury, the Treasury

shall lay before Parliament a report setting out—

(a)
the manner in which the best interests of the taxpayer are to be protected

in connection with such sale,

Consideration of Bill: 8 July 2013
560

Financial Services (Banking Reform) Bill, continued

(b)
the expected impact that any sale might have on competition for the

provision of core services, customer choice and the rate of economic

growth,

(c)
an appraisal of the options for potential structural changes in the bank

concerned including—

(i)
the separation of the provision of core services from the

provision of investment activities,

(ii)
the retention of a class of assets in the ownership of HM

Treasury,

(iii)
the impact of any sale on the creation of a regional banking

network.

(2)
A copy of the report in subsection (1) shall be laid before Parliament and

sufficient time shall be given for the appropriate committees of both Houses of

Parliament to consider its findings before any sale decision.’.

Local stakeholder banks

Caroline Lucas

NC15


To move the following Clause:—

‘(1)
Within three months of Royal Assent of this Act the Secretary of State shall

publish for consultation a report setting out proposals for the creation of networks

of local stakeholder banks.

(2)
This report shall contain an examination of stakeholder banking structures,

defined as credit institutions that are not owned by private shareholders, with the

with the aim of maximising shareholder returns. The examination should draw on

experience in the UK and elsewhere and include—

(a)
co-operative banks;

(b)
credit unions;

(c)
community development finance institutions (CDFIs);

(d)
public-interest savings banks.

(3)
The report shall examine potential impacts of the creation of networks of local

stakeholder banks on—

(a)
customer service and product range,

(b)
accessibility to banking services for customer underserved by

commercial banks,

(c)
financial stability,

(d)
accountability to local stakeholders.

(4)
A copy of this report and the outcome of the full consultation shall be laid before

Parliament and sufficient time shall be given for consideration of its findings by

members of relevant committees of both Houses before any decisions are taken

on the sale of state-owned banking assets.’.

Consideration of Bill: 8 July 2013
561

Financial Services (Banking Reform) Bill, continued

Mr Chancellor of the Exchequer

5

Clause  4,  page  3,  line  35,  at end insert—

‘(3A)
Subject to that, in deciding whether and, if so, how to exercise their powers under

subsection (2)(b), the Treasury must have regard to the desirability of minimising

any adverse effect that the ring-fencing provisions might be expected to have on

competition in the market for services provided in the course of carrying on core

activities, including any adverse effect on the ease with which new entrants can

enter the market.

(3B)
In subsection (3A) “the ring-fencing provisions” means ring-fencing rules and the

duty imposed as a result of section 142G.’.

New clauses relating to portability of bank accounts

Portable account numbers

Ed Balls

Chris Leslie

Cathy Jamieson

Catherine McKinnell

NC12

To move the following Clause:—

‘(1)
Within six months of Royal Assent of this Act, the Treasury shall lay before

Parliament a report considering—

(a)
the adequacy of voluntary arrangements made by UK ring-fenced bodies

to facilitate easier customer switching of bank account services; and

(b)
legislative options for the introduction of portable account numbers and

sort codes for retail bank accounts provided by UK ring-fenced bodies.

(2)
The Chancellor of the Exchequer may, by affirmative order to be approved by

both Houses of Parliament, confer powers upon the appropriate regulator to

require UK ring-fenced bodies to comply with any specified scheme to establish

the use of portable account numbers and sort codes.’.

Portable account numbers (No. 2)

Andrea Leadsom

Mr Brooks Newmark

Mark Garnier

Mr David Ruffley

John Thurso

Teresa Pearce

John Mann

NC14

To move the following Clause:—



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