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Financial Services (Banking Reform) Bill |
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[The page and line references are to HL Bill 38, the bill as first printed for the Lords.] |
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1 | Page 9, leave out lines 7 to 9 and insert— |
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| “(a) | in relation to a PRA-authorised person, the PRA, |
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| (b) | in relation to any other authorised person, the FCA;” |
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2 | Page 9, line 27, at end insert “and of any rules made by it under section 192JA (rules |
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| applying to parent undertakings of ring-fenced bodies).” |
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3 | Page 12, line 19, leave out from “a” to end of line 24 and insert “notice (a |
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| (1A) | The preliminary notice must— |
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| (a) | state that it is a preliminary notice, |
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| (b) | state that the regulator proposes to exercise the group restructuring |
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| (c) | state the action which the regulator proposes to take in the exercise |
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| (e) | give reasons for the proposed action (which must include the |
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| regulator’s reasons for being satisfied as to the matters mentioned |
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4 | Page 12, leave out lines 25 to 30 and insert— |
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| “(2) | The appropriate regulator must give a copy of the preliminary notice to the |
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5 | Page 12, line 31, leave out “first” |
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6 | Page 12, line 40, leave out from beginning to end of line 11 on page 13 |
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7 | Page 13, line 13, leave out “third preliminary notice” and insert “preliminary notice |
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8 | Page 13, line 15, after “if” insert “, having considered any representations made by |
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| any of the relevant persons,” |
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9 | Page 13, line 19, after “a” insert “written” |
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10 | Page 13, line 19, at end insert “and give a copy of that notice to the Treasury.” |
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11 | Page 13, line 20, leave out from second “period” to end of line 22 and insert— |
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| “(a) | beginning 3 months after the end of the period specified under |
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| section 142M(3) as that within which any representations must be |
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| (b) | ending 6 months after the end of that period.” |
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12 | Page 13, line 31, leave out “third” |
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13 | Page 13, line 34, leave out “third” |
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14 | Page 13, line 38, leave out “third” |
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15 | Page 13, line 43, leave out from “must” to end of line 44 and insert “specify the date |
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| or dates by which each of the following must be completed—” |
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16 | Page 13, line 46, leave out “or” |
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17 | Page 17, leave out lines 20 to 44 and insert— |
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| “(1A) | The Treasury may by regulations require a ring-fenced body to make |
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| arrangements for any one or more of the following purposes— |
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| (a) | ensuring that, except in prescribed cases, the ring-fenced body |
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| cannot become liable to meet, or contribute to the meeting of, |
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| pension liabilities which arise in connection with persons’ service |
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| on or after a date specified in the regulations (“the specified date”) |
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| in any employment, other than service in an employment in respect |
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| of which the employer is a ring-fenced body; |
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| (b) | ensuring that, except in prescribed cases, the default of a person |
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| other than another ring-fenced body would not result in the ring- |
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| fenced body becoming liable to meet, or contribute to the meeting |
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| of, pension liabilities arising in connection with persons’ service in |
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| any employment before the specified date; |
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| (c) | to the extent that it is not possible to ensure the result mentioned in |
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| paragraph (a) or (b), minimising any potential liability falling |
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| within paragraph (a) or (b). |
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| (1B) | The regulations may make provision enabling the trustees or managers of |
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| a relevant pension scheme in respect of which the employer or one of the |
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| employers is a ring-fenced body— |
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| (a) | to transfer to another relevant pension scheme all or part of the |
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| pension liabilities arising in connection with persons’ service before |
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| the specified date together with all or part of the assets of the |
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| (b) | to divide the scheme into two or more sections in relation to which |
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| prescribed conditions are met. |
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| (1C) | The regulations may make provision— |
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| (a) | enabling a ring-fenced body to apply to the court in a case where |
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| the ring-fenced body has been unable to reach agreement with |
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| another person (“P”) about the making of arrangements with P on |
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| commercial terms for one or more of the purposes in subsection |
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| (b) | enabling the court on such an application to order P to enter into |
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| arrangements with the ring-fenced body for those purposes on such |
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| terms as the court considers fair and reasonable in the |
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| (1D) | The regulations must provide that any terms specified by the court by |
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| virtue of provision made under subsection (1C)— |
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| (a) | must be terms which, in the court’s opinion, represent terms on |
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| which the arrangements might be entered into if they were being |
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| entered into for commercial reasons between willing parties |
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| dealing at arm’s length, and |
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| (b) | may involve the payment of any sum by instalments. |
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| (1E) | The regulations may make other provision— |
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| (a) | about the making by a ring-fenced body of arrangements for one or |
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| more of the purposes in subsection (1A); |
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| (b) | about any transfer or division falling within subsection (1B).” |
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18 | Page 18, line 11, leave out “a ring-fenced body from making” and insert “the |
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19 | Page 18, line 18, leave out “a ring-fenced body to make the arrangements” and |
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| insert “the arrangements to be made” |
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20 | Page 18, line 19, at end insert— |
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| “( ) | require the trustees or managers of a relevant pension scheme or |
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| any employer in relation to a relevant pension scheme to give notice |
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| of prescribed matters to prescribed persons;” |
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21 | Page 18, line 25, leave out “the ring-fenced body to make the arrangements” and |
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| insert “the arrangements to be made” |
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22 | Page 18, leave out lines 27 and 28 |
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23 | Page 18, line 34, at end insert— |
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| “( ) | modify, exclude or apply (with or without modification) any |
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| primary or subordinate legislation.” |
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24 | Page 18, line 34, at end insert— |
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| “(3A) | The Treasury may by regulations require an authorised person who will or |
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| may be a ring-fenced body or an authorised person who will or may be a |
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| member of a ring-fenced body’s group to do all it can to obtain from the |
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| Pensions Regulator a clearance statement in relation to any arrangements |
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| to be made for the purpose of complying with— |
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| (a) | regulations under this section, or |
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| (b) | any provision made by or under this Part (other than this section) |
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| when the provision comes into force.” |
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25 | Page 18, line 35, leave out from beginning to “the” and insert “A “clearance |
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| statement” is a statement issued by” |
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26 | Page 18, line 49, leave out “The regulations” and insert “Regulations under this |
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27 | Page 19, line 5, at end insert “and this section” |
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28 | Page 19, line 5, at end insert— |
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| “(1A) | “Relevant pension scheme” means an occupational pension scheme that is |
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| not a money purchase scheme.” |
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29 | Page 19, line 9, leave out ““employer”,” |
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30 | Page 19, line 14, at end insert— |
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| “(3A) | “Employer”, in relation to a relevant pension scheme, means— |
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| (a) | a person who is for the purposes of Part 1 of the Pensions Act 1995 |
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| or Part 2 of the Pensions (Northern Ireland) Order 1995 an |
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| employer in relation to the scheme, and |
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| (b) | any other person who has or may have any liability under the |
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| (3B) | “Employment” has the meaning given in section 181(1) of the Pension |
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| Schemes Act 1993 or section 176(1) of the Pension Schemes (Northern |
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| (3C) | “Pension liabilities” means liabilities attributable to or associated with the |
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| provision under a relevant pension scheme of pensions or other benefits.” |
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31 | Page 21, line 12, at end insert— |
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| “(4) | Any reference to a qualifying parent undertaking is to be read in |
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| accordance with section 142L(4).”” |
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32 | Page 21, line 15, at end insert— |
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| “( ) | In section 391 of FSMA 2000 (publication), in subsection (1ZB), after |
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34 | Page 22, line 13, after “provisions,” insert— |
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| “( ) | the extent to which ring-fenced bodies are carrying on the regulated |
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| activity of dealing in investments as principal (whether in the |
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| United Kingdom or elsewhere) in circumstances where as a result |
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| of an order under section 142D(2) that activity is not an excluded |
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| ( ) | the extent to which ring-fenced bodies are carrying on activities that |
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| would be excluded activities by virtue of an order under section |
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| 142D(4) but for an exemption or exclusion made by such an order, |
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| ( ) | the extent to which ring-fenced bodies are doing things that they |
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| would be prohibited from doing by an order under section 142E but |
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| for an exemption made by such an order,” |
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35 | Insert the following new Clause— |
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| | “Independent review of operation of legislation relating to ring-fencing |
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| (1) | The Treasury must, before the end of the initial period, appoint a panel of |
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| at least 5 persons (“the review panel”) to carry out a review of the operation |
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| of the legislation relating to ring-fencing. |
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| (2) | “The legislation relating to ring-fencing” means— |
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| (a) | Part 9B of FSMA 2000 (as inserted by section 4); |
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| (b) | orders and regulations made by the Treasury under that Part; |
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| (c) | ring-fencing rules, as defined by section 142H(3) of FSMA 2000, |
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| made by the FCA or the PRA; |
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| (d) | section 192JA of FSMA 2000 (as inserted by section (Power of FCA |
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| and PRA to make rules applying to parent undertakings)); |
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| (e) | rules made by the FCA or the PRA under that section. |
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| (3) | The initial period is the period of 2 years beginning with the first day on |
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| which section 142G of FSMA 2000 is fully in force. |
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| (4) | The members of the review panel must be persons— |
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| (a) | who appear to the Treasury to be independent of the PRA, the FCA, |
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| the Bank of England and the Treasury, and |
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| (b) | who do not appear to the Treasury to have any financial or other |
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| interests that could reasonably be regarded as affecting their |
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| suitability to serve as members of the review panel. |
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| (5) | In appointing the members of the review panel, the Treasury— |
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| (a) | must have regard to the need to ensure that the review panel |
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| (considered as a whole) has the necessary experience to undertake |
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| (b) | must ensure that at least one of the members is a person appearing |
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| to the Treasury to have substantial experience in central banking or |
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| banking regulation at a senior level. |
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| (6) | Before appointing the members of the review panel, the Treasury must |
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| consult the chair of the Treasury Committee of the House of Commons. |
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| (7) | The reference in subsection (6) to the Treasury Committee of the House of |
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| (a) | if the name of that Committee is changed, is a reference to that |
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| 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 |
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| of Commons, is to be treated as a reference to the Committee by |
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| which the functions are exercisable; |
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| | and any question arising under paragraph (a) or (b) is to be determined by |
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| the Speaker of the House of Commons. |
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| (8) | The Treasury must appoint one of the members of the review panel to be |
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| (9) | The review panel must, within a reasonable time after the end of the initial |
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| period, make a written report to the Treasury— |
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| (a) | setting out the results of the review, and |
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| (b) | making such recommendations (if any) as the panel considers |
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| (a) | lay a copy of the report before Parliament, and |
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| (b) | publish the report in such manner as they think fit. |
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| (11) | Any expenses reasonably incurred in the conduct of the review are to be |
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| paid by the Treasury out of money provided by Parliament.” |
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36 | Insert the following new Clause— |
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| | “PRA review of proprietary trading |
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| (1) | The PRA must carry out a review of proprietary trading engaged in |
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| (whether or not as a regulated activity) by relevant authorised persons, for |
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| the purpose of considering whether further restrictions on any kind of |
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| proprietary trading ought to be imposed. |
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| (2) | The review must begin before the end of the 12 months beginning with the |
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| first day on which section 142G of FSMA 2000 is fully in force. |
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| (3) | On completion of the review, the PRA must make a written report to the |
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| (a) | the extent to which relevant authorised persons engage in |
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| (b) | whether proprietary trading engaged in by relevant authorised |
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| persons gives rise to any risks to their safety and soundness; |
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| (c) | whether any kinds of proprietary trading are particularly likely to |
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| (d) | anything done by the PRA to minimise risks to the safety and |
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| soundness of relevant authorised persons arising from proprietary |
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| trading engaged in by them; |
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| (e) | any difficulties encountered by the PRA in seeking to minimise |
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| (4) | The report must include an assessment by the PRA of each of the |
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| (a) | whether the PRA’s powers under FSMA 2000 are, and might be |
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| expected to continue to be, sufficient to enable it to advance its |
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| objectives in relation to relevant authorised persons who engage in |
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| (b) | the effectiveness of restrictions imposed in countries or territories |
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| outside the United Kingdom on proprietary trading by banks (so |
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| far as experience in those countries or territories appears to the PRA |
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| to be of relevance to the United Kingdom). |
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| (5) | The report must be made within 9 months of the beginning of the review. |
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| (6) | The Treasury must lay a copy of the report before Parliament. |
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| (7) | The PRA must publish the report in such manner as it thinks fit. |
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| (8) | The functions of the PRA under this section are to be taken for the purposes |
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| of FSMA 2000 to be functions under that Act. |
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| (9) | This section is to be read with the interpretative provisions in section |
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| (Reviews of proprietary trading: interpretation).” |
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37 | Insert the following new Clause— |
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| | “Independent review of proprietary trading |
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| (1) | The Treasury must, after receiving the report of the PRA under section |
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| (PRA review of proprietary trading) but before the end of the initial period, |
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| appoint one or more persons (“the review panel”) to carry out a review of |
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| proprietary trading engaged in (whether or not as a regulated activity) by |
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| relevant authorised persons. |
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| (2) | The initial period is the period of 2 years beginning with the first day on |
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| which section 142G of FSMA 2000 is fully in force. |
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| (3) | The members of the review panel must be persons— |
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| (a) | who appear to the Treasury to be independent of the PRA, the FCA, |
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| the Bank of England and the Treasury, and |
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| (b) | who do not appear to the Treasury to have any financial or other |
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| interests that could reasonably be regarded as affecting their |
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| suitability to serve as members of the review panel. |
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| (4) | In appointing the members of the review panel, the Treasury must have |
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| regard to the need to ensure that the review panel (considered as a whole) |
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| has the necessary experience to undertake the review. |
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| (5) | Before appointing the members of the review panel, the Treasury must |
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| consult the chair of the Treasury Committee of the House of Commons. |
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| (6) | The reference in subsection (5) to the Treasury Committee of the House of |
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| (a) | if the name of that Committee is changed, is a reference to that |
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| 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 |
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| of Commons, is to be treated as a reference to the Committee by |
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| which the functions are exercisable; |
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| | and any question arising under paragraph (a) or (b) is to be determined by |
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| the Speaker of the House of Commons. |
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| (7) | If the review panel consists of two or more members, the Treasury must |
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| appoint one of them to be the chair of the panel. |
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| (8) | The review panel must, within a reasonable time after the end of the initial |
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| period, make a written report to the Treasury— |
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| (a) | stating whether the panel agrees with the conclusions reached by |
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| the PRA in its report under section (PRA review of proprietary |
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| (b) | stating whether the panel recommends any further restrictions on |
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| any kind of proprietary trading in relation to relevant authorised |
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| (c) | making such other recommendations as the panel thinks fit. |
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| (a) | lay a copy of the report before Parliament, and |
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| (b) | publish the report in such manner as they think fit. |
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| (10) | Any expenses reasonably incurred in the conduct of the review are to be |
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| paid by the Treasury out of money provided by Parliament. |
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| (11) | This section is to be read with the interpretative provisions in section |
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| (Reviews of proprietary trading: interpretation).” |
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