142.133-139

House of Commons

Session 2013 - 14
Internet Publications
Other Bills before Parliament

Lords Amendments to the Financial Services (Banking Reform) Bill

133

      (2)
In exercising any functions within sub-paragraph (3), the Regulator

must act through its board.

      (3)
The functions referred to in sub-paragraph (2) are—

(a)
giving general directions under section (Directions);

(b)
imposing generally-imposed requirements under section (System

rules).

      (4)
The function of issuing general guidance may not be discharged by an

officer or member of staff of the Regulator or of the FCA.

Annual plan

6    (1)
The Regulator must in respect of each of its financial years prepare an

annual plan which has been approved by the FCA.

      (2)
The plan must be prepared—

(a)
in the case of the Regulator’s first financial year, as soon as

reasonably practicable after it is established, and

(b)
in the case of each subsequent financial year, before the start of

the financial year.

      (3)
The Regulator may, with the approval of the FCA, vary the plan in

respect of a financial year at any time after its preparation.

      (4)
An annual plan in respect of a financial year must set out—

(a)
the aims of the Regulator for the year,

(b)
how the extent to which each of those aims is met is to be

determined,

(c)
the relative priorities of each of those aims, and

(d)
how its resources are to be allocated among the activities to be

carried on in connection with the discharge of its functions.

      (5)
In sub-paragraph (4) references to aims for a financial year include aims

for a longer period that includes that year.

      (6)
Before preparing or varying an annual plan, the Regulator must

consult—

(a)
the Treasury, and

(b)
such other persons (if any) as the Regulator considers

appropriate.

      (7)
The Regulator must publish each annual plan, and each variation of an

annual plan, in the way it considers appropriate.

Annual report

7    (1)
At least once a year, the Regulator must make a report to the FCA in

relation to the discharge of its functions.

      (2)
The report must—

(a)
set out the extent to which the Regulator has met its aims and

priorities for the period covered by the report,

(b)
set out the extent to which the Regulator has advanced its

payment systems objectives,

(c)
include a copy of its latest accounts, and

134

(d)
comply with any requirement specified in rules made by the

FCA.

      (3)
The Regulator must publish each report in the way it considers

appropriate.

      (4)
Nothing in this paragraph requires the Regulator to make a report at any

time in the period of 12 months beginning with its establishment.

      (5)
The Treasury may—

(a)
require the Regulator to comply with any provision of the

Companies Act 2006 about accounts and their audit which would

not otherwise apply to it, or

(b)
direct that any provision of that Act about accounts and their

audit is to apply to the Regulator with such modifications as are

specified in the direction, whether or not the provision would

otherwise apply to it.

      (6)
Compliance with any requirement under sub-paragraph (5)(a) or (b) is

enforceable by injunction or, in Scotland, an order for specific

performance under section 45 of the Court of Session Act 1988.

      (7)
Proceedings under sub-paragraph (6) may be brought only by the

Treasury.

      (8)
The FCA’s power to make rules under sub-paragraph (2)(d) is to be

treated as if it were a power of the FCA to make rules under FSMA 2000

(and rules made under sub-paragraph (2)(d) are to be treated

accordingly).

Audit of accounts

8    (1)
The Regulator must send a copy of its annual accounts to the

Comptroller and Auditor General and the Treasury as soon as is

reasonably practicable.

      (2)
The Comptroller and Auditor General must—

(a)
examine, certify and report on accounts received under this

paragraph, and

(b)
send a copy of the certified accounts and the report to the

Treasury.

      (3)
The Treasury must lay the copy of the certified accounts and the report

before Parliament.

      (4)
The Regulator must send a copy of the certified accounts and the report

to the FCA.

      (5)
Except as provided for by paragraph 7(5), the Regulator is exempt from

the requirements of Part 16 of the Companies Act 2006 (audit) and its

balance sheet must contain a statement to that effect.

      (6)
In this paragraph “annual accounts” has the meaning given by section

471 of the Companies Act 2006.

135

Funding

9    (1)
For the purposes mentioned in sub-paragraph (2) the FCA may make

rules requiring participants in regulated payment systems to pay to the

FCA specified amounts or amounts calculated in a specified way.

      (2)
The purposes are—

(a)
meeting the relevant costs (see sub-paragraph (3)), and

(b)
enabling the Regulator to maintain adequate reserves.

      (3)
In this paragraph “the relevant costs” means—

(a)
the expenses incurred, or expected to be incurred, by the

Regulator in connection with the discharge of its functions,

(b)
the expenses incurred by the FCA in establishing the Regulator,

(c)
any other expenses incurred by the FCA in connection with the

discharge of its functions under this Part, and

(d)
any expenses incurred, or expected to be incurred, by the FCA in

connection with the discharge of the Regulator’s functions by an

officer or member of staff of the FCA under arrangements made

under paragraph 5.


For the purposes of paragraph (b) it does not matter when the expenses

were incurred.

      (4)
Before making any rules under sub-paragraph (1) the FCA must consult

the Treasury.

      (5)
The amounts to be paid under the rules may include a component to

cover the expenses of the FCA in collecting the payments (“collection

costs”).

      (6)
The FCA must pay to the Regulator the amounts that it receives under

the rules, apart from the following amounts (which it may keep)—

(a)
amounts in respect of expenses falling within sub-paragraph

(3)(b) to (d);

(b)
amounts in respect of its collection costs.

      (7)
In this paragraph “specified” means specified in the rules.

      (8)
The FCA’s power to make rules under this paragraph is to be treated as

if it were a power of the FCA to make rules under FSMA 2000 (and rules

made under this paragraph are to be treated accordingly).

      (9)
But the requirements to carry out a cost benefit analysis under section

138I of FSMA 2000 do not apply in relation to rules made under this

paragraph.

Penalty receipts

10  (1)
The Regulator must in respect of each of its financial years pay to the

Treasury its penalty receipts after deducting its enforcement costs.

      (2)
The Regulator’s “penalty receipts” in respect of a financial year are any

amounts received by it during the year by way of penalties imposed

under section (Penalties).

      (3)
The Regulator’s “enforcement costs” in respect of a financial year are the

expenses incurred by it during the year in connection with—

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(a)
the exercise, or consideration of the possible exercise, of any of its

enforcement powers in particular cases, or

(b)
the recovery of penalties imposed under section (Penalties).

      (4)
For the purposes of sub-paragraph (3) the Regulator’s enforcement

powers are—

(a)
its powers under sections (Publication of compliance failures etc) to

(Injunctions);

(b)
its powers under any other enactment specified by the Treasury

by order;

(c)
its powers in relation to the investigation of relevant offences;

(d)
its powers in England and Wales or Northern Ireland in relation

to the prosecution of relevant offences.

      (5)
In sub-paragraph (4) “relevant offences” means—

(a)
offences under this Part;

(b)
any other offences specified by the Treasury by order.

      (6)
The Treasury may give directions to the Regulator as to how it is to

comply with its duty under sub-paragraph (1).

      (7)
The directions may in particular—

(a)
specify descriptions of expenditure that are, or are not, to be

regarded as incurred in connection with either of the matters

mentioned in sub-paragraph (3),

(b)
relate to the calculation and timing of the deduction in respect of

the Regulator’s enforcement costs, and

(c)
specify the time when any payment is required to be made to the

Treasury.

      (8)
The directions may also require the Regulator to provide the Treasury at

specified times with specified information relating to—

(a)
penalties that the Regulator has imposed under section

(Penalties), or

(b)
the Regulator’s enforcement costs.

      (9)
The Treasury must pay into the Consolidated Fund any sums received

by them under this paragraph.

11  (1)
The Regulator must prepare and operate a scheme (“the financial

penalty scheme”) for ensuring that the amounts that, as a result of the

deduction for which paragraph 10(1) provides, are retained by the

Regulator in respect of amounts paid to it by way of penalties imposed

under section (Penalties) are applied for the benefit of participants in

regulated payment systems.

      (2)
The financial penalty scheme may, in particular, make different

provision with respect to different classes of participant.

      (3)
The financial penalty scheme must ensure that those who have become

liable to pay a penalty to the Regulator in any financial year do not

receive any benefit under the scheme in the following financial year.

      (4)
Up-to-date details of the financial penalty scheme must be set out in a

document (the “scheme details”).

137

12  (1)
The scheme details must be published by the Regulator in the way

appearing to it to be best calculated to bring them to the attention of the

public.

      (2)
Before making the financial penalty scheme, the Regulator must publish

a draft of the proposed scheme in the way appearing to the Regulator to

be best calculated to bring it to the attention of the public.

      (3)
The draft must be accompanied by notice that representations about the

proposals may be made to the Regulator within a specified time.

      (4)
Before making the scheme, the Regulator must have regard to any

representations made to it in accordance with sub-paragraph (3).

      (5)
If the Regulator makes the proposed scheme, it must publish an account,

in general terms, of—

(a)
the representations made to it in accordance with sub-paragraph

(3), and

(b)
its response to them.

      (6)
If the scheme differs from the draft published under sub-paragraph (2)

in a way which is, in the opinion of the Regulator, significant, the

Regulator must (in addition to complying with sub-paragraph (5))

publish details of the difference.

      (7)
The Regulator must, without delay, give the Treasury a copy of any

scheme details published by it.

      (8)
The Regulator may charge a reasonable fee for providing a person with

a copy of—

(a)
a draft published under sub-paragraph (2);

(b)
scheme details.

      (9)
Sub-paragraphs (2) to (6) and (8)(a) also apply to a proposal to alter or

replace the financial penalty scheme.

Records

13
The Regulator must maintain satisfactory arrangements for—

(a)
recording decisions made in the exercise of its functions, and

(b)
the safe-keeping of those records which it considers ought to be

preserved.

Exemption from liability in damages

14  (1)
None of the following is to be liable in damages for anything done or

omitted in the discharge, or purported discharge, of the Regulator’s

functions—

(a)
the Regulator;

(b)
any person (“P”) who is, or is acting as, an officer or member of

staff of the Regulator;

(c)
any person who could be held vicariously liable for things done

or omitted by P, but only in so far as the liability relates to P’s

conduct.

      (2)
If the Regulator has made arrangements under paragraph 5 for any of its

functions to be discharged by an officer or member of staff of the FCA,

references in sub-paragraph (1) to a person who is an officer or member

138

of staff of the Regulator include references to the officer or member of

staff of the FCA.

      (3)
Anything done or omitted by a person mentioned in sub-paragraph

(1)(b) or (c) while acting, or purporting to act, as a result of an

appointment under section (Reports by skilled persons) or (Appointment of

persons to conduct investigations) is to be taken for the purposes of sub-

paragraph (1) to have been done or omitted in the discharge or (as the

case may be) purported discharge of the Regulator’s functions.

      (4)
Sub-paragraph (1) does not apply—

(a)
if the act or omission is shown to have been in bad faith, or

(b)
so as to prevent an award of damages made in respect of an act

or omission on the ground that the act or omission was unlawful

as a result of section 6(1) of the Human Rights Act 1998.”

Freedom of information

15
In Part 6 of Schedule 1 to the Freedom of Information Act 2000 (public

authorities to which Act applies), at the appropriate place insert—

“The Payment Systems Regulator established under section

(The Payment Systems Regulator) of the Financial Services

(Banking Reform) Act 2013.”

Equality

16
In Part 1 of Schedule 19 to the Equality Act 2010 (public authorities:

general), under the heading “Industry, business, finance etc.”, at the

appropriate place insert—

“The Payment Systems Regulator established under section

(The Payment Systems Regulator) of the Financial Services

(Banking Reform) Act 2013.””
176
Insert the following new Schedule—

“Procedure for appeals to the CMA

Functions of CMA to be discharged by group

1
Except where specified otherwise in this Schedule, the functions of the

CMA with respect to an appeal are to be carried out on behalf of the

CMA by a group constituted for the purpose by the chair of the CMA

under Schedule 4 to the Enterprise and Regulatory Reform Act 2013.

2    (1)
Schedule 4 to the Enterprise and Regulatory Reform Act 2013 is

amended as follows.

      (2)
In paragraph 35(1) (membership of CMA panel), after paragraph (c)

insert—

“(ca)
at least one person (a “payment systems panel

member”) appointed to the CMA panel under

paragraph 1(1)(b) for the purpose of being available for

selection as a member of a group constituted to carry

out functions on behalf of the CMA with respect to an

appeal made in accordance with section (Appeals to

Competition and Markets Authority) of the Financial

139

Services (Banking Reform) Act 2013 (a “specialist

payment systems group”);”.

      (3)
In paragraph 38 (membership of CMA groups), after sub-paragraph (5)

insert—

“(5A)
In the case of a specialist payment systems group, the group

must include at least one payment systems member.”

      (4)
In paragraph 48 (performance of functions of chair with respect to

constitution etc of CMA group), in sub-paragraph (4)(c), at the end

insert—

“(v)
Schedule (Procedure for appeals to the CMA) to

the Financial Services (Banking Reform) Act

2013.”

Application for permission to bring appeal

3    (1)
An application for permission to bring an appeal may be made only by

sending a notice to the CMA requesting the permission.

      (2)
An application for permission to appeal must be accompanied by all

such information as may be required by appeal rules.

      (3)
Appeal rules may require information contained in an application for

permission to appeal to be verified by a statement of truth.

      (4)
A person who applies for permission to bring an appeal in accordance

with this paragraph is referred to in this Schedule as the appellant.

      (5)
The appellant must send the Payment Systems Regulator—

(a)
a copy of the application for permission to appeal at the same

time as it is sent to the CMA, and

(b)
such other information as may be required by appeal rules.

      (6)
The CMA’s decision whether to grant permission to appeal is to be taken

by an authorised member of the CMA.

      (7)
Before the authorised member decides whether to grant permission

under this paragraph, the Payment Systems Regulator must be given an

opportunity of making representations or observations, in accordance

with paragraph 5(2).

      (8)
The CMA’s decision on an application for permission must be made—

(a)
where the Payment Systems Regulator makes representations or

observations in accordance with paragraph 5(2), before the end

of 10 working days beginning with the first working day after the

day on which those representations or observations are received;

(b)
in any other case, before the end of 14 working days beginning

with the first working day after the day on which the application

for permission was received.

      (9)
The grant of permission may be made subject to conditions, which may

include—

(a)
conditions which limit the matters that are to be considered on

the appeal in question;

(b)
conditions for the purpose of expediting the determination of the

appeal;