142.154-160

House of Commons

Session 2013 - 14
Internet Publications
Other Bills before Parliament

Lords Amendments to the Financial Services (Banking Reform) Bill

154

      (6)
The Bank of England may modify an FMI transfer scheme before

approving it, but only modifications to which both the old company and

the new company have consented may be made.

      (7)
In deciding whether to approve an FMI transfer scheme, the Bank of

England must have regard, in particular, to—

(a)
the public interest, and

(b)
any effect that the scheme is likely to have on the interests of third

parties.

      (8)
Before approving an FMI transfer scheme, the Bank of England must

consult the Treasury.

      (9)
The old company and the new company each have a duty to provide the

Bank of England with all information and other assistance that the Bank

may reasonably require for the purposes of, or in connection with, the

exercise of the powers conferred on it by this paragraph.

Provision that may be made by a scheme

5    (1)
An FMI transfer scheme may contain provision—

(a)
for the creation, in favour of the old company or the new

company, of an interest or right in or in relation to property

transferred in accordance with the scheme;

(b)
for giving effect to a transfer to the new company by the creation,

in favour of that company, of an interest or right in or in relation

to property retained by the old company;

(c)
for the creation of new rights and liabilities (including rights of

indemnity and duties to indemnify) as between the old company

and the new company;

(d)
in connection with any provision made under this sub-

paragraph, provision making incidental provision as to the

interests, rights and liabilities of other persons with respect to the

property, rights and liabilities to which the scheme relates.

      (2)
The property, rights and liabilities of the old company that may be

transferred in accordance with an FMI transfer scheme include—

(a)
property, rights and liabilities that would not otherwise be

capable of being transferred or assigned by the old company;

(b)
property acquired, and rights and liabilities arising, in the period

after the making of the scheme but before it takes effect;

(c)
rights and liabilities arising after it takes effect in respect of

matters occurring before it takes effect;

(d)
property situated anywhere in the United Kingdom or

elsewhere;

(e)
rights and liabilities under the law of a part of the United

Kingdom or of a place outside the United Kingdom;

(f)
rights and liabilities under an enactment, EU instrument or

subordinate legislation.

      (3)
The transfers to which effect may be given by an FMI transfer scheme

include transfers of interests and rights that are to take effect in

accordance with the scheme as if there were—

(a)
no such requirement to obtain a person’s consent or concurrence,

155

(b)
no such liability in respect of a contravention of any other

requirement, and

(c)
no such interference with any interest or right,


as there would be, in the case of a transaction apart from this Act, by

reason of a provision falling within sub-paragraph (4).

      (4)
A provision falls within this sub-paragraph to the extent that it has effect

(whether under an enactment or agreement or otherwise) in relation to

the terms on which the old company is entitled, or subject, to anything

to which the transfer relates.

      (5)
Sub-paragraph (6) applies where (apart from that sub-paragraph) a

person would be entitled, in consequence of anything done or likely to

be done by or under this Act in connection with an FMI transfer

scheme—

(a)
to terminate, modify, acquire or claim an interest or right, or

(b)
to treat an interest or right as modified or terminated.

      (6)
That entitlement—

(a)
is not enforceable in relation to that interest or right until after the

transfer of the interest or right by the scheme, and

(b)
is then enforceable in relation to the interest or right only in so far

as the scheme contains provision for the interest or right to be

transferred subject to whatever confers that entitlement.

      (7)
Sub-paragraphs (3) to (6) have effect where shares in a subsidiary of the

old company are transferred—

(a)
as if the reference in sub-paragraph (4) to the terms on which the

old company is entitled or subject to anything to which the

transfer relates included a reference to the terms on which the

subsidiary is entitled or subject to anything immediately before

the transfer takes effect, and

(b)
in relation to an interest or right of the subsidiary, as if the

references in sub-paragraph (6) to the transfer of the interest or

right included a reference to the transfer of the shares.

      (8)
Sub-paragraphs (3) and (4) apply to the creation of an interest or right by

an FMI transfer scheme as they apply to the transfer of an interest or

right.

Further provision about transfers

6    (1)
An FMI transfer scheme may make incidental, supplemental,

consequential and transitional provision in connection with the other

provisions of the scheme.

      (2)
An FMI transfer scheme may in particular make provision, in relation to

a provision of the scheme—

(a)
for the new company to be treated as the same person in law as

the old company;

(b)
for agreements made, transactions effected or other things done

by or in relation to the old company to be treated, so far as may

be necessary for the purposes of or in connection with a transfer

in accordance with the scheme, as made, effected or done by or

in relation to the new company;

156

(c)
for references in an agreement, instrument or other document to

the old company or to an employee or office holder with the old

company to have effect, so far as may be necessary for the

purposes of or in connection with a transfer in accordance with

the scheme, with such modifications as are specified in the

scheme;

(d)
that the effect of any transfer in accordance with the scheme in

relation to contracts of employment with the old company is not

to terminate any of those contracts but is to be that periods of

employment with that company are to count for all purposes as

periods of employment with the new company;

(e)
for proceedings commenced by or against the old company to be

continued by or against the new company.

      (3)
Sub-paragraph (2)(c) does not apply to references in an enactment or in

subordinate legislation.

      (4)
An FMI transfer scheme may make provision for disputes between the

old company and the new company as to the effect of the scheme to be

referred to such arbitration as may be specified in or determined under

the scheme.

      (5)
Where a person is entitled, in consequence of an FMI transfer scheme, to

possession of a document relating in part to the title to land or other

property in England and Wales, or to the management of such land or

other property—

(a)
the scheme may provide for that person to be treated as having

given another person an acknowledgement in writing of the right

of that other person to production of the document and to

delivery of copies of it, and

(b)
section 64 of the Law of Property Act 1925 (production and safe

custody of documents) is to have effect accordingly, and on the

basis that the acknowledgement did not contain an expression of

contrary intention.

      (6)
Where a person is entitled, in consequence of an FMI transfer scheme, to

possession of a document relating in part to the title to land or other

property in Scotland or to the management of such land or other

property, subsections (1) and (2) of section 16 of the Land Registration

(Scotland) Act 1979 (omission of certain clauses in deeds) is to have effect

in relation to the transfer—

(a)
as if the transfer had been effected by deed, and

(b)
as if the words “unless specially qualified” were omitted from

each of those subsections.

      (7)
Where a person is entitled, in consequence of an FMI transfer scheme, to

possession of a document relating in part to the title to land or other

property in Northern Ireland or to the management of such land or other

property—

(a)
the scheme may provide for that person to be treated as having

given another person an acknowledgement in writing of the right

of that other person to production of the document and to

delivery of copies of it, and

(b)
section 9 of the Conveyancing Act 1881 is to have effect

accordingly, and on the basis that the acknowledgement does not

contain an expression of contrary intention.

157

      (8)
In this paragraph references to a transfer in accordance with an FMI

transfer scheme include references to the creation in accordance with

such a scheme of an interest, right or liability.

Effect of scheme

7    (1)
In relation to each provision of an FMI transfer scheme for the transfer of

property, rights or liabilities, or for the creation of interests, rights or

liabilities—

(a)
the property, interests, rights or liabilities become by virtue of

this Schedule the property, interests, rights or liabilities of the

transferee at the time appointed by the court for the purposes of

paragraph 4(4), and

(b)
the provisions of that scheme in relation to that property, or those

interests, rights or liabilities, have effect from that time.

      (2)
In this paragraph “the transferee” means—

(a)
in relation to property, rights or liabilities transferred by an FMI

transfer scheme, the new company;

(b)
in relation to interests, rights or liabilities created by such a

scheme, the person in whose favour, or in relation to whom, they

are created.

Subsequent modification of scheme

8    (1)
The Bank of England may by notice to the old company and the new

company modify an FMI transfer scheme after it has taken effect, but

only modifications to which both the old company and the new

company have consented may be made.

      (2)
The notice must specify the time at which it is to take effect (the

“modification time”).

      (3)
Where a notice is issued under this paragraph in relation to an FMI

transfer scheme, as from the modification time, the scheme is for all

purposes to be treated as having taken effect, at the time appointed for

the purposes of paragraph 4(4), with the modifications made by the

notice.

      (4)
Those modifications may make—

(a)
any provision that could have been included in the scheme when

it took effect at the time appointed for the purposes of paragraph

4(4), and

(b)
transitional provision in connection with provision falling within

paragraph (a).

      (5)
In deciding whether to modify an FMI transfer scheme, the Bank of

England must have regard, in particular, to—

(a)
the public interest, and

(b)
any effect that the modification is likely to have on the interests

of third parties.

      (6)
Before modifying an FMI transfer scheme that has taken effect, the Bank

of England must consult the Treasury.

      (7)
The old company and the new company each have a duty to provide the

Bank of England with all information and other assistance that the Bank

158

may reasonably require for the purposes of, or in connection with, the

exercise of the powers conferred on it by this paragraph.

Provision relating to foreign property

9    (1)
An FMI transfer scheme may contain provision about—

(a)
the transfer of foreign property, right and liabilities, and

(b)
the creation of foreign property, rights and liabilities.

      (2)
For this purpose property, or a right, interest or liability, is “foreign” if

an issue relating to it arising in any proceedings would (in accordance

with the rules of private international law) be determined under the law

of a country or territory outside the United Kingdom.

Application of Schedule to transfers to subsidiaries

10
Where a proposed transfer falling within subsection (5) of section

(Objective of FMI administration) is a transfer of the kind mentioned in

subsection (6)(a) of that section, this Schedule has effect in relation to the

transfer as if—

(a)
paragraph 4(1)(a) were omitted, and

(b)
in paragraph 4(6), for the words from “both” onwards there were

substituted “the old company has consented may be made”.”
179
Insert the following new Schedule—

“Functions of FCA under competition legislation

Part 1

Amendments of Financial Services and Markets Act 2000

1
Part 16A of FSMA 2000 (consumer protection and competition) is

amended as follows.

2
Omit section 234H (power of FCA to make request to Office of Fair

Trading).

3
After section 234H insert—

234I
The FCA’s functions under Part 4 of the Enterprise Act 2002

(1)
The functions to which this subsection applies (“the concurrent

functions”) are to be concurrent functions of the FCA and the

Competition and Markets Authority (referred to in this Part as

“the CMA”).

(2)
Subsection (1) applies to the functions of the CMA under Part 4

of the Enterprise Act 2002 (market investigations), so far as those

functions—

(a)
are exercisable by the CMA Board (within the meaning of

Schedule 4 to the Enterprise and Regulatory Reform Act

2013), and

(b)
relate to the provision of financial services.

(3)
But subsection (1) does not apply to functions under the

following sections of the Enterprise Act 2002—

159


section 166 (duty to maintain register of undertakings

and orders);


section 171 (duty to publish guidance).

(4)
So far as is necessary for the purposes of, or in connection with,

subsections (1) and (2)—

(a)
references in Part 4 of the Enterprise Act 2002 to the CMA

(including references in provisions of that Act applied by

that Part) are to be read as including references to the

FCA, and

(b)
references in that Part to section 5 of that Act are to be

read as including references to section 234M of this Act.

(5)
But subsection (4) does not apply—

(a)
in relation to section 166 or 171 of that Act, or

(b)
where the context otherwise requires.

(6)
Section 130A of the Enterprise Act 2002 has effect in relation to

the FCA by virtue of subsections (1) and (2) as if—

(a)
in subsection (2)(a) of that section, the reference to the

acquisition or supply of goods or services of one or more

than one description in the United Kingdom were a

reference to the acquisition or provision in the United

Kingdom of financial services, and

(b)
in subsection (2)(b) of that section, the reference to the

extent to which steps can and should be taken were a

reference to the extent to which steps that might include

steps under Part 4 of that Act can and should be taken.

(7)
Before the CMA or the FCA first exercises any of the concurrent

functions in relation to any matter, it must consult the other.

(8)
Neither the CMA nor the FCA may exercise any of the concurrent

functions in relation to any matter if any of those functions have

been exercised in relation to that matter by the other.

234J
The FCA’s functions under the Competition Act 1998

(1)
The functions to which this subsection applies are to be

concurrent functions of the FCA and the CMA.

(2)
Subsection (1) applies to the functions of the CMA under the

provisions of Part 1 of the Competition Act 1998, so far as relating

to any of the following that relate to the provision of financial

services—

(a)
agreements, decisions or concerted practices of the kind

mentioned in section 2(1) of that Act,

(b)
conduct of the kind mentioned in section 18(1) of that Act,

(c)
agreements, decisions or concerted practices of the kind

mentioned in Article 101(1) of the Treaty on the

Functioning of the European Union, and

(d)
conduct which amounts to abuse of the kind mentioned

in Article 102 of the Treaty on the Functioning of the

European Union.

(3)
But subsection (1) does not apply to functions under the

following provisions of that Act—

160


section 31D(1) to (6) (duty to publish guidance);


section 38(1) to (6) (duty to publish guidance about

penalties);


section 40B(1) to (4) (duty to publish statement of policy

on penalties);


section 51 (rules).

(4)
So far as necessary for the purposes of, or in connection with, the

provisions of subsections (1) and (2), references to the CMA in

Part 1 of the Competition Act 1998 are to be read as including

references to the FCA.

(5)
But subsection (4) does not apply—

(a)
in relation to sections 31D(1) to (6), 38(1) to (6), 40B(1) to

(4), 51, 52(6) and (8) and 54 of that Act, or

(b)
where the context otherwise requires.

234K
Duty to consider exercise of powers under Competition Act 1998

(1)
Before exercising a power listed in subsection (3), the FCA must

consider whether it would be more appropriate to proceed under

the Competition Act 1998.

(2)
The FCA must not exercise such a power if it considers that it

would be more appropriate to proceed under the Competition

Act 1998.

(3)
Those powers are—

(a)
the power under section 55J(2) to vary or cancel a Part 4A

permission;

(b)
the power under section 55L to impose a requirement on

an authorised person with a Part 4A permission, or to

vary a requirement imposed under that section;

(c)
the power to take action under section 88E;

(d)
the power to take action under section 89U;

(e)
the power to give a direction under section 192C;

(f)
the power to impose a requirement under section 196.

234L
Provision of information and assistance to a CMA group

(1)
For the purpose of assisting a CMA group in carrying out a

relevant investigation, the FCA must give the CMA group—

(a)
any relevant information which the FCA has in its

possession, and

(b)
any other assistance which the CMA group may

reasonably require in relation to any matters falling

within the scope of the investigation.

(2)
A “relevant investigation” is an investigation carried out on a

reference made by the FCA under section 131 of the Enterprise

Act 2002 by virtue of section 234I.

(3)
“Relevant information”, in relation to a relevant investigation, is

information—

(a)
which relates to matters falling within the scope of the

investigation, and

(b)
which—