142.41-46

House of Commons

Session 2013 - 14
Internet Publications
Other Bills before Parliament

Lords Amendments to the Financial Services (Banking Reform) Bill

41
81
Insert the following new Clause—


“Variation of agreements relating to payment systems

(1)
This section applies to the following agreements—

(a)
any agreement made between the operator of a regulated payment

system and a payment service provider;

(b)
any agreement made between a payment service provider with

direct access to a regulated payment system and another person for

the purpose of enabling that other person to become a payment

service provider in relation to the system;

(c)
any agreement concerning fees or charges payable in connection

with—

(i)
participation in a regulated payment system, or

(ii)
the use of services provided by a regulated payment system.

(2)
The Payment Systems Regulator may, on the application of a party to an

agreement to which this section applies, vary the agreement by—

(a)
varying any of the fees or charges payable under the agreement, or

(b)
in the case of an agreement within subsection (1)(a) or (b), varying

any other terms and conditions relating to the payment service

provider’s participation in the payment system.

(3)
In the case of an agreement within subsection (1)(b), the reference in

subsection (2)(b) to the payment service provider is to the payment service

provider which does not have direct access to the payment system.

(4)
The power under this section to vary any fee or charge includes power to

specify a maximum fee or charge.

(5)
If the Payment Systems Regulator varies an agreement under this section,

the agreement has effect subject to the variation.”
82
Insert the following new Clause—


“Power to require disposal of interest in payment system

(1)
The Payment Systems Regulator may require a person who has an interest

in the operator of a regulated payment system to dispose of all or part of

that interest.

(2)
The power conferred by subsection (1) may be exercised only if the

Payment Systems Regulator is satisfied that, if the power is not exercised,

there is likely to be a restriction or distortion of competition in—

(a)
the market for payment systems, or

(b)
a market for services provided by payment systems.

(3)
The Payment Systems Regulator may not exercise the power conferred by

subsection (1) without the consent of the Treasury.

(4)
If the Payment Systems Regulator decides to exercise the power conferred

by subsection (1) in relation to a person who has an interest in the operator

of a regulated payment system—

(a)
the Payment Systems Regulator must notify the relevant

competition authorities (see subsection (5)), and

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(b)
the relevant competition authorities may not take any action in

relation to the person that would require the person to dispose of all

or part of that interest.

(5)
The relevant competition authorities are—

(a)
the Secretary of State,

(b)
the Competition and Markets Authority, and

(c)
the FCA.”
83
Insert the following new Clause—


“The Regulator’s functions under Part 4 of the Enterprise Act 2002

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

functions of the Payment Systems Regulator and the Competition and

Markets Authority (“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 participation in payment systems.

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

of the Enterprise Act 2002—


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 Payment Systems

Regulator,

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

including references to section (Function of keeping markets under

review) of this Act, and

(c)
references in that Part to consumers are to be read as including

references to any person who uses, or is likely to use, services

provided by payment systems in the course of a business carried on

by the person.

(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 is to have effect in relation to the

Payment Systems Regulator 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 participation in

payment systems used to provide services in the United Kingdom,

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

43

to which steps that might include steps under Part 4 of that Act can

and should be taken.”
84
Insert the following new Clause—


“Restrictions on exercise of functions under Part 4 of the Enterprise Act 2002

(1)
Before the CMA or the Payment Systems Regulator first exercises any of the

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

(2)
Neither the CMA nor the Payment Systems Regulator 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.

(3)
In subsections (1) and (2) “the concurrent functions” means the functions

which by virtue of section (The Regulator’s functions under Part 4 of the

Enterprise Act 2002) are concurrent functions of the Payment Systems

Regulator and the CMA.

(4)
Before the FCA or the Payment Systems Regulator first exercises any of the

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

(5)
Neither the FCA nor the Payment Systems Regulator 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.

(6)
In subsections (4) and (5) “the concurrent functions”—

(a)
in relation to the Payment Systems Regulator, means the functions

which by virtue of section (The Regulator’s functions under Part 4 of

the Enterprise Act 2002) are concurrent functions of the Payment

Systems Regulator and the CMA, and

(b)
in relation to the FCA, means the functions which by virtue of

section 234I of FSMA 2000 are concurrent functions of the FCA and

the CMA.

(7)
In this section “the CMA” means the Competition and Markets Authority.”
85
Insert the following new Clause—


“The Regulator’s functions under the Competition Act 1998

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

functions of the Payment Systems Regulator and the Competition and

Markets Authority (“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 participation in payment systems—

(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.

44

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

of that Act—


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 Payment

Systems Regulator.

(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.”
86
Insert the following new Clause—


“Duty to consider exercise of powers under Competition Act 1998

(1)
Before exercising any power within subsection (2), the Payment Systems

Regulator must consider whether it would be more appropriate to proceed

under the Competition Act 1998.

(2)
The powers referred to in subsection (1) are—

(a)
its power to give a direction under section (Directions) (apart from

the power to give a general direction);

(b)
its power to impose a requirement under section (System rules)

(apart from the power to impose a generally-imposed

requirement);

(c)
its powers under sections (Power to require granting of access to

payment systems), (Variation of agreements relating to payment systems)

and (Power to require disposal of interest in payment system).

(3)
The Payment Systems Regulator must not exercise the power if it considers

that it would be more appropriate to proceed under the Competition Act

1998.”
87
Insert the following new Clause—


“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 Payment Systems Regulator must give the CMA group—

(a)
any relevant information which it 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 Payment Systems Regulator under section 131 of the

Enterprise Act 2002 by virtue of section (The Regulator’s functions under Part

4 of the Enterprise Act 2002).

45

(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—

(i)
is requested by the CMA group for the purpose of the

investigation, or

(ii)
in the opinion of the Payment Systems Regulator, it would

be appropriate to give to the CMA group for that purpose.

(4)
A CMA group, in carrying out a relevant investigation, must take into

account any information given to it under this section.

(5)
In this section “CMA group” has the same meaning as in Schedule 4 to the

Enterprise and Regulatory Reform Act 2013.”
88
Insert the following new Clause—


“Function of keeping markets under review

(1)
For the purpose of the functions conferred on it by sections (Power to require

disposal of interest in payment system) to (Provision of information and assistance

to a CMA group) the Payment Systems Regulator is to have the function of

keeping under review—

(a)
the market for payment systems, and

(b)
the markets for services provided by payment systems.

(2)
The function conferred by subsection (1) is to be carried out with a view to

(among other things) ensuring that the Payment Systems Regulator has

sufficient information to take informed decisions and to carry out its other

functions effectively.”
89
Insert the following new Clause—


“Exclusion of general duties

(1)
Section (Regulator’s general duties in relation to payment systems) (the

Payment Systems Regulator’s general duties) does not apply in relation to

anything done by the Payment Systems Regulator in the carrying out of its

functions by virtue of sections (The Regulator’s functions under Part 4 of the

Enterprise Act 2002) to (Provision of information and assistance to a CMA

group).

(2)
But in the carrying out of any functions by virtue of sections (The

Regulator’s functions under Part 4 of the Enterprise Act 2002) to (Provision of

information and assistance to a CMA group), the Payment Systems Regulator

may have regard to any of the matters in respect of which a duty is imposed

by section (Regulator’s general duties in relation to payment systems) if it is a

matter to which the Competition and Markets Authority is entitled to have

regard in the carrying out of those functions.”
90
Insert the following new Clause—


“Concurrent competition powers: supplementary provision

(1)
If any question arises as to whether, by virtue of section (The Regulator’s

functions under Part 4 of the Enterprise Act 2002) or (The Regulator’s functions

46

under the Competition Act 1998), any functions fall to be, or are capable of

being, carried out by the Payment Systems Regulator in relation to any

particular case, that question is to be referred to, and determined by, the

Treasury.

(2)
No objection is to be taken to anything done under the Competition Act

1998 or Part 4 of the Enterprise Act 2002 by or in relation to the Payment

Systems Regulator on the ground that it should have been done by or in

relation to the Competition and Markets Authority.”
91
Insert the following new Clause—


“Amendments relating to Regulator’s competition powers

(1)
In section 9E of the Company Directors Disqualification Act 1986

(interpretation of sections 9A to 9D), in subsection (2), after paragraph (f)

insert—

“(g)
the Payment Systems Regulator established under section

(The Payment Systems Regulator) of the Financial Services

(Banking Reform) Act 2013.”

(2)
In section 54 of the Competition Act 1998 (regulators), in subsection (1),

omit the “and” at the end of paragraph (g) and after paragraph (h) insert—

“(i)
the Payment Systems Regulator established under section

(The Payment Systems Regulator) of the Financial Services

(Banking Reform) Act 2013.”

(3)
In section 136 of the Enterprise Act 2002 (investigations and reports on

market investigation references)—

(a)
in subsection (7), at the end insert—

“(j)
in relation to the Payment Systems Regulator,

section (The Regulator’s functions under Part 4 of the

Enterprise Act 2002) of the Financial Services

(Banking Reform) Act 2013.”;

(b)
in subsection (8), for “or Monitor” substitute “, Monitor or the

Payment Systems Regulator.”;

(c)
at the end insert—

“(10)
In this section “the Payment Systems Regulator” means the

body established under section (The Payment Systems

Regulator) of the Financial Services (Banking Reform) Act

2013.”

(4)
In section 52(4) of the Enterprise and Regulatory Reform Act 2013 (power

to remove concurrent competition functions of sectoral regulators), after

paragraph (f) insert—

“(g)
the Payment Systems Regulator established under section

(The Payment Systems Regulator) of the Financial Services

(Banking Reform) Act 2013.”

(5)
In Schedule 4 to the Enterprise and Regulatory Reform Act 2013 (the

Competition and Markets Authority), in paragraph 16 (concurrency

report), at the end of sub-paragraph (7) insert—

“(h)
the Payment Systems Regulator established under

section (The Payment Systems Regulator) of the Financial

Services (Banking Reform) Act 2013.””