142.52-58

House of Commons

Session 2013 - 14
Internet Publications
Other Bills before Parliament

Lords Amendments to the Financial Services (Banking Reform) Bill

52
102
Insert the following new Clause—

“Appeals in relation to penalties

(1)
This section applies where a person is appealing to the Competition Appeal

Tribunal (“the Tribunal”) against a decision to impose a penalty under

section (Penalties).

(2)
The person may appeal against—

(a)
the imposition of the penalty,

(b)
the amount of the penalty, or

(c)
any date by which the penalty, or any part of it, is required to be

paid.

(3)
The means of making an appeal is by sending the Tribunal a notice of

appeal in accordance with Tribunal rules.

(4)
The notice of appeal must be sent within the period specified, in relation to

the decision appealed against, in those rules.

(5)
The Tribunal may do any of the following—

(a)
uphold the penalty;

(b)
set aside the penalty;

(c)
substitute for the penalty a penalty of an amount decided by the

Tribunal;

(d)
vary any date by which the penalty, or any part of it, is required to

be paid.

(6)
If an appeal is made in accordance with this section, the penalty is not

required to be paid until the appeal has been determined.

(7)
Subsections (2), (5) and (6) do not restrict the power to make Tribunal rules;

and those subsections are subject to Tribunal rules.

(8)
Except as provided by this section, the validity of the penalty may not be

questioned by any legal proceedings whatever.

(9)
In the case of an appeal made in accordance with this section, a decision of

the Tribunal has the same effect as, and may be enforced in the same

manner as, a decision of the Payment Systems Regulator.”
103
Insert the following new Clause—

“Appeals to Competition and Markets Authority

(1)
This section applies where a person is appealing to the Competition and

Markets Authority (“the CMA”) against a CMA-appealable decision.

(2)
In determining the appeal the CMA must have regard, to the same extent

as is required of the Payment Systems Regulator, to the matters to which

the Payment Systems Regulator must have regard in discharging its

functions under this Part.

(3)
In determining the appeal the CMA—

(a)
may have regard to any matter to which the Payment Systems

Regulator was not able to have regard in relation to the decision,

but

53

(b)
must not, in the exercise of that power, have regard to any matter to

which the Payment Systems Regulator would not have been

entitled to have regard in reaching its decision had it had the

opportunity of doing so.

(4)
The CMA must either—

(a)
dismiss the appeal, or

(b)
quash the whole or part of the decision to which the appeal relates.

(5)
The CMA may act as mentioned in subsection (4)(b) only to the extent that

it is satisfied that the decision was wrong on one or more of the following

grounds—

(a)
that the Payment Systems Regulator failed properly to have regard

to any matter mentioned in subsection (2);

(b)
that the Payment Systems Regulator failed to give the appropriate

weight to any matter mentioned in subsection (2);

(c)
that the decision was based, wholly or partly, on an error of fact;

(d)
that the decision was wrong in law.

(6)
If the CMA quashes the whole or part of a decision, it may either—

(a)
refer the matter back to the Payment Systems Regulator with a

direction to reconsider and make a new decision in accordance with

its ruling, or

(b)
substitute its own decision for that of the Payment Systems

Regulator.

(7)
The CMA may not direct the Payment Systems Regulator to take any action

which it would not otherwise have the power to take in relation to the

decision.

(8)
Schedule (Procedure for appeals to the CMA) contains further provision about

the making of appeals in accordance with this section.”
104
Insert the following new Clause—


“Enforcement of requirement to dispose of interest in payment system

(1)
A requirement imposed under section (Power to require disposal of interest in

payment system) is enforceable by civil proceedings brought by the Payment

Systems Regulator for an injunction or for interdict or for any other

appropriate relief or remedy.

(2)
Civil proceedings may not be brought to enforce a requirement imposed

under that section unless—

(a)
the time for bringing an appeal against the decision to impose the

requirement has expired and no appeal has been brought within

that time, or

(b)
the person on whom the requirement was imposed has within that

time brought such an appeal and the appeal has been dismissed or

withdrawn.”
105
Insert the following new Clause—

54

“Information and investigation powers

Power to obtain information or documents

(1)
The Payment Systems Regulator may by notice in writing require a person

to provide information or documents—

(a)
which the Payment Systems Regulator thinks will help the

Treasury in determining whether to make a designation order, or

(b)
which the Payment Systems Regulator otherwise requires in

connection with its functions under this Part.

(2)
In particular, a notice under subsection (1) may require a participant in a

regulated payment system to notify the Payment Systems Regulator if

events of a specified kind occur.

(3)
A notice under subsection (1) may require information or documents to be

provided—

(a)
in a specified form or manner;

(b)
at a specified time;

(c)
in respect of a specified period.”
106
Insert the following new Clause—

“Reports by skilled persons

(1)
The Payment Systems Regulator may—

(a)
require a person who is a participant in a regulated payment system

to provide the Payment Systems Regulator with a report on any

matter relating to the person’s participation in the system (“the

matter concerned”), or

(b)
appoint a person to provide the Payment Systems Regulator with a

report on the matter concerned.


The person whose participation in the payment system is to be the subject

of the report is referred to in this section as “the relevant participant”.

(2)
The power conferred by subsection (1)(a) is exercisable by giving the

relevant participant a notice in writing.

(3)
When acting under subsection (1)(a), the Payment Systems Regulator may

require the report to be in a form specified in the notice.

(4)
The Payment Systems Regulator must give written notice of an

appointment under subsection (1)(b) to the relevant participant.

(5)
A person appointed to make a report under this section—

(a)
must be a person appearing to the Payment Systems Regulator to

have the skills necessary to make a report on the matter concerned,

and

(b)
where the appointment is to be made by the relevant participant,

must be a person nominated or approved by the Payment Systems

Regulator.

(6)
It is the duty of—

(a)
the relevant participant, and

55

(b)
any person who is providing (or who has at any time provided)

services to the relevant participant in relation to the matter

concerned,


to give the person appointed to prepare a report all such assistance as the

appointed person may reasonably require.

(7)
The obligation imposed by subsection (6) is enforceable, on the application

of the Payment Systems Regulator, by an injunction or, in Scotland, by an

order for specific performance under section 45 of the Court of Session Act

1988.

(8)
The Payment Systems Regulator may direct the relevant participant to pay

any expenses incurred by the Payment Systems Regulator in relation to an

appointment under subsection (1)(b).”
107
Insert the following new Clause—

“Appointment of persons to conduct investigations

(1)
If it considers that it is desirable to do so in order to advance any of its

payment systems objectives, the Payment Systems Regulator may appoint

one or more competent persons to conduct an investigation on its behalf

into the nature, conduct or state of the business of any participant in a

regulated payment system.

(2)
If it appears to the Payment Systems Regulator that there are circumstances

suggesting that there may have been a compliance failure, the Payment

Systems Regulator may appoint one or more competent persons to conduct

an investigation on its behalf.”
108
Insert the following new Clause—


“Investigations: general

(1)
This section applies if the Payment Systems Regulator appoints one or

more competent persons (“investigators”) under section (Appointment of

persons to conduct investigations) to conduct an investigation on its behalf.

(2)
The Payment Systems Regulator must give written notice of the

appointment of an investigator to the person who is the subject of the

investigation.

(3)
Subsections (2) and (9) do not apply if—

(a)
the Payment Systems Regulator believes that the notice required by

subsection (2) or (9) would be likely to result in the investigation

being frustrated, or

(b)
the investigator is appointed under subsection (2) of section

(Appointment of persons to conduct investigations).

(4)
A notice under subsection (2) must—

(a)
specify the provision under which the investigator was appointed,

and

(b)
state the reason for the appointment.

(5)
Nothing prevents the Payment Systems Regulator from appointing as an

investigator—

(a)
a member of its staff, or

(b)
a member of staff of the FCA.

56

(6)
An investigator who conducts an investigation must make a report of the

investigation to the Payment Systems Regulator.

(7)
The Payment Systems Regulator may, by a direction to an investigator,

control—

(a)
the scope of the investigation,

(b)
the period during which the investigation is to be conducted,

(c)
the conduct of the investigation, and

(d)
the reporting of the investigation.

(8)
A direction may, in particular—

(a)
confine the investigation to particular matters;

(b)
extend the investigation to additional matters;

(c)
require the investigator to discontinue the investigation or to take

only those steps that are specified in the direction;

(d)
require the investigator to make such interim reports as are so

specified.

(9)
If there is a change in the scope or conduct of the investigation and, in the

opinion of the Payment Systems Regulator, the person who is the subject of

the investigation is likely to be significantly prejudiced by not being made

aware of it, that person must be given written notice of the change.”
109
Insert the following new Clause—


“Powers of persons appointed under section (Appointment of persons to

conduct investigations)

(1)
An investigator may require any person within subsection (2)—

(a)
to attend before the investigator at a specified time and place and

answer questions, or

(b)
otherwise to provide any information which the investigator

requires.

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

(a)
the person who is the subject of the investigation (“the person under

investigation”);

(b)
any person connected with the person under investigation;

(c)
in the case of an investigation into whether there has been a

compliance failure, any person who in the investigator’s opinion is

or may be able to give information which is or may be relevant to

the investigation.

(3)
An investigator may also require any person to produce at a specified time

and place any specified documents or documents of a specified

description.

(4)
A requirement under subsection (1) or (3) may be imposed only so far as

the investigator concerned reasonably considers the question, provision of

information or production of the document to be relevant to the purposes

of the investigation.

(5)
In the case of an investigation into whether there has been a compliance

failure, the investigator may also require any person falling within

subsection (2)(c) to give the investigator all assistance in connection with

the investigation which the person is reasonably able to give.

57

(6)
For the purposes of this section, a person is connected with the person

under investigation (“A”) if the person is or has at any relevant time been—

(a)
a member of A’s group,

(b)
a controller of A, or

(c)
a partnership of which A is a member.

(7)
In this section—

“controller” has the same meaning as in FSMA 2000 (see section 422 of

that Act);

“group” has the same meaning as in FSMA 2000 (see section 421 of

that Act);

“investigator” means a person conducting an investigation under

section (Appointment of persons to conduct investigations);

“specified” means specified in a notice in writing.”
110
Insert the following new Clause—


“Information and documents: supplemental provisions

(1)
In this section “relevant document” means a document produced in

response to a requirement imposed under section (Power to obtain

information or documents) or (Powers of persons appointed under section

(Appointment of persons to conduct investigations)).

(2)
In a case where—

(a)
the Payment Systems Regulator has power under section (Power to

obtain information or documents), or an investigator has power under

section (Powers of persons appointed under section (Appointment of

persons to conduct investigations)), to require a person to produce a

document, but

(b)
it appears that the document is in the possession of another person,


the power may be exercised in relation to that other person.

(3)
Any person to whom a relevant document is produced may—

(a)
take copies or extracts from the document, or

(b)
require the person producing the document, or any relevant person

(see subsection (4)), to provide an explanation of the document.

(4)
“Relevant person”, in relation to a person who is required to produce a

document, means a person who—

(a)
has been or is or is proposed to be a director or controller of that

person,

(b)
has been or is an auditor of that person,

(c)
has been or is an actuary, accountant or lawyer appointed or

instructed by that person, or

(d)
has been or is an employee of that person.

(5)
A relevant document may be retained for so long as the person to whom it

is produced considers that it is necessary to retain it (rather than copies of

it) for the purposes for which the document was requested.

(6)
If the person to whom a relevant document is produced has reasonable

grounds for believing—

(a)
that the document may have to be produced for the purposes of any

legal proceedings, and

58

(b)
that it might otherwise be unavailable for those purposes,


it may be retained until the proceedings are concluded.

(7)
If a person who is required under section (Power to obtain information or

documents) or (Powers of persons appointed under section (Appointment of

persons to conduct investigations)) to produce a document fails to do so, the

Payment Systems Regulator or an investigator may require the person to

state, to the best of the person’s knowledge and belief, where the document

is.

(8)
A lawyer may be required under section (Power to obtain information or

documents) or (Powers of persons appointed under section (Appointment of

persons to conduct investigations)) or this section to provide the name and

address of a client.

(9)
A person may not be required under section (Power to obtain information or

documents) or (Powers of persons appointed under section (Appointment of

persons to conduct investigations)) or this section to disclose information or

produce a document in respect of which the person owes an obligation of

confidence as a result of carrying on the business of banking unless—

(a)
the person is the person under investigation or a member of that

person’s group,

(b)
the person to whom the obligation of confidence is owed is the

person under investigation or a member of that person’s group,

(c)
the person to whom the obligation of confidence is owed consents

to the disclosure or production, or

(d)
the imposing on the person of a requirement with respect to such

information or document has been specifically authorised by the

Payment Systems Regulator.

(10)
If a person claims a lien on a document, its production under section (Power

to obtain information or documents) or (Powers of persons appointed under

section (Appointment of persons to conduct investigations)) does not affect the

lien.

(11)
In this section—

“controller” has the same meaning as in FSMA 2000 (see section 422 of

that Act);

“group” has the same meaning as in FSMA 2000 (see section 421 of

that Act);

“investigator” means a person appointed under section (Appointment

of persons to conduct investigations).”
111
Insert the following new Clause—


“Admissibility of statements made to investigators

(1)
A statement made to an investigator by a person in compliance with an

information requirement is admissible in evidence in any proceedings, so

long as it also complies with any requirements governing the admissibility

of evidence in the circumstances in question.

(2)
But in criminal proceedings in which that person is charged with an offence

to which this subsection applies—

(a)
no evidence relating to the statement may be adduced by or on

behalf of the prosecution, and