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Lords Amendments to the Financial Services (Banking Reform) Bill


 
 

59

 
 

(b)    

no question relating to the statement may be asked by or on behalf

 

of the prosecution,

 

    

unless evidence relating to the statement is adduced, or a question relating

 

to it is asked, in the proceedings by or on behalf of that person.

 

(3)    

Subsection (2) applies to any offence other than—

 

(a)    

an offence under section (Enforcement of information and investigation

 

powers)(6);

 

(b)    

an offence under section 5 of the Perjury Act 1911 (false statements

 

made otherwise than on oath);

 

(c)    

an offence under section 44(2) of the Criminal Law (Consolidation)

 

(Scotland) Act 1995 (false statements made otherwise than on oath);

 

(d)    

an offence under Article 10 of the Perjury (Northern Ireland) Order

 

1979.

 

(4)    

In this section—

 

“information requirement” means a requirement imposed by an

 

investigator under section (Powers of persons appointed under section

 

(Appointment of persons to conduct investigations)) or (Information and

 

documents: supplemental provisions);

 

“investigator” means a person appointed under section (Appointment

 

of persons to conduct investigations).”

112

Insert the following new Clause—

 

         

“Entry of premises under warrant

 

(1)    

A justice of the peace may issue a warrant under this section if satisfied on

 

information on oath given by or on behalf of the Payment Systems

 

Regulator or an investigator that there are reasonable grounds for believing

 

that the first or second set of conditions is satisfied.

 

(2)    

The first set of conditions is—

 

(a)    

that a person on whom an information requirement has been

 

imposed has failed (wholly or in part) to comply with it, and

 

(b)    

that on the premises specified in the warrant—

 

(i)    

there are documents which have been required, or

 

(ii)    

there is information which has been required.

 

(3)    

In this section “information requirement” means—

 

(a)    

a requirement imposed by the Payment Systems Regulator under

 

section (Power to obtain information or documents) or (Information and

 

documents: supplemental provision), or

 

(b)    

a requirement imposed by an investigator under section (Powers of

 

persons appointed under section (Appointment of persons to conduct

 

investigations)) or (Information and documents: supplemental

 

provisions).

 

(4)    

The second set of conditions is—

 

(a)    

that the premises specified in the warrant are premises of a

 

participant in a regulated payment system,

 

(b)    

that there are on the premises documents or information in relation

 

to which an information requirement could be imposed, and

 

(c)    

that if such a requirement were to be imposed—

 

(i)    

it would not be complied with, or


 
 

60

 
 

(ii)    

the documents or information to which it related would be

 

removed, tampered with or destroyed.

 

(5)    

A warrant under this section authorises a constable—

 

(a)    

to enter the premises specified in the warrant,

 

(b)    

to search the premises and take possession of any documents or

 

information appearing to be documents or information of a kind in

 

respect of which a warrant under this section was issued (“the

 

relevant kind”) or to take, in relation to any such documents or

 

information, any other steps which may appear to be necessary for

 

preserving them or preventing interference with them,

 

(c)    

to take copies of, or extracts from, any documents or information

 

appearing to be of the relevant kind,

 

(d)    

to require any person on the premises to provide an explanation of

 

any document or information appearing to be of the relevant kind

 

or to state where it may be found, and

 

(e)    

to use such force as may be reasonably necessary.

 

(6)    

A warrant under this section may be executed by any constable.

 

(7)    

The warrant may authorise persons to accompany any constable who is

 

executing it.

 

(8)    

The powers in subsection (5) may be exercised by a person who—

 

(a)    

is authorised by the warrant to accompany a constable, and

 

(b)    

exercises those powers in the company of, and under the

 

supervision of, a constable.

 

(9)    

In England and Wales, sections 15(5) to (8) and 16(3) to (12) of the Police

 

and Criminal Evidence Act 1984 (execution of search warrants and

 

safeguards) apply to warrants issued under this section.

 

(10)    

In Northern Ireland, Articles 17(5) to (8) and 18(3) to (12) of the Police and

 

Criminal Evidence (Northern Ireland) Order 1989 apply to warrants issued

 

under this section.

 

(11)    

This section has effect in relation to Scotland as if—

 

(a)    

for any reference to a justice of the peace there were substituted a

 

reference to a justice of the peace or a sheriff, and

 

(b)    

for any reference to information on oath there were substituted a

 

reference to evidence on oath.

 

(12)    

In this section “investigator” means a person appointed under section

 

(Appointment of persons to conduct investigations).”

113

Insert the following new Clause—

 

         

“Retention of documents taken under section (Entry of premises under warrant)

 

(1)    

Any document of which possession is taken under section (Entry of premises

 

under warrant) (“a seized document”) may be retained so long as it is

 

necessary to retain it (rather than copies of it) in the circumstances.

 

(2)    

A person claiming to be the owner of a seized document may apply to a

 

magistrates’ court or (in Scotland) the sheriff for an order for the delivery

 

of the document to the person appearing to the court or sheriff to be the

 

owner.


 
 

61

 
 

(3)    

If on an application under subsection (2) the court or (in Scotland) the

 

sheriff cannot ascertain who is the owner of the seized document the court

 

or sheriff (as the case may be) may make such order as the court or sheriff

 

thinks fit.

 

(4)    

An order under subsection (2) or (3) does not affect the right of any person

 

to take legal proceedings against any person in possession of a seized

 

document for the recovery of the document.

 

(5)    

Any right to bring proceedings (as described in subsection (4)) may only be

 

exercised within 6 months of the date of the order made under subsection

 

(2) or (3).”

114

Insert the following new Clause—

 

         

“Enforcement of information and investigation powers

 

(1)    

If a person other than an investigator (“the defaulter”) fails to comply with

 

a requirement imposed under any of sections (Power to obtain information or

 

documents) to (Entry of premises under warrant), the person imposing the

 

requirement may certify that fact in writing to the court.

 

(2)    

If the court is satisfied that the defaulter failed without reasonable excuse

 

to comply with the requirement, it may deal with the defaulter (and in the

 

case of a body corporate, any director or other officer of the body) as if that

 

person were in contempt.

 

(3)    

In subsection (2) “officer”, in relation to a limited liability partnership,

 

means a member of the limited liability partnership.

 

(4)    

A person who knows or suspects that an investigation is being or is likely

 

to be conducted under section (Appointment of persons to conduct

 

investigations) is guilty of an offence if the person—

 

(a)    

falsifies, conceals, destroys or otherwise disposes of a document

 

which the person knows or suspects is or would be relevant to such

 

an investigation, or

 

(b)    

causes or permits the falsification, concealment, destruction or

 

disposal of such a document.

 

(5)    

It is a defence for a person charged with an offence under subsection (4) to

 

show that the person had no intention of concealing facts disclosed by the

 

documents from the investigator.

 

(6)    

A person is guilty of an offence if the person, in purported compliance with

 

a requirement imposed under any of sections (Power to obtain information or

 

documents) to (Entry of premises under warrant)—

 

(a)    

provides information which the person knows to be false or

 

misleading in a material particular, or

 

(b)    

recklessly provides information which is false or misleading in a

 

material particular.

 

(7)    

A person guilty of an offence under subsection (4) or (6) is liable—

 

(a)    

on summary conviction—

 

(i)    

in England and Wales, to imprisonment for a term not

 

exceeding 12 months (or 6 months, if the offence was

 

committed before the commencement of section 154(1) of

 

the Criminal Justice Act 2003) or a fine, or both;


 
 

62

 
 

(ii)    

in Scotland, to imprisonment for a term not exceeding 12

 

months or a fine not exceeding the statutory maximum, or

 

both;

 

(iii)    

in Northern Ireland, to imprisonment for a term not

 

exceeding 6 months or a fine not exceeding the statutory

 

maximum, or both;

 

(b)    

on conviction on indictment, to imprisonment for a term not

 

exceeding 2 years or a fine, or both.

 

(8)    

Any person who intentionally obstructs the exercise of any rights conferred

 

by a warrant under section (Entry of premises under warrant) is guilty of an

 

offence and liable on summary conviction—

 

(a)    

in England and Wales, to imprisonment for a term not exceeding 51

 

weeks (or 3 months, if the offence was committed before the

 

commencement of section 280(2) of the Criminal Justice Act 2003) or

 

a fine, or both;

 

(b)    

in Scotland, to imprisonment for a term not exceeding 3 months or

 

a fine not exceeding level 5 on the standard scale, or both;

 

(c)    

in Northern Ireland, to imprisonment for a term not exceeding 3

 

months or a fine not exceeding level 5 on the standard scale, or both.

 

(9)    

In this section—

 

“court” means the High Court or, in Scotland, the Court of Session;

 

“investigator” means a person appointed under section (Appointment

 

of persons to conduct investigations).”

115

Insert the following new Clause—

 

“Disclosure of information

 

         

Restrictions on disclosure of confidential information

 

(1)    

Confidential information must not be disclosed by a primary recipient, or

 

by any person obtaining the information directly or indirectly from a

 

primary recipient, without the consent of—

 

(a)    

the person from whom the primary recipient obtained the

 

information, and

 

(b)    

if different, the person to whom it relates.

 

(2)    

In this section “confidential information” means information which—

 

(a)    

relates to the business or other affairs of any person,

 

(b)    

was received by the primary recipient for the purposes of, or in the

 

discharge of, any functions of the Payment Systems Regulator

 

under this Part, and

 

(c)    

is not prevented from being confidential information by subsection

 

(4).

 

(3)    

It is immaterial for the purposes of subsection (2) whether or not the

 

information was received—

 

(a)    

as a result of a requirement to provide it imposed by or under any

 

enactment;

 

(b)    

for other purposes as well as purposes mentioned in that

 

subsection.

 

(4)    

Information is not confidential information if—


 
 

63

 
 

(a)    

it has been made available to the public by virtue of being disclosed

 

in any circumstances in which, or for any purposes for which,

 

disclosure is not precluded by this section, or

 

(b)    

it is in the form of a summary or a collection of information that is

 

framed in such a way that it is not possible to ascertain from it

 

information relating to any particular person.

 

(5)    

Each of the following is a primary recipient for the purposes of this

 

section—

 

(a)    

the Payment Systems Regulator;

 

(b)    

the FCA;

 

(c)    

a person who is or has been employed by the Payment Systems

 

Regulator or the FCA;

 

(d)    

a person who is or has been engaged to provide services to the

 

Payment Systems Regulator or the FCA;

 

(e)    

any auditor or expert instructed by the Payment Systems Regulator

 

or the FCA;

 

(f)    

a person appointed to make a report under section (Reports by skilled

 

persons);

 

(g)    

a person appointed under section (Appointment of persons to conduct

 

investigations).

 

(6)    

Nothing in this section applies to information received by a primary

 

recipient for the purposes of, or in the discharge of, any functions of the

 

Payment Systems Regulator under the Competition Act 1998 or the

 

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

 

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

 

Act 1998).

 

    

(For provision about the disclosure of such information, see Part 9 of the

 

Enterprise Act 2002.)”

116

Insert the following new Clause—

 

         

“Exemptions from section (Restrictions on disclosure of confidential

 

information)

 

(1)    

Section (Restrictions on disclosure of confidential information) does not prevent

 

a disclosure of confidential information which—

 

(a)    

is made for the purpose of facilitating the carrying out of a public

 

function, and

 

(b)    

is permitted by regulations made by the Treasury under this

 

section.

 

(2)    

For the purposes of this section “public functions” includes—

 

(a)    

functions conferred by or in accordance with any provision

 

contained in any enactment;

 

(b)    

functions conferred by or in accordance with any provision

 

contained in the EU Treaties or any EU instrument;

 

(c)    

similar functions conferred on persons by or under provisions

 

having effect as part of the law of a country or territory outside the

 

United Kingdom;

 

(d)    

functions exercisable in relation to specified disciplinary

 

proceedings.


 
 

64

 
 

(3)    

Regulations under this section may, in particular, make provision

 

permitting the disclosure of confidential information or of confidential

 

information of a specified kind—

 

(a)    

by specified recipients, or recipients of a specified description, to

 

any person for the purpose of enabling or assisting the recipient to

 

discharge specified public functions;

 

(b)    

by specified recipients, or recipients of a specified description, to

 

specified persons, or persons of specified descriptions, for the

 

purpose of enabling or assisting those persons to discharge

 

specified public functions;

 

(c)    

by the Payment Systems Regulator to the Treasury for any purpose;

 

(d)    

by any recipient if the disclosure is with a view to or in connection

 

with specified proceedings.

 

(4)    

Regulations under this section may also include provision—

 

(a)    

making any permission to disclose confidential information subject

 

to conditions (which may relate to the obtaining of consents or any

 

other matter);

 

(b)    

restricting the uses to which confidential information disclosed

 

under the regulations may be put.

 

(5)    

In relation to confidential information, each of the following is a

 

“recipient”—

 

(a)    

a primary recipient;

 

(b)    

a person obtaining the information directly or indirectly from a

 

primary recipient.

 

(6)    

In this section—

 

“confidential information” and “primary recipient” have the same

 

meaning as in section (Restrictions on disclosure of confidential

 

information);

 

“specified” means specified in regulations.”

117

Insert the following new Clause—

 

         

“Offences relating to disclosure of confidential information

 

(1)    

A person who discloses information in contravention of section

 

(Restrictions on disclosure of confidential information) is guilty of an offence.

 

(2)    

A person guilty of an offence under subsection (1) is liable—

 

(a)    

on summary conviction—

 

(i)    

in England and Wales, to imprisonment for a term not

 

exceeding 3 months or a fine, or both;

 

(ii)    

in Scotland, to imprisonment for a term not exceeding 12

 

months or a fine not exceeding the statutory maximum, or

 

both;

 

(iii)    

in Northern Ireland, to imprisonment for a term not

 

exceeding 3 months or a fine not exceeding the statutory

 

maximum, or both;

 

(b)    

on conviction on indictment, to imprisonment for a term not

 

exceeding 2 years or a fine, or both.

 

(3)    

A person is guilty of an offence if—


 
 

65

 
 

(a)    

information has been disclosed to the person in accordance with

 

regulations made under section (Exemptions from section

 

(Restrictions on disclosure of confidential information)), and

 

(b)    

the person uses the information in contravention of any provision

 

of those regulations.

 

(4)    

A person guilty of an offence under subsection (3) is liable on summary

 

conviction—

 

(a)    

in England and Wales, to imprisonment for a term not exceeding 51

 

weeks (or 3 months, if the offence was committed before the

 

commencement of section 280(2) of the Criminal Justice Act 2003) or

 

a fine, or both;

 

(b)    

in Scotland, to imprisonment for a term not exceeding 3 months or

 

a fine not exceeding level 5 on the standard scale, or both;

 

(c)    

in Northern Ireland, to imprisonment for a term not exceeding 3

 

months or a fine not exceeding level 5 on the standard scale, or both.

 

(5)    

In proceedings against a person (“P”) for an offence under this section it is

 

a defence for P to prove—

 

(a)    

that P did not know and had no reason to suspect that the

 

information was confidential information;

 

(b)    

that P took all reasonable precautions and exercised all due

 

diligence to avoid committing the offence.

 

(6)    

In this section “confidential information” has the same meaning as in

 

section (Restrictions on disclosure of confidential information).”

118

Insert the following new Clause—

 

         

“Information received from Bank of England

 

(1)    

The following are regulators for the purposes of this section—

 

(a)    

the Payment Systems Regulator;

 

(b)    

the FCA.

 

(2)    

A regulator must not disclose to any person specially protected

 

information.

 

(3)    

“Specially protected information” is information in relation to which the

 

first and second conditions are met.

 

(4)    

The first condition is that the regulator received the information from—

 

(a)    

the Bank of England (“the Bank”), or

 

(b)    

the other regulator where that regulator had received the

 

information from the Bank.

 

(5)    

The second condition is that the Bank notified the regulator to which it

 

disclosed the information that the Bank held the information for the

 

purpose of its functions with respect to any of the following—

 

(a)    

monetary policy;

 

(b)    

financial operations intended to support financial institutions for

 

the purposes of maintaining stability;

 

(c)    

the provision of private banking services and related services.

 

(6)    

The notification referred to in subsection (5) must be—

 

(a)    

in writing, and


 
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