|
|
| |
| | |
38 | Insert the following new Clause— |
|
| | “Reviews of proprietary trading: interpretation |
|
| (1) | This section has effect for the interpretation of sections (PRA review of |
|
| proprietary trading) and (Independent review of proprietary trading). |
|
| (2) | A person engages in “proprietary trading” where the person trades in |
|
| commodities or financial instruments as principal. |
|
| |
| (a) | “commodity” includes any produce of agriculture, forestry or |
|
| fisheries, or any mineral, either in its natural state or having |
|
| undergone only such processes as are necessary or customary to |
|
| prepare the produce or mineral for the market; |
|
| (b) | “financial instrument” includes anything specified in Section C of |
|
| Annex I to Directive 2004/39/EC of the European Parliament and |
|
| of the Council of 21 April 2004 on markets in financial instruments. |
|
| (4) | “Relevant authorised person” means a PRA-authorised person which— |
|
| |
| (b) | meets condition A or B, and |
|
| |
| (5) | Condition A is that the UK institution has permission under Part 4A of |
|
| FSMA 2000 to carry on the regulated activity of accepting deposits. |
|
| |
| (a) | the institution is for the purposes of FSMA 2000 an investment firm |
|
| (see section 424A of that Act), |
|
| (b) | it has permission under Part 4A to carry on the regulated activity of |
|
| dealing in investments as principal, and |
|
| (c) | when carried on by it, that activity is a PRA-regulated activity. |
|
| (7) | In subsections (4) to (6)— |
|
| (a) | “UK institution” means an institution which is incorporated in, or |
|
| formed under the law of any part of, the United Kingdom; |
|
| (b) | “insurer” means an institution which is authorised under FSMA |
|
| 2000 to carry on the regulated activity of effecting or carrying out |
|
| contracts of insurance as principal; |
|
| (c) | “PRA-authorised person” and “PRA-regulated activity” have the |
|
| same meaning as in FSMA 2000. |
|
| (8) | Subsections (5), (6)(b) and (7)(b) are to be read in accordance with section |
|
| 22 of FSMA 2000, taken with Schedule 2 to that Act and any order under |
|
| |
39 | Insert the following new Clause— |
|
| | “Right to obtain documents and information |
|
| (1) | A review panel appointed under section (Independent review of operation of |
|
| legislation relating to ring-fencing) or (Independent review of proprietary |
|
| |
|
|
| |
| | |
|
| (a) | has a right of access at any reasonable time to all such documents as |
|
| the panel may reasonably require for the purposes of the review, |
|
| |
| (b) | may require any person holding or accountable for any such |
|
| document to provide such information and explanation as are |
|
| reasonably necessary for that purpose. |
|
| (2) | An obligation imposed on a person as a result of the exercise of the powers |
|
| conferred by subsection (1) is enforceable by injunction or, in Scotland, by |
|
| an order for specific performance under section 45 of the Court of Session |
|
| |
|
40 | Insert the following new Clause— |
|
| |
| Bail-in stabilisation option |
|
| Bail-in stabilisation option |
|
| (1) | Schedule (Bail-in stabilisation option) (which contains amendments relating |
|
| to a new stabilisation option in Part 1 of the Banking Act 2009) has effect. |
|
| (2) | The Treasury may by order make any provision they consider appropriate |
|
| in consequence of the application to building societies of the amendments |
|
| |
| (3) | An order may, in particular— |
|
| (a) | enable the Bank of England, for the purpose of enabling it to |
|
| exercise in relation to the business of a building society any of the |
|
| powers exercisable as a result of the amendments made by this |
|
| |
| (i) | to convert the building society into a company, or |
|
| (ii) | to transfer the business of the building society to a company |
|
| which immediately before the transfer is owned by the Bank |
|
| or by a person of a description specified in the order; |
|
| (b) | enable the Bank of England, in connection with the exercise of a |
|
| power conferred by virtue of paragraph (a), to cancel membership |
|
| rights or shares in the building society; |
|
| (c) | provide for any power exercisable as a result of the amendments |
|
| made by this Part to be exercisable in relation to the company— |
|
| (i) | into which the building society is converted, or |
|
| (ii) | to which the business of the building society is transferred; |
|
| (d) | enable the Bank of England, in a case where it has transferred the |
|
| business of a building society by virtue of paragraph (a)(ii), to |
|
| dissolve the building society at any time after the transfer; |
|
| (e) | confer functions on the Treasury, the Bank of England, the FCA, the |
|
| PRA or a bail-in administrator; |
|
| (f) | make further amendments of Part 1 of the Banking Act 2009; |
|
| (g) | amend or modify the effect of the Building Societies Act 1986 or any |
|
| other enactment to which this subsection applies. |
|
|
|
| |
| | |
|
| (4) | Subsection (3) applies to any enactment (including a fiscal enactment) |
|
| |
| (a) | before the passing of this Act, or |
|
| (b) | on or before the last day of the Session in which this Act is passed. |
|
| |
| “bail-in administrator” is to be read in accordance with section 12B of |
|
| the Banking Act 2009 (as inserted by paragraph 2 of Schedule (Bail- |
|
| in stabilisation option)); |
|
| “building society” has the same meaning as in section 84 of the |
|
| |
| “company” means a company as defined in section 1(1) of the |
|
| Companies Act 2006 which is a public company limited by shares.” |
|
41 | Insert the following new Clause— |
|
| |
| Conduct of persons working in financial services sector |
|
| |
| |
| After section 65 of FSMA 2000 insert— |
|
| “65A | Professional standards |
|
| (1) | The regulator will raise standards of professionalism in financial |
|
| services by mandating a licensing regime based on training and |
|
| |
| (2) | This licensing regime must— |
|
| (a) | apply to all approved persons exercising controlled |
|
| functions, regardless of financial sector; |
|
| (b) | specify minimum thresholds of competence including |
|
| integrity, professional qualifications, continuous |
|
| professional development and adherence to a recognised |
|
| code of conduct and revised Banking Standards Rules; |
|
| (c) | make provisions in connection with— |
|
| (i) | the granting of a licence; |
|
| (ii) | the refusal of a licence; |
|
| (iii) | the withdrawal of a licence; and |
|
| (iv) | the revalidation of a licensed person of a prescribed |
|
| description whenever the appropriate regulator sees |
|
| fit, either as a condition of the person continuing to |
|
| hold a licence or of the person’s licence being |
|
| |
| (d) | be evidenced by individuals holding an annual validation |
|
| |
| (e) | include specific provision for a Senior Persons Regime in |
|
| relation to activities involving the exercise of a significant |
|
| influence over a controlled function under section 59 of the |
|
| |
|
|
| |
| | |
|
| (3) | In section 59, for “authorised” substitute “licensed” throughout the |
|
| |
42 | Insert the following new Clause— |
|
| | “Functions for which approval is required |
|
| (1) | Section 59 of FSMA 2000 (approval for particular arrangements) is |
|
| |
| |
| (3) | For subsection (6) substitute— |
|
| “(6) | The PRA may specify a description of function under subsection |
|
| (3)(a) only if, in relation to the carrying on of a regulated activity by |
|
| a PRA-authorised person, it is satisfied that the function is a senior |
|
| management function as defined in section 59ZA.” |
|
| (4) | After subsection (6) insert— |
|
| |
| (a) | a function of a description specified in rules made by the |
|
| FCA under subsection (3)(a) or (b) is a controlled function in |
|
| relation to the carrying on of a regulated activity by a |
|
| relevant authorised person, and |
|
| (b) | the FCA is satisfied that, in relation to the carrying on of a |
|
| regulated activity by a relevant authorised person, the |
|
| function is a senior management function as defined in |
|
| |
| | the FCA must designate the function in the rules as a senior |
|
| |
| (6B) | If a function of a description specified in rules made by the PRA |
|
| under subsection (3)(a) is a controlled function in relation to the |
|
| carrying on of a regulated activity by a relevant authorised person, |
|
| the PRA must designate the function in the rules as a senior |
|
| |
| (6C) | For the meaning of “relevant authorised person”, see section 71A.” |
|
| (5) | Omit subsections (7) to (7B) and (11).” |
|
43 | Insert the following new Clause— |
|
| | “Senior management functions |
|
| After section 59 of FSMA 2000 insert— |
|
| “59ZA | Senior management functions |
|
| (1) | This section has effect for determining whether a function is for the |
|
| purposes of section 59(6) or (6A) a senior management function. |
|
| (2) | A function is a “senior management function”, in relation to the |
|
| carrying on of a regulated activity by an authorised person, if— |
|
| (a) | the function will require the person performing it to be |
|
| responsible for managing one or more aspects of the |
|
|
|
| |
| | |
|
| authorised person’s affairs, so far as relating to the activity, |
|
| |
| (b) | those aspects involve, or might involve, a risk of serious |
|
| |
| (i) | for the authorised person, or |
|
| (ii) | for business or other interests in the United |
|
| |
| (3) | In subsection (2)(a) the reference to managing one or more aspects |
|
| of an authorised person’s affairs includes a reference to taking |
|
| decisions, or participating in the taking of decisions, about how one |
|
| or more aspects of those affairs should be carried on.”” |
|
44 | Insert the following new Clause— |
|
| | “Statements of responsibilities |
|
| (1) | Section 60 of FSMA 2000 (applications for approval) is amended as follows. |
|
| (2) | After subsection (2) insert— |
|
| |
| (a) | the application is for the approval of a person to perform a |
|
| designated senior management function, and |
|
| (b) | the authorised person concerned is a relevant authorised |
|
| person (see section 71A), |
|
| | the appropriate regulator must require the application to contain, |
|
| or be accompanied by, a statement setting out the aspects of the |
|
| affairs of the authorised person concerned which it is intended that |
|
| the person will be responsible for managing in performing the |
|
| |
| (2B) | A statement provided under subsection (2A) is known as a |
|
| “statement of responsibilities”. |
|
| (2C) | In subsection (2A) “designated senior management function” |
|
| means a function designated as a senior management function |
|
| under section 59(6A) or (6B).” |
|
| (3) | After subsection (6) insert— |
|
| “(6A) | Subsection (6) applies to references to a relevant authorised person |
|
| as it applies to references to the authorised person concerned.”” |
|
45 | Insert the following new Clause— |
|
| “Vetting by relevant authorised persons of candidates for approval |
|
| After section 60 of FSMA 2000 insert— |
|
| “60A | Vetting of candidates by relevant authorised persons |
|
| (1) | Before a relevant authorised person may make an application for a |
|
| regulator’s approval under section 59, the authorised person must |
|
| be satisfied that the person in respect of whom the application is |
|
| made (“the candidate”) is a fit and proper person to perform the |
|
| function to which the application relates. |
|
|
|
| |
| | |
|
| (2) | In deciding that question, the authorised person must have regard, |
|
| in particular, to whether the candidate, or any person who may |
|
| perform a function on the candidate’s behalf— |
|
| (a) | has obtained a qualification, |
|
| (b) | has undergone, or is undergoing, training, |
|
| (c) | possesses a level of competence, or |
|
| (d) | has the personal characteristics, |
|
| | required by general rules made by the regulator in relation to |
|
| persons performing functions of the kind to which the application |
|
| |
| (3) | For the meaning of “relevant authorised person”, see section 71A.”” |
|
46 | Insert the following new Clause— |
|
| | “Determination of applications for approval |
|
| In section 61 of FSMA 2000 (determination of applications), in subsection |
|
| |
| (a) | omit the “or” at the end of paragraph (b), and |
|
| (b) | after paragraph (c) insert “or |
|
| (d) | has the personal characteristics,”.” |
|
47 | Insert the following new Clause— |
|
| | “Power to give approval subject to conditions or for limited period |
|
| (1) | Section 61 of FSMA 2000 (determination of applications) is amended as |
|
| |
| (2) | For subsection (1) substitute— |
|
| “(1) | The regulator to which an application for approval is made under |
|
| section 60 may grant the application only if— |
|
| (a) | it is satisfied that the person in respect of whom the |
|
| application is made (“the candidate”) is a fit and proper |
|
| person to perform the function to which the application |
|
| |
| (b) | in a case where the application is for approval to perform a |
|
| designated senior management function in relation to the |
|
| carrying on of a regulated activity by a relevant authorised |
|
| person (a “relevant senior management application”), it is |
|
| satisfied that the condition in paragraph (a) will be met if the |
|
| application is granted subject to one or more conditions (as |
|
| to which, see subsection (2B)).” |
|
| (3) | In subsection (2), for “deciding that question” substitute “determining the |
|
| |
| (4) | After subsection (2A) insert— |
|
| “(2B) | The regulator to which a relevant senior management application is |
|
| made under section 60 may in particular— |
|
| (a) | grant the application subject to any conditions that the |
|
| regulator considers appropriate, and |
|
|
|
| |
| | |
|
| (b) | grant the application so as to give approval only for a |
|
| |
| (2C) | A regulator may exercise the power under paragraph (a) or (b) of |
|
| |
| (a) | where the regulator is the FCA, it appears to the FCA that it |
|
| is desirable to do so in order to advance one or more of its |
|
| operational objectives, and |
|
| (b) | where the regulator is the PRA, it appears to the PRA that it |
|
| is desirable to do so in order to advance any of its objectives. |
|
| (2D) | Consent given by the FCA for the granting of the application may |
|
| be conditional on the manner in which the PRA exercises its power |
|
| |
| (5) | After subsection (3) insert— |
|
| “(3ZA) | In the case of a relevant senior management application, the |
|
| reference in subsection (3)(a) to granting the application is a |
|
| reference to granting it without imposing conditions or limiting the |
|
| period for which the approval has effect.” |
|
| (6) | After subsection (5) insert— |
|
| |
| (a) | “designated senior management function” means a function |
|
| designated as a senior management function under section |
|
| |
| (b) | any reference to a relevant authorised person includes a |
|
| reference to a person who has applied for permission under |
|
| Part 4A and will be a relevant authorised person if |
|
| |
| (7) | For the meaning of “relevant authorised person”, see section 71A.” |
|
| (7) | In section 62 of FSMA 2000 (applications for approval: procedure and right |
|
| |
| (a) | in subsection (2), after “the application” insert “, or to grant the |
|
| application subject to conditions or for a limited period (or both)”; |
|
| (b) | in subsection (3), after “the application” insert “, or to grant the |
|
| application subject to conditions or for a limited period (or both)”; |
|
| (c) | in subsection (4), after “the application” insert “, or to grant the |
|
| application subject to conditions or for a limited period (or both)”.” |
|
48 | Insert the following new Clause— |
|
| | “Changes in responsibilities of senior managers |
|
| After section 62 of FSMA 2000 insert— |
|
| “62A | Changes in responsibilities of senior managers |
|
| (1) | This section applies where— |
|
| (a) | an authorised person has made an application to the |
|
| appropriate regulator for approval under section 59 for a |
|
| person to perform a designated senior management |
|
| |
|