Session 2014 - 15
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Public Bill Committee:                               

204

 

, continued

 
 

(3)    

Subsection (1) does not limit the grounds on which the power in

 

section 333E(3) may be exercised.

 

FCA’s duties and power to give guidance

 

333N  

FCA’s duties

 

(1)    

Thegraphic FCA must discharge its general pensions guidance functions with

 

a view to securing an appropriate degree of protection for recipients of

 

pensions guidance from designated guidance providers.

 

(2)    

In discharging its general pensions guidance functions the FCA must

 

have regard to—

 

(a)    

its graphicstrategic and operational objectives in section 1B(2) and

 

(3), and

 

(b)    

the regulatory principles in section 3B.

 

(3)    

In this section the FCA’s “general pensions guidance functions”

 

means its functions of—

 

(a)    

setgraphicting standards under section 333G,

 

(b)    

issuing statements under section 333J,

 

(c)    

giving general guidance under section 333O (see section

 

333O(9)),

 

(d)    

making rules under section 333P, and

 

(e)    

detgraphicermining the general policy and principles by reference to

 

which it performs particular functions under this Part.

 

333O  

Power of the FCA to give guidance

 

(1)    

The FCA may give guidance consisting of such information and

 

advice relating to its functions under sections 333G, 333H, 333I, 333J

 

and graphic333P as it considers appropriate.

 

(2)    

Subsection (3) applies where the FCA proposes to give guidance to

 

designated guidance providers generally, or to a class of designated

 

guidance providers, in relation to standards set under section 333G or

 

rules made under section 333P.

 

(3)    

Whegraphicre this subsection applies, subsections (1)(b), (2)(e) and (3) of

 

section 138I apply to the proposed guidance as they apply to proposed

 

rules, unless the FCA considers that the delay in complying with those

 

provisions would be prejudicial to the interests of recipients of

 

pensions guidance from designated guidance providers.

 

(4)    

The FgraphicCA may—

 

(a)    

publish its guidance,

 

(b)    

offer copies of its published guidance for sale at a reasonable

 

price, and

 

(c)    

if it gives guidance in response to a request made by any

 

pergraphicson, make a reasonable charge for that guidance.

 

(5)    

On giving any general guidance, the FCA must give written notice to

 

the Treasury without delay.

 

(6)    

If the FCA alters any of its general guidance, it must give written

 

notice to the Treasury without delay.

 

(7)    

The graphicnotice under subsection (6) must include details of the alteration.


 
 

Public Bill Committee:                               

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, continued

 
 

(8)    

If the FCA revokes any of its general guidance, it must give written

 

notice to the Treasury without delay.

 

(9)    

In this section “general guidance” means guidance given by the FCA

 

under this section which is—

 

(a)    

givegraphicn to persons generally, to designated guidance providers

 

generally or to a class of designated guidance provider,

 

(b)    

intended to have continuing effect, and

 

(c)    

given in writing or other legible form.

 

Funding of pensions guidance

 

333P  

Fundgraphicing of FCA’s pensions guidance costs

 

(1)    

For the purpose of meeting the FCA’s pensions guidance costs the

 

FCA must make rules requiring designated guidance providers, or any

 

specified class of designated guidance provider, to pay to the FCA

 

specified amounts or amounts calculated in a specified way.

 

(2)    

Befgraphicore the FCA publishes a draft of the rules it must consult the

 

Treasury.

 

(3)    

The amounts to be paid under the rules may include a component—

 

(a)    

to cover the expenses of the FCA in collecting the payments;

 

(b)    

to enable the FCA to maintain an adequate reserve.

 

(4)    

In graphicthis section the “FCA’s pensions guidance costs” means the

 

expenses incurred, or expected to be incurred, by the FCA in

 

connection with the carrying out of the functions conferred on it by

 

this Part other than by section 333Q.

 

333Q  

Funding of Treasury’s pensions guidance costs

 

(1)    

Thgraphice Treasury must, from time to time, notify the FCA of the amount

 

of the Treasury’s pensions guidance costs.

 

(2)    

Having been so notified, the FCA must make rules requiring

 

authorised persons, or any specified class of authorised person, to pay

 

to the FCA specified amounts or amounts calculated in a specified way

 

with agraphic view to recovering the amount notified under subsection (1).

 

(3)    

The amounts to be paid under the rules may include a component to

 

cover the expenses of the FCA in collecting the payments (“collection

 

costs”).

 

(4)    

Before the FCA publishes a draft of the rules it must consult the

 

Tregraphicasury.

 

(5)    

The rules may be made only with the consent of the Treasury.

 

(6)    

The Treasury may notify the FCA of matters that they will take into

 

account when deciding whether or not to give consent for the purposes

 

of subsection (5).

 

(7)    

The FgraphicCA must have regard to any matters notified under subsection

 

(6) before publishing a draft of rules to be made under this section.

 

(8)    

The FCA must pay to the Treasury the amounts that it receives under

 

rules made under this section apart from amounts in respect of its

 

collection costs (which it may keep).


 
 

Public Bill Committee:                               

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, continued

 
 

(9)    

The Tgraphicreasury must pay into the Consolidated Fund the amounts

 

received by them under subsection (8).

 

(10)    

In this section the “Treasury’s pensions guidance costs” means the

 

expenses incurred, or expected to be incurred, by the Treasury—

 

(a)    

in giving pensions guidance or arranging for it to be given by

 

degraphicsignated guidance providers,

 

(b)    

in meeting the expenses of designated guidance providers

 

incurred in connection with the giving of the guidance

 

(including expenses incurred by virtue of sections 333G(2),

 

333L and 333P), whether by means of the power conferred by

 

sectigraphicon 333D or otherwise,

 

(c)    

in providing services to designated guidance providers to

 

support them in giving the guidance,

 

(d)    

in increasing awareness of the availability of the guidance,

 

(e)    

in undertaking or commissioning research relating to the

 

givigraphicng of the guidance, and

 

(f)    

otherwise in connection with the carrying out of its functions

 

under section 333B.

 

(11)    

The Treasury may by regulations amend the definition of the

 

“Treasury’s pensions guidance costs” in subsection (10).”

 

3          

In section graphic1B (the FCA’s general duties), after subsection (7) insert—

 

“(7A)    

The FCA’s general functions do not include its general pensions

 

guidance functions (see section 333N(3)).”

 

4          

After section 137FA insert—

 

“137FB 

FCA general rules: disclosure of information about the availability

 

of pengraphicsions guidance

 

(1)    

The FCA must make general rules requiring information about the

 

availability of pensions guidance to be given by the trustees or

 

managers of a relevant pension scheme to members of the scheme with

 

a right or entitlement to cash balance benefits or other money purchase

 

bengraphicefits.

 

(2)    

Before the FCA publishes a draft of any rules to be made by virtue of

 

this section, it must consult—

 

(a)    

the Secretary of State, and

 

(b)    

the Treasury.

 

(3)    

In degraphictermining what provision to include in the rules, the FCA must

 

have regard to any regulations that are for the time being in force under

 

section 113 of the Pension Schemes Act 1993 concerning the giving

 

of information about the availability of pensions guidance to members

 

of pension schemes with a right or entitlement to cash balance benefits

 

or othgraphicer money purchase benefits.

 

(4)    

In this section—

 

“cash balance benefits” has the meaning given by section 152(5) of the

 

Finance Act 2004;

 

“money purchase benefits” has the meaning given by section 152(4) of

 

the Fgraphicinance Act 2004;

 

“pensions guidance” means pensions guidance given by virtue of Part

 

20A;


 
 

Public Bill Committee:                               

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, continued

 
 

“relevant pension scheme” means a pension scheme set up by a person

 

with permission under this Act to establish—

 

(a)    

a pgraphicersonal pension scheme within the meaning of an order under

 

section 22, or

 

(b)    

a stakeholder pension scheme within the meaning of such an

 

order.”

 

5          

In section 138I (rules: consultation by the FCA)—

 

(a)    

in graphicsubsection (6) (exemption from requirement to carry out a cost

 

benefit analysis), after paragraph (a) insert—

 

“(aa)    

section 137FB;”;

 

(b)    

in that subsection, after paragraph (c) insert—

 

“(ca)    

section 333P;

 

(cb)    

segraphicction 333Q;”;

 

(c)    

in subsection (10) (rules to which requirement to consult the PRA does

 

not apply), after “apply to” insert “—

 

(a)    

rules made by the FCA under section 137FB, 333P or

 

333Q, or

 

(b)    

graphic.

 

6          

In section 139A (power of the FCA to give guidance), after subsection (1)

 

insert—

 

“(1A)    

The FCA may not give guidance under this section relating to its

 

functions under sections 333G, 333H, 333I, 333J and 333P (see

 

sectgraphicion 333O for provision about the giving of guidance relating to

 

these functions).”

 

7          

In section 140A (competition scrutiny: interpretation), in subsection (1), in

 

paragraph (a) of the definition of “regulating provisions”—

 

(a)    

in sub-paragraph (ii), after “section 139B(5)” insert “or 333O(9)”;

 

(b)    

aftegraphicr sub-paragraph (iv) insert—

 

“(v)    

standards set under section 333G;

 

(vi)    

statement issued by the FCA under 333J;”.

 

8          

In section 168 (appointment of persons to carry out investigations in particular

 

cases), in subsection (2)(a), after “section 24(1)” insert “or 333F”.

 

9          

In sectiographicn 429 (Parliamentary control of statutory instruments), in subsection

 

(2) (regulations subject to the affirmative resolution procedure), for “or 262”

 

substitute “, 262, 333C or 333Q”.

 

10         

In Schedule 1ZA (the FCA), in paragraph 8 (arrangements for discharging

 

functions)—

 

(a)    

in sgraphicub-paragraph (3) (legislative functions that must be exercised by

 

the FCA acting through its governing body), in paragraph (c)(i), for

 

“or 312J” substitute “, 312J or 333J”;

 

(b)    

in sub-paragraph (3), after paragraph (d) insert—

 

“(e)    

setting standards under section 333G.”

 

(c)    

in sub-pargraphicagraph (4), after “section 139B(5)” insert “or 333O(9)”.

 

11         

In that Schedule, in paragraph 11 (annual report), in sub-paragraph (1) (matters

 

to be covered in the report), after paragraph (ha) insert—

 

“(hb)    

how, in its opinion, it has complied with its duties in section

 

333N,”.

 

12         

In that Schedugraphicle, in paragraph 23 (fees)—

 

(a)    

in sub-paragraph (1), in the opening words, after “of this Act” insert

 

“other than sections 333P and 333Q”;


 
 

Public Bill Committee:                               

208

 

, continued

 
 

(b)    

in sub-paragraph (1)(a), after “functions” insert “, other than its

 

excepted functions,”;

 

(c)    

in subgraphic-paragraph (2)(a), after “(ca)” insert “but not its excepted

 

functions”;

 

(d)    

after sub-paragraph (2) insert—

 

“(2ZA)  

The “excepted functions” of the FCA are—

 

(a)    

its functions under sections 333E to 333P, and

 

(b)    

its fungraphicctions under section 333Q so far as relating

 

to the collection of payments.”

 

13         

In section 85 of the Financial Services Act 2012 (relevant functions in relation

 

to scheme for investigating complaints against FCA and other regulators), in

 

subsection (4) (legislative functions of the FCA that are excluded)—

 

(a)    

in pgraphicaragraph (c)(i), for “or 312J” substitute “, 312J or 333J”;

 

(b)    

in paragraph (e), after “139B(5)” insert “or 333O(9)”;

 

(c)    

after paragraph (e) insert—

 

“(f)    

setting standards under section 333G of FSMA

 

2000.”

 

14  (1)  

For thgraphice purpose of the exercise of a function conferred by a provision listed in

 

the first column of the table, a consultation requirement listed in the

 

corresponding entry in the second column may be satisfied by things done

 

before the day on which this Act is passed.

 

Provision conferring function

Consultation requirement

 
 

Section 1graphic37FB of FSMA

Sections 137FB(2) and

 
  

138I(1) of FSMA

 
 

Section 333E(1)(e) of FSMA

Section 333E(2) of FSMA

 
 

Section 333G(1) of FSMA

Section 138I(1) of FSMA as

 
  

appgraphiclied with modifications by

 
  

section 333G(5) of FSMA

 
 

Section 333J(1) of FSMA

Section 333K(1) of FSMA

 
 

Section 333O(1) of FSMA

Section 138(1)(b) of FSMA

 
  

as applied by section 333O(3)

 
  

of FgraphicSMA

 
 

Section 333P(1) of FSMA

Sections 138I(1) and 333P(2)

 
  

of FSMA.

 
 

Section 333Q(2) of FSMA

Sections 138I(1) and 333Q(4)

 
  

of FSMA

 
 

      (2)  

graphicWhere before the day on which this Act is passed the Financial Conduct

 

Authority publishes a draft of proposed standards for the giving of pensions

 

guidance by designated guidance providers—

 

(a)    

the consultation requirement in section 138I of FSMA may be treated

 

as satisfied by virtue of sub-paragraph (1) even if the draft is not

 

accompagraphicnied by—

 

(i)    

a cost benefit analysis, or

 

(ii)    

an explanation of the Financial Conduct Authority’s reasons

 

for believing that setting the proposed standards would secure


 
 

Public Bill Committee:                               

209

 

, continued

 
 

an appropriate degree of protection for recipients of pensions

 

guidagraphicnce from designated guidance providers, and

 

(b)    

if it is, any resulting standards published under section 138G(4) of

 

FSMA must be accompanied by—

 

(i)    

a cost benefit analysis within the meaning of section 138I of

 

that Act even if the conditions in subsection (5) of section

 

138graphicI are not satisfied, and

 

(ii)    

an explanation of the Financial Conduct Authority’s reasons

 

for believing that setting the standards will secure an

 

appropriate degree of protection for recipients of pensions

 

guidance from designated guidance providers.

 

      (3)  

References graphicin sub-paragraph (2) to provisions of sections 138G and 138I of

 

FSMA are to those provisions as applied with modifications by section

 

333G(5) of that Act.

 

      (4)  

Where before the day on which this Act is passed the Financial Conduct

 

Authority publishes a draft of proposed rules requiring information about the

 

availabilgraphicity of pensions guidance to be given by the trustees or managers of a

 

relevant pension scheme to members of the scheme with a right or entitlement

 

to cash balance benefits or other money purchase benefits, the consultation

 

requirement in section 137FB(2) of FSMA may be treated as satisfied by virtue

 

of sub-paragraph (1) even if the only consultation before publication was with

 

the Trgraphiceasury.

 

      (5)  

In this paragraph—

 

“consultation requirement” includes—

 

(c)    

a requirement to publish a draft;

 

(d)    

a requirement under section 333E(2)(b) or (c) of FSMA;

 

“FSMgraphicA” means the Financial Services and Markets Act 2000.

 

15         

Expenses incurred by the Financial Conduct Authority before the day on which

 

this Act is passed in anticipation of the conferral of functions on it by virtue of

 

the amendments made by this Schedule are to be treated as if they had been

 

incurred on or after that day.”

 

Member’s explanatory statement

 

The Schedule inserted by this amendment sets out the legislative framework for the giving of

 

pensions guidance to pension scheme members with a right or entitlement to cash balance benefits

 

or other money purchase benefits by inserting a new Part 20A into the Financial Services and

 

Markets Act 2000 and making consequential amendments.

 

As Amendments to Steve Webb’s proposed New Schedule (NS2):—

 

Nigel Mills

 

(a)

 

Line  21,  after “Treasury’s”, insert “and the Department for Work and Pensions’”

 

Nigel Mills

 

(b)

 

Line  22,  after “Treasury”, insert “and the Department for Work and Pensions”

 

Nigel Mills

 

(c)

 

Line  24,  after “Treasury”, insert “and the Department for Work and Pensions”


 
 

Public Bill Committee:                               

210

 

, continued

 
 

Nigel Mills

 

(d)

 

Line  36,  after “(3)”, insert “subject to the condition in subsection (3A)”

 

Nigel Mills

 

(e)

 

Line  38,  at end insert—

 

“(3A)    

The following people may not give pension guidance—

 

(a)    

persons set out in section 154(1) of the Finance Act 2004;

 

(b)    

persons whose main business is the operation or management of pension

 

schemes;

 

(c)    

persons whose main business is the provision of products or other

 

arrangements that provide or are capable of providing income for persons

 

in retirement;

 

(3B)    

A person shall not be excluded by subsection (3A) solely for the reason of

 

providing a Pension Scheme for the employees of that Person.”

 

Nigel Mills

 

(f)

 

Line  72,  after “(e)”, insert “Subject to the condition in subsection (1A)”

 

Nigel Mills

 

(g)

 

Line  74,  at end insert—

 

“(1A)    

The following persons may not be designated under section (1)(e)—

 

(a)    

persons set out in section 154(1) of the Finance Act 2004;

 

(b)    

persons whose main business is the operation or management of Pension

 

Schemes;

 

(c)    

persons whose main business is the provision of products or other

 

arrangements that provide or are capable of providing income for persons

 

in retirement;

 

(1B)    

A person shall not be excluded by subsection (1A) solely for the reason of

 

providing a Pension Scheme for the employees of that person.”

 

Nigel Mills

 

(h)

 

Line  129,  at end insert—

 

“(1A)    

The standards in subsection (1) must include—

 

(a)    

a guidance session provided by a designated guidance provider should in

 

general be planned to have a duration of at least 30 minutes;

 

(b)    

individuals in receipt of guidance should be provided with joining

 

instructions at least 14 days prior to the guidance session which sets out

 

the information needed to make the session effective, including the

 

preparation by the individual of a statement of their financial affairs and

 

sources of income in retirement.”

 


 
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