Session 2012 - 13
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Financial Services Bill


Financial Services Bill
Part 2 — Amendments of Financial Services and Markets Act 2000

124

 

(c)   

in subsections (3)(c), (4) to (9) and (11), for “Authority” substitute

“PRA”, and

(d)   

after subsection (12) insert—

“(13)   

Before giving a notice under any provision of this section, the

PRA must consult the FCA.”

5

(10)   

In section 322 (rules applicable to former underwriting members)—

(a)   

in subsection (1), for “The Authority” substitute “The PRA”,

(b)   

in subsection (4), for “Part X (except sections 152 to 154)” substitute

“Part 9A (except sections 137R, 138F, 138G and 138H)”, and

(c)   

at the end insert—

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“(5)   

In the event that the activity of effecting or carrying out

contracts of insurance as principal is not to any extent a PRA-

regulated activity, the function conferred on the PRA by

subsection (1) is exercisable instead by the FCA.”

Information

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38      

Information, investigations, disclosure etc.

Schedule 12 contains miscellaneous amendments of FSMA 2000, including

amendments relating to information gathering, investigations and disclosure.

Auditors and actuaries

39      

Auditors and actuaries

20

Schedule 13 contains miscellaneous amendments of Part 22 of FSMA 2000

(auditors and actuaries).

Consumer protection and competition

40      

Provisions about consumer protection and competition

(1)   

After section 234B of FSMA 2000 insert—

25

“Part 16A

Consumer protection and competition

Super-complaints and references to FCA

234C    

Complaints by consumer bodies

(1)   

A designated consumer body may make a complaint to the FCA that a

30

feature, or combination of features, of a market in the United Kingdom

for financial services is, or appears to be, significantly damaging the

interests of consumers.

(2)   

“Designated consumer body” means a body designated by the

Treasury by order.

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Financial Services Bill
Part 2 — Amendments of Financial Services and Markets Act 2000

125

 

(3)   

The Treasury—

(a)   

may designate a body only if it appears to them to represent the

interests of consumers of any description, and

(b)   

must publish in such manner as they think fit (and may from

time to time vary) criteria to be applied by them in determining

5

whether to make or revoke a designation.

(4)   

Sections 425A and 425B (meaning of “consumers”) apply for the

purposes of this section, but the references to consumers in this section

do not include consumers who are authorised persons.

(5)   

In this section—

10

(a)   

“market in the United Kingdom” has the meaning given in

section 140A;

(b)   

the reference to a feature of a market in the United Kingdom for

financial services has a meaning corresponding to that which a

reference to a feature of a market in the United Kingdom for

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goods and services has (by virtue of section 140A(3)) for the

purposes of Chapter 4 of Part 9A.

234D    

Reference by scheme operator or regulated person

(1)   

A relevant person may make a reference to the FCA where it appears to

that person that either the first set of conditions or the second set of

20

conditions are satisfied.

(2)   

Each of the following is a “relevant person”—

(a)   

the scheme operator;

(b)   

a regulated person.

(3)   

The first set of conditions is—

25

(a)   

that there may have been—

(i)   

in the case of a reference by the scheme operator, a

regular failure by one or more regulated persons to

comply with requirements applicable to the carrying on

by them of any activity, or

30

(ii)   

in the case of a reference by a regulated person, a regular

failure by that person to comply with requirements

applicable to the carrying on by that person of any

activity, and

(b)   

that as a result consumers have suffered, or may suffer, loss or

35

damage in respect of which, if they brought legal proceedings,

a remedy or relief would be available in the proceedings.

(4)   

The reference to the failure by a regulated person (“R”) to comply with

a requirement applicable to the carrying on by R of any activity

includes anything done, or omitted to be done, by R in carrying on the

40

activity—

(a)   

which is a breach of a duty or other obligation, prohibition or

restriction, or

(b)   

which otherwise gives rise to the availability of remedy or relief

in legal proceedings.

45

(5)   

It does not matter whether—

(a)   

the duty or other obligation, prohibition or restriction, or

 
 

Financial Services Bill
Part 2 — Amendments of Financial Services and Markets Act 2000

126

 

(b)   

the remedy or relief,

   

arises as a result of any provision made by or under this or any other

Act, a rule of law or otherwise.

(6)   

The second set of conditions is—

(a)   

in the case of a reference by the scheme operator, that one or

5

more regulated persons have, on a regular basis, acted or failed

to act, in such a way that, if a complaint were made under the

ombudsman scheme in relation to that conduct, the

ombudsman would be likely to determine the complaint in

favour of the complainant,

10

(b)   

in the case of a reference by a regulated person, that the

regulated person has, on a regular basis, acted or failed to act in

such a way that, if a complaint were made under the

ombudsman scheme in relation to that conduct, the

ombudsman would be likely to determine the complaint in

15

favour of the complainant, and

(c)   

in either case, that—

(i)   

if the complaint would fall within the compulsory

jurisdiction or the consumer credit jurisdiction, the

ombudsman would be likely to make an award under

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section 229(2)(a) or give a direction under section

229(2)(b), or

(ii)   

if voluntary jurisdiction rules made for the purposes of

section 227 provide for the making of an award against

a respondent or the giving of a direction that a

25

respondent take certain steps in relation to a

complainant, and the complaint would fall within the

voluntary jurisdiction, the ombudsman would be likely

to make such an award or give such a direction.

(7)   

“Consumers” has the meaning given in section 1G.

30

(8)   

“Regulated person” means—

(a)   

an authorised person,

(b)   

an electronic money issuer, as defined in section 1H(8),

(c)   

a payment service provider, as defined in section 1H(8).

234E    

Response by FCA

35

(1)   

The FCA must within 90 days after the day on which it receives a

complaint under section 234C or a reference under section 234D

publish a response stating how it proposes to deal with the complaint

or reference, and in particular—

(a)   

whether it has decided to take any action, or to take no action,

40

and

(b)   

if it has decided to take action, what action it proposes to take.

(2)   

The response must—

(a)   

include a copy of the complaint or reference, and

(b)   

state the FCA’s reasons for its proposals.

45

(3)   

The Treasury may by order amend subsection (1) by substituting any

period for the period for the time being specified there.

 
 

Financial Services Bill
Part 2 — Amendments of Financial Services and Markets Act 2000

127

 

234F    

Section 234E: exceptions

(1)   

This section applies where the FCA has received a reference under

section 234D from a person who is a relevant person as a result of

subsection (2)(b) of that section.

(2)   

The duty to respond in section 234E does not apply if the FCA considers

5

that the reference is frivolous, vexatious or has been made in bad faith.

(3)   

The FCA must within 90 days after the day on which it receives the

reference inform the person who made it that—

(a)   

the duty to respond under section 234E does not apply by virtue

of this section, and

10

(b)   

its reasons for reaching the conclusion in paragraph (a).

(4)   

The Treasury may by order amend subsection (3) by substituting any

period for the period for the time being specified there.

234G    

Guidance

(1)   

The guidance given by the FCA under section 139A—

15

(a)   

must include guidance about the presentation of a reasoned

case for a complaint under section 234C or a reference under

section 234D, and

(b)   

may include guidance about such other matters as appears to

the FCA to be appropriate for the purposes of section 234C or

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234D.

(2)   

Guidance given under this section is to be taken to be general guidance

as defined in section 139B(5).

Competition

234H    

Power of FCA to make request to Office of Fair Trading

25

(1)   

The FCA may ask the Office of Fair Trading (“the OFT”) to consider

whether a feature, or combination of features, of a market in the United

Kingdom for financial services may prevent, restrict or distort

competition in connection with the supply or acquisition of any

financial services in the United Kingdom or a part of the United

30

Kingdom.

(2)   

The OFT must, within 90 days after the day on which it receives the

request, publish a response stating how it proposes to deal with the

request and in particular—

(a)   

whether it has decided to take any action, or to take no action,

35

in response to the request, and

(b)   

if it has decided to take action, what action it proposes to take.

(3)   

The response must state the OFT’s reasons for its proposals.

(4)   

The Treasury may by order amend subsection (2) by substituting any

period for the period for the time being specified there.

40

(5)   

In this section—

(a)   

“market in the United Kingdom” has the meaning given in

section 140A(1);

 
 

Financial Services Bill
Part 2 — Amendments of Financial Services and Markets Act 2000

128

 

(b)   

the reference to a feature of a market in the United Kingdom for

financial services has a meaning corresponding to that which a

reference to a feature of a market in the United Kingdom for

goods and services has (by virtue of section 140A(3)) for the

purposes of Chapter 4 of Part 9A.”

5

Insolvency

41      

Insolvency

Schedule 14 contains amendments of Part 24 of FSMA 2000 (insolvency).

Miscellaneous amendments of FSMA 2000

42      

The consumer financial education body

10

Schedule 15 contains amendments of FSMA 2000 relating to the consumer

financial education body.

43      

Members of the professions

Schedule 16 contains miscellaneous amendments of FSMA 2000 relating to

financial services provided by members of the professions.

15

44      

International obligations

In section 410 of FSMA 2000 (international obligations), in subsection (4), for

paragraph (a) substitute—

“(a)   

the FCA;

(aa)   

the PRA;

20

(ab)   

the Bank of England when exercising functions conferred on it

by Part 18;”.

45      

Interpretation of FSMA 2000

(1)   

In section 417 of FSMA 2000 (definitions), in subsection (1)—

(a)   

omit the definition of “the Authority”,

25

(b)   

in the definition of “control of information rules” for “section 147(1)”

substitute “section 137N”,

(c)   

after the definition of “exempt person” insert—

““the FCA” means the Financial Conduct Authority;”,

(d)   

in the definition of “financial promotion rules” for “section 145”

30

substitute “section 137P”,

(e)   

for the definition of “general rules” substitute—

““general rules”—

(a)   

in relation to the FCA, has the meaning given in

section 137A(2), and

35

(b)   

in relation to the PRA, has the meaning given in

section 137E(2);”,

(f)   

omit the definition of “money laundering rules”;

(g)   

omit the definition of “notice of control”;

 
 

Financial Services Bill
Part 2 — Amendments of Financial Services and Markets Act 2000

129

 

(h)   

for the definition of “Part IV permission” substitute—

““Part 4A permission” has the meaning given in section

55A(5);”,

(i)   

after the definition of “partnership” insert—

““the PRA” means the Prudential Regulation Authority;

5

“PRA-authorised person” has the meaning given in section

2B(5);

“PRA-regulated activity” has the meaning given in section

22A;”,

(j)   

in the definition of “price stabilising rules” for “section 144” substitute

10

“section 137O”,

(k)   

after that definition insert—

““principal” in relation to an appointed representative, is

to be read in accordance with section 39;”,

(l)   

in the definition of “regulating provisions” for “section “159(1)”

15

substitute “section 140A”,

(m)   

after that definition insert—

““regulator” has the meaning given in section 3A(2);”,

(n)   

omit the definitions of “regulatory objectives” and “regulatory

provisions”,

20

(o)   

for the definition of “rule” substitute—

““rule” means a rule made by the FCA or the PRA under

this Act;”,

(p)   

in the definition of “rule-making instrument” for “section 153”

substitute “section 138G”,

25

(q)   

for the definition of “threshold conditions” substitute—

““threshold conditions”, in relation to a regulated activity,

has the meaning given in section 55B(1);”,

(r)   

in the definition of “UK authorised person” for “section 178(4)”

substitute “section 191G(1)”, and

30

(s)   

in the definition of “the UK financial system” for “section 3” substitute

“section 1I”.

(2)   

After section 421 of FSMA 2000 insert—

“421ZA  

Immediate group

In this Act “immediate group”, in relation to a person (“A”), means—

35

(a)   

A;

(b)   

a parent undertaking of A;

(c)   

a subsidiary undertaking of A;

(d)   

a subsidiary undertaking of a parent undertaking of A;

(e)   

a parent undertaking of a subsidiary undertaking of A.”

40

(3)   

After section 425B of FSMA 2000 insert—

“425C   

 “Qualifying EU provision”

(1)   

In this Act “qualifying EU provision” means a provision of—

(a)   

a directly applicable EU regulation, or

(b)   

an EU decision for whose enforcement the United Kingdom is

45

required by an EU obligation to make provision.

 
 

Financial Services Bill
Part 3 — Mutual societies

130

 

(2)   

In subsection (1)(b) “EU decision” means a decision under an EU

directive or EU regulation.”

46      

Parliamentary control of statutory instruments

(1)   

Section 429 of FSMA 2000 (Parliamentary control of statutory instruments) is

amended as follows.

5

(2)   

In subsection (1) (orders subject to the affirmative resolution procedure)—

(a)   

in paragraph (a)—

(i)   

after “section” insert “1J, 3B(4), 55C,”,

(ii)   

after “or (e),” insert “138K(6)(c), 192B(6), 204A(7), 213(1A),”, and

(iii)   

after “236(5),” insert “285(4), 380(12), 382(15), 384(13),”, and

10

(b)   

omit paragraph (b).

(3)   

In subsection (8)—

(a)   

after “under section” insert “3G(1), 137C(1)(b),”,

(b)   

after “165A(2)(d)” insert “, 192A(4)”, and

(c)   

after “which” insert “section 22B or”.

15

Part 3

Mutual societies

Transfer of functions

47      

Mutual societies: power to transfer functions

(1)   

The Treasury may by order amend the legislation relating to mutual societies

20

for any of the relevant purposes.

(2)   

“The legislation relating to mutual societies” means—

(a)   

the Industrial and Provident Societies Act 1965;

(b)   

the Industrial and Provident Societies 1967;

(c)   

the Friendly and Industrial and Provident Societies Act 1968;

25

(d)   

the Industrial and Provident Societies Act (Northern Ireland) 1969;

(e)   

the Friendly Societies Act 1974;

(f)   

the Credit Unions Act 1979;

(g)   

the Credit Unions (Northern Ireland) Order 1985;

(h)   

the Building Societies Act 1986;

30

(i)   

the Friendly Societies Act 1992.

(3)   

The relevant purposes are—

(a)   

providing for any function of the FSA to be exercisable by that body

corporate as the FCA;

(b)   

providing for any function of the FSA to be transferred to the PRA;

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(c)   

providing for any function of the FSA to be exercisable by that body

corporate as the FCA and also to be exercisable concurrently by the

PRA;

(d)   

providing for any function which is exercisable by the FCA or the PRA

(whether by virtue of a previous order under this section or otherwise)

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Revised 28 May 2012