Financial Services Bill

Session 2012 - 13
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Other Bills before Parliament

Financial Services Bill

Financial Services Bill
Part 9 — General
166

Interpretation
98
Interpretation
(1)
In this Act “FSMA 2000” means the Financial Services and Markets Act 2000.
(2)
In this Act—
“the FCA” means the Financial Conduct Authority;
5
“the PRA” means the Prudential Regulation Authority;
“the UK financial system” means the financial system of the United
Kingdom.
(3)
In this Act “enactment” includes—
(a)
an enactment contained in subordinate legislation within the meaning
10
of the Interpretation Act 1978;
(b)
an enactment contained in, or in an instrument made under, an Act of
the Scottish Parliament;
(c)
an enactment contained in, or in an instrument made under, a Measure
or Act of the National Assembly for Wales;
15
(d)
an enactment contained in, or in an instrument made under, Northern
Ireland legislation.
Consequential and transitional provisions
99
Power to make further consequential amendments etc
(1)
The Treasury or the Secretary of State may by order make such provision
20
amending, repealing, revoking or applying with modifications any enactment
to which this section applies as they consider necessary or expedient in
consequence of any provision made by or under this Act.
(2)
This section applies to—
(a)
any enactment passed or made before the passing of this Act, and
25
(b)
any enactment passed or made on or before the last day of the Session
in which this Act is passed.
(3)
Amendments and repeals made under this section are additional to those
made by or under any other provision of this Act.
100
Transitional provisions and savings
30
(1)
Schedule 20 contains transitional provisions.
(2)
Schedule 21 contains provision about the transfer of property, rights and
liabilities.
(3)
The Treasury may by order make such provision as they consider necessary or
expedient for transitory, transitional or saving purposes in connection with the
35
commencement of any provision made by or under this Act.
(4)
An order under subsection (3) may, in particular—
(a)
make provision enabling any person by whom any powers will become
exercisable, on a date set by or under this Act, by virtue of any
provision made by or under this Act to take before that date any steps
40
which are necessary as a preliminary to the exercise of those powers;

Financial Services Bill
Part 9 — General
167

(b)
make provision treating any rules made, permission given or other
thing done by the Financial Services Authority before commencement
under an enactment amended by this Act—
(i)
as having been made, given or done under a corresponding
provision of the enactment as so amended;
5
(ii)
as having been made, given or done (or also made, given or
done) by the PRA or the Bank of England;
(c)
make provision for the continuation of proceedings begun before
commencement, including provision about the decisions available to
bodies before which such proceedings take place and the effect of their
10
decisions;
(d)
make provision for making savings, or additional savings, from the
effect of any repeal or revocation made by or under this Act.
(5)
An order under subsection (3) may—
(a)
confer functions on the Treasury, the FCA or the PRA, or on the Bank
15
of England or its Financial Policy Committee;
(b)
modify, exclude or apply (with or without modifications) any
enactment (including any provision of, or made under, this Act).
(6)
In subsection (4) “commencement” means the commencement of such
provisions of this Act as may be specified by the order.
20
Final provisions
101
Financial provision
(1)
There is to be paid out of money provided by Parliament—
(a)
any expenditure incurred under or by virtue of this Act by a Minister
of the Crown or government department (apart from any expenditure
25
to be met from the National Loans Fund), and
(b)
any increase attributable to this Act in the sums payable under any
other Act out of money so provided.
(2)
There is to be paid out of the National Loans Fund any increase attributable to
this Act in the sums payable under any other Act out of that Fund.
30
102
Extent
This Act extends to England and Wales, Scotland and Northern Ireland.
103
Commencement
(1)
The following provisions come into force on the day on which this Act is
passed—
35
sections 96 to 99;
section 100(3) to (8);
sections 101 and 102;
this section;
section 104.
40
(2)
Section 94 comes into force at the end of the period of 2 months beginning with
day on which this Act is passed.

Financial Services Bill
Part 9 — General
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(3)
The remaining provisions of this Act come into force on such day as the
Treasury may by order appoint.
(4)
Different days may be appointed for different purposes.
104
Short title
This Act may be cited as the Financial Services Act 2012.
5

Financial Services Bill
Schedule 1 — Bank of England Financial Policy Committee
Part 1 — Schedule to be inserted as Schedule 2A to Bank of England Act 1998
169

Schedules
Schedule 1
Section 3

Bank of England Financial Policy Committee
Part 1
Schedule to be inserted as Schedule 2A to Bank of England Act 1998
5

This is the Schedule to be inserted in the Bank of England Act 1998 after
Schedule 2—
“Schedule 2A
Section 9B

Financial Policy Committee
Terms of office of appointed members
10
1     (1)
Appointment under section 9B(1)(d) or (e) as a member of the
Financial Policy Committee is to be for a period of 3 years, but this
is subject to sub-paragraph (2) and to paragraph 3.
      (2)
Initially some appointments may be for shorter and different
periods so as to secure that appointments expire at different times.
15
2     (1)
A person may not be appointed as a member of the Committee
under section 9B(1)(e) more than twice.
      (2)
For this purpose an appointment which by virtue of paragraph
1(2) is for a period of less than 3 years is to be disregarded.
3     (1)
If it appears to the Chancellor of the Exchequer that in the
20
circumstances it is desirable to do so, the Chancellor may, before
the end of term for which a person is appointed as a member of the
Committee under section 9B(1)(e), extend the persons’s term of
office on one occasion for a specified period of not more than 6
months.
25
      (2)
The term being extended may be the person’s first or second term
or, in a case where paragraph 2(2) allows a third term, the person’s
third term.
      (3)
If a person whose first term of office is extended is subsequently
re-appointed under section 9B(1)(e)—
30
(a)
the length of the second term is to be reduced by a period
equal to the extension of the first term, but
(b)
the second term may itself subsequently be extended
under sub-paragraph (1).

Financial Services Bill
Schedule 1 — Bank of England Financial Policy Committee
Part 1 — Schedule to be inserted as Schedule 2A to Bank of England Act 1998
170

      (4)
In a case where a person’s second term of office is extended and
paragraph 2(2) allows a third term, sub-paragraph (3) is to be read
as if the references to first and second terms were references to
second and third terms respectively.
4     (1)
A person appointed under section 9B(1)(d) or (e) may resign the
5
office by written notice to the Bank.
      (2)
Where the notice relates to a person appointed under section
9B(1)(e), the Bank must give a copy of the notice to the Treasury.
5     (1)
The terms and conditions on which a person holds office as a
member of the Committee appointed under section 9B(1)(e) are to
10
be such as the Bank may determine.
      (2)
The function of determining terms and conditions of office under
sub-paragraph (1) is to stand delegated to the sub-committee
constituted by section 3.
Qualification for appointment
15
6     (1)
The following persons are disqualified for appointment under
section 9B(1)(d) or (e)—
(a)
a Minister of the Crown;
(b)
a person serving in a government department in
employment in respect of which remuneration is paid out
20
of money provided by Parliament.
      (2)
A member of the Monetary Policy Committee of the Bank
appointed under section 13(2)(c) is disqualified for appointment
under section 9B(1)(e).
Removal of appointed members
25
7
A person appointed under section 9B(1)(d) or (e) vacates office on
becoming a person to whom paragraph 6(1)(a) or (b) applies.
8
A person appointed under section 9B(1)(d) vacates office on
ceasing to have executive responsibility within the Bank for the
analysis of threats to financial stability or, as the case may be, the
30
analysis of markets.
9     (1)
The Bank may, with the consent of the Chancellor of the
Exchequer, remove a member appointed under section 9B(1)(d) or
(e) (“M”) if it is satisfied—
(a)
that M has been absent from 3 or more meetings of the
35
Committee without the Committee’s consent,
(b)
that M has become bankrupt, that M’s estate has been
sequestrated or that M has made an arrangement with or
granted a trust deed for M’s creditors, or
(c)
that M is unable or unfit to discharge M’s functions as a
40
member.
      (2)
The Bank may, with the consent of the Chancellor of the
Exchequer, also remove a member appointed under section
9B(1)(e) (“M”) if it is satisfied that in all the circumstances M’s

Financial Services Bill
Schedule 1 — Bank of England Financial Policy Committee
Part 1 — Schedule to be inserted as Schedule 2A to Bank of England Act 1998
171

financial or other interests are such as substantially to affect the
functions as member which it would be proper for M to discharge.
      (3)
The function of removing a member under sub-paragraph (1) or
(2) is to stand delegated to the sub-committee constituted by
section 3.
5
Meetings
10    (1)
The Committee shall meet at least 4 times in each calendar year.
      (2)
The Governor of the Bank (or in the Governor’s absence the Bank’s
Deputy Governor for financial stability) may summon a meeting
at any time on giving such notice as the person giving the notice
10
thinks the circumstances require.
Proceedings
11    (1)
At a meeting of the Committee, the proceedings are to be
regulated as follows.
      (2)
The quorum is to be 7 (excluding the Treasury’s representative)
15
and of the 7—
(a)
one must be the Governor of the Bank or the Bank’s
Deputy Governor for financial stability,
(b)
unless both those mentioned in paragraph (a) are present,
one must be either of the other Deputy Governors of the
20
Bank, and
(c)
one must be a member appointed under section 9B(1)(e).
      (3)
The chair is to be taken by the Governor of the Bank or, if the
Governor is not present, by the Bank’s Deputy Governor for
financial stability.
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      (4)
The person chairing the meeting must seek to secure that decisions
of the Committee are reached by consensus wherever possible.
      (5)
Where that person forms the opinion that consensus cannot be
reached, a decision is to be taken by a vote of all those members
present at the meeting.
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      (6)
In the event of a tie, the person chairing the meeting is to have a
second casting vote.
      (7)
At a meeting of the Committee—
(a)
the Treasury’s representative may not vote, and
(b)
any view expressed by the Treasury’s representative is to
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be disregarded in determining under sub-paragraph (4) or
(5) whether there is a consensus.
      (8)
Subject to sub-paragraphs (2) to (7) and paragraph 14, the
Committee is to determine its own procedure.
12
The Committee may, in relation to sub-paragraph (2), (3), (4) or (5)
40
of paragraph 11, determine circumstances in which a member
who is not present at, but is in communication with, a meeting is
to be treated for the purposes of that sub-paragraph as present at
it.

Financial Services Bill
Schedule 1 — Bank of England Financial Policy Committee
Part 2 — Other amendments relating to Financial Policy Committee
172

13
The Committee may invite other persons to attend, or to attend
and speak at, any meeting of the Committee.
14
If a member of the Committee (“M”) has any direct or indirect
interest (including any reasonably likely future interest) in any
dealing or business which falls to be considered by the
5
Committee—
(a)
M must disclose that interest to the Committee when it
considers the dealing or business, and
(b)
the Committee must decide whether M is to be permitted
to participate in any proceedings of the Committee relating
10
to any question arising from its consideration of the
dealing or business, and if so to what extent and subject to
what conditions (if any).”
Part 2
Other amendments relating to Financial Policy Committee
15
Bank of England Act 1998 (c. 11)
1
In section 4 of the Bank of England Act 1998 (annual report by Bank), in
subsection (2), for the “and” at the end of paragraph (a) substitute—
“(aa)
a report by the court of directors on the activities of the
Financial Policy Committee of the Bank, and”.
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2
In section 15 of the Bank of England Act 1998 (publication of minutes of
meetings of Monetary Policy Committee) after subsection (4) insert—
“(4A)
The Bank shall exclude from minutes published under this section
information which relates to proceedings of the Financial Policy
Committee if the Bank considers that publication of that information
25
would be against the public interest.”
3
In section 40 of the Bank of England Act 1998 (orders), after subsection (4)
insert—
“(4A)
Section 9M contains its own provisions about parliamentary
procedure in relation to an order under section 9K.”
30
House of Commons Disqualification Act 1975 (c. 24)
4
In Part 3 of Schedule 1 to the House of Commons Disqualification Act 1975
(other disqualifying offices), at the appropriate place insert—
“Member of the Financial Policy Committee of the Bank of
England appointed under section 9B(1)(d) or (e) of the Bank
35
of England Act 1998.”
Northern Ireland Assembly Disqualification Act 1975 (c. 25)
5
In Part 3 of Schedule 1 to the Northern Ireland Assembly Disqualification
Act 1975 (other disqualifying offices), at the appropriate place insert—
“Member of the Financial Policy Committee of the Bank of
40
England appointed under section 9B(1)(d) or (e) of the Bank
of England Act 1998.”