Financial Services Bill

Page 1, leave out line 9

Page 1, leave out line 10

Page 1, line 12, at end insert—

“(2A) Any person appointed under subsection (2)(a) shall be appointed with the consent of the Treasury Committee of the House of Commons.”

Page 1, line 12, at end insert—

“(2A) The Chancellor of the Exchequer shall consult with the chairman of the court prior to the appointment of any person under subsection (2)(a).”

Insert the following new Clause—

“Removal from office

After paragraph 8 of Schedule 1 to the Bank of England Act 1998 (removal from office) insert—

“8A The Bank may not remove a person from office as Governor under paragraph 8 without the consent of the Treasury Committee of the House of Commons.””

Insert the following new Clause—

“Retrospective reviews of Bank performance by the court of directors

(1) Section 2 of the Bank of England Act 1998 (functions of court of directors) is amended as follows.

(2) After subsection (5) insert—

“(6) The court shall conduct retrospective reviews of the performance of the Bank with respect to its functions and objectives.

(7) The court shall determine the particular matters to be reviewed under subsection (6).

(8) The court must publish a report on each review carried out under subsections (6) and (7) unless the court decides that all or part of such a report should not be published for reasons of confidentiality or because it would endanger financial stability.

(9) When all or part of a report of a review is not published under the provisions of subsection (8), the court must—

(a) publish as much as possible of the report,

(b) send a copy of the full report to the Chairman of the Treasury Committee of the House of Commons or, in exceptional circumstances, inform the Chairman of the Treasury Committee of the reasons for not sending it, and

(c) publish the report or part of the report as soon as possible after the court decides that the considerations in subsection (8) no longer apply.””

Insert the following new Clause—

“Publication of court minutes

(1) Section 2 of the Bank of England Act 1998 (functions of court of directors) is amended as follows.

(2) After subsection (5) insert—

“(6) After each meeting of the court, the Bank shall publish minutes of the meeting before the end of the period of two weeks beginning with the day of the meeting.

(7) Subsection (6) shall not apply to minutes of any proceedings where the court has decided that publication should be delayed for reasons of confidentiality or because publication would endanger financial stability.

(8) Where any part of the court’s minutes is not published under the provisions of subsection (7), the Chairman of the court shall inform the Chairman of the Treasury Committee of the House of Commons of the reasons.

(9) Any part of the minutes of a meeting of the court must be published as soon as the court has decided that the considerations in subsection (7) no longer apply.””

Insert the following new Clause—

“Oversight Committee

(1) The Bank of England Act 1998 is amended as follows.

(2) For section 3 substitute—

“3A Oversight Committee

(1) There is to be a sub-committee of the court of directors of the Bank (“the Oversight Committee”) consisting of the directors of the Bank.

(2) The functions of the Oversight Committee are—

(a) keeping under review the Bank’s performance in relation to—

(i) the Bank’s objectives (that is, the objectives specified in relation to it in this Act and the other objectives for the time being determined by the court of directors of the Bank),

(ii) the duty of the Financial Policy Committee under section 9C, and

(iii) the Bank’s strategy as for the time being determined by the court of directors of the Bank (including its financial stability strategy);

(b) monitoring the extent to which the objectives set by the court of directors of the Bank in relation to the Bank’s financial management have been met;

(c) keeping under review the internal financial controls of the Bank with a view to securing the proper conduct of its financial affairs;

(d) the functions conferred on the Oversight Committee by the provisions listed in subsection (4).

(3) The Bank may arrange for specified functions of the Bank to be discharged by the Oversight Committee.

(4) The provisions referred to in subsection (2)(d) are—

(a) section 9B (review of procedures followed by Financial Policy Committee);

(b) section 16 (review of procedures followed by Monetary Policy Committee);

(c) paragraph 14 of Schedule 1 (remuneration of Governor and Deputy Governors);

(d) paragraph 5 of Schedule 2A (terms and conditions of office of members of Financial Policy Committee appointed under section 9B(1)(e));

(e) paragraph 9 of that Schedule (removal of members of Financial Policy Committee appointed under section 9B(1)(e));

(f) paragraph 4(2) of Schedule 3 (terms and conditions of office of members of Monetary Policy Committee appointed under section 13(2)(c));

(g) paragraph 9 of that Schedule (removal of members of Monetary Policy Committee appointed under section 13(2)(c));

(h) paragraph 15 of Schedule 1ZB to the Financial Services and Markets Act 2000 (terms of service and remuneration of members of the governing body of the Prudential Regulation Authority).

3B Oversight Committee: procedure

(1) The chair of the court (designated under paragraph 13 of Schedule 1) is to chair meetings of the Oversight Committee (when present).

(2) The Committee is to determine its own procedure, but this is subject to subsection (1) and subsection (5).

(3) The Committee may invite other persons to attend, or to attend and speak at, any meeting of the Committee.

(4) The Committee may delegate any of its functions to two or more of its members.

(5) 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 Committee—

(a) M must disclose that interest to the Committee when it considers that dealing or business, and

(b) the Committee must decide whether M is to be permitted to participate in any proceedings of the Committee relating 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).

3C Reviews

(1) In the discharge of any of its functions, the Oversight Committee may arrange—

(a) for a review to be conducted under this section in relation to any matter by a person appointed by the Committee, and

(b) for the person conducting the review to make one or more reports to the Committee.

(2) The persons who may be appointed to conduct a review include an officer or employee of the Bank.

(3) A review under this section is a “performance review” if it—

(a) is arranged by the Committee in the discharge of any of its functions under section 3A(2)(a) and (b), and

(b) relates to past events.

(4) If the person to be appointed to conduct a performance review is an officer or employee of the Bank, the appointment requires the consent of the Governor of the Bank.

(5) In the case of a performance review, the Committee must have regard to the desirability of ensuring that sufficient time has elapsed—

(a) for the review to be effective, and

(b) to avoid the review having a material adverse effect on the exercise by the Bank of its functions.

3D Publication of reports of performance reviews

(1) The Bank must give the Treasury a copy of any report made to the Oversight Committee by a person appointed under section 3C to conduct a performance review (as defined by subsection (3) of that section).

(2) Subject to subsection (3), the Bank must also publish the report.

(3) Subsection (2) does not require the publication of information whose publication at the time when the report is made would in the opinion of the Bank be against the public interest.

(4) Where the Bank decides under subsection (3) that publication of information at the time when the report is made would be against the public interest, it must keep under consideration the question of whether publication of the information would still be against the public interest.

(5) Where the Bank decides that publication of any information is no longer against the public interest, it must publish the information.

(6) The Treasury must lay before Parliament a copy of any report or other information published by the Bank under this section.

3E Recommendations resulting from review

(1) This section applies where a report made by a person appointed under section 3C to conduct a review makes recommendations to the Bank as to steps to be taken by it.

(2) The Oversight Committee must—

(a) monitor the Bank’s response to the report, and

(b) if or to the extent that the Bank accepts the recommendations, monitor the implementation of the recommendations.

3F Oversight Committee: further provisions

(1) The documents to which the Oversight Committee is to have access in the discharge of its functions include documents considered, or to be considered, by the Financial Policy Committee or the Monetary Policy Committee.

(2) One or two members of the Oversight Committee may attend any meeting of the Financial Policy Committee or the Monetary Policy Committee, but a person attending by virtue of this subsection may not speak unless invited to do so by the person chairing the meeting.

(3) Subsection (2) does not affect—

(a) anything done in relation to the Financial Policy Committee by a member of that Committee who is also a member of the Oversight Committee,

(b) the powers of the Financial Policy Committee under paragraph 13 of Schedule 2A, or

(c) the powers of the Monetary Policy Committee under paragraph 13A of Schedule 3.”

(3) In section 4 (annual report by the Bank), in subsection (2), for paragraph (a) substitute—

“(a) a report by the Oversight Committee on the matters for which it is responsible, and”.

(4) In section 16 (functions of court of directors)—

(a) in subsection (1), for “court of directors of the Bank” substitute “Oversight Committee”,

(b) in subsection (2)—

(i) for “the court’s function” substitute “the function of the Oversight Committee”,

(ii) for “the Committee” substitute “the Monetary Policy Committee”,

(c) omit subsection (3), and

(d) accordingly, in the heading, for “court of directors” substitute “Oversight Committee”.”

Insert the following new Clause—

“Monetary policy objective

In paragraph (b) of section 11 of the Bank of England Act 1998, delete the words “subject to that”.”

Page 2, line 21, at end insert “, and

(c) define and explain what is meant by “financial stability””

Page 2, line 26, at end insert “, and

(c) other bodies it deems relevant”

Page 3, line 14, leave out “4” and insert “6”

Page 3, leave out line 15

Page 3, line 25, at end insert “(not least political)”

Page 3, line 28, leave out “court of directors” and insert “Oversight Committee”

Page 3, line 28, at end insert “Financial Policy”

Page 3, leave out lines 30 and 31

Page 3, line 32, after “the” insert “Financial Policy”

Page 4, line 8, at end insert “, and the same requirement must be placed on the Monetary Policy Committee”

Page 4, line 21, at end insert—

“(8) The Treasury and the Financial Policy Committee must agree and publish a set of indicators which the Committee will use to measure its performance in meeting the Financial Stability Objective.”

Page 4, leave out lines 22 to 31

Page 6, leave out lines 3 to 7

Page 8, line 32, at end insert—

“(1A) If the Treasury considers it appropriate to proceed with the making of an order under section 9K, the Treasury may lay before Parliament—

(a) a draft order, and

(b) an explanatory document.

(1B) The explanatory document laid under subsection (1A) must—

(a) introduce and give reasons for the order,

(b) explain why the Treasury considers that the order serves the purpose in section 9K, and

(c) be accompanied by a copy of any representations received from the FPC or the Governor.

(1C) The Treasury may not act under subsection (1A) before the end of the period of 12 weeks beginning with the day on which the consultation began, unless the order is made in accordance with section 9K(2)(b).

(1D) Subject as follows, if after the expiry of the 40-day period the draft order laid under subsection (1A) is approved by a resolution of each House of Parliament, the Minister may make an order in the terms of the draft order.

(1E) The procedure in subsection (1F) to (1J) shall apply to the draft order instead of the procedure in subsection (1D) if—

(a) either House of Parliament so resolves within the 30-day period, or

(b) a committee of either House charged with reporting on the draft order so recommends within the 30-day period and the House to which the recommendation is made does not by resolution reject the recommendation within the period.

(1F) The Minister must have regard to—

(a) any representations,

(b) any resolution of either House of Parliament, and

(c) any recommendation of a committee of either House of Parliament charged with reporting on the draft order, made during the 60-day period with regard to the draft order.

(1G) If after the expiry of the 60-day period the draft order is approved by a resolution of each House of Parliament, the Minister may make an order in the terms of the draft order.

(1H) If after the expiry of the 60-day period the Minister wishes to proceed with the draft order but with the material changes, the Minister may lay before Parliament—

(a) a revised draft order, and

(b) a statement giving a summary of the changes proposed.

(1J) If the revised draft order is approved by a resolution of each House of Parliament, the Minister may make an order in the terms of the revised draft order.

(1K) For the purposes of this section an order is made in the terms of a draft order or revised draft order if it contains no material changes to its provisions.

(1L) In this section, references to the “30-day”, “40-day” and “60-day” periods in relation to any draft order are to the periods of 30, 40 and 60 days beginning with the day on which the draft order was laid before Parliament.

(1M) For the purposes of subsection (1L) no account is to be taken of any time during which Parliament is dissolved or prorogued or during which either House is adjourned for more than four days.”

Page 12, line 31, after “a” insert “complete”

Page 12, leave out lines 34 and 35

Page 170, line 11, leave out “Bank” and insert “Oversight Committee”

Page 170, leave out lines 12 to 14

Page 170, line 32, leave out “Bank” and insert “Oversight Committee”

Page 170, line 35, at end insert “Financial Policy”

Page 170, line 42, leave out “Bank” and insert “Oversight Committee”

Page 171, leave out lines 3 to 5

Page 174, line 3, at end insert—

“(8A) After paragraph 12 insert—

12A (1) The Bank must publish a record of each meeting of the court—

(a) before the end of the period of 6 weeks beginning with the day of the meeting, or

(b) if no meeting of the court is subsequently held during that period, before the end of the period of 2 weeks beginning with the day of the next meeting.

(2) The record must specify any decisions taken at the meeting (including decisions to take no action) and must set out, in relation to each decision, a summary of the court’s deliberations.

(3) Sub-paragraphs (1) and (2) do not require the publication of information whose publication within the time required by sub-paragraph (1) would in the opinion of the court be against the public interest.

(4) Publication under this section is to be in such manner as the Bank thinks fit.””

Page 174, line 3, at end insert—

“(8B) In paragraph 14(1), for “it” substitute “the Oversight Committee”.”

Page 174, line 4, leave out “No provision of this paragraph” and insert “Nothing in sub-paragraphs (2) to (6)”

Page 174, leave out lines 34 to 38 and insert—

“(b) for sub-paragraph (2) substitute—

“(2) The terms and conditions on which a person holds office as a member of the Committee appointed under section 13(2)(c) are to be such as the Oversight Committee may determine.”

(c) omit sub-paragraph (3).”

Page 174, line 42, at end insert—

“(7A) In paragraph 9—

(a) in sub-paragraph (1)—

(i) for “Bank” substitute “Oversight Committee”, and

(ii) in paragraph (a), for “the Committee’s meetings” and “the Committee’s consent” substitute “meetings of the Monetary Policy Committee” and “that Committee’s consent”, and

(b) omit sub-paragraph (2).”

Page 37, line 16, leave out from “with” to “that” in line 18 and insert—

“(a) a local weights and measures authority in England, Wales or Scotland, or

(b) the Department of Enterprise, Trade and Investment in Northern Ireland,

for the provision by the authority or department to the FCA of services which relate to activities to which this subsection applies.

(5A) Subsection (5) applies to activities”

Page 178, line 9, at end insert—

9A (1) The FCA must publish a record of each meeting of its governing body—

(a) before the end of the period of 6 weeks beginning with the day of the meeting, or

(b) if no meeting of the governing body is subsequently held during that period, before the end of the period of 2 weeks beginning with the day of the next meeting.

(2) The record must specify any decision taken at the meeting (including decisions to take no action) and must set out, in relation to each decision, a summary of the deliberations of the governing body.

(3) Sub-paragraphs (1) and (2) do not require the publication of information whose publication within the time required by sub-paragraph (1) would in the opinion of the governing body be against the public interest.

(4) Publication under this section is to be in such manner as the FCA thinks fit.”

Page 185, line 43, after “by” insert “the Oversight Committee of”

Page 185, line 45, leave out “the Bank” and insert “that Committee”

Page 186, leave out lines 1 to 4

Page 58, line 40, at end insert—

55Z1 Notification of ESMA

A regulator must notify ESMA of—

(a) the giving by it of a Part 4A permission to an investment firm, where the regulated activities to which the permission relates are investment services and activities,

(b) the giving by it of a Part 4A permission to a management company (as defined in section 237(2)), where the regulated activities to which the permission relates fall within paragraph 8 of Schedule 2,

(c) the cancellation by it of a Part 4A permission of a description falling within paragraph (b), or

(d) the cancellation by it of a Part 4A permission under section 55J(6), in reliance on any one or more of the conditions in section 55K(1)(b) to (d).

55Z2 Notification of EBA

(1) A regulator must notify EBA of—

(a) the giving by it of a Part 4A permission to a credit institution, where the regulated activity to which the permission relates falls within paragraph 4 of Schedule 2,

(b) the cancellation by it of a Part 4A permission of a description falling within paragraph (a).

(2) “Credit institution” has the meaning given in section 1H(8).”

Page 198, line 39, leave out sub-paragraph (2) and insert—

“(2) For “the Authority” or “the Authority’s”, in each place, substitute “the appropriate regulator” or “the appropriate regulator’s”.”

Page 199, line 1, leave out “(7)” and insert “(8)”

Page 199, line 2, leave out “(8)” and insert “(9)”

Page 199, line 10, leave out “(9)” and insert “(10)”

Page 199, line 13, at end insert—

“( ) In the heading, for “Authority” substitute “appropriate regulator”.”

Page 199, line 32, leave out sub-paragraph (2) and insert—

“(2) For “the Authority” or “the Authority’s”, in each place, substitute “the appropriate regulator” or “the appropriate regulator’s”.”

Page 199, line 34, leave out “(11)” and insert “(11A)”

Page 199, line 35, leave out “(11A)” and insert “(11AB)”

Page 200, line 39, leave out sub-paragraph (4) and insert—

“(4) In subsections (3) to (11), for “the Authority” substitute “the regulator”.”

Page 201, line 1, leave out “(10)” and insert “(11)”

Page 201, line 2, leave out “(11)” and insert “(12)”

Page 64, line 25, leave out from “State)” to end of line 26 and insert—

“(a) in subsection (1), for “competent authority”, in the second and third places, substitute “FCA”, and

(b) in subsection (3A), for “competent authority” substitute “FCA”.”

Page 64, line 32, after ““other”” insert—

“( ) in subsection (1A), for “competent authority”, in the first place, substitute “FCA”.”

Page 223, line 25, leave out “subsection (5)” and “subsections (5) and (6)”

Page 225, line 12, leave out “and (12) (in both places)” and insert “(12) (in both places) and (13) (in the first place),”

Page 233, line 18, leave out “and”

Page 233, line 19, at end insert “, and

(c) for “a final notice” substitute “the notice required by subsection (2A)”.

( ) After that subsection insert—

“(2A) The notice required by this subsection is—

(a) in a case where the regulator is acting in accordance with a direction given by the Tribunal under section 133(6)(b), or by the court on an appeal from a decision by the Tribunal under section 133(6), a further decision notice, and

(b) in any other case, a final notice.”.”

Page 234, line 30, at end insert—

“( ) In subsection (7A), for “the Authority” substitute “a regulator”.”

Page 124, line 20, at end insert—

“( ) In section 340 of FSMA 2000 (appointment of auditors and actuaries)—

(a) After subsection (2) insert—

“(2A) Rules must require auditors of deposit taking institutions to provide a narrative report on the institution’s risk management policies and its exposure to risk as part of the audited accounts of the institution.””

Page 272, line 4, at end insert—

“Omit paragraph 5.”

Page 162, line 20, at end insert—

“(ga) enable the Department of Enterprise, Trade and Investment in Northern Ireland to institute proceedings in Northern Ireland for a relevant offence;”

Page 162, line 24, after “(2)(g)” insert “and (ga)”

Page 162, line 30, at end insert—

“(3A) The Treasury may make provision by virtue of subsection (2)(ga) only with the consent of the Department of Enterprise, Trade and Investment in Northern Ireland.”

Page 289, line 13, at end insert—

“In paragraph 8 of Schedule 6 (additional threshold conditions), in sub-paragraph (2)(b), for “the Authority” substitute “such of the FCA or the PRA as may be specified,”.”

Page 302, line 5, at end insert—

(1) Section 29 of the Trustee Act 2000 (remuneration of certain trustees) is amended as follows.

(2) In subsection (3)—

(a) for “an authorised institution under the Banking Act 1987” substitute “a deposit taker”, and

(b) for “institution’s” substitute “deposit taker’s”.

(3) After that subsection insert—

“(3A) In subsection (3), “deposit taker” means—

(a) a person who has permission under Part 4A of the Financial Services and Markets Act 2000 to accept deposits, or

(b) an EEA firm of the kind mentioned in paragraph 5(b) of Schedule 3 to that Act which has permission under paragraph 15 of that Schedule (as a result of qualifying for authorisation under paragraph 12(1) of that Schedule) to accept deposits.

(3B) A reference in subsection (3A) to a person or firm with permission to accept deposits does not include a person or firm with permission to do so only for the purposes of, or in the course of, carrying on another regulated activity in accordance with that permission.

(3C) Subsections (3A) and (3B) must be read with—

(a) section 22 of the Financial Services and Markets Act 2000,

(b) any relevant order under that section, and

(c) Schedule 2 to that Act.”.”

Page 310, line 32, at end insert—

(1) Part 4 of Schedule 19 to the Finance Act 2011 (the bank levy) is amended as follows.

(2) In paragraph 37(2), in both places, for “section 213(2)(b)” substitute “section 213(3)(b)”.

(3) In paragraph 38(3)(a), for “section 139(1)” substitute “section 137B(1)”.

In Part 1 of Schedule 1 to the Terrorism Prevention and Investigation Measures Act 2011 (measures), in paragraph 5(4), for “Part 4” substitute “Part 4A”.”