Financial Services Bill

SECOND
MARSHALLED
LIST OF AMENDMENTS
TO BE MOVED
IN COMMITTEE
OF THE WHOLE HOUSE

The amendments have been marshalled in accordance with the Instruction of 20th June 2012, as follows—

Clause 3
Schedule 1
Clause 4
Schedule 2
Clause 5
Schedule 3
Clauses 6 to 10
Schedule 4
Clauses 11 to 13
Schedule 5
Clauses 14 to 20
Schedule 6
Clauses 21 to 27
Schedule 7
Clauses 28 to 32
Schedule 8
Clauses 33 and 34
Schedule 9
Clause 35
Schedule 10
Clause 36
Schedule 11
Clauses 37 and 38
Schedule 12
Clause 39
Schedule 13
Clauses 40 and 41
Schedule 14
Clause 42
Schedule 15
Clause 43
Schedule 16
Clauses 44 to 90
Schedule 17
Clauses 91 to 95
Schedules 18 and 19
Clauses 96 to 100
Schedules 20 and 21
Clauses 101 to 104

[Amendments marked * are new or have been altered]

Clause 3

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

32

Page 3, line 31, at end insert—

“( ) The Supervisory Board will ensure that all members of the Financial Policy Committee are provided with adequate economic, legal and monetary advice and research support.”

LORD SASSOON

33

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

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

34

Page 3, line 34, after “functions” insert “having regard to the Government’s growth, employment and other economic objectives”

BARONESS KRAMER

LORD SHARKEY

THE LORD BISHOP OF DURHAM

35

Page 3, line 34, leave out from “functions“ to end of line 36 and insert “in relation to financial policy in a manner designed to contribute to the achievement by the Bank of the Financial Stability Objective; and this shall include promoting—

(a) a stable and sustainable supply of finance to the economy, and

(b) subject to that, the economic policy of Her Majesty’s Government, including its objectives for economic growth and employment.

9CA Specification of matters relevant to objectives

(1) The Treasury may by notice in writing to the Bank specify for the purposes of section 9C—

(a) what a stable and sustainable supply of finance is to be taken to consist of,

(b) the objectives of Her Majesty’s Government in achieving a stable and sustainable supply of finance, and

(c) what the economic policy of Her Majesty’s Government is to be taken to be including its objectives for economic growth and employment.

(2) The Treasury shall specify under subsection (1) both of the matters mentioned there—

(a) before the end of the period of 7 days beginning with the day on which this Act comes into force, and

(b) at least once in every period of 12 months beginning on the anniversary of the day on which this Act comes into force.

(3) Where the Treasury give notice under this section they shall—

(a) publish the notice in such manner as they think fit, and

(b) lay a copy of it before Parliament.

9CB Matters to be considered in achieving the Financial Stability Objective”

LORD SASSOON

35A

Page 3, line 35, leave out from first “to” to end of line 36 and insert—

“(a) contributing to the achievement by the Bank of the Financial Stability Objective, and

(b) subject to that, supporting the economic policy of Her Majesty’s Government, including its objectives for growth and employment.”

35B

Page 3, line 37, leave out “of that objective” and insert “by the Bank of the Financial Stability Objective”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

36

Page 4, line 3, at end insert—

“( ) factors likely to lead to a loss of confidence in the financial system as a whole”

LORD SASSOON

36A

Page 4, line 4, leave out “(1)” and insert “(1)(a)”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

37

Page 4, line 5, leave out “in its opinion”

LORD BARNETT

LORD PESTON

38

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

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

39

Page 4, leave out lines 13 to 21

LORD MCFALL OF ALCLUITH

BARONESS NOAKES

40

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.”

LORD SASSOON

40A

Page 4, line 21, at end insert—

“9CA Specification of matters relevant to economic policy

(1) The Treasury may by notice in writing to the Financial Policy Committee specify for the purposes of section 9C(1)(b) what the economic policy of Her Majesty’s Government is to be taken to be.

(2) The Treasury must specify under subsection (1) the matter mentioned there—

(a) before the end of the period of 30 days beginning with the day on which section 9C comes into force, and

(b) at least once in every calendar year following that in which the first notice under that subsection is given.

(3) Where the Treasury give notice under this section they must—

(a) publish the notice in such manner as they think fit, and

(b) lay a copy of it before Parliament.”

LORD BARNETT

LORD PESTON

41

Page 4, leave out lines 22 to 31

LORD SASSOON

41A

Page 4, line 29, at end insert—

“( ) the responsibility of the Committee in relation to support for the economic policy of Her Majesty’s Government, including its objectives for growth and employment;”

41B

Page 5, line 13, leave out from “while” to “seek” in line 14 and insert “complying with section 9C(1),”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

42

Page 5, line 16, after first “of” insert “its strategic objective and”

BARONESS NOAKES

42A

Page 5, leave out line 38

LORD MCFALL OF ALCLUITH

43

Page 5, line 39, at end insert—

“(e) preparing and publishing clear regulatory statements for the FCA and the PRA”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

44

Page 5, line 39, at end insert—

“( ) assessing its functions in the light of the policies of the European Financial Stability Board”

LORD BARNETT

LORD PESTON

45

Page 6, leave out lines 3 to 7

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

46

Page 6, line 7, at end insert “provided that such a direction does not conflict with the FCA’s consumer protection objective”

47

Page 6, line 7, at end insert—

“(1A) The Financial Policy Committee may give a direction to the FCA or the PRA requiring the regulator to exercise its functions so as to ensure the implementation, by or in relation to a specified class of regulated persons, of a disclosure of their leverage ratio, as defined in the Basel III agreement, as part of their regular reporting not later than the beginning of 2013.”

LORD FLIGHT

47A

Page 6, line 16, at end insert—

“( ) An order under subsection (2) may only exclude or modify procedural requirements under FSMA 2000 where the Committee believe that this is necessary due to the urgency of the situation, and where this occurs the order must include an explanation of the reasons for excluding or modifying the procedural requirements of FSMA 2000.”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

48

Page 6, line 20, leave out from “description” to end of line 21

BARONESS HAYTER OF KENTISH TOWN

LORD EATWELL

49

Page 6, line 26, at end insert—

“( ) in the case of the FCA, must take account of any representations from the Financial Services Consumer Panel”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

50

Page 6, line 28, leave out “or within a specified period”

51

Page 6, leave out lines 40 to 42

52

Page 7, line 8, at end insert “and in the case of the FCA, must be reported to the Financial Services Consumer Panel”

53

Page 7, line 30, at end insert—

“( ) If a copy is not laid before Parliament, a copy should be sent to the Chair of the Treasury Committee, together with reasons why distribution is restricted.”

54

Page 7, line 40, after “Committee” insert “and the public”

55

Page 7, line 42, after “Committee” insert “and the public”

56

Page 7, line 43, at end insert “and the Deputy Governor for Financial Stability”

57

Page 7, line 43, at end insert—

“( ) Where an order is made under subsection (2)(b), the reasons for not consulting the Committee or the public (or both) shall be subject to scrutiny by the Treasury Select Committee of the House of Commons.”

58

Page 8, line 5, leave out “, the FCA or the PRA”

59

Page 8, line 23, after “be” insert “on the Bank’s website and”

60

Page 8, line 23, after “such” insert “other”

61

Page 8, line 28, at end insert—

“( ) Where a direction in relation to a macro-prudential measure is exercised as a matter of urgency, a statement must be published within 10 days.”

LORD MCFALL OF ALCLUITH

BARONESS NOAKES

LORD EATWELL

62

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 subsections (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.”

BARONESS NOAKES

62A

Page 9, line 5, leave out from beginning to end of line 18 on page 10

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

63

Page 9, leave out lines 13 to 17

64

Page 9, line 31, at end insert—

“(2A) The FPC must carry out and complete a review of the definition of regulated persons and the scope of exemptions permitted under FSMA 2000 to consider whether the scope of exemptions is appropriate.

(2B) The FPC must make recommendations under subsection (2A)—

(a) before the end of the period of 30 days beginning with the day on which this section comes into force, and

(b) at least once in every calendar year following that in which the first recommendations are made.”

65

Page 9, line 34, leave out “it considers that”

66

Page 10, line 2, leave out from “description” to end of line 4

BARONESS HAYTER OF KENTISH TOWN

LORD EATWELL

67

Page 10, line 13, at end insert “and in the case of the FCA, must be reported to the Financial Services Consumer Panel”

68

[Withdrawn]

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

69

Page 10, leave out lines 15 to 18

LORD SASSOON

69A

Page 10, line 18, at end insert—

“Explanation

9QA Duty to prepare explanation

(1) In connection with the exercise of any of the specified powers, the Financial Policy Committee must prepare an explanation of—

(a) the reasons for the Committee’s decision to exercise the power, in the way in which it is being exercised, and

(b) the Committee’s reasons for believing that the exercise of the power, in the way in which it is being exercised, is compatible with the duties of the Committee under the following provisions—

(i) section 9C(1) (as read with section 9C(4)), and

(ii) section 9E.

(2) The specified powers are—

(a) the power to give a direction under section 9G;

(b) the power to make recommendations under section 9N, so far as relating to the exercise of the Bank’s functions in relation to payment systems, settlement systems and clearing houses;

(c) the power to make recommendations under section 9O, so far as relating to the exercise by the Treasury of their power to make orders under any of the provisions mentioned in subsection (2) of that section;

(d) the power to make recommendations under section 9P.

(3) The explanation required by subsection (1) in relation to the duty in section 9E(3)(a) must include an estimate of the costs and an estimate of the benefits that would arise from compliance with the direction or recommendation in question, unless in the opinion of the Committee it is not reasonably practicable to include such an estimate.”

69B

Page 10, line 18, at end insert—

“Review

9QB Duty to review directions and recommendations

(1) The Financial Policy Committee must—

(a) before the end of each review period, review each direction given by it under section 9G, other than a direction revoked before the end of the review period, and

(b) prepare a summary of its conclusions.

(2) A review period is—

(a) in relation to the first review, the period of 12 months beginning with the day on which the direction was given, and

(b) in relation to subsequent reviews, the period of 12 months beginning with the day on which the previous review was completed.

(3) The Financial Policy Committee must maintain arrangements for the review at regular intervals of any recommendations that it has made under any of sections 9N to 9Q and are of continuing relevance.”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

70

Page 10, line 21, after “record” insert “with minutes”

71

Page 11, line 12, at end insert “but always on the Bank of England website”

72

Page 11, line 21, at end insert—

“( ) it must inform the Chair of the Treasury Committee of the House of Commons”

73

Page 11, line 37, at end insert “including both the most likely outcome and a range of reasonably possible scenarios”

74

Page 12, line 2, at end insert—

“( ) an assessment of the impact of each macro-prudential measure on employment and economic growth”

LORD SASSOON

74A

Page 12, line 9, leave out “Committee’s objectives” and insert “objectives set out in section 9C(1)(a) and (b)”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

75

Page 12, line 9, at end insert—

“( ) an assessment of the state of financial stability against early warning indicators and must report against the effectiveness of the macro-prudential measures deployed”

76

Page 12, line 9, at end insert—

“( ) an assessment of the impact of the Committee’s measures on the functioning of financial markets and the wider economy”

LORD SASSOON

76A

Page 12, line 9, at end insert—

“(4A) If during the reporting period the Committee has made any decision in relation to which section 9QA requires the preparation of an explanation, the financial stability report must include the required explanation.”

76B

Page 12, line 9, at end insert—

“(4B) If during the reporting period the Committee has completed the review of a direction or recommendation, the financial stability report must include a summary of the review.”

76C

Page 12, line 14, leave out “subsection (3) or (4)” and insert “subsections (3) to (4B)”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

77

Page 12, line 22, after “be” insert “on the website of the Bank”

78

Page 12, line 22, after “such” insert “other”

79

Page 12, line 28, after “Bank” insert “, the Deputy Governor for Financial Stability”

80

Page 12, line 31, leave out “a record” and insert “minutes”

LORD BARNETT

LORD PESTON

81

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

82

Page 12, leave out lines 34 and 35

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

83

Page 12, line 34, after “be” insert “on the website of the Treasury”

84

Page 12, line 34, after “such” insert “other”

85

Page 12, line 38, after first “the” insert “Bank or”

86

Page 12, line 41, at end insert—

“( ) If the decision is taken not to publish information in the minutes, the Chair of the Treasury Committee of the House of Commons will be informed, and provided with minutes of the information withheld.”

LORD MCFALL OF ALCLUITH

87

Page 13, line 43, leave out “may” and insert “must”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

88

Page 14, line 7, at end insert—

“( ) Where publication of information is deemed to be against the public interest, the Chair of the Treasury Committee of the House of Commons will be informed of the information withheld, and given reasons.”

89

Page 14, line 12, at end insert—

“9WA Financial Stability Advisory Panel

(1) There will be a Financial Stability Advisory Panel.

(2) The membership of the Panel will be—

(a) the Deputy Governor for Financial Stability;

(b) 6 members appointed by the Treasury, subject to approval by the Treasury Committee of the House of Commons;

and the members appointed under paragraph (b) will be academics, members of staff of international organisations, practitioners, or others with particular skills in the analysis of systemic risk.

(3) The Financial Stability Advisory Panel will—

(a) provide written advice to the Financial Policy Committee concerning the analysis of systemic risk;

(b) once a year prepare a report assessing the analysis of systemic risk by the Financial Policy Committee over the preceding 12 months (the first report to be twelve months after this section comes into force);

(c) assess the effectiveness of measures prescribed under section 9K in the attainment of the financial stability objective of the Bank;

(d) assess the effectiveness of directions and recommendations of the Financial Policy Committee under sections 9G and 9N in the attainment of the financial stability objective of the Bank;

(e) prepare an annual report on matters referred to in section 9WA(3) to be presented by the Supervisory Board of the Bank, and subsequently published on the Bank website.”

After Clause 3

LORD BARNETT

LORD PESTON

90

Insert the following new Clause—

“Monetary policy objective

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

Schedule 1

LORD SASSOON

91

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

92

Page 170, leave out lines 12 to 14

93

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

94

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

95

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

96

Page 171, leave out lines 3 to 5

Clause 4

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

96A*

Page 14, line 35, at end insert—

“( ) Within a year of commencement of this Act the Bank of England shall publish a review of the effectiveness of coordination by the regulators of the exercise of their functions relating to membership of, and their relations with, the European Supervisory Authorities (namely, the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority), and their relations with other regulatory bodies outside the United Kingdom.”

Schedule 2

LORD SASSOON

97

Page 174, line 3, at end insert—

“(8A) After paragraph 12 insert—

“Publication of record of meetings

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.””

98

Page 174, line 3, at end insert—

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

BARONESS KRAMER

98A

Page 174, line 3, at end insert—

“( ) In paragraph 13, for sub-paragraph (3)(a) substitute—

“(a) a director of the Bank to chair its meetings (“the chair of the Court”), and”.”

LORD SASSOON

99

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

100

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.”, and

(c) omit sub-paragraph (3).”

101

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).”

101ZA

Page 175, line 13, after “Bank’s” insert “functions under the Financial Services and Markets Act 2000, of its other”

Clause 5

LORD SASSOON

101ZB

Page 15, line 25, leave out “or”

101ZC

Page 15, line 26, at end insert “or

(d) a qualifying EU provision that is specified, or of a description specified, for the purposes of this subsection by the Treasury by order.”

LORD MCFALL OF ALCLUITH

BARONESS NOAKES

101ZD

Page 15, leave out line 31

LORD FLIGHT

101A

Page 15, line 32, at end insert—

“(c) does not harm the competitive position of the United Kingdom in the markets for the provision of domestic and international financial services.”

LORD MCFALL OF ALCLUITH

BARONESS NOAKES

101B

Page 15, leave out lines 33 and 34

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

101C*

Page 15, line 34, at end insert “, fairly, efficiently and transparently.”

101D*

Page 15, line 34, at end insert “in the best interests of society as a whole.”

LORD SHARKEY

BARONESS ANDREWS

THE LORD BISHOP OF DURHAM

BARONESS KRAMER

102

Page 16, line 3, at end insert—

“(d) the deprived communities objective (see section 1F).”

LORD PHILLIPS OF SUDBURY

BARONESS KRAMER

THE LORD BISHOP OF DURHAM

BARONESS MEACHER

103

Page 16, line 7, at end insert “and society”

LORD PHILLIPS OF SUDBURY

BARONESS KRAMER

LORD HODGSON OF ASTLEY ABBOTTS

BARONESS MEACHER

104

Page 16, line 7, at end insert—

“(4A) The FCA must, so far as is compatible with acting in a way which advances its operational objectives, carry out its general functions and other activities in a way which—

(a) takes account of the distinctive features of social investment; and

(b) does not inhibit the development of social investment.”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

104ZA*

Page 16, line 7, at end insert—

“( ) The FCA must, so far as is compatible with acting in a way which advances its operational objectives, discharge its general functions in a way which promotes the growth and development of social finance and social investment.”

BARONESS HAYTER OF KENTISH TOWN

LORD EATWELL

104ZB*

Page 16, line 7, at end insert—

“( ) As part of the FCA’s consumer protection and integrity objectives, the FCA will raise standards of professionalism in financial services by mandating a training and competence regime which must—

(a) apply to all approved persons exercising controlled functions, regardless of financial sector,

(b) specify minimum thresholds of competence including integrity, and professional qualifications, continuous professional development and adherence to a recognised code of conduct,

(c) be evidence by individuals holding an annual validation of competence.”

BARONESS NOAKES

104A

Page 16, line 15, at end insert—

“( ) the international character of financial services and markets and the desirability of maintaining the competitive position of the United Kingdom.”

BARONESS HAYTER OF KENTISH TOWN

LORD EATWELL

104AA*

Page 16, line 15, at end insert—

“(c) the ease with which consumers can have access to financial services and products which are affordable and appropriate to their needs.”

LORD FLIGHT

104B

Page 16, line 30, at end insert—

“(9) The FCA shall work with the Department of Education to secure the provision of teaching on financial literacy at both primary and secondary level.”

BARONESS HAYTER OF KENTISH TOWN

LORD EATWELL

104BA*

Page 16, line 30, at end insert—

“1BA Memorandum of understanding between FCA and Office of Fair Trading

(1) The FCA must co-ordinate with the Office of Fair Trading (OFT).

(2) In particular, the FCA and the OFT must prepare and maintain a memorandum of understanding which sets out their respective roles and responsibilities and how they will work together.

(3) The FCA must—

(a) lay before Parliament a copy of the memorandum and any revised memorandum, and

(b) publish the memorandum as currently in force in such manner as it thinks fit.”

LORD PESTON

LORD BARNETT

104C

Page 16, line 35, at end insert—

“( ) the need to inform and educate consumers with special emphasis on the unavoidability of some risk;”

LORD MCFALL OF ALCLUITH

105

Page 16, line 38, after “of” insert “ability, disability and vulnerability generally”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

105A*

Page 16, line 41, after “is” insert “intelligible to them, appropriately presented”

LORD BORRIE

BARONESS OPPENHEIM-BARNES

106

Page 16, line 41, leave out “fit for purpose” and insert “intelligible”

LORD SHARKEY

BARONESS HAYTER OF KENTISH TOWN

LORD EATWELL

106A*

Page 17, line 2, at end insert “and having regard to the general duty to provide those services honestly, fairly and professionally in accordance with the best interests of the consumers in question”

BARONESS HAYTER OF KENTISH TOWN

LORD EATWELL

106B*

Page 17, line 2, at end insert “and the requirement that all asset managers shall disclose the nature of their commitment to the stewardship code or explain their alternative investment strategy”

BARONESS DRAKE

LORD STONEHAM OF DROXFORD

107

Page 17, line 2, at end insert—

“(ea) the general principle that, where consumers properly repose trust in a firm’s discretion and are vulnerable to the exercise of that discretion, the firm has a duty to act in the consumer’s best interests”

LORD BORRIE

BARONESS OPPENHEIM-BARNES

108

Page 17, line 7, at end insert—

“(h) where credit is granted to a consumer, a clear statement, in cash terms, of the total cost of such credit”

LORD FLIGHT

108A

Page 17, line 7, at end insert—

“(h) the ease with which consumers can access regulated financial services that meet their needs”

BARONESS HAYTER OF KENTISH TOWN

LORD EATWELL

108B*

Page 17, line 7, at end insert—

“( ) the ease with which consumers can access regulated financial services that meet their needs.”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

108C*

Page 17, line 7, at end insert—

“( ) the general principle that firms or advisers must act honestly, fairly and professionally in the best interests of their customers.”

108D*

Page 17, line 7, at end insert—

“( ) the general principle that regulated entities engaging in discretionary asset management will ordinarily owe fiduciary duty to their clients.”

108E*

Page 17, line 12, after “stability” insert “growth”

LORD PHILLIPS OF SUDBURY

BARONESS KRAMER

BARONESS MEACHER

109

Page 17, line 12, at end insert “and social responsibility”

LORD MCFALL OF ALCLUITH

110

Page 17, line 15, at end insert—

“( ) the confidence which the UK financial system generates within the UK and in the financial markets of other countries,”

LORD FRASER OF CARMYLLIE

110A*

Page 17, line 20, leave out “in the interests of consumers”

LORD PHILLIPS OF SUDBURY

BARONESS KRAMER

BARONESS MEACHER

111

Page 17, line 21, after “consumers” insert “and society”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

111A*

Page 17, line 23, after “exchange” insert “or market maker”

LORD MCFALL OF ALCLUITH

LORD SHARKEY

112

Page 17, line 26, leave out “may” and insert “must”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

112A*

Page 17, line 27, after “services” insert “and products”

LORD MCFALL OF ALCLUITH

113

Page 17, line 31, at end insert “and their ability to easily access financial advice”

LORD SHARKEY

BARONESS KRAMER

LORD LUCAS

THE LORD BISHOP OF DURHAM

114

Page 17, line 34, after “market,” insert—

“( ) developments in the markets for unregulated financial services that are in the interests of consumers and businesses,

( ) the desirability of establishing a new authorisation regime for direct financial platform providers to protect consumers and providers,”

LORD MCFALL OF ALCLUITH

115

Page 17, line 34, leave out “and”

116

Page 17, line 35, at end insert “, and

(e) how proper regulation of regulated financial services impacts on competition in the provision of those services”

BARONESS DRAKE

BARONESS HAYTER OF KENTISH TOWN

LORD EATWELL

117

Page 17, line 35, at end insert “, and

(e) the ease with which consumers can identify and obtain services which are appropriate to their needs and represent good value for money”

LORD FLIGHT

117A

Page 17, line 35, at end insert “, and

(e) the ease with which consumers can access regulated financial services that meet their needs”

LORD SHARKEY

BARONESS ANDREWS

THE LORD BISHOP OF DURHAM

BARONESS KRAMER

118

Page 17, line 35, at end insert—

“1F The deprived communities objective

(1) The deprived communities objective is to promote an appropriate level of financial services provision in deprived communities.

(2) In order to facilitate this objective, the FCA must require each PRA-authorised person to publish relevant data on a quarterly basis by postcode, including the total amount of lending to small enterprises and medium enterprises.

(3) In considering what level of provision is appropriate, the FCA must have regard to the needs of small enterprises, third sector organisations and consumers in deprived communities for affordable loans, savings and insurance products.”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

118A*

Page 17, line 35, at end insert—

“(3) In furtherance of the competition objective, the FCA shall publish, maintain and review a code (The access and choice code) setting out (amongst other things)—

(a) the approach that the FCA will take to ensure that the market provides different consumers with access to and choice about products and services that are suitable for their needs;

(b) the approach that the FCA will take to ensure that the business conduct of those providing regulated financial services continues to promote competition in the interests of different consumers over the life of any agreement;

(c) the additional steps that the FCA may take where competition does not deliver access and choice to suitable products and services for different consumers.

(4) The Treasury may by order specify—

(a) financial needs of different consumers that are to be considered essential;

(b) the outcomes that are necessary to demonstrate that essential financial needs of different consumers are met.

(5) Section 138L (1)(b) and (2) to (5) and 138K do not apply in relation to rules made by the FCA if it considers that it is necessary or expedient not to comply with them for the purpose of achieving an outcome specified in an order under subsection (4) of this section.

(6) Where the FCA considers that it is unable to achieve an outcome specified in an order made under subsection (4), the Treasury may by order confer additional powers on the FCA or direct obligations on those providing regulated financial services to ensure that the essential needs of different consumers are met.”

LORD MCFALL OF ALCLUITH

BARONESS NOAKES

118B

Page 17, leave out lines 37 to 44

LORD FRASER OF CARMYLLIE

118C*

Page 18, line 1, leave out lines 1 to 32

LORD FLIGHT

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

118D

Page 19, line 3, at end insert—

“(j) by claims management companies who provide services to persons covering litigation, or claims under regulation schemes or voluntary arrangements”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

118E*

Page 19, line 3, at end insert—

“( ) by debt management companies or debt adjustment services companies.”

118F*

Page 19, line 8, at end insert—

“( ) money laundering and the financing of terrorism”

LORD SHARKEY

BARONESS KRAMER

LORD LUCAS

THE LORD BISHOP OF DURHAM

119

Page 19, line 14, at end insert—

“( ) “Direct finance platform” means an electronic system, operated by a direct finance platform operator, which brings together multiple participants, the majority of whom are consumers or micro-enterprises (or both), in the system and in accordance with non-discretionary rules that are binding on the direct finance platform operator and the participants.”

LORD PHILLIPS OF SUDBURY

BARONESS KRAMER

LORD HODGSON OF ASTLEY ABBOTTS

BARONESS MEACHER

120

Page 19, line 47, at end insert—

““social investment” means investment into or by organisations which exist wholly or mainly to provide benefits for society or the environment;”

LORD SHARKEY

BARONESS ANDREWS

THE LORD BISHOP OF DURHAM

121

Page 19, line 47, at end insert—

““deprived communities” means those local areas identified by the Indices of Multiple Deprivation of England, Scotland and Wales, as being within the most deprived 10 per cent of all communities in the United Kingdom;

“third sector organisation” has the meaning given under section 18(2) of the Dormant Bank and Building Society Accounts Act 2008;

“small enterprises” has the meaning given under section 382 of the Companies Act 2006.”

LORD HODGSON OF ASTLEY ABBOTTS

BARONESS KRAMER

121A

Page 20, line 13, at end insert—

“Consumer protection: further objectives

1JA Consumer protection: further objectives

The Treasury may by order—

(a) amend or supplement the factors set out in section 1C(2) to which the FCA must have regard when considering what degree of protection may be appropriate for consumers, where one of the principal aims of consumers engaging in investment activity is to benefit society or the environment; and

(b) specify circumstances in which the FCA may regard consumers to be engaging in investment activity with the aims set out in paragraph (a).”

BARONESS HAYTER OF KENTISH TOWN

LORD EATWELL

121B*

Page 20, line 21, at end insert—

“1KA Coordination between the FCA and Financial Reporting Council

The FCA must coordinate with the Financial Reporting Council (FRC) with a view to promoting—

(a) understanding application of the principles of the UK Stewardship Code by relevant authorised persons,

(b) transparency regarding the approach to the Stewardship Code taken by relevant authorised persons, and

(c) high standards of responsible ownership, including in relation to the management of environmental, social and governance risks and opportunities.”

BARONESS HAYTER OF KENTISH TOWN

LORD EATWELL

[In substitution for Amendment 68]

121C*

Page 20, line 21, at end insert—

“1KB Memorandum of understanding between FCA and Financial Reporting Council

(1) The FCA must prepare and maintain a memorandum of understanding with the Financial Reporting Council (FRC) describing in general terms how they intend to coordinate their activities.

(2) The FCA must—

(a) lay before Parliament a copy of the memorandum and any revised memorandum, and

(b) publish the memorandum as currently in force in such manner as it thinks fit.”

LORD MCFALL OF ALCLUITH

122

Page 21, line 16, leave out “and”

123

Page 21, line 17, at end insert “, and

(c) persons representing the constituent parts of the United Kingdom”

124

Page 21, line 34, leave out “and”

125

Page 21, line 35, at end insert “and

(c) persons representing the constituent parts of the United Kingdom”

126

Page 22, line 23, leave out “and”

127

Page 22, line 24, at end insert “, and

(f) persons representing the constituent parts of the United Kingdom.”

LORD PESTON

LORD BARNETT

127A

Page 22, line 35, leave out “may” and insert “must”

LORD MCFALL OF ALCLUITH

128

Page 22, line 37, at end insert “taking into account the need to represent the constituent parts of the United Kingdom”

LORD PESTON

LORD BARNETT

128A

Page 22, line 37, at end insert “, and this representation must include households who use such financial services as the banks and simple savings methods”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

128AA*

Page 22, line 44, at end insert—

“1QA The Social Investment Panel

(1) Arrangements under section 1M must include the establishment and maintenance of a panel of persons (to be known as “the Social Investment Panel”) to represent the interests of organisations which specialise wholly or mainly in social finance or social investment.

(2) The FCA must appoint one of the members of the Social Investment Panel to be its chair.

(3) The Treasury’s approval is required for the appointment or dismissal of the chair.

(4) The FCA must appoint to the Social Investment Panel such individuals who represent—

(a) organisations carrying out social finance activity, and

(b) social sector organisations receiving social investment,

as it considers appropriate.

(5) The FCA may appoint to the Social Investment Panel such other persons as it considers appropriate.

(6) In making the appointments, the FCA must have regard to the desirability of ensuring the representation of a range of different forms of social sector organisations.”

128AB*

Page 23, line 5, at end insert—

“( ) If the FCA disagrees with any representations made by the Panels it must give the Panel(s) a statement in writing of its reasons for disagreeing.”

BARONESS NOAKES

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

128B

Page 23, line 8, leave out “may” and insert “must”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

128BA*

Page 23, line 10, at end insert—

“( ) A review must be conducted every 12 months.”

128BB*

Page 23, line 28, at end insert “and the Bank of England.”

LORD MCFALL OF ALCLUITH

BARONESS NOAKES

128BC

Page 23, line 28, at end insert—

“1SA Report to Treasury Select Committee

(1) The FCA must conduct reviews of its own policy and performance if requested by the Treasury Committee of the House of Commons.

(2) On completion of a review, the FCA must make a written report to the Treasury Select Committee setting out the result of the review.”

LORD SASSOON

128BD

Page 24, line 20, leave out “or”

128BE

Page 24, line 21, at end insert “or

(d) a qualifying EU provision that is specified, or of a description specified, for the purposes of this subsection by the Treasury by order.”

LORD MCFALL OF ALCLUITH

BARONESS NOAKES

128BF

Page 24, line 26, after “promoting” insert “competition among and”

BARONESS KRAMER

LORD SHARKEY

128BG*

Page 24, line 34, at end insert—

“(4) The PRA must, so far as is compatible with its general and insurance objectives, discharge its general functions in a way that promotes effective competition in the interests of consumers.”

LORD FLIGHT

128BH

Page 25, line 14, leave out “those who are or may become”

LORD SASSOON

128BJ

Page 25, line 35, at end insert—

“2DA Strategy

(1) The PRA must—

(a) determine its strategy in relation to its objectives, and

(b) from time to time review, and if necessary revise, the strategy.

(2) Before determining or revising its strategy, the PRA must consult the Bank of England about a draft of the strategy or of the revisions.

(3) The PRA must determine its strategy within 12 months of the coming into force of this section.

(4) The PRA must carry out and complete a review of its strategy before the end of each relevant period.

(5) The relevant period is 12 months beginning with the date on which the previous review was completed, except that in the case of the first review the relevant period is the period of 12 months beginning with the date on which the strategy was determined under subsection (3).

(6) The PRA must publish its strategy.

(7) If the strategy is revised the PRA must publish the revised strategy.

(8) Publication under subsection (6) or (7) is to be in such manner as the PRA thinks fit.”

LORD FLIGHT

129

Page 26, line 8, at end insert—

“2GA Duty to have regard to the competitive consequences of its actions

In discharging its general functions, the PRA shall have regard to—

(a) the desirability of promoting the competitive position of the United Kingdom financial services industry; and

(b) the potential effects on that competitive position of its taking, or failing to take, action.”

LORD HODGSON OF ASTLEY ABBOTTS

129ZA*

Page 26, line 8, at end insert—

“2GA Duty to have regard to competition

In discharging its functions, the PRA shall at all times have regard to the need to—

(a) minimise the adverse effects on competition which may arise from its activities;

(b) avoid unnecessary regulatory barriers to entry or to business expansion;

(c) avoid restriction to consumer choice;

(d) ensure that UK institutions and companies are not placed at a competitive disadvantage.”

LORD SHARKEY

129ZB*

Page 27, line 6, at end insert “and consumers”

129ZC*

Page 27, line 9, after “consulting” add “consumers and”

BARONESS NOAKES

129A

Page 27, leave out lines 13 and 14 and insert—

“(2) Those arrangements must include the establishment and maintenance of one or more panels of persons representing the interests of practitioners.”

LORD FLIGHT

129B

Page 27, leave out lines 13 and 14 and insert—

“(2) At a minimum such arrangements should include the establishment of such panels as the PRA thinks representative of PRA authorised persons, and where appropriate consumers falling within the scope of the insurance objective.”

LORD MCFALL OF ALCLUITH

130

Page 27, line 13, leave out “may” and insert “must”

LORD SHARKEY

130ZA*

Page 27, line 19, at end insert “and by the Consumer Panel”

LORD FLIGHT

130ZB

Page 27, line 19, at end insert—

“( ) If the PRA disagrees with a view expressed, or proposal made, in the representation, it must give a statement in writing of its reasons for disagreeing.”

BARONESS NOAKES

130A

Page 27, line 24, leave out “may” and insert “must”

LORD FLIGHT

130B

Page 28, line 38, at end insert “, and so as to minimise the burden and cost of compliance borne by persons subject to their principles and rules”

LORD HODGSON OF ASTLEY ABBOTTS

131

Page 28, line 39, after “restriction” insert “or operational rules”

132

Page 28, line 39, leave out “is” and insert “are”

133

Page 28, line 40, after “person” insert “or firm”

134

Page 28, line 41, after “proportionate” insert “, reasonable and fair”

135

Page 29, line 1, at end insert “, operational requirement”

LORD MCFALL OF ALCLUITH

136

Page 29, line 4, at end insert “subject to taking into account the vulnerability of the consumer by virtue of disability, age or incapacity”

LORD PHILLIPS OF SUDBURY

BARONESS KRAMER

LORD HODGSON OF ASTLEY ABBOTTS

BARONESS MEACHER

137

Page 29, line 15, at end insert—

“(g) the desirability generally of having due regard to the particular requirements of social investment so far as is compatible with the advancement by each regulator of its objectives”

LORD PHILLIPS OF SUDBURY

BARONESS KRAMER

BARONESS MEACHER

138

Page 29, line 15, at end insert—

“(h) the general principle that those regulated should reasonably assist consumers in taking responsibility”

LORD SHARKEY

138A*

Page 29, line 15, at end insert—

“(g) the principle that, where appropriate, authorised persons should act honestly, fairly and professionally in accordance with the best interests of consumers who are their clients;

(h) the principle that, where appropriate, authorised persons should manage conflicts of interest fairly, both between itself and its clients and between clients.”

LORD PHILLIPS OF SUDBURY

BARONESS KRAMER

LORD HODGSON OF ASTLEY ABBOTTS

BARONESS MEACHER

139

Page 29, line 17, at end insert—

“( ) “Social investment” means investment into or by organisations which exist wholly or mainly to provide benefits for society or the environment.”

BARONESS NOAKES

LORD MCFALL OF ALCLUITH

BARONESS COHEN OF PIMLICO

139A*

Page 29, line 18, at end insert—

“( ) Subsection (1)(b) shall include consideration of the capacity of the financial sector to contribute to the growth of the United Kingdom economy in the medium or long term.”

LORD FLIGHT

LORD HODGSON OF ASTLEY ABBOTTS

140

Page 29, line 42, at end insert—

“(d) that the exercise of their functions in relation to persons regulated by both the PRA and the FCA is coordinated with a view to avoiding the making of duplicative requests and the imposition of inconsistent requirements on such persons.”

BARONESS KRAMER

140A*

Page 29, line 42, at end insert—

“(d) that the PRA and FCA are considered equal in status.”

LORD FLIGHT

140B

Page 30, line 4, at end insert—

“(c) the FCA and PRA shall publish guidance explaining those circumstances covered by paragraphs (a) and (b) where the duty to co-ordinate shall not apply.”

140C

Page 31, line 11, at end insert “and consult publicly on any proposed changes”

140D

Page 31, leave out lines 19 to 24 and insert—

“( ) The memorandum need not relate to any aspect of compliance with section 3D if the regulators consider that publication of information about that aspect would be against the public interest.”

LORD SASSOON

140E

Page 31, line 30, leave out from “responsibility” to end of line 32 and insert “for measures designed, in relation to with-profits policies, for the purpose in subsection (2) belongs to the PRA rather than the FCA.”

BARONESS DRAKE

141

Page 31, line 45, at end insert—

“(4A) A with-profits fund is a fund into which premiums for with-profits policies are paid, and the PRA will regulate with-profits funds in line with the following principles—

(a) the purposes of the with-profits fund will be to provide guaranteed benefits and subject to this to generate profits for distribution to policyholders in the proportions specified in the with-profits policy;

(b) the with-profits fund will be managed for those and not for other purpose;

(c) any profits made by the fund will be distributed insofar as their retention is not justified for the purposes of the with-profits fund; and

(d) the insurer will exercise its discretions reasonably and fairly and it must not exercise its discretion in ways that unduly discriminate.”

LORD SASSOON

142

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”

LORD MCFALL OF ALCLUITH

143

Page 37, line 24, at end insert “and must be published in such manner as the Bank of England considers appropriate”

Schedule 3

LORD SASSOON

143A

Page 175, line 30, after first “functions” insert “, in relation to the FCA,”

LORD MCFALL OF ALCLUITH

BARONESS NOAKES

143B

Page 176, line 2, at end insert “following consideration by the Treasury Select Committee of the House of Commons”

LORD SASSOON

BARONESS HAYTER OF KENTISH TOWN

144

Page 178, line 9, at end insert—

“Publication of record of meetings of governing body

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.”

LORD MCFALL OF ALCLUITH

BARONESS NOAKES

144A

Page 178, line 27, at end insert—

“(ia) an analysis of the costs and benefits arising from regulation for which the PRA is responsible,”

LORD FLIGHT

144B

Page 178, line 30, at end insert—

“(k) any direction made under section 137C or 137P (or both), the outcome of any such direction and how it is complied with section 138N”

LORD TEVERSON

BARONESS KRAMER

144C*

Page 178, line 41, insert new subsection—

“10A (1) In relation to each report made under paragraph 10, the FCA must publish at the same time as the report an invitation to members of the public to make representations to the FCA, within the 3 months beginning with the date of publication—

(a) about the report,

(b) about the way in which the FCA has discharged, or failed to discharge, its functions during the period to which the report relates, and

(c) about the extent to which, in their opinion, the FCA’s objectives have been advanced and the FCA has considered the regulatory principles in section 3B.

(2) The invitation must be published in the way appearing to it to be best calculated to bring the invitation to the attention of the public.”

144D*

Page 178, line 44, after “(“the annual general meeting”)” insert “as part of the consultation and”

144E*

Page 179, leave out lines 28 and 29, and insert—

“12 (1) The FCA must publish a report about its consultation and its annual meeting in accordance with paragraph 10A.

(2) The report must contain an account, in general terms, of any representations received in pursuance of the invitation published under that paragraph.

(3) The report must be published not later than 4 months after the date on which the report under paragraph 10 was published.”

LORD SASSOON

144F

Page 182, line 11, after “Act” insert “or any of the other Acts mentioned in section 1A(6)”

144G

Page 182, line 27, at end insert—

“(3A) Neither section 1A(6)(d) nor the definition of “functions” in paragraph 1 applies for the purposes of sub-paragraph (2).”

144H

Page 183, line 16, leave out from “as,” to end of line 18 and insert “a member, officer or member of staff of the FCA;”

144J

Page 183, line 33, leave out “or a member of its governing body”

LORD FLIGHT

144K

Page 185, line 4, at end insert—

“The Bank must be satisfied that the non-executive members of the PRA Board have relevant experience and expertise across the sectors (including banking and insurance) that are subject to regulation by the PRA.”

LORD SASSOON

145

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

146

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

147

Page 186, leave out lines 1 to 4

147A

Page 186, line 9, after “functions” insert “or its functions under section 2DA (strategy)”

147B

Page 186, line 25, at end insert—

“Budget

17A (4) The PRA must, for each of its financial years, adopt an annual budget which has been approved by the Bank.

(5) The budget must be adopted before the start of the financial year to which it relates, except that the first budget must be adopted as soon as reasonably practicable after the coming into force of this paragraph.

(6) The PRA may, with the approval of the Bank, vary the budget for a financial year at any time after its adoption.

(7) The PRA must publish each budget, and each variation of a budget, in such manner as the PRA thinks fit.”

LORD MCFALL OF ALCLUITH

BARONESS NOAKES

147C

Page 186, line 38, at end insert—

“(ga) an analysis of the costs and benefits arising from regulation for which the PRA is responsible,”

LORD TEVERSON

BARONESS KRAMER

147D*

Page 187, line 22, insert new paragraph—

“19A (1) Not later than 3 months after publishing the report under paragraph 19, the PRA must hold a public meeting (“the annual meeting”) as part of the consultation and for the purposes of enabling that report to be considered.

(2) The PRA must organise the annual meeting so as to allow—

(a) a general discussion of the contents of the report which is being considered, and

(b) a reasonable opportunity for those attending the meeting to put questions to the PRA about the way in which it discharged, or failed to discharge, its functions during the period to which the report relates.

(3) But otherwise the annual meeting is to be organised and conducted in such a way as the PRA considers appropriate.

(4) The PRA must give reasonable notice of its annual meeting.

(5) That notice must—

(a) give details of the time and place at which the meeting is to be held,

(b) set out the proposed agenda for the meeting,

(c) indicate the proposed duration of the meeting,

(d) give details of the PRA’s arrangements for enabling persons to attend, and

(e) be published by the PRA in the way appearing to it to be best calcuated to bring the notice to the attention of the public.

(6) If the PRA proposes to alter any of the arrangements which have been included in the notice given under sub-paragraph (5), it must—

(a) give reasonable notice of the alteration, and

(b) publish that notice in the way appearing to the PRA to be best calculated to bring it to the attention of the public.”

147E*

Page 187, line 24, after “consultation” insert “and its annual meeting”

LORD SASSOON

147F

Page 190, line 6, after “Act” insert “or any of the other Acts mentioned in section 2A(6)”

147G

Page 190, line 22, at end insert—

“(3A) Neither section 2A(6)(d) nor the definition of “functions” in paragraph 1 applies for the purposes of sub-paragraph (2).”

146H

Page 191, line 8, leave out from “as,” to end of line 10 and insert “a member, officer or member of staff of the PRA;”

147J

Page 191, line 25, leave out “or a member of its governing body”

Clause 6

LORD FLIGHT

147K

Page 39, line 9, at end insert—

“Claims management companies

23C Provision of services consisting of advice or services in respect of claims for compensation, restitution, repayment or any other remedy for loss or damage, or in respect of some other obligation.”

Clause 7

LORD MCFALL OF ALCLUITH

148

Page 40, line 8, at end insert—

“( ) a draft of the order has been consulted upon with such persons as the Treasury considers appropriate,”

Clause 8

LORD MCFALL OF ALCLUITH

149

Page 41, line 20, at end insert—

“( ) a draft of the order has been consulted upon with such persons as the Treasury considers appropriate,”

Clause 9

LORD PESTON

LORD BARNETT

149A

Page 42, line 5, at end insert—

“( ) An application for permission must include a statement as to whether the regulated activity is charged for, and in a case of an individual who provides the financial advice without charge, no permission is required.”

LORD FLIGHT

149B

Page 44, line 17, after “FCA” insert “(which shall not be required where the applicant seeks permission to carry on the regulated activity of accepting deposits)”

149C

Page 46, line 17, after “FCA” insert “(which shall not be required where the applicant holds permission to carry on the regulated activity of accepting deposits)”

149D

Page 46, line 26, after “FCA” insert “(except in a case where the applicant holds permission to carry on the regulated activity of accepting deposits)”

149E

Page 46, line 41, after “FCA” insert “(except in a case where immediately before the variation the applicant held permission to carry on the regulated activity of accepting deposits)”

149F

Page 47, line 47, after “FCA” insert “(except in a case where the applicant holds permission to carry on the regulated activity of accepting deposits)”

149G

Page 48, line 4, at end insert “(which shall not be required where the applicant holds permission to carry on the regulated activity of accepting deposits)”

LORD MCFALL OF ALCLUITH

150

Page 49, line 9, after “if” insert “after investigation”

LORD FLIGHT

150A

Page 50, line 22, after “FCA” insert “(except in a case where the applicant holds permission to carry on the regulated activity of accepting deposits)”

LORD MCFALL OF ALCLUITH

151

Page 53, line 45, leave out “may” and insert “must”

152

Page 53, line 46, after “relationship” insert “(including family, business or other association)”

LORD FLIGHT

152A

Page 55, line 31, after “FCA” insert “(except in a case where the applicant holds permission to carry on the regulated activity of accepting deposits)”

LORD SASSOON

153

Page 58, line 40, at end insert—

“Notification

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).”

Schedule 4

LORD SASSOON

154

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”.”

155

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

156

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

157

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

158

Page 199, line 13, at end insert—

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

159

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”.”

160

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

161

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

162

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

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

163

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

164

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

Clause 11

LORD MCFALL OF ALCLUITH

165

Page 59, line 24, after “if” insert “after investigation”

Clause 12

LORD FLIGHT

165A

Page 61, line 13, leave out from beginning to end of line 8 on page 62 and insert—

“(3) The PRA and FCA must, in relation to dual-authorised persons—

(a) specify in rules those functions carried on by authorised persons which are significant-influence functions;

(b) set up and maintain joint arrangements to exercise their power under section 59(3)(a) to approve holders of any significant-influence function.

(4) The FCA must, in relation to FCA-authorised persons—

(a) specify in rules those functions carried on by authorised persons which are significant-influence functions;

(b) set up and maintain arrangements to exercise its power under section 59(4)(a) to approve holders of any significant-influence function.””

Clause 14

LORD FLIGHT

165B

Page 63, leave out lines 34 and 35 and insert—

“( ) In section 72—”

165C

Page 63, line 36, leave out paragraph (a)

165D

Page 63, line 40, leave out subsection (3)

165E

Page 64, line 12, leave out subsections (6) to (10)

LORD SASSOON

166

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”.”

167

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

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

LORD FLIGHT

167A

Page 64, line 40, leave out paragraph (a)

167B

Page 65, line 1, leave out subsection (12)

165C

Page 65, line 4, leave out paragraphs (a) to (k)

167D

Page 65, line 19, leave out paragraph (l)

Clause 16

LORD MCFALL OF ALCLUITH

168

Page 66, line 39, after “may” insert “after investigation”

169

Page 67, line 42, after “state” insert “the reasons for imposing a penalty and”

170

Page 68, line 5, at end insert “and the reasons for suspension or restriction”

Clause 17

LORD PESTON

LORD BARNETT

170A

Page 71, line 5, leave out “may” and insert “must”

LORD MCFALL OF ALCLUITH

171

Page 72, line 11, after “may” insert “after investigation”

172

Page 72, line 14, at end insert—

“( ) The FCA must provide reasons for the actions which it has taken under section 89Q.”

173

Page 74, line 37, after “may” insert “after investigation”

Clause 21

LORD FLIGHT

173ZA

Page 77, line 36, leave out paragraphs (a) to (c)

Clause 22

LORD PESTON

LORD BARNETT

173A

Page 78, line 14, leave out “may” and insert “must”

LORD FLIGHT

173AA

Page 80, line 44, at end insert—

“(11) The FCA shall only take a decision under subsections (1) and (2) if all of the following conditions are fulfilled—

(a) a financial instrument or activity or practice gives rise to significant investor protection concerns or poses a serious threat to the orderly functioning and integrity of financial markets or the stability of whole or part of the financial system;

(b) existing regulatory requirements applicable to the financial instrument or activity or practice do not sufficiently address the risks referred to in subsections (1) and (2) and the issue would not be better addressed by improved supervision or enforcement of existing requirements;

(c) the action is proportionate taking into account the nature of the risks identified, the level of sophistication of investors or market participants concerned and the likely effect of the action on investors and market participants who may hold, use or benefit from the financial instrument or activity.

(12) When taking action under subsection (1) or (2), the FCA shall take into account the extent to which the action does not have a detrimental effect on the efficiency of financial markets or on investors that is disproportionate to the benefits of the action.

(13) The FCA shall revoke a prohibition or restriction if the conditions of subsection (11) are no longer met.”

173AB

Page 88, leave out lines 9 to 11

173AC

Page 88, line 9, leave out “, or is likely to be,”

173AD

Page 89, line 22, leave out “must” and insert “may”

173AE

Page 89, line 23, leave out “(even if the direction is revoked)”

173AF

Page 97, line 30, leave out from beginning to end of line 8 on page 98

173AG

Page 98, line 11, leave out “temporary”

173AH

Page 98, line 22, at end insert—

“(7) The statement of policy prepared under subsection (1) must—

(a) specify how, in exercising the functions mentioned in that subsection, the FCA will comply with the requirements of section 3D (regulatory principles),

(b) set out the process by which decisions on the use of temporary product intervention rules are made, including, but not limited to, who is accountable for the decision, how the conditions in section 137C(11) have been fulfilled and the type of evidence relied upon,

(c) in circumstances where powers have been used, set out the process for reviewing the decision.

(8) The FCA’s statement of policy must include having regard to whether—

(a) the proposed action addresses a threat to section 137C (1)(a) or (1)(b), or both;

(b) regulatory requirements that are applicable to the relevant financial instrument or activity do not address the threat.”

LORD PESTON

LORD BARNETT

173B

Page 99, line 4, leave out “may” and insert “must”

173C

Page 99, line 27, leave out “may” and insert “must”

LORD FLIGHT

173D

Page 101, line 4, at end insert—

“(5) The FCA and the Office of Fair Trading (OFT) must co-ordinate in the exercise of their functions to promote competition in financial services, and the FCA and the OFT must prepare and maintain a memorandum of understanding which describes the role of each regulator in relation to promoting competition in financial services markets.

(6) The memorandum of understanding should make clear the OFT will only conduct a market study into a financial services market within the regulatory remit of the FCA in exceptional circumstances.”

LORD MCFALL OF ALCLUITH

174

Page 103, line 25, after “may” insert “after consultation with such persons as they consider appropriate”

Clause 25

LORD MCFALL OF ALCLUITH

175

Page 110, line 3, after “notice” insert “containing the reasons for the direction”

176

Page 114, line 5, after “must” insert “consult with such persons as it considers appropriate”

Clause 30

LORD MCFALL OF ALCLUITH

177

Page 116, line 14, after “if” insert “after investigation”

178

Page 117, line 2, after “if” insert “after investigation”

179

Page 117, line 12, at end insert “the reason for its decision to issue a statement and”

180

Page 117, line 23, after “out” insert “the reasons for its decision to issue a statement and”

LORD HODGSON OF ASTLEY ABBOTTS

181

Page 118, line 6, at end insert “, and

(c) the proportion of that business in relation to the firm or person being investigated”

Schedule 8

LORD SASSOON

182

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

182A

Page 223, line 40, leave out from “provision)” to “substitute” in line 41 and insert “for “Authority” (in each place)”

183

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

Schedule 9

LORD FLIGHT

183A

Page 232, line 23, leave out paragraph (b)

LORD SASSOON

184

Page 233, line 18, leave out “and”

185

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.”.”

LORD FLIGHT

185A

Page 233, line 23, leave out from beginning to end of line 29 on page 234

186

Page 233, leave out line 39

LORD SASSOON

187

Page 234, line 30, at end insert—

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

LORD FLIGHT

187A

Page 234, line 42, leave out paragraph (a)

Schedule 10

LORD SASSOON

187B

Page 239, line 33, at end insert—

“( ) In subsection (7), omit “board members,”.”

LORD TEVERSON

BARONESS KRAMER

187C*

Page 240, line 12, insert new subsection—

“(5A) In making any provision of the scheme under subsection (3), the relevant regulator must so far as practicable establish classes of authorised person on which levies may be imposed such that the claims that are likely to be made in respect of that class of person share a close affinity. For these purposes, a claim shares a close affinity with another claim if both the nature of the services or activities and the type of financial instruments in relation to which the claims arise exhibit a high degree of similarity.”

LORD SASSOON

187D

Page 242, line 11, at end insert—

“In section 221 (powers of court), in subsection (2), after “director or” insert “other”.

In section 222 (statutory immunity), in subsection (1), omit “board member,”.”

Schedule 11

LORD FLIGHT

187E

Page 242, line 16, at end insert—

“After section 225 insert—

“225A General obligations

(1) In discharging its functions, the scheme operator must comply with the requirements of this section.

(2) The scheme operator must, so far as is reasonably practicable, act in a way which is compatible with the FCA’s strategic and operational objectives and regulatory principles.””

187F

Page 243, line 5, leave out “must” and insert “may, if it considers appropriate to do so in any particular case,”

187G

Page 243, line 7, leave out from first “the” to “to” in line 9 and insert “scheme operator decides it is appropriate”

187H

Page 243, line 10, leave out from “must” to end of line 11 and insert “explain the rationale for publication”

187J

Page 243, line 17, at end insert—

“( ) Unless the respondent agrees, a report of a determination published by the scheme operator may not include the name of subject of the respondent, or particulars which, in the opinion of the scheme operator, are likely to identify the respondent or reveal commercially sensitive information.”

187K

Page 243, line 17, at end insert—

“( ) Where the scheme operator considers it appropriate to publish a report of its determination, the scheme operator must specify a reasonable period (which may not be less than 28 days) within which the respondent may make representations to the scheme operator.”

187L

Page 243, line 17, at end insert—

“( ) The scheme operator must then decide, within a reasonable period, whether to publish the determination in question.”

LORD SASSOON

187M

Page 243, line 17, at end insert—

“In section 232 (powers of court), in subsection (2), after “director or” insert “other”.”

LORD FLIGHT

187N

Page 243, line 20, at beginning insert “If the scheme operator considers that an issue with implications wider than an individual case has arisen or could arise it shall suspend determination of such complaints and refer the matter to the FCA and”

187P

Page 244, line 7, at end insert—

“The FCA must take such steps as are necessary to ensure that the scheme operator exercises those functions in a manner which is consistent with its strategic and operational objectives and the regulatory principles, and at least once a year, the FCA will conduct a review of the scheme operators’ operations, policies and procedures.”

187Q

Page 244, line 18, at end insert—

“( ) This must include, but not be limited to, a regulatory clarification procedure pursuant to which the FCA shall be called upon to resolve any issue or provide any guidance to the ombudsman (or both) with respect to any applicable regulatory matters arising from or in relation to a complaint or group of complaints.”

LORD SASSOON

187R

Page 244, line 22, at end insert—

“In paragraph 6 (status), in sub-paragraph (2), omit “board members,”.”

LORD FLIGHT

187S

Page 246, line 4, at end insert—

“(za) in sub-paragraph (1)—

(i) for “scheme operator” substitute “FCA”; and

(ii) after “for reference of complaints” substitute “to the scheme operator”.

(zb) in sub-paragraph (2)—

(i) in the first sentance, leave out “may” and insert “must”;

(ii) in sub-sub-paragraph (a) after “reasonable” insert “which matters must include, but not be limited to—

(i) the FCA’s strategic and operational objectives and regulatory principles;

(ii) any applicable laws and regulations in force at the relevant times;

(iii) any applicable regulatory rules, guidance and standards in place at the relevant times; and

(iv) the finding or outcome of any such other complaint determination body or process as referred to in sub-paragraph (2)(c) below;”;

(iii) leave out sub-paragraph (7).”

187T

Page 246, line 26, at end insert—

“ After paragraph 19, insert—

“ The scheme operator must consult publicly on any information, advice or guidance produced prior to publication.””

Schedule 12

LORD SASSOON

187U

Page 250, line 35, at end insert—

“( ) at the end of paragraph (i), omit “or”,”

187V

Page 250, line 37, after “insert” insert ““or”

187W

Page 255, leave out lines 29 and 30 and insert—

“(i) officers of, or members of the staff of, the regulator, or”

187X

Page 255, line 43, leave out “or members of its governing body”

Clause 39

BARONESS WHEATCROFT

LORD LAWSON OF BLABY

BARONESS KRAMER

188

Page 124, line 20, at end insert—

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

Clause 40

LORD MCFALL OF ALCLUITH

189

Page 125, line 3, after “of” insert “the general public or”

LORD FLIGHT

189A

Page 125, line 18, leave out from beginning to end of line 34 on page 126

189B

Page 127, line 25, leave out from beginning to end of line 5 on page 128

Schedule 15

LORD SASSOON

189C

Page 272, line 2, at end insert—

“In paragraph 3 (status), in sub-paragraph (2), omit “board members,”.”

BARONESS NOAKES

190

Page 272, line 4, at end insert—

“Omit paragraph 5.”

Clause 62

LORD FLIGHT

190A

Page 139, line 24, at end insert—

“( ) The memorandum must make provision for the UK authorities to consult with the financial services industry and, where appropriate, consumers on initiatives brought forward by the European Supervisory Authorities, the EU institutions and other international organisations.”

Clause 65

LORD MCFALL OF ALCLUITH

191

Page 141, line 3, at end insert—

“( ) The person appointed by the Treasury to hold the inquiry under this section must be suitably qualified and experienced to hold such an inquiry.”

Clause 66

LORD MCFALL OF ALCLUITH

192

Page 141, line 29, at end insert—

“( ) The power conferred by this section is not exercisable in relation to information or documents in respect of which a claim to legal professional privilege (in Scotland to confidentiality of communications) could be maintained in legal proceedings.”

Clause 74

LORD HODGSON OF ASTLEY ABBOTTS

192A

Page 145, line 20, at end insert—

“( ) In carrying out an investigation, the regulator must have regard to its regulatory principles and act proportionately, reasonably and fairly.”

192B

Page 145, line 30, at end insert “or becomes aware that the investigation does not meet the principles by which the regulator must abide”

Clause 79

LORD MCFALL OF ALCLUITH

193

Page 148, line 15, at end insert—

“( ) The investigator must be suitably qualified and experienced to conduct such investigations.”

Clause 91

LORD SASSOON

194

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;”

195

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

196

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.”

After Clause 94

LORD FLIGHT

197

Insert the following new Clause—

“Retail account transfer

Transferability of retail banking current accounts

(1) If an individual customer gives notice in writing to a bank at which he holds a personal current account (Bank A) that he wishes to transfer the balance standing to the credit of that account (Account A) to a personal current account established or to be established at another bank (Bank B) and thereafter to close Account A—

(a) Bank A shall without charge within a period of 10 working days—

(i) transfer to Bank B the balance of Account A less any charges owing in respect of that account;

(ii) notify Bank B of all standing orders, direct debits and other orders for periodical payments that the customer has created in relation to Account A;

(iii) pass to Bank B a copy of all material that it holds in relation to the customer as a result of having performed checks on his identity, the source of his funds or otherwise with regard to its regulatory obligations to counter financial crime;

(b) Bank B shall without charge—

(i) accept the funds transferred under paragraph (a)(i) and credit them without deduction to the account that the customer has applied to open (Account B);

(ii) accept the details that Bank A provides under paragraph (a)(ii) and apply them to Account B so that they operate in accordance with the customer’s instructions from the date that Account B is credited under sub-paragraph (i);

(iii) save where it has grounds for suspicion, accept the material provided under paragraph (a)(iii) in lieu of performing fresh checks on the identity of the customer, the source of his funds or otherwise in relation to its regulatory obligations to counter financial crime.

(2) In this section a bank shall mean any person authorised under this Act and holding a permission for deposit taking granted by the PRA.”

Schedule 18

LORD SASSOON

197A

Page 286, line 16, at end insert—

“In section 177 (offences), in subsection (2), after “director or” insert “other”.”

198

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,”.”

199

Page 302, line 5, at end insert—

“Trustee Act 2000 (c. 29)

(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.”.”

200

Page 310, line 32, at end insert—

“Finance Act 2011 (c. 11)

(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)”.

Terrorism Prevention and Investigation Measures Act 2011 (c. 23)

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”.”

Clause 98

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

201

Page 166, line 4, at end insert—

“where the phrase “court of directors” appears it is to be understood as “Supervisory Board”;”

Prepared 2nd July 2012