Financial Services Bill

Page 140, line 36, leave out subsection (4) and insert—

“(4) If subsections (2) or (3) apply, the Treasury must arrange for an enquiry to be held under section 65 unless the Treasury consider that it is not in the public interest that there should be an independent inquiry into the events and the circumstances surrounding them.”

Page 140, line 38, leave out “may” and insert “must”

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.”

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.”

Page 142, line 44, at end insert—

“( ) Any direction under subsection (4) must be laid before Parliament and published.”

Page 144, line 3, at end insert—

“( ) Any direction under subsection (5) must be laid before Parliament and published.”

Page 145, line 7, leave out “may” and insert “must”

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.”

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

Page 146, line 6, at end insert—

“( ) Any direction under subsection (5) or (6) must be laid before Parliament and published.”

Page 148, line 15, at end insert—

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

[Re-tabled as Amendment 187TA]

Page 149, line 13, leave out “, 318 or 328” and insert “or 318”

Insert the following new Clause—

“Objectives and conditions

(1) The Banking Act 2009 is amended as follows.

(2) In section 3 (interpretation: other expressions), after “this Part—” insert—

““client assets” means assets which an institution has undertaken to hold for a client (whether or not on trust, and whether or not the undertaking has been complied with),”.

(3) In section 4 (special resolution objectives), after subsection (8) insert—

“(8A) Objective 6, which applies in any case in which client assets may be affected, is to protect those assets.

(8B) Objective 7 is to minimise adverse effects on institutions (such as investment exchanges and clearing houses) that support the operation of financial markets.”

(4) In section 8(2) (Condition A: private sector purchaser and bridge bank)—

(a) in paragraph (b) for “the banking systems of the United Kingdom, or” substitute “those systems,”, and

(b) after paragraph (c) insert “, or

(d) the protection of any client assets that may be affected.”

(5) In section 47 (restriction of partial transfers), for subsection (3) substitute—

“(3) Provision under subsection (2) may, in particular, refer to—

(a) particular classes of deposit;

(b) particular classes of client assets.”

(6) In the Table in section 261 (index of defined terms), after the entry relating to “central counterparty clearing services”, insert—

“Client assets (Part 1)

3”.”

Page 154, line 24, at end insert—

“( ) In section 83 (supplemental), in subsection (2)(d)—

(a) at the end of sub-paragraph (iii) insert “and”, and

(b) for sub-paragraphs (iv) and (v) substitute—

“(iv) is not subject to the restriction in section 29(3) that the securities issued by the bank were transferred under the original order (as defined in section 29(1)).””

Page 156, line 1, at end insert—

“( ) In section 1(6) of that Act (table describing provisions of Part 1), in the entry relating to sections 76 to 81, for “81” substitute “81A”.”

Insert the following new Clause—

“Groups

(1) The Banking Act 2009 is amended as follows.

(2) In section 1 (overview), for the entry in the Table relating to sections 82 and 83 substitute—

“Sections 81B to 83

Groups”.

(3) In section 20 (directors), after subsection (1) insert—

“(1A) Subsection (1) also applies to a director of any undertaking which is a banking group company in respect of a specified bank.”

(4) After section 36 insert—

“36A Directors

(1) A property transfer instrument may enable the Bank of England—

(a) to remove a director of a specified bank;

(b) to vary the service contract of a director of a specified bank;

(c) to terminate the service contract of a director of a specified bank;

(d) to appoint a director of a specified bank.

(2) Subsection (1) also applies to a director of any undertaking which is a banking group company in respect of a specified bank.

(3) Appointments under subsection (1)(d) are to be on terms and conditions agreed with the Bank of England.”

(5) For the italic heading before section 82 substitute “Groups”, and after that heading insert—

“81B Sale to commercial purchaser and transfer to bridge bank

(1) The Bank of England may exercise a stabilisation power in respect of a banking group company in accordance with section 11(2) or 12(2) if the following conditions are met.

(2) Condition 1 is that the PRA is satisfied that the general conditions for the exercise of a stabilisation power set out in section 7 are met in respect of a bank in the same group.

(3) Condition 2 (which does not apply in a financial assistance case) is that the Bank of England is satisfied that the exercise of the power in respect of the banking group company is necessary, having regard to the public interest in—

(a) the stability of the financial systems of the United Kingdom,

(b) the maintenance of public confidence in the stability of those systems,

(c) the protection of depositors, or

(d) the protection of any client assets that may be affected.

(4) Condition 3 (which applies only in a financial assistance case) is that—

(a) the Treasury have recommended the Bank of England to exercise a stabilisation power on the grounds that it is necessary to protect the public interest, and

(b) in the Bank’s opinion, exercise of the power in respect of the banking group company is an appropriate way to provide that protection.

(5) Condition 4 is that the banking group company is an undertaking incorporated in, or formed under the law of any part of, the United Kingdom.

(6) Before determining whether Condition 2 or 3 (as appropriate) is met, the Bank of England must consult—

(a) the Treasury,

(b) the PRA, and

(c) the FCA.

(7) In exercising a stabilisation power in reliance on this section the Bank of England must have regard to the need to minimise the effect of the exercise of the power on other undertakings in the same group.

(8) In this section “financial assistance case” means a case in which the Treasury notify the Bank of England that they have provided financial assistance in respect of a bank in the same group for the purpose of resolving or reducing a serious threat to the stability of the financial systems of the United Kingdom.

81C Section 81B: supplemental

(1) In the following provisions references to banks include references to banking group companies—

(a) section 10(1), and

(b) section 75(5)(a).

(2) Where the Bank of England exercises a stabilisation power in respect of a banking group company in reliance on section 81B, the provisions relating to the stabilisation powers and the bank administration procedure contained in this Act (except sections 7 and 8) and any other enactment apply (with any necessary modifications) as if the banking group company were a bank.

(3) For the purposes of the application of section 143 (grounds for applying for bank administration order), the reference in subsection (2) to the Bank of England exercising a stabilisation power includes a case where the Bank of England intends to exercise such a power.

81D Interpretation: “banking group company” &c.

(1) In this Part “banking group company” means an undertaking—

(a) which is (or, but for the exercise of a stabilisation power, would be) in the same group as a bank, and

(b) in respect of which any conditions specified in an order made by the Treasury are met.

(2) An order may require the Bank of England to consult specified persons before determining whether the conditions are met.

(3) An order—

(a) is to be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

(4) If an order contains a statement that the Treasury are of the opinion that, by reason of urgency, it is necessary to make the order without complying with subsection (3)(b)—

(a) the order may be made, and

(b) the order lapses unless approved by resolution of each House of Parliament during the period of 28 days (ignoring periods of dissolution, prorogation or adjournment of either House for more than 4 days) beginning with the day on which the order is made.

(5) The lapse of an order under subsection (4)(b)—

(a) does not invalidate anything done under or in reliance on the order before the lapse and at a time when neither House has declined to approve the order, and

(b) does not prevent the making of a new order (in new terms).

(6) Undertakings are in the same group for the purposes of sections 81B, 81C and this section if they are group undertakings in respect of each other.

(7) Expressions defined in the Companies Act 2006 have the same meaning in section 81B and this section as in that Act.”

(6) In the Table in section 259 (statutory instruments), in Part 1 after the entry relating to section 78 insert—

“81D

Meaning of “banking group company”

Draft affirmative resolution (except for urgent cases)”

(7) In the Table in section 261 (index of defined terms), after the entry relating to “bank insolvency order” insert—

“Banking group company

81D”.”

Insert the following new Clause—

“Application to investment firms

(1) The Banking Act 2009 is amended as follows.

(2) In section 1 (overview), after the entry in the Table relating to sections 84 to 89 insert—

“Section 89A

Investment firms”.

“(8) Section 89A applies this Part to investment firms with modifications.”

(4) In section 75(5) (power to change law: application to other institutions), omit the “or” following paragraph (c) and after that paragraph insert—

“(ca) to investment firms,”.

(5) After section 89 (and in Part 1) insert—

“Investment firms

89A Application to investment firms

(1) This Part applies to investment firms as it applies to banks, subject to the modifications in subsection (2).

(2) Ignore sections 1(2)(b), 4(2)(b) and (6), 5(1)(b), 7(7), 8(2)(c) and 14(5).”

(6) After section 159 insert—

“159A Application to investment firms

This Part applies to investment firms as it applies to banks.”

(7) After section 258 insert—

“258A “Investment firm”

(1) In this Act “investment firm” means a UK institution which is (or, but for the exercise of a stabilisation power, would be) an investment firm for the purposes of Directive 2006/49/EC on the capital adequacy of investment firms and credit institutions.

(2) But “investment firm” does not include—

(a) an institution which is also—

(i) a bank (within the meaning of Part 1),

(ii) a building society (within the meaning of section 119 of the Building Societies Act 1986), or

(iii) a credit union (within the meaning of section 31 of the Credit Unions Act 1979 or Article 2(2) of the Credit Unions (Northern Ireland) Order 1985), or

(b) an institution which is of a class or description specified in an order made by the Treasury.

(3) An order—

(a) is to be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

(4) If an order contains a statement that the Treasury are of the opinion that, by reason of urgency, it is necessary to make the order without complying with subsection (3)(b)—

(a) the order may be made, and

(b) the order lapses unless approved by resolution of each House of Parliament during the period of 28 days (ignoring periods of dissolution, prorogation or adjournment of either House for more than 4 days) beginning with the day on which the order is made.

(5) The lapse of an order under subsection (4)(b)—

(a) does not invalidate anything done under or in reliance on the order before the lapse and at a time when neither House has declined to approve the order, and

(b) does not prevent the making of a new order (in new terms).

(6) In subsection (1) “UK institution” means an institution which is incorporated in, or formed under the law of any part of, the United Kingdom.”

(8) In the Table in section 259 (statutory instruments), in Part 7 after the entry relating to section 257 insert—

“258A

Meaning of “investment firm”

Draft affirmative resolution (except for urgent cases)”.

(9) In the Table in section 261 (index of defined terms), after the entry relating to “inter-bank payment system”, insert—

“Investment firm

258A”.

Insert the following new Clause—

“Application to UK clearing houses

(1) The Banking Act 2009 is amended as follows.

(2) In section 1 (overview), after the entry in the Table relating to section 89A, insert—

“Sections 89B to 89G

UK clearing houses”.

“(9) Section 89B applies this Part to UK clearing houses with modifications.”

(4) After section 39 insert—

“39A Banks which are clearing houses

Sections 89C to 89E (clearing house rules, membership and recognition) apply in relation to a bank which would be a UK clearing house but for section 89G(2) (exclusion of banks etc from definition of UK clearing house) as they apply in relation to a UK clearing house.”

(5) In section 75(5) (power to change law: application to other institutions), after paragraph (ca) insert—

“(cb) to UK clearing houses, or”.

(6) After section 89A (and in Part 1) insert—

“UK clearing houses

89B Application to UK clearing houses

(1) This Part applies to UK clearing houses as it applies to banks, subject to—

(a) the modifications specified in subsections (2) to (5), and in the Table in subsection (6), and

(b) any other necessary modifications.

(2) For section 13 substitute—

“13 Transfer of ownership

(1) The third stabilisation option is to transfer ownership of the UK clearing house to any person.

(2) For that purpose the Bank of England may make one or more share transfer instruments.”

(3) For sections 28 and 29 substitute—

“28 Onward transfer

(1) This section applies where the Bank of England has made a share transfer instrument, in respect of securities issued by a UK clearing house, in accordance with section 13(2) (“the original instrument”).

(2) The Bank of England may make one or more onward share transfer instruments.

(3) An onward share transfer instrument is a share transfer instrument which—

(a) provides for the transfer of—

(i) securities which were issued by the UK clearing house before the original instrument and have been transferred by the original instrument or a supplemental share transfer instrument, or

(ii) securities which were issued by the UK clearing house after the original instrument;

(b) makes other provision for the purposes of, or in connection with, the transfer of securities issued by the UK clearing house (whether the transfer has been or is to be effected by that instrument, by another share transfer instrument or otherwise).

(4) An onward share transfer instrument may not transfer securities to the transferor under the original instrument.

(5) The Bank of England may not make an onward share transfer instrument unless the transferee under the original instrument is—

(a) the Bank of England,

(b) a nominee of the Treasury, or

(c) a company wholly owned by the Bank of England or the Treasury.

(6) Sections 7 and 8 do not apply to an onward share transfer instrument (but it is to be treated in the same way as any other share transfer instrument for all other purposes, including for the purposes of the application of a power under this Part).

(7) Before making an onward share transfer instrument the Bank of England must consult—

(a) if the UK clearing house is a PRA-authorised person, the PRA, and

(b) the FCA.

(8) Section 26 applies where the Bank of England has made an onward share transfer instrument.

29 Reverse share transfer

(1) This section applies where the Bank of England has made a share transfer instrument in accordance with section 13(2) (“the original instrument”) providing for the transfer of securities issued by a UK clearing house to a person (“the original transferee”).

(2) The Bank of England may make one or more reverse share transfer instruments in respect of securities issued by the UK clearing house and held by the original transferee (whether or not they were transferred by the original instrument).

(3) If the Bank of England makes an onward share transfer instrument in respect of securities transferred by the original instrument, the Bank may make one or more reverse share transfer instruments in respect of securities issued by the UK clearing house and held by a transferee under the onward share transfer instrument (“the onward transferee”).

(4) A reverse share transfer instrument is a share transfer instrument which—

(a) provides for transfer to the transferor under the original instrument (where subsection (2) applies);

(b) provides for transfer to the original transferee (where subsection (3) applies);

(c) makes other provision for the purposes of, or in connection with, the transfer of securities which are, could be or could have been transferred under paragraph (a) or (b).

(5) The Bank of England may not make a reverse share transfer instrument under subsection (2) unless—

(a) the original transferee is—

(i) the Bank of England,

(ii) a company wholly owned by the Bank of England or the Treasury, or

(iii) a nominee of the Treasury, or

(b) the reverse share transfer instrument is made with the written consent of the original transferee.

(6) The Bank of England may not make a reverse share transfer instrument under subsection (3) unless—

(a) the onward transferee is—

(i) the Bank of England,

(ii) a company wholly owned by the Bank of England or the Treasury, or

(iii) a nominee of the Treasury, or

(b) the reverse share transfer instrument is made with the written consent of the onward transferee.

(7) Sections 7 and 8 do not apply to a reverse share transfer instrument (but it is to be treated in the same way as any other share transfer instrument for all other purposes including for the purposes of the application of a power under this Part).

(8) Before making a reverse share transfer instrument the Bank of England must consult—

(a) if the UK clearing house is a PRA-authorised person, the PRA, and

(b) the FCA.

(9) Section 26 applies where the Bank of England has made a reverse share transfer instrument.”

(4) For sections 45 and 46 substitute—

“45 Transfer of ownership: property transfer

(1) This section applies where the Bank of England has made a share transfer instrument, in respect of securities issued by a UK clearing house, in accordance with section 13(2) (“the original instrument”).

(2) The Bank of England may make one or more property transfer instruments.

(3) A property transfer instrument is an instrument which—

(a) provides for property, rights or liabilities of the UK clearing house to be transferred (whether accruing or arising before or after the original instrument);

(b) makes other provision for the purposes of, or in connection with, the transfer of property, rights or liabilities of the UK clearing house (whether the transfer has been or is to be effected by the instrument or otherwise).

(4) The Bank of England may not make a property transfer instrument in accordance with this section unless the original instrument transferred securities to—

(a) the Bank of England,

(b) a company wholly owned by the Bank of England or the Treasury, or

(c) a nominee of the Treasury.

(5) Sections 7 and 8 do not apply to a property transfer instrument made in accordance with this section.

(6) Section 42 applies where the Bank of England has made a property transfer instrument in accordance with this section.

(7) Before making a property transfer instrument in accordance with this section, the Bank of England must consult—

(a) if the UK clearing house is a PRA-authorised person, the PRA, and

(b) the FCA.

46 Transfer of ownership: reverse property transfer

(1) This section applies where the Bank of England has made a property transfer instrument in accordance with section 45(2) (“the original instrument”).

(2) The Bank of England may make one or more reverse property transfer instruments in respect of property, rights or liabilities of the transferee under the original instrument.

(3) A reverse property transfer instrument is a property transfer instrument which—

(a) provides for transfer to the transferor under the original instrument;

(b) makes other provision for the purposes of, or in connection with, the transfer of property, rights or liabilities which are, could be or could have been transferred.

(4) The Bank of England must not make a reverse property transfer instrument unless—

(a) the transferee under the original instrument is—

(i) the Bank of England,

(ii) a company wholly owned by the Bank of England or the Treasury, or

(iii) a nominee of the Treasury, or

(b) the reverse property transfer instrument is made with the written consent of the transferee under the original instrument.

(5) Sections 7 and 8 do not apply to a reverse property transfer instrument made in accordance with this section.

(6) Before making a reverse property transfer instrument in accordance with this section, the Bank of England must consult—

(a) if the UK clearing house is a PRA-authorised person, the PRA, and

(b) the FCA.

(7) Section 42 applies where the Bank of England has made a reverse property transfer instrument in accordance with this section.”

(5) For section 81 substitute—

“81 Transfer of ownership: report

(1) This section applies where the Bank of England makes one or more share transfer instruments in respect of a UK clearing house under section 13(2).

(2) The Bank must report to the Chancellor of the Exchequer about the exercise of the power to make share transfer instruments under that section.

(3) The report must comply with any requirements as to content specified by the Treasury.

(4) The report must be made as soon as is reasonably practicable after the end of one year beginning with the date of the first transfer instrument made under section 13(2).”

(6) The table mentioned in subsection (1)(a) is as follows—

Provision	Modification
Section 1	Ignore subsection (2)(b) and (c).
	In subsection (3)(c), for “to temporary public ownership” substitute “of ownership”.
	In subsection (4)(a), for “15, 16, 26 to 31 and 85” substitute “15, 26 and 28 to 31”.
Section 4	Ignore subsection (2)(b) and (c).
	Ignore subsection (3)(a), (b) and (ba).
	In subsection (5), for “banking” substitute “financial”.
	In subsection (6), for “protect depositors” substitute “maintain the continuity of central counterparty clearing services”.
	Ignore subsections (8A), (8B) and (9).
Section 5	Ignore subsection (1)(b) and (c).
	In subsection (3)— (a) for “Sections 12 and 13 require” substitute “Section 12 requires”, and (b) ignore the words “and temporary public ownership”.
Section 6	In subsection (4)— (a) after “Before” insert “issuing or”, and (b) ignore paragraph (d).
	In subsection (5) after “after” insert “issuing or”.
Section 7	In subsection (1), for “PRA” substitute “Bank of England”.
	In subsection (2), for the words following “satisfy the” substitute “recognition requirements”.
	The Bank of England may treat Condition 1 as met if satisfied that it would be met but for the withdrawal or possible withdrawal of critical clearing services by the UK clearing house.
	In subsection (3), for “satisfy the threshold conditions” substitute “maintain the continuity of any critical clearing services it provides while also satisfying the recognition requirements”.
	In subsection (4), for “PRA” substitute “Bank of England”.
	Ignore subsection (4A).
	In subsection (5)— (a) for “PRA” substitute “Bank of England”, and (b) ignore paragraph (a) unless the UK clearing house is a PRA-authorised person, in which case for “Bank of England” substitute “PRA”.
	Ignore subsections (7) and (8).
	For the purposes of section 7— (a) “critical clearing services” means central counterparty clearing services the withdrawal of which may, in the Bank of England’s opinion, threaten the stability of the financial systems of the United Kingdom, and (b) “recognition requirements” means the requirements resulting from section 286 of the Financial Services and Markets Act 2000.
Section 8	In subsection (1), omit “in accordance with section 11(2) or 12(2)”.
	Ignore subsection (2)(c) and (d).
	In subsection (3), ignore paragraph (a) unless the UK clearing house is a PRA-authorised person.
	In subsection (4), ignore the words “in accordance with section 11(2) or 12(2)”.
Section 9	Ignore section 9.
Section 11	Ignore subsection (2)(a).
Section 13	See above.
Section 14	Ignore subsection (5).
Section 16	Ignore section 16.
Section 20	Ignore subsections (2) and (4).
Section 24	In subsection (1), ignore paragraph (c) unless the UK clearing house is a PRA-authorised person.
Section 25	Ignore section 25.
Section 26	In subsection (1), for “11(2)” substitute “13(2)”.
	In subsection (5), ignore paragraph (a) unless the UK clearing house is a PRA-authorised person.
	In subsection (6), for “11(2)” substitute “13(2)”.
Sections 26A and 27	Ignore sections 26A and 27.
Sections 28 and 29	See above.
Section 30	In subsection (5), ignore paragraph (a) unless the UK clearing house is a PRA-authorised person.
Section 31	In subsection (4), for “7, 8 and 51” substitute “7 and 8”.
	In subsection (5), ignore paragraph (a) unless the UK clearing house is a PRA-authorised person.
Section 41	In subsection (1), ignore paragraph (c) unless the UK clearing house is a PRA-authorised person.
Section 42	In subsection (5), ignore paragraph (a) unless the UK clearing house is a PRA-authorised person.
Section 42A	In subsection (5), for “7, 8 and 50” substitute “7 and 8”.
	In subsection (6), ignore paragraph (a) unless the UK clearing house is a PRA-authorised person.
Section 43	In subsection (6), for “7, 8 and 52” substitute “7 and 8”.
	In subsection (7), ignore paragraph (a) unless the UK clearing house is a PRA-authorised person.
Section 44	In subsection (5), for “7, 8 and 52” substitute “7 and 8”.
	In subsection (6), ignore paragraph (a) unless the UK clearing house is a PRA-authorised person.
Sections 45 and 46	See above.
Sections 49 to 53	Ignore sections 49 to 53.
Section 54	In subsection (1), for “A compensation scheme order” substitute “An order under section 89F”.
	In subsection (4)(b), for “compensation scheme order” substitute “the order under section 89F”.
Section 55	In subsection (10), for “to which section 62 applies” substitute “under section 89F”.
Section 56	In subsection (6), for “to which section 62 applies” substitute “under section 89F”.
Section 57	In subsection (1), for “A compensation scheme order” substitute “An order under section 89F”.
	In subsection (4)(a), for “has had a permission under Part 4A of the Financial Services and Markets Act 2000 (regulated activities) varied or cancelled” substitute “no longer qualifies as a recognised body under Part 18 of the Financial Services and Markets Act 2000 (recognised investment exchanges and clearing houses) or is subject to a requirement imposed under that Part”.
Section 58	In subsection (1), for “A resolution fund order” substitute “An order under section 89F that provides for transferors to become entitled to the proceeds of the disposal of things transferred”.
	Ignore subsection (3).
	In subsection (4), for “A resolution fund order” substitute “An order under section 89F that provides for transferors to become entitled to the proceeds of the disposal of things transferred”.
	In subsection (5), for “A resolution fund order” substitute “An order under section 89F that provides for transferors to become entitled to the proceeds of the disposal of things transferred”.
	Ignore subsections (6) to (8).
Section 59	Ignore section 59.
Section 60	In subsection (3)(c), ignore the references to bank insolvency and bank administration.
	In subsection (4)— (a) ignore paragraphs (a) and (b), and (b) in paragraph (c), for “a third party compensation order” substitute “an order under section 89F”.
	In subsection (5)— (a) ignore paragraph (a), and (b) in paragraph (c), for “a compensation scheme order or resolution fund order” substitute “an order under section 89F”.
Section 61	In subsection (1)— (a) ignore paragraphs (a) to (c), and (b) treat the subsection as including a reference to orders under section 89F.
	Ignore subsection (2)(b).
Section 62	Ignore section 62.
Section 65	In subsection (1)(a)(ii), for “order” substitute “instrument”.
	In subsection (3)— (a) in paragraph (a), ignore the words “where subsection (1)(a)(i) applies”, and (b) ignore paragraph (b).
Section 66	In subsection (1)— (a) in paragraph (a), ignore the reference to section 11(2)(a), (b) in paragraph (d)(i), ignore the words following “England”, and (c) ignore paragraph (d)(ii).
Section 68	In subsection (1)(a), for “order” substitute “instrument”.
Section 69	In subsection (4)— (a) in paragraph (a), ignore the words “in relation to sections 63 and 64”, and (b) ignore paragraph (b).
Section 70	In subsection (3)— (a) in paragraph (a), ignore the words “in relation to section 63”, and (b) ignore paragraph (b).
Section 71	Ignore subsection (1)(a).
Section 72	Ignore subsection (1)(a).
Section 73	Ignore subsection (1)(a).
Section 79A	In subsection (2), ignore the words “share transfer instruments and”.
Section 81	See above.
Section 81B	In subsection (1), for “or 12(2)” substitute “, 12(2) or 13(2)”.
	Ignore subsection (3)(c) and (d).
	In subsection (6), ignore paragraph (b) unless the clearing house is a PRA-authorised person.
Section 81C	In subsection (2), ignore the words “and the bank administration procedure”.
	Ignore subsection (3).
Sections 82 and 83	Ignore sections 82 and 83.

89C Clearing house rules

(1) A property transfer instrument made in respect of a UK clearing house may make provision about the consequences of a transfer for the rules of the clearing house.

(2) In particular, an instrument may—

(a) modify or amend the rules of a UK clearing house;

(b) in a case where some, but not all, of the business of a UK clearing house is transferred, make provision as to the application of the rules in relation to the parts of the business that are, and are not, transferred.

(3) Provision by virtue of this section may (but need not) be limited so as to have effect—

(a) for a specified period, or

(b) until a specified event occurs or does not occur.

89D Clearing house membership

(1) A property transfer instrument made in respect of a UK clearing house may make provision about the consequences of a transfer for membership of the clearing house.

(2) In particular, an instrument may—

(a) make provision modifying the terms on which a person is a member of a UK clearing house;

(b) in a case where some, but not all, of the business of a UK clearing house is transferred, provide for a person who was a member of the transferor to remain a member of the transferor while also becoming a member of the transferee.

89E Recognition of transferee company

(1) The Bank of England may provide for a company to which the business of a UK clearing house is transferred in accordance with section 12(2) to be treated as a recognised clearing house for the purposes of the Financial Services and Markets Act 2000—

(a) for a specified period, or

(b) until a specified event occurs.

(2) The provision may have effect—

(a) for a period specified in the instrument, or

(b) until the occurrence of an event specified or described in the instrument.

(3) The power under this section—

(a) may be exercised only with the consent of the Treasury, and

(b) must be exercised by way of provision in a property transfer instrument (or supplemental instrument).

89F Clearing house compensation orders

(1) The Treasury may by order make provision for protecting the financial interests of transferors and others in connection with any transfer under this Part as it applies by virtue of section 89B.

(2) The order may make provision establishing a scheme—

(a) for determining whether transferors should be paid compensation, or providing for transferors to be paid compensation, and establishing a scheme for paying any compensation,

(b) under which transferors become entitled to the proceeds of the disposal of things transferred in specified circumstances, and to a specified extent, and

(c) for compensation to be paid to persons other than transferors.

(3) An order—

(a) is to be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

89G Interpretation: “UK clearing house” &c.

(1) In this Part “UK clearing house” means a clearing house—

(a) which is incorporated in, or formed under the law of any part of, the United Kingdom,

(b) which provides central counterparty clearing services, and

(c) in relation to which a recognition order is in force under Part 18 of the Financial Services and Markets Act 2000.

(2) But “UK clearing house” does not include a clearing house which is also—

(a) a bank,

(b) a building society (within the meaning of section 119 of the Building Societies Act 1986),

(c) a credit union (within the meaning of section 31 of the Credit Unions Act 1979 or Article 2(2) of the Credit Unions (Northern Ireland) Order 1985), or

(d) an investment firm.

(3) Where a stabilisation power is exercised in respect of a UK clearing house, it does not cease to be a UK clearing house for the purposes of this Part if the recognition order referred to in subsection (1)(c) is later revoked.

(4) In this Part—

“central counterparty clearing services” has the same meaning as in section 155 of the Companies Act 1989 (see subsection (3A) of that section), and

“PRA-authorised person” has the meaning given by section 2B(5) of the Financial Services and Markets Act 2000.”

(7) In the Table in section 259 (statutory instruments), in Part 1 after the entry relating to section 89 insert—

“89F

Clearing house compensation orders

Draft affirmative resolution”.

(8) In the Table in section 261 (index of defined terms)—

(a) after the entry relating to “bridge bank share transfer instrument” insert—

“central counterparty clearing services	89G”,
“PRA-authorised person	89G”, and

(c) at the end insert—

“UK clearing house

89G”.”

Page 279, line 32, at end insert—

“Section 81B

Page 281, line 6, at end insert—

“( ) In subsection (6), after “filed” insert “(in Scotland, lodged)”.”

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 23, at end insert—

“(2A) If an order under this section makes provision by virtue of subsection (2)(b) enabling the FCA to exercise any of its powers under sections 205 to 206A of FSMA 2000 (disciplinary measures) by reference to an act or omission that constitutes an offence under CCA 1974, the order must also make provision by virtue of subsection (2)(d) ensuring that a person in respect of whom the power has been exercised cannot subsequently be convicted of the offence by reference to the same act or omission.”

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 162, line 32, leave out from “may” to “by” in line 34

Page 162, line 38, at end insert—

“( ) In exercising their powers under this section, the Treasury must have regard to—

(a) the importance of securing an appropriate degree of protection for consumers, and

(b) the principle that a burden or restriction which is imposed on a person, or on the carrying on of an activity, should be proportionate to the benefits, considered in general terms, which are expected to result from the imposition of that burden or restriction.”

Page 163, line 2, at end insert—

““consumers” has the meaning given in section 1G of FSMA 2000;”

Insert the following new Clause—

“Suspension of licences under Part 3 of Consumer Credit Act 1974

(1) The Consumer Credit Act 1974 is amended as follows.

(2) In section 32 (suspension or revocation)—

(a) in subsection (1), omit “or suspended”,

(b) in subsection (2)—

(i) in paragraph (a), omit “, as the case may be,” and “, or suspend it until a specified date or indefinitely,”, and

(ii) in paragraph (b), omit “or suspension” and “or suspend”,

(c) in subsection (3)—

(i) in paragraph (a), omit “, as the case may be,” and “, or suspend it until a specified date or indefinitely,”, and

(ii) in paragraph (b), omit “or suspension”,

(d) in subsection (4)—

(i) in paragraph (a), omit “, as the case may be,” and “, or suspend it until a specified date or indefinitely,”, and

(ii) in paragraph (b), omit “or suspension”,

(e) in subsections (6) and (7), omit “or suspension”,

(f) omit subsection (8),

(g) in subsection (9), omit “or to suspend”, and

(h) for the title, omit “Suspension and”.

(3) After section 32 insert—

“32A Power to suspend licence

(1) If during the currency of a licence it appears to the OFT to be urgently necessary for the protection of consumers that the licence should cease to have effect immediately or on a specified date, the OFT is to proceed as follows.

(2) In the case of a standard licence the OFT must, by notice—

(a) inform the licensee that the OFT is suspending the licence from the date of the notice or from a later date specified in the notice,

(b) state the OFT’s reasons for the suspension,

(c) state either—

(i) that the suspension is to end on a specified date, which must be no later than the last day of the 12 months beginning with the day on which the suspension takes effect, or

(ii) that the duration of the suspension is to be as provided by section 32B,

(d) specify any provision to be made under section 34A, and

(e) invite the licensee to submit to the OFT in accordance with section 34ZA representations—

(i) as to the suspension, and

(ii) about the provision (if any) that is or should be made under section 34A.

(3) In the case of a group licence the OFT must—

(a) give general notice that the OFT is suspending the licence from the date of the notice or from a later date specified in the notice,

(b) state in the notice the OFT’s reasons for the suspension,

(c) state in the notice either—

(i) that the suspension is to end on a specified date, which must be no later than the last day of the 12 months beginning with the day on which the suspension takes effect, or

(ii) that the duration of the suspension is to be as provided by section 32B,

(d) specify in the notice any provision to be made under section 34A, and

(e) in the notice invite any licensee to submit to the OFT in accordance with section 34ZA representations as to the suspension.

(4) In the case of a group licence issued on application the OFT must also—

(a) inform the original applicant of the matters specified under subsection (3)(a) to (d) in the general notice, and

(b) invite the original applicant to submit to the OFT in accordance with section 34ZA representations as to the suspension.

(5) Except for the purposes of sections 29 to 32 and section 33A, a licensee under a suspended licence is to be treated, in respect of the period of suspension, as if the licence had not been issued.

(6) The suspension may, if the OFT thinks fit, be ended by notice given by it to the licensee or, in the case of a group licence, by general notice.

(7) In this section “consumers”, in relation to a licence, means individuals who have been or may be affected by the carrying on of the business to which the licence relates, other than individuals who are themselves licensees.

32B Duration of suspension

(1) This section applies where a notice under section 32A provides for the duration of a suspension under that section to be as provided by this section.

(2) The suspension ends at the end of the period of 12 months beginning with the day on which it takes effect, but this is subject to—

(a) subsections (3) and (4) (where those subsections give a later time), and

(b) the powers of the OFT under section 32A(6) and section 33.

(3) Subsection (4) applies where—

(a) the OFT gives notice under section 32 that it is minded to revoke the licence, and

(b) it gives that notice—

(i) on or before giving the notice under section 32A, or

(ii) after giving that notice but before the end of the period of 12 months mentioned in subsection (2).

(4) The period of suspension is to continue until—

(a) the time of any determination by the OFT not to revoke the licence in pursuance of the notice under section 32, or

(b) where the OFT determines to revoke the licence in pursuance of the notice, the end of the appeal period.”

(4) In section 33 (application to end suspension), for subsection (1) substitute—

“(1) On an application made by a licensee the OFT may, if it thinks fit, by notice to the licensee end the suspension of a licence under section 32A, whether the suspension was for a fixed period or for a period determined in accordance with section 32B.”

(5) In section 33A (power of OFT to impose requirements on licensees) after subsection (6) insert—

“(6A) A requirement imposed under this section during a period of suspension cannot take effect before the end of the suspension.”

(6) After section 34 insert—

“34ZA Representations to OFT: suspension under section 32A

(1) Where this section applies to an invitation by the OFT to any person (“P”) to submit representations, the OFT must invite P, within 21 days after the notice containing the invitation is given to P or published, or such longer period as the OFT may allow—

(a) to submit P’s representations in writing to the OFT, and

(b) to give notice to the OFT, if P thinks fit, that P wishes to make representations orally,

and where notice is given under paragraph (b) the OFT must arrange for the oral representations to be heard.

(2) The OFT must reconsider its determination under section 32A and determine whether to confirm it (with or without variation) or revoke it and in doing so must take into account any representations submitted or made under this section.

(3) The OFT must give notice of its determination under this section to the persons who were required to be invited to submit representations about the original determination under section 32A or, where the invitation to submit representations was required to be given by general notice, must give general notice of the confirmation or revocation.”

(7) In section 34A (winding-up of standard licensee’s business), in subsection (2)—

(a) in paragraph (c), omit “suspend or”, and

(b) after paragraph (c) insert—

“(d) a determination to suspend such a licence under section 32A (including a determination made under section 34ZA on reconsidering a previous determination under section 32A);”.

(8) In section 41 (appeals) after subsection (1) insert—

“(1ZA) References in the table to a determination as to the suspension of a standard licence or group licence are to be read as references to a determination under section 34ZA to confirm a determination to suspend a standard licence or group licence.”

(9) Nothing in this section affects the powers conferred by section 22 of FSMA 2000 or section 91 of this Act.”

Insert the following new Clause—

“Power of the FCA to make further provision about regulation of consumer credit

(1) The FCA may make rules or apply a sanction to authorised persons who offer credit on terms that the FCA judge to cause consumer detriment.

(2) This may include rules that determine a maximum total cost for consumers of a product and determine the maximum duration of a supply of a product or service to an individual consumer.”

Insert the following new Clause—

“Phasing out commercial debt management

In Part 2 of FSMA 2000, after section 30 insert—

“30A Prohibition of specified fees for debt management

(1) The FCA will make rules under this section to prohibit any person whether authorised or not from charging a consumer fees of a specified description in respect of debt management services or debt solutions.

(2) For the purpose of subsection (1), rules may specify fees to be prohibited in terms that include, but are not limited to—

(a) the total amount of fees charged in respect of one or more debt solutions,

(b) the size of any particular fee payment,

(c) the timing and manner that fees fall due,

(d) the type and nature of debt management services or debt solutions, and

(e) any other matter that the FCA deems necessary to meet its objectives.

(3) The rules may define debt management services and debt solutions for the purpose of this section and this may include both regulated and unregulated activities.

(4) Subsection (5) will take effect no later than three years after rules under this section come into effect and not later than 6 years after the passing of this Act.

(5) At the expiry of the period set out in subsection (4) the FCA shall make rules prohibiting any person, whether authorised or not, from charging a consumer fees or charges of any amount in respect of an agreement for debt management services or debt solutions made after these rules come into effect.

(6) The FCA may extend the period set out in subsection (4) where it is satisfied that the prohibition in subsection (5) would result in significant detriment for consumers.

(7) Any agreement made in contravention of a prohibition in this section will be unenforceable against the consumer or consumers it relates to.

(8) A consumer who has entered into an agreement that contravenes a prohibition under this section will be entitled to recover—

(a) any money or other property paid or transferred by him under the agreement, and

(b) compensation for any loss sustained by him as a result of having parted with it.

(9) The FCA may specify persons, or classes of persons who may be exempted from the prohibitions set out in this section in respect of more or more specified debt management services or debt solutions.””

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.”

Insert the following new Clause—

“Amendment of Tribunals, Courts and Enforcement Act 2007

In section 124 of the Tribunals, Courts and Enforcement Act 2007 (charges by operator of approved scheme), for subsections (1) and (2) substitute—

“(1) The operator of an approved scheme may recover its charges from debtors or affected creditors (or both).

(2) In this section—

“charges” means the costs which the operator incurs, taking one year with another, in connection with the approved scheme along with any charges made by the operator, so far as those costs and charges are reasonable;

“debtors” means—

(a) debtors who make requests for debt repayment plans to be arranged in accordance with the approved scheme, and

(b) debtors for whom debt repayment plans are arranged in accordance with the approved scheme.””

Page 286, line 16, at end insert—

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

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 291, line 32, at end insert—

“Lloyd’s Act 1982 (c. xiv)

In section 7 of the Lloyd’s Act 1982 (the Disciplinary Committee and the Appeal Tribunal), in subsection (1A)(c), for “Financial Services Authority” substitute “Prudential Regulation Authority or the Financial Conduct Authority”.”

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.”.”

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”.”

Page 311, line 16, at end insert—

“Charities and Trustee Investment (Scotland) Act 2005 (asp 10)

In section 106 of the Charities and Trustee Investment (Scotland) Act 2005 (general interpretation), in the definition of “relevant financial institution”, for “Part 4” substitute “Part 4A”.”

Page 311, line 37, at end insert—

“Part 5 Amendment of Measure of the National Assembly for Wales Welsh Language (Wales) Measure 2011 (nawm 1)

In Schedule 6 to the Welsh Language (Wales) Measure 2011 (public bodies etc: standards)—

(a) in the Welsh text, omit the entry relating to “Awdurdod Gwasanaethau Ariannol (“The Financial Services Authority”)” and at the appropriate place among the entries headed “Cyffredinol” insert—

“Awdurdod Ymddygiad Ariannol (“Financial Conduct Authority”) Safonau cyflenwi gwasanaethau Safonau llunio polisi Safonau gweithredu Safonau cadw cofnodion.”

(b) in the English text, omit the entry relating to “The Financial Services Authority (“Awdurdod Gwasanaethau Ariannol”)” and at the appropriate place among the entries headed “General” insert—

“Financial Conduct Authority (“Awdurdod Ymddygiad Ariannol”) Record keeping standards Service delivery standards Policy making standards Operational standards.”

(c) in the Welsh text, at the appropriate place among the entries headed “Cyffredinol”, insert—

“Awdurdod Rheoleiddio Darbodus (“Prudential Regulation Authority”) Safonau cyflenwi gwasanaethau Safonau llunio polisi Safonau gweithredu Safonau cadw cofnodion.”

(d) in the English text, at the appropriate place among the entries headed “General”, insert—

“Prudential Regulation Authority (“Awdurdod Rheoleiddio Darbodus”) Record keeping standards Service delivery standards Policy making standards Operational standards.”.”

Page 166, line 4, at end insert—

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

Page 166, line 41, at end insert—

“(aa) make provision treating any relevant instrument which was made, issued or given by the Financial Services Authority under any enactment before section 5 is fully in force and is designated by the FCA, the PRA or the Bank of England (or any two or more of them) in accordance with the order—

(i) as having been made, issued or given by the designating body or bodies;

(ii) as having been made, issued or given (or also made, issued or given) under a corresponding provision of this Act or of an enactment as amended by or under this Act;

(ab) make provision enabling a body which makes a designation by virtue of paragraph (aa) to modify the instrument being designated;

(ac) make provision treating anything done before section 5 is fully in force by persons appointed by the Financial Services Authority with the approval of the Treasury as having been done by the FCA;

(ad) make provision treating anything done before section 5 is fully in force by persons appointed by the Prudential Regulation Authority Limited with the approval of the Treasury and the Bank of England as having been done by the PRA;”

Page 167, line 1, leave out “rules made,”

Page 167, line 20, at end insert—

“(b) “relevant instrument” means rules, guidance, requirements or a code, scheme, statement or direction.”

Page 167, line 41, leave out “Section 94 comes” and insert “Sections 94 and (Suspension of licences under Part 3 of Consumer Credit Act 1974) come”