Financial Services Bill

Page 43, line 33, at end insert “, or

(b) the setting of a specified benchmark.”

Page 43, line 34, after “(1A),” insert—

“( ) after subsection (5) insert—

“(6) “Benchmark” means an index, rate or price that—

(a) is determined from time to time by reference to the state of the market,

(b) is made available to the public (whether free of charge or on payment), and

(c) is used for reference for purposes that include one or more of the following—

(i) determining the interest payable, or other sums due, under loan agreements or under other contracts relating to investments;

(ii) determining the price at which investments may be bought or sold or the value of investments;

(iii) measuring the performance of investments.””

Page 44, line 18, leave out “22(1A)” and insert “22(1A)(a)”

Page 44, line 35, at end insert—

24E The matters with respect to which provisions may be made under section 22(1A)(b) include, in particular, those described in general terms in this Part of this Schedule.

24F Providing any information or expression of opinion that—

(a) is required by another person in connection with the determination of a benchmark, and

(b) is provided to that person for that purpose.

24G (1) Administering the arrangements for determining a benchmark.

(2) Collecting, analysing or processing information or expressions of opinion for the purpose of the determination of a benchmark.

24H (1) Determining a benchmark.

(2) Publishing a benchmark or information connected with a benchmark.””

Insert the following new Clause—

“Appointed representatives

(1) Section 39 of FSMA 2000 (appointed representatives) is amended as follows.

(2) After subsection (1B) insert—

“(1C) Subsection (1D) applies where an authorised person (“A”)—

(a) has permission under Part 4A, or permission resulting from any other provision of this Act, only in relation to one or more qualifying activities,

(b) is a party to a contract with another authorised person (A’s “principal”) which—

(i) permits or requires A to carry on business of a prescribed description (“the relevant business”), and

(ii) complies with such requirements as may be prescribed, and

(c) is someone for whose activities in carrying on the whole or part of the relevant business A’s principal has accepted responsibility in writing.

(1D) Sections 20(1) and (1A) and 23(1A) do not apply in relation to the carrying on by A of a relevant additional activity.

(1E) In subsections (1C) and (1D)—

(a) “qualifying activity” means a regulated activity which is of a prescribed kind and relates—

(i) to rights under a contract of the kind mentioned in paragraph 23 of Schedule 2, other than one under which the obligation of the borrower to repay is secured on land, or

(ii) to rights under a contract of the kind mentioned in paragraph 23B of that Schedule;

(b) “relevant additional activity” means a regulated activity which—

(i) is not one to which A’s permission relates, and

(ii) is comprised in the carrying on of the business for which A’s principal has accepted responsibility.”

(3) For subsection (2) substitute—

“(2) In this Act “appointed representative” means—

(a) a person who is exempt as a result of subsection (1), or

(b) a person carrying on a regulated activity in circumstances where, as a result of subsection (1D), sections 20(1) and (1A) and 23(1A) do not apply.””

Page 47, line 32, at end insert—

“( ) The regulators must co-ordinate their procedures for, and provide clear and detailed guidance on, the processes for applying for, varying and cancelling permission that are applicable to authorised persons regulated by both PRA and the FCA.”

Page 47, line 35, after “in” insert “or specified under”

Page 47, line 39, after “in” insert “or specified under”

Page 49, line 23, after “FCA” insert “, which shall not be required where the applicant seeks permission to carry on the regulated activity of accepting deposits,”

Page 51, line 25, after “FCA” insert “, which shall not be required where the applicant holds permission to carry on the regulated activity of accepting deposits,”

Page 51, line 34, after “FCA” insert “, which shall not be required where the applicant holds permission to carry on the regulated activity of accepting deposits,”

Page 52, line 4, after “FCA” insert “, which shall not be required where immediately before the variation the applicant held permission to carry on the regulated activity of accepting deposits,”

Page 53, line 8, after “FCA” insert “, which shall not be required where the applicant holds permission to carry on the regulated activity of accepting deposits,”

Page 53, line 13, at end insert “, which shall not be required where the applicant holds permission to carry on the regulated activity of accepting deposits,”

Page 55, line 41, after “FCA” insert “, which shall not be required where the applicant holds permission to carry on the regulated activity of accepting deposits,”

Page 56, line 9, leave out “expires” and insert “may be expressed to expire”

Page 56, line 10, leave out “this” and insert “the imposition of a requirement that expires at the end of a specified period”

Page 61, line 8, after “FCA” insert “, which shall not be required where the applicant holds permission to carry on the regulated activity of accepting deposits,”

Page 65, line 22, at end insert—

“( ) In seeking to ensure an appropriate degree of protection for consumers, the PRA and FCA shall—

(a) require banks to provide clear and prominent warnings to consumers where deposits are not covered by the Financial Services Compensation Scheme; and

(b) make and maintain effective arrangements to consult consumers on the prominence and method of such warnings.”

Page 67, line 12, at end insert—

“( ) In the event of a prohibition order being made, the FCA and PRA shall—

(a) publish an explanatory statement regarding the decision; and

(b) include the individual on an updated list of those subject to prohibition orders to be presented on HM Treasury’s website.”

Page 67, line 32, at end insert “, which shall not be required where the application for approval relates to an individual who is, or is applying to be, approved to perform the function of acting as a director at a firm that holds or is seeking to hold permission to carry on the regulated activity of accepting deposits”

Page 70, line 8, leave out paragraph (c) and insert—

“( ) section 87B to 87D;”

Page 70, line 15, at end insert—

“( ) For section 73 substitute—

“73 General duty of the FCA

In discharging its functions under this Part, the FCA should, so far is compatible with its strategic and operational objectives, have regard to the international character of capital markets and the desirability of maintaining the competitive position of the United Kingdom.””

Page 70, line 18, at end insert—

“( ) In section 87A (criteria for approval of prospectus)—

(a) in subsection (1), for “competent authority” substitute ““FCA”,

(b) in subsection (7)(a), for “competent authority”, in the first place, substitute “FCA”, and

(c) in the heading, for “competent authority” substitute “FCA”.”

Page 71, line 15, leave out paragraph (a)

Page 75, line 7, at end insert—

“( ) The Treasury must lay before Parliament a copy of any statement published under this section.”

Page 85, line 9, at end insert—

“137AA FCA general rules: stewardship

The power of the FCA to make general rules includes the power to make such rules (“stewardship rules”) relating to the exercise of shareholder rights, including voting rights, by authorised persons.”

Page 87, line 28, at end insert—

“137DA Rules requiring participation in benchmark

(1) The power of the FCA to make general rules includes power to make rules requiring authorised persons to take specified steps in connection with the setting by a specified person of a specified benchmark.

(2) The rules may in particular—

(a) require authorised persons to whom the rules apply to provide information of a specified kind, or expressions of opinion as to specified matters, to persons determined in accordance with the rules;

(b) make provision about the form in which and the time by which any information or expression of opinion is to be provided;

(c) make provision by reference to any code or other document published by the person responsible for the setting of the benchmark or by any other person determined in accordance with the rules, as the code or other document has effect from time to time.

(3) Rules making provision of the kind mentioned in subsection (2)(c) may provide that the code of practice or other document is to be capable of affecting obligations imposed by the rules only if specified requirements are met in relation to it.

(4) In this section—

“benchmark” has the meaning given in section 22(6);

“specified” means specified in or determined in accordance with the rules.”

Line 17, after “benchmark” insert “, by the Financial Reporting Council”

Line 21, leave out “of practice”

Line 23, at end insert—

“(3A) If at any time in the opinion of the FCA there is no person responsible for the setting of the benchmark, or the person responsible is not performing this function to a sufficient standard, the FCA may take such steps as it deems necessary so as to ensure the continuation of the setting of the benchmark.”

Page 87, line 28, at end insert—

“137DA Rules determining the identification of the specified person responsible for setting a specified benchmark

The rules determining the identification of the specified person responsible for setting a specified benchmark must be agreed with the consent of the Treasury Select Committee.”

Page 92, line 10, after “in” insert “or specified under”

Page 93, line 12, leave out “section 397(5)(b)” and insert “the relevant exemption provisions”

Page 93, line 19, at end insert—

“(4) “The relevant exemption provisions” are the following provisions of the Financial Services Act 2012—

(a) section (Misleading impressions)(9)(b);

(b) section (Misleading statements etc in relation to benchmarks)(4)(a).”

Page 95, line 29, leave out “must” and insert “may”

Page 95, line 45, at end insert—

“137S Limitation

Neither regulator may make rules that require any person to review, take action with regard to, pay compensation for or otherwise effect redress in relation to any transaction, sale, provision of advice, exercise of discretion or other act or omission where an action based on that event would fall outside the time limits prescribed under the Limitation Act 1980.”

Page 98, leave out line 14

Page 99, line 40, at end insert “or under section 138KA(2)”

Page 102, line 46, at end insert—

“138KA Consultation: common investment funds and common deposit funds

(1) Subsection (2) applies where a regulator proposes to make a rule (“the proposed rule”) which would apply to both—

(a) common investment funds or common deposit funds, and

(b) collective investment schemes other than common investment funds.

(2) The regulator must prepare a statement setting out—

(a) its opinion on whether or not the impact of the proposed rule on fund structures within subsection (1)(a) will be different from its impact on fund structures within subsection (1)(b), and

(b) if so, details of the difference.

(3) Subsection (4) applies where a regulator makes a rule which—

(a) applies both to—

(i) common investment funds or common deposit funds, and

(ii) collective investment schemes other than common investment funds, and

(b) differs from the draft of the proposed rule published under section 138I(1)(b) or section 138(J)(1)(b) (as the case may be).

(4) The regulator must prepare a statement setting out—

(a) its opinion whether or not the impact of the rule is different from the impact of the proposed rule on—

(i) the fund structures within subsection (3)(a)(i), and

(ii) those fund structures as compared with fund structures within subsection (3)(a)(ii), and

(b) if so, details of the difference.

(5) A “common investment fund” is a fund established under—

(a) section 22(5) of the Charities Act 1960;

(b) section 24(5) of the Charities Act 1993; or

(c) section 96 of the Charities Act 2011.

(6) A “common deposit fund” is a fund established under—

(a) section 22A of the Charities Act 1960;

(b) section 25 of the Charities Act 1993; or

(c) section 100 of the Charities Act 2011.”

Page 103, leave out lines 13 and 14

Page 105, leave out lines 20 and 21 and insert “to its functions under the short selling regulation.”

Page 110, line 2, leave out from “Authority”” to end of line 3 and insert “or “Authority’s” in each place substitute “FCA” or “FCA’s”.”

Page 110, line 4, leave out subsection (2) and insert—

“(2) Subsection (1) does not affect references to “the competent authority”.”

Page 111, line 20, at end insert “or 3IA”

Page 114, leave out lines 24 to 26

Page 114, leave out lines 35 to 40

Page 251, leave out lines 30 to 32

Page 122, leave out lines 3 to 26 and insert—

“296A Additional power to direct UK clearing houses

(1) The Bank of England may direct a UK clearing house to take, or refrain from taking, specified action if the Bank is satisfied that it is desirable to give the direction, having regard to the public interest in—

(a) protecting and enhancing the stability of the UK financial system,

(b) maintaining public confidence in the stability of the UK financial system,

(c) maintaining the continuity of the central counterparty clearing services provided by the clearing house, and

(d) maintaining and enhancing the financial resilience of the clearing house.

(2) The direction may, in particular—

(a) specify the time for compliance with the direction,

(b) require the rules of the clearing house to be amended, and

(c) override such rules (whether generally or in their application to a particular case).

(3) The direction is enforceable, on the application of the Bank, by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.

(4) The Bank may revoke a direction given under this section.

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

296B Additional power to direct UK clearing houses (No. 2)

(1) The Bank of England shall ensure that each authorised Clearing House draws up and maintains a recovery plan providing, through measures taken by the management of the clearing house or by a group entity, for the restoration of its financial situation following significant deterioration.

(2) The Bank of England shall ensure that the clearing houses update their recovery plans at least annually or after change to the legal or organisational structure of the clearing house, its business or its financial situation, which could have a material effect on, or necessitates a change to the recovery plan; and the Bank of England may require authorised clearing houses to update their recovery plans more frequently.

(3) Recovery plans shall not assume any access to or receipt of extraordinary public financial support but shall include, where applicable, an analysis of how and when a clearing house may apply for the use of central bank facilities in stressed conditions and available collateral.

(4) The Bank of England shall ensure that authorised clearing houses include in recovery plans appropriate conditions and procedures to ensure the timely implementation of recovery actions as well as a wide range of recovery options; and the Bank of England shall ensure that firms test their recovery plans against a range of scenarios of financial distress, varying in their severity including system wide events, legal-entity specific stress and group-wide stress.

296C Additional power to direct UK clearing houses (No. 3)

(1) The Bank of England shall require authorised clearing houses to submit recovery plans to it for review.

(2) The Bank of England shall review those plans and assess the extent to which each plan the following criteria—

(a) the implementation of the arrangements proposed in the plan would be likely to restore the viability and financial soundness of the clearing house, taking into account the preparatory measures that the clearing house has taken or has planned to take;

(b) the plan or specific options could be implemented effectively in situations of financial stress and without causing any significant adverse effect on the financial system, including in the event that other clearing houses implemented recovery plans within the same time period.

(3) Where the Bank of England assess that there are deficiencies in the recovery plan, or potential impediments to its implementation, they shall notify the clearing house of their assessment and require the clearing house to submit, within three months, a revised plan demonstrating how those deficiencies or impediments have been addressed.

(4) If the clearing house fails to submit a revised recovery plan, or if the Bank of England determines that the revised recovery plan does not adequately remedy the deficiencies or potential impediments identified in its original assessment, the Bank of England shall require the clearing house to take any measure it considers necessary to ensure that the deficiencies or impediments are removed; and the Bank of England may, in particular, require the clearing house to take actions to—

(a) facilitate the reduction of the risk profile of the clearing house;

(b) enable timely recapitalisation measures;

(c) make changes to the firm strategy;

(d) make changes to the funding strategy so as to improve the resilience of the core business lines and critical operations;

(e) make changes to the governance structure of the clearing house.”

Page 122, leave out lines 24 to 26

Leave out Clause 30 and insert the following new Clause—

“Additional power to direct UK clearing houses

After section 296 of FSMA 2000 insert—

“296A Additional power to direct UK clearing houses

(1) The Bank of England may direct a UK clearing house to take, or refrain from taking, the specified actions in subsection (4) if all the conditions in subsections (2), (3) and (6) are met and the Bank is satisfied that it is desirable to give the direction, having regard to the public interest in—

(a) protecting and enhancing the stability of the UK financial system,

(b) maintaining public confidence in the stability of the UK financial system,

(c) maintaining the continuity of the central counterparty clearing services provided by the clearing house,

(d) maintaining and enhancing the financial resilience of the clearing house, and

(e) maintaining the integrity of property rights in accordance with a Convention right (within the meaning of the Human Rights Act 1998),

which together, constitute the “public interest factors”, and no public interest factor shall be given priority over any other unless the Bank has grounds to determine otherwise.

(2) The conditions are that—

(a) the clearing house, has, or is likely, to fail to meet the requirements of paragraph 16 or 27 of Part III of the Schedule to the Recognition Regulations;

(b) a serious threat exists to the stability of the financial system of the United Kingdom arising from central counterparty clearing services provided by the relevant UK clearing house; and

(c) in the opinion of the Bank, the specified action would ameliorate the threat referred to in paragraph (b), having regard to the public interest factors.

(3) Before determining whether the conditions in subsection (2) are met, the Bank shall consult the PRA, the Treasury, and the relevant CCP or CCPs.

(4) The specified actions are requiring the clearing house to take or refrain from taking, for a specified period and in relation to specified transactions, steps in relation to margining, eligible collateral, risk management arrangements and continuity of clearing services and other functions as may be determined, for any market contracts cleared by the CCP.

(5) The direction may, in particular—

(a) specify the time for compliance with the direction,

(b) require the rules of the clearing house to be amended, and

(c) override such rules (whether generally or in their application to a particular case).

(6) The Bank shall not issue any direction under this section unless it has obtained an order from the court; and the direction is enforceable, on the application of the Bank, by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.

(7) The Bank may revoke a direction given under this section.

(8) If the Bank gives a direction to a UK clearing house under this section, the clearing house may apply to the court to amend or revoke the direction; and the court may make an order revoking the direction with immediate effect on any or all of the following grounds—

(a) the order is not for a specified action;

(b) the conditions were or are not met; or

(c) the satisfaction of the public interest factors.

(9) Section 47 of the Banking Act 2009 (as applied to clearing houses pursuant to section 89B of the Banking Act 2009) shall apply to directions given under this section where the direction involves a partial property transfer.

(10) Section 48 of the Banking Act 2009 (as applied to clearing houses pursuant to section 89B of the Banking Act 2009) shall apply to directions given under this section where the direction involves protected arrangements as therein defined.

(11) Section 89F of the Banking Act 2009 (as applied to clearing houses pursuant to section 89B of the Banking Act 2009) shall apply to directions given under this section where the direction may result in financial loss to the clearing house.

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

Page 257, line 8, after “(1)” insert—

“(a) after the definition of “applicant” insert—

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

(b) ”

Page 126, line 10, at end insert—

“(2) If the Treasury consider that it is in the public interest to do so, the Treasury may by order—

(a) amend section 391 of FSMA 2000 by substituting for subsections (1) to (1ZB) the following—

“(1) Neither the regulator giving a warning notice nor a person to whom it is given or copied may publish the notice or any details concerning it.”, and

(b) repeal section 395(1)(d) and (2)(b) and (c) of that Act.”

Page 258, leave out lines 12 and 13 and insert—

“(4) For subsection (2) substitute—

“(2) A contravention within subsection (1) or (1A)—

(a) does not, except as provided by section 23(1A), make a person guilty of an offence,

(b) does not, except as provided by section 26A, make any transaction void or unenforceable, and

(c) does not, except as provided by subsection (3), give rise to any right of action for breach of statutory duty.””

Page 258, line 15, at end insert—

“( ) After subsection (3) insert—

“(4) Subsections (1) and (1A) are subject to section 39(1D).

(5) References in this Act to an authorised person acting in contravention of this section are references to the person acting in a way that results in a contravention within subsection (1) or (1A).””

Page 258, line 15, at end insert—

“2A (1) Section 23 (contravention of the general prohibition) is amended as follows.

(2) After subsection (1) insert—

“(1A) An authorised person (“A”) is guilty of an offence if A carries on a credit-related regulated activity in the United Kingdom, or purports to do so, otherwise than in accordance with permission—

(a) given to that person under Part 4A, or

(b) resulting from any other provision of this Act.

(1B) In this Act “credit-related regulated activity” means a regulated activity of a kind designated by the Treasury by order.

(1C) The Treasury may designate a regulated activity under subsection (1B) only if the activity involves a person—

(a) entering into or administering an agreement under which the person provides another person with credit,

(b) exercising or being able to exercise the rights of the lender under an agreement under which another person provides a third party with credit, or

(c) taking steps to procure payment of debts due under an agreement under which another person is provided with credit.

(1D) But a regulated activity may not be designated under subsection (1B) if the agreement in question is one under which the obligation of the borrower is secured on land.

(1E) “Credit” includes any cash loan or other financial accommodation.

(1F) A person guilty of an offence under subsection (1A) is liable—

(a) on summary conviction, to imprisonment for a term not exceeding the applicable maximum term or a fine not exceeding the statutory maximum, or both;

(b) on conviction on indictment, to imprisonment for a term not exceeding two years, or a fine, or both.

(1G) The “applicable maximum term” is—

(a) in England and Wales, 12 months (or 6 months, if the offence was committed before the commencement of section 154(1) of the Criminal Justice Act 2003);

(b) in Scotland, 12 months;

(c) in Northern Ireland, 6 months.”

(3) After subsection (3) insert—

“(4) Subsection (1A) is subject to section 39(1D).

(5) No proceedings may be brought against a person in respect of an offence under subsection (1A) in a case where either regulator has taken action under section 205, 206 or 206A in relation to the alleged contravention within section 20(1) or (1A).”

(4) In the heading to the section, at the end insert “or section 20(1) or (1A)”.

2B After section 23 insert—

“23A Parliamentary control in relation to certain orders under section 23

(1) This section applies to the first order made under section 23(1B).

(2) This section also applies to any subsequent order made under section 23(1B) which contains a statement by the Treasury that, in their opinion, the effect (or one of the effects) of the proposed order would be that an activity would become a credit-related regulated activity.

(3) An order to which this section applies may not be made unless a draft of the order has been laid before Parliament and approved by a resolution of each House.”

2C After section 26 insert—

“26A Agreements relating to credit

(1) An agreement that is made by an authorised person in contravention of section 20 is unenforceable against the other party if the agreement is entered into in the course of carrying on a credit-related regulated activity involving matters falling within section 23(1C)(a).

(2) The other party is entitled to recover—

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

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

(3) In subsections (1) and (2) “agreement” means an agreement—

(a) which is made after this section comes into force, and

(b) the making or performance of which constitutes, or is part of, the credit-related regulated activity.

(4) If the administration of an agreement involves the carrying on of a credit-related regulated activity, the agreement may not be enforced by a person for the time being exercising the rights of the lender under the agreement unless that person has permission, given under Part 4A or resulting from any other provision of this Act, in relation to that activity.

(5) If the taking of steps to procure payment of debts due under an agreement involves the carrying on of a credit-related regulated activity, the agreement may not be enforced by a person for the time being exercising the rights of the lender under the agreement unless the agreement is enforced in accordance with permission—

(a) given under Part 4A to the person enforcing the agreement, or

(b) resulting from any other provision of this Act.”

3 In section 27 (agreements made through unauthorised persons) for subsection (1) substitute—

“(1) This section applies to an agreement that—

(a) is made by an authorised person (“the provider”) in the course of carrying on a regulated activity,

(b) is not made in contravention of the general prohibition,

(c) if it relates to a credit-related regulated activity, is not made in contravention of section 20, and

(d) is made in consequence of something said or done by another person (“the third party”) in the course of—

(i) a regulated activity carried on by the third party in contravention of the general prohibition, or

(ii) a credit-related regulated activity carried on by the third party in contravention of section 20.

(1A) The agreement is unenforceable against the other party.”

4 In section 28 (agreements made unenforceable by section 26 or 27)—

(a) at the end of subsection (1) insert “, other than an agreement entered into in the course of carrying on a credit-related regulated activity”,

(b) in the heading to the section, at the end insert “: general cases”.

5 After section 28 insert—

“28A Credit-related agreements made unenforceable by section 26, 26A or 27

(1) This section applies to an agreement that—

(a) is entered into in the course of carrying on a credit-related regulated activity, and

(b) is unenforceable because of section 26, 26A or 27.

(2) The amount of compensation recoverable as a result of that section is—

(a) the amount agreed by the parties, or

(b) on the application of either party, the amount specified in a written notice given by the FCA to the applicant.

(3) If on application by the relevant firm the FCA is satisfied that it is just and equitable in the circumstances of the case, it may by written notice to the applicant allow—

(a) the agreement to be enforced, or

(b) money paid or property transferred under the agreement to be retained.

(4) In considering whether to allow the agreement to be enforced or (as the case may be) the money or property paid or transferred under the agreement to be retained the FCA must—

(a) if the case arises as a result of section 26 or 26A, have regard to the issue mentioned in subsection (5), or

(b) if the case arises as a result of section 27, have regard to the issue mentioned in subsection (6).

(5) The issue is whether the relevant firm reasonably believed that by making the agreement the relevant firm was neither contravening the general prohibition nor contravening section 20.

(6) The issue is whether the provider knew that the third party was (in carrying on the credit-related regulated activity) either contravening the general prohibition or contravening section 20.

(7) An application to the FCA under this section by the relevant firm may relate to specified agreements or to agreements of a specified description or made at a specified time.

(8) “The relevant firm” means—

(a) in a case falling within section 26, the person in breach of the general prohibition;

(b) in a case falling within section 26A or 27, the authorised person concerned.

(9) If the FCA thinks fit, it may when acting under subsection (2)(b) or (3)—

(a) limit the determination in its notice to specified agreements, or agreements of a specified description or made at a specified time;

(b) make the determination in its notice conditional on the doing of specified acts by the applicant.

28B Decisions under section 28A: procedure

(1) A notice under section 28A(2)(b) or (3) must—

(a) give the FCA’s reasons for its determination, and

(b) give an indication of—

(i) the right to have the matter referred to the Tribunal that is conferred by subsection (3), and

(ii) the procedure on such a reference.

(2) The FCA must, so far as it is reasonably practicable to do so, give a copy of the notice to any other person who appears to it to be affected by the determination to which the notice relates.

(3) A person who is aggrieved by the determination of an application under section 28A(2)(b) or (3) may refer the matter to the Tribunal.””

Page 258, line 36, at end insert—

“( ) In section 130 (guidance), in subsection (1)(b), for “section 397 of this Act” substitute “Part 6A of the Financial Services Act 2012”.”

Page 260, line 19, at end insert—

“( ) After subsection (1) insert—

“(1A) Each regulator’s policy with respect to the imposition of penalties, suspensions or restrictions under this Part must include policy with respect to their imposition in relation to conduct which constitutes or may constitute an offence by virtue of section 23(1A) (authorised persons carrying on credit-related regulated activities otherwise than in accordance with permission).””

Page 261, line 8, leave out from beginning to “qualifying” in line 9 and insert “for sub-paragraph (i) (but not the “or” following it) substitute—

“(i) which is imposed by or under this Act or by a”

Page 262, line 6, leave out from beginning to “qualifying” in line 7 and insert “for sub-paragraph (i) (but not the “or” following it) substitute—

“(i) which is imposed by or under this Act or by a”

Page 267, line 45, at end insert “, and

(d) a decision under section 391(1)(c) to publish information about the matter to which a warning notice relates.”

Page 268, line 2, leave out from “from” to end of line 4 and insert ““, that the decision” to the end and insert “that—

(a) a decision falling within any of paragraphs (a) to (c) of subsection (1) is taken—

(i) by a person not directly involved in establishing the evidence on which the decision is based, or

(ii) by 2 or more persons who include a person not directly involved in establishing that evidence,

(b) a decision falling within paragraph (d) of subsection (1) is taken—

(i) by a person other than the person by whom the decision was first proposed, or

(ii) by 2 or more persons not including the person by whom the decision was first proposed, and

(c) a decision falling within paragraph (d) of subsection (1) is taken in accordance with a procedure which is, as far as possible, the same as that applicable to a decision which gives rise to an obligation to give a warning notice and which falls within paragraph (b) or (c) of subsection (1).””

Page 269, line 2, at end insert—

“(16) After subsection (13) insert—

“(14) Neither regulator may publish any information about the matter to which a warning notice given under section 67 relates unless—

(a) it has provided to the individual to which it relates (“the relevant individual”) a draft of the warning notice and the information that it intends to publish (“the relevant material”);

(b) the relevant individual is notified in writing that he may, within a period of not less than 14 days from receipt of the relevant information, make written or written and oral representations to the relevant regulator; and

(c) the relevant regulator has, subsequent to receiving any representations that the relevant individual has made within the specified period, given the relevant individual a written statement containing its reasons for determining whether to publish the relevant material in the form and manner proposed by the relevant regulator or as it otherwise determines.

(15) Each regulator shall constitute a body to take the decision to publish the information to which this section relates and to consider representations made by a relevant individual, which body shall comprise persons of whom the majority are not employees of either regulator.””

Page 269, line 32, at end insert—

“30A In section 400 (offences by a body corporate etc) after subsection (6) insert—

“(6A) References in this section to an offence under this Act include a reference to an offence under Part 6A of the Financial Services Act 2012 (offences relating to financial services).””

Page 269, line 33, at end insert—

“( ) For subsection (1) substitute—

“(1) In this section “offence” means—

(a) an offence under this Act,

(b) an offence under subordinate legislation made under this Act, or

(c) an offence under Part 6A of the Financial Services Act 2012 (offences relating to financial services).””

Page 270, line 19, leave out from “of” to end of line 20 and insert “any other offence”

Page 270, line 25, at end insert—

“32A In section 403 (jurisdiction and procedure in respect of offences), in subsection (7), at the end insert “or an offence under Part 6A of the Financial Services Act 2012 (offences relating to financial services).”

Page 126, line 21, at end insert—

“( ) The Treasury or the Secretary of State may by order amend Schedule 17 to FSMA 2000 to require a scheme operator acting under the Schedule to make rules relating to the behaviour of a person who has entered into an agreement with a complainant to represent the complainant with respect to a complaint under the compulsory jurisdiction, the consumer credit jurisdiction or the voluntary jurisdiction pursuant to which any fee has been, will be or may be paid by the complainant.”

Page 276, line 13, at end insert—

“2A (1) The FCA must require any body corporate established under this Schedule to make rules (“complainant representative rules”) requiring a person who has entered into an agreement with a complainant to represent the complainant with respect to a complaint under the compulsory jurisdiction, the consumer credit jurisdiction or the voluntary jurisdiction pursuant to which any fee has been, will be or may be paid by the complainant to act transparently and promptly to assist both the complainant and the ombudsman.

(2) The FCA shall allow scheme operators adequate time to undertake consultation on draft complainant representative rules, and shall specify the nature of the consultation to be undertaken.

(3) The consent of the FCA is required before any complainant representative rules may be made.”

Page 278, line 35, at end insert —

“31 After paragraph 22 insert—

23 This Part of this Schedule applies to a complaint under the compulsory jurisdiction, the consumer credit jurisdiction or the voluntary jurisdiction in respect of which the complainant has entered into an agreement with a complainant representative.

24 A “complainant representative” is a person who has entered into an agreement with a complainant with respect to a complaint pursuant to which any fee has been, will be or may be paid by the complainant.

25 The scheme operator must make rules, to be known as “complainant representative rules”, which are to set out requirements applicable to complainant representatives and to complaints falling within paragraph 23.

26 Complainant representative rules may, among other things—

(a) require that a complainant representative disclose to the scheme operator the agreement referred to in paragraph 24 when a complaint within paragraph 23 is made;

(b) require a complainant representative to take reasonable steps to obtain from the complainant, and as appropriate to supply to the ombudsman, such information as an ombudsman might reasonably require to determine a complaint;

(c) provide for the consequences if a complainant representative does not comply with complainant representative rules or other applicable legal or regulatory requirements, including requiring or enabling the ombudsman not to consider any complaint or to consider a complaint only if conditions specified by the ombudsman have been satisfied;

(d) enable the ombudsman to dismiss a complaint without consideration of its merits where the complainant representative has not cooperated with reasonable requests made by the respondent, including not providing adequate information as to the true nature of the complaint.

27 Complainant representative rules shall not require the disclosure to the ombudsman scheme of any material which is legally privileged.

28 If the scheme operator proposes to make any complainant representative rules it must publish a draft of the proposed rules in the way appearing to it to be best calculated to bring them to the attention of persons appearing as likely to be affected.

29 The draft must be accompanied by a statement that representations about the proposals may be made to the scheme operator within a time specified in the statement.

30 Before making the proposed complainant representative rules, the scheme operator must have regard to any representations made to it under paragraph 29.

31 The consent of the Authority is required before any complainant representative rules may be made.””

Page 282, line 25, at end insert—

“( ) In subsection (2)—

(a) in paragraph (a), for “or 397” substitute “or under Part 6A of the Financial Services Act 2012”, and

(b) after paragraph (b) insert—

“(ba) an authorised person may have contravened section 20 in relation to a credit-related regulated activity;”.”

[Withdrawn]

Page 282, line 39, leave out paragraph (f)

Page 282, leave out line 41 and insert—

“(h) for paragraph (k) substitute—”

Page 287, line 30, leave out “directors,”

Page 289, line 11, at end insert—

“1A In Part 22 (auditors and actuaries), before section 340 (and the italic heading immediately before it) insert—

339A General duties of PRA in relation to auditors

(1) The arrangements maintained by the PRA under section 2K (supervision of PRA-authorised persons) must include arrangements for—

(a) the sharing with auditors of PRA-authorised persons of information that the PRA is not prevented from disclosing, and

(b) the exchange of opinions with auditors of PRA-authorised persons.

(2) The PRA must issue and maintain a code of practice describing how it will comply with subsection (1).

(3) The PRA may at any time alter or replace a code issued under this section.

(4) If a code is altered or replaced, the PRA must issue the altered or replacement code.

(5) When the PRA issues a code under this section the PRA must—

(a) give a copy of the code to the Treasury, and

(b) publish the code in such manner as the PRA thinks fit.

(6) The Treasury must lay before Parliament a copy of the code.

(7) “Auditor” means an auditor appointed under or as a result of a statutory provision.””

Page 289, line 17, leave out sub-paragraph (4) and insert—

“(4) For subsection (3) substitute—

“(3A) The PRA—

(a) must make rules imposing on auditors of PRA-authorised persons such duties as may be specified in relation to co-operation with the PRA in connection with the supervision by the PRA of PRA-authorised persons, and

(b) may make rules—

(i) imposing such other duties on auditors of PRA-authorised persons as may be specified, and

(ii) imposing such duties on actuaries acting for PRA-authorised persons as may be specified.

(3B) The FCA may make rules imposing on auditors of, or actuaries acting for, authorised persons other than PRA-authorised persons such duties as may be specified.””

Page 289, line 20, at end insert—

“( ) In subsection (5), for “(3)” substitute “(3A) or (3B)”.”

Page 289, leave out lines 25 to 28 and insert—

“( ) In subsection (6), for “(3)” substitute “(3B)”.”

Page 134, line 13, at end insert—

“234GA Complaints and proceedings: collective actions and redress

The Treasury and Secretary of State shall within three months of the passing of this Act shall bring forward proposals—

(a) to introduce provisions for collective proceedings before the court in respect of financial service claims made by consumers; such proceedings to provide for both ‘opt in’ or ‘opt out’ procedures;

(b) to introduce provision for collective proceedings before the court in respect of financial service claims made by small and medium sized businesses; and such proceedings to provide for both ‘opt in’ and ‘opt out’ procedures;

(c) to introduce provision for complaints made by or on behalf of consumers or by or on behalf of small and medium sized businesses to the FCA that a feature, or combination of features, of a market in the United Kingdom for financial services is, or appears to be, damaging to the interests of small business or significant groups of consumers.”

Page 296, leave out line 39 and insert—

“(2) For subsection (2) substitute—

“(2) If the administrator thinks that the company or partnership is carrying on, or has carried on—

(a) a regulated activity in contravention of the general prohibition, or

(b) a credit-related regulated activity in contravention of section 20,

the administrator must report the matter to the appropriate regulator without delay.””

Page 298, line 36, at end insert—

“( ) in paragraph (b), after “prohibition” insert “or a credit-related regulated activity in contravention of section 20””

Page 301, leave out lines 14 to 22 and insert—

“18 For section 370 substitute—

“370 Liquidator’s duty to report to FCA and PRA

(1) If—

(a) a company is being wound up voluntarily or a body is being wound up on a petition presented by any person, and

(b) it appears to the liquidator that the company or body is carrying on, or has carried on—

(i) a regulated activity in contravention of the general prohibition, or

(ii) a credit-related regulated activity in contravention of section 20,

the liquidator must report the matter without delay to the FCA and, if the regulated activity concerned is a PRA-regulated activity, to the PRA.””

Page 301, leave out line 28

Page 302, line 28, at end insert—

“( ) in paragraph (b), for the words from “carried on” to the end substitute “carried on—

(i) a regulated activity in contravention of the general prohibition, or

(ii) a credit-related regulated activity in contravention of section 20”,”

Page 135, line 19, at end insert—

“( ) after that definition insert—

““credit-related regulated activity” has the meaning given in section 23(1B);””

Page 136, line 43, after “3B(4),” insert “3F(6),”

Page 137, line 6, after “22B” insert “or 23A”

Page 152, line 6, leave out from beginning to “give” in line 7 and insert—

“(1) This section applies where—

(a) the Treasury consider that it is in the public interest that either regulator should undertake an investigation into any relevant events, and

(b) it does not appear to the Treasury that the regulator has undertaken or is undertaking an investigation (under this Part or otherwise) into those events.

(1A) The Treasury must”

Page 152, line 18, leave out “(1)” and insert “(1A)”

Insert the following new Clause—

“Publication of directions

(1) This section applies to a direction given by the Treasury under any of the following provisions—

(a) section 72(4);

(b) section 73(5);

(c) section 77(5).

(2) As soon as practicable after giving the direction, the Treasury must—

(a) lay before Parliament a copy of the direction, and

(b) publish the direction in such manner as the Treasury think fit.

(3) Subsection (2) does not apply where the Treasury consider that publication of the direction would be against the public interest.”

Insert the following new Clause—

Misleading statements

(1) Subsection (2) applies to a person (“P”) who—

(a) makes a statement which P knows to be false or misleading in a material respect,

(b) makes a statement which is false or misleading in a material respect, being reckless as to whether it is, or

(c) dishonestly conceals any material facts whether in connection with a statement made by P or otherwise.

(2) P commits an offence if P makes the statement or conceals the facts with the intention of inducing, or is reckless as to whether making it or concealing them may induce, another person (whether or not the person to whom the statement is made)—

(a) to enter into or offer to enter into, or to refrain from entering or offering to enter into, a relevant agreement, or

(b) to exercise, or refrain from exercising, any rights conferred by a relevant investment.

(3) In proceedings for an offence under subsection (2) brought against a person to whom that subsection applies as a result of paragraph (a) of subsection (1), it is a defence for the person charged (“D”) to show that the statement was made in conformity with—

(a) price stabilising rules,

(b) control of information rules, or

(c) the relevant provisions of Commission Regulation (EC) No 2273/2003 of 22 December 2003 implementing Directive 2003/6/EC of the European Parliament and of the Council as regards exemptions for buy-back programmes and stabilisation of financial instruments.

(4) Subsections (1) and (2) do not apply unless—

(a) the statement is made in or from, or the facts are concealed in or from, the United Kingdom or arrangements are made in or from the United Kingdom for the statement to be made or the facts to be concealed,

(b) the person on whom the inducement is intended to or may have effect is in the United Kingdom, or

(c) the agreement is or would be entered into or the rights are or would be exercised in the United Kingdom.”

Insert the following new Clause—

“Misleading impressions

(1) A person (“P”) who does any act or engages in any course of conduct which creates a false or misleading impression as to the market in or the price or value of any relevant investments commits an offence if—

(a) P intends to create the impression, and

(b) the case falls within subsection (2) or (3) (or both).

(2) The case falls within this subsection if P intends, by creating the impression, to induce another person to acquire, dispose of, subscribe for or underwrite the investments or to refrain from doing so or to exercise or refrain from exercising any rights conferred by the investments.

(3) The case falls within this subsection if—

(a) P knows that the impression is false or misleading or is reckless as to whether it is, and

(b) P intends by creating the impression to produce any of the results in subsection (4) or is aware that creating the impression is likely to produce any of the results in that subsection.

(4) Those results are—

(a) the making of a gain for P or another, or

(b) the causing of loss to another person or the exposing of another person to the risk of loss.

(5) References in subsection (4) to gain or loss are to be read in accordance with subsections (6) to (8).

(6) “Gain” and “loss”—

(a) extend only to gain or loss in money or other property of any kind;

(b) include such gain or loss whether temporary or permanent.

(7) “Gain” includes a gain by keeping what one has, as well as a gain by getting what one does not have.

(8) “Loss” includes a loss by not getting what one might get, as well as a loss by parting with what one has.

(9) In proceedings brought against any person (“D”) for an offence under subsection (1) it is a defence for D to show—

(a) to the extent that the offence results from subsection (2), that D reasonably believed that D’s conduct would not create an impression that was false or misleading as to the matters mentioned in subsection (1),

(b) that D acted or engaged in the conduct—

(i) for the purpose of stabilising the price of investments, and

(ii) in conformity with price stabilising rules,

(c) that D acted or engaged in the conduct in conformity with control of information rules, or

(d) that D acted or engaged in the conduct in conformity with the relevant provisions of Commission Regulation (EC) No 2273/2003 of 22 December 2003 implementing Directive 2003/6/EC of the European Parliament and of the Council as regards exemptions for buy-back programmes and stabilisation of financial instruments.

(10) This section does not apply unless—

(a) the act is done, or the course of conduct is engaged in, in the United Kingdom, or

(b) the false or misleading impression is created there.”

Insert the following new Clause—

“Misleading statements etc in relation to benchmarks

(1) A person (“A”) who makes to another person (“B”) a false or misleading statement commits an offence if—

(a) A makes the statement in the course of arrangements for the setting of a relevant benchmark,

(b) A intends that the statement should be used by B for the purpose of the setting of a relevant benchmark, and

(c) A knows that the statement is false or misleading or is reckless as to whether it is.

(2) A person (“C”) who does any act or engages in any course of conduct which creates a false or misleading impression as to the price or value of any investment or as to the interest rate appropriate to any transaction commits an offence if—

(a) C intends to create the impression,

(b) the impression may affect the setting of a relevant benchmark,

(c) C knows that the impression is false or misleading or is reckless as to whether it is, and

(d) C knows that the impression may affect the setting of a relevant benchmark.

(3) In proceedings for an offence under subsection (1), it is a defence for the person charged (“D”) to show that the statement was made in conformity with—

(a) price stabilising rules,

(b) control of information rules, or

(c) the relevant provisions of Commission Regulation (EC) No 2273/2003 of 22 December 2003 implementing Directive 2003/6/EC of the European Parliament and of the Council as regards exemptions for buy-back programmes and stabilisation of financial instruments.

(4) In proceedings brought against any person (“D”) for an offence under subsection (2) it is a defence for D to show—

(a) that D acted or engaged in the conduct—

(i) for the purpose of stabilising the price of investments, and

(ii) in conformity with price stabilising rules,

(b) that D acted or engaged in the conduct in conformity with control of information rules, or

(c) that D acted or engaged in the conduct in conformity with the relevant provisions of Commission Regulation (EC) No 2273/2003 of 22 December 2003 implementing Directive 2003/6/EC of the European Parliament and of the Council as regards exemptions for buy-back programmes and stabilisation of financial instruments.

(5) Subsection (1) does not apply unless the statement is made in or from the United Kingdom or to a person in the United Kingdom.

(6) Subsection (2) does not apply unless—

(a) the act is done, or the course of conduct is engaged in, in the United Kingdom, or

(b) the false or misleading impression is created there.”

Insert the following new Clause—

“Penalties

(1) A person guilty of an offence under this Part is liable—

(a) on summary conviction, to imprisonment for a term not exceeding the applicable maximum term or a fine not exceeding the statutory maximum, or both;

(b) on conviction on indictment, to imprisonment for a term not exceeding 7 years or a fine, or both.

(2) For the purpose of subsection (1)(a) “the applicable maximum term” is—

(a) in England and Wales, 12 months (or 6 months, if the offence was committed before the commencement of section 154(1) of the Criminal Justice Act 2003);

(b) in Scotland, 12 months;

(c) in Northern Ireland, 6 months.”

Insert the following new Clause—

“Interpretation of Part 6A

(1) This section has effect for the interpretation of this Part.

(2) “Investment” includes any asset, right or interest.

(3) “Relevant agreement” means an agreement—

(a) the entering into or performance of which by either party constitutes an activity of a kind specified in an order made by the Treasury, and

(b) which relates to a relevant investment.

(4) “Relevant benchmark” means a benchmark of a kind specified in an order made by the Treasury.

(5) “Relevant investment” means an investment of a kind specified in an order made by the Treasury.

(6) Schedule 2 to FSMA 2000 (except paragraphs 25 and 26) applies for the purposes of subsections (3) and (5) with references to section 22 of that Act being read as references to each of those subsections.

(7) Nothing in Schedule 2 to FSMA 2000, as applied by subsection (6), limits the power conferred by subsection (3) or (5).

(8) “Price stabilising rules” and “control of information rules” have the same meaning as in FSMA 2000.

(9) In this section “benchmark” has the meaning given in section 22(6) of FSMA 2000.”

Insert the following new Clause—

“Affirmative procedure for certain orders

(1) This section applies to the first order made under section (“Interpretation of Part 6A”).

(2) This section also applies to any subsequent order made under that section which contains a statement by the Treasury that the effect of the proposed order would include one or more of the following—

(a) that an activity which is not specified for the purposes of subsection (2)(a) of that section would become one so specified,

(b) that an investment which is not a relevant investment would become a relevant investment;

(c) that a benchmark which is not a relevant benchmark would become a relevant benchmark.

(3) A statutory instrument containing (alone or with other provisions) an order to which this section applies may not be made unless a draft of the instrument has been laid before Parliament and approved by a resolution of each House.”

Insert the following new Clause—

“Consequential repeal

Section 397 of FSMA 2000 (which relates to misleading statements and practices and is superseded by the provisions of this Part) is repealed.”

Page 186, line 37, at end insert—

“(fa) provide for any provision of sections 162 to 165 and 174A of CCA 1974 which relates to—

(i) the powers of a local weights and measures authority in Great Britain or the Department of Enterprise, Trade and Investment in Northern Ireland in relation to compliance with any provision made by or under CCA 1974,

(ii) the powers of such an authority or that Department in relation to the commission or suspected commission of offences under any provision made by or under CCA 1974,

(iii) the powers that may be conferred by warrant on an officer of such an authority or that Department, or

(iv) things done in the exercise of any of those powers,

to apply in relation to compliance with FSMA 2000 so far as relating to relevant regulated activities, in relation to the commission or suspected commission of a relevant offence or in relation to things done in the exercise of any of those powers as applied by the order;”

Page 187, line 8, leave out from “subsection” to “by” in line 10 and insert “(2)(fa) to (h)—

(a) “relevant regulated activity” means an activity that is a regulated activity for the purposes of FSMA 2000”

Page 187, line 14, at end insert—

“(b) “relevant offence” means an offence under FSMA 2000 committed in relation to such an activity.”

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—

“Payment to Treasury of penalties received by Financial Services Authority

(1) The Financial Services Authority (“the FSA”) must in respect of its financial year beginning with 1 April 2012 and each subsequent financial year pay to the Treasury its penalty receipts after deducting its enforcement costs.

(2) The FSA’s “penalty receipts” in respect of a financial year are any amounts received by it during the year by way of penalties imposed under FSMA 2000.

(3) The FSA’s “enforcement costs” in respect of a financial year are the expenses incurred by it during the year in connection with—

(a) the exercise, or consideration of the possible exercise, of any of its enforcement powers in particular cases, or

(b) the recovery of penalties imposed under FSMA 2000.

(4) For this purpose the FSA’s enforcement powers are—

(a) its powers under any of the provisions mentioned in subsection (5),

(b) its powers under any other enactment specified by the Treasury by order,

(c) its powers in relation to the investigation of relevant offences, and

(d) its powers in England and Wales or Northern Ireland in relation to the prosecution of relevant offences.

(5) The provisions referred to in subsection (4)(a) are the following provisions of FSMA 2000—

(a) section 56 (prohibition orders),

(b) section 63A (penalties relating to performance of controlled functions without approval),

(c) section 66 (disciplinary powers in relation to approved persons),

(d) section 87M (public censure of issuer),

(e) section 89 (public censure of sponsor),

(f) section 89K (public censure of issuer),

(g) section 91 (penalties for breach of Part 6 rules),

(h) section 123 (penalties in case of market abuse),

(i) section 131G (short selling etc: power to impose penalty or issue censure),

(j) sections 205, 206 and 206A (disciplinary measures),

(k) section 249 (disqualification of auditor for breach of trust scheme rules),

(l) section 345 (disqualification of auditor or actuary), and

(m) Part 25 (injunctions and restitution).

(6) “Relevant offences” are—

(a) offences under FSMA 2000,

(b) offences under subordinate legislation made under that Act,

(c) offences falling within section 402(1) of that Act, and

(d) any other offences specified by the Treasury by order.

(7) The Treasury may give directions to the FSA as to how the FSA is to comply with its duty under subsection (1).

(8) The directions may in particular—

(a) specify descriptions of expenditure that are, or are not, to be regarded as incurred in connection with either of the matters mentioned in subsection (3),

(b) relate to the calculation and timing of the deduction in respect of the FSA’s enforcement costs, and

(c) specify the time when any payment is required to be made to the Treasury.

(9) The directions may also require the FSA to provide the Treasury at specified times with information relating to—

(a) penalties that the FSA has imposed under FSMA 2000, or

(b) the FSA’s enforcement costs.

(10) The Treasury must pay into the Consolidated Fund any sums received by them under this section.

(11) The scheme operated by the FSA under paragraph 16 of Schedule 1 to FSMA 2000 is, in the case of penalties received by the FSA on or after 1 April 2012, to apply only in relation to sums retained by the FSA as a result of the deduction for which subsection (1) provides.

(12) When section 6(2) is fully in force, the Treasury may by order repeal this section.”

Insert the following new Clause—

“Payment to Treasury of penalties received by Bank of England

(1) The Bank of England (“the Bank”) must in respect of each of its financial years pay to the Treasury its penalty receipts after deducting its enforcement costs.

(2) The Bank’s “penalty receipts” in respect of a financial year are any amounts received by the Bank during the year by way of penalties imposed under any of the following provisions—

(a) sections 192K and 312F of FSMA 2000, and

(b) section 198 of the Banking Act 2009.

(3) The Bank’s “enforcement costs” in respect of a financial year are the expenses incurred by it during the year in connection with—

(a) the exercise, or consideration of the possible exercise, of any of its enforcement powers in particular cases, or

(b) the recovery of penalties imposed under any of the provisions mentioned in subsection (2).

(4) For this purpose the Bank’s enforcement powers are—

(a) its powers under any of the provisions mentioned in subsection (5),

(b) its powers under any other enactment specified by the Treasury by order,

(c) its powers in relation to the investigation of offences under FSMA 2000 or of any other offences specified by the Treasury by order, and

(d) its powers in England and Wales or Northern Ireland in relation to the prosecution of offences under FSMA 2000 or of any other offences specified by the Treasury by order.

(5) The provisions referred to in subsection (4)(a) are as follows—

(a) sections 192K to 192N of FSMA 2000 (parent undertakings), as applied to the Bank by Schedule 17A to that Act,

(b) sections 312E and 312F of that Act (disciplinary measures in relation to clearing houses),

(c) sections 380, 382 and 384 of that Act (injunctions and restitution), as applied to the Bank by Schedule 17A to that Act, and

(d) sections 197 to 200 and 202A of the Banking Act 2009 (inter-bank payment systems).

(6) The Treasury may give directions to the Bank as to how the Bank is to comply with its duty under subsection (1).

(7) The directions may in particular—

(a) specify descriptions of expenditure that are, or are not, to be regarded as incurred in connection with either of the matters mentioned in subsection (3),

(b) relate to the calculation and timing of the deduction in respect of the Bank’s enforcement costs, and

(c) specify the time when any payment is required to be made to the Treasury.

(8) The directions may also require the Bank to provide the Treasury at specified times with specified information relating to—

(a) penalties that the Bank has imposed under the provisions mentioned in subsection (2), or

(b) the Bank’s enforcement costs.

(9) The Treasury must pay into the Consolidated Fund any sums received by them under this section.”

Insert the following new Clause—

Power to exempt from provision made by or under FSMA 2000

(1) The Treasury may by order provide for common investment funds and common deposit funds to be exempt from any relevant provision that applies to collective investment schemes.

(2) “Relevant provision” means a provision of, or made under, FSMA 2000.”

Insert the following new Clause—

“Bank account transferability

(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 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, save where it has grounds for suspicion, accept the material provided under paragraph (a) 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 permission for deposit taking granted by the PRA.”

Page 342, line 34, at end insert—

“( ) In Part 5 of Schedule 3 to that Act, for paragraph 20A substitute—

20A (1) Subject to sub-paragraph (4), a person (“A”) does not contravene section 29, so far as relating to age discrimination, by doing anything in connection with the provision of a financial service.

(2) Where A conducts an assessment of risk for the purposes of providing the financial service to another person (“B”), A may rely on sub-paragraph (1) only if the assessment of risk, so far as it involves a consideration of B’s age, is carried out by reference to information which is relevant to the assessment of risk and from a source on which it is reasonable to rely.

(3) In this paragraph, “financial service” includes a service of a banking, credit, insurance, personal pension, investment or payment nature.

(4) A person seeking to rely on this exception must establish and provide to the public a written policy stating the terms and the basis of their reliance of this exception.””

Page 346, line 3, at end insert—

Page 193, line 20, at end insert—

“( ) an order under section 36(2) (power to amend sections 391 and 395 of FSMA 2000);”

Page 193, line 27, after “which” insert “section (Affirmative procedure for certain orders) or”

Page 349, line 6, at end insert—

“(1A) The FSA may disclose to the Bank of England any information which the FSA considers that it is necessary or expedient to disclose to the Bank in preparation for the commencement of any provision of this Act conferring functions on the Bank.”

Page 349, line 8, leave out “sub-paragraph (1)” and insert “sub-paragraphs (1) and (1A)”

Page 196, line 9, at end insert—

“section (Payment to Treasury of penalties received by Financial Services Authority);”