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(ii) for “a draft published under subsection (1)” substitute “the
draft”,

(h) in subsection (9), for “the Authority” substitute “a regulator”, and

(i) for subsection (10) substitute—

(10) 5Cost benefit analysis” means—

(a) an analysis of the costs together with an analysis of the
benefits that will arise—

(i) if the proposed direction is given, or

(ii) if subsection (5)(b) applies, from the direction
10that has been given, and

(b) subject to subsection (10A), an estimate of those costs
and of those benefits.

(10A) If, in the opinion of the regulator concerned—

(a) the costs or benefits referred to in subsection (10) cannot
15reasonably be estimated, or

(b) it is not reasonably practicable to produce an estimate,

the cost benefit analysis need not estimate them, but must
include a statement of the opinion of the regulator concerned
and an explanation of it.

(9) 20In section 320 (former underwriting members)—

(a) in subsection (2), for “Part IV permission” substitute “Part 4A
permission”,

(b) in subsection (3), for “The Authority” substitute “The PRA”, and

(c) at the end insert—

(5) 25In the event that the activity of effecting or carrying out
contracts of insurance as principal is not to any extent a PRA-
regulated activity, the function conferred on the PRA by
subsection (3) is exercisable instead by the FCA.

(6) Accordingly, in that case—

(a) 30references in section 321 to the PRA are to be read as
references to the FCA, and

(b) the reference in section 321(13) to the FCA is to be read
as a reference to the PRA.

(10) In section 321 (requirements imposed under section 320)—

(a) 35in subsection (2), for “the Authority” substitute “the PRA”,

(b) in subsection (3)(b), for “the Authority’s” substitute “the PRA’s”,

(c) in subsections (3)(c), (4) to (9) and (11), for “Authority” substitute
“PRA”, and

(d) after subsection (12) insert—

(13) 40Before giving a notice under any provision of this section, the
PRA must consult the FCA.

(11) In section 322 (rules applicable to former underwriting members)—

(a) in subsection (1), for “The Authority” substitute “The PRA”,

(b) in subsection (4), for “Part X (except sections 152 to 154)” substitute
45“Part 9A (except sections 137R, 138F, 138G and 138H)”, and

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(c) at the end insert—

(5) In the event that the activity of effecting or carrying out
contracts of insurance as principal is not to any extent a PRA-
regulated activity, the function conferred on the PRA by
5subsection (1) is exercisable instead by the FCA.

Information

40 Information, investigations, disclosure etc.

Schedule 12 contains miscellaneous amendments of FSMA 2000, including
amendments relating to information gathering, investigations and disclosure.

10Auditors and actuaries

41 Auditors and actuaries

Schedule 13 contains miscellaneous amendments of Part 22 of FSMA 2000
(auditors and actuaries).

Consumer protection and competition

42 15Provisions about consumer protection and competition

After section 234B of FSMA 2000 insert—

Part 16A
Consumer protection and competition
20Super-complaints and references to FCA
234C Complaints by consumer bodies

(1) A designated consumer body may make a complaint 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, significantly damaging the
25interests of consumers.

(2) “Designated consumer body” means a body designated by the
Treasury by order.

(3) The Treasury—

(a) may designate a body only if it appears to them to represent the
30interests of consumers of any description, and

(b) must publish in such manner as they think fit (and may from
time to time vary) criteria to be applied by them in determining
whether to make or revoke a designation.

(4) Sections 425A and 425B (meaning of “consumers”) apply for the
35purposes of this section, but the references to consumers in this section
do not include consumers who are authorised persons.

(5) In this section—

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(a) “market in the United Kingdom” has the meaning given in
section 140A;

(b) the reference to a feature of a market in the United Kingdom for
financial services has a meaning corresponding to that which a
5reference to a feature of a market in the United Kingdom for
goods and services has (by virtue of section 140A(3)) for the
purposes of Chapter 4 of Part 9A.

234D Reference by scheme operator or regulated person

(1) A relevant person may make a reference to the FCA where it appears to
10that person that either the first set of conditions or the second set of
conditions are satisfied.

(2) Each of the following is a “relevant person”—

(a) the scheme operator;

(b) a regulated person.

(3) 15The first set of conditions is—

(a) that there may have been—

(i) in the case of a reference by the scheme operator, a
regular failure by one or more regulated persons to
comply with requirements applicable to the carrying on
20by them of any activity, or

(ii) in the case of a reference by a regulated person, a regular
failure by that person to comply with requirements
applicable to the carrying on by that person of any
activity, and

(b) 25that as a result consumers have suffered, or may suffer, loss or
damage in respect of which, if they brought legal proceedings,
a remedy or relief would be available in the proceedings.

(4) The reference to the failure by a regulated person (“R”) to comply with
a requirement applicable to the carrying on by R of any activity
30includes anything done, or omitted to be done, by R in carrying on the
activity—

(a) which is a breach of a duty or other obligation, prohibition or
restriction, or

(b) which otherwise gives rise to the availability of remedy or relief
35in legal proceedings.

(5) It does not matter whether—

(a) the duty or other obligation, prohibition or restriction, or

(b) the remedy or relief,

arises as a result of any provision made by or under this or any other
40Act, a rule of law or otherwise.

(6) The second set of conditions is—

(a) in the case of a reference by the scheme operator, that one or
more regulated persons have, on a regular basis, acted or failed
to act, in such a way that, if a complaint were made under the
45ombudsman scheme in relation to that conduct, the
ombudsman would be likely to determine the complaint in
favour of the complainant,

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(b) in the case of a reference by a regulated person, that the
regulated person has, on a regular basis, acted or failed to act in
such a way that, if a complaint were made under the
ombudsman scheme in relation to that conduct, the
5ombudsman would be likely to determine the complaint in
favour of the complainant, and

(c) in either case, that—

(i) if the complaint would fall within the compulsory
jurisdiction or the consumer credit jurisdiction, the
10ombudsman would be likely to make an award under
section 229(2)(a) or give a direction under section
229(2)(b), or

(ii) if voluntary jurisdiction rules made for the purposes of
section 227 provide for the making of an award against
15a respondent or the giving of a direction that a
respondent take certain steps in relation to a
complainant, and the complaint would fall within the
voluntary jurisdiction, the ombudsman would be likely
to make such an award or give such a direction.

(7) 20“Consumers” has the meaning given in section 1G.

(8) “Regulated person” means—

(a) an authorised person,

(b) an electronic money issuer, as defined in section 1H(8),

(c) a payment service provider, as defined in section 1H(8).

234E 25Response by FCA

(1) The FCA must within 90 days after the day on which it receives a
complaint under section 234C or a reference under section 234D
publish a response stating how it proposes to deal with the complaint
or reference, and in particular—

(a) 30whether it has decided to take any action, or to take no action,
and

(b) if it has decided to take action, what action it proposes to take.

(2) The response must—

(a) include a copy of the complaint or reference, and

(b) 35state the FCA’s reasons for its proposals.

(a)(a)include a copy of the complaint or reference, and

(b) state the FCA’s reasons for its proposals.

(3) The Treasury may by order amend subsection (1) by substituting any
period for the period for the time being specified there.

234F 40Section 234E: exceptions

(1) This section applies where the FCA has received a reference under
section 234D from a person who is a relevant person as a result of
subsection (2)(b) of that section.

(2) The duty to respond in section 234E does not apply if the FCA considers
45that the reference is frivolous, vexatious or has been made in bad faith.

(3) The FCA must within 90 days after the day on which it receives the
reference inform the person who made it that—

(a) the duty to respond under section 234E does not apply by virtue
of this section, and

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(b) its reasons for reaching the conclusion in paragraph (a).

(4) The Treasury may by order amend subsection (3) by substituting any
period for the period for the time being specified there.

234G Guidance

(1) 5The guidance given by the FCA under section 139A—

(a) must include guidance about the presentation of a reasoned
case for a complaint under section 234C or a reference under
section 234D, and

(b) may include guidance about such other matters as appears to
10the FCA to be appropriate for the purposes of section 234C or
234D.

(2)
Guidance given under this section is to be taken to be general guidance
as defined in section 139B(5).

Competition
234H 15Power of FCA to make request to Office of Fair Trading

(1) The FCA may ask the Office of Fair Trading (“the OFT”) to consider
whether a feature, or combination of features, of a market in the United
Kingdom for financial services may prevent, restrict or distort
competition in connection with the supply or acquisition of any
20financial services in the United Kingdom or a part of the United
Kingdom.

(2) The OFT must, within 90 days after the day on which it receives the
request, publish a response stating how it proposes to deal with the
request and in particular—

(a) 25whether it has decided to take any action, or to take no action,
in response to the request, and

(b) if it has decided to take action, what action it proposes to take.

(3) The response must state the OFT’s reasons for its proposals.

(4) The Treasury may by order amend subsection (2) by substituting any
30period for the period for the time being specified there.

(5) In this section—

(a) “market in the United Kingdom” has the meaning given in
section 140A(1);

(b) the reference to a feature of a market in the United Kingdom for
35financial services has a meaning corresponding to that which a
reference to a feature of a market in the United Kingdom for
goods and services has (by virtue of section 140A(3)) for the
purposes of Chapter 4 of Part 9A.

Insolvency

43 40Insolvency

Schedule 14 contains amendments of Part 24 of FSMA 2000 (insolvency).

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Miscellaneous amendments of FSMA 2000

44 The consumer financial education body

Schedule 15 contains amendments of FSMA 2000 relating to the consumer
financial education body.

45 5Members of the professions

Schedule 16 contains miscellaneous amendments of FSMA 2000 relating to
financial services provided by members of the professions.

46 International obligations

In section 410 of FSMA 2000 (international obligations), in subsection (4), for
10paragraph (a) substitute—

(a) the FCA;

(aa) the PRA;

(ab) the Bank of England when exercising functions conferred on it
by Part 18;.

47 15Interpretation of FSMA 2000

(1) In section 417 of FSMA 2000 (definitions), in subsection (1)—

(a) omit the definition of “the Authority”,

(b) in the definition of “control of information rules” for “section 147(1)”
substitute “section 137N”,

(c) 20after the definition of “exempt person” insert—

(d) in the definition of “financial promotion rules” for “section 145”
substitute “section 137P”,

(e) for the definition of “general rules” substitute—

(f) 30omit the definition of “money laundering rules”;

(g) omit the definition of “notice of control”;

(h) for the definition of “Part IV permission” substitute—

(i) 35after the definition of “partnership” insert—

(j) in the definition of “price stabilising rules” for “section 144” substitute
“section 137O”,

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(k) after that definition insert—

(l) in the definition of “regulating provisions” for “section “159(1)”
5substitute “section 140A”,

(m) after that definition insert—

(n) omit the definitions of “regulatory objectives” and “regulatory
provisions”,

(o) 10for the definition of “rule” substitute—

(p) in the definition of “rule-making instrument” for “section 153”
substitute “section 138G”,

(q) 15for the definition of “threshold conditions” substitute—

(r) in the definition of “UK authorised person” for “section 178(4)”
substitute “section 191G(1)”, and

(s) 20in the definition of “the UK financial system” for “section 3” substitute
“section 1I”.

(2) After section 421 of FSMA 2000 insert—

421ZA Immediate group

In this Act “immediate group”, in relation to a person (“A”), means—

(a) 25A;

(b) a parent undertaking of A;

(c) a subsidiary undertaking of A;

(d) a subsidiary undertaking of a parent undertaking of A;

(e) a parent undertaking of a subsidiary undertaking of A.

(3) 30After section 425B of FSMA 2000 insert—

425C   Qualifying EU provision”

(1) In this Act “qualifying EU provision” means a provision of—

(a) a directly applicable EU regulation, or

(b) an EU decision for whose enforcement the United Kingdom is
35required by an EU obligation to make provision.

(2) In subsection (1)(b) “EU decision” means a decision under an EU
directive or EU regulation.

48 Parliamentary control of statutory instruments

(1) Section 429 of FSMA 2000 (Parliamentary control of statutory instruments) is
40amended as follows.

(2) In subsection (1) (orders subject to the affirmative resolution procedure)—

(a) in paragraph (a)—

(i) after “section” insert “1J, 3B(4), 55C,”,

(ii) after “or (e),” insert “138K(6)(c), 192B(6), 204A(7), 213(1A),”, and

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(iii) after “236(5),” insert “285(4), 380(12), 382(15), 384(13),”, and

(b) omit paragraph (b).

(3) In subsection (8)—

(a) after “under section” insert “3G(1), 137C(1)(b),”,

(b) 5after “165A(2)(d)” insert “, 192A(4)”, and

(c) after “which” insert “section 22B or”.

Part 3 Mutual societies

Transfer of functions

49 10Mutual societies: power to transfer functions

(1) The Treasury may by order amend the legislation relating to mutual societies
for any of the relevant purposes.

(2) “The legislation relating to mutual societies” means—

(a) the Industrial and Provident Societies Act 1965;

(b) 15the Industrial and Provident Societies 1967;

(c) the Friendly and Industrial and Provident Societies Act 1968;

(d) the Industrial and Provident Societies Act (Northern Ireland) 1969;

(e) the Friendly Societies Act 1974;

(f) the Credit Unions Act 1979;

(g) 20the Credit Unions (Northern Ireland) Order 1985;

(h) the Building Societies Act 1986;

(i) the Friendly Societies Act 1992.

(3) The relevant purposes are—

(a) providing for any function of the FSA to be exercisable by that body
25corporate as the FCA;

(b) providing for any function of the FSA to be transferred to the PRA;

(c) providing for any function of the FSA to be exercisable by that body
corporate as the FCA and also to be exercisable concurrently by the
PRA;

(d) 30providing for any function which is exercisable by the FCA or the PRA
(whether by virtue of a previous order under this section or otherwise)
to be transferred to, or to be exercisable concurrently by, the other
regulator;

(e) providing for any function which is exercisable by the FCA and the
35PRA (whether by virtue of a previous order under this section or
otherwise) to be exercisable only by one of them;

(f) making provision that appears to the Treasury to be necessary or
expedient in consequence of the provisions of this Act.

(4) In relation to the Industrial and Provident Societies Act (Northern Ireland)
401969 and the Credit Unions (Northern Ireland) Order 1985, the relevant
purposes also include—

(a) providing for any function of a Northern Ireland department or the
Registrar of Credit Unions for Northern Ireland to be transferred to the

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FCA or the PRA, or to both the FCA and PRA to be exercised
concurrently;

(b) providing for any function of a Northern Ireland department or the
Registrar of Credit Unions for Northern Ireland which relates to the
5determination of disputes to be exercisable instead by a court.

50 Further provision that may be included in orders under section 49

(1) In this section a “transfer order” means an order under section 49 making
provision for any of the purposes mentioned in subsection (3)(a) to (e) or (4) of
that section.

(2) 10The additional powers conferred by section 104(2) on a person making an
order under this Act include power for the Treasury, when making a transfer
order, to include—

(a) such consequential provision as the Treasury consider appropriate;

(b) provision for the transfer of any property, rights or liabilities held,
15enjoyed or incurred by any person in connection with transferred
functions;

(c) provision for the application of the Transfer of Undertakings
(Protection of Employment) Regulations 2006 in connection with any
transfer of staff;

(d) 20provision for the carrying on and completion by or under the authority
of the person to whom the functions are transferred of any proceedings,
investigations or other matters commenced, before the order takes
effect, by or under the authority of the person from whom the functions
are transferred;

(e) 25provision amending any enactment relating to transferred functions in
connection with their exercise by, or under the authority of, the person
to whom they are transferred;

(f) provision requiring either regulator to consult the other, notify the
other or obtain the consent of the other in connection with the exercise
30of transferred functions;

(g) provision for the substitution of the person to whom functions are
transferred for the person from whom they are transferred, in any
instrument, contract or legal proceedings made or begun before the
order takes effect.

(3) 35For the purposes of subsection (2) a transfer order is to be taken to transfer
functions to any person by whom any function becomes exercisable by virtue
of the order.

(4) On or after the making of a transfer order (“the original order”) the Treasury
may by order make any incidental, supplemental, consequential or transitional
40provision or provision by virtue of subsection (2) which they had power to
include in the original order.

(5) The provisions of this section do not limit—

(a) the powers conferred by section 107 or 108(3), or

(b) the powers exercisable under Schedule 21 in connection with a transfer
45order that transfers functions to the PRA or to the FCA and the PRA.

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51 Power to apply or disapply provision made by or under FSMA 2000

(1) The Treasury may by order provide—

(a) for any relevant provision that would not otherwise apply in relation to
transferred functions to apply in relation to those functions with such
5modifications as may be specified;

(b) for any relevant provision that would otherwise apply in relation to
transferred functions not to apply in relation to them or to apply with
such modifications as may be specified.

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

(3) 10“Transferred function” means a function that has been or is being transferred
by an order under section 49; and section 50(3) applies for the purpose of this
subsection.

52 Evidence

(1) A certificate issued by the Treasury that property vested in a person
15immediately before a transfer order takes effect has been transferred as a result
of the order is conclusive evidence of the transfer.

(2) “Transfer order” means—

(a) an order under section 49,

(b) an order under section 50(4), or

(c) 20an order under Part 21 of FSMA 2000 (mutual societies).

53 Repeals in Part 21 of FSMA 2000

(1) The following provisions of Part 21 of FSMA 2000 are repealed—

(a) in section 334 (the Friendly Societies Commission), subsections (1) and
(2);

(b) 25section 335 (the Registry of Friendly Societies);

(c) section 336 (the Building Societies Commission);

(d) section 337 (the Building Societies Investor Protection Board);

(e) section 338 (industrial and provident societies and credit unions);

(f) section 339 (supplemental provisions).

(2) 30The repeals in subsection (1) do not have the effect of revoking any order made
under any provision of Part 21 of FSMA 2000 before the commencement of this
section.

Building societies: miscellaneous

54 Building societies: creation of floating charges

(1) 35Section 9B of the Building Societies Act 1986 (restriction on creation of floating
charges) is amended as follows.

(2) In subsection (1), at the end insert “unless it complies with the requirements in
subsection (1A)”.

(3) After that subsection insert—

(1A) 40The requirements are that the floating charge—

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