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Financial Services Bill (HL Bill 48)

Financial Services BillPage 190

(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
5beginning 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
1034A, 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) 15inform 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
20under 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
25who 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
30duration 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
35time), 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) 40it 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) 45the time of any determination by the OFT not to revoke the
licence in pursuance of the notice under section 32, or

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(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
5notice 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) 10A 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
15(“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
20representations 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
25it 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
30invitation 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) 35in 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
40section 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
45suspend a standard licence or group licence.

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(9) Nothing in this section affects the powers conferred by section 22 of FSMA 2000
or section 98 of this Act.

Amendments of Companies Act 1989

100 Amendments of Companies Act 1989

(1) 5Section 166 of the Companies Act 1989 (power of Secretary of State to give
directions to recognised investment exchange or recognised clearing house) is
amended as follows.

(2) In subsection (2)(a)—

(a) for “Authority”, in the first place, substitute “appropriate regulator”,
10and

(b) for “Authority”, in the second place, substitute “regulator”.

(3) In subsection (2)(b)—

(a) for “Authority”, in the first place, substitute “appropriate regulator”,
and

(b) 15for “Authority”, in the second place, substitute “regulator”.

(4) In subsection (3)—

(a) for “Authority” substitute “appropriate regulator”,

(b) omit the “or” following paragraph (a), and

(c) at the end insert—

(c) 20in either case, that the direction is necessary having
regard to the public interest in the stability of the
financial system of the United Kingdom, or

(d) in either case, that the direction is necessary—

(i) to facilitate a proposed or possible use of a
25power under Part 1 of the Banking Act 2009
(special resolution regime), or

(ii) in connection with a particular exercise of a
power under that Part.

(5) In subsection (7)—

(a) 30for “Authority”, in the first place, substitute “appropriate regulator”,
and,

(b) omit the words from “The Authority shall not” to the end.

(6) After that subsection insert—

(7A) Where the exchange or clearing house is acting in accordance with a
35direction under subsection (2)(a) that was given only by virtue of
paragraph (a) of subsection (3), the appropriate regulator shall not give
a direction under subsection (7) unless it is satisfied that the direction
under that subsection will not impede or frustrate the proper and
efficient conduct of the default proceedings.

(7B) 40Where the exchange or clearing house has taken action under its default
rules without being directed to do so, the appropriate regulator shall
not give a direction under subsection (7) unless—

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(a) it is satisfied that the direction under that subsection will not
impede or frustrate the proper and efficient conduct of the
default proceedings, or

(b) it is satisfied that the direction is necessary—

(i) 5having regard to the public interest in the stability of the
financial system of the United Kingdom,

(ii) to facilitate a proposed or possible use of a power under
Part 1 of the Banking Act 2009 (special resolution
regime), or

(iii) 10in connection with a particular exercise of a power
under that Part.

(7) In subsection (8), for “Authority” substitute “the regulator which gave the
direction”.

(8) At the end insert—

(9) 15The appropriate regulator”—

(a) in relation to a recognised UK investment exchange, means the
FCA, and

(b) in relation to a recognised UK clearing house, means the Bank
of England.

(9) 20In the heading, omit “of Secretary of State”.

Settlement systems

101 Evidencing and transfer of title to securities without written instrument

In section 785 of the Companies Act 2006 (provision enabling procedures for
evidencing and transferring title), at the end insert—

(7) 25The regulations may confer functions on any person, including—

(a) the function of giving guidance or issuing a code of practice in
relation to any provision made by the regulations, and

(b) the function of making rules for the purposes of any provision
made by the regulations.

(8) 30The regulations may, in prescribed cases, confer immunity from
liability in damages.

Director of Savings

102 Provision of services by Director of Savings

(1) The Director of Savings (“the Director”) may enter into arrangements with a
35public body for the provision by the Director, or persons authorised by the
Director, of services to the body.

(2) Arrangements are to be on such terms, including terms as to payment, as may
be agreed.

(3) “Public body” means a person or body whose functions are of a public nature.

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Part 9 General

Further amendments and repeals

103 Further minor and consequential amendments and repeals

(1) 5Schedule 18 contains further amendments of FSMA 2000 and other
enactments.

(2) Schedule 19 contains further consequential repeals.

Orders

104 Orders: general

(1) 10Any power of the Treasury or the Secretary of State to make an order under this
Act is exercisable by statutory instrument.

(2) Any order made by the Treasury or the Secretary of State under this Act may—

(a) contain such incidental or transitional provision as the Treasury
consider appropriate, and

(b) 15make different provision for different cases.

105 Orders: Parliamentary control

(1) A statutory instrument containing (alone or with other provision) an order to
which subsection (2) applies may not be made unless a draft of the instrument
has been laid before Parliament and approved by a resolution of each House.

(2) 20This subsection applies to—

(a) an order under Part 3 (mutual societies);

(b) an order under section 98 (power to make further provision about
regulation of consumer credit);

(c) an order under section 107 (power to make further consequential
25amendments) that amends or repeals primary legislation.

(3) A statutory instrument containing an order under this Act, other than an
instrument to which subsection (1) applies or an instrument containing only
provision made under section 111 (commencement), is subject to annulment in
pursuance of a resolution of either House of Parliament.

(4) 30In this section “primary legislation” means—

(a) an Act of Parliament,

(b) an Act of the Scottish Parliament,

(c) a Measure or Act of the National Assembly for Wales, or

(d) Northern Ireland legislation.

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Interpretation

106 Interpretation

(1) In this Act “FSMA 2000” means the Financial Services and Markets Act 2000.

(2) In this Act—

  • 5“the FCA” means the Financial Conduct Authority;

  • “the PRA” means the Prudential Regulation Authority;

  • “the UK financial system” means the financial system of the United
    Kingdom.

(3) In this Act “enactment” includes—

(a) 10an enactment contained in subordinate legislation within the meaning
of the Interpretation Act 1978;

(b) an enactment contained in, or in an instrument made under, an Act of
the Scottish Parliament;

(c) an enactment contained in, or in an instrument made under, a Measure
15or Act of the National Assembly for Wales;

(d) an enactment contained in, or in an instrument made under, Northern
Ireland legislation.

Consequential and transitional provisions

107 Power to make further consequential amendments etc

(1) 20The Treasury or the Secretary of State may by order make such provision
amending, repealing, revoking or applying with modifications any enactment
to which this section applies as they consider necessary or expedient in
consequence of any provision made by or under this Act.

(2) This section applies to—

(a) 25any enactment passed or made before the passing of this Act, and

(b) any enactment passed or made on or before the last day of the Session
in which this Act is passed.

(3) Amendments and repeals made under this section are additional to those
made by or under any other provision of this Act.

108 30Transitional provisions and savings

(1) Schedule 20 contains transitional provisions.

(2) Schedule 21 contains provision about the transfer of property, rights and
liabilities.

(3) The Treasury may by order make such provision as they consider necessary or
35expedient for transitory, transitional or saving purposes in connection with the
commencement of any provision made by or under this Act.

(4) An order under subsection (3) may, in particular—

(a) make provision enabling any person by whom any powers will become
exercisable, on a date set by or under this Act, by virtue of any
40provision made by or under this Act to take before that date any steps
which are necessary as a preliminary to the exercise of those powers;

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(b) make provision treating any relevant instrument which was made,
issued or given by the Financial Services Authority under any
enactment before section 6 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
5accordance 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
10enactment as amended by or under this Act;

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

(d) make provision treating anything done before section 6 is fully in force
by persons appointed by the Financial Services Authority with the
15approval of the Treasury as having been done by the FCA;

(e) make provision treating anything done before section 6 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;

(f) 20make provision treating any permission given or other thing done by
the Financial Services Authority before commencement under an
enactment amended by this Act—

(i) as having been made, given or done under a corresponding
provision of the enactment as so amended;

(ii) 25as having been made, given or done (or also made, given or
done) by the PRA or the Bank of England;

(g) make provision for the continuation of proceedings begun before
commencement, including provision about the decisions available to
bodies before which such proceedings take place and the effect of their
30decisions;

(h) make provision for making savings, or additional savings, from the
effect of any repeal or revocation made by or under this Act.

(5) An order under subsection (3) may—

(a) confer functions on the Treasury, the FCA or the PRA, or on the Bank
35of England or its Financial Policy Committee;

(b) modify, exclude or apply (with or without modifications) any
enactment (including any provision of, or made under, this Act).

(6) In subsection (4)

(a) “commencement” means the commencement of such provisions of this
40Act as may be specified by the order;

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

Final provisions

109 Financial provision

(1) 45There is to be paid out of money provided by Parliament—

(a) any expenditure incurred under or by virtue of this Act by a Minister
of the Crown or government department (apart from any expenditure
to be met from the National Loans Fund), and

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(b) any increase attributable to this Act in the sums payable under any
other Act out of money so provided.

(2) There is to be paid out of the National Loans Fund any increase attributable to
this Act in the sums payable under any other Act out of that Fund.

110 5Extent

This Act extends to England and Wales, Scotland and Northern Ireland.

111 Commencement

(1) The following provisions come into force on the day on which this Act is
passed—

  • 10sections 104 to 107;

  • section 108(3) to (6);

  • sections 109 and 110;

  • this section;

  • section 112.

(2) 15Sections 99 and 102 come into force at the end of the period of 2 months
beginning with day on which this Act is passed.

(3) The remaining provisions of this Act come into force on such day as the
Treasury may by order appoint.

(4) Different days may be appointed for different purposes.

112 20Short title

This Act may be cited as the Financial Services Act 2012.

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SCHEDULES

Section 4

SCHEDULE 1 Bank of England Financial Policy Committee

Part 1 5Schedule to be inserted as Schedule 2A to Bank of England Act 1998

This is the Schedule to be inserted in the Bank of England Act 1998 after
Schedule 2—

Section 9B

Schedule 2A Financial Policy Committee

Terms of office of appointed members

1 (1) 10Appointment under section 9B(1)(d) or (e) as a member of the
Financial Policy Committee is to be for a period of 3 years, but this
is subject to sub-paragraph (2) and to paragraph 3.

(2) Initially some appointments may be for shorter and different
periods so as to secure that appointments expire at different times.

2 (1) 15A person may not be appointed as a member of the Committee
under section 9B(1)(e) more than twice.

(2) For this purpose an appointment which by virtue of paragraph
1(2) is for a period of less than 3 years is to be disregarded.

3 (1) If it appears to the Chancellor of the Exchequer that in the
20circumstances it is desirable to do so, the Chancellor may, before
the end of term for which a person is appointed as a member of the
Committee under section 9B(1)(e), extend the persons’s term of
office on one occasion for a specified period of not more than 6
months.

(2) 25The term being extended may be the person’s first or second term
or, in a case where paragraph 2(2) allows a third term, the person’s
third term.

(3) If a person whose first term of office is extended is subsequently
re-appointed under section 9B(1)(e)—

(a) 30the length of the second term is to be reduced by a period
equal to the extension of the first term, but

(b) the second term may itself subsequently be extended
under sub-paragraph (1).

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(4) In a case where a person’s second term of office is extended and
paragraph 2(2) allows a third term, sub-paragraph (3) is to be read
as if the references to first and second terms were references to
second and third terms respectively.

4 (1) 5A person appointed under section 9B(1)(d) or (e) may resign the
office by written notice to the Bank.

(2) Where the notice relates to a person appointed under section
9B(1)(e), the Bank must give a copy of the notice to the Treasury.

5 The terms and conditions on which a person holds office as a
10member of the Committee appointed under section 9B(1)(e) are to
be such as the Oversight Committee may determine.

Qualification for appointment

6 (1) The following persons are disqualified for appointment under
section 9B(1)(d) or (e)—

(a) 15a Minister of the Crown;

(b) a person serving in a government department in
employment in respect of which remuneration is paid out
of money provided by Parliament.

(2) A member of the Monetary Policy Committee of the Bank
20appointed under section 13(2)(c) is disqualified for appointment
under section 9B(1)(e).

Removal of appointed members

7 A person appointed under section 9B(1)(d) or (e) vacates office on
becoming a person to whom paragraph 6(1)(a) or (b) applies.

8 25A person appointed under section 9B(1)(d) vacates office on
ceasing to have executive responsibility within the Bank for the
analysis of threats to financial stability or, as the case may be, the
analysis of markets.

9 (1) The Oversight Committee may, with the consent of the Chancellor
30of the Exchequer, remove a member appointed under section
9B(1)(d) or (e) (“M”) if it is satisfied—

(a) that M has been absent from 3 or more meetings of the
Financial Policy Committee without the Committee’s
consent,

(b) 35that M has become bankrupt, that M’s estate has been
sequestrated or that M has made an arrangement with or
granted a trust deed for M’s creditors, or

(c) that M is unable or unfit to discharge M’s functions as a
member.

(2) 40The Oversight Committee may, with the consent of the Chancellor
of the Exchequer, also remove a member appointed under section
9B(1)(e) (“M”) if it is satisfied that in all the circumstances M’s
financial or other interests are such as substantially to affect the
functions as member which it would be proper for M to discharge.