Financial Services Bill (HL Bill 48)

(4) Before making the scheme, the PRA must have regard to any
representations made to it in accordance with sub-paragraph (3).

(5) If the PRA makes the proposed scheme, it must publish an
account, in general terms, of—

(a) 5the representations made to it in accordance with sub-
paragraph (3), and

(b) its response to them.

(6) If the scheme differs from the draft published under sub-
paragraph (2) in a way which is, in the opinion of the PRA,
10significant, the PRA must (in addition to complying with sub-
paragraph (5)) publish details of the difference.

(7) The PRA must, without delay, give the Treasury a copy of any
scheme details published by it.

(8) The PRA may charge a reasonable fee for providing a person with
15a copy of—

(a) a draft published under sub-paragraph (2);

(b) scheme details.

(9) Sub-paragraphs (2) to (6) and (8)(a) also apply to a proposal to
alter or replace the financial penalty scheme.

20Fees

29 (1) The PRA may make rules providing for the payment to it of such
fees, in connection with the discharge of any of its qualifying
functions, as it considers will (taking account of its expected
income from fees and charges provided for by any other provision
25of this Act) enable it—

(a) to meet expenses incurred in carrying out its functions or
for any incidental purpose,

(b) to repay the principal of, and pay any interest on, any
relevant borrowing and to meet relevant commencement
30expenses, and

(c) to maintain adequate reserves.

(2) The “qualifying functions” of the PRA are—

(a) its functions under or as a result of this Act or any of the
other Acts mentioned in section 2A(6), and

(b) 35its functions under or as a result of a qualifying EU
provision that is specified, or of a description specified, for
the purposes of this sub-paragraph by the Treasury by
order.

(3) In sub-paragraph (1)(b)—

• 40“relevant borrowing” means any money borrowed by the
  PRA which has been used for the purpose of meeting
  expenses incurred in relation to its assumption of
  functions under this Act, and

• “relevant commencement expenses” means expenses
  45incurred by the PRA, the FCA or the Bank—

  Financial Services BillPage 221

  (a)

  in preparation for the exercise of functions by the
  PRA under this Act, or

  (b)

  for the purpose of facilitating the exercise by the PRA
  of those functions or otherwise in connection with
  5their exercise by it.

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

(5) For the purposes of sub-paragraph (3) it is irrelevant when the
borrowing of the money, the incurring of the expenses or the
10assumption of functions took place (and, in particular, it is
irrelevant if expenses were incurred by the FCA at a time when it
was known as the Financial Services Authority).

(6) In fixing the amount of any fee which is to be payable to the PRA,
no account is to be taken of any sums which the PRA receives, or
15expects to receive, by way of penalties imposed by it under this
Act.

(7) Any fee which is owed to the PRA under any provision made by
or under this Act may be recovered as a debt due to the PRA.

Services for which fees may not be charged

30 20The power conferred by paragraph 29 may not be used to
require—

(a) a fee to be paid in respect of the discharge of any of the
PRA’s functions under paragraph 13, 14, 19 or 20 of
Schedule 3, or

(b) 25a fee to be paid by any person whose application for
approval under section 59 has been granted.

Part 4 Miscellaneous

Exemption from liability in damages

31 (1) 30None of the following is to be liable in damages for anything done
or omitted in the discharge, or purported discharge, of the PRA’s
functions—

(a) the PRA;

(b) any person (“P”) who is, or is acting as, a member, officer
35or member of staff of the PRA;

(c) any person who could be held vicariously liable for things
done or omitted by P, but only in so far as the liability
relates to P’s conduct.

(2) Sub-paragraph (1) does not apply—

(a) 40if the act or omission is shown to have been in bad faith, or

(b) so as to prevent an award of damages made in respect of
an act or omission on the ground that the act or omission
was unlawful as a result of section 6(1) of the Human
Rights Act 1998.

Accredited financial investigators

32 For the purposes of this Act anything done by an accredited
financial investigator within the meaning of the Proceeds of Crime
Act 2002 who—

(a) 5is, or is acting as, an officer of, or member of the staff of, the
PRA, or

(b) is appointed by the PRA under section 167 or 168 to
conduct an investigation,

is to be treated as done in the exercise or discharge of a function of
10the PRA.

Amounts required by rules to be paid to the PRA

33 Any amount (other than a fee) which is required by rules to be
paid to the PRA may be recovered as a debt due to the PRA.”

Section 11

SCHEDULE 4 15EEA passport rights and treaty rights

Part 1 Amendments of Schedule 3 to FSMA 2000: EEA passport rights

Introductory

1 Schedule 3 to FSMA 2000 (EEA passport rights) is amended as follows.

20Exercise of passport rights by EEA firms

2 (1) Paragraph 13 (establishment) is amended as follows.

(2) In sub-paragraphs (1) and (1A), for “Authority”, in each place, substitute
“appropriate UK regulator”.

(3) After sub-paragraph (1A) insert—

“(1B) 25Where the PRA receives a consent notice, it must give a copy to the
FCA without delay.

(1C) Where the FCA receives a consent notice it must in prescribed
cases give a copy to the PRA without delay.

(1D) In a case where the FCA is the appropriate UK regulator, the
30consent of the PRA is required for any notice by the FCA for the
purposes of sub-paragraph (1)(ba) which relates to—

(a) a PRA-regulated activity,

(b) a PRA-authorised person, or

(c) a person whose immediate group includes a PRA-
35authorised person.

(1E) If the FCA—

(a) receives a consent notice, or

(b) receives under sub-paragraph (1B) a copy of a consent
notice,

it must prepare for the firm’s supervision.

(1F) If the PRA—

(a) 5receives a consent notice, or

(b) receives under sub-paragraph (1C) a copy of a consent
notice which identifies PRA-regulated activities or relates
to a PRA-authorised person,

it must prepare for the firm’s supervision.”

(4) 10In sub-paragraph (2)—

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

(b) omit paragraph (a).

(5) In sub-paragraph (3), for “Authority” substitute “appropriate UK regulator”.

(6) In sub-paragraph (4), after the definition of “applicable provisions” insert—

• 15““the appropriate UK regulator” means whichever of the FCA
  and the PRA is the competent authority for the purposes of
  the relevant single market directive;”.

3 (1) Paragraph 14 (services) is amended as follows.

(2) In sub-paragraph (1), for “Authority”, in each place, substitute “appropriate
20UK regulator”.

(3) After sub-paragraph (1) insert—

“(1A) Relevant notice” means—

(a) a regulator’s notice, or

(b) where none is required by sub-paragraph (1), a notice
25informing the appropriate UK regulator of the firm’s
intention to provide services in the United Kingdom.

(1B) Where the PRA receives a relevant notice, it must give a copy to
the FCA without delay.

(1C) Where the FCA receives a relevant notice, it must in prescribed
30cases give a copy to the PRA without delay.

(1D) If the FCA—

(a) receives a relevant notice, or

(b) receives under sub-paragraph (1B) a copy of a relevant
notice,

35it must prepare for the firm’s supervision.

(1E) If the PRA—

(a) receives a relevant notice, or

(b) receives under sub-paragraph (1C) a copy of a relevant
notice which identifies PRA-regulated activities or relates
40to a PRA-authorised person,

it must, unless the firm falls within paragraph 5(e), prepare for the
firm’s supervision.”

(4) For sub-paragraph (2) substitute—

“(2) If the appropriate UK regulator has received a relevant notice, it
must, unless the firm falls within paragraph 5(a) or (e), notify the
firm of the applicable provisions (if any).”

(5) 5Omit sub-paragraph (2A).

(6) In sub-paragraph (3)—

(a) for “(2)(b)” substitute “(2)”, and

(b) for the words from “Authority” to the end substitute “appropriate
UK regulator received the relevant notice”.

(7) 10In sub-paragraph (4), after the definition of “applicable provisions” insert—

• ““the appropriate UK regulator” means whichever of the FCA
  and the PRA is the competent authority for the purposes of
  the relevant single market directive;”.

4 (1) Paragraph 15A (application for approval to manage UCITS) is amended as
15follows.

(2) For “Authority” or “Authority’s”, in each place, substitute “appropriate UK
regulator” or “appropriate UK regulator’s”.

(3) After sub-paragraph (6) insert—

“(6A) If—

(a) 20the FCA is the appropriate UK regulator, and

(b) the firm is, or the firm’s immediate group includes, a PRA-
authorised person,

the FCA must give the PRA a copy of the notice under sub-
paragraph (4).”

(4) 25In sub-paragraph (7), before the definition of “specified” insert—

• ““the appropriate UK regulator” means whichever of the FCA
  and the PRA is the competent authority for the purposes of
  the UCITS directive;”.

5 (1) Paragraph 15B (representations and references to the Tribunal) is amended
30as follows.

(2) For “Authority”, in both places, substitute “appropriate UK regulator”.

(3) After sub-paragraph (3) insert—

“(4) In this paragraph “the appropriate UK regulator” has the same
meaning as in paragraph 15A.”

6 35In paragraph 15C (information to home state regulator), in sub-paragraph
(1), for “Authority” substitute “appropriate UK regulator, as defined in
paragraph 15A(7),”.

7 In paragraph 17 (continuing regulation of EEA firms)—

(a) before paragraph (a) insert—

“(za) 40require the FCA and the PRA to notify
each other about EEA firms qualifying
for authorisation;”, and

(b) in paragraph (c), for “the Authority” substitute “the FCA or the
PRA”.

8 In paragraph 18 (giving up right to authorisation), in paragraph (b), for “Part
IV permission” substitute “Part 4A permission”.

5Exercise of passport rights by UK firms

9 In Part 3 (exercise of passport rights by UK firms), before the italic heading
before paragraph 19 insert—

“Meaning of “the appropriate UK regulator”

18A In this Part of this Schedule “the appropriate UK regulator”
10means—

(a) where the UK firm is a PRA-authorised person, the PRA;

(b) in any other case, the FCA.”

10 (1) Paragraph 19 (establishment) is amended as follows.

(2) For “Authority”, in each place, substitute “appropriate UK regulator”.

(3) 15After sub-paragraph (7B) insert—

“(7C) Where the PRA is the appropriate UK regulator, it must consult the
FCA before deciding whether to give a consent notice, except where
sub-paragraph (7A) applies.

(7D) Where the FCA is the appropriate UK regulator, it must consult the
20PRA before deciding whether to give a consent notice in relation to a
UK firm whose immediate group includes a PRA-authorised
person.”

11 (1) Paragraph 20 (services) is amended as follows.

(2) For “Authority”, in each place, substitute “appropriate UK regulator”.

(3) 25After sub-paragraph (3A) insert—

“(3AA) Where the PRA is the appropriate UK regulator, it must consult
the FCA before deciding whether to give a consent notice.

(3AB) Where the FCA is the appropriate UK regulator, it must consult
the PRA before deciding whether to give a consent notice in
30relation to a UK firm whose immediate group includes a PRA-
authorised person.”

12 In paragraph 20ZA (information for host state regulator), for “Authority”, in
each place, substitute “appropriate UK regulator”.

13 In paragraph 20B (notice of intention to market), for “Authority”, in each
35place, substitute “appropriate UK regulator”.

14 In paragraph 22 (continuing regulation of UK firms), in sub-paragraph (3)—

(a) for “the Authority’s consent” substitute “the consent of the FCA or
the PRA”, and

(b) in paragraph (b), for “the Authority” substitute “the FCA or the
40PRA”.

15 (1) Paragraph 23 (power to impose requirements) is amended as follows.

(2) For “the Authority”, in each place, substitute “the FCA”.

(3) In sub-paragraph (1)(a), for “Part IV permission” substitute “Part 4A
permission”.

(4) 5In sub-paragraphs (2) and (2A), for “section 45” substitute “section 55L or
55M”.

(5) After sub-paragraph (2A) insert—

“(2B) This paragraph does not affect any duty of the FCA to consult the
PRA before exercising its power under section 55L or 55M.”

16 (1) 10Paragraph 24 (which relates to UK firms exercising rights under the banking
consolidation directive) is amended as follows.

(2) In sub-paragraph (1)(a), for “Part IV permission” substitute “Part 4A
permission”.

(3) In sub-paragraph (2)—

(a) 15for “the Authority”, in the first place, substitute “either regulator”,

(b) in paragraph (a), for “Part IV permission” substitute “Part 4A
permission”, and

(c) in paragraph (b), for “the Authority” substitute “that regulator”.

17 After paragraph 24 insert—

20“Arrangements between FCA and PRA

24A (1) The regulators may make arrangements about—

(a) how they will consult each other when required to do so by
paragraph 19(7C) or (7D) or 20(3AA) or (3AB) or by
regulations under paragraph 22;

(b) 25how each of them will act in response to any advice or
representations received from the other.

(2) The arrangements may require one regulator to obtain the consent
of the other in specified circumstances before—

(a) giving a consent notice under paragraph 19 or 20, or

(b) 30exercising specified functions under regulations under
paragraph 22.

(3) The arrangements must be in writing, and must specify—

(a) the EEA rights to which they relate, and

(b) the date on which they come into force.

(4) 35Where arrangements are in force under this paragraph, the
regulators must exercise functions in accordance with the
arrangements.

(5) The regulators must publish any arrangements under this
paragraph in such manner as they think fit.”

18 40In paragraph 25 (information to be included in the public record) for
“Authority” substitute “FCA”.

19 In paragraph 26 (UK management companies: delegation of functions), for
“Authority”, in each place, substitute “appropriate UK regulator”.

20 In paragraph 27 (UK management companies: withdrawal of authorisation),
for “Authority”, in each place, substitute “appropriate UK regulator”.

21 5In paragraph 28 (management companies: request for information), for
“Authority”, in each place, substitute “appropriate UK regulator”.

Part 2 Amendments of Schedule 4 to FSMA 2000: Treaty rights

22 Schedule 4 to FSMA 2000 (Treaty rights) is amended as follows.

23 (1) 10Paragraph 3 (exercise of Treaty rights) is amended as follows.

(2) In sub-paragraph (2), for “Authority” substitute “appropriate UK regulator”.

(3) After that sub-paragraph insert—

“(2A) In sub-paragraph (2) “the appropriate UK regulator” means—

(a) where any of the activities to which the notification under
15that sub-paragraph relates is a PRA-regulated activity, the
PRA;

(b) in any other case, the FCA.

(2B) Where the PRA receives a notification under sub-paragraph (2), it
must give a copy to the FCA without delay.

(2C) 20Where the FCA receives a notification under sub-paragraph (2), it
must in prescribed cases give a copy to the PRA without delay.”

24 After paragraph 3 insert—

“Notification between UK regulators

3A Regulations may require the PRA and the FCA to notify each other
25about Treaty firms qualifying for authorisation.”

25 (1) Paragraph 4 (permission) is amended as follows.

(2) In sub-paragraph (3)—

(a) for “a Part IV permission” substitute “a Part 4A permission”, and

(b) for “Authority” substitute “appropriate UK regulator”.

(3) 30In sub-paragraph (4), for “Authority” substitute “appropriate UK regulator”.

(4) After that sub-paragraph insert—

“(5) The appropriate UK regulator” means—

(a) where the Treaty firm is a PRA-authorised person, the
FCA or the PRA;

(b) 35in any other case, the FCA.”

26 (1) Paragraph 5 (notice to Authority) is amended as follows.

(2) In sub-paragraph (2), for “the Authority” substitute “the appropriate UK
regulator”.

(3) After sub-paragraph (2) insert—

“(2A) The appropriate UK regulator” means—

(a) where any of the activities to which the notice relates is a
PRA-regulated activity, the PRA;

(b) 5in any other case, the FCA.

(2B) Where the PRA receives a notice under sub-paragraph (2), it must
give a copy to the FCA without delay.

(2C) Where the FCA receives a notice under sub-paragraph (2) from—

(a) a PRA-authorised person, or

(b) 10a person whose immediate group includes a PRA-
authorised person,

it must give a copy to the PRA without delay.”

(4) For sub-paragraph (4) substitute—

“(4) Subsections (1), (4) and (8) of section 55U apply to a notice under
15sub-paragraph (2) as they apply to an application for a Part 4A
permission.”

(5) In the italic heading immediately before paragraph 5, for “Authority”
substitute “UK regulator”.

Part 3 20Amendments of sections 34 and 35 of FSMA 2000: EEA firms and Treaty firms

27 (1) Section 34 of FSMA 2000 (EEA firms) is amended as follows.

(2) In subsection (2), for “the Authority” substitute “the appropriate regulator”.

(3) After that subsection insert—

“(2A) In subsection (2) “the appropriate regulator” means—

(a) 25in the case of a PRA-authorised person, the PRA, and

(b) in any other case, the FCA.”

(4) In subsection (3), for “Part IV permission” substitute “Part 4A permission”.

28 (1) Section 35 of FSMA 2000 (Treaty firms) is amended as follows.

(2) In subsection (2), for “the Authority” substitute “the appropriate regulator”.

(3) 30After that subsection insert—

“(2A) In subsection (2) “the appropriate regulator” means—

(a) in the case of a PRA-authorised person, the PRA, and

(b) in any other case, the FCA.”

(4) In subsection (3), for “Part IV permission” substitute “Part 4A permission”.

35Part 4 Amendments of Part 13 of FSMA 2000: Powers of intervention

29 Part 13 of FSMA 2000 (incoming firms: intervention by Authority) is
amended as follows.

30 In the heading to Part 13, for “Authority” substitute “FCA or PRA”.

31 In section 193 (interpretation of Part 13), in subsection (1), in the definition
of “power of intervention”, for “the Authority” substitute “the FCA or the
PRA”.

32 (1) 5Section 194 (general grounds on which power of intervention is exercisable)
is amended as follows.

(2) In subsection (1)—

(a) for “Authority”, in each place, substitute “appropriate regulator”,

(b) in paragraph (c), for the words from “meet” to the end substitute
10“advance—

“(i) in the case of the FCA, one or more of its
operational objectives, and

(ii) in the case of the PRA, any of its objectives.”

(3) After subsection (1A) insert—

“(1B) 15The appropriate regulator” means—

(a) where the incoming firm is a PRA-authorised person, the
FCA or the PRA;

(b) in any other case, the FCA.”

(4) In subsection (3), for “Authority”, in each place, substitute “FCA”.

33 (1) 20Section 194A (contravention by relevant EEA firm with UK branch of
requirement under markets in financial instruments directive) is amended
as follows.

(2) For “the Authority” or “the Authority’s”, in each place, substitute “the
appropriate regulator” or “the appropriate regulator’s”.

(3) 25After subsection (8) insert—

“(9) Subsection (4) is not to be regarded as requiring the PRA to take
action in relation to the contravention of a requirement falling within
subsection (3) in a case where it is satisfied that the FCA is required
to act, and is acting or has acted, under subsection (4)—

(a) 30in relation to that requirement, or

(b) where that requirement is imposed by rules made by the
PRA, in relation to an identical requirement imposed by rules
made by the FCA.”

(10) “The appropriate regulator” means—

(a) 35where the relevant EEA firm is a PRA-authorised person, the
FCA or, subject to subsection (9), the PRA;

(b) in any other case, the FCA.”

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

34 (1) Section 195 (exercise of power in support of overseas regulator) is amended
40as follows.

(2) In subsection (1), for “Authority” substitute “appropriate regulator”.

(3) In subsection (2), for “Authority’s” substitute “appropriate regulator’s”.