Financial Services Bill (HL Bill 48)

(3) In subsection (3), for “Authority” substitute “regulator”.

(4) In subsection (4), for “the Authority” substitute “either regulator”.

(5) In subsections (5) and (6) for “The Authority”, in each place, substitute “The
regulator in question”.

(6) 5In subsection (7), for the words from “exercised” to the end substitute
“exercised—

(a) by either regulator, to impose requirements on a person who is
connected with an authorised person;

(b) by the FCA, to impose requirements on an operator, trustee or
10depositary of a scheme recognised under section 270 or 272 who is
not an authorised person;

(c) by the FCA, to impose requirements on a recognised investment
exchange;

(d) by the FCA, to impose requirements on a person who is connected
15with a recognised investment exchange.”

(7) In subsection (9)—

(a) for “the Authority”, in the first place, substitute “the regulator
exercising the power”,

(b) for “the Authority’s” substitute “that regulator’s”, and

(c) 20for “the Authority”, in the second place, substitute “that regulator”.

(8) In subsection (11)—

(a) in the opening words, for “an authorised person” substitute “another
person”, and

(b) in paragraph (d), at the end insert “(reading references in that Part to
25the authorised person as references to A)”.

(9) In the heading, for “Authority’s” substitute “Regulators’”.

2 In section 165A (power to require information relevant to financial
stability)—

(a) for “Authority”, in each place, substitute “PRA”, and

(b) 30in the heading, for “Authority’s” substitute “PRA’s”.

3 In section 165B (safeguards relating to section 165A)—

(a) for “Authority”, in each place, substitute “PRA”, and

(b) for “Authority’s”, in each place, substitute “PRA’s”.

4 In section 165C (orders under section 165A(2)(d)) for subsection (1)
35substitute—

“(1) The Treasury may make an order under section 165A(2)(d) only if
either or both of the following conditions is met in relation to the
provision made by the order.

(1A) Condition A is that the Treasury consider that—

(a) 40the activities carried on by the prescribed person or persons
of the prescribed description, or the way in which those
activities (or any part of them) are carried on, or

(b) any failure to carry on those activities (or any part of them),

pose, or would be likely to pose, a serious threat to the stability of the
45UK financial system.

(1B) Condition B is that the provision implements all or part of a
recommendation made by the Financial Policy Committee of the
Bank of England under section 9P of the Bank of England Act 1998.”

5 For section 166 (reports by skilled persons) substitute—

“166 5Reports by skilled persons

(1) This section applies where either regulator has required or could
require a person to whom subsection (2) applies (“the person
concerned”) to provide information or produce documents with
respect to any matter (“the matter concerned”).

(2) 10This subsection applies to—

(a) an authorised person (“A”),

(b) any other member of A’s group,

(c) a partnership of which A is a member, or

(d) a person who has at any relevant time been a person falling
15within paragraph (a), (b) or (c),

who is, or was at the relevant time, carrying on a business.

(3) The regulator mentioned in subsection (1) may either—

(a) by notice in writing given to the person concerned, require
the person concerned to provide the regulator with a report
20on the matter concerned, or

(b) itself appoint a person to provide the regulator with a report
on the matter concerned.

(4) When acting under subsection (3)(a), the regulator may require the
report to be in such form as may be specified in the notice.

(5) 25The regulator must give notice of an appointment under subsection
(3)(b) to the person concerned.

(6) The person appointed to make a report—

(a) must be a person appearing to the regulator to have the skills
necessary to make a report on the matter concerned, and

(b) 30where the appointment is to be made by the person
concerned, must be a person nominated or approved by the
regulator.

(7) It is the duty of—

(a) the person concerned, and

(b) 35any person who is providing (or who has at any time
provided) services to the person concerned in relation to the
matter concerned,

to give the person appointed to prepare a report all such assistance
as the appointed person may reasonably require.

(8) 40The obligation imposed by subsection (7) is enforceable, on the
application of the regulator in question, by an injunction or, in
Scotland, by an order for specific performance under section 45 of the
Court of Session Act 1988.

(9) A regulator may make rules providing for expenses incurred by it in
45relation to an appointment under subsection (3)(b) to be payable as a
fee by the person concerned.

(10) The powers conferred by this section may also be exercised by the
FCA in relation to a person to whom subsection (11) applies, (and
references to the person concerned are to be read accordingly).

(11) This subsection applies to—

(a) 5a recognised investment exchange (“A”),

(b) any other member of A’s group,

(c) a partnership of which A is a member, or

(d) a person who has at any time been a person falling within
paragraph (a), (b) or (c),

10who is, or was at the relevant time, carrying on a business.”

6 After section 166 insert—

166A   Appointment of skilled person to collect and update information

(1) This section applies if either regulator considers that an authorised
person has contravened a requirement in rules made by that
15regulator to collect, and keep up to date, information of a description
specified in the rules.

(2) The regulator may either—

(a) require the authorised person to appoint a skilled person to
collect or update the information, or

(b) 20itself appoint a skilled person to do so.

(3) References in this section to a skilled person are to a person—

(a) appearing to the regulator to have the skills necessary to
collect or update the information in question, and

(b) where the appointment is to be made by the authorised
25person, nominated or approved by the regulator.

(4) The regulator must give notice of an appointment under subsection
(2)(b) to the authorised person.

(5) The skilled person may require any person to provide all such
assistance as the skilled person may reasonably require to collect or
30update the information in question.

(6) A requirement imposed under subsection (5) is enforceable, on the
application of the regulator in question, by an injunction or, in
Scotland, by an order for specific performance under section 45 of the
Court of Session Act 1988.

(7) 35A contractual or other requirement imposed on a person (“P”) to
keep any information in confidence does not apply if—

(a) the information is or may be relevant to anything required to
be done as a result of this section,

(b) an authorised person or a skilled person requests or requires
40P to provide the information for the purpose of securing that
those things are done, and

(c) the regulator in question has approved the making of the
request or the imposition of the requirement before it is made
or imposed.

(8) 45An authorised person may provide information (whether received
under subsection (7) or otherwise) that would otherwise be subject to

a contractual or other requirement to keep it in confidence if it is
provided for the purposes of anything required to be done as a result
of this section.

(9) A regulator may make rules providing for expenses incurred by it in
5relation to an appointment under subsection (2)(b) to be payable as a
fee by the authorised person.

(10) In this section “authorised person”, in relation to the PRA, means
PRA-authorised person.”

7 (1) Section 167 (appointment of investigator in general cases) is amended as
10follows.

(2) In subsection (1), for “the Authority or the Secretary of State (“the
investigating authority”)” substitute “an investigating authority”.

(3) After subsection (5) insert—

“(5A) Investigating authority” means—

(a) 15in relation to a recognised investment exchange, the
Secretary of State or the FCA;

(b) in relation to an authorised person or former authorised
person, the FCA or the PRA;

(c) in relation to an appointed representative or former
20appointed representative, the FCA or the PRA.”

8 (1) Section 168 (appointment of investigator in specific cases) is amended as
follows.

(2) In subsection (1)—

(a) omit paragraph (a), and

(b) 25in paragraph (b), for “191” substitute “191F”.

(3) In subsection (4)—

(a) in the opening words, for “the Authority” substitute “an
investigating authority”,

(b) in paragraph (c), for “Authority” substitute “investigating
30authority”,

(c) after that paragraph insert—

“(ca) a recognised investment exchange may have
contravened the recognition requirements (within the
meaning of Part 18);”,

(d) 35in paragraph (f), for “an authorised or exempt person” substitute “a
person”,

(e) in paragraph (h), for “Authority” substitute “investigating
authority”,

(f) at the end of paragraph (i), omit “or”,

(g) 40in paragraph (j), omit the words from “or by any” to the end, and

(h) after that paragraph insert “or—

(k) a person may have contravened a qualifying EU
provision that is specified, or of a description
specified, for the purposes of this subsection by the
45Treasury by order.”

(4) In subsection (5), for “Authority” substitute “investigating authority”.

(5) For subsection (6) substitute—

“(6) Investigating authority” means—

(a) in subsections (1) to (3), the FCA, the PRA or the Secretary of
State;

(b) 5in subsections (4) and (5), the FCA or the PRA.”

9 (1) Section 169 (investigations at the request of an overseas regulator) is
amended as follows.

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

(3) In subsections (3) and (4), in each place, for “Authority” substitute
10“regulator”.

(4) In subsection (5), in each place, for “Authority” substitute “regulator”.

(5) In subsection (6), for “Authority” substitute “regulator”.

(6) In subsection (7), for “the Authority” substitute “a regulator”.

(7) In subsection (8), for “Authority” substitute “regulator”,

(8) 15In subsection (9), for “The Authority” substitute “Each regulator”.

(9) In subsection (11), for “Authority” substitute “regulator”.

10 In section 169A (supporting an overseas regulator regarding financial
stability), in subsection (1), for “Authority” substitute “PRA”.

11 In section 170 (investigations: general), in subsection (10), for paragraphs (a)
20and (b) substitute—

“(a) the FCA, if the FCA appointed the investigator;

(aa) the PRA, if the PRA appointed the investigator;

(b) the Secretary of State, if the Secretary of State appointed the
investigator.”

12 25In section 174 (admissibility of statements to investigators), in subsection (2),
for “the Authority” substitute “a regulator”.

13 (1) Section 175 (information and documents: supplemental) is amended as
follows.

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

(3) 30After subsection (2) insert—

“(2A) A document so produced may be retained for so long as the person
to whom it is produced considers that it is necessary to retain it
(rather than copies of it) for the purposes for which the document
was requested.

(2B) 35If the person to whom a document is so produced has reasonable
grounds for believing—

(a) that the document may have to be produced for the purposes
of any legal proceedings, and

(b) that it might otherwise be unavailable for those purposes,

40it may be retained until the proceedings are concluded.”

(4) In subsection (3), for “Authority” substitute “regulator”.

14 (1) Section 176 (entry of premises under warrant) is amended as follows.

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

(3) After subsection (5) insert—

“(5A) A warrant under this section may be executed by any constable.

(5B) 5The warrant may authorise persons to accompany any constable
who is executing it.

(5C) The powers in subsection (5) may be exercised by a person
authorised by the warrant to accompany a constable; but that person
may exercise those powers only in the company of, and under the
10supervision of, a constable.”

(4) In subsection (6), for “16” substitute “16(3) to (12)”.

(5) In subsection (7), for “18” substitute “18(3) to (12)”.

(6) Omit subsection (8).

(7) In subsection (11), in paragraph (a), for “the Authority” substitute “a
15regulator”.

15 After section 176 insert—

“176A Retention of documents taken under section 176

(1) Any document of which possession is taken under section 176 (“a
seized document”) may be retained so long as it is necessary to retain
20it (rather than copies of it) in the circumstances.

(2) A person claiming to be the owner of a seized document may apply
to a magistrates’ court or (in Scotland) the sheriff for an order for the
delivery of the document to the person appearing to the court or
sheriff to be the owner.

(3) 25If on an application under subsection (2) the court or (in Scotland) the
sheriff cannot ascertain who is the owner of the seized document the
court or sheriff (as the case may be) may make such order as the court
or sheriff thinks fit.

(4) An order under subsection (2) or (3) does not affect the right of any
30person to take legal proceedings against any person in possession of
a seized document for the recovery of the document.

(5) Any right to bring proceedings (as described in subsection (4)) may
only be exercised within 6 months of the date of the order made
under subsection (2) or (3).”

35Part 2 Part 23 of FSMA 2000: public record, disclosure of information and co-
operation

16 (1) Section 347 (record of authorised persons) is amended as follows.

(2) In subsections (1) to (6), for “Authority”, in each place, substitute “FCA”.

(3) 40Omit subsection (1)(f).

(4) In subsection (2), in paragraph (e)—

(a) omit “or recognised clearing house,”, and

(b) omit “or clearing house”.

(5) In subsection (8), for “Authority” substitute “FCA or the PRA”.

17 5After section 347 insert—

347A   Duty of PRA to disclose information relevant to the record

(1) The PRA must, for the purpose of assisting the FCA to comply with
its duty under section 347—

(a) notify the FCA if the information included in the record as
10required under section 347(2)(a) appears to the PRA to be
incomplete or inaccurate,

(b) if it makes a prohibition order relating to an individual,
provide the FCA with information falling within section
347(2)(f) in relation to that order,

(c) 15where it is the appropriate regulator in relation to an
approved person, provide the FCA with information falling
within section 347(2)(g) in relation to that approved person,
and

(d) where the FCA has notified the PRA that it considers it
20appropriate to include in the record information of a certain
description, disclose to the FCA such information of that
description as the PRA has in its possession.

(2) The duty to provide information under this section does not apply to
information which the PRA reasonably believes is in the possession
25of the FCA.

(3) Subsection (1) does not require or authorise the disclosure of
information whose disclosure is prohibited by or under section 348.

(4)
This section is without prejudice to any other power to disclose
information.

(5)
30In this section references to the “record” are to the record maintained
under section 347.”

18 (1) Section 348 (restrictions on disclosure of information) is amended as follows.

(2) In subsection (2)(b)—

(a) for “Authority” substitute “FCA, the PRA”, and

(b) 35omit “, the competent authority for the purposes of Part VI”.

(3) In subsection (5)—

(a) for paragraph (a) substitute—

“(a) the FCA;

(aa) the PRA;”,

(b) 40omit paragraph (b),

(c) in paragraph (d), for “139E” substitute “166A”, and

(d) after paragraph (e) insert—

“(ea) a person who is or has been engaged to provide
services to a person mentioned in those paragraphs;”.

(4) 45In subsection (6)—

(a) in paragraph (a), for “the competent authority” substitute “the FCA”,

(b) in paragraph (b), for “Authority” substitute “FCA, the PRA”, and

(c) omit paragraph (c).

(5) In the heading for “Authority” substitute “FCA, PRA”.

19 (1) 5Section 349 (exceptions from section 348) is amended as follows.

(2) In subsection (2)(c), for “Authority” substitute “FCA or the PRA”.

(3) In subsection (3A)(a), for “Authority” substitute “FCA or the PRA”.

(4) In subsection (3B)(c), for “Authority’s functions” substitute “functions of the
FCA or the PRA”.

20 (1) 10Section 350 (disclosure of information by HMRC) is amended as follows.

(2) For subsection (1) substitute—

“(1) No obligation as to secrecy imposed by statute or otherwise prevents
the disclosure of Revenue information to—

(a) the FCA or the PRA, if the disclosure is made for the purpose
15of assisting or enabling that regulator to discharge its
functions under this or any other Act, or

(b) the Secretary of State, if the disclosure is made for the
purpose of assisting in the investigation of a matter under
section 168 or with a view to the appointment of an
20investigator under that section.”

(3) In subsection (4), for “subsection (1)” substitute “subsection (1)(b)”.

21 Omit section 351 (competition information).

22 In section 351A (disclosure under the UCITS directive), in subsection (1), for
“the Authority” substitute “the FCA or the PRA”.

23 (1) 25In section 353 (removal of other restrictions on disclosure), in subsection
(1)(b)—

(a) for “Authority”, in the first place, substitute “FCA or the PRA”, and

(b) for “Authority”, in the second place, substitute “either of them”.

24 After section 353 insert—

30“Information received from Bank of England

353A Information received from Bank of England

(1) A regulator must not disclose to any person specially protected
information.

(2) “Specially protected information” is information in relation to which
35the first and second conditions are met.

(3) The first condition is that the regulator received the information
from—

(a) the Bank of England (“the Bank”), or

(b) the other regulator where that regulator had received the
40information from the Bank.

(4) The second condition is that the Bank notified the regulator to which
it disclosed the information that the Bank held the information for
the purpose of its functions with respect to any of the following—

(a) monetary policy;

(b) 5financial operations intended to support financial
institutions for the purposes of maintaining stability;

(c) the provision of private banking services and related
services.

(5) The notification referred to in subsection (4) must be—

(a) 10in writing, and

(b) given before, or at the same time as, the Bank discloses the
information.

(6) The prohibition in subsection (1) does not apply—

(a) to disclosure by one regulator to the other regulator where
15the regulator making the disclosure informs the other
regulator that the information is specially protected
information by virtue of this section;

(b) where the Bank has consented to disclosure of the
information;

(c) 20to information which has been made available to the public
by virtue of being disclosed in any circumstances in which, or
for any purposes for which, disclosure is not precluded by
this section;

(d) to information which the regulator is required to disclose in
25pursuance of any EU obligation.

(7) In this section references to disclosure by or to a regulator or by the
Bank include references to disclosure by or to—

(a) persons who are, or are acting as,—

(i) officers of, or members of the staff of, the regulator, or

(ii) 30directors, officers, employees or agents of the Bank, or

(b) auditors, experts, contractors or investigators appointed by
the regulator or the Bank under powers conferred by this Act
or otherwise.

(8) References to disclosure by a regulator do not include references to
35disclosure between persons who fall within any paragraph of
subsection (7)(a) or (b) in relation to that regulator.

(9) Each regulator must take such steps as are reasonable in the
circumstances to prevent the disclosure of specially protected
information, in cases not excluded by subsection (6), by those who
40are or have been—

(a) its officers or members of staff (including persons acting as its
officers or members of staff);

(b) auditors, experts, contractors or investigators appointed by
the regulator under powers conferred by this Act or
45otherwise;

(c) persons to whom the regulator has delegated any of its
functions.”

25 For section 354 substitute—

354A   FCA’s duty to co-operate with others

(1) The FCA must take such steps as it considers appropriate to co-
operate with other persons (whether in the United Kingdom or
5elsewhere) who have functions—

(a) similar to those of the FCA, or

(b) in relation to the prevention or detection of financial crime.

(2) The persons referred to in subsection (1) do not include the Bank of
England or the PRA (but see sections 3D and 3P).

(3) 10The FCA must take such steps as it considers appropriate to co-
operate with—

(a) the Panel on Takeovers and Mergers;

(b) an authority designated as a supervisory authority for the
purposes of Article 4.1 of the Takeovers Directive;

(c) 15any other person or body that exercises functions of a public
nature, under legislation in any country or territory outside
the United Kingdom, that appear to the FCA to be similar to
those of the Panel on Takeovers and Mergers.

(4) Co-operation may include the sharing of information which the FCA
20is not prevented from disclosing.

(5) “Financial crime” has the meaning given in section 1H(3).

354B PRA’s duty to co-operate with others

(1) The PRA must take such steps as it considers appropriate to co-
operate with—

(a) 25other persons (whether in the United Kingdom or elsewhere)
who have functions similar to those of the PRA, and

(b) other bodies that have functions relevant to financial
stability.

(2) The persons referred to in subsection (1) do not include the Bank of
30England or the FCA (but see sections 3D and 3P).

(3) Co-operation may include the sharing of information which the PRA
is not prevented from disclosing.

354C PRA’s duty to provide information to Bank of England

(1) The PRA must disclose to the Bank of England (“the Bank”) any
35information in its possession that it thinks will or may assist the Bank
in achieving its financial stability objective.

(2) The duty in subsection (1) applies whether or not the Bank has
requested that the information be disclosed to it.

(3) Subsection (1) does not require or authorise the disclosure of
40information whose disclosure—

(a) is prohibited by or under section 348 or any other enactment;

(b) is incompatible with any EU obligation;

(c) would constitute or be punishable as a contempt of court.