Financial Services Bill (HL Bill 48)

(3) In subsections (2) to (7), for “Authority” substitute “appropriate regulator”.

(4) After subsection (7) insert—

“(8) The appropriate regulator” means—

(a) for the purposes of subsections (2) to (4), (6) and (7)—

(i) 5where the company is a PRA-authorised person, each
of the FCA and the PRA, and

(ii) in any other case, the FCA;

(b) for the purposes of subsection (5)—

(i) where the company is a PRA-authorised person, the
10FCA or the PRA, and

(ii) in any other case, the FCA.”

(5) In the heading, for “Authority’s powers” substitute “Powers of FCA and
PRA”.

13 (1) Section 366 (insurers effecting or carrying out long-term contracts of
15insurance) is amended as follows.

(2) In subsections (1), (2) and (5), for “Authority” substitute “PRA”.

(3) At the end insert—

“(9) Before giving or refusing consent under subsection (1), the PRA must
consult the FCA.

(10) 20In the event that the activity of effecting or carrying out long-term
contracts of insurance as principal is not to any extent a PRA-
regulated activity—

(a) references to the PRA in subsections (1), (2) and (5) are to be
read as references to the FCA, and

(b) 25subsection (9) does not apply.”

14 (1) Section 367 (winding-up petitions) is amended as follows.

(2) In subsection (1)—

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

(b) in paragraph (a), after “authorised person” insert “or recognised
30investment exchange”.

(3) After that subsection insert—

“(1A) The PRA may present a petition to the court for the winding up of a
body which is a PRA-regulated person.”

(4) In subsection (2), for “subsection (1)” substitute “subsections (1) and (1A)”.

(5) 35In subsection (6), after “(1)” insert “or (1A)”.

15 (1) Section 368 (winding-up petitions: EEA and Treaty firms) is amended as
follows.

(2) The existing provision becomes subsection (1).

(3) In that subsection—

(a) 40for “The Authority” substitute “A regulator”, and

(b) after “it” insert “or the other regulator”.

(4) After that subsection insert—

“(2) If a regulator receives from the home state regulator of a body falling
within subsection (1)(a) or (b) a request to present a petition to the
court under section 367 for the winding up of the body, it must—

(a) 5notify the other regulator of the request, and

(b) provide the other regulator with such information relating to
the request as it thinks fit.”

16 (1) Section 369 (insurers: service of petition etc. on Authority) is amended as
follows.

(2) 10In subsection (1)—

(a) for “the Authority” substitute “a regulator”, and

(b) for “on the Authority” substitute “on the appropriate regulator”.

(3) In subsection (2)—

(a) for “the Authority” substitute “a regulator”, and

(b) 15for “on the Authority” substitute “on the appropriate regulator”.

(4) After that subsection insert—

“(3) The appropriate regulator” means—

(a) in relation to a PRA-authorised person, the FCA and the PRA,
and

(b) 20in any other case, the FCA.

(4) If either regulator—

(a) presents a petition for the winding up of a PRA-authorised
person with permission to effect or carry out contracts of
insurance, or

(b) 25applies to have a provisional liquidator appointed under
section 135 of the 1986 Act (or Article 115 of the 1989 Order)
in respect of a PRA-authorised person with permission to
effect or carry out contracts of insurance,

that regulator must serve a copy of the petition or application (as the
30case requires) on the other regulator.”

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

17 (1) Section 369A (reclaim funds: service of petition etc. on Authority) is
amended as follows.

(2) In subsection (1)—

(a) 35for “other than the Authority” substitute “other than a regulator”,
and

(b) for “on the Authority” substitute “on the appropriate regulator”.

(3) In subsection (2)—

(a) for “other than the Authority” substitute “other than a regulator”,
40and

(b) for “on the Authority” substitute “on the appropriate regulator”.

(4) After subsection (3) insert—

“(4) The appropriate regulator” means—

(a) in relation to an authorised reclaim fund that is a PRA-
authorised person, the FCA and the PRA, and

(b) in relation to any other authorised reclaim fund, the FCA.

(5) If either regulator—

(a) 5presents a petition for the winding up of an authorised
reclaim fund that is a PRA-authorised person, or

(b) applies to have a provisional liquidator appointed under
section 135 of the 1986 Act (or Article 115 of the 1989 Order)
in respect of an authorised reclaim fund that is a PRA-
10authorised person,

that regulator must serve a copy of the petition or application (as the
case requires) on the other regulator.”

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

18 (1) Section 370 (liquidator’s duty to report to Authority) is amended as follows.

(2) 15The existing provision becomes subsection (1).

(3) In subsection (1)—

(a) in paragraph (a), for “a person other than the Authority” substitute
“any person”, and

(b) in paragraph (b), for “to the Authority without delay” substitute
20“without delay to the FCA and, if the regulated activity concerned is
a PRA-regulated activity, to the PRA”.

(4) After that subsection insert—

“(2) Subsection (1) does not apply where—

(a) a body is being wound up on a petition presented by a
25regulator, and

(b) the regulator’s petition depended on a contravention by the
body of the general prohibition.”

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

19 (1) Section 371 (power to participate in proceedings: winding up by the court)
30is amended as follows.

(2) In subsection (1)—

(a) omit “other than the Authority”, and

(b) in paragraph (a), after “authorised person” insert “or recognised
investment exchange”.

(3) 35In subsections (2) to (5), for “Authority” substitute “appropriate regulator”.

(4) After subsection (5) insert—

“(6) The appropriate regulator” means—

(a) for the purposes of subsections (2), (3) and (5)—

(i) where the body is a PRA-regulated person, each of
40the FCA and the PRA, and

(ii) in any other case, the FCA;

(b) for the purposes of subsection (4)—

(i) where the body is a PRA-regulated person, the FCA
or the PRA, and

(ii) in any other case, the FCA.

(7) But where the petition was presented by a regulator “the appropriate
regulator” does not include the regulator which presented the
petition.”

(5) 5In the heading, for “Authority’s powers” substitute “Powers of FCA and
PRA”.

20 (1) Section 372 (bankruptcy petitions) is amended as follows.

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

(3) After that subsection insert—

“(1A) 10The PRA may present a petition to the court—

(a) under section 264 of the 1986 Act (or Article 238 of the 1989
Order) for a bankruptcy order to be made against an
individual who is a PRA-regulated person;

(b) under section 5 of the 1985 Act for the sequestration of the
15estate of an individual who is a PRA-regulated person.”

(4) In subsection (2), for “such a petition may be presented” substitute “a
petition may be presented by virtue of subsection (1) or (1A)”.

(5) In subsection (4)(a)—

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

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

(6) In subsection (6)—

(a) after “(1)(b)” insert “or (1A)(b)”, and

(b) in paragraph (a), for “the Authority” substitute “the regulator by
which the petition is presented”.

21 (1) 25Section 373 (insolvency practitioner’s duty to report to Authority) is
amended as follows.

(2) In subsection (1)—

(a) in paragraph (a), omit the words from “by virtue of” to “Authority”,
and

(b) 30for “to the Authority without delay” substitute “without delay to the
FCA and, if the regulated activity concerned is a PRA-regulated
activity, to the PRA”.

(3) After that subsection insert—

“(1A) Subsection (1) does not apply where—

(a) 35the bankruptcy order or sequestration award is in force by
virtue of a petition presented by a regulator, and

(b) the regulator’s petition depended on a contravention by the
individual of the general prohibition.”

(4) In the heading, for “to Authority” substitute “to FCA and PRA”.

22 (1) 40Section 374 (Authority’s powers to participate in proceedings: bankruptcy)
is amended as follows.

(2) In subsection (1), omit “other than the Authority”.

(3) In subsections (2) to (4), for “Authority” substitute “appropriate regulator”.

(4) After subsection (6) insert—

“(7) The appropriate regulator” means—

(a) for the purposes of subsections (2) and (3)—

(i) 5where the individual or entity is a PRA-regulated
person, each of the FCA and the PRA, and

(ii) in any other case, the FCA;

(b) for the purposes of subsection (4)—

(i) where the individual or entity is a PRA-regulated
10person, the FCA or the PRA, and

(ii) in any other case, the FCA.

(8) But where the petition was presented by a regulator “the appropriate
regulator” does not include the regulator which presented the
petition.”

(5) 15In the heading, for “Authority’s powers” substitute “Powers of FCA or
PRA”.

23 (1) Section 375 (Authority’s right to apply for an order relating to debt
avoidance) is amended as follows.

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

(3) 20After subsection (1) insert—

“(1A) The PRA may apply for an order under section 423 of the 1986 Act
(or Article 367 of the 1989 Order) in relation to a debtor if—

(a) at the time the transaction at an undervalue was entered into,
the debtor was carrying on a PRA-regulated activity
25(whether or not in contravention of the general prohibition);
and

(b) a victim of the transaction is or was party to an agreement
entered into with the debtor, the making or performance of
which constituted or was part of a PRA-regulated activity
30carried on by the debtor.”

(4) In subsection (2), after “subsection (1)(b)” insert “or subsection (1A)(b) (as
the case may be)”.

(5) In the heading, for “Authority’s right” substitute “Right of FCA and PRA”.

24 (1) Section 376 (continuation of contracts of long-term insurance where insurer
35in liquidation) is amended as follows.

(2) In subsection (11)(c), for “Authority” substitute “PRA”.

(3) After subsection (11) insert—

“(11A) The PRA must—

(a) consult the FCA before making an application under
40subsection (10), and

(b) provide the FCA with a copy of any actuary’s report made to
the PRA under that subsection.

(11B) In the event that the activity of effecting or carrying out long-term
contracts of insurance as principal is not to any extent a PRA-
authorised activity—

(a) the reference in subsection (11)(c) to the PRA is to be read as
5a reference to the FCA, and

(b) subsection (11A) does not apply.”

Section 44

SCHEDULE 15 The consumer financial education body

1 Schedule 1A (further provision about the consumer financial education
10body) is amended as follows.

2 In paragraph 1 (ensuring exercise of functions) for “Authority”, in each
place, substitute “FCA”.

3 In paragraph 2 (constitution) for “Authority”, in each place, substitute
“FCA”.

4 15In paragraph 3 (status), in sub-paragraph (2), omit “board members,”.

5 In paragraph 4 (discharge of functions by others), in sub-paragraph (1)(a),
for “section 6A(1)” substitute “section 3R(3)”.

6 In paragraph 5 in sub-paragraph (1), for “section 6A(1)” substitute “section
3R(3)”.

7 20For paragraph 6 (and the italic heading before it) substitute—

“Discharge of functions: considerations

6 In discharging the consumer financial education function the
consumer financial education body must have regard to the duty
25of the FCA to advance its operational objectives.

Relationship with the FCA

6A (1) The consumer financial education body and the FCA must each
take such steps as it considers appropriate to co-operate with the
30other in the exercise of their functions under this Act.

(2) The consumer financial education body and the FCA must
prepare and maintain a memorandum describing how they intend
to comply with sub-paragraph (1).

(3) The consumer financial education body must ensure that the
35memorandum as currently in force is published in the way
appearing to it to be best calculated to bring it to the attention of
the public.

6B If the consumer financial education body considers that it has
information that, in its opinion, would or might be of assistance to
40the FCA in advancing one or more of the FCA’s operational
objectives, it must disclose that information to the FCA.”

8 In paragraph 7 (budget) for “Authority”, in each place, substitute “FCA”.

9 In paragraph 8 (annual plan)—

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

(b) in sub-paragraph (6), after paragraph (d) insert—

“(da) 5the Smaller Business Practitioner Panel;”.

10 In paragraph 9 (annual reports)—

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

(b) at the end insert—

“(5) The Treasury may—

(a) 10require the consumer financial education body to
comply with any provision of the Companies Act
2006 about accounts and their audit which would
not otherwise apply to it, or

(b) direct that any provision of that Act about accounts
15and their audit is to apply to the consumer financial
education body with such modifications as are
specified in the direction, whether or not the
provision would otherwise apply to it.

(6) Compliance with any requirement under sub-paragraph
20(5)(a) or (b) is enforceable by injunction or, in Scotland, an
order for specific performance under section 45 of the
Court of Session Act 1988.

(7) Proceedings under sub-paragraph (6) may be brought only
by the Treasury.”

11 25After paragraph 9 insert—

“Audit of accounts

9A (1) The consumer financial education body must send a copy of its
annual accounts to the Comptroller and Auditor General and the
30Treasury as soon as is reasonably practicable.

(2) The Comptroller and Auditor General must—

(a) examine, certify and report on accounts received under
this paragraph, and

(b) send a copy of the certified accounts and the report to the
35Treasury.

(3) The Treasury must lay the copy of the certified accounts and the
report before Parliament.

(4) The consumer financial education body must send a copy of the
certified accounts and the report to the FCA.

(5) 40Except as provided for by paragraph 9(5), the consumer financial
education body is exempt from the requirements of Part 16 of the
Companies Act 2006 (audit) and its balance sheet must contain a
statement to that effect.

(6) In this paragraph “annual accounts” has the meaning given by
45section 471 of the Companies Act 2006.”

12 In paragraph 11 (meaning of “relevant costs”) for “Authority” substitute
“FCA”.

13 In paragraph 12 (funding) for “Authority”, in each place, substitute “FCA”.

14 In paragraph 13 (funding by consumer credit licensees), in sub-paragraph
5(5)(a), for “Authority” substitute “FCA”.

15 In paragraph 15 (reviews of use of resources), for “Authority”, in each place,
substitute “FCA”.

16 In the title to the Schedule, in the marginal reference, for “Section 6A”
substitute “Section 3R”.

Section 45

10SCHEDULE 16 Provision of financial services by members of the professions

1 In section 325 (general duty)—

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

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

2 15In section 328 (directions relating to the general prohibition), for
“Authority”, in each place, substitute “FCA”.

3 In section 329 (orders relating to the general prohibition), for “Authority”, in
each place, substitute “FCA”.

4 In section 330 (consultation)—

(a) 20for “Authority”, in each place, substitute “FCA”, and

(b) for subsection (10) substitute—

“(10) Cost benefit analysis” means—

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

(i) 25if the proposed direction is given, or

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

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

(10A) 30If, in the opinion of the FCA—

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

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

35the cost benefit analysis need not estimate them, but must
include a statement of the FCA’s opinion and an explanation
of it.”

5 In section 331 (procedure for making orders), for “Authority”, in each place,
substitute “FCA”.

6 40In section 332 (rules relating to persons to whom the general prohibition
does not apply), for “Authority”, in each place, substitute “FCA”.

Section 97

SCHEDULE 17 Amendments of Banking Act 2009 related to Part 2 of this Act

Part 1 Amendments of Part 1 of the Act

1 5Part 1 of the Banking Act 2009 is amended as follows.

2 (1) Section 1 (overview) is amended as follows.

(2) In subsection (5), for paragraph (c) and the “and” before it, substitute—

“(c) the Prudential Regulation Authority, and

(d) the Financial Conduct Authority.”

(3) 10In the Table, after the entry relating to sections 82 and 83, insert—

3 In section 2 (interpretation: “bank”), for “Part 4” substitute “Part 4A”.

4 In section 3 (interpretation: other expressions), for the definition of “the
FSA” and the “and” following it, substitute—

• 15““the PRA” means the Prudential Regulation Authority,

• “the FCA” means the Financial Conduct Authority, and”.

5 In section 4 (special resolution objectives), in subsection (3), for paragraph
(b) and the “and” following it, substitute—

“(b) the PRA,

(ba) 20the FCA, and”.

6 In section 5 (code of practice), in subsection (5), for paragraph (b) and the
“and” following it, substitute—

“(b) the PRA,

(ba) the FCA, and”.

7 (1) 25Section 6 (code of practice: procedure) is amended as follows.

(2) Omit subsections (1) and (2).

(3) For subsection (4) substitute—

“(4) Before re-issuing the code of practice the Treasury must consult—

(a) the PRA,

(b) 30the FCA,

(c) the Bank of England, and

(d) the scheme manager of the Financial Services Compensation
Scheme (established under Part 15 of the Financial Services
and Markets Act 2000).

(5) 35As soon as is reasonably practicable after re-issuing the code of
practice the Treasury shall lay a copy before Parliament.”

8 (1) Section 7 (general conditions) is amended as follows.

(2) In subsection (1), for “FSA” substitute “PRA”.

(3) In subsection (2), omit the words from “(within” to the end.

(4) In subsection (4), for “FSA” substitute “PRA”.

(5) After that subsection insert—

“(4A) 5The threshold conditions” means the threshold conditions, as
defined by subsection (1) of section 55B of the Financial Services and
Markets Act 2000, for which the PRA is treated as responsible under
subsection (2) of that section.”

(6) In subsection (5)—

(a) 10for “FSA” substitute “PRA”, and

(b) at the end of paragraph (a) insert—

“(aa) the FCA,”.

9 In section 8 (specific conditions: private sector purchaser and bridge bank),
in subsection (3), for paragraph (a) and the “and” following it, substitute—

“(a) 15the PRA,

(aa) the FCA, and”.

10 In section 9 (specific conditions: temporary public ownership), in subsection
(4), for paragraph (a) and the “and” following it, substitute—

“(a) the PRA,

(aa) 20the FCA, and”.

11 In section 10 (Banking Liaison Panel), in subsection (3), for paragraph (c)
substitute—

“(c) a member appointed by the PRA,

(ca) a member appointed by the FCA,”.

12 25In section 24 (procedure: instruments), in subsection (1), for paragraph (c)
and the “and” following it, substitute—

“(c) the PRA,

(ca) the FCA, and”.

13 In section 25 (procedure: orders), in subsection (2), for paragraph (c) and the
30“and” following it, substitute—

“(c) the PRA,

(ca) the FCA, and”.

14 In section 26 (supplemental instruments), in subsection (5), for paragraph (a)
and the “and” following it, substitute—

“(a) 35the PRA,

(aa) the FCA, and”.

15 In section 27 (supplemental orders), in subsection (5), for paragraph (a) and
the “and” following it, substitute—

“(a) the PRA,

(aa) 40the FCA, and”.

16 In section 28 (onward transfer), in subsection (6), for paragraph (a) and the
“and” following it, substitute—

“(a) the PRA,