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Financial Services BillPage 310

(aa) the FCA, and.

17 In section 29 (reverse share transfer), in subsection (6), for paragraph (a) and
the “and” following it, substitute—

(a) the PRA,

(aa) 5the FCA, and.

18 In section 30 (bridge bank: share transfers), in subsection (5), for paragraph
(a) and the “and” following it, substitute—

(a) the PRA,

(aa) the FCA, and.

19 10In section 31 (bridge bank: reverse share transfer), in subsection (5), for
paragraph (a) and the “and” following it, substitute—

(a) the PRA,

(aa) the FCA, and.

20 In section 41 (procedure), in subsection (1), for paragraph (c) and the “and”
15following it, substitute—

(c) the PRA,

(ca) the FCA, and.

21 In section 42 (supplemental instruments), in subsection (5), for paragraph (a)
and the “and” following it, substitute—

(a) 20the PRA,

(aa) the FCA, and.

22 In section 43 (onward transfer), in subsection (7), for paragraph (a) and the
“and” following it, substitute—

(a) the PRA,

(aa) 25the FCA, and.

23 In section 44 (reverse property transfer), in subsection (6), for paragraph (a)
and the “and” following it, substitute—

(a) the PRA,

(aa) the FCA, and.

24 30In section 45 (temporary public ownership: property transfer), in subsection
(8), for paragraph (a) and the “and” following it, substitute—

(a) the PRA,

(aa) the FCA, and.

25 In section 46 (temporary public ownership: reverse property transfer), in
35subsection (7), for paragraph (a) and the “and” following it, substitute—

(a) the PRA,

(aa) the FCA, and.

26 In section 57 (valuation principles), in subsection (4)(a), for “Part 4”
substitute “Part 4A”.

27 (1) 40Section 82 (temporary public ownership) is amended as follows.

(2) In subsection (2), for “the FSA are” substitute “the PRA is”.

(3) In subsection (5), for paragraph (a) and the “and” following it, substitute—

(a) the PRA,

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(aa) the FCA, and.

28 After section 83 insert—

Banks not regulated by PRA

83A Modifications of Part

(1) 5In the application of this Part to an FCA-regulated bank the
modifications specified in the Table apply.

(2) In this section—

TABLE OF MODIFICATIONS
15
Provision Modification
Section 7
(a)

Treat the references to the PRA in subsections
(1), (4), (4A) and (5) as references to the FCA.

(b)

Ignore subsection (5)(aa).

(c)

20If the bank has as a member of its immediate
group a PRA-authorised person the FCA
must consult the PRA before determining
whether or not Condition 2 is met.


Section 8 25Subsection (3)(a) does not apply unless the bank has
as a member of its immediate group a PRA-
authorised person.
Section 9 Subsection (4)(a) does not apply unless the bank has
as a member of its immediate group a PRA-
30authorised person.
Section 24 Ignore subsection (1)(c).
Section 25 Ignore subsection (2)(c).
Section 26 Subsection (5)(a) does not apply unless the bank has
as a member of its immediate group a PRA-
35authorised person.
Section
26A
Subsection (6)(a) does not apply unless the bank has
as a member of its immediate group a PRA-
authorised person.
Section 27 Subsection (5)(a) does not apply unless the bank has
40as a member of its immediate group a PRA-
authorised person.

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Provision Modification
Section 28 Subsection (6)(a) does not apply unless the bank has
as a member of its immediate group a PRA-
authorised person.
Section 29 5Subsection (6)(a) does not apply unless the bank has
as a member of its immediate group a PRA-
authorised person.
Section 30 Subsection (5)(a) does not apply unless the bank has
as a member of its immediate group a PRA-
10authorised person.
Section 31 Subsection (5)(a) does not apply unless the bank has
as a member of its immediate group a PRA-
authorised person.
Section 41 Ignore subsection (1)(c).
Section 42 15Subsection (5)(a) does not apply unless the bank has
as a member of its immediate group a PRA-
authorised person.
Section
42A
Subsection (6)(a) does not apply unless the bank has
as a member of its immediate group a PRA-
20authorised person.
Section 43 Subsection (7)(a) does not apply unless the bank has
as a member of its immediate group a PRA-
authorised person.
Section 44 Subsection (6)(a) does not apply unless the bank has
25as a member of its immediate group a PRA-
authorised person.
Section 45 Subsection (8)(a) does not apply unless the bank has
as a member of its immediate group a PRA-
authorised person.
Section 46 30Subsection (7)(a) does not apply unless the bank has
as a member of its immediate group a PRA-
authorised person.
Section 81B
(a)

Treat the reference to the PRA in subsection
(2) as a reference to the FCA.

(b)

35Ignore subsection (6)(b).


Section 82
(a)

Treat the reference to the PRA in subsection
(2) as a reference to the FCA.

(b)

Ignore subsection (5)(a).


40

Part 2 Amendments of Part 2 of the Act

29 Part 2 of the Banking Act 2009 is amended as follows.

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30 In section 91 (interpretation: “bank”), for “Part 4” substitute “Part 4A”.

31 In section 93 (interpretation: other expressions), for subsection (1)
substitute—

(1) In this Part—

(a) 5“the PRA” means the Prudential Regulation Authority, and

(b) “the FCA” means the Financial Conduct Authority.

32 In section 95 (application), in subsection (1)(b), for “FSA” substitute “PRA”.

33 In section 96 (grounds for applying), for “FSA”, in each place, substitute
“PRA”.

34 10In section 97 (grounds for making), in subsection (1), for “FSA” substitute
“PRA”.

35 In section 98 (commencement), in subsection (2), for “FSA”, in both places,
substitute “PRA”.

36 (1) Section 100 (liquidation committee) is amended as follows.

(2) 15For subsection (2) substitute—

(2) The liquidation committee is to consist initially of—

(a) two individuals nominated by the Bank of England,

(b) one individual nominated by the PRA,

(c) one individual nominated by the FCA, and

(d) 20one individual nominated by the FSCS.

(3) In subsection (6)(c), for “and the FSA” substitute “, the PRA and the FCA”.

37 In section 101 (liquidation committee: supplemental), in subsection (7), for
“FSA” substitute “PRA, the FCA”.

38 In section 103 (general powers, duties and effect), in the Table—

(a) 25in the entry relating to section 147 of the Insolvency Act 1986, for
“FSA” substitute “PRA”, and

(b) in the entry relating to section 241 of that Act, for “FSA” substitute
“PRA”.

39 (1) Section 108 (removal by court) is amended as follows.

(2) 30In subsection (1)(b), for “FSA” substitute “PRA”.

(3) In subsection (2)—

(a) for “FSA” substitute “PRA”, and

(b) after “England” insert “and the FCA”.

(4) In subsection (3), for “FSA” substitute “PRA and the FCA”.

40 35In section 109 (removal by creditors), in subsection (4) for “and the FSA”
substitute “, the PRA and the FCA”.

41 In section 113 (company voluntary arrangement), in subsection (2)(b), for
sub-paragraph (i) substitute—

(i) the PRA,

(ia) 40the FCA,.

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42 In section 115 (dissolution), in subsection (2)(b), for sub-paragraph (i)
substitute—

(i) the PRA,

(ia) the FCA,.

43 5In section 117 (bank insolvency as alternative order), in subsection (2)(a)—

(a) for “FSA” substitute “PRA”, and

(b) after “England” insert “and the FCA”.

44 (1) Section 120 (notice of preliminary steps) is amended as follows.

(2) For “FSA”, in each place (including the heading), substitute “PRA”.

(3) 10In subsection (6), after “filed” insert “(in Scotland, lodged)”.

(4) In subsection (10), in paragraph (a), after “England” insert “and the FCA”.

45 After section 129 insert—

129A Banks not regulated by PRA

(1) In the application of this Part to an FCA-regulated bank the
15modifications specified in the Table apply.

(2) In this section—

TABLE OF MODIFICATIONS
Provision 25Modification
Section 95 Treat the reference to the PRA in
subsection (1) as a reference to the FCA.
Section 96
(a)

Treat the references to the PRA in
subsections (2) and (3) as references
30to the FCA.

(b)

If the bank has as a member of its
immediate group a PRA-authorised
person the Bank of England must
consult the PRA before applying
35for a bank insolvency order.

(c)

The FCA must consult the PRA
before applying for a bank
insolvency order.


Section 97 40Treat the reference to the PRA in
subsection (1) as a reference to the FCA.

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Provision Modification
Section 98 Treat the references to the PRA in
subsection (2) as references to the FCA.
Section 100
(a)

Treat the reference to two
5individuals in subsection (2)(a) as a
reference to one individual.

(b)

Ignore subsection (2)(b).

(c)

Ignore the reference to the PRA in
subsection (6)(c).


10
Section 101 Ignore the reference to the PRA in
subsection (7).
Section 103 In the Table, in the entries relating to
sections 147 and 241 of the Insolvency Act
151986, treat the reference to the PRA as a
reference to the FCA.
Section 108
(a)

Treat the reference to the PRA in
subsections (1) and (2) as a
reference to the FCA.

(b)

20Ignore the duty to consult the FCA
in subsection (2).

(c)

Ignore the reference to the PRA in
subsection (3).


Section 109 25Ignore the reference to the PRA in
subsection (4).
Section 113 Ignore subsection (2)(b)(i).
Section 115 Ignore subsection (2)(b)(i).
Section 117
(a)

Treat the reference to the PRA in
30subsection (2) as a reference to the
FCA.

(b)

Ignore the duty to obtain the
consent of the FCA in subsection
(2)(a).


35
Section 120
(a)

Treat the references to the PRA in
subsections (5), (7) and (10) as
references to the FCA.

(b)

Ignore the duty to inform the FCA
40in subsection (10)(a).


Part 3 Amendments of Part 3 to the Act

46 Part 3 of the Banking Act 2009 is amended as follows.

47 45In section 147 (administrator’s proposals), in subsection (6), for “FSA”
substitute “PRA and a copy of it to the FCA”.

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48 In section 153 (successful rescue), in subsection (3), for “FSA” substitute
“PRA and the FCA”.

49 In section 157 (other processes), in subsection (1), for “Before exercising an
insolvency power in respect of a residual bank the FSA” substitute “Before
5the PRA or the FCA exercises an insolvency power in respect of a residual
bank, whichever of them is exercising the power”.

50 After section 157 insert—

157A Banks not regulated by PRA

(1) In the application of this Part to an FCA-regulated bank the
10modifications specified in the Table apply.

(2) In this section “FCA-regulated bank” means a bank which does not
carry on any activity which is a PRA-regulated activity for the
purposes of the Financial Services and Markets Act 2000.

TABLE OF MODIFICATIONS
Provision 15Modification
Section 147 The bank administrator must send the
statement to the FCA (and need not send a
copy of it to the PRA).
Section 153 Ignore the reference to the PRA in
20subsection (3).
Section 157 Ignore the reference to the PRA in
subsection (1).

51 In section 166 (interpretation: general), for subsection (2) substitute—

(2) In this Part—

Part 4 Amendments of Parts 4 to 6 of the Act

52 Parts 4 to 6 of the Banking Act 2009 are amended as follows.

53 (1) 30Section 183 (interpretation of Part 5) is amended as follows.

(2) In paragraph (c)—

(a) for “section 3(2)” substitute “section 1I”, and

(b) omit “(market confidence)”.

(3) For paragraph (e), and the “and” before it, substitute—

(e) 35the FCA” means the Financial Conduct Authority,

(f) “Part 4A permission” has the meaning given by section 55A
of the Financial Services and Markets Act 2000,

(g) “the PRA” means the Prudential Regulation Authority,

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(h) “PRA-regulated activity” has the meaning given by section
22A of the Financial Services and Markets Act 2000, and

(i) “recognised investment exchange” has the meaning given by
section 285 of that Act.

54 5In section 223 (termination of right to issue), in subsections (5) and (6), for
“Part 4” substitute “Part 4A”.

55 (1) Section 232 (definition) is amended as follows.

(2) In subsections (2) and (6)(a), for “Part 4” substitute “Part 4A”.

(3) In subsection (5B), in the definition of “rules”, for “section 139(1)” substitute
10“section 137B(1)”.

(4) After subsection (6) insert—

(7) The Treasury may by order amend the definition of “investment
activity” in subsection (5B), including by defining that term by
reference to rules or guidance made by the PRA or the FCA under the
15Financial Services and Markets Act 2000.

56 In section 234 (regulations: details), for subsection (8)(b) substitute—

(b) the Prudential Regulation Authority,

(ba) the Financial Conduct Authority,.

57 In section 235 (regulations: procedure), at the end insert—

(6) 20An order under section 232(7)—

(a) is to be made by statutory instrument, and

(b) is subject to annulment in pursuance of a resolution of either
House of Parliament.

58 In section 246 (information), in subsection (2)—

(a) 25for paragraph (b) substitute—

(b) the Prudential Regulation Authority;

(ba) the Financial Conduct Authority;, and

(b) in paragraph (d), for “or the Financial Services Authority” substitute,
“the Prudential Regulation Authority or the Financial Conduct
30Authority”.

59 (1) Section 249 (functions) is amended as follows.

(2) In subsection (1)—

(a) for “Financial Services Authority” substitute “Prudential Regulation
Authority or the Financial Conduct Authority”, and

(b) 35for “the Authority” substitute “that authority”.

(3) In subsection (2), for “Financial Services Authority” substitute “Prudential
Regulation Authority or the Financial Conduct Authority”.

(4) Omit subsection (3).

60 In section 250 (information), for “Financial Services Authority” substitute
40“Prudential Regulation Authority.”

61 (1) Section 259 (statutory instruments) is amended as follows.

(2) In the entry in the Table relating to section 232, for “232” substitute “232(6)”.

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(3) After that entry insert—

232(7) Investment banks: definition
of investment activity
Negative
resolution.

(4) In the entry in the Table relating to section 249, for “FSA—” substitute “PRA
5or FCA—”.

62 In the Table in section 261 (index of defined terms)—

(a) after the entry relating to “enactment” insert—

FCA 3, 93, 166 & 183

(b) omit the entry relating to the FSA, and

(c) 10after the entry relating to “partial property transfer” insert—

PRA 3, 93, 166 & 183.

Section 103(1)

SCHEDULE 18 Further minor and consequential amendments

Part 1 15Amendments of FSMA 2000

1 FSMA 2000 is amended as follows.

2 (1) Section 33 (withdrawal of authorisation) is amended as follows.

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

(3) 20In subsection (2), for “Authority” substitute “appropriate regulator”.

(4) After 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.

(5) 25In the heading, omit “by the Authority”.

3 (1) Section 36 (persons authorised as a result of being concerned in collective
investment schemes) is amended as follows.

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

(3) In subsection (2), for “Part IV permission” substitute “Part 4A permission”.

4 30In section 38 (exemption orders), in subsection (2), for “Part IV permission”
substitute “Part 4A permission”.

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5 (1) Section 39 (exemption of appointed representatives) is amended as follows.

(2) In subsection (1B), for “Authority”, in each place, substitute “FCA”.

(3) For subsection (4) substitute—

(4) In determining whether an authorised person has complied with—

(a) 5a provision contained in or made under this Act, or

(b) a qualifying EU provision that is specified, or of a description
specified, for the purposes of this subsection by the Treasury
by order,

anything which a relevant person has done or omitted as respects
10business for which the authorised person has accepted responsibility
is to be treated as having been done or omitted by the authorised
person.

6 In section 39A (tied agents operating outside the United Kingdom), for
“Authority”, in each place, substitute “FCA”.

7 15In section 97(1)(d) (contravention of Part 6 rules: appointment of persons to
carry out investigations), for “83, 85, 87G or 98” substitute “85 or 87G”.

8 In section 177 (offences), in subsection (2), after “director or” insert “other”.

9 (1) In each of the provisions of Part 17 (collective investment schemes)
mentioned in sub-paragraph (2), for “Authority”, or “Authority’s”, in each
20place, substitute “FCA” or “FCA’s”.

(2) Those provisions are—

(a) sections 237 to 239;

(b) sections 242 to 252A;

(c) sections 254 to 262 (including the heading to section 259);

(d) 25section 264;

(e) section 266;

(f) sections 271 to 283B.

10 (1) Section 249 (disqualification of auditor for breach of trust scheme rules) is
amended as follows.

(2) 30In subsection (1) for the words from “it may” to the end substitute “it may
do one or more of the following—

(a) disqualify the auditor from being the auditor of any
authorised unit trust scheme or authorised open-ended
investment company;

(b) 35publish a statement to the effect that it appears to the FCA
that the auditor has failed to comply with the duty;

(c) impose on the auditor a penalty, payable to the FCA, of such
amount as the FCA considers appropriate.

(3) For subsection (2) substitute—

(2) 40Sections 345B to 345E have effect in relation to the taking of action
under subsection (1) as they have effect in relation to the taking of
action under section 345(2).

(4) For the heading substitute “Disciplinary measures”.

11 (1) Section 250 (modification or waiver of rules) is amended as follows.

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