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(4) The direction may relate to all regulated persons or to regulated
persons of a specified description, but may not relate to a specified
regulated person.

(5) The direction—

(a) 5may refer to the opinion of the regulator or require or authorise
the exercise of a discretion by the regulator;

(b) may be expressed to remain in force for a specified period or
until revoked.

(6) The direction may not require its provisions to be implemented by
10specified means or within a specified period, but may include
recommendations as to the means to be used and the timing of
implementation.

(7) A recommendation made under subsection (6) may be expressed to be
one to which section 9Q(3) (duty to comply or explain) applies.

(8) 15The direction may not require the regulator to do anything that it has
no power to do, but the existence of the direction is relevant to the
exercise of any discretion conferred on the regulator.

(9) The direction may specify particular matters to which the regulator is
or is not to have regard in complying with the direction, but those
20matters must be specified in relation to all regulated persons or a class
of regulated person rather than a specified regulated person.

(10) The direction may refer to a publication issued by the FCA, the PRA,
another body in the United Kingdom or an international organisation,
as the publication has effect from time to time.

9I 25Compliance with directions under section 9H

(1) The regulator must comply with a direction given to it under section 9H
as soon as reasonably practicable.

(2) An order under section 9L may, in relation to cases where the regulator
is complying with a direction under section 9H, exclude or modify any
30procedural requirement that would otherwise apply under FSMA 2000
in relation to the exercise by the regulator of its functions in pursuance
of the direction.

(3) The regulator to which a direction under section 9H is given must give
the Financial Policy Committee one or more reports on how it is
35complying or has complied with the direction.

(4) The Financial Policy Committee may give directions to the regulator
specifying the times by which reports required by subsection (3) must
be given to the Committee.

(5) “Regulator” has the same meaning as in section 9H.

9J 40Revocation of directions under section 9H

(1) The Financial Policy Committee may at any time by notice to the
regulator revoke a direction under section 9H.

(2) A direction under section 9H is to be taken to be revoked if the measure
to which it relates ceases to be a macro-prudential measure, but this is
45subject to any provision made under section 9L(4)(e).

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(3) The revocation of a direction under section 9H does not affect the
validity of anything previously done in accordance with it.

(4) “Regulator” has the same meaning as in section 9H.

9K Further provisions about directions under section 9H

(1) 5Each of the following must be in writing—

(a) a direction under section 9H;

(b) a notice revoking such a direction;

(c) a report under section 9I(3).

(2) The Financial Policy Committee must give the Treasury a copy of any
10direction under section 9H or any notice revoking such a direction.

(3) The Treasury may, if they think fit, lay before Parliament a copy of a
direction under section 9H or a notice revoking such a direction.

(4) Where a direction under section 9H, or a notice revoking such a
direction, is included in a record published under section 9U, the
15Treasury must, if they have not already done so, lay before Parliament
a copy of the direction or notice in the form in which it is published in
the record.

9L Macro-prudential measures

(1) For the purposes of section 9H a “macro-prudential measure” is a
20measure prescribed by the Treasury by order.

(2) Before making an order under this section, the Treasury must—

(a) consult the Financial Policy Committee, or

(b) if the Treasury considers that the delay involved in consulting
the Committee would be prejudicial to the stability of the UK
25financial system, consult the Governor of the Bank.

(3) In prescribing a measure, the order must specify whether the measure
is prescribed in relation to the FCA, the PRA, or both.

(4) An order under this section—

(a) may make different provision for different cases;

(b) 30may confer a discretion on the Financial Policy Committee, the
FCA or the PRA;

(c) may refer to rules made by the FCA or the PRA;

(d) may refer to a publication issued by the FCA, the PRA, another
body in the United Kingdom or an international organisation,
35as the publication has effect from time to time;

(e) may contain transitional provisions and savings relating to the
coming into force of any provision of the order or to the ceasing
to be in force of any temporary provision made by the order.

9M Statements of policy by Financial Policy Committee

(1) 40In relation to each macro-prudential measure prescribed under section
9L, the Financial Policy Committee must prepare and maintain a
written statement of the general policy that it proposes to follow in
relation to the exercise of its power of direction under section 9H so far
as it relates to that measure.

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(2) The Committee may at any time alter or replace a statement maintained
under this section.

(3) The Bank must publish each statement maintained under this section.

(4) Publication is to be in such manner as the Bank thinks fit.

(5) 5Nothing in this section is to be regarded as preventing the Financial
Policy Committee from exercising its power of direction under section
9H in relation to a macro-prudential measure, where it considers it
necessary to do so by reason of urgency, before it has prepared a
statement under this section in relation to that measure.

9N 10Parliamentary control of orders under section 9L

(1) Except as provided by subsection (2), an order under section 9L is not
to be made unless a draft of the order has been laid before and
approved by resolution of each House of Parliament.

(2) An order under section 9L may be made without a draft having been
15laid and approved as mentioned in subsection (1) if the order contains
a statement that the Treasury are of the opinion that, by reason of
urgency, it is necessary to make the order without a draft being so laid
and approved.

(3) An order under section 9L made in accordance with subsection (2)

(a) 20must be laid before Parliament after being made, and

(b) ceases to have effect at the end of the relevant period unless
before the end of that period the order is approved by a
resolution of each House of Parliament (but without affecting
anything done under the order or the power to make a new
25order).

(4) The “relevant period” is a period of 28 days beginning with the day on
which the order is made.

(5) In reckoning the relevant period no account is to be taken of any time
during which Parliament is dissolved or prorogued or during which
30either House is adjourned for more than 4 days.

Recommendations by Financial Policy Committee
9O Making of recommendations within the Bank

(1) The Financial Policy Committee may make recommendations within
the Bank.

(2) 35The recommendations may, in particular, relate to—

(a) the provision by the Bank of financial assistance to financial
institutions;

(b) the exercise by the Bank of its functions in relation to payment
systems, settlement systems and clearing houses.

(3) 40The Committee may not make recommendations about—

(a) the provision by the Bank of financial assistance in relation to a
particular financial institution, or

(b) the exercise by the Bank of its powers under Parts 1 to 3 of the
Banking Act 2009 in relation to a particular institution.

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(4) The recommendations must be made or confirmed in writing.

9P Recommendations to Treasury

(1) The Financial Policy Committee may make recommendations to the
Treasury.

(2) 5The recommendations may, in particular, relate to the exercise by the
Treasury of their power to make orders under—

(a) section 9L (macro-prudential measures),

(b) section 22(1) or (1A) of FSMA 2000 (regulated activities),

(c) section 22A(1) of that Act (designation of activities requiring
10prudential regulation by PRA),

(d) section 137C(1)(b) of that Act (purposes for which FCA may
make product intervention rules), or

(e) section 165A(2)(d) of that Act (additional persons who may be
required by PRA to provide information).

(3) 15The recommendations must be made or confirmed in writing.

(4) The Committee may make a recommendation under subsection (2)(e)
only if it considers that the exercise by the Treasury of their power to
make an order under section 165A(2)(d) of FSMA 2000 in the manner
proposed is desirable for the purposes of the exercise by the Committee
20of its functions.

(5) Before giving a recommendation under subsection (2)(e), the
Committee must consult the Treasury.

9Q Recommendations to FCA and PRA

(1) The Financial Policy Committee may make recommendations to the
25FCA and the PRA about the exercise of their respective functions.

(2) The recommendations may relate to all regulated persons or to
regulated persons of a specified description, but may not relate to the
exercise of the functions of the FCA or the PRA in relation to a specified
regulated person.

(3) 30If the recommendations are expressed to be recommendations to which
this subsection applies, the body to which they are made must as soon
as reasonably practicable—

(a) act in accordance with the recommendations, or

(b) if to any extent it does not, notify the Committee of the extent to
35which it has not acted in accordance with the recommendations
and of the reasons for its decision.

(4) The recommendations, and any notification under subsection (3)(b),
must be made or confirmed in writing.

(5) “Regulated person” has the same meaning as in section 9H.

9R 40Recommendations to other persons

(1) The Financial Policy Committee may make recommendations to
persons other than those mentioned in sections 9O to 9Q.

(2) The recommendations must be made or confirmed in writing.

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Explanation
9S Duty to prepare explanation

(1) In connection with the exercise of any of the specified powers, the
Financial Policy Committee must prepare an explanation of—

(a) 5the reasons for the Committee’s decision to exercise the power,
in the way in which it is being exercised, and

(b) the Committee’s reasons for believing that the exercise of the
power, in the way in which it is being exercised, is compatible
with the duties of the Committee under the following
10provisions—

(i) section 9C(1) (as read with section 9C(4)), and

(ii) section 9F.

(2) The specified powers are—

(a) the power to give a direction under section 9H;

(b) 15the power to make recommendations under section 9O, so far as
relating to the exercise of the Bank’s functions in relation to
payment systems, settlement systems and clearing houses;

(c) the power to make recommendations under section 9P, so far as
relating to the exercise by the Treasury of their power to make
20orders under any of the provisions mentioned in subsection (2)
of that section;

(d) the power to make recommendations under section 9Q.

(3) The explanation required by subsection (1) in relation to the duty in
section 9F(3)(a) must include an estimate of the costs and an estimate of
25the benefits that would arise from compliance with the direction or
recommendation in question, unless in the opinion of the Committee it
is not reasonably practicable to include such an estimate.

Review
9T Duty to review directions and recommendations

(1) 30The Financial Policy Committee must—

(a) before the end of each review period, review each direction
given by it under section 9H, other than a direction revoked
before the end of the review period, and

(b) prepare a summary of its conclusions.

(2) 35A review period is—

(a) in relation to the first review, the period of 12 months beginning
with the day on which the direction was given, and

(b) in relation to subsequent reviews, the period of 12 months
beginning with the day on which the previous review was
40completed.

(3) The Financial Policy Committee must maintain arrangements for the
review at regular intervals of any recommendations that it has made
under any of sections 9O to 9R and are of continuing relevance.

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Publication of record of meetings
9U Publication of record of meetings

(1) The Bank must publish a record of each meeting of the Financial Policy
Committee before the end of the period of 6 weeks beginning with the
5day of the meeting.

(2) The record must specify any decisions taken at the meeting (including
decisions to take no action) and must set out, in relation to each
decision, a summary of the Committee’s deliberations.

(3) The decisions referred to in subsection (2) include in particular a
10decision—

(a) to give or revoke a direction under section 9H;

(b) to make recommendations under any of sections 9O to 9R.

(4) Where a decision has been made to give or revoke a direction under
section 9H, the record must include the text of the direction or of the
15notice of revocation.

(5) Where a decision has been made to make recommendations under any
of sections 9O to 9R, the record must include the recommendations.

(6) Where since the previous meeting the Committee has received a
notification under section 9Q(3)(b), the record must include the
20notification.

(7) The information required by subsections (1) and (2) does not include
information identifying particular members of the Committee.

(8) Subsections (1) to (6) do not require the publication of—

(a) information about any recommendations made under 9O(2)(a);

(b) 25information whose publication within the time required by
subsection (1) would in the opinion of the Committee be against
the public interest;

(c) information about any decision under paragraph (b);

(d) information about a decision to give a direction under section
309H which has been revoked before the record of the meeting at
which it was given is published;

(e) information about the decision to revoke a direction where
information about the direction is withheld under paragraph
(d).

(9) 35Publication under this section or section 9V is to be in such manner as
the Bank thinks fit.

9V Deferred publication

(1) Where the Financial Policy Committee decides under subsection (8)(b)
of section 9U that publication of information within the time required
40by subsection (1) of that section would be against the public interest—

(a) it must consider whether to fix a date as the earliest date on
which the information may be published, and

(b) if it does not fix a date, it must keep under consideration the
question whether publication of the information would still be
45against the public interest.

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(2) The Committee must from time to time determine the procedures that
it will follow in complying with the duty in subsection (1)(b).

(3) Where the Committee—

(a) fixes a date under subsection (1)(a) as the earliest date on which
5any information may be published, or

(b) decides under subsection (1)(b) that publication of any
information is no longer against the public interest,

the Bank must publish the information at the time when it next
publishes under section 9U(1) the record of a meeting of the
10Committee.

Financial stability reports by Financial Policy Committee
9W Financial stability reports by Financial Policy Committee

(1) The Financial Policy Committee must prepare and publish reports
relating to financial stability (“financial stability reports”).

(2) 15Two financial stability reports must be published in each calendar year.

(3) A financial stability report must include—

(a) the Committee’s view of the stability of the UK financial system
at the time when the report is prepared,

(b) an assessment of the developments that have influenced the
20current position,

(c) an assessment of the strengths and weaknesses of the UK
financial system,

(d) an assessment of risks to the stability of the UK financial system,
and

(e) 25the Committee’s view of the outlook for the stability of the UK
financial system.

(4) A financial stability report must also include—

(a) a summary of the activities of the Committee in the reporting
period, and

(b) 30an assessment of the extent to which the exercise by the
Committee of its functions (both during the reporting period
and previously) has succeeded during the reporting period in
achieving the objectives set out in section 9C(1)(a) and (b).

(5) If during the reporting period the Committee has made any decision in
35relation to which section 9S requires the preparation of an explanation,
the financial stability report must include the required explanation.

(6) If during the reporting period the Committee has completed the review
of a direction or recommendation, the financial stability report must
include a summary of the review.

(7) 40The reporting period is the period since the date of the previous
financial stability report, except that in the case of the first financial
stability report it is the period since the time when this section came
fully into force.

(8) Nothing in subsections (3) to (6) is to be regarded as requiring the
45Committee to include in a financial stability report any information

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whose publication would in the Committee’s opinion be against the
public interest.

(9) The Committee must give a copy of each financial stability report to the
Treasury.

(10) 5The Treasury must lay before Parliament a copy of each financial
stability report.

(11) Publication of a financial stability report is to be in such manner as the
Bank thinks fit.

Meetings between Governor and Chancellor of the Exchequer
9X 10Meetings between Governor and Chancellor of the Exchequer

(1) As soon as reasonably practicable after the publication by the Financial
Policy Committee of a financial stability report, the Governor of the
Bank and the Chancellor of the Exchequer must meet to discuss the
report and any other matters relating to the stability of the UK financial
15system that they consider it appropriate to discuss.

(2) The Treasury must publish a record of each meeting required by
subsection (1) before the end of the period of 6 weeks beginning with
the day of the meeting.

(3) Publication under subsection (2) is to be in such manner as the Treasury
20think fit.

(4) Subsection (2) does not require the publication of information whose
publication within the time required by that subsection would in the
opinion of the Treasury be against the public interest.

(5) Before publishing the record of a meeting required by subsection (1), or
25deciding under subsection (4) not to publish such a record, the
Treasury must consult the Bank about the record and its publication.

Power of Bank to require FCA or PRA to provide information
9Y Directions requiring information or documents

(1) The Bank may exercise the powers conferred by this section where it
30considers that information or documents are reasonably required in
connection with the exercise by the Bank of its functions in pursuance
of the Financial Stability Objective.

(2) The Bank may give a direction to the FCA or the PRA (“the regulator”)
requiring the regulator—

(a) 35to provide the Bank with specified information or information
of a specified description, or

(b) to produce to the Bank specified documents or documents of a
specified description.

(3) The direction may relate to information or documents which are held
40by persons other than the regulator and which the regulator has power
to obtain or whose production the regulator has power to require.

(4) Any information or documents to which the direction relates are—

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(a) where the information or documents are held by a person in
relation to whom the powers conferred by subsections (1) and
(3) of section 165 of FSMA 2000 are exercisable, to be taken to be
information or documents to which that section applies by
5virtue of subsection (4) of that section, and

(b) where they are held by a person to whom section 165A of FSMA
2000 applies and the direction is given to the PRA, to be taken
to be information or documents to which that section applies by
virtue of subsection (3) of that section.

(5) 10The information or documents must be provided or produced before
the end of such period as may be specified.

(6) The Bank may require any information provided under this section to
be provided in such form as it may require.

(7) The Bank may require—

(a) 15any information provided, whether in a document or otherwise,
to be verified in such manner as it may require;

(b) any document produced to be authenticated in such manner as
it may require.

9Z Further provisions about directions under section 9Y

(1) 20In the exercise of its functions under section 9Y, the Bank must have
regard to the principle that a burden or restriction which is imposed on
a person, or on the carrying on of an activity, should be proportionate
to the benefits, considered in general terms, which are expected to
result from the imposition of that burden or restriction.

(2) 25Before giving a direction under section 9Y to the FCA or the PRA (“the
regulator”), the Bank must consult the regulator.

(3) A direction under section 9Y must be in writing, and may be revoked
by a notice in writing.

(4) As soon as practicable after giving a direction under section 9Y, the
30Bank must publish the direction in such manner as it thinks appropriate
for bringing the direction to the attention of persons (other than the
regulator to which it is given) who may be affected by it.

(5) Subsection (4) does not require the publication of information whose
publication at the time required by that subsection would in the
35opinion of the Bank be against the public interest.

(6) Where the Bank decides under subsection (5) that publication of any
information would be against the public interest, it must from time to
time review that decision and if it subsequently decides that
publication is no longer against the public interest it must comply with
40subsection (4).

Supplementary
9ZA Interpretation of Part 1A

In this Part—

(2) After Schedule 2 to the Bank of England Act 1998 insert as Schedule 2A the
Schedule set out in Part 1 of Schedule 1 to this Act.

(3) The further amendments relating to the Financial Policy Committee in Part 2
15of Schedule 1 have effect.

(4) Sections 2B and 2C of the Bank of England Act 1998 (which relate to the
establishment and procedure of the Financial Stability Committee) are
repealed.

5 Further amendments relating to Bank of England

20Schedule 2 contains further amendments relating to the Bank of England.

Part 2 Amendments of Financial Services and Markets Act 2000

Financial Conduct Authority and Prudential Regulation Authority

6 The new Regulators

(1) 25For sections 1 to 18 of the Financial Services and Markets Act 2000 (in this Act
referred to as “FSMA 2000”) substitute—

Part 1A The Regulators
CHAPTER 1 The Financial Conduct Authority
30The Financial Conduct Authority
1A The Financial Conduct Authority

(1) The body corporate previously known as the Financial Services
Authority is renamed as the Financial Conduct Authority.

(2) The Financial Conduct Authority is in this Act referred to as “the FCA”.

(3) 35The FCA is to have the functions conferred on it by or under this Act.

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