Financial Services Bill (HL Bill 48)

(a) for “competent authority” or “competent authority’s”, in each place,
substitute “FCA” or “FCA’s”, and

(b) for “the authority” or “the Authority”, in each place, substitute “the
FCA”.

(3) 5Those provisions are—

(a) sections 73A to 84;

(b) section 86;

(c) section 87A to 87D (including the heading to section 87A);

(d) section 87G;

(e) 10sections 87J to 87O (including the italic heading before section 87J);

(f) sections 87Q to 88;

(g) sections 89A to 97 (including the italic heading before section 89H and
the heading to that section);

(h) section 101(2);

(i) 15section 103(1).

(4) Before section 73A insert an italic heading “Rules”.

(5) In section 77(3) (discontinuance and suspension of listing), for “sections 96 and
99” substitute “section 96 and paragraph 21(6) of Schedule 1ZA”.

(6) In section 87E (transfer by competent authority of application for approval)—

(a) 20in subsection (1), for “competent authority”, in the first place, substitute
“FCA”,

(b) in subsections (2) to (4), for “competent authority” substitute “FCA”,
and

(c) in the heading, for “competent authority” substitute “FCA”.

(7) 25In section 87F (transfer to competent authority of application for approval)—

(a) in subsection (1)—

(i) for “Where the competent authority” substitute “Where the
FCA”, and

(ii) in paragraph (b), for “competent authority” substitute “FCA”,

(b) 30in subsection (2), for “competent authority” substitute “FCA”, and

(c) in the heading, for “competent authority” substitute “FCA”.

(8) In section 87H (prospectus approved in another EEA State)—

(a) in subsection (1), for “competent authority”, in the second and third
places, substitute “FCA”, and

(b) 35in subsection (3A), for “competent authority” substitute “FCA”.

(9) In section 87I (provision of information to host member State)—

(a) in subsection (1)—

(i) for “competent authority”, in the first place, substitute “FCA”,

(ii) in paragraph (b), for “competent authority” substitute “FCA”,
40and

(iii) in paragraph (c), omit “other”,

(b) in subsection (1A), for “competent authority”, in the first place,
substitute “FCA”, and

(c) in subsections (3) to (5), for “competent authority” substitute “FCA”.

(10) In section 87P (exercise of powers at request of competent authority of another
EEA State)—

(a) in subsection (1)(c), for “competent authority”, in the second place,
substitute “FCA”, and

(b) 5in subsection (2), for “competent authority” substitute “FCA”.

(11) In section 100A (exercise of powers where UK is host member State)—

(a) in subsections (1) and (2), for “competent authority” substitute “FCA”,

(b) in subsection (3), for “the authority”, in both places, substitute “the
FCA”,

(c) 10in subsection (4), for “The authority” substitute “The FCA”,

(d) in subsections (5) and (6), for “the authority” substitute “the FCA”.

(12) In Schedule 10 (compensation: exemptions), for “competent authority”, in each
place, substitute “FCA”.

(13) Omit the following provisions—

(a) 15section 72 (Financial Services Authority to exercise functions of the
competent authority under Part 6) and the italic heading before it;

(b) section 73 (general duty of the competent authority);

(c) section 99 (fees);

(d) section 100 (penalties);

(e) 20in section 101 (general provisions), subsections (1) and (3) to (8);

(f) section 102 (exemption from liability in damages);

(g) in section 103 (interpretation), subsections (2) and (3);

(h) in section 195 (exercise of power in support of overseas regulator),
subsection (4)(b);

(i) 25in section 410 (international obligations), subsection (4)(b);

(j) in section 415 (jurisdiction in civil proceedings), subsection (1)(b);

(k) Schedule 7 (modification of Act in its application to the Financial
Services Authority when acting as competent authority for purposes of
Part 6);

(l) 30Schedule 8 (power to transfer functions under Part 6 to other persons).

16 Discontinuance or suspension at the request of the issuer: procedure

(1) FSMA 2000 is amended as follows.

(2) In section 78A (discontinuance or suspension at the request of the issuer:
procedure)—

(a) 35in subsection (1), for paragraphs (a) and (b) substitute—

“(a) immediately, if the notification under subsection (2) so
provides;

(b) in any other case, on such date as may be provided for
in that notification.”,

(b) 40in subsection (2), for “give him written notice” substitute “notify the
issuer (whether in writing or otherwise)”, and

(c) for subsection (3) substitute—

“(3) The notification must—

(a) notify the issuer of the date on which the discontinuance
45or suspension took effect or will take effect, and

(b) notify the issuer of such other matters (if any) as are
specified in listing rules.”

(3) In section 395(13) (definition of “supervisory notice”), after “a notice” insert “or
notification”.

17 5Listing rules: disciplinary powers in relation to sponsors

(1) FSMA 2000 is amended as follows.

(2) In section 88 (provision that may be made by listing rules in relation to
sponsors)—

(a) in subsection (3), at the end insert—

“(e) 10provide for limitations or other restrictions to be
imposed on the services to which an approval relates
(whether or not the approval has already been granted);

(f) provide for the approval of a sponsor to be suspended
on the application of the sponsor.”,

(b) 15in subsection (4), in paragraph (a), for “for approval as a sponsor”
substitute “under sponsor rules”,

(c) after that paragraph (but before the “or” at the end) insert—

“(aa) to impose limitations or other restrictions on the services
to which a person’s approval relates,”,

(d) 20in subsection (5), in paragraph (a), for “for approval” substitute “under
sponsor rules”,

(e) after that paragraph (but before the “or” at the end) insert—

“(aa) not to impose limitations or other restrictions on the
services to which a person’s approval relates,”,

(f) 25in subsection (6), in paragraph (a), for “for approval” substitute “under
sponsor rules”,

(g) after that paragraph (a) (but before the “or” at the end) insert—

“(aa) to impose limitations or other restrictions on the services
to which a person’s approval relates,”, and

(h) 30after subsection (7) insert—

“(8) In this section any reference to an application under sponsor
rules means—

(a) an application for approval as a sponsor,

(b) an application for the suspension of an approval as a
35sponsor,

(c) an application for the withdrawal of the suspension of
an approval as a sponsor, or

(d) an application for the withdrawal or variation of a
limitation or other restriction on the services to which a
40sponsor’s approval relates.”

(3) The power to make provision under section 88(3)(e) of FSMA 2000 (as inserted
by subsection (2)(a) above) includes power to make provision in relation to
persons who were approved as sponsors before the coming into force of
subsection (2)(a) above.

(4) For section 89 substitute—

“88A Disciplinary powers: contravention of s.88(3)(c) or (e)

(1) The FCA may take action against a sponsor under this section if it
considers that the sponsor has contravened a requirement or restriction
5imposed on the sponsor by rules made as a result of section 88(3)(c) or
(e).

(2) If the FCA is entitled to take action under this section against a sponsor,
it may do one or more of the following—

(a) impose a penalty on the sponsor of such amount as it considers
10appropriate;

(b) suspend, for such period as it considers appropriate, the
sponsor’s approval;

(c) impose, for such period as it considers appropriate, such
limitations or other restrictions in relation to the performance of
15services to which the sponsor’s approval relates as it considers
appropriate;

(d) publish a statement to the effect that the sponsor has
contravened a requirement or restriction imposed on the
sponsor by rules made as a result of section 88(3)(c) or (e).

(3) 20The period for which a suspension or restriction is to have effect may
not exceed 12 months.

(4) A suspension may relate only to the performance in specified
circumstances of a service to which the approval relates.

(5) A restriction may, in particular, be imposed so as to require the sponsor
25to take, or refrain from taking, specified action.

(6) The FCA may—

(a) withdraw a suspension or restriction; or

(b) vary a suspension or restriction so as to reduce the period for
which it has effect or otherwise to limit its effect.

(7) 30The FCA may not take action against a sponsor under this section after
the end of the limitation period unless, before the end of that period, it
has given a warning notice to the sponsor under section 88B(1).

(8) “The limitation period” means the period of 3 years beginning with the
first day on which the FCA knew that the sponsor had contravened the
35requirement or restriction.

(9) For this purpose the FCA is to be treated as knowing that a sponsor has
contravened a requirement or restriction if it has information from
which that can reasonably be inferred.

88B Action under s.88A: procedure and right to refer to Tribunal

(1) 40If the FCA proposes to take action against a sponsor under section 88A,
it must give the sponsor a warning notice.

(2) A warning notice about a proposal to impose a penalty must state the
amount of the penalty.

(3) A warning notice about a proposal—

(a) 45to suspend an approval, or

(b) to impose a restriction in relation to the performance of a
service,

must state the period for which the suspension or restriction is to have
effect.

(4) 5A warning notice about a proposal to publish a statement must set out
the terms of the statement.

(5) If the FCA decides to take action against a sponsor under section 88A,
it must give the sponsor a decision notice.

(6) A decision notice about the imposition of a penalty must state the
10amount of the penalty.

(7) A decision notice about—

(a) the suspension of an approval, or

(b) the imposition of a restriction in relation to the performance of
a service,

15must state the period for which the suspension or restriction is to have
effect.

(8) A decision notice about the publication of a statement must set out the
terms of the statement.

(9) If the FCA decides to take action against a sponsor under section 88A,
20the sponsor may refer the matter to the Tribunal.

88C Action under s.88A: statement of policy

(1) The FCA must prepare and issue a statement of its policy with respect
to—

(a) the imposition of penalties, suspensions or restrictions under
25section 88A,

(b) the amount of penalties under that section, and

(c) the period for which suspensions or restrictions under that
section are to have effect.

(2) The FCA’s policy in determining what the amount of a penalty should
30be, or what the period for which a suspension or restriction is to have
effect should be, must include having regard to—

(a) the seriousness of the contravention in question in relation to
the nature of the requirement concerned,

(b) the extent to which that contravention was deliberate or
35reckless, and

(c) whether the sponsor concerned is an individual.

(3) The FCA may at any time alter or replace a statement issued under this
section.

(4) If a statement issued under this section is altered or replaced, the FCA
40must issue the altered or replaced statement.

(5) In exercising, or deciding whether to exercise, its power under section
88A in the case of any particular contravention, the FCA must have
regard to any statement of policy published under this section and in
force at a time when the contravention in question occurred.

(6) A statement issued under this section must be published by the FCA in
the way appearing to the FCA to be best calculated to bring it to the
attention of the public.

(7) The FCA may charge a reasonable fee for providing a person with a
5copy of the statement.

(8) The FCA must, without delay, give the Treasury a copy of any
statement which it publishes under this section.

88D Statement of policy under s.88C: procedure

(1) Before issuing a statement under section 88C, the FCA must publish a
10draft of the proposed statement in the way appearing to the FCA to be
best calculated to bring it to the attention of the public.

(2) The draft must be accompanied by notice that representations about the
proposal may be made to the FCA within a specified time.

(3) Before issuing the proposed statement, the FCA must have regard to
15any representations made to it in accordance with subsection (2).

(4) If the FCA issues the proposed statement it must publish an account, in
general terms, of—

(a) the representations made to it in accordance with subsection (2),
and

(b) 20its response to them.

(5) If the statement differs from the draft published under subsection (1) in
a way which is, in the opinion of the FCA, significant, the FCA must (in
addition to complying with subsection (4)) publish details of the
difference.

(6) 25The FCA may charge a reasonable fee for providing a person with a
copy of a draft published under subsection (1).

(7) This section also applies to a proposal to alter or replace a statement.

88E Powers exercisable to advance operational objectives

(1) The FCA may take action against a sponsor under this section if it
30considers that it is desirable to do so in order to advance one or more of
its operational objectives.

(2) If the FCA is entitled to take action under this section against a sponsor,
it may—

(a) suspend, for such period as it considers appropriate, the
35sponsor’s approval, or

(b) impose, for such period as it considers appropriate, such
limitations or other restrictions in relation to the performance of
services to which the sponsor’s approval relates as it considers
appropriate.

(3) 40A suspension may relate only to the performance in specified
circumstances of a service to which the approval relates.

(4) A restriction may, in particular, be imposed so as to require the sponsor
to take, or refrain from taking, specified action.

(5) The FCA may—

(a) withdraw a suspension or restriction, or

(b) vary a suspension or restriction so as to reduce the period for
which it has effect or otherwise to limit its effect.

(6) A person against whom the FCA takes action under this section may
5refer the matter to the Tribunal.

88F Action under s.88E: procedure

(1) Action against a sponsor under section 88E takes effect—

(a) immediately, if the notice given under subsection (3) so
provides, or

(b) 10on such later date as may be specified in the notice.

(2) If the FCA—

(a) proposes to take action against a sponsor under that section, or

(b) takes action against a sponsor under that section with
immediate effect,

15it must give the sponsor written notice.

(3) The notice must—

(a) give details of the action,

(b) state the FCA’s reasons for taking the action and for its
determination as to when the action takes effect,

(c) 20inform the sponsor that the sponsor may make representations
to the FCA within such period as may be specified in the notice
(whether or not the matter has been referred to the Tribunal),

(d) inform the sponsor of when the action takes effect,

(e) inform the sponsor of the right to refer the matter to the
25Tribunal, and

(f) give an indication of the procedure on such a reference.

(4) The FCA may extend the period allowed under the notice for making
representations.

(5) If the FCA decides—

(a) 30to take the action in the way proposed, or

(b) if the action has taken effect, not to rescind it,

the FCA must give the sponsor written notice.

(6) If the FCA decides—

(a) not to take the action in the way proposed,

(b) 35to take action under section 88E that differs from the action
originally proposed, or

(c) to rescind action which has taken effect,

the FCA must give the sponsor written notice.

(7) A notice under subsection (5) must—

(a) 40inform the sponsor of the right to refer the matter to the
Tribunal, and

(b) give an indication of the procedure on such a reference.

(8) A notice under subsection (6)(b) must comply with subsection (3).”

(5) In section 392 (warning and decisions notices: application of provisions
relating to third party rights and access to evidence)—

(a) for “section 89(2),” substitute “section 88B(1),”, and

(b) for “section 89(3),” substitute “section 88B(5),”.

(6) 5In section 395(13) (meaning of “supervisory notice”), after paragraph (bza)
insert—

“(bzb) section 88F(2), (5) or (6)(b);”.

18 Primary information providers

(1) In Part 6 of FSMA 2000 (official listing), after section 89O insert—

10“Primary information providers

89P Primary information providers

(1) Part 6 rules may require issuers of financial instruments to use primary
information providers for the purpose of giving information of a
specified description to a market of a specified description.

(2) 15“Primary information provider” means a person approved by the FCA
for the purposes of this section.

(3) “Specified” means specified in the Part 6 rules.

(4) Part 6 rules made by virtue of subsection (1) may—

(a) provide for the FCA to maintain a list of providers;

(b) 20impose requirements on a provider in relation to the giving of
information or of information of a specified description;

(c) specify the circumstances in which a person is qualified for
being approved as a provider;

(d) provide for limitations or other restrictions to be imposed on the
25giving of information to which an approval relates (whether or
not the approval has already been granted);

(e) provide for the approval of a provider to be suspended on the
application of the provider.

(5) If the FCA proposes—

(a) 30to refuse a person’s application under information provider
rules,

(b) to impose limitations or other restrictions on the giving of
information to which a person’s approval relates, or

(c) to cancel a person’s approval as a provider otherwise than at the
35person’s request,

it must give the person a warning notice.

(6) If the FCA decides—

(a) to grant the application under information provider rules,

(b) not to impose limitations or other restrictions on the giving of
40information to which a person’s approval relates, or

(c) not to cancel the approval,

it must give the person concerned written notice of its decision.

(7) If the FCA decides—

(a) to refuse to grant the application under information provider
rules,

(b) to impose limitations or other restrictions on the giving of
information to which a person’s approval relates, or

(c) 5to cancel the approval,

it must give the person concerned a decision notice.

(8) A person to whom a decision notice is given under this section may
refer the matter to the Tribunal.

(9) In this section any reference to an application under information
10provider rules means—

(a) an application for approval as a provider,

(b) an application for the suspension of an approval as a provider,

(c) an application for the withdrawal of the suspension of an
approval as a provider, or

(d) 15an application for the withdrawal or variation of a limitation or
other restriction on the giving of information to which a
provider’s approval relates.

89Q Disciplinary powers: contravention of s.89P(4)(b) or (d)

(1) The FCA may take action against a provider under this section if it
20considers that the provider has contravened a requirement or
restriction imposed on the provider by rules made as a result of section
89P(4)(b) or (d).

(2) If the FCA is entitled to take action under this section against a
provider, it may do one or more of the following—

(a) 25impose a penalty on the provider of such amount as it considers
appropriate;

(b) suspend, for such period as it considers appropriate, the
provider’s approval;

(c) impose, for such period as it considers appropriate, such
30limitations or other restrictions in relation to the giving by the
provider of information as it considers appropriate;

(d) publish a statement to the effect that the provider has
contravened a requirement or restriction imposed on the
provider by rules made as a result of section 89P(4)(b) or (d).

(3) 35The period for which a suspension or restriction is to have effect may
not exceed 12 months.

(4) A suspension may relate only to the giving of information in specified
circumstances.

(5) A restriction may, in particular, be imposed so as to require the
40provider to take, or refrain from taking, specified action.

(6) The FCA may—

(a) withdraw a suspension or restriction, or

(b) vary a suspension or restriction so as to reduce the period for
which it has effect or otherwise to limit its effect.

(7) The FCA may not take action against a provider under this section after
the end of the limitation period unless, before the end of that period, it
has given a warning notice to the provider under section 89R(1).

(8) “The limitation period” means the period of 3 years beginning with the
5first day on which the FCA knew that the provider had contravened the
requirement or restriction.

(9) For this purpose the FCA is to be treated as knowing that a provider has
contravened a requirement or restriction if it has information from
which that can reasonably be inferred.

89R 10Action under s.89Q: procedure and right to refer to Tribunal

(1) If the FCA proposes to take action against a provider under section
89Q, it must give the provider a warning notice.

(2) A warning notice about a proposal to impose a penalty must state the
amount of the penalty.

(3) 15A warning notice about a proposal—

(a) to suspend an approval, or

(b) to impose a restriction in relation to the giving of information,

must state the period for which the suspension or restriction is to have
effect.

(4) 20A warning notice about a proposal to publish a statement must set out
the terms of the statement.

(5) If the FCA decides to take action against a provider under section 89Q,
it must give the provider a decision notice.

(6) A decision notice about the imposition of a penalty must state the
25amount of the penalty.

(7) A decision notice about—

(a) the suspension of an approval, or

(b) the imposition of a restriction in relation to the giving of
information,

30must state the period for which the suspension or restriction is to have
effect.

(8) A decision notice about the publication of a statement must set out the
terms of the statement.

(9) If the FCA decides to take action against a provider under section 89Q,
35the provider may refer the matter to the Tribunal.

89S Action under s.89Q: statement of policy

(1) The FCA must prepare and issue a statement of its policy with respect
to—

(a) the imposition of penalties, suspensions or restrictions under
40section 89Q,

(b) the amount of penalties under that section,

(c) the period for which suspensions or restrictions under that
section are to have effect, and