(7) In section 34A (winding-up of standard licensee’s business), in subsection
(2)—

(a) in paragraph (c), omit “suspend or”, and

(b) after paragraph (c) insert—

“(d) 5a determination to suspend such a licence under section
32A (including a determination made under section
34ZA on reconsidering a previous determination under
section 32A);”.

(8) In section 41 (appeals) after subsection (1) insert—

“(1ZA) 10References in the table to a determination as to the suspension of a
standard licence or group licence are to be read as references to a
determination under section 34ZA to confirm a determination to
suspend a standard licence or group licence.”

(9) Nothing in this section affects the powers conferred by section 22 of FSMA 2000
15or section 107 of this Act.

Penalties received by Financial Services Authority or Bank of England

109 Payment to Treasury of penalties received by Financial Services Authority

(1) The Financial Services Authority (“the FSA”) must in respect of its financial
year beginning with 1 April 2012 and each subsequent financial year pay to the
20Treasury its penalty receipts after deducting its enforcement costs.

(2) The FSA’s “penalty receipts” in respect of a financial year are any amounts
received by it during the year by way of penalties imposed under FSMA 2000.

(3) The FSA’s “enforcement costs” in respect of a financial year are the expenses
incurred by it during the year in connection with—

(a) 25the exercise, or consideration of the possible exercise, of any of its
enforcement powers in particular cases, or

(b) the recovery of penalties imposed under FSMA 2000.

(4) For this purpose the FSA’s enforcement powers are—

(a) its powers under any of the provisions mentioned in subsection (5),

(b) 30its powers under any other enactment specified by the Treasury by
order,

(c) its powers in relation to the investigation of relevant offences, and

(d) its powers in England and Wales or Northern Ireland in relation to the
prosecution of relevant offences.

(5) 35The provisions referred to in subsection (4)(a) are the following provisions of
FSMA 2000—

(a) section 56 (prohibition orders),

(b) section 63A (penalties relating to performance of controlled functions
without approval),

(c) 40section 66 (disciplinary powers in relation to approved persons),

(d) section 87M (public censure of issuer),

(e) section 89 (public censure of sponsor),

(f) section 89K (public censure of issuer),

(g) section 91 (penalties for breach of Part 6 rules),

(h) section 123 (penalties in case of market abuse),

(i) section 131G (short selling etc: power to impose penalty or issue
censure),

(j) sections 205, 206 and 206A (disciplinary measures),

(k) 5section 249 (disqualification of auditor for breach of trust scheme rules),

(l) section 345 (disqualification of auditor or actuary), and

(m) Part 25 (injunctions and restitution).

(6) “Relevant offences” are—

(a) offences under FSMA 2000,

(b) 10offences under subordinate legislation made under that Act,

(c) offences falling within section 402(1) of that Act, and

(d) any other offences specified by the Treasury by order.

(7) The Treasury may give directions to the FSA as to how the FSA is to comply
with its duty under subsection (1).

(8) 15The directions may in particular—

(a) specify descriptions of expenditure that are, or are not, to be regarded
as incurred in connection with either of the matters mentioned in
subsection (3),

(b) relate to the calculation and timing of the deduction in respect of the
20FSA’s enforcement costs, and

(c) specify the time when any payment is required to be made to the
Treasury.

(9) The directions may also require the FSA to provide the Treasury at specified
times with information relating to—

(a) 25penalties that the FSA has imposed under FSMA 2000, or

(b) the FSA’s enforcement costs.

(10) The Treasury must pay into the Consolidated Fund any sums received by them
under this section.

(11) The scheme operated by the FSA under paragraph 16 of Schedule 1 to FSMA
302000 is, in the case of penalties received by the FSA on or after 1 April 2012, to
apply only in relation to sums retained by the FSA as a result of the deduction
for which subsection (1) provides.

(12) When section 6(2) is fully in force, the Treasury may by order repeal this
section.

110 35Payment to Treasury of penalties received by Bank of England

(1) The Bank of England (“the Bank”) must in respect of each of its financial years
pay to the Treasury its penalty receipts after deducting its enforcement costs.

(2) The Bank’s “penalty receipts” in respect of a financial year are any amounts
received by the Bank during the year by way of penalties imposed under any
40of the following provisions—

(a) sections 192K and 312F of FSMA 2000, and

(b) section 198 of the Banking Act 2009.

(3) The Bank’s “enforcement costs” in respect of a financial year are the expenses
incurred by it during the year in connection with—

(a) the exercise, or consideration of the possible exercise, of any of its
enforcement powers in particular cases, or

(b) the recovery of penalties imposed under any of the provisions
mentioned in subsection (2).

(4) 5For this purpose the Bank’s enforcement powers are—

(a) its powers under any of the provisions mentioned in subsection (5),

(b) its powers under any other enactment specified by the Treasury by
order,

(c) its powers in relation to the investigation of offences under FSMA 2000
10or of any other offences specified by the Treasury by order, and

(d) its powers in England and Wales or Northern Ireland in relation to the
prosecution of offences under FSMA 2000 or of any other offences
specified by the Treasury by order.

(5) The provisions referred to in subsection (4)(a) are as follows—

(a) 15sections 192K to 192N of FSMA 2000 (parent undertakings), as applied
to the Bank by Schedule 17A to that Act,

(b) sections 312E and 312F of that Act (disciplinary measures in relation to
clearing houses),

(c) sections 380, 382 and 384 of that Act (injunctions and restitution), as
20applied to the Bank by Schedule 17A to that Act, and

(d) sections 197 to 200 and 202A of the Banking Act 2009 (inter-bank
payment systems).

(6) The Treasury may give directions to the Bank as to how the Bank is to comply
with its duty under subsection (1).

(7) 25The directions may in particular—

(a) specify descriptions of expenditure that are, or are not, to be regarded
as incurred in connection with either of the matters mentioned in
subsection (3),

(b) relate to the calculation and timing of the deduction in respect of the
30Bank’s enforcement costs, and

(c) specify the time when any payment is required to be made to the
Treasury.

(8) The directions may also require the Bank to provide the Treasury at specified
times with specified information relating to—

(a) 35penalties that the Bank has imposed under the provisions mentioned in
subsection (2), or

(b) the Bank’s enforcement costs.

(9) The Treasury must pay into the Consolidated Fund any sums received by them
under this section.

40Amendments of Companies Act 1989

111 Amendments of Companies Act 1989

(1) Section 166 of the Companies Act 1989 (power of Secretary of State to give
directions to recognised investment exchange or recognised clearing house) is
amended as follows.

(2) In subsection (2)(a)—

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

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

(3) 5In subsection (2)(b)—

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

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

(4) In subsection (3)—

(a) 10for “Authority” substitute “appropriate regulator”,

(b) omit the “or” following paragraph (a), and

(c) at the end insert—

“(c) in either case, that the direction is necessary having
regard to the public interest in the stability of the
15financial system of the United Kingdom, or

(d) in either case, that the direction is necessary—

(i) to facilitate a proposed or possible use of a
power under Part 1 of the Banking Act 2009
(special resolution regime), or

(ii) 20in connection with a particular exercise of a
power under that Part.”

(5) In subsection (7)—

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

(b) 25omit the words from “The Authority shall not” to the end.

(6) After that subsection insert—

“(7A) Where the exchange or clearing house is acting in accordance with a
direction under subsection (2)(a) that was given only by virtue of
paragraph (a) of subsection (3), the appropriate regulator shall not give
30a direction under subsection (7) unless it is satisfied that the direction
under that subsection will not impede or frustrate the proper and
efficient conduct of the default proceedings.

(7B) Where the exchange or clearing house has taken action under its default
rules without being directed to do so, the appropriate regulator shall
35not give a direction under subsection (7) unless—

(a) it is satisfied that the direction under that subsection will not
impede or frustrate the proper and efficient conduct of the
default proceedings, or

(b) it is satisfied that the direction is necessary—

(i) 40having regard to the public interest in the stability of the
financial system of the United Kingdom,

(ii) to facilitate a proposed or possible use of a power under
Part 1 of the Banking Act 2009 (special resolution
regime), or

(iii) 45in connection with a particular exercise of a power
under that Part.”

(7) In subsection (8), for “Authority” substitute “regulator which gave the
direction”.

(8) At the end insert—

“(9) The appropriate regulator”—

(a) 5in relation to a recognised UK investment exchange, means the
FCA, and

(b) in relation to a recognised UK clearing house, means the Bank
of England.”

(9) In the heading, omit “of Secretary of State”.

10Settlement systems

112 Evidencing and transfer of title to securities without written instrument

In section 785 of the Companies Act 2006 (provision enabling procedures for
evidencing and transferring title), at the end insert—

“(7) The regulations may confer functions on any person, including—

(a) 15the function of giving guidance or issuing a code of practice in
relation to any provision made by the regulations, and

(b) the function of making rules for the purposes of any provision
made by the regulations.

(8) The regulations may, in prescribed cases, confer immunity from
20liability in damages.”

Director of Savings

113 Provision of services by Director of Savings

(1) The Director of Savings (“the Director”) may enter into arrangements with a
public body for the provision by the Director, or persons authorised by the
25Director, of services to the body.

(2) Arrangements are to be on such terms, including terms as to payment, as may
be agreed.

(3) “Public body” means a person or body whose functions are of a public nature.

Part 10 30General

Further amendments and repeals

114 Further minor and consequential amendments and repeals

(1) Schedule 18 contains further amendments of FSMA 2000 and other
enactments.

(2) 35Schedule 19 contains further consequential repeals.

Orders

115 Orders: general

(1) Any power of the Treasury or the Secretary of State to make an order under this
Act is exercisable by statutory instrument.

(2) 5Any order made by the Treasury or the Secretary of State under this Act may—

(a) contain such incidental or transitional provision as the Treasury
consider appropriate, and

(b) make different provision for different cases.

116 Orders: Parliamentary control

(1) 10A statutory instrument containing (alone or with other provision) an order to
which subsection (2) applies may not be made unless a draft of the instrument
has been laid before Parliament and approved by a resolution of each House.

(2) This subsection applies to—

(a) an order under section 37(2) (power to amend sections 391 and 395 of
15FSMA 2000);

(b) an order under Part 3 (mutual societies);

(c) an order under section 107 (power to make further provision about
regulation of consumer credit);

(d) an order under section 118 (power to make further consequential
20amendments) that amends or repeals primary legislation.

(3) A statutory instrument containing an order under this Act, other than an
instrument to which section 94 or subsection (1) applies or an instrument
containing only provision made under section 122 (commencement), is subject
to annulment in pursuance of a resolution of either House of Parliament.

(4) 25In this section “primary legislation” means—

(a) an Act of Parliament,

(b) an Act of the Scottish Parliament,

(c) a Measure or Act of the National Assembly for Wales, or

(d) Northern Ireland legislation.

30Interpretation

117 Interpretation

(1) In this Act “FSMA 2000” means the Financial Services and Markets Act 2000.

(2) In this Act—

• “the FCA” means the Financial Conduct Authority;

• 35“the PRA” means the Prudential Regulation Authority;

• “the UK financial system” means the financial system of the United
  Kingdom.

(3) In this Act “enactment” includes—

(a) an enactment contained in subordinate legislation within the meaning
40of the Interpretation Act 1978;

(b) an enactment contained in, or in an instrument made under, an Act of
the Scottish Parliament;

(c) an enactment contained in, or in an instrument made under, a Measure
or Act of the National Assembly for Wales;

(d) 5an enactment contained in, or in an instrument made under, Northern
Ireland legislation.

Consequential and transitional provisions

118 Power to make further consequential amendments etc

(1) The Treasury or the Secretary of State may by order make such provision
10amending, repealing, revoking or applying with modifications any enactment
to which this section applies as they consider necessary or expedient in
consequence of any provision made by or under this Act.

(2) This section applies to—

(a) any enactment passed or made before the passing of this Act, and

(b) 15any enactment passed or made on or before the last day of the Session
in which this Act is passed.

(3) Amendments and repeals made under this section are additional to those
made by or under any other provision of this Act.

119 Transitional provisions and savings

(1) 20Schedule 20 contains transitional provisions.

(2) Schedule 21 contains provision about the transfer of property, rights and
liabilities.

(3) The Treasury may by order make such provision as they consider necessary or
expedient for transitory, transitional or saving purposes in connection with the
25commencement of any provision made by or under this Act.

(4) An order under subsection (3) may, in particular—

(a) make provision enabling any person by whom any powers will become
exercisable, on a date set by or under this Act, by virtue of any
provision made by or under this Act to take before that date any steps
30which are necessary as a preliminary to the exercise of those powers;

(b) make provision treating any relevant instrument which was made,
issued or given by the Financial Services Authority under any
enactment before section 6 is fully in force and is designated by the
FCA, the PRA or the Bank of England (or any two or more of them) in
35accordance with the order—

(i) as having been made, issued or given by the designating body
or bodies;

(ii) as having been made, issued or given (or also made, issued or
given) under a corresponding provision of this Act or of an
40enactment as amended by or under this Act;

(c) make provision enabling a body which makes a designation by virtue
of paragraph (b) to modify the instrument being designated;

(d) make provision treating anything done before section 6 is fully in force
by persons appointed by the Financial Services Authority with the
approval of the Treasury as having been done by the FCA;

(e) make provision treating anything done before section 6 is fully in force
5by persons appointed by the Prudential Regulation Authority Limited
with the approval of the Treasury and the Bank of England as having
been done by the PRA;

(f) make provision treating any permission given or other thing done by
the Financial Services Authority before commencement under an
10enactment amended by this Act—

(i) as having been made, given or done under a corresponding
provision of the enactment as so amended;

(ii) as having been made, given or done (or also made, given or
done) by the PRA or the Bank of England;

(g) 15make provision for the continuation of proceedings begun before
commencement, including provision about the decisions available to
bodies before which such proceedings take place and the effect of their
decisions;

(h) make provision for making savings, or additional savings, from the
20effect of any repeal or revocation made by or under this Act.

(5) An order under subsection (3) may—

(a) confer functions on the Treasury, the FCA or the PRA, or on the Bank
of England or its Financial Policy Committee;

(b) modify, exclude or apply (with or without modifications) any
25enactment (including any provision of, or made under, this Act).

(6) In subsection (4)—

(a) “commencement” means the commencement of such provisions of this
Act as may be specified by the order;

(b) “relevant instrument” means rules, guidance, requirements or a code,
30scheme, statement or direction.

Final provisions

120 Financial provision

(1) There is to be paid out of money provided by Parliament—

(a) any expenditure incurred under or by virtue of this Act by a Minister
35of the Crown or government department (apart from any expenditure
to be met from the National Loans Fund), and

(b) any increase attributable to this Act in the sums payable under any
other Act out of money so provided.

(2) There is to be paid out of the National Loans Fund any increase attributable to
40this Act in the sums payable under any other Act out of that Fund.

121 Extent

This Act extends to England and Wales, Scotland and Northern Ireland.

122 Commencement

(1) The following provisions come into force on the day on which this Act is
passed—

• section 109;

• 5sections 115 to 118;

• section 119(3) to (6);

• sections 120 and 121;

• this section;

• section 123.

(2) 10Sections 108 and 113 come into force at the end of the period of 2 months
beginning with day on which this Act is passed.

(3) The remaining provisions of this Act come into force on such day as the
Treasury may by order appoint.

(4) Different days may be appointed for different purposes.

123 15Short title

This Act may be cited as the Financial Services Act 2012.

SCHEDULES

Section 4

SCHEDULE 1 Bank of England Financial Policy Committee

Part 1 5Schedule to be inserted as Schedule 2A to Bank of England Act 1998

This is the Schedule to be inserted in the Bank of England Act 1998 after
Schedule 2—

Section 9B

“Schedule 2A Financial Policy Committee

Terms of office of appointed members

1 (1) 10Appointment under section 9B(1)(d) or (e) as a member of the
Financial Policy Committee is to be for a period of 3 years, but this
is subject to sub-paragraph (2) and to paragraph 3.

(2) Initially some appointments may be for shorter and different
periods so as to secure that appointments expire at different times.

2 (1) 15A person may not be appointed as a member of the Committee
under section 9B(1)(e) more than twice.

(2) For this purpose an appointment which by virtue of paragraph
1(2) is for a period of less than 3 years is to be disregarded.

3 (1) If it appears to the Chancellor of the Exchequer that in the
20circumstances it is desirable to do so, the Chancellor may, before
the end of the term for which a person is appointed as a member
of the Committee under section 9B(1)(e), extend the persons’s
term of office on one occasion for a specified period of not more
than 6 months.

(2) 25The term being extended may be the person’s first or second term
or, in a case where paragraph 2(2) allows a third term, the person’s
third term.

(3) If a person whose first term of office is extended is subsequently
re-appointed under section 9B(1)(e)—

(a) 30the length of the second term is to be reduced by a period
equal to the extension of the first term, but

(b) the second term may itself subsequently be extended
under sub-paragraph (1).