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(4) In a case where a person’s second term of office is extended and
paragraph 2(2) allows a third term, sub-paragraph (3) is to be read
as if the references to first and second terms were references to
second and third terms respectively.

4 (1) 5A person appointed under section 9B(1)(d) or (e) may resign the
office by written notice to the Bank.

(2) Where the notice relates to a person appointed under section
9B(1)(e), the Bank must give a copy of the notice to the Treasury.

5 The terms and conditions on which a person holds office as a
10member of the Committee appointed under section 9B(1)(e) are to
be such as the Oversight Committee may determine.

Qualification for appointment

6 (1) The following persons are disqualified for appointment under
section 9B(1)(d) or (e)—

(a) 15a Minister of the Crown;

(b) a person serving in a government department in
employment in respect of which remuneration is paid out
of money provided by Parliament.

(2) A member of the Monetary Policy Committee of the Bank
20appointed under section 13(2)(c) is disqualified for appointment
under section 9B(1)(e).

Removal of appointed members

7 A person appointed under section 9B(1)(d) or (e) vacates office on
becoming a person to whom paragraph 6(1)(a) or (b) applies.

8 25A person appointed under section 9B(1)(d) vacates office on
ceasing to have executive responsibility within the Bank for the
analysis of threats to financial stability or, as the case may be, the
analysis of markets.

9 (1) The Oversight Committee may, with the consent of the Chancellor
30of the Exchequer, remove a member appointed under section
9B(1)(d) or (e) (“M”) if it is satisfied—

(a) that M has been absent from 3 or more meetings of the
Financial Policy Committee without the Committee’s
consent,

(b) 35that M has become bankrupt, that a debt relief order
(under Part 7A of the Insolvency Act 1986) has been made
in respect of M, that M’s estate has been sequestrated or
that M has made an arrangement with or granted a trust
deed for M’s creditors, or

(c) 40that M is unable or unfit to discharge M’s functions as a
member.

(2) The Oversight Committee may, with the consent of the Chancellor
of the Exchequer, also remove a member appointed under section
9B(1)(e) (“M”) if it is satisfied that in all the circumstances M’s
45financial or other interests are such as substantially to affect the
functions as member which it would be proper for M to discharge.

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Meetings

10 (1) The Committee shall meet at least 4 times in each calendar year.

(2) The Governor of the Bank (or in the Governor’s absence the Bank’s
Deputy Governor for financial stability) may summon a meeting
5at any time on giving such notice as the person giving the notice
thinks the circumstances require.

Proceedings

11 (1) At a meeting of the Committee, the proceedings are to be
regulated as follows.

(2) 10The quorum is to be 7 (excluding the Treasury’s representative)
and of the 7—

(a) one must be the Governor of the Bank or the Bank’s
Deputy Governor for financial stability,

(b) unless both those mentioned in paragraph (a) are present,
15one must be either of the other Deputy Governors of the
Bank, and

(c) one must be a member appointed under section 9B(1)(e).

(3) The chair is to be taken by the Governor of the Bank or, if the
Governor is not present, by the Bank’s Deputy Governor for
20financial stability.

(4) The person chairing the meeting must seek to secure that decisions
of the Committee are reached by consensus wherever possible.

(5) Where that person forms the opinion that consensus cannot be
reached, a decision is to be taken by a vote of all those members
25present at the meeting.

(6) In the event of a tie, the person chairing the meeting is to have a
second casting vote.

(7) At a meeting of the Committee—

(a) the Treasury’s representative may not vote, and

(b) 30any view expressed by the Treasury’s representative is to
be disregarded in determining under sub-paragraph (4) or
(5) whether there is a consensus.

(8) Subject to sub-paragraphs (2) to (7) and paragraph 14, the
Committee is to determine its own procedure.

12 35The Committee may, in relation to sub-paragraph (2), (3), (4) or (5)
of paragraph 11, determine circumstances in which a member
who is not present at, but is in communication with, a meeting is
to be treated for the purposes of that sub-paragraph as present at
it.

13 40The Committee may invite other persons to attend, or to attend
and speak at, any meeting of the Committee.

14 If a member of the Committee (“M”) has any direct or indirect
interest (including any reasonably likely future interest) in any

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dealing or business which falls to be considered by the
Committee—

(a) M must disclose that interest to the Committee when it
considers the dealing or business, and

(b) 5the Committee must decide whether M is to be permitted
to participate in any proceedings of the Committee relating
to any question arising from its consideration of the
dealing or business, and if so to what extent and subject to
what conditions (if any).

10Part 2 Other amendments relating to Financial Policy Committee

Bank of England Act 1998 (c. 11)1998 (c. 11)

1 In section 4 of the Bank of England Act 1998 (annual report by Bank), in
subsection (2), for the “and” at the end of paragraph (a) substitute—

(aa) 15a report by the court of directors on the activities of the
Financial Policy Committee of the Bank, and.

2 In section 15 of the Bank of England Act 1998 (publication of minutes of
meetings of Monetary Policy Committee) after subsection (4) insert—

(4A) The Bank shall exclude from minutes published under this section
20information which relates to proceedings of the Financial Policy
Committee if the Bank considers that publication of that information
would be against the public interest.

3 In section 40 of the Bank of England Act 1998 (orders), after subsection (4)
insert—

(4A) 25Section 9N contains its own provisions about parliamentary
procedure in relation to an order under section 9L.

House of Commons Disqualification Act 1975 (c. 24)1975 (c. 24)

4 In Part 3 of Schedule 1 to the House of Commons Disqualification Act 1975
(other disqualifying offices), at the appropriate place insert—

Northern Ireland Assembly Disqualification Act 1975 (c. 25)1975 (c. 25)

5 In Part 3 of Schedule 1 to the Northern Ireland Assembly Disqualification
35Act 1975 (other disqualifying offices), at the appropriate place insert—

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Section 5

SCHEDULE 2 Further amendments relating to Bank of England

Court of directors

1 (1) Schedule 1 to the Bank of England Act 1998 (which makes further provision
5about the court of directors) is amended as follows.

(2) For paragraph 1 substitute—

1 (1) Appointment as Governor of the Bank shall be for a period of 8
years.

(2) Appointment as Deputy Governor of the Bank shall be for a period
10of 5 years.

(3) A person may not be appointed—

(a) as Governor, more than once, or

(b) as Deputy Governor, more than twice.

(4) A person appointed as Governor or Deputy Governor of the Bank
15shall work exclusively for the Bank; and for this purpose work in
an office that an enactment requires to be held by the Governor or
a Deputy Governor is to be taken to be work for the Bank.

(3) In paragraph 2—

(a) for “director” substitute “non-executive director”, and

(b) 20for the words from “3 years” to the end substitute “4 years, or such
shorter period as may be specified in the appointment”.

(4) Omit paragraph 3.

(5) In paragraph 4, for “director” substitute “non-executive director”.

(6) In paragraph 5—

(a) 25in sub-paragraph (1), for “director” substitute “non-executive
director”, and

(b) for sub-paragraph (2) substitute—

(2) An officer or employee of the Bank, other than a person
holding office under section 9B(1)(e), is disqualified for
30appointment as non-executive director of the Bank.

(7) For paragraph 6 substitute—

6 (1) The fact that a person has held office as Governor of the Bank does
not disqualify that person from appointment as Deputy Governor
or non-executive director of the Bank.

(2) 35The fact that a person has held office as Deputy Governor or non-
executive director of the Bank does not disqualify that person
from re-appointment to that office or for appointment to the other
office or as Governor of the Bank, but this is subject to paragraph
1(3)(b).

(8) 40In paragraph 7(2), for “director” substitute “non-executive director”.

(9) In paragraph 8—

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(a) the existing provision becomes sub-paragraph (1),

(b) in that provision, for “director” substitute “non-executive director”,
and

(c) after that provision insert—

(2) 5In relation to the Deputy Governor for prudential
regulation, the reference in sub-paragraph (1)(c) to
inability or unfitness to discharge functions as member of
the court of directors is to be read as including a reference
to inability or unfitness to discharge functions as Chief
10Executive of the Prudential Regulation Authority.

(10) In paragraph 11—

(a) in paragraph (b), for “servant” substitute “employee”, and

(b) in paragraph (c)(ii), for “servants” substitute “employees”.

(11) After paragraph 12 insert—

15Publication of record of meetings

12A (1) The Bank must publish a record of each meeting of the court—

(a) before the end of the period of 6 weeks beginning with the
day of the meeting, or

(b) if no meeting of the court is subsequently held during that
20period, before the end of the period of 2 weeks beginning
with the day of the next 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 court’s deliberations.

(3) 25Sub-paragraphs (1) and (2) do not require the publication of
information whose publication within the time required by sub-
paragraph (1) would in the opinion of the court be against the
public interest.

(4) Publication under this section is to be in such manner as the Bank
30thinks fit.

(12) In paragraph 13, after sub-paragraph (3), insert—

(3A) But a member of the court who is the Governor or a Deputy
Governor of the Bank may not be designated under paragraph (a)
or (b) of sub-paragraph (3).

(13) 35In paragraph 14(1), for “it” substitute “the Oversight Committee”.

(14) In paragraph 15, for “director” substitute “non-executive director”.

(15) Nothing in sub-paragraphs (2) to (7) affects the term of any appointment
made before the commencement of that provision.

Monetary Policy Committee

2 (1) 40 Schedule 3 to the Bank of England Act 1998 (Monetary Policy Committee)
is amended as follows.

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(2) In paragraph 1, for the words from “except that” to the end substitute “but
this is subject to paragraph 2B”.

(3) Omit paragraph 2.

(4) After paragraph 2A insert—

2B (1) 5If it appears to the Chancellor of the Exchequer that in the
circumstances it is desirable to do so, the Chancellor may, before
the end of the 3 years for which a person is appointed as a member
of the Committee under section 13(2)(c), extend the persons’s term
of office on one occasion for a specified period of not more than 6
10months.

(2) The term being extended may be the person’s first or second term.

(3) If a person whose first term of office is extended is subsequently
re-appointed under section 13(2)(c)—

(a) the length of the second term is to be reduced by a period
15equal to the extension of the first term, but

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

(5) In paragraph 3—

(a) the existing provision becomes sub-paragraph (1), and

(b) 20after that provision insert—

(2) Where the notice relates to a person appointed under
section 13(2)(c), the Bank must give a copy of the notice to
the Treasury.

(6) In paragraph 4—

(a) 25omit sub-paragraph (1),

(b) for sub-paragraph (2) substitute—

(2) The terms and conditions on which a person holds office as
a member of the Committee appointed under section
13(2)(c) are to be such as the Oversight Committee may
30determine., and

(c) omit sub-paragraph (3).

(7) After paragraph 5 insert—

5A A member of the Financial Policy Committee of the Bank
appointed under section 9B(1)(e) is disqualified for appointment
35under section 13(2)(c).

(8) In paragraph 9—

(a) in sub-paragraph (1)—

(i) for “Bank” substitute “Oversight Committee”, and

(ii) in paragraph (a), for “the Committee’s meetings” and “the
40Committee’s consent” substitute “meetings of the Monetary
Policy Committee” and “that Committee’s consent”, and

(b) omit sub-paragraph (2).

(9) In paragraphs 10(2) and 11(3), leave out “with executive responsibility”.

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(10) After paragraph 13 insert—

13A The Committee may invite other persons to attend, or to attend
and speak at, any meeting of the Committee.

(11) Sub-paragraph (3) does not affect the term of any appointment made before
5the commencement of that sub-paragraph, and sub-paragraph (6) does not
affect the status of a person appointed before the commencement of that sub-
paragraph during the remainder of the term for which the person had been
appointed.

Immunity

3 (1) 10Section 244 of the Banking Act 2009 (immunity) is amended as follows.

(2) In subsection (2)—

(a) in paragraph (a), for “servant” substitute “employee”, and

(b) in paragraph (c), for “functions exercised” substitute “the exercise or
purported exercise of the Bank’s functions under the Financial
15Services and Markets Act 2000, of its other regulatory functions or of
functions undertaken”.

(3) After subsection (2) insert—

(2A) The Bank’s functions under the Financial Services and Markets Act
2000 are to be taken to include any functions that it may exercise as a
20result of an appointment under any of sections 97, 166 to 169 and 284
of that Act.

Changes in terminology

4 In section 4 of the Bank of England Act 1998 (Bank’s annual report), in
subsection (4)(a), for “directors” substitute “non-executive directors”.

5 25In Schedule 7 to the Bank of England Act 1998 (restriction on disclosure of
information), in paragraph 1(3)(a), for “servant” substitute “employee”.

6 In Part 3 of Schedule 1 to the House of Commons Disqualification Act 1975
(other disqualifying offices), in the entry relating to the Bank of England, for
“Director” substitute “non-executive director”.

7 30In Part 3 of Schedule 1 to the Northern Ireland Assembly Disqualification
Act 1975 (other disqualifying offices), in the entry relating to the Bank of
England, for “Director” substitute “non-executive director”.

Section 6

SCHEDULE 3 Financial Conduct Authority and Prudential Regulation Authority:
35Schedules to be substituted as Schedules 1ZA and 1ZB to FSMA 2000

These are the Schedules 1ZA and 1ZB to be substituted for Schedule 1 to

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FSMA 2000—

Section 1A

Schedule 1ZA The Financial Conduct Authority

Part 1 General

5Interpretation

1 In this Schedule—

Constitution

2 (1) The constitution of the FCA must provide for the FCA to have a
governing body.

(2) 15The governing body must consist of—

(a) a chair appointed by the Treasury,

(b) a chief executive appointed by the Treasury,

(c) the Bank’s Deputy Governor for prudential regulation,

(d) 2 members appointed jointly by the Secretary of State and
20the Treasury, and

(e) at least one other member appointed by the Treasury.

(3) The members referred to in sub-paragraph (2)(a), (c) and (d) are to
be non-executive members.

(4) In exercising its powers under sub-paragraph (2)(e) to appoint
25executive or non-executive members, the Treasury must secure
that the majority of members of the governing body are non-
executive members.

(5) An employee of the FCA may not be appointed as a non-executive
member.

(6) 30In the following provisions of this Schedule an “appointed
member” means a member of the governing body appointed
under sub-paragraph (2)(a), (b), (d) or (e).

3 (1) The terms of service of the appointed members are to be
determined by the Treasury.

(2) 35In the case of a member appointed under paragraph 2(2)(d), the
Treasury must consult the Secretary of State about the terms of
service.

(3) Before appointing a person as an appointed member, the Treasury
(or as the case requires the Treasury and the Secretary of State)
40must consider whether the person has any financial or other

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interests that could have a material effect on the extent of the
functions as member that it would be proper for the person to
discharge.

(4) The terms of service of an appointed member (“M”) must be such
5as—

(a) to secure that M is not subject to direction by the Treasury
or the Secretary of State,

(b) to require M not to act in accordance with the directions of
any other person, and

(c) 10to prohibit M from acquiring any financial or other
interests that have a material effect on the extent of the
functions as member that it would be proper for M to
discharge.

(5) If an appointed member is an employee of the FCA, the member’s
15interest as employee is to be disregarded for the purposes of sub-
paragraphs (3) and (4)(c) and paragraph 4(1)(b).

(6) A person who is an employee of the PRA is disqualified for
appointment as an appointed member.

(7) The FCA may pay expenses to the Bank’s Deputy Governor for
20prudential regulation in respect of that person’s service as a
member.

4 (1) The Treasury may remove an appointed member from office—

(a) on the grounds of incapacity or serious misconduct, or

(b) on the grounds that in all the circumstances the member’s
25financial or other interests are such as to have a material
effect on the extent of the functions as member that it
would be proper for the person to discharge.

(2) Before removing from office a member appointed under
paragraph 2(2)(d), the Treasury must consult the Secretary of
30State.

5 The validity of any act of the FCA is not affected—

(a) by any vacancy in any of the offices mentioned in
paragraph 2(2)(a), (b) or (c),

(b) by a defect in the appointment of a person—

(i) 35to any of those offices, or

(ii) as an appointed member.

6 The Bank’s Deputy Governor for prudential regulation must not
take part in any discussion by or decision of the FCA which relates
to—

(a) 40the exercise of the FCA’s functions in relation to a
particular person, or

(b) a decision not to exercise those functions.

Remuneration

7 The FCA must pay to the appointed members such remuneration
45as may be determined—

(a) in the case of the non-executive members, by the Treasury;

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(b) in the case of the executive members, by the FCA.

Arrangements for discharging functions

8 (1) The FCA may make arrangements for any of its functions to be
discharged by a committee, sub-committee, officer or member of
5staff of the FCA, but subject to the following provisions.

(2) In exercising its legislative functions, the FCA must act through its
governing body.

(3) For that purpose, the following are the FCA’s legislative
functions—

(a) 10making rules;

(b) issuing codes under section 64 or 119;

(c) issuing statements under—

(i) section 63C, 64, 69, 88C, 89S, 93, 124, 131J, 138N,
192H, 192N, 210 or 312J,

(ii) 15section 345D (whether as a result of section 345(2)
or section 249(1)), or

(iii) section 80 of the Financial Services Act 2012;

(d) giving directions under section 316, 318 or 328.

(4) The function of issuing general guidance (as defined in section
20139B(5)) may not be discharged by an officer or member of staff of
the FCA.

Records

9 The FCA must maintain satisfactory arrangements for—

(a) recording decisions made in the exercise of its functions,
25and

(b) the safe-keeping of those records which it considers ought
to be preserved.

Publication of record of meetings of governing body

10 (1) The FCA must publish a record of each meeting of its governing
30body—

(a) before the end of the period of 6 weeks beginning with the
day of the meeting, or

(b) if no meeting of the governing body is subsequently held
during that period, before the end of the period of 2 weeks
35beginning with the day of the next meeting.

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

(3) 40Sub-paragraphs (1) and (2) do not require the publication of
information whose publication within the time required by sub-
paragraph (1) would in the opinion of the governing body be
against the public interest.

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Contents page 115-119 120-129 130-139 140-149 150-159 160-169 170-179 180-189 190-199 200-209 210-219 220-229 230-239 240-249 250-259 260-269 270-279 280-289 290-299 300-309 310-319 Last page