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(a) the discharge of its functions,

(b) the extent to which, in its opinion, its objectives have been
advanced,

(c) its consideration of the principles in section 3B and of the
5matter mentioned in section 2H(1)(b),

(d) how it has complied with section 3D,

(e) any direction given under section 3I or 3J during the
period to which the report relates,

(f) how it has complied with section 354B(1) so far as relating
10to co-operation with persons outside the United Kingdom,
and

(g) such other matters as the Treasury may from time to time
direct.

(2) Sub-paragraph (1) does not require the inclusion in the report of
15any information whose publication would in the opinion of the
PRA be against the public interest.

(3) The report must be accompanied by—

(a) a statement of the remuneration of the members of the
governing body of the PRA during the period to which the
20report relates, and

(b) such other reports or information, prepared by such
persons, as the Treasury may from time to time direct.

(4) The Treasury must lay before Parliament a copy of each report
received by them under this paragraph.

25Consultation about annual report

20 (1) In relation to each report made under paragraph 19, the PRA must
publish at the same time as the report an invitation to members of
the public to make representations to the PRA, within the 3
months beginning with the date of publication—

(a) 30about the report,

(b) about the way in which the PRA has discharged, or failed
to discharge, its functions during the period to which the
report relates, and

(c) about the extent to which, in their opinion, the PRA’s
35objectives have been advanced and the PRA has
considered the regulatory principles in section 3B and the
matter mentioned in section 2H(1)(b).

(2) The invitation must be published in the way appearing to it to be
best calculated to bring the invitation to the attention of the public.

40Report on consultation

21 (1) The PRA must publish a report about its consultation in
accordance with paragraph 20.

(2) The report must contain an account, in general terms, of any
representations received in pursuance of the invitation published
45under that paragraph.

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(3) The report must be published not later than 4 months after the
date on which the report under paragraph 19 was published.

Accounts and audit

22 (1) The Treasury may—

(a) 5require the PRA to comply with any provisions of the
Companies Act 2006 about accounts and their audit which
would not otherwise apply to it, or

(b) direct that any provision of that Act about accounts and
their audit is to apply to the PRA with such modifications
10as are specified in the direction, whether or not the
provision would otherwise apply to the PRA.

(2) Compliance with any requirement under sub-paragraph (1)(a) or
(b) is enforceable by injunction or, in Scotland, an order for specific
performance under section 45 of the Court of Session Act 1988.

(3) 15Proceedings under sub-paragraph (2) may be brought only by the
Treasury.

23 (1) The PRA must send a copy of its annual accounts to the
Comptroller and Auditor General as soon as is reasonably
practicable.

(2) 20The Comptroller and Auditor General must—

(a) examine, certify and report on accounts received under
this paragraph, and

(b) send a copy of the certified accounts and the report to the
Treasury.

(3) 25The Treasury must lay the copy of the certified accounts and the
report before Parliament.

(4) The PRA must send a copy of the certified accounts and the report
to the Bank.

(5) Except as provided by paragraph 22(1), the PRA is exempt from
30the requirements of Part 16 of the Companies Act 2006 (audit), and
its balance sheet must contain a statement to that effect.

(6) In this paragraph “annual accounts” has the meaning given in
section 471 of the Companies Act 2006.

Part 2 35Status

Status

24 In relation to any of its functions—

(a) the PRA is not to be regarded as acting on behalf of the
Crown, and

(b) 40its members, officers and staff are not to be regarded as
Crown servants.

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Exemption from requirement for use of “limited” in name of PRA

25 The PRA is to be exempt from the requirements of the Companies
Act 2006 relating to the use of “limited” as part of its name.

26 If the Secretary of State is satisfied that any action taken by the
5PRA makes it inappropriate for the exemption given by paragraph
25 to continue, the Secretary of State may, after consulting the
Treasury, give a direction removing it.

Part 3 Penalties and fees

10Penalties

27 In determining its policy with respect to the amounts of penalties
to be imposed by it under this Act, the PRA must take no account
of the expenses which it incurs, or expects to incur, in discharging
its functions.

28 (1) 15The PRA must in respect of each of its financial years pay to the
Treasury its penalty receipts after deducting its enforcement costs.

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

(3) 20The PRA’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 this Act.

(4) 25For this purpose the PRA’s enforcement powers are—

(a) its powers under any of the provisions mentioned in
section 133(7A),

(b) its powers under section 56 (prohibition orders),

(c) its powers under Part 25 of this Act (injunctions and
30restitution),

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

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

(f) 35its powers in England and Wales or Northern Ireland in
relation to the prosecution of relevant offences.

(5) “Relevant offences” are—

(a) offences under FSMA 2000,

(b) offences under subordinate legislation made under that
40Act, and

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

(6) The Treasury may give directions to the PRA as to how the PRA is
to comply with its duty under sub-paragraph (1).

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(7) The 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 sub-paragraph (3),

(b) 5relate to the calculation and timing of the deduction in
respect of the PRA’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 PRA to provide the Treasury
10at specified times with information relating to—

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

(b) the PRA’s enforcement costs.

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

29 (1) 15The PRA must prepare and operate a scheme (“the financial
penalty scheme”) for ensuring that the amounts that, as a result of
the deduction for which paragraph 28(1) provides, are retained by
the PRA in respect of amounts paid to it by way of penalties
imposed under this Act are applied for the benefit of PRA-
20authorised persons.

(2) The financial penalty scheme may, in particular, make different
provision with respect to different classes of PRA-authorised
person.

(3) The financial penalty scheme must ensure that those who have
25become liable to pay a penalty to the PRA in any financial year of
the PRA do not receive any benefit under the scheme in the
following financial year.

(4) Up-to-date details of the financial penalty scheme must be set out
in a document (“the scheme details”).

30 (1) 30The scheme details must be published by the PRA in the way
appearing to it to be best calculated to bring them to the attention
of the public.

(2) Before making the financial penalty scheme, the PRA must
publish a draft of the proposed scheme in the way appearing to the
35PRA to be best calculated to bring it to the attention of the public.

(3) The draft must be accompanied by notice that representations
about the proposals may be made to the PRA within a specified
time.

(4) Before making the scheme, the PRA must have regard to any
40representations made to it in accordance with sub-paragraph (3).

(5) If the PRA makes the proposed scheme, it must publish an
account, in general terms, of—

(a) the representations made to it in accordance with sub-
paragraph (3), and

(b) 45its response to them.

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(6) If the scheme differs from the draft published under sub-
paragraph (2) in a way which is, in the opinion of the PRA,
significant, the PRA must (in addition to complying with sub-
paragraph (5)) publish details of the difference.

(7) 5The PRA must, without delay, give the Treasury a copy of any
scheme details published by it.

(8) The PRA may charge a reasonable fee for providing a person with
a copy of—

(a) a draft published under sub-paragraph (2);

(b) 10scheme details.

(9) Sub-paragraphs (2) to (6) and (8)(a) also apply to a proposal to
alter or replace the financial penalty scheme.

Fees

31 (1) The PRA may make rules providing for the payment to it of such
15fees, in connection with the discharge of any of its qualifying
functions, as it considers will (taking account of its expected
income from fees and charges provided for by any other provision
of this Act) enable it—

(a) to meet expenses incurred in carrying out its functions or
20for any incidental purpose,

(b) to repay the principal of, and pay any interest on, any
relevant borrowing and to meet relevant commencement
expenses, and

(c) to maintain adequate reserves.

(2) 25The “qualifying functions” of the PRA are—

(a) its functions under or as a result of this Act or any of the
other Acts mentioned in section 2A(6), and

(b) its functions under or as a result of a qualifying EU
provision that is specified, or of a description specified, for
30the purposes of this sub-paragraph by the Treasury by
order.

(3) In sub-paragraph (1)(b)

(4) Neither section 2A(6)(d) nor the definition of “functions” in
45paragraph 1 applies for the purposes of sub-paragraph (2).

(5) For the purposes of sub-paragraph (3) it is irrelevant when the
borrowing of the money, the incurring of the expenses or the

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assumption of functions took place (and, in particular, it is
irrelevant if expenses were incurred by the FCA at a time when it
was known as the Financial Services Authority).

(6) In fixing the amount of any fee which is to be payable to the PRA,
5no account is to be taken of any sums which the PRA receives, or
expects to receive, by way of penalties imposed by it under this
Act.

(7) Any fee which is owed to the PRA under any provision made by
or under this Act may be recovered as a debt due to the PRA.

10Services for which fees may not be charged

32 The power conferred by paragraph 31 may not be used to
require—

(a) a fee to be paid in respect of the discharge of any of the
PRA’s functions under paragraph 13, 14, 19 or 20 of
15Schedule 3, or

(b) a fee to be paid by any person whose application for
approval under section 59 has been granted.

Part 4 Miscellaneous

20Exemption from liability in damages

33 (1) None of the following is to be liable in damages for anything done
or omitted in the discharge, or purported discharge, of the PRA’s
functions—

(a) the PRA;

(b) 25any person (“P”) who is, or is acting as, a member, officer
or member of staff of the PRA;

(c) any person who could be held vicariously liable for things
done or omitted by P, but only in so far as the liability
relates to P’s conduct.

(2) 30Anything done or omitted by a person mentioned in sub-
paragraph (1)(a) or (b) while acting, or purporting to act, as a
result of an appointment under any of sections 97, 166 to 169 and
284 is to be taken for the purposes of sub-paragraph (1) to have
been done or omitted in the discharge, or as the case may be
35purported discharge, of the PRA’s functions.

(3) Sub-paragraph (1) does not apply—

(a) if the act or omission is shown to have been in bad faith, or

(b) so as to prevent an award of damages made in respect of
an act or omission on the ground that the act or omission
40was unlawful as a result of section 6(1) of the Human
Rights Act 1998.

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Accredited financial investigators

34 For the purposes of this Act anything done by an accredited
financial investigator within the meaning of the Proceeds of Crime
Act 2002 who—

(a) 5is, or is acting as, an officer of, or member of the staff of, the
PRA, or

(b) is appointed by the PRA under section 167 or 168 to
conduct an investigation,

is to be treated as done in the exercise or discharge of a function of
10the PRA.

Amounts required by rules to be paid to the PRA

35 Any amount (other than a fee) which is required by rules to be
paid to the PRA may be recovered as a debt due to the PRA.

Section 12

SCHEDULE 4 15EEA passport rights and treaty rights

Part 1 Amendments of Schedule 3 to FSMA 2000: EEA passport rights

Introductory

1 Schedule 3 to FSMA 2000 (EEA passport rights) is amended as follows.

20Exercise of passport rights by EEA firms

2 (1) Paragraph 13 (establishment) is amended as follows.

(2) In sub-paragraphs (1) and (1A), for “Authority”, in each place, substitute
“appropriate UK regulator”.

(3) After sub-paragraph (1A) insert—

(1B) 25Where the PRA receives a consent notice, it must give a copy to the
FCA without delay.

(1C) Where the FCA receives a consent notice it must in prescribed
cases give a copy to the PRA without delay.

(1D) In a case where the FCA is the appropriate UK regulator, the
30consent of the PRA is required for any notice by the FCA for the
purposes of sub-paragraph (1)(ba) which relates to—

(a) a PRA-regulated activity,

(b) a PRA-authorised person, or

(c) a person whose immediate group includes a PRA-
35authorised person.

(1E) If the FCA—

(a) receives a consent notice, or

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(b) receives under sub-paragraph (1B) a copy of a consent
notice,

it must prepare for the firm’s supervision.

(1F) If the PRA—

(a) 5receives a consent notice, or

(b) receives under sub-paragraph (1C) a copy of a consent
notice which identifies PRA-regulated activities or relates
to a PRA-authorised person,

it must prepare for the firm’s supervision.

(4) 10In sub-paragraph (2)—

(a) for “Authority” substitute “appropriate UK regulator”, and

(b) omit paragraph (a).

(5) In sub-paragraph (3), for “Authority” substitute “appropriate UK regulator”.

(6) In sub-paragraph (4), after the definition of “applicable provisions” insert—

3 (1) Paragraph 14 (services) is amended as follows.

(2) In sub-paragraph (1), for “Authority”, in each place, substitute “appropriate
20UK regulator”.

(3) After sub-paragraph (1) insert—

(1A) Relevant notice” means—

(a) a regulator’s notice, or

(b) where none is required by sub-paragraph (1), a notice
25informing the appropriate UK regulator of the firm’s
intention to provide services in the United Kingdom.

(1B) Where the PRA receives a relevant notice, it must give a copy to
the FCA without delay.

(1C) Where the FCA receives a relevant notice, it must in prescribed
30cases give a copy to the PRA without delay.

(1D) If the FCA—

(a) receives a relevant notice, or

(b) receives under sub-paragraph (1B) a copy of a relevant
notice,

35it must prepare for the firm’s supervision.

(1E) If the PRA—

(a) receives a relevant notice, or

(b) receives under sub-paragraph (1C) a copy of a relevant
notice which identifies PRA-regulated activities or relates
40to a PRA-authorised person,

it must, unless the firm falls within paragraph 5(e), prepare for the
firm’s supervision.

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(4) For sub-paragraph (2) substitute—

(2) If the appropriate UK regulator has received a relevant notice, it
must, unless the firm falls within paragraph 5(a) or (e), notify the
firm of the applicable provisions (if any).

(5) 5Omit sub-paragraph (2A).

(6) In sub-paragraph (3)—

(a) for “(2)(b)” substitute “(2)”, and

(b) for the words from “Authority” to the end substitute “appropriate
UK regulator received the relevant notice”.

(7) 10In sub-paragraph (4), after the definition of “applicable provisions” insert—

4 (1) Paragraph 15A (application for approval to manage UCITS) is amended as
15follows.

(2) For “Authority” or “Authority’s”, in each place, substitute “appropriate UK
regulator” or “appropriate UK regulator’s”.

(3) After sub-paragraph (6) insert—

(6A) If—

(a) 20the FCA is the appropriate UK regulator, and

(b) the firm is, or the firm’s immediate group includes, a PRA-
authorised person,

the FCA must give the PRA a copy of the notice under sub-
paragraph (4).

(4) 25In sub-paragraph (7), before the definition of “specified” insert—

5 (1) Paragraph 15B (representations and references to the Tribunal) is amended
30as follows.

(2) For “Authority”, in both places, substitute “appropriate UK regulator”.

(3) After sub-paragraph (3) insert—

(4) In this paragraph “the appropriate UK regulator” has the same
meaning as in paragraph 15A.

6 35In paragraph 15C (information to home state regulator), in sub-paragraph
(1), for “Authority” substitute “appropriate UK regulator, as defined in
paragraph 15A(7),”.

7 In paragraph 17 (continuing regulation of EEA firms)—

(a) before paragraph (a) insert—

(za) 40require the FCA and the PRA to notify
each other about EEA firms qualifying
for authorisation;, and

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(b) in paragraph (c), for “the Authority” substitute “the FCA or the
PRA”.

8 In paragraph 18 (giving up right to authorisation), in paragraph (b), for “Part
IV permission” substitute “Part 4A permission”.

5Exercise of passport rights by UK firms

9 In Part 3 (exercise of passport rights by UK firms), before the italic heading
before paragraph 19 insert—

Meaning of “the appropriate UK regulator”

18A In this Part of this Schedule “the appropriate UK regulator”
10means—

(a) where the UK firm is a PRA-authorised person, the PRA;

(b) in any other case, the FCA.

10 (1) Paragraph 19 (establishment) is amended as follows.

(2) For “Authority”, in each place, substitute “appropriate UK regulator”.

(3) 15After sub-paragraph (7B) insert—

(7C) Where the PRA is the appropriate UK regulator, it must consult the
FCA before deciding whether to give a consent notice, except where
sub-paragraph (7A) applies.

(7D) Where the FCA is the appropriate UK regulator, it must consult the
20PRA before deciding whether to give a consent notice in relation to a
UK firm whose immediate group includes a PRA-authorised
person.

11 (1) Paragraph 20 (services) is amended as follows.

(2) For “Authority”, in each place, substitute “appropriate UK regulator”.

(3) 25After sub-paragraph (3A) insert—

(3AA) Where the PRA is the appropriate UK regulator, it must consult
the FCA before deciding whether to give a consent notice.

(3AB) Where the FCA is the appropriate UK regulator, it must consult
the PRA before deciding whether to give a consent notice in
30relation to a UK firm whose immediate group includes a PRA-
authorised person.

12 In paragraph 20ZA (information for host state regulator), for “Authority”, in
each place, substitute “appropriate UK regulator”.

13 In paragraph 20B (notice of intention to market), for “Authority”, in each
35place, substitute “appropriate UK regulator”.

14 In paragraph 22 (continuing regulation of UK firms), in sub-paragraph (3)—

(a) for “the Authority’s consent” substitute “the consent of the FCA or
the PRA”, and

(b) in paragraph (b), for “the Authority” substitute “the FCA or the
40PRA”.

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