Financial Services Bill (HL Bill 60)

15 (1) Paragraph 23 (power to impose requirements) is amended as follows.

(2) For “the Authority”, in each place, substitute “the FCA”.

(3) In sub-paragraph (1)(a), for “Part IV permission” substitute “Part 4A
permission”.

(4) 5In sub-paragraphs (2) and (2A), for “section 45” substitute “section 55L or
55M”.

(5) After sub-paragraph (2A) insert—

“(2B) This paragraph does not affect any duty of the FCA to consult the
PRA before exercising its power under section 55L or 55M.”

16 (1) 10Paragraph 24 (which relates to UK firms exercising rights under the banking
consolidation directive) is amended as follows.

(2) In sub-paragraph (1)(a), for “Part IV permission” substitute “Part 4A
permission”.

(3) In sub-paragraph (2)—

(a) 15for “the Authority”, in the first place, substitute “either regulator”,

(b) in paragraph (a), for “Part IV permission” substitute “Part 4A
permission”, and

(c) in paragraph (b), for “the Authority” substitute “that regulator”.

17 After paragraph 24 insert—

20“Arrangements between FCA and PRA

24A (1) The regulators may make arrangements about—

(a) how they will consult each other when required to do so by
paragraph 19(7C) or (7D) or 20(3AA) or (3AB) or by
regulations under paragraph 22;

(b) 25how each of them will act in response to any advice or
representations received from the other.

(2) The arrangements may require one regulator to obtain the consent
of the other in specified circumstances before—

(a) giving a consent notice under paragraph 19 or 20, or

(b) 30exercising specified functions under regulations under
paragraph 22.

(3) The arrangements must be in writing, and must specify—

(a) the EEA rights to which they relate, and

(b) the date on which they come into force.

(4) 35Where arrangements are in force under this paragraph, the
regulators must exercise functions in accordance with the
arrangements.

(5) The regulators must publish any arrangements under this
paragraph in such manner as they think fit.”

18 40In paragraph 25 (information to be included in the public record) for
“Authority” substitute “FCA”.

19 In paragraph 26 (UK management companies: delegation of functions), for
“Authority”, in each place, substitute “appropriate UK regulator”.

20 In paragraph 27 (UK management companies: withdrawal of authorisation),
for “Authority”, in each place, substitute “appropriate UK regulator”.

21 5In paragraph 28 (management companies: request for information), for
“Authority”, in each place, substitute “appropriate UK regulator”.

Part 2 Amendments of Schedule 4 to FSMA 2000: Treaty rights

22 Schedule 4 to FSMA 2000 (Treaty rights) is amended as follows.

23 (1) 10Paragraph 3 (exercise of Treaty rights) is amended as follows.

(2) In sub-paragraph (2), for “Authority” substitute “appropriate UK regulator”.

(3) After that sub-paragraph insert—

“(2A) In sub-paragraph (2) “the appropriate UK regulator” means—

(a) where any of the activities to which the notification under
15that sub-paragraph relates is a PRA-regulated activity, the
PRA;

(b) in any other case, the FCA.

(2B) Where the PRA receives a notification under sub-paragraph (2), it
must give a copy to the FCA without delay.

(2C) 20Where the FCA receives a notification under sub-paragraph (2), it
must in prescribed cases give a copy to the PRA without delay.”

24 After paragraph 3 insert—

“Notification between UK regulators

3A Regulations may require the PRA and the FCA to notify each other
25about Treaty firms qualifying for authorisation.”

25 (1) Paragraph 4 (permission) is amended as follows.

(2) In sub-paragraph (3)—

(a) for “a Part IV permission” substitute “a Part 4A permission”, and

(b) for “Authority” substitute “appropriate UK regulator”.

(3) 30In sub-paragraph (4), for “Authority” substitute “appropriate UK regulator”.

(4) After that sub-paragraph insert—

“(5) The appropriate UK regulator” means—

(a) where the Treaty firm is a PRA-authorised person, the
FCA or the PRA;

(b) 35in any other case, the FCA.”

26 (1) Paragraph 5 (notice to Authority) is amended as follows.

(2) In sub-paragraph (2), for “the Authority” substitute “the appropriate UK
regulator”.

(3) After sub-paragraph (2) insert—

“(2A) The appropriate UK regulator” means—

(a) where any of the activities to which the notice relates is a
PRA-regulated activity, the PRA;

(b) 5in any other case, the FCA.

(2B) Where the PRA receives a notice under sub-paragraph (2), it must
give a copy to the FCA without delay.

(2C) Where the FCA receives a notice under sub-paragraph (2) from—

(a) a PRA-authorised person, or

(b) 10a person whose immediate group includes a PRA-
authorised person,

it must give a copy to the PRA without delay.”

(4) For sub-paragraph (4) substitute—

“(4) Subsections (1), (4) and (8) of section 55U apply to a notice under
15sub-paragraph (2) as they apply to an application for a Part 4A
permission.”

(5) In the italic heading immediately before paragraph 5, for “Authority”
substitute “UK regulator”.

Part 3 20Amendments of sections 34 and 35 of FSMA 2000: EEA firms and Treaty firms

27 (1) Section 34 of FSMA 2000 (EEA firms) is amended as follows.

(2) In subsection (2), for “the Authority” substitute “the appropriate regulator”.

(3) After that subsection insert—

“(2A) In subsection (2) “the appropriate regulator” means—

(a) 25in the case of a PRA-authorised person, the PRA, and

(b) in any other case, the FCA.”

(4) In subsection (3), for “Part IV permission” substitute “Part 4A permission”.

28 (1) Section 35 of FSMA 2000 (Treaty firms) is amended as follows.

(2) In subsection (2), for “the Authority” substitute “the appropriate regulator”.

(3) 30After that subsection insert—

“(2A) In subsection (2) “the appropriate regulator” means—

(a) in the case of a PRA-authorised person, the PRA, and

(b) in any other case, the FCA.”

(4) In subsection (3), for “Part IV permission” substitute “Part 4A permission”.

35Part 4 Amendments of Part 13 of FSMA 2000: Powers of intervention

29 Part 13 of FSMA 2000 (incoming firms: intervention by Authority) is
amended as follows.

30 In the heading to Part 13, for “Authority” substitute “FCA or PRA”.

31 In section 193 (interpretation of Part 13), in subsection (1), in the definition
of “power of intervention”, for “the Authority” substitute “the FCA or the
PRA”.

32 (1) 5Section 194 (general grounds on which power of intervention is exercisable)
is amended as follows.

(2) In subsection (1)—

(a) for “Authority”, in each place, substitute “appropriate regulator”,

(b) in paragraph (c), for the words from “meet” to the end substitute
10“advance—

“(i) in the case of the FCA, one or more of its
operational objectives, and

(ii) in the case of the PRA, any of its objectives.”

(3) After subsection (1A) insert—

“(1B) 15The appropriate regulator” means—

(a) where the incoming firm is a PRA-authorised person, the
FCA or the PRA;

(b) in any other case, the FCA.”

(4) In subsection (3), for “Authority”, in each place, substitute “FCA”.

33 (1) 20Section 194A (contravention by relevant EEA firm with UK branch of
requirement under markets in financial instruments directive) is amended
as follows.

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

(3) 25After subsection (8) insert—

“(9) Subsection (4) is not to be regarded as requiring the PRA to take
action in relation to the contravention of a requirement falling within
subsection (3) in a case where it is satisfied that the FCA is required
to act, and is acting or has acted, under subsection (4)—

(a) 30in relation to that requirement, or

(b) where that requirement is imposed by rules made by the
PRA, in relation to an identical requirement imposed by rules
made by the FCA.”

(10) “The appropriate regulator” means—

(a) 35where the relevant EEA firm is a PRA-authorised person, the
FCA or, subject to subsection (9), the PRA;

(b) in any other case, the FCA.”

(4) In the heading, for “Authority” substitute “appropriate regulator”.

34 (1) Section 195 (exercise of power in support of overseas regulator) is amended
40as follows.

(2) In subsection (1), for “Authority” substitute “appropriate regulator”.

(3) In subsection (2), for “Authority’s” substitute “appropriate regulator’s”.

(4) After subsection (2) insert—

“(2A) The appropriate regulator” means—

(a) where the incoming firm is a PRA-authorised person, the
FCA or the PRA;

(b) 5in any other case, the FCA.”

(5) In subsection (4)—

(a) in paragraph (a), for “the Authority” substitute “either regulator”,
and

(b) omit paragraph (b).

(6) 10In subsections (5) to (8), for “Authority”, in each place, substitute
“appropriate regulator”.

35 (1) Section 195A (contravention by relevant EEA firm or EEA UCITS of
directive requirement: home state regulator primarily responsible for
securing compliance) is amended as follows.

(2) 15For “the Authority” or “the Authority’s”, in each place, substitute “the
appropriate regulator” or “the appropriate regulator’s”.

(3) After subsection (11A) insert—

“(11B) Subsection (4) is not to be regarded as requiring the PRA to notify the
home state regulator in relation to the contravention of a
20requirement falling within subsection (2) or (3) in a case where the
PRA is satisfied that the FCA is required to act, and is acting or has
acted, under subsection (4) in relation to that requirement.”

(4) In subsection (12), before the definition of “home state” insert—

• ““the appropriate regulator” means—

  (a)

  25where the relevant EEA firm is a PRA-authorised
  person, the FCA or, subject to subsection (11B), the
  PRA;

  (b)

  in any other case, the FCA;”.

36 For section 196 substitute—

“196 30The power of intervention

(1) If a regulator is entitled to exercise its power of intervention in
respect of an incoming firm under this Part, it may impose any
requirement in relation to the firm which that regulator could
impose if—

(a) 35the firm’s permission was a Part 4A permission; and

(b) the regulator was entitled to exercise its power under section
55L(3) or 55M(3).

(2) The FCA must consult the PRA before exercising its powers by virtue
of this section in relation to—

(a) 40a PRA-authorised person, or

(b) a member of a group which includes a PRA-authorised
person.

(3) The PRA must consult the FCA before exercising its powers by virtue
of this section.”

37 (1) Section 197 (procedure on exercise of power of intervention) is amended as
follows.

(2) In subsection (2), for “Authority” substitute “regulator”.

(3) In subsection (3), for “the Authority” substitute “a regulator”.

(4) 5In subsection (4)—

(a) in paragraph (c), for “Authority’s” substitute “regulator’s”, and

(b) in paragraph (d), for “Authority” substitute “regulator”.

(5) In subsections (5) to (7), for “Authority”, in each place, substitute
“regulator”.

38 (1) 10Section 198 (power to apply to court for injunction in respect of certain
overseas insurance companies) is amended as follows.

(2) In subsections (1) to (3), for “Authority”, in each place, substitute
“appropriate regulator”.

(3) After subsection (3) insert—

“(3A) 15The appropriate regulator” means whichever regulator is, at the
time when the request is received, the competent authority for the
purposes of the provision referred to in subsection (1)(a), (b) or (c).”

39 (1) Section 199 (additional procedure for EEA firms in certain cases) is amended
as follows.

(2) 20In subsection (1), for “the Authority” substitute “a regulator”.

(3) In subsection (2)(a)(i), for “the Authority” substitute “that regulator”.

(4) In subsections (3) to (11), for “the Authority” substitute “the regulator”.

(5) After subsection (11) insert—

“(12) Subsection (3) is not to be regarded as requiring the PRA to take
25action in relation to the contravention of a relevant requirement in a
case where it is satisfied that the FCA is required to act, and is acting
or has acted, under subsection (3)—

(a) in relation to that requirement, or

(b) where that requirement is imposed by rules made by the
30PRA, in relation to an identical requirement imposed by rules
made by the FCA.”

40 (1) Section 199A (management companies: loss of authorisation) is amended as
follows.

(2) In subsection (2), for “Authority”, in both places, substitute “appropriate
35regulator”.

(3) For subsection (4) substitute—

“(4) In this section—

• “the appropriate regulator” means whichever of the FCA and
  the PRA is the competent authority for the purposes of the
  40UCITS directive;

• “collective investment scheme” has the same meaning as in
  Part 17.”

41 (1) Section 200 (rescission and variation of requirements) is amended as follows.

(2) In subsection (1), for “The Authority” substitute “Either regulator”.

(3) In subsection (2)—

(a) for “the Authority”, in the first place, substitute “either regulator”,
5and

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

(4) In subsections (3) and (4), for “Authority” substitute “regulator”.

(5) In subsection (5)—

(a) for “the Authority”, in the first place, substitute “either regulator”,
10and

(b) in paragraph (a), for “the Authority” substitute “the regulator”.

42 For section 201 substitute—

“201 Effect of certain requirements on other persons

If either regulator, in exercising its power of intervention, imposes on
15an incoming firm a requirement of the kind mentioned in subsection
(4) of section 55P, the requirement has the same effect in relation to
the firm as it would have in relation to an authorised person if it had
been imposed on the authorised person by the regulator acting
under section 55L or 55M.”

43 20In section 202 (contravention of requirement imposed under Part 13), in
subsection (1), for “the Authority” substitute “a regulator”.

Section 15

SCHEDULE 5 Performance of regulated activities

1 Part 5 of FSMA 2000 is amended as follows.

2 (1) 25Section 58 (applications relating to prohibition orders: procedure and right
to refer to Tribunal) is amended as follows.

(2) In subsections (2) to (5), for “Authority” substitute “appropriate regulator”.

(3) After subsection (5) insert—

“(6) The appropriate regulator” means the regulator to which the
30application is made.”

3 In section 59 (approval for particular arrangements), omit subsection (9).

4 (1) Section 60 (applications for approval), for “Authority” or “Authority’s”, in
each place, substitute “appropriate regulator” or “appropriate regulator’s”.

(2) For subsection (3) substitute—

“(3) 35At any time after the application is received and before it is
determined, the appropriate regulator may require the applicant to
provide it with such further information as it reasonably considers
necessary to enable it to determine the application or, as the case
requires, to decide whether to give consent.”

(3) In subsection (6), for “Part IV” substitute “Part 4A”.

(4) After subsection (6) insert—

“(7) The PRA must consult the FCA before—

(a) giving a direction under subsection (2)(a) in relation to a class
5of applicants, or

(b) imposing a requirement under subsection (2)(b) on a class of
applicants.

(8) The PRA must as soon as practicable notify the FCA of the receipt or
withdrawal of an application to the PRA, unless the case is one in
10which by virtue of arrangements under section 59B the consent of the
FCA is not required.

(9) “The appropriate regulator”—

(a) in relation to a controlled function which is of a description
specified in rules made by the FCA, means the FCA;

(b) 15in relation to a controlled function which is of a description
specified in rules made by the PRA, means the PRA, and for
the purposes of subsection (3) also includes the FCA in cases
where the consent of the FCA is required.”

5 (1) Section 61 (determination of applications) is amended as follows.

(2) 20In subsection (1), for “The Authority may grant an application made under
section 60” substitute “The regulator to which an application is made under
section 60 may grant the application”.

(3) In subsection (2)—

(a) for “the Authority” substitute “the regulator”, and

(b) 25after “general rules” insert “made by that regulator”.

(4) After subsection (2) insert—

“(2A) Subsections (1) and (2) apply in relation to the giving by the FCA of
any required consent as they apply in relation to the grant of the
application.”

(5) 30In subsection (3), for the words from the beginning to “determine” substitute
“The regulator to which an application is made under section 60 must,
before the end of the period for consideration, determine”.

(6) After subsection (3) insert—

“(3A) The period for consideration”—

(a) 35in any case where the application under section 60 is made by
a person applying for permission under Part 4A (see section
60(6)), means whichever ends last of—

(i) the period within which the application for that
permission must be determined under section 55V(1)
40or (2), and

(ii) the period of 3 months beginning with the date on
which the regulator receives the application under
section 60, and

(b) in any other case, means the period of 3 months beginning
with the date on which the regulator receives the application
under section 60.”

(7) In subsection (4), for “the Authority”, in each place, substitute “a regulator”.

(8) 5In subsection (5)—

(a) for “Authority”, in the first place, substitute “regulator to which the
application was made”, and

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

6 (1) Section 62 (applications for approval: procedure and right to refer to
10Tribunal) is amended as follows.

(2) In subsection (1), for the words from “If” to “, it” substitute “If the regulator
to which an application is made under section 60 (“an application”) decides
to grant the application, it”.

(3) In subsections (2) to (4)—

(a) 15for “the Authority” substitute “the regulator to which an application
is made”, and

(b) for “an application” substitute “the application”.

7 (1) Section 63 (withdrawal of approval) is amended as follows.

(2) In subsection (2)—

(a) 20for “its approval, the Authority may take into account any matter
which it could take into account if it were” substitute “an approval,
the FCA or the PRA may take into account any matter which could
be taken into account in”, and

(b) at the end insert “(on the assumption, if it is not the case, that the
25application was one falling to be considered by it)”.

(3) In subsections (3) to (5)—

(a) for “the Authority” substitute “a regulator”, and

(b) for “its approval” substitute “an approval”.

8 In section 63A (performance of controlled functions without approval:
30power to impose penalties), for “Authority”, in each place, substitute
“appropriate regulator”.

9 In section 63B (procedure and right to refer to Tribunal), for “the Authority”,
in each place, substitute “a regulator”.

10 (1) Section 63C (statement of policy) is amended as follows.

(2) 35In subsection (1), for “The Authority” substitute “Each regulator”.

(3) In subsections (2) and (3), for “The Authority’s” substitute “Each
regulator’s”.

(4) In subsection (4), for “the Authority” substitute “the regulator that has
issued the statement”.

(5) 40In subsection (5)—

(a) for “The Authority” substitute “A regulator”, and

(b) after “issued” insert “by it”.

(6) In subsection (6), for “replaced, the Authority” substitute “replaced by a
regulator, the regulator”.

(7) In subsection (7), for “The Authority” substitute “A regulator”.

(8) In subsection (8)—

(a) 5after “section” insert “by a regulator”, and

(b) for “Authority”, in both places, substitute “regulator”.

(9) In subsection (9), for “Authority” substitute “regulator”.

(10) In subsection (10)—

(a) for “the Authority” substitute “a regulator”, and

(b) 10after “published” insert “by it”.

11 (1) Section 63D (statement of policy: procedure) is amended as follows.

(2) In subsection (1)—

(a) for “issuing” substitute “a regulator issues”, and

(b) for “Authority”, in both places, substitute “regulator”.

(3) 15In subsections (2), (3), (4) and (5) (in both places), for “Authority” substitute
“regulator”.

(4) In subsection (6)—

(a) for “The Authority” substitute “A regulator”, and

(b) after “published” insert “by it”.

12 (1) 20Section 64 (conduct of approved persons: statement and codes) is amended
as follows.

(2) In subsection (2)—

(a) for “the Authority” substitute “a regulator”, and

(b) after “subsection (1)” insert “or (1A)”.

(3) 25In subsection (3)(a) to (c), for “Authority” substitute “regulator issuing the
code”.

(4) In subsection (4)—

(a) for “The Authority” substitute “A regulator”, and

(b) after “issued” insert “by it”.

(5) 30In subsection (5)—

(a) after “replaced” insert “by a regulator”, and

(b) for “Authority” substitute “regulator”.

(6) In subsection (6)—

(a) for “the Authority”, in the first place, substitute “the regulator that
35issued it”, and

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

(7) In subsection (10), for “The Authority” substitute “A regulator”.

(8) In subsection (11), for paragraph (b) substitute—

“(b) is to be treated for the purposes of section 1B(6)(a) as part of
40the FCA’s rule-making functions (where the power is
exercisable by the FCA) and is to be treated for the purposes