Financial Services Bill (HL Bill 60)

Part 5 Injunctions and restitution

19 (1) Section 380 (injunctions) is amended as follows.

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

(3) 5In subsection (6)(a)—

(a) in the opening words, for “Authority” substitute “appropriate
regulator”,

(b) for sub-paragraph (i) (but not the “or” following it) substitute—

“(i) which is imposed by or under this Act or by a
10qualifying EU provision specified, or of a
description specified, for the purposes of this
subsection by the Treasury by order”, and

(c) in sub-paragraph (ii), for the words from “which the Authority” to
the end substitute “mentioned in section 402(1)”.

(4) 15In subsection (7), omit paragraph (a) (and the “and” at the end of it).

(5) After subsection (7) insert—

“(8) The PRA is the “appropriate regulator” in the case of a contravention
of—

(a) a requirement that is imposed by the PRA under any
20provision of this Act,

(b) a requirement under section 56(6) where the authorised
person concerned is a PRA-authorised person and the
prohibition order concerned is made by the PRA, or

(c) a requirement under section 59(1) or (2) where the authorised
25person concerned is a PRA-authorised person and the
approval concerned falls to be given by the PRA.

(9) In the case of a contravention of a requirement that is imposed by a
qualifying EU provision, “the appropriate regulator” is whichever of
the PRA or the FCA (or both) is specified by the Treasury by order in
30relation to the qualifying EU provision for the purposes of this
section.

(10) In the case of a contravention of a requirement where the
contravention constitutes an offence under this Act, the “appropriate
regulator” is whichever of the PRA or the FCA has power to
35prosecute the offence (see section 401).

(11) The FCA is the “appropriate regulator” in the case of a contravention
of any other requirement.

(12) The Treasury may by order amend the definition of “appropriate
regulator”.”

20 (1) 40Section 381 (injunctions in case of market abuse) is amended as follows.

(2) In subsections (1) to (3), for “Authority” substitute “FCA”.

(3) In subsection (4), after “The court” insert “may”.

21 (1) Section 382 (restitution orders) is amended as follows.

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

(3) In subsections (2) and (3), for “Authority” substitute “regulator concerned”.

(4) In subsection (7), for “Authority” substitute “appropriate regulator”.

(5) In subsection (9)(a)—

(a) 5in the opening words, for “Authority” substitute “appropriate
regulator”,

(b) for sub-paragraph (i) (but not the “or” following it) substitute—

“(i) which is imposed by or under this Act or by a
qualifying EU provision specified, or of a
10description specified, for the purposes of this
subsection by the Treasury by order”, and

(c) in sub-paragraph (ii), for the words from “which the Authority” to
the end substitute “mentioned in section 402(1)”.

(6) In subsection (10), omit paragraph (a) (and the “and” at the end of it).

(7) 15After subsection (10) insert—

“(11) The PRA is the “appropriate regulator” in the case of a contravention
of—

(a) a requirement that is imposed by the PRA under any
provision of this Act,

(b) 20a requirement under section 56(6) where the authorised
person concerned is a PRA-authorised person and the
prohibition order concerned is made by the PRA, or

(c) a requirement under section 59(1) or (2) where the authorised
person concerned is a PRA-authorised person and the
25approval concerned falls to be given by the PRA.

(12) In the case of a contravention of a requirement that is imposed by a
qualifying EU provision, “the appropriate regulator” is whichever of
the PRA or the FCA (or both) is specified by the Treasury by order in
relation to the qualifying EU provision for the purposes of this
30section.

(13) In the case of a contravention of a requirement where the
contravention constitutes an offence under this Act, the “appropriate
regulator” is the regulator which has power to prosecute the offence
(see section 401).

(14) 35The FCA is the “appropriate regulator” in the case of a contravention
of any other requirement.

(15) The Treasury may by order amend the definition of “appropriate
regulator”.”

22 In section 383(1), (4), (5) and (9) (restitution orders in case of market abuse),
40for “ Authority” substitute “FCA”.

23 (1) Section 384 (power of Authority to require restitution) is amended as
follows.

(2) In subsection (1)—

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

(b) after “authorised person” insert “or recognised investment
exchange”.

(3) In subsections (2) and (4), for “Authority” substitute “FCA”.

(4) In subsection (5)—

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

(b) for “Authority”, in each of the other places, substitute “regulator
concerned”.

(5) In subsection (6), for “Authority” substitute “regulator concerned”.

(6) 10In subsection (7)—

(a) in paragraph (a), for the words from “any directly applicable” to
“auctioning regulation” substitute “a qualifying EU provision
specified, or of a description specified, for the purposes of this
subsection by the Treasury by order”, and

(b) 15in paragraph (b), for the words from “in relation to which” to the end
substitute “mentioned in section 402(1)”.

(7) Omit subsection (8).

(8) After subsection (8) insert—

“(9) The PRA is the “appropriate regulator” in the case of a contravention
20of—

(a) a requirement that is imposed by the PRA under any
provision of this Act,

(b) a requirement under section 56(6) where the authorised
person concerned is a PRA-authorised person and the
25prohibition order concerned is made by the PRA, or

(c) a requirement under section 59(1) or (2) where the authorised
person concerned is a PRA-authorised person and the
approval concerned falls to be given by the PRA.

(10) In the case of a contravention of a requirement that is imposed by a
30qualifying EU provision, “the appropriate regulator” is whichever of
the PRA or the FCA (or both) is specified by the Treasury by order in
relation to the qualifying EU provision for the purposes of this
section.

(11) In the case of a contravention of a requirement where the
35contravention constitutes an offence under this Act, the “appropriate
regulator” is the regulator which has power to prosecute the offence
(see section 401).

(12) The FCA is the “appropriate regulator” in the case of a contravention
of any other requirement.

(13) 40The Treasury may by order amend the definition of “appropriate
regulator”.”

(9) In the heading, for “Authority” substitute “FCA or PRA”.

(10) In the italic heading before section 384, for “Authority” substitute “FCA or
PRA”.

24 (1) 45Section 385 (warning notices) is amended as follows.

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

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

25 In section 386(1) and (3) (decision notices), for “Authority” substitute
“regulator”.

5Part 6 Notice procedures

26 (1) Section 387 (warning notices) is amended as follows.

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

(3) 10After subsection (1) insert—

“(1A) Where the PRA is the regulator concerned and the FCA proposes to
refuse consent for the purposes of section 55F, 55I or 59 or to give
conditional consent as mentioned in section 55F(5) or 55I(8), the
warning notice given by the PRA must—

(a) 15state that fact, and

(b) give the reasons for the FCA’s proposal.”

(4) In subsection (2)—

(a) for “The warning” substitute “A warning”,

(b) for “28 days” substitute “14 days”, and

(c) 20for “Authority” substitute “regulator concerned”.

(5) In subsection (3), for “The Authority” substitute “The regulator concerned”.

(6) After subsection (3) insert—

“(3A) Where the PRA receives any representations in response to a
warning notice given by it under section 55X(1) or (2) or 62(2) in a
25case falling within subsection (1A) it must—

(a) if the representations are in writing, give a copy to the FCA,
or

(b) if they are not in writing and have not been given directly to
the FCA by the person making them, provide the FCA with a
30record of them.”

(7) In subsection (4), for “The Authority” substitute “The regulator concerned”.

27 (1) Section 388 (decision notices) is amended as follows.

(2) In subsection (1)(b), for “the Authority’s reasons” substitute “the reasons of
the regulator giving the notice (“the regulator concerned”)”.

(3) 35After subsection (1) insert—

“(1A) Where the PRA is the regulator concerned and the FCA has decided
to refuse consent for the purposes of section 55F, 55I or 59 or to give
conditional consent as mentioned in section 55F(5) or 55I(8), the
decision notice given by the PRA must—

(a) 40state that fact, and

(b) give the reasons for the FCA’s decision.”

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

28 In section 389(1) (notices of discontinuance)—

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

(b) 5in paragraphs (a) and (b), after “notice” insert “given by it”.

29 (1) Section 390 (final notices) is amended as follows.

(2) In subsection (1)—

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

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

(3) 10In subsection (2)—

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

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

(c) for “a final notice” substitute “the notice required by subsection
15(2A)”.

(4) After that subsection insert—

“(2A) The notice required by this subsection is—

(a) in a case where the regulator is acting in accordance with a
direction given by the Tribunal under section 133(6)(b), or by
20the court on an appeal from a decision by the Tribunal under
section 133(6), a further decision notice, and

(b) in any other case, a final notice.”.

(5) In subsections (9) and (10), for “the Authority” substitute “the regulator
giving the notice”.

30 (1) 25Section 391 (publication) is amended as follows.

(2) For subsection (1) substitute—

“(1) In the case of a warning notice falling within subsection (1ZB)—

(a) neither the regulator giving the notice nor a person to whom
it is given or copied may publish the notice;

(b) 30a person to whom the notice is given or copied may not
publish any details concerning the notice unless the regulator
giving the notice has published those details; and

(c) after consulting the persons to whom the notice is given or
copied, the regulator giving the notice may publish such
35information about the matter to which the notice relates as it
considers appropriate.

(1ZA) In the case of a warning notice not falling within subsection (1ZB),
neither the regulator giving the notice nor a person to whom it is
given or copied may publish the notice or any details concerning it.

(1ZB) 40A warning notice falls within this subsection if it is given under—

(a) section 63B;

(b) section 67;

(c) section 87M;

(d) section 88B;

(e) section 89K;

(f) section 89R;

(g) section 92;

(h) section 126;

(i) 5section 131H;

(j) section 192L;

(k) section 207;

(l) section 312G;

(m) section 345B (whether as a result of section 345(2) or 345A(3)
10or section 249(1)).”

(3) In subsections (1A), (2) and (3), for “Authority” substitute “regulator giving
the notice”.

(4) In subsection (4)—

(a) for “The Authority” substitute “The regulator giving a decision or
15final notice”, and

(b) for “a decision notice or final notice” substitute “the notice”.

(5) In subsection (5), for “Authority” substitute “regulator giving the notice”.

(6) For subsection (6) substitute—

“(6) The FCA may not publish information under this section if, in its
20opinion, publication of the information would be—

(a) unfair to the person with respect to whom the action was
taken (or was proposed to be taken),

(b) prejudicial to the interests of consumers, or

(c) detrimental to the stability of the UK financial system.

(6A) 25The PRA may not publish information under this section if, in its
opinion, publication of the information would be—

(a) unfair to the person with respect to whom the action was
taken (or was proposed to be taken),

(b) prejudicial to the safety and soundness of PRA-authorised
30persons, or

(c) in a case where section 2C applies, prejudicial to securing the
appropriate degree of protection for policyholders.”

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

(8) In subsection (7A), for “the Authority” substitute “a regulator”.

31 (1) 35Section 392 (application of sections 393 and 394) is amended as follows.

(2) In paragraph (a)—

(a) for “54(1)” substitute “55Z(1)”, and

(b) after “131H(1),” insert “192L(1),”.

(3) In paragraph (b)—

(a) 40for “54(2)” substitute “55Z(2)”, and

(b) after “131H(4),” insert “192L(4),”.

32 (1) Section 393 (third party rights) is amended as follows.

(2) In subsections (1)(b) and (2), for “Authority” substitute “regulator giving the
notice”.

(3) In subsection (3)—

(a) for “28 days” substitute “14 days”, and

(b) 5 for “the Authority” substitute “the regulator giving the notice”.

(4) In subsections (4)(b), (6), (7), (9)(b) and (11)(b), for “the Authority” substitute
“the regulator giving the notice”.

(5) In subsection (12), for “which the Authority must disclose” substitute “to
which access must be given”.

33 (1) 10Section 394 (access to Authority material) is amended as follows.

(2) In subsection (1)—

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

(b) in paragraph (b), for “, in the opinion of the Authority,” substitute
15“, in the regulator’s opinion,”.

(3) In subsection (2), for “the Authority”, in both places, substitute “the
regulator giving the notice”.

(4) In subsection (3), for “The Authority” substitute “The regulator giving the
notice”.

(5) 20In subsection (4)—

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

(b) for “the Authority’s” substitute “the regulator’s”.

(6) In subsection (5), for “the Authority” substitute “the regulator giving the
notice”.

(7) 25In subsection (6)—

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

(b) in paragraph (b), for “the Authority in connection with the matter to
which the notice to which this section applies” substitute “the
30regulator giving the notice in connection with the matter to which
that notice”.

(8) In the heading, for “Authority” substitute “FCA or PRA”.

34 (1) Section 395 (the Authority’s procedures) is amended as follows.

(2) For subsection (1) substitute—

“(1) 35Each regulator must determine the procedure that it proposes to
follow in relation to the following—

(a) a decision which gives rise to an obligation to give a
supervisory notice,

(b) in the case of the FCA, a decision which—

(i) 40gives rise to an obligation for it to give a warning
notice or decision notice, or

(ii) gives rise to an obligation for the PRA to include a
statement under section 387(1A) in a warning notice

or a statement under section 388(1A) in a decision
notice,

(c) in the case of the PRA, a decision which gives rise to an
obligation for it to give a warning notice or decision notice,
5other than a decision which depends entirely on a decision of
the FCA of the kind mentioned in paragraph (b)(ii).”

(3) In subsection (2)—

(a) omit the words from “which gives” to “such notice”, and

(b) at the end insert “, or by 2 or more persons who include a person not
10directly involved in establishing that evidence”.

(4) In subsection (3), for the words from “taken” to the end substitute “taken
otherwise as mentioned in subsection (2) if the person taking the decision is
of a level of seniority laid down by the procedure and—

“(a) in the case of procedure proposed by the FCA, the FCA
15considers that, in the particular case, it is necessary in order
to advance one or more of its operational objectives, or

(b) in the case of procedure proposed by the PRA, the PRA
considers that, in the particular case, it is necessary in order
to advance any of its objectives.”

(5) 20In subsection (5)—

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

(b) for “the procedure” substitute “its procedure”.

(6) In subsection (6)—

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

(b) 25for “it” substitute “the statement”.

(7) In subsection (7), for “The Authority” substitute “The regulator issuing the
statement”.

(8) In subsection (8)—

(a) for “The Authority” substitute “The regulator issuing a statement
30under this section”, and

(b) for “any statement which it issues under this section” substitute “the
statement”.

(9) In subsection (9)—

(a) for “giving” substitute “a regulator gives”,

(b) 35after “decision notice,” insert “other than a warning notice or
decision notice relating to a decision of the PRA that is required by a
a decision of the FCA of the kind mentioned in subsection (1)(b)(ii)”,
and

(c) for “the Authority” substitute “the regulator”.

(10) 40After subsection (9) insert—

“(9A) When the FCA takes a decision falling within subsection (1)(b)(ii), it
must follow its stated procedure.”

(11) In subsection (10)—

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

(b) 45for “the procedure” substitute “its procedure”.

(12) In subsection (11), for “The Authority’s” substitute “A regulator’s”.

(13) In subsection (13), for paragraph (a) substitute—

“(a) 55Y(4), (7) or (8)(b);”.

(14) In the heading, for “Authority’s” substitute “FCA’s and PRA’s”.

(15) 5In the italic heading before that section, for “Authority’s” substitute “FCA’s
and PRA’s”.

35 (1) Section 396 (statements under s.395: consultation) is amended as follows.

(2) In subsection (1)—

(a) after “a statement of” insert “its”,

(b) 10for “the Authority”, in the first place, substitute “the regulator”,

(c) for “the Authority”, in the second place, substitute “it”, and

(d) for “it” substitute “the draft”.

(3) In subsection (2), for “Authority” substitute “regulator publishing the draft”.

(4) In subsection (3), for “Before issuing the proposed statement of procedure,
15the Authority” substitute “Before a regulator issues the proposed statement
of its procedure, it”.

(5) In subsection (4), for “Authority issues the proposed statement of
procedure” substitute “regulator issues the proposed statement of its
procedure,”.

(6) 20In subsection (5)—

(a) for “statement of procedure differs from the draft published”
substitute “statement of the regulator’s procedure differs from the
draft published by it”,

(b) for “, in the opinion of the Authority,” substitute “, in its opinion,”,
25and

(c) for “the Authority must” substitute “it must”.

(7) In subsection (6)—

(a) for “The Authority” substitute “The regulator publishing a draft
under subsection (1)”, and

(b) 30for “a draft published under subsection (1)” substitute “the draft”.

Part 7 Offences

36 (1) Section 398 (misleading the Authority: residual cases) is amended as
follows.

(2) 35In subsection (1), for “the Authority” substitute “a regulator”.

(3) In the heading, for “the Authority” substitute “FCA or PRA”.

37 In section 400 (offences by a body corporate etc) after subsection (6) insert—

“(6A) References in this section to an offence under this Act include a
reference to an offence under Part 7 of the Financial Services Act 2012
40(offences relating to financial services).”

38 (1) Section 401 (proceedings for offences) is amended as follows.

(2) For subsection (1) substitute—

“(1) In this section “offence” means—

(a) an offence under this Act,

(b) 5an offence under subordinate legislation made under this
Act, or

(c) an offence under Part 7 of the Financial Services Act 2012
(offences relating to financial services).”

(3) In subsections (2)(a) and (3)(a), for “Authority” substitute “appropriate
10regulator”.

(4) After subsection (3) insert—

“(3A) For the purposes of subsections (2)(a) and (3)(a), the PRA is the
“appropriate regulator” in respect of each of the following offences—

(a) an offence under section 55P(10) where the contravention is
15of a requirement imposed by the PRA;

(b) an offence under section 56(4) where the prohibition order is
made by the PRA;

(c) an offence under section 177(3) where the investigation is
being, or is likely to be, conducted on behalf of the PRA;

(d) 20an offence under section 177(4) where the requirement is
imposed by the PRA;

(e) an offence under section 177(6) where the warrant is issued as
a result of information on oath given by the PRA or a person
appointed by the PRA to conduct an investigation on its
25behalf;

(f) an offence under section 191F(1) where the notice should
have been given to the PRA;

(g) an offence under any of section 191F(2) to (7) where the
notice, approval or information was given to or by the PRA;

(h) 30an offence under section 366(3), unless the activity of
effecting or carrying out long-term contracts of insurance is
not to any extent a PRA-regulated activity;

(i) an offence under section 398(1) where the information was
given to the PRA.

(3B) 35For the purposes of subsections (2)(a) and (3)(a), the FCA is the
“appropriate regulator” in respect of any other offence.”

(5) In subsection (5), for “Authority” substitute “appropriate regulator”.

39 (1) Section 402 (power of the Authority to institute proceedings for certain other
offences) is amended as follows.

(2) 40In subsections (1) and (2), for “Authority” substitute “FCA”.

(3) In the heading, for “the Authority” substitute “FCA”.

40 In section 403 (jurisdiction and procedure in respect of offences), in
subsection (7), at the end insert “or an offence under Part 7 of the Financial
Services Act 2012 (offences relating to financial services).