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(5) The third condition is that the PRA is of the opinion that the giving of
the direction is desirable in order to advance the PRA’s general
objective or its insurance objective.

(6) A direction under this section is a direction requiring the FCA not to
5exercise the power or not to exercise it in a specified manner.

(7) The direction may be expressed to have effect during a specified period
or until revoked.

(8) The FCA is not required to comply with a direction under this section
if or to the extent that in the opinion of the FCA compliance would be
10incompatible with any EU obligation or any other international
obligation of the United Kingdom.

(9) Subsections (1) to (8) apply only if the effecting or carrying out of with-
profits policies is a PRA-regulated activity.

(10) In this section “with-profits insurer” and “with-profits policy” have the
15same meaning as they have for the purposes of section 3F.

3K Revocation of directions under section 3I or 3J

(1) The PRA may at any time by notice to the FCA revoke a direction under
section 3I or 3J.

(2) The revocation of a direction under section 3I or 3J does not affect the
20validity of anything previously done in accordance with it.

3L Further provisions about directions under section 3I or 3J

(1) Before giving a direction under section 3I or 3J, the PRA must consult
the FCA.

(2) A direction under section 3I or 3J must be given or confirmed in
25writing, and must be accompanied by a statement of the reasons for
giving it.

(3) A notice revoking a direction under section 3I or 3J must be given or
confirmed in writing.

(4) The PRA must—

(a) 30publish the direction and statement, or the notice, in such
manner as it thinks fit, and

(b) where the direction or notice relates to a particular authorised
person or a particular with-profits insurer, give a copy of the
direction and statement, or the notice, to that person.

(5) 35The PRA must give the Treasury a copy of—

(a) a direction under section 3I;

(b) a statement relating to such a direction;

(c) a notice revoking such a direction.

(6) The Treasury must lay before Parliament any document received by
40them under subsection (5).

(7) Subsection (4) does not apply where the PRA, after consulting the
Treasury, decides that compliance with that subsection would be
against the public interest, and at any time when this subsection

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excludes the application of subsection (4) in relation to a direction
under section 3I, subsection (6) also does not apply.

(8) Where the PRA decides that compliance with subsection (4) would be
against the public interest, it must from time to time review that
5decision and if it subsequently decides that compliance is no longer
against the public interest it must—

(a) comply with that subsection, and

(b) in the case of a direction under section 3I, notify the Treasury for
the purposes of subsection (6).

10Directions relating to consolidated supervision
3M Directions relating to consolidated supervision of groups

(1) This section applies where one of the regulators (“the supervising
regulator”), but not the other, is the competent authority for the
purpose of consolidated supervision that is required in relation to some
15or all of the members of a group (“the relevant group”) in pursuance of
any of the relevant directives.

(2) “Consolidated supervision” includes supplementary supervision.

(3) The “relevant directives” are—

(a) the banking consolidation directive;

(b) 20Directive 2002/87/EC of the European Parliament and of the
Council on the supplementary supervision of credit
institutions, insurance undertakings and investment firms in a
financial conglomerate;

(c) Directive 2006/49/EC on the capital adequacy of investment
25firms and credit institutions;

(d) Directive 2009/138/EC of the European Parliament and the
Council of 25 November 2009 on the taking-up and pursuit of
the business of Insurance and Reinsurance (Solvency II).

(4) The supervising regulator may, if it considers it necessary to do so for
30the effective consolidated supervision of the relevant group, give the
other regulator a direction under this section.

(5) A direction under this section is a direction requiring the other
regulator to exercise, or not to exercise, a relevant function in a
specified manner in relation to authorised persons who are members of
35the relevant group.

(6) The direction may relate to members of the relevant group other than
the members in respect of which consolidated supervision is required.

(7) A “relevant function”, in relation to either regulator, is a function
conferred by or under this Act which relates to the regulation of
40authorised persons, but does not include—

(a) the regulator’s function of making rules under this Act;

(b) its function of preparing and issuing codes under this Act;

(c) its function of determining the general policy and principles by
reference to which it performs particular functions;

(d) 45the FCA’s functions in relation to the giving of general
guidance;

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(e) the PRA’s functions in relation to the giving of guidance under
section 2I;

(f) the FCA’s functions in relation to consent for the purposes of
section 55F or 55I.

(8) 5The direction may not require the regulator to which it is given (“the
directed regulator”) to do anything that it has no power to do, but the
direction is relevant to the exercise of any discretion conferred on the
directed regulator.

(9) The directed regulator must comply with the direction as soon as
10practicable, but this is subject to subsections (10) and (11).

(10) The directed regulator is not required to comply with a direction under
this section if or to the extent that in its opinion compliance would be
incompatible with any EU obligation or any other international
obligation of the United Kingdom.

(11) 15Directions given by the FCA under this section are subject to any
directions given to the FCA under section 3I or 3J.

3N Revocation of directions under section 3M

(1) The supervising regulator may at any time by notice to the other
regulator revoke a direction under section 3M.

(2) 20The revocation of the direction does not affect the validity of anything
previously done in accordance with it.

(3) Expressions defined for the purposes of section 3M have the same
meaning in this section.

3O Further provisions about directions under section 3M

(1) 25Before giving a direction under section 3M, the supervising regulator
must consult the other regulator.

(2) A direction under section 3M must be given or confirmed in writing,
and must be accompanied by a statement of the reasons for giving it.

(3) A notice revoking a direction under section 3M must be given or
30confirmed in writing.

(4) The regulator to which a direction under section 3M is given must give
a copy of the direction and statement to each of the authorised persons
to whom the direction relates.

(5) The supervising regulator must publish the direction and statement, or
35the notice, in such manner as it thinks fit.

(6) But subsection (4) or (5) does not apply in a case where the regulator on
which the duty is imposed considers that compliance with that
subsection would be against the public interest.

(7) In a case where a regulator decides that compliance with subsection (4)
40or (5) would be against the public interest, the regulator must from time
to time review that decision and if it subsequently decides that
compliance is no longer against the public interest it must comply with
the subsection.

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(8) Expressions defined for the purposes of section 3M have the same
meaning in this section.

3P Consultation by regulator complying with direction

(1) If the directed regulator is required by this Act to consult any person
5other than the supervising regulator before exercising the relevant
function to which the direction relates, the directed regulator must give
the supervising regulator copies of any written representations
received from the persons consulted.

(2) Expressions defined for the purposes of section 3M have the same
10meaning in this section.

Co-operation with Bank of England
3Q Co-operation by FCA and PRA with Bank of England

(1) Each regulator must take such steps as it considers appropriate to co-
operate with the Bank of England in connection with—

(a) 15the pursuit by the Bank of its Financial Stability Objective, and

(b) the Bank’s compliance with its duties under sections 58 and 59
of the Financial Services Act 2012 (duty to notify Treasury of
possible need for public funds and of subsequent changes).

(2) Co-operation under subsection (1) may include the sharing of
20information that the regulator is not prevented from disclosing.

Arrangements for provision of services
3R Arrangements for provision of services

(1) The regulators may enter into arrangements with each other for the
provision of services by one of them to the other.

(2) 25Either regulator may enter into arrangements with the Bank of England
for the provision of services—

(a) by the Bank to the regulator, or

(b) by the regulator to the Bank.

(3) Either regulator may enter into arrangements with any of the bodies
30specified in subsection (4) for the provision of services by the regulator
to that body.

(4) Those bodies are—

(a) the consumer financial education body (see section 3S(2)),

(b) the scheme manager (see section 212(1)), and

(c) 35the scheme operator (see section 225(2)).

(5) The FCA may enter into arrangements with—

(a) a local weights and measures authority in England, Wales or
Scotland, or

(b) the Department of Enterprise, Trade and Investment in
40Northern Ireland,

for the provision by the authority or department to the FCA of services
which relate to activities to which this subsection applies.

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(6) Subsection (5) applies to activities that are regulated activities by virtue
of—

(a) an order made under section 22(1) in relation to an investment
of a kind falling within paragraph 23 or 23B of Schedule 2, or

(b) 5an order made under section 22(1A).

(7) Arrangements under this section are to be on such terms as may be
agreed by the parties.

Enhancing public understanding of financial matters etc.
3S The consumer financial education body

(1) 10The consumer financial education body continues to have the
consumer financial education function.

(2) The “consumer financial education body” means the body corporate
originally established by the Financial Services Authority under section
6A of this Act (as it had effect before the passing of the Financial
15Services Act 2012).

(3) The consumer financial education function is to enhance—

(a) the understanding and knowledge of members of the public of
financial matters (including the UK financial system), and

(b) the ability of members of the public to manage their own
20financial affairs.

(4) The consumer financial education function includes, in particular—

(a) promoting awareness of the benefits of financial planning;

(b) promoting awareness of the financial advantages and
disadvantages in relation to particular decisions relating to
25different kinds of goods or services;

(c) promoting awareness of the benefits and risks associated with
different kinds of financial dealing (which includes informing
the FCA and other bodies of those benefits and risks);

(d) the publication of educational materials or the carrying out of
30other educational activities;

(e) the provision of information and advice to members of the
public;

(f) assisting members of the public with the management of debt;

(g) working with other organisations which provide debt services,
35with a view to improving—

(i) the availability to the public of those services;

(ii) the quality of the services provided;

(iii) consistency in the services available, in the way in which
they are provided and in the advice given.

(5) 40In subsection (4) “debt services” means debt advice or assistance with
the management of debt.

(6) Schedule 1A makes further provision about the consumer financial
education body.

(2) For Schedule 1 to FSMA 2000 substitute the Schedules 1ZA and 1ZB set out in
45Schedule 3 to this Act.

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Regulated activities

7 Extension of scope of regulation

(1) In section 22 of FSMA 2000 (the classes of activity and categories of
investment)—

(a) 5after subsection (1) insert—

(1A) An activity is also a regulated activity for the purposes of this
Act if it is an activity of a specified kind which is carried on by
way of business and relates to—

(a) information about a person’s financial standing, or

(b) 10the setting of a specified benchmark.,

(b) in subsection (3), after “(1)” insert “or (1A)”,

(c) after subsection (5) insert—

(6) Benchmark” means an index, rate or price that—

(a) is determined from time to time by reference to the state
15of the market,

(b) is made available to the public (whether free of charge or
on payment), and

(c) is used for reference for purposes that include one or
more of the following—

(i) 20determining the interest payable, or other sums
due, under loan agreements or under other
contracts relating to investments;

(ii) determining the price at which investments may
be bought or sold or the value of investments;

(iii) 25measuring the performance of investments.”,
and

(d) for the heading substitute “Regulated activities”.

(2) Schedule 2 to FSMA 2000 (regulated activities) is amended as follows.

(3) For paragraph 23 (and the italic heading before it) substitute—

30Loans and other forms of credit

23 (1) Rights under any contract under which one person provides another
with credit.

(2) “Credit” includes any cash loan or other financial accommodation.

(3) “Cash” includes money in any form.

(4) 35It is immaterial for the purposes of sub-paragraph (1) whether or not
the obligation of the borrower is secured on property of any kind.

(4) After paragraph 23A insert—

Contracts for hire of goods

23B (1) Rights under a contract for the bailment or (in Scotland) hiring of
40goods to a person other than a body corporate.

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(2) “Goods” has the meaning given in section 61(1) of the Sale of Goods
Act 1979.

(3) It is immaterial for the purposes of sub-paragraph (1) whether the
rights of the person to whom the goods are bailed or hired have been
5assigned to a body corporate.

(5) After paragraph 24 insert—

Part 2A Regulated activities relating to information about persons’ financial
standing
24A 10General

The matters with respect to which provision may be made under
section 22(1A)(a) include, in particular, those described in general
terms in this Part of this Schedule.

24B Providing credit reference services

15Furnishing persons with information that—

(a) is relevant to the financial standing of persons other than
bodies corporate, and

(b) is collected for that purpose by the person furnishing it.

24C Providing credit information services

(1) 20Taking steps on behalf of a person other than a body corporate in
connection with information relevant to that person’s financial
standing that is or may be held by a regulated person.

(2) “Regulated person” means—

(a) a person who is carrying on a regulated activity, or

(b) 25a person who is carrying on a business in respect of which a
licence under section 21 of the Consumer Credit Act 1974 is
required.

Giving advice to a person other than a body corporate in relation to
the taking of any steps of the kind mentioned in paragraph 24C(1).

30Part 2B Regulated activities relating to the setting of benchmarks
24E General

The matters with respect to which provisions may be made under
section 22(1A)(b) include, in particular, those described in general
35terms in this Part of this Schedule.

24F Providing information

Providing any information or expression of opinion that—

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(a) is required by another person in connection with the
determination of a benchmark, and

(b) is provided to that person for that purpose.

24G Administration

(1) 5Administering the arrangements for determining a benchmark.

(2) Collecting, analysing or processing information or expressions of
opinion for the purpose of the determination of a benchmark.

24H Determining or publishing benchmark or publishing connected information

(1) Determining a benchmark.

(2) 10Publishing a benchmark or information connected with a
benchmark.

8 Orders under section 22 of FSMA 2000

(1) Schedule 2 to FSMA 2000 (regulated activities) is amended as follows.

(2) In paragraph 25(1)—

(a) 15after “22(1)” insert “or (1A)”, and

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

(3) For paragraph 26 substitute—

Parliamentary control

26 (1) This paragraph applies to any order made under section 22(1) or (1A)
20which contains a statement by the Treasury that, in their opinion, the
effect (or one of the effects) of the proposed order would be that an
activity which is not a regulated activity would become a regulated
activity.

(2) No order to which this paragraph applies may be made unless—

(a) 25a draft of the order has been laid before Parliament and
approved by a resolution of each House, or

(b) sub-paragraph (4) applies.

(3) Sub-paragraph (4) applies if an order to which this paragraph
applies also contains a statement that the Treasury are of the opinion
30that, by reason of urgency, it is necessary to make the order without
a draft being so laid and approved.

(4) Where this sub-paragraph applies the order—

(a) must be laid before Parliament after being made, and

(b) ceases to have effect at the end of the relevant period unless
35before the end of that period the order is approved by a
resolution of each House of Parliament (but without that
affecting anything done under the order or the power to
make a new order).

(5) The “relevant period” is a period of 28 days beginning with the day
40on which the order is made.

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(6) In calculating the relevant period no account is to be taken of any
time during which Parliament is dissolved or prorogued or during
which both Houses are adjourned for more than 4 days.

9 Designation of activities requiring prudential regulation by PRA

5After section 22 of FSMA 2000 insert—

22A Designation of activities requiring prudential regulation by PRA

(1) The Treasury may by order specify the regulated activities that are
“PRA-regulated activities” for the purposes of this Act.

(2) An order under subsection (1) may—

(a) 10provide for exceptions;

(b) confer powers on the Treasury or either regulator;

(c) authorise the making of rules or other instruments by either
regulator for purposes of, or connected with, any relevant
provision;

(d) 15make provision in respect of any information or document
which in the opinion of the Treasury or either regulator is
relevant for purposes of, or connected with, any relevant
provision;

(e) make such consequential, transitional, or supplemental
20provision as the Treasury considers appropriate for purposes
of, or connected with, any relevant provision.

(3) Provision made as a result of subsection (2)(e) may amend any primary
or subordinate legislation, including any provision of, or made under,
this Act.

(4) 25“Relevant provision” means this section or any provision made under
this section.

22B Parliamentary control in relation to certain orders under section 22A

(1) This section applies to the first order made under section 22A(1).

(2) This section also applies to any subsequent order made under section
3022A(1) which—

(a) contains a statement by the Treasury that, in their opinion, the
effect (or one of the effects) of the proposed order would be—

(i) that an activity would become a PRA-regulated activity,
or

(ii) 35that a PRA-regulated activity would become a regulated
activity that is not a PRA-regulated activity, or

(b) amends primary legislation.

(3) No order to which this section applies may be made unless—

(a) a draft of the order has been laid before Parliament and
40approved by a resolution of each House, or

(b) subsection (5) applies.

(4) Subsection (5) applies if an order to which this section applies contains
a statement that the Treasury are of the opinion that, by reason of

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urgency, it is necessary to make the order without a draft being so laid
and approved.

(5) Where this subsection applies the order—

(a) must be laid before Parliament after being made, and

(b) 5ceases to have effect at the end of the relevant period unless
before the end of that period the order is approved by a
resolution of each House of Parliament (but without that
affecting anything done under the order or the power to make
a new order).

(6) 10The “relevant period” is a period of 28 days beginning with the day on
which the order is made.

(7) In calculating the relevant period no account is to be taken of any time
during which Parliament is dissolved or prorogued or during which
both Houses are adjourned for more than 4 days.

15Appointed representatives

10 Appointed representatives

(1) Section 39 of FSMA 2000 (appointed representatives) is amended as follows.

(2) After subsection (1B) insert—

(1C) Subsection (1D) applies where an authorised person (“A”)—

(a) 20has permission under Part 4A, or permission resulting from any
other provision of this Act, only in relation to one or more
qualifying activities,

(b) is a party to a contract with another authorised person (A’s
“principal”) which—

(i) 25permits or requires A to carry on business of a
prescribed description (“the relevant business”), and

(ii) complies with such requirements as may be prescribed,
and

(c) is someone for whose activities in carrying on the whole or part
30of the relevant business A’s principal has accepted
responsibility in writing.

(1D) Sections 20(1) and (1A) and 23(1A) do not apply in relation to the
carrying on by A of a relevant additional activity.

(1E) In subsections (1C) and (1D)—

(a) 35“qualifying activity” means a regulated activity which is of a
prescribed kind and relates—

(i) to rights under a contract of the kind mentioned in
paragraph 23 of Schedule 2, other than one under which
the obligation of the borrower to repay is secured on
40land, or

(ii) to rights under a contract of the kind mentioned in
paragraph 23B of that Schedule;

(b) “relevant additional activity” means a regulated activity
which—

(i) 45is not one to which A’s permission relates, and

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