Financial Services (Banking Reform) Bill

Amendment
to be moved
in committee

[Supplementary to the Revised Marshalled List]

Before Schedule 2

LORD DEIGHTON

[In substitution for Amendment 109 with revised wording]

109

Insert the following new Schedule—

“SCHEDULE

FUNCTIONS OF FCA UNDER COMPETITION LEGISLATION

PART 1

AMENDMENTS OF FINANCIAL SERVICES AND MARKETS ACT 2000

1 Part 16A of FSMA 2000 (consumer protection and competition) is
amended as follows.

2 Omit section 234H (power of FCA to make request to Office of Fair
Trading).

3 After section 234H insert—

“234I          Matters in relation to which the FCA has competition functions

(1)   In sections 234J and 234K “financial sector activities” means the
provision of financial services.

(2)   The Treasury may by order amend this section.

234J          The FCA’s functions under Part 4 of the Enterprise Act 2002

(1)   The functions to which this subsection applies (“the concurrent
functions”) are to be concurrent functions of the FCA and the
Competition and Markets Authority (referred to in this Part as
“the CMA”).

(2)   Subsection (1) applies to the functions of the CMA under Part 4
of the Enterprise Act 2002 (market investigations), so far as those
functions—

(a)   are exercisable by the CMA Board (within the meaning of
Schedule 4 to the Enterprise and Regulatory Reform Act
2013), and

(b)   relate to financial sector activities.

(3)   But subsection (1) does not apply to functions under the
following sections of the Enterprise Act 2002—

(none)   section 166 (duty to maintain register of undertakings
and orders);

(none)   section 171 (duty to publish guidance).

(4)   So far as is necessary for the purposes of, or in connection with,
subsections (1) and (2)—

(a)   references in Part 4 of the Enterprise Act 2002 to the CMA
(including references in provisions of that Act applied by
that Part) are to be read as including references to the
FCA, and

(b)   references in that Part to section 5 of that Act are to be
read as including references to section 234N of this Act.

(5)   But subsection (4) does not apply—

(a)   in relation to section 166 or 171 of that Act, or

(b)   where the context otherwise requires.

(6)   Section 130A of the Enterprise Act 2002 has effect in relation to
the FCA by virtue of subsections (1) and (2) as if—

(a)   in subsection (2)(a) of that section, the reference to the
acquisition or supply of goods or services of one or more
than one description in the United Kingdom were a
reference to financial sector activities involving services
provided or received in the United Kingdom, and

(b)   in subsection (2)(b) of that section, the reference to the
extent to which steps can and should be taken were a
reference to the extent to which steps that might include
steps under Part 4 of that Act can and should be taken.

(7)   Before the CMA or the FCA first exercises any of the concurrent
functions in relation to any matter, it must consult the other.

(8)   Neither the CMA nor the FCA may exercise any of the concurrent
functions in relation to any matter if any of those functions have
been exercised in relation to that matter by the other.

234K          The FCA’s functions under the Competition Act 1998

(1)   The functions to which this subsection applies (“the concurrent
functions”) are to be concurrent functions of the FCA and the
CMA.

(2)   Subsection (1) applies to the functions of the CMA under the
provisions of Part 1 of the Competition Act 1998, so far as relating
to any of the following that relate to financial sector activities—

(a)   agreements, decisions or concerted practices of the kind
mentioned in section 2(1) of that Act,

(b)   conduct of the kind mentioned in section 18(1) of that Act,

(c)   agreements, decisions or concerted practices of the kind
mentioned in Article 101(1) of the Treaty on the
Functioning of the European Union, and

(d)   conduct which amounts to abuse of the kind mentioned
in Article 102 of the Treaty on the Functioning of the
European Union.

(3)   But subsection (1) does not apply to functions under the
following provisions of that Act—

(none)   section 31D(1) to (6) (duty to publish guidance);

(none)   section 38(1) to (6) (duty to publish guidance about
penalties);

(none)   section 40B(1) to (4) (duty to publish statement of policy
on penalties);

(none)   section 51 (rules).

(4)   So far as necessary for the purposes of, or in connection with, the
provisions of subsections (1) and (2), references to the CMA in
Part 1 of the Competition Act 1998 are to be read as including
references to the FCA.

(5)   But subsection (4) does not apply—

(a)   in relation to sections 31D(1) to (6), 38(1) to (6), 40B(1) to
(4), 51, 52(6) and (8) and 54 of that Act, or

(b)   where the context otherwise requires.

234L          Duty to consider exercise of powers under Competition Act 1998

(1)   Before exercising a power listed in subsection (3), the FCA must
consider whether it would be more appropriate to proceed under
the Competition Act 1998.

(2)   The FCA must not exercise such a power if it considers that it
would be more appropriate to proceed under the Competition
Act 1998.

(3)   Those powers are—

(a)   the power under section 55J(2) to vary or cancel a Part 4A
permission;

(b)   the power under section 55L to impose a requirement on
an authorised person with a Part 4A permission, or to
vary a requirement imposed under that section;

(c)   the power to take action under section 88E;

(d)   the power to take action under section 89U;

(e)   the power to give a direction under section 192C;

(f)   the power to impose a requirement under section 196.

234M           Provision of information and assistance to a CMA group

(1)   For the purpose of assisting a CMA group in carrying out a
relevant investigation, the FCA must give the CMA group—

(a)   any relevant information which the FCA has in its
possession, and

(b)   any other assistance which the CMA group may
reasonably require in relation to any matters falling
within the scope of the investigation.

(2)   A “relevant investigation” is an investigation carried out on a
reference made by the FCA under section 131 of the Enterprise
Act 2002 by virtue of section 234J.

(3)   “Relevant information”, in relation to a relevant investigation, is
information—

(a)   which relates to matters falling within the scope of the
investigation, and

(b)   which—

(i)   is requested by the CMA group for the purpose of
the investigation, or

(ii)   in the FCA’s opinion, it would be appropriate to
give to the CMA group for that purpose.

(4)   A CMA group, in carrying out a relevant investigation, must take
into account any information given to it under this section.

(5)   In this section “CMA group” has the same meaning as in
Schedule 4 to the Enterprise and Regulatory Reform Act 2013.

234N          Information relating to FCA’s competition functions

(1)   For the purpose of the functions conferred on it by sections 234J
to 234M the FCA is to have the function of keeping under review
the market for financial services.

(2)   The function conferred by subsection (1) is to be carried out with
a view to (among other things) ensuring that the FCA has
sufficient information to take informed decisions and to carry out
its other functions effectively.

234O          Exclusion of general duties

(1)   Section 1B (the FCA’s general duties) does not apply in relation
to anything done by the FCA in the carrying out of its functions
by virtue of sections 234J to 234M.

(2)   But in the carrying out of any functions by virtue of sections 234J
to 234M, the FCA may have regard to any of the matters in
respect of which a duty is imposed by section 1B if it is a matter
to which the CMA is entitled to have regard in the carrying out
of those functions.

234P          Supplementary provision

(1)   If any question arises as to whether, by virtue of sections 234J and
234K, any functions fall to be, or are capable of being, carried out
by the FCA in relation to any particular case, that question is to
be referred to, and determined by, the Treasury.

(2)   No objection is to be taken to anything done under the
Competition Act 1998 or Part 4 of the Enterprise Act 2002 by or
in relation to the FCA on the ground that it should have been
done by or in relation to the CMA.”

4 In section 3I of FSMA 2000 (power of PRA to require FCA to refrain from
specified action), in subsection (3)(a), after “55I” insert “, a power
conferred on it by sections 234J to 234N”.

5 In section 354A of FSMA 2000 (FCA’s duty to co-operate with others),
after subsection (2) insert—

“(2A)    Subsection (1) does not apply in relation to the Competition and
Markets Authority in a case where the FCA has made a reference
under section 131 of the Enterprise Act 2002 as a result of section
234J (but see section 234M).”

6    (1)   Schedule 1ZA to FSMA 2000 (the Financial Conduct Authority) is
amended as follows.

(2)   In paragraph 8 (arrangements for discharging functions), after sub-
paragraph (4) insert—

“(5)   In respect of the exercise of a function under Part 1 of the
Competition Act 1998, the power in sub-paragraph (1) is
subject to provision in rules made under section 51 of that Act
by virtue of paragraph 1A of Schedule 9 to that Act.”

(3)   In paragraph 23 (fees), after sub-paragraph (2) insert—

“(2A)   The functions referred to in sub-paragraph (1)(a) include
functions of the FCA under the Competition Act 1998 or the
Enterprise Act 2002 as a result of Part 16A of this Act.”

PART 2

AMENDMENTS OF OTHER LEGISLATION

Company Directors Disqualification Act 1986

7 In section 9E of the Company Directors Disqualification Act 1986
(interpretation of sections 9A to 9D), in subsection (2), after paragraph
(g) insert—

“(h)   the Financial Conduct Authority.”

Competition Act 1998

8 In section 54 of the Competition Act 1998 (regulators), in subsection (1),
after paragraph (i) insert—

“(j)   the Financial Conduct Authority.”

Enterprise Act 2002

9    (1)   Section 136 of the Enterprise Act 2002 (investigations and reports on
market investigation references) is amended as follows.

(2)   In subsection (7), after paragraph (e) insert—

“(ea)   in relation to the Financial Conduct Authority, section
234J of the Financial Services and Markets Act 2000;”.

(3)   In subsection (8), after “the Office of Rail Regulation,” insert “the
Financial Conduct Authority,”.

Enterprise and Regulatory Reform Act 2013

10 In section 52(4) of the Enterprise and Regulatory Reform Act 2013
(power to remove concurrent competition functions of sectoral
regulators), after paragraph (g) insert—

“(h)   the Financial Conduct Authority.”

11 In Schedule 4 to the Enterprise and Regulatory Reform Act 2013 (the
Competition and Markets Authority), in paragraph 16 (concurrency
report), at the end of sub-paragraph (7) insert—

“(i)   the Financial Conduct Authority.””

Prepared 9th October 2013