Financial Services (Banking Reform) Bill

House of Lords

Session 2013 - 14
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Financial Services (Banking Reform) Bill

Financial Services (Banking Reform) Bill
Schedule 5 — Procedure for appeals to the CMA
141

(a)
inform the parties to the appeal of the time limit for determining the
appeal, and
(b)
publish that time limit in such manner as it considers appropriate for
the purpose of bringing it to the attention of any other persons likely
to be affected by the determination.
5
      (4)
In this paragraph the “permission date” is the date on which the CMA gave
permission to bring the appeal in accordance with section 66(8).
Matters to be considered on appeal
8     (1)
The CMA, if it thinks it necessary to do so for the purpose of securing the
determination of an appeal within the period provided for by paragraph 7,
10
may disregard—
(a)
any or all matters raised by an appellant that were not raised by that
appellant at the time of the relevant application, and
(b)
any or all matters raised by the Payment Systems Regulator that
were not contained in representations or observations made for the
15
purposes of the appeal in accordance with paragraph 5.
      (2)
In this paragraph “relevant application” means an application under
paragraph 3 or 4.
Production of documents etc
9     (1)
For the purposes of this Schedule, the CMA may by notice—
20
(a)
require a person to produce to the CMA the documents specified or
otherwise identified in the notice;
(b)
require any person who carries on a business to supply to the CMA
such estimates, forecasts, returns or other information as may be
specified or described in the notice in relation to that business.
25
      (2)
The power to require the production of a document, or the supply of any
estimate, forecast, return or other information, is a power to require its
production or, as the case may be, supply—
(a)
at the time and place specified in the notice, and
(b)
in a legible form.
30
      (3)
No person is to be compelled under this paragraph to produce a document
or supply an estimate, forecast, return or other information which the person
could not be compelled to produce in civil proceedings in the High Court or
Court of Session.
      (4)
An authorised member of the CMA may, for the purpose of the exercise of
35
the functions of the CMA, make arrangements for copies to be taken of a
document produced or an estimate, forecast, return or other information
supplied to it under this paragraph.
      (5)
A notice for the purposes of this paragraph—
(a)
may be issued on the CMA’s behalf by an authorised member of the
40
CMA;
(b)
must include information about the possible consequences of not
complying with the notice (as set out in paragraph 13).

Financial Services (Banking Reform) Bill
Schedule 5 — Procedure for appeals to the CMA
142

Oral hearings
10    (1)
For the purposes of this Schedule an oral hearing may be held, and evidence
may be taken on oath—
(a)
by a person considering an application for permission to bring an
appeal under paragraph 3,
5
(b)
by a person considering an application for a direction under
paragraph 4, or
(c)
by a group with the function of determining an appeal;

and, for that purpose, such a person or group may administer oaths.
      (2)
The CMA may by notice require a person—
10
(a)
to attend at a time and place specified in the notice, and
(b)
at that time and place, to give evidence to a person or group
mentioned in sub-paragraph (1).
      (3)
At any oral hearing the person or group conducting the hearing may—
(a)
require the appellant or the Payment Systems Regulator, if present at
15
the hearing, to give evidence or to make representations or
observations, or
(b)
require a person attending the hearing as a representative of the
appellant or of the Payment Systems Regulator to make
representations or observations.
20
      (4)
A person who gives oral evidence at the hearing may be cross-examined by
or on behalf of any party to the appeal.
      (5)
If the appellant, the Payment Systems Regulator, or the appellant’s or
Payment Systems Regulator’s representative is not present at a hearing—
(a)
there is no requirement to give notice to that person under sub-
25
paragraph (2), and
(b)
the person or group conducting the hearing may determine the
application or appeal without hearing that person’s evidence,
representations or observations.
      (6)
No person is to be compelled under this paragraph to give evidence which
30
the person could not be compelled to give in civil proceedings in the High
Court or Court of Session.
      (7)
Where a person is required under this paragraph to attend at a place more
than 10 miles from the person’s place of residence, an authorised member of
the CMA must arrange for the person to be paid the necessary expenses of
35
attendance.
      (8)
A notice for the purposes of this paragraph may be issued on the CMA’s
behalf by an authorised member of the CMA.
Written statements
11    (1)
The CMA may by notice require a person to produce a written statement
40
with respect to a matter specified in the notice to—
(a)
a person who is considering, or is to consider, an application for a
direction under paragraph 4, or
(b)
a group with the function of determining an appeal.

Financial Services (Banking Reform) Bill
Schedule 5 — Procedure for appeals to the CMA
143

      (2)
The power to require the production of a written statement includes
power—
(a)
to specify the time and place at which it is to be produced, and
(b)
to require it to be verified by a statement of truth;

and a statement required to be so verified must be disregarded unless it is so
5
verified.
      (3)
No person is to be compelled under this paragraph to produce a written
statement with respect to any matter about which the person could not be
compelled to give evidence in civil proceedings in the High Court or Court
of Session.
10
      (4)
A notice for the purposes of this paragraph may be issued on the CMA’s
behalf by an authorised member of the CMA.
Expert advice
12
Where permission to bring an appeal is granted under paragraph 3, the
CMA may commission expert advice with respect to any matter raised by a
15
party to the appeal.
Defaults in relation to evidence
13    (1)
If a person (“the defaulter”)—
(a)
fails to comply with a notice issued or other requirement imposed
under paragraph 9, 10 or 11,
20
(b)
in complying with a notice under paragraph 11, makes a statement
that is false in any material particular, or
(c)
in providing information verified in accordance with a statement of
truth required by appeal rules, provides information that is false in a
material particular,
25

an authorised member of the CMA may certify that fact to the court.
      (2)
If the court is satisfied that the defaulter failed without reasonable excuse to
comply with the notice or other requirement, or made the false statement, or
provided the false information, it may deal with the defaulter (and in the
case of a body corporate, any director or other officer of the body) as if that
30
person were in contempt.
      (3)
In sub-paragraph (2) “officer”, in relation to a limited liability partnership,
means a member of the limited liability partnership.
      (4)
In this paragraph “court” means—
(a)
the High Court, or
35
(b)
in Scotland, the Court of Session.
14    (1)
A person who wilfully alters, suppresses or destroys a document which the
person has been required to produce under paragraph 9 is guilty of an
offence.
      (2)
A person guilty of an offence under this paragraph is liable—
40
(a)
on summary conviction—
(i)
in England and Wales, to imprisonment for a term not
exceeding 12 months (or 6 months, if the offence was
committed before the commencement of section 154(1) of the
Criminal Justice Act 2003) or a fine, or both;
45

Financial Services (Banking Reform) Bill
Schedule 5 — Procedure for appeals to the CMA
144

(ii)
in Scotland, to imprisonment for a term not exceeding 12
months or a fine not exceeding the statutory maximum, or
both;
(iii)
in Northern Ireland, to imprisonment for a term not
exceeding 6 months or a fine not exceeding the statutory
5
maximum, or both;
(b)
on conviction on indictment, to imprisonment for a term not
exceeding 2 years or a fine, or both.
Determination of appeal by CMA
15    (1)
A determination by the CMA on an appeal—
10
(a)
must be contained in an order made by the CMA;
(b)
must set out the reasons for the determination;
(c)
takes effect at the time specified in the order or determined in
accordance with provision made in the order;
(d)
must be notified by the CMA to the parties to the appeal;
15
(e)
must be published by the CMA—
(i)
as soon as reasonably practicable after the determination is
made;
(ii)
in such manner as the CMA considers appropriate for the
purpose of bringing the determination to the attention of any
20
person likely to be affected by it (other than a party to the
appeal).
      (2)
The CMA may exclude from publication under sub-paragraph (1)(e) any
information which it is satisfied is—
(a)
commercial information, the disclosure of which would, or might in
25
the CMA’s opinion, significantly harm the legitimate business
interests of an undertaking to which it relates, or
(b)
information relating to the private affairs of an individual, the
disclosure of which would, or might in the CMA’s opinion,
significantly harm the individual’s interests.
30
      (3)
The Payment Systems Regulator must take such steps as it considers
necessary for it to comply with an order of the CMA made by virtue of sub-
paragraph (1)(a).
      (4)
The steps must be taken—
(a)
if a time is specified in (or is to be determined in accordance with) the
35
order, within that time;
(b)
in any other case, within a reasonable time.
Appeal rules
16    (1)
The CMA Board may make rules of procedure regulating the conduct and
disposal of appeals.
40
      (2)
Those rules may include provision supplementing the provisions of this
Schedule in relation to any application, notice, hearing, power or
requirement for which this Schedule provides; and that provision may, in
particular, impose time limits or other restrictions on—
(a)
the taking of evidence at an oral hearing, or
45
(b)
the making of representations or observations at such a hearing.

Financial Services (Banking Reform) Bill
Schedule 5 — Procedure for appeals to the CMA
145

      (3)
The CMA Board must publish rules made under this paragraph in such
manner as it considers appropriate for the purpose of bringing them to the
attention of those likely to be affected by them.
      (4)
Before making rules under this paragraph, the CMA Board must consult
such persons as it considers appropriate.
5
      (5)
Rules under this paragraph may make different provision for different cases.
Costs
17    (1)
A group that determines an appeal must make an order requiring the
payment to the CMA of the costs incurred by the CMA in connection with
the appeal.
10
      (2)
An order under sub-paragraph (1) must require those costs to be paid—
(a)
where the appeal is allowed in full, by the Payment Systems
Regulator;
(b)
where the appeal is dismissed in full, by the appellant;
(c)
where the appeal is partially allowed, by one or more parties in such
15
proportions as the CMA considers appropriate in all the
circumstances.
      (3)
The group that determines an appeal may also make such order as it thinks
fit for requiring a party to the appeal to make payments to another party in
respect of costs reasonably incurred by that other party in connection with
20
the appeal.
      (4)
A person who is required by an order under this paragraph to pay a sum to
another person must comply with the order before the end of the period of
28 days beginning with the day after the making of the order.
      (5)
Sums required to be paid by an order under this paragraph but not paid
25
within the period mentioned in sub-paragraph (4) are to bear interest at such
rate as may be determined in accordance with provision contained in the
order.
      (6)
Any costs payable by virtue of an order under this paragraph and any
interest that has not been paid may be recovered as a civil debt by the person
30
in whose favour the order is made.
Interpretation
18    (1)
In this Schedule—
“appeal” means an appeal made in accordance with section 69;
“appeal rules” means rules of procedure under paragraph 16;
35
“authorised member of the CMA”—
(a)
in relation to a power exercisable in connection with an
appeal in respect of which a group has been constituted by
the chair of the CMA under Schedule 4 to the Enterprise and
Regulatory Reform Act 2013, means a member of that group
40
who has been authorised by the chair of the CMA to exercise
that power;
(b)
in relation to a power exercisable in connection with an
application for permission to bring an appeal, or otherwise in

Financial Services (Banking Reform) Bill
Schedule 6 — Conduct of FMI administration
146

connection with an appeal in respect of which a group has
not been so constituted by the chair of the CMA, means—
(i)
any member of the CMA Board who is also a member
of the CMA panel, or
(ii)
any member of the CMA panel authorised by the
5
Treasury (whether generally or specifically) to
exercise the power in question;
“CMA” means the Competition and Markets Authority;
“CMA Board” and “CMA panel” have the same meaning as in Schedule
4 to the Enterprise and Regulatory Reform Act 2013;
10
“group” means a group selected in accordance with paragraph 6;
“statement of truth”, in relation to the production of a statement or
provision of information by a person, means a statement that the
person believes the facts stated in the statement or information to be
true;
15
“working day” means any day other than—
(a)
Saturday or Sunday;
(b)
Christmas Day or Good Friday;
(c)
a day which is a bank holiday under the Banking and
Financial Dealings Act 1971 in any part of the United
20
Kingdom.
      (2)
References in this Schedule to a party to an appeal are references to—
(a)
the appellant, or
(b)
the Payment Systems Regulator.
Schedule 6
25
Section 106

Conduct of FMI administration
1
The following provisions of this Schedule provide for—
(a)
the general powers and duties of FMI administrators (by application
of provisions about administrators), and
(b)
the general process and effects of FMI administration (by application
30
of provisions about administration).
2
The provisions set out in the Tables apply in relation to FMI administration
as in relation to administration, with—
(a)
the modifications set out in paragraph 3,
(b)
any other modification specified in the Tables, and
35
(c)
any other necessary modification.
3
The modifications are that—
(a)
a reference to the administrator is a reference to the FMI
administrator,
(b)
a reference to administration is a reference to FMI administration,
40
(c)
a reference to an administration application is a reference to an FMI
administration application,
(d)
a reference to an administration order is a reference to an FMI
administration order,

Financial Services (Banking Reform) Bill
Schedule 6 — Conduct of FMI administration
147

(e)
a reference to a company is a reference to the infrastructure
company, and
(f)
a reference to the purpose of administration (other than the reference
in paragraph 111(1) of Schedule B1) is a reference to the objective in
section 100.
5
4
Powers conferred by this Part of this Act and by the 1986 Act (as applied) are
in addition to, and not in restriction of, any existing powers of instituting
proceedings against any contributory or debtor of an infrastructure
company, or the estate of any contributory or debtor, for the recovery of any
call or other sum.
10
5
A reference in an enactment or other document to anything done under a
provision applied by this Part of this Act includes a reference to the
provision as applied.
TABLE 1 OF APPLIED PROVISIONS
SCHEDULE B1 TO THE INSOLVENCY ACT 1986
15

Provision of
Subject
Modification

Schedule B1

Para.
Dismissal of pending winding-

40(1)(a)
up petition

Para. 41
Dismissal of administrative or

20

other receiver

Para. 42
Moratorium on insolvency
Ignore sub-paras. (4) and (5).

proceedings

Para. 43
Moratorium on other legal

process

25

Para.
Interim moratorium

44(1)(a) and

(5)

Para. 46
Announcement of appointment
Ignore sub-para. (6)(b) and (c).

Paras. 47
Statement of affairs

30

and 48

Para. 49
Administrator’s proposals
(a)
The administrator must obtain the

approval of the Bank of England to

any proposals under sub-para. (1).

(b)
Treat the reference in sub-para.

35

(2)(b) to the objective mentioned in

para. 3(1)(a) or (b) as a reference to

the objective in section 100 of this

Act.

(c)
Ignore sub-para. (3)(b).

40

Para. 59
General powers

Para. 60 and
General powers
The exercise of powers under Schedule 1 is

Schedule 1

subject to section 100 of this Act.

Para. 61
Directors

Para. 62
Power to call meetings of

45

creditors