Financial Services (Banking Reform) Bill (HL Bill 54)

(4) The notice of appeal must be sent within the period specified, in relation to the
decision appealed against, in those rules.

(5) The Tribunal may do any of the following—

(a) uphold the penalty;

(b) 5set aside the penalty;

(c) substitute for the penalty a penalty of an amount decided by the
Tribunal;

(d) vary any date by which the penalty, or any part of it, is required to be
paid.

(6) 10If an appeal is made in accordance with this section, the penalty is not required
to be paid until the appeal has been determined.

(7) Subsections (2), (5) and (6) do not restrict the power to make Tribunal rules;
and those subsections are subject to Tribunal rules.

(8) Except as provided by this section, the validity of the penalty may not be
15questioned by any legal proceedings whatever.

(9) In the case of an appeal made in accordance with this section, a decision of the
Tribunal has the same effect as, and may be enforced in the same manner as, a
decision of the Payment Systems Regulator.

69 Appeals to Competition and Markets Authority

(1) 20This section applies where a person is appealing to the Competition and
Markets Authority (“the CMA”) against a CMA-appealable decision.

(2) In determining the appeal the CMA must have regard, to the same extent as is
required of the Payment Systems Regulator, to the matters to which the
Payment Systems Regulator must have regard in discharging its functions
25under this Part.

(3) In determining the appeal the CMA—

(a) may have regard to any matter to which the Payment Systems
Regulator was not able to have regard in relation to the decision, but

(b) must not, in the exercise of that power, have regard to any matter to
30which the Payment Systems Regulator would not have been entitled to
have regard in reaching its decision had it had the opportunity of doing
so.

(4) The CMA must either—

(a) dismiss the appeal, or

(b) 35quash the whole or part of the decision to which the appeal relates.

(5) The CMA may act as mentioned in subsection (4)(b) only to the extent that it is
satisfied that the decision was wrong on one or more of the following
grounds—

(a) that the Payment Systems Regulator failed properly to have regard to
40any matter mentioned in subsection (2);

(b) that the Payment Systems Regulator failed to give the appropriate
weight to any matter mentioned in subsection (2);

(c) that the decision was based, wholly or partly, on an error of fact;

(d) that the decision was wrong in law.

(6) If the CMA quashes the whole or part of a decision, it may either—

(a) refer the matter back to the Payment Systems Regulator with a
direction to reconsider and make a new decision in accordance with its
ruling, or

(b) 5substitute its own decision for that of the Payment Systems Regulator.

(7) The CMA may not direct the Payment Systems Regulator to take any action
which it would not otherwise have the power to take in relation to the decision.

(8) Schedule 5 contains further provision about the making of appeals in
accordance with this section.

70 10Enforcement of requirement to dispose of interest in payment system

(1) A requirement imposed under section 48 is enforceable by civil proceedings
brought by the Payment Systems Regulator for an injunction or for interdict or
for any other appropriate relief or remedy.

(2) Civil proceedings may not be brought to enforce a requirement imposed under
15that section unless—

(a) the time for bringing an appeal against the decision to impose the
requirement has expired and no appeal has been brought within that
time, or

(b) the person on whom the requirement was imposed has within that time
20brought such an appeal and the appeal has been dismissed or
withdrawn.

Information and investigation powers

71 Power to obtain information or documents

(1) The Payment Systems Regulator may by notice in writing require a person to
25provide information or documents—

(a) which the Payment Systems Regulator thinks will help the Treasury in
determining whether to make a designation order, or

(b) which the Payment Systems Regulator otherwise requires in
connection with its functions under this Part.

(2) 30In particular, a notice under subsection (1) may require a participant in a
regulated payment system to notify the Payment Systems Regulator if events
of a specified kind occur.

(3) A notice under subsection (1) may require information or documents to be
provided—

(a) 35in a specified form or manner;

(b) at a specified time;

(c) in respect of a specified period.

(4) The Payment Systems Regulator may disclose information obtained by virtue
of this section to—

(a) 40the Treasury;

(b) the Bank of England;

(c) the FCA;

(d) the PRA;

(e) the Office of Communications;

(f) an authority in a country or territory outside the United Kingdom that
exercises functions similar to those of the Treasury, the Bank of
England, the FCA, the PRA or the Payment Systems Regulator in
5relation to payment systems;

(g) the European Commission;

(h) the European Central Bank;

(i) the Bank for International Settlements.

(5) Subsection (4)—

(a) 10overrides any requirement to keep information in confidence, and

(b) is without prejudice to any other power to disclose information.

(6) The Treasury may by regulations permit the disclosure of information
obtained by virtue of this section to a specified person.

(7) The Payment Systems Regulator may publish information obtained by virtue
15of this section.

(8) The Treasury may make regulations about the manner and extent of
publication under subsection (7).

(9) In subsection (4)(f) the reference to payment systems is to be read as if
subsection (2)(b) of section 32 were omitted.

72 20Reports by skilled persons

(1) The Payment Systems Regulator may—

(a) require a person who is a participant in a regulated payment system
(“the relevant participant”) to provide the Payment Systems Regulator
with a report on any matter relating to the system (“the matter
25concerned”), or

(b) appoint a person to provide the Payment Systems Regulator with a
report on the matter concerned.

(2) The power conferred by subsection (1)(a) is exercisable by giving the relevant
participant a notice in writing.

(3) 30When acting under subsection (1)(a), the Payment Systems Regulator may
require the report to be in a form specified in the notice.

(4) The Payment Systems Regulator must give written notice of an appointment
under subsection (1)(b) to the relevant participant.

(5) A person appointed to make a report under this section—

(a) 35must be a person appearing to the Payment Systems Regulator to have
the skills necessary to make a report on the matter concerned, and

(b) where the appointment is to be made by the relevant participant, must
be a person nominated or approved by the Payment Systems
Regulator.

(6) 40It is the duty of—

(a) the relevant participant, and

(b) any person who is providing (or who has at any time provided)
services to the relevant participant in relation to the matter concerned,

to give the person appointed to prepare a report all such assistance as the
appointed person may reasonably require.

(7) The obligation imposed by subsection (6) is enforceable, on the application of
the Payment Systems Regulator, by an injunction or, in Scotland, by an order
5for specific performance under section 45 of the Court of Session Act 1988.

(8) The Payment Systems Regulator may direct the relevant participant to pay any
expenses incurred by the Payment Systems Regulator in relation to an
appointment under subsection (1)(b).

73 Appointment of persons to conduct investigations

(1) 10If it considers that it is desirable to do so in order to advance any of its payment
systems objectives, the Payment Systems Regulator may appoint one or more
competent persons to conduct an investigation on its behalf into the nature,
conduct or state of the business of any participant in a regulated payment
system.

(2) 15If it appears to the Payment Systems Regulator that there are circumstances
suggesting that there may have been a compliance failure, the Payment
Systems Regulator may appoint one or more competent persons to conduct an
investigation on its behalf.

74 Investigations: general

(1) 20This section applies if the Payment Systems Regulator appoints one or more
competent persons (“investigators”) under section 73 to conduct an
investigation on its behalf.

(2) The Payment Systems Regulator must give written notice of the appointment
of an investigator to the person who is the subject of the investigation.

(3) 25Subsections (2) and (9) do not apply if—

(a) the Payment Systems Regulator believes that the notice required by
subsection (2) or (9) would be likely to result in the investigation being
frustrated, or

(b) the investigator is appointed under subsection (2) of section 73.

(4) 30A notice under subsection (2) must—

(a) specify the provision under which the investigator was appointed, and

(b) state the reason for the appointment.

(5) Nothing prevents the Payment Systems Regulator from appointing as an
investigator—

(a) 35a member of its staff, or

(b) a member of staff of the FCA.

(6) An investigator who conducts an investigation must make a report of the
investigation to the Payment Systems Regulator.

(7) The Payment Systems Regulator may, by a direction to an investigator,
40control—

(a) the scope of the investigation,

(b) the period during which the investigation is to be conducted,

(c) the conduct of the investigation, and

(d) the reporting of the investigation.

(8) A direction may, in particular—

(a) confine the investigation to particular matters;

(b) extend the investigation to additional matters;

(c) 5require the investigator to discontinue the investigation or to take only
those steps that are specified in the direction;

(d) require the investigator to make such interim reports as are so
specified.

(9) If there is a change in the scope or conduct of the investigation and, in the
10opinion of the Payment Systems Regulator, the person who is the subject of the
investigation is likely to be significantly prejudiced by not being made aware
of it, that person must be given written notice of the change.

75 Powers of persons appointed under section 73

(1) An investigator may require any person within subsection (2)—

(a) 15to attend before the investigator at a specified time and place and
answer questions, or

(b) otherwise to provide any information which the investigator requires.

(2) The persons referred to in subsection (1) are—

(a) the person who is the subject of the investigation (“the person under
20investigation”);

(b) any person connected with the person under investigation;

(c) in the case of an investigation into whether there has been a compliance
failure, any person who in the investigator’s opinion is or may be able
to give information which is or may be relevant to the investigation.

(3) 25An investigator may also require any person to produce at a specified time and
place any specified documents or documents of a specified description.

(4) A requirement under subsection (1) or (3) may be imposed only so far as the
investigator concerned reasonably considers the question, provision of
information or production of the document to be relevant to the purposes of
30the investigation.

(5) In the case of an investigation into whether there has been a compliance failure,
the investigator may also require any person falling within subsection (2)(c) to
give the investigator all assistance in connection with the investigation which
the person is reasonably able to give.

(6) 35For the purposes of this section, a person is connected with the person under
investigation (“A”) if the person is or has at any relevant time been—

(a) a member of A’s group,

(b) a controller of A, or

(c) a partnership of which A is a member.

(7) 40In this section—

• “controller” has the same meaning as in FSMA 2000 (see section 422 of that
  Act);

• “group” has the same meaning as in FSMA 2000 (see section 421 of that
  Act);

Financial Services (Banking Reform) BillPage 65

• “investigator” means a person conducting an investigation under section
  73;

• “specified” means specified in a notice in writing.

76 Information and documents: supplemental provisions

(1) 5In this section “relevant document” means a document produced in response
to a requirement imposed under section 71 or 75.

(2) In a case where—

(a) the Payment Systems Regulator has power under section 71, or an
investigator has power under section 75, to require a person to produce
10a document, but

(b) it appears that the document is in the possession of another person,

the power may be exercised in relation to that other person.

(3) Any person to whom a relevant document is produced may—

(a) take copies or extracts from the document, or

(b) 15require the person producing the document, or any relevant person
(see subsection (4)), to provide an explanation of the document.

(4) “Relevant person”, in relation to a person who is required to produce a
document, means a person who—

(a) has been or is or is proposed to be a director or controller of that person,

(b) 20has been or is an auditor of that person,

(c) has been or is an actuary, accountant or lawyer appointed or instructed
by that person, or

(d) has been or is an employee of that person.

(5) A relevant document may be retained for so long as the person to whom it is
25produced considers that it is necessary to retain it (rather than copies of it) for
the purposes for which the document was requested.

(6) If the person to whom a relevant document is produced has reasonable
grounds for believing—

(a) that the document may have to be produced for the purposes of any
30legal proceedings, and

(b) that it might otherwise be unavailable for those purposes,

it may be retained until the proceedings are concluded.

(7) If a person who is required under section 71 or 75 to produce a document fails
to do so, the Payment Systems Regulator or an investigator may require the
35person to state, to the best of the person’s knowledge and belief, where the
document is.

(8) A lawyer may be required under section 71 or 75 or this section to provide the
name and address of a client.

(9) A person may not be required under section 71 or 75 or this section to disclose
40information or produce a document in respect of which the person owes an
obligation of confidence as a result of carrying on the business of banking
unless—

(a) the person is the person under investigation or a member of that
person’s group,

(b) the person to whom the obligation of confidence is owed is the person
under investigation or a member of that person’s group,

(c) the person to whom the obligation of confidence is owed consents to
the disclosure or production, or

(d) 5the imposing on the person of a requirement with respect to such
information or document has been specifically authorised by the
Payment Systems Regulator.

(10) If a person claims a lien on a document, its production under section 71 or 75
does not affect the lien.

(11) 10In this section—

• “controller” has the same meaning as in FSMA 2000 (see section 422 of that
  Act);

• “group” has the same meaning as in FSMA 2000 (see section 421 of that
  Act);

• 15“investigator” means a person appointed under section 73.

77 Admissibility of statements made to investigators

(1) A statement made to an investigator by a person in compliance with an
information requirement is admissible in evidence in any proceedings, so long
as it also complies with any requirements governing the admissibility of
20evidence in the circumstances in question.

(2) But in criminal proceedings in which that person is charged with an offence to
which this subsection applies—

(a) no evidence relating to the statement may be adduced by or on behalf
of the prosecution, and

(b) 25no question relating to the statement may be asked by or on behalf of
the prosecution,

unless evidence relating to the statement is adduced, or a question relating to
it is asked, in the proceedings by or on behalf of that person.

(3) Subsection (2) applies to any offence other than—

(a) 30an offence under section 80(6);

(b) an offence under section 5 of the Perjury Act 1911 (false statements
made otherwise than on oath);

(c) an offence under section 44(2) of the Criminal Law (Consolidation)
(Scotland) Act 1995 (false statements made otherwise than on oath);

(d) 35an offence under Article 10 of the Perjury (Northern Ireland) Order
1979.

(4) In this section—

• “information requirement” means a requirement imposed by an
  investigator under section 75 or 76;

• 40“investigator” means a person appointed under section 73.

78 Entry of premises under warrant

(1) A justice of the peace may issue a warrant under this section if satisfied on
information on oath given by or on behalf of the Payment Systems Regulator
or an investigator that there are reasonable grounds for believing that the first
45or second set of conditions is satisfied.

(2) The first set of conditions is—

(a) that a person on whom an information requirement has been imposed
has failed (wholly or in part) to comply with it, and

(b) that on the premises specified in the warrant—

(i) 5there are documents which have been required, or

(ii) there is information which has been required.

(3) In this section “information requirement” means—

(a) a requirement imposed by the Payment Systems Regulator under
section 71 or 76, or

(b) 10a requirement imposed by an investigator under section 75 or 76.

(4) The second set of conditions is—

(a) that the premises specified in the warrant are premises of a participant
in a regulated payment system,

(b) that there are on the premises documents or information in relation to
15which an information requirement could be imposed, and

(c) that if such a requirement were to be imposed—

(i) it would not be complied with, or

(ii) the documents or information to which it related would be
removed, tampered with or destroyed.

(5) 20A warrant under this section authorises a constable—

(a) to enter the premises specified in the warrant,

(b) to search the premises and take possession of any documents or
information appearing to be documents or information of a kind in
respect of which a warrant under this section was issued (“the relevant
25kind”) or to take, in relation to any such documents or information, any
other steps which may appear to be necessary for preserving them or
preventing interference with them,

(c) to take copies of, or extracts from, any documents or information
appearing to be of the relevant kind,

(d) 30to require any person on the premises to provide an explanation of any
document or information appearing to be of the relevant kind or to
state where it may be found, and

(e) to use such force as may be reasonably necessary.

(6) A warrant under this section may be executed by any constable.

(7) 35The warrant may authorise persons to accompany any constable who is
executing it.

(8) The powers in subsection (5) may be exercised by a person who—

(a) is authorised by the warrant to accompany a constable, and

(b) exercises those powers in the company of, and under the supervision
40of, a constable.

(9) In England and Wales, sections 15(5) to (8) and 16(3) to (12) of the Police and
Criminal Evidence Act 1984 (execution of search warrants and safeguards)
apply to warrants issued under this section.

(10) In Northern Ireland, Articles 17(5) to (8) and 18(3) to (12) of the Police and
45Criminal Evidence (Northern Ireland) Order 1989 apply to warrants issued
under this section.

(11) This section has effect in relation to Scotland as if—

(a) for any reference to a justice of the peace there were substituted a
reference to a justice of the peace or a sheriff, and

(b) for any reference to information on oath there were substituted a
5reference to evidence on oath.

(12) In this section “investigator” means a person appointed under section 73.

79 Retention of documents taken under section 78

(1) Any document of which possession is taken under section 78 (“a seized
document”) may be retained so long as it is necessary to retain it (rather than
10copies of it) in the circumstances.

(2) A person claiming to be the owner of a seized document may apply to a
magistrates’ court or (in Scotland) the sheriff for an order for the delivery of the
document to the person appearing to the court or sheriff to be the owner.

(3) If on an application under subsection (2) the court or (in Scotland) the sheriff
15cannot ascertain who is the owner of the seized document the court or sheriff
(as the case may be) may make such order as the court or sheriff thinks fit.

(4) An order under subsection (2) or (3) does not affect the right of any person to
take legal proceedings against any person in possession of a seized document
for the recovery of the document.

(5) 20Any right to bring proceedings (as described in subsection (4)) may only be
exercised within 6 months of the date of the order made under subsection (2)
or (3).

80 Enforcement of information and investigation powers

(1) If a person other than an investigator (“the defaulter”) fails to comply with a
25requirement imposed under any of sections 71 to 78, the person imposing the
requirement may certify that fact in writing to the court.

(2) If the court is satisfied that the defaulter failed without reasonable excuse to
comply with the requirement, 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 person
30were in contempt.

(3) In subsection (2) “officer”, in relation to a limited liability partnership, means a
member of the limited liability partnership.

(4) A person who knows or suspects that an investigation is being or is likely to be
conducted under section 73 is guilty of an offence if the person—

(a) 35falsifies, conceals, destroys or otherwise disposes of a document which
the person knows or suspects is or would be relevant to such an
investigation, or

(b) causes or permits the falsification, concealment, destruction or disposal
of such a document.

(5) 40It is a defence for a person charged with an offence under subsection (4) to
show that the person had no intention of concealing facts disclosed by the
documents from the investigator.

(6) A person is guilty of an offence if the person, in purported compliance with a
requirement imposed under any of sections 71 to 78—

(a) provides information which the person knows to be false or misleading
in a material particular, or

(b) 5recklessly provides information which is false or misleading in a
material particular.

(7) A person guilty of an offence under subsection (4) or (6) is liable—

(a) on summary conviction—

(i) in England and Wales, to imprisonment for a term not
10exceeding 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;

(ii) in Scotland, to imprisonment for a term not exceeding 12
months or a fine not exceeding the statutory maximum, or both;

(iii) 15in Northern Ireland, to imprisonment for a term not exceeding
6 months or a fine not exceeding the statutory maximum, or
both;

(b) on conviction on indictment, to imprisonment for a term not exceeding
2 years or a fine, or both.

(8) 20Any person who intentionally obstructs the exercise of any rights conferred by
a warrant under section 78 is guilty of an offence and liable on summary
conviction—

(a) in England and Wales, to imprisonment for a term not exceeding 51
weeks (or 3 months, if the offence was committed before the
25commencement of section 280(2) of the Criminal Justice Act 2003) or a
fine, or both;

(b) in Scotland, to imprisonment for a term not exceeding 3 months or a
fine not exceeding level 5 on the standard scale, or both;

(c) in Northern Ireland, to imprisonment for a term not exceeding 3
30months or a fine not exceeding level 5 on the standard scale, or both.

(9) In this section—

• “court” means the High Court or, in Scotland, the Court of Session;

• “investigator” means a person appointed under section 73.

Guidance

81 35Guidance

(1) The Payment Systems Regulator may give guidance consisting of such
information and advice as it considers appropriate—

(a) with respect to the operation of specified provisions of this Part;

(b) with respect to any other matter relating to its functions under this Part;

(c) 40with respect to any other matters about which it appears to the
Payment Systems Regulator to be desirable to give information or
advice.

(2) Guidance given by the Payment Systems Regulator under this section must
include guidance about how it intends to advance its payment systems
45objectives in discharging its functions under this Part in relation to different
categories of payment system or participants in payment systems.