Financial Services (Banking Reform) Bill (HL Bill 62)

(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
of, a constable.

(9) 5In 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
Criminal Evidence (Northern Ireland) Order 1989 apply to warrants issued
10under 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
15reference to evidence on oath.

(12) In this section “investigator” means a person appointed under section 76.

82 Retention of documents taken under section 81

(1) Any document of which possession is taken under section 81 (“a seized
document”) may be retained so long as it is necessary to retain it (rather than
20copies 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
25cannot 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) 30Any 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).

83 Enforcement of information and investigation powers

(1) If a person other than an investigator (“the defaulter”) fails to comply with a
35requirement imposed under any of sections 74 to 81, 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
40were 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 76 is guilty of an offence if the person—

(a) falsifies, conceals, destroys or otherwise disposes of a document which
the person knows or suspects is or would be relevant to such an
5investigation, or

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

(5) It 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
10documents 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 74 to 81—

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

(b) 15recklessly 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
20exceeding 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) 25in 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) 30Any person who intentionally obstructs the exercise of any rights conferred by
a warrant under section 81 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
35commencement 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
40months 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 76.

Disclosure of information

84 Restrictions on disclosure of confidential information

(1) Confidential information must not be disclosed by a primary recipient, or by
any person obtaining the information directly or indirectly from a primary
5recipient, without the consent of—

(a) the person from whom the primary recipient obtained the information,
and

(b) if different, the person to whom it relates.

(2) In this section “confidential information” means information which—

(a) 10relates to the business or other affairs of any person,

(b) was received by the primary recipient for the purposes of, or in the
discharge of, any functions of the Payment Systems Regulator under
this Part, and

(c) is not prevented from being confidential information by subsection (4).

(3) 15It is immaterial for the purposes of subsection (2) whether or not the
information was received—

(a) as a result of a requirement to provide it imposed by or under any
enactment;

(b) for other purposes as well as purposes mentioned in that subsection.

(4) 20Information is not confidential information if—

(a) it has been made available to the public by virtue of being disclosed in
any circumstances in which, or for any purposes for which, disclosure
is not precluded by this section, or

(b) it is in the form of a summary or a collection of information that is
25framed in such a way that it is not possible to ascertain from it
information relating to any particular person.

(5) Each of the following is a primary recipient for the purposes of this section—

(a) the Payment Systems Regulator;

(b) the FCA;

(c) 30a person who is or has been employed by the Payment Systems
Regulator or the FCA;

(d) a person who is or has been engaged to provide services to the Payment
Systems Regulator or the FCA;

(e) any auditor or expert instructed by the Payment Systems Regulator or
35the FCA;

(f) a person appointed to make a report under section 75;

(g) a person appointed under section 76.

(6) Nothing in this section applies to information received by a primary recipient
for the purposes of, or in the discharge of, any functions of the Payment
40Systems Regulator under the Competition Act 1998 or the Enterprise Act 2002
by virtue of section 52 or 54.

(For provision about the disclosure of such information, see Part 9 of the
Enterprise Act 2002.)

(For provision about the disclosure of such information, see Part 9 of the
45Enterprise Act 2002.)

85 Exemptions from section 84

(1) Section 84 does not prevent a disclosure of confidential information which—

(a) is made for the purpose of facilitating the carrying out of a public
function, and

(b) is permitted by regulations made by the Treasury under this section.

(2) For the purposes of this section “public functions” includes—

(a) 5functions conferred by or in accordance with any provision contained
in any enactment;

(b) functions conferred by or in accordance with any provision contained
in the EU Treaties or any EU instrument;

(c) similar functions conferred on persons by or under provisions having
10effect as part of the law of a country or territory outside the United
Kingdom;

(d) functions exercisable in relation to specified disciplinary proceedings.

(3) Regulations under this section may, in particular, make provision permitting
the disclosure of confidential information or of confidential information of a
15specified kind—

(a) by specified recipients, or recipients of a specified description, to any
person for the purpose of enabling or assisting the recipient to
discharge specified public functions;

(b) by specified recipients, or recipients of a specified description, to
20specified persons, or persons of specified descriptions, for the purpose
of enabling or assisting those persons to discharge specified public
functions;

(c) by the Payment Systems Regulator to the Treasury for any purpose;

(d) by any recipient if the disclosure is with a view to or in connection with
25specified proceedings.

(4) Regulations under this section may also include provision—

(a) making any permission to disclose confidential information subject to
conditions (which may relate to the obtaining of consents or any other
matter);

(b) 30restricting the uses to which confidential information disclosed under
the regulations may be put.

(5)
In relation to confidential information, each of the following is a “recipient”—

(a) a primary recipient;

(b) a person obtaining the information directly or indirectly from a
35primary recipient.

(6) In this section—

• “confidential information” and “primary recipient” have the same
  meaning as in section 84;

• “specified” means specified in regulations.

86 40Offences relating to disclosure of confidential information

(1) A person who discloses information in contravention of section 84 is guilty of
an offence.

(2) A person guilty of an offence under subsection (1) is liable—

(a) on summary conviction—

(i) 45in England and Wales, to imprisonment for a term not
exceeding 3 months 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) in Northern Ireland, to imprisonment for a term not exceeding
3 months or a fine not exceeding the statutory maximum, or
5both;

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

(3) A person is guilty of an offence if—

(a) information has been disclosed to the person in accordance with
10regulations made under section 85, and

(b) the person uses the information in contravention of any provision of
those regulations.

(4) A person guilty of an offence under subsection (3) is liable on summary
conviction—

(a) 15in England and Wales, to imprisonment for a term not exceeding 51
weeks (or 3 months, if the offence was committed before the
commencement 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
20fine not exceeding level 5 on the standard scale, or both;

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

(5) In proceedings against a person (“P”) for an offence under this section it is a
defence for P to prove—

(a) 25that P did not know and had no reason to suspect that the information
was confidential information;

(b) that P took all reasonable precautions and exercised all due diligence to
avoid committing the offence.

(6) In this section “confidential information” has the same meaning as in section
3084.

87 Information received from Bank of England

(1) The following are regulators for the purposes of this section—

(a) the Payment Systems Regulator;

(b) the FCA.

(2) 35A regulator must not disclose to any person specially protected information.

(3) “Specially protected information” is information in relation to which the first
and second conditions are met.

(4) The first condition is that the regulator received the information from—

(a) the Bank of England (“the Bank”), or

(b) 40the other regulator where that regulator had received the information
from the Bank.

(5) The second condition is that the Bank notified the regulator to which it
disclosed the information that the Bank held the information for the purpose of
its functions with respect to any of the following—

(a) 45monetary policy;

(b) financial operations intended to support financial institutions for the
purposes of maintaining stability;

(c) the provision of private banking services and related services.

(6) The notification referred to in subsection (5) must be—

(a) 5in writing, and

(b) given before, or at the same time as, the Bank discloses the information.

(7) The prohibition in subsection (2) does not apply—

(a) to disclosure by one regulator to the other regulator where the
regulator making the disclosure informs the other regulator that the
10information is specially protected information by virtue of this section;

(b) where the Bank has consented to disclosure of the information;

(c) to information which has been made available to the public by virtue of
being disclosed in any circumstances in which, or for any purposes for
which, disclosure is not precluded by this section;

(d) 15to information which the regulator is required to disclose in pursuance
of any EU obligation.

(8) In this section references to disclosure by or to a regulator or by the Bank
include references to disclosure by or to any of the following—

(a) persons who are, or are acting as, officers of, or members of the staff of,
20the regulator;

(b) persons who are, or are acting as, officers, employees or agents of the
Bank;

(c) auditors, experts, contractors or investigators appointed by the
regulator or the Bank under powers conferred by this Part or otherwise.

(9) 25References to disclosure by a regulator do not include references to disclosure
between persons who fall within subsection (8)(a) or (b) in relation to that
regulator.

(10) Each regulator must take such steps as are reasonable in the circumstances to
prevent the disclosure of specially protected information, in cases not excluded
30by subsection (7), by those who are or have been—

(a) its officers or members of staff (including persons acting as its officers
or members of staff);

(b) auditors, experts, contractors or investigators appointed by the
regulator under powers conferred by this Part or otherwise;

(c) 35persons to whom the regulator has delegated any of its functions.

88 Disclosure of information by Bank to Regulator

In section 246 of the Banking Act 2009 (information), in subsection (2), after
paragraph (c) insert—

“(ca) the Payment Systems Regulator (established under section 33 of
40the Financial Services (Banking Reform) Act 2013);”.

Guidance

89 Guidance

(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) with respect to any other matters about which it appears to the
Payment Systems Regulator to be desirable to give information or
5advice.

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

(3) 10In this Part “general guidance” means guidance given by the Payment Systems
Regulator under this section which—

(a) is given—

(i) to persons generally,

(ii) to participants in payment systems, or regulated payment
15systems, generally, or

(iii) to a class of participant in a payment system or regulated
payment system,

(b) is intended to have continuing effect, and

(c) is given in writing or other legible form.

(4) 20The Payment Systems Regulator may give financial or other assistance to
persons giving information or advice of a kind which the Payment Systems
Regulator could give under this section.

(5) The Payment Systems Regulator may—

(a) publish its guidance,

(b) 25offer copies of its published guidance for sale at a reasonable price, and

(c) if it gives guidance in response to a request made by any person, make
a reasonable charge for that guidance.

Reports

90 Reports

30If it considers that it is desirable to do so in order to advance any of its payment
systems objectives, the Payment Systems Regulator may prepare and publish
a report into any matter which it considers relevant to the exercise of its
functions under this Part.

Relationship with other regulators

91 35Duty of regulators to ensure co-ordinated exercise of functions

(1) The following are regulators for the purposes of this section—

(a) the Payment Systems Regulator;

(b) the Bank of England;

(c) the FCA;

(d) 40the PRA.

(2) The regulators must co-ordinate the exercise of their relevant functions (see
subsection (5)) with a view to ensuring—

(a) that each regulator consults every other regulator (where not otherwise
required to do so) in connection with any proposed exercise of a
relevant function in a way that may have a material adverse effect on
the advancement by that other regulator of any of its objectives;

(b) 5that where appropriate each regulator obtains information and advice
from every other regulator in connection with the exercise of its
relevant functions in relation to matters of common regulatory interest
in cases where the other regulator may be expected to have relevant
information or relevant expertise.

(3) 10The duty in subsection (2) applies only to the extent that compliance with the
duty—

(a) is compatible with the advancement by each regulator of any of its
objectives, and

(b) does not impose a burden on the regulators that is disproportionate to
15the benefits of compliance.

(4) A function conferred on a regulator relates to matters of common regulatory
interest if—

(a) another regulator exercises similar or related functions in relation to the
same persons,

(b) 20another regulator exercises functions which relate to different persons
but relate to similar subject-matter, or

(c) its exercise could affect the advancement by another regulator of any of
its objectives.

(5) “Relevant functions” means—

(a) 25in relation to the Payment Systems Regulator, its functions under this
Part;

(b) in relation to the Bank of England, its functions under Part 5 of the
Banking Act 2009 (inter-bank payment systems);

(c) in relation to the FCA, the functions conferred on it by or under FSMA
302000 (see section 1A(6) of that Act);

(d) in relation to the PRA, the functions conferred on it by or under FSMA
2000 (see section 2A(6) of that Act).

(6) “Objectives” means—

(a) in relation to the Payment Systems Regulator, its payment systems
35objectives;

(b) in relation to the Bank of England, its Financial Stability Objective
under section 2A of the Bank of England Act 1998;

(c) in relation to the FCA, its strategic objective and operational objectives
under section 1B of FSMA 2000;

(d) 40in relation to the PRA, its general objective under section 2B of that Act.

92 Memorandum of understanding

(1) The following are regulators for the purposes of this section—

(a) the Payment Systems Regulator;

(b) the Bank of England;

(c) 45the FCA;

(d) the PRA.

(2) The regulators must prepare and maintain a memorandum which describes in
general terms—

(a) the role of each regulator in relation to the exercise of relevant functions
which relate to matters of common regulatory interest, and

(b) 5how the regulators intend to comply with section 91 in relation to the
exercise of such functions.

(3) The regulators must review the memorandum at least once in each calendar
year.

(4) The regulators must give the Treasury a copy of the memorandum and any
10revised memorandum.

(5) The Treasury must lay before Parliament a copy of any document received by
them under this section.

(6) The regulators must ensure that the memorandum as currently in force is
published in the way appearing to them to be best calculated to bring it to the
15attention of the public.

(7) The memorandum need not relate to any aspect of compliance with section 91
if the regulators consider—

(a) that publication of information about that aspect would be against the
public interest, or

(b) 20that that aspect is a technical or operational matter not affecting the
public.

(8) In this section—

(a) the reference in subsection (2)(a) to matters of common regulatory
interest is to be read in accordance with section 91(4), and

(b) 25references to relevant functions are to be read in accordance with
section 91(5).

93 Power of Bank to require Regulator to refrain from specified action

(1) Where the first, second and third conditions are met, the Bank of England may
give a direction under this section to the Payment Systems Regulator.

(2) 30The first condition is that the Payment Systems Regulator is proposing to
exercise any of its powers under this Part in relation to a participant in a
regulated payment system.

(3) The second condition is that the Bank of England is of the opinion that the
exercise of the power in the manner proposed may—

(a) 35threaten the stability of the UK financial system,

(b) have serious consequences for business or other interests in the United
Kingdom, or

(c) have an adverse effect on the Bank’s ability to act in its capacity as a
monetary authority.

(4) 40The third condition is that the Bank of England is of the opinion that the giving
of the direction is necessary in order to avoid the possible consequence falling
within subsection (3).

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

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

(7) The Payment Systems Regulator is not required to comply with a direction
under this section if or to the extent that in the opinion of the Payment Systems
5Regulator compliance would be incompatible with any EU obligation or any
other international obligation of the United Kingdom.

94 Power of FCA to require Regulator to refrain from specified action

(1) Where the first, second and third conditions are met, the FCA may give a
direction under this section to the Payment Systems Regulator.

(2) 10The first condition is that the Payment Systems Regulator is proposing to
exercise any of its powers under this Part in relation to a participant in a
regulated payment system.

(3) The second condition is that the FCA is of the opinion that the exercise of the
power in the manner proposed may have an adverse effect on the ability of the
15FCA to comply with its duty under section 1B(1) of FSMA 2000 (FCA’s general
duties).

(4) The third condition is that the FCA is of the opinion that the giving of the
direction is necessary in order to avoid the possible consequence falling within
subsection (3).

(5) 20A direction under this section is a direction requiring the Payment Systems
Regulator not to exercise the power or not to exercise it in a specified manner.

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

(7) The Payment Systems Regulator is not required to comply with a direction
25under this section if or to the extent that in the opinion of the Payment Systems
Regulator compliance would be incompatible with any EU obligation or any
other international obligation of the United Kingdom.

95 Power of PRA to require Regulator to refrain from specified action

(1) Where the first, second and third conditions are met, the PRA may give a
30direction under this section to the Payment Systems Regulator.

(2) The first condition is that the Payment Systems Regulator is proposing to
exercise any of its powers under this Part in relation to—

(a) a class of PRA-authorised persons, or

(b) a particular PRA-authorised person.

(3) 35The second condition is that the PRA is of the opinion that the exercise of the
power in the manner proposed may—

(a) threaten the stability of the UK financial system,

(b) result in the failure of a PRA-authorised person in a way that would
have an adverse effect on the stability of the UK financial system,

(c) 40threaten the continuity of core services provided in the United
Kingdom, or

(d) have an adverse effect on the ability of the PRA to comply with its duty
under section 2B(1) of FSMA 2000 (the PRA’s general objective).