Pension Schemes Bill (HL Bill 79)
SCHEDULE 3 continued
Pension Schemes BillPage 70
force, the reference in subsection (4)(a) to a fine is to be read as a
reference to a fine not exceeding level 5 on the standard scale.
Standards for giving of pensions guidance by designated guidance providers
333H
Standards for giving of pensions guidance by designated guidance
5providers
(1)
The FCA must from time to time set standards for the giving of
pensions guidance by designated guidance providers.
(2)
A failure by a designated guidance provider to comply with a
standard set under this section is actionable at the suit of a private
10person who suffers loss as a result of the failure, subject to the
defences and other incidents applying to actions for breach of
statutory duty.
(3)
In subsection (2) “private person” has the same meaning as in section
138D.
(4)
15Standards set under this section may provide for subsection (2) not
to apply to a failure to comply with a specified provision of the
standards.
(5) Standards set under this section—
(a)
may make different provision for different cases and may, in
20particular, make different provision in respect of different
classes of designated guidance providers or different types of
pensions guidance;
(b)
may include incidental, supplemental, consequential or
transitional provision.
(6)
25The procedural provisions of this Act in the first column of the table
apply to the setting of standards under this section as if references in
those provisions to the making of rules (however expressed) were
references to the setting of standards and with the additional
modifications in the second column.
| Procedural provisions of this Act |
30Additional modifications |
|---|---|
| Sections 138G and 138H |
Treat the references to a rule- making instrument as references to a standard- 35making instrument. |
Pension Schemes BillPage 71
| Procedural provisions of this Act |
Additional modifications |
|---|---|
| Section 138I | Treat— (a)
5subsection (1)(a) as if it (b)
subsection (2)(d) as if it |
| Section 138L | 20Treat the reference in subsection (1) to consumers (as defined in section 425A) as a reference to recipients of pensions guidance from 25designated guidance providers. |
333I
Monitoring of compliance with standards by designated guidance
providers
(1)
The FCA must maintain arrangements for monitoring compliance by
designated guidance providers with the standards set under section
30333H.
(2)
Sections 165 and 167 apply for the purpose of enabling the FCA to
monitor compliance but as if—
(a)
references to an authorised person or a former authorised
person (other than in section 165(11)(d)) were references to a
35designated guidance provider or a former designated
guidance provider;
(b) section 165(7)(b) to (d) were omitted;
(c)
the reference in section 167(5A)(b) to the FCA or the PRA
were a reference to the FCA.
(3)
40Section 175 applies as if a power that the FCA or an investigator has
by virtue of subsection (2) were a power under Part 11.
(4)
Section 177 applies as if a requirement imposed by virtue of
subsection (2) were a requirement imposed under Part 11.
(5)
References in a provision of Part 11 to section 165, 167, 175 or 177
45include the relevant section as applied with modifications by this
section.
Pension Schemes BillPage 72
333J
Failure by designated guidance providers to comply with standards:
FCA recommendations
(1)
If the FCA considers that a designated guidance provider has failed
to comply with a standard set under section 333H the FCA may—
(a)
5recommend steps that the designated guidance provider
might take to prevent the continuance or recurrence of the
failure or to make redress to those affected by the failure, and
(b)
having made such a recommendation, recommend that the
Treasury give a direction under section 333M.
(2)
10The FCA must publish a recommendation made under subsection
(1)(b) unless the FCA considers that to do so—
(a) would be against the public interest, or
(b) would be inappropriate for some other reason.
(3)
If the condition in subsection (2)(a) or (b) is satisfied in relation to a
15recommendation but would not be satisfied if the FCA published
part only of the recommendation, the FCA may publish that part.
(4)
If the power conferred by section 333E(3) to revoke a designation is
exercised before the power in subsection (1) the reference in
subsection (1) to a designated guidance provider is to be read as a
20reference to a person who, at the time of the failure to comply, was a
designated guidance provider.
333K FCA policy on making recommendations under section 333J
(1)
The FCA must prepare and issue a statement of its policy with
respect to the making of recommendations under section 333J.
(2)
25The FCA may at any time alter or replace a statement issued under
this section.
(3)
If a statement issued under this section is altered or replaced, the
FCA must issue the altered or replaced statement.
(4)
The FCA may issue a statement under this section only with the
30consent of the Treasury.
(5)
A statement issued under this section must be published by the FCA
in the way appearing to the FCA to be best calculated to bring it to
the attention of the public.
(6)
The FCA may charge a reasonable fee for providing a person with a
35copy of the statement.
333L
FCA policy on making recommendations under section 333J:
procedure
(1) Before issuing a statement under section 333K, the FCA must—
(a) consult the Treasury, and
(b)
40publish a draft of the proposed statement in the way
appearing to the FCA to be best calculated to bring it to the
attention of the public.
(2)
The draft must be accompanied by notice that representations about
the proposal may be made to the FCA within a specified time.
Pension Schemes BillPage 73
(3)
Before issuing the proposed statement, the FCA must have regard to
any representations made to it within the specified time.
(4)
If the FCA issues the proposed statement it must publish an account,
in general terms, of—
(a) 5the representations made to it within the specified time, and
(b) its response to them.
(5)
If the statement differs from the draft published under subsection
(1)(b) in a way which is, in the opinion of the FCA, significant, the
FCA must (in addition to complying with subsection (4)) publish
10details of the difference.
(6)
The FCA may charge a reasonable fee for providing a person with a
copy of a draft published under subsection (1)(b).
(7) This section also applies to a proposal to alter or replace a statement.
333M
Failure by designated guidance providers to comply with standards:
15Treasury directions
(1)
If the Treasury consider that a designated guidance provider has
failed to comply with a standard set under section 333H the Treasury
may direct the provider to take such steps as the Treasury consider
appropriate—
(a) 20to prevent the continuance or recurrence of the failure;
(b) to make redress to those affected by the failure.
(2)
The Treasury may give a direction under subsection (1) only if the
FCA has made a recommendation under section 333J(1)(b) (although
the terms of the direction need not be the same as that recommended
25by the FCA).
(3) The Treasury must—
(a) give notice in writing of a direction under subsection (1), and
(b) send a copy of the notice to the FCA.
(4)
The notice must inform the designated guidance provider that
30representations about why the direction should not be published
may be made to the Treasury within a specified time.
(5)
Once the time specified under subsection (4) has elapsed, the
Treasury must publish the direction unless—
(a)
the Treasury consider that to do so would be against the
35public interest;
(b)
having considered representations made by the designated
guidance provider within the specified time, the Treasury
consider that it would be inappropriate to do so for some
other reason.
(6)
40If the condition in subsection (5)(a) or (b) is satisfied in relation to a
direction but would not be satisfied if the Treasury published part
only of the direction, the Treasury may publish that part.
(7)
A direction under subsection (1) is enforceable, on an application
made by the Treasury, by injunction or, in Scotland, by an order for
45specific performance under section 45 of the Court of Session Act
1988.
Pension Schemes BillPage 74
333N
Directions to designated guidance providers under section 333M:
relationship with power to revoke a designation
(1)
The power conferred by section 333M(1) is exercisable in addition to,
or instead of, the power conferred by section 333E(3) to revoke a
5designation.
(2)
If the power in section 333E(3) is exercised before the power in
section 333M(1) the reference in section 333M(1) to a designated
guidance provider is to be read as a reference to a person who, at the
time of the failure to comply, was a designated guidance provider.
(3)
10Subsection (1) does not limit the grounds on which the power in
section 333E(3) may be exercised.
FCA’s duties and power to give guidance
333O FCA’s duties
(1)
The FCA must discharge its general pensions guidance functions
15with a view to securing an appropriate degree of protection for
recipients of pensions guidance from designated guidance
providers.
(2)
In discharging its general pensions guidance functions the FCA must
have regard to—
(a)
20its strategic and operational objectives in section 1B(2) and
(3), and
(b) the regulatory principles in section 3B.
(3)
In this section the FCA’s “general pensions guidance functions”
means its functions of—
(a) 25setting standards under section 333H,
(b) issuing statements under section 333K,
(c)
giving general guidance under section 333P (see section
333P(9)),
(d) making rules under section 333Q, and
(e)
30determining the general policy and principles by reference to
which it performs particular functions under this Part.
333P Power of the FCA to give guidance
(1)
The FCA may give guidance consisting of such information and
advice relating to its functions under sections 333H, 333I, 333J, 333K
35and 333Q as it considers appropriate.
(2)
Subsection (3) applies where the FCA proposes to give guidance to
designated guidance providers generally, or to a class of designated
guidance provider, in relation to standards set under section 333H or
rules made under section 333Q.
(3)
40Where this subsection applies, subsections (1)(b), (2)(e) and (3) of
section 138I apply to the proposed guidance as they apply to
proposed rules, unless the FCA considers that the delay in
complying with those provisions would be prejudicial to the
interests of recipients of pensions guidance from designated
45guidance providers.
Pension Schemes BillPage 75
(4) The FCA may—
(a) publish its guidance,
(b)
offer copies of its published guidance for sale at a reasonable
price, and
(c)
5if it gives guidance in response to a request made by any
person, make a reasonable charge for that guidance.
(5)
On giving any general guidance, the FCA must give written notice to
the Treasury without delay.
(6)
If the FCA alters any of its general guidance, it must give written
10notice to the Treasury without delay.
(7) The notice under subsection (6) must include details of the alteration.
(8)
If the FCA revokes any of its general guidance, it must give written
notice to the Treasury without delay.
(9)
In this section “general guidance” means guidance given by the FCA
15under this section which is—
(a)
given to persons generally, to designated guidance providers
generally or to a class of designated guidance provider,
(b) intended to have continuing effect, and
(c) given in writing or other legible form.
20Funding of pensions guidance
333Q Funding of FCA’s pensions guidance costs
(1)
For the purpose of meeting the FCA’s pensions guidance costs the
FCA must make rules requiring designated guidance providers, or
any specified class of designated guidance provider, to pay to the
25FCA specified amounts or amounts calculated in a specified way.
(2)
Before the FCA publishes a draft of the rules it must consult the
Treasury.
(3) The amounts to be paid under the rules may include a component—
(a) to cover the expenses of the FCA in collecting the payments;
(b) 30to enable the FCA to maintain an adequate reserve.
(4)
In this section the “FCA’s pensions guidance costs” means the
expenses incurred, or expected to be incurred, by the FCA in
connection with the carrying out of the functions conferred on it by
this Part other than by section 333R.
333R 35Funding of Treasury’s pensions guidance costs
(1)
The Treasury must, from time to time, notify the FCA of the amount
of the Treasury’s pensions guidance costs.
(2)
Having been so notified, the FCA must make rules requiring
authorised persons, or any specified class of authorised person, to
40pay to the FCA specified amounts or amounts calculated in a
specified way with a view to recovering the amount notified under
subsection (1).
Pension Schemes BillPage 76
(3)
The amounts to be paid under the rules may include a component to
cover the expenses of the FCA in collecting the payments (“collection
costs”).
(4)
Before the FCA publishes a draft of the rules it must consult the
5Treasury.
(5) The rules may be made only with the consent of the Treasury.
(6)
The Treasury may notify the FCA of matters that they will take into
account when deciding whether or not to give consent for the
purposes of subsection (5).
(7)
10The FCA must have regard to any matters notified under subsection
(6) before publishing a draft of rules to be made under this section.
(8)
The FCA must pay to the Treasury the amounts that it receives under
rules made under this section apart from amounts in respect of its
collection costs (which it may keep).
(9)
15The Treasury must pay into the Consolidated Fund the amounts
received by them under subsection (8).
(10)
In this section the “Treasury’s pensions guidance costs” means the
expenses incurred, or expected to be incurred, by the Treasury—
(a)
in giving pensions guidance or arranging for it to be given by
20designated guidance providers,
(b)
in meeting the expenses of designated guidance providers
incurred in connection with the giving of the guidance
(whether by means of the power conferred by section 333D or
otherwise),
(c)
25in providing services to designated guidance providers to
support them in giving the guidance,
(d) in increasing awareness of the availability of the guidance,
(e)
in undertaking or commissioning research relating to the
giving of the guidance, and
(f)
30otherwise in connection with the carrying out of its functions
under section 333B.
(11)
For the purposes of subsection (10)(b) “expenses of designated
guidance providers”—
(a)
includes expenses incurred by virtue of sections 333H(2),
35333J, 333M and 333Q, and
(b)
where a recommendation or direction has been made by
virtue of section 333J(4) or 333N(2), includes expenses of a
former designated guidance provider.
(12)
The Treasury may by regulations amend the definition of the
40“Treasury’s pensions guidance costs” in subsection (10).”
3 In section 1B (the FCA’s general duties), after subsection (7) insert—
“(7A)
The FCA’s general functions do not include its general pensions
guidance functions (see section 333O(3)).”
4
In section 1M (the FCA’s general duty to consult), after “section 1B” insert
45“and its duties under section 333O”.
Pension Schemes BillPage 77
5
In section 1S (reviews by independent person into discharge of FCA
functions), in subsection (3) (excluded functions), after “(4)” insert “or its
duties under section 333O(1) and (2)(a)”.
6 After section 137FA insert—
“137FB
5 FCA general rules: disclosure of information about the availability of
pensions guidance
(1)
The FCA must make general rules requiring information about the
availability of pensions guidance to be given by the trustees or
managers of a relevant pension scheme to members of the scheme,
10and survivors of members of the scheme, with subsisting rights in
respect of any flexible benefits.
(2)
Before the FCA publishes a draft of any rules to be made by virtue of
this section, it must consult—
(a) the Secretary of State, and
(b) 15the Treasury.
(3)
In determining what provision to include in the rules, the FCA must
have regard to any regulations that are for the time being in force
under section 113 of the Pension Schemes Act 1993 concerning the
giving of information about the availability of pensions guidance to
20members of pension schemes, and survivors of members of pension
schemes, with subsisting rights in respect of any flexible benefits.
(4) In this section—
-
“flexible benefit” has the meaning given by section 74 of the
Pension Schemes Act 2015; -
25“pensions guidance” means pensions guidance given by virtue
of Part 20A; -
“relevant pension scheme” means a pension scheme set up by a
person with permission under this Act to establish—(a)a personal pension scheme within the meaning of an
30order under section 22, or(b)a stakeholder pension scheme within the meaning of
such an order; -
“subsisting right” has the meaning given by section 76 of the
Pension Schemes Act 2015; -
35“survivor” has the meaning given by section 76 of the Pension
Schemes Act 2015.”
7 (1) Section 138F (notification of rules) is amended as follows.
(2) The existing text becomes subsection (1).
(3) After that subsection insert—
“(2)
40Subsection (1)(b) does not apply to rules made under or by virtue of
section 137FB, 333Q or 333R.”
8 In section 138I (rules: consultation by the FCA)—
(a)
in subsection (6) (exemption from requirement to carry out a cost
benefit analysis), after paragraph (a) insert—
“(aa) 45section 137FB;”;
Pension Schemes BillPage 78
(b) in that subsection, after paragraph (c) insert—
“(ca) section 333Q;
(cb) section 333R;”;
(c)
in subsection (10) (rules to which requirement to consult the PRA
5does not apply), after “apply to” insert “—
(a)
rules made by the FCA under section 137FB, 333Q or
333R, or
(b)”.
9
In section 139A (power of the FCA to give guidance), after subsection (1)
10insert—
“(1A)
The FCA may not give guidance under this section relating to its
functions under sections 333H, 333I, 333J, 333K and 333Q (see section
333P for provision about the giving of guidance relating to these
functions).”
10
15In section 140A (competition scrutiny: interpretation), in subsection (1), in
paragraph (a) of the definition of “regulating provisions”—
(a) in sub-paragraph (ii), after “section 139B(5)” insert “or 333P(9)”;
(b) after sub-paragraph (iv) insert—
“(v) standards set under section 333H;
(vi) 20statement issued by the FCA under 333K;”.
11
In section 168 (appointment of persons to carry out investigations in
particular cases), in subsection (2)(a), after “section 24(1)” insert “or 333G”.
12
In section 429 (Parliamentary control of statutory instruments), in subsection
(2) (regulations subject to the affirmative resolution procedure), for “or 262”
25substitute “, 262, 333C or 333R”.
13
In Schedule 1ZA (the FCA), in paragraph 8 (arrangements for discharging
functions)—
(a)
in sub-paragraph (3) (legislative functions that must be exercised by
the FCA acting through its governing body), in paragraph (c)(i), for
30“or 312J” substitute “, 312J or 333K”;
(b) in sub-paragraph (3), after paragraph (d) insert—
“(e) setting standards under section 333H.”
(c) in sub-paragraph (4), after “section 139B(5)” insert “or 333P(9)”.
14
In that Schedule, in paragraph 11 (annual report), in sub-paragraph (1)
35(matters to be covered in the report), after paragraph (ha) insert—
“(hb)
how, in its opinion, it has complied with its duties in
section 333O,”.
15
In that Schedule, in paragraph 21 (FCA financial penalty scheme), in sub-
paragraph (2) (list of “regulated persons” who may benefit from the
40scheme)—
(a) omit the “and” at the end of paragraph (c);
(b) at the end of paragraph (d) insert “, and
(e) designated guidance providers.”
16 In that Schedule, in paragraph 23 (fees)—
(a)
45in sub-paragraph (1), in the opening words, after “of this Act” insert
“other than sections 333Q and 333R”;
Pension Schemes BillPage 79
(b)
in sub-paragraph (1)(a), after “functions” insert “, other than its
excepted functions,”;
(c)
in sub-paragraph (2)(a), after “(ca)” insert “but not its excepted
functions”;
(d) 5after sub-paragraph (2) insert—
“(2ZA) The “excepted functions” of the FCA are—
(a) its functions under sections 333E to 333Q, and
(b)
its functions under section 333R so far as relating to
the collection of payments.”
17
10In section 85 of the Financial Services Act 2012 (relevant functions in relation
to scheme for investigating complaints against FCA and other regulators), in
subsection (4) (legislative functions of the FCA that are excluded)—
(a) in paragraph (c)(i), for “or 312J” substitute “, 312J or 333K”;
(b) in paragraph (e), after “139B(5)” insert “or 333P(9)”;
(c) 15after paragraph (e) insert—
“(f) setting standards under section 333H of FSMA 2000.”
18
(1)
For the purpose of the exercise of a function conferred by a provision listed
in the first column of the table, a consultation requirement listed in the
corresponding entry in the second column may be satisfied by things done
20before the day on which this Act is passed.
| Provision conferring function |
Consultation requirement |
|---|---|
| Section 137FB of FSMA | Sections 137FB(2) and 138I(1) of FSMA |
| Section 333E(1)(e) of FSMA |
25Section 333E(2) of FSMA |
| Section 333H(1) of FSMA | Section 138I(1) of FSMA as applied with modifications by section 30333H(6) of FSMA |
| Section 333K(1) of FSMA | Section 333L(1) of FSMA |
| Section 333P(1) of FSMA | Section 138(1)(b) of FSMA as applied by section 333P(3) of FSMA |
| Section 333Q(1) of FSMA | 35Sections 138I(1) and 333Q(2) of FSMA. |
| Section 333R(2) of FSMA | Sections 138I(1) and 333R(4) of FSMA |
(2)
Where before the day on which this Act is passed the Financial Conduct
40Authority publishes a draft of proposed standards for the giving of pensions
guidance by designated guidance providers—