Bank of England and Financial Services Bill (HL Bill 75)

(6) After paragraph 9(1) insert—

“(1A) The court of directors may, with the consent of the Chancellor of
the Exchequer, also remove a member appointed under section
13(2)(c) if it is satisfied that in all the circumstances his financial or
5other interests are such as substantially to affect the functions as
member which it would be proper for him to discharge.””

22 (1) Schedule 7 (restriction on disclosure of information) is amended as follows.

(2) In paragraph 2(1)—

(a) omit the “or” at the end of sub-paragraph (b);

(b) 10at the end of sub-paragraph (c) insert “or

(d) its functions as the Prudential Regulation
Authority.””

(3) In paragraph 3(1), in column 1 of the table, in the entry for the Financial
Conduct Authority or the Prudential Regulation Authority omit “or the
15Prudential Regulation Authority”.

Part 2 Other Acts

Bank of England Act 1946 (c. 27)Bank of England Act 1946 (c. 27)

23 In section 4(1) of the Bank of England Act 1946 (power of Treasury to give
20directions to the Bank)—

(a) the words “monetary policy” become paragraph (a);

(b) after that paragraph insert—

“(b) the exercise by the Bank of its functions as the
Prudential Regulation Authority (see section 2A of
25the Financial Services and Markets Act 2000).””

House of Commons Disqualification Act 1975 (c. 24)House of Commons Disqualification Act 1975 (c. 24)

24 In Part 3 of Schedule 1 to the House of Commons Disqualification Act 1975
(other disqualifying offices)—

(a) omit “Member of the governing body of the Prudential Regulation
30Authority;”;

(b) at the appropriate place insert—

““Member of the Prudential Regulation Committee of the Bank of
England appointed under section 30A(2)(f) or (g) of the Bank of
England Act 1998”.”

35Northern Ireland Assembly Disqualification Act 1975 (c. 25)Northern Ireland Assembly Disqualification Act 1975 (c. 25)

25 In Part 3 of Schedule 1 to the Northern Ireland Assembly Disqualification
Act 1975 (other disqualifying offices)—

(a) omit “Member of the governing body of the Prudential Regulation
Authority;”;

(b) 40at the appropriate place insert—

““Member of the Prudential Regulation Committee of the Bank of
England appointed under section 30A(2)(f) or (g) of the Bank of
England Act 1998”.”

Financial Services and Markets Act 2000 (c. 8)Financial Services and Markets Act 2000 (c. 8)

26 5The Financial Services and Markets Act 2000 is amended as follows.

27 Omit section 2O (independent reviews of PRA).

28 Omit section 2P (right to obtain documents etc for purposes of section 2O).

29 In section 3C (duty to follow principles of good governance), for “each
regulator” substitute “the FCA”.

30 (1) 10Section 3Q (co-operation by FCA and PRA with Bank of England) is
amended as follows.

(2) In the heading, omit “and PRA”.

(3) In subsection (1), for “Each regulator” substitute “The FCA”.

(4) In subsection (2), for “regulator” substitute “FCA”.

31 15In section 3R(2) (arrangements for provision of services by and to Bank of
England)—

(a) for “Either regulator” substitute “The FCA”;

(b) in paragraphs (a) and (b), for “regulator” substitute “FCA”.

32 After section 3S insert—

20““Interpretation

3T Interpretation

In this Part “enactment” includes—

(a) an enactment contained in subordinate legislation within the
meaning of the Interpretation Act 1978;

(b) 25an enactment contained in, or in an instrument made under,
an Act of the Scottish Parliament;

(c) an enactment contained in, or in an instrument made under,
a Measure or Act of the National Assembly for Wales;

(d) an enactment contained in, or in an instrument made under,
30Northern Ireland legislation.””

33 (1) Section 137J (rules about recovery plans) is amended as follows.

(2) In subsection (1), for paragraphs (a) and (b) substitute “the Treasury”.

(3) After subsection (1) insert—

“(1A) The FCA must also consult the Bank of England.””

34 (1) 35Section 137K (rules about resolution packs) is amended as follows.

(2) In subsection (1), for paragraphs (a) and (b) substitute “the Treasury”.

(3) After subsection (1) insert—

“(1A) The FCA must also consult the Bank of England.””

35 (1) Section 138F is amended as follows.

(2) In subsection (1), for paragraphs (a) and (b) substitute “to the Treasury”.

(3) After subsection (1) insert—

“(1A) The FCA must also give written notice to the Bank of England.””

(4) 5In subsection (2) for “(1)(b)” substitute “(1A)”.

36 (1) Section 165 (regulators’ power to require information: authorised persons
etc) is amended as follows.

(2) In subsection (4)—

(a) the words from “information” to the end become paragraph (a);

(b) 10at the end of that paragraph (a) insert “, and

“(b) in relation to the exercise by the PRA of the powers conferred
by subsections (1) and (3), to information and documents
reasonably required by the Bank of England in connection
with the exercise by the Bank of its functions in pursuance of
15its financial stability objective.””

(3) After subsection (8) insert—

“(8A) “Financial stability objective” means the objective set out in section
2A of the Bank of England Act 1998.””

37 (1) Section 165A (PRA’s power to require information: financial stability) is
20amended as follows.

(2) In subsection (3)—

(a) the words from “information” to the end become paragraph (a);

(b) at the end of that paragraph (a) insert “, and

(b) information and documents reasonably required by
25the Bank of England in connection with the exercise
by the Bank of its functions in pursuance of its
financial stability objective.””

(3) After subsection (7) insert—

“(7A) “Financial stability objective” means the objective set out in section
302A of the Bank of England Act 1998.””

38 In section 187A(5A) (assessment: consultation by PRA with FCA) for “has
been directed by the Bank of England under section 189(1A)” substitute “is
required by section 189(1ZB)”.

39 (1) Section 189 (assessment procedure) is amended as follows.

(2) 35In subsection (1A), for “But where” substitute “Where the appropriate
regulator is the FCA and”.

(3) After subsection (1A) insert—

“(1ZB) Where the appropriate regulator is the PRA and—

(a) the section 178 notice relates to an acquisition or increase of
40control over a credit institution, investment firm or banking
group company, and

(b) the credit institution, investment firm or banking group
company is one in relation to which the Bank of England is
exercising its powers under sections 6A to 6C of the Banking
Act 2009 or the special resolution regime under Part 1 of that
5Act,

the PRA must act under this Part in a timely manner, and shorten the
assessment period so far as reasonably practicable.””

(4) In subsection (1B), omit the definition of “bank”.

40 In section 190(1A) (requests for further information), after “189(1A)” insert
10“or section 189(1ZB) applies”.

41 In section 192F(3) (consultation between regulators)—

(a) for “either regulator” substitute “the FCA”;

(b) for “the regulator” substitute “it”.

42 In section 192I(1)(a) (statement of policy relating to directions) after
15“regulator and” insert “, where the issuing regulator is the FCA,”.

43 In section 285A(3)(a) (which introduces Part 1 of Schedule 17A) for “and the
PRA” substitute “, and between the FCA and the PRA,”.

44 In section 345A (PRA disciplinary measures) omit subsection (6).

45 (1) Section 348 (restrictions on disclosure of confidential information) is
20amended as follows.

(2) In subsection (5)(aa) for “PRA” substitute “Bank of England”.

(3) At the end insert—

“(8) In this section references to the Bank of England include the Bank
acting in its capacity as the PRA.””

46 (1) 25Section 353A (restriction on disclosing information received from Bank) is
amended as follows.

(2) In subsection (1) for “A regulator” substitute “The FCA”.

(3) In subsection (3) for the words from “the regulator” to the end substitute “the
FCA received the information from the Bank of England.”

(4) 30In subsection (4) for “regulator to which it disclosed the information”
substitute “FCA”.

(5) In subsection (6)—

(a) omit paragraph (a);

(b) in paragraph (d) for “regulator” substitute “FCA”.

(6) 35In subsection (7)—

(a) in the words before paragraph (a) for “a regulator” substitute “the
FCA”;

(b) in paragraphs (a)(i) and (b) for “regulator” substitute “FCA”.

(7) In subsection (8)—

(a) 40for “a regulator” substitute “the FCA”;

(b) for “that regulator” substitute “the FCA”.

(8) In subsection (9)—

(a) for “Each regulator” substitute “The FCA”;

(b) in paragraphs (b) and (c) for “regulator” substitute “FCA”.

(9) After subsection (9) insert—

“(10) In this section references to the Bank of England include the Bank
5acting in its capacity as the PRA.””

47 In section 354B(2) (PRA’s duty to co-operate) for the words from “Bank” to
the end substitute “FCA (but see section 3D)”.

48 Omit section 354C (PRA’s general duty to provide information to Bank).

49 In section 417(1) (definitions) after the definition of “authorised person”
10insert—

• “““Bank of England” is to be read in accordance with section
  2A(4) to (6);”.”

50 (1) Schedule 1ZB (Prudential Regulation Authority) is amended as follows.

(2) In the shoulder note, for “2A” substitute “2AB.”

(3) 15In paragraph 1—

(a) omit the definition of “the Bank”;

(b) for “2A(6)” substitute “2AB(3)”.

(4) Omit paragraphs 2 to 16 and 18.

(5) In paragraph 19 (annual report)—

(a) 20in sub-paragraph (1), in the words before paragraph (a), for
“Treasury” substitute “Chancellor of the Exchequer”;

(b) omit sub-paragraph (3)(a);

(c) in sub-paragraph (4)—

(i) for “Treasury” substitute “Chancellor of the Exchequer”;

(ii) 25for “them” substitute “the Chancellor”;

(d) after sub-paragraph (4) insert—

“(5) The Chancellor may comply with sub-paragraph (4) by
laying a document containing a report under this
paragraph together with a report under section 4 of the
30Bank of England Act 1998.””

(6) Omit paragraphs 22 to 26.

(7) In paragraph 31—

(a) in sub-paragraph (2) for “2A(6)” substitute “2AB(3)”;

(b) in sub-paragraph (4) for “2A(6)(d)” substitute “2AB(3)(d)”.

51 (1) 35Schedule 17A (exercise of Part 18 functions by Bank of England) is amended
as follows.

(2) In paragraph 2(1) for “appropriate regulators” substitute “FCA”.

(3) In paragraph 17—

(a) in sub-paragraph (5), for the words from “the reference” to the end
40substitute “subsection (1)(a) required consultation with the FCA.”;

(b) omit sub-paragraph (6)(b).

(4) In paragraph 23—

(a) the existing text becomes sub-paragraph (1);

(b) after that sub-paragraph insert—

“(2) Paragraph 9(2)(a) does not apply to the reference to the
5PRA in section 348(8).””

(5) In paragraph 35(3)—

(a) at the end of paragraph (a) insert “and”;

(b) omit paragraph (b).

Banking Act 2009 (c. 1)Banking Act 2009 (c. 1)

52 10The Banking Act 2009 is amended as follows.

53 In section 83ZZ (co-operation)—

(a) at the end of paragraph (a) insert “, and”;

(b) omit paragraph (b).

54 (1) Section 83Z1 (delegation of enforcement functions) is amended as follows.

(2) 15In subsection (1)—

(a) for “appropriate regulator” substitute “FCA”;

(b) for “that regulator” substitute “the FCA”.

(3) Omit subsection (2)(b).

(4) In subsection (3), for “appropriate regulator” substitute “FCA”.

55 20In section 89L(2)(c)(i) (application of section 348 of Financial Services and
Markets Act 2000) omit inserted paragraph (ca).

56 (1) Section 96 (ground for applying for bank insolvency order) is amended as
follows.

(2) In subsection (2)(a) omit “the PRA has informed the Bank of England that”.

(3) 25In subsection (3)(a), for the words from “has”, in the first place it occurs, to
the end substitute “is satisfied that Condition 2 in section 7 is met, and”.

57 (1) Section 108 (removal of bank liquidator by court) is amended as follows.

(2) In subsection (2) omit “the Bank of England and”.

(3) In subsection (3) omit “the PRA and”.

58 30In section 117(2)(a) (consents required for making of bank insolvency order)
omit “the Bank of England and”.

59 (1) In section 129A (modifications for banks not regulated by PRA), the table in
subsection (2) is amended as follows.

(2) In the entry for section 108, in column 2—

(a) 35for paragraph (b) substitute—

“(b) Treat the reference in subsection (2) to the FCA as a
reference to the Bank of England.”;”

(b) omit paragraph (c).

(3) In the entry for section 117, in column 2, for paragraph (b) substitute—

“(b) Treat the reference in subsection (2) to the FCA as a
reference to the Bank of England.””

60 Omit section 204(4)(ba) (Bank may disclose information to PRA).

61 5Omit section 246(2)(b) (Bank may disclose information to PRA).

62 Before section 257 insert—

“256B “Bank of England” and “Prudential Regulation Authority”

(1) In this Act references to the Bank of England do not include the Bank
acting in its capacity as the Prudential Regulation Authority.

(2) 10For the interpretation of references to the Prudential Regulation
Authority, see section 2A of the Financial Services and Markets Act
2000.””

63 In section 261 (index of defined terms), at the appropriate places in the table
insert—

Financial Services Act 2012 (c. 21)2012 (c. 21)

64 The Financial Services Act 2012 is amended as follows.

65 20In section 85(8) (definition of relevant functions) for “2A(6)” substitute
“2AB(3)”.

66 (1) Section 117 (interpretation) is amended as follows.

(2) In subsection (2), in the entry for “the PRA”, at the end insert “(and see
section 2A of the Financial Services and Markets Act 2000 for the
25interpretation of references to the Prudential Regulation Authority)”.

(3) After subsection (2) insert—

“(2A) In this Act references to the Bank of England do not include the Bank
acting in its capacity as the PRA.””

Financial Services (Banking Reform) Act 2013 (c. 33)2013 (c. 33)

67 30The Financial Services (Banking Reform) Act 2013 is amended as follows.

68 In section 98(5)(d) (definition of relevant functions), for “2A(6)” substitute
“2AB(3)”.

Repeals

69 The following provisions are repealed.

Section 17

SCHEDULE 3 Saving and transitional provision relating to Part 1

Interpretation

1 In this Schedule—

• 15“the Bank” means the Bank of England;

• “the company” means the body corporate originally incorporated as
  the Prudential Regulation Authority Limited and renamed as the
  Prudential Regulation Authority by section 2A of the Financial
  Services and Markets Act 2000 (as it had effect before section 12 came
  20into force);

• “enactment” has the same meaning as in Part 1A of that Act (see section
  3T);

• “transferred function” means a function transferred from the company
  to the Bank by virtue of section 12;

• 25“transferred property” means any property, right or liability
  transferred from the company to the Bank by virtue of section 15.

Financial stability strategy

2 (1) Sub-paragraph (2) applies to the financial stability strategy, determined by
the court of directors of the Bank under section 9A of the Bank of England
30Act 1998, which is in effect immediately before section 5 comes into force.

(2) After section 5 comes into force the strategy is to continue to have effect, and
is to be treated as having been determined by the Bank.

(3) In section 9A of the Bank of England Act 1998, references to a review include
a review carried out by the court of directors under that section before
35section 5 came into force.

Saving for orders under section 2A(6)(d) of the Financial Services and Markets Act 2000

3 An order made under section 2A(6)(d) of the Financial Services and Markets
Act 2000 before section 12 of this Act comes into force—

(a) is not revoked by virtue of section 12 coming into force, and

(b) may be amended or revoked as if made under section 2AB(3)(d) of
the Financial Services and Markets Act 2000 (inserted by section 12).

Prudential regulation strategy

4 (1) 5Sub-paragraph (2) applies to the strategy determined by the company under
section 2E of the Financial Services and Markets Act 2000 which is in effect
immediately before section 12 comes into force.

(2) After section 12 comes into force the strategy is to continue to have effect,
and is to be treated as having been determined under section 2E of that Act
10by the Bank in its capacity as the Prudential Regulation Authority.

Prudential regulation budget

5 (1) Sub-paragraph (2) applies to the budget adopted by the company under
paragraph 18 of Schedule 1ZB to the Financial Services and Markets Act
2000 for the financial year in which section 12 comes into force.

(2) 15After section 12 comes into force the budget is to be treated as the budget for
the Bank’s functions as the Prudential Regulation Authority for the financial
year to which it relates, adopted by the Prudential Regulation Committee of
the Bank under paragraph 18 of Schedule 6A to the Bank of England Act
1998.

20Annual report

6 (1) Sub-paragraphs (2) and (3) apply to the first report under paragraph 19 of
Schedule 1ZB to the Financial Services and Markets Act 2000 made by the
Bank in its capacity as the Prudential Regulation Authority.

(2) The report must be made not later than a year after the last report made
25under that paragraph by the company.

(3) If section 12 came into force during the period to which the report relates
(“the reporting period”), the report must deal with things done by the
company during the reporting period before that section came into force (as
well as things done by the Bank in its capacity as the Prudential Regulation
30Authority after that section came into force).

Information

7 (1) The company may disclose to the Bank any information which the company
considers that it is necessary or expedient to disclose to the Bank in
preparation for the commencement of section 12.

(2) 35Section 348 of the Financial Services and Markets Act 2000 (restrictions on
disclosure of confidential information) has effect subject to sub-paragraph
(1).

Corporation tax: intangible assets

8 (1) This paragraph applies for the purposes of Part 8 of the Corporation Tax Act
402009.

(2) Expressions used in this paragraph have the same meaning as in that Part.

(3) The transfer of a chargeable intangible asset is a tax-neutral transfer.

(4) An intangible fixed asset which is a pre-FA 2002 asset of the company at the
time of the transfer is to be treated, on and after the transfer, as a pre-FA 2002
asset of the Bank.

(5) 5“Transfer” means a transfer from the company to the Bank by virtue of
section 15.

Construction of enactments and subordinate legislation

9 (1) Section 2A(1) and (3) of the Financial Services and Markets Act 2000
(meaning of “Prudential Regulation Authority”) does not apply to an
10enactment if and to the extent that the enactment makes provision about a
time before section 12 came into force.

(2) In relation to such a time references to the Prudential Regulation Authority
are to the company.

Construction of other documents

10 (1) 15Sub-paragraph (2) applies to any provision in a document other than an
enactment that—

(a) relates to a transferred function and is in effect immediately before
the function is transferred, or

(b) relates to transferred property and is in effect immediately before the
20property is transferred.

(2) After the function or the property is transferred, any references in the
provision (however expressed)—

(a) to or including the company, or

(b) having effect as references to or including the company,

25are to be read, so far as is appropriate in consequence of the transfer, as to or
including the Bank in its capacity as the Prudential Regulation Authority.

Continuity: general provision

11 (1) The transfer of functions from the company to the Bank by virtue of section
12 does not affect the validity of anything done (or having effect as if done)
30by or in relation to the company before that section comes into force.

(2) The transfer of property, rights and liabilities from the company to the Bank
by virtue of section 15 does not affect the validity of anything done (or
having effect as if done) by or in relation to the company before that section
comes into force.

12 (1) 35Sub-paragraph (2) applies to anything that—

(a) is done (or has effect as if done) by or in relation to the company for
the purposes of, or otherwise in connection with, a transferred
function or transferred property, and

(b) is in effect immediately before the function or property is
40transferred.

(2) Anything to which this sub-paragraph applies is to be treated, so far as is
appropriate in consequence of the transfer, as done by or in relation to the
Bank, in its capacity as the Prudential Regulation Authority.