Financial Guidance and Claims Bill (HL Bill 1)

A

BILL

TO

Make provision establishing a new financial guidance body; to make
provision about the funding of debt advice in Scotland, Wales and Northern
Ireland; and to make provision about the regulation of claims management
services.

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—

Part 1 Financial Guidance

Establishment of the single financial guidance body

1 The single financial guidance body

(1) 5A body corporate with functions relating to financial guidance is established
(the “single financial guidance body”).

(2) Schedule 1 makes further provision about the single financial guidance body.

(3) The name of the new body is to be determined by regulations made by the
Secretary of State.

(4) 10The regulations may—

(a) amend any provision of this Part, or of any Act amended by this Part,
so as to replace the words “single financial guidance body” with the
name of the body;

(b) make incidental, supplementary and consequential provision.

(5) 15The power to make regulations under subsection (3) is exercisable by statutory
instrument; and an instrument containing such regulations is subject to
annulment in pursuance of a resolution of either House of Parliament.

(6) The consumer financial education body is dissolved.

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(7) Schedule 2 makes provision about schemes for the transfer of staff, property,
rights and liabilities—

(a) from the Secretary of State and the Pensions Advisory Service Limited
to the single financial guidance body;

(b) 5from the consumer financial education body to the single financial
guidance body.

Functions and objectives of the single financial guidance body

2 Functions and objectives

(1) The single financial guidance body has the following functions—

(a) 10the pensions guidance function;

(b) the debt advice function;

(c) the money guidance function;

(d) the strategic function.

(2) The single financial guidance body also has the function of providing advice
15and assistance to the Secretary of State on matters relating to the functions
listed in subsection (1).

(3) The single financial guidance body may do anything that is incidental or
conducive to the exercise of its functions.

(4) The pensions guidance function is to provide, to members of the public,
20information and guidance on matters relating to occupational and personal
pensions.

(5) The debt advice function is to provide, to members of the public in England,
information and advice on debt.

(6) The money guidance function is to provide, to members of the public,
25information and guidance designed to enhance people’s understanding and
knowledge of financial matters and their ability to manage their own financial
affairs.

(7) The strategic function is to support and co-ordinate the development of a
national strategy to improve—

(a) 30the financial capability of members of the public,

(b) the ability of members of the public to manage debt, and

(c) the provision of financial education to children and young people,

by working with others in the financial services industry, the devolved
authorities and the public and voluntary sectors.

(8) 35In exercising its functions, the single financial guidance body must have regard
to its objectives, which are—

(a) to improve the ability of members of the public to make informed
financial decisions,

(b) to support the provision of information, guidance and advice in areas
40where it is lacking,

(c) to secure that information, guidance and advice is provided to
members of the public in the clearest and most cost-effective way
(including having regard to information provided by other
organisations),

Financial Guidance and Claims BillPage 3

(d) to ensure that information, guidance and advice is available to those
most in need of it (and to allocate its resources accordingly), and

(e) to work closely with the devolved authorities as regards the provision
of information, guidance and advice to members of the public in
5Scotland, Wales and Northern Ireland.

(9) In this section “the devolved authorities” means—

(a) the Scottish Ministers,

(b) the Welsh Ministers, and

(c) the Department for Communities in Northern Ireland.

3 10Specific requirements as to the pensions guidance function

(1) As part of its pensions guidance function, the single financial guidance body
must provide information and guidance for the purposes of helping a member
of a pension scheme, or a survivor of a member of a pension scheme, to make
decisions about what to do with the flexible benefits that may be provided to
15the member or survivor.

(2) In subsection (1)—

(a) references to a member, or a survivor of a member, of a pension scheme
include a member, or a survivor of a member, of a pension scheme for
which the PPF has assumed responsibility under Part 2 of the Pensions
20Act 2004 or Part 3 of the Pensions (Northern Ireland) Order 2005 (S.I.
2005/255 (N.I. 1)), but

(b) in relation to such a member or survivor, the reference to the flexible
benefits that may be provided is to be read as a reference to the money
purchase benefits that may be provided by the PPF by virtue of sections
25161 and 170 of that Act or Articles 145 and 154 of that Order.

(3) In this section—

  • “flexible benefit” has the meaning given by section 74 of the Pension
    Schemes Act 2015;

  • “money purchase benefits”—

    (a)

    30in relation to England and Wales and Scotland, has the meaning
    given by section 181(1) of the Pension Schemes Act 1993, and

    (b)

    in relation to Northern Ireland, has the meaning given by
    section 176(1) of the Pension Schemes (Northern Ireland) Act
    1993;

  • 35“pension scheme” has the meaning given by section 1(5) of the Pension
    Schemes Act 1993;

  • PPF” means the Board of the Pension Protection Fund;

  • “survivor” has the meaning given by section 76(1) of the Pension Schemes
    Act 2015.

4 40Delegation of functions to delivery partner organisations

(1) The single financial guidance body may arrange for another person (a
“primary SFGB delivery partner”) to carry out any of the following functions
on its behalf—

(a) the pensions guidance function;

(b) 45the debt advice function;

(c) the money guidance function.

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(2) A primary SFGB delivery partner may arrange for another person (a
“secondary SFGB delivery partner”) to carry out any of the functions it is
carrying out on behalf of the single financial guidance body.

(3) A secondary SFGB delivery partner may arrange for another person to carry
5out any of the functions it is carrying out on behalf of the single financial
guidance body, but only with the consent of the single financial guidance body.

(4) Arrangements under this section may include provision as to payment to the
SFGB delivery partner.

(5) Arrangements under this section must include provision requiring an SFGB
10delivery partner to disclose information to the single financial guidance body
or the FCA when requested to do so to enable the single financial guidance
body or the FCA to exercise the functions set out in section 7 (monitoring and
enforcement of standards).

5 Guidance and directions from the Secretary of State

(1) 15The Secretary of State may issue guidance and give directions to the single
financial guidance body about the exercise of its functions.

(2) The Secretary of State must publish any directions that are given to the single
financial guidance body.

(3) The single financial guidance body must have regard to guidance, and comply
20with directions, given to it by the Secretary of State.

Standards set by the single financial guidance body

6 Setting standards

(1) The single financial guidance body must from time to time set standards to be
complied with by—

(a) 25persons providing information or guidance in pursuance of the body’s
pensions guidance function,

(b) persons providing information or advice in pursuance of the body’s
debt advice function, and

(c) persons providing information or guidance in pursuance of the body’s
30money guidance function.

(2) Before finalising the standards, the single financial guidance body must obtain
the approval of the FCA.

(3) The single financial guidance body must publish the standards.

7 Monitoring and enforcement of standards

(1) 35The single financial guidance body must monitor its own and SFGB delivery
partners’ compliance with the standards.

(2) The FCA must, at least once in every three years, carry out a review of—

(a) whether the standards continue to be appropriate, and

(b) how the single financial guidance body is monitoring and enforcing the
40standards.

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(3) As soon as practicable after the FCA has completed its review, it must provide
a report on the review to—

(a) the single financial guidance body, and

(b) the Secretary of State.

(4) 5The report may contain recommendations to the single financial guidance
body.

Funding of the single financial guidance body

8 Financial assistance from the Secretary of State

(1) The Secretary of State may pay grants or make loans, or give any other form of
10financial assistance, to meet expenditure in connection with the establishment
of the single financial guidance body (including expenditure incurred or
expected to be incurred before the commencement of section 1).

(2) The Secretary of State may pay grants or make loans, or give any other form of
financial assistance, to the single financial guidance body for the purpose of
15enabling it to carry out its functions.

(3) Financial assistance may be given under subsection (1) or (2) subject to any
conditions the Secretary of State thinks appropriate (including conditions as to
repayment).

9 Levies under Pension Schemes Act 1993 and Pension Schemes (NI) Act 1993

(1) 20In section 175(1) of the Pension Schemes Act 1993 (power to make regulations
imposing levies to meet certain expenditure)—

(a) omit the “or” at the end of paragraph (c), and

(b) after paragraph (d) insert or

(e) under section 8 of the Financial Guidance and Claims
25Act 2017 (financial assistance from Secretary of State)
relating to the single financial guidance body’s pensions
guidance function (see section 2 of that Act),”.

(2) In section 170(1) of the Pension Schemes (Northern Ireland) Act 1993 (power to
make regulations imposing levies to meet certain expenditure)—

(a) 30omit the “or” at the end of paragraph (c), and

(b) after paragraph (d) insert or

(e) under section 8 of the Financial Guidance and Claims
Act 2017 (financial assistance from Secretary of State)
relating to the single financial guidance body’s pensions
35guidance function (see section 2 of that Act),”.

(3) References in regulations made under section 175(1) of the Pension Schemes
Act 1993 (including regulations in force before the commencement of this
section) to “expenditure referred to in section 175(1) of the 1993 Act” are to be
read as references to expenditure referred to in section 175(1) of the Pension
40Schemes Act 1993 as amended by this section.

(4) References in regulations made under section 170(1) of the Pension Schemes
(Northern Ireland) Act 1993 (including regulations in force before the
commencement of this section) to “expenditure referred to in section 170(1) of
the Act” are to be read as references to expenditure referred to in section 170(1)

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of the Pension Schemes (Northern Ireland) Act 1993 as amended by this
section.

10 Levy under FSMA 2000 for expenses of single financial guidance body

(1) In the Financial Services and Markets Act 2000, after section 137S, insert—

137SA 5 Rules to recover expenses relating to the single financial guidance
body

(1) The Secretary of State may, from time to time, notify the FCA of the
amount of—

(a) the expenses incurred, or expected to be incurred, by the
10Secretary of State under section 8 of the Financial Guidance and
Claims Act 2017 (financial assistance from Secretary of State to
single financial guidance body), and

(b) any other expenses incurred, or expected to be incurred, by the
Secretary of State in connection with the operation of the single
15financial guidance body,

that the Secretary of State considers should be recovered under this
section.

(2) Where the Secretary of State has notified the FCA of an amount of
expenses under subsection (1), the FCA must make rules for imposing
20levies with a view to recovering—

(a) the amount notified, and

(b) expenses incurred by the FCA in connection with its functions
under this section.

(3) The rules must require the payment to the FCA of specified sums, or
25sums calculated in a specified way, by—

(a) authorised persons, electronic money issuers or payment
service providers, or

(b) any specified class of authorised person, electronic money
issuer or payment service provider.

(4) 30Before the FCA publishes a draft of rules to be made under this section
it must consult the Secretary of State.

(5) The rules may be made only with the consent of the Secretary of State.

(6) The Secretary of State may notify the FCA of matters that will be taken
into account when deciding whether or not to give consent under
35subsection (5).

(7) The 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 the Secretary of State the sums it receives under
rules made under this section, apart from those paid to recover the
40expenses mentioned in subsection (2)(b) (which the FCA may keep).

(9) Subsection (10) applies where—

(a) the Secretary of State has notified the FCA under subsection (1)
of an amount which included expenses expected to be incurred,

(b) the FCA has made rules to recover the amount, and paid sums
45received under the rules to the Secretary of State, but

Financial Guidance and Claims BillPage 7

(c) the expenses expected to be incurred were not in fact incurred.

(10) The Secretary of State need not arrange for the sums received under the
rules to be paid back, but must, when next notifying an amount to the
FCA under subsection (1), take into account the fact that the sums
5received included an amount representing expenses that were not in
fact incurred.

(11) In this section—

  • “electronic money issuer” means a person who is an electronic
    money issuer for the purposes of the Electronic Money
    10Regulations 2011 (S.I. 2011/99) as a result of falling within any
    of paragraphs (a) to (e) and (h) to (j) of the definition in
    regulation 2(1);

  • “payment service provider” means a person who is a payment
    service provider for the purposes of the Payment Services
    15Regulations 2009 (S.I. 2009/209) as a result of falling within any
    of paragraphs (a) to (f) of the definition in regulation 2(1).”

(2) The requirements for the FCA to consult, before making rules under section
137SA of the Financial Services and Markets Act 2000, contained in—

(a) section 137SA(4) of that Act, and

(b) 20section 138I(1) of that Act,

may be satisfied by things done before the day on which this Act is passed.

(3) Rules under section 137SA of the Financial Services and Markets Act 2000 may
impose levies with a view to recovering expenses incurred by the FCA before
the day on which this Act is passed.

25Funding of debt advice in Scotland, Wales and Northern Ireland

11 Levy under FSMA 2000 for debt advice expenses of devolved authorities

(1) In the Financial Services and Markets Act 2000, after section 137SA (inserted by
section 10), insert—

137SB Rules to recover debt advice expenses incurred by the devolved
30authorities

(1) The Treasury may, from time to time, notify the FCA of the amount of
the expenses incurred, or expected to be incurred, by the devolved
authorities in connection with the provision of information and advice
on debt to members of the public in Scotland, Wales and Northern
35Ireland.

(2) Where the Treasury have notified the FCA of an amount of expenses
under subsection (1), the FCA must make rules for imposing levies with
a view to recovering—

(a) the amount notified, and

(b) 40expenses incurred by the FCA in connection with its functions
under this section.

(3) The rules must require the payment to the FCA of specified sums, or
sums calculated in a specified way, by—

(a) authorised persons, electronic money issuers or payment
45service providers, or

Financial Guidance and Claims BillPage 8

(b) any specified class of authorised person, electronic money
issuer or payment service provider.

(4) Before the FCA publishes a draft of rules to be made under this section
it must consult the Treasury.

(5) 5The rules may be made only with the consent of the Treasury.

(6) The Treasury may notify the FCA of matters that will be taken into
account when deciding whether or not to give consent under
subsection (5).

(7) The FCA must have regard to any matters notified under subsection (6)
10before publishing a draft of rules to be made under this section.

(8) The FCA must pay the Treasury the sums it receives under rules made
under this section, apart from those paid to recover the expenses
mentioned in subsection (2)(b) (which the FCA may keep).

(9) Subsection (10) applies where—

(a) 15the Treasury have notified the FCA under subsection (1) of an
amount which included expenses expected to be incurred,

(b) the FCA has made rules to recover the amount, and paid sums
received under the rules to the Treasury, but

(c) the expenses expected to be incurred were not in fact incurred.

(10) 20The Treasury need not arrange for the sums received under the rules to
be paid back, but must, when next notifying an amount to the FCA
under subsection (1), take into account the fact that the sums received
included an amount representing expenses that were not in fact
incurred.

(11) 25In this section—

  • the “devolved authorities” means—

    (a)

    the Scottish Ministers,

    (b)

    the Welsh Ministers, and

    (c)

    the Department for Communities in Northern Ireland;

  • 30“electronic money issuer” and “payment service provider” have
    the same meanings as in section 137SA.”

(2) The requirements for the FCA to consult, before making rules under section
137SB of the Financial Services and Markets Act 2000, contained in—

(a) section 137SB(4) of that Act, and

(b) 35section 138I(1) of that Act,

may be satisfied by things done before the day on which this section comes into
force.

(3) Rules under section 137SB of the Financial Services and Markets Act 2000 may
impose levies with a view to recovering expenses incurred by the FCA before
40the day on which this section comes into force.

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Miscellaneous

12 Disclosure of information

(1) The single financial guidance body may disclose information to the Secretary
of State, and the Secretary of State may disclose information to the single
5financial guidance body, provided that the disclosure (in either case) is for the
purpose of enabling or facilitating the exercise of—

(a) a function of the single financial guidance body, or

(b) a function of the Secretary of State that—

(i) relates directly to the single financial guidance body, or

(ii) 10is the same as, or in a similar area to, a function of the single
financial guidance body.

(2) The single financial guidance body may disclose information to a devolved
authority, and a devolved authority may disclose information to the single
financial guidance body, provided that the disclosure (in either case) is for the
15purpose of enabling or facilitating—

(a) the exercise of a function of the single financial guidance body, or

(b) the provision of information and advice on debt to members of the
public in Scotland, Wales or Northern Ireland.

(3) The single financial guidance body may disclose information to the FCA, and
20the FCA may disclose information to the single financial guidance body,
provided that the disclosure (in either case) is for the purpose of enabling or
facilitating the exercise of—

(a) a function of the single financial guidance body, or

(b) a function of the FCA that—

(i) 25relates directly to the single financial guidance body, or

(ii) is in a similar area to a function of the single financial guidance
body.

(4) A devolved authority may disclose information to the FCA, and the FCA may
disclose information to a devolved authority, provided that the disclosure (in
30either case) is for the purpose of enabling or facilitating—

(a) the provision of information and advice on debt to members of the
public in Scotland, Wales or Northern Ireland, or

(b) the exercise of a function of the FCA that relates to the provision of
information or advice on debt.

(5) 35The single financial guidance body may disclose information to an SFGB
delivery partner, and an SFGB delivery partner may disclose information to
the single financial guidance body, provided that the disclosure (in either case)
is for the purpose of enabling or facilitating the exercise of a function that the
SFGB delivery partner is carrying out on behalf of the single financial guidance
40body.

(6) The single financial guidance body must disclose information—

(a) to the Secretary of State, where requested to do so by the Secretary of
State;

(b) to the FCA, where the FCA requests information for the purposes of a
45review under section 7 (monitoring and enforcement of standards).

(7) A disclosure of information which is authorised or required by this section
does not breach—