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Financial Services and Markets Bill - continued        House of Commons
PART IX, RULES AND GUIDANCE - continued
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  CHAPTER III
  COMPETITION SCRUTINY
Interpretation.     129. - (1) In this Chapter-
 
 
    "Director" means the Director General of Fair Trading;
 
    "practices", in relation to the Authority, means practices adopted by the Authority in the exercise of functions under this Act;
 
    "regulating provisions" means any-
 
      (a) rules;
 
      (b) general guidance (as defined by section 128(5));
 
      (c) other guidance published under section 67;
 
      (d) statement issued by the Authority under section 61;
 
      (e) statement published by the Authority under section 67, 99 or 182;
 
      (f) code issued by the Authority under section 61 or 96.
      (2) For the purposes of this Chapter, regulating provisions or practices have a significant anti-competitive effect if they have, or are intended or likely to have, to any significant extent the effect of preventing, restricting or distorting competition.
 
      (3) In determining under this Chapter whether any of the regulating provisions have, or are likely to have, a particular effect, the Treasury and the Director may assume that the persons to whom the provisions concerned are addressed will act in accordance with them.
 
Reports by Director General of Fair Trading.     130. - (1) If the Authority-
 
 
    (a) makes, issues or publishes new regulating provisions, or
 
    (b) alters or revokes any of its regulating provisions,
  it must give written notice to the Director without delay.
 
      (2) A notice under subsection (1) must include a statement as to whether the matter to which the notice relates is likely to have any effect on competition.
 
      (3) The Director may report to the Treasury that a matter of which he receives notice under subsection (1) does not in his opinion result in the regulating provisions having a significant anti-competitive effect.
 
      (4) The Director must keep under review-
 
 
    (a) the regulating provisions, and
 
    (b) the matters specified in any notices sent to him under this section,
  and if at any time he is of the opinion that any regulating provisions or any such matters as are mentioned in paragraph (b) (taken alone or together) have a significant anti-competitive effect, he must report that to the Treasury, giving details of what the effect is or is likely to be.
 
      (5) The Director-
 
 
    (a) may at any time consider whether the Authority's practices have a significant anti-competitive effect and, if so, what the effect is or is likely to be; and
 
    (b) if he is of that opinion, he must report it to the Treasury, giving details of what the effect is or is likely to be.
      (6) The Director may, if he thinks fit, publish any report made by him under subsection (3).
 
      (7) The Treasury must publish any report made to them by the Director under subsection (4) or (5).
 
      (8) A report which is published under subsection (6) or (7) must, so far as is practicable, exclude any matter which relates to the affairs of a particular person the publication of which, in the opinion of the Director or the Treasury, would or might seriously and prejudicially affect the interests of that person.
 
Power of the Director to request information.     131. - (1) For the purpose of investigating any matter with a view to its consideration under section 130, the Director may exercise the powers conferred on him by this section.
 
      (2) The Director may by notice in writing require any person to produce to him or to a person appointed by him for the purpose, at a time and place specified in the notice, any document which-
 
 
    (a) is specified or described in the notice;
 
    (b) is a document in that person's custody or under his control; and
 
    (c) relates to any matter relevant to the investigation.
      (3) The Director may by notice in writing-
 
 
    (a) require any person carrying on any business to provide him with such information as may be specified or described in the notice; and
 
    (b) specify the time within which, and the manner and form in which, any such information is to be provided.
      (4) No person may be required under this section to produce or disclose a privileged communication.
 
      (5) If a person ("the defaulter") refuses, or otherwise fails, to comply with a notice under this section, the Director may certify that fact in writing to the court and the court may enquire into the case.
 
      (6) If, after hearing any witness who may be produced against or on behalf of the defaulter and any statement which may be offered in defence, the court is satisfied that the defaulter did not have a reasonable excuse for refusing or otherwise failing to comply with the notice, the court may punish the defaulter as if he had been guilty of contempt of court.
 
      (7) "Court" means-
 
 
    (a) the High Court; or
 
    (b) in relation to Scotland, the Court of Session.
Powers and duties of Treasury.     132. - (1) The Treasury may take action under subsection (3) if it appears to them that-
 
 
    (a) the regulating provisions or practices referred to in a report from the Director under section 130(4) or (5) have, or are intended or likely to have, a significant anti-competitive effect; and
 
    (b) any of those regulating provisions or practices have a significant anti-competitive effect which is greater than is necessary for a permitted purpose.
      (2) "Permitted purposes" are-
 
 
    (a) protecting the interests of persons who use, or are or may be contemplating using, any of the services provided by authorised persons in carrying on regulated activities;
 
    (b) maintaining confidence in the financial system;
 
    (c) ensuring compliance with an international obligation of the United Kingdom.
      (3) The Treasury may do one or both of the following-
 
 
    (a) direct the Authority to take specified steps for the purpose of securing that the significant anti-competitive effect of the regulating provisions or practices is no greater than is necessary for a permitted purpose;
 
    (b) alter any rules for that purpose.
      (4) Before acting under subsection (3), the Treasury must-
 
 
    (a) take such steps as they consider appropriate to allow the Authority, and any other person appearing to the Treasury to be affected, an opportunity to make representations-
 
      (i) about a report made by the Director under section 130(4) or (5);
 
      (ii) as to whether, and if so how, the Treasury should exercise their powers under subsection (3); and
 
    (b) have regard to any such representations.
      (5) "The financial system" has the same meaning as in section 3.
 
 
Exclusions from UK competition law
The Fair Trading Act 1973.     133. - (1) For the purpose of determining whether a monopoly situation within the meaning of the Fair Trading Act 1973 ("the 1973 Act") exists by reason of the circumstances mentioned in section 7(1)(c) of that Act, no account shall be taken of-
 
 
    (a) the Authority's regulating provisions or any conduct required or contemplated by those provisions;
 
    (b) any practices of the Authority; or
 
    (c) any practices of persons who are subject to the Authority's regulating provisions and which are required or contemplated by those provisions.
      (2) Subsection (3) applies if, on a monopoly reference under section 50 or 51 of the 1973 Act which falls within section 49 of that Act, the Competition Commission finds that a monopoly situation within the meaning of that Act exists and-
 
 
    (a) that the person (or, if more than one, any of the persons) in whose favour it exists is subject to the Authority's regulating provisions; or
 
    (b) that any such person's conduct in carrying on a business to which those provisions relate is the subject of any of those provisions.
      (3) The Commission, in making its report on the reference, must exclude from its consideration the question whether the regulating provisions or the Authority's practices operate, or may be expected to operate, against the public interest.
 
      (4) Section 54(3) of the 1973 Act has effect subject to subsection (3).
 
The Competition Act 1998.     134. - (1) The Chapter I prohibition does not apply to an agreement the parties to which consist of or include-
 
 
    (a) an authorised person, or
 
    (b) a person who is otherwise subject to the Authority's regulating provisions,
  to the extent to which the agreement consists of provisions the inclusion of which is required or contemplated by any of the Authority's regulating provisions or practices.
 
      (2) The Chapter I prohibition does not apply to the practices of an authorised person or a person who is otherwise subject to the regulating provisions to the extent to which the practices are required or contemplated by any of the Authority's regulating provisions or practices.
 
      (3) The Chapter II prohibition does not apply to conduct of-
 
 
    (a) an authorised person, or
 
    (b) a person who is otherwise subject to the Authority's regulating provisions,
  to the extent to which the conduct is required or contemplated by any of the Authority's regulating provisions or practices.
 
      (4) "The Chapter I prohibition" means the prohibition imposed by section 2(1) of the Competition Act 1998.
 
      (5) "The Chapter II prohibition" means the prohibition imposed by section 18(1) of that Act.
 
 
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