Amendments proposed to the Financial Services and Markets Bill, As Amended - continued House of Commons

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Orders in relation to the general prohibition

   

Mr Chancellor of the Exchequer

NC39

To move the following Clause—

    '.—(1) Subsection (2) applies if it appears to the Authority that a person to whom, as a result of section (Exemption from the general prohibition)(1), the general prohibition does not apply is not a fit and proper person to carry on regulated activities in accordance with that section.

    (2) The Authority may make an order disapplying section (Exemption from the general prohibition)(1) in relation to that person to the extent specified in the order.

    (3) The Authority may, on the application of the person named in an order under subsection (1), vary or revoke it.

    (4) "Specified" means specified in the order.

    (5) If a partnership is named in an order under this section, the order is not affected by any change in its membership.

    (6) If a partnership named in an order under this section is dissolved, the order continues to have effect in relation to any partnership which succeeds to the business of the dissolved partnership.

    (7) For the purposes of subsection (6), a partnership is to be regarded as succeeding to the business of another partnership only if—

      (a) the members of the resulting partnership are substantially the same as those of the former partnership; and

      (b) succession is to the whole or substantially the whole of the business of the former partnership.'.


Consultation

   

Mr Chancellor of the Exchequer

NC40

To move the following Clause—

    '.—(1) Before giving a direction under section (Directions in relation to the general prohibition)(1), the Authority must publish a draft of the proposed direction.

    (2) The draft must be accompanied by—

      (a) a cost benefit analysis; and

      (b) notice that representations about the proposed direction may be made to the Authority within a specified time.

    (3) Before giving the proposed direction, the Authority must have regard to any representations made to it in accordance with subsection (2)(b).

    (4) If the Authority gives the proposed direction it must publish an account, in general terms, of—

      (a) the representations made to it in accordance with subsection (2)(b); and

      (b) its response to them.

    (5) If the direction differs from the draft published under subsection (1) in a way which is, in the opinion of the Authority, significant—

      (a) the Authority must (in addition to complying with subsection (4)) publish details of the difference; and

      (b) those details must be accompanied by a cost benefit analysis.

    (6) Subsections (1) to (5) do not apply if the Authority considers that the delay involved in complying with them would prejudice the interests of consumers.

    (7) Neither subsection (2)(a) nor subsection (5)(b) applies if the Authority considers—

      (a) that, making the appropriate comparison, there will be no increase in costs; or

      (b) that, making that comparison, there will be an increase in costs but the increase will be of minimal significance.

    (8) The Authority may charge a reasonable fee for providing a person with a copy of a draft published under subsection (1).

    (9) When the Authority is required to publish a document under this section it must do so in the way appearing to it to be best calculated to bring it to the attention of the public.

    (10) "Cost benefit analysis" means an estimate of the costs together with an analysis of the benefits that will arise—

      (a) if the proposed direction is given; or

      (b) if subsection (5)(b) applies, from the direction that has been given.

    (11) "The appropriate comparison" means—

      (a) in relation to subsection (2)(a), a comparison between the overall position if the direction is given and the overall position if it is not given;

      (b) in relation to subsection (5)(b), a comparison between the overall position after the giving of the direction and the overall position before it was given.'.


Procedure on making or varying orders under section (Orders in relation to the general prohibition)

   

Mr Chancellor of the Exchequer

NC41

To move the following Clause—

    '.—(1) If the Authority proposes to make an order under section (Orders in relation to the general prohibition), it must give the person concerned a warning notice.

    (2) The warning notice must set out the terms of the proposed order.

    (3) If the Authority decides to make an order under section (Orders in relation to the general prohibition), it must give the person concerned a decision notice.

    (4) The decision notice must—

      (a) name the person to whom the order applies;

      (b) set out the terms of the order; and

      (c) be given to the person named in the order.

    (5) Subsections (6) to (8) apply to an application for the variation or revocation of an order under section (Orders in relation to the general prohibition).

    (6) If the Authority decides to grant the application, it must give the applicant written notice of its decision.

    (7) If the Authority proposes to refuse the application, it must give the applicant a warning notice.

    (8) If the Authority decides to refuse the application, it must give the applicant a decision notice.

    (9) A person—

      (a) against whom the Authority have decided to make an order under section (Orders in relation to the general prohibition), or

      (b) whose application for the variation or revocation of such an order the Authority had decided to refuse,

    may refer the matter to the Tribunal.

    (10) The Authority may not make an order under section (Orders in relation to the general prohibition) unless—

      (a) the period within which the decision to make to the order may be referred to the Tribunal has expired and no such reference has been made; or

      (b) if such a reference has been made, the reference has been determined.'.


Rules in relation to persons to whom the general prohibition does not apply

   

Mr Chancellor of the Exchequer

NC42

To move the following Clause—

    '.—(1) The Authority may make rules applicable to persons to whom, as a result of section (Exemption from the general prohibition)(1), the general prohibition does not apply.

    (2) The power conferred by subsection (1) is to be exercised for the purpose of ensuring that clients are aware that such persons are not authorised persons.

    (3) A designated professional body must make rules—

      (a) applicable to members of the profession in relation to which it is established who are not authorised persons; and

      (b) governing the carrying on of regulated activities by those members.

    (4) Rules made in compliance with subsection (3) must be designed to secure that, in providing a particular professional service to a particular client, the member carries on only regulated activities which arise out of, or are complementary to, the provision by him of that service to that client.

    (5) Rules made by a designated professional body under subsection (3) require the approval of the Authority.'.


Restrictions on powers of Treasury

   

Mr William Hague
Mr Francis Maude [R]
Mr David Heathcoat-Amory
Mr Howard Flight [R]
Sir Nicholas Lyell
Mr Tim Loughton [R]

NC1

To move the following Clause:—

    '(1) Where given power under this Act to make regulations or orders, the Treasury shall not exercise those powers so as to impose restrictions or requirements which are likely to have any of the relevant effects, except to the necessary extent, and shall disapply, limit or relax restrictions or requirements imposed by or under this Act so as to seek to ensure that they are likely to have the relevant effects only to the necessary extent.

    (2) The relevant effects are: impairing, impeding, restricting or distorting competition or innovation.

    (3) The necessary extent is: the extent necessary to protect actual or potential consumers and financial markets or exchanges or to maintain confidence in the financial system.

    (4) Competition is: the international competitiveness of the United Kingdom, the financial system or UK persons and competition between authorised persons.

    (5) "Consumers" has the same meaning as in section 5.

    (6) "The financial system" has the same meaning as in section 3.

    (7) "UK person" means a person whose registered office (or, if he does not have a registered office, whose head office) is in the United Kingdom.'.


Matters to be included in orders under section 20

   

Mr William Hague
Mr Francis Maude [R]
Mr David Heathcoat-Amory
Mr Howard Flight [R]
Sir Nicholas Lyell
Mr Tim Loughton [R]

NC2

To move the following Clause:—

    '.—(1) The Treasury shall specify each of the activities set out in subsection (2) in any order made by it pursuant to section 20.

    (2) The activities referred to in subsection (1) are the following—

      (a) providing advice to a consumer on the choice of a manager;

      (b) providing advice to a consumer on the performance of assets under the management of a manager;

      (c) providing advice to a consumer on asset mix or allocation for a fund;

      (d) advising on the structuring or reorganisation of a fund.

    (3) References in this section to advice and advising do not include the provision of legal advice.

    (4) "Consumer" means a person who uses, or may be contemplating using, the services provided by a manager.

    (5) "Manager" means a person who performs the regulated activity of managing investments in the United Kingdom.

    (6) "Fund" means an occupational pension scheme, or other assets held under trust.

    (7) "Occupational pension scheme" means any scheme or arrangement which is comprised in one or more instruments or agreements and which has, or is capable of having, effect in relation to one or more descriptions or categories of employment so as to provide benefits, in the form of pensions or otherwise, payable on termination of service, or on death or retirement, to or in respect of earners with qualifying service in an employment of any such description or category.'.

 
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Prepared 24 Jan 2000