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

   

Mr Chancellor of the Exchequer

NC37

To move the following Clause—

    '.—(1) The general prohibition does not apply to the carrying on of a regulated activity by a person ("P") if—

(a) the conditions set out in subsections (2) to (7) are satisfied; and

(b) there is not in force—

    (i) a direction under section (Directions in relation to the general prohibition), or

    (ii) an order under section (Orders in relation to the general prohibition),

which prevents this subsection from applying to the carrying on of that activity by him.

    (2) P must be—

(a) a member of a profession; or

(b) controlled or managed by one or more such members.

    (3) P must not receive from a person other than his client any pecuniary reward or other advantage, for which he does not account to his client, arising out of his carrying on of any of the activities.

    (4) The manner of the provision by P of any service in the course of carrying on the activities must be incidental to the provision by him of professional services.

    (5) P must not carry on, or hold himself out as carrying on, a regulated activity other than one which rules made as a result of section (Rules in relation to persons to whom the general prohibition does not apply)(3) allow him to carry on.

    (6) The activities must not be of a description, or relate to an investment of a description, specified in an order made by the Treasury for the purposes of this subsection.

    (7) The activities must be the only regulated activities carried on by P.

    (8) "Professional services" means services—

(a) which do not constitute carrying on a regulated activity, and

(b) the provision of which is supervised and regulated by a designated professional body.'.

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Directions in relation to the general prohibition

   

Mr Chancellor of the Exchequer

NC38

To move the following Clause—

    '.—(1) The Authority may direct that section (Exemption from the general prohibition)(1) is not to apply to the extent specified in the direction.

    (2) A direction under subsection (1)—

(a) must be in writing;

(b) may be given in relation to different classes of person or different descriptions of regulated activity.

    (3) The Authority may exercise the power conferred by subsection (1) only if it is satisfied that it is desirable in order to protect the interests of clients.

    (4) In considering whether it is so satisfied, the Authority must have regard amongst other things to the effectiveness of any arrangements made by any designated professional body—

(a) for securing compliance with rules made under (Rules in relation to persons to whom the general prohibition does not apply)(1);

(b) for dealing with complaints against its members in relation to the carrying on by them of exempt regulated activities;

(c) in order to offer redress to clients who suffer, or claim to have suffered, loss as a result of misconduct by its members in their carrying on of exempt regulated activities;

(d) for co-operating with the Authority under section (Authority's general duty)(4).

    (5) In this Part "clients" means—

(a) persons who use, or may be contemplating using, any of the services provided by a member of a profession in the course of carrying on exempt regulated activities;

(b) persons who have rights which are derived from, or otherwise attributable to, or which may be adversely affected by, the use of such services by other persons.'.

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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.'.

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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.'.

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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.'.

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Prepared 26 Jan 2000