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

424

Page     190,     line     33     [Clause     364],     leave out paragraph (b).

   

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

184

Page     190,     line     33     [Clause     364],     leave out 'in any EEA State' and insert—

    (i) in any EEA State; or

    (ii) in exercise of an EEA right;'.

   

Mr Chancellor of the Exchequer

425

Page     190,     line     35     [Clause     364],     leave out 'that' and insert 'the regulated'.

   

Mr Chancellor of the Exchequer

426

Page     190,     line     40     [Clause     364],     leave out 'third' and insert 'fourth'.

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

38

Page     193,     line     9     [Clause     367],     at end insert—

    '(8) An agreement or arrangement is not within subsection (4)(g) if the agreement or arrangement is for the other person to acquire, hold or dispose of shares or other interests as agent or custodian on behalf of H without the other person being able to exercise, or control the exercise of, voting rights otherwise than at the direction of H.'.

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

52

Page     194,     line     37     [Clause     372],     leave out 'other provision of this Act' and insert 'provision of this Act other than section (Restrictions on powers of Treasury).'

   

Mr Chancellor of the Exchequer

427

Page     194,     line     41     [Clause     373],     at end insert—

    '( ) The Lord Chancellor's power to make rules under section 107 is exercisable by statutory instrument.'.

   

Mr Chancellor of the Exchequer

428

Page     194,     line     44     [Clause     373],     leave out 'Treasury consider' and insert 'person making it considers'.

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

53

Page     195,     line     3     [Clause     374],     after 'section', insert '110(6A), 111(6),'.

   

Mr Chancellor of the Exchequer

429

Page     195,     line     3     [Clause     374],     leave out '237' and insert '(Carrying on regulated activities by way of business)'.

   

Mr Chancellor of the Exchequer

430

Page     195,     line     6     [Clause     374],     at end insert—

    '( ) No regulations are to be made under section 237 unless a draft of the regulations has been laid before Parliament and approved by a resolution of each House.'.

   

Mr Chancellor of the Exchequer

431

Page     195,     line     7     [Clause     374],     leave out from beginning to second 'to' and insert 'An order to which, if it is made, subsection (4) will apply is not'.

   

Mr Chancellor of the Exchequer

432

Page     195,     line     10     [Clause     374],     leave out subsection (3).

   

Mr Chancellor of the Exchequer

433

Page     195,     line     13     [Clause     374],     leave out 'made'.

   

Mr Chancellor of the Exchequer

434

Page     195,     line     17     [Clause     374],     at end insert—

'( ) it is the first order to be made, or to contain provision made, under section 19(5);'.

   

Mr Chancellor of the Exchequer

435

Page     195,     line     22     [Clause     374],     leave out subsection (5).

   

Mr Chancellor of the Exchequer

455

Page     195,     line     24     [Clause     374],     at end insert—

    '(5A) An order containing a provision to which, if the order is made, subsection (5B) will apply is not to be made unless a draft of the order has been laid before Parliament and approved by a resolution of each House.

    (5B) This subsection applies to a provision contained in an order if—

(a) it is the first to be made in the exercise of the power conferred by subsection (1) of section (Designation of professional bodies) or it removes a body from those for the time being designated under that subsection; or

(b) it is the first to be made in the exercise of the power conferred by subsection (6) of section (Exemption from the general prohibition) or it adds a description of regulated activity or investment to those for the time being specified for the purposes of that subsection.'.

   

Mr Chancellor of the Exchequer

436

Page     195,     line     26     [Clause     374],     after '376(2)' insert 'or to which paragraph 26 of Schedule 2 applies'.

   

Dr Vincent Cable
Mr Brian Cotter
Mr Colin Breed

28

Page     195,     line     30     [Clause     376], after 'Sections', insert '20,'.

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NEW SCHEDULES

Insurance and banking business transfer schemes: certificates

   

Mr Chancellor of the Exchequer

NS1

To move the following Schedule—

'TRANSFER SCHEMES: CERTIFICATES

Part I

Insurance Business Transfer Schemes

    1.—(1) For the purposes of section (Sanction of the court for business transfer schemes)(3) the appropriate certificates, in relation to an insurance business transfer scheme, are—

(a) a certificate under paragraph 2;

(b) if sub-paragraph (2) applies, a certificate under paragraph 3;

(c) if sub-paragraph (3) applies, a certificate under paragraph 4;

(d) if sub-paragraph (4) applies, a certificate under paragraph 5.

    (2) This sub-paragraph applies if—

(a) the authorised person concerned is a UK authorised person which has received authorisation under Article 6 of the first life insurance directive or of the first non-life insurance directive from the Authority; and

(b) the establishment from which the business is to be transferred under the proposed insurance business transfer scheme is in an EEA State other than the United Kingdom.

    (3) This sub-paragraph applies if—

(a) the authorised person concerned has received authorisation under Article 6 of the first life insurance directive from the Authority;

(b) the proposed transfer relates to long-term insurance business; and

(c) as regards any policy which is included in the proposed transfer and which evidences a contract of insurance (other than reinsurance), an EEA State other than the United Kingdom is the State of the commitment.

    (4) This sub-paragraph applies if—

(a) the authorised person concerned has received authorisation under Article 6 of the first non-life insurance directive from the Authority;

(b) the business to which the proposed insurance business transfer scheme relates is general insurance business; and

(c) as regards any policy which is included in the proposed transfer and which evidences a contract of insurance (other than reinsurance), the risk is situated in an EEA State other than the United Kingdom.

Certificates as to margin of solvency

    2.—(1) A certificate under this paragraph is to be given—

(a) by the relevant authority; or

(b) in a case in which there is no relevant authority, given by the Authority.

    (2) A certificate given under sub-paragraph (1)(a) is one certifying that, taking the proposed transfer into account—

(a) the transferee possesses, or will possess before the scheme takes effect, the necessary margin of solvency; or

(b) there is no necessary margin of solvency applicable to the transferee.

    (3) A certificate under sub-paragraph (1)(b) is one certifying that the Authority has received from the authority which it considers to be the authority responsible for supervising insurance companies in the place to which the business is to be transferred that, taking the proposed transfer into account—

(a) the transferee possesses or will possess before the scheme takes effect the margin of solvency required under the law applicable in that place; or

(b) there is no such margin of solvency applicable to the transferee .

    (4) "Necessary margin of solvency" means the margin of solvency required in relation to the transferee, taking the proposed transfer into account, under the law which it is the responsibility of the relevant authority to apply.

    (5) "Margin of solvency" means the excess of the value of the assets of the transferee over the amount of its liabilities.

    (6) "Relevant authority" means—

(a) if the transferee is an EEA firm falling within paragraph 5(d) of Schedule 3, its home state regulator;

(b) if the transferee is a Swiss general insurance company, the authority responsible for supervising insurance companies in Switzerland;

(c) if the transferee is an authorised person not falling within paragraph (a) or (b), the Authority.

    (7) In sub-paragraph (6), any reference to a transferee of a particular description includes a reference to a transferee who will be of that description if the proposed scheme takes effect.

    (8) "Swiss general insurance company" means a company—

(a) whose head office is in Switzerland;

(b) which has permission to carry on regulated activities consisting of the effecting and carrying out of general insurance contracts; and

(c) whose permission is not restricted to reinsurance business.

Certificates as to consent

    3. A certificate under this paragraph is one given by the Authority and certifying that the host State regulator has been notified of the proposed scheme and that—

(a) that regulator has responded to the notification; or

(b) that it has not responded but the period of three months beginning with the notification has elapsed.

Certificates as to long-term business

    4. A certificate under this paragraph is one given by the Authority and certifying that the authority responsible for supervising insurance companies in the State of the commitment has been notified of the proposed scheme and that—

(a) that authority has consented to the proposed scheme; or

(b) the period of three months beginning with the notification has elapsed and that authority has not refused its consent.

Certificates as to general business

    5. A certificate under this paragraph is one given by the Authority and certifying that the authority responsible for supervising insurance companies in the EEA State in which the risk is situated has been notified of the proposed scheme and that—

(a) that authority has consented to the proposed scheme; or

(b) the period of three months beginning with the notification has elapsed and that authority has not refused its consent.

Interpretation of Part I

    6.—(1) "State of the commitment", in relation to a commitment entered into at any date, means—

(a) if the policyholder is an individual, the State in which he had his habitual residence at that date;

(b) if the policyholder is not an individual, the State in which the establishment of the policyholder to which the commitment relates was situated at that date.

    (2) "Commitment" means a commitment represented by insurance business of a prescribed class.

    (3) References to the EEA State in which a risk is situated are—

(a) if the insurance relates to a building or to a building and its contents (so far as the contents are covered by the same policy), to the EEA State in which the building is situated;

(b) if the insurance relates to a vehicle of any type, to the EEA State of registration;

(c) in the case of policies of a duration of four months or less covering travel or holiday risks (whatever the class concerned), to the EEA State in which the policyholder took out the policy;

(d) in a case not covered by paragraphs (a) to (c)—

    (i) if the policyholder is an individual, to the EEA State in which he has his habitual residence at the date when the contract is entered into; and

    (ii) otherwise, to the EEA State in which the establishment of the policyholder to which the policy relates is situated at that date.

Part II

Banking Business Transfer Schemes

    7.—(1) For the purposes of section (Sanction of the court for business transfer schemes)(3) the appropriate certificates, in relation to a banking business transfer scheme, are—

(a) a certificate under paragraph 8; and

(b) if sub-paragraph (2) applies, a certificate under paragraph 9.

    (2) This sub-paragraph applies if the authorised person concerned or the transferee is an EEA firm falling within paragraph 5(b) of Schedule j05036.s.

Certificates as to financial resources

    8.—(1) A certificate under this paragraph is one given by the relevant authority and certifying that, taking the proposed transfer into account, the transferee possesses, or will possess before the scheme takes effect, adequate financial resources.

    (2) "Relevant authority" means—

(a) if the transferee is a person with a Part IV permission or with permission under Schedule j04188.s, the Authority;

(b) if the transferee is an EEA firm falling within paragraph 5(b) of Schedule j05036.s, its home state regulator;

(c) if the transferee does not fall within paragraph (a) or (b), the authority responsible for the supervision of the transferee's business in the place in which the transferee has its head office.

    (3) In sub-paragraph (2), any reference to a transferee of a particular description of person includes a reference to a transferee who will be of that description if the proposed banking business transfer scheme takes effect.

Certificates as to consent of home state regulator

    9. A certificate under this paragraph is one given by the Authority and certifying that the home State regulator of the authorised person concerned or of the transferee has been notified of the proposed scheme and that—

(a) the home State regulator has responded to the notification; or

(b) the period of three months beginning with the notification has elapsed.'.

Prepared 26 Jan 2000