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"(2A) If no warning notice is given before the end of the period for consideration the application shall be treated as granted.".
Government amendments Nos. 249 to 255.
Amendment No. 225, in clause 62, page 29, line 1, after "issue", insert "or alter".
Amendment No. 226, in page 29, line 2, after "it", insert--
Government amendments Nos. 256 to 270, 272 to 277 and 279.
Amendment No. 227, in clause 85, page 39, line 26, at end insert--
Amendment No. 228, in page 39, line 30, at end insert--
Government amendments Nos. 280 to 284.
Amendment No. 229, in clause 87, page 40, line 10, at end insert--
Government amendments Nos. 285 to 315.
Amendment No. 365, in clause 142, page 68, line 30, at end insert--
Amendment No. 375, in clause 183, page 91, line 3, at end insert--
Amendment No. 376, in clause 184, page 91, line 12, at end insert--
Government amendments Nos. 320 to 325.
Amendment No. 377, in page 91, line 32, leave out "authorised persons" and insert "the public".
Government amendment No. 326.
Amendment No. 378, in clause 185, page 91, line 37, leave out--
and insert--
Amendment No. 379, in page 91, line 37, at end insert--
Government amendments Nos. 327 to 329.
Amendment No. 392, in clause 235, page 118, line 32, leave out from "give" to end of line and insert--
Amendment No. 394, in clause 236, page 119, line 38, after "must", insert--
Government amendments Nos. 140 and 331 to 344.
Amendment No. 11, in clause 351, page 181, line 39, after "case", insert--
Government amendments Nos. 345 to 363.
Mr. Timms:
The Government gave an undertaking in Committee to standardise the FSA's procedures, including for when the FSA consults on its making and amending of rules and codes, and of policy statements. New clauses 13, 14, 25, 26, 30, 31 and a number of amendments are intended to achieve that consistency, and I hope that they will be widely welcomed.
New clauses 40 and 41 relate to the new provisions on professionals. New clause 40 deals with the procedures to apply to directions by the FSA to cut back the scope of
the exemption in relation to classes of person or activity. It sets out the procedure for consulting on a direction in line with similar procedures throughout the Bill. New clause 41 deals with individual orders made by the FSA to ban persons from carrying on regulated activities under the professionals' exemption. It sets out the procedure that will apply to a banning order under new clause 39. Essentially, the warning and decision notice procedures applied throughout the Bill should be adhered to, and the subject of the order can refer the matter to the tribunal.
Clause 48 provides that an authorised person should have a certificate setting out the terms of their permission and that the certificate is to have particular evidential weight. At present, the certificate takes precedence over the register that the FSA must maintain under clause 311, or over the notice to be issued under clause 47(4), in determining a person's position.
Our intention was to provide some certainty for authorised persons. However, we have become aware that some difficult practical issues would result from giving precedence to certificates in that way. It would be imperative for the FSA always to repossess a certificate when a permission is altered or cancelled. For example, what would happen if the authorised person declined to return the certificate or claimed to have lost it?
We are persuaded that it would not be right to place such reliance on certificates. By deleting clause 48 and the related provisions in schedule 5, we are deliberately leaving it open to the courts to place weight on a variety of forms of documentation--including the public register to be maintained by the FSA under clause 311--as they consider appropriate.
Amendment No. 269 makes a simple drafting change to clause 63. Amendment No. 140 makes a consequential change to clause 274, following the introduction in Committee of provisions as to recognised nominees. It provides that the FSA must have regard to representations from a recognised nominee before using its power of direction in respect of such a body.
Mr. Flight:
As the Minister pointed out, the Government's new clauses and the related amendments would standardise various procedural requirements relating to the making by the FSA of rules and codes and to the issue of policy statements. As far as we have been able to digest them, the amendments are welcome improvements; they appear to work.
However, the Opposition have some qualifications or questions. First, although in some cases the consultation procedures apply to proposals to alter or replace statements or policies, it is not clear what the position would be if the FSA proposed to alter rules made under part IX. If the rules were revoked and replaced by new ones, the consultation procedure would apply; however, the provisions do not cover alterations to rules.
Secondly, it seems to be assumed that many existing rules will be continued under the measure. As we have pointed out, those rules are intended to be grandfathered so as to avoid the need for the consultation procedure, and will not be subject to cost-benefit analysis. We are not clear how that grandfathering will be put into effect.
Thirdly, the consultation procedures do not apply to the Treasury's powers to make orders or to prescribe other matters under the measure. We think that the procedures should apply.
Finally, various Opposition amendments buried within the group cover many different territories. I shall not address each one, but shall discuss them in groups.
Amendment No. 236 is especially important. It would require the FSA to consult persons representing the interests of practitioners before making appointments to the practitioner panel. We had tabled alternative amendments on that. However, such a panel must be properly representative of practitioners and consultation is a sensible way to achieve that.
Amendments Nos. 216 and 217 would amend clause 49 to bring within the warning notice, decision notice procedures proposals by the FSA to impose conditions on applicants for permission to carry on regulated activities. Amendments Nos. 218 to 221 would amend clause 50 to bring within those procedures proposals by the FSA to use its own-initiative power, for example in non-urgent cases.
In the case of any application for approval, amendment No. 224 would provide that, if no warning notice were given before the end of the period for consideration of the application--the three-month period--the application would be treated as granted. We proposed that amendment in Committee and I thought that it had received a sympathetic response.
Amendments Nos. 227 and 228 would introduce to clause 85 the provisions of clauses 349 and 350--the warning notice, decision notice procedures--in the case of the proposed imposition of penalties for contravention of listing rules.
Amendment No. 365 would require a copy of an investigator's report made under the provisions of clauses 139 and 140 to be provided to the person under investigation before proceedings are commenced against him. We consider that to be of some import.
Amendments Nos. 375 and 376 amend clauses 183 and 184 to make it clear that the FSA cannot give notices for penalties, or publish statements, while the decision is open to review.
Clause 351(7) provides that if the FSA fails to follow its warning notice, decision notice procedure, it will not affect the validity of the relevant warning notice or decision notice. Amendment No. 11 provides that that is the case only
Amendment No. 379 is of some import. It provides that, before the FSA publishes a disciplinary notice, it must have regard to any representations and make a statement as to whether representations were made and what its response to them was.
Amendment No. 392 relates to powers on intervention. It would require the FSA, when revoking a power, to give separate written notice to the manager and trustee, not only to the applicant.
"or, as the case may be a draft of it as proposed to be altered".
"and the procedure on such an appeal".
"(4) The provisions of sections 349(3) to 349(5) shall apply in relation to the warning notices as if the competent authority was the Authority.
(5) If, notwithstanding the representations made to the competent authority before the end of the period specified in the warning notice, the competent authority decides to impose a penalty on a person under section 84, the competent authority must give the person concerned written notice of the decision it takes and must inform him of the right of appeal available to him and the procedure on such an appeal.
(6) The provisions of sections 350(1)(c), 350(6) and 351 shall apply to any such notice under subsection (5) as if it were a decision notice and the competent authority was the Authority.".
"(2) The competent authority may not give a notice for payment under section 88(1) while the decision to give that notice is open to review.
(3) "Open to review" bears the meaning set out in section 350(7) as if references to the Tribunal were to the person or body to which appeal may be made under the arrangements to be established under subsection (1).".
"and if any proceedings are commenced against any person in reliance on the report the investigating authority shall provide a copy of the report to such person prior to the commencement of proceedings".
"(5) The Authority shall not give a notice for payment while the decision to give that notice is open to review within the meaning of section 350(7).".
"(4) The Authority shall not publish a statement under section 179 while the decision to publish that statement is open to review within the meaning of section 350(7).".
"consult such persons as it considers appropriate"
"include in the material a statement that representations about the material may be made to the Authority within a specified time".
"(7A) Before publishing the material under this section the Authority must have regard to any representations made to it in accordance with subsection (7) and must make a statement as to the representations (if any) made to it and its response, in general terms, to them.".
"separate written notice of its decision to the manager and trustee of the scheme".
"without prejudice to its other powers under section 108".
"if the failure does not materially prejudice the person to whom the warning notice or decision notice is given".
"if the failure does not materially prejudice the person to whom the warning notice or decision notice is given".
We shall not press our amendment No. 377; we debated that subject pretty fully in Committee. Similarly, we shall not press amendment No. 378, to which it relates.
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