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Mr. Flight: I could cite difficult cases in which an existing self-regulating organisation left a matter in no man's land for anything up to one or two years because no one wanted to take responsibility for a difficult decision. Ultimately, decisions have been forced, usually by a potential employer being brave enough to address the issue. Some such cases have given rise to considerable injustice. The Minister appears to be saying that the three months is not really three months: what happens if a decision is not reached within three months? We do not want a regime that allows people to be left in limbo.

Mr. Timms: That, too, will be a matter of concern to the FSA. However, the problem can be seen the other way around: making the amendment could result in the unhappy outcome of a person assuming that he had approval and taking up a position with an authorised firm, only to find that the FSA sought to withdraw that approval a matter of days later. The Government's approach is correct, but the hon. Gentleman is right to say that care must be taken throughout the process, so that such cases are not repeated.

Amendments Nos. 225 and 226 have been overtaken by some of the Government amendments, so I shall not speak about them. The hon. Gentleman did not focus on them.

That brings me to amendments Nos. 227 to 229. In Committee, my hon. Friend the Economic Secretary set out the changes that we would make to the clauses dealing with official listing, following the decision to transfer the competent authority function from the London stock exchange to the FSA. We have not tabled amendments to part VI consequential on that decision; we shall do so in another place.

We shall in another place also propose changes to the warning notice and decision notice procedures. Those changes will rationalise the provisions, for example, by ensuring that a notice for payment is something that is given and takes effect only after the end of the review process.

As the hon. Gentleman said, amendment No. 365 is identical to one that we discussed in Committee. We agree that a person must know of what he or she is accused; that basic requirement is recognised in the Bill in several ways. In disciplinary and market abuse cases, clause 349 requires the FSA to disclose the reasons for proposing the action in the warning notice that it must give to the person concerned. Subsection (5) of that clause requires the FSA to make available the evidence on which it proposes to rely in any proceedings before the tribunal. We are working on proposals to extend this right of access to include additional information. In most cases these disclosure requirements and rights of access will cover most, if not all, of the contents of any report prepared

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following an investigation. We cannot agree to automatic disclosure of the full report of an investigation regardless of its content or the use that it might be put to. For example, it might reveal the source of a tip-off within a company under investigation. We think that that would be going too far. We are providing a great deal of transparency in this process. It is right that we should do so, but there are limits to what is appropriate.

I am grateful to Opposition Members for tabling amendments Nos. 375 and 376. They would prevent the FSA from imposing disciplinary measures under part XIII while the decision is still open to review. Clause 356 already prevents the FSA from publishing any information about a matter to which the decision relates while the decision is still open for review. The main provision that prevents such abuse is clause 108(5), which provides that a

Any notice of payment that the FSA purported to issue before the matter was referred to the tribunal would also be rendered ineffective if the matter was then referred to the tribunal. I understand that there could be some ambiguity about the status of such a notice and the passage of time under clause 108 if the firm decided not to refer the matter to the tribunal. It would be useful to consider whether the provision could be reworded as part of the amendments that we are proposing to put forward when the Bill is considered in another place. I hope that that will be of some reassurance to Opposition Members.

Amendments Nos. 377 to 379 aim to specify consultation procedures on statements of policy on the imposition of penalties. As we undertook in Committee, we have introduced a series of new clauses and amendments to standardise procedures. New clause 30 addresses the Opposition's concerns on this issue, I hope to their satisfaction.

The purpose of amendment No. 392 is to amend clause 235, which deals with the procedural aspects of revoking directions that are given under clause 231, so that both the manager and trustee of a scheme receive a written decision notice when an application for revocation has been made. I recall that the matter was raised in Committee. Procedural issues in this part of the Bill are still being broadly assessed, and this is a point that we shall consider further, as we said in Committee.

Amendment No. 394 concerns the role of the tribunal in the urgent intervention procedure for authorised unit trusts under clause 236. Again, the matter was debated in Committee. We said then that we would review the urgent intervention powers set out in the Bill at a later date, and we still intend to do so.

Amendment No. 11 is similar to an amendment tabled in Committee. As we explained then, we think that our amendments achieve the required effect. As it stands, clause 351(7) gives the FSA flexibility in carrying out its published procedures. That is necessary because there is a risk that any minor error or departure from the standard procedure would result in the entire procedure becoming a nullity.

In practice, the question whether there has been a procedural error that has materially prejudiced the other party would be resolved by the tribunal, whose proceedings would provide a completely fresh look at the

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case and a decision unprejudiced by any procedural errors by the FSA. The problem with a prejudice test is that it suggests that the tribunal should strike down a decision of the FSA wherever it has materially disadvantaged the other party. That would in effect lead to long arguments about the minutiae of the procedures adopted by the FSA. The tribunal's own fair procedures should effectively rectify any procedural failures as it provides a full opportunity for a fair hearing before a judicial body. The tribunal's ability to balance any material disadvantage was welcomed by the right hon. and learned Member for North-East Bedfordshire (Sir N. Lyell) in Committee.

Amendment No. 392 deals with the procedural aspects of revoking directions given under clause 231. We are looking into the matter.

Amendment No. 394 concerns the role of the tribunal in the urgent intervention procedure for authorised unit trusts under clause 236, to which we will give further consideration.

I hope that I have responded to the long list of amendments to the satisfaction of Opposition Members.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 14

Statements of policy: procedure

".--(1) Before issuing a statement under section 86, the competent authority must publish a draft of the proposed statement in the way appearing to the competent authority to be best calculated to bring it to the attention of the public.
(2) The draft must be accompanied by notice that representations about the proposal may be made to the competent authority within a specified time.
(3) Before issuing the proposed statement, the competent authority must have regard to any representations made to it in accordance with subsection (2).
(4) If the competent authority issues the proposed statement it must publish an account, in general terms, of--
(a) the representations made to it in accordance with subsection (2); and
(b) its response to them.
(5) If the statement differs from the draft published under subsection (1) in a way which is, in the opinion of the competent authority, significant, the competent authority must (in addition to complying with subsection (4)) publish details of the difference.
(6) The competent authority may charge a reasonable fee for providing a person with a copy of a draft published under subsection (1).
(7) This section also applies to a proposal to alter or replace a statement.".--[Mr. Timms.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 15

Control of business transfers

. No insurance business transfer scheme or banking business transfer scheme is to have effect unless an order has been made in relation to it under section (Sanction of the court for transfer schemes)(1).".--[Mr. Timms.]

Brought up, and read the First time.

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9 pm

Mr. Timms: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Sir Alan Haselhurst): With this it will be convenient to discuss the following: Government new clause 16--Insurance business transfer schemes.

Government new clause 17--Banking business transfer scheme.

Government new clause 18--Application for order sanctioning transfer scheme.

Government new clause 19--Requirements on applicants.

Government new clause 20--Scheme reports.

Government new clause 21--Right to participate in proceedings.

Government new clause 22--Sanction of the court for business transfer schemes.

Government new clause 23--Effect of order sanctioning business transfer scheme.

Government new clause 24--Rights of certain policy holders.

Government new schedule 1--Insurance and banking business transfer schemes: certificates.

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