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"(a) on giving a person a Part IV permission, imposes an assets requirement on him; or
(b) varies an authorised person's Part IV permission so as to alter an assets requirement imposed on him or impose such a requirement on him.
(1A) A person on whom an assets requirement is imposed is referred to in this section as "A".
(1B) "Assets requirement" means a requirement under section 38--
(a) prohibiting the disposal of, or other dealing with, any of A's assets (whether in the United Kingdom or elsewhere) or restricting such disposals or dealings; or
(b) that all or any of A's assets, or all or any assets belonging to consumers but held by A or to his order, must be transferred to and held by a trustee approved by the Authority.".
Mr. Deputy Speaker: With this it will be convenient to discuss the following: amendment No. 208, in page 20, line 8, after "by", insert "A".
Amendment No. 209, in page 20, line 15, leave out
and insert "for the purposes.".
Government amendment No. 106.
Amendment No. 210, in page 20, line 24, after "A", insert--
Government amendments Nos. 107 to 109.
Amendment No. 211, in page 20, line 40, after "liquidator", insert "or administrator".
Government amendment No. 110.
Amendment No. 212, in page 20, line 43, after "A", insert "or the Authority".
Amendment No. 213, in page 20, line 46, after "A", insert "or the Authority".
Government amendments Nos. 111 and 127.
Mr. Timms:
This group contains a number of drafting amendments to clause 43, which deals with the effect that prohibitions or restrictions imposed as a requirement by the FSA on a firm's dealings or assets may have on third parties, such as the firm's bank.
The Opposition amendments, which are largely drafting amendments, are interesting. We are particularly interested in the suggestion in amendment No. 208 to insert "A". That amendment would be rendered ineffective by amendment No. 104, but the drafting suggestion has now been incorporated in that amendment. Amendment No. 208 was tabled in time for us to do that, and we are grateful to Conservative Members for bringing that suggestion forward.
Amendment No. 209 is also the subject of amendments Nos. 104 and 105 and other consequential amendments, which have the effect of removing the distinction between the main requirement and any connected requirement that amendment No. 209 seeks to clarify. I hope that Conservative Members will be satisfied with that arrangement.
Amendments Nos. 210 to 213 make further interesting drafting suggestions, and we would like to consider them further with the parliamentary draftsman. On that basis, I hope that the amendments will be withdrawn.
Mr. Heathcoat-Amory:
I am grateful to the hon. Gentleman for having accepted one of our amendments, or at least incorporating it in one of his. We realise that amendment No. 208 is not exactly the stuff by which Governments rise and fall. Nevertheless, it was an attempt to tidy up the clause and make it a little clearer by ensuring that in referring to A's assets we also include assets belonging to investors but held by A, or to A's order. I think that that phrase is a little clearer than the one that left out one of the A's. The Minister said that that had been graciously accepted.
I should mention a few other amendments. The Minister kindly said that he was interested in them, which is code for saying that he may be minded to accept some of them. Amendment No. 211 was intended to make it clear that references to a liquidator should also include administrators. Today, companies frequently go not into liquidation but into administration in an attempt to keep going and recover assets. I think that we have copied that practice from the United States, although I am no expert. Usually, administration is preferable if there is an opportunity to save the firm concerned. The Minister may consider whether references to the liquidator should include the administrator too.
I am not sure whether the Minister was minded to accept amendment No. 212. If he was, he would be changing the attitude that he and the Economic Secretary adopted in Committee, where they appeared to think the amendment unnecessary. Its purpose is to ensure that assets held by trustees are recoverable for investors; otherwise, someone under investigation could plant assets in the hands of trustees. I assume that that is the reason behind the provision in the Bill, and it is a valid reason.
However, our point is that if the principal fails to give notice to the trustee, the authority should have powers to give written notice to the trustee. There is no great danger here of excessive bureaucracy, or of one body leaving it to the other to issue the written notice. In all cases, I expect that the authority would issue a written notice to
the trustee. If the authorised person also wrote, then two pieces of paper would exist--but it is better to be safe than sorry. I urge the Government at least to consider amendment No. 212, possibly with a view to accepting it in the other place.
Mr. Timms:
I am grateful to the right hon. Gentleman for those remarks, and we will reconsider amendment No. 212 in the light of what he has said.
Amendment agreed to.
Amendments made: No. 105, in page 20, line 13, leave out subsection (2).
No. 106, in page 20, line 18, leave out "(1)(a)" and insert "(1B)(a)".
No. 107, in page 20, line 34, leave out "(1)(b)" and insert "(1B)(b)".
No. 108, in page 20, line 35, after "released" insert "or dealt with".
No. 109, in page 20, line 37, leave out "(1)(b)" and insert "(1B)(b)".
No. 110, in page 20, line 42, leave out "(1)(b)" and insert "(1B)(b)".
No. 111, in page 21, line 8, leave out "(1)(b)" and insert "(1B)(b)".--[Miss Melanie Johnson.]
Mr. Timms:
I beg to move amendment No. 271, in page 31, line 11, at end insert--
"in connection with the imposition"
"or any other duty which it may owe A".
Amendments made: No. 112, in page 21, line 28, leave out "qualifying for authorisation under" and insert
"authorised as a result of".
No. 113, in page 21, line 33, at end insert "and".
No. 114, in page 21, line 34, leave out from "Treaty" to end of line 35.--[Miss Melanie Johnson.]
Amendment made: No. 407, in page 22, line 32, leave out clause 48.--[Miss Melanie Johnson.]
Amendment made: No. 116, in page 25, line 1, leave out subsection (7).--[Miss Melanie Johnson.]
Amendment made: No. 117, in page 27, line 11, leave out "rules under section 110" and insert "general rules".--[Miss Melanie Johnson.]
Amendments made: No. 249, in page 28, line 24, after "code" insert 'issued'.
No. 250, in page 28, line 31, at end insert--
"( ) The Authority may at any time alter or replace a statement or code issued under this section.
( ) If a statement or code is altered or replaced, the altered or replacement statement or code must be issued by the Authority.
( ) A statement or code issued under this section must be published by the Authority in the way appearing to the Authority to be best calculated to bring it to the attention to the public.".
No. 251, in page 28, line 32, leave out "issued under subsection (2)" and insert--
"published under this section and in force".
No. 252, in page 28, line 37, at end insert--
"( ) A person is not to be taken to have failed to comply with a statement of principle if he shows that, at the time of the alleged failure, it or its associated code of practice had not been published.
( ) The Authority must, without delay, give the Treasury a copy of any statement or code which it publishes under this section.".
No. 253, in page 28, line 40, leave out "for different cases" and insert--
"in relation to persons, cases or circumstances of different descriptions.".
No. 254, in page 28, line 42, at end insert--
"( ) The Authority may charge a reasonable fee for providing a person with a copy of a statement or code published under this section.".--[Miss Melanie Johnson.]
Amendments made: No. 255, in page 29, line 1, leave out from beginning to "must" and insert--
"Before issuing a statement or code under section 61, the Authority".
No. 256, in page 29, line 4, leave out "a statement" and insert--
"(a) a cost benefit analysis; and
(b) notice".
No. 257, in page 29, line 5, leave out
"before the end of a specified period"
and insert "within a specified time".
No. 258, in page 29, line 7, leave out "a" and insert "the proposed".
No. 259, in page 29, line 8, leave out "(2)" and insert "(2)(b)".
No. 260, in page 29, line 8, at end insert--
"(3A) If the Authority issues the proposed statement or code 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.
(3B) If the statement or code 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 (3A)) publish details of the difference; and
(b) those details must be accompanied by a cost benefit analysis.
(3C) Neither subsection (2)(a) nor subsection (3B)(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.".
No. 261, in page 29, line 9, leave out "Subsection (1) does" and insert--
"Subsections (1) to (3C) do".
No. 262, in page 29, line 10, leave out "it" and insert "them".
No. 263, in page 29, line 12, leave out paragraph (a).
No. 264, in page 29, line 13, leave out from "61" to end of line 14.
No. 265, in page 29, line 15, leave out "the statement or code" and insert--
"a draft published under subsection (1)".
No. 266, in page 29, line 16, at end insert--
"( ) This section also applies to a proposal to alter or replace a statement or code.".
No. 267, in page 29, line 17, leave out subsections (7) to (12).
No. 268, in page 29, line 28, at end insert--
"( ) 'Cost benefit analysis' means an estimate of the costs together with an analysis of the benefits that will arise--
(a) if the proposed statement or code is issued; or
(b) if subsection (3B)(b) applies, from the statement or code that has been issued.
( ) 'The appropriate comparison' means--
(a) in relation to subsection (2)(a), a comparison between the overall position if the statement or code is issued and the overall position if it is not issued;
(b) in relation to subsection (3B)(b), a comparison between the overall position after the issuing of the statement or code and the overall position before it was issued.".--[Miss Melanie Johnson.]
Amendment made: No. 269, in page 30, line 11, leave out from "when" to "is" and insert "a warning notice.--[Miss Melanie Johnson.]
Amendment made: No. 270, in page 31, line 5, leave out from "and" to end of line 11 and insert--
"issue a statement of its policy with respect to--
(a) the imposition of penalties under section 63; and
(b) the amount of penalties under that section.".--[Miss Melanie Johnson.]
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