Consumer Credit Bill

House of Commons

Session 2004 - 05
Internet Publications
Other Bills before Parliament

Consumer Credit Bill

Consumer Credit Bill
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Further powers of OFT to regulate conduct of licensees etc.
38
Power of OFT to impose requirements on licensees
After section 33 of the 1974 Act insert—
“Further powers of OFT to regulate conduct of licensees etc.
33A
Power of OFT to impose requirements on licensees
5
(1)
This section applies where the OFT is dissatisfied with any matter in
connection with—
(a)
a business being carried on, or which has been carried on, by a
licensee or by an associate or a former associate of a licensee;
(b)
a proposal to carry on a business which has been made by a
10
licensee or by an associate or a former associate of a licensee; or
(c)
any conduct not covered by paragraph (a) or (b) of a licensee or
of an associate or a former associate of a licensee.
(2)
The OFT may by notice to the licensee require him to do or not to do (or
to cease doing) anything specified in the notice for purposes connected
15
with—
(a)
addressing the matter with which the OFT is dissatisfied; or
(b)
securing that matters of the same or a similar kind do not arise.
(3)
A requirement imposed under this section on a licensee shall only
relate to a business which the licensee is carrying on, or is proposing to
20
carry on, under the licence under which he is a licensee.
(4)
Such a requirement may be framed by reference to a named person
other than the licensee.
(5)
For the purposes of subsection (1) it is immaterial whether the matter
with which the OFT is dissatisfied arose before or after the licensee
25
became a licensee.
(6)
If—
(a)
a person makes an application for a standard licence, and
(b)
while dealing with that application the OFT forms the opinion
that, if such a licence were to be issued to that person, it would
30
be minded to impose on him a requirement under this section,

the OFT may, before issuing such a licence to that person, do (in whole
or in part) anything that it must do under section 33D or 34(1) or (2) in
relation to the imposing of the requirement.
(7)
In this section ‘associate’, in addition to the persons specified in section
35
184, includes a business associate.”
39
Power of OFT to impose requirements on supervisory bodies
After section 33A of the 1974 Act (inserted by section 38 of this Act) insert—
“33B
Power of OFT to impose requirements on supervisory bodies
(1)
This section applies where the OFT is dissatisfied with the way in
40
which a responsible person in relation to a group licence—

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(a)
is regulating or otherwise supervising, or has regulated or
otherwise supervised, persons who are licensees under that
licence; or
(b)
is proposing to regulate or otherwise to supervise such persons.
(2)
The OFT may by notice to the responsible person require him to do or
5
not to do (or to cease doing) anything specified in the notice for
purposes connected with—
(a)
addressing the matters giving rise to the OFT’s dissatisfaction;
or
(b)
securing that matters of the same or a similar kind do not arise.
10
(3)
A requirement imposed under this section on a responsible person in
relation to a group licence shall only relate to practices and procedures
for regulating or otherwise supervising licensees under the licence in
connection with their carrying on of businesses under the licence.
(4)
For the purposes of subsection (1) it is immaterial whether the matters
15
giving rise to the OFT’s dissatisfaction arose before or after the issue of
the group licence in question.
(5)
If—
(a)
a person makes an application for a group licence, and
(b)
while dealing with that application the OFT forms the opinion
20
that, if such a licence were to be issued to that person, it would
be minded to impose on him a requirement under this section,

the OFT may, before issuing such a licence to that person, do (in whole
or in part) anything that it must do under section 33D or 34(1) or (2) in
relation to the imposing of the requirement.
25
(6)
For the purposes of this Part a person is a responsible person in relation
to a group licence if—
(a)
he is the original applicant for it; and
(b)
he has a responsibility (whether by virtue of an enactment, an
agreement or otherwise) for regulating or otherwise
30
supervising persons who are licensees under the licence.”
40
Supplementary provision relating to requirements
After section 33B of the 1974 Act (inserted by section 39 of this Act) insert—
“33C
Supplementary provision relating to requirements
(1)
A notice imposing a requirement under section 33A or 33B may include
35
provision about the time at or by which, or the period during which, the
requirement is to be complied with.
(2)
A requirement imposed under section 33A or 33B shall not have effect
after the licence by reference to which it is imposed has itself ceased to
have effect.
40
(3)
A person shall not be required under section 33A or 33B to compensate,
or otherwise to make amends to, another person.
(4)
The OFT may by notice to the person on whom a requirement has been
imposed under section 33A or 33B vary or revoke the requirement
(including any provision made under subsection (1) of this section in
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relation to it) with effect from such date as may be specified in the
notice.
(5)
The OFT may exercise its power under subsection (4) in relation to a
requirement either on its own motion or on the application of a person
falling within subsection (6) or (7) in relation to the requirement.
5
(6)
A person falls within this subsection in relation to a requirement if he
is the person on whom the requirement is imposed.
(7)
A person falls within this subsection in relation to a requirement if—
(a)
the requirement is imposed under section 33A;
(b)
he is not the person on whom the requirement is imposed;
10
(c)
the requirement is framed by reference to him by name; and
(d)
the effect of the requirement is—
(i)
to prevent him being an employee of the person on
whom the requirement is imposed;
(ii)
to restrict the activities that he may engage in as an
15
employee of that person; or
(iii)
otherwise to prevent him from doing something, or to
restrict his doing something, in connection with a
business being carried on by that person.”
41
Procedure in relation to requirements
20
After section 33C of the 1974 Act (inserted by section 40 of this Act) insert—
“33D
Procedure in relation to requirements
(1)
Before making a determination—
(a)
to impose a requirement on a person under section 33A or 33B,
(b)
to refuse an application under section 33C(5) in relation to a
25
requirement imposed under either of those sections, or
(c)
to vary or to revoke a requirement so imposed,

the OFT shall proceed as follows.
(2)
The OFT shall give a notice to every person to whom subsection (3)
applies in relation to the determination—
30
(a)
informing him, with reasons, that it is minded to make the
determination; and
(b)
inviting him to submit to it representations as to the
determination under section 34.
(3)
This subsection applies to a person in relation to the determination if he
35
falls within, or as a consequence of the determination would fall within,
section 33C(6) or (7) in relation to the requirement in question.
(4)
This section does not require the OFT to give a notice to a person if the
determination in question is in the same terms as a proposal made to
the OFT by that person (whether as part of an application under this
40
Part or otherwise).”

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Guidance on requirements
After section 33D of the 1974 Act (inserted by section 41 of this Act) insert—
“33E
Guidance on requirements
(1)
The OFT shall prepare and publish guidance in relation to how it
exercises, or how it proposes to exercise, its powers by virtue of sections
5
33A to 33C.
(2)
If the OFT revises the guidance at any time after it has been published,
the OFT shall publish it as revised.
(3)
The guidance shall be published in such manner as the OFT thinks fit
for the purpose of bringing it to the attention of those likely to be
10
affected by it.
(4)
In preparing or revising the guidance the OFT shall consult such
persons as it thinks fit.
(5)
In exercising its powers by virtue of sections 33A to 33C the OFT shall
have regard to the guidance as most recently published.”
15
43
Consequential amendments relating to requirements
(1)
In section 23 of the 1974 Act (authorisation of specific activities by licence) after
subsection (4) insert—
“(5)
An activity does not cease to be covered by a licence simply because it
involves a failure to comply with a requirement imposed under section
20
33A or 33B.”
(2)
In section 35(1) of that Act (particulars to be kept in register maintained by
OFT) after paragraph (b) insert—
“(ba)
requirements imposed under section 33A or 33B which are in
effect or which have been in effect, with details of any variation
25
of such a requirement;”.
(3)
In the Table in section 41 of that Act (appeals) after the entry relating to “refusal
to end suspension of licence in accordance with terms of application” insert the
following entry—

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“Determination—
A person who falls within

(a)
to impose a
section 33C(6) or (7) in

requirement under
relation to the requirement

section 33A or
unless the OFT was not

33B;
required to give a notice to

5

(b)
to refuse an
him in relation to the

application under
determination by virtue of

section 33C(5) in
section 33D(4).”

relation to a

requirement

10

imposed under

either of those

sections; or

(c)
to vary or revoke a

requirement so

15

imposed.

Powers and duties in relation to information
44
Provision of information etc. by applicants
(1)
In subsection (2) of section 6 of the 1974 Act (which contains provision relating
to applications)—
20
(a)
for “particulars” substitute “information and documents”;
(b)
for “by” in the second place where it occurs substitute “or describe in a”.
(2)
For subsection (3) of that section substitute—
“(3)
Where the OFT receives an application, it may by notice to the applicant
at any time before the determination of the application require him to
25
provide such further information or documents relevant to the
application as may be specified or described in the notice.”
(3)
After subsection (4) of that section insert—
“(5)
Subsection (6) applies where a general notice is published under
subsection (2)—
30
(a)
after an application has been made; but
(b)
before its determination.
(6)
The applicant shall, within such period as may be specified in the
general notice, provide the OFT with any information or document—
(a)
which he has not previously provided in relation to the
35
application by virtue of this section;
(b)
which he would have been required to provide with his
application had it been made after the general notice was
published; and
(c)
which the general notice requires to be provided for the
40
purposes of this subsection.
(7)
An applicant shall notify the OFT, giving details, if before his
application is determined—

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(a)
any information or document provided by him in relation to the
application by virtue of this section is, to any extent, superseded
or otherwise affected by a change in circumstances; or
(b)
he becomes aware of an error in or omission from any such
information or document.
5
(8)
A notification for the purposes of subsection (7) shall be given within
the period of 28 days beginning with the day on which (as the case may
be)—
(a)
the information or document is superseded;
(b)
the change in circumstances occurs; or
10
(c)
the applicant becomes aware of the error or omission.
(9)
Subsection (7) does not require an applicant to notify the OFT about—
(a)
anything of which he is required to notify it under section 36; or
(b)
an error in or omission from any information or document
which is a clerical error or omission not affecting the substance
15
of the information or document.”
45
Duties to notify changes in information etc.
After section 36 of the 1974 Act insert—
“36A
Further duties to notify changes etc.
(1)
Subsections (2) to (4) apply where a general notice is published under
20
section 6(2).
(2)
A person who is the holder of a standard licence or who is the original
applicant for a group licence shall, in relation to each relevant
application which he has made and which has been determined before
the publication of the general notice, provide the OFT with any
25
information or document—
(a)
which he would have been required to provide with the
application had the application been made after the general
notice was published; and
(b)
which the general notice requires to be provided for the
30
purposes of this subsection.
(3)
Any such information or document shall be provided within such
period as may be specified in the general notice.
(4)
Subsection (2) does not require a person to provide any information or
document—
35
(a)
which he provided in relation to the application by virtue of
section 6;
(b)
which he has previously provided in relation to the application
by virtue of this section; or
(c)
which he would have been required to provide in relation to the
40
application by virtue of subsection (5) but for subsection (6).
(5)
A person who is the holder of a standard licence or who is the original
applicant for a group licence shall, in relation to each relevant
application which he has made, notify the OFT giving details if, after
the application is determined, any information or document which
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he—

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(a)
provided in relation to the application by virtue of section 6, or
(b)
has so provided by virtue of this section,

is, to any extent, superseded or otherwise affected by a change in
circumstances.
(6)
Subsection (5) does not require a person to notify the OFT about a
5
matter unless it falls within a description of matters specified by the
OFT in a general notice.
(7)
A description may be specified for the purposes of subsection (6) only
if the OFT is satisfied that the matters which would fall within that
description are matters which would be relevant to the question of—
10
(a)
whether, having regard to section 25(2), a person is a fit person
to carry on a business under a standard licence; or
(b)
whether the public interest is better served by a group licence
remaining in effect than by obliging the licensees under it to
apply separately for standard licences.
15
(8)
A person who is the holder of a standard licence or who is the original
applicant for a group licence shall, in relation to each relevant
application which he has made, notify the OFT about every error or
omission—
(a)
in or from any information or document which he provided by
20
virtue of section 6, or which he has provided by virtue of this
section, in relation to the application; and
(b)
of which he becomes aware after the determination of the
application.
(9)
A notification for the purposes of subsection (5) or (8) shall be given
25
within the period of 28 days beginning with the day on which (as the
case may be)—
(a)
the information or document is superseded;
(b)
the change in circumstances occurs; or
(c)
the holder of the standard licence or the original applicant
30
becomes aware of the error or omission.
(10)
This section does not require a person to notify the OFT about—
(a)
anything of which he is required to notify it under section 36; or
(b)
an error in or omission from any information or document
which is a clerical error or omission not affecting the substance
35
of the information or document.
(11)
In this section ‘relevant application’ means, in relation to a person who
is the holder of a standard licence or who is the original applicant for a
group licence—
(a)
the original application for the licence; or
40
(b)
an application for its renewal or for its variation.”
46
Power of OFT to require information generally
After section 36A of the 1974 Act (inserted by section 45 of this Act) insert—
“36B
Power of OFT to require information generally
(1)
The OFT may by notice to a person require him—
45