06193.47-53

House of Commons

Session 2005 - 06
Internet Publications
Other Bills before Parliament

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(a)
he benefits from or falls to benefit in consequence of a

connected transaction to which any of the parties is not

an authorised participant, and

(b)
he knew or ought reasonably to have known that one

of the other parties was not an authorised participant.

      (6)
A responsible person of a members association commits an

offence if—

(a)
the association benefits from or falls to benefit in

consequence of a connected transaction to which any

of the parties is not an authorised participant, and

(b)
he knew or ought reasonably to have known of the

matters mentioned in paragraph (a).

      (7)
An individual who is a regulated participant commits an

offence if—

(a)
he is a party to a transaction of a description mentioned

in paragraph 2(3)(a),

(b)
he benefits from or falls to benefit in consequence of a

connected transaction to which any of the parties is not

an authorised participant,

(c)
sub-paragraph (5)(b) does not apply to him, and

(d)
as soon as practicable after knowledge comes to him

that one of the parties to the connected transaction is

not an authorised participant he fails to take all

reasonable steps to repay to any person who has

provided him with any benefit in consequence of the

connected transaction the value of the benefit.

      (8)
A responsible person of a members association commits an

offence if—

(a)
the association is a party to a transaction of a

description mentioned in paragraph 2(3)(a),

(b)
the association benefits from or falls to benefit in

consequence of a connected transaction to which any

of the parties is not an authorised participant,

(c)
sub-paragraph (6)(b) does not apply to him, and

(d)
as soon as practicable after knowledge comes to him

that one of the parties to the connected transaction is

not an authorised participant he fails to take all

reasonable steps to repay to any person who has

provided the association with any benefit in

consequence of the connected transaction the value of

the benefit.

      (9)
A person commits an offence if he—

(a)
knowingly enters into, or

(b)
knowingly does any act in furtherance of,


any arrangement which facilitates or is likely to facilitate,

whether by means of concealment or disguise or otherwise,

the participation by a regulated participant in a controlled

transaction with a person other than an authorised participant.

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    (10)
It is a defence for a person charged with an offence under sub-

paragraph (2) to prove that he took all reasonable steps to

prevent the members association entering into the transaction.

    (11)
It is a defence for a person charged with an offence under sub-

paragraph (6) to prove that he took all reasonable steps to

prevent the members association benefiting in consequence of

the connected transaction.

    (12)
A reference to a regulated participant entering into a

controlled transaction includes a reference to any

circumstances in which the terms of a controlled transaction

are varied so as to increase the amount of money to which the

regulated participant is entitled in consequence of the

transaction.

    (13)
A reference to a regulated participant entering into a

transaction in which another participant is not an authorised

participant includes a reference to any circumstances in which

another party to the transaction who is an authorised

participant ceases (for whatever reason) to be an authorised

participant.

    (14)
This paragraph does not apply to a transaction which is

entered into before the commencement of section (Regulation of

loans etc) of the Electoral Administration Act 2006.

Transaction reports: transactions with authorised participants

9    (1)
A regulated participant must prepare a report under this

paragraph in respect of each controlled transaction entered

into by him which is a recordable transaction.

      (2)
For the purposes of this paragraph a controlled transaction is

a recordable transaction—

(a)
if the value of the transaction is more than £5,000

(where the regulated participant is a members

association) or £1,000 (in any other case); or

(b)
if the aggregate value of it and any other controlled

benefit or benefits accruing to the regulated

participant—

(i)
from the same person and in the same calendar

year, and

(ii)
in respect of which no report has been

previously made under this paragraph,


is more than £5,000 (where the regulated participant is

a members association) or £1,000 (in any other case).

      (3)
A controlled benefit is—

(a)
a controlled donation within the meaning of paragraph

1(3) of Schedule 7;

(b)
a controlled transaction.

      (4)
A controlled benefit which is a controlled donation accrues—

(a)
from the permissible donor (within the meaning of

section 54(2)) who made it, and

(b)
when it is accepted by the donee.

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      (5)
A controlled benefit which is a controlled transaction

accrues—

(a)
from any authorised participant who is a party to it,

and

(b)
when it is entered into.

      (6)
For the purposes of this paragraph, if—

(a)
the value of a controlled transaction as first entered

into is such that it is not a recordable transaction, but

(b)
the terms of the transaction are subsequently varied in

such a way that it becomes a recordable transaction,


the regulated participant must be treated as having entered

into a recordable transaction on the date when the variation

takes effect.

      (7)
A regulated participant must deliver the report prepared in

accordance with sub-paragraph (1) to the Commission within

the period of 30 days beginning with—

(a)
if sub-paragraph (2)(a) applies, the date on which the

transaction is entered into;

(b)
if sub-paragraph (2)(b) applies, the date on which the

benefit which causes the aggregate amount to exceed

£5,000 or (as the case may be) £1,000 accrues.

      (8)
Each report prepared in accordance with sub-paragraph (1)

must—

(a)
give the name and address of the regulated participant;

and

(b)
if he is the holder of a relevant elective office, specify

the office in question.

      (9)
Each such report must also give—

(a)
such information as is required to be given, in the case

of a report prepared in accordance with section 71M,

by virtue of paragraphs 2 and 5(2) and (3) of Schedule

6A;

(b)
in relation to a controlled transaction of a description

mentioned in paragraph 2(1) or (2) above, such

information as is required to be given, in the case of a

report prepared in accordance with that section, by

virtue of paragraph 6 of that Schedule;

(c)
in relation to a controlled transaction of a description

mentioned in paragraph 2(3)(b) above, such

information as is required to be given, in the case of a

report prepared in accordance with that section, by

virtue of paragraph 7 of that Schedule;

(d)
the date on which the transaction is entered into;

(e)
such other information as is required by regulations

made by the Commission.

    (10)
In the application of paragraphs 2, 5(2) and (3), 6 and 7 of

Schedule 6A in accordance with sub-paragraph (9) above—

(a)
any reference to a recordable transaction within the

meaning of that Schedule must be construed as a

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reference to a recordable transaction within the

meaning of this paragraph;

(b)
any reference to section 71G or section 71F(4)(a) must

be construed as a reference to paragraph 3 above or

paragraph 2(3)(a) above;

(c)
any reference to a regulated transaction or a registered

party within the meaning of that Schedule must be

construed as a reference to a controlled transaction or a

regulated participant within the meaning of this

paragraph;

(d)
any reference to a transaction report within the

meaning of that Schedule must be construed as a

reference to a report under this paragraph.

Transaction reports: transactions with unauthorised participants

10  (1)
A regulated participant must—

(a)
prepare a report under this paragraph in respect of

each controlled transaction entered into by him and

falling within paragraph 5 or 6(1)(b); and

(b)
deliver the report to the Commission within the period

of 30 days beginning with the date when the

transaction was dealt with in accordance with that

paragraph.

      (2)
Each such report must—

(a)
give the name and address of the regulated participant;

(b)
if he is the holder of a relevant elective office, specify

the office in question.

      (3)
Each such report in respect of a transaction falling within

paragraph 5 must also give—

(a)
the name and address of the unauthorised participant;

(b)
the nature of the transaction (that is to say, whether it

is a loan or a credit facility);

(c)
the value of the transaction or, in the case of a credit

facility to which no limit is specified, a statement to

that effect;

(d)
the date on which the transaction was entered into and

the date when, and manner in which, it was dealt with

in accordance with paragraph 5;

(e)
such other information as is required by regulations

made by the Commission.

      (4)
Each such report in respect of a transaction falling within

paragraph 6(1)(b) must also give—

(a)
the name and address of the unauthorised participant;

(b)
the value of the transaction or, in the case of a security

to which no limit is specified, a statement to that effect;

(c)
a description of the principal features of the transaction

mentioned in paragraph 6(1)(a);

(d)
where the security given consists in or includes rights

over any property, the nature of that property;

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(e)
the date on which the transaction was entered into and

the date when, and manner in which, it was dealt with

in accordance with paragraph 6;

(f)
such other information as is required by regulations

made by the Commission.

Transaction reports: changes to recorded transactions

11  (1)
A regulated participant must—

(a)
prepare a report under this paragraph in respect of

each change to a recorded transaction; and

(b)
deliver the report to the Commission within the period

of 30 days beginning with the date on which the

change takes effect.

      (2)
A recorded transaction is a transaction recorded in a report

under paragraph 9.

      (3)
There is a change to a recorded transaction if—

(a)
another authorised participant becomes party to the

transaction (whether in place of or in addition to any

existing participant),

(b)
there is any change in the details given in relation to the

transaction in pursuance of paragraph 9(9), or

(c)
the transaction comes to an end.

      (4)
For the purposes of sub-paragraph (3)(c), a loan comes to an

end if—

(a)
the whole debt (or all the remaining debt) is repaid;

(b)
the creditor releases the whole debt (or all the

remaining debt).

      (5)
There is also a change to a recorded transaction if a person who

is not an authorised participant becomes party to the

transaction (whether in place of or in addition to any existing

participant).

      (6)
Each report prepared in accordance with sub-paragraph (1)

must—

(a)
give the name and address of the regulated participant;

and

(b)
if he is the holder of a relevant elective office, specify

the office in question.

      (7)
Each such report must also give—

(a)
details of the change;

(b)
the date on which the change takes effect;

(c)
in the case of a change falling within sub-paragraph (5),

the date when and the manner in which the transaction

was dealt with in accordance with paragraph 5 or 6;

(d)
such other information as is required by regulations

made by the Commission.

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Offence of failing to deliver transaction report

12  (1)
Where a report required to be delivered to the Commission

under paragraph 9(1), 10(1) or 11(1) is not delivered by the end

of the period of 30 days mentioned in paragraph 9(7), 10(1) or

11(1)—

(a)
the regulated participant, or

(b)
(if a members association) the responsible person,


is guilty of an offence.

      (2)
If such a report is delivered to the Commission which does not

comply with any requirements of paragraph 9, 10 or 11 as

regards the information to be given in such a report—

(a)
the regulated participant, or

(b)
(if a members association) the responsible person,


is guilty of an offence.

      (3)
Where a person is charged with an offence under this

paragraph, it shall be a defence to prove that he took all

reasonable steps, and exercised all due diligence, to ensure

that any requirements—

(a)
as regards the preparation and delivery of a report in

respect of the transaction in question, or

(b)
as regards the information to be given in the report in

question,


as the case may be, were complied with in relation to that

transaction or report.

      (4)
Where the court is satisfied, on an application made by the

Commission, that any failure to comply with any such

requirements in relation to any transaction entered into by a

regulated participant was attributable to an intention on the

part of any person to conceal the existence or true value of the

transaction, the court may make such order as it thinks fit to

restore (so far as is possible) the parties to the transaction to the

position they would have been in if the transaction had not

been entered into.

      (5)
An order under sub-paragraph (4) may in particular—

(a)
where the transaction is a loan or credit facility, require

that any amount owed by the regulated participant be

repaid (and that no further sums be advanced under

it);

(b)
where any form of security is given for a sum owed

under the transaction, or the transaction is an

arrangement by which any form of security is given,

require that the security be discharged.

Declaration in transaction report

13  (1)
Each report under paragraph 9 or 10 must, when delivered to

the Commission, be accompanied by a declaration made by—

(a)
the regulated participant, or

(b)
(if a members association) the responsible person,


which complies with sub-paragraph (2) or (3).

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      (2)
In the case of a report under paragraph 9, the declaration must

state that, to the best of the declarant’s knowledge and belief,

any transaction recorded in the report as having been entered

into by the regulated participant was entered into with an

authorised participant.

      (3)
In the case of a report under paragraph 10, the declaration

must state that, to the best of the declarant’s knowledge and

belief, the transaction recorded in the report as having been

entered into by the regulated participant has been dealt with

in accordance with paragraph 5 or 6.

      (4)
A person commits an offence if he knowingly or recklessly

makes a false declaration under this paragraph.

Existing transactions

14  (1)
Paragraphs 9 to 11 have effect in relation to existing

transactions as they have effect in relation to transactions

entered into after the date on which those paragraphs come

into force, except that—

(a)
references in paragraph 9 to a controlled benefit do not

include references to a controlled donation;

(b)
in paragraph 9(2)(b)(i) the words “and in the same

calendar year” are omitted;

(c)
the requirement in paragraph 9(7), 10(1)(b) or 11(1)(b)

is a requirement to deliver the report within the period

of 60 days beginning with the date on which that

provision comes into force.

      (2)
An existing transaction is a controlled transaction which, at the

date on which paragraphs 9 to 11 come into force, has not

come to an end for the purposes of paragraph 11(3)(c).

Register of recordable transactions

15  (1)
Section 71V applies in relation to transactions reported to the

Commission under this Schedule (“relevant transactions”) as it

applies to transactions reported to them under Part 4A of this

Act.

      (2)
But in its application in accordance with sub-paragraph (1),

section 71V(2) has effect in relation to a relevant transaction as

if (instead of requiring the register to contain the details

mentioned in paragraphs (a) to (c) of that subsection) it

required the register to contain such details as have been given

in relation to the transaction in pursuance of paragraph 9(8)

and (9), 10(2), (3) and (4) or 11(6) and (7).

16  (1)
Paragraph 9 does not apply to holders of relevant elective

office.

      (2)
Sub-paragraph (2) applies in relation to transactions in which

a holder of a relevant elective office is a participant if—

(a)
the relevant body has in place arrangements requiring

the holder of the office to report such transactions, and