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Public Bill Committee: 19th June 2007                  

329

 

Legal Services Bill-[Lords], continued

 
 

(or a material interest) against whom obligations under subsection (4) may be imposed.

 


 

Bridget Prentice

 

144

 

Schedule  13,  page  194,  line  25,  leave out ‘has an interest in’ and insert ‘holds’.

 

 

Members’ explanatory statement

 

This amendment is related to amendment 111. It amends the first test for a material interest by re­

 

placing the 10% interest in shares test with a 10% shareholding test.

 

Bridget Prentice

 

145

 

Schedule  13,  page  194,  line  27,  leave out ‘interest in shares’ and insert

 

‘shareholding’.

 

 

Members’ explanatory statement

 

This amendment is related to amendment 111. It amends the second test for a material interest by

 

replacing the test of significant influence by virtue of an interest in shares with a test of significant

 

influence by virtue of a shareholding.

 

Bridget Prentice

 

146

 

Schedule  13,  page  194,  line  28,  leave out ‘has an interest in’ and insert ‘holds’.

 

 

Members’ explanatory statement

 

This amendment is related to amendment 111. It amends the third test for a material interest by

 

replacing the test of 10% interest in shares in a parent undertaking with a test of 10% shareholding

 

in a parent undertaking.

 

Bridget Prentice

 

147

 

Schedule  13,  page  194,  line  31,  leave out ‘interest in shares’ and insert

 

‘shareholding’.

 

 

Members’ explanatory statement

 

This amendment is related to amendment 111. It amends the fourth test for a material interest by

 

replacing the test of significant influence by virtue of an interest in shares in a parent undertaking

 

with a test of significant influence by virtue of a shareholding in a parent undertaking.

 

Bridget Prentice

 

148

 

Schedule  13,  page  194,  line  32,  leave out paragraph (e) and insert—

 

‘( )    

is entitled to exercise, or control the exercise of, voting power in B

 

which, if it consists of voting rights, constitutes at least 10% of the

 

voting rights in B,’.

 

 

Members’ explanatory statement

 

This amendment clarifies that any voting power (as defined in paragraph 5(4)) constitutes a ma­

 

terial interest, unless it is voting rights, in which case 10% of voting rights in a body constitutes a

 

material interest.


 
 

Public Bill Committee: 19th June 2007                  

330

 

Legal Services Bill-[Lords], continued

 
 

Bridget Prentice

 

149

 

Schedule  13,  page  194,  line  35,  leave out ‘voting power in B’ and insert

 

‘entitlement to exercise, or control the exercise of, voting rights in B’.

 

 

Members’ explanatory statement

 

This amendment clarifies that the significant influence test in sub-paragraph (f) is by virtue of vot­

 

ing rights. A test for significant influence by virtue of other voting power is unnecessary, since oth­

 

er voting power is caught by the test in sub-paragraph (e).

 

Bridget Prentice

 

150

 

Schedule  13,  page  194,  line  36,  leave out paragraph (g) and insert—

 

‘( )    

is entitled to exercise, or control the exercise of, voting power in P

 

which, if it consists of voting rights, constitutes at least 10% of the

 

voting rights in P,’.

 

 

Members’ explanatory statement

 

This amendment clarifies that any voting power (as defined in paragraph 5(4)) in P constitutes a

 

material interest, unless it is voting rights, in which case 10% of voting rights in P constitutes a

 

material interest.

 

Bridget Prentice

 

151

 

Schedule  13,  page  194,  line  39,  leave out ‘voting power in P’ and insert

 

‘entitlement to exercise, or control the exercise of, voting rights in P’.

 

 

Members’ explanatory statement

 

This amendment clarifies that the significant influence test in sub-paragraph (h) is by virtue of vot­

 

ing rights in P. A test for significant influence by virtue of other voting power is unnecessary, since

 

other voting power is caught by the test in sub-paragraph (g).

 

Bridget Prentice

 

152

 

Schedule  13,  page  195,  line  15,  leave out ‘has an interest in’ and insert ‘holds’.

 

 

Members’ explanatory statement

 

This amendment is related to amendment 111. It amends the first test for a controlled interest by

 

replacing the interest in shares test with a shareholding test.

 

Bridget Prentice

 

153

 

Schedule  13,  page  195,  line  16,  leave out ‘has an interest in’ and insert ‘holds’.

 

 

Members’ explanatory statement

 

This amendment is related to amendment 111. It amends the second test for a controlled interest

 

by replacing the test of x% interest in shares in a parent undertaking with a test of x% shareholding

 

in a parent undertaking.

 

Bridget Prentice

 

154

 

Schedule  13,  page  195,  line  19,  leave out ‘power’ and insert ‘rights’.

 

 

Members’ explanatory statement

 

This amendment clarifies that x% voting rights, not x% voting power, constitutes a controlled in­


 
 

Public Bill Committee: 19th June 2007                  

331

 

Legal Services Bill-[Lords], continued

 
 

terest. Voting power other than voting rights constitutes a material interest (see amendment 148).

 

There is no power to set a higher percentage of such power which constitutes a controlled interest

 

because it cannot be quantified.

 

Bridget Prentice

 

155

 

Schedule  13,  page  195,  line  21,  leave out ‘power’ and insert ‘rights’.

 

 

Members’ explanatory statement

 

This amendment clarifies that x% voting rights, not x% voting power, constitutes a controlled in­

 

terest. Voting power other than voting rights constitutes a material interest (see amendment 150).

 

There is no power to set a higher percentage of such power which constitutes a controlled interest

 

because it cannot be quantified.

 

Bridget Prentice

 

156

 

Schedule  13,  page  196,  line  1,  leave out ‘an interest in the shares of’ and insert ‘a

 

shareholding in’.

 

 

Members’ explanatory statement

 

This amendment is related to amendment 111. It amends the test for whether a person is an asso­

 

ciate by referring to a shareholding in a body rather than an interest in shares in a body.

 

Bridget Prentice

 

157

 

Schedule  13,  page  196,  line  20,  after ‘V’, insert ‘(whether or not they are interests

 

within the meaning of section 72(2A))’.

 

 

Members’ explanatory statement

 

This amendment is related to amendment 111. It clarifies that the reference to interests in S or V

 

is not to be construed in accordance with the meaning of an interest in a body as set out in section

 

72(2A) (as inserted by amendment 111).

 

Mr Jonathan Djanogly

 

Mr Henry Bellingham

 

Mr Tobias Ellwood

 

Simon Hughes

 

John Hemming

 

212

 

Schedule  13,  page  197,  line  11,  at end insert ‘Licensing rules must provide that, in

 

determining whether the requirements of sub-paragraph 1 are met, the burden of proof

 

rests on the person who wishes to hold the restricted interest.’.

 

 

Members’ explanatory statement

 

This amendment is designed to make clear that the onus of demonstrating ‘fitness to own’ rests on

 

the applicant, rather than it being for the licensing authority to demonstrate that a person was not

 

fit and proper before it could withhold approval.

 

Bridget Prentice

 

158

 

Schedule  13,  page  197,  line  15,  leave out ‘an interest in’ and insert ‘holding’.

 

 

Members’ explanatory statement

 

This amendment is related to amendment 111 and the amendments to the material interest and con­

 

trolled interest provisions (amendments 144 – 155). It changes an interest in a particular percent­


 
 

Public Bill Committee: 19th June 2007                  

332

 

Legal Services Bill-[Lords], continued

 
 

age of shares to a holding of a particular percentage of shares.

 

Bridget Prentice

 

159

 

Schedule  13,  page  197,  line  18,  leave out ‘power’ and insert ‘rights’.

 

 

Members’ explanatory statement

 

This amendment is related to the amendments to the voting power tests in the material interest and

 

controlled interest provisions (amendments 148 – 151 and 154 – 155). Only voting rights can con­

 

stitute a controlled interest so the provision about lesser restricted interests only applies in relation

 

to voting rights.

 

Bridget Prentice

 

160

 

Schedule  13,  page  197,  line  24,  leave out ‘an interest in’ and insert ‘holding’.

 

 

Members’ explanatory statement

 

This amendment is related to amendment 111 and the amendments to the material interest and con­

 

trolled interest provisions (amendments 144 – 155). It changes the reference to an interest in a

 

smaller percentage of shares to a holding of a smaller percentage of shares.

 

Bridget Prentice

 

161

 

Schedule  13,  page  197,  line  27,  leave out ‘power’ and insert ‘rights’.

 

 

Members’ explanatory statement

 

This amendment is related to the amendments to the voting power tests in the material interest and

 

controlled interest provisions (amendments 148 – 151 and 154 – 155). Only voting rights can con­

 

stitute a controlled interest so the provision about lesser restricted interests only applies in relation

 

to voting rights.

 

Bridget Prentice

 

162

 

Schedule  13,  page  208,  line  29,  leave out ‘an interest in shares in a licensed body’

 

and insert ‘a shareholding in a licensed body, or in a parent undertaking of a licensed

 

body,’.

 

 

Members’ explanatory statement

 

This amendment is related to amendment 111. It provides that licensing rules may limit a non-au­

 

thorised person’s shareholding in a licensed body or parent undertaking, rather than his interest

 

in shares of a licensed body or parent undertaking.

 

Bridget Prentice

 

163

 

Schedule  13,  page  208,  line  31,  at end insert—

 

‘(aa)    

a non-authorised person may not have an entitlement to exercise, or

 

control the exercise of, voting rights in a licensable body, or a parent

 

undertaking of a licensable body, which exceeds a limit specified in

 

the rules (“the voting limit”);’.

 

 

Members’ explanatory statement

 

This amendment is related to amendment 111 and the clarification between voting rights and vot­

 

ing power in amendments 148 – 151 and 154 – 155. It provides that licensing rules may limit a

 

non-authorised person’s percentage of voting rights in a licensed body or parent undertaking.


 
 

Public Bill Committee: 19th June 2007                  

333

 

Legal Services Bill-[Lords], continued

 
 

Bridget Prentice

 

164

 

Schedule  13,  page  208,  line  32,  leave out ‘in which non-authorised persons have an

 

interest’ and insert ‘, or a parent undertaking of a licensed body, held by non-authorised

 

persons’.

 

 

Members’ explanatory statement

 

This amendment is related to amendment 111. It provides that licensing rules may limit the total

 

proportion of shares held by non-authorised persons in a licensed body or parent undertaking,

 

rather than the total proportion of shares in which non-authorised persons have an interest.

 

Bridget Prentice

 

165

 

Schedule  13,  page  208,  line  34,  at end insert—

 

‘(c)    

the total proportion of voting rights in a licensed body, or a parent

 

undertaking of a licensed body, which non-authorised persons are

 

entitled to exercise or control the exercise of, may not exceed a limit

 

specified in the rules.

 

( )    

Rules made under any paragraph of sub-paragraph (1) in relation to a licensed

 

body and a parent undertaking may specify different limits in relation to the

 

licensed body and the parent undertaking.’.

 

 

Members’ explanatory statement

 

This amendment is related to amendments 111, 148 – 151 and 154 – 155. It provides that licensing

 

rules may limit the total proportion of voting rights by non-authorised persons in licensed bodies

 

or parent undertakings. It also provides that limits under paragraph 38(1) may differ for licensed

 

bodies and parent undertakings.

 

Bridget Prentice

 

166

 

Schedule  13,  page  208,  line  35,  leave out from ‘(1)(a)’ to end of line 37 and insert

 

‘or (aa) may provide that references in those rules to a person, in relation to a person’s

 

shareholding or entitlement to exercise or control the exercise of voting rights, are to—

 

(a)    

the person,

 

(b)    

any of the person’s associates, or

 

(c)    

the person and any of the person’s associates taken together.’.

 

 

Members’ explanatory statement

 

This amendment is related to amendments 111 and 163, and brings the provision for associates

 

into line with the provision at paragraph 3(3) and 4(2).

 

Bridget Prentice

 

167

 

Schedule  13,  page  209,  line  2,  after ‘body’, insert ‘, or a parent undertaking of a

 

licensed body,’.

 

 

Members’ explanatory statement

 

This amendment is related to amendments 162 and 163 and related to amendment 168. Since

 

amendments 162 and 163 allow for limits to be set in relation to both licensed bodies and parent

 

undertakings, this amendment adds the reference to parent undertakings.

 

Bridget Prentice

 

168

 

Schedule  13,  page  209,  line  4,  at end insert ‘or (aa) in relation to the body.’.


 
 

Public Bill Committee: 19th June 2007                  

334

 

Legal Services Bill-[Lords], continued

 
 

 

Members’ explanatory statement

 

This amendment is related to amendment 163. It provides that paragraph 39 applies not only

 

where licensing rules have been made under paragraph 38(1)(a), but also paragraph 38(1)(aa).

 

Bridget Prentice

 

169

 

Schedule  13,  page  209,  line  5,  leave out from ‘acquires’ to ‘and’ in line 6 and insert

 

‘—

 

(a)    

a shareholding in the body which exceeds the share limit, or

 

(b)    

an entitlement to exercise, or control the exercise of, voting rights in

 

the body which exceeds the voting limit,

 

            

must notify the body (and, if the body is a parent undertaking of a licensed

 

body, the licensed body)’.

 

 

Members’ explanatory statement

 

This amendment is related to amendments 162, 163 and 168. It provides that the notification obli­

 

gations apply to non-authorised persons who exceed the share limit or the voting limit, and pro­

 

vides for when a notice must be given to a licensed body or a parent undertaking and a licensed

 

body.

 

Bridget Prentice

 

170

 

Schedule  13,  page  209,  line  21,   leave out ‘licensed body’ and insert ‘body (and, if

 

the body is a parent undertaking of a licensed body, the licensed body)’.

 

 

Members’ explanatory statement

 

This amendment is related to amendment 169. It follows the addition in that amendment of the ob­

 

ligation to notify the licensed body where there is an obligation to notify a body that is a parent

 

undertaking.

 

Bridget Prentice

 

171

 

Schedule  13,  page  209,  line  33,   leave out paragraph 41.

 

 

Members’ explanatory statement

 

This amendment is related to the amendments to the material and controlled interest provisions

 

(144 - 155) and to this Part that allow for divestiture of share capital in parent undertakings or

 

other bodies, no matter whether the licensed body in question is a body with share capital.

 

Bridget Prentice

 

172

 

Schedule  13,  page  209,  line  38,   leave out ‘relevant’.

 

 

Members’ explanatory statement

 

This amendment is related to amendment 171, which deleted paragraph 41 and therefore the term

 

“relevant licensed body”.

 

Bridget Prentice

 

173

 

Schedule  13,  page  210,  line  2,   leave out ‘interest in shares in any body’ and insert

 

‘shareholding in a body corporate with a share capital’.

 

 

Members’ explanatory statement


 
 

Public Bill Committee: 19th June 2007                  

335

 

Legal Services Bill-[Lords], continued

 
 

This amendment is related to amendments to the material interest and controlled interest provi­

 

sions (amendments 144 – 155). It replaces the reference to interest in shares in any body with

 

shareholding in any body corporate with a share capital.

 

Bridget Prentice

 

174

 

Schedule  13,  page  210,  line  12,   leave out sub-paragraph (3) and insert—

 

      ‘()  

In sub-paragraph (1)(b), references to a person’s shareholding are to be read in

 

accordance with paragraph 3(3) or 4(2) (as the case may be).’.

 

 

Members’ explanatory statement

 

This amendment is related to amendments to the material interest and controlled interest provi­

 

sions (amendments 144 – 155), and also brings the reference to associates into line with para­

 

graphs 3(3), 4(2) and also to 38(2) pursuant to amendment 166.

 

Bridget Prentice

 

175

 

Schedule  13,  page  210,  line  15,   after ‘38(1)(a)’, insert ‘or (aa)’.

 

 

Members’ explanatory statement

 

This amendment is related to amendment 163. It provides that the divestiture condition may apply

 

where licensing rules have been made not only under paragraph 38(1)(a) (share limit), but also

 

under paragraph 38(1)(aa) (voting limit).

 

Bridget Prentice

 

176

 

Schedule  13,  page  210,  line  16,   leave out from ‘a’ to end of line 17 and insert

 

‘licensed body if—

 

(a)    

the person’s shareholding in the body, or a parent undertaking of the

 

body, exceeds the share limit, and the body or parent undertaking (as

 

the case may be) is a body corporate with a share capital, or

 

(b)    

the person’s entitlement to exercise or control the exercise of voting

 

rights in the body, or a parent undertaking of the body, exceeds the

 

voting limit by virtue of the person holding shares in a body corporate

 

with a share capital.’.

 

 

Members’ explanatory statement

 

This amendment is related to amendments 162 and 163. It provides that the divestiture condition

 

is satisfied where the share limit or voting limit has been exceeded in relation to a licensed body

 

or parent undertaking.

 

Bridget Prentice

 

177

 

Schedule  13,  page  210,  line  18,   leave out from ‘means’ to end of line 19 and

 

insert—

 

‘(a)    

in a case within sub-paragraph (1)(a), the number of shares by which

 

the person’s shareholding exceeds the share limit, and

 

(b)    

in a case within sub-paragraph (1)(b), the number of shares held by the

 

person in excess of the number of shares the person could hold without

 

the person’s entitlement to exercise, or control the exercise of, voting

 

rights exceeding the voting limit.’.

 

 

Members’ explanatory statement

 

This amendment is related to amendments 162, 163 and 176. It changes the definition of “excess


 
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