Legal Services Bill [Lords] - continued          House of Commons

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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 voting rights in P. A test for significant influence by virtue of other voting power is unnecessary, since other voting power inherently gives such influence and is therefore 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 interest. 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 interest. 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 associate 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 {jx109}(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 {jx109}(2A) (as inserted by amendment 111).

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 controlled interest provisions (amendments 144 – 155). It changes an interest in a particular percentage 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 – 158). Only voting rights can constitute 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 controlled 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 – 158). Only voting rights can constitute 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-authorised 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 voting power in amendments 148 – 151 and 154 – 158. It provides that licensing rules may limit a non-authorised person’s percentage of voting rights in a licensed body or parent undertaking.

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 1. 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 – 158. 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.’.

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 obligations apply to non-authorised persons who exceed the share limit or the voting limit, and provides 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 obligation 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
This amendment is related to amendments to the material interest and controlled interest provisions (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 provisions (amendments 144 – 155), and also brings the reference to associates into line with paragraphs 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 shares” to reflect the changes made in these provisions.

Bridget Prentice

178

Schedule 13, page 210, line 20, leave out sub-paragraph (3) and insert—

    ‘() References in this paragraph to a person’s shareholding (or holding of shares) or entitlement are to be read in accordance with any applicable licensing rules made under paragraph 38(2).’.

Members’ explanatory statement
This amendment brings the reference to associates into line with the changes made to paragraph 38(2) pursuant to amendment 166.

Bridget Prentice

179

Schedule 13, page 210, line 25, leave out ‘relevant’.

Members’ explanatory statement
This amendment is related to amendment 171, which deleted the concept of “relevant licensed body”.

Bridget Prentice

180

Schedule 13, page 213, line 20, at end insert ‘or (aa).’.

Members’ explanatory statement
This amendment is related to amendment 163. It provides that paragraph 50 applies both where licensing rules have been made under paragraph 38(1)(a) and paragraph 38(1)(aa).

Bridget Prentice

181

Schedule 13, page 213, line 22, leave out from ‘where’ to end of line 24 and insert ‘a non-authorised person acquires—

      (a) a shareholding in a licensed body or parent undertaking of a licensed body which exceeds the share limit, or

      (b) an entitlement to exercise, or control the exercise of, voting rights in a licensed body or parent undertaking of a licensed body which exceeds the voting limit.’.

Members’ explanatory statement
This amendment is related to amendment 163 and 180. It provides that the licensing authority may notify the Board both where a non-authorised person exceeds the share limit or exceeds the voting limit.

Bridget Prentice

182

Schedule 13, page 213, line 36, at end insert—

      ‘( ) If the share limit or voting limit is breached in relation to a parent undertaking of a licensed body, references in sub-paragraphs (3) and (6) to the licensed body include the parent undertaking.’.

Members’ explanatory statement
This amendment is related to amendments 162 and 163 and 180 and 181. It provides that the parent undertaking must also be notified in the circumstances set out in the amendment.

Bridget Prentice

183

Schedule 13, page 214, line 7, at end insert—

      ‘( ) If the share limit or voting limit is breached in relation to a parent undertaking of a licensed body, references in sub-paragraphs (1) and (5) to the licensed body include the parent undertaking.’.

Members’ explanatory statement
This amendment is related to amendments 162 and 163 and 180 and 181. It provides that the parent undertaking must also be notified in the circumstances set out in the amendment.

Bridget Prentice

184

Schedule 14, page 214, line 35, leave out paragraph (b).

Members’ explanatory statement
This amendment removes licensing authorities' power to intervene where a person is appointed manager or receiver of a licensed body's property, because insolvency is covered by paragraph 1(2)(c). This is consistent with the Law Society’s powers in relation to recognised bodies, as amended by Schedule 16 paragraph 113.

Bridget Prentice

185

Schedule 16, page 243, line 45, leave out ‘in shares’.

Members’ explanatory statement
This amendment is related to amendment 111. It adjusts the definition of interest in a recognised body to refer to the definition of interest in a body in Clause 72 of the Bill, rather than the former “interest in shares” in a body.

Bridget Prentice

186

Schedule 16, page 244, line 38, leave out ‘in shares’.

Members’ explanatory statement
This amendment is related to amendment 111. It adjusts the definition of interest in a recognised body to refer to the definition of interest in a body in Clause 72 of the Bill, rather than the former “interest in shares” in a body.

Bridget Prentice

187

Schedule 16, page 245, line 5, leave out ‘in shares’.

Members’ explanatory statement
This amendment is related to amendment 111. It provides that section 44B applies to persons with an interest in a recognised body, rather than persons with an interest in shares in a recognised body. See also amendment 188.

Bridget Prentice

188

Schedule 16, page 246, line 28, leave out ‘in shares’.

Members’ explanatory statement
This amendment is related to amendments 111 and 187. It provides that an interest in a recognised body (see amendment 187) has the same meaning as interest in a body in Clause 72 of the Bill.

Bridget Prentice

189

Schedule 16, page 265, line 6, after ‘(5)’, insert ‘(a), and at least one of the persons within subsection (5)(b),’.

Members’ explanatory statement
This amendment adjusts the management and control condition in sub-paragraph (4) to provide that at least one of the directors is a person in sub-paragraph (4)(a), and at least one of the persons who holds shares in the body (see amendment 190) falls under sub-paragraph (4)(a).

Bridget Prentice

190

Schedule 16, page 265, line 13, leave out ‘have an interest’ and insert ‘hold shares’.

Members’ explanatory statement
This amendment is related to amendment 111. It replaces the concept of interest in the recognised body with a shareholding in the recognised body.

Bridget Prentice

191

Schedule 16, page 265, line 45, after ‘managers’, insert ‘or employees’.

Members’ explanatory statement
This amendment alters the definition of “relevant legal services” to refer to employees who are authorised persons, rather than just managers who are authorised persons.

Bridget Prentice

192

Schedule 16, page 266, line 2, at end insert—

      ‘“shares”, in relation to a body, has the same meaning as in Part 5 of the Legal Services Act 2007 (see sections jx09 and j615 of that Act);’.

Members’ explanatory statement
This amendment is related to amendment 190, which replaces a reference to an interest in shares with a reference to holding shares. It gives “shares” the same meaning as in Clause 72.

Bridget Prentice

193

Schedule 16, page 266, line 4, leave out ‘in shares’.

Members’ explanatory statement
This amendment is related to amendment 111. It adjusts the definition of interest in a recognised body to refer to the definition of interest in a body in Clause 72 of the Bill, rather than the former “interest in shares” in a body.

Bridget Prentice

194

Schedule 16, page 270, line 42, at end insert ‘, and for this purpose a person has an interest in the body if he has an interest in the body within the meaning of Part 5 of the Legal Services Act 2007 (see sections jx09 and j615 of that Act).’.

Members’ explanatory statement
This amendment inserts a definition of “interest in the body”. The definition refers to the definition of interest in a body in Clause 72 of the Bill.

Bridget Prentice

195

Schedule 16, page 272, line 10, leave out ‘in shares’.

Members’ explanatory statement
This amendment is related to amendment 111. It adjusts the meaning of interest in a recognised body to refer to the definition of interest in a body in Clause 72 of the Bill, rather than the former “interest in shares” in a body.
 
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Prepared: 7 June 2007