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| | (a) | take account of the desirability of resolving informally matters which |
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| | arise between the Board and an approved regulator, and |
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| | (b) | specify how, in exercising the functions mentioned in that subsection, the |
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| | Board will comply with the requirements of section 3(3) (regulatory |
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| | activities to be proportionate, consistent and targeted only at cases in |
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| | which action is needed, etc).’.
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| Clause 51, page 28, line 4, at end insert— |
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| | ‘(2A) | Practising fee income shall be kept separate from the other assets of a regulator.’. |
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| | Clauses 52 and 53 Agreed to. |
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| Clause 54, page 30, line 21, at end insert— |
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| | ‘(1A) | An approved regulator must consider any request made by an external regulatory |
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| | body for the approved regulator to reconsider any provision made by its |
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| | regulatory arrangements on the grounds that the provision either— |
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| | (a) | conflicts with a requirement of a regulatory provision made by the |
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| | external regulatory body, or |
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| | (b) | unnecessarily duplicates any regulatory provision made by that external |
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| Clause 54, page 30, line 27, at end insert— |
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| | ‘(2A) | An external regulatory body may make an application to an approved regulator |
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| | under this section if it considers that the arrangements of the approved |
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| | (a) | frustrate the exercise of the external regulatory body’s requirements, or |
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| | (b) | conflict with the external regulatory body’s regulatory requirements, or |
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| | (c) | give rise to unnecessary duplication of regulatory requirements for the |
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| | subjects of the external regulatory body. |
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| | (2B) | For the purposes of subsection (2A)(c) above, “subjects” means any individuals |
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| | or entities subject to the regulatory powers and jurisdication of the external |
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| | (2C) | Where an application is made to an approved regulator under this section, the |
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| | (a) | determine whether such regulatory conflict exists with the external |
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| | regulatory body’s requirements and, where it so determines, take such |
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| | steps as are reasonably practicable to address the regulatory conflict |
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| | outlined by the external regulatory body, or, |
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| | (b) | in the absence of satisfactory resolution and where provisions for the |
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| | resolution of external regulatory conflict provide, make an application to |
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| | the Board under subsection (4).’. |
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| Clause 55, page 31, line 6, at end insert— |
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| | ‘(d) | shall give a reason and explanation for such notice.’. |
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| Clause 56, page 31, line 31, at end add— |
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| | ‘(4) | Without prejudice to subsection (2) the Board may, in exceptional circumstances |
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| | and as a temporary measure, issue an order requiring the approved regulator to |
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| | comply with the notice or with such directions as would have been contained in |
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| | the order had a successful application been made.’.
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| | Clauses 57 to 62 Agreed to. |
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| Clause 63, page 35, line 4, at end insert ‘and, in either case, no other approved |
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| regulator is suitable and willing to regulate the activity in question.’.
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| | Clauses 64 to 70 Agreed to. |
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| Clause 71, page 41, line 8, at end insert ‘, provided that a body is not a “licensable |
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| body” if the only managers who are non-authorised persons are individuals who do not |
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| directly provide any services to consumers.’. |
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| Clause 71, page 41, line 8, at end add— |
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| | ‘(3) | Without prejudice to the powers vested in the board by this Part of this Act, the |
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| | Board must seek to ensure that, as far as is practicable, licenses to permit |
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| | alternative business structures for the provision of legal services are issued on an |
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| | incremental basis, in order to reduce the risk of a disruption of the market for legal |
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| Clause 72, page 41, line 10, leave out subsections (1) and (2) and insert— |
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| | ‘(1) | A body (“B”) is a licensable body if a non-authorised person— |
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| | (a) | is a manager of B, or |
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| | (b) | has an interest in B. |
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| | (2) | A body (“B”) is also a licensable body if— |
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| | (a) | another body (“A”) is a manager of B, or has an interest in B, and |
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| | (b) | non-authorised persons are entitled to exercise, or control the exercise of, |
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| | at least 10% of the voting rights in A. |
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| | (2A) | For the purposes of this Act, a person has an interest in a body if— |
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| | (a) | the person holds shares in the body, or |
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| | (b) | the person is entitled to exercise, or control the exercise of, voting rights |
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| | (2B) | A body may be licensable by virtue of both subsection (1) and subsection (2). |
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| | (2C) | For the purposes of this Act, a non-authorised person has an indirect interest in a |
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| | licensable body if the body is licensable by virtue of subsection (2) and the non- |
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| | authorised person is entitled to exercise, or control the exercise of, voting rights |
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| Clause 72, page 41, line 10, leave out subsection (1) and insert— |
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| | ‘(1) | For the purposes of this Act, a body is a “licensable body” if— |
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| | (a) | at least one manager of the body is an individual who is a non-authorised |
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| | person who provides services directly or indirectly to clients; or |
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| | (b) | more than 25 per cent. of the managers of the body are individuals who |
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| | are not authorised persons regardless of whether they provide services |
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| | directly or indirectly to clients; or |
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| | (c) | at least one person who has an interest in shares in the body is a non- |
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| | authorised person and is not a manager of that body.’.
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| Clause 72, page 41, line 13, at end insert— |
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| | ‘(1A) | A body is not a licensable body if it is regulated under section 9(A) of the |
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| | Administration of Justice Act 1985.’.
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| Clause 72, page 41, line 26, at end insert ‘, and references to the holding of shares, |
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| or to a shareholding, are to be construed accordingly.’. |
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| | Clause, as amended, Agreed to. |
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| | Clauses 73 to 76 Agreed to. |
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| | Clauses 77 to 82 Agreed to. |
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| [Adjourned till Thursday at 9.00 a.m. |
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