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Prohibit short selling; to require disclosure by pension funds and their trustees |
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of records of loans of their shares for the purpose of short selling, and of the |
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fees received in such cases; to require banks and building societies to offer |
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their retail customers current and savings accounts free of any charge for |
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holding the accounts when such accounts are in credit; and for connected |
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Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and |
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consent of the Lords Spiritual and Temporal, and Commons, in this present |
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Parliament assembled, and by the authority of the same, as follows:— |
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1 | Prohibition of short selling |
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(1) | It shall be an offence for a person (P) to enter into a transaction that (whether |
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by itself or in conjunction with other transactions) has the effect of— |
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(a) | creating a net short position in a company listed in the UK; |
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(b) | increasing any net short position in a company listed in the UK that P |
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had before the coming into force of this section. |
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(2) | Subsection (1) does not apply to a person acting in the capacity of a market |
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(3) | A person guilty of an offence under subsection (1) is liable, on summary |
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conviction, to an unlimited fine or 12 months’ imprisonment. |
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2 | Disclosure requirements on pension funds and their trustees in relation to |
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(1) | Managers and trustees of a pension fund shall publish in the annual accounts |
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of their fund for the financial year ending with 31 March 2009, and any |
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subsequent financial year before the coming into force of this Act, a statement |
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(a) | the quantities of shares of the fund that have been lent for the purpose |
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(b) | the fees received by the fund for lending those shares; and |
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(c) | the price of the shares at both the beginning and the end of the period |
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during which they were lent. |
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(2) | A penalty may be imposed by the Financial Services Authority on the |
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managers and trustees of a pension fund who fail to comply with subsection |
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(3) | The penalty which may be imposed for a first offence under subsection (2) is a |
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penalty not exceeding £100,000. |
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(4) | The penalty which may be imposed for a second or subsequent offence under |
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subsection (2) is an unlimited fine. |
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3 | Bank and building society accounts of retail customers |
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(1) | It shall be a requirement on banks and building societies that accept deposits |
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from retail customers that they must offer retail customers— |
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(a) | at least one current account in respect of which no charge is made for |
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holding the account when it is in credit; and |
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(b) | at least one savings account in respect of which no charge is made for |
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holding the account when it is in credit, and on which interest is paid |
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(2) | A penalty may be imposed by the Financial Services Authority on a bank or |
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building society which fails to offer accounts in accordance with subsection 1. |
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(3) | The penalty which may be imposed for a first offence under subsection (2) is a |
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penalty not exceeding £100,000. |
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(4) | The penalty which may be imposed for a second or subsequent offence under |
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subsection (2) is an unlimited fine. |
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“bank” has the meaning as defined in section 2 of the Banking Act 2009 |
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“building society” has the meaning as defined in section 119(1) of the |
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Building Societies Act 1986 (c.53); |
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“market maker” means an entity that, ordinarily as part of their business, |
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deals as principal in equities, options or derivatives- |
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(a) | to fulfil orders received from clients, in response to a client‘s |
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request to trade or to hedge positions arising out of those |
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(b) | in a way that ordinarily has the effect of providing liquidity on |
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a regular basis to the market on both bid and offer sides of the |
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market in comparable size. |
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“net short position” means a net short position which gives rise to an |
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economic exposure to the issued capital of a company, taking account |
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of any form of economic interest in the shares of the company; |
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“retail customer” means a customer or prospective customer of a bank or |
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building society who is acting for purposes which are outside his trade, |
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