41

House of Commons

Thursday 7 January 2010

Public Bill Committee

New Amendments handed in are marked thus

Amendments which will comply with the required notice period at their next appearance

Financial Services Bill

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Note

The Amendments have been arranged in accordance with the Order of the

Committee [8 December 2009].

Mr Mark Hoban

40

Clause  6,  page  4,  line  15,  leave out subsection (3).

Mr Andrew Love

42

Clause  6,  page  4,  line  15,  at end insert—

‘(3A)

In section 5(2) (matters the FSA must have regard to in considering what degree

of consumer protection may be appropriate), insert at end “, including—

(i)	advice and information about regulatory action taken in

pursuance of this objective, and

(ii)	any needs for advice and information identified by the consumer

financial education body.”’.

Mr Mark Hoban

43

Clause  6,  page  4,  line  36,  leave out ‘and advice’.

Public Bill Committee: 7 January 2010

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Financial Services Bill, continued

Mr Mark Hoban

47

Schedule  1,  page  52,  line  31,  at end insert—

‘(4)	The board must include at least two members who represent the interests of

consumers.’.

Mr Mark Hoban

46

Schedule  1,  page  53,  line  30,  leave out paragraph 6.

Mr Mark Hoban

48

Schedule  1,  page  54,  line  32,  at end insert—

‘(d)	the quantitative and qualitative measures it will use to determine whether

it has met its objectives.’.

Mr Mark Hoban

49

Schedule  1,  page  58,  line  4,  leave out sub-paragraph (4).

Mr Mark Hoban

44

Clause  7,  page  5,  line  18,  leave out paragraph (b).

Mr Mark Hoban

45

Clause  8,  page  6,  line  7,  leave out ‘financial stability objective’ and insert

‘objectives’.

Mr Mark Hoban

52

Clause  9,  page  7,  line  5,  leave out paragraph (a).

Mr Mark Hoban

50

Clause  9,  page  7,  line  11,  leave out ‘first’.

Mr Mark Hoban

51

Clause  9,  page  7,  line  13,  leave out subsections (7) and (8).

Public Bill Committee: 7 January 2010

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Financial Services Bill, continued

Mr Mark Hoban

53

Clause  11,  page  8,  line  28,  leave out paragraph (c).

Mr Colin Breed

Dr Vincent Cable

55

Clause  11,  page  8,  line  33,  at end insert ‘; and

(c)	the regulatory objectives of the Authority.’.

Mr Mark Hoban

54

Clause  11,  page  9,  line  11,  after ‘void’, insert ‘where that agreement was signed

after 19 November 2009.’.

Ian Pearson

56

Clause  11,  page  9,  line  17,  at end insert—

‘( )	A provision that, at the time the rules are made, is contained in an agreement

made before that time may not be rendered void under subsection (9)(b) unless it

is subsequently amended so as to contravene a prohibition under subsection

(9)(a).’.

Member’s explanatory statement

This amendment makes it clear that the general rules about remuneration may not render void any

provision which is already in an agreement when the rules are made (so long as the provision is

not subsequently amended in a way that contravenes the rules).

Rob Marris

57

Clause  12,  page  11,  line  5,  at end insert ‘or requiring the authorised person to be

broken up into several persons by a date specified by the Authority.’.

New Clauses

Disclosure of enforcement actions

Mr Mark Hoban

NC1

To move the following Clause:—

‘In the Financial Services and Markets Act 2000, after section 349 insert—

“349A

Disclosure of enforcement actions

(1)	Section 348 does not prevent the disclosure by the Authority of

information that—

(a)	an authorised person is subject to actions taken under Part 14 of

the Act; or

Public Bill Committee: 7 January 2010

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Financial Services Bill, continued

(b)	an approved person is subject to actions taken under section 66

of the Act.

(2)	Prior to a public statement that action is being taken under Part 14 or

section 66 of the Act, the Authority must notify the person subject to the

action seven days prior to any disclosure of its intended course of

action.”.’.

Identification of additional powers needed to fulfil responsibilities for financial stability

Mr Mark Hoban

NC2

To move the following Clause:—

‘The Treasury must lay a report setting out the powers that the Financial Services

Authority and the Bank of England need to fulfil their responsibilities for

financial stability under the relevant legislation within one year of the

commencement of this Act.’.

Securing consumer protection

Mr Andrew Love

NC3

To move the following Clause:—

‘(1)	The Financial Services and Markets Act 2000 is amended as follows.

(2)	After section 5, insert the following new section—

“5A	Securing consumer protection

(1)	This section applies where the Authority becomes aware that any feature

or combination of features of a financial services market, product,

service, or provider in the United Kingdom is or appears to be

significantly harming the interests of consumers.

(2)	The Authority must take such action as it considers reasonable and

practicable to remedy, mitigate or prevent any detrimental effects on

consumers resulting from or relating to the feature or features of a

financial services market, product or provider.

(3)	The Authority must ensure that action taken under subsection (2) shall

have regard to the need to achieve as comprehensive solution as is

reasonable and practicable.

(4)	Action under subsection (2) may include action by the Authority itself

and recommendations on the taking of action by others where the

Authority can not by itself meet the requirements of subsection (3).

(5)	For the purpose of subsection (1) the Authority becomes aware in the

event of any of the following—

Public Bill Committee: 7 January 2010

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Financial Services Bill, continued

(a)	its own research, reviews, monitoring, supervision or

enforcement work;

(b)	on a referral by the scheme operator of the ombudsman scheme

or the Office of Fair Trading; or

(c)	Following acceptance of a request from a designated consumer

body made under susection (6).

(6)	A designated consumer body may by presenting evidence of apparent or

likely significant harm to the interests of consumers request that the

Authority takes action under this section.

(7)	The Authority shall within 90 days of a request under subsection (6)

publish a response stating—

(a)	whether it accepts or rejects the need for action; and

(b)	the reasons for its decision.

(8)	For the purpose of section (5)(c) “designated consumer body” includes—

(a)	a body designated by the Secretary of State by order under

section 11 of the Enterprise Act 2002;

(b)	the financial services consumer panel; or

(c)	the consumer financial education body.

(9)	The Authority shall prepare and publish a report within one year of any

of the events set out in subsection (5) setting out the action it intends to

take and the reasons for its decisions.

(10)	In this section reference to a financial services market, product or

provider refers to regulated activities as defined by Section 22.”’.

Duty regarding socio-economic inequalities

Mr Andrew Love

NC4

To move the following Clause:—

‘(1)	The Financial Services and Markets Act 2000 is amended as follows.

(2)	In section 2(1) (the FSA’s general duties), after paragraph (b) insert—

“(c)	which when making decisions of a strategic nature about how to exercise

its functions the Authority considers desirable so as to exercise them in a

way that is designed to reduce the inequalities of outcome which result

from socio-economic disadvantage.”’.

Public Bill Committee: 7 January 2010

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Financial Services Bill, continued

Restrictions on provision of credit limit increases

Mr Colin Breed

Dr Vincent Cable

NC5

To move the following Clause:—

‘(1)	A consumer credit firm which provides an increase in credit limit otherwise than

in accordance with this section commits an offence.

(2)	Credit limit increases may be provided only to a person who has asked to receive

such an increase.

(3)	This request may take the form:

(a)	of a specific one-off request from a person, or

(b)	of a decision by a person to opt in to being offered a limit increase.

(4)	In the case of section 3(b), the consumer credit firm may offer a person a limit

increase, but must gain specific approval from the person before providing this

increase.

(5)	In the case of section 3(b), a person may choose to opt out of receiving offers of

limit increases at any time by informing the consumer credit firm, and their

request must be processed with immediate effect.

(6)	A consumer credit firm must undertake proper credit checks and an assessment

of the person’s ability to repay before offering an increase in their credit limit.’.

Amendment of the Unfair Terms in Consumer Contract Regulations 1999

Mr Colin Breed

Dr Vincent Cable

NC6

To move the following Clause:—

‘(1)	The Unfair Terms in Consumer Contract Regulations 1999 (S.I. 1999/2083) is

amended as follows.

(2)	After regulation 6(1), insert—

“(1A)

Paragraph 2 shall not apply to contracts for the supply of financial

services.”.

(3)	After regulation 6(2) insert—

“In so far as it is in plain and intelligible language, the assessment of a term in a

contract for financial services shall not relate—

(a)	to the definition of the main subject matter of the contract, or

(b)	to the adequacy of the main price or remuneration, as against the goods

or services supplied in exchange.

(4)	Where a term of a contract provides for the charging of a consumer and the

circumstances in which that charge can be imposed need not arise during the term

of the contract, then such price or remuneration shall not fall within the main price

or remuneration for the purposes of paragraph 3.

Public Bill Committee: 7 January 2010

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Financial Services Bill, continued

(5)	If for the purposes of paragraph 3 there is doubt about what represents the main

price or remuneration, the interpretation which is most favourable to the

consumer shall prevail.”’.

Removal of reduction of financial crime as an FSA regulatory objective

Mr Mark Hoban

NC7

To move the following Clause:—

‘(1)	The Financial Services and Markets Act 2000 is amended as follows.

(2)	In section 2(2) (the FSA’s regulatory objectives) omit paragraph (d) (which

provides for the reduction in financial crime to be one of its objectives).

(3)	Omit Section 6 (the reduction of financial crime).’.

Maintenance of competition

Mr Andrew Tyrie

NC8

To move the following Clause:—

‘(1)	The Financial Services and Markets Act 2000 is amended as follows.

(2)	In section 2(2) (the FSA’s regulatory objectives), add a new paragraph—

“(e)	the maintenance of competition.”

(3)	In section 2(3), omit paragraphs (f) and (g).

(4)	After section 2 add a new section—

“Maintenance of competition

The maintenance of competition objective referred to in section 2(2)(e)

is: regulating in a way which facilitates competition in financial services

and markets in the United Kingdom between those who are subject to any

form of regulation by the Authority or those in any category of authorised

participants, and in a way which minimises the adverse effect on

competition that may arise from anything done in the discharge of the

Authority’s general functions.”’.

Ian Pearson

That certain written evidence already reported to the House be appended to the proceedings of

the Committee

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Revised 7 January 2010