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| [thirteenth and fourteenth SittingS]
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| Clause 26, page 29, line 13, leave out ‘to make rules’ and insert ‘for a scheme to be |
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| Clause 26, page 29, line 20, leave out ‘make rules’ and insert ‘propose a scheme’. |
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| Clause 26, page 29, line 38, leave out ‘rules are’ and insert ‘scheme order is’. |
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| Clause 26, page 29, line 41, leave out ‘making rules’ and insert ‘proposing a |
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| Clause 26, page 29, line 43, at end insert— |
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| | ‘(11) | If the Authority proposes a scheme under this section, it shall apply to the court |
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| | for a consumer redress scheme order. |
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| | (12) | “Consumer redress scheme order” means an order imposing a consumer redress |
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| | scheme on relevant firms. |
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| | (13) | Any application by the Authority under this section shall— |
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| | (a) | attach a draft order setting out the rules of the proposed consumer redress |
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| | (b) | be notified to relevant firms and be published as required by the Civil |
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| | Procedure Rules or as otherwise directed by the court. |
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| | (14) | Upon an application under subsection (11), the court may make a consumer |
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| | redress scheme order if it is satisfied that— |
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| | (a) | the making of such an order represents the most appropriate means for |
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| | the fair and efficient resolution of the liability of relevant firms to pay |
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| | (b) | the consumer redress scheme is just and equitable; and |
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| | (c) | the consumer redress scheme order complies with section 404A. |
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| | (15) | At any time after the making of a consumer redress scheme order, any relevant |
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| | firm, the Authority, the ombudsman scheme or any other party permitted by |
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| | Court rules to do so, may apply to the court for— |
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| | (a) | any amendment to be made to the consumer redress scheme order, or |
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| | (b) | clarification or directions regarding the operation of the consumer |
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| | | and upon any such application the court may make any order it considers |
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| | appropriate (including making any amendment to the consumer redress scheme |
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| Clause 26, page 30, line 2, leave out ‘Rules under section 404’ and insert ‘a |
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| consumer redress scheme order’. |
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| Clause 26, page 30, line 41, leave out ‘rules’ and insert ‘consumer redress scheme |
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| Clause 26, page 30, line 45, leave out ‘rules’ and insert ‘consumer redress scheme |
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| Clause 26, page 30, line 48, leave out from beginning to end of line 2 on page 31 |
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| | ‘(4) | Matters may not be set out in a redress scheme order as a result of subsection |
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| | (1)(d) if a court would not grant such relief in the circumstances specified.’. |
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| Clause 26, page 31, leave out lines 3 to 5. |
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| Clause 26, page 31, leave out lines 21 and 22. |
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| Clause 26, page 31, line 22, at end insert— |
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| | ‘404AA | Rules of court about consumer redress schemes |
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| | (1) | Rules of court may make provision about consumer redress schemes. |
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| | (2) | Such rules shall be designed with the objectives of ensuring, inter alia, that— |
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| | (a) | applications concerning consumer redress schemes are heard and |
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| | determined expeditiously; and |
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| | (b) | notice of such applications is published so as to bring the application to |
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| | the attention of those who may be affected by the consumer redress |
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| | (3) | The rules may in particular— |
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| | (a) | make provision about applications for or in connection with consumer |
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| | (b) | make provision about the notice to be given to relevant firms regarding |
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| | (c) | make provision about the publication of such applications, so as to bring |
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| | the application to the attention of those persons who may be affected by |
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| | a consumer redress scheme order; |
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| | (d) | set out the criteria to be applied by the court when deciding whether to |
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| | make a consumer redress order (or the terms of such an order including |
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| | the rules of the consumer redress scheme); |
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| | (e) | make provision for any other matter relating or incidental to the proper |
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| | management and conduct of the consumer redress scheme; |
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| | (f) | make provision for the court to consider whether other means may be |
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| | more appropriate for the fair and efficient resolution of the liability of |
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| | relevant firms to pay redress to consumers, and to give directions as it |
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| Clause 26, page 31, leave out lines 32 to 38 and insert— |
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| | ‘(2) | If a consumer considers that a relevant firm has failed to make an accurate |
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| | determination in accordance with a consumer redress scheme, the consumer may, |
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| | in respect of that determination or failure, make a complaint under the |
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| Clause 26, page 33, leave out lines 7 to 9 and insert— |
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| | ‘(c) | natural persons who, in the matters to which the consumer redress |
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| | scheme relates, are acting for purposes which are outside their trade |
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| | business or profession;’. |
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| Clause 26, page 33, line 46, leave out from ‘interest;’ to end of line 2 on page 34. |
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| | Clauses 35 and 36 Agreed to. |
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| | Clauses 37 to 39 Agreed to. |
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| | Disclosure of enforcement actions |
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| To move the following Clause:— |
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| | ‘In the Financial Services and Markets Act 2000, after section 349 insert— |
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| | “349A | Disclosure of enforcement actions |
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| | (1) | Section 348 does not prevent the disclosure by the Authority of |
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| | (a) | an authorised person is subject to actions taken under Part 14 of |
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| | (b) | an approved person is subject to actions taken under section 66 |
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| | (2) | Prior to a public statement that action is being taken under Part 14 or |
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| | section 66 of the Act, the Authority must notify the person subject to the |
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| | action seven days prior to any disclosure of its intended course of |
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| | Identification of additional powers needed to fulfil responsibilities for financial stability |
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| | Negatived on division NC2 |
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| To move the following Clause:— |
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| | ‘The Treasury must lay a report setting out the powers that the Financial Services |
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| | Authority and the Bank of England need to fulfil their responsibilities for |
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| | financial stability under the relevant legislation within one year of the |
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| | commencement of this Act.’. |
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| | Securing consumer protection |
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| To move the following Clause:— |
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| | ‘(1) | The Financial Services and Markets Act 2000 is amended as follows. |
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| | (2) | After section 5, insert the following new section— |
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| | “5A | Securing consumer protection |
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| | (1) | This section applies where the Authority becomes aware that any feature |
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| | or combination of features of a financial services market, product, |
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| | service, or provider in the United Kingdom is or appears to be |
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| | significantly harming the interests of consumers. |
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| | (2) | The Authority must take such action as it considers reasonable and |
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| | practicable to remedy, mitigate or prevent any detrimental effects on |
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| | consumers resulting from or relating to the feature or features of a |
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| | financial services market, product or provider. |
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| | (3) | The Authority must ensure that action taken under subsection (2) shall |
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| | have regard to the need to achieve as comprehensive solution as is |
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| | reasonable and practicable. |
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| | (4) | Action under subsection (2) may include action by the Authority itself |
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| | and recommendations on the taking of action by others where the |
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| | Authority can not by itself meet the requirements of subsection (3). |
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| | (5) | For the purpose of subsection (1) the Authority becomes aware in the |
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| | event of any of the following— |
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| | (a) | its own research, reviews, monitoring, supervision or |
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| | (b) | on a referral by the scheme operator of the ombudsman scheme |
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| | or the Office of Fair Trading; or |
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| | (c) | Following acceptance of a request from a designated consumer |
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| | body made under susection (6). |
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| | (6) | A designated consumer body may by presenting evidence of apparent or |
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| | likely significant harm to the interests of consumers request that the |
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| | Authority takes action under this section. |
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| | (7) | The Authority shall within 90 days of a request under subsection (6) |
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| | publish a response stating— |
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| | (a) | whether it accepts or rejects the need for action; and |
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| | (b) | the reasons for its decision. |
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| | (8) | For the purpose of section (5)(c) “designated consumer body” includes— |
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| | (a) | a body designated by the Secretary of State by order under |
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| | section 11 of the Enterprise Act 2002; |
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| | (b) | the financial services consumer panel; or |
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| | (c) | the consumer financial education body. |
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| | (9) | The Authority shall prepare and publish a report within one year of any |
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| | of the events set out in subsection (5) setting out the action it intends to |
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| | take and the reasons for its decisions. |
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| | (10) | In this section reference to a financial services market, product or |
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| | provider refers to regulated activities as defined by Section 22.”’. |
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| | Duty regarding socio-economic inequalities |
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| To move the following Clause:— |
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| | ‘(1) | The Financial Services and Markets Act 2000 is amended as follows. |
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| | (2) | In section 2(1) (the FSA’s general duties), after paragraph (b) insert— |
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| | “(c) | which when making decisions of a strategic nature about how to exercise |
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| | its functions the Authority considers desirable so as to exercise them in a |
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| | way that is designed to reduce the inequalities of outcome which result |
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| | from socio-economic disadvantage.”’. |
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| | Restrictions on provision of credit limit increases |
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| To move the following Clause:— |
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| | ‘(1) | A consumer credit firm which provides an increase in credit limit otherwise than |
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| | in accordance with this section commits an offence. |
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| | (2) | Credit limit increases may be provided only to a person who has asked to receive |
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| | (3) | This request may take the form: |
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| | (a) | of a specific one-off request from a person, or |
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| | (b) | of a decision by a person to opt in to being offered a limit increase. |
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| | (4) | In the case of section 3(b), the consumer credit firm may offer a person a limit |
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| | increase, but must gain specific approval from the person before providing this |
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| | (5) | In the case of section 3(b), a person may choose to opt out of receiving offers of |
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| | limit increases at any time by informing the consumer credit firm, and their |
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| | request must be processed with immediate effect. |
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| | (6) | A consumer credit firm must undertake proper credit checks and an assessment |
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| | of the person’s ability to repay before offering an increase in their credit limit.’. |
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| | Amendment of the Unfair Terms in Consumer Contract Regulations 1999 |
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| To move the following Clause:— |
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| | ‘(1) | The Unfair Terms in Consumer Contract Regulations 1999 (S.I. 1999/2083) is |
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| | (2) | After regulation 6(1), insert— |
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| | “(1A) | Paragraph 2 shall not apply to contracts for the supply of financial |
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| | (3) | After regulation 6(2) insert— |
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| | | “In so far as it is in plain and intelligible language, the assessment of a term in a |
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| | contract for financial services shall not relate— |
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| | (a) | to the definition of the main subject matter of the contract, or |
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| | (b) | to the adequacy of the main price or remuneration, as against the goods |
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| | or services supplied in exchange. |
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| | (4) | Where a term of a contract provides for the charging of a consumer and the |
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| | circumstances in which that charge can be imposed need not arise during the term |
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| | of the contract, then such price or remuneration shall not fall within the main price |
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| | or remuneration for the purposes of paragraph 3. |
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| | (5) | If for the purposes of paragraph 3 there is doubt about what represents the main |
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| | price or remuneration, the interpretation which is most favourable to the |
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| | consumer shall prevail.”’. |
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| | Removal of reduction of financial crime as an FSA regulatory objective |
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| To move the following Clause:— |
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| | ‘(1) | The Financial Services and Markets Act 2000 is amended as follows. |
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| | (2) | In section 2(2) (the FSA’s regulatory objectives) omit paragraph (d) (which |
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| | provides for the reduction in financial crime to be one of its objectives). |
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| | (3) | Omit Section 6 (the reduction of financial crime).’. |
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| | Maintenance of competition |
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| To move the following Clause:— |
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| | ‘(1) | The Financial Services and Markets Act 2000 is amended as follows. |
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| | (2) | In section 2(2) (the FSA’s regulatory objectives), add a new paragraph— |
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| | “(e) | the maintenance of competition.”. |
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| | (3) | In section 2(3), omit paragraphs (f) and (g). |
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| | (4) | After section 2, add a new section— |
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| | | “Maintenance of competition |
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| | (1) | The maintenance of competition objective referred to in section 2(2)(e) |
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| | is: regulating in a way which facilitates competition in financial services |
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| | and markets in the United Kingdom between those who are subject to any |
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| | form of regulation by the Authority or those in any category of authorised |
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| | participants, and in a way which minimises the adverse effect on |
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| | competition that may arise from anything done in the discharge of the |
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| | Authority’s general functions. |
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