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21

 

House of Commons

 
 

Thursday 14 January 2010

 

Public Bill Committee Proceedings

 

Financial Services Bill


 

[thirteenth and fourteenth SittingS]


 

Mr Mark Hoban

 

Withdrawn  70

 

Clause  26,  page  29,  line  13,  leave out ‘to make rules’ and insert ‘for a scheme to be

 

made’.

 

Mr Mark Hoban

 

Not called  71

 

Clause  26,  page  29,  line  20,  leave out ‘make rules’ and insert ‘propose a scheme’.

 

Mr Mark Hoban

 

Not called  72

 

Clause  26,  page  29,  line  38,  leave out ‘rules are’ and insert ‘scheme order is’.

 

Mr Mark Hoban

 

Not called  73

 

Clause  26,  page  29,  line  41,  leave out ‘making rules’ and insert ‘proposing a

 

scheme’.

 

Mr Mark Hoban

 

Not called  74

 

Clause  26,  page  29,  line  43,  at end insert—

 

‘(11)    

If the Authority proposes a scheme under this section, it shall apply to the court

 

for a consumer redress scheme order.

 

(12)    

“Consumer redress scheme order” means an order imposing a consumer redress

 

scheme on relevant firms.

 

(13)    

Any application by the Authority under this section shall—

 

(a)    

attach a draft order setting out the rules of the proposed consumer redress

 

scheme in full; and

 

(b)    

be notified to relevant firms and be published as required by the Civil

 

Procedure Rules or as otherwise directed by the court.

 

(14)    

Upon an application under subsection (11), the court may make a consumer

 

redress scheme order if it is satisfied that—

 

(a)    

the making of such an order represents the most appropriate means for

 

the fair and efficient resolution of the liability of relevant firms to pay

 

redress to consumers;


 
 

Public Bill Committee Proceedings: 14 January 2010        

22

 

Financial Services Bill, continued

 
 

(b)    

the consumer redress scheme is just and equitable; and

 

(c)    

the consumer redress scheme order complies with section 404A.

 

(15)    

At any time after the making of a consumer redress scheme order, any relevant

 

firm, the Authority, the ombudsman scheme or any other party permitted by

 

Court rules to do so, may apply to the court for—

 

(a)    

any amendment to be made to the consumer redress scheme order, or

 

(b)    

clarification or directions regarding the operation of the consumer

 

redress scheme;

 

    

and upon any such application the court may make any order it considers

 

appropriate (including making any amendment to the consumer redress scheme

 

order).’.

 

Mr Mark Hoban

 

Not called  75

 

Clause  26,  page  30,  line  2,  leave out ‘Rules under section 404’ and insert ‘a

 

consumer redress scheme order’.

 

Mr Mark Hoban

 

Not called  76

 

Clause  26,  page  30,  line  41,  leave out ‘rules’ and insert ‘consumer redress scheme

 

order’.

 

Mr Mark Hoban

 

Not called  77

 

Clause  26,  page  30,  line  45,  leave out ‘rules’ and insert ‘consumer redress scheme

 

order’.

 

Mr Mark Hoban

 

Withdrawn  78

 

Clause  26,  page  30,  line  48,  leave out from beginning to end of line 2 on page 31

 

and insert—

 

‘(4)    

Matters may not be set out in a redress scheme order as a result of subsection

 

(1)(d) if a court would not grant such relief in the circumstances specified.’.

 

Mr Mark Hoban

 

Not called  79

 

Clause  26,  page  31,  leave out lines 3 to 5.

 

Mr Mark Hoban

 

Withdrawn  80

 

Clause  26,  page  31,  leave out lines 21 and 22.

 

Mr Mark Hoban

 

Not called  81

 

Clause  26,  page  31,  line  22,  at end insert—

 

‘404AA 

  Rules of court about consumer redress schemes

 

(1)    

Rules of court may make provision about consumer redress schemes.

 

(2)    

Such rules shall be designed with the objectives of ensuring, inter alia, that—

 

(a)    

applications concerning consumer redress schemes are heard and

 

determined expeditiously; and


 
 

Public Bill Committee Proceedings: 14 January 2010        

23

 

Financial Services Bill, continued

 
 

(b)    

notice of such applications is published so as to bring the application to

 

the attention of those who may be affected by the consumer redress

 

scheme.

 

(3)    

The rules may in particular—

 

(a)    

make provision about applications for or in connection with consumer

 

redress scheme orders;

 

(b)    

make provision about the notice to be given to relevant firms regarding

 

such applications;

 

(c)    

make provision about the publication of such applications, so as to bring

 

the application to the attention of those persons who may be affected by

 

a consumer redress scheme order;

 

(d)    

set out the criteria to be applied by the court when deciding whether to

 

make a consumer redress order (or the terms of such an order including

 

the rules of the consumer redress scheme);

 

(e)    

make provision for any other matter relating or incidental to the proper

 

management and conduct of the consumer redress scheme;

 

(f)    

make provision for the court to consider whether other means may be

 

more appropriate for the fair and efficient resolution of the liability of

 

relevant firms to pay redress to consumers, and to give directions as it

 

considers necessary.’.

 

Mr Mark Hoban

 

Withdrawn  82

 

Clause  26,  page  31,  leave out lines 32 to 38 and insert—

 

‘(2)    

If a consumer considers that a relevant firm has failed to make an accurate

 

determination in accordance with a consumer redress scheme, the consumer may,

 

in respect of that determination or failure, make a complaint under the

 

ombudsman scheme.’.

 

Mr Mark Hoban

 

Not moved  83

 

Clause  26,  page  33,  leave out lines 7 to 9 and insert—

 

‘(c)    

natural persons who, in the matters to which the consumer redress

 

scheme relates, are acting for purposes which are outside their trade

 

business or profession;’.

 

Mr Mark Hoban

 

Not moved  84

 

Clause  26,  page  33,  line  46,  leave out from ‘interest;’ to end of line 2 on page 34.

 

Clause Agreed to.

 

Clauses 35 and 36 Agreed to.

 

Schedule 2 Agreed to.

 

Clauses 37 to 39 Agreed to.

 



 
 

Public Bill Committee Proceedings: 14 January 2010        

24

 

Financial Services Bill, continued

 
 

New Clauses

 

Disclosure of enforcement actions

 

Mr Mark Hoban

 

Not called  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

 

(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

 

Negatived on division  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

 

Withdrawn  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,


 
 

Public Bill Committee Proceedings: 14 January 2010        

25

 

Financial Services Bill, continued

 
 

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—

 

(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

 

Withdrawn  NC4

 

To move the following Clause:—


 
 

Public Bill Committee Proceedings: 14 January 2010        

26

 

Financial Services Bill, continued

 
 

‘(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.”’.

 


 

Restrictions on provision of credit limit increases

 

Mr Colin Breed

 

Dr Vincent Cable

 

Withdrawn  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

 

Withdrawn  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—


 
 

Public Bill Committee Proceedings: 14 January 2010        

27

 

Financial Services Bill, continued

 
 

(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.

 

(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

 

Withdrawn  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

 

Withdrawn  NC9

 

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

 

(1)    

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.


 
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