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Lord Peyton of Yeovil: I have two points that I hope the Minister can answer. I am giving him an opportunity to rest his vocal chords. It has been a while since a Bill has come before the House in which the Minister has sung solo for so long without any interruptions or contributions from any other noble Lord. I believe my noble friends are extremely restrained and courteous in their behaviour.
Lord McIntosh of Haringey: They are happy!
Lord Peyton of Yeovil: I cannot speak for them, but I believe that that is going too far. I cannot possibly say that I am happy. I am just depressed and oppressed by the bulk of legislation with which we are faced and, as I said yesterday, the fruit that it is likely to bear in due course.
First, Amendment No. 182--I refer to the second subsection on page 12 of the Marshalled List--states:
- "If the competent authority is entitled to impose a penalty on a person under this section in respect of a particular matter it may, instead of imposing a penalty on him in respect of that matter, publish a statement censuring him".
Secondly, Amendment No. 183 proposes leaving out the words,
- "impose a penalty on a person under subsection (1)(b)",
- "take action against a person under this section".
Lord McIntosh of Haringey: On Amendment No. 182, it is reasonable, as in the rest of the Bill, that the competent authority should have the option of imposing a financial penalty or stating the equivalent of a reprimand or a caution in the criminal law--"You have behaved very badly"--where a financial penalty may not be appropriate.
Lord Peyton of Yeovil: Was there anything to stop the competent authority issuing a statement before? I do not understand why this provision is necessary.
Lord McIntosh of Haringey: There is a power to make a statement about an issuer so it is not necessary for that purpose, but there has never been a power to make a statement relating to a director, and that is covered by this amendment.
The noble Lord questions the need for Amendment No. 183. The change from imposing a penalty to taking action is precisely because the options include both imposing a penalty and issuing a censure, and taking action includes both the penalty and the statement.
Lord Fraser of Carmyllie: I may have missed something that the Minister said; if so, I apologise. In regard to the penalties to be imposed under Schedule 1, the language in the new clause exactly reflects that. Is there some reason why that has been put in as a new clause and the other remains in a schedule? Is this just a quirk of the drafting?
Lord McIntosh of Haringey: It certainly will not be a quirk of the drafting. Believe me, there is some good reason for that on which I shall write to the noble and learned Lord.
Lord Borrie: Although it seems that these amendments are useful, particularly those on the statement of policy which amplifies what was in the Bill in the first place, I am still somewhat puzzled with regard to penalties. Unlike other legislation dealing with criminal or quasi-criminal penalties, such as the Competition Act 1998, why is no maximum set out in the legislation?
Lord McIntosh of Haringey: These are not criminal or quasi-criminal penalties.
On Question, amendment agreed to.
Lord McIntosh of Haringey moved Amendments Nos. 183 to 185:
- Page 40, line 14, leave out ("impose a penalty on a person under subsection (1)(b)") and insert ("take action against a person under this section").
- Page 40, line 16, at end insert ("unless proceedings against that person, in respect of the contravention, were begun before the end of that period").
- Page 40, line 19, at end insert ("; and
On Question, amendments agreed to.
Clause 87, as amended, agreed to.
[Amendment No. 185A not moved.]
Clause 89 [Statement of policy]:
Lord McIntosh of Haringey moved Amendments Nos. 186 and 187:
On Question, amendments agreed to.
Clause 89, as amended, agreed to.
Clause 91 [Appeals against penalties]:
On Question, Whether Clause 91 shall stand part of the Bill?
Lord McIntosh of Haringey: I have given notice of my intention to oppose the Question that Clause 91 shall stand part of the Bill.
Clause 93 [Obligations of issuers of listed securities]:
Lord McIntosh of Haringey moved Amendments Nos. 188 and 189:
Clause 93, as amended, agreed to.
Lord McIntosh of Haringey moved Amendment No. 190:
(b) proceedings against a person in respect of a contravention are to be treated as begun when a warning notice is given to him under section 88.").
6 p.m.
Page 40, line 31, leave out ("publish") and insert ("issue").
Page 40, line 34, at end insert--
("( ) The Authority's policy in determining what the amount of a penalty should be must include having regard to--
(a) the seriousness of the contravention in question in relation to the nature of the requirement contravened;
(b) the extent to which that contravention was deliberate or reckless; and
(c) whether the person on whom the penalty is to be imposed is an individual.").
Page 42, line 7, leave out from beginning to ("if") in line 10.
Page 42, line 10, after ("information,") insert ("they may include provision").
On Question, amendments agreed to.
After Clause 93, insert the following new clause--
(" .--(1) Subsection (2) applies if it appears to the competent authority that there are circumstances suggesting that--
(a) there may have been a breach of listing rules;
(b) a person who was at the material time a director of an issuer of listed securities has been knowingly concerned in a breach of listing rules by that issuer;
(c) a person who was at the material time a director of a person applying for the admission of securities to the official list has been knowingly concerned in a breach of listing rules by that applicant;
(d) there may have been a contravention of section 81, 83 or 94.
(2) The competent authority may appoint one or more competent persons to conduct an investigation on its behalf.
(3) Part XI applies to an investigation under subsection (2) as if--
(a) the investigator were appointed under section 158(1);
(b) references to the investigating authority in relation to him were to the competent authority;
(c) references to the offences mentioned in section 159 were to those mentioned in subsection (1)(d);
(d) references to an authorised person were references to the person under investigation.").
The noble Lord said: In moving Amendment No. 190, I shall speak also to Amendment No. 264. This amendment introduces a power for the competent authority to appoint investigators where it appears to it that there are circumstances suggesting that there may have been a breach of the listing rules, that a person who was or is a director of an applicant for listing or an issuer was knowingly concerned in a breach or that there may have been a contravention of the criminal offences in Clauses 81, 83 or 94.
Investigators appointed under this clause have the same power as persons appointed under Clause 158 in Part XI of the Bill. The investigator can, under the provisions of Clause 162, require the person who is the subject of the investigation or any person connected with him to attend and answer questions or otherwise provide such information as the investigator may require.
The reason for putting the investigation power onto a statutory footing is twofold. First, as matters stand, the competent authority has no statutory power to require an issuer of listed securities and those involved in running the issuer's affairs to provide information where it appears that there may have been a breach of listing rules. We think that that is unsatisfactory and consider it important that the competent authority should have effective powers to police the listing rules.
Secondly, we want procedural checks concerning the conduct of investigations to apply. These are set out in Clause 161 of the Bill. Among other matters, the competent authority will be required to give written notice of the appointment of investigators to the person who is the subject of the investigation and to make the person aware of any significant change in the scope or conduct of the investigation. I beg to move.
On Question, amendment agreed to.
Clause 95 [Fees]:
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