77 Power of Treasury to require regulator to undertake investigation
(1) This section applies where—
(a) the Treasury consider that it is in the public interest that a regulator should undertake an investigation into any relevant events, and
(b) it does not appear to the Treasury that the regulator has undertaken or is undertaking an investigation (under this Part or otherwise) into those events.
(2) The Treasury must give the regulator a direction specifying the relevant events and requiring the regulator to undertake an investigation into those events and the circumstances surrounding them and to report to the Treasury on the result of the investigation.
(3) “Relevant events” means events that have occurred in relation to—
(a) a collective investment scheme,
(b) a person who is, or was at the time of the events, carrying on a regulated activity (whether or not as an authorised person), ...
(c) listed securities or an issuer of listed securities, or
(d) a regulated payment system.
(4) “Relevant events” do not include any events occurring before 1 December 2001 (but no such limitation applies to the reference in subsection (2) to surrounding circumstances).
(1) Where a regulator is required by section 73 , 74 or 76A or under section 77 to carry out an investigation, it is for the regulator to decide how it is to be carried out, but this is subject to the following provisions.
(2) In carrying out such an investigation, the regulator must have regard to the desirability of minimising any adverse effect that the carrying out of the investigation may have on the exercise by the regulator of any of its other functions.
(3) The regulator may postpone the start of, or suspend, an investigation if it considers it necessary to do so to avoid a material adverse effect on the exercise by it of any of its other functions.
(4) The regulator must notify the Treasury if it postpones the start of, or suspends, an investigation under subsection (3), and the notification must specify when the investigation will begin or resume.
(5) The Treasury may, by a direction to the regulator, control—
(a) the scope of the investigation;
(b) the period during which the investigation is to be carried out;
(c) the conduct of the investigation;
(d) the making of reports.
(6) A direction may, in particular—
(a) confine the investigation to particular matters;
(b) extend the investigation to additional matters;
(c) require the regulator to postpone the start of, or suspend, an investigation until a specified time or until a further direction;
(d) where a notification has been received under subsection (3), require the regulator to begin or resume the investigation immediately or at a specified time;
(e) require the regulator to discontinue the investigation or to take only such steps as are specified in the direction;
(f) require the regulator to make such interim reports as are so specified.
(7) In exercising the power conferred on them by this section, the Treasury must have regard to the desirability of minimising any adverse effect that the carrying out of the investigation may have on the exercise by the regulator of any of its other functions.
On completion of an investigation required by section 73 , 74 or 76A or under section 77, the regulator must make a written report to the Treasury—
(a) setting out the result of the investigation,
(b) setting out the lessons (if any) that the regulator considers that it should learn from the investigation, and
(c) making such recommendations (if any) as the regulator considers appropriate.
(1) Each regulator must prepare and issue a statement of its policy with respect to the exercise of its functions under sections 73 to 79 (“the relevant sections”) and, in particular—
(a) the matters it will take into account in determining whether the conditions which give rise to its duty to carry out an investigation under section 73 , 74 or 76A (as the case may be) are met, and
(b) how it will carry out investigations under the relevant sections.
(2) A regulator may at any time alter or replace a statement issued by it under this section.
(3) If a statement issued under this section is altered or replaced by a regulator, the regulator must issue the altered or replacement statement.
(4) A regulator must obtain the consent of the Treasury before issuing a statement under this section.
(5) A statement issued under this section by a regulator must be published by the regulator in the way appearing to the regulator to be best calculated to bring it to the attention of the public.
(6) A regulator must, without delay, give the Treasury a copy of any statement which it publishes under this section.
(7) In exercising, or deciding whether to exercise, its functions under the relevant sections a regulator must have regard to any statement published by it under this section and for the time being in force.
(8) A regulator may charge a reasonable fee for providing a person with a copy of a statement issued by it.
(1) This section applies to a direction given by the Treasury under any of the following provisions—
(a) section 73(4);
(b) section 74(5);
(ba) section 76A(4);
(c) section 78(5).
(2) As soon as practicable after giving the direction, the Treasury must—
(a) lay before Parliament a copy of the direction, and
(b) publish the direction in such manner as the Treasury think fit.
(3) Subsection (2) does not apply where the Treasury consider that publication of the direction would be against the public interest.
82 Publication of reports of inquiries and investigations
(1) This section applies where a report is made to the Treasury under section 71 or 79.
(2) Subject to subsection (3), the Treasury must publish the report in full.
(3) The Treasury may withhold material in the report from publication to such extent—
(a) as is required by any statutory provision (including any provision of assimilated direct legislation) or rule of law, or
(b) as the Treasury consider to be necessary in the public interest, having regard in particular to the matters mentioned in subsection (4).
(4) Those matters are—
(a) the extent to which withholding material might inhibit the allaying of public concern;
(b) the risk of harm or damage that could be avoided or reduced by withholding any material;
(c) any conditions of confidentiality subject to which any person acquired information that was given to the inquiry or used in the investigation.
(5) In subsection (4)(b) “harm or damage” includes in particular—
(a) damage to national security or international relations;
(b) damage to the economic interests of the United Kingdom or a part of the United Kingdom;
(c) damage caused by disclosure of commercially sensitive information.
(6) The Treasury must lay before Parliament whatever is published under subsection (2).
(7) If the Treasury receive a report under section 71 or 79, but withhold all or part of the material in the report from publication, they must publish and lay before Parliament a statement of their reasons for not publishing the report in full.
(8) Publication under subsection (2) or (7) is to be in such manner as the Treasury think fit.
(9) References to a report under section 71 or 79 include references to an interim report required under section 69 or 78.
(1) In this Part—
“authorised person” has the same meaning as in FSMA 2000;
“collective investment scheme” has the same meaning as in FSMA 2000;
“consumer” has the meaning given in section 1G of FSMA 2000;
“listed securities” means anything which has been admitted to the official list under Part 6 of FSMA 2000;
“PRA-authorised person” has the same meaning as in FSMA 2000;
“recognised clearing house” has the same meaning as in FSMA 2000;
“recognised CSD” has the same meaning as in FSMA 2000;
“recognised investment exchange” has the same meaning as in FSMA 2000;
“regulated activity” has the same meaning as in FSMA 2000;
“regulator” means the FCA , the PRA or the Payment Systems Regulator.
(2) A direction by the Treasury under this Part must be given in writing.
84 Arrangements for the investigation of complaints
(1) The regulators must—
(a) make arrangements (“the complaints scheme”) for the investigation of complaints arising in connection with the exercise of, or failure to exercise, any of their relevant functions (see section 85). ...
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1A) The Treasury must appoint an independent person (“the investigator”) to be responsible for the conduct of investigations in accordance with the complaints scheme.
(2) For the purposes of this Part “the regulators” are the FCA, the PRA and the Bank of England, and references to a regulator are to be read accordingly.
(3) The complaints scheme must be designed so that, as far as reasonably practicable, complaints are investigated quickly.
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) The terms and conditions on which the investigator is appointed must be such as, in the opinion of the Treasury, are reasonably designed to secure—
(a) that the investigator will be free at all times to act independently of the regulators, and
(b) that complaints will be investigated under the complaints scheme without favouring the regulators.
85 Relevant functions in relation to complaints scheme
(1) This section has effect for the interpretation of the reference in section 84(1)(a) to the relevant functions of the regulators.
(2) The relevant functions of the FCA or the PRA are—
(a) its functions conferred by or under FSMA 2000, other than its legislative functions and its standards review functions, and
(b) such other functions as the Treasury may by order provide.
(3) The relevant functions of the Bank of England are—
(a) its functions under Part 18 of FSMA 2000 (recognised clearing houses and CSDs ) or under Part 5 of the Banking Act 2009 (... payment systems) or Part 5A of that Act (wholesale cash distribution), other than its legislative functions, and
(b) such other functions as the Treasury may by order provide.
(4) For the purposes of subsection (2)(a), the following are the FCA's legislative functions—
(a) making rules under FSMA 2000;
(b) issuing codes under section ... 119 of FSMA 2000;
(c) issuing statements under—
(i) section 63ZD, 63C, ... 69, 88C, 89S, 93, 124, ... 138N, 192H, 192N, 210 or 312J of FSMA 2000,
(ii) section 345D of FSMA 2000 (whether as a result of section 345(2) or 345A(3) or section 249(1) or 261K(1) of that Act), or
(iii) section 80 of the Financial Services Act 2012;
(d) giving directions under section 316, 318 or 328 of FSMA 2000;
(e) issuing general guidance, as defined in section 139B(5) ... of FSMA 2000.
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(g) making technical standards in accordance with Chapter 2A of Part 9A of FSMA 2000;
(h) making EU Exit instruments under the Financial Regulators’ Powers (Technical Standards) (Amendment etc.) (EU Exit) Regulations 2018.
(4A) For the purposes of subsection (2)(a), the FCA's standards review functions are the FCA's functions under sections 9(2) and 10 of the Financial Guidance and Claims Act 2018 (approving and reviewing standards set by Money and Pensions Service).
(5) For the purposes of subsection (2)(a), the following are the PRA's legislative functions—
(a) making rules under FSMA 2000;
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c) issuing statements under—
(i) section 63ZD, 63C, ... 69, 192H, 192N, 210 or 345D of FSMA 2000, or
(ii) section 80 of the Financial Services Act 2012;
(d) giving directions under section 316 or 318 of FSMA 2000;
(e) issuing guidance under section 2I of FSMA 2000.
(f) making technical standards in accordance with Chapter 2A of Part 9A of FSMA 2000;
(g) making EU Exit instruments under the Financial Regulators’ Powers (Technical Standards) (Amendment etc.) (EU Exit) Regulations 2018.
(6) For the purposes of subsection (3)(a), the following functions of the Bank of England under Part 18 of FSMA 2000 are legislative functions—
(a) making rules;
(b) issuing statements—
(i) under section 312J, or
(ii) by virtue of the application by Schedule 17A of a provision mentioned in subsection (5)(c)(i) of this section.
(7) For the purposes of subsection (3)(a), the following functions of the Bank of England under Parts 5 and 5A of the Banking Act 2009 are legislative functions—
(a) publishing principles or codes of practice under sections 188 ,189, 206K and 206L;
(b) preparing statements under section 198(3) and 206T(3).
(8) For the purposes of subsection (2), sections 1A(6) and 2AB(3) of FSMA 2000 do not apply.
86 Consultation in relation to, and publication of, complaints scheme
(1) Before making the complaints scheme, the regulators must publish a draft of the proposed scheme in the way appearing to them to be best calculated to bring it to the attention of the public.
(2) The draft must be accompanied by notice that representations about it may be made to any of the regulators within a specified time.
(3) Before making the proposed complaints scheme, the regulators must have regard to any representations made to any of them in accordance with subsection (2).
(4) If the regulators make the proposed complaints scheme, they must publish an account, in general terms, of—
(a) the representations made to any of them in accordance with subsection (2), and
(b) their response to the representations.
(5) If the complaints scheme differs from the draft published under subsection (1) in a way which is, in the opinion of the regulators, significant the regulators must (in addition to complying with subsection (4)) publish details of the difference.
(6) The regulators must publish up-to-date details of the complaints scheme including, in particular, details of—
(a) the provision made under section 87(5), and
(b) the powers which the investigator has to investigate a complaint.
(7) Those details must be published in the way appearing to the regulators to be best calculated to bring them to the attention of the public.
(8) The regulators must notify the Treasury of the publication of details under subsection (6).
(9) A regulator may charge a reasonable fee for providing a person with a copy of—
(a) a draft published under subsection (1), or
(b) details published under subsection (6).
(10) Subsections (1) to (5) and (9)(a) also apply to a proposal to alter or replace the complaints scheme.
(1) A regulator is not obliged to investigate in accordance with the complaints scheme a complaint which it reasonably considers would be more appropriately dealt with in another way (for example by referring the matter to the Upper Tribunal or by the institution of other legal proceedings).
(2) The complaints scheme must provide—
(a) for reference to the investigator of any complaint which a regulator is investigating,
(b) for the investigator—
(i) to have the means to conduct a full investigation of the complaint,
(ii) to report to the regulator to which the complaint relates and the complainant on the result of the investigator's investigation, and
(iii) to be able to publish the investigator's report (or part of it) if the investigator considers that it (or the part) ought to be brought to the attention of the public, and
(c) for the meeting by the regulators of the expenses of the scheme.
(3) If a regulator has decided not to investigate a complaint, it must notify the investigator.
(4) If the investigator considers that a complaint of which the investigator has been notified under subsection (3) ought to be investigated, the investigator may proceed as if the complaint had been referred to the investigator under the complaints scheme.
(5) The complaints scheme must confer on the investigator the power to recommend, if the investigator thinks it appropriate, that the regulator to which a complaint relates takes either or both of the following steps—
(a) makes a compensatory payment to the complainant, or
(b) remedies the matter complained of.
(6) The complaints scheme must require the regulator to which a complaint relates, in a case where the investigator—
(a) has reported that the complaint is well-founded, or
(b) has criticised the regulator in a report,
to inform the investigator and the complainant of the steps which it proposes to take in response to the report.
(7) The investigator may require the regulator to which a complaint relates to publish the whole or a specified part of the response.
(8) The investigator may appoint a person to conduct the investigation on the investigator's behalf but subject to the investigator's direction.
(9) An officer or employee of any of the regulators may not be appointed under subsection (8).
(9A) The complaints scheme must provide—
(a) for the investigator to prepare an annual report on its investigations under the scheme, to publish it and send a copy of it to each regulator and to the Treasury;
(b) for each regulator to respond to any recommendations or criticisms relating to it in the report, to publish the response and send a copy of it to the investigator and the Treasury;
(ba) for the regulator’s response under paragraph (b) to include a summary of—
(i) the cases in which the regulator decided not to follow any relevant recommendations, and
(ii) the reasons for not following those recommendations;
(c) for the Treasury to lay the annual report and any response before Parliament.
(9B) The complaints scheme may make provision about the period to which each annual report must relate (“the reporting period”) and the contents of the report and must in particular provide for it to include—
(a) information concerning any general trends emerging from the investigations undertaken during the reporting period;
(b) any recommendations which the investigator considers appropriate as to the steps a regulator should take in response to such trends;
(c) a review of the effectiveness during the reporting period of the procedures (both formal and informal) of each regulator for handling and resolving complaints which have been investigated by the investigator during the reporting period;
(d) an assessment of the extent to which those procedures were accessible and fair, including where appropriate an assessment in relation to different categories of complainant;
(e) any recommendations about how those procedures, or the way in which they are operated, could be improved.
(f) such other matters as the Treasury may from time to time direct.
(9C) In subsection (9A)(ba) the reference to “relevant recommendations”, in relation to the regulator’s response in respect of an annual report, is a reference to—
(a) any recommendations to the regulator contained in that annual report, and
(b) any recommendations to the regulator contained in final reports relating to individual complaints given during the period to which that annual report relates.
(10) Subsection (2) is not to be taken as preventing a regulator from making arrangements for the initial investigation of a complaint to be conducted by the regulator.
(1) Neither the investigator appointed under section 84 nor a person appointed to conduct an investigation on the investigator's behalf under section 87(8) is to be liable in damages for anything done or omitted in the discharge, or purported discharge, of functions in relation to the investigation of a complaint.
(2) Subsection (1) does not apply—
(a) if the act or omission is shown to have been in bad faith, or
(b) so as to prevent an award of damages made in respect of an act or omission on the ground that the act or omission was unlawful as a result of section 6(1) of the Human Rights Act 1998.
(1) Subsection (2) applies to a person (“P”) who—
(a) makes a statement which P knows to be false or misleading in a material respect,
(b) makes a statement which is false or misleading in a material respect, being reckless as to whether it is, or
(c) dishonestly conceals any material facts whether in connection with a statement made by P or otherwise.
(2) P commits an offence if P makes the statement or conceals the facts with the intention of inducing, or is reckless as to whether making it or concealing them may induce, another person (whether or not the person to whom the statement is made)—
(a) to enter into or offer to enter into, or to refrain from entering or offering to enter into, a relevant agreement, or
(b) to exercise, or refrain from exercising, any rights conferred by a relevant investment.
(3) In proceedings for an offence under subsection (2) brought against a person to whom that subsection applies as a result of paragraph (a) of subsection (1), it is a defence for the person charged (“D”) to show that the statement was made in conformity with—
(a) price stabilising rules,
(b) control of information rules, or
(c) the relevant provisions of Article 5 (exemption for buy-back programmes and stabilisation) of the market abuse regulation.
(4) Subsections (1) and (2) do not apply unless—
(a) the statement is made in or from, or the facts are concealed in or from, the United Kingdom or arrangements are made in or from the United Kingdom for the statement to be made or the facts to be concealed,
(b) the person on whom the inducement is intended to or may have effect is in the United Kingdom, or
(c) the agreement is or would be entered into or the rights are or would be exercised in the United Kingdom.
(1) A person (“P”) who does any act or engages in any course of conduct which creates a false or misleading impression as to the market in or the price or value of any relevant investments commits an offence if—
(a) P intends to create the impression, and
(b) the case falls within subsection (2) or (3) (or both).
(2) The case falls within this subsection if P intends, by creating the impression, to induce another person to acquire, dispose of, subscribe for or underwrite the investments or to refrain from doing so or to exercise or refrain from exercising any rights conferred by the investments.
(3) The case falls within this subsection if—
(a) P knows that the impression is false or misleading or is reckless as to whether it is, and
(b) P intends by creating the impression to produce any of the results in subsection (4) or is aware that creating the impression is likely to produce any of the results in that subsection.
(4) Those results are—
(a) the making of a gain for P or another, or
(b) the causing of loss to another person or the exposing of another person to the risk of loss.
(5) References in subsection (4) to gain or loss are to be read in accordance with subsections (6) to (8).
(6) “Gain” and “loss”—
(a) extend only to gain or loss in money or other property of any kind;
(b) include such gain or loss whether temporary or permanent.
(7) “Gain” includes a gain by keeping what one has, as well as a gain by getting what one does not have.
(8) “Loss” includes a loss by not getting what one might get, as well as a loss by parting with what one has.
(9) In proceedings brought against any person (“D”) for an offence under subsection (1) it is a defence for D to show—
(a) to the extent that the offence results from subsection (2), that D reasonably believed that D's conduct would not create an impression that was false or misleading as to the matters mentioned in subsection (1),
(b) that D acted or engaged in the conduct—
(i) for the purpose of stabilising the price of investments, and
(ii) in conformity with price stabilising rules,
(c) that D acted or engaged in the conduct in conformity with control of information rules, or
(d) that D acted or engaged in the conduct in conformity with the relevant provisions of Article 5 (exemption for buy-back programmes and stabilisation) of the market abuse regulation.
(10) This section does not apply unless—
(a) the act is done, or the course of conduct is engaged in, in the United Kingdom, or
(b) the false or misleading impression is created there.
(11) See section 137Q(3) of FSMA 2000 regarding the power of the FCA to make rules for the purposes of subsection (9)(d).
91 Misleading statements etc in relation to benchmarks
(1) A person (“A”) who makes to another person (“B”) a false or misleading statement commits an offence if—
(a) A makes the statement in the course of arrangements for the setting of a relevant benchmark,
(b) A intends that the statement should be used by B for the purpose of the setting of a relevant benchmark, and
(c) A knows that the statement is false or misleading or is reckless as to whether it is.
(2) A person (“C”) who does any act or engages in any course of conduct which creates a false or misleading impression as to the price or value of any investment or as to the interest rate appropriate to any transaction commits an offence if—
(a) C intends to create the impression,
(b) the impression may affect the setting of a relevant benchmark,
(c) C knows that the impression is false or misleading or is reckless as to whether it is, and
(d) C knows that the impression may affect the setting of a relevant benchmark.
(3) In proceedings for an offence under subsection (1), it is a defence for the person charged (“D”) to show that the statement was made in conformity with—
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b) control of information rules, or
(c) the relevant provisions of Article 5 (exemption for buy-back programmes and stabilisation) of the market abuse regulation.
(4) In proceedings brought against any person (“D”) for an offence under subsection (2) it is a defence for D to show—
(a) that D acted or engaged in the conduct—
(i) for the purpose of stabilising the price of investments, and
(ii) in conformity with price stabilising rules,
(b) that D acted or engaged in the conduct in conformity with control of information rules, or
(c) that D acted or engaged in the conduct in conformity with the relevant provisions of Article 5 (exemption for buy-back programmes and stabilisation) of the market abuse regulation.
(5) Subsection (1) does not apply unless the statement is made in or from the United Kingdom or to a person in the United Kingdom.
(6) Subsection (2) does not apply unless—
(a) the act is done, or the course of conduct is engaged in, in the United Kingdom, or
(b) the false or misleading impression is created there.
(7) See section 137Q(3) of FSMA 2000 regarding the power of the FCA to make rules for the purposes of subsection (4)(c).
(1) A person guilty of an offence under this Part is liable—
(a) on summary conviction, to imprisonment for a term not exceeding the applicable maximum term or a fine not exceeding the statutory maximum, or both;
(b) on conviction on indictment, to imprisonment for a term not exceeding 10 years or a fine, or both.
(2) For the purpose of subsection (1)(a) “the applicable maximum term” is—
(a) in England and Wales, the general limit in a magistrates’ court (or 6 months, if the offence was committed before 2 May 2022);
(b) in Scotland, 12 months;
(c) in Northern Ireland, 6 months.
(1) This section has effect for the interpretation of this Part.
(2) “Investment” includes any asset, right or interest.
(3) “Relevant agreement” means an agreement—
(a) the entering into or performance of which by either party constitutes an activity of a kind specified in an order made by the Treasury, and
(b) which relates to a relevant investment.
(4) “Relevant benchmark” means a benchmark of a kind specified in an order made by the Treasury.
(5) “Relevant investment” means an investment of a kind specified in an order made by the Treasury.
(6) Schedule 2 to FSMA 2000 (except paragraphs 25 and 26) applies for the purposes of subsections (3) and (5) with references to section 22 of that Act being read as references to each of those subsections.
(7) Nothing in Schedule 2 to FSMA 2000, as applied by subsection (6), limits the power conferred by subsection (3) or (5).
(8) “Price stabilising rules” and “control of information rules” have the same meaning as in FSMA 2000.
(8A) “Market abuse regulation” means Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC.
(8B) References to Article 5 of the market abuse regulation include—
(a) any EU regulation, originally made under that Article, which is assimilated direct legislation, and
(b) any subordinate legislation (within the meaning of the Interpretation Act 1978) made under that Article on or after IP completion day.
(9) In this section “benchmark” has the meaning given in section 22(6) of FSMA 2000.
(1) This section applies to the first order made under section 93.
(2) This section also applies to any subsequent order made under that section which contains a statement by the Treasury that the effect of the proposed order would include one or more of the following—
(a) that an activity which is not specified for the purposes of subsection (3)(a) of that section would become one so specified,
(b) that an investment which is not a relevant investment would become a relevant investment;
(c) that a benchmark which is not a relevant benchmark would become a relevant benchmark.
(3) A statutory instrument containing (alone or with other provisions) an order to which this section applies may not be made unless a draft of the instrument has been laid before Parliament and approved by a resolution of each House.
(1) The Banking Act 2009 is amended as follows.
(2) In section 3 (interpretation: other expressions), after “this Part—” insert—
“client assets” means assets which an institution has undertaken to hold for a client (whether or not on trust, and whether or not the undertaking has been complied with),
.
(3) In section 4 (special resolution objectives), after subsection (8) insert—
(8A) Objective 6, which applies in any case in which client assets may be affected, is to protect those assets.
(8B) Objective 7 is to minimise adverse effects on institutions (such as investment exchanges and clearing houses) that support the operation of financial markets.
(4) In section 8(2) (Condition A: private sector purchaser and bridge bank)—
(a) in paragraph (b) for “the banking systems of the United Kingdom, or” substitute “ those systems, ”, and
(b) after paragraph (c) insert
, or
(d) the protection of any client assets that may be affected.
(5) In section 47 (restriction of partial transfers), for subsection (3) substitute—
(3) Provision under subsection (2) may, in particular, refer to—
(a) particular classes of deposit;
(b) particular classes of client assets.
(6) In the Table in section 261 (index of defined terms), after the entry relating to “central counterparty clearing services”, insert—
Client assets (Part 1) | 3
.
(1) The Banking Act 2009 is amended as follows.
(2) After section 26 insert—
Private sector purchaser: reverse share transfer
26A (1) This section applies where the Bank of England has made a share transfer instrument in accordance with section 11(2) (“the original instrument”) providing for the transfer of securities issued by a bank to a person (“the original transferee”).
(2) The Bank of England may make one or more private sector reverse share transfer instruments in respect of securities issued by the bank and held by the original transferee.
(3) A private sector reverse share transfer instrument is a share transfer instrument which—
(a) provides for transfer to the transferor under the original instrument;
(b) makes other provision for the purposes of, or in connection with, the transfer of securities which are, could be or could have been transferred under paragraph (a).
(4) The Bank of England must not make a private sector reverse share transfer instrument without the written consent of the original transferee.
(5) Sections 7, 8 and 50 do not apply to a private sector reverse share transfer instrument (but it is to be treated in the same way as any other share transfer instrument for all other purposes including for the purposes of the application of a power under this Part).
(6) Before making a private sector reverse share transfer instrument the Bank of England must consult—
(a) the PRA,
(b) the FCA, and
(c) the Treasury.
(7) Section 26 applies where the Bank of England has made a private sector reverse share transfer instrument.
(3) In section 29 (reverse share transfer)—
(a) in subsection (3) for the words from “securities”, in the second place, to the end substitute “ securities issued by the bank and held by a transferee under the onward share transfer order (“the onward transferee”). ”, and
(b) after subsection (4) insert—
(4A) The Treasury must not make a reverse share transfer order under subsection (3) unless—
(a) the onward transferee is—
(i) a company wholly owned by the Bank of England,
(ii) a company wholly owned by the Treasury, or
(iii) a nominee of the Treasury, or
(b) the reverse share transfer order is made with the written consent of the onward transferee.
(4) In section 31 (bridge bank: reverse share transfer)—
(a) in subsection (1) omit the words from “providing for” to the end,
(b) in subsection (2) for “person within subsection (1)(a) to (c)” substitute “ transferee under the original instrument ”,
(c) after subsection (3) insert—
(3A) The Bank of England must not make a bridge bank reverse share transfer instrument unless—
(a) the transferee under the original instrument is—
(i) a company wholly owned by the Bank of England,
(ii) a company wholly owned by the Treasury, or
(iii) a nominee of the Treasury, or
(b) the bridge bank reverse share transfer instrument is made with the written consent of the transferee under the original instrument.
(5) After section 42 insert—
Private sector purchaser: reverse property transfer
42A (1) This section applies where the Bank of England has made a property transfer instrument in accordance with section 11(2) (“the original instrument”) providing for the transfer of property, rights or liabilities of a bank to a person (“the original transferee”).
(2) The Bank of England may make one or more private sector reverse property transfer instruments in respect of property, rights or liabilities of the original transferee.
(3) A private sector reverse property transfer instrument is a property transfer instrument which—
(a) provides for transfer to the transferor under the original instrument;
(b) makes other provision for the purposes of, or in connection with, the transfer of property, rights or liabilities that are, could be or could have been transferred under paragraph (a) (whether the transfer has been or is to be effected by that instrument or otherwise).
(4) The Bank of England must not make a private sector reverse property transfer instrument without the written consent of the original transferee.
(5) Sections 7, 8 and 50 do not apply to a private sector reverse property transfer instrument (but it is to be treated in the same way as any other property transfer instrument for all other purposes including for the purposes of the application of a power under this Part).
(6) Before making a private sector reverse property transfer instrument the Bank of England must consult—
(a) the PRA,
(b) the FCA, and
(c) the Treasury.
(7) Section 42 applies where the Bank of England has made a private sector reverse property transfer instrument.
(6) In section 44 (reverse property transfer)—
(a) in subsection (3) for “of a transferee” to the end substitute “ of a transferee under the onward property transfer instrument (“the onward transferee”). ”,
(b) after subsection (4) insert—
(4A) The Bank of England must not make a reverse property transfer instrument unless—
(a) the onward transferee is—
(i) a company wholly owned by the Bank of England,
(ii) a company wholly owned by the Treasury, or
(iii) a company wholly owned by a nominee of the Treasury, or
(b) the reverse property transfer instrument is made with the written consent of the onward transferee.
(7) In section 46 (temporary public ownership: reverse property transfer)—
(a) in subsection (1) omit from “providing for” to the end, and
(b) after subsection (3) insert—
(3A) The Treasury must not make a reverse property transfer order unless—
(a) the transferee under the original order is—
(i) a company wholly owned by the Bank of England,
(ii) a company wholly owned by the Treasury, or
(iii) a nominee of the Treasury, or
(b) the reverse property transfer order is made with the written consent of the transferee under the original order.
(8) In section 48A (creation of liabilities), in subsection (1) after “42(3)(b),” insert “ 42A(3)(b), ”.
(9) In section 53 (onward and reverse transfers: compensation), in subsection (1)—
(a) before paragraph (a) insert—
(za) the Bank of England makes a private sector reverse share transfer instrument under section 26A,
, and
(b) after paragraph (d) insert—
(da) the Bank of England makes a private sector reverse property transfer instrument under section 42A,
.
(10) In section 83 (supplemental), in subsection (2)(d)—
(a) at the end of sub-paragraph (iii) insert “ and ”, and
(b) for sub-paragraphs (iv) and (v) substitute—
(iv) is not subject to the restriction in section 29(3) that the securities issued by the bank were transferred under the original order (as defined in section 29(1)).
(11) In the Table in section 261 (index of defined terms), after the entry relating to “partial property transfer”, insert—
Private sector reverse property transfer instrument | 42A
Private sector reverse share transfer instrument | 26A
98 Property transfer instruments: property held on trust
(1) The Banking Act 2009 is amended as follows.
(2) In section 34(7) (effect of property transfer instruments: provision in respect of property held on trust), in paragraph (a) omit “(which provision may remove or alter the terms of the trust)”.
(3) At the end of section 34 insert—
(8) Provision under subsection (7)(a) may remove or alter the terms of the trust on which the property is held only to the extent that the Bank of England thinks it necessary or expedient for the purpose of transferring—
(a) the legal or beneficial interest of the transferor in the property;
(b) any powers, rights or obligations of the transferor in respect of the property.
(9) In subsection (8) references to the transferor are references to the transferor under the property transfer instrument.
(4) In section 45 (temporary public ownership: property transfer orders) after subsection (5) insert—
(5A) In the application of section 34(8) by virtue of subsection (5)(b) above, the reference to the Bank of England is to be treated as a reference to the Treasury.
(5) In section 46 (temporary public ownership: reverse property transfer orders) after subsection (5) insert—
(5A) In the application of section 34(8) by virtue of subsection (5)(b) above, the reference to the Bank of England is to be treated as a reference to the Treasury.
99 Reports following exercise of a stabilisation power
(1) After section 79 of the Banking Act 2009 insert—
Private sector purchaser: report
79A (1) This section applies where the Bank of England sells all or part of a bank's business to a commercial purchaser.
(2) The Bank must report to the Chancellor of the Exchequer about the exercise of the power to make share transfer instruments and property transfer instruments under section 11(2).
(3) The report must comply with any requirements as to content specified by the Treasury.
(4) The report must be made as soon as is reasonably practicable after the end of one year beginning with the date of the first transfer instrument made under section 11(2).
(2) After section 81 of that Act insert—
Accounting information to be included in reports under sections 80 and 81
81A (1) A report under section 80(1) or 81 must include accounting information in respect of the bank or bridge bank that is the subject of the report.
(2) In this section “accounting information” means—
(a) a balance sheet that, in the opinion of the person making the report, gives a true and fair view of the state of affairs of the bank or bridge bank as at the reporting date, and
(b) a profit and loss account that, in the opinion of the person making the report, gives a true and fair view of the profit or loss of the bank or bridge bank for the reporting period.
(3) In this section—
(a) “reporting period” means the period to which the report relates, and
(b) “reporting date” means the last day of the reporting period.
(3) In section 1(6) of that Act (table describing provisions of Part 1), in the entry relating to sections 76 to 81, for “81” substitute “ 81A ”.
(1) The Banking Act 2009 is amended as follows.
(2) In section 1 (overview), for the entry in the Table relating to sections 82 and 83 substitute—
Sections 81B to 83 | Groups
.
(3) In section 20 (directors), after subsection (1) insert—
(1A) Subsection (1) also applies to a director of any undertaking which is a banking group company in respect of a specified bank.
(4) After section 36 insert—
Directors
36A (1) A property transfer instrument may enable the Bank of England—
(a) to remove a director of a specified bank;
(b) to vary the service contract of a director of a specified bank;
(c) to terminate the service contract of a director of a specified bank;
(d) to appoint a director of a specified bank.
(2) Subsection (1) also applies to a director of any undertaking which is a banking group company in respect of a specified bank.
(3) Appointments under subsection (1)(d) are to be on terms and conditions agreed with the Bank of England.
(5) For the italic heading before section 82 substitute “ Groups ”, and after that heading insert—
Sale to commercial purchaser and transfer to bridge bank
81B (1) The Bank of England may exercise a stabilisation power in respect of a banking group company in accordance with section 11(2) or 12(2) if the following conditions are met.
(2) Condition 1 is that the PRA is satisfied that the general conditions for the exercise of a stabilisation power set out in section 7 are met in respect of a bank in the same group.
(3) Condition 2 (which does not apply in a financial assistance case) is that the Bank of England is satisfied that the exercise of the power in respect of the banking group company is necessary, having regard to the public interest in—
(a) the stability of the financial systems of the United Kingdom,
(b) the maintenance of public confidence in the stability of those systems,
(c) the protection of depositors, or
(d) the protection of any client assets that may be affected.
(4) Condition 3 (which applies only in a financial assistance case) is that—
(a) the Treasury have recommended the Bank of England to exercise a stabilisation power on the grounds that it is necessary to protect the public interest, and
(b) in the Bank's opinion, exercise of the power in respect of the banking group company is an appropriate way to provide that protection.
(5) Condition 4 is that the banking group company is an undertaking incorporated in, or formed under the law of any part of, the United Kingdom.
(6) Before determining whether Condition 2 or 3 (as appropriate) is met, the Bank of England must consult—
(a) the Treasury,
(b) the PRA, and
(c) the FCA.
(7) In exercising a stabilisation power in reliance on this section the Bank of England must have regard to the need to minimise the effect of the exercise of the power on other undertakings in the same group.
(8) In this section “financial assistance case” means a case in which the Treasury notify the Bank of England that they have provided financial assistance in respect of a bank in the same group for the purpose of resolving or reducing a serious threat to the stability of the financial systems of the United Kingdom.
Section 81B: supplemental
81C (1) In the following provisions references to banks include references to banking group companies—
(a) section 10(1), and
(b) section 75(5)(a).
(2) Where the Bank of England exercises a stabilisation power in respect of a banking group company in reliance on section 81B, the provisions relating to the stabilisation powers and the bank administration procedure contained in this Act (except sections 7 and 8) and any other enactment apply (with any necessary modifications) as if the banking group company were a bank.
(3) For the purposes of the application of section 143 (grounds for applying for bank administration order), the reference in subsection (2) to the Bank of England exercising a stabilisation power includes a case where the Bank of England intends to exercise such a power.
Interpretation: “banking group company” &c.
81D (1) In this Part “banking group company” means an undertaking—
(a) which is (or, but for the exercise of a stabilisation power, would be) in the same group as a bank, and
(b) in respect of which any conditions specified in an order made by the Treasury are met.
(2) An order may require the Bank of England to consult specified persons before determining whether the conditions are met.
(3) An order—
(a) is to be made by statutory instrument, and
(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.
(4) If an order contains a statement that the Treasury are of the opinion that, by reason of urgency, it is necessary to make the order without complying with subsection (3)(b)—
(a) the order may be made, and
(b) the order lapses unless approved by resolution of each House of Parliament during the period of 28 days (ignoring periods of dissolution, prorogation or adjournment of either House for more than 4 days) beginning with the day on which the order is made.
(5) The lapse of an order under subsection (4)(b)—
(a) does not invalidate anything done under or in reliance on the order before the lapse and at a time when neither House has declined to approve the order, and
(b) does not prevent the making of a new order (in new terms).
(6) Undertakings are in the same group for the purposes of sections 81B, 81C and this section if they are group undertakings in respect of each other.
(7) Expressions defined in the Companies Act 2006 have the same meaning in section 81B and this section as in that Act.
(6) In the Table in section 259 (statutory instruments), in Part 1 after the entry relating to section 78 insert—
81D | Meaning of “banking group company” | Draft affirmative resolution (except for urgent cases)
(7) In the Table in section 261 (index of defined terms), after the entry relating to “bank insolvency order” insert—
Banking group company | 81D
.
(1) The Banking Act 2009 is amended as follows.
(2) In section 1 (overview), after the entry in the Table relating to sections 84 to 89 insert—
Section 89A | Investment firms
.
(3) In section 2 (interpretation: “bank”), at the end insert—
(8) Section 89A applies this Part to investment firms with modifications.
(4) In section 75(5) (power to change law: application to other institutions), omit the “or” following paragraph (c) and after that paragraph insert—
(ca) to investment firms,
.
(5) After section 89 (and in Part 1) insert—
Investment firms
Application to investment firms
89A (1) This Part applies to investment firms as it applies to banks, subject to the modifications in subsection (2).
(2) Ignore sections 1(2)(b), 4(2)(b) and (6), 5(1)(b), 7(7), 8(2)(c) and 14(5).
(6) After section 159 insert—
Application to investment firms
159A This Part applies to investment firms as it applies to banks.
(7) After section 258 insert—
Investment firm”
258A (1) In this Act “investment firm” means a UK institution which is (or, but for the exercise of a stabilisation power, would be) an investment firm for the purposes of Directive 2006/49/EC on the capital adequacy of investment firms and credit institutions.
(2) But “investment firm” does not include—
(a) an institution which is also—
(i) a bank (within the meaning of Part 1),
(ii) a building society (within the meaning of section 119 of the Building Societies Act 1986), or
(iii) a credit union (within the meaning of section 31 of the Credit Unions Act 1979 or Article 2(2) of the Credit Unions (Northern Ireland) Order 1985), or
(b) an institution which is of a class or description specified in an order made by the Treasury.
(3) An order—
(a) is to be made by statutory instrument, and
(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.
(4) If an order contains a statement that the Treasury are of the opinion that, by reason of urgency, it is necessary to make the order without complying with subsection (3)(b)—
(a) the order may be made, and
(b) the order lapses unless approved by resolution of each House of Parliament during the period of 28 days (ignoring periods of dissolution, prorogation or adjournment of either House for more than 4 days) beginning with the day on which the order is made.
(5) The lapse of an order under subsection (4)(b)—
(a) does not invalidate anything done under or in reliance on the order before the lapse and at a time when neither House has declined to approve the order, and
(b) does not prevent the making of a new order (in new terms).
(6) In subsection (1) “UK institution” means an institution which is incorporated in, or formed under the law of any part of, the United Kingdom.
(8) In the Table in section 259 (statutory instruments), in Part 7 after the entry relating to section 257 insert—
258A | Meaning of “investment firm” | Draft affirmative resolution (except for urgent cases)
(9) In the Table in section 261 (index of defined terms), after the entry relating to “inter-bank payment system”, insert—
Investment firm | 258A
.
(10) In section 214B(1)(a) of FSMA 2000 (contribution to costs of special resolution regime) for “or credit union” substitute “ , credit union or investment firm ”.
(1) Part 5 of the Banking Act 2009 (inter-bank payment systems) is amended as follows.
(2) After section 186 insert—
Amendment of recognition order
186A (1) The Treasury may amend a recognition order.
(2) Before amending a recognition order the Treasury must—
(a) consult the Bank of England,
(b) notify the operator of the recognised inter-bank payment system, and
(c) consider any representations made.
(3) In addition, the Treasury—
(a) must consult the FCA before amending a recognition order in respect of a payment system the operator of which—
(i) is, or has applied to become, a recognised investment exchange, or
(ii) has, or has applied for, a Part 4A permission, and
(b) if the operator has, or has applied for, a Part 4A permission for the carrying on of a PRA-regulated activity, must also consult the PRA.
(4) The Treasury must consider any request by the operator of a recognised inter-bank payment system for the amendment of its recognition order.
(3) For section 191 substitute—
Directions
191 (1) The Bank of England may give directions in writing to the operator of a recognised inter-bank system.
(2) A direction may—
(a) require or prohibit the taking of specified action in the operation of the system;
(b) set standards to be met in the operation of the system.
(3) If a direction is given for the purpose of resolving or reducing a threat to the stability of the UK financial system, the operator (including its officers and staff) has immunity from liability in damages in respect of action or inaction in accordance with the direction.
(4) A direction given for the purpose mentioned in subsection (3) must—
(a) include a statement that it is given for that purpose, and
(b) inform the operator of the effect of that subsection.
(5) The Treasury may by order confer immunity on any person from liability in damages in respect of action or inaction in accordance with a direction (including a direction given for the purpose mentioned in subsection (3)).
(6) An order—
(a) is to be made by statutory instrument, and
(b) is subject to annulment in pursuance of a resolution of either House of Parliament.
(7) An immunity conferred by or under this section does not extend to action or inaction—
(a) in bad faith, or
(b) in contravention of section 6(1) of the Human Rights Act 1998.
(4) In section 186 (procedure)—
(a) for subsection (2) substitute—
(2) In addition, the Treasury—
(a) must consult the FCA before making a recognition order in respect of a payment system the operator of which—
(i) is, or has applied to become, a recognised investment exchange, or
(ii) has, or has applied for, a Part 4A permission, and
(b) if the operator has, or has applied for, a Part 4A permission for the carrying on of a PRA-regulated activity, must also consult the PRA.
, and
(b) in subsection (3), for “or the FSA” substitute “ , the FCA or the PRA ”.
(5) In section 187 (de-recognition), for subsection (4) substitute—
(4) In addition, the Treasury—
(a) must consult the FCA before revoking a recognition order in respect of a payment system the operator of which—
(i) is, or has applied to become, a recognised investment exchange, or
(ii) has, or has applied for, a Part 4A permission, and
(b) if the operator has, or has applied for, a Part 4A permission for the carrying on of a PRA-regulated activity, must also consult the PRA.
(6) In section 192 (role of FSA)—
(a) in subsection (1), for “the FSA” substitute “ the FCA or the PRA ”,
(b) for subsection (2) substitute—
(2) The Bank of England—
(a) must consult the FCA before taking action under this Part in respect of a recognised inter-bank payment system the operator of which satisfies section 186(2)(a), and
(b) must consult the PRA before taking action under this Part in respect of a recognised inter-bank payment system the operator of which satisfies section 186(2)(b).
,
(c) in subsection (3)—
(i) for “the FSA”, in the first place, substitute “ the FCA or the PRA ”,
(ii) for “the FSA”, in the second place, substitute “ it ”,
(iii) for “section 186(2)” substitute “ section 186(2)(a) or (b) ”, and
(iv) in paragraph (a), for “the FSA” substitute “ the FCA or (as the case may be) the PRA ”, and
(d) in the heading, for “FSA” substitute “ FCA and PRA ”.
(7) After section 202 insert—
Injunctions
202A (1) If, on the application of the Bank of England, the court is satisfied—
(a) that there is a reasonable likelihood that there will be a compliance failure, or
(b) that there has been a compliance failure and there is a reasonable likelihood that it will continue or be repeated,
the court may make an order restraining the conduct constituting the failure.
(2) If, on the application of the Bank of England, the court is satisfied—
(a) that there has been a compliance failure by the operator of a recognised inter-bank payment system, and
(b) that there are steps which could be taken for remedying the failure,
the court may make an order requiring the operator, and anyone else who appears to have been knowingly concerned in the failure, to take such steps as the court may direct to remedy it.
(3) If, on the application of the Bank of England, the court is satisfied—
(a) that there may have been a compliance failure by the operator of a recognised inter-bank payment system, or
(b) that a person may have been knowingly concerned in a compliance failure,
the court may make an order restraining the operator or person from dealing with any assets which it is satisfied the operator or person is reasonably likely to deal with.
(4) The jurisdiction conferred by this section is exercisable—
(a) in England and Wales and Northern Ireland, by the High Court, and
(b) in Scotland, by the Court of Session.
(5) In this section—
(a) references to an order restraining anything are, in Scotland, to be read as references to an interdict prohibiting that thing,
(b) references to remedying a failure include mitigating its effect, and
(c) references to dealing with assets include disposing of them.
(8) After section 203 insert—
Records
203A (1) The Bank of England must maintain satisfactory arrangements for—
(a) recording decisions made in the exercise of its functions under this Part, and
(b) the safe-keeping of those records which it considers ought to be preserved.
(2) The duty in subsection (1) does not apply to a decision to issue a notice under section 204(1).
Annual report
203B (1) At least once a year the Bank of England must make a report to the Treasury on—
(a) the discharge of its functions under this Part,
(b) the extent to which, in its opinion, in discharging those functions its financial stability objective has been met, and
(c) such other matters as the Treasury may from time to time direct.
(2) Subsection (1) does not require the inclusion in the report of any information whose publication would in the opinion of the Bank of England be against the public interest.
(3) The Treasury must lay before Parliament a copy of each report received by them under this section.
(9) In section 204 (information)—
(a) after subsection (1), insert—
(1A) The Bank of England may by notice in writing require the operator of a recognised inter-bank payment system to provide information which the Bank requires in connection with the exercise of its functions (whether under this Part or otherwise) in pursuance of its financial stability objective.
,
(b) in subsections (2) and (3), after “notice” insert “ under subsection (1) or (1A) ”,
(c) in subsection (4), for paragraph (b) substitute—
(b) the FCA;
(ba) the PRA;
, and
(d) in paragraph (c) of that subsection, for “or the FSA” substitute “ , the FCA or the PRA ”.
(10) In section 206A (services forming part of recognised inter-bank payment systems)—
(a) in subsection (4)(a), for “and the FSA” substitute “ , the FCA and the PRA ”, and
(b) in subsection (6), for paragraph (b) (and the “and” at the end of it) substitute—
(b) the FCA,
(ba) the PRA, and
.
In Part 5 of the Banking Act 2009, after section 206A insert—
International obligations
206B (1) If it appears to the Treasury that any action proposed to be taken by the Bank of England in exercising its powers under this Part would be incompatible with EU obligations or any other international obligations of the United Kingdom, the Treasury may direct the Bank not to take that action.
(2) If it appears to the Treasury that any action which the Bank of England has power under this Part to take is required for the purpose of implementing any such obligation, the Treasury may direct the Bank to take that action.
(3) A direction under this section—
(a) may include such supplemental or incidental requirements as the Treasury consider necessary or expedient, and
(b) is enforceable on an application by the Treasury, by injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.
107 Power to make further provision about regulation of consumer credit
(1) Subsection (2) applies on or at any time after the making, after the passing of this Act, of an order under section 22 of FSMA 2000 which has the effect that an activity (a “transferred activity”)—
(a) ceases to be an activity in respect of which a licence under section 21 of CCA 1974 is required or would be required but for the exemption conferred by subsection (2), (3) or (4) of that section or paragraph 15(3) of Schedule 3 to FSMA 2000, and
(b) becomes a regulated activity for the purposes of FSMA 2000.
(2) The Treasury may by order do any one or more of the following—
(a) transfer to the FCA functions of the OFT under any provision of CCA 1974 that remains in force;
(b) provide that any specified provision of FSMA 2000 which relates to the powers or duties of the FCA in connection with the failure of any person to comply with a requirement imposed by or under FSMA 2000 is to apply, subject to any specified modifications, in connection with the failure of any person to comply with a requirement imposed by or under a specified provision of CCA 1974;
(c) require the FCA to issue a statement of policy in relation to the exercise of powers conferred on it by virtue of paragraph (b);
(d) in connection with provision made by virtue of paragraph (b), provide that failure to comply with a specified provision of CCA 1974 no longer constitutes an offence or that a person may not be convicted of an offence under a specified provision of CCA 1974 in respect of an act or omission in a case where the FCA has exercised specified powers in relation to that person in respect of that act or omission;
(e) provide for the transfer to the Treasury of any functions under CCA 1974 previously exercisable by the Secretary of State;
(f) provide that functions of the Secretary of State under CCA 1974 are exercisable concurrently with the Treasury;
(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(h) enable local weights and measures authorities to institute proceedings in England and Wales for a relevant offence;
(i) enable the Department of Enterprise, Trade and Investment in Northern Ireland to institute proceedings in Northern Ireland for a relevant offence;
(j) provide that references in a specified enactment to the FCA's functions under FSMA 2000 include references to its functions resulting from any order under this section.
(3) If an order under this section makes provision by virtue of subsection (2)(b) enabling the FCA to exercise any of its powers under sections 205 to 206A of FSMA 2000 (disciplinary measures) by reference to an act or omission that constitutes an offence under CCA 1974, the order must also make provision by virtue of subsection (2)(d) ensuring that a person in respect of whom the power has been exercised cannot subsequently be convicted of the offence by reference to the same act or omission.
(4) In subsection (2)(h) and (i)—
(a) “relevant regulated activity” means an activity that is a regulated activity for the purposes of FSMA 2000 by virtue of—
(i) an order made under section 22(1) of that Act in relation to an investment of a kind falling within paragraph 23 or 23B of Schedule 2 to that Act, or
(ii) an order made under section 22(1A)(a) of that Act;
(b) “relevant offence” means an offence under FSMA 2000 committed in relation to such an activity.
(5) The Treasury may make provision by virtue of subsection (2)(i) only with the consent of the Department of Enterprise, Trade and Investment in Northern Ireland.
(6) On or at any time after the making of an order under section 22 of FSMA 2000 of the kind mentioned in subsection (1), the Treasury may by order—
(a) exclude the application of any provision of CCA 1974 in relation to a transferred activity, or
(b) repeal any provision of CCA 1974 which relates to a transferred activity.
(7) In exercising their powers under this section, the Treasury must have regard to—
(a) the importance of securing an appropriate degree of protection for consumers, and
(b) the principle that a burden or restriction which is imposed on a person, or on the carrying on of an activity, should be proportionate to the benefits, considered in general terms, which are expected to result from the imposition of that burden or restriction.
(8) The additional powers conferred by section 115(2) on a person making an order under this Act include power for the Treasury, when making an order under this section—
(a) to make such consequential provision as the Treasury consider appropriate;
(b) to amend any enactment, including any provision of, or made under, this Act.
(9) The provisions of this section do not limit—
(a) the powers conferred by section 118 or by section 22 of FSMA 2000, or
(b) the powers exercisable under Schedule 21 in connection with the transfer of functions from the OFT.
(10) In this section—
“CCA 1974” means the Consumer Credit Act 1974;
“consumers” has the meaning given in section 1G of FSMA 2000;
“the OFT” means the Office of Fair Trading.
108 Suspension of licences under Part 3 of Consumer Credit Act 1974
(1) The Consumer Credit Act 1974 is amended as follows.
(2) In section 32 (suspension or revocation)—
(a) in subsection (1), omit “or suspended”,
(b) in subsection (2)—
(i) in paragraph (a), omit “, as the case may be,” and “, or suspend it until a specified date or indefinitely,”, and
(ii) in paragraph (b), omit “or suspension” and “or suspend”,
(c) in subsection (3)—
(i) in paragraph (a), omit “, as the case may be,” and “, or suspend it until a specified date or indefinitely,”, and
(ii) in paragraph (b), omit “or suspension”,
(d) in subsection (4)—
(i) in paragraph (a), omit “, as the case may be,” and “, or suspend it until a specified date or indefinitely,”, and
(ii) in paragraph (b), omit “or suspension”,
(e) in subsections (6) and (7), omit “or suspension”,
(f) omit subsection (8),
(g) in subsection (9), omit “or to suspend”, and
(h) in the heading, omit “Suspension and”.
(3) After section 32 insert—
Power to suspend licence
32A (1) If during the currency of a licence it appears to the OFT to be urgently necessary for the protection of consumers that the licence should cease to have effect immediately or on a specified date, the OFT is to proceed as follows.
(2) In the case of a standard licence the OFT must, by notice—
(a) inform the licensee that the OFT is suspending the licence from the date of the notice or from a later date specified in the notice,
(b) state the OFT's reasons for the suspension,
(c) state either—
(i) that the suspension is to end on a specified date, which must be no later than the last day of the 12 months beginning with the day on which the suspension takes effect, or
(ii) that the duration of the suspension is to be as provided by section 32B,
(d) specify any provision to be made under section 34A, and
(e) invite the licensee to submit to the OFT in accordance with section 34ZA representations—
(i) as to the suspension, and
(ii) about the provision (if any) that is or should be made under section 34A.
(3) In the case of a group licence the OFT must—
(a) give general notice that the OFT is suspending the licence from the date of the notice or from a later date specified in the notice,
(b) state in the notice the OFT's reasons for the suspension,
(c) state in the notice either—
(i) that the suspension is to end on a specified date, which must be no later than the last day of the 12 months beginning with the day on which the suspension takes effect, or
(ii) that the duration of the suspension is to be as provided by section 32B,
(d) specify in the notice any provision to be made under section 34A, and
(e) in the notice invite any licensee to submit to the OFT in accordance with section 34ZA representations as to the suspension.
(4) In the case of a group licence issued on application the OFT must also—
(a) inform the original applicant of the matters specified under subsection (3)(a) to (d) in the general notice, and
(b) invite the original applicant to submit to the OFT in accordance with section 34ZA representations as to the suspension.
(5) Except for the purposes of sections 29 to 32 and section 33A, a licensee under a suspended licence is to be treated, in respect of the period of suspension, as if the licence had not been issued.
(6) The suspension may, if the OFT thinks fit, be ended by notice given by it to the licensee or, in the case of a group licence, by general notice.
(7) In this section “consumers”, in relation to a licence, means individuals who have been or may be affected by the carrying on of the business to which the licence relates, other than individuals who are themselves licensees.
Duration of suspension
32B (1) This section applies where a notice under section 32A provides for the duration of a suspension under that section to be as provided by this section.
(2) The suspension ends at the end of the period of 12 months beginning with the day on which it takes effect, but this is subject to—
(a) subsections (3) and (4) (where those subsections give a later time), and
(b) the powers of the OFT under section 32A(6) and section 33.
(3) Subsection (4) applies where—
(a) the OFT gives notice under section 32 that it is minded to revoke the licence, and
(b) it gives that notice—
(i) on or before giving the notice under section 32A, or
(ii) after giving that notice but before the end of the period of 12 months mentioned in subsection (2).
(4) The period of suspension is to continue until—
(a) the time of any determination by the OFT not to revoke the licence in pursuance of the notice under section 32, or
(b) where the OFT determines to revoke the licence in pursuance of the notice, the end of the appeal period.
(4) In section 33 (application to end suspension), for subsection (1) substitute—
(1) On an application made by a licensee the OFT may, if it thinks fit, by notice to the licensee end the suspension of a licence under section 32A, whether the suspension was for a fixed period or for a period determined in accordance with section 32B.
(5) In section 33A (power of OFT to impose requirements on licensees) after subsection (6) insert—
(6A) A requirement imposed under this section during a period of suspension cannot take effect before the end of the suspension.
(6) After section 34 insert—
Representations to OFT: suspension under section 32A
34ZA (1) Where this section applies to an invitation by the OFT to any person (“P”) to submit representations, the OFT must invite P, within 21 days after the notice containing the invitation is given to P or published, or such longer period as the OFT may allow—
(a) to submit P's representations in writing to the OFT, and
(b) to give notice to the OFT, if P thinks fit, that P wishes to make representations orally,
and where notice is given under paragraph (b) the OFT must arrange for the oral representations to be heard.
(2) The OFT must reconsider its determination under section 32A and determine whether to confirm it (with or without variation) or revoke it and in doing so must take into account any representations submitted or made under this section.
(3) The OFT must give notice of its determination under this section to the persons who were required to be invited to submit representations about the original determination under section 32A or, where the invitation to submit representations was required to be given by general notice, must give general notice of the confirmation or revocation.
(7) In section 34A (winding-up of standard licensee's business), in subsection (2)—
(a) in paragraph (c), omit “suspend or”, and
(b) after paragraph (c) insert—
(d) a determination to suspend such a licence under section 32A (including a determination made under section 34ZA on reconsidering a previous determination under section 32A);
.
(8) In section 41 (appeals) after subsection (1) insert—
(1ZA) References in the table to a determination as to the suspension of a standard licence or group licence are to be read as references to a determination under section 34ZA to confirm a determination to suspend a standard licence or group licence.
(9) Nothing in this section affects the powers conferred by section 22 of FSMA 2000 or section 107 of this Act.
109 Payment to Treasury of penalties received by Financial Services Authority
(1) The Financial Services Authority (“the FSA”) must in respect of its financial year beginning with 1 April 2012 and each subsequent financial year pay to the Treasury its penalty receipts after deducting its enforcement costs.
(2) The FSA's “penalty receipts” in respect of a financial year are any amounts received by it during the year by way of penalties imposed under FSMA 2000.
(3) The FSA's “enforcement costs” in respect of a financial year are the expenses incurred by it during the year in connection with—
(a) the exercise, or consideration of the possible exercise, of any of its enforcement powers in particular cases, or
(b) the recovery of penalties imposed under FSMA 2000.
(4) For this purpose the FSA's enforcement powers are—
(a) its powers under any of the provisions mentioned in subsection (5),
(b) its powers under any other enactment specified by the Treasury by order,
(c) its powers in relation to the investigation of relevant offences, and
(d) its powers in England and Wales or Northern Ireland in relation to the prosecution of relevant offences.
(5) The provisions referred to in subsection (4)(a) are the following provisions of FSMA 2000—
(a) section 56 (prohibition orders),
(b) section 63A (penalties relating to performance of controlled functions without approval),
(c) section 66 (disciplinary powers in relation to approved persons),
(d) section 87M (public censure of issuer),
(e) section 89 (public censure of sponsor),
(f) section 89K (public censure of issuer),
(g) section 91 (penalties for breach of Part 6 rules),
(h) section 123 (penalties in case of market abuse),
(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(j) sections 205, 206 and 206A (disciplinary measures),
(k) section 249 (disqualification of auditor for breach of trust scheme rules),
(l) section 345 (disqualification of auditor or actuary), and
(m) Part 25 (injunctions and restitution).
(6) “Relevant offences” are—
(a) offences under FSMA 2000,
(b) offences under subordinate legislation made under that Act,
(c) offences falling within section 402(1) of that Act, and
(d) any other offences specified by the Treasury by order.
(7) The Treasury may give directions to the FSA as to how the FSA is to comply with its duty under subsection (1).
(8) The directions may in particular—
(a) specify descriptions of expenditure that are, or are not, to be regarded as incurred in connection with either of the matters mentioned in subsection (3),
(b) relate to the calculation and timing of the deduction in respect of the FSA's enforcement costs, and
(c) specify the time when any payment is required to be made to the Treasury.
(9) The directions may also require the FSA to provide the Treasury at specified times with information relating to—
(a) penalties that the FSA has imposed under FSMA 2000, or
(b) the FSA's enforcement costs.
(10) The Treasury must pay into the Consolidated Fund any sums received by them under this section.
(11) The scheme operated by the FSA under paragraph 16 of Schedule 1 to FSMA 2000 is, in the case of penalties received by the FSA on or after 1 April 2012, to apply only in relation to sums retained by the FSA as a result of the deduction for which subsection (1) provides.
(12) When section 6(2) is fully in force, the Treasury may by order repeal this section.
110 Payment to Treasury of penalties received by Bank of England
(1) The Bank of England (“the Bank”) must in respect of each of its financial years pay to the Treasury its penalty receipts after deducting its enforcement costs.
(2) The Bank's “penalty receipts” in respect of a financial year are any amounts received by the Bank during the year by way of penalties imposed under any of the following provisions—
(a) sections 192K , 309U, 309Z2 and 312F of FSMA 2000, and
(b) sections 198 and 206T of the Banking Act 2009.
(3) The Bank's “enforcement costs” in respect of a financial year are the expenses incurred by it during the year in connection with—
(a) the exercise, or consideration of the possible exercise, of any of its enforcement powers in particular cases, or
(b) the recovery of penalties imposed under any of the provisions mentioned in subsection (2).
(4) For this purpose the Bank's enforcement powers are—
(a) its powers under any of the provisions mentioned in subsection (5),
(b) its powers under any other enactment specified by the Treasury by order,
(c) its powers in relation to the investigation of offences under FSMA 2000 or of any other offences specified by the Treasury by order, and
(d) its powers in England and Wales or Northern Ireland in relation to the prosecution of offences under FSMA 2000 or of any other offences specified by the Treasury by order.
(5) The provisions referred to in subsection (4)(a) are as follows—
(a) sections 192K to 192N of FSMA 2000 (parent undertakings), as applied to the Bank by Schedule 17A to that Act,
(aa) sections 309B, 309U and 309Z2 of that Act (Part 18 prohibition orders),
(b) sections 312E , 312F and 312FA of that Act (disciplinary measures in relation to clearing houses and central securities depositories ),
(c) sections 380, 382 and 384 of that Act (injunctions and restitution), as applied to the Bank by Schedule 17A to that Act, ...
(d) sections 197 to 200 and 202A of the Banking Act 2009 (... payment systems) , and
(e) sections 206S to 206V and 206Y of that Act (wholesale cash distribution).
(6) The Treasury may give directions to the Bank as to how the Bank is to comply with its duty under subsection (1).
(7) The directions may in particular—
(a) specify descriptions of expenditure that are, or are not, to be regarded as incurred in connection with either of the matters mentioned in subsection (3),
(b) relate to the calculation and timing of the deduction in respect of the Bank's enforcement costs, and
(c) specify the time when any payment is required to be made to the Treasury.
(8) The directions may also require the Bank to provide the Treasury at specified times with specified information relating to—
(a) penalties that the Bank has imposed under the provisions mentioned in subsection (2), or
(b) the Bank's enforcement costs.
(9) The Treasury must pay into the Consolidated Fund any sums received by them under this section.
(1) Section 166 of the Companies Act 1989 (power of Secretary of State to give directions to recognised investment exchange or recognised clearing house) is amended as follows.
(2) In subsection (2)(a)—
(a) for “Authority”, in the first place, substitute “ appropriate regulator ”, and
(b) for “Authority”, in the second place, substitute “ regulator ”.
(3) In subsection (2)(b)—
(a) for “Authority”, in the first place, substitute “ appropriate regulator ”, and
(b) for “Authority”, in the second place, substitute “ regulator ”.
(4) In subsection (3)—
(a) for “Authority” substitute “ appropriate regulator ”,
(b) omit the “or” following paragraph (a), and
(c) at the end insert—
(c) in either case, that the direction is necessary having regard to the public interest in the stability of the financial system of the United Kingdom, or
(d) in either case, that the direction is necessary—
(i) to facilitate a proposed or possible use of a power under Part 1 of the Banking Act 2009 (special resolution regime), or
(ii) in connection with a particular exercise of a power under that Part.
(5) In subsection (7)—
(a) for “Authority”, in the first place, substitute “ appropriate regulator ”, and,
(b) omit the words from “The Authority shall not” to the end.
(6) After that subsection insert—
(7A) Where the exchange or clearing house is acting in accordance with a direction under subsection (2)(a) that was given only by virtue of paragraph (a) of subsection (3), the appropriate regulator shall not give a direction under subsection (7) unless it is satisfied that the direction under that subsection will not impede or frustrate the proper and efficient conduct of the default proceedings.
(7B) Where the exchange or clearing house has taken action under its default rules without being directed to do so, the appropriate regulator shall not give a direction under subsection (7) unless—
(a) it is satisfied that the direction under that subsection will not impede or frustrate the proper and efficient conduct of the default proceedings, or
(b) it is satisfied that the direction is necessary—
(i) having regard to the public interest in the stability of the financial system of the United Kingdom,
(ii) to facilitate a proposed or possible use of a power under Part 1 of the Banking Act 2009 (special resolution regime), or
(iii) in connection with a particular exercise of a power under that Part.
(7) In subsection (8), for “Authority” substitute “ regulator which gave the direction ”.
(8) At the end insert—
(9) The appropriate regulator”—
(a) in relation to a recognised UK investment exchange, means the FCA, and
(b) in relation to a recognised UK clearing house, means the Bank of England.
(9) In the heading, omit “of Secretary of State”.
112 Evidencing and transfer of title to securities without written instrument
In section 785 of the Companies Act 2006 (provision enabling procedures for evidencing and transferring title), at the end insert—
(7) The regulations may confer functions on any person, including—
(a) the function of giving guidance or issuing a code of practice in relation to any provision made by the regulations, and
(b) the function of making rules for the purposes of any provision made by the regulations.
(8) The regulations may, in prescribed cases, confer immunity from liability in damages.
(1) The Director of Savings (“the Director”) may enter into arrangements with a public body for the provision by the Director, or persons authorised by the Director, of services to the body.
(2) Arrangements are to be on such terms, including terms as to payment, as may be agreed.
(3) “Public body” means a person or body whose functions are of a public nature.
(1) Any power of the Treasury or the Secretary of State to make an order under this Act is exercisable by statutory instrument.
(2) Any order made by the Treasury or the Secretary of State under this Act may—
(a) contain such incidental or transitional provision as the Treasury consider appropriate, and
(b) make different provision for different cases.
(1) A statutory instrument containing (alone or with other provision) an order to which subsection (2) applies may not be made unless a draft of the instrument has been laid before Parliament and approved by a resolution of each House.
(2) This subsection applies to—
(a) an order under section 37(2) (power to amend sections 391 and 395 of FSMA 2000);
(b) an order under Part 3 (mutual societies);
(c) an order under section 107 (power to make further provision about regulation of consumer credit);
(d) an order under section 118 (power to make further consequential amendments) that amends or repeals primary legislation.
(3) A statutory instrument containing an order under this Act, other than an instrument to which section 94 or subsection (1) applies or an instrument containing only provision made under section 122 (commencement), is subject to annulment in pursuance of a resolution of either House of Parliament.
(4) In this section “primary legislation” means—
(a) an Act of Parliament,
(b) an Act of the Scottish Parliament,
(c) a Measure or Act of the National Assembly for Wales, or
(d) Northern Ireland legislation.