Financial Services Bill

MARSHALLED
LIST OF AMENDMENTS
TO BE MOVED
IN COMMITTEE
OF THE WHOLE HOUSE

The amendments have been marshalled in accordance with the Instruction of 20th June 2012, as follows—

Clauses 1 to 3
Schedule 1
Clause 4
Schedule 2
Clause 5
Schedule 3
Clauses 6 to 10
Schedule 4
Clauses 11 to 13
Schedule 5
Clauses 14 to 20
Schedule 6
Clauses 21 to 27
Schedule 7
Clauses 28 to 32
Schedule 8
Clauses 33 and 34
Schedule 9
Clause 35
Schedule 10
Clause 36
Schedule 11
Clauses 37 and 38
Schedule 12
Clause 39
Schedule 13
Clauses 40 and 41
Schedule 14
Clause 42
Schedule 15
Clause 43
Schedule 16
Clauses 44 to 90
Schedule 17
Clauses 91 to 95
Schedules 18 and 19
Clauses 96 to 100
Schedules 20 and 21
Clauses 101 to 104

[Amendments marked * are new or have been altered]

Before Clause 1

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

1*

Insert the following new Clause—

“Supervisory Board

In section 1 of the Bank of England Act 1998 (court of directors), for subsection (1) substitute—

“(1) The court of directors of the Bank shall be replaced with a Supervisory Board.””

Clause 1

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

2*

Page 1, line 6, leave out “court” and insert “Supervisory Board”

LORD BARNETT

LORD PESTON

3

Page 1, leave out line 9

4

Page 1, leave out line 10

LORD MCFALL OF ALCLUITH

BARONESS NOAKES

5

Page 1, line 12, at end insert—

“(2A) Any person appointed under subsection (2)(a) shall be appointed with the consent of the Treasury Committee of the House of Commons.”

BARONESS WHEATCROFT

BARONESS KRAMER

6

Page 1, line 12, at end insert—

“(2A) The Chancellor of the Exchequer shall consult with the chairman of the court prior to the appointment of any person under subsection (2)(a).”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

7*

Page 1, line 12, at end insert—

“(2A) The Chancellor of Exchequer shall only appoint a person under subsection (2)(e) if he is satisfied that the person has knowledge or experience which is likely to be relevant to the Court’s functions and would enhance the diversity of the composition of the Court.”

8*

Page 1, line 12, at end insert—

“( ) In section 2 of the Bank of England Act 1998 (functions of the court of directors) for subsections (1) and (2) substitute—

“(1) The Supervisory Board will be responsible for overseeing the development and execution of the objectives and strategic policies of the Bank of England, including monetary policy and stability policy, subject to instructions from the Treasury.

(2) There will be a Supervisory Board Secretariat, charged with providing economic, legal and monetary advice and research support to the Supervisory Board.””

THE LORD BISHOP OF DURHAM

LORD SHARKEY

BARONESS KRAMER

9*

Page 1, line 17, at end insert—

“(3) In section 2 of that Act (functions of court of directors), at the end insert—

“The court of directors shall divide the roles of chairman of the Monetary Policy Committee (established in section 13), Financial Policy Committee (established in section 9B) and the Prudential Regulation Authority (established in the Financial Services and Markets Act 2000) between the Governor and Deputy Governors, so that the Governor shall not chair more than one of the three.””

After Clause 1

LORD MCFALL OF ALCLUITH

BARONESS NOAKES

10

Insert the following new Clause—

“Removal from office

After paragraph 8 of Schedule 1 to the Bank of England Act 1998 (removal from office) insert—

“8A The Bank may not remove a person from office as Governor under paragraph 8 without the consent of the Treasury Committee of the House of Commons.””

11

Insert the following new Clause—

“Retrospective reviews of Bank performance by the court of directors

(1) Section 2 of the Bank of England Act 1998 (functions of court of directors) is amended as follows.

(2) After subsection (5) insert—

“(6) The court shall conduct retrospective reviews of the performance of the Bank with respect to its functions and objectives.

(7) The court shall determine the particular matters to be reviewed under subsection (6).

(8) The court must publish a report on each review carried out under subsections (6) and (7) unless the court decides that all or part of such a report should not be published for reasons of confidentiality or because it would endanger financial stability.

(9) When all or part of a report of a review is not published under the provisions of subsection (8), the court must—

(a) publish as much as possible of the report,

(b) send a copy of the full report to the Chairman of the Treasury Committee of the House of Commons or, in exceptional circumstances, inform the Chairman of the Treasury Committee of the reasons for not sending it, and

(c) publish the report or part of the report as soon as possible after the court decides that the considerations in subsection (8) no longer apply.””

12

Insert the following new Clause—

“Publication of court minutes

(1) Section 2 of the Bank of England Act 1998 (functions of court of directors) is amended as follows.

(2) After subsection (5) insert—

“(6) After each meeting of the court, the Bank shall publish minutes of the meeting before the end of the period of two weeks beginning with the day of the meeting.

(7) Subsection (6) shall not apply to minutes of any proceedings where the court has decided that publication should be delayed for reasons of confidentiality or because publication would endanger financial stability.

(8) Where any part of the court’s minutes is not published under the provisions of subsection (7), the Chairman of the court shall inform the Chairman of the Treasury Committee of the House of Commons of the reasons.

(9) Any part of the minutes of a meeting of the court must be published as soon as the court has decided that the considerations in subsection (7) no longer apply.””

After Clause 2

LORD SASSOON

13

Insert the following new Clause—

“Oversight Committee

(1) The Bank of England Act 1998 is amended as follows.

(2) For section 3 substitute—

“3A Oversight Committee

(1) There is to be a sub-committee of the court of directors of the Bank (“the Oversight Committee”) consisting of the directors of the Bank.

(2) The functions of the Oversight Committee are—

(a) keeping under review the Bank’s performance in relation to—

(i) the Bank’s objectives (that is, the objectives specified in relation to it in this Act and the other objectives for the time being determined by the court of directors of the Bank),

(ii) the duty of the Financial Policy Committee under section 9C, and

(iii) the Bank’s strategy as for the time being determined by the court of directors of the Bank (including its financial stability strategy);

(b) monitoring the extent to which the objectives set by the court of directors of the Bank in relation to the Bank’s financial management have been met;

(c) keeping under review the internal financial controls of the Bank with a view to securing the proper conduct of its financial affairs;

(d) the functions conferred on the Oversight Committee by the provisions listed in subsection (4).

(3) The Bank may arrange for specified functions of the Bank to be discharged by the Oversight Committee.

(4) The provisions referred to in subsection (2)(d) are—

(a) section 9B (review of procedures followed by Financial Policy Committee);

(b) section 16 (review of procedures followed by Monetary Policy Committee);

(c) paragraph 14 of Schedule 1 (remuneration of Governor and Deputy Governors);

(d) paragraph 5 of Schedule 2A (terms and conditions of office of members of Financial Policy Committee appointed under section 9B(1)(e));

(e) paragraph 9 of that Schedule (removal of members of Financial Policy Committee appointed under section 9B(1)(e));

(f) paragraph 4(2) of Schedule 3 (terms and conditions of office of members of Monetary Policy Committee appointed under section 13(2)(c));

(g) paragraph 9 of that Schedule (removal of members of Monetary Policy Committee appointed under section 13(2)(c));

(h) paragraph 15 of Schedule 1ZB to the Financial Services and Markets Act 2000 (terms of service and remuneration of members of the governing body of the Prudential Regulation Authority).

3B Oversight Committee: procedure

(1) The chair of the court (designated under paragraph 13 of Schedule 1) is to chair meetings of the Oversight Committee (when present).

(2) The Committee is to determine its own procedure, but this is subject to subsection (1) and subsection (5).

(3) The Committee may invite other persons to attend, or to attend and speak at, any meeting of the Committee.

(4) The Committee may delegate any of its functions to two or more of its members.

(5) If a member of the Committee (“M”) has any direct or indirect interest (including any reasonably likely future interest) in any dealing or business which falls to be considered by the Committee—

(a) M must disclose that interest to the Committee when it considers that dealing or business, and

(b) the Committee must decide whether M is to be permitted to participate in any proceedings of the Committee relating to any question arising from its consideration of the dealing or business, and if so to what extent and subject to what conditions (if any).

3C Reviews

(1) In the discharge of any of its functions, the Oversight Committee may arrange—

(a) for a review to be conducted under this section in relation to any matter by a person appointed by the Committee, and

(b) for the person conducting the review to make one or more reports to the Committee.

(2) The persons who may be appointed to conduct a review include an officer or employee of the Bank.

(3) A review under this section is a “performance review” if it—

(a) is arranged by the Committee in the discharge of any of its functions under section 3A(2)(a) and (b), and

(b) relates to past events.

(4) If the person to be appointed to conduct a performance review is an officer or employee of the Bank, the appointment requires the consent of the Governor of the Bank.

(5) In the case of a performance review, the Committee must have regard to the desirability of ensuring that sufficient time has elapsed—

(a) for the review to be effective, and

(b) to avoid the review having a material adverse effect on the exercise by the Bank of its functions.

3D Publication of reports of performance reviews

(1) The Bank must give the Treasury a copy of any report made to the Oversight Committee by a person appointed under section 3C to conduct a performance review (as defined by subsection (3) of that section).

(2) Subject to subsection (3), the Bank must also publish the report.

(3) Subsection (2) does not require the publication of information whose publication at the time when the report is made would in the opinion of the Bank be against the public interest.

(4) Where the Bank decides under subsection (3) that publication of information at the time when the report is made would be against the public interest, it must keep under consideration the question of whether publication of the information would still be against the public interest.

(5) Where the Bank decides that publication of any information is no longer against the public interest, it must publish the information.

(6) The Treasury must lay before Parliament a copy of any report or other information published by the Bank under this section.

3E Recommendations resulting from review

(1) This section applies where a report made by a person appointed under section 3C to conduct a review makes recommendations to the Bank as to steps to be taken by it.

(2) The Oversight Committee must—

(a) monitor the Bank’s response to the report, and

(b) if or to the extent that the Bank accepts the recommendations, monitor the implementation of the recommendations.

3F Oversight Committee: further provisions

(1) The documents to which the Oversight Committee is to have access in the discharge of its functions include documents considered, or to be considered, by the Financial Policy Committee or the Monetary Policy Committee.

(2) One or two members of the Oversight Committee may attend any meeting of the Financial Policy Committee or the Monetary Policy Committee, but a person attending by virtue of this subsection may not speak unless invited to do so by the person chairing the meeting.

(3) Subsection (2) does not affect—

(a) anything done in relation to the Financial Policy Committee by a member of that Committee who is also a member of the Oversight Committee,

(b) the powers of the Financial Policy Committee under paragraph 13 of Schedule 2A, or

(c) the powers of the Monetary Policy Committee under paragraph 13A of Schedule 3.”

(3) In section 4 (annual report by the Bank), in subsection (2), for paragraph (a) substitute—

“(a) a report by the Oversight Committee on the matters for which it is responsible, and”.

(4) In section 16 (functions of court of directors)—

(a) in subsection (1), for “court of directors of the Bank” substitute “Oversight Committee”,

(b) in subsection (2)—

(i) for “the court’s function” substitute “the function of the Oversight Committee”,

(ii) for “the Committee” substitute “the Monetary Policy Committee”,

(c) omit subsection (3), and

(d) accordingly, in the heading, for “court of directors” substitute “Oversight Committee”.”

Clause 3

LORD BARNETT

LORD PESTON

14

Page 2, line 21, at end insert “, and

(c) define and explain what is meant by “financial stability””

15

Page 2, line 26, at end insert “, and

(c) other bodies it deems relevant”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

16*

Page 2, line 26, at end insert “, and

( ) the public”

17*

Page 2, line 27, after “Committee” insert “and the Treasury”

18*

Page 2, line 35, leave out “3” and insert “1”

19*

Page 2, line 37, leave out “3” and insert “1”

20*

Page 3, line 3, leave out from “be” to end of line 4 and insert “on the Bank’s website, and, if deemed appropriate by the Bank, in hard copy”

LORD MCFALL OF ALCLUITH

BARONESS NOAKES

21

Page 3, line 14, leave out “4” and insert “6”

LORD BARNETT

LORD PESTON

22

Page 3, leave out line 15

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

23*

Page 3, line 24, after “functions” insert “and must have regard to the desirability of ensuring a broad representation of practitioners and consumers in the UK financial services sector”

LORD MCFALL OF ALCLUITH

24

Page 3, line 24, after “functions,” insert—

“( ) has knowledge of the markets in each of the constituent parts of the United Kingdom,”

LORD BARNETT

LORD PESTON

25

Page 3, line 25, at end insert “(not least political)”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

26*

Page 3, line 27, at end insert—

“( ) allow sufficient time for the Treasury Select Committee to hold appointment hearings with candidates to be appointed under subsection (1)(e) before their appointment to the Committee.”

27*

Page 3, line 27, at end insert—

“( ) secure the agreement of the Treasury Committee of the House of Commons.”

LORD SASSOON

28

Page 3, line 28, leave out “court of directors” and insert “Oversight Committee”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

29*

Page 3, line 28, leave out “procedures” and insert “activities”

LORD SASSOON

30

Page 3, line 28, at end insert “Financial Policy”

LORD SASSOON

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

31

Page 3, leave out lines 30 and 31

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

32*

Page 3, line 31, at end insert—

“( ) The Supervisory Board will ensure that all members of the Financial Policy Committee are provided with adequate economic, legal and monetary advice and research support.”

LORD SASSOON

33

Page 3, line 32, after “the” insert “Financial Policy”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

34*

Page 3, line 34, after “functions” insert “having regard to the Government’s growth, employment and other economic objectives”

BARONESS KRAMER

LORD SHARKEY

THE LORD BISHOP OF DURHAM

35

Page 3, line 34, leave out from “functions“ to end of line 36 and insert “in relation to financial policy in a manner designed to contribute to the achievement by the Bank of the Financial Stability Objective; and this shall include promoting—

(a) a stable and sustainable supply of finance to the economy, and

(b) subject to that, the economic policy of Her Majesty’s Government, including its objectives for economic growth and employment.

9CA Specification of matters relevant to objectives

(1) The Treasury may by notice in writing to the Bank specify for the purposes of section 9C—

(a) what a stable and sustainable supply of finance is to be taken to consist of,

(b) the objectives of Her Majesty’s Government in achieving a stable and sustainable supply of finance, and

(c) what the economic policy of Her Majesty’s Government is to be taken to be including its objectives for economic growth and employment.

(2) The Treasury shall specify under subsection (1) both of the matters mentioned there—

(a) before the end of the period of 7 days beginning with the day on which this Act comes into force, and

(b) at least once in every period of 12 months beginning on the anniversary of the day on which this Act comes into force.

(3) Where the Treasury give notice under this section they shall—

(a) publish the notice in such manner as they think fit, and

(b) lay a copy of it before Parliament.

9CB Matters to be considered in achieving the Financial Stability Objective”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

36*

Page 4, line 3, at end insert—

“( ) factors likely to lead to a loss of confidence in the financial system as a whole”

37*

Page 4, line 5, leave out “in its opinion”

LORD BARNETT

LORD PESTON

38

Page 4, line 8, at end insert “, and the same requirement must be placed on the Monetary Policy Committee”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

39*

Page 4, leave out lines 13 to 21

LORD MCFALL OF ALCLUITH

BARONESS NOAKES

40

Page 4, line 21, at end insert—

“(8) The Treasury and the Financial Policy Committee must agree and publish a set of indicators which the Committee will use to measure its performance in meeting the Financial Stability Objective.”

LORD BARNETT

LORD PESTON

41

Page 4, leave out lines 22 to 31

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

42*

Page 5, line 16, after first “of” insert “its strategic objective and”

LORD MCFALL OF ALCLUITH

43

Page 5, line 39, at end insert—

“(e) preparing and publishing clear regulatory statements for the FCA and the PRA”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

44*

Page 5, line 39, at end insert—

“( ) assessing its functions in the light of the policies of the European Financial Stability Board”

LORD BARNETT

LORD PESTON

45

Page 6, leave out lines 3 to 7

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

46*

Page 6, line 7, at end insert “provided that such a direction does not conflict with the FCA’s consumer protection objective”

47*

Page 6, line 7, at end insert—

“(1A) The Financial Policy Committee may give a direction to the FCA or the PRA requiring the regulator to exercise its functions so as to ensure the implementation, by or in relation to a specified class of regulated persons, of a disclosure of their leverage ratio, as defined in the Basel III agreement, as part of their regular reporting not later than the beginning of 2013.”

48*

Page 6, line 20, leave out from “description” to end of line 21

BARONESS HAYTER OF KENTISH TOWN

LORD EATWELL

49*

Page 6, line 26, at end insert—

“( ) in the case of the FCA, must take account of any representations from the Financial Services Consumer Panel”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

50*

Page 6, line 28, leave out “or within a specified period”

51*

Page 6, leave out lines 40 to 42

52*

Page 7, line 8, at end insert “and in the case of the FCA, must be reported to the Financial Services Consumer Panel”

53*

Page 7, line 30, at end insert—

“( ) If a copy is not laid before Parliament, a copy should be sent to the Chair of the Treasury Committee, together with reasons why distribution is restricted.”

54*

Page 7, line 40, after “Committee” insert “and the public”

55*

Page 7, line 42, after “Committee” insert “and the public”

56*

Page 7, line 43, at end insert “and the Deputy Governor for Financial Stability”

57*

Page 7, line 43, at end insert—

“( ) Where an order is made under subsection (2)(b), the reasons for not consulting the Committee or the public (or both) shall be the subject to scrutiny by the Treasury Select Committee of the House of Commons.”

58*

Page 8, line 5, leave out “, the FCA or the PRA”

59*

Page 8, line 23, after “be” insert “on the Bank’s website and”

60*

Page 8, line 23, after “such” insert “other”

61*

Page 8, line 28, at end insert—

“( ) Where a direction in relation to a macro-prudential measure is exercised as a matter of urgency, a statement must be published within 10 days.”

LORD MCFALL OF ALCLUITH

BARONESS NOAKES

LORD EATWELL

62

Page 8, line 32, at end insert—

“(1A) If the Treasury considers it appropriate to proceed with the making of an order under section 9K, the Treasury may lay before Parliament—

(a) a draft order, and

(b) an explanatory document.

(1B) The explanatory document laid under subsection (1A) must—

(a) introduce and give reasons for the order,

(b) explain why the Treasury considers that the order serves the purpose in section 9K, and

(c) be accompanied by a copy of any representations received from the FPC or the Governor.

(1C) The Treasury may not act under subsection (1A) before the end of the period of 12 weeks beginning with the day on which the consultation began, unless the order is made in accordance with section 9K(2)(b).

(1D) Subject as follows, if after the expiry of the 40-day period the draft order laid under subsection (1A) is approved by a resolution of each House of Parliament, the Minister may make an order in the terms of the draft order.

(1E) The procedure in subsections (1F) to (1J) shall apply to the draft order instead of the procedure in subsection (1D) if—

(a) either House of Parliament so resolves within the 30-day period, or

(b) a committee of either House charged with reporting on the draft order so recommends within the 30-day period and the House to which the recommendation is made does not by resolution reject the recommendation within the period.

(1F) The Minister must have regard to—

(a) any representations,

(b) any resolution of either House of Parliament, and

(c) any recommendation of a committee of either House of Parliament charged with reporting on the draft order, made during the 60-day period with regard to the draft order.

(1G) If after the expiry of the 60-day period the draft order is approved by a resolution of each House of Parliament, the Minister may make an order in the terms of the draft order.

(1H) If after the expiry of the 60-day period the Minister wishes to proceed with the draft order but with the material changes, the Minister may lay before Parliament—

(a) a revised draft order, and

(b) a statement giving a summary of the changes proposed.

(1J) If the revised draft order is approved by a resolution of each House of Parliament, the Minister may make an order in the terms of the revised draft order.

(1K) For the purposes of this section, an order is made in the terms of a draft order or revised draft order if it contains no material changes to its provisions.

(1L) In this section, references to the “30-day”, “40-day” and “60-day” periods in relation to any draft order are to the periods of 30, 40 and 60 days beginning with the day on which the draft order was laid before Parliament.

(1M) For the purposes of subsection (1L), no account is to be taken of any time during which Parliament is dissolved or prorogued or during which either House is adjourned for more than four days.”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

63*

Page 9, leave out lines 13 to 17

64*

Page 9, line 31, at end insert—

“(2A) The FPC must carry out and complete a review of the definition of regulated persons and the scope of exemptions permitted under FSMA 2000 to consider whether the scope of exemptions is appropriate.

(2B) The FPC must make recommendations under subsection (2A)—

(a) before the end of the period of 30 days beginning with the day on which this section comes into force, and

(b) at least once in every calendar year following that in which the first recommendations are made.”

65*

Page 9, line 34, leave out “it considers that”

66*

Page 10, line 2, leave out from “description” to end of line 4

BARONESS HAYTER OF KENTISH TOWN

LORD EATWELL

67*

Page 10, line 13, at end insert “and in the case of the FCA, must be reported to the Financial Services Consumer Panel”

68*

Page 10, line 15, at end insert—

“( ) The FCA must prepare and maintain a memorandum with the Financial Reporting Council describing in general terms how they intend to coordinate their activities.

( ) The FCA must—

(a) lay before Parliament a copy of the memorandum and any revised memorandum, and

(b) publish the memorandum as currently in force in such manner as they think fit.”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

69*

Page 10, leave out lines 15 to 18

70*

Page 10, line 21, after “record” insert “with minutes”

71*

Page 11, line 12, at end insert “but always on the Bank of England website”

72*

Page 11, line 21, at end insert—

“( ) it must inform the Chair of the Treasury Committee of the House of Commons”

73*

Page 11, line 37, at end insert “including both the most likely outcome and a range of reasonably possible scenarios”

74*

Page 12, line 2, at end insert—

“( ) an assessment of the impact of each macro-prudential measure on employment and economic growth”

75*

Page 12, line 9, at end insert—

“( ) an assessment of the state of financial stability against early warning indicators and must report against the effectiveness of the macro-prudential measures deployed”

76*

Page 12, line 9, at end insert—

“( ) an assessment of the impact of the Committee’s measures on the functioning of financial markets and the wider economy”

77*

Page 12, line 22, after “be” insert “on the website of the Bank”

78*

Page 12, line 22, after “such” insert “other”

79*

Page 12, line 28, after “Bank” insert “, the Deputy Governor for Financial Stability”

80*

Page 12, line 31, leave out “a record” and insert “minutes”

LORD BARNETT

LORD PESTON

81

Page 12, line 31, after “a” insert “complete”

82

Page 12, leave out lines 34 and 35

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

83*

Page 12, line 34, after “be” insert “on the website of the Treasury”

84*

Page 12, line 34, after “such” insert “other”

85*

Page 12, line 38, after first “the” insert “Bank or”

86*

Page 12, line 41, at end insert—

“( ) If the decision is taken not to publish information in the minutes, the Chair of the Treasury Committee of the House of Commons will be informed, and provided with minutes of the information withheld.”

LORD MCFALL OF ALCLUITH

87

Page 13, line 43, leave out “may” and insert “must”

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

88*

Page 14, line 7, at end insert—

“( ) Where publication of information is deemed to be against the public interest, the Chair of the Treasury Committee of the House of Commons will be informed of the information withheld, and given reasons.”

89*

Page 14, line 12, at end insert—

“9WA Financial Stability Advisory Panel

(1) There will be a Financial Stability Advisory Panel.

(2) The membership of the Panel will be—

(a) the Deputy Governor for Financial Stability;

(b) 6 members appointed by the Treasury, subject to approval by the Treasury Committee of the House of Commons;

and the members appointed under paragraph (b) will be academics, members of staff of international organisations, practitioners, or others with particular skills in the analysis of systemic risk.

(3) The Financial Stability Advisory Panel will—

(a) provide written advice to the Financial Policy Committee concerning the analysis of systemic risk;

(b) once a year prepare a report assessing the analysis of systemic risk by the Financial Policy Committee over the preceding 12 months (the first report to be twelve months after this section comes into force);

(c) assess the effectiveness of measures prescribed under section 9K in the attainment of the financial stability objective of the Bank;

(d) assess the effectiveness of directions and recommendations of the Financial Policy Committee under sections 9G and 9N in the attainment of the financial stability objective of the Bank;

(e) prepare an annual report on matters referred to in section 9WA(3) to be presented by the Supervisory Board of the Bank, and subsequently published on the Bank website.”

After Clause 3

LORD BARNETT

LORD PESTON

90

Insert the following new Clause—

“Monetary policy objective

In paragraph (b) of section 11 of the Bank of England Act 1998, omit the words “subject to that”.”

Schedule 1

LORD SASSOON

91

Page 170, line 11, leave out “Bank” and insert “Oversight Committee”

92

Page 170, leave out lines 12 to 14

93

Page 170, line 32, leave out “Bank” and insert “Oversight Committee”

94

Page 170, line 35, at end insert “Financial Policy”

95

Page 170, line 42, leave out “Bank” and insert “Oversight Committee”

96

Page 171, leave out lines 3 to 5

Schedule 2

LORD SASSOON

97

Page 174, line 3, at end insert—

“(8A) After paragraph 12 insert—

“Publication of record of meetings

12A (1) The Bank must publish a record of each meeting of the court—

(a) before the end of the period of 6 weeks beginning with the day of the meeting, or

(b) if no meeting of the court is subsequently held during that period, before the end of the period of 2 weeks beginning with the day of the next meeting.

(2) The record must specify any decisions taken at the meeting (including decisions to take no action) and must set out, in relation to each decision, a summary of the court’s deliberations.

(3) Sub-paragraphs (1) and (2) do not require the publication of information whose publication within the time required by sub-paragraph (1) would in the opinion of the court be against the public interest.

(4) Publication under this section is to be in such manner as the Bank thinks fit.””

98

Page 174, line 3, at end insert—

“(8B) In paragraph 14(1), for “it” substitute “the Oversight Committee”.”

99

Page 174, line 4, leave out “No provision of this paragraph” and insert “Nothing in sub-paragraphs (2) to (6)”

100

Page 174, leave out lines 34 to 38 and insert—

“(b) for sub-paragraph (2) substitute—

“(2) The terms and conditions on which a person holds office as a member of the Committee appointed under section 13(2)(c) are to be such as the Oversight Committee may determine.”

(c) omit sub-paragraph (3).”

101

Page 174, line 42, at end insert—

“(7A) In paragraph 9—

(a) in sub-paragraph (1)—

(i) for “Bank” substitute “Oversight Committee”, and

(ii) in paragraph (a), for “the Committee’s meetings” and “the Committee’s consent” substitute “meetings of the Monetary Policy Committee” and “that Committee’s consent”, and

(b) omit sub-paragraph (2).”

Clause 5

LORD SHARKEY

102*

Page 16, line 3, at end insert—

“(d) the deprived communities objective (see section 1F).”

LORD PHILLIPS OF SUDBURY

BARONESS KRAMER

103*

Page 16, line 7, at end insert “and society”

BARONESS DRAKE

LORD STONEHAM OF DROXFORD

104*

Page 16, line 7, at end insert—

“(4A) The FCA must, so far as is compatible with acting in a way which advances its operational objectives carry out its general functions and other activities in a way which—

(a) takes account of the distinctive features of social investment; and

(b) does not inhibit the development of social investment.”

LORD MCFALL OF ALCLUITH

105

Page 16, line 38, after “of” insert “ability, disability and vulnerability generally”

LORD BORRIE

BARONESS OPPENHEIM-BARNES

106

Page 16, line 41, leave out “fit for purpose” and insert “intelligible”

BARONESS DRAKE

LORD STONEHAM OF DROXFORD

107*

Page 17, line 2, at end insert—

“(ea) the general principle that, where consumers properly repose trust in a firm’s discretion and are vulnerable to the exercise of that discretion, the firm has a duty to act in the consumer’s best interests”

LORD BORRIE

BARONESS OPPENHEIM-BARNES

108

Page 17, line 7, at end insert—

“(h) where credit is granted to a consumer, a clear statement, in cash terms, of the total cost of such credit”

LORD PHILLIPS OF SUDBURY

BARONESS KRAMER

109*

Page 17, line 12, at end insert “and social responsibility”

LORD MCFALL OF ALCLUITH

110

Page 17, line 15, at end insert—

“( ) the confidence which the UK financial system generates within the UK and in the financial markets of other countries,”

LORD PHILLIPS OF SUDBURY

BARONESS KRAMER

111*

Page 17, line 21, after “consumers” insert “and society”

LORD MCFALL OF ALCLUITH

112

Page 17, line 26, leave out “may” and insert “must”

113

Page 17, line 31, at end insert “and their ability to easily access financial advice”

LORD SHARKEY

BARONESS KRAMER

114*

Page 17, line 34, after “market,” insert—

“( ) developments in the markets for unregulated financial services that are in the interests of consumers and businesses,

( ) the desirability of establishing a new authorisation regime for direct financial platform providers to protect consumers and providers,”

LORD MCFALL OF ALCLUITH

115

Page 17, line 34, leave out “and”

116

Page 17, line 35, at end insert “, and

(e) how proper regulation of regulated financial services impacts on competition in the provision of those services”

BARONESS DRAKE

117*

Page 17, line 35, at end insert—

“(e) the ease with which consumers can identify and obtain services which are appropriate to their needs and represent good value for money”

LORD SHARKEY

118*

Page 17, line 35, at end insert—

“1F The deprived communities objective

(1) The deprived communities objective is to promote an appropriate level of financial services provision in deprived communities.

(2) In order to facilitate this objective, the FCA must require each PRA-authorised person to publish relevant data on a quarterly basis by postcode, including the total amount of lending to small enterprises and medium enterprises.

(3) In considering what level of provision is appropriate, the FCA must have regard to the needs of small enterprises, third sector organisations and consumers in deprived communities for affordable loans, savings and insurance products.”

LORD SHARKEY

BARONESS KRAMER

119*

Page 19, line 14, at end insert—

“( ) “Direct finance platform” means an electronic system, operated by a direct finance platform operator, which brings together multiple participants, the majority of whom are consumers or micro-enterprises (or both), in the system and in accordance with non-discretionary rules that are binding on the direct finance platform operator and the participants.”

LORD PHILLIPS OF SUDBURY

BARONESS KRAMER

120*

Page 19, line 47, at end insert—

““social investment” means investment into or by organisations which exist wholly or mainly to provide benefits for society or the environment;”

LORD SHARKEY

121*

Page 19, line 47, at end insert—

““deprived communities” means those local areas identified by the Indices of Multiple Deprivation of England, Scotland and Wales, as being within the most deprived 10 per cent of all communities in the United Kingdom;

“third sector organisation” has the meaning given under section 18(2) of the Dormant Bank and Building Society Accounts Act 2008;

“small enterprises” has the meaning given under section 382 of the Companies Act 2006.”

LORD MCFALL OF ALCLUITH

122

Page 21, line 16, leave out “and”

123

Page 21, line 17, at end insert “, and

(c) persons representing the constituent parts of the United Kingdom”

124

Page 21, line 34, leave out “and”

125

Page 21, line 35, at end insert “and

(c) persons representing the constituent parts of the United Kingdom”

126

Page 22, line 23, leave out “and”

127

Page 22, line 24, at end insert “, and

(f) persons representing the constituent parts of the United Kingdom.”

128

Page 22, line 37, at end insert “taking into account the need to represent the constituent parts of the United Kingdom”

LORD FLIGHT

129

Page 26, line 8, at end insert—

“2GA Duty to have regard to the competitive consequences of its actions

In discharging its general functions, the PRA shall have regard to—

(a) the desirability of promoting the competitive position of the United Kingdom financial services industry; and

(b) the potential effects on that competitive position of its taking, or failing to take, action.”

LORD MCFALL OF ALCLUITH

130

Page 27, line 13, leave out “may” and insert “must”

LORD HODGSON OF ASTLEY ABBOTTS

131

Page 28, line 39, after “restriction” insert “or operational rules”

132

Page 28, line 39, leave out “is” and insert “are”

133

Page 28, line 40, after “person” insert “or firm”

134

Page 28, line 41, after “proportionate” insert “, reasonable and fair”

135

Page 29, line 1, at end insert “, operational requirement”

LORD MCFALL OF ALCLUITH

136

Page 29, line 4, at end insert “subject to taking into account the vulnerability of the consumer by virtue of disability, age or incapacity”

LORD PHILLIPS OF SUDBURY

BARONESS KRAMER

137*

Page 29, line 15, at end insert—

“(g) the desirability generally of having due regard to the particular requirements of social investment so far as is compatible with the advancement by each regulator of its objectives”

138*

Page 29, line 15, at end insert—

“(h) the general principle that those regulated should reasonably assist consumers in taking responsibility”

139*

Page 29, line 17, at end insert—

“( ) “Social investment” means investment into or by third sector organisations which exist wholly or mainly to provide benefits for society or the environment.”

LORD FLIGHT

140

Page 29, line 42, at end insert—

“(d) that the exercise of their functions in relation to persons regulated by both the PRA and the FCA is coordinated with a view to avoiding the making of duplicative requests and the imposition of inconsistent requirements on such persons.”

BARONESS DRAKE

141*

Page 31, line 45, at end insert—

“(4A) A with-profits fund is a fund into which premiums for with-profits policies are paid. The PRA will regulate with-profits funds in line with the following principles—

(a) the purposes of the with-profits fund will be to provide guaranteed benefits and subject to this to generate profits for distribution to policyholders in the proportions specified in the with-profits policy;

(b) the with-profits fund will be managed for those and not for other purpose;

(c) any profits made by the fund will be distributed insofar as their retention is not justified for the purposes of the with-profits fund; and

(d) the insurer will exercise its discretions reasonably and fairly and it must not exercise its discretion in ways that unduly discriminate.”

LORD SASSOON

142

Page 37, line 16, leave out from “with” to “that” in line 18 and insert—

“(a) a local weights and measures authority in England, Wales or Scotland, or

(b) the Department of Enterprise, Trade and Investment in Northern Ireland,

for the provision by the authority or department to the FCA of services which relate to activities to which this subsection applies.

(5A) Subsection (5) applies to activities”

LORD MCFALL OF ALCLUITH

143

Page 37, line 24, at end insert “and must be published in such manner as the Bank of England considers appropriate”

Schedule 3

LORD SASSOON

BARONESS HAYTER OF KENTISH TOWN

144

Page 178, line 9, at end insert—

“Publication of record of meetings of governing body

9A (1) The FCA must publish a record of each meeting of its governing body—

(a) before the end of the period of 6 weeks beginning with the day of the meeting, or

(b) if no meeting of the governing body is subsequently held during that period, before the end of the period of 2 weeks beginning with the day of the next meeting.

(2) The record must specify any decision taken at the meeting (including decisions to take no action) and must set out, in relation to each decision, a summary of the deliberations of the governing body.

(3) Sub-paragraphs (1) and (2) do not require the publication of information whose publication within the time required by sub-paragraph (1) would in the opinion of the governing body be against the public interest.

(4) Publication under this section is to be in such manner as the FCA thinks fit.”

LORD SASSOON

145

Page 185, line 43, after “by” insert “the Oversight Committee of”

146

Page 185, line 45, leave out “the Bank” and insert “that Committee”

147

Page 186, leave out lines 1 to 4

Clause 7

LORD MCFALL OF ALCLUITH

148

Page 40, line 8, at end insert—

“( ) a draft of the order has been consulted upon with such persons as the Treasury considers appropriate,”

Clause 8

LORD MCFALL OF ALCLUITH

149

Page 41, line 20, at end insert—

“( ) a draft of the order has been consulted upon with such persons as the Treasury considers appropriate,”

Clause 9

LORD MCFALL OF ALCLUITH

150

Page 49, line 9, after “if” insert “after investigation”

151

Page 53, line 45, leave out “may” and insert “must”

152

Page 53, line 46, after “relationship” insert “(including family, business or other association)”

LORD SASSOON

153

Page 58, line 40, at end insert—

“Notification

55Z1 Notification of ESMA

A regulator must notify ESMA of—

(a) the giving by it of a Part 4A permission to an investment firm, where the regulated activities to which the permission relates are investment services and activities,

(b) the giving by it of a Part 4A permission to a management company (as defined in section 237(2)), where the regulated activities to which the permission relates fall within paragraph 8 of Schedule 2,

(c) the cancellation by it of a Part 4A permission of a description falling within paragraph (b), or

(d) the cancellation by it of a Part 4A permission under section 55J(6), in reliance on any one or more of the conditions in section 55K(1)(b) to (d).

55Z2 Notification of EBA

(1) A regulator must notify EBA of—

(a) the giving by it of a Part 4A permission to a credit institution, where the regulated activity to which the permission relates falls within paragraph 4 of Schedule 2,

(b) the cancellation by it of a Part 4A permission of a description falling within paragraph (a).

(2) “Credit institution” has the meaning given in section 1H(8).”

Schedule 4

LORD SASSOON

154

Page 198, line 39, leave out sub-paragraph (2) and insert—

“(2) For “the Authority” or “the Authority’s”, in each place, substitute “the appropriate regulator” or “the appropriate regulator’s”.”

155

Page 199, line 1, leave out “(7)” and insert “(8)”

156

Page 199, line 2, leave out “(8)” and insert “(9)”

157

Page 199, line 10, leave out “(9)” and insert “(10)”

158

Page 199, line 13, at end insert—

“( ) In the heading, for “Authority” substitute “appropriate regulator”.”

159

Page 199, line 32, leave out sub-paragraph (2) and insert—

“(2) For “the Authority” or “the Authority’s”, in each place, substitute “the appropriate regulator” or “the appropriate regulator’s”.”

160

Page 199, line 34, leave out “(11)” and insert “(11A)”

161

Page 199, line 35, leave out “(11A)” and insert “(11AB)”

162

Page 200, line 39, leave out sub-paragraph (4) and insert—

“(4) In subsections (3) to (11), for “the Authority” substitute “the regulator”.”

163

Page 201, line 1, leave out “(10)” and insert “(11)”

164

Page 201, line 2, leave out “(11)” and insert “(12)”

Clause 11

LORD MCFALL OF ALCLUITH

165

Page 59, line 24, after “if” insert “after investigation”

Clause 14

LORD SASSOON

166

Page 64, line 25, leave out from “State)” to end of line 26 and insert—

“(a) in subsection (1), for “competent authority”, in the second and third places, substitute “FCA”, and

(b) in subsection (3A), for “competent authority” substitute “FCA”.”

167

Page 64, line 32, after ““other”” insert—

“( ) in subsection (1A), for “competent authority”, in the first place, substitute “FCA”.”

Clause 16

LORD MCFALL OF ALCLUITH

168

Page 66, line 39, after “may” insert “after investigation”

169

Page 67, line 42, after “state” insert “the reasons for imposing a penalty and”

170

Page 68, line 5, at end insert “and the reasons for suspension or restriction”

Clause 17

LORD MCFALL OF ALCLUITH

171

Page 72, line 11, after “may” insert “after investigation”

172

Page 72, line 14, at end insert—

“( ) The FCA must provide reasons for the actions which it has taken under section 89Q.”

173

Page 74, line 37, after “may” insert “after investigation”

Clause 22

LORD MCFALL OF ALCLUITH

174

Page 103, line 25, after “may” insert “after consultation with such persons as they consider appropriate”

Clause 25

LORD MCFALL OF ALCLUITH

175

Page 110, line 3, after “notice” insert “containing the reasons for the direction”

176

Page 114, line 5, after “must” insert “consult with such persons as it considers appropriate”

Clause 30

LORD MCFALL OF ALCLUITH

177

Page 116, line 14, after “if” insert “after investigation”

178

Page 117, line 2, after “if” insert “after investigation”

179

Page 117, line 12, at end insert “the reason for its decision to issue a statement and”

180

Page 117, line 23, after “out” insert “the reasons for its decision to issue a statement and”

LORD HODGSON OF ASTLEY ABBOTTS

181

Page 118, line 6, at end insert “, and

(c) the proportion of that business in relation to the firm or person being investigated”

Schedule 8

LORD SASSOON

182

Page 223, line 25, leave out “subsection (5)” and “subsections (5) and (6)”

183

Page 225, line 12, leave out “and (12) (in both places)” and insert “(12) (in both places) and (13) (in the first place),”

Schedule 9

LORD SASSOON

184

Page 233, line 18, leave out “and”

185

Page 233, line 19, at end insert “, and

(c) for “a final notice” substitute “the notice required by subsection (2A)”.

( ) After that subsection insert—

“(2A) The notice required by this subsection is—

(a) in a case where the regulator is acting in accordance with a direction given by the Tribunal under section 133(6)(b), or by the court on an appeal from a decision by the Tribunal under section 133(6), a further decision notice, and

(b) in any other case, a final notice.”.”

LORD FLIGHT

186

Page 233, leave out line 39

LORD SASSOON

187

Page 234, line 30, at end insert—

“( ) In subsection (7A), for “the Authority” substitute “a regulator”.”

Clause 39

BARONESS WHEATCROFT

LORD LAWSON OF BLABY

BARONESS KRAMER

188

Page 124, line 20, at end insert—

“( ) In section 340 of FSMA 2000 (appointment of auditors and actuaries) after subsection (2) insert—

“(2A) Rules must require auditors of deposit taking institutions to provide a narrative report on the institution’s risk management policies and its exposure to risk as part of the audited accounts of the institution.””

Clause 40

LORD MCFALL OF ALCLUITH

189

Page 125, line 3, after “of” insert “the general public or”

Schedule 15

BARONESS NOAKES

190

Page 272, line 4, at end insert—

“Omit paragraph 5.”

Clause 65

LORD MCFALL OF ALCLUITH

191

Page 141, line 3, at end insert—

“( ) The person appointed by the Treasury to hold the inquiry under this section must be suitably qualified and experienced to hold such an inquiry.”

Clause 66

LORD MCFALL OF ALCLUITH

192

Page 141, line 29, at end insert—

“( ) The power conferred by this section is not exercisable in relation to information or documents in respect of which a claim to legal profession privilege (in Scotland to confidentiality of communications) could be maintained in legal proceedings.”

Clause 79

LORD MCFALL OF ALCLUITH

193

Page 148, line 15, at end insert—

“( ) The investigator must be suitably qualified and experienced to conduct such investigations.”

Clause 91

LORD SASSOON

194

Page 162, line 20, at end insert—

“(ga) enable the Department of Enterprise, Trade and Investment in Northern Ireland to institute proceedings in Northern Ireland for a relevant offence;”

195

Page 162, line 24, after “(2)(g)” insert “and (ga)”

196

Page 162, line 30, at end insert—

“(3A) The Treasury may make provision by virtue of subsection (2)(ga) only with the consent of the Department of Enterprise, Trade and Investment in Northern Ireland.”

After Clause 94

LORD FLIGHT

197

Insert the following new Clause—

“Retail account transfer

Transferability of retail banking current accounts

(1) If an individual customer gives notice in writing to a bank at which he holds a personal current account (Bank A) that he wishes to transfer the balance standing to the credit of that account (Account A) to a personal current account established or to be established at another bank (Bank B) and thereafter to close Account A—

(a) Bank A shall without charge within a period of 10 working days—

(i) transfer to Bank B the balance of Account A less any charges owing in respect of that account;

(ii) notify Bank B of all standing orders, direct debits and other orders for periodical payments that the customer has created in relation to Account A;

(iii) pass to Bank B a copy of all material that it holds in relation to the customer as a result of having performed checks on his identity, the source of his funds or otherwise with regard to its regulatory obligations to counter financial crime;

(b) Bank B shall without charge—

(i) accept the funds transferred under paragraph (a)(i) and credit them without deduction to the account that the customer has applied to open (Account B);

(ii) accept the details that Bank A provides under paragraph (a)(ii) and apply them to Account B so that they operate in accordance with the customer’s instructions from the date that Account B is credited under sub-paragraph (i);

(iii) save where it has grounds for suspicion, accept the material provided under paragraph (a)(iii) in lieu of performing fresh checks on the identity of the customer, the source of his funds or otherwise in relation to its regulatory obligations to counter financial crime.

(2) In this section a bank shall mean any person authorised under this Act and holding a permission for deposit taking granted by the PRA.”

Schedule 18

LORD SASSOON

198

Page 289, line 13, at end insert—

“In paragraph 8 of Schedule 6 (additional threshold conditions), in sub-paragraph (2)(b), for “the Authority” substitute “such of the FCA or the PRA as may be specified,”.”

199

Page 302, line 5, at end insert—

“Trustee Act 2000 (c. 29)

(1) Section 29 of the Trustee Act 2000 (remuneration of certain trustees) is amended as follows.

(2) In subsection (3)—

(a) for “an authorised institution under the Banking Act 1987” substitute “a deposit taker”, and

(b) for “institution’s” substitute “deposit taker’s”.

(3) After that subsection insert—

“(3A) In subsection (3), “deposit taker” means—

(a) a person who has permission under Part 4A of the Financial Services and Markets Act 2000 to accept deposits, or

(b) an EEA firm of the kind mentioned in paragraph 5(b) of Schedule 3 to that Act which has permission under paragraph 15 of that Schedule (as a result of qualifying for authorisation under paragraph 12(1) of that Schedule) to accept deposits.

(3B) A reference in subsection (3A) to a person or firm with permission to accept deposits does not include a person or firm with permission to do so only for the purposes of, or in the course of, carrying on another regulated activity in accordance with that permission.

(3C) Subsections (3A) and (3B) must be read with—

(a) section 22 of the Financial Services and Markets Act 2000,

(b) any relevant order under that section, and

(c) Schedule 2 to that Act.”.”

200

Page 310, line 32, at end insert—

“Finance Act 2011 (c. 11)

(1) Part 4 of Schedule 19 to the Finance Act 2011 (the bank levy) is amended as follows.

(2) In paragraph 37(2), in both places, for “section 213(2)(b)” substitute “section 213(3)(b)”.

(3) In paragraph 38(3)(a), for “section 139(1)” substitute “section 137B(1)”.

Terrorism Prevention and Investigation Measures Act 2011 (c. 23)

In Part 1 of Schedule 1 to the Terrorism Prevention and Investigation Measures Act 2011 (measures), in paragraph 5(4), for “Part 4” substitute “Part 4A”.”

Clause 98

LORD EATWELL

BARONESS HAYTER OF KENTISH TOWN

201*

Page 166, line 4, at end insert—

“where the phrase “court of directors” appears it is to be understood as “Supervisory Board”;”

Prepared 25th June 2012