245

House of Commons

Notices of Amendments

given on

Thursday 14 January 2010

Consideration of Bill

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Financial Services Bill, As Amended

No credit agreement to be enforceable if its total cost exceeds the statutory limit

Rob Marris

NC1

To move the following Clause:—

‘(1)	No agreement regulated by the Consumer Credit Act 1974 shall be enforceable if

the total cost of credit charged under that agreement or the cost of transactions

linked to that agreement exceed the relevant limits sect by the OFT pursuant to

sections [Quanta of statutory limits] and [Limits on costs of transactions linked to

credit agreements].

(2)	Where a consumer credit agreement is found to be unlawful by virtue of

subsection (1) that agreement and any linked agreement shall be unenforceable

and the lender and any agent acting on its behalf shall be liable to:

(a)	a fine determined by the OFT in accordance with section [Level of fines];

and

(b)	the revocation of the lender’s Consumer Credit Licence.’.

OFT’s power to set statutory limit

Rob Marris

NC2

To move the following Clause:—

‘(1)	Where the OFT is satisfied that insufficient price competition in a defined credit

market is causing or may cause a detriment to consumers the OFT shall set a

reasonable limit on the total cost chargeable for credit by lenders in that market.

(2)	In setting the limit referred to in subsection (1) the OFT shall consider evidence

of:

(a)	the degree of price competition in the credit market; and

(b)	the level of consumer detriment caused by any identified lack of price

competition.

Notices of Amendments: 14 January 2010

246

Financial Services Bill, continued

(3)	The OFT shall within three months of the date on which this Act or any Part

thereof comes into force and thereafter on each anniversary thereof decide

whether or not to set a limit on the total cost of credit for any consumer credit

market and shall publish that decision and the reasons for it.’.

Quanta of statutory limits

Rob Marris

NC3

To move the following Clause:—

‘(1)	The OFT shall set statutory limits which reasonably reflect the cost of providing

credit in a properly functioning competitive credit market.

(2)	To reflect variations in the amount of reasonable costs incurred by lenders

different statutory limits may be set for loans of different amounts and of different

durations.

(3)	The OFT may on not less than 14 days’ published notice vary any statutory limits

to reflect wider macroeconomic conditions including but not limited to changes

in the Bank of England’s base lending rate.’.

Limits on cost of transactions linked to credit agreements

Rob Marris

NC4

To move the following Clause:—

‘(1)	Where the OFT sets a statutory limit for a credit market it may also set limits on

cost of transactions linked to such credit agreements which costs are not included

in the total charge for credit.

(2)	Limits on the cost of transactions linked to credit agreements include:

(a)	the cash price of good which are being offered for sale on credit terms;

and

(b)	the costs of any related insurance or collection services.

(3)	The OFT may set reasonable limits on the cost of transactions linked to credit

agreements if it finds evidence that:

(a)	the statutory limit is likely to be avoided; or

(b)	there is likely to be a consumer detriment which is more than de

minimis.’.

Publication of limits

Rob Marris

NC5

To move the following Clause:—

‘When it sets a statutory limit or sets a limit on the cost of transactions linked to

credit agreements the OFT shall take reasonable steps to ensure that such limits

are timeously:

(a)	published in the London Gazette;

(b)	publicised throughout the credit industry;

(c)	notified to relevant consumer groups; and

Notices of Amendments: 14 January 2010

247

Financial Services Bill, continued

(d)	notified to relevant advice agencies.’.

Level of fines

Rob Marris

NC6

To move the following Clause:—

‘(1)	The OFT may impose a fine on any lender who exceeds a statutory limit or a limit

on the cost of transactions linked to credit agreements.

(2)	A fine imposed by virtue of subsection shall not exceed 5 per cent. of that lender’s

annual turnover.

(3)	When setting a fine the OFT shall have regard to:

(a)	the length of time that the lender has been operating in the market;

(b)	the lender’s previous record regarding statutory limits;

(c)	the lender’s previous record regarding the cost of transactions linked to

credit agreements; and

(d)	the annual turnover of the lender in its most recent annual accounts.

(4)	A lender upon whom a fine is imposed by the OFT pursuant to this section has

the right to appeal to the Secretary of State for Business, Innovation and Skills

within 28 days after being notified by the OFT of that fine.’.

Definitions

Rob Marris

NC7

To move the following Clause:—

‘(1)	In the sections [No credit limit to be enforceable if its total exceeds the statutory

limit], [OFT’s power to set statutory limit], [Quanta of statutory limits], [Limits

on cost of transactions linked to credit agreements], [Publication of limits] and

[Level of fines] “OFT” means the Office for Fair Trading.

(2)	In sections [Quanta of statutory limits] and [Publication of limits] the “statutory

limit” means the limit referred to in subsection (1) of section [OFT’s power to set

statutory limit].

(3)	In sections [Publication of limits] and [Level of fines] “limits on the cost of

transactions linked to credit agreements” means the limits referred to in

subsection (1) of section [Limits on cost of transactions linked to credit

agreements].’.

Financial Services Authority regulation of Northern Ireland credit unions

Mark Durkan

NC8

To move the following Clause:—

‘(1)	The Finaincial Services and Markets Act 2000 (Exemption) (Amendment) Order

2001 is amended as follows.

(2)	Omit Articles 3 and 4.’.

Notices of Amendments: 14 January 2010

248

Financial Services Bill, continued

Mark Durkan

1

Page  50,  line  43  [Clause  38],  at end insert—

‘(2A)

Section [Financial Services Authority regulation of Northern Ireland credit

unions] shall come into force at the end of the period of six months beginning

with the day on which this Act is passed.’.

Short selling

Mr Frank Field

NC9

To move the following Clause:—

‘(1)	The Financial Services Authority (“the Authority”) must make rules prohibiting

persons from engaging in short selling of shares except in one of the following

circumstances—

(a)	the share price at the time of the transaction was higher than it was at the

close of the previous trading day of the market on which the share was

listed; or

(b)	the short selling was by a person who borrowed the shares, and the

beneficial owners of the shares had given prior permission at an annual

general meeting for the shares to be lent.

(2)	Any person who engages in short selling under the provisions of paragraph 1(a)

or (b) must make a declaration of the sale to the Authority on the day of the

transaction.

(3)	The Authority may set requirements as to the form and content of declarations

made under section (2), but the Authority must require that such declarations

state—

(a)	the number of shares sold;

(b)	the price for which they were sold;

(c)	any features of the transaction which would confer a financial advantage

on the seller in the event of a decrease in the price of the shares; and

(d)	the person to whom they were sold.

(4)	The Authority must publish on its website all declarations under subsection (2) as

soon as possible after they are received, and in any case not more than 24 hours

after receipt.

(5)	If the Authority is satisfied that a person has contravened the provisions of

subsections (1) or (2), it may impose a penalty of such amount as it considers

appropriate on—

(a)	the person who contravened the provision or requirement, in which case

the penalty must not be less than the profit made by the person in

question; or

(b)	any person who was knowingly concerned in the contravention.

(6)	Rules under this section may apply to short selling wholly outside the United

Kingdom by persons outside the United Kingdom, but only in so far as the rules

relate to shares admitted to trading on a market within the United Kingdom.

(7)	For the purposes of this section the cases where a person engages in short selling

in relation to shares include any case where—

(a)	the person enters into a transaction which relates to shares; and

(b)	the effect (or one of the effects) of the transaction is to confer a financial

advantage on the person in the event of a decrease in the price or value of

the shares.’.

Notices of Amendments: 14 January 2010

249

Financial Services Bill, continued

Mr Frank Field

2

Page  13,  line  29,  leave out Clause 13.

Bank and building society accounts of retail customers

Mr Frank Field

NC10

To move the following Clause:—

‘(1)	It shall be a requirement on banks and building societies that accept deposits from

retail customers that they must offer retail customers—

(a)	at least one current account in respect of which no charge is made for

holding the account when it is in credit; and

(b)	at least one savings account in respect of which no charge is made for

holding the account when it is in credit, and on which interest is paid to

the account holder.

(2)	A penalty may be imposed by the Financial Services Authority on a bank or

builidng society which fails to offer accounts in accordance with subsection (1).

(3)	The penalty which may be imposed for a first offence under subsection (2) is a

penalty not exceeding £100,000.

(4)	The penalty which may be imposed for a second or subsequent offence under

subsection (2) is an unlimited fine.’.

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Revised 15 January 2010