Financial Services and Markets Bill - continued        House of Lords
PART V, PERFORMANCE OF REGULATED ACTIVITIES - continued
Approval - continued

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Determination of applications.     60. - (1) The Authority may grant an application made under section 59 only if it is satisfied that the person in respect of whom the application is made ("the candidate") is a fit and proper person to perform the function to which the application relates.
 
      (2) In deciding that question, the Authority may have regard (among other things) to whether the candidate, or any person who may perform a function on his behalf-
 
 
    (a) has obtained a qualification,
 
    (b) has undergone, or is undergoing, training, or
 
    (c) possesses a level of competence,
  required by general rules in relation to persons performing functions of the kind to which the application relates.
 
      (3) The Authority must, before the end of the period of three months beginning with the date on which it receives an application made under section 59 ("the period for consideration"), determine whether-
 
 
    (a) to grant the application; or
 
    (b) to give a warning notice under section 61(2).
      (4) If the Authority imposes a requirement under section 59(3), the period for consideration stops running on the day on which the requirement is imposed but starts running again-
 
 
    (a) on the day on which the required information is received by the Authority; or
 
    (b) if the information is not provided on a single day, on the last of the days on which it is received by the Authority.
      (5) A person who makes an application under section 59 may withdraw his application by giving written notice to the Authority at any time before the Authority determines it, but only with the consent of-
 
 
    (a) the candidate; and
 
    (b) the person by whom the candidate is to be retained to perform the function concerned, if not the applicant.
Applications for approval: procedure and right to refer to Tribunal.     61. - (1) If the Authority decides to grant an application made under section 59 ("an application"), it must give written notice of its decision to each of the interested parties.
 
      (2) If the Authority proposes to refuse an application, it must give a warning notice to each of the interested parties.
 
      (3) If the Authority refuses an application, it must give a decision notice to each of the interested parties.
 
      (4) If the Authority decides to refuse an application, each of the interested parties may refer the matter to the Tribunal.
 
      (5) "The interested parties", in relation to an application, are-
 
 
    (a) the applicant;
 
    (b) the person in respect of whom the application is made ("A"); and
 
    (c) the person by whom A's services are to be retained, if not the applicant.
Withdrawal of approval.     62. - (1) The Authority may withdraw an approval given under section 58 if it considers that the person in respect of whom it was given is not a fit and proper person to perform the function to which the approval relates.
 
      (2) When considering whether to withdraw its approval, the Authority may take into account any matter which it could take into account if it were considering an application made under section 59 in respect of the performance of the function to which the approval relates.
 
      (3) If the Authority proposes to withdraw its approval, it must give each of the interested parties a warning notice.
 
      (4) If the Authority decides to withdraw its approval, it must give each of the interested parties a decision notice.
 
      (5) If the Authority decides to withdraw its approval, each of the interested parties may refer the matter to the Tribunal.
 
      (6) "The interested parties", in relation to an approval, are-
 
 
    (a) the person on whose application it was given ("A");
 
    (b) the person in respect of whom it was given ("B"); and
 
    (c) the person by whom B's services are retained, if not A.
 
Conduct
Conduct: statements and codes.     63. - (1) The Authority may issue statements of principle with respect to the conduct expected of approved persons.
 
      (2) If the Authority issues a statement of principle under subsection (1), it must also issue a code of practice for the purpose of helping to determine whether or not a person's conduct complies with the statement of principle.
 
      (3) A code issued under subsection (2) may specify-
 
 
    (a) descriptions of conduct which, in the opinion of the Authority, comply with a statement of principle;
 
    (b) descriptions of conduct which, in the opinion of the Authority, do not comply with a statement of principle;
 
    (c) factors which, in the opinion of the Authority, are to be taken into account in determining whether or not a person's conduct complies with a statement of principle.
      (4) The Authority may at any time alter or replace a statement or code issued under this section.
 
      (5) If a statement or code is altered or replaced, the altered or replacement statement or code must be issued by the Authority.
 
      (6) A statement or code issued under this section must be published by the Authority in the way appearing to the Authority to be best calculated to bring it to the attention to the public.
 
      (7) A code published under this section and in force at the time when any particular conduct takes place may be relied on so far as it tends to establish whether or not that conduct complies with a statement of principle.
 
      (8) Failure to comply with a statement of principle under this section does not of itself give rise to any right of action by persons affected or affect the validity of any transaction.
 
      (9) A person is not to be taken to have failed to comply with a statement of principle if he shows that, at the time of the alleged failure, it or its associated code of practice had not been published.
 
      (10) The Authority must, without delay, give the Treasury a copy of any statement or code which it publishes under this section.
 
      (11) The power under this section to issue statements of principle and codes of practice-
 
 
    (a) includes power to make different provision in relation to persons, cases or circumstances of different descriptions; and
 
    (b) is to be treated for the purposes of section 2(4)(a) as part of the Authority's rule-making functions.
      (12) The Authority may charge a reasonable fee for providing a person with a copy of a statement or code published under this section.
 
      (13) "Approved person" means a person in relation to whom the Authority has given its approval under section 58.
 
Statements and codes: procedure.     64. - (1) Before issuing a statement or code under section 63, the Authority must publish a draft of it in the way appearing to the Authority to be best calculated to bring it to the attention of the public.
 
      (2) The draft must be accompanied by -
 
 
    (a) a cost benefit analysis; and
 
    (b) notice that representations about the proposal may be made to the Authority within a specified time.
      (3) Before issuing the proposed statement or code, the Authority must have regard to any representations made to it in accordance with subsection (2)(b).
 
      (4) If the Authority issues the proposed statement or code it must publish an account, in general terms, of-
 
 
    (a) the representations made to it in accordance with subsection (2)(b); and
 
    (b) its response to them.
      (5) If the statement or code differs from the draft published under subsection (1) in a way which is, in the opinion of the Authority, significant-
 
 
    (a) the Authority must (in addition to complying with subsection (4)) publish details of the difference; and
 
    (b) those details must be accompanied by a cost benefit analysis.
      (6) Neither subsection (2)(a) nor subsection (5)(b) applies if the Authority considers-
 
 
    (a) that, making the appropriate comparison, there will be no increase in costs; or
 
    (b) that, making that comparison, there will be an increase in costs but the increase will be of minimal significance.
      (7) Subsections (1) to (6) do not apply if the Authority considers that the delay involved in complying with them would prejudice the interests of consumers.
 
      (8) A statement or code must state that it is issued under section 63.
 
      (9) The Authority may charge a reasonable fee for providing a copy of a draft published under subsection (1).
 
      (10) This section also applies to a proposal to alter or replace a statement or code.
 
      (11) "Cost benefit analysis" means an estimate of the costs together with an analysis of the benefits that will arise-
 
 
    (a) if the proposed statement or code is issued; or
 
    (b) if subsection (5)(b) applies, from the statement or code that has been issued.
      (12) "The appropriate comparison" means-
 
 
    (a) in relation to subsection (2)(a), a comparison between the overall position if the statement or code is issued and the overall position if it is not issued;
 
    (b) in relation to subsection (5)(b), a comparison between the overall position after the issuing of the statement or code and the overall position before it was issued.
Disciplinary powers.     65. - (1) The Authority may take action against a person under this section if-
 
 
    (a) it appears to the Authority that he is guilty of misconduct; and
 
    (b) the Authority is satisfied that it is appropriate in all the circumstances to take action against him.
      (2) A person is guilty of misconduct if, while an approved person-
 
 
    (a) he has failed to comply with a statement of principle issued under section 63; or
 
    (b) he has been knowingly concerned in a contravention by the relevant authorised person of a requirement imposed on that authorised person by or under this Act.
      (3) If the Authority is entitled to take action under this section against a person, it may-
 
 
    (a) impose a penalty on him of such amount as it considers appropriate; or
 
    (b) publish a statement of his misconduct.
      (4) The Authority may not take action under this section after the end of the period of two years beginning with the first day on which the Authority knew of the misconduct, unless proceedings in respect of it against the person concerned were begun before the end of that period.
 
      (5) For the purposes of subsection (4)-
 
 
    (a) the Authority is to be treated as knowing of misconduct if it has information from which the misconduct can reasonably be inferred; and
 
    (b) proceedings against a person in respect of misconduct are to be treated as begun when a warning notice is given to him under section 66(1).
      (6) "Approved person" has the same meaning as in section 63.
 
      (7) "Relevant authorised person", in relation to an approved person, means the person on whose application approval under section 58 was given.
 
 
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Prepared 11 February 2000