House of Lords portcullis
House of Lords
Session 1999-2000
Internet Publications
Other Bills before Parliament
Arrangement of Clauses (Contents)

Financial Services and Markets Bill

This is the Financial Services and Markets Bill, as passed by the House of Commons and introduced in the House of Lords on 10th February 2000.

 
EXPLANATORY NOTES

Explanatory Notes to the Bill, prepared by HM Treasury, are published separately as HL Bill 32- EN.


EUROPEAN CONVENTION ON HUMAN RIGHTS

The Lord McIntosh of Haringey has made the following statement under section 19(1)(a) of the Human Rights Act 1998:

In my view the provisions of the Financial Services and Markets Bill are compatible with the Convention rights.


 
 
 
ARRANGEMENT OF CLAUSES

PART I
THE REGULATOR
Clause 
1.The Financial Services Authority.
The Authority's general duties
2.The Authority's general duties.

The regulatory objectives
3.Market confidence.
4.Public awareness.
5.The protection of consumers.
6.The reduction of financial crime.

Arrangements for consulting practitioners and consumers
7.The Authority's general duty to consult.
8.The Practitioner Panel.
9.The Consumer Panel.

Reviews
10.Reviews.
11.Right to obtain documents and information.

Inquiries
12.Cases in which the Treasury may arrange independent inquiries.
13.Power to appoint person to hold an inquiry.
14.Powers of appointed person and procedure.
15.Conclusion of inquiry.
16.Obstruction and contempt.

PART II
REGULATED AND PROHIBITED ACTIVITIES
The general prohibition
17.The general prohibition.

Requirement for permission
18.Authorised persons acting without permission.

Financial promotion
19.Restrictions on financial promotion.

Regulated activities
20.The classes of activity and categories of investment.

Offences
21.Contravention of the general prohibition.
22.False claims to be authorised or exempt.
23.Contravention of section 19.

Enforceability of agreements
24.Agreements made by unauthorised persons.
25.Agreements made through unauthorised persons.
26.Agreements made unenforceable by section 24 or 25.
27.Deposit-taking in breach of general prohibition.
28.Enforceability of agreements resulting from unlawful communications.

PART III
AUTHORISATION AND EXEMPTION
Authorisation
29.Authorised persons.
30.Partnerships and unincorporated associations.

Ending of authorisation
31.Withdrawal of authorisation by the Authority.
32.EEA firms.
33.Treaty firms.
34.Persons authorised as a result of paragraph 1(1) of Schedule 5.

Exercise of EEA rights by UK firms
35.Exercise of EEA rights by UK firms.

Exemption
36.Exemption orders.
37.Exemption of appointed representatives.

PART IV
PERMISSION TO CARRY ON REGULATED ACTIVITIES
Application for permission
38.Application for permission.
39.The threshold conditions.

Permission
40.Giving permission.
41.Imposition of requirements.

Variation and cancellation of Part IV permission
42.Variation etc. at request of authorised person.
43.Variation etc. on the Authority's own initiative.
44.Variation of permission on acquisition of control.
45.Exercise of powers in support of overseas regulator.
46.Prohibitions and restrictions.

Connected persons
47.Persons connected with an applicant.

Additional permissions
48.Authority's duty to consider other permissions etc.

Procedure
49.Applications under this Part.
50.Determination of applications.
51.Refusal of application for permission.
52.Procedure on exercise of the Authority's own-initiative power.
53.Exercise of own-initiative power with immediate effect.

References to the Tribunal
54.Right to refer matters to the Tribunal.

PART V
PERFORMANCE OF REGULATED ACTIVITIES
Prohibition orders
55.Prohibition orders.
56.Prohibition orders: procedure and right to refer to Tribunal.
57.Applications relating to prohibitions: procedure and right to refer to Tribunal.

Approval
58.Approval for particular arrangements.
59.Applications for approval.
60.Determination of applications.
61.Applications for approval: procedure and right to refer to Tribunal.
62.Withdrawal of approval.

Conduct
63.Conduct: statements and codes.
64.Statements and codes: procedure.
65.Disciplinary powers.
66.Disciplinary measures: procedure and right to refer to Tribunal.
67.Notice for payment.
68.Publication.
69.Statement of policy.
70.Statements of policy: procedure.

Breach of statutory duty
71.Actions for damages.

PART VI
OFFICIAL LISTING
The competent authority
72.The competent authority.

The official list
73.The official list.

Listing
74.Applications for listing.
75.Decision on application.
76.Discontinuance and suspension of listing.

Listing particulars
77.Listing particulars and other documents.
78.General duty of disclosure in listing particulars.
79.Supplementary listing particulars.
80.Exemptions from disclosure.
81.Registration of listing particulars.

Prospectuses
82.Prospectuses.
83.Publication of prospectus.
84.Application of this Part to prospectuses.
85.Approval of prospectus where no application for listing.

Compensation
86.Compensation for false or misleading particulars.

Penalties
87.Penalties for breach of listing rules.
88.Warning notices.
89.Statement of policy.
90.Statements of policy: procedure.
91.Appeals against penalties.
92.Notice for payment.

Miscellaneous
93.Obligations of issuers of listed securities.
94.Advertisements etc. in connection with listing applications.
95.Fees.
96.Listing rules: general provisions.
97.Exemption from liability in damages.
98.Interpretation of this Part.

PART VII
CONTROL OF BUSINESS TRANSFERS
99.Control of business transfers.
100.Insurance business transfer schemes.
101.Banking business transfer scheme.
102.Application for order sanctioning transfer scheme.
103.Requirements on applicants.
104.Scheme reports.
105.Right to participate in proceedings.
106.Sanction of the court for business transfer schemes.
107.Effect of order sanctioning business transfer scheme.
108.Rights of certain policyholders.

PART VIII
PENALTIES FOR MARKET ABUSE
Market abuse
109.Market abuse.

The Code
110.The Code.
111.Codes: procedure.
112.Effect of the Code.

Power to impose penalties
113.Power to impose penalties in cases of market abuse.

Statement of policy
114.Statement of policy.
115.Statements of policy: procedure.

Procedure
116.Warning notices.
117.Decision notices and right to refer to Tribunal.
118.Notice for payment.

Miscellaneous
119.Suspension of investigations.
120.Power of court to impose penalty in cases of market abuse.
121.Guidance.
122.Effect on transactions.

PART IX
HEARINGS AND APPEALS
123.The Financial Services and Markets Tribunal.
124.Proceedings: general provision.

Legal assistance before the Tribunal
125.Legal assistance scheme.
126.Provisions of the legal assistance scheme.
127.Funding of the legal assistance scheme.

Appeals
128.Further appeal on a point of law.

PART X
RULES AND GUIDANCE
CHAPTER I
RULE-MAKING POWERS
129.General rule-making power.
130.Non-regulated activity rules.
131.Miscellaneous ancillary matters.
132.Restriction on managers of authorised unit trust schemes.
133.Insurance business rules.
134.Insurance business: regulations supplementing Authority's rules.
135.Endorsement of codes etc. issued by other bodies.

Price stabilising and certain other rules
136.Price stabilising rules.
137.Financial promotion rules.
138.Money laundering rules.

Modification or waiver
139.Modification or waiver of rules.

Contravention of rules
140.Evidential provisions.
141.Actions for damages.
142.Limits on effect of contravening rules.

Procedural provisions
143.Notification of rules to Treasury.
144.Rule-making instruments.
145.Verification of rules.
146.Consultation.
147.General supplementary powers.

CHAPTER II
GUIDANCE
148.Guidance.
149.Notification of guidance to Treasury.

CHAPTER III
COMPETITION SCRUTINY
150.Interpretation.
151.Reports by Director General of Fair Trading.
152.Power of the Director to request information.
153.Consideration by Competition Commission.
154.Role of the Treasury.
155.The Competition Act 1998.

PART XI
INFORMATION GATHERING AND INVESTIGATIONS
Powers to gather information
156.Authority's power to require information.
157.Reports by skilled persons.

Appointment of investigators
158.Appointment of persons to carry out general investigations.
159.Appointment of persons to carry out investigations in particular cases.

Assistance to overseas regulators
160.Investigations etc. in support of overseas regulator.

Conduct of investigations
161.Investigations: general.
162.Powers of persons appointed under section 158.
163.Additional power of persons appointed as a result of section 159(1).
164.Powers of person appointed to investigate as a result of section 159(2).
165.Admissibility of statements made to investigators.
166.Information and documents: supplemental provisions.
167.Entry of premises under warrant.

Offences
168.Offences.

PART XII
CONTROL OVER AUTHORISED PERSONS
Notice of control
169.Obligation to notify the Authority.

Acquiring, increasing and reducing control
170.Acquiring control.
171.Increasing control.
172.Reducing control.

Acquiring or increasing control: procedure
173.Notification.
174.Duty of Authority in relation to notice of control.
175.Approval of acquisition of control.
176.Conditions attached to approval.
177.Objection to acquisition of control.
178.Objection to existing control.
179.Notices of objection under section 178: procedure.

Improperly acquired shares
180.Improperly acquired shares.

Reducing control: procedure
181.Notification.

Offences
182.Offences under this Part.

Miscellaneous
183.Power to change definitions of control etc.

PART XIII
INCOMING FIRMS: INTERVENTION BY AUTHORITY
Interpretation
184.Interpretation of this Part.
185.General grounds on which powers of intervention are exercisable.
186.Exercise of powers in support of overseas regulator.
187.The power of intervention.

Exercise of powers of intervention
188.Procedure.
189.Procedure in cases of urgency.
190.Power to apply to court for injunction in respect of certain overseas insurance companies.
191.Additional procedure for EEA firms in certain cases.

Supplemental
192.Rescission and variation of requirements.
193.Re-issue of certificate of authorisation.
194.Effect of certain requirements on other persons.
195.Actions for damages.

Powers of Director General of Fair Trading
196.Power to prohibit the carrying on of Consumer Credit Act business.
197.Power to restrict the carrying on of Consumer Credit Act business.

PART XIV
DISCIPLINARY MEASURES
198.Public censure.
199.Financial penalties.
200.Proposal to take disciplinary measures.
201.Decision notice.
202.Notice for payment.
203.Publication.
204.Statements of policy.
205.Statements of policy: procedure.

PART XV
THE FINANCIAL SERVICES COMPENSATION SCHEME
The scheme manager
206.The scheme manager.

The scheme
207.The compensation scheme.

Provisions of the scheme
208.General.
209.Rights of the scheme in relevant person's insolvency.
210.Continuity of long-term insurance policies.
211.Insurers in financial difficulties.

Annual report
212.Annual report.

Information and documents
213.Scheme manager's power to require information.
214.Scheme manager's power to inspect information held by liquidator etc.
215.Powers of court where information required.

Miscellaneous
216.Statutory immunity.
217.Management expenses.
218.Scheme manager's power to inspect documents held by Official Receiver etc.

PART XVI
THE OMBUDSMAN SCHEME
The scheme
219.The scheme and the scheme operator.
220.Compulsory jurisdiction.
221.Voluntary jurisdiction.

Determination of complaints
222.Determination under the compulsory jurisdiction.
223.Awards.
224.Costs.

Information
225.Ombudsman's power to require information.
226.Powers of court where information required.
227.Data protection.

Funding
228.Industry funding.

PART XVII
COLLECTIVE INVESTMENT SCHEMES
CHAPTER I
INTERPRETATION
229.Collective investment schemes.
230.Other definitions.

CHAPTER II
RESTRICTIONS ON PROMOTION
231.Restrictions on promotion.
232.Single property schemes.
233.Restriction on approval of promotion.
234.Actions for damages.

CHAPTER III
AUTHORISED UNIT TRUST SCHEMES
Applications for authorisation
235.Applications for authorisation of unit trust schemes.
236.Authorisation orders.
237.Determination of applications.

Applications refused
238.Procedure when refusing an application.

Certificates
239.Certificates.

Rules
240.Rules.
241.Scheme particulars rules.
242.Disqualification of auditor for breach of trust scheme rules.
243.Modification or waiver of rules.

Alterations of schemes
244.Alteration of schemes and changes of manager or trustee.
245.Procedure when refusing approval of change of manager or trustee.

Exclusion clauses
246.Avoidance of exclusion clauses.

Ending of authorisation
247.Revocation of authorisation order otherwise than by consent.
248.Procedure.
249.Requests for revocation of authorisation order.

Powers of intervention
250.Directions.
251.Applications to the court.
252.Procedure: giving directions and varying them otherwise than as requested.
253.Procedure: refusal to revoke or vary direction.
254.Procedure: revocation of direction and grant of request for variation.
255.Procedure in cases of urgency.

CHAPTER IV
OPEN-ENDED INVESTMENT COMPANIES
256.Open-ended investment companies.
257.Amendment of section 716 Companies Act 1985.

CHAPTER V
RECOGNISED OVERSEAS SCHEMES
Schemes constituted in other EEA States
258.Schemes constituted in other EEA States.
259.Representations and references to the Tribunal.
260.Disapplication of rules.
261.Power of Authority to suspend promotion of scheme.

Schemes authorised in designated countries or territories
262.Schemes authorised in designated countries or territories.
263.Procedure.

Individually recognised overseas schemes
264.Individually recognised overseas schemes.
265.Matters that may be taken into account.
266.Applications for recognition of individual schemes.
267.Determination of applications.
268.Procedure when refusing an application.
269.Alteration of schemes and changes of operator, trustee or depositary.

Rules and information gathering: schemes recognised under sections 262 and 264
270.Rules as to scheme particulars.

Revocation of recognition under sections 262 and 264
271.Revocation of recognition.
272.Procedure.

Powers of intervention: schemes recognised under sections 262 and 264
273.Directions.
274.Procedure.
275.Procedure in cases of urgency.

Facilities and information in UK
276.Facilities and information in UK.

CHAPTER VI
INVESTIGATIONS
277.Power to investigate.

PART XVIII
RECOGNISED INVESTMENT EXCHANGES AND CLEARING HOUSES
CHAPTER I
EXEMPTION
General
278.Exemption for recognised investment exchanges and clearing houses.
279.Qualification for recognition.

Applications for recognition
280.Application by an investment exchange.
281.Application by a clearing house.
282.Applications: supplementary.
283.Recognition orders.
284.Liability in relation to recognised body's regulatory functions.
285.Overseas investment exchanges and clearing houses.

Supervision
286.Notification requirements.
287.Modification or waiver of rules.
288.Notification: overseas investment exchanges and overseas clearing houses.
289.Authority's power to give directions.
290.Variation of recognition order in relation to recognised nominee.
291.Revoking recognition.
292.Directions and revocation: procedure.
293.Complaints about recognised bodies.

Other matters
294.Supervision of certain contracts.

CHAPTER II
COMPETITION SCRUTINY
295.Interpretation.
296.Examination of rules and guidance.
297.Continuing scrutiny.
298.Initial report by Director General of Fair Trading.
299.Further reports by Director General of Fair Trading.
300.Reports: supplementary.
301.Investigations by Director General of Fair Trading.
302.Procedure on exercise of certain powers by Treasury.

CHAPTER III
EXCLUSION FROM OTHER UK COMPETITION LAW
The Fair Trading Act 1973
303.Monopoly situations etc.

The Competition Act 1998 (c.41.)
304.The Chapter I prohibition.
305.The Chapter II prohibition.

CHAPTER IV
Interpretation
306.Interpretation of Part XVIII.

PART XIX
LLOYD'S
General
307.Authority's general duty.

The Society
308.The Society: authorisation and permission.

Power to apply Act to Lloyd's underwriting
309.Direction by Authority.
310.The core provisions.
311.Exercise of powers through Council.
312.Consultation.

Former underwriting members
313.Former underwriting members.
314.Requirements imposed under section 313.

Supplemental
315.Interpretation of this Part.

PART XX
PROVISION OF FINANCIAL SERVICES BY MEMBERS OF THE PROFESSIONS
316.Authority's general duty.
317.Designation of professional bodies.
318.Exemption from the general prohibition.
319.Directions in relation to the general prohibition.
320.Orders in relation to the general prohibition.
321.Consultation.
322.Procedure on making or varying orders under section 320.
323.Rules in relation to persons to whom the general prohibition does not apply.

PART XXI
MUTUAL SOCIETIES
Friendly societies
324.The Friendly Societies Commission.
325.The Registry of Friendly Societies.

Building societies
326.The Building Societies Commission.
327.The Building Societies Investor Protection Board.

Industrial and provident societies and credit unions
328.Industrial and provident societies and credit unions.

Supplemental
329.Supplemental provisions.

PART XXII
AUDITORS AND ACTUARIES
Appointment
330.Appointment.

Information
331.Auditor or actuary's access to books etc.
332.Information given by auditor or actuary to the Authority.
333.Information given by auditor or actuary to the Authority: persons with close links.
334.Duty of auditor or actuary resigning etc. to give notice.

Disqualification
335.Disqualification.

Offence
336.Provision of false or misleading information to auditor or actuary.

PART XXIII
PUBLIC RECORD AND DISCLOSURE OF INFORMATION
The public record
337.The record of authorised persons etc.

Disclosure of information
338.Restrictions on disclosure of confidential information by Authority etc.
339.Exceptions from section 338.
340.Disclosure of information by the Inland Revenue.
341.Offences.
342.Removal of other restrictions on disclosure.

PART XXIV
INSOLVENCY
Interpretation
343.Interpretation of this Part.

Voluntary arrangements
344.Authority's powers to participate in proceedings: company voluntary arrangements.
345.Authority's powers to participate in proceedings: individual voluntary arrangements.

Administration orders
346.Petitions.
347.Insurance companies.
348.Administrator's duty to report to Authority.
349.Authority's powers to participate in proceedings.

Receivership
350.Authority's powers to participate in proceedings.
351.Receiver's duty to report to Authority.

Voluntary winding up
352.Authority's powers to participate in proceedings.
353.Insurance companies carrying on long-term business.

Winding up by the court
354.Winding-up petitions.
355.Winding-up petitions: EEA and Treaty firms.
356.Insurance companies: service of petition etc. on Authority.
357.Liquidator's duty to report to Authority.
358.Authority's powers to participate in proceedings.

Bankruptcy
359.Petitions.
360.Insolvency practitioner's duty to report to Authority.
361.Authority's powers to participate in proceedings.

Provisions against debt avoidance
362.Authority's right to apply for an order.

Supplemental provisions concerning insurance companies
363.Continuation of long term business while in liquidation.
364.Reducing the value of contracts instead of winding up.
365.Treatment of assets on winding up.
366.Winding- up rules.

PART XXV
INJUNCTIONS AND RESTITUTION
Injunctions
367.Injunctions.
368.Injunctions in cases of market abuse.

Restitution orders
369.Restitution orders.
370.Restitution orders in cases of market abuse.

Restitution required by Authority
371.Power of Authority to require restitution.
372.Warning notices.
373.Decision notices.
374.Notice for payment.

PART XXVI
NOTICES
Warning notices
375.Warning notices.

Decision notice
376.Decision notices.

The Authority's procedures
377.The Authority's procedures.
378.Statements under section 377: consultation.

PART XXVII
OFFENCES
Miscellaneous offences
379.Misleading statements and practices.
380.Misleading the Authority: residual cases.
381.Misleading the Director General of Fair Trading.

Bodies corporate and partnerships
382.Offences by bodies corporate etc.

Institution of proceedings
383.Proceedings for offences.
384.Power of the Authority to institute proceedings for certain other offences.

PART XXVIII
MISCELLANEOUS
Third countries: Community measures
385.Directions.
386.Interpretation of section 385.
387.Consequences of a direction under section 385.
388.EFTA firms.

International obligations
389.International obligations.

Tax treatment of levies and repayments
390.Tax treatment of levies and repayments.

Gaming contracts
391.Gaming contracts.

PART XXIX
INTERPRETATION
392.Definitions.
393.Carrying on activities in the United Kingdom.
394.Carrying on regulated activities by way of business.
395.Parent and subsidiary undertaking.
396.Group.
397.Controller.
398.Manager.
399.Expressions relating to insurance.
400.Expressions relating to authorisation elsewhere in the single market.
401.Privileged communications.

PART XXX
SUPPLEMENTAL
402.Consequential and supplementary provision.
403.Regulations and orders.
404.Parliamentary control of statutory instruments.
405.Northern Ireland.
406.Commencement.
407.Minor and consequential amendments, transitional provisions and repeals.
408.Short title.
 

SCHEDULES:
    Schedule 1-The Financial Services Authority
    Part I-General
    Part II-Status
    Part III-Penalties and Fees
    Part IV-Miscellaneous.
    Schedule 2-Regulated Activities
    Part I-Regulated Activities
    Part II-Investments
    Part III-Supplemental Provisions
    Schedule 3-EEA Passport Rights
    Part I-Defined terms
    Part II-Exercise of Passport Rights by EEA Firms
    Part III-Exercise of Passport Rights by UK Firms
    Schedule 4-Treaty Rights
    Schedule 5-Persons Concerned in Collective Investment Schemes
    Schedule 6-Threshold Conditions
    Part I-Section 38 Permission
    Part II-Authorisation
    Part III-Additional Conditions
    Schedule 7-Transfer of functions under Part VI
    Schedule 8-Non-listing Prospectuses
    Schedule 9-Compensation: Exemptions
    Schedule 10-Offers of Securities
    Schedule 11-Transfer schemes: certificates
    Part I-Insurance Business Transfer Schemes
    Part II-Banking Business Transfer Schemes
    Schedule 12-The Financial Services and Markets Tribunal
    Part I-General
    Part II-The Tribunal
    Part III-Constitution of Tribunal
    Part IV-Tribunal Procedure
    Schedule 13-Role of the Competition Commission
    Schedule 14-Information and Investigations: Connected Persons
    Part I-Rules for Specific Bodies
    Part II-Additional Rules
    Schedule 15-Prohibitions and Restrictions imposed by Director General of Fair Trading
    Schedule 16-The Ombudsman Scheme
    Part I-General
    Part II-The Scheme Operator
    Part III-The Compulsory Jurisdiction
    Part IV-The Voluntary Jurisdiction
    Schedule 17-Mutuals
    Part I-Friendly Societies
    Part II-Building Societies
    Part III-Industrial and Provident Societies
    Part IV-Credit Unions
    Schedule 18-Minor and Consequential Amendments
    Schedule 19-Repeals
 


 
previous section contents continue
 
House of Lords home page Houses of Parliament home page House of Commons home page search page enquiries

© Parliamentary copyright 2000
Prepared 11 February 2000