Financial Services and Markets Bill - continued        House of Lords
PART X, RULES AND GUIDANCE - continued

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Price stabilising and certain other rules
Price stabilising rules.     141. - (1) The Authority may make rules ("price stabilising rules") as to-
 
 
    (a) the circumstances and manner in which,
 
    (b) the conditions subject to which, and
 
    (c) the time when or the period during which,
  action may be taken for the purpose of stabilising the price of investments of specified kinds.
 
      (2) Price stabilising rules-
 
 
    (a) are to be made so as to apply only to authorised persons;
 
    (b) may make different provision in relation to different kinds of investment.
      (3) The Authority may make rules which, for the purposes of section 392(4)(b), treat a person who acts or engages in conduct-
 
 
    (a) for the purpose of stabilising the price of investments, and
 
    (b) in conformity with such provisions corresponding to price stabilising rules and made by a body or authority outside the United Kingdom as may be specified in the rules under this subsection,
  as acting, or engaging in that conduct, for that purpose and in conformity with price stabilising rules.
 
      (4) The Treasury may by order impose limitations on the power to make rules under this section.
 
      (5) Such an order may, in particular-
 
 
    (a) specify the kinds of investment in relation to which price stabilising rules may make provision;
 
    (b) specify the kinds of investment in relation to which rules made under subsection (3) may make provision;
 
    (c) provide for price stabilising rules to make provision for action to be taken for the purpose of stabilising the price of investments only in such circumstances as the order may specify;
 
    (d) provide for price stabilising rules to make provision for action to be taken for that purpose only at such times or during such periods as the order may specify.
      (6) If provisions specified in rules made under subsection (3) are altered, the rules continue to apply to those provisions as altered, but only if before the alteration the Authority has notified the body or authority concerned (and has not withdrawn its notification) that it is satisfied with its consultation procedures.
 
      (7) "Consultation procedures" has the same meaning as in section 140.
 
Financial promotion rules.     142. - (1) The Authority may make rules applying to authorised persons about the communication of invitations or inducements of a kind mentioned in section 19(1) or 234(1).
 
      (2) Rules under this section may, in particular-
 
 
    (a) make provision about the form and content of communications; and
 
    (b) make provision about the approval by authorised persons of communications by others.
      (3) The Treasury may by order impose limitations on the power to make rules under this section.
 
Money laundering rules.     143. The Authority may make rules in relation to the prevention and detection of money laundering in connection with the carrying on of regulated activities by authorised persons.
 
 
Modification or waiver
Modification or waiver of rules.     144. - (1) This section applies in relation to the following-
 
 
    (a) auditors and actuaries rules;
 
    (b) financial promotion rules;
 
    (c) general rules;
 
    (d) insurance business rules;
 
    (e) money laundering rules; and
 
    (f) price stabilising rules.
      (2) The Authority may, on the application or with the consent of an authorised person, direct that all or any of the rules to which this section applies-
 
 
    (a) are not to apply to the authorised person; or
 
    (b) are to apply to him with such modifications as may be specified in the direction.
      (3) An application must be made in such manner as the Authority may direct.
 
      (4) The Authority may not give a direction unless it is satisfied that-
 
 
    (a) compliance by the authorised person with the rules, or with the rules as unmodified, would be unduly burdensome or would not achieve the purpose for which the rules were made; and
 
    (b) the direction would not result in undue risk to persons whose interests the rules are intended to protect.
      (5) A direction may be given subject to conditions.
 
      (6) Unless it is satisfied that it is inappropriate or unnecessary to do so, a direction must be published by the Authority in such a way as it thinks most suitable for bringing the direction to the attention of-
 
 
    (a) those likely to be affected by it; and
 
    (b) others who may be likely to make an application for a similar direction.
      (7) In deciding whether it is satisfied as mentioned in subsection (6), the Authority must-
 
 
    (a) take into account whether the direction relates to a rule contravention of which is actionable in accordance with section 146;
 
    (b) consider whether its publication would prejudice, to an unreasonable degree, the commercial interests of the authorised person concerned or any other member of his immediate group; and
 
    (c) consider whether its publication would be contrary to an international obligation of the United Kingdom.
      (8) For the purposes of paragraphs (b) and (c) of subsection (7), the Authority must consider whether it would be possible to publish the direction without either of the consequences mentioned in those paragraphs by publishing it without disclosing the identity of the authorised person concerned.
 
      (9) The Authority may-
 
 
    (a) revoke a direction; or
 
    (b) vary it on the application, or with the consent, of the authorised person to whom it relates.
      (10) "Direction" means a direction under subsection (2).
 
      (11) "Immediate group", in relation to an authorised person ("A"), means-
 
 
    (a) A;
 
    (b) a parent undertaking of A;
 
    (c) a subsidiary undertaking of A;
 
    (d) a subsidiary undertaking of a parent undertaking of A;
 
    (e) a parent undertaking of a subsidiary undertaking of A.
 
Contravention of rules
Evidential provisions.     145. - (1) If a particular rule so provides, contravention of the rule does not give rise to any of the consequences provided for by other provisions of this Act.
 
      (2) A rule which so provides must also provide-
 
 
    (a) that contravention may be relied on as tending to establish contravention of such other rule as may be specified; or
 
    (b) that compliance may be relied on as tending to establish compliance with such other rule as may be specified.
      (3) A rule may include the provision mentioned in subsection (1) only if the Authority considers that it is appropriate for it also to include the provision required by subsection (2).
 
Actions for damages.     146. - (1) A contravention by an authorised person of a rule is actionable at the suit of a private person who suffers loss as a result of the contravention, subject to the defences and other incidents applying to actions for breach of statutory duty.
 
      (2) If rules so provide, subsection (1) does not apply to contravention of a specified provision of those rules.
 
      (3) If rules so provide, a contravention of a specified provision of those rules is to be actionable at the suit of a person other than a private person if he suffers loss as a result of the contravention, subject to the defences and other incidents applying to actions for breach of statutory duty.
 
      (4) In subsections (1) and (3) "rule" does not include-
 
 
    (a) listing rules; or
 
    (b) a rule requiring an authorised person to have or maintain financial resources.
      (5) "Private person" has such meaning as may be prescribed.
 
Limits on effect of contravening rules.     147. - (1) A person is not guilty of an offence by reason of a contravention of a rule made by the Authority.
 
      (2) No such contravention makes any transaction void or unenforceable.
 
 
Procedural provisions
Notification of rules to Treasury.     148. - (1) If the Authority makes any rules, it must give a copy to the Treasury without delay.
 
      (2) If the Authority alters or revokes any rules, it must give written notice to the Treasury without delay.
 
      (3) Notice of an alteration must include details of the alteration.
 
Rule-making instruments.     149. - (1) Any power conferred on the Authority to make rules is exercisable in writing.
 
      (2) An instrument by which rules are made by the Authority ("a rule-making instrument") must specify the provision under which the rules are made.
 
      (3) To the extent to which a rule-making instrument does not comply with subsection (2), it is void.
 
      (4) A rule-making instrument must be published by the Authority in the way appearing to the Authority to be best calculated to bring it to the attention of the public.
 
      (5) The Authority may charge a reasonable fee for providing a person with a copy of a rule-making instrument.
 
      (6) A person is not to be taken to have contravened any rule made by the Authority if he shows that at the time of the alleged contravention the rule-making instrument concerned had not been made available in accordance with this section.
 
Verification of rules.     150. - (1) The production of a printed copy of a rule-making instrument purporting to be made by the Authority-
 
 
    (a) on which is endorsed a certificate signed by a member of the Authority's staff authorised by it for that purpose, and
 
    (b) which contains the required statements,
  is evidence (or in Scotland sufficient evidence) of the facts stated in the certificate.
 
      (2) The required statements are-
 
 
    (a) that the instrument was made by the Authority;
 
    (b) that the copy is a true copy of the instrument; and
 
    (c) that on a specified date the instrument was made available to the public in accordance with section 149(4).
      (3) A certificate purporting to be signed as mentioned in subsection (1) is to be taken to have been properly signed unless the contrary is shown.
 
      (4) A person who wishes in any legal proceedings to rely on a rule-making instrument may require the Authority to endorse a copy of the instrument with a certificate of the kind mentioned in subsection (1).
 
Consultation.     151. - (1) If the Authority proposes to make any rules, it must publish a draft of the proposed rules in the way appearing to it to be best calculated to bring them to the attention of the public.
 
      (2) The draft must be accompanied by-
 
 
    (a) a cost benefit analysis;
 
    (b) an explanation of the purpose of the proposed rules;
 
    (c) an explanation of the Authority's reasons for believing that making the proposed rules is compatible with its general duties under section 2; and
 
    (d) notice that representations about the proposals may be made to the Authority within a specified time.
      (3) In the case of a proposal to make rules under a provision mentioned in subsection (9), the draft must also be accompanied by details of the expected expenditure by reference to which the proposal is made.
 
      (4) Before making the proposed rules, the Authority must have regard to any representations made to it in accordance with subsection (2)(d).
 
      (5) If the Authority makes the proposed rules, it must publish an account, in general terms, of-
 
 
    (a) the representations made to it in accordance with subsection (2)(d); and
 
    (b) its response to them.
      (6) If the rules differ 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 (5)) publish details of the difference; and
 
    (b) those details must be accompanied by a cost benefit analysis.
      (7) Subsections (1) to (6) do not apply if the Authority considers that the delay involved in complying with them would be prejudicial to the interests of consumers.
 
      (8) Neither subsection (2)(a) nor subsection (6)(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.
      (9) Neither subsection (2)(a) nor subsection (6)(b) requires a cost benefit analysis to be carried out in relation to rules made under-
 
 
    (a) section 133(2);
 
    (b) subsection (1) of section 209 as a result of subsection (4) of that section;
 
    (c) section 230;
 
    (d) paragraph 17 of Schedule 1.
      (10) "Cost benefit analysis" means an estimate of the costs together with an analysis of the benefits that will arise-
 
 
    (a) if the proposed rules are made; or
 
    (b) if subsection (6) applies, from the rules that have been made.
      (11) "The appropriate comparison" means-
 
 
    (a) in relation to subsection (2)(a), a comparison between the overall position if the rules are made and the overall position if they are not made;
 
    (b) in relation to subsection (6)(b), a comparison between the overall position after the making of the rules and the overall position before they were made.
      (12) The Authority may charge a reasonable fee for providing a person with a copy of a draft published under subsection (1).
 
General supplementary powers.     152. - (1) Rules made by the Authority may make different provision for different cases and may, in particular, make different provision in respect of different descriptions of authorised person, activity or investment.
 
      (2) Rules made by the Authority may contain such incidental, supplemental, consequential and transitional provision as the Authority considers appropriate.
 
  CHAPTER II
  GUIDANCE
Guidance.     153. - (1) The Authority may give guidance consisting of such information and advice as it considers appropriate-
 
 
    (a) with respect to the operation of this Act and of any rules made under it;
 
    (b) with respect to any matters relating to functions of the Authority;
 
    (c) for the purpose of meeting the regulatory objectives;
 
    (d) with respect to any other matters about which it appears to the Authority to be desirable to give information or advice.
      (2) The Authority may give financial or other assistance to persons giving information or advice of a kind which the Authority could give under this section.
 
      (3) If the Authority proposes to give guidance to regulated persons generally, or to a class of regulated person, in relation to rules to which those persons are subject, subsections (1), (2) and (4) to (10) of section 151 apply to the proposed guidance as they apply to proposed rules.
 
      (4) The Authority may-
 
 
    (a) publish its guidance;
 
    (b) offer copies of its published guidance for sale at a reasonable price; and
 
    (c) if it gives guidance in response to a request made by any person, make a reasonable charge for that guidance.
      (5) In this Chapter, references to guidance given by the Authority include references to any recommendation made by the Authority to persons generally, to regulated persons generally or to any class of regulated person.
 
      (6) "Regulated person" means any-
 
 
    (a) authorised person;
 
    (b) person who is otherwise subject to rules made by the Authority.
Notification of guidance to Treasury.     154. - (1) On giving any general guidance, the Authority must give the Treasury a copy of the guidance without delay.
 
      (2) If the Authority alters any of its general guidance, it must give written notice to the Treasury without delay.
 
      (3) The notice must include details of the alteration.
 
      (4) If the Authority revokes any of its general guidance, it must give written notice to the Treasury without delay.
 
      (5) "General guidance" means guidance given by the Authority under section 153 which is-
 
 
    (a) given to persons generally, to regulated persons generally or to a class of regulated person;
 
    (b) intended to have continuing effect; and
 
    (c) given in writing or other legible form.
      (6) "Regulated person" has the same meaning as in section 153.
 
 
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