Financial Services and Markets Bill - continued        House of Lords
PART XVII, COLLECTIVE INVESTMENT SCHEMES - continued

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Powers of intervention
Directions.     253. - (1) The Authority may give a direction under this section if it appears to the Authority that-
 
 
    (a) one or more of the requirements for the making of an authorisation order are no longer satisfied;
 
    (b) the manager or trustee of an authorised unit trust scheme has contravened, or is likely to contravene, a requirement imposed on him by or under this Act;
 
    (c) the manager or trustee of such a scheme has, in purported compliance with any such requirement, knowingly or recklessly given the Authority information which is false or misleading in a material particular; or
 
    (d) none of paragraphs (a) to (c) applies, but it is desirable to give a direction in order to protect the interests of participants or potential participants in such a scheme.
      (2) A direction under this section may-
 
 
    (a) require the manager of the scheme to cease the issue or redemption, or both the issue and redemption, of units under the scheme on a date specified in the direction until such further date as is specified in that or another direction;
 
    (b) require the manager and trustee of the scheme to wind it up by such date as is specified in the direction or, if no date is specified, as soon as practicable.
      (3) If the authorisation order is revoked, the revocation does not affect any direction under this section which is then in force.
 
      (4) A direction may be given under this section in relation to a scheme in the case of which the authorisation order has been revoked if a direction under this section was already in force at the time of revocation.
 
      (5) If a person contravenes a direction under this section, section 146 applies to the contravention as it applies to a contravention mentioned in that section.
 
      (6) The Authority may, either on its own initiative or on the application of the manager or trustee of the scheme concerned, revoke or vary a direction given under this section if it appears to the Authority-
 
 
    (a) in the case of revocation, that it is no longer necessary for the direction to take effect or continue in force;
 
    (b) in the case of variation, that the direction should take effect or continue in force in a different form.
Applications to the court.     254. - (1) If the Authority could give a direction under section 253, it may also apply to the court for an order-
 
 
    (a) removing the manager or the trustee, or both the manager and the trustee, of the scheme; and
 
    (b) replacing the person or persons removed with a suitable person or persons nominated by the Authority.
      (2) The Authority may nominate a person for the purposes of subsection (1)(b) only if it is satisfied that, if the order was made, the requirements of section 239(4) to (7) would be complied with.
 
      (3) If it appears to the Authority that there is no person it can nominate for the purposes of subsection (1)(b), it may apply to the court for an order-
 
 
    (a) removing the manager or the trustee, or both the manager and the trustee, of the scheme; and
 
    (b) appointing an authorised person to wind up the scheme.
      (4) On an application under this section the court may make such order as it thinks fit.
 
      (5) The court may, on the application of the Authority, rescind any such order as is mentioned in subsection (3) and substitute such an order as is mentioned in subsection (1).
 
      (6) The Authority must give written notice of the making of an application under this section to the manager and trustee of the scheme concerned.
 
      (7) The jurisdiction conferred by this section may be exercised by-
 
 
    (a) the High Court;
 
    (b) in Scotland, the Court of Session.
Procedure on giving directions under section 253 and varying them on Authority's own initiative.     255. - (1) A direction takes effect-
 
 
    (a) immediately, if the notice given under subsection (3) states that that is the case;
 
    (b) on such date as may be specified in the notice; or
 
    (c) if no date is specified in the notice, when the matter to which it relates is no longer open to review.
      (2) A direction may be expressed to take effect immediately (or on a specified date) only if the Authority, having regard to the ground on which it is exercising its power under section 253, considers that it is necessary for the direction to take effect immediately (or on that date).
 
      (3) If the Authority proposes to give a direction under section 253, or gives such a direction with immediate effect, it must give separate written notice to the manager and the trustee of the scheme concerned.
 
      (4) The notice must-
 
 
    (a) give details of the direction;
 
    (b) inform the person to whom it is given of when the direction takes effect;
 
    (c) state the Authority's reasons for giving the direction and for its determination as to when the direction takes effect;
 
    (d) inform the person to whom it is given that he may make representations to the Authority within such period as may be specified in it (whether or not he has referred the matter to the Tribunal); and
 
    (e) inform him of his right to refer the matter to the Tribunal.
      (5) The Authority may extend the period allowed under the notice for making representations.
 
      (6) If, having considered any representations made by a person to whom the notice was given, the Authority decides-
 
 
    (a) to give the direction in the way proposed, or
 
    (b) if it has been given, not to revoke the direction,

it must give separate written notice to the manager and the trusteee of the scheme concerned.

      (7) If, having considered any representations made by a person to whom the notice was given, the Authority decides-
 
 
    (a) not to give the direction in the way proposed,
 
    (b) to give the direction in a way other than that proposed, or
 
    (c) to revoke a direction which has effect,

    it must give separate written notice to the manager and the trustee of the scheme concerned.

      (8) A notice given under subsection (6) must inform the person to whom it is given of his right to refer the matter to the Tribunal.
 
      (9) A notice under subsection (7)(b) must comply with subsection (4).
 
      (10) If a notice informs a person of his right to refer a matter to the Tribunal, it must give an indication of the procedure on such a reference.
 
      (11) This section applies to the variation of a direction on the Authority's own initiative as it applies to the giving of a direction.
 
Procedure: refusal to revoke or vary direction.     256. - (1) If on an application under section 253(6) for a direction to be revoked or varied the Authority proposes-
 
 
    (a) to vary the direction otherwise than in accordance with the application, or
 
    (b) to refuse to revoke or vary the direction,

it must give the applicant a warning notice.

      (2) If the Authority decides to refuse to revoke or vary the direction-
 
 
    (a) it must give the applicant a decision notice; and
 
    (b) the applicant may refer the matter to the Tribunal.
Procedure: revocation of direction and grant of request for variation.     257. - (1) If the Authority decides on its own initiative to revoke a direction under section 253 it must give separate written notices of its decision to the manager and trustee of the scheme.
 
      (2) If on an application under section 253(6) for a direction to be revoked or varied the Authority decides to revoke the direction or vary it in accordance with the application, it must give the applicant written notice of its decision.
 
      (3) A notice under this section must specify the date on which the decision takes effect.
 
      (4) The Authority may publish such information about the revocation or variation, in such way, as it considers appropriate.
 
 
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