Financial Services and Markets Bill - continued        House of Lords

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  PART XXVIII
  MISCELLANEOUS
 
Schemes for reviewing past business
Schemes for reviewing past business.     397. - (1) Subsection (2) applies if the Treasury are satisfied that there is evidence suggesting-
 
 
    (a) that there has been a widespread or regular failure on the part of authorised persons to comply with rules relating to a particular kind of activity; and
 
    (b) that, as a result, private persons have suffered (or will suffer) loss in respect of which authorised persons are (or will be) liable to make payments ("compensation payments").
      (2) The Treasury may by order ("a scheme order") authorise the Authority to establish and operate a scheme for-
 
 
    (a) determining the nature and extent of the failure;
 
    (b) establishing the liability of authorised persons to make compensation payments; and
 
    (c) determining the amounts payable by way of compensation payments.
      (3) An authorised scheme must be made so as to comply with specified requirements.
 
      (4) A scheme order may be made only if-
 
 
    (a) the Authority has given the Treasury a report about the alleged failure and asked them to make a scheme order;
 
    (b) the report contains details of the scheme which the Authority propose to make; and
 
    (c) the Treasury are satisfied that the proposed scheme is an appropriate way of dealing with the failure.
      (5) A scheme order may provide for specified provisions of or made under this Act to apply in relation to any provision of, or determination made under, the resulting authorised scheme subject to such modifications (if any) as may be specified.
 
      (6) For the purposes of this Act, failure on the part of an authorised person to comply with any provision of an authorised scheme is to be treated (subject to any provision made by the scheme order concerned) as a failure on his part to comply with rules.
 
      (7) This section applies whenever the failure in question occurred.
 
      (8) "Authorised scheme" means a scheme authorised by a scheme order.
 
      (9) "Private person" has such meaning as may be prescribed.
 
      (10) "Specified" means specified in a scheme order.
 
 
Third countries: Community measures
Directions.     398. - (1) For the purpose of implementing a third country decision, the Treasury may direct the Authority to-
 
 
    (a) refuse an application for permission under Part IV made by a body incorporated in, or formed under the law of, any part of the United Kingdom;
 
    (b) defer its decision on such an application either indefinitely or for such period as may be specified in the direction;
 
    (c) give a notice of objection to a person who has served a notice of control to the effect that he proposes to acquire a 50% stake in a UK authorised person; or
 
    (d) give a notice of objection to a person who has acquired a 50% stake in a UK authorised person without having served the required notice of control.
      (2) A direction may also be given in relation to-
 
 
    (a) any person falling within a class specified in the direction;
 
    (b) future applications, notices of control or acquisitions.
      (3) The Treasury may revoke a direction at any time.
 
      (4) But revocation does not affect anything done in accordance with the direction before it was revoked.
 
      (5) "Third country decision" means a decision of the Council or the Commission under-
 
 
    (a) Article 7(5) of the investment services directive;
 
    (b) Article 9(4) of the second banking coordination directive;
 
    (c) Article 29b(4) of the first non-life insurance directive; or
 
    (d) Article 32b(4) of the first life insurance directive.
Interpretation of section 398.     399. - (1) For the purposes of section 398, a person ("the acquirer") acquires a 50% stake in a UK authorised person ("A") on first falling within any of the cases set out in subsection (2).
 
      (2) The cases are where the acquirer-
 
 
    (a) holds 50% or more of the shares in A;
 
    (b) holds 50% or more of the shares in a parent undertaking ("P") of A;
 
    (c) is entitled to exercise, or control the exercise of, 50% or more of the voting power in A; or
 
    (d) is entitled to exercise, or control the exercise of, 50% or more of the voting power in P.
      (3) In subsection (2) "the acquirer" means-
 
 
    (a) the acquirer;
 
    (b) any of the acquirer's associates; or
 
    (c) the acquirer and any of his associates.
      (4) "Associate", "shares" and "voting power" have the same meaning as in section 414.
 
Consequences of a direction under section 398.     400. - (1) If the Authority refuses an application for permission as a result of a direction under section 398(1)(a)-
 
 
    (a) subsections (7) to (9) of section 50 do not apply in relation to the refusal; but
 
    (b) the Authority must notify the applicant of the refusal and the reasons for it.
      (2) If the Authority defers its decision on an application for permission as a result of a direction under section 398(1)(b)-
 
 
    (a) the time limit for determining the application mentioned in section 50(1) or (2) stops running on the day of the deferral and starts running again (if at all) on the day the period specified in the direction (if any) ends or the day the direction is revoked; and
 
    (b) the Authority must notify the applicant of the deferral and the reasons for it.
      (3) If the Authority gives a notice of objection to a person as a result of a direction under section 398(1)(c) or (d)-
 
 
    (a) sections 184 and 186 have effect as if the notice was a notice of objection within the meaning of Part XII; and
 
    (b) the Authority must state in the notice the reasons for it.
EFTA firms.     401. - (1) If a third country decision has been taken, the Treasury may make a determination in relation to an EFTA firm which is a subsidiary undertaking of a parent undertaking which is governed by the law of the country to which the decision relates.
 
      (2) "Determination" means a determination that the firm concerned does not qualify for authorisation under Schedule 3 even if it satisfies the conditions in paragraph 13 or 14 of that Schedule.
 
      (3) A determination may also be made in relation to any firm falling within a class specified in the determination.
 
      (4) The Treasury may withdraw a determination at any time.
 
      (5) But withdrawal does not affect anything done in accordance with the determination before it was withdrawn.
 
      (6) If the Treasury make a determination in respect of a particular firm, or withdraw such a determination, they must give written notice to that firm.
 
      (7) The Treasury must publish notice of any determination (or the withdrawal of any determination)-
 
 
    (a) in such a way as they think most suitable for bringing the determination (or withdrawal) to the attention of those likely to be affected by it; and
 
    (b) on, or as soon as practicable after, the date of the determination (or withdrawal).
      (8) "EFTA firm" means a firm, institution or undertaking which-
 
 
    (a) is an EEA firm as a result of paragraph 5(a), (b) or (d) of Schedule 3; and
 
    (b) is incorporated in, or formed under the law of, an EEA State which is not a member State.
      (9) "Third country decision" has the same meaning as in section 398.
 
Gibraltar.     402. - (1) The Treasury may by order-
 
 
    (a) modify Schedule 3 so as to provide for Gibraltar firms of a specified description to qualify for authorisation under that Schedule in specified circumstances;
 
    (b) modify Schedule 3 so as to make provision in relation to the exercise by UK firms of rights under the law of Gibraltar which correspond to EEA rights;
 
    (c) modify Schedule 4 so as to provide for Gibraltar firms of a specified description to qualify for authorisation under that Schedule in specified circumstances;
 
    (d) modify section 259 so as to make provision in relation to collective investment schemes constituted under the law of Gibraltar;
 
    (e) provide for the Authority to be able to give notice under section 259(2) on grounds relating to the law of Gibraltar;
 
    (f) provide for this Act to apply to a Gibraltar recognised scheme as if the scheme were a scheme recognised under section 259.
      (2) The fact that a firm may qualify for authorisation under Schedule 3 as a result of an order under subsection (1) does not prevent it from applying for a Part IV permission.
 
      (3) "Gibraltar firm" means a firm which has its head office in Gibraltar or is otherwise connected with Gibraltar.
 
      (4) "Gibraltar recognised scheme" means a collective investment scheme-
 
 
    (a) constituted in an EEA State other than the United Kingdom, and
 
    (b) recognised in Gibraltar under provisions which appear to the Authority to give effect to the provisions of a relevant Community instrument.
      (5) "Specified" means specified in the order.
 
      (6) "UK firm" and "EEA right" have the same meaning as in Schedule 3.
 
 
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