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Lord Stewartby: I wish to comment on one or two aspects of the drafting of the clause which has become a little more complicated since the introduction of Amendment No. 253, to which the noble Lord has just spoken.

Clause 231(1) is a blanket statement which the remainder of the clause goes on to limit in a substantial way. It is likely to be limited even more if the Treasury makes orders under the new subsections (5A) and (5B). Subsections (1) and (2) are a single sentence. Subsection (2) is, in many ways, the more important part because the exemptions are a large part of the total. If the language of the clause has not yet reached its final form, perhaps the Minister will consider whether it would be better to run those two subsections together.

The Minister partly answered my second point when he said that the four different categories in paragraphs (a) to (d) of subsection (5B) of his amendment are alternatives. What is meant by,

and how is that not covered by either paragraphs (b) or (d)?

In relation to subsection (3), the Minister gave an explanation of the Treasury's ability to repeal that by order--which I shall have to read tomorrow in the written text--but, again, is this something which is imminent?

Lord Jenkin of Roding: Before the Minister replies, perhaps I may ask him a question. Presumably subsection (5C), to which my noble friend Lord Stewartby referred, will be included in the report to the Delegated Powers and Deregulation Committee. Is it intended that this should be subject to an affirmative or negative resolution procedure? It will change the Bill; in its own way, it is a Henry VIII clause. It would be helpful if the Minister could give an indication of the Government's intentions.

Lord McIntosh of Haringey: Perhaps I may start with the point made by the noble Lord, Lord Jenkin. Yes, of course it will be included in the submission to the Delegated Powers and Deregulation Committee. It is too early to say whether we shall recommend or the committee will require that it should be subject to

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affirmative resolution. With the change from host state to home state regimes, this is a time-limited exercise. The horrific complication of the language--which I perfectly well recognise--is required because we are in the middle of that changing process and we have to legislate now.

The noble Lord asked me the significance of subsection (5B) and whether it would be enough to have a specified description of countries. We want to be as precise as we can and aim at recognised groups--for example, all EEA countries. We could, of course, have a specified description but--although still necessary--it would be less helpful than being as precise as we are in paragraphs (b), (c) and (d).

The repeal of subsection (3) is not imminent. Although it is a time-bound process, it is not one in which the end is in sight, or even in which the time-scale is known. The noble Lord, Lord Stewartby, made some interesting points about the drafting of the earlier parts of the clause and about perhaps combining subsections (1) and (2). I should like to think about that to see whether it is feasible. I shall write to the noble Lord about that. I am sure that I will be presented with all kinds of reasons why it is not feasible, but that does not deter me from attempting to explain it to the noble Lord.

Lord Kingsland: I thank the Minister for his very full response to my amendment. It gave me some comfort, but not by any means complete comfort. I shall look at the transcript in Hansard and consider what further initiatives I may take at Report stage. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 252C and 252D not moved.]

Lord McIntosh of Haringey moved Amendment No. 253:

    Page 119, line 25, at end insert--

("(5A) The Treasury may by order specify circumstances in which subsection (1) does not apply.
(5B) An order under subsection (5A) may, in particular, provide that subsection (1) does not apply in relation to communications--
(a) of a specified description;
(b) originating in a specified country or territory outside the United Kingdom;
(c) originating in a country or territory which falls within a specified description of country or territory outside the United Kingdom; or
(d) originating outside the United Kingdom.
(5C) The Treasury may by order repeal subsection (3).").

On Question, amendment agreed to.

[Amendment No. 253A not moved.]

Clause 231, as amended, agreed to.

Clause 232 [Single property schemes]:

On Question, Whether Clause 232 shall stand part of the Bill?

Lord Jenkin of Roding: Before we decide whether Clause 232 should stand part of the Bill, I should like

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to ask the Minister a question. I apologise to the noble Lord--I should have given him notice of this--but it is a fairly simple question. Clause 232 gives the Treasury power to exempt single property schemes from Clause 231(1). I was aware some years ago that considerable efforts were made to try to "securitise", I think was the expression, individual commercial properties with a view to making them more marketable. My impression at the time was that they never got off the ground; there were no successful moves in that direction. Are the Government anticipating that this power of exemption is likely to be used in the near future? What circumstances have prompted the Government to include this clause?

It seems quite right that they should be exempted as they will be investments directed at a very special class of investor. I can understand that. I hope that normal members of the public will be a bit chary about going into that kind of thing. But none the less, given that that is the case, are the Government contemplating an exemption order fairly soon?

Lord McIntosh of Haringey: This provision has been in legislation in almost identical terms since the Financial Services Act 1986. As the noble Lord, Lord Jenkin, said, it has not worked very well. We have no particular knowledge to suggest that it will work any better in the future, but we thought we should carry forward the provision in case it does work and we need to make the exemption.

Lord Jenkin of Roding: I thank the Minister for that reply.

Clause 232 agreed to.

Clauses 233 and 234 agreed to.

Clause 235 [Applications for authorisation of unit trust schemes]:

Lord Kingsland moved Amendment No. 253B:

    Page 120, line 36, after ("information") insert ("or documents").

The noble Lord said: In moving Amendment No. 253B, I shall speak also to my other amendments in the group.

The amendment relates to the requirement in Clause 236(1)(c) that an application for authorisation of a unit trust under Clause 235 must include a copy of the trust deed and a certificate signed by a solicitor that the trustee complies with the authority's regulations. This requirement, apparently, has its history in the procedures adopted by the Department of Trade and Industry prior to the Financial Services Act. In our view, it would be better and more flexible for the Bill to allow the authority to stipulate its requirements for authorisation under Clause 235(3), rather than including a requirement of this kind, which may not always be appropriate, on the face of the Bill.

Amendments Nos. 254A and 254C relate to the same basic proposition that the UCITS European directive requirement that unit holders must have a right to repurchase their units, which is interpreted by the authority as requiring a redemption date once every two weeks, should only be required to apply to

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UCITS qualifying unit trusts. That would then allow, assuming the authority so permitted, authorised unit trusts with limited redemption rights or redemption rights subject to conditions. An example would be an authorised unit trust established for stakeholder pension purposes, such as a pooled pension investment.

At present, the authority takes the view that an authorised securities fund cannot be established as a pooled pension investment because, in order to satisfy the pension requirements, the investor must accept restrictions on his ability to redeem. An authorised unit trust established as a feeder fund can, it appears, be established as a pooled pension investment. But that adds another fund layer to the structure. It is therefore plainly inefficient. These amendments would allow an authorised securities-type fund to be established as a pooled pension investment with restrictions on redemption consistent with the requirements for pensions. I beg to move.

6 p.m.

Lord McIntosh of Haringey: I do not recognise what the noble Lord is saying as relating to Amendment No. 253B, which seeks to add the words "or documents" to "information". I am a little taken aback.

Lord Kingsland: I am speaking to Clause 236, page 121, line 19.

Lord McIntosh of Haringey: That is in the next grouping.

Lord Kingsland: I beg the noble Lord's pardon and indeed the Committee's pardon.

Lord Strabolgi: The amendment before the Committee is Amendment No. 253B.

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