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Lord Bach: I am grateful to noble Lords who have taken part in this short debate. Perhaps the best way I can answer the noble and learned Lord, Lord Fraser of Carmyllie, is to invite him to consider the comments of his noble friend Lord Jenkin of Roding as to why

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subsection (2) is necessary. It concerns, among other things, the Data Protection Act. I am afraid that I cannot satisfy the noble Lord, Lord Hunt, tonight, although we both considered this problem for many hours on Sub-Committee E in relation to fraud in the Community and Community funds. I hope that I may consider his remarks and write him a short letter on the latest position on this matter as far as the Treasury is concerned.

Lord Elton: I hope that we may receive a rather longer letter on what information the authority is prevented from disclosing. I do not think that what the noble Lord said about the intervention of my noble friend Lord Jenkin of Roding relates to what my noble friend said. He said that there is substantial legislation preventing the disclosure of information by all kinds of people. All the measure we are discussing states is not that that is to be disregarded but that it is to be enforced. It states that the authority may give whatever information it is allowed to give. That comes close to being otiose. We are being required to use that word too often with regard to this Bill.

Lord Bach: The purpose of subsection (2) is to make clear that the authority is not obliged to disclose information which it is under an obligation not to disclose. That can be information on a wide variety of matters; for example, matters which come under the protection of the Data Protection Act. I think that is about as far as I can take it this evening.

Lord Elton: That is why I prefaced my remarks by inviting a letter. However, I think that it will be a fairly long letter.

On Question, amendment agreed to.

Clauses 343 to 345 agreed to.

Lord McIntosh of Haringey moved Amendment No. 266:


    After Clause 345, insert the following new clause--

AUTHORITY'S POWERS TO PARTICIPATE IN PROCEEDINGS: TRUST DEEDS FOR CREDITORS IN SCOTLAND

(" .--(1) This section applies where a trust deed has been granted by or on behalf of a debtor who is an authorised person.
(2) The trustee must, as soon as practicable after he becomes aware that the debtor is an authorised person, send to the Authority--
(a) in every case, a copy of the trust deed;
(b) where any other document or information is sent to every creditor known to the trustee in pursuance of paragraph 5(1)(c) of Schedule 5 to the 1985 Act, a copy of such document or information.
(3) Paragraph 7 of that Schedule applies to the Authority as if it were a qualified creditor who has not been sent a copy of the notice as mentioned in paragraph 5(1)(c) of the Schedule.
(4) The Authority must be given the same notice as the creditors of any meeting of creditors held in relation to the trust deed.
(5) A person appointed for the purpose by the Authority is entitled to attend and participate in (but not to vote at) any such meeting of creditors as if the Authority were a creditor under the deed.

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(6) This section does not affect any right the Authority has as a creditor of a debtor who is an authorised person.
(7) Expressions used in this section and in the 1985 Act have the same meaning in this section as in that Act.").

The noble Lord said: Amendments Nos. 266 to 271 make technical changes to bring this part of the Bill into line with Scots bankruptcy law--about which I know nothing! Amendment No. 272 is a drafting change resulting from earlier amendments to Part VII of the Bill.

Amendment No. 266 is necessary because in England, Wales and Northern Ireland insolvency law provides that an individual who is unable to pay his debts may apply to the court for a moratorium during which he may prepare a proposal to his creditors for settlement of his debts. While this is in force the person is protected against the presentation of a bankruptcy petition.

If an authorised person wished to enter into such an arrangement this would clearly be of interest to the FSA. Therefore Clause 345 gives the FSA various rights in these circumstances, including the right to be heard by the court when the authorised person applies for such a moratorium.

Scotland has a separate law of bankruptcy which makes no provision for individual voluntary arrangements. It does, however, provide for a broadly equivalent procedure: that is to say, a voluntary trust deed for creditors within the meaning of Section 5(4A) of the Bankruptcy (Scotland) Act 1985. The purpose of the trust deed is to allow a person who cannot pay his debts to hand over his assets to a trustee, who will then arrange a settlement with his creditors as an alternative to sequestration in the courts. I hope that the noble and learned Lord, Lord Fraser, will agree that that is an accurate summary of the situation.

The new clause after Clause 345 is intended to provide the FSA with similar rights in respect of voluntary trust deeds entered into by authorised persons in Scotland as it has in respect of individual voluntary arrangements in England, Wales and Northern Ireland.

Amendments Nos. 267 to 271 are also concerned to ensure that the FSA has equivalent rights in Scotland as in the rest of the UK. Clauses 360 and 361, which these amend, deal with the FSA's rights in respect of the bankruptcy or sequestration of authorised persons. In England, Wales and Northern Ireland it is possible to take bankruptcy proceedings only against individuals. In Scotland, however, it is possible to take bankruptcy proceedings against other kinds of entities, such as partnerships, under Section 6 of the Bankruptcy (Scotland) Act 1985. These amendments ensure that the FSA has the same rights in respect of such persons as it does in respect of individuals.

Amendment No. 272 makes a drafting change to Clause 363, which deals with the insolvency of insurance companies. This is necessary to take account of amendments we have made to Part VII of the Bill. I beg to move.

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10 p.m.

Lord Fraser of Carmyllie: I compliment the Minister on what he has said. I took the 1985 Bill through another place. His recollection of its terms is infinitely greater than my own.

On Question, amendment agreed to.

Clauses 346 to 359 agreed to.

Clause 360 [Insolvency practitioner's duty to report to Authority]:

Lord McIntosh of Haringey moved Amendment No. 267:


    Page 188, line 13, at end insert--


("( ) "Individual" includes an entity mentioned in section 361(1)(c).").

On Question, amendment agreed to.

Clause 360, as amended, agreed to.

Clause 361 [Authority's powers to participate in proceedings]:

Lord McIntosh of Haringey moved Amendments Nos. 268 to 271:


    Page 188, line 19, at end insert ("; or


(c) under section 6 of the 1985 Act for the sequestration of the estate belonging to or held for or jointly by the members of an entity mentioned in subsection (1) of that section").
Page 188, line 22, after ("individual") insert ("or entity").


    Page 188, line 29, at end insert ("or entity").


    Page 188, line 39, at end insert--


("( ) "Entity" means an entity which--
(a) is, or has been, an authorised person; or
(b) is carrying on, or has carried on, a regulated activity in contravention of the general prohibition.").

On Question, amendments agreed to.

Clause 361, as amended, agreed to.

Clause 362 agreed to.

Clause 363 [Continuation of long term business while in liquidation]:

Lord McIntosh of Haringey moved Amendment No. 272:


    Page 190, line 6, leave out ("Schedule 2C to the 1982 Act") and insert ("Part VII").

On Question, amendment agreed to.

Clause 363, as amended, agreed to.

Clauses 364 to 366 agreed to.

Clause 367 [Injunctions]:

Lord McIntosh of Haringey moved Amendment No. 273:


    Page 192, line 4, at end insert--


("( ) In the application of subsection (6) to Scotland--
(a) in paragraph (a)(ii) for "which the Authority has power to prosecute under this Act" substitute "mentioned in paragraph (a) or (b) of section 384(1)"; and
(b) in paragraph (b) omit "which the Secretary of State has power to prosecute under this Act".").

The noble Lord said: In moving Amendment No. 273, I shall speak also to Amendments Nos. 274 and 275.

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This part of the Bill gives the FSA and the Secretary of State rights, in certain circumstances, to take out injunctions or interdicts against persons carrying on financial services business and to seek restitution orders against persons engaged in such business. These amendments make technical changes to bring these provisions into line with Scots law.

Clauses 367, 369 and 371 each include a power to take action when a person commits, or may be about to commit, offences created under other legislation which the FSA or the Secretary of State has the power to prosecute--in other words, the offence of insider dealing or an offence under the money laundering legislation.

So far as concerns England, Wales and Northern Ireland, this is satisfactory because the FSA and the Secretary of State have such prosecution powers. In Scotland, however, neither the FSA nor the Secretary of State has powers to prosecute these or any offences because the Lord Advocate is the sole prosecuting authority. The amendments are intended to take account of this by making direct reference to subsection (1) of Clause 384, where the offences which the FSA has the power to prosecute are set out. I beg to move.

On Question, amendment agreed to.

Clause 367, as amended, agreed to.

Clause 368 agreed to.

Clause 369 [Restitution orders]:


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