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Lord McIntosh of Haringey moved Amendments Nos. 275Q, 275R and 276:



    Page 198, line 13, at end insert--


("(2A) But the procedure may permit a decision which gives rise to an obligation to give a supervisory notice to be taken by a person other than a person mentioned in subsection (2) if--
(a) the Authority considers that, in the particular case, it is necessary in order to protect the interests of consumers; and
(b) the person taking the decision is of a level of seniority laid down by the procedure.
(2B) A level of seniority laid down by the procedure for the purposes of subsection (2A)(b) must be appropriate to the importance of the decision.").
Page 198, line 14, leave out ("publish") and insert ("issue").

The noble Lord said: I beg to move Amendments Nos. 275Q to 276 en bloc.

On Question, amendments agreed to.

[Amendment No. 276YA not moved.]

Lord McIntosh of Haringey moved Amendment No. 276ZA:


    Page 198, line 27, leave out ("warning notice or decision").

On Question, amendment agreed to.

[Amendment No. 276A not moved.]

Lord McIntosh of Haringey moved Amendment No. 276AA:


    Page 198, line 29, at end insert--


("( ) "Supervisory notice" means a notice given in accordance with section--
(a) (Procedure on giving directions under section 250 or varying them on Authority's own initiative)(3), (6) or (7)(b);
(b) (Procedure on giving directions under section 261 or varying them on Authority's own initiative)(3), (6) or (7)(b);

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(c) (Procedure on giving directions under section 273 or varying them on Authority's own initiative) (3), (7)(a) or (9)(a) (as a result of subsection (8)(b)); or
(d) 314(2) or (4).").

On Question, amendment agreed to.

Clause 377, as amended, agreed to.

Clause 378 agreed to.

Clause 379 [Misleading statements and practices]:

[Amendments Nos. 276AB and 276AC not moved.]

Clause 379 agreed to.

Clauses 380 and 381 agreed to.

11.15 p.m.

Clause 382 [Offences by bodies corporate etc.]

Lord Kingsland moved Amendment No. 276B:


    Page 201, line 13, leave out ("in") and insert ("constituted under the law of").

The noble Lord said: As the Committee is aware, an English limited partnership is not a legal entity and therefore each partner is treated as committing an offence committed by any of them while acting as a partner. Subsection (3) therefore provides for exemptions. The amendment makes sense of subsection (3). Conversely, it is ridiculous to think that there are exemptions for partners of any partnership provided only that the offence is committed in England.

So far as concerns Amendment No. 276C, subsection (4) is the opposite of subsection (3). It surely relates to a Scottish limited partnership, which is a legal entity. This is why the liability provisions are set out in the same language as those for a body corporate in subsection (1). Again, it does not make any sense that any kind of partnership will have its partners liable on this basis provided only that the offence is committed in Scotland. I beg to move.

Lord McIntosh of Haringey: These amendments seek to replace the definition of a partnership "in" England or Scotland with the formula of a partnership "constituted under the laws of" England or Scotland.

I am grateful to the noble Lord for bringing forward these amendments. I can see that there might be some confusion as to whether what is being referred to in subsections (3) and (4) is the "nationality" of the partnership--that is, whether it is constituted under English, Scots or Northern Ireland law--or the territory in which the offence may have been committed.

Unfortunately, I am unable to accept the amendments as they stand. Although they would leave the Bill in a form which might cover partnerships formed in any part of the UK, they would not cover a partnership constituted under the laws of a foreign state. Since it is possible for such partnerships to do business in the UK, and to commit offences in the UK, it is clearly necessary that the Bill should enable us to deal with such persons.

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I can assure the noble Lord, Lord Kingsland, that we are aware that there is a problem and that we intend to bring forward amendments which will deal with the problem he has identified.

Lord Kingsland: I can hardly believe it. I think that is four in a row. I am very much obliged to the Minister.

Lord McIntosh of Haringey: Let me assure the noble Lord that I went further this time than I went last time.

Lord Kingsland: I am extremely happy to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 276C not moved.]

Clause 382 agreed to.

Clauses 383 to 388 agreed to.

Lord McIntosh of Haringey moved Amendment No. 276D:


    After Clause 388, insert the following new clause--

GIBRALTAR

(" .--(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 258 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 258(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 258.
(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.").

The noble Lord said: I gave notice of this amendment in the Second Reading debate. This is a new clause which has been introduced to take account of several matters arising from Gibraltar's status within the European Economic Area.

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The provisions of the treaty relating to the right of establishment and the freedom to supply services apply to Gibraltar. However, Gibraltar is not a separate member state in its own right, but its nationals have rights to passport into other member states on the basis that it is part of the UK for these purposes.

Because of this unique status, there is no Community obligation to provide the passporting mechanism between the UK and Gibraltar. However, it has been the established policy of the previous Government and of this one to provide for an "internal passport" between Gibraltar and the UK for the activities covered by the passport directives, as and when we are satisfied with the relevant regulatory standards in Gibraltar. The clause provides the necessary mechanism for this. It carries forward existing provisions (subsection (1)(a)) in the relevant regulations which give the Treasury the power to extend the passport arrangements to Gibraltar firms which are covered by one of the single market directives.

At present, if they comply with the relevant notification procedure, Gibraltar insurance companies are allowed to passport their services into the UK. Similarly, Gibraltar credit institutions are allowed to passport into the UK for the provision of banking services. But this does not yet extend to investment services; investment firms have not yet been granted the right to passport into the UK. The Gibraltar insurance companies and credit institutions which benefit from this passport will continue to do so. Further passport rights will be granted as and when we are satisfied with the relevant regulatory standards in Gibraltar. As now, the passport will be optional and not an exclusive route to authorisation. Gibraltar firms will still have the option of seeking Part IV permissions.

The clause also enables the Treasury to enable firms from other EEA states which have exercised passport rights to branch or provide services into Gibraltar to then exercise those rights in relation to the United Kingdom proper without going through the full directive notification requirements. The phrase "or otherwise connected with Gibraltar" ensures that the power is broad enough to cover such firms. Without this, we might be in breach of our obligations under the directives.

The clause also gives the Treasury the power under subsection (1)(b) to extend the application of Schedule 4 so that a Gibraltar firm can exercise treaty rights if it is authorised by the Gibraltar competent authority and the relevant conditions in Schedule 4 are met. Subsection (1)(c) gives the Treasury the power, by order, to extend the application of Part III of Schedule 3 in relation to the exercise by UK firms of rights to establish branches or to provide services into Gibraltar in accordance with the equivalent provisions under Gibraltar law.

Subsection (1)(e) enables the Treasury to modify the provisions of Clause 258 so that the authority can refuse to admit a collective investment scheme from

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another member state if the way in which it proposes to market its units is incompatible with requirements imposed in Gibraltar in the general good. This is necessary to accommodate the possibility that a collective investment scheme from another member state may acquire an automatic right to sell units in Gibraltar once it is recognised by virtue of Clause 258. The clause will confer no new rights on Gibraltar firms until the relevant powers are exercised, but existing rights will continue. I beg to move.


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