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Lord McIntosh of Haringey: My Lords, it is no disrespect to the amendment to remind the House of the very specialist nature of the clauses that it is proposed to amend. We are talking about a requirement on the authority to give a warning notice under Clause 248 when it has been notified of a proposed change in the identity of either the trustee or the manager.

In Clause 247, the Bill requires the manager to notify a proposal to replace the trustee and the trustee to notify a proposal to replace the manager. The amendment says that the authority has to give a warning notice to both. As the Bill stands, if the authority proposes to refuse to approve such a replacement--and only in those circumstances--it must simply give a warning notice to the party that notified it of the proposal.

The amendment would simply put an extra administrative burden on the FSA and would complicate the procedures. It is not just that extra notices would be required; the issue of a decision notice to persons who have received a warning notice also triggers the right for the party that has been given the notice to refer the matter to the tribunal. It would be quite inappropriate for both parties to have rights of referral to the tribunal when the refusal would generally be counter only to the interests of the party proposing the change, who would not of course be the one whose replacement was being refused.

It is also important that the person who has to present the case, both to the authority and to the tribunal if necessary, is the person who will retain a continuing responsibility for the scheme. He will be the party with the interest in the proposed replacement of the other party and must make the case for it. It may be that the person who is to be replaced wishes to give up his role in relation to the scheme. In such a case, if he were aggrieved by a refusal from the authority effectively to release him from his obligations, he could seek judicial review of the authority's conduct in an appropriate case.

Of course we appreciate that a change in the manager or trustee of a scheme has a significant impact on the regulation of the scheme. It may well be that the authority chooses to discuss the matter with the party who it is proposed to replace. However, that should not be an obligation as suggested in this amendment.

Amendment No. 164A would require the authority to specify a "reasonable" period within which a person to whom it has issued a notice of its proposal to issue a direction under Clause 253 may make representations to the authority. The amendment is unnecessary as the authority, being a public body, is bound in any event to act reasonably. Persons to whom notices are issued would have recourse to the normal legal remedy of judicial review were it not to allow a reasonable period for representations. The amendment would add nothing to that. Moreover, it

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would contrast with similar provisions in other clauses of the Bill; for example, in the second new procedure clause recently inserted after Clause 51. It would also be unhelpful to cast doubt on the authority's duty to act reasonably in these cases by explicitly specifying such a requirement in Clause 255. I hope that noble Lords will not pursue these amendments.

Lord Kingsland: My Lords, I am most grateful to the Minister for his reply. I have heard many reasons for not inserting the word "reasonable" in an Act of Parliament but never that one. So, yet again, the noble Lord has made legislative history.

Lord McIntosh of Haringey: My Lords, it was exactly the same sort of argument.

Lord Kingsland: My Lords, as I said, the Minister has made legislative history yet again. Indeed, the noble Lord has confirmed what I just said.

I make no apology for the fact that these amendments concern very specific matters in the Bill. But, of course, the Bill is about individuals conducting their economic life on a daily basis. These details matter enormously to the success of their enterprise. In my submission, it is perfectly proper for the Opposition to deal with detailed matters by way of amendments where that is appropriate. However, I might have misunderstood what the Minister said.

Lord McIntosh of Haringey: My Lords, I deeply apologise if there was any suggestion in my response that it was inappropriate or improper for the Opposition to raise these matters. I had no intention of giving that impression. I was simply pointing out the very specialist nature of the clauses which it is proposed to amend.

Lord Kingsland: My Lords, I am much obliged to the Minister for his response. Perhaps I read too much into his opening remarks. I thought he was suggesting that the amendment was unnecessary or, perhaps, rather tiresome. However, he clearly took neither view and I am most grateful to him for his clear explanation.

I very much regret that the amendments seem to have had no impact whatever on the Minister. However, he will be relieved to hear that instead of pressing them now I shall read what he has said and consider whether they ought to be brought back at Third Reading. In the meantime I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

11.30 p.m.

Clause 253 [Directions]:

Lord McIntosh of Haringey moved Amendments Nos. 163 and 164:


    Page 132, line 6, leave out from ("scheme") to end of line 8.


    Page 132, line 9, leave out from ("up") to end of line 11.

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The noble Lord said: My Lords, these amendments have already been spoken to with Amendment No. 107. I beg to move Amendments Nos. 163 and 164 en bloc.

On Question, amendments agreed to.

Clause 255 [Procedure on giving directions under section 253 and varying them on Authority's own initiative]:

[Amendment No. 164A not moved.]

Lord McIntosh of Haringey moved Amendments Nos. 165 and 166:


    Page 133, line 29, at end insert--


("( ) If the direction imposes a requirement under section 253(2)(a), the notice must state that the requirement has effect until--
(a) a specified date; or
(b) a further direction.
( ) If the direction imposes a requirement under section 253(2)(b), the scheme must be wound up--
(a) by a date specified in the notice; or
(b) if no date is specified, as soon as practicable.").


    Page 134, line 7, at end insert--


("(12) For the purposes of subsection (1)(c), whether a matter is open to review is to be determined in accordance with section 386(6A).").

The noble Lord said: My Lords, these amendments were debated with Amendment No. 107. I beg to move Amendments Nos. 165 and 166 en bloc.

On Question, amendments agreed to.

Clause 263 [Power of Authority to suspend promotion of scheme]:

Lord McIntosh of Haringey moved Amendment No. 167:


    Page 137, line 29, leave out ("of a kind mentioned in section 234(1)").

The noble Lord said: My Lords, this amendment was debated with Amendment No. 48. I beg to move.

On Question, amendment agreed to.

Clause 264 [Procedure on giving directions under section 263 and varying them on Authority's own initiative]:

Lord McIntosh of Haringey moved Amendment No. 168:


    Page 139, line 28, at end insert--


("(14) For the purposes of subsection (1)(c), whether a matter is open to review is to be determined in accordance with section 386(6A).").

The noble Lord said: My Lords, this amendment was debated with Amendment No. 107. I beg to move.

On Question, amendment agreed to.

Clause 265 [Procedure on application for variation or revocation of direction]:

Lord McIntosh of Haringey moved Amendment No. 169:


    Page 139, line 39, at end insert--


("( ) If the application is refused, the operator of the scheme may refer the matter to the Tribunal.").

9 May 2000 : Column 1505

The noble Lord said: My Lords, this amendment was debated with Amendment No. 107. I beg to move.

On Question, amendment agreed to.

Clause 278 [Procedure on giving directions under section 277 and varying them otherwise than as requested]:

Lord McIntosh of Haringey moved Amendment No. 170:


    Page 146, line 23, at end insert--


("(12) For the purposes of subsection (1)(c), whether a matter is open to review is to be determined in accordance with section 386(6A).").

The noble Lord said: My Lords, this amendment was debated with Amendment No. 107. I beg to move.

On Question, amendment agreed to.

Clause 280 [Power to investigate]:

Lord McIntosh of Haringey moved Amendment No. 170A:


    Page 146, line 40, leave out ("The Authority or the Secretary of State") and insert ("An investigating authority").

The noble Lord said: My Lords, in moving Amendment No. 170A I wish to speak also to Amendments Nos. 170AA, AB, AC, AD, AE, AF, AG, AH, AJ, AK and AL. This group of amendments has come about in part as a result of concerns raised in Committee about the need to align the circumstances in which an investigator appointed under this clause may obtain information subject to banking confidentiality with those set out in Clause 171 for investigations under Part XI.

Amendment No. 170AK amends Clause 280 so that it accords precisely with the circumstances set out in Clause 171 by inserting the provision for banking confidentiality to be lifted when the investigating authority directs, or when the person to whom confidentiality is owed permits. We have also, as I indicated to your Lordships that we would, tabled amendments to introduce further aspects of the Part XI investigations provisions which are appropriate for investigations concerning collective investment schemes. These amendments ensure that the provisions in the Bill are not any less effective than those in the 1986 Act.

Overall, this group streamlines the drafting, and reduces the potential for ambiguity or uncertainty arising from differences in terminology. I have taken the opportunity to supply noble Lords with a copy of Clause 280, as amended by these amendments.

Amendments Nos. 170A, AB, AC, AE and AF are all drafting amendments adjusting the wording of Clause 280 to reflect the use of the term "investigating authority" in Part XI as a result of the amendments we have discussed to that part.

Amendment No. 170AL ensures that the term "investigating authority" has the same meaning as it has under Part XI, that is, either the FSA or the Secretary of State. Amendment No. 170AG is a further consequential drafting change.

Amendment No. 170AD deletes subsection (4) to Clause 280 which allows the administering of oaths to those under investigation. This is unnecessary, and

9 May 2000 : Column 1506

potentially confusing, as Clause 173, which applies to investigations under this clause by virtue of subsection (7), already allows the courts to deal with a person who does not comply with the requirements of the investigations regime as if he were in contempt. Also, Clause 173(4) already makes it an offence to provide false information. Again, this aligns the clause more precisely with Part XI.

Clause 280(7) currently ensures that lawyers may be required to furnish the names of their clients and that liens are not affected by the production of a document. Amendment No. 170AH extends certain other provisions of Clause 171 which are also appropriate to this kind of investigation. These are the powers to take copies or extracts of documents; to require explanations of documents; and to require a person to give an explanation where he fails to produce a document.

Amendment No. 170AJ provides for a power of entry of premises under warrant for collective investment schemes investigations. This is a vital element in ensuring that these powers are effective and it will bring Clause 280 more fully in line with the current position under the Financial Services Act 1986.

Amendment No. 170AA is a drafting amendment which aligns the wording of the Part XVII regime with that of Part XI as regards the persons permitted to conduct investigations.

I hope that noble Lords will appreciate the desirability of these amendments. I beg to move.


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