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Lord Kingsland: My Lords, I shall read carefully in Hansard what the Minister said and will let him know now that I shall return to this matter at Third Reading. Meanwhile, I beg leave to withdraw the amendment.

Amendment No. 183WAA, as an amendment to Amendment No. 183WA, by leave, withdrawn.

On Question, Amendment No. 183WA agreed to.

12.30 a.m.

Lord McIntosh of Haringey moved Amendments Nos. 183XA to 183ZA:



    Page 200, line 43, at end insert--


("( ) But the court may not make an order under subsection (2) if it is satisfied that--
(a) the person concerned believed, on reasonable grounds, that his behaviour did not fall within paragraph (a) or (b) of subsection (1); or
(b) he took all reasonable precautions and exercised all due diligence to avoid behaving in a way which fell within paragraph (a) or (b) of subsection (1).").


    Page 200, line 46, leave out ("(1)") and insert ("(1A)").

The noble Lord said: My Lords, with the leave of the House I shall move Amendments Nos. 183XA to 183ZA en bloc. I beg to move.

On Question, amendments agreed to.

[Amendment No. 183A not moved.]

Lord McIntosh of Haringey moved Amendments Nos. 183AA to 183AC:


    Page 201, line 13, leave out ("paragraph (a) of that subsection") and insert ("subsection (1A)(a)").


    Page 201, line 15, leave out ("paragraph (b) of that subsection") and insert ("subsection (1A)(b)").


    Page 201, line 28, leave out ("(1)") and insert ("(1A)").

9 May 2000 : Column 1534

The noble Lord said: My Lords, with the leave of the House I shall move Amendments Nos. 183AA to 183AC en bloc. I beg to move.

On Question, amendments agreed to.

Clause 378 [Power of Authority to require restitution]:

Lord McIntosh of Haringey moved Amendment No. 183AD:


    Page 201, line 41, leave out ("and") and insert (", or


(b) by taking or refraining from taking any action has required or encouraged another person or persons to engage in behaviour which, if engaged in by the person concerned, would amount to market abuse,
and the condition mentioned in subsection (2A) is fulfilled,
(2A) The condition is--").

The noble Lord said: My Lords, I beg to move.

[Amendment No. 183ADA, as an amendment to Amendment No. 183AD, not moved.]

On Question, Amendment No. 183AD agreed to.

Lord McIntosh of Haringey moved Amendments Nos. 183AE to 183AJ:


    Page 201, line 42, leave out ("him") and insert ("the person concerned").


    Page 201, line 44, at end insert--


("( ) But the Authority may not exercise that power as a result of subsection (2) if, having considered any representations made to it in response to a warning notice, there are reasonable grounds for it to be satisfied that--
(a) the person concerned believed, on reasonable grounds, that his behaviour did not fall within paragraph (a) or (b) of that subsection; or
(b) he took all reasonable precautions and exercised all due diligence to avoid behaving in a way which fell within paragraph (a) or (b) of that subsection.").


    Page 202, line 6, leave out ("(2)") and insert ("(2A)").


    Page 202, line 8, leave out ("(2)") and insert ("(2A)").


    Page 202, line 10, leave out ("(2)") and insert ("(2A)").

The noble Lord said: My Lords, with the leave of the House I shall move Amendments Nos. 183AE to 183AJ en bloc. I beg to move.

On Question, amendments agreed to.

[Amendment No. 183B not moved.]

Lord McIntosh of Haringey moved Amendments Nos. 183C and 183D:


    Page 202, line 16, leave out ("(2)") and insert ("(2A)").


    Page 202, line 18, leave out ("(2)") and insert ("(2A)").

The noble Lord said: My Lords, with the leave of the House I shall move Amendments Nos. 183C and 183D en bloc. I beg to move.

On Question, amendments agreed to.

Clause 381 [Notice for payment]:

Lord McIntosh of Haringey moved Amendment No. 184:


    Leave out Clause 381.

On Question, amendment agreed to.

Clause 383 [Decision notices]:

Lord Bach moved Amendment No. 185:

9 May 2000 : Column 1535


    Page 203, line 35, leave out paragraph (b).

The noble Lord said: My Lords, these amendments represent 12 government amendments; namely, Amendments Nos. 185, 186, 187, 188, 195, 196, 197, 198, 199, 200, 201, and 212A. There are four opposition amendments; namely, Amendments Nos. 188A, 199A, 199B and 199C. I am happy to say that as regards the last amendment the Government accept it and they are grateful to the Opposition for having spotted the point.

Perhaps I may move the government amendments briefly and then invite the Opposition to speak to theirs. The Government's amendments in this group complete the rationalisation of the authority's decision-making procedures under the Bill. They are not very substantial, making a number of necessary further adjustments to Part XXVI mainly to reflect the other amendments we have considered at Report stage.

Clause 383 deals with decision notices. Amendment No. 185 deletes subsection 1(b) which is the requirement for a decision notice to specify the date on which the decision takes effect following the rationalisation. That is otiose because only supervisory notices will be capable of specifying a date on which the decision takes effect. Amendment No. 186 deletes subsection (3) for the same reason.

Clause 384 requires a notice of discontinuance to be issued when the FSA decides not to proceed with action proposed in a warning notice or for which a decision notice has been issued. Amendments Nos. 187 and 188 make minor drafting improvements to Clause 384 to make clear that that also applies where the refusal of an application which has been dropped was not a complete refusal of the original application. The previous text appeared only to apply to a complete refusal.

Clause 387 determines which decisions attract the third party's rights under Clause 388 to receive copies of warning and decision notices, to make representations, refer matters to the tribunal and the rights of access to material under Clause 389. These are the kinds of decisions which we have loosely described as disciplinary-type decisions. As we made clear in Committee, we propose to apply these provisions to certain types of supervisory-type decisions; namely, those which involve the final cancellation of authorisation, approval or recognition.

Amendments Nos. 195 and 197, therefore, add to references to warning and decision notices issued under the second new clause after Clause 51, which deal with the cancellation of a Part 1V permission. Similarly, Amendments Nos. 196 and 198 add references to warning and decision notices issued under Clause 66, which concern the exercise of the FSA's disciplinary powers under Part V of the Bill or the power of the competent authority for listing under Clause 87 to cancel a person's approval to act as sponsor for listing. Again, the Government consider it appropriate to apply Clauses 388 and 389 to these decisions.

9 May 2000 : Column 1536

Amendment No. 199 is a minor drafting change correcting a punctuation omission. Amendment No. 200 adds various references to clauses which involve supervisory notices to Clause 390. Amendment No. 201 alters some of the existing paragraph references in order to refer quickly to those places where the term "supervisory notice" applies. Amendment No. 212A is a consequential amendment. Clause 400 deals with the consequences of a Treasury direction made under Clause 398 in order to implement a third country decision. That is a decision taken by the European Council or the European Commission to restrict market access to persons from certain non-EEA countries on the grounds that reciprocal market access to persons from the EEA is not available in those countries.

Subsection (1) of Clause 400 disapplies the normal warning and decision notice procedure where refusal of an application for permission is given in accordance with such direction. The amendment simply updates the references to the procedural provision in line with Amendments Nos. 107 to 112.

If it is convenient to the House I invite the Opposition to speak to their amendments.

Lord Kingsland: My Lords, the Opposition has four amendments in this group but, as the Minister has kindly said, our Amendment No. 199C has been accepted by the Government for which we are duly grateful.

I shall deal with Amendments Nos. 199A and 199B and then go on to deal with Amendment No. 188A. That may seem numerically illogical but politically my contribution will accordingly rise to a crescendo.

As far as concerns Amendments Nos. 199A and 199B, a major preoccupation for firms that are at present subject to disciplinary proceedings is that the regulator is at a considerable advantage, first, because it possesses a full file of evidence relating to the firm's alleged offence which the firm may not have; and, secondly, because the regulator also possesses full information about its other disciplinary cases which enables it to make a comparison between the seriousness of the offence of the firm in question and other firms' offences. As disciplinary cases are nearly always held in private, this information is never made generally available.

Those two disadvantages are magnified in the case of disciplinary action being taken against an individual, who will not necessarily have access to his own firm's information relating to the circumstances of the alleged offence. Clause 389 gives a statutory right of access to material upon which the authority has relied; and what is now defined as "secondary material", which is other material that the authority has considered and which might undermine that decision.

However, there are significant carve-outs in subsections (2) to (7). One of those exclusions is of particular concern; namely, where the material was taken into account by the authority for the purpose of comparison with other cases. The present regulators

9 May 2000 : Column 1537

are under a duty to exercise their disciplinary powers in a consistent fashion. It is virtually impossible for a firm to prove whether or not it is observing this requirement if it does not have access to other comparable material. Therefore, it is essential that this kind of information is revealed. There is no requirement for full case papers or the names of other firms to be revealed. All that is necessary is for the authority to produce a schedule of the other cases and their key characteristics.

Before I turn to Amendment No. 188A, I should like to make two short observations on Clause 390. I hesitate to continue because I am not certain whether these have been covered completely by Amendment No. 199C. Perhaps the Minister could assist me in this respect.


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