FINANCIAL SERVICES AND MARKETS BILLGOVERNMENT
AMENDMENTS FOR REPORT STAGE
47. The Committee has already commented
on this bill at the pre-legislative scrutiny stage and when it
was introduced into this House
and also commented on a number of amendments before they were
considered in Committee.
The government has now invited the Committee to consider amendments
to be tabled for Report Stage. These amendments are discussed
in the Treasury's Memorandum which also discusses those amendments
made to the bill in Committee which were not referred to the Committee
at that stage because of the timetable. The Committee has considered
these amendments which have already been made to the bill but
sees no need to comment on them.
REPORT STAGE AMENDMENTS
48. The amendments to clause 19 (nos.
1 to 6)
affect the definition of "engaging in investment activity"
to which the restrictions on financial promotion apply. The amendments
introduce the term "controlled investment" and define
it as an investment of a kind of within a class specified in an
order made by the Treasury. The first order (or an amending order
extending the scope of the controls) will be subject to affirmative
procedure, other orders to negative procedure. There are other
49. The new clause (no. 7)
to be inserted after clause 93 enables the Treasury to
provide by order for competition scrutiny. The Memorandum explains
the need for the new power to which negative procedure applies.
50. Clause 142 confers powers on
the Authority to make rules in relation to the regulation of financial
promotion under Parts II and XVII of the bill. Amendments nos.
limit this rule making power for the reasons given in the Memorandum.
51. The new clause (no. 11)
to be inserted after clause 142 allows the Authority to
make rules which will, in effect, allow firms to operate "Chinese
Walls". The Memorandum explains the need for this and the
consequential amendments (nos. 18 and 19).
52. The amendment to clause 188 (no.
extends the Treasury's power to make orders under that clause
to enable exemptions to be created from the obligations under
clause 174 to notify proposed action affecting control over authorised
persons. Negative procedure applies.
53. Clause 344 allows regulations
made by the Treasury to create exceptions from the restrictions
imposed by clause 343 on the disclosure of confidential information
received by the FSA and others under the bill. The amendments
are intended to meet the criticism of the width of this power
made by the Committee in its Seventh Report when the Committee
urged that the power should be restricted "in a way which
clearly limits it to information needed by regulatory and other
public functions". The Memorandum explains the amendments
which meet the Committee's recommendation.
54. The new clause (no. 20)
to be inserted before clause 398 provides
the Treasury with an order-making power to allow the Authority
to require firms to review their past business and, where appropriate,
make restitution. The power is subject to affirmative procedure
(amendment no. 26).
The Memorandum explains the need for this power.
55. Clause 405 provides that certain
contracts shall not be made void or unenforceable if they are
gaming contracts. Subsection (2) defines such a contract as one
entered into by way of business when the making or performance
of the contract "constitutes a regulated activity falling
within paragraph 2 of Schedule 2". The Memorandum explains
why this provision is defective. The amendments (nos. 21-23)
deal with this but do so by creating a new Treasury order-making
power subject to negative procedure.
56. The new clause (no. 24)
to be inserted after clause 406 allows
the Treasury to make regulations about the service of documents
under the bill. The Memorandum explains the need (regulations
will enable changes to be made to keep up with electronic systems).
Negative procedure applies.
57. Clause 416 allows the Treasury
to make by order transitional provisions. The Memorandum explains
why that clause is not adequate to ensure a smooth transition
from present regulatory system to those under the bill. The new
clause (no. 25)
to be inserted after clause 416 extends the power in clause 416
to cover the matters identified in the Memorandum.
58. The Committee welcomes the amendments
to Clause 344 as meeting our earlier recommendation. Having considered
the Government's other amendments we consider that these raise
no problems either in relation to the delegated powers or to the
parliamentary control provided for these powers.
3 7th report, HL Paper 36. The Government's response
to this report was printed as an Annex to our 8th report, HL Paper
10th report, HL Paper 47. Back
The Treasury's memorandum was prepared on 10 April, before the
Marshalled list was produced. For ease of reference we cross-refer
the Treasury's numbering system with that of the Marshalled list
dated 11 April 2000 (HL Bill 53-I). Nos 1 to 6 translate as Marshalled
amendments 50 to 52 and 54 to 56. Back
Marshalled list no. 128. Back
Marshalled list nos. 153 to 155. Back
Marshalled list no. 156. Back
Marshalled list no. 159. Back
Marshalled list nos. 179 to 183. Back
Marshalled list no. 212. Back
Marshalled list no. 222. Back
Marshalled list nos. 213 to 215. Back
Marshalled list no. 216. Back
Marshalled list no. 220. Back
This report is also published on the Internet at the House of
Lords Select Committee Home Page (http://www.parliament.uk), where
further information about the work of the Committee is also available. Back