Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
Objectives of FSA etc
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If members of staff of the FSA are transferred to the consumer financial education body, the transfer is to be regarded for the purposes of TUPE as a relevant transfer, whether or not it would otherwise be so regarded.
In subsection (7)—“the consumer financial education body” has the same meaning as in section 6A of the Financial Services and Markets Act 2000,“the FSA” means the Financial Services Authority, and“TUPE” means the Transfer of Undertakings (Protection of Employment) Regulations 2006.
The Financial Services and Markets Act 2000 is amended as follows.
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In section 194 (general grounds on which power of intervention is exercisable)—
in subsection (1), for paragraph (c) substitute—, and
after that subsection insert—
Remuneration of executives of authorised persons
The Treasury may make provision by regulations about the preparation, approval and disclosure of executives' remuneration reports.
An executives' remuneration report is a report containing information about—
the remuneration of relevant executives of an authorised person, or
anything connected with the remuneration of relevant executives of an authorised person.
The following are relevant executives of an authorised person—
officers of the authorised person,
employees of the authorised person who fall within a prescribed description, and
other individuals who have a prescribed connection with the authorised person.
The individuals who may fall within subsection (3)(c) include any description of—
individuals who provide services, or whose services are provided (directly or indirectly), to the authorised person, or
individuals who are officers or employees of a member of the same group as the authorised person.
Regulations under this section may apply in relation to a prescribed description of authorised person.
Regulations under this section are subject to affirmative resolution procedure.
Regulations under section 4 may, in particular, make provision as to—
the information that must be contained in an executives' remuneration report,
how information is to be set out in the report, and
what is to be the auditable part of the report.
The information that may be required to be contained in an executives' remuneration report includes—
information corresponding to information that could be required by regulations under section 421 of the Companies Act 2006 to be contained in a directors' remuneration report, and
information comparing the remuneration of relevant executives of an authorised person with the remuneration of employees of the authorised person who fall within a prescribed description.
Regulations under section 4 may, in particular, make provision —
for the filing of executives' remuneration reports with the registrar of companies for any part of the United Kingdom or with the FSA, and
for the publication by the FSA of reports filed with it.
Regulations under section 4 may apply any provision made by or under the Companies Act 2006 relating to directors' remuneration reports, subject to such exceptions, adaptations and modifications as the Treasury consider appropriate.
The provisions that may be applied include provisions creating offences; but the regulations may not impose a liability for an offence which is more onerous than the liability for the offence under the applied provision.
Regulations under section 4 may provide that any requirement imposed on an authorised person by the regulations is to be treated for the purposes of prescribed provisions of the Financial Services and Markets Act 2000 as if it had been imposed on the person by a provision of that Act.
For the purposes of section 4 and this section—“authorised person” has the same meaning as in the Financial Services and Markets Act 2000 (see section 31),“the FSA” means the Financial Services Authority,“group” has the same meaning as in the Financial Services and Markets Act 2000 (see section 421),“officer”—in relation to a partnership, means a partner, and in relation to a body corporate whose affairs are managed by its members, means a member, and“prescribed” means specified in, or determined in accordance with, regulations under section 4.
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Recovery and resolution plans
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Short selling
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FSA's disciplinary powers
In Part 14 of the Financial Services and Markets Act 2000 (disciplinary measures), after section 206 insert—
In section 206 of the Financial Services and Markets Act 2000 (financial penalties), omit subsection (2) (which prevents the FSA from imposing a penalty under that section as well as withdrawing a person's authorisation under section 33).
In the Financial Services and Markets Act 2000, after section 63 insert—
Section 66 of the Financial Services and Markets Act 2000 (performance of regulated activities: disciplinary powers) is amended as follows.
In subsection (3)—
in the opening words, for “it may—” substitute “ it may do one or more of the following— ”, and
after paragraph (a) (but before the “or” at the end of it) insert—.
After that subsection insert—
In subsection (4), for “two years” substitute “ three years ”.
Section 391 of the Financial Services and Markets Act 2000 (publication) is amended as follows.
In subsection (1)(which prevents the FSA and the person to whom a warning or decision notice is given or copied from publishing the notice or any details concerning it), omit “or decision notice”.
After that subsection insert—
In subsection (4) (duty of FSA to publish information about a final notice), before “final notice” insert “ decision notice or ”.
Measures to protect consumers
In the Financial Services and Markets Act 2000, for section 404 (and the italic cross-heading before it) substitute—
This section has effect in relation to failures occurring before the commencement of this section (as well as in relation to failures occurring at or after the commencement of this section).
The Consumer Credit Act 1974 (“the CCA 1974”) is amended as follows.
After section 51 insert—
In Schedule 1 (prosecution and punishment of offences), after the entry relating to section 51(1) insert—
An offence under section 51A of the CCA 1974 is to be treated for the purposes of Part 3 of the Regulatory Enforcement and Sanctions Act 2008 (civil sanctions) as contained in the CCA 1974 immediately before the day on which that Act of 2008 was passed.
Financial Services Compensation Scheme
In the Financial Services and Markets Act 2000, for section 214B substitute—
Sections 214B to 214D of the Financial Services and Markets Act 2000 (as substituted by subsection (1)) apply to any case where a stabilisation power was exercised before the commencement of this section as if the references in sections 214B(4) and 214C(5) and (6) of that Act to any time were to any time on or after 19 November 2009.
In the Financial Services and Markets Act 2000, after Part 15 insert—
Powers to require information
The Financial Services and Markets Act 2000 is amended as follows.
After section 165 insert—
After section 169 insert—
The Treasury may, by notice in writing, require a person who participates (or is proposing to participate) in the asset protection scheme or a qualifying scheme—as they may reasonably require for the purposes of, or in connection with, the scheme or a relevant scheme agreement.
to provide such information, or
to produce such documents,
“The asset protection scheme” means the scheme known as the Asset Protection Scheme that was the subject of a statement made by the Chancellor of the Exchequer on 26 February 2009.
“Qualifying scheme” means a scheme specified in an order made by the Treasury.
“Relevant scheme agreement” means an agreement entered into (or proposed to be entered into) under the asset protection scheme or a qualifying scheme.
The information or documents must be provided or produced at such times, and at such place, as the Treasury may specify in the notice.
The Treasury may require the information to be provided in such form as they may reasonably require.
A requirement imposed on a person as a result of this section is enforceable by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.
The Treasury may specify a scheme in an order under subsection (3) only if it appears to them that the purpose of the scheme corresponds to, or is connected with, the purpose of the asset protection scheme.
An order under subsection (3) is subject to negative resolution procedure.
Banking Act 2009
In Part 5 of the Banking Act 2009 (inter-bank payment systems), after section 206 insert—
The Banking Act 2009 is amended as follows.
After section 48 insert—
In section 55 (independent valuer: supplemental), at the end insert—
In section 56 (independent valuer: money)—
in subsection (1), after paragraph (c) (but before the “and” at the end of it) insert—, and
at the end insert—
In section 84 (application of Part 1 to building societies), in the entry in the table relating to sections 49 to 62, in paragraph (c) of the third column, at the end insert “ but the Treasury may make a third party compensation order ”.
In section 145(6) (bank administration: general powers, duties and effect), in table 1 of applied provisions (Schedule B1 to the Insolvency Act 1986), for the entry relating to paragraph 80 substitute—
In section 153 (successful rescue), for subsections (2) and (3) substitute—
after “a bank,” insert “ building society or credit union, ”, and
for “the bank or the Bank of England” substitute “ the bank, building society or credit union, or the Bank of England, ”.
Director of Savings
In this section “relevant function” means a function of the Accountant General of the Senior Courts (“the Accountant General”) under court funds rules.
The Director of Savings (“the Director”) may discharge a relevant function if appointed by the Accountant General under court funds rules to do so.
The functions of the Director that are within section 69(1)(a) of the Deregulation and Contracting Out Act 1994 (contracting out of statutory functions) include any power of the Director, conferred under court funds rules, to discharge a relevant function.
In this section “court funds rules” means rules under section 38(7) of the Administration of Justice Act 1982.
General
This section applies to orders or regulations under this Act made by the Treasury or the Secretary of State.
Orders or regulations—
may contain incidental, supplementary, consequential, transitory, transitional or saving provision, and
may make different provision for different cases or circumstances.
Orders or regulations are to be made by statutory instrument.
Where orders or regulations are subject to “affirmative resolution procedure” the orders or regulations may not be made unless a draft of the statutory instrument containing them has been laid before, and approved by a resolution of, each House of Parliament.
Where orders or regulations are subject to “negative resolution procedure” the statutory instrument containing them is subject to annulment in pursuance of a resolution of either House of Parliament.
Schedule 2 contains minor and consequential amendments.
In that Schedule—Part 1 contains amendments of the Financial Services and Markets Act 2000, and Part 2 contains amendments of other legislation.
The Treasury or the Secretary of State may by order make such other provision amending, repealing or revoking any enactment as they consider necessary or expedient in consequence of any provision made by this Act.
“Enactment” includes—
an enactment contained in subordinate legislation within the meaning of the Interpretation Act 1978,
an enactment contained in, or in an instrument made under, an Act of the Scottish Parliament,
an enactment contained in, or in an instrument made under, Northern Ireland legislation, or
an enactment contained in, or in an instrument made under, a Measure or Act of the National Assembly for Wales.
An order under subsection (3) is subject to negative resolution procedure.
This Act extends to England and Wales, Scotland and Northern Ireland.
The following provisions of this Act come into force on the day on which this Act is passed—
section 1,
section 16,
in section 24—
subsections (1) and (2) so far as relating to the paragraphs of Schedule 2 mentioned in paragraph (l), and
subsections (3) to (5),
section 25,
this section,
section 27,
Schedule 1 except so far as that Schedule relates to paragraph 13, 15 or 16 of Schedule 1A to the Financial Services and Markets Act 2000, and
paragraphs 1 to 6, 11, 13, 16(1) and (2), 22, 24(1) and (2), 25, 27, 28, 30 to 32, 33(1) and (3), 34, 35, 37 to 45 and 48 of Schedule 2.
The following provisions of this Act come into force at the end of the period of 2 months beginning with the day on which this Act is passed—
section 18,
paragraphs 7 to 10, 12, 14, 15, 16(3), 17 to 20, 26, 29, 33(4), 46 and 47 of Schedule 2.
The other provisions of this Act come into force on such day as the Treasury or the Secretary of State may by order appoint (and different days may be appointed for different purposes).
The Treasury or the Secretary of State may by order make such provision as they consider necessary or expedient for transitory, transitional or saving purposes in connection with the commencement of any provision made by this Act.
This Act may be cited as the Financial Services Act 2010.
Further provision about the consumer financial education body
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Minor and consequential amendments
Amendments of Financial Services and Markets Act 2000
The Financial Services and Markets Act 2000 is amended as follows.
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In the italic cross-heading before section 64, at the end insert “ of approved persons ”.
Section 66 (performance of regulated activities: disciplinary powers) is amended as follows.
After subsection (5) insert—
In subsection (7), omit “under section 59”.
After that subsection insert—
Section 67 (disciplinary measures: procedure and right to refer to Tribunal) is amended as follows.
In subsection (1), at the end insert “ ; and if it proposes to take action under subsection (3)(aa) or (ab) of that section, it must also give each of the other interested parties a warning notice. ”
After subsection (2) insert—
In subsection (4), at the end insert “ ; and if it decides to take action under subsection (3)(aa) or (ab) of that section, it must also give each of the other interested parties a decision notice. ”
After subsection (5) insert—
In subsection (7), at the end insert “ ; and if the Authority decides to take action under section 66(3)(aa) or (ab), each of the other interested parties may also refer the matter to the Tribunal. ”
After that subsection insert—
Section 69 (statement of policy) is amended as follows.
In subsection (1), for paragraphs (a) and (b) substitute—
In subsection (2)—
in the opening words, after “should be” insert “ , or what the period for which a suspension or restriction is to have effect should be, ”, and
in paragraph (c), for “the person on whom the penalty is to be imposed” substitute “ the person against whom action is to be taken ”.
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In section 165 (FSA's power to require information), in the heading, at the end insert “ : authorised persons etc ”.
Section 168 (appointment of persons to carry out investigations in particular cases) is amended as follows.
In subsection (4), in paragraph (c), for “an authorised person” substitute “ a person ”.
In that subsection, after paragraph (h) insert—.
In section 176(11)(a) (entry of premises under warrant), after “165” insert “ , 165A, 169A ”.
Section 207 (proposal to take disciplinary measures) is amended as follows.
In subsection (1), omit the “or” before paragraph (b) and at the end of that paragraph insert.
At the end insert—
Section 208 (decision notice) is amended as follows.
In subsection (1), omit the “or” before paragraph (b) and at the end of that paragraph insert.
After subsection (3) insert—
In subsection (4), omit the “or” before paragraph (b) and at the end of that paragraph insert.
Section 210 (statements of policy) is amended as follows.
In subsection (1), for paragraphs (a) and (b) substitute—
In subsection (2)—
in the opening words, after “should be” insert “ , or what the period for which a suspension or restriction is to have effect should be, ”, and
in paragraph (c), for “the person on whom the penalty is to be imposed” substitute “ the person against whom action is to be taken ”.
In subsection (7), after “206” insert “ or 206A ”.
In section 212(2) (the scheme manager), after “those functions” insert “ and the functions conferred on it by or under Part 15A ”.
In section 219(3A) (scheme manager's power to require information), for “applying regulations under section 214B(3) above” substitute “ determining the matters mentioned in section 214D(2)(a) and (b) above ”.
In section 221A(3) (delegation of functions of FSCS manager), after “management expenses of the scheme manager” insert “ except where the function in question is one under Part 15A ”.
Section 223 (FSCS manager's management expenses) is amended as follows.
In subsection (3), in paragraph (c), after “214B” insert “ or 214D ”.
After that paragraph insert—
Section 224A (functions under the Banking Act 2009) is amended as follows.
The existing provision becomes subsection (1) of that section.
After that subsection insert—
In section 348(5)(d) (restrictions on disclosure of confidential information by Authority etc), after “a person appointed” insert “ to collect or update information under section 139E or ”.
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In section 391 (publication), for subsection (11) substitute—
Section 392 (warning and decision notices: third party rights and access to evidence) is amended as follows.
In paragraph (a)—
after “63(3),” insert “ 63B(1), ”, and
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In paragraph (b)—
after “63(4),” insert “ 63B(3), ”, and
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After section 415 insert—
In section 417(1) (definitions), after the definition of “UK authorised person” (but before the “and” at the end of it) insert—.
After section 425 insert—
Section 429 (Parliamentary control of statutory instruments) is amended as follows.
In subsection (1)(a)—
omit “404”, and
after “236(5),” insert “ 404G ”.
In subsection (2), after “214B” insert “ , 214D ”.
In subsection (8), after “one made under section” insert “ 165A(2)(d) or ”.
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In Schedule 4 (treaty rights), paragraph 1 is amended as follows.
The existing provision becomes sub-paragraph (1) of that paragraph.
In that sub-paragraph, omit the definition of “consumers”.
After that sub-paragraph insert—
Amendments of other legislation
Consumer Credit Act 1974
In section 25(2A)(b) of the Consumer Credit Act 1974 (evidence as to whether a licensee is a fit person), after sub-paragraph (i) insert—.
Contracting Out (Functions Relating to National Savings) Order 1998
In article 3 of the Contracting Out (Functions Relating to National Savings) Order 1998 (contracting out of functions), after paragraph (2) insert—
Financial Services and Markets Act 2000 (Markets in Financial Instruments) (Modification of Powers) Regulations 2006
In the Financial Services and Markets Act 2000 (Markets in Financial Instruments) (Modification of Powers) Regulations 2006, omit regulation 3(b)(ii) (which made an amendment of the Financial Services and Markets Act 2000 superseded by this Act).
Banking Act 2009
The Banking Act 2009 is amended as follows.
In section 1(6) (table describing provisions of Part 1), in the entry relating to sections 33 to 48, for “48” substitute “ 48A ”.
In section 61(2)(b) (sources of compensation), for the words from “subject” to “below),” substitute “ subject to section 214C of the Financial Services and Markets Act 2000 (limit on amount of special resolution regime payments), ”.
In section 83(2)(h) (supplemental), omit “- inserted by section 171 below”.
Omit section 171 (which made amendments of the Financial Services and Markets Act 2000 superseded by this Act).
In section 183(c) (interpretation of expressions for purposes of Part 5), omit “to “the financial system””.
In section 204(1)(a) (inter-bank payment systems: information), after “order” insert “ or an order under section 206A ”.
Omit section 248 (which made an amendment of the Financial Services and Markets Act 2000 superseded by this Act).
In section 250(2) (collection of information by FSA relevant to financial stability)—
after “section 165” insert “ or 165A ”, and
after “as qualified” insert “ , in the case of the section 165 power, ”.
Section 259 (statutory instruments) is amended as follows.
In the table in subsection (3), omit the entry relating to section 171.
In that table, after the entry relating to section 204 insert—
In subsection (5), omit paragraph (o) and the “and” before it.