Moved by
Lord Newby
48: After Clause 12, insert the following new Clause—
“Power to give approval subject to conditions or for limited period
(1) Section 61 of FSMA 2000 (determination of applications) is amended as follows.
(2) For subsection (1) substitute—
“(1) The regulator to which an application for approval is made under section 60 may grant the application only if—
(a) it is satisfied that the person in respect of whom the application is made (“the candidate”) is a fit and proper person to perform the function to which the application relates, or
(b) in a case where the application is for approval to perform a designated senior management function in relation to the carrying on of a regulated activity by a bank (a “bank-related senior management application”), it is satisfied that the condition in paragraph (a) will be met if the application is granted subject to one or more conditions (as to which, see subsection (2B)).”
(3) In subsection (2), for “deciding that question” substitute “determining the application”.
(4) After subsection (2A) insert—
“(2B) The regulator to which a bank-related senior management application is made under section 60 may in particular—
(a) grant the application subject to any conditions that the regulator considers appropriate, and
(b) grant the application so as to give approval only for a limited period.
(2C) A regulator may exercise the power under paragraph (a) or (b) of subsection (2B) only if—
(a) where the regulator is the FCA, it appears to the FCA that it is desirable to do so in order to advance one or more of its operational objectives, and
(b) where the regulator is the PRA, it appears to the PRA that it is desirable to do so in order to advance any of its objectives.
(2D) Consent given by the FCA for the granting of the application may be conditional on the manner in which the PRA exercises its power under subsection (2B).”
(5) After subsection (3) insert—
“(3ZA) In the case of a bank-related senior management application, the reference in subsection (3)(a) to granting the application is a reference to granting it without imposing conditions or limiting the period for which the approval has effect.”
(6) After subsection (5) insert—
“(6) In this section—
(a) “designated senior management function” means a function designated as a senior management function under section 59(6B) or (6C);
(b) any reference to a bank includes a reference to a person who has applied for permission under Part 4A and will be a bank if permission is given.”
(7) In section 62 of FSMA 2000 (applications for approval: procedure and right to refer to Tribunal)—
(a) in subsection (2), after “the application” insert “, or to grant the application subject to conditions or for a limited period (or both)”;
(b) in subsection (3), after “the application” insert “, or to grant the application subject to conditions or for a limited period (or both)”;
(c) in subsection (4), after “the application” insert “, or to grant the application subject to conditions or for a limited period (or both)”.”
49: After Clause 12, insert the following new Clause—
“Changes in responsibilities of senior managers
After section 62 of FSMA 2000 insert—
“62A Changes in responsibilities of senior managers
(1) This section applies where—
(a) an authorised person has made an application to the appropriate regulator for approval under section 59 for a person to perform a designated senior management function,
(b) the application contained, or was accompanied by, a statement of responsibilities under section 60(2A), and
(c) the application has been granted.
(2) If, since the granting of the application, there has been any significant change in the aspects of the authorised person’s affairs which the person is responsible for managing in performing the function, the authorised person must provide the appropriate regulator with a revised statement of responsibilities.
(3) The appropriate regulator may require the authorised person—
(a) to provide information which the person is required to give under this section in such form as the appropriate regulator may direct, or
(b) to verify such information in such a way as the appropriate regulator may direct.
(4) In this section—
“the appropriate regulator” has the same meaning as in section 60;
“designated senior management function” means a function designated as a senior management function under section 59(6B) or (6C).””
50: After Clause 12, insert the following new Clause—
“Variation of approval
After section 63 of FSMA 2000 insert—
“63ZA Variation of senior manager’s approval at request of bank
(1) Where an application for approval under section 59 is granted subject to conditions, the authorised person concerned may apply to the appropriate regulator to vary the approval by—
(a) varying a condition,
(b) removing a condition, or
(c) imposing a new condition.
(2) “The appropriate regulator”—
(a) in the case of an application for variation of an approval in a way described in subsection (1)(a) or (b), means whichever of the FCA or the PRA imposed the condition concerned;
(b) in the case of an application for variation of an approval in the way described in subsection (1)(c), means the regulator who gave the approval.
(3) The PRA must consult the FCA before determining an application under this section, unless the application relates to the variation or removal of a condition which was imposed by the PRA in exercise of its power under section 63ZB.
(4) The regulator to which an application is made under this section must, before the end of the period for consideration, determine whether—
(a) to grant the application; or
(b) to give a warning notice under section 62(2).
(5) “The period for consideration” means the period of 3 months beginning with the date on which the regulator receives the application.
(6) The FCA may refuse an application under this section if it appears to the FCA that it is desirable to do so in order to advance one or more of its operational objectives.
(7) The PRA may refuse an application under this section if it appears to the PRA that it is desirable to do so in order to advance any of its objectives.
(8) The following provisions apply to an application made under this section for variation of an approval as they apply to an application for approval made under section 60—
(none) section 60(2) to (8),
(none) section 61(4) and (5),
(none) section 62.
63ZB Variation of senior manager’s approval on initiative of regulator
(1) The FCA may vary an approval under section 59 given by the FCA or the PRA for the performance of a designated senior management function in relation to the carrying on of a regulated activity by a bank if the FCA considers that it is desirable to do so in order to advance one or more of its operational objectives.
(2) The PRA may vary an approval under section 59 for the performance of a designated senior management function in relation to the carrying on of a regulated activity by a bank if—
(a) either—
(i) the PRA gave the approval, or
(ii) the FCA gave the approval and the bank is a PRA-authorised person, and
(b) the PRA considers that it is desirable to do so in order to advance any of its objectives.
(3) A regulator may vary an approval by—
(a) imposing a condition,
(b) varying a condition,
(c) removing a condition, or
(d) limiting the period for which the approval is to have effect.
(4) Before one regulator varies an approval given by the other regulator, it must consult the other regulator.
(5) In this section “designated senior management function” means a function designated as a senior management function under section 59(6B) or (6C).
63ZC Exercise of power under section 63ZB: procedure
(1) This section applies to an exercise, by either regulator, of the power to vary an approval under section 63ZB.
(2) A variation takes effect—
(a) immediately, if the notice given under subsection (4) states that that is the case,
(b) on such date as is specified in the notice, or
(c) if no date is specified in the notice, when the matter to which the notice relates is no longer open to review.
(3) A variation may be expressed to take effect immediately (or on a specified date) only if the regulator concerned, having regard to the ground on which it is exercising the power to vary, reasonably considers that it is necessary for the variation to take effect immediately (or on that date).
(4) If either regulator proposes to vary an approval or varies an approval with immediate effect, it must give each of the interested parties written notice.
(5) The notice must—
(a) give details of the variation,
(b) state the regulator’s reasons for the variation,
(c) inform the interested parties that each of them may make representations to the regulator within such period as may be specified in the notice (whether or not any of the interested parties has referred the matter to the Tribunal),
(d) inform the interested parties of when the variation takes effect, and
(e) inform the interested parties of the right of each of them to refer the matter to the Tribunal.
(6) “The interested parties”, in relation to an approval, are—
(a) the person on whose application it was given (“A”),
(b) the person in respect of whom it was given (“B”), and
(c) the person by whom B’s services are retained, if not A.
(7) The regulator giving the notice may extend the period allowed under the notice for making representations.
(8) If having considered the representations made by the interested parties, the regulator decides—
(a) to vary the approval, or
(b) if the variation has taken effect, not to rescind it,
it must give each of the interested parties written notice.
(a) The administrator must obtain the approval of the Bank of England to any proposals under sub-para. (1).
(b) Treat the reference in sub-para. (2)(b) to the objective mentioned in para. 3(1)(a) or (b) as a reference to the objective in section (Objective of FMI administration) of this Act.
(c) Ignore sub-para. (3)(b).
(a) Before making an application in reliance on this paragraph the FMI administrator must give notice to the Bank of England, which is to be entitled to participate in the proceedings.
(b) In making directions the court must have regard to the objective in section (Objective of FMI administration) of this Act.
(a) Ignore sub-paras. (1) and (3).
(b) The Bank of England may apply to the court for the variation or revocation of any directions given by the court.
()“(2) Where a company is in FMI administration, a creditor or member of the company may apply to the court claiming that the FMI administrator is conducting himself or herself in a manner preventing the achievement of the objective of the FMI administration as quickly and efficiently as is reasonably practicable.”
()“(1) On an application made by a person mentioned in sub-paragraph (2), the court may provide for the appointment of an FMI administrator of a company to cease to have effect from a specified time.
()(2) The persons who may apply to the court under sub-paragraph (1) are—
()(a) the Bank of England;
()(b) with the consent of the Bank, the FMI administrator.”
(a) Para. 91(1) applies as if the only person who could make an application were the Bank of England.
(b) Ignore para. 91(2).
(a) in accordance with directions of the Bank of England, and
(b) if the Bank is satisfied that they will not prejudice the objective in section (Objective of FMI administration) of this Act.
(a) In considering making an order in reliance on section 241 the court must have regard to the objective in section (Objective of FMI administration) of this Act.
(b) Ignore subsections (2A)(a) and (3) to (3C).
(9) If having considered the representations made by the interested parties, the regulator decides—
(a) not to vary the approval,
(b) to vary the approval in a different way, or
(c) if the variation has taken effect, to rescind it,
it must give each of the interested parties written notice.
(a) The administrator must obtain the approval of the Bank of England to any proposals under sub-para. (1).
(b) Treat the reference in sub-para. (2)(b) to the objective mentioned in para. 3(1)(a) or (b) as a reference to the objective in section (Objective of FMI administration) of this Act.
(c) Ignore sub-para. (3)(b).
(a) Before making an application in reliance on this paragraph the FMI administrator must give notice to the Bank of England, which is to be entitled to participate in the proceedings.
(b) In making directions the court must have regard to the objective in section (Objective of FMI administration) of this Act.
(a) Ignore sub-paras. (1) and (3).
(b) The Bank of England may apply to the court for the variation or revocation of any directions given by the court.
()“(2) Where a company is in FMI administration, a creditor or member of the company may apply to the court claiming that the FMI administrator is conducting himself or herself in a manner preventing the achievement of the objective of the FMI administration as quickly and efficiently as is reasonably practicable.”
()“(1) On an application made by a person mentioned in sub-paragraph (2), the court may provide for the appointment of an FMI administrator of a company to cease to have effect from a specified time.
()(2) The persons who may apply to the court under sub-paragraph (1) are—
()(a) the Bank of England;
()(b) with the consent of the Bank, the FMI administrator.”
(a) Para. 91(1) applies as if the only person who could make an application were the Bank of England.
(b) Ignore para. 91(2).
(a) in accordance with directions of the Bank of England, and
(b) if the Bank is satisfied that they will not prejudice the objective in section (Objective of FMI administration) of this Act.
(a) In considering making an order in reliance on section 241 the court must have regard to the objective in section (Objective of FMI administration) of this Act.
(b) Ignore subsections (2A)(a) and (3) to (3C).
(10) A notice under subsection (8) must inform the interested parties of the right of each of them to refer the matter to the Tribunal.
(11) A notice under subsection (9)(b) must comply with subsection (5).
(12) If a notice informs the interested parties of the right to refer a matter to the Tribunal, it must give an indication of the procedure on such a reference.
(13) For the purposes of subsection (2)(c), whether a matter is open to review is to be determined in accordance with section 391(8).
(14) “Approval” means an approval under section 59.””
51: After Clause 12, insert the following new Clause—
“Statement of policy
After section 63ZC of FSMA 2000 (inserted by section (Variation of approval) above) insert—
“63ZD Statement of policy relating to conditional approval and variation
(1) Each regulator must prepare and issue a statement of its policy with respect to—
(a) its giving of approval under section 59 subject to conditions or for a limited period only, and
(b) its variation under section 63ZA or 63ZB of an approval given under section 59.
(2) A regulator may at any time alter or replace a statement issued by it under this section.
(3) If a statement issued under this section is altered or replaced by a regulator, the regulator must issue the altered or replacement statement.
(4) A statement issued under this section must be published by the regulator concerned in the way appearing to the regulator to be best calculated to bring it to the attention of the public.
(5) A regulator may charge a reasonable fee for providing a person with a copy of a statement published under this section.
(6) A regulator must, without delay, give the Treasury a copy of any statement which it publishes under this section.
63ZE Statement of policy: procedure
(1) Before issuing a statement of policy under section 63ZD, a regulator (“the issuing regulator”) must—
(a) consult the other regulator, and
(b) publish a draft of the proposed statement in the way appearing to the issuing regulator to be best calculated to bring it to the attention of the public.
(2) The duty of the FCA to consult the PRA under subsection (1)(a) applies only in so far as the statement of policy applies to persons whose approval under section 59 relates to the performance of a function designated by the FCA as a senior management function under section 59(6B) in relation to the carrying on by PRA-authorised persons of regulated activities.
(3) The draft must be accompanied by notice that representations about the proposal may be made to the issuing regulator within a specified time.
(4) Before issuing the proposed statement, the issuing regulator must have regard to any representations made to it in accordance with subsection (3).
(5) If the issuing regulator issues the proposed statement it must publish an account, in general terms, of—
(a) the representations made to it in accordance with subsection (3), and
(b) its response to them.
(6) If the statement differs from the draft published under subsection (1) in a way which is in the opinion of the issuing regulator significant, the issuing regulator—
(a) must before issuing it carry out any consultation required by subsection (1)(a), and
(b) must (in addition to complying with subsection (5)) publish details of the difference.
(7) The issuing regulator may charge a reasonable fee for providing a person with a draft published under subsection (1)(b).
(8) This section also applies to a proposal to alter or replace a statement.””
52: After Clause 12, insert the following new Clause—
“Extension of limitation periods for imposing sanctions
(1) Section 63A of FSMA 2000 (power to impose penalties) is amended as follows.
(2) In subsection (4), for “period of three years” substitute “relevant period”.
(3) After subsection (5A) insert—
“(5B) “The relevant period” is—
(a) in relation to the performance of a controlled function without approval before the day on which this subsection comes into force, the period of 3 years, and
(b) in relation to the performance of a controlled function without approval on or after that day, the period of 6 years.”
(4) Section 66 of FSMA 2000 (disciplinary powers) is amended as follows.
(5) In subsection (4), for “period of three years” substitute “relevant period”.
(6) After subsection (5) insert—
“(5ZA) “The relevant period” is—
(a) in relation to misconduct which occurs before the day on which this subsection comes into force, the period of 3 years, and
(b) in relation to misconduct which occurs on or after that day, the period of 6 years.””