Moved by
Lord Turnbull
97: Before Clause 16, insert the following new Clause—
“Special measures
(1) This section applies where the FCA or the PRA—
(a) has reason to believe that a bank’s systems or professional standards or culture do not provide sufficient safeguards against the commission of actions in respect of which the FCA or the PRA has power to take action, but
(b) do not have reason to believe that any such action has been committed (ignoring any action which is already being investigated or in respect of which action has been or is being taken).
(2) The FCA or the PRA may give notice to the bank of the belief mentioned in subsection (1)(a).
(3) If the FCA or the PRA gives a notice under subsection (2), it must invite the bank to make representations showing that sufficient safeguards are in place.
(4) Following the giving of a notice under subsection (2) and the receipt of representations under subsection (3) (if any are made), the FCA or the PRA may commission an independent investigation into the bank’s systems and professional standards and culture with a view to establishing whether sufficient safeguards are in place; and for that purpose—
(a) “independent” means independent of the FCA, the PRA and the bank, and
(b) an investigation may not be commissioned from a person involved in the auditing of companies.
(5) The bank must cooperate with the investigation.
(6) Following receipt of the report of the investigation under subsection (4), the FCA or the PRA may by notice require the bank to take measures to provide sufficient safeguards and to monitor their effectiveness.
(7) The bank must—
(a) comply with the notice, and
(b) appoint an appropriately senior member of the bank’s staff to oversee compliance.
(8) Compliance by a bank with a duty under this section may be considered for the purposes of the exercise by the FCA or the PRA of functions under FSMA 2000.”