Moved by
Lord Turnbull
184: After Clause 120, insert the following new Clause—
“Special measures
(1) This section applies where the FCA or the PRA—
(a) has reason to believe that a relevant authorised person’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 relevant authorised person of the belief mentioned in subsection (1)(a).
(3) If the FCA or the PRA gives notice under subsection (2), it must invite the relevant authorised person 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 relevant authorised person’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 relevant authorised person, and
(b) an investigation may not be commissioned from a person involved in the auditing of companies.
(5) The relevant authorised person 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 relevant authorised person to take measures to provide sufficient safeguards and to monitor their effectiveness.
(7) The relevant authorised person must—
(a) comply with the notice, and
(b) appoint an appropriately senior member of the relevant authorised person’s staff to oversee compliance.
(8) Compliance by a relevant authorised person 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.
(9) In this section, “relevant authorised person” has the meaning given by section 71A of FSMA 2000.”