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Financial Services Act 2012

Type Public General Act

Publication 2012-12-19

Last updated 2025-01-14

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(7) In subsection (4), for “The Authority” substitute “ The regulator concerned ”.

27

(1) Section 388 (decision notices) is amended as follows.

(2) In subsection (1)(b), for “the Authority's reasons” substitute “ the reasons of the regulator giving the notice (“the regulator concerned”) ”.

(3) After subsection (1) insert—

(1A) Where the PRA is the regulator concerned and the FCA has decided to refuse consent for the purposes of section 55F, 55I or 59 or to give conditional consent as mentioned in section 55F(5) or 55I(8), the decision notice given by the PRA must— (a) state that fact, and (b) give the reasons for the FCA's decision.

(4) In subsections (3) and (4), for “The Authority” substitute “ The regulator concerned ”.

28

In section 389(1) (notices of discontinuance)—

(a) for “the Authority” substitute “ a regulator ”, and

(b) in paragraphs (a) and (b), after “notice” insert “ given by it ”.

29

(1) Section 390 (final notices) is amended as follows.

(2) In subsection (1)—

(a) for “the Authority”, in the first place, substitute “ a regulator ”, and

(b) for “the Authority”, in the second place, substitute “ the regulator ”.

(3) In subsection (2)—

(a) for “the Authority”, in the first place, substitute “ a regulator ”,

(b) for “the Authority”, in the second place, substitute “ the regulator ”, and

(4) After that subsection insert—

(2A) The notice required by this subsection is— (a) in a case where the regulator is acting in accordance with a direction given by the Tribunal under section 133(6)(b), or by the court on an appeal from a decision by the Tribunal under section 133(6), a further decision notice, and (b) in any other case, a final notice.

(5) In subsections (9) and (10), for “the Authority” substitute “ the regulator giving the notice ”.

30

(1) Section 391 (publication) is amended as follows.

(2) For subsection (1) substitute—

(1) In the case of a warning notice falling within subsection (1ZB)— (a) neither the regulator giving the notice nor a person to whom it is given or copied may publish the notice, (b) a person to whom the notice is given or copied may not publish any details concerning the notice unless the regulator giving the notice has published those details, and (c) after consulting the persons to whom the notice is given or copied, the regulator giving the notice may publish such information about the matter to which the notice relates as it considers appropriate. (1ZA) In the case of a warning notice not falling within subsection (1ZB), neither the regulator giving the notice nor a person to whom it is given or copied may publish the notice or any details concerning it. (1ZB) A warning notice falls within this subsection if it is given under— (a) section 63B; (b) section 67; (c) section 87M; (d) section 88B; (e) section 89K; (f) section 89R; (g) section 92; (h) section 126; (i) section 131H; (j) section 192L; (k) section 207; (l) section 312G; (m) section 345B (whether as a result of section 345(2) or 345A(3) or section 249(1)).

(3) In subsections (1A), (2) and (3), for “Authority” substitute “ regulator giving the notice ”.

(4) In subsection (4)—

(a) for “The Authority” substitute “ The regulator giving a decision or final notice ”, and

(b) for “a decision notice or final notice” substitute “ the notice ”.

(5) In subsection (5), for “Authority” substitute “ regulator giving the notice ”.

(6) For subsection (6) substitute—

(6) The FCA may not publish information under this section if, in its opinion, publication of the information would be— (a) unfair to the person with respect to whom the action was taken (or was proposed to be taken), (b) prejudicial to the interests of consumers, or (c) detrimental to the stability of the UK financial system. (6A) The PRA may not publish information under this section if, in its opinion, publication of the information would be— (a) unfair to the person with respect to whom the action was taken (or was proposed to be taken), (b) prejudicial to the safety and soundness of PRA-authorised persons, or (c) in a case where section 2C applies, prejudicial to securing the appropriate degree of protection for policyholders.

(7) In subsection (7), for “Authority” substitute “ regulator ”.

(8) In subsection (7A), for “the Authority” substitute “ a regulator ”.

31

(1) Section 392 (application of sections 393 and 394) is amended as follows.

(2) In paragraph (a)—

(a) for “54(1)” substitute “ 55Z(1) ”, and

(b) after “131H(1),” insert “ 192L(1), ”.

(3) In paragraph (b)—

(a) for “54(2)” substitute “ 55Z(2) ”, and

(b) after “131H(4),” insert “ 192L(4), ”.

32

(1) Section 393 (third party rights) is amended as follows.

(2) In subsections (1)(b) and (2), for “Authority” substitute “ regulator giving the notice ”.

(3) In subsection (3)—

(a) for “28 days” substitute “ 14 days ”, and

(b) for “the Authority” substitute “ the regulator giving the notice ”.

(4) In subsections (4)(b), (6), (7), (9)(b) and (11)(b), for “the Authority” substitute “ the regulator giving the notice ”.

(5) In subsection (12), for “which the Authority must disclose” substitute “ to which access must be given ”.

33

(1) Section 394 (access to Authority material) is amended as follows.

(2) In subsection (1)—

(a) in the opening words, for “the Authority” substitute “ a regulator ”, and

(b) in paragraph (b), for “, in the opinion of the Authority,” substitute “ , in the regulator's opinion, ”.

(3) In subsection (2), for “the Authority”, in both places, substitute “ the regulator giving the notice ”.

(4) In subsection (3), for “The Authority” substitute “ The regulator giving the notice ”.

(5) In subsection (4)—

(a) for “the Authority” substitute “ the regulator giving the notice ”, and

(b) for “the Authority's” substitute “the regulator's”.

(6) In subsection (5), for “the Authority” substitute “ the regulator giving the notice ”.

(7) In subsection (6)—

(a) in paragraph (a), for “the Authority” substitute “ the regulator giving the notice ”, and

(b) in paragraph (b), for “the Authority in connection with the matter to which the notice to which this section applies” substitute “ the regulator giving the notice in connection with the matter to which that notice ”.

(8) In the heading, for “Authority” substitute “ FCA or PRA ”.

34

(1) Section 395 (the Authority's procedures) is amended as follows.

(2) For subsection (1) substitute—

(1) Each regulator must determine the procedure that it proposes to follow in relation to the following— (a) a decision which gives rise to an obligation to give a supervisory notice, (b) in the case of the FCA, a decision which— (i) gives rise to an obligation for it to give a warning notice or decision notice, or (ii) gives rise to an obligation for the PRA to include a statement under section 387(1A) in a warning notice or a statement under section 388(1A) in a decision notice, (c) in the case of the PRA, a decision which gives rise to an obligation for it to give a warning notice or decision notice, other than a decision which depends entirely on a decision of the FCA of the kind mentioned in paragraph (b)(ii), and (d) a decision under section 391(1)(c) to publish information about the matter to which a warning notice relates.

(3) In subsection (2), omit the words from “, that the decision” to the end and insert

that— (a) a decision falling within any of paragraphs (a) to (c) of subsection (1) is taken— (i) by a person not directly involved in establishing the evidence on which the decision is based, or (ii) by 2 or more persons who include a person not directly involved in establishing that evidence, (b) a decision falling within paragraph (d) of subsection (1) is taken— (i) by a person other than the person by whom the decision was first proposed, or (ii) by 2 or more persons not including the person by whom the decision was first proposed, and (c) a decision falling within paragraph (d) of subsection (1) is taken in accordance with a procedure which is, as far as possible, the same as that applicable to a decision which gives rise to an obligation to give a warning notice and which falls within paragraph (b) or (c) of subsection (1).

(4) In subsection (3), for the words from “taken” to the end substitute

taken otherwise than as mentioned in subsection (2) if the person taking the decision is of a level of seniority laid down by the procedure and— (a) in the case of procedure proposed by the FCA, the FCA considers that, in the particular case, it is necessary in order to advance one or more of its operational objectives, or (b) in the case of procedure proposed by the PRA, the PRA considers that, in the particular case, it is necessary in order to advance any of its objectives.

(5) In subsection (5)—

(a) for “The Authority” substitute “ Each regulator ”, and

(b) for “the procedure” substitute “ its procedure ”.

(6) In subsection (6)—

(a) for “the Authority” substitute “ the regulator issuing it ”, and

(b) for “it” substitute “ the statement ”.

(7) In subsection (7), for “The Authority” substitute “ The regulator issuing the statement ”.

(8) In subsection (8)—

(a) for “The Authority” substitute “ The regulator issuing a statement under this section ”, and

(b) for “any statement which it issues under this section” substitute “ the statement ”.

(9) In subsection (9)—

(a) for “giving” substitute “ a regulator gives ”,

(b) after “decision notice,” insert “ other than a warning notice or decision notice relating to a decision of the PRA that is required by a a decision of the FCA of the kind mentioned in subsection (1)(b)(ii) ”, and

(10) After subsection (9) insert—

(9A) When the FCA takes a decision falling within subsection (1)(b)(ii), it must follow its stated procedure.

(11) In subsection (10)—

(a) for “the Authority” substitute “ a regulator ”, and

(b) for “the procedure” substitute “ its procedure ”.

(12) In subsection (11), for “The Authority's” substitute “A regulator's”.

(13) In subsection (13), for paragraph (a) substitute—

(a) 55Y(4), (7) or (8)(b);

(14) In the heading, for “Authority's” substitute “FCA's and PRA's”.

(15) In the italic heading before that section, for “Authority's” substitute “FCA's and PRA's”.

35

(1) Section 396 (statements under s.395: consultation) is amended as follows.

(2) In subsection (1)—

(a) after “a statement of” insert “ its ”,

(b) for “the Authority”, in the first place, substitute “ the regulator ”,

(d) for “it” substitute “ the draft ”.

(3) In subsection (2), for “Authority” substitute “ regulator publishing the draft ”.

(4) In subsection (3), for “Before issuing the proposed statement of procedure, the Authority” substitute “ Before a regulator issues the proposed statement of its procedure, it ”.

(5) In subsection (4), for “Authority issues the proposed statement of procedure” substitute “ regulator issues the proposed statement of its procedure, ”.

(6) In subsection (5)—

(a) for “statement of procedure differs from the draft published” substitute “ statement of the regulator's procedure differs from the draft published by it ”,

(b) for “, in the opinion of the Authority,” substitute “ , in its opinion, ”, and

(7) In subsection (6)—

(a) for “The Authority” substitute “ The regulator publishing a draft under subsection (1) ”, and

(b) for “a draft published under subsection (1)” substitute “ the draft ”.

PART 7 — Offences

36

(1) Section 398 (misleading the Authority: residual cases) is amended as follows.

(2) In subsection (1), for “the Authority” substitute “ a regulator ”.

(3) In the heading, for “the Authority” substitute “ FCA or PRA ”.

37

In section 400 (offences by a body corporate etc) after subsection (6) insert—

(6A) References in this section to an offence under this Act include a reference to an offence under Part 7 of the Financial Services Act 2012 (offences relating to financial services).

38

(1) Section 401 (proceedings for offences) is amended as follows.

(2) For subsection (1) substitute—

(1) In this section “offence” means— (a) an offence under this Act, (b) an offence under subordinate legislation made under this Act, or (c) an offence under Part 7 of the Financial Services Act 2012 (offences relating to financial services).

(3) In subsections (2)(a) and (3)(a), for “Authority” substitute “ appropriate regulator ”.

(4) After subsection (3) insert—

(3A) For the purposes of subsections (2)(a) and (3)(a), the PRA is the “appropriate regulator” in respect of each of the following offences— (a) an offence under section 55P(10) where the contravention is of a requirement imposed by the PRA; (b) an offence under section 56(4) where the prohibition order is made by the PRA; (c) an offence under section 177(3) where the investigation is being, or is likely to be, conducted on behalf of the PRA; (d) an offence under section 177(4) where the requirement is imposed by the PRA; (e) an offence under section 177(6) where the warrant is issued as a result of information on oath given by the PRA or a person appointed by the PRA to conduct an investigation on its behalf; (f) an offence under section 191F(1) where the notice should have been given to the PRA; (g) an offence under any of section 191F(2) to (7) where the notice, approval or information was given to or by the PRA; (h) an offence under section 366(3), unless the activity of effecting or carrying out long-term contracts of insurance is not to any extent a PRA-regulated activity; (i) an offence under section 398(1) where the information was given to the PRA. (3B) For the purposes of subsections (2)(a) and (3)(a), the FCA is the “appropriate regulator” in respect of any other offence.

(5) In subsection (5), for “Authority” substitute “ appropriate regulator ”.

39

(1) Section 402 (power of the Authority to institute proceedings for certain other offences) is amended as follows.

(2) In subsections (1) and (2), for “Authority” substitute “ FCA ”.

(3) In the heading, for “the Authority” substitute “ FCA ”.

40

In section 403 (jurisdiction and procedure in respect of offences), in subsection (7), at the end insert “ or an offence under Part 7 of the Financial Services Act 2012 (offences relating to financial services) ”.

PART 8 — Co-operation

41

After section 415A insert—

(415B) (1) The FCA must consult the PRA before taking a qualifying step in relation to a person who— (a) is a PRA-authorised person, or (b) has a qualifying relationship with a PRA-authorised person. (2) The PRA must consult the FCA before taking a qualifying step. (3) In this section any reference to the taking of a qualifying step is a reference to— (a) the giving of a warning notice or decision notice under section 63B (performance of controlled functions without approval), (b) the giving of a warning notice or decision notice under section 67 (disciplinary powers in relation to approved person), (c) the giving of a warning notice under section 126 or a decision notice under section 127 (market abuse), (d) the giving of a warning notice or decision notice under section 131H (short selling), (e) the giving of a warning notice under section 207 or a decision notice under section 208 (breaches of requirements imposed by or under Act etc.), (f) the giving of a warning notice under section 312G or a decision notice under section 312H (recognised bodies), (g) the making of an application to the court under section 380, 381, 382 or 383 (injunctions or restitution), or (h) the giving of a warning notice under section 385 or a decision notice under section 386 (power of FCA or PRA to require restitution). (4) A person has a qualifying relationship with a PRA-authorised person (“A”) for the purposes of this section if— (a) the person is a member of A's immediate group, or (b) in the case of a qualifying step within subsection (3)(a) or (b), the person performs a significant-influence function under an arrangement entered into by A, or by a contractor of A, in relation to the carrying on by A of a regulated activity. “Significant-influence function” and “arrangement” have the same meanings as in section 59.

SCHEDULE 10

1

Part 15 of FSMA 2000 (the Financial Services Compensation Scheme) is amended as follows.

2

(1) Section 212 (the scheme manager) is amended as follows.

(2) For subsections (1) and (2) substitute—

(1) The scheme manager” means the body corporate established by the Financial Services Authority under this section as originally enacted. (2) The regulators must take such steps as are necessary to ensure that the scheme manager is, at all times, capable of exercising the functions conferred on it by or under this Part or Part 15A.

(3) In subsections (4) and (5) for “Authority” substitute “ regulators ”.

(4) In subsection (7), omit “board members,”.

3

(1) Section 213 (the compensation scheme) is amended as follows.

(2) In each place, for “Authority” substitute “ regulators ”.

(3) In subsection (1)—

(a) after “rules” insert “ made in accordance with an order under subsection (1A) ”, and

(b) for the words from “cases where” to the end substitute

cases where— (a) relevant persons are unable, or likely to be unable, to satisfy claims against them, or (b) persons who have assumed responsibility for liabilities arising from acts or omissions of relevant persons (“successors”) are unable, or likely to be unable, to satisfy claims against the successors that are based on those acts or omissions.

(4) After subsection (1) insert—

(1A) The Treasury must by order specify— (a) the cases in which the FCA may, or may not, make rules under subsection (1), and (b) the cases in which the PRA may, or may not, make rules under that subsection.

(5) In subsection (2), after “rules” insert “ (taken together) ”.

(6) In subsection (9)(a), after “against him” insert “ , or against a successor falling within subsection (1)(b), ”.

4

In section 214 (general provisions of the scheme), in subsection (1), after paragraph (a) insert—

(aa) as to the circumstances in which a successor falling within section 213(1)(b) is to be taken (for the purposes of the scheme) to be unable, or likely to be unable, to satisfy claims against the successor that are based on the acts or omissions of a relevant person;

5

In section 215 (rights of the scheme in insolvency), for “Authority”, in each place, substitute “ regulators ”.

6

In section 217 (insurers in financial difficulties), in subsection (5), for “Authority” substitute “ either regulator or both regulators ”.

7

After section 217 insert—

(217A) (1) Each regulator and the scheme manager must take such steps as they consider appropriate to co-operate with each other in the exercise of their functions under this Part and Part 15A. (2) Each regulator and the scheme manager must prepare and maintain a memorandum describing how that regulator and the scheme manager intend to comply with subsection (1). (3) The scheme manager must ensure that the memoranda as currently in force are published in the way appearing to it to be best calculated to bring them to the attention of the public.

8

For the italic heading before section 218 substitute “ Annual plan and report ”.

9

Before section 218 insert—

(217B) (1) The scheme manager must in respect of each of its financial years prepare an annual plan. (2) The plan must be prepared before the start of the financial year. (3) An annual plan in respect of a financial year must make provision about the use of the resources of the scheme manager. (4) The plan may include material relating to periods longer than the financial year in question. (5) Before preparing an annual plan, the scheme manager must consult such persons (if any) as the scheme manager considers appropriate. (6) The scheme manager must publish each annual plan in the way it considers appropriate.

10

(1) Section 218 (annual report) is amended as follows.

(2) In subsections (1) and (2)(b), for “Authority” substitute “ regulators ”.

(3) At the end insert—

(4) The Treasury may— (a) require the scheme manager to comply with any provisions of the Companies Act 2006 about accounts and their audit which would not otherwise apply to it, or (b) direct that any such provision of that Act is to apply to the scheme manager with such modifications as are specified in the direction. (5) Compliance with any requirement under subsection (4)(a) or (b) is enforceable by injunction or, in Scotland, an order for specific performance under section 45 of the Court of Session Act 1988. (6) Proceedings under subsection (5) may be brought only by the Treasury.

11

After section 218 insert—

(218ZA) (1) The scheme manager must send a copy of its annual accounts to the Comptroller and Auditor General and the Treasury as soon as is reasonably practicable. (2) The Comptroller and Auditor General must— (a) examine, certify and report on accounts received under this section, and (b) send a copy of the certified accounts and the report to the Treasury. (3) The Treasury must lay the copy of the certified accounts and the report before Parliament. (4) The scheme manager must send a copy of the certified accounts and the report to the regulators. (5) Except as provided by section 218(4), the scheme manager is exempt from the requirements of Part 16 of the Companies Act 2006 (audit), and its balance sheet must contain a statement to that effect. (6) In this section “annual accounts” has the meaning given by section 471 of the Companies Act 2006.

12

(1) Section 218A (power to require information) is amended as follows.

(2) In subsection (1)—

(a) for “The Authority”, in the first place, substitute “ Each regulator ”, and

(b) for “the Authority”, in the second and third place, substitute “ that regulator ”.

(3) In subsections (2) and (4), for “Authority” substitute “ regulator ”.

(4) In subsection (5), for “Authority's” substitute “regulator's”.

(5) In the heading, for “Authority's” substitute “Regulators'”.

13

In section 221 (powers of court), in subsection (2), after “director or” insert “ other ”.

14

In section 222 (statutory immunity), in subsection (1), omit “board member,”.

15

In section 224 (scheme manager's power to inspect documents), in subsection (1), after “relevant person,” insert “ or a successor falling within section 213(1)(b), ”.

SCHEDULE 11

1

In section 226 (compulsory jurisdiction), in subsection (3)(a), for “Authority” substitute “ FCA ”.

2

In section 226A (consumer credit jurisdiction), in subsection (7), for “Authority” substitute “ FCA ”.

3

In section 227 (voluntary jurisdiction), in subsection (6), for “Authority's” substitute “FCA's”.

4

(1) Section 228 (determination under the compulsory and consumer credit jurisdiction) is amended as follows.

(2) In subsection (4), in paragraph (c), omit “in writing”.

(3) After subsection (6) insert—

(6A) But the complainant is not to be treated as having rejected the determination by virtue of subsection (6) if— (a) the complainant notifies the ombudsman after the specified date of the complainant's acceptance of the determination, (b) the complainant has not previously notified the ombudsman of the complainant's rejection of the determination, and (c) the ombudsman is satisfied that such conditions as may be prescribed by rules made by the scheme operator for the purposes of this section are satisfied.

(4) After subsection (7) insert—

(7A) Where a determination is rejected by virtue of subsection (6), the notification under subsection (7) must contain a general description of the effect of subsection (6A).

5

In section 229 (awards), in subsection (4), for “Authority” substitute “ FCA ”.

6

In section 230 (costs), in subsection (2), for “Authority” substitute “ FCA ”.

7

After section 230 insert—

(230A) (1) The scheme operator must publish a report of any determination made under this Part. (2) But if the ombudsman who makes the determination informs the scheme operator that, in the ombudsman's opinion, it is inappropriate to publish a report of that determination (or any part of it) the scheme operator must not publish a report of that determination (or that part). (3) Unless the complainant agrees, a report of a determination published by the scheme operator may not include the name of the complainant, or particulars which, in the opinion of the scheme operator, are likely to identify the complainant. (4) The scheme operator may charge a reasonable fee for providing a person with a copy of a report.

8

In section 232 (powers of court), in subsection (2), after “director or” insert “ other ”.

9

After section 232 insert—

(232A) If the scheme operator considers that it has information that, in its opinion, would or might be of assistance to the FCA in advancing one or more of the FCA's operational objectives, it must disclose that information to the FCA.

10

In section 234 (industry funding), in subsection (1), for “Authority” substitute “ FCA ”.

11

In section 234A (funding by consumer credit licensees), in subsection (1), for “Authority” substitute “ FCA ”.

12

After section 234A insert—

(234B) (1) This section applies where a person (the “successor”) has assumed a liability (including a contingent one) of a person (the “predecessor”) who was, or (apart from this section) would have been, the respondent in respect of a complaint falling to be dealt with under the ombudsman scheme. (2) The complaint may (but need not) be dealt with under this Part as if the successor were the respondent.

13

Schedule 17 (the ombudsman scheme) is amended as follows.

14

For paragraph 2 (and the italic heading before it) substitute—

(2) The FCA must take such steps as are necessary to ensure that the body corporate established by the Financial Services Authority under this Schedule as originally enacted is, at all times, capable of exercising the functions conferred on the scheme operator by or under this Act.

15

In paragraph 3 (constitution)—

(a) for “Authority”, in each place, substitute “ FCA ”, and

(b) in sub-paragraph (4), after “9” insert “ , 9A ”.

16

After paragraph 3 insert—

(3A) (1) The scheme operator and the FCA must each take such steps as it considers appropriate to co-operate with the other in the exercise of their functions under this Part of this Act. (2) The scheme operator and the FCA must prepare and maintain a memorandum describing how they intend to comply with sub-paragraph (1). (3) The scheme operator must ensure that the memorandum as currently in force is published in the way appearing to the scheme operator to be best calculated to bring it to the attention of the public.

17

In paragraph 6 (status), in sub-paragraph (2), omit “board members,”.

18

In paragraph 7 (annual reports)—

(a) for “Authority”, in each place, substitute “ FCA ”, and

(b) at the end insert—

(5) The Treasury may— (a) require the scheme operator to comply with any provisions of the Companies Act 2006 about accounts and their audit which would not otherwise apply to it, or (b) direct that any provision of that Act about accounts and their audit is to apply to the scheme operator with such modifications as are specified in the direction, whether or not the provision would otherwise apply to the scheme manager. (6) Compliance with any requirement under sub-paragraph (5)(a) or (b) is enforceable by injunction or, in Scotland, an order for specific performance under section 45 of the Court of Session Act 1988. (7) Proceedings under sub-paragraph (6) may be brought only by the Treasury.

19

After paragraph 7 insert—

(7A) (1) The scheme operator must send a copy of its annual accounts to the Comptroller and Auditor General as soon as is reasonably practicable. (2) The Comptroller and Auditor General must— (a) examine, certify and report on accounts received under this paragraph, and (b) send a copy of the certified accounts and the report to the Treasury. (3) The Treasury must lay the copy of the certified accounts and the report before Parliament. (4) The scheme operator must send a copy of the certified accounts and the report to the FCA. (5) Except as provided by paragraph 7(5), the scheme operator is exempt from the requirements of Part 16 of the Companies Act 2006 (audit), and its balance sheet must contain a statement to that effect. (6) In this paragraph “annual accounts” has the meaning given by section 471 of the Companies Act 2006.

20

For the italic heading before paragraph 8 substitute “ Information, advice and guidance ”.

21

In paragraph 8 (guidance), for “guidance consisting of such information and advice” substitute “ such information, guidance or advice ”.

22

In paragraph 9 (budget), for “Authority”, in each place, substitute “ FCA ”.

23

After paragraph 9 insert—

(9A) (1) The scheme operator must in respect of each of its financial years prepare an annual plan. (2) The plan must be prepared before the start of the financial year. (3) An annual plan in respect of a financial year must make provision about the use of the resources of the scheme operator. (4) The plan may include material relating to periods longer than the financial year in question. (5) Before preparing an annual plan, the scheme operator must consult such persons (if any) as the scheme operator considers appropriate. (6) The scheme operator must publish each annual plan in the way it considers appropriate.

24

In paragraph 13 (procedural rules)—

(a) for “Authority”, in each place, substitute “ FCA ”,

(b) for “Authority's”, in each place, (including the italic heading), substitute “FCA's”, and

25

In paragraph 14 (scheme operator's rules)—

(a) in sub-paragraph (2), after paragraph (f) insert—

(fa) allow the correction of any clerical mistake in the written statement of a determination made by an ombudsman; (fb) provide that any irregularity arising from a failure to comply with any provisions of the scheme rules does not of itself render a determination void;”, and

(b) in sub-paragraph (7), for “Authority” substitute “ FCA ”.

26

In paragraph 16B (procedure for complaints etc), in sub-paragraph (1), after paragraph (d) insert—

(e) may provide that an ombudsman may correct any clerical mistake in a determination made by that ombudsman; (f) provide that any irregularity arising from a failure to comply with any provisions of the consumer credit rules does not of itself render a determination void.

27

In paragraph 16E (consumer credit rules), for “Authority”, in each place, substitute “ FCA ”.

28

In paragraph 18 (terms of reference), for “Authority”, in each place, substitute “ FCA ”.

29

In paragraph 19 (delegation), in sub-paragraph (3), for “Authority” substitute “ FCA ”.

30

In paragraph 20 (voluntary jurisdiction rules: procedure), for “Authority”, in each place, substitute “ FCA ”.

SCHEDULE 12

PART 1 — Part 11 of FSMA 2000: information gathering and investigations

1

(1) Section 165 (power to require information) is amended as follows.

(2) In subsection (1), for “The Authority” substitute “ Either regulator ”.

(3) In subsection (3), for “Authority” substitute “ regulator ”.

(4) In subsection (4), for “the Authority” substitute “ either regulator ”.

(5) In subsections (5) and (6) for “The Authority”, in each place, substitute “ The regulator in question ”.

(6) In subsection (7), for the words from “exercised” to the end substitute

exercised— (a) by either regulator, to impose requirements on a person who is connected with an authorised person; (b) by the FCA, to impose requirements on an operator, trustee or depositary of a scheme recognised under section 270 or 272 who is not an authorised person; (c) by the FCA, to impose requirements on a recognised investment exchange; (d) by the FCA, to impose requirements on a person who is connected with a recognised investment exchange.

(7) In subsection (9)—

(a) for “the Authority”, in the first place, substitute “ the regulator exercising the power ”,

(b) for “the Authority's” substitute “that regulator's”, and

(8) In subsection (11)—

(a) in the opening words, for “an authorised person” substitute “ another person ”, and

(b) in paragraph (d), at the end insert “ (reading references in that Part to the authorised person as references to A) ”.

(9) In the heading, for “Authority's” substitute “Regulators'”.

2

In section 165A (power to require information relevant to financial stability)—

(a) for “Authority”, in each place, substitute “ PRA ”, and

(b) in the heading, for “Authority's” substitute “PRA's”.

3

In section 165B (safeguards relating to section 165A)—

(a) for “Authority”, in each place, substitute “ PRA ”, and

(b) for “Authority's”, in each place, substitute “PRA's”.

4

In section 165C (orders under section 165A(2)(d)) for subsection (1) substitute—

(1) The Treasury may make an order under section 165A(2)(d) only if either or both of the following conditions is met in relation to the provision made by the order. (1A) Condition A is that the Treasury consider that— (a) the activities carried on by the prescribed person or persons of the prescribed description, or the way in which those activities (or any part of them) are carried on, or (b) any failure to carry on those activities (or any part of them), pose, or would be likely to pose, a serious threat to the stability of the UK financial system. (1B) Condition B is that the provision implements all or part of a recommendation made by the Financial Policy Committee of the Bank of England under section 9P of the Bank of England Act 1998.

5

For section 166 (reports by skilled persons) substitute—

(166) (1) This section applies where either regulator has required or could require a person to whom subsection (2) applies (“the person concerned”) to provide information or produce documents with respect to any matter (“the matter concerned”). (2) This subsection applies to— (a) an authorised person (“A”), (b) any other member of A's group, (c) a partnership of which A is a member, or (d) a person who has at any relevant time been a person falling within paragraph (a), (b) or (c), who is, or was at the relevant time, carrying on a business. (3) The regulator mentioned in subsection (1) may either— (a) by notice in writing given to the person concerned, require the person concerned to provide the regulator with a report on the matter concerned, or (b) itself appoint a person to provide the regulator with a report on the matter concerned. (4) When acting under subsection (3)(a), the regulator may require the report to be in such form as may be specified in the notice. (5) The regulator must give notice of an appointment under subsection (3)(b) to the person concerned. (6) The person appointed to make a report— (a) must be a person appearing to the regulator to have the skills necessary to make a report on the matter concerned, and (b) where the appointment is to be made by the person concerned, must be a person nominated or approved by the regulator. (7) It is the duty of— (a) the person concerned, and (b) any person who is providing (or who has at any time provided) services to the person concerned in relation to the matter concerned, to give the person appointed to prepare a report all such assistance as the appointed person may reasonably require. (8) The obligation imposed by subsection (7) is enforceable, on the application of the regulator in question, by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988. (9) A regulator may make rules providing for expenses incurred by it in relation to an appointment under subsection (3)(b) to be payable as a fee by the person concerned. (10) The powers conferred by this section may also be exercised by the FCA in relation to a person to whom subsection (11) applies, (and references to the person concerned are to be read accordingly). (11) This subsection applies to— (a) a recognised investment exchange (“A”), (b) any other member of A's group, (c) a partnership of which A is a member, or (d) a person who has at any time been a person falling within paragraph (a), (b) or (c), who is, or was at the relevant time, carrying on a business.

6

After section 166 insert—

(166A) (1) This section applies if either regulator considers that an authorised person has contravened a requirement in rules made by that regulator to collect, and keep up to date, information of a description specified in the rules. (2) The regulator may either— (a) require the authorised person to appoint a skilled person to collect or update the information, or (b) itself appoint a skilled person to do so. (3) References in this section to a skilled person are to a person— (a) appearing to the regulator to have the skills necessary to collect or update the information in question, and (b) where the appointment is to be made by the authorised person, nominated or approved by the regulator. (4) The regulator must give notice of an appointment under subsection (2)(b) to the authorised person. (5) The skilled person may require any person to provide all such assistance as the skilled person may reasonably require to collect or update the information in question. (6) A requirement imposed under subsection (5) is enforceable, on the application of the regulator in question, by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988. (7) A contractual or other requirement imposed on a person (“P”) to keep any information in confidence does not apply if— (a) the information is or may be relevant to anything required to be done as a result of this section, (b) an authorised person or a skilled person requests or requires P to provide the information for the purpose of securing that those things are done, and (c) the regulator in question has approved the making of the request or the imposition of the requirement before it is made or imposed. (8) An authorised person may provide information (whether received under subsection (7) or otherwise) that would otherwise be subject to a contractual or other requirement to keep it in confidence if it is provided for the purposes of anything required to be done as a result of this section. (9) A regulator may make rules providing for expenses incurred by it in relation to an appointment under subsection (2)(b) to be payable as a fee by the authorised person. (10) In this section “authorised person”, in relation to the PRA, means PRA-authorised person.

7

(1) Section 167 (appointment of investigator in general cases) is amended as follows.

(2) In subsection (1), for “the Authority or the Secretary of State (“the investigating authority”)” substitute “ an investigating authority ”.

(3) After subsection (5) insert—

(5A) Investigating authority” means— (a) in relation to a recognised investment exchange, the Secretary of State or the FCA; (b) in relation to an authorised person or former authorised person, the FCA or the PRA; (c) in relation to an appointed representative or former appointed representative, the FCA or the PRA.

8

(1) Section 168 (appointment of investigator in specific cases) is amended as follows.

(2) In subsection (1)—

(a) omit paragraph (a), and

(b) in paragraph (b), for “191” substitute “ 191F ”.

(3) In subsection (2)—

(a) in paragraph (a), for “or 397” substitute “ or under Part 7 of the Financial Services Act 2012 ”, and

(b) after paragraph (b) insert—

(ba) an authorised person may have contravened section 20 in relation to a credit-related regulated activity;

(4) In subsection (4)—

(a) in the opening words, for “the Authority” substitute “ an investigating authority ”,

(b) in paragraph (c), for “Authority” substitute “ investigating authority ”,

(ca) a recognised investment exchange may have contravened the recognition requirements (within the meaning of Part 18);

(d) in paragraph (f), for “an authorised or exempt person” substitute “ a person ”,

(e) in paragraph (h), for “the Authority” substitute “ a regulator ”,

(f) in paragraph (j), omit the words from “or by any” to the end, and

(g) for paragraph (k) substitute—

(k) a person may have contravened a qualifying EU provision that is specified, or of a description specified, for the purposes of this subsection by the Treasury by order.

(5) In subsection (5), for “Authority” substitute “ investigating authority ”.

(6) For subsection (6) substitute—

(6) Investigating authority” means— (a) in subsections (1) to (3), the FCA, the PRA or the Secretary of State; (b) in subsections (4) and (5), the FCA or the PRA.

9

(1) Section 169 (investigations at the request of an overseas regulator) is amended as follows.

(2) In subsection (1), for “the Authority” substitute “ a regulator ”.

(3) In subsections (3) and (4), in each place, for “Authority” substitute “ regulator ”.

(4) In subsection (5), in each place, for “Authority” substitute “ regulator ”.

(5) In subsection (6), for “Authority” substitute “ regulator ”.

(6) In subsection (7), for “the Authority” substitute “ a regulator ”.

(7) In subsection (8), for “Authority” substitute “ regulator ”.

(8) In subsection (9), for “The Authority” substitute “ Each regulator ”.

(9) In subsection (11), for “Authority” substitute “ regulator ”.

10

In section 169A (supporting an overseas regulator regarding financial stability), in subsection (1), for “Authority” substitute “ PRA ”.

11

In section 170 (investigations: general), in subsection (10), for paragraphs (a) and (b) substitute—

(a) the FCA, if the FCA appointed the investigator; (aa) the PRA, if the PRA appointed the investigator; (b) the Secretary of State, if the Secretary of State appointed the investigator.

12

In section 174 (admissibility of statements to investigators), in subsection (2), for “the Authority” substitute “ a regulator ”.

13

(1) Section 175 (information and documents: supplemental) is amended as follows.

(2) In subsection (1), for “the Authority” substitute “ either regulator ”.

(3) After subsection (2) insert—

(2A) A document so produced may be retained for so long as the person to whom it is produced considers that it is necessary to retain it (rather than copies of it) for the purposes for which the document was requested. (2B) If the person to whom a document is so produced has reasonable grounds for believing— (a) that the document may have to be produced for the purposes of any legal proceedings, and (b) that it might otherwise be unavailable for those purposes, it may be retained until the proceedings are concluded.

(4) In subsection (3), for “Authority” substitute “ regulator ”.

14

(1) Section 176 (entry of premises under warrant) is amended as follows.

(2) In subsection (1), for “the Authority” substitute “ either regulator ”.

(3) After subsection (5) insert—

(5A) A warrant under this section may be executed by any constable. (5B) The warrant may authorise persons to accompany any constable who is executing it. (5C) The powers in subsection (5) may be exercised by a person authorised by the warrant to accompany a constable; but that person may exercise those powers only in the company of, and under the supervision of, a constable.

(4) In subsection (6), for “16” substitute “ 16(3) to (12) ”.

(5) In subsection (7), for “18” substitute “ 18(3) to (12) ”.

(6) Omit subsection (8).

(7) In subsection (11), in paragraph (a), for “the Authority” substitute “ a regulator ”.

15

After section 176 insert—

(176A) (1) Any document of which possession is taken under section 176 (“a seized document”) may be retained so long as it is necessary to retain it (rather than copies of it) in the circumstances. (2) A person claiming to be the owner of a seized document may apply to a magistrates' court or (in Scotland) the sheriff for an order for the delivery of the document to the person appearing to the court or sheriff to be the owner. (3) If on an application under subsection (2) the court or (in Scotland) the sheriff cannot ascertain who is the owner of the seized document the court or sheriff (as the case may be) may make such order as the court or sheriff thinks fit. (4) An order under subsection (2) or (3) does not affect the right of any person to take legal proceedings against any person in possession of a seized document for the recovery of the document. (5) Any right to bring proceedings (as described in subsection (4)) may only be exercised within 6 months of the date of the order made under subsection (2) or (3).

PART 2 — Part 23 of FSMA 2000: public record, disclosure of information and co-operation

16

(1) Section 347 (record of authorised persons) is amended as follows.

(2) In subsections (1) to (6), for “Authority”, in each place, substitute “ FCA ”.

(3) Omit subsection (1)(f).

(4) In subsection (2), in paragraph (e)—

(a) omit “or recognised clearing house,”, and

(b) omit “or clearing house”.

(5) In subsection (8), for “Authority” substitute “ FCA or the PRA ”.

17

After section 347 insert—

(347A) (1) The PRA must, for the purpose of assisting the FCA to comply with its duty under section 347— (a) notify the FCA if the information included in the record as required under section 347(2)(a) appears to the PRA to be incomplete or inaccurate, (b) if it makes a prohibition order relating to an individual, provide the FCA with information falling within section 347(2)(f) in relation to that order, (c) where it is the appropriate regulator in relation to an approved person, provide the FCA with information falling within section 347(2)(g) in relation to that approved person, and (d) where the FCA has notified the PRA that it considers it appropriate to include in the record information of a certain description, disclose to the FCA such information of that description as the PRA has in its possession. (2) The duty to provide information under this section does not apply to information which the PRA reasonably believes is in the possession of the FCA. (3) Subsection (1) does not require or authorise the disclosure of information whose disclosure is prohibited by or under section 348. (4) This section is without prejudice to any other power to disclose information. (5) In this section references to the “record” are to the record maintained under section 347.

18

(1) Section 348 (restrictions on disclosure of information) is amended as follows.

(2) In subsection (2)(b)—

(a) for “Authority” substitute “ FCA, the PRA ”, and

(b) omit “, the competent authority for the purposes of Part VI”.

(3) In subsection (5)—

(a) for paragraph (a) substitute—

(a) the FCA; (aa) the PRA;

(b) omit paragraph (b),

(d) after paragraph (e) insert—

(ea) a person who is or has been engaged to provide services to a person mentioned in those paragraphs;

(4) In subsection (6)—

(a) in paragraph (a), for “the competent authority” substitute “ the FCA ”,

(b) in paragraph (b), for “Authority” substitute “ FCA, the PRA ”, and

(5) In the heading for “Authority” substitute “ FCA, PRA ”.

19

(1) Section 349 (exceptions from section 348) is amended as follows.

(2) In subsection (2)(c), for “Authority” substitute “ FCA or the PRA ”.

(3) In subsection (3A)(a), for “Authority” substitute “ FCA or the PRA ”.

(4) In subsection (3B)(c), for “Authority's functions” substitute “ functions of the FCA or the PRA ”.

20

(1) Section 350 (disclosure of information by HMRC) is amended as follows.

(2) For subsection (1) substitute—

(1) No obligation as to secrecy imposed by statute or otherwise prevents the disclosure of Revenue information to— (a) the FCA or the PRA, if the disclosure is made for the purpose of assisting or enabling that regulator to discharge its functions under this or any other Act, or (b) the Secretary of State, if the disclosure is made for the purpose of assisting in the investigation of a matter under section 168 or with a view to the appointment of an investigator under that section.

(3) In subsection (4), for “subsection (1)” substitute “ subsection (1)(b) ”.

21

Omit section 351 (competition information).

22

In section 351A (disclosure under the UCITS directive), in subsection (1), for “the Authority” substitute “ the FCA or the PRA ”.

23

(1) In section 353 (removal of other restrictions on disclosure), in subsection (1)(b)—

(a) for “Authority”, in the first place, substitute “ FCA or the PRA ”, and

(b) for “Authority”, in the second place, substitute “ either of them ”.

24

After section 353 insert—

(353A) (1) A regulator must not disclose to any person specially protected information. (2) “Specially protected information” is information in relation to which the first and second conditions are met. (3) The first condition is that the regulator received the information from— (a) the Bank of England (“the Bank”), or (b) the other regulator where that regulator had received the information from the Bank. (4) The second condition is that the Bank notified the regulator to which it disclosed the information that the Bank held the information for the purpose of its functions with respect to any of the following— (a) monetary policy; (b) financial operations intended to support financial institutions for the purposes of maintaining stability; (c) the provision of private banking services and related services. (5) The notification referred to in subsection (4) must be— (a) in writing, and (b) given before, or at the same time as, the Bank discloses the information. (6) The prohibition in subsection (1) does not apply— (a) to disclosure by one regulator to the other regulator where the regulator making the disclosure informs the other regulator that the information is specially protected information by virtue of this section; (b) where the Bank has consented to disclosure of the information; (c) to information which has been made available to the public by virtue of being disclosed in any circumstances in which, or for any purposes for which, disclosure is not precluded by this section; (d) to information which the regulator is required to disclose in pursuance of any EU obligation. (7) In this section references to disclosure by or to a regulator or by the Bank include references to disclosure by or to— (a) persons who are, or are acting as,— (i) officers of, or members of the staff of, the regulator, or (ii) officers, employees or agents of the Bank, or (b) auditors, experts, contractors or investigators appointed by the regulator or the Bank under powers conferred by this Act or otherwise. (8) References to disclosure by a regulator do not include references to disclosure between persons who fall within any paragraph of subsection (7)(a) or (b) in relation to that regulator. (9) Each regulator must take such steps as are reasonable in the circumstances to prevent the disclosure of specially protected information, in cases not excluded by subsection (6), by those who are or have been— (a) its officers or members of staff (including persons acting as its officers or members of staff); (b) auditors, experts, contractors or investigators appointed by the regulator under powers conferred by this Act or otherwise; (c) persons to whom the regulator has delegated any of its functions.

25

For section 354 substitute—

(354A) (1) The FCA must take such steps as it considers appropriate to co-operate with other persons (whether in the United Kingdom or elsewhere) who have functions— (a) similar to those of the FCA, or (b) in relation to the prevention or detection of financial crime. (2) The persons referred to in subsection (1) do not include the Bank of England or the PRA (but see sections 3D and 3Q). (3) The FCA must take such steps as it considers appropriate to co-operate with— (a) the Panel on Takeovers and Mergers; (b) an authority designated as a supervisory authority for the purposes of Article 4.1 of the Takeovers Directive; (c) any other person or body that exercises functions of a public nature, under legislation in any country or territory outside the United Kingdom, that appear to the FCA to be similar to those of the Panel on Takeovers and Mergers. (4) Co-operation may include the sharing of information which the FCA is not prevented from disclosing. (5) “Financial crime” has the meaning given in section 1H(3). (354B) (1) The PRA must take such steps as it considers appropriate to co-operate with— (a) other persons (whether in the United Kingdom or elsewhere) who have functions similar to those of the PRA, and (b) other bodies that have functions relevant to financial stability. (2) The persons referred to in subsection (1) do not include the Bank of England or the FCA (but see sections 3D and 3Q). (3) Co-operation may include the sharing of information which the PRA is not prevented from disclosing. (354C) (1) The PRA must disclose to the Bank of England (“the Bank”) any information in its possession that it thinks will or may assist the Bank in achieving its financial stability objective. (2) The duty in subsection (1) applies whether or not the Bank has requested that the information be disclosed to it. (3) Subsection (1) does not require or authorise the disclosure of information whose disclosure— (a) is prohibited by or under section 348 or any other enactment; (b) is incompatible with any EU obligation; (c) would constitute or be punishable as a contempt of court. (4) This section is without prejudice to any other power to disclose information. (5) The Bank's financial stability objective is the objective set out in section 2A(1) of the Bank of England Act 1998. (6) In this section “enactment” includes— (a) an Act of the Scottish Parliament, (b) Northern Ireland legislation, and (c) a Measure or Act of the National Assembly for Wales.

SCHEDULE 13

1

FSMA 2000 is amended as follows.

2

In Part 22 (auditors and actuaries), before section 340 (and the italic heading immediately before it) insert—

(339A) (1) The arrangements maintained by the PRA under section 2K (supervision of PRA-authorised persons) must include arrangements for— (a) the sharing with auditors of PRA-authorised persons of information that the PRA is not prevented from disclosing, and (b) the exchange of opinions with auditors of PRA-authorised persons. (2) The PRA must issue and maintain a code of practice describing how it will comply with subsection (1). (3) The PRA may at any time alter or replace a code issued under this section. (4) If a code is altered or replaced, the PRA must issue the altered or replacement code. (5) When the PRA issues a code under this section the PRA must— (a) give a copy of the code to the Treasury, and (b) publish the code in such manner as the PRA thinks fit. (6) The Treasury must lay before Parliament a copy of the code. (7) “Auditor” means an auditor appointed under or as a result of a statutory provision.

3

(1) Section 340 (appointment) is amended as follows.

(2) In subsection (1), for “Rules may require” substitute “ The appropriate regulator may make rules requiring ”.

(3) In subsection (2), for “Rules may require” substitute “ The appropriate regulator may make rules requiring ”.

(4) For subsection (3) substitute—

(3A) The PRA— (a) must make rules imposing on auditors of PRA-authorised persons such duties as may be specified in relation to co-operation with the PRA in connection with the supervision by the PRA of PRA-authorised persons, and (b) may make rules— (i) imposing such other duties on auditors of PRA-authorised persons as may be specified, and (ii) imposing such duties on actuaries acting for PRA-authorised persons as may be specified. (3B) The FCA may make rules imposing on auditors of, or actuaries acting for, authorised persons such duties as may be specified.

(5) In subsection (4), for “Authority”, in each place, substitute “ regulator making the rules ”.

(6) In subsection (5), for “(3)” substitute “ (3A) or (3B) ”.

(7) After subsection (5) insert—

(5A) In subsections (1) and (2) “the appropriate regulator” means— (a) in the case of a PRA-authorised person, the PRA; (b) in any other case, the FCA.

(8) In subsection (6), for “(3)” substitute “ (3B) ”.

(9) After subsection (7) insert—

(8) The powers conferred by this section enable only the making of such rules as appear to the regulator making them to be necessary or expedient— (a) in the case of the FCA, for the purpose of advancing one or more of its operational objectives, or (b) in the case of the PRA, for the purpose of advancing any of its objectives.

4

(1) Section 342 (information given by auditor or actuary) is amended as follows.

(2) In subsection (1), after “authorised person” insert “ or recognised investment exchange, ”.

(3) In subsection (3)—

(a) for “the Authority”, in the first place, substitute “ a regulator ”,

(b) after “authorised person” insert “ or recognised investment exchange ”, and

(4) In subsection (4), for “Authority” substitute “ regulator ”.

(5) In subsection (7), after “authorised person” insert “ or recognised investment exchange ”.

(6) For “the Authority”, in each other place (including the heading), substitute “ a regulator ”.

5

(1) Section 343 (information given by auditor or actuary: persons with close links) is amended as follows.

(2) In subsection (1)—

(a) in paragraph (a), after “authorised person” insert “ or recognised investment exchange, ”, and

(b) in paragraph (b), after “authorised person” insert “ or recognised investment exchange ”.

(3) In subsection (3)—

(a) for “the Authority”, in the first place, substitute “ a regulator ”,

(b) after “authorised person” insert “ or recognised investment exchange ”, and

(4) In subsection (4), for “Authority” substitute “ regulator ”.

(5) in subsection (7), after “authorised person” insert “ or recognised investment exchange ”.

(6) In subsection (8), after “authorised person” insert “ or recognised investment exchange ”.

(7) For “the Authority”, in each other place (including the heading), substitute “ a regulator ”.

6

(1) Section 344 (duty of auditor or actuary resigning to give notice) is amended as follows.

(2) In each place for “Authority” substitute “ appropriate regulator ”.

(3) In subsection (2)(a), after “authorised person” insert “ or recognised investment exchange ”.

(4) In subsection (3)(a), for “Authority's” substitute “regulator's”.

(5) After subsection (3) insert—

(4) In this section “the appropriate regulator” means— (a) in the case of an auditor of, or an actuary acting for, a PRA-authorised person, the PRA; (b) in any other case, the FCA.

7

(1) For section 345 (disqualification of auditor or actuary) and the italic heading before it substitute—

(345) (1) Subsection (2) applies if it appears to the FCA that an auditor or actuary to whom section 342 applies— (a) has failed to comply with a duty imposed on the auditor or actuary by rules made by the FCA, or (b) has failed to comply with a duty imposed under this Act to communicate information to the FCA. (2) The FCA may do one or more of the following— (a) disqualify the auditor or actuary from being the auditor of, or (as the case may be) from acting as an actuary for, any authorised person or any particular class of authorised person; (b) disqualify the auditor from being the auditor of any recognised investment exchange or any particular class of recognised investment exchange; (c) publish a statement to the effect that it appears to the FCA that the auditor or (as the case may be) actuary has failed to comply with the duty; (d) impose on the auditor or actuary a penalty, payable to the FCA, of such amount as the FCA considers appropriate. (3) If an auditor or actuary has been disqualified by the PRA under section 345A(4)(a), the FCA may disqualify the auditor or actuary, so long as the disqualification under that provision remains in force, from being the auditor of, or (as the case may be) from acting as an actuary for— (a) any FCA-authorised person, (b) any particular class of FCA-authorised person, (c) any recognised investment exchange, or (d) any particular class of recognised investment exchange. (4) In subsection (3) “FCA-authorised person” means an authorised person who is not a PRA-authorised person. (5) Where under subsection (2) or (3) the FCA disqualifies a person from being the auditor of an authorised person or recognised investment exchange or class of authorised person or recognised investment exchange and that authorised person or recognised investment exchange is also, or any person within that class is also, a recognised clearing house, the FCA must — (a) notify the Bank of England, and (b) notify the disqualified person that it has made a notification under paragraph (a). (6) The FCA may remove any disqualification imposed under paragraph (a) or (b) of subsection (2) if satisfied that the disqualified person will in future comply with the duty in question. (7) The FCA may at any time remove any disqualification imposed under subsection (3). (345A) (1) The following provisions of this section have effect only if the Treasury, by order made after consultation with the PRA, so provide. (2) Subsection (3) applies if it appears to the PRA that an auditor or actuary to whom section 342 applies— (a) has failed to comply with a duty imposed on the auditor or actuary by rules made by the PRA, or (b) has failed to comply with a duty imposed under this Act to communicate information to the PRA. (3) The PRA may exercise one or more of the specified powers. (4) The specified powers are such one or more of the following as may be specified in the order under subsection (1)— (a) to disqualify the auditor or actuary from being the auditor of, or (as the case may be) from acting as an actuary for, any PRA-authorised person or any particular class of PRA-authorised person; (b) to publish a statement to the effect that it appears to the PRA that the auditor or (as the case may be) actuary has failed to comply with the duty; (c) to impose on the auditor or actuary a penalty, payable to the PRA, of such amount as the PRA considers appropriate. (5) Where the PRA disqualifies a person under subsection (4)(a) it must— (a) notify the FCA, and (b) notify the person concerned that it has made a notification under paragraph (a). (6) Where the PRA disqualifies a person from being the auditor of a PRA-authorised person or class of PRA-authorised person, and that PRA-authorised person is also, or any person within that class is also, a recognised clearing house, the PRA must, in addition to complying with subsection (5)— (a) notify the Bank of England, and (b) notify the disqualified person that it has made a notification under paragraph (a). (7) The PRA may remove any disqualification imposed under subsection (4)(a) if satisfied that the disqualified person will in future comply with the duty in question. (345B) (1) If the FCA proposes to act under section 345(2) or the PRA proposes to act under section 345A(3), it must give the auditor or actuary to whom the action would relate a warning notice. (2) A warning notice about a proposal to impose a penalty must state the amount of the penalty. (3) A warning notice about a proposal to publish a statement must set out the terms of the statement. (4) If the FCA decides to act under section 345(2) or the PRA decides to act under section 345A(3), it must give the auditor or actuary to whom the action would relate a decision notice. (5) A decision notice about the imposition of a penalty must state the amount of the penalty. (6) A decision notice about the publication of a statement must set out the terms of the statement. (7) If the FCA decides to act under section 345(2) or the PRA decides to act under section 345A(3), the auditor or actuary concerned may refer the matter to the Tribunal. (345C) After a statement under section 345(2)(c) or 345A(4)(b) is published, the regulator that published it must send a copy of the statement to— (a) the auditor or actuary, and (b) any person to whom a copy of the decision notice was given under section 393(4). (345D) (1) The FCA must prepare and issue a statement of its policy with respect to— (a) the imposition of penalties under section 345(2)(d), and (b) the amount of penalties under that provision. (2) If by virtue of an order under section 345A(1), the PRA has power to impose penalties under section 345A(4)(c), the PRA must prepare and issue a statement of its policy with respect to— (a) the imposition of penalties under section 345A(4)(c), and (b) the amount of penalties under that provision. (3) A regulator's policy in determining what the amount of a penalty should be must include having regard to— (a) the seriousness of the contravention, and (b) the extent to which the contravention was deliberate or reckless. (4) A regulator may at any time alter or replace a statement issued under this section. (5) If a statement issued under this section is altered or replaced, the regulator must issue the altered or replacement statement. (6) A regulator must, without delay, give the Treasury a copy of any statement which it publishes under this section. (7) A statement issued under this section must be published by the regulator in the way appearing to the regulator to be best calculated to bring it to the attention of the public. (8) In deciding whether to exercise a power under section 345(2)(d) in the case of any particular contravention, the FCA must have regard to any statement of policy published by it under this section and in force at a time when the contravention occurred. (9) In deciding whether to exercise a power under section 345A(4)(c) in the case of any particular contravention, the PRA must have regard to any statement of policy published by it under this section and in force at a time when the contravention occurred. (10) A regulator may charge a reasonable fee for providing a person with a copy of the statement. (345E) (1) Before a regulator issues a statement under section 345D, the regulator must publish a draft of the proposed statement in the way appearing to the regulator to be best calculated to bring it to the attention of the public. (2) The draft must be accompanied by notice that representations about the proposal may be made to the regulator within a specified time. (3) Before issuing the proposed statement, the regulator must have regard to any representations made to it in accordance with subsection (2). (4) If the regulator issues the proposed statement it must publish an account, in general terms, of— (a) the representations made to it in accordance with subsection (2), and (b) its response to them. (5) If the statement differs from the draft published under subsection (1) in a way which is, in the opinion of the regulator, significant, the regulator must (in addition to complying with subsection (4)) publish details of the difference. (6) A regulator may charge a reasonable fee for providing a person with a copy of a draft under subsection (1). (7) This section also applies to a proposal to alter or replace a statement.

8

(1) Section 392 (application of sections 393 and 394) is amended as follows.

(2) In paragraph (a), for “345(2) (whether as a result of subsection (1) of that section” substitute “ 345B(1) (whether as a result of section 345(2), 345A(3) ”.

(3) In paragraph (b), for “345(3) (whether as a result of subsection (1) of that section” substitute “ 345B(4) (whether as a result of section 345(2), 345A(3) ”.

SCHEDULE 14

1

Part 24 of FSMA 2000 is amended as follows.

2

In section 355 (interpretation of Part 24) at the end of subsection (1) insert—

“PRA-regulated person” means a person who— (a) is or has been a PRA-authorised person, (b) is or has been an appointed representative whose principal (or one of whose principals) is, or was, a PRA-authorised person, or (c) is carrying on or has carried on a PRA-regulated activity in contravention of the general prohibition.

3

(1) Section 356 (powers to participate in proceedings: company voluntary arrangements) is amended as follows.

(2) In subsections (1) and (2), for “the Authority” substitute “ or recognised investment exchange, the appropriate regulator ”.

(3) In subsection (3)—

(a) for “the Authority”, in the first place, substitute “ a regulator ”, and

(b) for “the Authority”, in the second place, substitute “ the appropriate regulator ”.

(4) After subsection (3) insert—

(4) The appropriate regulator” means— (a) in the case of a PRA-authorised person— (i) for the purposes of subsections (1) and (2), the FCA or the PRA, and (ii) for the purposes of subsection (3), each of the FCA and the PRA; (b) in any other case, the FCA. (5) If either regulator makes an application to the court under any of those provisions in relation to a PRA-authorised person, the other regulator is entitled to be heard at any hearing relating to the application.

(5) In the heading, for “Authority's powers” substitute “ Powers of FCA and PRA ”.

4

(1) Section 357 (powers to participate in proceedings: individual voluntary arrangements) is amended as follows.

(2) In subsections (1) to (5), for “Authority” substitute “ appropriate regulator ”.

(3) In subsection (6)—

(a) for “the Authority”, in the first place, substitute “ a regulator ”, and

(b) for “the Authority”, in the second place, substitute “ the appropriate regulator ”.

(4) After subsection (6) insert—

(7) The appropriate regulator” means— (a) in the case of a PRA-authorised person— (i) for the purposes of subsections (1) and (4) to (6), each of the FCA and the PRA, and (ii) for the purposes of subsection (3), the FCA or the PRA; (b) in any other case, the FCA. (8) If either regulator makes an application to the court under any of the provisions mentioned in subsection (5) in relation to a PRA-authorised person, the other regulator is entitled to be heard at any hearing relating to the application.

(5) In the heading, for “Authority's powers” substitute “ Powers of FCA and PRA ”.

5

(1) Section 358 (powers to participate in proceedings: trust deeds for creditors in Scotland) is amended as follows.

(2) In subsections (1), (2) and (6), after “authorised person” insert “ or recognised investment exchange ”.

(3) In subsections (2) to (4), for “Authority” substitute “ appropriate regulator ”.

(4) In subsection (5)—

(a) for “the Authority”, in the first place, substitute “ the appropriate regulator ”, and

(b) for “the Authority”, in the second place, substitute “ that regulator ”.

(5) In subsection (6), for “the Authority” substitute “ a regulator ”.

(6) After subsection (6) insert—

(6A) The appropriate regulator” means— (a) in the case of a PRA-authorised person— (i) for the purposes of subsections (2), (3) and (4), each of the FCA and the PRA, and (ii) for the purposes of subsection (5), the FCA or the PRA; (b) in any other case, the FCA.

(7) In the heading, for “Authority's powers” substitute “ Powers of FCA and PRA ”.

6

(1) Section 359 (administration order) is amended as follows.

(2) In subsection (1)—

(a) for “Authority” substitute “ FCA ”, and

(b) in paragraph (a), after “authorised person” insert “ or recognised investment exchange ”.

(3) After subsection (1) insert—

(1A) The PRA may make an administration application under Schedule B1 to the 1986 Act or Schedule B1 to the 1989 Order in relation to a company or insolvent partnership which is a PRA-regulated person.

(4) In subsection (2), for “the Authority” substitute “ a regulator ”.

(5) In subsection (4), in the definition of “authorised deposit taker”, for “Part IV”, in both places, substitute “ Part 4A ”.

7

(1) Section 361 (administrator's duty to report) is amended as follows.

(2) For subsection (2) substitute—

(2) If the administrator thinks that the company or partnership is carrying on, or has carried on— (a) a regulated activity in contravention of the general prohibition, or (b) a credit-related regulated activity in contravention of section 20, the administrator must report the matter to the appropriate regulator without delay.

(3) After subsection (2) insert—

(2A) The appropriate regulator” means— (a) where the regulated activity is a PRA-regulated activity, the FCA and the PRA; (b) in any other case, the FCA.

(4) For subsection (3) substitute—

(3) Subsection (2) does not apply where— (a) the administration arises out of an administration order made on an application made or petition presented by a regulator, and (b) the regulator's application or petition depended on a contravention by the company or partnership of the general prohibition.

(5) In the heading, for “Authority” substitute “ FCA and PRA ”.

8

(1) Section 362 (powers to participate in proceedings: administration orders) is amended as follows.

(2) In subsection (1)—

(a) omit “other than the Authority”, and

(b) in paragraph (a), after “authorised person” insert “ or recognised investment exchange ”.

(3) After subsection (1A) insert—

(1B) This section also applies in relation to— (a) the appointment under paragraph 22 of Schedule B1 to the 1986 Act (as applied by order under section 420 of the 1986 Act), or under paragraph 23 of Schedule B1 to the 1989 Order (as applied by order under Article 364 of the 1989 Order), of an administrator of a partnership of a kind described in subsection (1)(a) to (c), or (b) the filing with the court of a copy of notice of intention to appoint an administrator under either of those paragraphs (as so applied).

(4) In subsections (2) to (6), for “Authority” substitute “ appropriate regulator ”.

(5) After subsection (6) insert—

(7) The appropriate regulator” means— (a) for the purposes of subsections (2) to (4) and (6)— (i) where the company or partnership is a PRA-regulated person, each of the FCA and the PRA, and (ii) in any other case, the FCA; (b) for the purposes of subsection (5)— (i) where the company or partnership is a PRA-regulated person, the FCA or the PRA, and (ii) in any other case, the FCA. (8) But where the administration application was made by a regulator “the appropriate regulator” does not include that regulator.

(6) In the heading, for “Authority's powers” substitute “ Powers of FCA and PRA ”.

9

(1) Section 362A (administrator appointed by company or directors) is amended as follows.

(2) In subsection (1), after “company” insert “ or partnership ”.

(3) For subsection (2) substitute—

(2) An administrator of the company or partnership may not be appointed under a provision specified in subsection (2A) without the consent of the appropriate regulator. (2A) Those provisions are— (a) paragraph 22 of Schedule B1 to the 1986 Act (including that paragraph as applied in relation to partnerships by order under section 420 of that Act); (b) paragraph 23 of Schedule B1 to the 1989 Order (including that paragraph as applied in relation to partnerships by order under article 364 of that Order). (2B) “The appropriate regulator” means— (a) where the company or partnership is a PRA-regulated person, the PRA, and (b) in any other case, the FCA.

10

(1) Section 363 (powers to participate in proceedings: receivership) is amended as follows.

(2) In subsection (1)(a), after “authorised person” insert “ or recognised investment exchange ”.

(3) In subsections (2) to (5), for “Authority” substitute “ appropriate regulator ”.

(4) After subsection (5) insert—

(6) The appropriate regulator” means— (a) for the purposes of subsections (2) to (4)— (i) where the company is a PRA-regulated person, each of the FCA and the PRA, and (ii) in any other case, the FCA; (b) for the purposes of subsection (5)— (i) where the company is a PRA-regulated person, the FCA or the PRA, and (ii) in any other case, the FCA.

(5) In the heading, for “Authority's powers” substitute “ Powers of FCA and PRA ”.

11

In section 364 (receiver's duty to report to Authority)—

(a) in paragraph (b), after “prohibition” insert “ or a credit-related regulated activity in contravention of section 20 ”,

(b) for “to the Authority without delay” substitute “ without delay to the FCA and, if the regulated activity concerned is a PRA-regulated activity, to the PRA ”, and

12

(1) Section 365 (powers to participate in proceedings: voluntary winding up) is amended as follows.

(2) In subsection (1)(b), after “authorised person” insert “ or recognised investment exchange ”.

(3) In subsections (2) to (7), for “Authority” substitute “ appropriate regulator ”.

(4) After subsection (7) insert—

(8) The appropriate regulator” means— (a) for the purposes of subsections (2) to (4), (6) and (7)— (i) where the company is a PRA-authorised person, each of the FCA and the PRA, and (ii) in any other case, the FCA; (b) for the purposes of subsection (5)— (i) where the company is a PRA-authorised person, the FCA or the PRA, and (ii) in any other case, the FCA.

(5) In the heading, for “Authority's powers” substitute “ Powers of FCA and PRA ”.

13

(1) Section 366 (insurers effecting or carrying out long-term contracts of insurance) is amended as follows.

(2) In subsections (1), (2) and (5), for “Authority” substitute “ PRA ”.

(3) At the end insert—

(9) Before giving or refusing consent under subsection (1), the PRA must consult the FCA. (10) In the event that the activity of effecting or carrying out long-term contracts of insurance as principal is not to any extent a PRA-regulated activity— (a) references to the PRA in subsections (1), (2) and (5) are to be read as references to the FCA, and (b) subsection (9) does not apply.

14

(1) Section 367 (winding-up petitions) is amended as follows.

(2) In subsection (1)—

(a) for “Authority” substitute “ FCA ”, and

(b) in paragraph (a), after “authorised person” insert “ or recognised investment exchange ”.

(3) After that subsection insert—

(1A) The PRA may present a petition to the court for the winding up of a body which is a PRA-regulated person.

(4) In subsection (2), for “subsection (1)” substitute “ subsections (1) and (1A) ”.

(5) In subsection (6), after “(1)” insert “ or (1A) ”.

15

(1) Section 368 (winding-up petitions: EEA and Treaty firms) is amended as follows.

(2) The existing provision becomes subsection (1).

(3) In that subsection—

(a) for “The Authority” substitute “ A regulator ”, and

(b) after “it” insert “ or the other regulator ”.

(4) After that subsection insert—

(2) If a regulator receives from the home state regulator of a body falling within subsection (1)(a) or (b) a request to present a petition to the court under section 367 for the winding up of the body, it must— (a) notify the other regulator of the request, and (b) provide the other regulator with such information relating to the request as it thinks fit.

16

(1) Section 369 (insurers: service of petition etc. on Authority) is amended as follows.

(2) In subsection (1)—

(a) for “the Authority” substitute “ a regulator ”, and

(b) for “on the Authority” substitute “ on the appropriate regulator ”.

(3) In subsection (2)—

(a) for “the Authority” substitute “ a regulator ”, and

(b) for “on the Authority” substitute “ on the appropriate regulator ”.

(4) After that subsection insert—

(3) The appropriate regulator” means— (a) in relation to a PRA-authorised person, the FCA and the PRA, and (b) in any other case, the FCA. (4) If either regulator— (a) presents a petition for the winding up of a PRA-authorised person with permission to effect or carry out contracts of insurance, or (b) applies to have a provisional liquidator appointed under section 135 of the 1986 Act (or Article 115 of the 1989 Order) in respect of a PRA-authorised person with permission to effect or carry out contracts of insurance, that regulator must serve a copy of the petition or application (as the case requires) on the other regulator.

(5) In the heading, for “Authority” substitute “ FCA and PRA ”.

17

(1) Section 369A (reclaim funds: service of petition etc. on Authority) is amended as follows.

(2) In subsection (1)—

(a) for “other than the Authority” substitute “ other than a regulator ”, and

(b) for “on the Authority” substitute “ on the appropriate regulator ”.

(3) In subsection (2)—

(a) for “other than the Authority” substitute “ other than a regulator ”, and

(b) for “on the Authority” substitute “ on the appropriate regulator ”.

(4) After subsection (3) insert—

(4) The appropriate regulator” means— (a) in relation to an authorised reclaim fund that is a PRA-authorised person, the FCA and the PRA, and (b) in relation to any other authorised reclaim fund, the FCA. (5) If either regulator— (a) presents a petition for the winding up of an authorised reclaim fund that is a PRA-authorised person, or (b) applies to have a provisional liquidator appointed under section 135 of the 1986 Act (or Article 115 of the 1989 Order) in respect of an authorised reclaim fund that is a PRA-authorised person, that regulator must serve a copy of the petition or application (as the case requires) on the other regulator.

(5) In the heading, for “Authority” substitute “ FCA and PRA ”.

18

For section 370 substitute—

(370) (1) If— (a) a company is being wound up voluntarily or a body is being wound up on a petition presented by any person, and (b) it appears to the liquidator that the company or body is carrying on, or has carried on— (i) a regulated activity in contravention of the general prohibition, or (ii) a credit-related regulated activity in contravention of section 20, the liquidator must report the matter without delay to the FCA and, if the regulated activity concerned is a PRA-regulated activity, to the PRA. (2) Subsection (1) does not apply where— (a) a body is being wound up on a petition presented by a regulator, and (b) the regulator's petition depended on a contravention by the body of the general prohibition.

19

(1) Section 371 (power to participate in proceedings: winding up by the court) is amended as follows.

(2) In subsection (1)—

(a) omit “other than the Authority”, and

(b) in paragraph (a), after “authorised person” insert “ or recognised investment exchange ”.

(3) In subsections (2) to (5), for “Authority” substitute “ appropriate regulator ”.

(4) After subsection (5) insert—

(6) The appropriate regulator” means— (a) for the purposes of subsections (2), (3) and (5)— (i) where the body is a PRA-regulated person, each of the FCA and the PRA, and (ii) in any other case, the FCA; (b) for the purposes of subsection (4)— (i) where the body is a PRA-regulated person, the FCA or the PRA, and (ii) in any other case, the FCA. (7) But where the petition was presented by a regulator “the appropriate regulator” does not include the regulator which presented the petition.

(5) In the heading, for “Authority's powers” substitute “ Powers of FCA and PRA ”.

20

(1) Section 372 (bankruptcy petitions) is amended as follows.

(2) In subsection (1), for “Authority” substitute “ FCA ”.

(3) After that subsection insert—

(1A) The PRA may present a petition to the court— (a) under section 264 of the 1986 Act (or Article 238 of the 1989 Order) for a bankruptcy order to be made against an individual who is a PRA-regulated person; (b) under section 5 of the 1985 Act for the sequestration of the estate of an individual who is a PRA-regulated person.

(4) In subsection (2), for “such a petition may be presented” substitute “ a petition may be presented by virtue of subsection (1) or (1A) ”.

(5) In subsection (4)(a)—

(a) for “the Authority”, in the first place, substitute “ a regulator ”, and

(b) for “the Authority”, in the second place, substitute “ that regulator ”.

(6) In subsection (6)—

(a) after “(1)(b)” insert “ or (1A)(b) ”, and

(b) in paragraph (a), for “the Authority” substitute “ the regulator by which the petition is presented ”.

21

(1) Section 373 (insolvency practitioner's duty to report to Authority) is amended as follows.

(2) In subsection (1)—

(a) in paragraph (a), omit the words from “by virtue of” to “Authority”,

(b) in paragraph (b), for the words from “carried on” to the end substitute

carried on— (i) a regulated activity in contravention of the general prohibition, or (ii) a credit-related regulated activity in contravention of section 20,

, and

(c) for “to the Authority without delay” substitute “ without delay to the FCA and, if the regulated activity concerned is a PRA-regulated activity, to the PRA ”.

(3) After that subsection insert—

(1A) Subsection (1) does not apply where— (a) the bankruptcy order or sequestration award is in force by virtue of a petition presented by a regulator, and (b) the regulator's petition depended on a contravention by the individual of the general prohibition.

(4) In the heading, for “to Authority” substitute “ to FCA and PRA ”.

22

(1) Section 374 (Authority's powers to participate in proceedings: bankruptcy) is amended as follows.

(2) In subsection (1), omit “other than the Authority”.

(3) In subsections (2) to (4), for “Authority” substitute “ appropriate regulator ”.

(4) After subsection (6) insert—

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