Legalize / United Kingdom / Public General Act

Financial Services (Banking Reform) Act 2013

Type Public General Act

Publication 2013-12-18

Last updated 2025-06-19

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(d) the imposing on the person of a requirement with respect to such information or document has been specifically authorised by the Payment Systems Regulator.

(10) If a person claims a lien on a document, its production under section 81 or 85 does not affect the lien.

(11) In this section—

“controller” has the same meaning as in FSMA 2000 (see section 422 of that Act);

“group” has the same meaning as in FSMA 2000 (see section 421 of that Act);

“investigator” means a person appointed under section 83.

Admissibility of statements made to investigators

87

(1) A statement made to an investigator by a person in compliance with an information requirement is admissible in evidence in any proceedings, so long as it also complies with any requirements governing the admissibility of evidence in the circumstances in question.

(2) But in criminal proceedings in which that person is charged with an offence to which this subsection applies—

(a) no evidence relating to the statement may be adduced by or on behalf of the prosecution, and

(b) no question relating to the statement may be asked by or on behalf of the prosecution,

unless evidence relating to the statement is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person.

(3) Subsection (2) applies to any offence other than—

(a) an offence under section 90(6);

(b) an offence under section 5 of the Perjury Act 1911 (false statements made otherwise than on oath);

(c) an offence under section 44(2) of the Criminal Law (Consolidation) (Scotland) Act 1995 (false statements made otherwise than on oath);

(d) an offence under Article 10 of the Perjury (Northern Ireland) Order 1979.

(4) In this section—

“information requirement” means a requirement imposed by an investigator under section 85 or 86;

“investigator” means a person appointed under section 83.

Entry of premises under warrant

88

(1) A justice of the peace may issue a warrant under this section if satisfied on information on oath given by or on behalf of the Payment Systems Regulator or an investigator that there are reasonable grounds for believing that the first or second set of conditions is satisfied.

(2) The first set of conditions is—

(a) that a person on whom an information requirement has been imposed has failed (wholly or in part) to comply with it, and

(b) that on the premises specified in the warrant—

(i) there are documents which have been required, or

(ii) there is information which has been required.

(3) In this section “information requirement” means—

(a) a requirement imposed by the Payment Systems Regulator under section 81 or 86, or

(b) a requirement imposed by an investigator under section 85 or 86.

(4) The second set of conditions is—

(a) that the premises specified in the warrant are premises of a participant in a regulated payment system,

(b) that there are on the premises documents or information in relation to which an information requirement could be imposed, and

(i) it would not be complied with, or

(ii) the documents or information to which it related would be removed, tampered with or destroyed.

(5) A warrant under this section authorises a constable—

(a) to enter the premises specified in the warrant,

(b) to search the premises and take possession of any documents or information appearing to be documents or information of a kind in respect of which a warrant under this section was issued (“the relevant kind”) or to take, in relation to any such documents or information, any other steps which may appear to be necessary for preserving them or preventing interference with them,

(d) to require any person on the premises to provide an explanation of any document or information appearing to be of the relevant kind or to state where it may be found, and

(e) to use such force as may be reasonably necessary.

(6) A warrant under this section may be executed by any constable.

(7) The warrant may authorise persons to accompany any constable who is executing it.

(8) The powers in subsection (5) may be exercised by a person who—

(a) is authorised by the warrant to accompany a constable, and

(b) exercises those powers in the company of, and under the supervision of, a constable.

(9) In England and Wales, sections 15(5) to (8) and 16(3) to (12) of the Police and Criminal Evidence Act 1984 (execution of search warrants and safeguards) apply to warrants issued under this section.

(10) In Northern Ireland, Articles 17(5) to (8) and 18(3) to (12) of the Police and Criminal Evidence (Northern Ireland) Order 1989 apply to warrants issued under this section.

(11) This section has effect in relation to Scotland as if—

(a) for any reference to a justice of the peace there were substituted a reference to a justice of the peace or a sheriff, and

(b) for any reference to information on oath there were substituted a reference to evidence on oath.

(12) In this section “investigator” means a person appointed under section 83.

Retention of documents taken under section 88

89

(1) Any document of which possession is taken under section 88 (“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).

Enforcement of information and investigation powers

90

(1) If a person other than an investigator (“the defaulter”) fails to comply with a requirement imposed under any of sections 81 to 88, the person imposing the requirement may certify that fact in writing to the court.

(2) If the court is satisfied that the defaulter failed without reasonable excuse to comply with the requirement, it may deal with the defaulter (and in the case of a body corporate, any director or other officer of the body) as if that person were in contempt.

(3) In subsection (2) “officer”, in relation to a limited liability partnership, means a member of the limited liability partnership.

(4) A person who knows or suspects that an investigation is being or is likely to be conducted under section 83 is guilty of an offence if the person—

(a) falsifies, conceals, destroys or otherwise disposes of a document which the person knows or suspects is or would be relevant to such an investigation, or

(b) causes or permits the falsification, concealment, destruction or disposal of such a document.

(5) It is a defence for a person charged with an offence under subsection (4) to show that the person had no intention of concealing facts disclosed by the documents from the investigator.

(6) A person is guilty of an offence if the person, in purported compliance with a requirement imposed under any of sections 81 to 88—

(a) provides information which the person knows to be false or misleading in a material particular, or

(b) recklessly provides information which is false or misleading in a material particular.

(7) A person guilty of an offence under subsection (4) or (6) is liable—

(a) on summary conviction—

(i) in England and Wales, to imprisonment for a term not exceeding the general limit in a magistrates’ court (or 6 months, if the offence was committed before 2 May 2022) or a fine, or both;

(ii) in Scotland, to imprisonment for a term not exceeding 12 months or a fine not exceeding the statutory maximum, or both;

(iii) in Northern Ireland, to imprisonment for a term not exceeding 6 months or a fine not exceeding the statutory maximum, or both;

(b) on conviction on indictment, to imprisonment for a term not exceeding 2 years or a fine, or both.

(8) Any person who intentionally obstructs the exercise of any rights conferred by a warrant under section 88 is guilty of an offence and liable on summary conviction—

(a) in England and Wales, to imprisonment for a term not exceeding 51 weeks (or 3 months, if the offence was committed before the commencement of section 280(2) of the Criminal Justice Act 2003) or a fine, or both;

(b) in Scotland, to imprisonment for a term not exceeding 3 months or a fine not exceeding level 5 on the standard scale, or both;

(c) in Northern Ireland, to imprisonment for a term not exceeding 3 months or a fine not exceeding level 5 on the standard scale, or both.

(9) In this section—

“court” means the High Court or, in Scotland, the Court of Session;

“investigator” means a person appointed under section 83.

Disclosure of information

Restrictions on disclosure of confidential information

91

(1) Confidential information must not be disclosed by a primary recipient, or by any person obtaining the information directly or indirectly from a primary recipient, without the consent of—

(a) the person from whom the primary recipient obtained the information, and

(b) if different, the person to whom it relates.

(2) In this section “confidential information” means information which—

(a) relates to the business or other affairs of any person,

(b) was received by the primary recipient for the purposes of, or in the discharge of, any functions of the Payment Systems Regulator under this Part, and

(3) It is immaterial for the purposes of subsection (2) whether or not the information was received—

(a) as a result of a requirement to provide it imposed by or under any enactment;

(b) for other purposes as well as purposes mentioned in that subsection.

(4) Information is not confidential information if—

(a) it 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, or

(b) it is in the form of a summary or a collection of information that is framed in such a way that it is not possible to ascertain from it information relating to any particular person.

(5) Each of the following is a primary recipient for the purposes of this section—

(a) the Payment Systems Regulator;

(b) the FCA;

(d) a person who is or has been engaged to provide services to the Payment Systems Regulator or the FCA;

(e) any auditor or expert instructed by the Payment Systems Regulator or the FCA;

(f) a person appointed to make a report under section 82;

(g) a person appointed under section 83.

(6) Nothing in this section applies to information received by a primary recipient for the purposes of, or in the discharge of, any functions of the Payment Systems Regulator under the Competition Act 1998 or the Enterprise Act 2002 by virtue of section 59 or 61.

(For provision about the disclosure of such information, see Part 9 of the Enterprise Act 2002.)

Exemptions from section 91

92

(1) Section 91 does not prevent a disclosure of confidential information which—

(a) is made for the purpose of facilitating the carrying out of a public function, and

(b) is permitted by regulations made by the Treasury under this section.

(2) For the purposes of this section “public functions” includes—

(a) functions conferred by or in accordance with any provision contained in any enactment;

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) similar functions to those in paragraph (a) conferred on persons by or under provisions having effect as part of the law of a country or territory outside the United Kingdom;

(d) functions exercisable in relation to specified disciplinary proceedings.

(3) Regulations under this section may, in particular, make provision permitting the disclosure of confidential information or of confidential information of a specified kind—

(a) by specified recipients, or recipients of a specified description, to any person for the purpose of enabling or assisting the recipient to discharge specified public functions;

(b) by specified recipients, or recipients of a specified description, to specified persons, or persons of specified descriptions, for the purpose of enabling or assisting those persons to discharge specified public functions;

(d) by any recipient if the disclosure is with a view to or in connection with specified proceedings.

(4) Regulations under this section may also include provision—

(a) making any permission to disclose confidential information subject to conditions (which may relate to the obtaining of consents or any other matter);

(b) restricting the uses to which confidential information disclosed under the regulations may be put.

(5) In relation to confidential information, each of the following is a “recipient”—

(a) a primary recipient;

(b) a person obtaining the information directly or indirectly from a primary recipient.

(6) In this section—

“confidential information” and “primary recipient” have the same meaning as in section 91;

“specified” means specified in regulations.

Offences relating to disclosure of confidential information

93

(1) A person who discloses information in contravention of section 91 is guilty of an offence.

(2) A person guilty of an offence under subsection (1) is liable—

(a) on summary conviction—

(i) in England and Wales, to imprisonment for a term not exceeding 3 months or a fine, or both;

(ii) in Scotland, to imprisonment for a term not exceeding 12 months or a fine not exceeding the statutory maximum, or both;

(iii) in Northern Ireland, to imprisonment for a term not exceeding 3 months or a fine not exceeding the statutory maximum, or both;

(b) on conviction on indictment, to imprisonment for a term not exceeding 2 years or a fine, or both.

(3) A person is guilty of an offence if—

(a) information has been disclosed to the person in accordance with regulations made under section 92, and

(b) the person uses the information in contravention of any provision of those regulations.

(4) A person guilty of an offence under subsection (3) is liable on summary conviction—

(a) in England and Wales, to imprisonment for a term not exceeding 51 weeks (or 3 months, if the offence was committed before the commencement of section 280(2) of the Criminal Justice Act 2003) or a fine, or both;

(b) in Scotland, to imprisonment for a term not exceeding 3 months or a fine not exceeding level 5 on the standard scale, or both;

(c) in Northern Ireland, to imprisonment for a term not exceeding 3 months or a fine not exceeding level 5 on the standard scale, or both.

(5) In proceedings against a person (“P”) for an offence under this section it is a defence for P to prove—

(a) that P did not know and had no reason to suspect that the information was confidential information;

(b) that P took all reasonable precautions and exercised all due diligence to avoid committing the offence.

(6) In this section “confidential information” has the same meaning as in section 91.

Information received from Bank of England

94

(1) The following are regulators for the purposes of this section—

(a) the Payment Systems Regulator;

(b) the FCA.

(2) A regulator must not disclose to any person specially protected information.

(3) “Specially protected information” is information in relation to which the first and second conditions are met.

(4) 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.

(5) 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;

(6) The notification referred to in subsection (5) must be—

(a) in writing, and

(b) given before, or at the same time as, the Bank discloses the information.

(7) The prohibition in subsection (2) 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) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) In this section references to disclosure by or to a regulator or by the Bank include references to disclosure by or to any of the following—

(a) persons who are, or are acting as, officers of, or members of the staff of, the regulator;

(b) persons who are, or are acting as, officers, employees or agents of the Bank;

(c) auditors, experts, contractors or investigators appointed by the regulator or the Bank under powers conferred by this Part or otherwise.

(9) References to disclosure by a regulator do not include references to disclosure between persons who fall within subsection (8)(a) or (b) in relation to that regulator.

(10) 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 (7), 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 Part or otherwise;

Disclosure of information by Bank to Regulator

95

In section 246 of the Banking Act 2009 (information), in subsection (2), after paragraph (c) insert—

(ca) the Payment Systems Regulator (established under section 40 of the Financial Services (Banking Reform) Act 2013);

Guidance

96

(1) The Payment Systems Regulator may give guidance consisting of such information and advice as it considers appropriate—

(a) with respect to the operation of specified provisions of this Part;

(b) with respect to any other matter relating to its functions under this Part;

(c) with respect to any other matters about which it appears to the Payment Systems Regulator to be desirable to give information or advice.

(2) Guidance given by the Payment Systems Regulator under this section must include guidance about how it intends to advance its payment systems objectives in discharging its functions under this Part in relation to different categories of payment system or participants in payment systems.

(3) In this Part “general guidance” means guidance given by the Payment Systems Regulator under this section which—

(a) is given—

(i) to persons generally,

(ii) to participants in payment systems, or regulated payment systems, generally, or

(iii) to a class of participant in a payment system or regulated payment system,

(b) is intended to have continuing effect, and

(4) The Payment Systems Regulator may give financial or other assistance to persons giving information or advice of a kind which the Payment Systems Regulator could give under this section.

(5) The Payment Systems Regulator may—

(a) publish its guidance,

(b) offer copies of its published guidance for sale at a reasonable price, and

Reports

97

If it considers that it is desirable to do so in order to advance any of its payment systems objectives, the Payment Systems Regulator may prepare and publish a report into any matter which it considers relevant to the exercise of its functions under this Part.

Relationship with other regulators

Duty of regulators to ensure co-ordinated exercise of functions

98

(1) The following are regulators for the purposes of this section—

(a) the Payment Systems Regulator;

(b) the Bank of England;

(d) the PRA.

(2) The regulators must co-ordinate the exercise of their relevant functions (see subsection (5)) with a view to ensuring—

(a) that each regulator consults every other regulator (where not otherwise required to do so) in connection with any proposed exercise of a relevant function in a way that may have a material adverse effect on the advancement by that other regulator of any of its objectives;

(b) that where appropriate each regulator obtains information and advice from every other regulator in connection with the exercise of its relevant functions in relation to matters of common regulatory interest in cases where the other regulator may be expected to have relevant information or relevant expertise.

(3) The duty in subsection (2) applies only to the extent that compliance with the duty—

(a) is compatible with the advancement by each regulator of any of its objectives, and

(b) does not impose a burden on the regulators that is disproportionate to the benefits of compliance.

(4) A function conferred on a regulator relates to matters of common regulatory interest if—

(a) another regulator exercises similar or related functions in relation to the same persons,

(b) another regulator exercises functions which relate to different persons but relate to similar subject-matter, or

(5) “Relevant functions” means—

(a) in relation to the Payment Systems Regulator, its functions under this Part or Part 2 of the Payment Card Interchange Fee Regulations 2015 ;

(b) in relation to the Bank of England, its functions under Part 5 of the Banking Act 2009 (...payment systems) or Part 5A of that Act (wholesale cash distribution);

(i) the functions conferred on it by or under FSMA 2000 (see section 1A(6) of that Act);

(ii) the functions conferred on it by or under Part 3 of the Payment Card Interchange Fee Regulations 2015 (S.I. 2015/1911);

(iii) the functions conferred on it by or under the Electronic Money Regulations 2011 (S.I. 2011/99);

(iv) its functions in regulating—

(a) credit institutions where authorised under Part 4A of FSMA 2000, or

(b) authorised payment institutions under the Payment Services Regulations 2017 (S.I. 2017/752).

(d) in relation to the PRA, the functions conferred on it by or under FSMA 2000 (see section 2AB(3) of that Act).

(6) “Objectives” means—

(a) in relation to the Payment Systems Regulator, its payment systems objectives and ensuring compliance with the interchange fee regulation (see Part 2 of the Payment Card Interchange Fee Regulations 2015) ;

(b) in relation to the Bank of England, its Financial Stability Objective under section 2A of the Bank of England Act 1998;

(c) in relation to the FCA, its strategic objective and operational objectives under section 1B of FSMA 2000 and ensuring compliance with Articles 8(2), (5) and (6), 9, 10(1) and (5), 11 and 12 of the interchange fee regulation (see Part 3 of the Payment Card Interchange Fee Regulations 2015) ;

(d) in relation to the PRA, its general objective under section 2B of that Act.

(7) In subsection (6) “the interchange fee regulation” means Regulation (EU) 2015/751 of the European Parliament and of the Council of 29th April 2015 on interchange fees for card-based payment transactions.

Memorandum of understanding

99

(1) The following are regulators for the purposes of this section—

(a) the Payment Systems Regulator;

(b) the Bank of England;

(d) the PRA.

(2) The regulators must prepare and maintain a memorandum which describes in general terms—

(a) the role of each regulator in relation to the exercise of relevant functions which relate to matters of common regulatory interest, and

(b) how the regulators intend to comply with section 98 in relation to the exercise of such functions.

(3) The regulators must review the memorandum at least once in each calendar year.

(4) The regulators must give the Treasury a copy of the memorandum and any revised memorandum.

(5) The Treasury must lay before Parliament a copy of any document received by them under this section.

(6) The regulators must ensure that the memorandum as currently in force is published in the way appearing to them to be best calculated to bring it to the attention of the public.

(7) The memorandum need not relate to any aspect of compliance with section 98 if the regulators consider—

(a) that publication of information about that aspect would be against the public interest, or

(b) that that aspect is a technical or operational matter not affecting the public.

(8) In this section—

(a) the reference in subsection (2)(a) to matters of common regulatory interest is to be read in accordance with section 98(4), and

(b) references to relevant functions are to be read in accordance with section 98(5).

Power of Bank to require Regulator to refrain from specified action

100

(1) Where the first, second and third conditions are met, the Bank of England may give a direction under this section to the Payment Systems Regulator.

(2) The first condition is that the Payment Systems Regulator is proposing to exercise any of its powers under this Part in relation to a participant in a regulated payment system.

(3) The second condition is that the Bank of England is of the opinion that the exercise of the power in the manner proposed may—

(a) threaten the stability of the UK financial system,

(b) have serious consequences for business or other interests in the United Kingdom, or

(4) The third condition is that the Bank of England is of the opinion that the giving of the direction is necessary in order to avoid the possible consequence falling within subsection (3).

(5) A direction under this section is a direction requiring the Payment Systems Regulator not to exercise the power or not to exercise it in a specified manner.

(6) The direction may be expressed to have effect during a specified period or until revoked.

(7) The Payment Systems Regulator is not required to comply with a direction under this section if or to the extent that in the opinion of the Payment Systems Regulator compliance would be incompatible with any ... international obligation of the United Kingdom.

Power of FCA to require Regulator to refrain from specified action

101

(1) Where the first, second and third conditions are met, the FCA may give a direction under this section to the Payment Systems Regulator.

(2) The first condition is that the Payment Systems Regulator is proposing to exercise any of its powers under this Part in relation to a participant in a regulated payment system.

(3) The second condition is that the FCA is of the opinion that the exercise of the power in the manner proposed may have an adverse effect on the ability of the FCA to comply with its duty under section 1B(1) of FSMA 2000 (FCA's general duties).

(4) The third condition is that the FCA is of the opinion that the giving of the direction is necessary in order to avoid the possible consequence falling within subsection (3).

(5) A direction under this section is a direction requiring the Payment Systems Regulator not to exercise the power or not to exercise it in a specified manner.

(6) The direction may be expressed to have effect during a specified period or until revoked.

(7) The Payment Systems Regulator is not required to comply with a direction under this section if or to the extent that in the opinion of the Payment Systems Regulator compliance would be incompatible with any ... international obligation of the United Kingdom.

Power of PRA to require Regulator to refrain from specified action

102

(1) Where the first, second and third conditions are met, the PRA may give a direction under this section to the Payment Systems Regulator.

(2) The first condition is that the Payment Systems Regulator is proposing to exercise any of its powers under this Part in relation to—

(a) a class of PRA-authorised persons, or

(b) a particular PRA-authorised person.

(3) The second condition is that the PRA is of the opinion that the exercise of the power in the manner proposed may—

(a) threaten the stability of the UK financial system,

(b) result in the failure of a PRA-authorised person in a way that would have an adverse effect on the stability of the UK financial system,

(d) have an adverse effect on the ability of the PRA to comply with its duty under section 2B(1) of FSMA 2000 (the PRA's general objective).

(4) The third condition is that the PRA is of the opinion that the giving of the direction is necessary in order to avoid the possible consequence falling within subsection (3).

(5) A direction under this section is a direction requiring the Payment Systems Regulator not to exercise the power or not to exercise it in a specified manner.

(6) The direction may be expressed to have effect during a specified period or until revoked.

(7) The Payment Systems Regulator is not required to comply with a direction under this section if or to the extent that in the opinion of the Payment Systems Regulator compliance would be incompatible with any ... international obligation of the United Kingdom.

(8) The reference in subsection (3)(b) to the “failure” of a PRA-authorised person is to be read in accordance with section 2J(3) and (4) of FSMA 2000.

(9) In this section—

“core services” has the same meaning as in FSMA 2000 (see section 142C of that Act), and

“PRA-authorised person” has the same meaning as in FSMA 2000 (see section 2B(5) of that Act).

Consultation, accountability and oversight

Regulator’s general duty to consult

103

(1) The Payment Systems Regulator must make and maintain effective arrangements for consulting relevant persons on—

(a) the extent to which its general policies and practices are consistent with its general duties under section 49, and

(b) how its payment systems objectives may best be achieved.

(2) The following are “relevant persons” for the purposes of this section—

(a) participants in regulated payment systems, and

(b) those who use, or are likely to use, services provided by regulated payment systems.

(3) Arrangements under this section must include the establishment and maintenance of one or more panels of persons to represent the interests of relevant persons.

(4) Where the Payment Systems Regulator establishes a panel under subsection (3), it must appoint one of the members of the panel to be its chair.

(5) The Treasury's approval is required for the appointment or dismissal of the chair of a panel established under subsection (3).

(5A) A person who receives remuneration from the FCA, the PRA, the Payment Systems Regulator, the Bank of England or the Treasury is disqualified from being appointed as a member of a panel established under subsection (3).

(5B) Subsection (5A) does not apply in respect of a panel mentioned in that subsection if regulations made by the Treasury provide for it not to apply to that panel.

(5C) Regulations under subsection (5B) may make provision in respect of a panel—

(a) generally, or

(b) only in relation to such descriptions of persons or cases as the regulations may specify (but the power to make such regulations may not be exercised so as to specify persons by name).

(6) The Payment Systems Regulator must—

(a) consider representations that are made to it in accordance with arrangements made under this section, and

(b) from time to time publish, in such manner as it thinks fit, responses to the representations.

Consultation in relation to generally applicable requirements

104

(1) In this Part references to imposing a generally applicable requirement are to—

(a) giving a general direction under section 54, or

(b) imposing a generally-imposed requirement under section 55,

and references to the requirement are to be read accordingly.

(2) Before imposing a generally applicable requirement, the Payment Systems Regulator must—

(a) consult the Bank of England, the FCA and the PRA, and

(b) after doing so, publish a draft of the proposed requirement in the way appearing to the Payment Systems Regulator to be best calculated to bring it to the attention of the public.

(3) The draft must be accompanied by—

(a) a cost benefit analysis,

(b) an explanation of the purpose of the proposed requirement,

(ba) an explanation of the ways in which having regard to specified matters under section 102B(2) has affected the proposed requirement,

(c) an explanation of the Payment Systems Regulator's reasons for believing that imposing the requirement is compatible with its duties under section 49, and

(d) notice that representations about the proposed requirement may be made to the Payment Systems Regulator within a specified time.

(4) Before imposing the proposed requirement the Payment Systems Regulator must have regard to any representations made to it in accordance with subsection (3)(d).

(5) If the Payment Systems Regulator proposes to impose the requirement, it must publish an account, in general terms, of—

(a) the representations made to it in accordance with subsection (3)(d), and

(b) its response to them.

(5A) The Payment Systems Regulator must include, in the account mentioned in subsection (5), a list of the respondents who made the representations, where those respondents have consented to the publication of their names.

(5B) The duty in subsection (5A) is not to be read as authorising or requiring such processing of personal data as would contravene the data protection legislation (but the duty is to be taken into account in determining whether particular processing of data would contravene that legislation).

(5C) In this section “data protection legislation” has the same meaning as in the Data Protection Act 2018 (see section 3 of that Act).

(5D) Where representations are made to the Payment Systems Regulator by a Committee of the House of Commons or the House of Lords or a Joint Committee of both Houses in accordance with subsection (3)(d), the Payment Systems Regulator’s account mentioned in subsection (5) must also describe how the Payment Systems Regulator has considered the representations made by that Committee in making the proposed requirement.

(6) If the requirement differs from the draft published under subsection (2)(b) in a way which is, in the opinion of the Payment Systems Regulator, significant the Payment Systems Regulator must (in addition to complying with subsection (5)) publish details of the difference together with a cost benefit analysis.

(7) For the purposes of this section a “cost benefit analysis” is—

(a) an analysis of the costs together with an analysis of the benefits that will arise—

(i) if the proposed requirement is imposed, or

(ii) if subsection (6) applies, from the requirement imposed, and

(b) subject to subsection (8), an estimate of those costs and of those benefits.

(8) If, in the opinion of the Payment Systems Regulator—

(a) the costs or benefits referred to in subsection (7) cannot reasonably be estimated, or

(b) it is not reasonably practicable to produce an estimate,

the cost benefit analysis need not estimate them, but must include a statement of the Payment Systems Regulator's opinion and an explanation of it.

(9) The Payment Systems Regulator may charge a reasonable fee for providing a person with a copy of a draft published under subsection (2)(b).

(10) Subsections (2)(b) and (3) to (6) do not apply if the Payment Systems Regulator considers that the delay involved in complying with them would be prejudicial to the interests of those who use, or are likely to use, services provided by regulated payment systems.

(11) Subsections (3)(a) and (6) do not apply if the Payment Systems Regulator considers that, making the appropriate comparison—

(a) there will be no increase in costs, or

(b) there will be an increase in costs but the increase will be of minimal significance.

(12) In subsection (11) the “appropriate comparison” means—

(a) in relation to subsection (3)(a), a comparison between the overall position if the requirement is imposed and the overall position if it is not imposed;

(b) in relation to subsection (6), a comparison between the overall position after the imposing of the requirement and the overall position before it was imposed.

(12A) The duty to provide the explanation referred to in subsection (3)(ba) does not apply in relation to any proposed requirement which changes an existing requirement and the changes consist of, or include, changes which, in the Payment Systems Regulator’s opinion, are not material.

(12B) Where an explanation is not provided by virtue of subsection (12A), the draft of the proposed requirement must be accompanied by a statement of the Payment Systems Regulator’s opinion.

Independent inquiries

105

(1) Section 68 of the Financial Services Act 2012 (cases in which Treasury may arrange independent inquiries) is amended as follows.

(2) In subsection (1), for “two” substitute “ three ”.

(3) After subsection (3) insert—

(3A) The third case is where it appears to the Treasury that— (a) events have occurred in relation to a regulated payment system which caused or risked causing significant damage to business or other interests throughout the United Kingdom, and (b) those events might not have occurred, or the threat or damage might have been reduced, but for a serious failure in— (i) the system established by Part 5 of the Financial Services (Banking Reform) Act 2013 for the regulation of payment systems, or (ii) the operation of that system.

(4) In section 83(1) (interpretation), after the definition of “regulated activity” insert—

“regulated payment system” has the same meaning as in Part 5 of the Financial Services (Banking Reform) Act 2013 (see section 110 of that Act);

Investigations into regulatory failure

106

(1) Part 5 of the Financial Services Act 2012 (inquiries and investigations) is amended as follows.

(2) After section 76 insert—

(76A) (1) Subsection (3) applies where it appears to the Payment Systems Regulator that— (a) events have occurred in relation to a regulated payment system which had or could have had a significant adverse effect on effective competition in the interests of— (i) participants in the payment system, or (ii) those who use, or are likely to use, the services provided by the payment system, and (b) those events might not have occurred, or the adverse effect might have been reduced, but for a serious failure in— (i) the system established by Part 5 of the Financial Services (Banking Reform) Act 2013 for the regulation of payment systems, or (ii) the operation of that system. (2) Subsection (3) also applies where the Treasury direct the Payment Systems Regulator that it appears to the Treasury that the conditions in subsection (1) are met in relation to specified events. (3) The Payment Systems Regulator must carry out an investigation into the events and the circumstances surrounding them and report to the Treasury on the result of the investigation. (4) Subsection (3) does not apply by virtue of subsection (1) if the Treasury direct the Payment Systems Regulator that it is not required to carry out an investigation into the events concerned. (5) In this section “participant”, in relation to a regulated payment system, has the same meaning as in Part 5 of the Financial Services (Banking Reform) Act 2013 (see section 42 of that Act).

(3) In section 77 (power of Treasury to require FCA or PRA to undertake investigation)—

(a) in subsection (1)(a), for “either regulator” substitute “ a regulator ”;

(b) in subsection (3), omit the “or” at the end of paragraph (b) and after paragraph (c) insert

, or (d) a regulated payment system.

;

(4) In section 78 (conduct of investigation), in subsection (1), for “or 74” substitute “ , 74 or 76A ”.

(5) In section 79 (conclusion of investigation), for “or 74” substitute “ , 74 or 76A ”.

(6) In section 80 (statements of policy), in subsection (1)(a), for “or 74” substitute “ , 74 or 76A ”.

(7) In section 81 (publication of directions), in subsection (1), after paragraph (b) insert—

(ba) section 76A(4);

(8) In section 83(1) (interpretation)—

(a) after the definition of “listed securities” insert—

“the Payment Systems Regulator” means the body established under section 40 of the Financial Services (Banking Reform) Act 2013;

;

(b) in the definition of “regulator”, for “or the PRA” substitute “ , the PRA or the Payment Systems Regulator ”.

Competition scrutiny

107

(1) Chapter 4 of Part 9A of FSMA 2000 (competition scrutiny) applies to the Payment Systems Regulator's practices and regulating provisions in relation to payment systems as it applies to the FCA's practices and regulating provisions within the meaning of that Chapter.

(2) In subsection (1)—

(a) the reference to the Payment Systems Regulator's practices in relation to payment systems is a reference to practices adopted by it in the exercise of functions under this Part, and

(b) the reference to the Payment Systems Regulator's regulating provisions in relation to payment systems is a reference to the following—

(i) any general directions given under section 54;

(ii) any generally-imposed requirements under section 55;

(iii) any guidance given under section 96.

Miscellaneous and supplemental

Relationship with Part 8 of the Payment Services Regulations 2009

108

(1) The Payment Systems Regulator may not exercise any power under sections 54 to 58 for the purposes of enabling a person to obtain or maintain access to, or participation in, a payment system in circumstances in which regulation 103 (prohibition on restrictive rules on access to payment systems) or 104 (indirect access to designated payment systems) of the Payment Services Regulations 2017 applies in relation to access to, or participation in, the payment system by the person.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Exemption from liability in damages for FCA and PRA

109

(1) In paragraph 25 of Schedule 1ZA to FSMA 2000 (FCA's exemption from liability in damages), after sub-paragraph (1) insert—

(1A) In sub-paragraph (1) the reference to the FCA's functions includes its functions under Part 5 of the Financial Services (Banking Reform) Act 2013 (regulation of payment systems).

(2) In paragraph 33 of Schedule 1ZB to FSMA 2000 (PRA's exemption from liability in damages), after sub-paragraph (1) insert—

(1A) In sub-paragraph (1) the reference to the PRA's functions includes its functions under Part 5 of the Financial Services (Banking Reform) Act 2013 (regulation of payment systems).

(3) For provision conferring immunity from liability in damages on the Bank of England in respect of its functions, see section 244 of the Banking Act 2009.

Interpretation of Part

110

(1) In this Part—

“CAT-appealable decision” has the meaning given by section 76(4);

“CMA-appealable decision” has the meaning given by section 76(7);

“compliance failure” has the meaning given by section 71;

“designation order” has the meaning given by section 43;

“digital settlement asset” has the meaning given by section 41(2A);

“digital settlement asset exchange provider” has the meaning given by section 182(5B) of the Banking Act 2009;

“direct access”, in relation to a payment system, is to be read in accordance with section 42(6);

“document” includes information recorded in any form and, in relation to information recorded otherwise than in legible form, references to its production include references to producing a copy of the information in legible form or in a form from which it can readily be produced in visible and legible form;

“general direction” has the meaning given by section 54(5);

“general guidance” has the meaning given by section 96(3);

“generally applicable requirement” has the meaning given by section 104(1);

“generally-imposed requirement” has the meaning given by section 55(3);

“infrastructure provider”, in relation to a payment system, has the meaning given by section 42(4);

“operator”, in relation to a payment system, has the meaning given by section 42(3);

“participant”, in relation to a payment system, has the meaning given by section 42 (and references to participation in a payment system are to be read in accordance with that section);

“payment service provider”, in relation to a payment system, has the meaning given by section 42(5);

“payment system” has the meaning given by section 41;

“recognised ... payment system” means a payment system (within the meaning of Part 5 of the Banking Act 2009) specified as a recognised system for the purposes of that Part;

“regulated payment system” means a payment system designated as a regulated payment system by a designation order;

“the UK financial system” has the meaning given by section 1I of FSMA 2000.

(2) References in this Part to the Payment Systems Regulator's payment systems objectives are to be read in accordance with section 49(2).

(3) References in this Part to the Bank of England's capacity as a monetary authority are to be read in accordance with section 244 of the Banking Act 2009.

PART 6 — Special administration for operators of certain infrastructure systems

Introductory

Financial market infrastructure administration

111

This Part—

(a) provides for a procedure to be known as FMI administration, ...

(b) restricts the powers of persons other than the Bank of England in relation to the insolvency of infrastructure companies, and

(c) confers power on the Bank of England to participate in proceedings under Part 26A of the Companies Act 2006 (arrangements and reconstructions: companies in financial difficulty).

Interpretation: infrastructure companies

112

(1) In this Part “infrastructure company” has the meaning given by this section.

(2) “Infrastructure company” means a company which is—

(a) the operator of a recognised ... payment system, other than an operator excluded by subsection (3),

(aa) a recognised DSA service provider,

(b) a recognised CSD ..., ...

(ba) a person recognised for the purposes of Part 5A of the Banking Act 2009 (wholesale cash distribution) as having systemic significance, or

(3) But a company is not an infrastructure company if it is a recognised central counterparty, as defined by section 285 of FSMA 2000.

(4) The Treasury may by order designate a company for the purposes of subsection (2)(c) if—

(a) the company provides services to a person falling within subsection (2)(a), (b) or (ba), and

(b) the Treasury are satisfied that an interruption in the provision of those services would have a serious adverse effect on the effective operation of the recognised ... payment system or securities settlement system in question or, in the case of a person falling within subsection (2)(ba), a relevant function.

(5) An order under subsection (4) must specify the recognised ... payment system or securities settlement system in connection with which the company is designated.

(6) Before designating a company under subsection (4), the Treasury must consult—

(a) the company to be designated,

(b) the person within subsection (2)(a), (b) or (ba) to whom the company provides services,

(d) if the company is a PRA-authorised person, the PRA and the FCA, and

(e) if the company is an authorised person other than a PRA-authorised person, the FCA.

(7) In subsection (4)(b), “relevant function” means a function performed by the person in relation to wholesale cash distribution.

Interpretation: other expressions

113

(1) In this Part—

“company” means a company registered under the Companies Act 2006;

“operator”, in relation to a recognised ... payment system, is to be read in accordance with section 183 of the Banking Act 2009;

“recognised CSD” has the meaning given by section 285 of FSMA 2000;

“recognised DSA service provider” means a DSA service provider, as defined by section 182(5A) of the Banking Act 2009, in respect of which a recognition order under section 184A of that Act is in force;

“recognised ... payment system” means a payment system, as defined by section 182 of the Banking Act 2009, in respect of which a recognition order under section 184 of that Act is in force;

“the relevant system” means—in relation to an infrastructure company falling within subsection (2)(a) of section 112, the recognised ... payment system,in relation to an infrastructure company falling within subsection (2)(b) of that section, the securities settlement system, in relation to an infrastructure company falling within subsection (2)(ba) of that section, any system used by the company to facilitate or control wholesale cash distribution, in relation to a company designated under subsection (4) of that section, the recognised ... payment system or securities settlement system falling within paragraph (b) of that subsection;

“securities settlement system” means a computer-based system, and procedures, which enable title to units of a security to be evidenced and transferred without a written instrument, and which facilitate supplementary and incidental matters.

“wholesale cash distribution” and “wholesale cash distribution activities” have the meanings given by section 206E of the Banking Act 2009.

(2) Expressions used in the definition of “securities settlement system” in subsection (1) are to be read in accordance with section 783 of the Companies Act 2006.

FMI administration orders

114

(1) In this Part “FMI administration order” means an order which—

(a) is made by the court in relation to an infrastructure company, and

(b) directs that, while the order is in force, the affairs, business and property of the company are to be managed by a person appointed by the court.

(2) A person appointed as mentioned in subsection (1)(b) is referred to in this Part as an FMI administrator.

(3) The FMI administrator of a company must manage its affairs, business and property, and exercise and perform the FMI administrator's functions, so as to achieve the objective in section 115.

Objective of FMI administration

115

(1) Where an FMI administrator is appointed in relation to the operator of a recognised ... payment system , or a recognised DSA service provider, ..., the objective of the FMI administration is—

(a) to ensure that the system or provider is and continues to be maintained and operated as an efficient and effective system or provider,

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , and

(c) to ensure by one or both of the specified means that it becomes unnecessary for the FMI administration order to remain in force for that purpose ....

(1A) Where an FMI administrator is appointed in relation to a recognised CSD ..., the objective of the FMI administration is—

(a) to ensure that the system is and continues to be maintained and operated as an efficient and effective system,

(b) to ensure that the protected activities continue to be carried on, and

(c) to ensure by one or both of the specified means that it becomes unnecessary for the FMI administration order to remain in force for that purpose or those purposes.

(1B) Where an FMI administrator is appointed in relation to a company that is a person recognised for the purposes of Part 5A of the Banking Act 2009, the objective of the FMI administration is—

(a) to ensure that the functions performed by the person in relation to wholesale cash distribution are and continue to be performed efficiently and effectively, and

(b) to ensure by one or both of the specified means that it becomes unnecessary for the FMI administration order to remain in force for that purpose or those purposes.

(2) Where an FMI administrator is appointed in relation to a company designated under subsection (4) of section 112, the objective of the FMI administration is—

(a) to ensure that services falling within that subsection continue to be provided, and

(b) to ensure by one or both of the specified means that it becomes unnecessary for the FMI administration order to remain in force for that purpose.

(3) The protected activities referred to in subsection (1A)(b) are such activities as the Bank of England may from time to time direct, which must be—

(a) regulated activities falling within section 285(3D) of FSMA 2000, or

(b) related activities which are necessary for the efficient carrying on of any of those regulated activities.

(4) The specified means are—

(a) the rescue as a going concern of the company subject to the FMI administration order, and

(b) transfers falling within subsection (5).

(5) A transfer falls within this subsection if it is a transfer as a going concern—

(a) to another company, or

(b) as respects different parts of the undertaking of the company subject to the FMI administration order, to two or more different companies,

of so much of that undertaking as it is appropriate to transfer for the purpose of achieving the objective of the FMI administration.

(6) The means by which transfers falling within subsection (5) may be effected include, in particular—

(a) a transfer of the undertaking of the company subject to the FMI administration order, or of part of its undertaking, to a wholly-owned subsidiary of that company, and

(b) the transfer to a company of securities of a wholly-owned subsidiary to which there has been a transfer falling within paragraph (a).

(7) The objective of the FMI administration may be achieved by transfers falling within subsection (5) only to the extent that—

(a) the rescue as a going concern of the company subject to the FMI administration order is not reasonably practicable or is not reasonably practicable without such transfers,

(b) the rescue of that company as a going concern will not achieve that objective or will not do so without such transfers, or

(c) such transfers would produce a result for the company's creditors as a whole that is better than the result that would be produced without them.

Application for FMI administration order

116

(1) An application for an FMI administration order may be made to the court by the Bank of England.

(2) An application must nominate a person to be appointed as the FMI administrator.

(3) The infrastructure company must be given notice of an application, in accordance with rules under section 411 of the 1986 Act (as applied in relation to FMI administration).

Powers of court

117

(1) The court may make an FMI administration order in relation to an infrastructure company if satisfied—

(a) that the company is unable to pay its debts,

(b) that the company is likely to be unable to pay its debts, or

(c) that, on a petition presented by the Secretary of State under section 124A of the 1986 Act (petition for winding up on grounds of public interest), it would be just and equitable (disregarding the objective of the FMI administration) to wind up the company.

(2) The court may not make an FMI administration order on the ground set out in subsection (1)(c) unless the Secretary of State has certified to the court that the case is one in which the Secretary of State considers (disregarding the objective of the FMI administration) that it would be appropriate to petition under section 124A of the 1986 Act.

(3) On an application for an FMI administration order, the court may—

(a) grant the application;

(b) dismiss the application;

(d) make an interim order;

(e) treat the application as a winding-up petition and make any order which the court could make under section 125 of the 1986 Act;

(f) make any other order which the court thinks appropriate.

(4) An interim order under subsection (3)(d) may, in particular—

(a) restrict the exercise of a power of the company or of its directors;

(b) make provision conferring a discretion on the court or on a person qualified to act as an insolvency practitioner in relation to the company.

(5) For the purposes of this section a company is unable to pay its debts if it is treated as being so unable under section 123 of the 1986 Act (definition of inability to pay debts).

FMI administrators

118

(1) The FMI administrator of a company—

(a) is an officer of the court, and

(b) in exercising and performing powers and duties in relation to the company, is the company's agent.

(2) The management by the FMI administrator of a company of any of its affairs, business or property must be carried out for the purpose of achieving the objective of the FMI administration as quickly and efficiently as is reasonably practicable.

(3) The FMI administrator of a company must exercise and perform powers and duties in the way which, so far as it is consistent with the objective of the FMI administration to do so, best protects—

(a) the interests of the company's creditors as a whole, and

(b) subject to those interests, the interests of the company's members as a whole.

Continuity of supply

119

(1) This section applies where, before the commencement of FMI administration, the infrastructure company had entered into arrangements with a supplier for the provision of a supply to the infrastructure company.

(2) After the commencement of FMI administration, the supplier—

(a) must not terminate a supply unless—

(i) any charges in respect of the supply which relate to a supply given after the commencement of FMI administration remain unpaid for more than 28 days,

(ii) the FMI administrator consents to the termination, or

(iii) the supplier has the permission of the court, which may be given if the supplier can show that the continued provision of the supply would cause the supplier to suffer hardship,

(b) must not make it a condition of a supply that any charges in respect of the supply which relate to a supply given before the commencement of FMI administration are paid, and

(c) must not do anything which has the effect of making it a condition of the giving of a supply that any charges within paragraph (b) are paid.

(3) Where, before the commencement of FMI administration, a contractual right to terminate a supply has arisen but has not been exercised, then, for the purposes of this section, the commencement of FMI administration causes that right to lapse and the supply is only to be terminated if a ground in subsection (2)(a) applies.

(4) Any provision in a contract between the infrastructure company and the supplier that purports to terminate the agreement if any action is taken to put the infrastructure company in FMI administration is void.

(5) Any expenses incurred by the infrastructure company on the provision of a supply after the commencement of FMI administration are to be treated as necessary disbursements in the course of the FMI administration.

(6) In this section—

“commencement of FMI administration” means the making of the FMI administration order;

“supplier” means the person controlling the provision of a supply to the infrastructure company, and includes a company that is a group undertaking (as defined by section 1161(5) of the Companies Act 2006) in respect of the infrastructure company;

“supply” means a supply of any of the following—computer hardware or software used by the infrastructure company in connection with the operation of the relevant system; in the case of an infrastructure company that is a person recognised for the purposes of Part 5A of the Banking Act 2009, goods or services used by the person in connection with wholesale cash distribution activities; financial data;infrastructure permitting electronic communication services;data processing;access to secure data networks used by the infrastructure company in connection with the operation of the relevant system;staff.

Power to direct FMI administrator

120

(1) If the Bank of England considers it necessary to do so for the purpose of achieving the objective of an FMI administration, the Bank may direct the FMI administrator to take, or refrain from taking, specified action.

(2) In deciding whether to give a direction under this section, the Bank of England must have regard to the public interest in—

(a) the protection and enhancement of the stability of the financial system of the United Kingdom, and

(b) the maintenance of public confidence in that system.

(3) A direction under this section must not be incompatible with a direction of the court that is in force under Schedule B1 to the 1986 Act.

(4) The Bank of England must, within a reasonable time of giving the direction, give the FMI administrator a statement of its reasons for giving the direction.

(5) A person listed in subsection (6) has immunity from liability in damages in respect of action or inaction in accordance with a direction under this section.

(6) Those persons are—

(a) the FMI administrator;

(b) the company in FMI administration;

(7) Immunity conferred by this section does not extend to action or inaction—

(a) in bad faith, or

(b) in contravention of section 6(1) of the Human Rights Act 1998.

(8) This section does not limit the powers conferred on the Bank of England by section 191 of the Banking Act 2009 (directions) in relation to a recognised ...payment system or section 206M of that Act (directions) in relation to a person recognised for the purposes of Part 5A of that Act.

Conduct of administration, transfer schemes etc.

121

(1) Schedule 6 (which applies the provisions of Schedule B1 to the 1986 Act about ordinary administration orders and certain other enactments to FMI administration orders) has effect.

(2) Schedule 7 (which makes provision for transfer schemes to achieve the objective of an FMI administration) has effect.

(3) The power to make rules conferred by section 411(1B) of the 1986 Act (rules relating to bank administration) is to apply for the purpose of giving effect to this Part as it applies for the purposes of giving effect to Part 3 of the Banking Act 2009 (and, accordingly, as if the reference in section 411(1B) to that Part included a reference to this Part).

Restrictions on other insolvency procedures

Restriction on winding-up orders and voluntary winding up

122

(1) A petition by a person other than the Bank of England for a winding up order in respect of an infrastructure company may not be determined unless—

(a) the petitioner has notified the Bank of England that the petition has been presented, and

(b) the period of 14 days beginning with the day on which the notice is received by the Bank has ended.

(2) A resolution for the voluntary winding up of an infrastructure company may not be made unless—

(a) the infrastructure company has applied to the court under this section,

(b) the company has notified the Bank of England that the application has been made, and

(c) after the end of the period of 14 days beginning with the day on which the notice is received by the Bank, the court gives permission for the resolution to be made.

Restriction on making of ordinary administration orders

123

(1) This section applies where an ordinary administration application is made in relation to an infrastructure company by a person other than the Bank of England.

(2) The court must dismiss the application if—

(a) an FMI administration order is in force in relation to the company, or

(b) an FMI administration order has been made in relation to the company but is not yet in force.

(3) Where subsection (2) does not apply, the court, on hearing the application, must not exercise its powers under paragraph 13 of Schedule B1 to the 1986 Act (other than its power of adjournment) unless—

(a) the applicant has notified the Bank of England that the application has been made, and

(b) the period of 14 days beginning with the day on which the notice is received by the Bank has ended.

(4) On the making of an FMI administration order in relation to an infrastructure company, the court must dismiss any ordinary administration application made in relation to the company which is outstanding.

(5) “Ordinary administration application” means an application under paragraph 12 of Schedule B1 to the 1986 Act.

Restriction on enforcement of security

124

A person may not take any step to enforce a security over property of an infrastructure company unless—

(a) notice of the intention to do so has been given to the Bank of England, and

(b) the period of 14 days beginning with the day on which the notice was received by the Bank has ended.

Financial support for companies in FMI administration

Loans

125

(1) This section applies where an FMI administration order has been made in relation to an infrastructure company.

(2) The Treasury may, out of money provided by Parliament, make loans to the company for achieving the objective in section 115.

(3) A loan under this section may be made on such terms as the Treasury think fit.

(4) The Treasury must pay into the Consolidated Fund sums received by them as a result of this section.

Indemnities

126

(1) This section applies where an FMI administration order has been made in relation to an infrastructure company.

(2) The Treasury may agree to indemnify persons in respect of one or both of the following—

(a) liabilities incurred in connection with the exercise of powers and duties by the FMI administrator;

(b) loss or damage sustained in that connection.

(3) The agreement may be made in whatever manner, and on whatever terms, the Treasury think fit.

(4) As soon as practicable after agreeing to indemnify persons under this section, the Treasury must lay before Parliament a statement of the agreement.

(5) If sums are paid by the Treasury in consequence of an indemnity agreed to under this section, the infrastructure company must pay the Treasury—

(a) such amounts in or towards the repayment to them of those sums as the Treasury may direct, and

(b) interest, at such rates as they may direct, on amounts outstanding under this subsection.

(6) Subsection (5) does not apply in the case of a sum paid by the Treasury for indemnifying a person in respect of a liability to the infrastructure company.

(7) Where a sum has been paid out by the Treasury in consequence of an indemnity agreed to under this section, the Treasury must lay a statement relating to that sum before Parliament—

(a) as soon as practicable after the end of the financial year in which that sum is paid out, and

(b) (except where subsection (5) does not apply in the case of the sum) as soon as practicable after the end of each subsequent relevant financial year.

(8) In relation to a sum paid out in consequence of an indemnity, a financial year is a relevant financial year for the purposes of subsection (7) unless—

(a) before the beginning of that year, the whole of that sum has been repaid to the Treasury under subsection (5), and

(b) the infrastructure company is not at any time during that year subject to liability to pay interest on amounts that became due under that subsection in respect of that sum.

(9) The power of the Treasury to agree to indemnify persons—

(a) is confined to a power to agree to indemnify persons in respect of liabilities, loss and damage incurred or sustained by them as relevant persons, but

(b) includes power to agree to indemnify persons (whether or not they are identified or identifiable at the time of the agreement) who subsequently become relevant persons.

(10) For the purposes of this section each of the following is a relevant person—

(a) the FMI administrator;

(b) an employee of the FMI administrator;

(d) a member or employee of a firm of which the FMI administrator is an employee;

(e) a member or employee of a firm of which the FMI administrator was an employee or member at a time when the order was in force;

(f) a body corporate which is the employer of the FMI administrator;

(g) an officer, employee or member of such a body corporate.

(11) For the purposes of subsection (10)—

(a) the references to the FMI administrator are to be read, where two or more persons are appointed to act as the FMI administrator, as references to any one or more of them, and

(b) the references to a firm of which a person was a member or employee at a particular time include references to a firm which holds itself out to be the successor of a firm of which the person was a member or employee at that time.

(12) The Treasury must pay into the Consolidated Fund sums received by them as a result of subsection (5).

Interpretation

Interpretation of Part

127

(1) In this Part—

“the 1986 Act” means the Insolvency Act 1986;

“business”, “member”, “property” and “security” have the same meaning as in the 1986 Act;

“company” has the meaning given by section 113;

“the court” means—in England and Wales and Northern Ireland, the High Court;in Scotland, the Court of Session;

“FMI administration order” and “FMI administrator” are to be read in accordance with section 114;

“infrastructure company” has the meaning given by section 112;

“operator”, in relation to a recognised ... payment system, has the meaning given by section 113;

“recognised ... payment system” has the meaning given by section 113;

“regulated activity” has the same meaning as in FSMA 2000;

“the relevant system” has the meaning given by section 113;

“securities settlement system” has the meaning given by section 113.

“wholesale cash distribution” and “wholesale cash distribution activities” have the meanings given by section 113.

(2) In this Part references to the FMI administrator of a company include a person appointed under paragraph 91 or 103 of Schedule B1 to the 1986 Act, as applied by Schedule 6 to this Act, to be the FMI administrator of a company.

(3) In this Part references to a person qualified to act as an insolvency practitioner in relation to a company are to be read in accordance with Part 13 of the 1986 Act, but as if references in that Part to a company included a company registered under the Companies Act 2006 in Northern Ireland.

Application of Part to Northern Ireland

Northern Ireland

128

(1) This section makes provision about this Part in its application to Northern Ireland.

(2) Any reference to any provision of the 1986 Act is to have effect as a reference to the corresponding provision of the Insolvency (Northern Ireland) Order 1989.

(3) Section 127(3) is to have effect as if the reference to Northern Ireland were a reference to England and Wales or Scotland.

PART 7 — Miscellaneous

Competition

Functions of FCA under competition legislation

129

Schedule 8 (which contains provision conferring on the FCA functions under competition legislation) has effect.

Competition as a secondary objective of the PRA

130

(1) For section 2H of FSMA 2000 substitute—

(2H) (1) When discharging its general functions in a way that advances its objectives (see section 2F), the PRA must so far as is reasonably possible act in a way which, as a secondary objective, facilitates effective competition in the markets for services provided by PRA-authorised persons in carrying on regulated activities. (2) In discharging its general functions, the PRA must also have regard to the regulatory principles in section 3B.

(2) In section 3B (regulatory principles to be applied by both regulators), in subsection (1), for “2H(1)(a)” substitute “ 2H(2) ”.

(3) In Schedule 1ZB to FSMA 2000 (the Prudential Regulation Authority)—

(a) in paragraph 19 (annual report), in sub-paragraph (1)—

(i) after paragraph (b) insert—

(ba) how it has complied with section 2H(1),

, and

(ii) in paragraph (c), omit the words from “and of” onwards, and

(b) in paragraph 20 (consultation about annual report), in sub-paragraph (1)(c), for the words from “and the PRA” onwards substitute “ and the PRA has facilitated effective competition in accordance with section 2H and has considered the regulatory principles in section 3B ”.

Consumers

Duty of FCA to make rules restricting charges for high-cost short-term credit

131

(1) In section 137C of FSMA 2000 (FCA general rules: cost of credit and duration of credit agreements), after subsection (1) insert—

(1A) The FCA must make rules by virtue of subsection (1)(a)(ii) and (b) in relation to one or more specified descriptions of regulated credit agreement appearing to the FCA to involve the provision of high-cost short-term credit, with a view to securing an appropriate degree of protection for borrowers against excessive charges. (1B) Before the FCA publishes a draft of any rules to be made by virtue of subsection (1)(a)(ii) or (b), it must consult the Treasury.

(2) In Schedule 1ZA to FSMA 2000, in paragraph 11 (FCA's annual report), in sub-paragraph (1), after paragraph (h) insert—

(ha) any rules that it has made as a result of section 137C during the period to which the report relates and the kinds of regulated credit agreement (within the meaning of that section) to which the rules apply,

(3) The FCA must ensure any rules that it is required to make as a result of the amendment made by subsection (1) are made not later than 2 January 2015 and apply (at least) to agreements entered into on or after that date.

Role of FCA Consumer Panel in relation to PRA

132

In section 1Q of FSMA 2000 (the Consumer Panel), after subsection (5) insert—

(5A) If it appears to the Consumer Panel that any matter being considered by it is relevant to the extent to which the general policies and practices of the PRA are consistent with the PRA's general duties under sections 2B to 2H, it may communicate to the PRA any views relating to that matter. (5B) The PRA may arrange to meet any of the FCA's expenditure on the Consumer Panel which is attributable to the Panel's functions under subsection (5A).

Parent undertakings

Power of FCA and PRA to make rules applying to parent undertakings

133

(1) After section 192J of FSMA 2000 insert—

(192JA) (1) The appropriate regulator may make such rules applying to bodies corporate falling within subsection (2) as appear to the regulator to be necessary or expedient for the group ring-fencing purposes. (2) A body corporate falls within this subsection if— (a) it is incorporated in the United Kingdom or has a place of business in the United Kingdom, (b) it is a parent undertaking of a ring-fenced body, and (c) it is not itself an authorised person. (3) The “group ring-fencing purposes” are the purposes set out in section 142H(4). (4) “The appropriate regulator” means— (a) in relation to the parent undertaking of a ring-fenced body that is a PRA-authorised person, the PRA; (b) in any other case, the FCA. (192JB) (1) The appropriate regulator may make rules requiring a qualifying parent undertaking to make arrangements that would in the opinion of the regulator allow or facilitate the exercise of the resolution powers in relation to the qualifying parent undertaking or any of its subsidiary undertakings in the event of a situation arising where all or part of the business of the parent undertaking or the subsidiary undertaking encounters or is likely to encounter financial difficulties. (2) The “resolution powers” are— (a) the powers conferred on the Treasury and the Bank of England by or under Parts 1 to 3 of the Banking Act 2009, and (b) any similar powers exercisable by an authority outside the United Kingdom. (3) The arrangements that may be required include arrangements relating to— (a) the issue of debt instruments by the parent undertaking; (b) the provision to a subsidiary undertaking (“S”) or a transferee by the parent undertaking, or by any other subsidiary undertaking of the parent undertaking, of such services and facilities as would be required to enable S or the transferee to operate the business, or part of the business, effectively. (4) In subsection (3)(b) “transferee” means a person to whom all or part of the business of the parent undertaking or the subsidiary undertaking could be transferred as a result of the exercise of the resolution powers. (5) “Debt instrument” has the same meaning as in section 142Y. (6) “The appropriate regulator” means— (a) where the subsidiary undertakings of the qualifying parent undertaking include a ring-fenced body that is a PRA-authorised person, the PRA; (b) where the subsidiary undertakings of the qualifying parent undertaking include one or more PRA-authorised persons but do not include any authorised person that is not a PRA-authorised person, the PRA; (c) where the subsidiary undertakings of the qualifying parent undertaking do not include any PRA-authorised person, the FCA; (d) in any other case, the PRA or the FCA.

(2) In section 192K of FSMA 2000 (power to impose penalty or issue censure)—

(a) in subsection (1), after “section 192J” insert “ or 192JB ”, and

(b) after that subsection insert—

(1A) This section also applies if a regulator is satisfied that a person (“P”) who is or has been a parent undertaking of a ring-fenced body has contravened a provision of rules made by that regulator under section 192JA.

Meetings with auditors

Duty to meet auditors of certain institutions

134

(1) Part 22 of FSMA 2000 (auditors and actuaries) is amended as follows.

(2) After section 339A insert—

(339B) (1) The FCA must make arrangements for meetings to take place at least once a year between— (a) the FCA, and (b) the auditor of any PRA-authorised person to which section 339C applies. (2) The PRA must make arrangements for meetings to take place at least once a year between— (a) the PRA, and (b) the auditor of any PRA-authorised person to which section 339C applies. (3) The annual report of each regulator must include the number of meetings that have taken place during the period to which the report relates between the regulator and auditors of PRA-authorised persons to which section 339C applies. (4) In subsection (3) “the annual report” means— (a) in relation to the FCA, every report which it is required by paragraph 11 of Schedule 1ZA to make to the Treasury, and (b) in relation to the PRA, every report which it is required by paragraph 19 of Schedule 1ZB to make to the Treasury. (5) In this section “auditor” means an auditor appointed under or as a result of a statutory provision. (339C) (1) This section applies to a PRA-authorised person which— (a) is a UK institution, (b) meets condition A or B, (c) is not an insurer or a credit union, and (d) is, in the opinion of the PRA, important to the stability of the UK financial system. (2) Condition A is that the person has permission under Part 4A to carry on the regulated activity of accepting deposits. (3) Condition B is that— (a) the person is an investment firm that has permission under Part 4A to carry on the regulated activity of dealing in investments as principal, and (b) when carried on by the person, that activity is a PRA-regulated activity. (4) In this section— (a) “UK institution” means an institution which is incorporated in, or formed under the law of any part of, the United Kingdom; (b) “insurer” means an institution which is authorised under this Act to carry on the regulated activity of effecting or carrying out contracts of insurance as principal; (c) “credit union” means a credit union as defined by section 31 of the Credit Unions Act 1979 or a credit union as defined by Article 2(2) of the Credit Unions (Northern Ireland) Order 1985. (5) Subsections (2), (3) and (4)(b) are to be read in accordance with Schedule 2, taken together with any order under section 22.

(3) The italic cross-heading before section 339A becomes “ General duties of regulator ”.

Fees to meet Treasury expenditure

Fees to meet Treasury expenditure relating to international organisations

135

(1) After section 410 of FSMA 2000 insert—

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