Bank of England and Financial Services Bill [Lords], As Amended

House of Commons Tuesday 19 April 2016 CONSIDERATION OF BILL (REPORT STAGE)

New Amendments handed in are marked thus  Amendments which will comply with the required notice period at their next appearance Amendments tabled since the last publication: Amendments (a) and (b) to NC12

BANK OF ENGLAND AND FINANCIAL SERVICES BILL [LORDS], AS AMENDED

NOTE This document includes all amendments tabled to date and includes any withdrawn amendments at the end. The amendments have been arranged in the order in which they relate to the Bill.

NEW CLAUSES

Mr Chancellor of the Exchequer NC12 To move the following Clause—

“Appointment of Financial Conduct Authority chief executive In Schedule 1ZA to the Financial Services and Markets Act 2000 (the Financial Conduct Authority), after paragraph 2 insert— “2A (1) The term of office of a person appointed as chief executive under 5 paragraph 2(2)(b) must not begin before— (a) the person has, in connection with the appointment, appeared before the Treasury Committee of the House of Commons, or (b) (if earlier) the end of the period of 3 months beginning with the day on which the appointment is made. 10 (2) Sub-paragraph (1) does not apply if the person is appointed as chief executive on an acting basis, pending a further appointment being made. 2 Consideration of Bill (Report Stage): 19 April 2016

Bank of England and Financial Services Bill-[Lords], continued (3) The reference to the Treasury Committee of the House of Commons— (a) if the name of that Committee is changed, is a reference to that 15 Committee by its new name, and (b) if the functions of that Committee (or substantially corresponding functions) become functions of a different Committee of the House of Commons, is to be treated as a reference to the Committee by which the functions are 20 exercisable. (4) Any question arising under sub-paragraph (3) is to be determined by the Speaker of the House of Commons.”” Member’s explanatory statement This new clause provides that the term of office of a person appointed as chief executive of the Financial Conduct Authority (otherwise than on a temporary basis) must not begin before that person has appeared before the Treasury Committee of the House of Commons or, if earlier, three months from the date of his or her appointment.

As Amendments to Mr Chancellor of the Exchequer’s proposed New Clause (Appointment of Financial Conduct Authority chief executive) (NC12):—

Mr Andrew Tyrie (a)  Line 9,at end insert— “(1A) If, before the term of office has begun, the Treasury Committee reports to the House that the appointment should not be confirmed, the Treasury shall not continue with the appointment unless the House of Commons resolves that the appointment should be confirmed.”

Mr Andrew Tyrie (b)  Line 22, at end insert— “In Schedule 1ZA to the Financial Services and Markets Act 2000, in paragraph 3(1), at the end insert “, except in the case of the chief executive of the FCA, who shall be appointed for a reappointable term of five years”.”

Consideration of Bill (Report Stage): 19 April 2016 3

Bank of England and Financial Services Bill-[Lords], continued Mr Andrew Tyrie Wes Streeting George Kerevan John Mann Mr Jacob Rees-Mogg Helen Goodman

Mr Steve Baker Rachel Reeves Rebecca Long Bailey Seema Malhotra John McDonnell Rob Marris Richard Burgon Greg Mulholland Mr Douglas Carswell Mark Durkan NC1 To move the following Clause—

“Chief Executive of the Financial Conduct Authority (1) Schedule 1ZA of the Financial Services and Markets Act 2000 is amended as follows. (2) After paragraph 2(2) insert— “(2A) The Treasury shall not appoint a chief executive without the consent of the Treasury Committee of the House of Commons.” (3) After paragraph 4(1) insert— “(1A) But a chief executive appointed under paragraph 2(2)(b) is not to be removed from office without the consent of the Treasury Committee of the House of Commons.” (4) After paragraph 27 insert—

“References to Treasury Committee

28 (1) Any reference in this Schedule to the Treasury Committee of the House of Commons— (a) if the name of that Committee is changed, is to be treated as a reference to that Committee by its new name, and (b) if the functions of that Committee (or substantially corresponding functions) become functions of a different Committee of the House of Commons, is to be treated as a reference to the Committee by which those functions are exercisable. (2) Any question arising under sub-paragraph (1) is to be determined by the Speaker of the House of Commons.””

4 Consideration of Bill (Report Stage): 19 April 2016

Bank of England and Financial Services Bill-[Lords], continued George Kerevan Roger Mullin Stewart Hosie Kirsty Blackman Alison Thewliss Mark Durkan NC2 To move the following Clause—

“Composition of the Court of Directors of the Bank of England In making nominations to the Court of Directors of the Bank of England, the Chancellor of the Exchequer must have regard to the importance of ensuring a balanced representation from the nations and regions of the United Kingdom.”

George Kerevan Roger Mullin NC3 To move the following Clause—

“Change in title of the Bank of England The Bank of England shall be known as the Bank of England, Scotland, Wales and Northern Ireland; and any reference in any enactment to the Bank of England shall be taken as a reference to the Bank of England, Scotland, Wales and Northern Ireland.”

Jonathan Edwards Mark Durkan NC5 To move the following Clause—

“Sterling Central Bank The Bank of England is renamed the Sterling Central Bank.” Member’s explanatory statement This new clause would change the name of the Bank of England to reflect its position as the UK central bank and the UK’s shared currency.

Consideration of Bill (Report Stage): 19 April 2016 5

Bank of England and Financial Services Bill-[Lords], continued Jonathan Edwards NC6 To move the following Clause—

“Membership of the Monetary Policy Committee of the Bank of England (1) Section 13 of the Bank of England Act 1998 is amended as follows. (2) At the end of subsection 2(c), add “of whom one each must be nominated by the Scottish Government, the Welsh Assembly Government and the Northern Ireland Executive.” Member’s explanatory statement This new clause seeks to ensure representation of the four nations of the United Kingdom on the Monetary Policy Committee.

Jonathan Edwards Mark Durkan NC7 To move the following Clause—

“Objectives of the Monetary Policy Committee After subsection 11(a) of the Bank of England Act 1998 there is inserted— “(b) maximum employment, and.”” Member’s explanatory statement This new clause would expand the mandated objectives of the Monetary Policy Committee to include maximum employment.

Jonathan Edwards Mark Durkan NC8 To move the following Clause—

“Bank of England Accountability and Devolved Legislatures Within three months of the passing of this Act, the Chancellor of the Exchequer shall lay a report before both Houses of Parliament on the merits of ensuring that the members of the policy committees of the Bank of England, including the Governor, appear before the respective economy committees of the devolved legislatures of the UK at least once a year.”

6 Consideration of Bill (Report Stage): 19 April 2016

Bank of England and Financial Services Bill-[Lords], continued Mr Charles Walker Nadine Dorries Mr Steve Baker Craig Mackinlay Sir William Cash NC9 To move the following Clause—

“Money laundering (1) In any regulations or orders transposing money laundering measures contained within Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 (or in relation to any subsequent EU amending or successor measure) the Secretary of State shall have a duty to ensure, insofar as such regulations relate to institutions regulated by the Financial Conduct Authority— (a) reasonable regard and due prominence is given to— (i) Preambular (33), (ii) Article 13(2), (iii) Article 15, and (iv) Article 16 and Annex II; (b) clarity is achieved with respect to the meaning and interpretation of “prominent public function” in the context of money laundering; (c) reasonable regard and due prominence is given to Article 22 which recognises that a PEP may have no prominent public function; and (d) any interpretation of “adequate” Article 20(b)(ii), and “enhanced” in Article 20(b)(iii) takes account of, and gives due prominence to, the provisions in Article 13 on risk sensitivity. (2) The Financial Services and Markets Act 2000 is amended as follows. (3) After Part 20A insert—

“PART 20C

MONEY LAUNDERING

333U Anti-money laundering: guidance (1) The FCA must, prior to relevant regulations coming into force, issue guidance to regulated entities on the definition of one or more categories of “politically exposed persons” (“PEPs”). (2) Guidance under subsection (1) must include, but need not be limited to— (a) a requirement to take a proportional, risk-based and differentiated approach to conducting transactions or business relationships with each category of PEP that may be defined; and (b) specified categories of persons to be— (i) included and (ii) excluded from any definitions of PEPs. Consideration of Bill (Report Stage): 19 April 2016 7

Bank of England and Financial Services Bill-[Lords], continued (3) The Secretary of State may, by regulation, make provision about— (a) the guidance issued, amended and/or reissued under subsection (1); (b) arrangements for complaints about the treatment of individuals by regulated entities to be received, assessed and adjudicated by the FCA, where— (i) a person was treated as though he or she was a PEP (and he was not), (ii) a person who is a PEP was treated unreasonably in disregard of guidance under subsection (1), particularly in regard to specific elements required under subsection (2)(a), or (iii) a person was refused a business relationship solely on the basis of that he or she is a PEP, (c) circumstances in which— (i) compensation payments are to be required from, or (ii) financial penalties are to be imposed on regulated entities where complaints under paragraph (b) are upheld. (4) For the purposes of subsection (1), “relevant regulations” means regulations transposing into UK law measures that EU Member States are required to implement to combat money-laundering (or subsequent regulations amending those regulations) that contain references to PEPs. (5) The power to make regulations under subsection (3) is exercisable by statutory instrument which may only be made after a draft of any such instrument has been laid before, and approved by a resolution of, each House of Parliament.””

Mr Gary Streeter NC10 To move the following Clause—

“Debt management plan charges (1) The Financial Services and Markets Act 2000 is amended as follows. (2) After section 137FBB insert— “137FBC FCA general rules: debt management plan charges (1) The FCA must make general rules in relation to debt management plans. (2) The rules must specify that— (a) if a majority of creditors agree to a creditor fee arrangement, then all creditors shall be bound by the arrangement; (b) a creditor fee arrangement may subsequently be varied by the agreement of a majority of creditors; and (c) a creditor fee arrangement and any variations must take the form of a written contract executed by a majority of the creditors and must be distributed to all creditors upon completion. 8 Consideration of Bill (Report Stage): 19 April 2016

Bank of England and Financial Services Bill-[Lords], continued (3) In this section— “creditor fee arrangement” means an arrangement whereby the fees incurred as part of the debt management plan are paid by the creditors, calculated either as a fixed amount, a percentage of the amount owed to them or a combination of a fixed amount and a percentage; and “a majority of creditors” means a subset of creditors where the amount owed to them is more than half of the total amount owed.””

Helen Goodman Meg Hillier Rachel Reeves John McDonnell Rob Marris Richard Burgon

Seema Malhotra Rebecca Long Bailey Julie Cooper NC13 To move the following Clause—

“Freedom of Information (1) Schedule 1, Part VI to the Freedom of Information Act 2000 is amended as follows. (2) In the entry relating to the Bank of England, leave out all the words after “England.””

John McDonnell Richard Burgon Rob Marris NC14 To move the following Clause—

“Combating abusive tax avoidance arrangements (1) Section 3B of the Financial Services and Markets Act 2000 (Regulatory principles to be applied by both regulators) is amended as follows. (2) At the end of subsection (1) insert— “(i) combating abusive tax avoidance arrangements. (1A) (a) in observing principle (i), the regulators must undertake, in consultation with the Treasury, an annual review for presentation to the Treasury into abusive tax avoidance, including measures to ascertain and record beneficial ownership of trusts using facilities provided by banks with UK holding companies or entities regulated by the Bank of England or the FCA, control of shareholders and ownership of shares, and investment arrangements in an overseas territory outside the UK involving UK financial institutions. Consideration of Bill (Report Stage): 19 April 2016 9

Bank of England and Financial Services Bill-[Lords], continued (b) in this section “beneficial ownership of trusts” includes ownership of any equitable interest in a trust including being an object of a discretionary trust, power of appointment or similar arrangement as well as any vested interest under a trust; (c) “control of shareholders and ownership of shares in companies using facilities provided by banks with UK holding companies or entities regulated by the Bank of England or the FCA” shall include control by any person with control over a voteholder in a company as defined in Part VI Official Listing s.89F of the FSMA (2000) as applied mutatis mutandis to this context, whether directly or indirectly, and whether alone or in concert with some other person.””

John McDonnell Richard Burgon Rob Marris Mark Durkan 6 Clause 9, page 7, line 19, at end insert— “(6A) The Comptroller may enquire into the Bank’s success in achieving its stated policy objectives but shall not enquire into the desirability of such objectives having been set. (6B) The Comptroller shall submit reports arising from the exercise of his powers under subsection (6A) to the Treasury Committee of the House of Commons (or any successor committee exercising the same or equivalent functions). (6C) The Comptroller shall lay before Parliament, and publish, each report arising under subsection (6B) promptly unless, in the opinion of the Treasury Committee, publication of a particular report would be likely materially adversely to affect the stability or functioning of the UK’s financial or banking system.”

John McDonnell Richard Burgon Rob Marris 7 Clause 11, page 12, line 2, at beginning insert “Subject to section 7ZA(6A) of the Bank of England Act 1998,”

George Kerevan Roger Mullin 1 Clause 24, page 20, leave out lines 5 to 10 10 Consideration of Bill (Report Stage): 19 April 2016

Bank of England and Financial Services Bill-[Lords], continued John McDonnell Richard Burgon Rob Marris 8 Clause 24, page 20, line 10, at end add “and insert— (6) Where the authorised person mentioned in subsection (5) is a relevant authorised person, as defined under section 71A of the Financial Services and Markets Act 2000, subsection (5)(d) does not apply and subsections (7) and (8) do apply. (6A) If the FCA satisfies itself that a person (P), who is a senior manager in relation to a relevant authorised person, is guilty of misconduct by virtue of subsections (5)(a)-(c), then P shall be guilty of misconduct, subject only to subsection (8). (6B) But P is not guilty of misconduct by virtue of subsections (5)(a)-(c) and (7) if P satisfies the FCA that P had taken such steps as a person in P’s position could reasonably be expected to take to avoid the contravention occurring (or continuing).””

George Kerevan Roger Mullin 2 Clause 24, page 20, leave out lines 22 to 27

John McDonnell Richard Burgon Rob Marris 9 Clause 24, page 20, line 27, at end add “and insert— (6) Where the PRA-authorised person mentioned in subsection (5) is a relevant authorised person, as defined under section 71A of the Financial Services and Markets Act 2000, subsection (5)(d) does not apply and subsections (6A) and (6B) do apply. (6A) If the PRA satisfies itself that a person (P) who is a senior manager in relation to a relevant PRA-authorised person is guilty of misconduct by virtue of subsections (5)(a)-(c), then P shall be guilty of misconduct, subject only to subsection (6B). (6B) But P is not guilty of misconduct by virtue of subsections (5)(a)-(c) and (7) if P satisfies the PRA that P had taken such steps as a person in P‘s position could reasonably be expected to take to avoid the contravention occurring (or continuing).” Consideration of Bill (Report Stage): 19 April 2016 11

Bank of England and Financial Services Bill-[Lords], continued Jonathan Edwards John McDonnell Rob Marris Richard Burgon Seema Malhotra Rebecca Long Bailey

Nia Griffith Susan Elan Jones Gerald Jones Nick Thomas-Symonds Mrs Madeleine Moon Albert Owen Carolyn Harris Paul Flynn Jo Stevens Ann Clwyd Kevin Brennan 4 Clause 36, page 34, line 15, at beginning insert— “( ) Subject to the provisions of subsection (3A).” Member’s explanatory statement This amendment and amendment 5 would enable Lloyds Banking Group, the holder of the Bank of Wales trademark, to issue banknotes in Wales.

Jonathan Edwards John McDonnell Rob Marris Richard Burgon Seema Malhotra Rebecca Long Bailey

Nia Griffith Susan Elan Jones Gerald Jones Nick Thomas-Symonds Mrs Madeleine Moon Albert Owen Carolyn Harris Paul Flynn Jo Stevens Ann Clwyd Kevin Brennan 5 Clause 36, page 34, line 44, at end insert— “(3A) Regulations under subsection (1) must make provision authorising Lloyds Banking Group to issue banknotes in Wales”. Member’s explanatory statement See the explanatory statement for amendment 4.

Mr Chancellor of the Exchequer 3 Schedule 2, page 49, line 12, at end insert— “( ) In paragraph 14 for “submit a monthly” substitute “, at least 8 times in each calendar year, submit a”” Member’s explanatory statement This amendment changes the frequency with which the Monetary Policy Committee is required to report to the court of directors from once a month to at least 8 times a year. This is because Clause 8(4) replaces a requirement for monthly Committee meetings with one for meetings at least 8 times a year. 12 Consideration of Bill (Report Stage): 19 April 2016

Bank of England and Financial Services Bill-[Lords], continued John McDonnell Richard Burgon Rob Marris 10 Schedule 4, page 62, line 2, leave out paragraph 18

ORDER OF THE HOUSE [1 FEBRUARY 2016] That the following provisions shall apply to the Bank of England and Financial Services Bill [Lords]:

Committal 1. The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee 2. Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 23 February 2016. 3. The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Proceedings on Consideration and up to and including Third Reading 4. Proceedings on Consideration and any proceedings in Legislative Grand Committee shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced. 5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day. 6. Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and up to and including Third Reading.

Other proceedings 7. Any other proceedings on the Bill (including any proceedings on consideration of any message from the Lords) may be programmed.

NOTICES WITHDRAWN

The following Notices were withdrawn on 15 April 2016:

NC11

The following Notices were withdrawn on 18 April 2016:

NC4