Overview

The Bank of England and Financial Services Bill [HL] amends the Bank of England Act 1998 and the Financial Services and Markets Act 2000, making significant changes to the governance of the Bank of England and the regulation of financial services in the UK. It also alters the process for issuing banknotes in Scotland and Northern Ireland.

Description

Bank of England: The bill alters the Bank's governance by changing the membership of its Court of Directors, abolishing the Oversight Committee, and redefining the functions of non-executive directors. It also introduces new procedures for the Monetary Policy Committee (MPC) and Financial Policy Committee (FPC), including changes to membership and meeting frequency. The bill enhances the Comptroller and Auditor General's oversight of the Bank's activities, particularly those indemnified by the Treasury. Finally, it clarifies the Bank's role as the Prudential Regulation Authority (PRA).

Financial Services: The bill extends the senior managers regime to all authorized persons, clarifying responsibilities and enforcement. New rules of conduct are introduced for directors of authorized persons. It addresses the enforceability of credit agreements, particularly those made through unauthorized persons. The bill also introduces a framework for "transformer vehicles," which are entities designed to assume and transfer risk. Further, it introduces changes to pensions guidance and advice, requiring specified authorized persons to verify that individuals have received appropriate advice before transferring or dealing with relevant annuities. Finally it requires the Bank of England to provide the Treasury with information concerning resolution planning for financial institutions.

Government Spending

The bill's impact on government spending is not explicitly stated in the provided text. However, the increased oversight and reporting requirements on the Bank could potentially lead to increased costs for both the Bank and the Treasury.

Groups Affected

• Bank of England: Significant changes to governance, internal committees, and reporting requirements.
• Financial institutions: Impact from the extended senior managers regime, new conduct rules, and changes to resolution planning requirements.
• Financial services professionals: Changes to the senior managers regime and rules of conduct will directly affect their responsibilities and potential liabilities.
• Consumers: Changes relating to credit agreements and pensions advice could affect consumer rights and protection.
• Banks issuing banknotes in Scotland and Northern Ireland: Changes to the process of authorizing banknote issuance.
• Treasury: Increased oversight responsibilities and access to information concerning the Bank of England's activities.
• Comptroller and Auditor General: Enhanced oversight and access to information related to the Bank of England's activities and financial reporting.

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