Overview

This bill amends the Financial Services Bill, primarily focusing on enhancing oversight of the Bank of England and introducing new regulations concerning benchmarks, credit agreements, and offences relating to financial services. It also clarifies responsibilities between the Bank of England, the Prudential Regulation Authority (PRA), and the Financial Conduct Authority (FCA).

Description

Oversight Committee for the Bank of England

The bill establishes an Oversight Committee within the Bank of England, comprising non-executive directors. This committee will review the Bank's performance against its objectives, monitor internal financial controls, and oversee the Financial Policy Committee and Monetary Policy Committee's procedures. Reports from performance reviews conducted by the committee will be submitted to the Treasury and, subject to public interest considerations, published.

Amendments to the Financial Policy Committee

The Financial Policy Committee's responsibilities are clarified to include supporting government economic policy, while still primarily focused on financial stability. The Treasury will specify matters relevant to government economic policy for the Committee.

Regulations on Benchmarks

New provisions regulate the setting of benchmarks, defining a benchmark and outlining requirements for information provision and administration. Authorised persons will be required to participate in the setting of specified benchmarks under FCA rules.

Appointed Representatives

Amendments clarify the rules regarding appointed representatives, focusing on circumstances where an authorised person carries on business on behalf of a principal.

Amendments to the FCA's Powers

The FCA’s powers are extended to include making rules about the cost and duration of credit agreements and to deal with infringements in emission allowance auctions. The FCA must also publish a record of meetings of its governing body (subject to public interest considerations).

Amendments to the PRA's Powers

The PRA must develop and publish a strategy regarding its objectives. The bill also creates the PRA Practitioner Panel to represent the interests of practitioners, with Treasury approval needed for the chair's appointment. The PRA receives additional powers in relation to with-profits policies.

New Offences

New offences are created regarding misleading statements and impressions in relation to financial markets and benchmarks, with specified defences available in certain circumstances.

Amendments to the Banking Act 2009

Significant changes to the Banking Act 2009 are made concerning the resolution of banking crises, focusing on the handling of banking groups and the protection of client assets. The Act’s application is extended to include investment firms and UK clearing houses.

Amendments to the Consumer Credit Act 1974

The bill amends the Consumer Credit Act 1974 to clarify the process for suspending licenses, with an emphasis on protecting consumers and providing opportunities for licensees to present representations.

Financial Penalty Payments

The FCA, the PRA, and the Bank of England are required to pay penalties received to the Treasury after deducting enforcement costs.

Government Spending

The bill's impact on government spending is not explicitly stated in the provided text. However, there will be costs associated with the establishment and operation of the new Oversight Committee, increased regulatory oversight, and potential compensation payments. Conversely, increased penalty payments to the Treasury could offset some costs.

Groups Affected

• Bank of England: Establishment of the Oversight Committee will significantly change its structure and operations.
• Financial Policy Committee and Monetary Policy Committee: Their procedures and responsibilities will be further defined and subject to greater oversight.
• Financial Conduct Authority (FCA): Expanded powers and responsibilities relating to benchmarks, credit agreements, and enforcement.
• Prudential Regulation Authority (PRA): New strategic planning requirements, establishment of the PRA Practitioner Panel, and additional powers concerning with-profits insurers.
• Financial Institutions: Subject to new regulations on benchmarks and credit agreements, and potential penalties for non-compliance.
• Consumers: Increased consumer protection measures within the framework of the Consumer Credit Act 1974.
• Treasury: Increased responsibilities related to oversight and direction of the Bank of England and financial regulators.

Powered by nyModel