Financial Services and Markets Bill — Power to impose penalties in cases of market abuse — 5 Jun 2000

Lords amendment agreed to.

Lords amendments Nos. 60 to 64 agreed to.

Lords amendment: No. 65, in page 24, line 24, leave out ("or an exempt person")

I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker:

With this we may discuss Lords amendments Nos. 66, 67, 69, 70, 406 to 409, 416 and 417.

behaves, or otherwise holds himself out, in a manner which indicates (or which is reasonably likely to be understood as indicating) that he is such a person,

Lords amendment agreed to.

Lords amendments Nos. 66 to 78 agreed to.

Lords amendment: No. 79, in page 33, line 5, leave out ("Stock Exchange") and insert ("Authority")

I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker:

With this we may discuss Lords amendments Nos. 80, 81, 83, 90 to 96, 99, 104, 105, 107 to 109, 111, 112, 436, 559, 626 to 631 and 633 to 636.

Lords amendment agreed to.

Lords amendments Nos. 80 to 102 agreed to.

Lords amendment: No. 103, after clause 92, to insert the following new clause-- Competition scrutiny --

("Competition

--(1) The Treasury may by order provide for--

(a) regulating provisions, and

(b) the practices of the competent authority in exercising its functions under this Part ("practices"),

to be kept under review.

(2) Provision made as a result of subsection (1) must require the person responsible for keeping regulating provisions and practices under review to consider--

(a) whether any regulating provision or practice has a significantly adverse effect on competition; or

(b) whether two or more regulating provisions or practices taken together have, or a particular combination of regulating provisions and practices has, such an effect.

(3) An order under this section may include provision corresponding to that made by any provision of Chapter III of Part X.

(4) Subsection (3) is not to be read as in any way restricting the power conferred by subsection (1).

(5) Subsections (6) to (8) apply for the purposes of provision made by or under this section.

(6) Regulating provisions or practices have a significantly adverse effect on competition if--

(a) they have, or are intended or likely to have, that effect; or

(b) the effect that they have, or are intended or likely to have, is to require or encourage behaviour which has, or is intended or likely to have, a significantly adverse effect on competition.

(7) If regulating provisions or practices have, or are intended or likely to have, the effect of requiring or encouraging exploitation of the strength of a market position they are to be taken to have, or be intended or be likely to have, an adverse effect on competition.

(8) In determining whether any of the regulating provisions or practices have, or are intended or likely to have, a particular effect, it may be assumed that the persons to whom the provisions concerned are addressed will act in accordance with them.

(9) "Regulating provisions" means--

(a) listing rules,

(b) general guidance given by the competent authority in connection with its functions under this Part.")

I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker (Mr. Michael J. Martin):

With this we may discuss Lords amendments Nos. 181, 182 and 183 and the amendment thereto, 184 to 186, 192 to 210, 337, 338, 353 to 371, 376 to 390, 392, 442 and 660.

a significantly adverse effect on competition.

The Treasury may by order provide for.

to be kept under review.

prejudicing the competitive position of the United Kingdom

a significantly adverse effect on competition.

We are talking about two separate exchanges and, although there will need to be co-operation between the FSA and its German counterparts, there are separate regulatory jurisdictions.--[ Official Report, House of Lords , 18 May 2000; Vol. 613, c. 373.]

have regard to . . . the desirability of maintaining the competitive position of the United Kingdom--

a significantly adverse effect on competition

I am concerned that there will inevitably be a tendency to err on the side of reducing the risks of the regulator at the expense of the regulated. The FSA and its chairman will probably be judged harshly if there is even modest wrongdoing that escapes their gaze.

the international character of financial services and markets and the desirability of maintaining the competitive position of the United Kingdom.

Lords amendment agreed to .

Lords amendments Nos. 104 to 126 agreed to .

Lords amendment: No. 127, in page 51, line 18, leave out subsection (3).

I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker:

With this we may discuss Lords amendments Nos. 128 to 130, 131 and the amendment thereto, 132, 133, 142, 143, 180 and the Government motion to disagree and Government amendment (a) in lieu and amendment (b) in lieu, 228, 487, 488, 489 and the amendment thereto and 490 to 501.

Given . . . the nature of the code and the panel's role in interpreting and applying it, I would naturally expect the FSA to take the panel's view before it decided whether behaviour fell within the safe harbour which the Government amendment would enable it to provide. It would be very foolish if it did not . . . I would expect the tribunal and, if the matter came before them, the higher courts, to attach due weight to the panel's views in accordance with established case law.--[ Official Report, House of Lords , 18 May 2000; Vol. 613, c. 403.]

the worst of all the amendments before us.--[ Official Report, House of Lords , 18 May 2000; Vol. 613, c. 414.]

But the Treasury's approval is required before any such provision may be included in the Authority's code.

If the Authority's code includes provisions of a kind authorised by subsection (1)--

the Authority must keep itself informed of the way in which the Panel on Takeovers and Mergers interprets and administers the relevant provisions of the City Code.

My Lords, I take it that it has been generally agreed that, as a general proposition, in principle the views of the FSA on these matters should prevail over those of the Takeover Panel.--[ Official Report, House of Lords , 18 May 2000; Vol. 613, c. 406.]

Except at the request of . . .

the Authority must keep itself informed.

as applied by the Panel and as amended from time to time by the Panel.

Lords amendment agreed to.

Lords amendments Nos. 128 to 130 agreed to.

Lords amendment: No. 131, in page 54, line 6, at end insert--

("( ) But the Authority may not impose a penalty on a person if, having considered any representations made to it in response to a warning notice, there are reasonable grounds for it to be satisfied that--

(a) he believed, on reasonable grounds, that his behaviour did not fall within paragraph (a) or (b) of subsection (1); or

(b) he took all reasonable precautions and exercised all due diligence to avoid behaving in a way which fell within paragraph (a) or (b) of that subsection.")

Amendment proposed to the Lords amendment: in line 9, after final 'subsection', insert '; or--

(c) he did not intend to give anyone a false or misleading impression falling within section 109(2)(b) and in engaging in the relevant behaviour he was not reckless as to whether he might give anyone that false or misleading impression; or

(d) where the relevant behaviour fell within section 109(2)(b) and was engaged in by a person other than an individual, the impression given by his behaviour was misleading only because of information which the individual who engaged in that behaviour on his behalf did not know about and that individual was an individual to whom subsection ( ) applies.

( ) This subsection applies to an individual if the information was withheld from him in circumstances permitted by control of information rules and he was not directly or indirectly required to engage in that behaviour by a person who did know the information.'.--[ Mr. Heathcoat-Amory. ]

Question put, That the amendment to the Lords amendment be made:--

The House divided: Ayes 112, Noes 301.

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