HM Treasury has published a short briefing note on Government amendments to the Financial Services (Banking Reform) Bill 2013-14 (the Bill) at third reading. The majority of the amendments tabled by the Government are designed to fulfil commitments it made at the Lords’ report stage. The remainder of the amendments make minor and technical changes that are intended to ensure that the provisions in the Bill properly deliver their policy intention.

The amendments cover:

  • payday lending cap. This encompasses the FCA’s duty to make rules to cap the cost of credit;
  • certification regime. This gives effect to the Parliamentary Commission on Banking Standards’ (PCBS) recommendations on the licencing regime and will impose certain obligations on banks and PRA regulated investment firms. These obligations will include considering at least once a year whether there are any grounds on which a regulator might seek to withdraw its approval of a senior manager or another person approved by the regulator and, if so, to notify the regulator of those grounds;
  • review of proprietary trading. This is to implement the recommendation of the PCBS for an independent review of proprietary trading. The amendment includes a provision for a review by the PRA within one year of the ring fence coming into force (the Government has committed to the ring fence coming into force in 2019), to assess to what extent proprietary trading is being carried out by authorised persons;
  • FCA’s consumer panel. This provides a statutory basis for arrangements where the FCA’s consumer panel can raise issues it is considering with the PRA;
  • review of ring fencing. The Government is making amendments to provide for an independent review of ring-fencing to be held two (rather than four) years after ring-fencing comes into force; and
  • application of the senior managers, certification and banking standards regime to foreign firms operating branches in the UK. The Government is bringing forward amendments to put in place a power to extend the definition of “relevant authorised persons” to include the UK branches of non-UK deposit-takers and investment firms.

View Financial Services (Banking Reform) Bill amendments – third reading, 5 December 2013


Leave a Reply

Your email address will not be published. Required fields are marked *