HC Deb 09 February 2000 vol 344 cc295-7
Mr. Timms

I beg to move amendment No. 104, in page 20, line 1, leave out from "Authority" to end of line 12 and insert—

  1. (a) on giving a person a Part IV permission, imposes an assets requirement on him; or
  2. (b) varies an authorised person's Part IV permission so as to alter an assets requirement imposed on him or impose such a requirement on him.
(1A) A person on whom an assets requirement is imposed is referred to in this section as "A". (1B) "Assets requirement" means a requirement under section 38—
  1. (a) prohibiting the disposal of, or other dealing with, any of A's assets (whether in the United Kingdom or elsewhere) or restricting such disposals or dealings; or
  2. (b) that all or any of A's assets, or all or any assets belonging to consumers but held by A or to his order, must be transferred to and held by a trustee approved by the Authority."

Mr. Deputy Speaker

With this it will be convenient to discuss the following: amendment No. 208, in page 20, line 8, after "by", insert "A".

Amendment No. 209, in page 20, line 15, leave out

in connection with the imposition and insert "for the purposes.".

Government amendment No. 106.

Amendment No. 210, in page 20, line 24, after insert—

or any other duty which it may owe A". Government amendments Nos. 107 to 109.

Amendment No. 211, in page 20, line 40, after "liquidator", insert "or administrator".

Government amendment No. 110.

Amendment No. 212, in page 20, line 43, after "A", insert "or the Authority".

Amendment No. 213, in page 20, line 46, after "A", insert "or the Authority".

Government amendments Nos. 111 and 127.

Mr. Timms

This group contains a number of drafting amendments to clause 43, which deals with the effect that prohibitions or restrictions imposed as a requirement by the FSA on a firm's dealings or assets may have on third parties, such as the firm's bank.

The Opposition amendments, which are largely drafting amendments, are interesting. We are particularly interested in the suggestion in amendment No. 208 to insert "A". That amendment would be rendered ineffective by amendment No. 104, but the drafting suggestion has now been incorporated in that amendment. Amendment No. 208 was tabled in time for us to do that, and we are grateful to Conservative Members for bringing that suggestion forward.

Amendment No. 209 is also the subject of amendments Nos. 104 and 105 and other consequential amendments, which have the effect of removing the distinction between the main requirement and any connected requirement that amendment No. 209 seeks to clarify. I hope that Conservative Members will be satisfied with that arrangement.

Amendments Nos. 210 to 213 make further interesting drafting suggestions, and we would like to consider them further with the parliamentary draftsman. On that basis, I hope that the amendments will be withdrawn.

Mr. Heathcoat-Amory

I am grateful to the hon. Gentleman for having accepted one of our amendments, or at least incorporating it in one of his. We realise that amendment No. 208 is not exactly the stuff by which Governments rise and fall. Nevertheless, it was an attempt to tidy up the clause and make it a little clearer by ensuring that in referring to A's assets we also include assets belonging to investors but held by A, or to A's order. I think that that phrase is a little clearer than the one that left out one of the A's. The Minister said that that had been graciously accepted.

I should mention a few other amendments. The Minister kindly said that he was interested in them, which is code for saying that he may be minded to accept some of them. Amendment No. 211 was intended to make it clear that references to a liquidator should also include administrators. Today, companies frequently go not into liquidation but into administration in an attempt to keep going and recover assets. I think that we have copied that practice from the United States, although I am no expert. Usually, administration is preferable if there is an opportunity to save the firm concerned. The Minister may consider whether references to the liquidator should include the administrator too.

I am not sure whether the Minister was minded to accept amendment No. 212. If he was, he would be changing the attitude that he and the Economic Secretary adopted in Committee, where they appeared to think the amendment unnecessary. Its purpose is to ensure that assets held by trustees are recoverable for investors; otherwise, someone under investigation could plant assets in the hands of trustees. I assume that that is the reason behind the provision in the Bill, and it is a valid reason.

However, our point is that if the principal fails to give notice to the trustee, the authority should have powers to give written notice to the trustee. There is no great danger here of excessive bureaucracy, or of one body leaving it to the other to issue the written notice. In all cases, I expect that the authority would issue a written notice to the trustee. If the authorised person also wrote, then two pieces of paper would exist—but it is better to be safe than sorry. I urge the Government at least to consider amendment No. 212, possibly with a view to accepting it in the other place.

Mr. Timms

I am grateful to the right hon. Gentleman for those remarks, and we will reconsider amendment No. 212 in the light of what he has said.

Amendment agreed to.

Amendments made: No. 105, in page 20, line 13, leave out subsection (2)

No. 106, in page 20, line 18, leave out "(1)(a)" and insert "(1B)(a)".

No. 107, in page 20, line 34, leave out "(1)(b)" and insert "(1B)(b)".

No. 108, in page 20, line 35, after "released" insert "or dealt with".

No. 109, in page 20, line 37, leave out "(1)(b)" and insert "(1B)(b)".

No. 110, in page 20, line 42, leave out "(1)(b)" and insert "(1B)(b)".

No. 111, in page 21, line 8, leave out "(1)(b)" and insert "(1B)(b)".—[Miss Melanie Johnson.]

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