PROHIBITION ORDERS (Hansard, 5 June 2000)

§ Miss Melanie Johnson
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.

§ Miss Johnson
Following consultation, part XX was introduced on Report. The amendments debated in another place introduced further necessary refinements to ensure that part XX works properly and in a way that is consistent with the rest of the Bill. It has the effect that certain professional firms which, among other things, are subject to regulation by a designated professional body, and offer financial services as an incidental part of their professional practice, will not require authorisation under the Bill.
Amendments Nos. 65 to 67 and 69 and 70 will amend clause 55 on prohibition orders so as to enable such an order to be issued, preventing an individual from performing functions in relation to an exempt regulated activity carried on by a professional firm which benefits from the exemption from the general prohibition under part XX.
As for exempt persons, amendment No. 406 will amend the definition of "exempt regulated activities" in clause 316. The amendment is the first in a package that will enable a professional firm which has the benefit of a part XX exemption also to carry on regulated activities as an exempt person without contravening the general prohibition. Clause 318 sets out the tests which need to be met in order for a professional firm to qualify for the exemption.
Amendment No. 407 is the second amendment in the package. It means that a professional firm carrying on exempt regulated activities under part XX will not be held to be in breach of a prohibition set out in clause 318(5) where he is also carrying on regulated activities in relation to which he is an exempt person. Amendment No. 408—the third amendment in the package—would amend subsection (7) so that where a professional firm carries on exempt regulated activities under part XX, it may also carry on activities as an exempt person—for instance, as an appointed representative.
Clause 323 requires the designated professional bodies to make rules designed to ensure that professional firms that benefit from the part XX exemption do not carry on regulated activities that are not complementary to providing particular services to a particular client. Amendment No. 416 completes the picture in relation to professional firms which are also exempt persons. It means that the clause 323 rule-making requirement will not extend to regulated activities conducted by professional firms as exempt persons under the Bill.
Amendment No. 417 will introduce a new clause into the Bill after clause 323, making it an offence for a person to describe himself as one who has the benefit of the part XX exemption in relation to a particular regulated activity, or 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, when he is not. The new clause would create an offence similar to that set out in clause 22, bringing persons who give the impression that they benefit from the provisions 61 of part XX when they do not, into line with persons who give the impression that they are authorised or exempt persons when they are not.
Clause 319 allows the authority to direct that the exemption from the general prohibition is not to apply to certain classes of professional. The authority may exercise this power only where it is satisfied that it is desirable to do so in the interests of clients.
Amendment No. 409 will require that any direction must be published in the way best calculated to bring it to the attention of the public. It will allow the authority to charge a reasonable fee for providing a copy of the direction, and requires it to give without delay a copy of any direction to the Treasury. These requirements ensure consistency between directions given under this clause and those given under clauses 309 and 311, both of which are in respect of Lloyd's.