HL Deb 09 November 1989 vol 512 cc1062-4

242 Clause 140, page 142, line 22, leave out from beginning to 'in' in line 24 and insert 'is approved by him'.

243 Page 142, line 29, leave out subsections (2) and (3) and insert '(2) The Secretary of State shall not approve an overseas investment exchange or clearing house unless he is satisfied

  1. (a) that the rules and practices of the body, together with the law of the country in which the body's head office is situated, provide adequate procedures for dealing with the default of persons pary to contracts connected with the body, and
  2. (b) that it is otherwise appropriate to approve the body.
(3) The reference in subsection (2)(a) to default is to a person being unable to meet his obligations.'.

244 Page 142, line 42, leave out 'regulations may' and insert `Secretary of State may make regulations which'.

245 Page 142, line 47, at end insert; and different provision may be made with respect to different bodies or descriptions of body.

246 Page 142, line 47, at end insert— '(6) Where the regulations apply any provisions of the Financial Services Act 1986, they may provide that those provisions apply with such exceptions, additions and adaptations as appear to the Secretary of State to be necessary or expedient.'.

247 Leave out Clause 141 and insert—

'Certain money market institutions.

—(1) The Secretary of State may by regulations provide that this Part applies to contracts of any specified description in relation to which settlement arrangements are provided by a person for the time being included in a list maintained by the Bank of England for the purposes of this section, as it applies to contracts connected with a recognised investment exchange or recognised clearing house.

(2) The Secretary of State shall not make any such regulations unless he is satisfied, having regard to the extent to which the contracts in question —

  1. (a) involve, or are likely to involve, investments falling within paragraph 2 of Schedule 5 to the Financial Services Act 1986 (money market investments), or
  2. (b) are otherwise of a kind dealt in by persons supervised by the Bank of England,
that it is appropriate that the arrangements should be subject to the supervision of the Bank of England.

(3) The approval of the Treasury is required for —

  1. (a) the conditions imposed by the Bank of England for admission to the list maintained by it for the purposes of this section, and
  2. (b) the arrangements for a person's admission to and removal from the list;
and any regulations made under this section shall cease to have effect if the approval of the Treasury is withdrawn, but without prejudice to their having effect again if approval is given for fresh conditions or arrangements.

(4) The Bank of England shall publish the list as for the time being in force and provide a certified copy of it at the request of any person wishing to refer to it in legal proceedings.

A certified copy shall be evidence (in Scotland, sufficient evidence) of the contents of the list; and a copy purporting to be certified by or on behalf of the Bank shall be deemed to have been duly certified unless the contrary is shown.

(5) Regulations under this section may, in relation to a person included in the list —

  1. (a) apply, with such exceptions, additions and adaptations as appear to the Secretary of State to be necessary or expedient, such of the provisions of the Financial Services Act 1986 as he considers appropriate, and
  2. (b) provide that the provisions of this Part apply with such exceptions, additions and adaptations as appear to the Secretary of State to be necessary or expedient.

(6) Before making any regulations under this section, the Secretary of State shall consult the Treasury and the Bank of England.

(7) In section 84(1) of the Banking Act 1987 (disclosure of information obtained under that Act), in the Table showing the authorities to which, and functions for the purposes of which, disclosure may be made, at the end add—

"A person included in the list maintained by the Bank for the purposes of section (Certain money market institutions) of the Companies Act 1989.
Functions under settlement arrangements to which regulations under that section relate.".

Settlement arrangements provided by the Bank of England.

. —(1) The Secretary of State may by regulations provide that this Part applies to contracts of any specified description in relation to which settlement arrangements are provided by the Bank of England, as it applies to contracts connected with a recognised investment exchange or recognised clearing house.

(2) Regulations under this section may provide that the provisions of this Part apply with such exceptions, additions and adaptations as appear to the Secretary of State to be necessary or expedient.

(3) Before making any regulations under this section, the Secretary of State shall consult the Treasury and the Bank of England.'.

Lord Trefgarne

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 242 to 247.

These amendments make modifications to the power to extend the market contracts provisions of the part to contracts connected with certain bodies other than recognised investment exchanges or recognised clearing houses. There are two main effects. First, the scope of Clause 140 is modified so that regulations may be made to apply the part, if that is thought appropriate, to contracts connected with any overseas exchange or clearing house which has adequate default procedures. It will no longer be a requirement that the body in question must participate in links of a certain kind with a recognised UK body. Secondly, criteria are added to inform the power to apply the part in relation to systems for the money markets operated by a person supervised by the Bank of England. The noble Lord, Lord Williams, may recall that my noble friend Lord Strathclyde indicated at an earlier stage that we were considering an amendment of this kind. The restructuring of Clause 141 into two new clauses is consequential.

Moved, That the House do agree with the Commons in the said amendments. —(Lord Trefgarne.)

Lord Williams of Elvel

My Lords, I indeed remember the remarks made by the noble Lord, Lord Strathclyde, on these matters. I have three questions on these amendments. On Amendment No. 243 would the noble Lord kindly give me some indication of what the Secretary of State or the Government consider to be adequate procedures? Secondly, under subsection (2)(b)—always on Amendment No. 243 —what is the substantive meaning of the expression: that it is otherwise appropriate to approve the body"? What other criteria are hidden behind all that?

Thirdly, in Amendment No. 247, I should be grateful if the noble Lord could let me know how the Bank of England proposes to choose people who are on the list. The list has to be published, as is specified in subsection (4), but there seem to be no prescriptions on the Bank of England on how they choose people to be on their list even if it is published. I should be grateful if the noble Lord could give me some indication of what the Government have in mind.

Lord Trefgarne

My Lords, I have the answers to a range of questions in front of me but not, I fear, the ones that the noble Lord has asked. I undertake to write to him as soon as possible.

On Question, Motion agreed to.