http://www.legislation.gov.uk/ukpga/2013/33/section/4/2013-12-18Financial Services (Banking Reform) Act 2013An Act to make further provision about banking and other financial services, including provision about the Financial Services Compensation Scheme; to make provision for the amounts owed in respect of certain deposits to be treated as a preferential debt on insolvency; to make further provision about payment systems and securities settlement systems; to make provision about the accounts of the Bank of England and its wholly owned subsidiaries; to make provision in relation to persons providing claims management services; and for connected purposes.texttext/xmlenStatute Law Database2024-09-062013-12-18PART 1Ring-fencingRing-fencing
4Ring-fencing of certain activities1

After Part 9A of FSMA 2000 insert—

PART 9BRing-fencingIntroductory

142A“Ring-fenced body”1

In this Act “ring-fenced body” means a UK institution which carries on one or more core activities (see section 142B) in relation to which it has a Part 4A permission.

2

But “ring-fenced body” does not include—

a

a building society within the meaning of the Building Societies Act 1986, or

b

a UK institution of a class exempted by order made by the Treasury.

3

An order under subsection (2)(b) may be made in relation to a class of UK institution only if the Treasury are of the opinion that the exemption conferred by the order would not be likely to have a significant adverse effect on the continuity of the provision in the United Kingdom of core services.

4

Subject to that, in deciding whether and, if so, how to exercise their powers under subsection (2)(b), the Treasury must have regard to the desirability of minimising any adverse effect that the ring-fencing provisions might be expected to have on competition in the market for services provided in the course of carrying on core activities, including any adverse effect on the ease with which new entrants can enter the market.

5

In subsection (4) “the ring-fencing provisions” means ring-fencing rules and the duty imposed as a result of section 142G.

6

An order under subsection (2)(b) may provide for the exemption to be subject to conditions.

7

In this section “UK institution” means a body corporate incorporated in the United Kingdom.

142BCore activities1

References in this Act to a “core activity” are to be read in accordance with this section.

2

The regulated activity of accepting deposits (whether carried on in the United Kingdom or elsewhere) is a core activity unless it is carried on in circumstances specified by the Treasury by order.

3

An order under subsection (2) may be made only if the Treasury are of the opinion that it is not necessary for either of the following purposes that the regulated activity of accepting deposits should be a core activity when carried on in the specified circumstances.

4

Those purposes are—

a

to secure an appropriate degree of protection for the depositors concerned, or

b

to protect the continuity of the provision in the United Kingdom of services provided in the course of carrying on the regulated activity of accepting deposits.

5

The Treasury may by order provide for a regulated activity other than that of accepting deposits to be a core activity, either generally or when carried on in circumstances specified in the order.

6

An order under subsection (5) may be made only if the Treasury are of the opinion—

a

that an interruption of the provision of services provided in the United Kingdom in the carrying on of the regulated activity concerned could adversely affect the stability of the UK financial system or of a significant part of that system, and

b

that the continuity of the provision of those services can more effectively be protected by treating the activity as a core activity.

142CCore services1

References in this Act to “core services” are to be read in accordance with this section.

2

The following are core services—

a

facilities for the accepting of deposits or other payments into an account which is provided in the course of carrying on the core activity of accepting deposits;

b

facilities for withdrawing money or making payments from such an account;

c

overdraft facilities in connection with such an account.

3

The Treasury may by order provide that any other specified services provided in the course of carrying on the core activity of accepting deposits are also core services.

4

If an order under section 142B(5) provides for an activity other than that of accepting deposits to be a core activity, the Treasury must by order provide that specified services provided in the course of carrying on that activity are core services.

5

The services specified by order under subsection (4) must be services in relation to which the Treasury are of the opinion mentioned in section 142B(6)(a).

142DExcluded activities1

References in this Act to an “excluded activity” are to be read in accordance with this section.

2

The regulated activity of dealing in investments as principal (whether carried on in the United Kingdom or elsewhere) is an excluded activity unless it is carried on in circumstances specified by the Treasury by order.

3

An order under subsection (2) may be made only if the Treasury are of the opinion that allowing ring-fenced bodies to deal in investments as principal in the specified circumstances would not be likely to result in any significant adverse effect on the continuity of the provision in the United Kingdom of core services.

4

The Treasury may by order provide for an activity other than the regulated activity of dealing in investments as principal to be an excluded activity, either generally or when carried on in circumstances specified in the order.

5

An activity to which an order under subsection (4) relates—

a

need not be a regulated activity, and

b

may be an activity carried on in the United Kingdom or elsewhere.

6

In deciding whether to make an order under subsection (4) in relation to any activity, the Treasury must—

a

have regard to the risks to which a ring-fenced body would be exposed if it carried on the activity concerned, and

b

consider whether the carrying on of that activity by a ring-fenced body would make it more likely that the failure of the body would have an adverse effect on the continuity of the provision in the United Kingdom of core services.

7

An order under subsection (4) may be made only if the Treasury are of the opinion that the making of the order is necessary or expedient for the purpose of protecting the continuity of the provision in the United Kingdom of core services.

142EPower of Treasury to impose prohibitions1

The Treasury may by order prohibit ring-fenced bodies from—

a

entering into transactions of a specified kind or with persons falling within a specified class;

b

establishing or maintaining a branch in a specified country or territory;

c

holding in specified circumstances shares or voting power in companies of a specified description.

2

In deciding whether to make an order under this section imposing a prohibition, the Treasury must—

a

have regard to the risks to which a ring-fenced body would be exposed if it did the thing to which the prohibition relates, and

b

consider whether the doing of that thing by a ring-fenced body would make it more likely that the failure of the body would have an adverse effect on the continuity of the provision in the United Kingdom of core services.

3

An order under this section may be made only if the Treasury are of the opinion that the making of the order is necessary or expedient for the purpose of protecting the continuity of the provision in the United Kingdom of core services.

4

An order under this section may in particular—

a

provide for any prohibition to be subject to exemptions specified in the order;

b

provide for any exemption to be subject to conditions specified in the order.

142FOrders under section 142A, 142B, 142D or 142E1

An order made under section 142A, 142B, 142D or 142E may—

a

authorise or require the making of rules by a regulator for the purposes of, or for purposes connected with, any provision of the order;

b

authorise the making of other instruments by a regulator for the purposes of, or for purposes connected with, any provision of the order;

c

refer to a publication issued by a regulator, another body in the United Kingdom or an international organisation, as the publication has effect from time to time.

2

If the order confers powers on a regulator or authorises or requires the making of rules or other instruments by a regulator, the order may also—

a

impose conditions on the exercise of any power conferred on the regulator;

b

impose consultation requirements on the regulator;

c

make the exercise of a power by the regulator subject to the consent of the Treasury.

Ring-fenced bodies not to carry on excluded activities or contravene prohibitions
142GRing-fenced bodies not to carry on excluded activities or contravene prohibitions1

A ring-fenced body which—

a

carries on an excluded activity or purports to do so, or

b

contravenes any provision of an order under section 142E,

is to be taken to have contravened a requirement imposed on the body by the appropriate regulator under this Act.

2

The contravention does not—

a

make a person guilty of an offence;

b

make a transaction void or unenforceable;

c

(subject to subsection (3)) give rise to any right of action for breach of statutory duty.

3

In such cases as the Treasury may specify by order, the contravention is actionable at the suit of a person who suffers loss as a result of the contravention, subject to the defences and other incidents applying to actions for breach of statutory duty.

4

In this section “the appropriate regulator” means—

a

in relation to a ring-fenced body which is a PRA-authorised person, the PRA;

b

in relation to any other ring-fenced body, the FCA.

Ring-fencing rules
142HRing-fencing rules1

In the exercise of its power to make general rules, the appropriate regulator must in particular make rules—

a

requiring a ring-fenced body to make arrangements to ensure the effective provision to the ring-fenced body of services and facilities that it requires in relation to the carrying on of a core activity, and

b

making provision for the group ring-fencing purposes applying to ring-fenced bodies and to authorised persons who are members of a ring-fenced body's group.

2

Section 142E(1)(c) does not affect the power of the appropriate regulator to make general rules imposing restrictions on the extent of the shares or voting power that a ring-fenced body may hold in another company, except where a restriction on the extent of the shares or voting power that the ring-fenced body may hold in the company is imposed by order under section 142E(1)(c).

3

General rules that are required by this section or make provision falling within subsection (2) are in this Act referred to as “ring-fencing rules”.

4

The “group ring-fencing purposes” are—

a

ensuring as far as reasonably practicable that the carrying on of core activities by a ring-fenced body is not adversely affected by the acts or omissions of other members of its group;

b

ensuring as far as reasonably practicable that in carrying on its business a ring-fenced body—

i

is able to take decisions independently of other members of its group, and

ii

does not depend on resources which are provided by a member of its group and which would cease to be available to the ring-fenced body in the event of the insolvency of the other member;

c

ensuring as far as reasonably practicable that the ring-fenced body would be able to continue to carry on core activities in the event of the insolvency of one or more other members of its group.

5

Ring-fencing rules made for the group ring-fencing purposes must include—

a

provision restricting the power of a ring-fenced body to enter into contracts with other members of its group otherwise than on arm's length terms;

b

provision restricting the payments that a ring-fenced body may make (by way of dividend or otherwise) to other members of its group;

c

provision requiring the disclosure to the appropriate regulator of information relating to transactions between a ring-fenced body and other members of its group;

d

provision requiring a ring-fenced body to ensure that its board of directors (or if there is no such board, the equivalent management body) includes to a specified extent—

i

members who are treated by the rules as being independent of other members of the ring-fenced body's group,

ii

members who are treated by the rules as being independent of the ring-fenced body itself, and

iii

non-executive members;

e

provision requiring a ring-fenced body to act in accordance with a remuneration policy meeting specified requirements;

f

provision requiring a ring-fenced body to act in accordance with a human resources policy meeting specified requirements;

g

provision requiring arrangements made by the ring-fenced body for the identification, monitoring and management of risk to meet specified requirements;

h

such other provision as the appropriate regulator considers necessary or expedient for any of the purposes in subsection (4).

6

The reference in subsection (5)(e) to a remuneration policy is a reference to a policy about the remuneration of officers, employees and other persons who (in each case) are of a specified description.

7

The reference in subsection (5)(f) to a human resources policy is a reference to a policy about the appointment and management of officers, employees and other persons who (in each case) are of a specified description.

8

In this section—

the appropriate regulator” means—

a

in relation to a PRA-authorised person, the PRA;

b

in relation to any other authorised person, the FCA;

shares” has the meaning given in section 422;

specified” means specified in the rules;

voting power” has the meaning given in section 422.

142IPowers of Treasury in relation to ring-fencing rules1

The Treasury may by order require the appropriate regulator, as defined in section 142H(8), to include (or not to include) in ring-fencing rules specified provision relating to—

a

any of the matters mentioned in section 142H(5)(a) to (g), or

b

any other specified matter.

2

The power to make an order under this section is exercisable only if the Treasury consider it necessary or expedient to do so—

a

for any of the group ring-fencing purposes as defined in section 142H(4), or

b

otherwise for securing the independence of ring-fenced bodies from other members of their groups.

3

Specified” means specified in the order.

142JReview of ring-fencing rules etc1

The PRA must carry out reviews of its ring-fencing rules and of any rules made by it under section 192JA (rules applying to parent undertakings of ring-fenced bodies).

2

The first review must be completed before the end of the period of 5 years beginning with the day on which the first ring-fencing rules come into force.

3

Subsequent reviews must be completed before the end of the period of 5 years beginning with the day on which the previous review was completed.

4

The PRA must give the Treasury a report of each review.

5

The Treasury must lay a copy of the report before Parliament.

6

The PRA must publish the report in such manner as it thinks fit.

7

If (because any ring-fenced body is not a PRA-authorised person) section 142H has the effect of requiring the FCA to make ring-fencing rules, subsections (1) to (6) apply to the FCA as they apply to the PRA.

Group restructuring powers
142KCases in which group restructuring powers become exercisable1

The appropriate regulator may exercise the group restructuring powers only if it is satisfied that one or more of Conditions A to D is met in relation to a ring-fenced body that is a member of a group.

2

Condition A is that the carrying on of core activities by the ring-fenced body is being adversely affected by the acts or omissions of other members of its group.

3

Condition B is that in carrying on its business the ring-fenced body—

a

is unable to take decisions independently of other members of its group, or

b

depends on resources which are provided by a member of its group and which would cease to be available in the event of the insolvency of the other member.

4

Condition C is that in the event of the insolvency of one or more other members of its group the ring-fenced body would be unable to continue to carry on the core activities carried on by it.

5

Condition D is that the ring-fenced body or another member of its group has engaged, or is engaged, in conduct which is having, or would apart from this section be likely to have, an adverse effect on the advancement by the appropriate regulator—

a

in the case of the PRA, of the objective in section 2B(3)(c), or

b

in the case of the FCA, of the continuity objective.

6

The appropriate regulator may not exercise the group restructuring powers in relation to any person if—

a

either regulator has previously exercised the group restructuring powers in relation to that person, and

b

the decision notice in relation to the current exercise is given before the second anniversary of the day on which the decision notice in relation to the previous exercise was given.

7

In this section and sections 142L to 142Q “the appropriate regulator” means—

a

where the ring-fenced body is a PRA-authorised person, the PRA;

b

where it is not, the FCA.

142LGroup restructuring powers1

In this Part “the group restructuring powers” means one or more of the powers conferred by this section.

2

Where the appropriate regulator is the PRA, the powers conferred by this section are as follows—

a

in relation to the ring-fenced body, power to impose a requirement on the ring-fenced body requiring it to take any of the steps mentioned in subsection (5),

b

in relation to any member of the ring-fenced body's group which is a PRA-authorised person, power to impose a requirement on the PRA-authorised person requiring it to take any of the steps mentioned in subsection (6),

c

in relation to any member of the ring-fenced body's group which is an authorised person but not a PRA-authorised person, power to direct the FCA to impose a requirement on the authorised person requiring it to take any of the steps mentioned in subsection (6), and

d

in relation to a qualifying parent undertaking, power to give a direction under this paragraph to the parent undertaking requiring it to take any of the steps mentioned in subsection (6).

3

Where the appropriate regulator is the FCA, the powers conferred by this section are as follows—

a

in relation to the ring-fenced body, power to impose a requirement on the ring-fenced body requiring it to take any of the steps mentioned in subsection (5),

b

in relation to any member of the ring-fenced body's group which is an authorised person but not a PRA-authorised person, power to impose a requirement on the authorised person requiring it to take any of the steps mentioned in subsection (6),

c

in relation to any member of the ring-fenced body's group which is a PRA-authorised person, power to direct the PRA to impose a requirement on the authorised person requiring it to take any of the steps mentioned in subsection (6), and

d

in relation to a qualifying parent undertaking, power to give a direction under this paragraph to the parent undertaking requiring it to take any of the steps mentioned in subsection (6).

4

A parent undertaking of a ring-fenced body by reference to which the group restructuring powers are exercisable is for the purposes of this Part a “qualifying parent undertaking” if—

a

it is a body corporate which is incorporated in the United Kingdom and has a place of business in the United Kingdom, and

b

it is not itself an authorised person.

5

The steps that the ring-fenced body may be required to take are—

a

to dispose of specified property or rights to an outside person;

b

to apply to the court under Part 7 for an order sanctioning a ring-fencing transfer scheme relating to the transfer of the whole or part of the business of the ring-fenced body to an outside person;

c

otherwise to make arrangements discharging the ring-fenced body from specified liabilities.

6

The steps that another authorised person or a qualifying parent undertaking may be required to take are—

a

to dispose of any shares in, or securities of, the ring-fenced body to an outside person;

b

to dispose of any interest in any other body corporate that is a member of the ring-fenced body's group to an outside person;

c

to dispose of other specified property or rights to an outside person;

d

to apply to the court under Part 7 for an order sanctioning a ring-fencing transfer scheme relating to the transfer of the whole or part of the business of the authorised person or qualifying parent undertaking to an outside person.

7

In subsections (5) and (6) “outside person” means a person who, after the implementation of the disposal or scheme in question, will not be a member of the group of the ring-fenced body by reference to which the powers are exercised (whether or not that body is to remain a ring-fenced body after the implementation of the disposal or scheme in question).

8

It is immaterial whether a requirement to be imposed on an authorised person by the appropriate regulator, or by the other regulator at the direction of the appropriate regulator, is one that the regulator imposing it could impose under section 55L or 55M.

142MProcedure: preliminary notices1

If the appropriate regulator proposes to exercise the group restructuring powers in relation to any authorised person or qualifying parent undertaking (“the person concerned”), the regulator must give each of the relevant persons a notice (a “preliminary notice”).

2

The preliminary notice must—

a

state that it is a preliminary notice,

b

state that the regulator proposes to exercise the group restructuring powers,

c

state the action which the regulator proposes to take in the exercise of those powers,

d

be in writing, and

e

give reasons for the proposed action (which must include the regulator's reasons for being satisfied as to the matters mentioned in section 142K(1)).

3

The appropriate regulator must give a copy of the preliminary notice to the Treasury.

4

The preliminary notice must specify a reasonable period (which may not be less than 14 days) within which any of the relevant persons may make representations to the regulator.

5

The relevant persons are—

a

the person concerned,

b

the ring-fenced body, if not the person concerned, and

c

any other authorised person who will, in the opinion of the appropriate regulator, be significantly affected by the exercise of the group restructuring powers.

142NProcedure: warning notice and decision notice1

If the appropriate regulator has given a preliminary notice under section 142M, it must either—

a

if, having considered any representations made by any of the relevant persons, it still proposes to exercise the group restructuring powers, give each of the relevant persons a warning notice during the warning notice period, or

b

before the end of the warning notice period, give each of them a written notice stating that it has decided not to exercise the powers and give a copy of that notice to the Treasury.

2

The “warning notice period” is the period—

a

beginning 3 months after the end of the period specified under section 142M(4) as that within which any representations must be made, and

b

ending 6 months after the end of that period.

3

Before giving a warning notice under subsection (1)(a), the appropriate regulator must—

a

give the Treasury a draft of the notice,

b

provide the Treasury with any information that the Treasury may require in order to decide whether to give their consent, and

c

obtain the consent of the Treasury.

4

The action specified in the warning notice may be different from that specified in the preliminary notice if—

a

the appropriate regulator considers that different action is appropriate as a result of any change in circumstances since the preliminary notice was given, or

b

the person concerned consents to the change.

5

The regulator must, in particular, have regard to anything that—

a

has been done by the person concerned since the giving of the preliminary notice, and

b

represents action that would have been required in pursuance of the proposals in that notice.

6

If the regulator decides to exercise the group restructuring powers it must give each of the relevant persons a decision notice.

7

The decision notice must specify the date or dates by which each of the following must be completed—

a

any disposal of shares, securities or other property that is required by the notice;

b

any transfer of liabilities for which the notice requires arrangements to be made.

8

The giving of consent for the purpose of subsection (4)(b) does not affect any right to refer to the Tribunal the matter to which any decision notice resulting from the warning notice relates.

9

The relevant persons” has the same meaning as in section 142M.

142OReferences to Tribunal1

A notified person who is aggrieved by—

a

the imposition by either regulator of a requirement as a result of section 142L(2)(a) or (b) or (3)(a) or (b),

b

a requirement to be imposed as a result of the giving by one regulator to the other of a direction under section 142L(2)(c) or (3)(c), or

c

the giving by either regulator of a direction under section 142L(2)(d) or (3)(d),

may refer the matter to the Tribunal.

2

Notified person” means a person to whom a decision notice under section 142N(6) was given or ought to have been given.

142PSubsequent variation of requirement or direction1

A regulator may at any time with the consent of the person concerned vary—

a

a requirement imposed by it as a result of section 142L(2)(a) or (b) or (3)(a) or (b), or

b

a direction given by it as a result of section 142L(2)(c) or (d) or (3)(c) or (d).

2

The person concerned may at any time apply to the appropriate regulator for the variation of—

a

a requirement imposed by it as a result of section 142L(2)(a) or (b) or (3)(a) or (b), or

b

a direction given by it as a result of section 142L(2)(c) or (d) or (3)(c) or (d).

3

Sections 55U, 55V, 55X and 55Z3 apply to an application under subsection (2) as they apply to an application for the variation of a requirement imposed by the appropriate regulator under section 55L or 55M.

142QConsultation etc. between regulators1

Where a notice under section 142M or a warning notice or decision notice under section 142N relates to a requirement to be imposed in pursuance of a direction to be given as a result of section 142L(2)(c) or (3)(c), the appropriate regulator must—

a

consult the other regulator before giving the notice, and

b

give a copy of the notice to the other regulator.

2

The appropriate regulator must consult the other regulator before varying under section 142P a direction given as a result of section 142L(2)(c) or (3)(c).

3

Directions given by the FCA as a result of section 142L(3)(c) are subject to any directions given to the FCA under section 3I.

142RRelationship with regulators' powers under Parts 4A and 12A1

Subsection (2) applies in relation to—

a

a ring-fenced body which is a member of a mixed group, and

b

a parent undertaking of such a ring-fenced body.

2

A regulator may not exercise its general powers in relation to the ring-fenced body or parent undertaking so as to achieve either of the results in subsection (3).

3

Those results are—

a

that no existing group member is a parent undertaking of the ring-fenced body;

b

that the ring-fenced body is not a member of a mixed group.

4

In subsection (3)(a) “existing group member” means a person who is a member of the ring-fenced body's group at the time when the requirement is imposed or the direction given.

5

Except as provided by subsections (1) to (4), the provisions of sections 142K to 142Q do not limit the general powers of either regulator.

6

For the purposes of this section, a regulator's “general powers” are its powers under the following provisions—

a

section 55L or 55M (imposition of requirements in connection with Part 4A permission);

b

section 192C (power to direct qualifying parent undertaking).

7

For the purposes of this section, a ring-fenced body is a member of a mixed group if a member of the ring-fenced body's group carries on an excluded activity.

Failure of parent undertaking to comply with direction
142SPower to impose penalty or issue censure1

This section applies if a regulator is satisfied that a person who is or has been a qualifying parent undertaking (“P”) has contravened a requirement of a direction given to P by that regulator as a result of section 142L(2)(d) or (3)(d).

2

The regulator may impose a penalty of such amount as it considers appropriate on—

a

P, or

b

any person who was knowingly concerned in the contravention.

3

The regulator may, instead of imposing a penalty on a person, publish a statement censuring the person.

4

The regulator may not take action against a person under this section after the end of the limitation period unless, before the end of that period, it has given a warning notice to the person under section 142T.

5

The limitation period” means the period of 3 years beginning with the first day on which the regulator knew of the contravention.

6

For this purpose a regulator is to be treated as knowing of a contravention if it has information from which the contravention can reasonably be inferred.

7

The requirements that a regulator may be required to impose as a result of a direction under section 142L(2)(c) or (3)(c) include requirements that the regulator would not but for the direction have power to impose.

142TProcedure and right to refer to Tribunal1

If a regulator proposes to take action against a person under section 142S, it must give the person a warning notice.

2

A warning notice about a proposal to impose a penalty must state the amount of the penalty.

3

A warning notice about a proposal to publish a statement must set out the terms of the statement.

4

If the regulator decides to take action against a person under section 142S, it must give the person a decision notice.

5

A decision notice about the imposition of a penalty must state the amount of the penalty.

6

A decision notice about the publication of a statement must set out the terms of the statement.

7

If the regulator decides to take action against a person under section 142S, the person may refer the matter to the Tribunal.

142UDuty on publication of statement

After a statement under section 142S(3) is published, the regulator must send a copy of the statement to—

a

the person in respect of whom it is made, and

b

any person to whom a copy of the decision notice was given under section 393(4).

142VImposition of penalties under section 142S: statement of policy1

Each regulator must prepare and issue a statement of policy with respect to—

a

the imposition of penalties under section 142S, and

b

the amount of penalties under that section.

2

A regulator's policy in determining what the amount of a penalty should be must include having regard to—

a

the seriousness of the contravention,

b

the extent to which the contravention was deliberate or reckless, and

c

whether the person on whom the penalty is to be imposed is an individual.

3

A regulator may at any time alter or replace a statement issued under this section.

4

If a statement issued under this section is altered or replaced, the regulator must issue the altered or replacement statement.

5

In exercising, or deciding whether to exercise, a power under section 142S(2) in the case of any particular contravention, a regulator must have regard to any statement of policy published under this section and in force at a time when the contravention occurred.

6

A statement under this section must be published by the regulator concerned in the way appearing to the regulator to be best calculated to bring it to the attention of the public.

7

A regulator may charge a reasonable fee for providing a person with a copy of the statement published under this section.

8

A regulator must, without delay, give the Treasury a copy of any statement which it publishes under this section.

9

Section 192I applies in relation to a statement under this section as it applies in relation to a statement under section 192H.

Pension liabilities
142WPension liabilities1

The Treasury may by regulations require a ring-fenced body to make arrangements for any one or more of the following purposes—

a

ensuring that, except in prescribed cases, the ring-fenced body cannot become liable to meet, or contribute to the meeting of, pension liabilities which arise in connection with persons' service on or after a date specified in the regulations (“the specified date”) in any employment, other than service in an employment in respect of which the employer is a ring-fenced body;

b

ensuring that, except in prescribed cases, the default of a person other than another ring-fenced body would not result in the ring-fenced body becoming liable to meet, or contribute to the meeting of, pension liabilities arising in connection with persons' service in any employment before the specified date;

c

to the extent that it is not possible to ensure the result mentioned in paragraph (a) or (b), minimising any potential liability falling within paragraph (a) or (b).

2

The regulations may make provision enabling the trustees or managers of a relevant pension scheme in respect of which the employer or one of the employers is a ring-fenced body—

a

to transfer to another relevant pension scheme all or part of the pension liabilities arising in connection with persons' service before the specified date together with all or part of the assets of the scheme, or

b

to divide the scheme into two or more sections in relation to which prescribed conditions are met.

3

The regulations may make provision—

a

enabling a ring-fenced body to apply to the court in a case where the ring-fenced body has been unable to reach agreement with another person (“P”) about the making of arrangements with P on commercial terms for one or more of the purposes in subsection (1), and

b

enabling the court on such an application to order P to enter into arrangements with the ring-fenced body for those purposes on such terms as the court considers fair and reasonable in the circumstances.

4

The regulations must provide that any terms specified by the court by virtue of provision made under subsection (3)—

a

must be terms which, in the court's opinion, represent terms on which the arrangements might be entered into if they were being entered into for commercial reasons between willing parties dealing at arm's length, and

b

may involve the payment of any sum by instalments.

5

The regulations may make other provision—

a

about the making by a ring-fenced body of arrangements for one or more of the purposes in subsection (1);

b

about any transfer or division falling within subsection (2).

6

The regulations may in particular—

a

require a ring-fenced body to cease to participate in a relevant pension scheme unless the scheme is divided into two or more sections in relation to which prescribed conditions are met;

b

provide that assets or liabilities of a relevant pension scheme may not be transferred under the arrangements to another occupational pension scheme unless the other scheme meets prescribed conditions;

c

require ring-fenced bodies to establish new occupational pension schemes in prescribed circumstances;

d

provide that any provision of a relevant pension scheme that might prevent the making of the arrangements, other than a provision requiring the consent of the trustees or managers of the scheme, is not to have effect in prescribed circumstances;

e

make provision enabling the trustees or managers of a relevant pension scheme, with the consent of the employers in relation to the scheme, to modify the scheme by resolution for the purpose of enabling the arrangements to be made;

f

require the trustees or managers of a relevant pension scheme or any employer in relation to a relevant pension scheme to give notice of prescribed matters to prescribed persons;

g

make provision enabling the court, on an application made in accordance with the regulations by a ring-fenced body, if it appears to the court that the trustees or managers of a relevant pension scheme, or an employer in relation to such a scheme, have unreasonably refused their consent to any step that would enable the arrangements to be made, to order that the step may be taken without that consent;

h

confer exemption from any provision of the regulations in prescribed cases;

i

confer functions on the PRA;

j

provide that a ring-fenced body which contravenes a prescribed requirement of the regulations is to be taken to have contravened a requirement imposed by the PRA under this Act;

k

modify, exclude or apply (with or without modification) any primary or subordinate legislation.

7

The Treasury may by regulations require an authorised person who will or may be a ring-fenced body or an authorised person who will or may be a member of a ring-fenced body's group to do all it can to obtain from the Pensions Regulator a clearance statement in relation to any arrangements to be made for the purpose of complying with—

a

regulations under this section, or

b

any provision made by or under this Part (other than this section) when the provision comes into force.

8

A “clearance statement” is a statement issued by the Pensions Regulator under any of the following provisions—

a

section 42 of the Pensions Act 2004 (clearance statements relating to contribution notice under section 38);

b

section 46 of that Act (clearance statements relating to financial support directions);

c

Article 38 of the Pensions (Northern Ireland) Order 2005 (clearance statements relating to contribution notices under article 34);

d

Article 42 of that Order (clearance statements relating to financial support directions).

9

In relation to a ring-fenced body that is not a PRA-authorised person, references in subsection (6) to the PRA are to be read as references to the FCA.

10

Regulations under this section may not require ring-fenced bodies to achieve the results mentioned in subsection (1) before 1 January 2026, but this does not prevent the regulations requiring steps to be taken at any time after the regulations come into force.

142XFurther interpretative provisions for section 142W1

The following provisions have effect for the interpretation of section 142W and this section.

2

Relevant pension scheme” means an occupational pension scheme that is not a money purchase scheme.

3

Occupational pension scheme” has the meaning given in section 1 of the Pension Schemes Act 1993 or section 1 of the Pension Schemes (Northern Ireland) Act 1993 and, in relation to such a scheme, “member” and “trustees or managers” have the same meaning as in Part 1 of the Pensions Act 1995 or Part 2 of the Pensions (Northern Ireland) Order 1995.

4

Money purchase scheme” has the meaning given in section 181(1) of the Pension Schemes Act 1993 or section 176(1) of the Pension Schemes (Northern Ireland) Act 1993.

5

Employer”, in relation to a relevant pension scheme, means—

a

a person who is for the purposes of Part 1 of the Pensions Act 1995 or Part 2 of the Pensions (Northern Ireland) Order 1995 an employer in relation to the scheme, and

b

any other person who has or may have any liability under the scheme.

6

Employment” has the meaning given in section 181(1) of the Pension Schemes Act 1993 or section 176(1) of the Pension Schemes (Northern Ireland) Act 1993.

7

Pension liabilities” means liabilities attributable to or associated with the provision under a relevant pension scheme of pensions or other benefits.

8

The court” means—

a

in relation to England and Wales or Northern Ireland, the High Court, and

b

in relation to Scotland, the Court of Session.

Loss-absorbency requirements
142YPower of Treasury in relation to loss-absorbency requirements1

The Treasury may by order make provision about the exercise by either regulator of its functions under this Act, so far as they are (apart from the order) capable of being exercised in relation to a relevant body so as to require the relevant body—

a

to issue any debt instrument, or

b

to ensure that any part of the relevant body's debt consists of debt owed by it in respect of debt instruments, or debt instruments of a particular kind.

2

A “relevant body” is—

a

a ring-fenced body,

b

any other body corporate that has a Part 4A permission relating to the regulated activity of accepting deposits, or

c

a body corporate that is a member of the group of a body falling within paragraph (a) or (b).

3

Debt instrument” means—

a

a bond,

b

any other instrument creating or acknowledging a debt, or

c

an instrument giving rights to acquire a debt instrument.

4

An order under this section may in particular—

a

require the regulator to exercise its functions so as to require relevant bodies to do either or both of the things mentioned in subsection (1);

b

limit the extent to which the regulator may require a relevant body's debt to consist of debt owed in respect of debt instruments or of debt instruments of a kind specified in the order;

c

require the regulator—

i

to make, or not to make, provision by reference to specified matters, or

ii

to have regard, or not to have regard, to specified matters;

d

require the regulator to consult, or obtain the consent of, the Treasury before making rules of a specified description or exercising any other specified function;

e

impose on the regulator in connection with the exercise of a specified function procedural requirements which would not otherwise apply to the exercise of the function;

f

refer to a publication issued by a regulator, another body in the United Kingdom or an international organisation, as the publication has effect from time to time.

5

Specified” means specified in the order.

General
142ZAffirmative procedure in relation to certain orders under Part 9B1

This section applies to an order containing provision made under any of the following provisions of this Part—

a

section 142A(2)(b);

b

section 142B(2) or (5);

c

section 142C;

d

section 142D(2) or (4);

e

section 142E;

f

section 142I;

g

section 142Y.

2

No order to which this section applies may be made unless—

a

a draft of the order has been laid before Parliament and approved by a resolution of each House, or

b

subsection (4) applies.

3

Subsection (4) applies if an order under 142D(4) or 142E contains a statement that the Treasury are of the opinion that, by reason of urgency, it is necessary to make the order without a draft being so laid and approved.

4

Where this subsection applies the order—

a

must be laid before Parliament after being made, and

b

ceases to have effect at the end of the relevant period unless before the end of that period the order is approved by a resolution of each House of Parliament (but without that affecting anything done under the order or the power to make a new order).

5

The “relevant period” is a period of 28 days beginning with the day on which the order is made.

6

In calculating the relevant period no account is to be taken of any time during which Parliament is dissolved or prorogued or during which either House is adjourned for more than 4 days.

142Z1Interpretation of Part 9B1

This section has effect for the interpretation of this Part.

2

Any reference to—

a

the regulated activity of accepting deposits, or

b

the regulated activity of dealing in investments as principal,

is to be read in accordance with Schedule 2, taken with any order under section 22.

3

Any reference to the group restructuring powers is to be read in accordance with section 142L(1).

4

Any reference to a qualifying parent undertaking is to be read in accordance with section 142L(4).

2

In section 133 of FSMA 2000 (proceedings before Tribunal), in subsection (7A), after paragraph (i) insert—

ia

a decision to take action under section 142S;

.

3

In section 391 of FSMA 2000 (publication), in subsection (1ZB), after paragraph (i) insert—

ia

section 142N;

.

4

In section 392 of FSMA 2000 (application of sections 393 and 394)—

a

in paragraph (a), after “131H(1),” insert “ 142T(1), ”, and

b

in paragraph (b), after “131H(4),” insert “ 142T(4), ”.

5

In section 417 of FSMA 2000 (definitions), in subsection (1)—

a

after the definition of “control of information rules” insert—

core activities” has the meaning given in section 142B;

core services” has the meaning given in section 142C;

,

b

after the definition of “ESMA” insert—

excluded activities” has the meaning given in section 142D;

, and

c

after the definition of “regulator” insert—

ring-fenced body” has the meaning given in section 142A;

ring-fencing rules” has the meaning given in section 142H;

.

6

In Schedule 1ZA to FSMA 2000 (the Financial Conduct Authority), in paragraph 8(3)(c)(i), after “138N,” insert “ 142V, ”.

7

In Schedule 1ZB to FSMA 2000 (the Prudential Regulation Authority), in paragraph 16(3)(c)(i), after “69,” insert “ 142V, ”.

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<portionBody period="#period2">
<part eId="part-1" period="#period3">
<num>
<strong>PART 1</strong>
</num>
<heading>Ring-fencing</heading>
<hcontainer name="crossheading" eId="part-1-crossheading-ringfencing" period="#period3">
<heading>
<em>Ring-fencing</em>
</heading>
<section eId="section-4" period="#period3">
<num>4</num>
<heading>Ring-fencing of certain activities</heading>
<subsection eId="section-4-1">
<num>1</num>
<content>
<p>After Part 9A of FSMA 2000 insert—</p>
<p class="BlockAmendment">
<mod>
<quotedStructure class="unknown unknown unknown default" startQuote="" endQuote="">
<part eId="d4e161">
<num>
<strong>PART 9B</strong>
</num>
<heading>Ring-fencing</heading>
<hcontainer name="crossheading" eId="d4e167">
<heading>
<em>Introductory</em>
</heading>
<section eId="d4e174">
<num>142A</num>
<heading>“Ring-fenced body”</heading>
<subsection eId="d4e178">
<num>1</num>
<content>
<p>
In this Act “
<term refersTo="#term-ring-fenced-body">ring-fenced body</term>
” means a
<abbr class="Acronym" title="United Kingdom">UK</abbr>
institution which carries on one or more core activities (see section 142B) in relation to which it has a Part 4A permission.
</p>
</content>
</subsection>
<subsection eId="d4e190">
<num>2</num>
<intro>
<p>
But “
<term refersTo="#term-ring-fenced-body">ring-fenced body</term>
” does not include—
</p>
</intro>
<paragraph eId="d4e199">
<num>a</num>
<content>
<p>a building society within the meaning of the Building Societies Act 1986, or</p>
</content>
</paragraph>
<paragraph eId="d4e205">
<num>b</num>
<content>
<p>
a
<abbr class="Acronym" title="United Kingdom">UK</abbr>
institution of a class exempted by order made by the Treasury.
</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e214">
<num>3</num>
<content>
<p>
An order under subsection (2)(b) may be made in relation to a class of
<abbr class="Acronym" title="United Kingdom">UK</abbr>
institution only if the Treasury are of the opinion that the exemption conferred by the order would not be likely to have a significant adverse effect on the continuity of the provision in the United Kingdom of core services.
</p>
</content>
</subsection>
<subsection eId="d4e223">
<num>4</num>
<content>
<p>Subject to that, in deciding whether and, if so, how to exercise their powers under subsection (2)(b), the Treasury must have regard to the desirability of minimising any adverse effect that the ring-fencing provisions might be expected to have on competition in the market for services provided in the course of carrying on core activities, including any adverse effect on the ease with which new entrants can enter the market.</p>
</content>
</subsection>
<subsection eId="d4e229">
<num>5</num>
<content>
<p>
In subsection (4) “
<term refersTo="#term-the-ring-fencing-provisions">the ring-fencing provisions</term>
” means ring-fencing rules and the duty imposed as a result of section 142G.
</p>
</content>
</subsection>
<subsection eId="d4e238">
<num>6</num>
<content>
<p>An order under subsection (2)(b) may provide for the exemption to be subject to conditions.</p>
</content>
</subsection>
<subsection eId="d4e244">
<num>7</num>
<content>
<p>
In this section “
<term refersTo="#term-uk-institution">
<abbr class="Acronym" title="United Kingdom">UK</abbr>
institution
</term>
” means a body corporate incorporated in the United Kingdom.
</p>
</content>
</subsection>
</section>
<section eId="d4e258">
<num>142B</num>
<heading>Core activities</heading>
<subsection eId="d4e262">
<num>1</num>
<content>
<p>References in this Act to a “core activity” are to be read in accordance with this section.</p>
</content>
</subsection>
<subsection eId="d4e268">
<num>2</num>
<content>
<p>The regulated activity of accepting deposits (whether carried on in the United Kingdom or elsewhere) is a core activity unless it is carried on in circumstances specified by the Treasury by order.</p>
</content>
</subsection>
<subsection eId="d4e274">
<num>3</num>
<content>
<p>An order under subsection (2) may be made only if the Treasury are of the opinion that it is not necessary for either of the following purposes that the regulated activity of accepting deposits should be a core activity when carried on in the specified circumstances.</p>
</content>
</subsection>
<subsection eId="d4e280">
<num>4</num>
<intro>
<p>Those purposes are—</p>
</intro>
<paragraph eId="d4e286">
<num>a</num>
<content>
<p>to secure an appropriate degree of protection for the depositors concerned, or</p>
</content>
</paragraph>
<paragraph eId="d4e292">
<num>b</num>
<content>
<p>to protect the continuity of the provision in the United Kingdom of services provided in the course of carrying on the regulated activity of accepting deposits.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e298">
<num>5</num>
<content>
<p>The Treasury may by order provide for a regulated activity other than that of accepting deposits to be a core activity, either generally or when carried on in circumstances specified in the order.</p>
</content>
</subsection>
<subsection eId="d4e304">
<num>6</num>
<intro>
<p>An order under subsection (5) may be made only if the Treasury are of the opinion—</p>
</intro>
<paragraph eId="d4e310">
<num>a</num>
<content>
<p>
that an interruption of the provision of services provided in the United Kingdom in the carrying on of the regulated activity concerned could adversely affect the stability of the
<abbr class="Acronym" title="United Kingdom">UK</abbr>
financial system or of a significant part of that system, and
</p>
</content>
</paragraph>
<paragraph eId="d4e319">
<num>b</num>
<content>
<p>that the continuity of the provision of those services can more effectively be protected by treating the activity as a core activity.</p>
</content>
</paragraph>
</subsection>
</section>
<section eId="d4e328">
<num>142C</num>
<heading>Core services</heading>
<subsection eId="d4e332">
<num>1</num>
<content>
<p>References in this Act to “core services” are to be read in accordance with this section.</p>
</content>
</subsection>
<subsection eId="d4e338">
<num>2</num>
<intro>
<p>The following are core services—</p>
</intro>
<paragraph eId="d4e344">
<num>a</num>
<content>
<p>facilities for the accepting of deposits or other payments into an account which is provided in the course of carrying on the core activity of accepting deposits;</p>
</content>
</paragraph>
<paragraph eId="d4e350">
<num>b</num>
<content>
<p>facilities for withdrawing money or making payments from such an account;</p>
</content>
</paragraph>
<paragraph eId="d4e356">
<num>c</num>
<content>
<p>overdraft facilities in connection with such an account.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e362">
<num>3</num>
<content>
<p>The Treasury may by order provide that any other specified services provided in the course of carrying on the core activity of accepting deposits are also core services.</p>
</content>
</subsection>
<subsection eId="d4e368">
<num>4</num>
<content>
<p>If an order under section 142B(5) provides for an activity other than that of accepting deposits to be a core activity, the Treasury must by order provide that specified services provided in the course of carrying on that activity are core services.</p>
</content>
</subsection>
<subsection eId="d4e374">
<num>5</num>
<content>
<p>The services specified by order under subsection (4) must be services in relation to which the Treasury are of the opinion mentioned in section 142B(6)(a).</p>
</content>
</subsection>
</section>
<section eId="d4e383">
<num>142D</num>
<heading>Excluded activities</heading>
<subsection eId="d4e387">
<num>1</num>
<content>
<p>References in this Act to an “excluded activity” are to be read in accordance with this section.</p>
</content>
</subsection>
<subsection eId="d4e393">
<num>2</num>
<content>
<p>The regulated activity of dealing in investments as principal (whether carried on in the United Kingdom or elsewhere) is an excluded activity unless it is carried on in circumstances specified by the Treasury by order.</p>
</content>
</subsection>
<subsection eId="d4e399">
<num>3</num>
<content>
<p>An order under subsection (2) may be made only if the Treasury are of the opinion that allowing ring-fenced bodies to deal in investments as principal in the specified circumstances would not be likely to result in any significant adverse effect on the continuity of the provision in the United Kingdom of core services.</p>
</content>
</subsection>
<subsection eId="d4e405">
<num>4</num>
<content>
<p>The Treasury may by order provide for an activity other than the regulated activity of dealing in investments as principal to be an excluded activity, either generally or when carried on in circumstances specified in the order.</p>
</content>
</subsection>
<subsection eId="d4e411">
<num>5</num>
<intro>
<p>An activity to which an order under subsection (4) relates—</p>
</intro>
<paragraph eId="d4e417">
<num>a</num>
<content>
<p>need not be a regulated activity, and</p>
</content>
</paragraph>
<paragraph eId="d4e423">
<num>b</num>
<content>
<p>may be an activity carried on in the United Kingdom or elsewhere.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e429">
<num>6</num>
<intro>
<p>In deciding whether to make an order under subsection (4) in relation to any activity, the Treasury must—</p>
</intro>
<paragraph eId="d4e435">
<num>a</num>
<content>
<p>have regard to the risks to which a ring-fenced body would be exposed if it carried on the activity concerned, and</p>
</content>
</paragraph>
<paragraph eId="d4e441">
<num>b</num>
<content>
<p>consider whether the carrying on of that activity by a ring-fenced body would make it more likely that the failure of the body would have an adverse effect on the continuity of the provision in the United Kingdom of core services.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e447">
<num>7</num>
<content>
<p>An order under subsection (4) may be made only if the Treasury are of the opinion that the making of the order is necessary or expedient for the purpose of protecting the continuity of the provision in the United Kingdom of core services.</p>
</content>
</subsection>
</section>
<section eId="d4e456">
<num>142E</num>
<heading>Power of Treasury to impose prohibitions</heading>
<subsection eId="d4e460">
<num>1</num>
<intro>
<p>The Treasury may by order prohibit ring-fenced bodies from—</p>
</intro>
<paragraph eId="d4e466">
<num>a</num>
<content>
<p>entering into transactions of a specified kind or with persons falling within a specified class;</p>
</content>
</paragraph>
<paragraph eId="d4e472">
<num>b</num>
<content>
<p>establishing or maintaining a branch in a specified country or territory;</p>
</content>
</paragraph>
<paragraph eId="d4e478">
<num>c</num>
<content>
<p>holding in specified circumstances shares or voting power in companies of a specified description.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e484">
<num>2</num>
<intro>
<p>In deciding whether to make an order under this section imposing a prohibition, the Treasury must—</p>
</intro>
<paragraph eId="d4e490">
<num>a</num>
<content>
<p>have regard to the risks to which a ring-fenced body would be exposed if it did the thing to which the prohibition relates, and</p>
</content>
</paragraph>
<paragraph eId="d4e496">
<num>b</num>
<content>
<p>consider whether the doing of that thing by a ring-fenced body would make it more likely that the failure of the body would have an adverse effect on the continuity of the provision in the United Kingdom of core services.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e502">
<num>3</num>
<content>
<p>An order under this section may be made only if the Treasury are of the opinion that the making of the order is necessary or expedient for the purpose of protecting the continuity of the provision in the United Kingdom of core services.</p>
</content>
</subsection>
<subsection eId="d4e508">
<num>4</num>
<intro>
<p>An order under this section may in particular—</p>
</intro>
<paragraph eId="d4e514">
<num>a</num>
<content>
<p>provide for any prohibition to be subject to exemptions specified in the order;</p>
</content>
</paragraph>
<paragraph eId="d4e520">
<num>b</num>
<content>
<p>provide for any exemption to be subject to conditions specified in the order.</p>
</content>
</paragraph>
</subsection>
</section>
<section eId="d4e529">
<num>142F</num>
<heading>Orders under section 142A, 142B, 142D or 142E</heading>
<subsection eId="d4e533">
<num>1</num>
<intro>
<p>An order made under section 142A, 142B, 142D or 142E may—</p>
</intro>
<paragraph eId="d4e539">
<num>a</num>
<content>
<p>authorise or require the making of rules by a regulator for the purposes of, or for purposes connected with, any provision of the order;</p>
</content>
</paragraph>
<paragraph eId="d4e545">
<num>b</num>
<content>
<p>authorise the making of other instruments by a regulator for the purposes of, or for purposes connected with, any provision of the order;</p>
</content>
</paragraph>
<paragraph eId="d4e551">
<num>c</num>
<content>
<p>refer to a publication issued by a regulator, another body in the United Kingdom or an international organisation, as the publication has effect from time to time.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e557">
<num>2</num>
<intro>
<p>If the order confers powers on a regulator or authorises or requires the making of rules or other instruments by a regulator, the order may also—</p>
</intro>
<paragraph eId="d4e563">
<num>a</num>
<content>
<p>impose conditions on the exercise of any power conferred on the regulator;</p>
</content>
</paragraph>
<paragraph eId="d4e569">
<num>b</num>
<content>
<p>impose consultation requirements on the regulator;</p>
</content>
</paragraph>
<paragraph eId="d4e575">
<num>c</num>
<content>
<p>make the exercise of a power by the regulator subject to the consent of the Treasury.</p>
</content>
</paragraph>
</subsection>
</section>
</hcontainer>
<hcontainer name="crossheading" eId="d4e581">
<heading>
<em>Ring-fenced bodies not to carry on excluded activities or contravene prohibitions</em>
</heading>
<section eId="d4e588">
<num>142G</num>
<heading>Ring-fenced bodies not to carry on excluded activities or contravene prohibitions</heading>
<subsection eId="d4e592">
<num>1</num>
<intro>
<p>A ring-fenced body which—</p>
</intro>
<paragraph eId="d4e598">
<num>a</num>
<content>
<p>carries on an excluded activity or purports to do so, or</p>
</content>
</paragraph>
<paragraph eId="d4e604">
<num>b</num>
<content>
<p>contravenes any provision of an order under section 142E,</p>
</content>
</paragraph>
<wrapUp>
<p>is to be taken to have contravened a requirement imposed on the body by the appropriate regulator under this Act.</p>
</wrapUp>
</subsection>
<subsection eId="d4e612">
<num>2</num>
<intro>
<p>The contravention does not—</p>
</intro>
<paragraph eId="d4e618">
<num>a</num>
<content>
<p>make a person guilty of an offence;</p>
</content>
</paragraph>
<paragraph eId="d4e624">
<num>b</num>
<content>
<p>make a transaction void or unenforceable;</p>
</content>
</paragraph>
<paragraph eId="d4e630">
<num>c</num>
<content>
<p>(subject to subsection (3)) give rise to any right of action for breach of statutory duty.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e636">
<num>3</num>
<content>
<p>In such cases as the Treasury may specify by order, the contravention is actionable at the suit of a person who suffers loss as a result of the contravention, subject to the defences and other incidents applying to actions for breach of statutory duty.</p>
</content>
</subsection>
<subsection eId="d4e642">
<num>4</num>
<intro>
<p>
In this section “
<term refersTo="#term-the-appropriate-regulator">the appropriate regulator</term>
” means—
</p>
</intro>
<paragraph eId="d4e651">
<num>a</num>
<content>
<p>in relation to a ring-fenced body which is a PRA-authorised person, the PRA;</p>
</content>
</paragraph>
<paragraph eId="d4e657">
<num>b</num>
<content>
<p>in relation to any other ring-fenced body, the FCA.</p>
</content>
</paragraph>
</subsection>
</section>
</hcontainer>
<hcontainer name="crossheading" eId="d4e663">
<heading>
<em>Ring-fencing rules</em>
</heading>
<section eId="d4e670">
<num>142H</num>
<heading>Ring-fencing rules</heading>
<subsection eId="d4e674">
<num>1</num>
<intro>
<p>In the exercise of its power to make general rules, the appropriate regulator must in particular make rules—</p>
</intro>
<paragraph eId="d4e680">
<num>a</num>
<content>
<p>requiring a ring-fenced body to make arrangements to ensure the effective provision to the ring-fenced body of services and facilities that it requires in relation to the carrying on of a core activity, and</p>
</content>
</paragraph>
<paragraph eId="d4e686">
<num>b</num>
<content>
<p>making provision for the group ring-fencing purposes applying to ring-fenced bodies and to authorised persons who are members of a ring-fenced body's group.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e692">
<num>2</num>
<content>
<p>Section 142E(1)(c) does not affect the power of the appropriate regulator to make general rules imposing restrictions on the extent of the shares or voting power that a ring-fenced body may hold in another company, except where a restriction on the extent of the shares or voting power that the ring-fenced body may hold in the company is imposed by order under section 142E(1)(c).</p>
</content>
</subsection>
<subsection eId="d4e698">
<num>3</num>
<content>
<p>
General rules that are required by this section or make provision falling within subsection (2) are in this Act referred to as “
<term refersTo="#term-ring-fencing-rules">ring-fencing rules</term>
”.
</p>
</content>
</subsection>
<subsection eId="d4e707">
<num>4</num>
<intro>
<p>The “group ring-fencing purposes” are—</p>
</intro>
<paragraph eId="d4e713">
<num>a</num>
<content>
<p>ensuring as far as reasonably practicable that the carrying on of core activities by a ring-fenced body is not adversely affected by the acts or omissions of other members of its group;</p>
</content>
</paragraph>
<paragraph eId="d4e719">
<num>b</num>
<intro>
<p>ensuring as far as reasonably practicable that in carrying on its business a ring-fenced body—</p>
</intro>
<subparagraph eId="d4e725">
<num>i</num>
<content>
<p>is able to take decisions independently of other members of its group, and</p>
</content>
</subparagraph>
<subparagraph eId="d4e731">
<num>ii</num>
<content>
<p>does not depend on resources which are provided by a member of its group and which would cease to be available to the ring-fenced body in the event of the insolvency of the other member;</p>
</content>
</subparagraph>
</paragraph>
<paragraph eId="d4e737">
<num>c</num>
<content>
<p>ensuring as far as reasonably practicable that the ring-fenced body would be able to continue to carry on core activities in the event of the insolvency of one or more other members of its group.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e743">
<num>5</num>
<intro>
<p>Ring-fencing rules made for the group ring-fencing purposes must include—</p>
</intro>
<paragraph eId="d4e749">
<num>a</num>
<content>
<p>provision restricting the power of a ring-fenced body to enter into contracts with other members of its group otherwise than on arm's length terms;</p>
</content>
</paragraph>
<paragraph eId="d4e755">
<num>b</num>
<content>
<p>provision restricting the payments that a ring-fenced body may make (by way of dividend or otherwise) to other members of its group;</p>
</content>
</paragraph>
<paragraph eId="d4e761">
<num>c</num>
<content>
<p>provision requiring the disclosure to the appropriate regulator of information relating to transactions between a ring-fenced body and other members of its group;</p>
</content>
</paragraph>
<paragraph eId="d4e767">
<num>d</num>
<intro>
<p>provision requiring a ring-fenced body to ensure that its board of directors (or if there is no such board, the equivalent management body) includes to a specified extent—</p>
</intro>
<subparagraph eId="d4e773">
<num>i</num>
<content>
<p>members who are treated by the rules as being independent of other members of the ring-fenced body's group,</p>
</content>
</subparagraph>
<subparagraph eId="d4e779">
<num>ii</num>
<content>
<p>members who are treated by the rules as being independent of the ring-fenced body itself, and</p>
</content>
</subparagraph>
<subparagraph eId="d4e785">
<num>iii</num>
<content>
<p>non-executive members;</p>
</content>
</subparagraph>
</paragraph>
<paragraph eId="d4e791">
<num>e</num>
<content>
<p>provision requiring a ring-fenced body to act in accordance with a remuneration policy meeting specified requirements;</p>
</content>
</paragraph>
<paragraph eId="d4e797">
<num>f</num>
<content>
<p>provision requiring a ring-fenced body to act in accordance with a human resources policy meeting specified requirements;</p>
</content>
</paragraph>
<paragraph eId="d4e803">
<num>g</num>
<content>
<p>provision requiring arrangements made by the ring-fenced body for the identification, monitoring and management of risk to meet specified requirements;</p>
</content>
</paragraph>
<paragraph eId="d4e809">
<num>h</num>
<content>
<p>such other provision as the appropriate regulator considers necessary or expedient for any of the purposes in subsection (4).</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e815">
<num>6</num>
<content>
<p>The reference in subsection (5)(e) to a remuneration policy is a reference to a policy about the remuneration of officers, employees and other persons who (in each case) are of a specified description.</p>
</content>
</subsection>
<subsection eId="d4e821">
<num>7</num>
<content>
<p>The reference in subsection (5)(f) to a human resources policy is a reference to a policy about the appointment and management of officers, employees and other persons who (in each case) are of a specified description.</p>
</content>
</subsection>
<subsection eId="d4e827">
<num>8</num>
<content>
<p>In this section—</p>
<blockList class="unordered">
<item>
<p>
<term refersTo="#term-the-appropriate-regulator">the appropriate regulator</term>
” means—
</p>
<blockList class="ordered">
<item>
<num>a</num>
<p>in relation to a PRA-authorised person, the PRA;</p>
</item>
<item>
<num>b</num>
<p>in relation to any other authorised person, the FCA;</p>
</item>
</blockList>
</item>
<item>
<p>
<term refersTo="#term-shares">shares</term>
” has the meaning given in section 422;
</p>
</item>
<item>
<p>
<term refersTo="#term-specified">specified</term>
” means specified in the rules;
</p>
</item>
<item>
<p>
<term refersTo="#term-voting-power">voting power</term>
” has the meaning given in section 422.
</p>
</item>
</blockList>
</content>
</subsection>
</section>
<section eId="d4e874">
<num>142I</num>
<heading>Powers of Treasury in relation to ring-fencing rules</heading>
<subsection eId="d4e878">
<num>1</num>
<intro>
<p>The Treasury may by order require the appropriate regulator, as defined in section 142H(8), to include (or not to include) in ring-fencing rules specified provision relating to—</p>
</intro>
<paragraph eId="d4e884">
<num>a</num>
<content>
<p>any of the matters mentioned in section 142H(5)(a) to (g), or</p>
</content>
</paragraph>
<paragraph eId="d4e890">
<num>b</num>
<content>
<p>any other specified matter.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e896">
<num>2</num>
<intro>
<p>The power to make an order under this section is exercisable only if the Treasury consider it necessary or expedient to do so—</p>
</intro>
<paragraph eId="d4e902">
<num>a</num>
<content>
<p>for any of the group ring-fencing purposes as defined in section 142H(4), or</p>
</content>
</paragraph>
<paragraph eId="d4e908">
<num>b</num>
<content>
<p>otherwise for securing the independence of ring-fenced bodies from other members of their groups.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e914">
<num>3</num>
<content>
<p>
<term refersTo="#term-specified">Specified</term>
” means specified in the order.
</p>
</content>
</subsection>
</section>
<section eId="d4e928">
<num>142J</num>
<heading>
Review of ring-fencing rules
<abbr title="Et cetera" xml:lang="la">etc</abbr>
</heading>
<subsection eId="d4e932">
<num>1</num>
<content>
<p>The PRA must carry out reviews of its ring-fencing rules and of any rules made by it under section 192JA (rules applying to parent undertakings of ring-fenced bodies).</p>
</content>
</subsection>
<subsection eId="d4e938">
<num>2</num>
<content>
<p>The first review must be completed before the end of the period of 5 years beginning with the day on which the first ring-fencing rules come into force.</p>
</content>
</subsection>
<subsection eId="d4e944">
<num>3</num>
<content>
<p>Subsequent reviews must be completed before the end of the period of 5 years beginning with the day on which the previous review was completed.</p>
</content>
</subsection>
<subsection eId="d4e950">
<num>4</num>
<content>
<p>The PRA must give the Treasury a report of each review.</p>
</content>
</subsection>
<subsection eId="d4e956">
<num>5</num>
<content>
<p>The Treasury must lay a copy of the report before Parliament.</p>
</content>
</subsection>
<subsection eId="d4e962">
<num>6</num>
<content>
<p>The PRA must publish the report in such manner as it thinks fit.</p>
</content>
</subsection>
<subsection eId="d4e968">
<num>7</num>
<content>
<p>If (because any ring-fenced body is not a PRA-authorised person) section 142H has the effect of requiring the FCA to make ring-fencing rules, subsections (1) to (6) apply to the FCA as they apply to the PRA.</p>
</content>
</subsection>
</section>
</hcontainer>
<hcontainer name="crossheading" eId="d4e974">
<heading>
<em>Group restructuring powers</em>
</heading>
<section eId="d4e981">
<num>142K</num>
<heading>Cases in which group restructuring powers become exercisable</heading>
<subsection eId="d4e985">
<num>1</num>
<content>
<p>The appropriate regulator may exercise the group restructuring powers only if it is satisfied that one or more of Conditions A to D is met in relation to a ring-fenced body that is a member of a group.</p>
</content>
</subsection>
<subsection eId="d4e991">
<num>2</num>
<content>
<p>Condition A is that the carrying on of core activities by the ring-fenced body is being adversely affected by the acts or omissions of other members of its group.</p>
</content>
</subsection>
<subsection eId="d4e997">
<num>3</num>
<intro>
<p>Condition B is that in carrying on its business the ring-fenced body—</p>
</intro>
<paragraph eId="d4e1003">
<num>a</num>
<content>
<p>is unable to take decisions independently of other members of its group, or</p>
</content>
</paragraph>
<paragraph eId="d4e1009">
<num>b</num>
<content>
<p>depends on resources which are provided by a member of its group and which would cease to be available in the event of the insolvency of the other member.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1015">
<num>4</num>
<content>
<p>Condition C is that in the event of the insolvency of one or more other members of its group the ring-fenced body would be unable to continue to carry on the core activities carried on by it.</p>
</content>
</subsection>
<subsection eId="d4e1021">
<num>5</num>
<intro>
<p>Condition D is that the ring-fenced body or another member of its group has engaged, or is engaged, in conduct which is having, or would apart from this section be likely to have, an adverse effect on the advancement by the appropriate regulator—</p>
</intro>
<paragraph eId="d4e1027">
<num>a</num>
<content>
<p>in the case of the PRA, of the objective in section 2B(3)(c), or</p>
</content>
</paragraph>
<paragraph eId="d4e1033">
<num>b</num>
<content>
<p>in the case of the FCA, of the continuity objective.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1039">
<num>6</num>
<intro>
<p>The appropriate regulator may not exercise the group restructuring powers in relation to any person if—</p>
</intro>
<paragraph eId="d4e1045">
<num>a</num>
<content>
<p>either regulator has previously exercised the group restructuring powers in relation to that person, and</p>
</content>
</paragraph>
<paragraph eId="d4e1051">
<num>b</num>
<content>
<p>the decision notice in relation to the current exercise is given before the second anniversary of the day on which the decision notice in relation to the previous exercise was given.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1057">
<num>7</num>
<intro>
<p>
In this section and sections 142L to 142Q “
<term refersTo="#term-the-appropriate-regulator">the appropriate regulator</term>
” means—
</p>
</intro>
<paragraph eId="d4e1066">
<num>a</num>
<content>
<p>where the ring-fenced body is a PRA-authorised person, the PRA;</p>
</content>
</paragraph>
<paragraph eId="d4e1072">
<num>b</num>
<content>
<p>where it is not, the FCA.</p>
</content>
</paragraph>
</subsection>
</section>
<section eId="d4e1081">
<num>142L</num>
<heading>Group restructuring powers</heading>
<subsection eId="d4e1085">
<num>1</num>
<content>
<p>
In this Part “
<term refersTo="#term-the-group-restructuring-powers">the group restructuring powers</term>
” means one or more of the powers conferred by this section.
</p>
</content>
</subsection>
<subsection eId="d4e1094">
<num>2</num>
<intro>
<p>Where the appropriate regulator is the PRA, the powers conferred by this section are as follows—</p>
</intro>
<paragraph eId="d4e1100">
<num>a</num>
<content>
<p>in relation to the ring-fenced body, power to impose a requirement on the ring-fenced body requiring it to take any of the steps mentioned in subsection (5),</p>
</content>
</paragraph>
<paragraph eId="d4e1106">
<num>b</num>
<content>
<p>in relation to any member of the ring-fenced body's group which is a PRA-authorised person, power to impose a requirement on the PRA-authorised person requiring it to take any of the steps mentioned in subsection (6),</p>
</content>
</paragraph>
<paragraph eId="d4e1112">
<num>c</num>
<content>
<p>in relation to any member of the ring-fenced body's group which is an authorised person but not a PRA-authorised person, power to direct the FCA to impose a requirement on the authorised person requiring it to take any of the steps mentioned in subsection (6), and</p>
</content>
</paragraph>
<paragraph eId="d4e1118">
<num>d</num>
<content>
<p>in relation to a qualifying parent undertaking, power to give a direction under this paragraph to the parent undertaking requiring it to take any of the steps mentioned in subsection (6).</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1124">
<num>3</num>
<intro>
<p>Where the appropriate regulator is the FCA, the powers conferred by this section are as follows—</p>
</intro>
<paragraph eId="d4e1130">
<num>a</num>
<content>
<p>in relation to the ring-fenced body, power to impose a requirement on the ring-fenced body requiring it to take any of the steps mentioned in subsection (5),</p>
</content>
</paragraph>
<paragraph eId="d4e1136">
<num>b</num>
<content>
<p>in relation to any member of the ring-fenced body's group which is an authorised person but not a PRA-authorised person, power to impose a requirement on the authorised person requiring it to take any of the steps mentioned in subsection (6),</p>
</content>
</paragraph>
<paragraph eId="d4e1142">
<num>c</num>
<content>
<p>in relation to any member of the ring-fenced body's group which is a PRA-authorised person, power to direct the PRA to impose a requirement on the authorised person requiring it to take any of the steps mentioned in subsection (6), and</p>
</content>
</paragraph>
<paragraph eId="d4e1148">
<num>d</num>
<content>
<p>in relation to a qualifying parent undertaking, power to give a direction under this paragraph to the parent undertaking requiring it to take any of the steps mentioned in subsection (6).</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1154">
<num>4</num>
<intro>
<p>A parent undertaking of a ring-fenced body by reference to which the group restructuring powers are exercisable is for the purposes of this Part a “qualifying parent undertaking” if—</p>
</intro>
<paragraph eId="d4e1160">
<num>a</num>
<content>
<p>it is a body corporate which is incorporated in the United Kingdom and has a place of business in the United Kingdom, and</p>
</content>
</paragraph>
<paragraph eId="d4e1166">
<num>b</num>
<content>
<p>it is not itself an authorised person.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1172">
<num>5</num>
<intro>
<p>The steps that the ring-fenced body may be required to take are—</p>
</intro>
<paragraph eId="d4e1178">
<num>a</num>
<content>
<p>to dispose of specified property or rights to an outside person;</p>
</content>
</paragraph>
<paragraph eId="d4e1184">
<num>b</num>
<content>
<p>to apply to the court under Part 7 for an order sanctioning a ring-fencing transfer scheme relating to the transfer of the whole or part of the business of the ring-fenced body to an outside person;</p>
</content>
</paragraph>
<paragraph eId="d4e1190">
<num>c</num>
<content>
<p>otherwise to make arrangements discharging the ring-fenced body from specified liabilities.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1196">
<num>6</num>
<intro>
<p>The steps that another authorised person or a qualifying parent undertaking may be required to take are—</p>
</intro>
<paragraph eId="d4e1202">
<num>a</num>
<content>
<p>to dispose of any shares in, or securities of, the ring-fenced body to an outside person;</p>
</content>
</paragraph>
<paragraph eId="d4e1208">
<num>b</num>
<content>
<p>to dispose of any interest in any other body corporate that is a member of the ring-fenced body's group to an outside person;</p>
</content>
</paragraph>
<paragraph eId="d4e1214">
<num>c</num>
<content>
<p>to dispose of other specified property or rights to an outside person;</p>
</content>
</paragraph>
<paragraph eId="d4e1220">
<num>d</num>
<content>
<p>to apply to the court under Part 7 for an order sanctioning a ring-fencing transfer scheme relating to the transfer of the whole or part of the business of the authorised person or qualifying parent undertaking to an outside person.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1226">
<num>7</num>
<content>
<p>
In subsections (5) and (6) “
<term refersTo="#term-outside-person">outside person</term>
” means a person who, after the implementation of the disposal or scheme in question, will not be a member of the group of the ring-fenced body by reference to which the powers are exercised (whether or not that body is to remain a ring-fenced body after the implementation of the disposal or scheme in question).
</p>
</content>
</subsection>
<subsection eId="d4e1235">
<num>8</num>
<content>
<p>It is immaterial whether a requirement to be imposed on an authorised person by the appropriate regulator, or by the other regulator at the direction of the appropriate regulator, is one that the regulator imposing it could impose under section 55L or 55M.</p>
</content>
</subsection>
</section>
<section eId="d4e1244">
<num>142M</num>
<heading>Procedure: preliminary notices</heading>
<subsection eId="d4e1248">
<num>1</num>
<content>
<p>
If the appropriate regulator proposes to exercise the group restructuring powers in relation to any authorised person or qualifying parent undertaking (“
<term refersTo="#term-the-person-concerned">the person concerned</term>
”), the regulator must give each of the relevant persons a notice (a “preliminary notice”).
</p>
</content>
</subsection>
<subsection eId="d4e1257">
<num>2</num>
<intro>
<p>The preliminary notice must—</p>
</intro>
<paragraph eId="d4e1263">
<num>a</num>
<content>
<p>state that it is a preliminary notice,</p>
</content>
</paragraph>
<paragraph eId="d4e1269">
<num>b</num>
<content>
<p>state that the regulator proposes to exercise the group restructuring powers,</p>
</content>
</paragraph>
<paragraph eId="d4e1275">
<num>c</num>
<content>
<p>state the action which the regulator proposes to take in the exercise of those powers,</p>
</content>
</paragraph>
<paragraph eId="d4e1281">
<num>d</num>
<content>
<p>be in writing, and</p>
</content>
</paragraph>
<paragraph eId="d4e1287">
<num>e</num>
<content>
<p>give reasons for the proposed action (which must include the regulator's reasons for being satisfied as to the matters mentioned in section 142K(1)).</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1293">
<num>3</num>
<content>
<p>The appropriate regulator must give a copy of the preliminary notice to the Treasury.</p>
</content>
</subsection>
<subsection eId="d4e1299">
<num>4</num>
<content>
<p>The preliminary notice must specify a reasonable period (which may not be less than 14 days) within which any of the relevant persons may make representations to the regulator.</p>
</content>
</subsection>
<subsection eId="d4e1305">
<num>5</num>
<intro>
<p>The relevant persons are—</p>
</intro>
<paragraph eId="d4e1311">
<num>a</num>
<content>
<p>the person concerned,</p>
</content>
</paragraph>
<paragraph eId="d4e1317">
<num>b</num>
<content>
<p>the ring-fenced body, if not the person concerned, and</p>
</content>
</paragraph>
<paragraph eId="d4e1323">
<num>c</num>
<content>
<p>any other authorised person who will, in the opinion of the appropriate regulator, be significantly affected by the exercise of the group restructuring powers.</p>
</content>
</paragraph>
</subsection>
</section>
<section eId="d4e1332">
<num>142N</num>
<heading>Procedure: warning notice and decision notice</heading>
<subsection eId="d4e1336">
<num>1</num>
<intro>
<p>If the appropriate regulator has given a preliminary notice under section 142M, it must either—</p>
</intro>
<paragraph eId="d4e1342">
<num>a</num>
<content>
<p>if, having considered any representations made by any of the relevant persons, it still proposes to exercise the group restructuring powers, give each of the relevant persons a warning notice during the warning notice period, or</p>
</content>
</paragraph>
<paragraph eId="d4e1348">
<num>b</num>
<content>
<p>before the end of the warning notice period, give each of them a written notice stating that it has decided not to exercise the powers and give a copy of that notice to the Treasury.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1354">
<num>2</num>
<intro>
<p>The “warning notice period” is the period—</p>
</intro>
<paragraph eId="d4e1360">
<num>a</num>
<content>
<p>beginning 3 months after the end of the period specified under section 142M(4) as that within which any representations must be made, and</p>
</content>
</paragraph>
<paragraph eId="d4e1366">
<num>b</num>
<content>
<p>ending 6 months after the end of that period.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1372">
<num>3</num>
<intro>
<p>Before giving a warning notice under subsection (1)(a), the appropriate regulator must—</p>
</intro>
<paragraph eId="d4e1378">
<num>a</num>
<content>
<p>give the Treasury a draft of the notice,</p>
</content>
</paragraph>
<paragraph eId="d4e1384">
<num>b</num>
<content>
<p>provide the Treasury with any information that the Treasury may require in order to decide whether to give their consent, and</p>
</content>
</paragraph>
<paragraph eId="d4e1390">
<num>c</num>
<content>
<p>obtain the consent of the Treasury.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1396">
<num>4</num>
<intro>
<p>The action specified in the warning notice may be different from that specified in the preliminary notice if—</p>
</intro>
<paragraph eId="d4e1402">
<num>a</num>
<content>
<p>the appropriate regulator considers that different action is appropriate as a result of any change in circumstances since the preliminary notice was given, or</p>
</content>
</paragraph>
<paragraph eId="d4e1408">
<num>b</num>
<content>
<p>the person concerned consents to the change.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1414">
<num>5</num>
<intro>
<p>The regulator must, in particular, have regard to anything that—</p>
</intro>
<paragraph eId="d4e1420">
<num>a</num>
<content>
<p>has been done by the person concerned since the giving of the preliminary notice, and</p>
</content>
</paragraph>
<paragraph eId="d4e1426">
<num>b</num>
<content>
<p>represents action that would have been required in pursuance of the proposals in that notice.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1432">
<num>6</num>
<content>
<p>If the regulator decides to exercise the group restructuring powers it must give each of the relevant persons a decision notice.</p>
</content>
</subsection>
<subsection eId="d4e1438">
<num>7</num>
<intro>
<p>The decision notice must specify the date or dates by which each of the following must be completed—</p>
</intro>
<paragraph eId="d4e1444">
<num>a</num>
<content>
<p>any disposal of shares, securities or other property that is required by the notice;</p>
</content>
</paragraph>
<paragraph eId="d4e1450">
<num>b</num>
<content>
<p>any transfer of liabilities for which the notice requires arrangements to be made.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1456">
<num>8</num>
<content>
<p>The giving of consent for the purpose of subsection (4)(b) does not affect any right to refer to the Tribunal the matter to which any decision notice resulting from the warning notice relates.</p>
</content>
</subsection>
<subsection eId="d4e1462">
<num>9</num>
<content>
<p>
<term refersTo="#term-the-relevant-persons">The relevant persons</term>
” has the same meaning as in section 142M.
</p>
</content>
</subsection>
</section>
<section eId="d4e1474">
<num>142O</num>
<heading>References to Tribunal</heading>
<subsection eId="d4e1478">
<num>1</num>
<intro>
<p>A notified person who is aggrieved by—</p>
</intro>
<paragraph eId="d4e1484">
<num>a</num>
<content>
<p>the imposition by either regulator of a requirement as a result of section 142L(2)(a) or (b) or (3)(a) or (b),</p>
</content>
</paragraph>
<paragraph eId="d4e1490">
<num>b</num>
<content>
<p>a requirement to be imposed as a result of the giving by one regulator to the other of a direction under section 142L(2)(c) or (3)(c), or</p>
</content>
</paragraph>
<paragraph eId="d4e1496">
<num>c</num>
<content>
<p>the giving by either regulator of a direction under section 142L(2)(d) or (3)(d),</p>
</content>
</paragraph>
<wrapUp>
<p>may refer the matter to the Tribunal.</p>
</wrapUp>
</subsection>
<subsection eId="d4e1504">
<num>2</num>
<content>
<p>
<term refersTo="#term-notified-person">Notified person</term>
” means a person to whom a decision notice under section 142N(6) was given or ought to have been given.
</p>
</content>
</subsection>
</section>
<section eId="d4e1516">
<num>142P</num>
<heading>Subsequent variation of requirement or direction</heading>
<subsection eId="d4e1520">
<num>1</num>
<intro>
<p>A regulator may at any time with the consent of the person concerned vary—</p>
</intro>
<paragraph eId="d4e1526">
<num>a</num>
<content>
<p>a requirement imposed by it as a result of section 142L(2)(a) or (b) or (3)(a) or (b), or</p>
</content>
</paragraph>
<paragraph eId="d4e1532">
<num>b</num>
<content>
<p>a direction given by it as a result of section 142L(2)(c) or (d) or (3)(c) or (d).</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1538">
<num>2</num>
<intro>
<p>The person concerned may at any time apply to the appropriate regulator for the variation of—</p>
</intro>
<paragraph eId="d4e1544">
<num>a</num>
<content>
<p>a requirement imposed by it as a result of section 142L(2)(a) or (b) or (3)(a) or (b), or</p>
</content>
</paragraph>
<paragraph eId="d4e1550">
<num>b</num>
<content>
<p>a direction given by it as a result of section 142L(2)(c) or (d) or (3)(c) or (d).</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1556">
<num>3</num>
<content>
<p>Sections 55U, 55V, 55X and 55Z3 apply to an application under subsection (2) as they apply to an application for the variation of a requirement imposed by the appropriate regulator under section 55L or 55M.</p>
</content>
</subsection>
</section>
<section eId="d4e1568">
<num>142Q</num>
<heading>
Consultation
<abbr title="et cetera" xml:lang="la">etc.</abbr>
between regulators
</heading>
<subsection eId="d4e1572">
<num>1</num>
<intro>
<p>Where a notice under section 142M or a warning notice or decision notice under section 142N relates to a requirement to be imposed in pursuance of a direction to be given as a result of section 142L(2)(c) or (3)(c), the appropriate regulator must—</p>
</intro>
<paragraph eId="d4e1578">
<num>a</num>
<content>
<p>consult the other regulator before giving the notice, and</p>
</content>
</paragraph>
<paragraph eId="d4e1584">
<num>b</num>
<content>
<p>give a copy of the notice to the other regulator.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1590">
<num>2</num>
<content>
<p>The appropriate regulator must consult the other regulator before varying under section 142P a direction given as a result of section 142L(2)(c) or (3)(c).</p>
</content>
</subsection>
<subsection eId="d4e1596">
<num>3</num>
<content>
<p>Directions given by the FCA as a result of section 142L(3)(c) are subject to any directions given to the FCA under section 3I.</p>
</content>
</subsection>
</section>
<section eId="d4e1605">
<num>142R</num>
<heading>Relationship with regulators' powers under Parts 4A and 12A</heading>
<subsection eId="d4e1609">
<num>1</num>
<intro>
<p>Subsection (2) applies in relation to—</p>
</intro>
<paragraph eId="d4e1615">
<num>a</num>
<content>
<p>a ring-fenced body which is a member of a mixed group, and</p>
</content>
</paragraph>
<paragraph eId="d4e1621">
<num>b</num>
<content>
<p>a parent undertaking of such a ring-fenced body.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1627">
<num>2</num>
<content>
<p>A regulator may not exercise its general powers in relation to the ring-fenced body or parent undertaking so as to achieve either of the results in subsection (3).</p>
</content>
</subsection>
<subsection eId="d4e1633">
<num>3</num>
<intro>
<p>Those results are—</p>
</intro>
<paragraph eId="d4e1639">
<num>a</num>
<content>
<p>that no existing group member is a parent undertaking of the ring-fenced body;</p>
</content>
</paragraph>
<paragraph eId="d4e1645">
<num>b</num>
<content>
<p>that the ring-fenced body is not a member of a mixed group.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1651">
<num>4</num>
<content>
<p>
In subsection (3)(a) “
<term refersTo="#term-existing-group-member">existing group member</term>
” means a person who is a member of the ring-fenced body's group at the time when the requirement is imposed or the direction given.
</p>
</content>
</subsection>
<subsection eId="d4e1660">
<num>5</num>
<content>
<p>Except as provided by subsections (1) to (4), the provisions of sections 142K to 142Q do not limit the general powers of either regulator.</p>
</content>
</subsection>
<subsection eId="d4e1666">
<num>6</num>
<intro>
<p>For the purposes of this section, a regulator's “general powers” are its powers under the following provisions—</p>
</intro>
<paragraph eId="d4e1672">
<num>a</num>
<content>
<p>section 55L or 55M (imposition of requirements in connection with Part 4A permission);</p>
</content>
</paragraph>
<paragraph eId="d4e1678">
<num>b</num>
<content>
<p>section 192C (power to direct qualifying parent undertaking).</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1684">
<num>7</num>
<content>
<p>For the purposes of this section, a ring-fenced body is a member of a mixed group if a member of the ring-fenced body's group carries on an excluded activity.</p>
</content>
</subsection>
</section>
</hcontainer>
<hcontainer name="crossheading" eId="d4e1690">
<heading>
<em>Failure of parent undertaking to comply with direction</em>
</heading>
<section eId="d4e1697">
<num>142S</num>
<heading>Power to impose penalty or issue censure</heading>
<subsection eId="d4e1701">
<num>1</num>
<content>
<p>This section applies if a regulator is satisfied that a person who is or has been a qualifying parent undertaking (“P”) has contravened a requirement of a direction given to P by that regulator as a result of section 142L(2)(d) or (3)(d).</p>
</content>
</subsection>
<subsection eId="d4e1707">
<num>2</num>
<intro>
<p>The regulator may impose a penalty of such amount as it considers appropriate on—</p>
</intro>
<paragraph eId="d4e1713">
<num>a</num>
<content>
<p>P, or</p>
</content>
</paragraph>
<paragraph eId="d4e1719">
<num>b</num>
<content>
<p>any person who was knowingly concerned in the contravention.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1725">
<num>3</num>
<content>
<p>The regulator may, instead of imposing a penalty on a person, publish a statement censuring the person.</p>
</content>
</subsection>
<subsection eId="d4e1731">
<num>4</num>
<content>
<p>The regulator may not take action against a person under this section after the end of the limitation period unless, before the end of that period, it has given a warning notice to the person under section 142T.</p>
</content>
</subsection>
<subsection eId="d4e1737">
<num>5</num>
<content>
<p>
<term refersTo="#term-the-limitation-period">The limitation period</term>
” means the period of 3 years beginning with the first day on which the regulator knew of the contravention.
</p>
</content>
</subsection>
<subsection eId="d4e1746">
<num>6</num>
<content>
<p>For this purpose a regulator is to be treated as knowing of a contravention if it has information from which the contravention can reasonably be inferred.</p>
</content>
</subsection>
<subsection eId="d4e1752">
<num>7</num>
<content>
<p>The requirements that a regulator may be required to impose as a result of a direction under section 142L(2)(c) or (3)(c) include requirements that the regulator would not but for the direction have power to impose.</p>
</content>
</subsection>
</section>
<section eId="d4e1761">
<num>142T</num>
<heading>Procedure and right to refer to Tribunal</heading>
<subsection eId="d4e1765">
<num>1</num>
<content>
<p>If a regulator proposes to take action against a person under section 142S, it must give the person a warning notice.</p>
</content>
</subsection>
<subsection eId="d4e1771">
<num>2</num>
<content>
<p>A warning notice about a proposal to impose a penalty must state the amount of the penalty.</p>
</content>
</subsection>
<subsection eId="d4e1777">
<num>3</num>
<content>
<p>A warning notice about a proposal to publish a statement must set out the terms of the statement.</p>
</content>
</subsection>
<subsection eId="d4e1783">
<num>4</num>
<content>
<p>If the regulator decides to take action against a person under section 142S, it must give the person a decision notice.</p>
</content>
</subsection>
<subsection eId="d4e1789">
<num>5</num>
<content>
<p>A decision notice about the imposition of a penalty must state the amount of the penalty.</p>
</content>
</subsection>
<subsection eId="d4e1795">
<num>6</num>
<content>
<p>A decision notice about the publication of a statement must set out the terms of the statement.</p>
</content>
</subsection>
<subsection eId="d4e1801">
<num>7</num>
<content>
<p>If the regulator decides to take action against a person under section 142S, the person may refer the matter to the Tribunal.</p>
</content>
</subsection>
</section>
<section eId="d4e1810">
<num>142U</num>
<heading>Duty on publication of statement</heading>
<intro>
<p>After a statement under section 142S(3) is published, the regulator must send a copy of the statement to—</p>
</intro>
<paragraph eId="d4e1816">
<num>a</num>
<content>
<p>the person in respect of whom it is made, and</p>
</content>
</paragraph>
<paragraph eId="d4e1822">
<num>b</num>
<content>
<p>any person to whom a copy of the decision notice was given under section 393(4).</p>
</content>
</paragraph>
</section>
<section eId="d4e1831">
<num>142V</num>
<heading>Imposition of penalties under section 142S: statement of policy</heading>
<subsection eId="d4e1835">
<num>1</num>
<intro>
<p>Each regulator must prepare and issue a statement of policy with respect to—</p>
</intro>
<paragraph eId="d4e1841">
<num>a</num>
<content>
<p>the imposition of penalties under section 142S, and</p>
</content>
</paragraph>
<paragraph eId="d4e1847">
<num>b</num>
<content>
<p>the amount of penalties under that section.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1853">
<num>2</num>
<intro>
<p>A regulator's policy in determining what the amount of a penalty should be must include having regard to—</p>
</intro>
<paragraph eId="d4e1859">
<num>a</num>
<content>
<p>the seriousness of the contravention,</p>
</content>
</paragraph>
<paragraph eId="d4e1865">
<num>b</num>
<content>
<p>the extent to which the contravention was deliberate or reckless, and</p>
</content>
</paragraph>
<paragraph eId="d4e1871">
<num>c</num>
<content>
<p>whether the person on whom the penalty is to be imposed is an individual.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1877">
<num>3</num>
<content>
<p>A regulator may at any time alter or replace a statement issued under this section.</p>
</content>
</subsection>
<subsection eId="d4e1883">
<num>4</num>
<content>
<p>If a statement issued under this section is altered or replaced, the regulator must issue the altered or replacement statement.</p>
</content>
</subsection>
<subsection eId="d4e1889">
<num>5</num>
<content>
<p>In exercising, or deciding whether to exercise, a power under section 142S(2) in the case of any particular contravention, a regulator must have regard to any statement of policy published under this section and in force at a time when the contravention occurred.</p>
</content>
</subsection>
<subsection eId="d4e1895">
<num>6</num>
<content>
<p>A statement under this section must be published by the regulator concerned in the way appearing to the regulator to be best calculated to bring it to the attention of the public.</p>
</content>
</subsection>
<subsection eId="d4e1901">
<num>7</num>
<content>
<p>A regulator may charge a reasonable fee for providing a person with a copy of the statement published under this section.</p>
</content>
</subsection>
<subsection eId="d4e1907">
<num>8</num>
<content>
<p>A regulator must, without delay, give the Treasury a copy of any statement which it publishes under this section.</p>
</content>
</subsection>
<subsection eId="d4e1913">
<num>9</num>
<content>
<p>Section 192I applies in relation to a statement under this section as it applies in relation to a statement under section 192H.</p>
</content>
</subsection>
</section>
</hcontainer>
<hcontainer name="crossheading" eId="d4e1919">
<heading>
<em>Pension liabilities</em>
</heading>
<section eId="d4e1926">
<num>142W</num>
<heading>Pension liabilities</heading>
<subsection eId="d4e1930">
<num>1</num>
<intro>
<p>The Treasury may by regulations require a ring-fenced body to make arrangements for any one or more of the following purposes—</p>
</intro>
<paragraph eId="d4e1936">
<num>a</num>
<content>
<p>
ensuring that, except in prescribed cases, the ring-fenced body cannot become liable to meet, or contribute to the meeting of, pension liabilities which arise in connection with persons' service on or after a date specified in the regulations (“
<term refersTo="#term-the-specified-date">the specified date</term>
”) in any employment, other than service in an employment in respect of which the employer is a ring-fenced body;
</p>
</content>
</paragraph>
<paragraph eId="d4e1945">
<num>b</num>
<content>
<p>ensuring that, except in prescribed cases, the default of a person other than another ring-fenced body would not result in the ring-fenced body becoming liable to meet, or contribute to the meeting of, pension liabilities arising in connection with persons' service in any employment before the specified date;</p>
</content>
</paragraph>
<paragraph eId="d4e1951">
<num>c</num>
<content>
<p>to the extent that it is not possible to ensure the result mentioned in paragraph (a) or (b), minimising any potential liability falling within paragraph (a) or (b).</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1957">
<num>2</num>
<intro>
<p>The regulations may make provision enabling the trustees or managers of a relevant pension scheme in respect of which the employer or one of the employers is a ring-fenced body—</p>
</intro>
<paragraph eId="d4e1963">
<num>a</num>
<content>
<p>to transfer to another relevant pension scheme all or part of the pension liabilities arising in connection with persons' service before the specified date together with all or part of the assets of the scheme, or</p>
</content>
</paragraph>
<paragraph eId="d4e1969">
<num>b</num>
<content>
<p>to divide the scheme into two or more sections in relation to which prescribed conditions are met.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1975">
<num>3</num>
<intro>
<p>The regulations may make provision—</p>
</intro>
<paragraph eId="d4e1981">
<num>a</num>
<content>
<p>enabling a ring-fenced body to apply to the court in a case where the ring-fenced body has been unable to reach agreement with another person (“P”) about the making of arrangements with P on commercial terms for one or more of the purposes in subsection (1), and</p>
</content>
</paragraph>
<paragraph eId="d4e1987">
<num>b</num>
<content>
<p>enabling the court on such an application to order P to enter into arrangements with the ring-fenced body for those purposes on such terms as the court considers fair and reasonable in the circumstances.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e1993">
<num>4</num>
<intro>
<p>The regulations must provide that any terms specified by the court by virtue of provision made under subsection (3)—</p>
</intro>
<paragraph eId="d4e1999">
<num>a</num>
<content>
<p>must be terms which, in the court's opinion, represent terms on which the arrangements might be entered into if they were being entered into for commercial reasons between willing parties dealing at arm's length, and</p>
</content>
</paragraph>
<paragraph eId="d4e2005">
<num>b</num>
<content>
<p>may involve the payment of any sum by instalments.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e2011">
<num>5</num>
<intro>
<p>The regulations may make other provision—</p>
</intro>
<paragraph eId="d4e2017">
<num>a</num>
<content>
<p>about the making by a ring-fenced body of arrangements for one or more of the purposes in subsection (1);</p>
</content>
</paragraph>
<paragraph eId="d4e2023">
<num>b</num>
<content>
<p>about any transfer or division falling within subsection (2).</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e2029">
<num>6</num>
<intro>
<p>The regulations may in particular—</p>
</intro>
<paragraph eId="d4e2035">
<num>a</num>
<content>
<p>require a ring-fenced body to cease to participate in a relevant pension scheme unless the scheme is divided into two or more sections in relation to which prescribed conditions are met;</p>
</content>
</paragraph>
<paragraph eId="d4e2041">
<num>b</num>
<content>
<p>provide that assets or liabilities of a relevant pension scheme may not be transferred under the arrangements to another occupational pension scheme unless the other scheme meets prescribed conditions;</p>
</content>
</paragraph>
<paragraph eId="d4e2047">
<num>c</num>
<content>
<p>require ring-fenced bodies to establish new occupational pension schemes in prescribed circumstances;</p>
</content>
</paragraph>
<paragraph eId="d4e2053">
<num>d</num>
<content>
<p>provide that any provision of a relevant pension scheme that might prevent the making of the arrangements, other than a provision requiring the consent of the trustees or managers of the scheme, is not to have effect in prescribed circumstances;</p>
</content>
</paragraph>
<paragraph eId="d4e2059">
<num>e</num>
<content>
<p>make provision enabling the trustees or managers of a relevant pension scheme, with the consent of the employers in relation to the scheme, to modify the scheme by resolution for the purpose of enabling the arrangements to be made;</p>
</content>
</paragraph>
<paragraph eId="d4e2065">
<num>f</num>
<content>
<p>require the trustees or managers of a relevant pension scheme or any employer in relation to a relevant pension scheme to give notice of prescribed matters to prescribed persons;</p>
</content>
</paragraph>
<paragraph eId="d4e2071">
<num>g</num>
<content>
<p>make provision enabling the court, on an application made in accordance with the regulations by a ring-fenced body, if it appears to the court that the trustees or managers of a relevant pension scheme, or an employer in relation to such a scheme, have unreasonably refused their consent to any step that would enable the arrangements to be made, to order that the step may be taken without that consent;</p>
</content>
</paragraph>
<paragraph eId="d4e2077">
<num>h</num>
<content>
<p>confer exemption from any provision of the regulations in prescribed cases;</p>
</content>
</paragraph>
<paragraph eId="d4e2083">
<num>i</num>
<content>
<p>confer functions on the PRA;</p>
</content>
</paragraph>
<paragraph eId="d4e2089">
<num>j</num>
<content>
<p>provide that a ring-fenced body which contravenes a prescribed requirement of the regulations is to be taken to have contravened a requirement imposed by the PRA under this Act;</p>
</content>
</paragraph>
<paragraph eId="d4e2096">
<num>k</num>
<content>
<p>modify, exclude or apply (with or without modification) any primary or subordinate legislation.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e2102">
<num>7</num>
<intro>
<p>The Treasury may by regulations require an authorised person who will or may be a ring-fenced body or an authorised person who will or may be a member of a ring-fenced body's group to do all it can to obtain from the Pensions Regulator a clearance statement in relation to any arrangements to be made for the purpose of complying with—</p>
</intro>
<paragraph eId="d4e2108">
<num>a</num>
<content>
<p>regulations under this section, or</p>
</content>
</paragraph>
<paragraph eId="d4e2114">
<num>b</num>
<content>
<p>any provision made by or under this Part (other than this section) when the provision comes into force.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e2120">
<num>8</num>
<intro>
<p>A “clearance statement” is a statement issued by the Pensions Regulator under any of the following provisions—</p>
</intro>
<paragraph eId="d4e2126">
<num>a</num>
<content>
<p>section 42 of the Pensions Act 2004 (clearance statements relating to contribution notice under section 38);</p>
</content>
</paragraph>
<paragraph eId="d4e2132">
<num>b</num>
<content>
<p>section 46 of that Act (clearance statements relating to financial support directions);</p>
</content>
</paragraph>
<paragraph eId="d4e2138">
<num>c</num>
<content>
<p>Article 38 of the Pensions (Northern Ireland) Order 2005 (clearance statements relating to contribution notices under article 34);</p>
</content>
</paragraph>
<paragraph eId="d4e2144">
<num>d</num>
<content>
<p>Article 42 of that Order (clearance statements relating to financial support directions).</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e2150">
<num>9</num>
<content>
<p>In relation to a ring-fenced body that is not a PRA-authorised person, references in subsection (6) to the PRA are to be read as references to the FCA.</p>
</content>
</subsection>
<subsection eId="d4e2156">
<num>10</num>
<content>
<p>Regulations under this section may not require ring-fenced bodies to achieve the results mentioned in subsection (1) before 1 January 2026, but this does not prevent the regulations requiring steps to be taken at any time after the regulations come into force.</p>
</content>
</subsection>
</section>
<section eId="d4e2165">
<num>142X</num>
<heading>Further interpretative provisions for section 142W</heading>
<subsection eId="d4e2169">
<num>1</num>
<content>
<p>The following provisions have effect for the interpretation of section 142W and this section.</p>
</content>
</subsection>
<subsection eId="d4e2175">
<num>2</num>
<content>
<p>
<term refersTo="#term-relevant-pension-scheme">Relevant pension scheme</term>
” means an occupational pension scheme that is not a money purchase scheme.
</p>
</content>
</subsection>
<subsection eId="d4e2184">
<num>3</num>
<content>
<p>
<term refersTo="#term-occupational-pension-scheme">Occupational pension scheme</term>
” has the meaning given in section 1 of the Pension Schemes Act 1993 or section 1 of the Pension Schemes (Northern Ireland) Act 1993 and, in relation to such a scheme, “
<term refersTo="#term-member">member</term>
” and “
<term refersTo="#term-trustees-or-managers">trustees or managers</term>
” have the same meaning as in Part 1 of the Pensions Act 1995 or Part 2 of the Pensions (Northern Ireland) Order 1995.
</p>
</content>
</subsection>
<subsection eId="d4e2199">
<num>4</num>
<content>
<p>
<term refersTo="#term-money-purchase-scheme">Money purchase scheme</term>
” has the meaning given in section 181(1) of the Pension Schemes Act 1993 or section 176(1) of the Pension Schemes (Northern Ireland) Act 1993.
</p>
</content>
</subsection>
<subsection eId="d4e2208">
<num>5</num>
<intro>
<p>
<term refersTo="#term-employer">Employer</term>
”, in relation to a relevant pension scheme, means—
</p>
</intro>
<paragraph eId="d4e2217">
<num>a</num>
<content>
<p>a person who is for the purposes of Part 1 of the Pensions Act 1995 or Part 2 of the Pensions (Northern Ireland) Order 1995 an employer in relation to the scheme, and</p>
</content>
</paragraph>
<paragraph eId="d4e2223">
<num>b</num>
<content>
<p>any other person who has or may have any liability under the scheme.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e2229">
<num>6</num>
<content>
<p>
<term refersTo="#term-employment">Employment</term>
” has the meaning given in section 181(1) of the Pension Schemes Act 1993 or section 176(1) of the Pension Schemes (Northern Ireland) Act 1993.
</p>
</content>
</subsection>
<subsection eId="d4e2238">
<num>7</num>
<content>
<p>
<term refersTo="#term-pension-liabilities">Pension liabilities</term>
” means liabilities attributable to or associated with the provision under a relevant pension scheme of pensions or other benefits.
</p>
</content>
</subsection>
<subsection eId="d4e2247">
<num>8</num>
<intro>
<p>
<term refersTo="#term-the-court">The court</term>
” means—
</p>
</intro>
<paragraph eId="d4e2256">
<num>a</num>
<content>
<p>in relation to England and Wales or Northern Ireland, the High Court, and</p>
</content>
</paragraph>
<paragraph eId="d4e2262">
<num>b</num>
<content>
<p>in relation to Scotland, the Court of Session.</p>
</content>
</paragraph>
</subsection>
</section>
</hcontainer>
<hcontainer name="crossheading" eId="d4e2268">
<heading>
<em>Loss-absorbency requirements</em>
</heading>
<section eId="d4e2275">
<num>142Y</num>
<heading>Power of Treasury in relation to loss-absorbency requirements</heading>
<subsection eId="d4e2279">
<num>1</num>
<intro>
<p>The Treasury may by order make provision about the exercise by either regulator of its functions under this Act, so far as they are (apart from the order) capable of being exercised in relation to a relevant body so as to require the relevant body—</p>
</intro>
<paragraph eId="d4e2285">
<num>a</num>
<content>
<p>to issue any debt instrument, or</p>
</content>
</paragraph>
<paragraph eId="d4e2291">
<num>b</num>
<content>
<p>to ensure that any part of the relevant body's debt consists of debt owed by it in respect of debt instruments, or debt instruments of a particular kind.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e2297">
<num>2</num>
<intro>
<p>A “relevant body” is—</p>
</intro>
<paragraph eId="d4e2303">
<num>a</num>
<content>
<p>a ring-fenced body,</p>
</content>
</paragraph>
<paragraph eId="d4e2309">
<num>b</num>
<content>
<p>any other body corporate that has a Part 4A permission relating to the regulated activity of accepting deposits, or</p>
</content>
</paragraph>
<paragraph eId="d4e2315">
<num>c</num>
<content>
<p>a body corporate that is a member of the group of a body falling within paragraph (a) or (b).</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e2321">
<num>3</num>
<intro>
<p>
<term refersTo="#term-debt-instrument">Debt instrument</term>
” means—
</p>
</intro>
<paragraph eId="d4e2330">
<num>a</num>
<content>
<p>a bond,</p>
</content>
</paragraph>
<paragraph eId="d4e2336">
<num>b</num>
<content>
<p>any other instrument creating or acknowledging a debt, or</p>
</content>
</paragraph>
<paragraph eId="d4e2342">
<num>c</num>
<content>
<p>an instrument giving rights to acquire a debt instrument.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e2348">
<num>4</num>
<intro>
<p>An order under this section may in particular—</p>
</intro>
<paragraph eId="d4e2354">
<num>a</num>
<content>
<p>require the regulator to exercise its functions so as to require relevant bodies to do either or both of the things mentioned in subsection (1);</p>
</content>
</paragraph>
<paragraph eId="d4e2360">
<num>b</num>
<content>
<p>limit the extent to which the regulator may require a relevant body's debt to consist of debt owed in respect of debt instruments or of debt instruments of a kind specified in the order;</p>
</content>
</paragraph>
<paragraph eId="d4e2366">
<num>c</num>
<intro>
<p>require the regulator—</p>
</intro>
<subparagraph eId="d4e2372">
<num>i</num>
<content>
<p>to make, or not to make, provision by reference to specified matters, or</p>
</content>
</subparagraph>
<subparagraph eId="d4e2378">
<num>ii</num>
<content>
<p>to have regard, or not to have regard, to specified matters;</p>
</content>
</subparagraph>
</paragraph>
<paragraph eId="d4e2384">
<num>d</num>
<content>
<p>require the regulator to consult, or obtain the consent of, the Treasury before making rules of a specified description or exercising any other specified function;</p>
</content>
</paragraph>
<paragraph eId="d4e2390">
<num>e</num>
<content>
<p>impose on the regulator in connection with the exercise of a specified function procedural requirements which would not otherwise apply to the exercise of the function;</p>
</content>
</paragraph>
<paragraph eId="d4e2396">
<num>f</num>
<content>
<p>refer to a publication issued by a regulator, another body in the United Kingdom or an international organisation, as the publication has effect from time to time.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e2402">
<num>5</num>
<content>
<p>
<term refersTo="#term-specified">Specified</term>
” means specified in the order.
</p>
</content>
</subsection>
</section>
</hcontainer>
<hcontainer name="crossheading" eId="d4e2411">
<heading>
<em>General</em>
</heading>
<section eId="d4e2418">
<num>142Z</num>
<heading>Affirmative procedure in relation to certain orders under Part 9B</heading>
<subsection eId="d4e2422">
<num>1</num>
<intro>
<p>This section applies to an order containing provision made under any of the following provisions of this Part—</p>
</intro>
<paragraph eId="d4e2428">
<num>a</num>
<content>
<p>section 142A(2)(b);</p>
</content>
</paragraph>
<paragraph eId="d4e2434">
<num>b</num>
<content>
<p>section 142B(2) or (5);</p>
</content>
</paragraph>
<paragraph eId="d4e2440">
<num>c</num>
<content>
<p>section 142C;</p>
</content>
</paragraph>
<paragraph eId="d4e2446">
<num>d</num>
<content>
<p>section 142D(2) or (4);</p>
</content>
</paragraph>
<paragraph eId="d4e2452">
<num>e</num>
<content>
<p>section 142E;</p>
</content>
</paragraph>
<paragraph eId="d4e2458">
<num>f</num>
<content>
<p>section 142I;</p>
</content>
</paragraph>
<paragraph eId="d4e2464">
<num>g</num>
<content>
<p>section 142Y.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e2470">
<num>2</num>
<intro>
<p>No order to which this section applies may be made unless—</p>
</intro>
<paragraph eId="d4e2476">
<num>a</num>
<content>
<p>a draft of the order has been laid before Parliament and approved by a resolution of each House, or</p>
</content>
</paragraph>
<paragraph eId="d4e2482">
<num>b</num>
<content>
<p>subsection (4) applies.</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e2488">
<num>3</num>
<content>
<p>Subsection (4) applies if an order under 142D(4) or 142E contains a statement that the Treasury are of the opinion that, by reason of urgency, it is necessary to make the order without a draft being so laid and approved.</p>
</content>
</subsection>
<subsection eId="d4e2494">
<num>4</num>
<intro>
<p>Where this subsection applies the order—</p>
</intro>
<paragraph eId="d4e2500">
<num>a</num>
<content>
<p>must be laid before Parliament after being made, and</p>
</content>
</paragraph>
<paragraph eId="d4e2506">
<num>b</num>
<content>
<p>ceases to have effect at the end of the relevant period unless before the end of that period the order is approved by a resolution of each House of Parliament (but without that affecting anything done under the order or the power to make a new order).</p>
</content>
</paragraph>
</subsection>
<subsection eId="d4e2512">
<num>5</num>
<content>
<p>The “relevant period” is a period of 28 days beginning with the day on which the order is made.</p>
</content>
</subsection>
<subsection eId="d4e2518">
<num>6</num>
<content>
<p>In calculating the relevant period no account is to be taken of any time during which Parliament is dissolved or prorogued or during which either House is adjourned for more than 4 days.</p>
</content>
</subsection>
</section>
<section eId="d4e2527">
<num>142Z1</num>
<heading>Interpretation of Part 9B</heading>
<subsection eId="d4e2531">
<num>1</num>
<content>
<p>This section has effect for the interpretation of this Part.</p>
</content>
</subsection>
<subsection eId="d4e2537">
<num>2</num>
<intro>
<p>Any reference to—</p>
</intro>
<paragraph eId="d4e2543">
<num>a</num>
<content>
<p>the regulated activity of accepting deposits, or</p>
</content>
</paragraph>
<paragraph eId="d4e2549">
<num>b</num>
<content>
<p>the regulated activity of dealing in investments as principal,</p>
</content>
</paragraph>
<wrapUp>
<p>is to be read in accordance with Schedule 2, taken with any order under section 22.</p>
</wrapUp>
</subsection>
<subsection eId="d4e2557">
<num>3</num>
<content>
<p>Any reference to the group restructuring powers is to be read in accordance with section 142L(1).</p>
</content>
</subsection>
<subsection eId="d4e2563">
<num>4</num>
<content>
<p>Any reference to a qualifying parent undertaking is to be read in accordance with section 142L(4).</p>
</content>
</subsection>
</section>
</hcontainer>
</part>
</quotedStructure>
</mod>
</p>
</content>
</subsection>
<subsection eId="section-4-2">
<num>2</num>
<content>
<p>In section 133 of FSMA 2000 (proceedings before Tribunal), in subsection (7A), after paragraph (i) insert—</p>
<p class="BlockAmendment">
<mod>
<quotedStructure class="primary unknown main default" startQuote="" endQuote="">
<paragraph eId="d4e2576">
<num>ia</num>
<content>
<p>a decision to take action under section 142S;</p>
</content>
</paragraph>
</quotedStructure>
</mod>
<inline name="AppendText">.</inline>
</p>
</content>
</subsection>
<subsection eId="section-4-3">
<num>3</num>
<content>
<p>In section 391 of FSMA 2000 (publication), in subsection (1ZB), after paragraph (i) insert—</p>
<p class="BlockAmendment">
<mod>
<quotedStructure class="primary unknown main default" startQuote="" endQuote="">
<paragraph eId="d4e2591">
<num>ia</num>
<content>
<p>section 142N;</p>
</content>
</paragraph>
</quotedStructure>
</mod>
<inline name="AppendText">.</inline>
</p>
</content>
</subsection>
<subsection eId="section-4-4">
<num>4</num>
<intro>
<p>In section 392 of FSMA 2000 (application of sections 393 and 394)—</p>
</intro>
<paragraph eId="section-4-4-a">
<num>a</num>
<content>
<p>
in paragraph (a), after “131H(1),” insert
<mod>
<quotedText>“ 142T(1), ”</quotedText>
</mod>
, and
</p>
</content>
</paragraph>
<paragraph eId="section-4-4-b">
<num>b</num>
<content>
<p>
in paragraph (b), after “131H(4),” insert
<mod>
<quotedText>“ 142T(4), ”</quotedText>
</mod>
.
</p>
</content>
</paragraph>
</subsection>
<subsection eId="section-4-5">
<num>5</num>
<intro>
<p>In section 417 of FSMA 2000 (definitions), in subsection (1)—</p>
</intro>
<paragraph eId="section-4-5-a">
<num>a</num>
<content>
<p>after the definition of “control of information rules” insert—</p>
<p class="BlockAmendment">
<mod>
<quotedStructure class="unknown unknown unknown default" startQuote="" endQuote="">
<p>
<term refersTo="#term-core-activities">core activities</term>
” has the meaning given in section 142B;
</p>
<p>
<term refersTo="#term-core-services">core services</term>
” has the meaning given in section 142C;
</p>
</quotedStructure>
</mod>
<inline name="AppendText">,</inline>
</p>
</content>
</paragraph>
<paragraph eId="section-4-5-b">
<num>b</num>
<content>
<p>after the definition of “ESMA” insert—</p>
<p class="BlockAmendment">
<mod>
<quotedStructure class="unknown unknown unknown default" startQuote="" endQuote="">
<p>
<term refersTo="#term-excluded-activities">excluded activities</term>
” has the meaning given in section 142D;
</p>
</quotedStructure>
</mod>
<inline name="AppendText">, and</inline>
</p>
</content>
</paragraph>
<paragraph eId="section-4-5-c">
<num>c</num>
<content>
<p>after the definition of “regulator” insert—</p>
<p class="BlockAmendment">
<mod>
<quotedStructure class="unknown unknown unknown default" startQuote="" endQuote="">
<p>
<term refersTo="#term-ring-fenced-body">ring-fenced body</term>
” has the meaning given in section 142A;
</p>
<p>
<term refersTo="#term-ring-fencing-rules">ring-fencing rules</term>
” has the meaning given in section 142H;
</p>
</quotedStructure>
</mod>
<inline name="AppendText">.</inline>
</p>
</content>
</paragraph>
</subsection>
<subsection eId="section-4-6">
<num>6</num>
<content>
<p>
In Schedule 1ZA to FSMA 2000 (the Financial Conduct Authority), in paragraph 8(3)(c)(i), after “138N,” insert
<mod>
<quotedText>“ 142V, ”</quotedText>
</mod>
.
</p>
</content>
</subsection>
<subsection eId="section-4-7">
<num>7</num>
<content>
<p>
In Schedule 1ZB to FSMA 2000 (the Prudential Regulation Authority), in paragraph 16(3)(c)(i), after “69,” insert
<mod>
<quotedText>“ 142V, ”</quotedText>
</mod>
.
</p>
</content>
</subsection>
</section>
</hcontainer>
</part>
</portionBody>
</portion>
</akomaNtoso>