Financial Services and Markets Act 2000

[F1 PART 1 U.K. General

Textual Amendments

F1 Schs. 1ZA, 1ZB substituted for Sch. 1 (24.1.2013 for specified purposes, 19.2.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 3 (with Sch. 20); S.I. 2013/113, art. 2(1)(b)(c)(2), Sch. Pts. 2, 3, 4; S.I. 2013/423, art. 3, Sch.

Interpretation U.K.

1 U.K. In this Schedule—

• “the Bank” means the Bank of England;

• “functions”, in relation to the PRA, means functions conferred on the PRA by or under any provision of this Act (see section 2A(6) which affects the meaning of references to such functions).

Constitution U.K.

2 U.K. The constitution of the PRA must provide—

(a) for the Governor of the Bank to be the chair of the PRA,

(b) for the Bank's Deputy Governor for prudential regulation to be the chief executive of the PRA, and

(c) for the PRA to have a governing body.

3 U.K. The governing body must consist of —

(a) the chair,

(b) the chief executive,

(c) the Bank's Deputy Governor for financial stability,

(d) the chief executive of the FCA, and

(e) other members (in this Schedule referred to as “appointed members”).

4 U.K. The validity of any act of the PRA is not affected—

(a) by any vacancy resulting from a vacancy in the office of Governor of the Bank, Deputy Governor of the Bank for prudential regulation, Deputy Governor of the Bank for financial stability, or chief executive of the FCA, or

(b) by a defect in the appointment of a person—

(i) to any of those offices, or

(ii) as an appointed member.

5 U.K. The chief executive of the FCA must not take part in any discussion by or decision of the PRA which relates to—

(a) the exercise of the PRA's functions in relation to a particular person, or

(b) a decision not to exercise those functions.

Appointed members of governing body U.K.

6 U.K. The appointed members must be appointed by the court of directors of the Bank with the approval of the Treasury.

7 U.K. Paragraphs 8 to 12 apply to the exercise by the court of directors of the Bank of its power to appoint appointed members.

8 U.K. The court of directors must secure that the majority of the members of the governing body of the PRA are non-executive members.

9 U.K. For the purposes of paragraph 8, and for the purposes of the PRA's duty in section 3C (duty to follow principles of good governance) none of the following is a non-executive member—

(a) the members referred to in paragraph 3(a), (b) and c), and

(b) a member who is an employee of the PRA or of the Bank.

10 U.K. The court of directors must have regard to generally accepted principles of good practice relating to the making of public appointments.

11 (1) Before appointing a person as an appointed member, the court of directors must consider whether the person has any financial or other interests that could have a material effect on the extent of the functions as member that it would be proper for the person to discharge. U.K.

(2) The terms on which an appointed member (“M”) is appointed must be such as—

(a) to secure that M is not subject to direction by the Bank,

(b) to require M not to act in accordance with the directions of any other person, and

(c) to prohibit M from acquiring any financial or other interests that have a material effect on the extent of the functions as member that it would be proper for M to discharge.

(3) If M is an employee of the PRA, M's interest as employee is to be disregarded for the purposes of sub-paragraphs (1) and (2)(c) and paragraph 14.

12 U.K. An employee of the FCA is disqualified for appointment as an appointed member.

13 U.K. The PRA must pay to the Bank the amount of any expenses incurred by the Bank in connection with the appointment of appointed members.

14 U.K. The court of directors of the Bank may, with the approval of the Treasury, remove an appointed member from office—

(a) on the grounds of incapacity or serious misconduct, or

(b) on the grounds that in all the circumstances the member's financial or other interests are such as to have a material effect on the extent of the functions as member that it would be proper for the person to discharge.

Terms of service U.K.

15 (1) The terms of service of the members of the governing body are to be determined by the Oversight Committee of the Bank. U.K.

(2) The PRA must pay to the members of its governing body such remuneration as may be determined by that Committee.

Modifications etc. (not altering text)

C1 Sch. 1ZB para. 15 modified (temp.) (20.2.2013) by The Financial Services Act 2012 (Transitional Provisions) (Rules and Miscellaneous Provisions) Order 2013 (S.I. 2013/161), arts. 1(1), 12(3)

Arrangements for discharging functions U.K.

16 (1) The PRA may make arrangements for any of its functions to be discharged by a committee, sub-committee, officer or member of staff of the PRA, but subject to the following provision. U.K.

(2) In exercising its legislative functions or its functions under section 2E (strategy), the PRA must act through its governing body.

(3) For that purpose, the following are the PRA's legislative functions—

(a) making rules;

F2 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) issuing statements under—

(i) section [F3 63ZD,] 63C, F4 ... 69, 192H, 192N, 210 or 345D, or

(ii) section 80 of the Financial Services Act 2012;

(d) giving directions under section 316 or 318;

(e) issuing guidance under section 2I.

Textual Amendments

F2 Sch. 1ZB para. 16(3)(b) omitted (7.3.2016) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(5), Sch. 3 para. 17(a); S.I. 2015/490, art. 2(1)(b) (with savings and transitional provisions in S.I. 2015/492 (as amended by S.I. 2015/1660))

F3 Word in Sch. 1ZB para. 16(3)(c)(i) inserted (25.7.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(5), Sch. 3 para. 17(b)(i); S.I. 2014/1819, art. 2(4)(b)

F4 Word in Sch. 1ZB para. 16(3)(c)(i) omitted (7.3.2016) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(5), Sch. 3 para. 17(b)(ii); S.I. 2015/490, art. 2(1)(b) (with savings and transitional provisions in S.I. 2015/492 (as amended by S.I. 2015/1660))

Modifications etc. (not altering text)

C2 Sch. 1ZB para. 16(2) modified (20.2.2013) by The Financial Services Act 2012 (Transitional Provisions) (Rules and Miscellaneous Provisions) Order 2013 (S.I. 2013/161), arts. 1(1), 3(8)(b)

Records U.K.

17 U.K. The PRA must maintain satisfactory arrangements for—

(a) recording decisions made in the exercise of its functions, and

(b) the safe-keeping of those records which it considers ought to be preserved.

Budget U.K.

18 (1) The PRA must, for each of its financial years, adopt an annual budget which has been approved by the Bank. U.K.

(2) The budget must be adopted before the start of the financial year to which it relates, except that the first budget must be adopted as soon as reasonably practicable after the coming into force of this paragraph.

(3) The PRA may, with the approval of the Bank, vary the budget for a financial year at any time after its adoption.

(4) The PRA must publish each budget, and each variation of a budget, in such manner as the PRA thinks fit.

Annual report U.K.

19 (1) At least once a year the PRA must make a report to the Treasury on— U.K.

(a) the discharge of its functions,

(b) the extent to which, in its opinion, its objectives have been advanced,

[F5 (ba) how it has complied with section 2H(1),]

(c) its consideration of the principles in section 3B F6 ...,

(d) how it has complied with section 3D,

(e) any direction given under section 3I or 3J during the period to which the report relates,

(f) how it has complied with section 354B(1) so far as relating to co-operation with persons outside the United Kingdom, and

(g) such other matters as the Treasury may from time to time direct.

(2) Sub-paragraph (1) does not require the inclusion in the report of any information whose publication would in the opinion of the PRA be against the public interest.

(3) The report must be accompanied by—

(a) a statement of the remuneration of the members of the governing body of the PRA during the period to which the report relates, and

(b) such other reports or information, prepared by such persons, as the Treasury may from time to time direct.

(4) The Treasury must lay before Parliament a copy of each report received by them under this paragraph.

Textual Amendments

F5 Sch. 1ZB para. 19(1)(ba) inserted (1.3.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), ss. 130(3)(a)(i), 148(5); S.I. 2014/377, art. 2(1)(a), Sch. Pt. 1

F6 Words in Sch. 1ZB para. 19(1)(c) omitted (1.3.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), ss. 130(3)(a)(ii), 148(5); S.I. 2014/377, art. 2(1)(a), Sch. Pt. 1

Modifications etc. (not altering text)

C3 Sch. 1ZB para. 19(1) applied (with modifications) (1.4.2013) by The Financial Services Act 2012 (Transitional Provisions) (Miscellaneous Provisions) Order 2013 (S.I. 2013/442), arts. 1(3), 4(2)

Consultation about annual report U.K.

20 (1) In relation to each report made under paragraph 19, the PRA must publish at the same time as the report an invitation to members of the public to make representations to the PRA, within the 3 months beginning with the date of publication— U.K.

(a) about the report,

(b) about the way in which the PRA has discharged, or failed to discharge, its functions during the period to which the report relates, and

(c) about the extent to which, in their opinion, the PRA's objectives have been advanced [F7 and the PRA has facilitated effective competition in accordance with section 2H and has considered the regulatory principles in section 3B] .

(2) The invitation must be published in the way appearing to it to be best calculated to bring the invitation to the attention of the public.

Textual Amendments

F7 Words in Sch. 1ZB para. 20(1)(c) substituted (1.3.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), ss. 130(3)(b), 148(5); S.I. 2014/377, art. 2(1)(a), Sch. Pt. 1

Report on consultation U.K.

21 (1) The PRA must publish a report about its consultation in accordance with paragraph 20. U.K.

(2) The report must contain an account, in general terms, of any representations received in pursuance of the invitation published under that paragraph.

(3) The report must be published not later than 4 months after the date on which the report under paragraph 19 was published.

Accounts and audit U.K.

22 (1) The Treasury may— U.K.

(a) require the PRA to comply with any provisions of the Companies Act 2006 about accounts and their audit which would not otherwise apply to it, or

(b) direct that any provision of that Act about accounts and their audit is to apply to the PRA with such modifications as are specified in the direction, whether or not the provision would otherwise apply to the PRA.

(2) Compliance with any requirement under sub-paragraph (1)(a) or (b) is enforceable by injunction or, in Scotland, an order for specific performance under section 45 of the Court of Session Act 1988.

(3) Proceedings under sub-paragraph (2) may be brought only by the Treasury.

23 (1) The PRA must send a copy of its annual accounts to the Comptroller and Auditor General as soon as is reasonably practicable. U.K.

(2) The Comptroller and Auditor General must—

(a) examine, certify and report on accounts received under this paragraph, and

(b) send a copy of the certified accounts and the report to the Treasury.

(3) The Treasury must lay the copy of the certified accounts and the report before Parliament.

(4) The PRA must send a copy of the certified accounts and the report to the Bank.

(5) Except as provided by paragraph 22(1), the PRA is exempt from the requirements of Part 16 of the Companies Act 2006 (audit), and its balance sheet must contain a statement to that effect.

(6) In this paragraph “annual accounts” has the meaning given in section 471 of the Companies Act 2006.]