Explanatory Note
(This note is not part of the Order)
This Order transfers a number of functions currently exercisable by the Secretary of State to the Treasury with effect from 7th June, so as to be exercisable by the Treasury alone, by the Secretary of State and the Treasury acting jointly or by the Secretary of State and the Treasury acting concurrently. It also makes a number of ancillary and supplementary provisions.
The main functions transferred are functions under the Company Securities (Insider Dealing) Act 1985, the Financial Services Act 1986, Parts VII (financial markets and insolvency) and IX (transfer of securities) of the Companies Act 1989, the Uncertificated Securities Regulations 1992 and the Barlow Clowes ex gratiapayments scheme. The statutory powers are transferred by virtue of Article 2, which is subject to Articles 3 to 5. Article 3 excludes functions specified in Schedule 1 from the transfer so that they remain exercisable by the Secretary of State. The functions that thus remain with the Secretary of State are in the main functions connected with the prudential supervision of insurance undertakings and enforcement (including investigations and prosecutions). Article 4 provides that functions specified in Schedule 2 are to be exercisable by the Secretary of State and the Treasury acting jointly. These joint functions consist, essentially, of certain functioed on, together with functions of making secondary legislation under Part VII of the Companies Act 1989 which affects the operation of insolvency law. Article 5 provides that certain minor functions set out in Schedule 3 to the Order are to be exercisable concurrently. The functions under the Barlow Clowes ex gratiapayments scheme are transferred by Article 7.
To a considerable extent the functions of the Secretary of State under the Financial Services Act 1986 and to a lesser degree under Part VII of the Companies Act 1989 have been transferred(1), under powers contained in those Acts, in whole or in part to a “designated agency”(at the date of this Order, The Securities and Investments Board) so as to be exercisable by that agency alone or concurrently with the Secretary of State. This Order operates on the functions of the Secretary of State so far as they remain vested in him following those transfers. Article 6 both preserves the effect of those transfers and ensures that the Treasury can assume the powers from the designated agency in circumstances where the Secretary of State would have been entitled to resume them.
Article 9 designates the Treasury as the appropriate authority to make Regulations implementing certain EC Directives in the area of financial services, in place of the Secretary of State.
Articles 8 and 10 (together with Schedule 4) make ancillary and supplemental provision, in particular provision in relation to property rights and liabilities held by the Secretary of State in connection with the functions transferred by the Order and provision enabling enactments and instruments to be interpreted correctly in consequence of the transfers effected by the Order.
The following Orders have transferred functions of the Secretary of State to the designated agency: (in the case of The Financial Services Act 1986) The Financial Services Act 1986 (Delegation) Order 1987 S.I. 1987/942, The Financial Services Act 1986 (Delegation) (Transitional Provisions) Order 1987/2035, The Finanical Services Act 1986 (Delegation) (No. 2) Order 1988 S.I. 1988/738, the Companies Act 1989 (Commencement No. 3 Transitional Provisions and Transfer of Functions under the Financial Services Act 1986) Order 1990 S.I. 1990/354, The Financial Services Act 1986 (Delegation) Order 1991 S.I. 1991/200 and The Financial Services Act 1986 (Delegation) (No. 2) Order 1991 S.I. 1991/1256; and (in the case of Part VII of the Companies Act 1989) The Companies Act 1989 (Commencement No. 10 and Saving Provisions) Order 1991 S.I. 1991/871.